CONTENTS

Of Annual Report 2003

M id Va l l e y M e g a m a l l

Notice of Annual General Meeting

4-9

Statement Accompanying Notice of

Annual General Meeting
10

Corporate Information
14 - 15

Profile of the Board of Directors

18 -24

Statement of Directors’ Responsibilities

26

Report of the Audit Committee

28 - 32

Chairman’s Statement
34 - 35

Review of Operations
38 - 42

Statement on Corporate Governance

44 - 49

Statement of Internal Control

52 - 53

Analysis of Share/Warrant 1999/2004/

Irredeemable Convertible Preference Share
2002/2007 Holdings
56 - 60

List of Properties
62 - 65

Five-Year Group Financial Highlights

68

Reports and Financial Statements

72 - 141

Additional Compliance Information

144 - 148

Proxy Form
149 - 150

Annual Report 2003 1

T h i s p a g e i n t e n t i o n a l l y l e f t b l a n k

Annual Report 2003 2

NOTICE OF A N N U A L G E N E R A L M E E T I N G

Annual Report 2003 3

 NOTICE OF A N N U A L G E N E R A L M E E T I N G

NOTICE IS HEREBY GIVEN that the Fortieth Annual General Meeting of IGB Corporation Berhad will be held
at Bintang Ballroom, Level 5, Cititel Mid Valley, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur,
on Monday, 31 May 2004 at 3.00 p.m. for the transaction of the following businesses:

1. To receive the Audited Financial Statements for the year ended 31 December 2003 and the
Reports of the Directors and Auditors thereon. Resolution 1

2. To sanction the declaration and payment of a final dividend of 3% less tax and 2% tax-exempt
for the year ended 31 December 2003. Resolution 2

3. To re-elect Mr Tan Boon Seng who retires in accordance with Article 85 of the Articles
of Association. Resolution 3

4. To re-elect the following Directors who retire in accordance with Article 89 of the Articles
of Association:

(i) Mr Tan Boon Lee Resolution 4

(ii) Madam Tan Lei Cheng Resolution 5
(iii) Madam Pauline Tan Suat Ming Resolution 6
(iv) Mr Tony Tan @ Choon Keat Resolution 7
(v) Mr Tan Kai Seng Resolution 8
(vi) Datuk Abdul Habib bin Mansur Resolution 9
(vii) Dato’ Haji Megat Muhaiyadin bin Megat Hassan Resolution 10

5. To re-appoint PricewaterhouseCoopers as auditors and to authorise the Directors to fix

their remuneration. Resolution 11

Annual Report 2003 4

 NOTICE OF A N N U A L G E N E R A L M E E T I N G (CONT’D)

6. As special business, to consider and if thought fit, pass the following ordinary resolutions:

(i) Proposed issue of options to Tan Boon Lee

‘THAT, the Directors of the Company be and are hereby authorized at any time and
from time to time to offer and to grant to Tan Boon Lee, an Executive Director of the
Company, options to subscribe for such number of new ordinary shares of RM0.50
each in the Company and if such options are accepted and exercised, to allot and issue such
number of new ordinary shares in the Company to him under the IGB Group Employee
Share Option Scheme 2003 (‘Scheme’) subject always to:

(a) the allocation of options, in aggregate to eligible employees who are Executive
Directors and senior management of the Company and/or its subsidiaries (which
are not dormant) do not exceed 50% of the shares available under the Scheme; and

(b) the allocation of options to any individual eligible employee who either singly or
collectively through his/her associates (as defined in the Companies Act, 1965), holds
20% or more in the issued and paid-up share capital of the Company, does not exceed
10% of the shares available under the Scheme;

subject to such terms and conditions and/or any adjustments which may be made in
accordance with the provisions of the Bye-Laws of the Scheme.’ Resolution 12

(ii) Authority to Directors to issue shares

‘THAT, subject to the Companies Act, 1965, the Articles of Association of the Company
and approvals of the relevant governmental/regulatory authorities, the Directors be and are
hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to allot and
issue shares in the Company from time to time and upon such terms and conditions and
for such purposes as the Directors may deem fit provided that the aggregate number of
shares to be issued pursuant to this resolution does not exceed 10% of the issued share
capital of the Company for the time being and that the Directors be and are also empowered
to obtain the approval of Bursa Malaysia for the listing and quotation for the additional
shares so issued and that such authority shall continue in force until the conclusion of the
next Annual General Meeting of the Company.’ Resolution 13

Annual Report 2003 5

S r i B u k i t P er sek u tu an

Annual Report 2003 6

 NOTICE OF A N N U A L G E N E R A L M E E T I N G (CONT’D)

(iii) Proposed Shareholders’ Mandate for Recurrent Transactions

‘THAT, pursuant to Chapter 10, Paragraph 10.09 of the Listing Requirements of Bursa
Malaysia (‘Listing Requirements’), the Company and its subsidiaries (‘IGB Group’) be
and are hereby authorized to enter into and give effect to the Recurrent Transactions with
specified classes of Related Parties as detailed in Section 2.3 of the Circular to Shareholders
dated 30 April 2004, which are necessary for IGB Group’s day-to-day operations in the
ordinary course of business on terms not more favourable to the Related Parties than those
generally available to the public and not detrimental to minority shareholders of
the Company.

AND THAT such approval shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting (‘AGM’) of the Company, at
which time it will lapse, unless by a resolution passed at the AGM whereby the
authority is renewed;

(b) the expiration of the period within which the next AGM of the Company is required to
be held pursuant to Section 143(1) of the Companies Act, 1965 (‘Act’) (but shall not
extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or

(c) revoked or varied by a resolution passed by the shareholders in a general meeting;

whichever is earlier; and the aggregate value of the Recurrent Transactions be disclosed in
the annual report of the Company.

AND THAT the Directors of the Company be and are hereby authorized to complete and
do all such acts and things as they may consider expedient or necessary to give effect to the Resolution 14
Proposed Shareholders’ Mandate for Recurrent Transactions.

7. To consider any other business of which due notice shall have been given.

Annual Report 2003 7

 NOTICE OF A N N U A L G E N E R A L M E E T I N G (CONT’D)

By Order of the Board

Tina Chan
Mary Wong
Company Secretaries

Kuala Lumpur
30 April 2004

Notes:

1. Appointment of Proxy
A member entitled to attend and vote at the meeting may appoint a proxy to vote in his stead. A proxy may but
need not be a member of the Company. The instrument appointing a proxy, in the case of an individual, shall be
signed by the appointer or his attorney and in the case of a corporation, either under seal or under the hand of an
officer or attorney duly authorized in writing. The instrument appointing a proxy must be deposited at the Registered
Office of the Company at least 48 hours before the appointed time for holding the Annual General Meeting or at
any adjournment thereof.

Annual Report 2003 8

 NOTICE OF A N N U A L G E N E R A L M E E T I N G (CONT’D)

2. Closure of Register
The Register of Members will be closed on I July 2004 for purpose of preparing warrants for the final dividend which,
if approved, will be paid on 30 July 2004 to every member who is entitled to receive the dividend as at 4.00 p.m. on
30 June 2004.

3. Re-election of Directors
Details of Directors who are standing for re-election are set out in the Profile of the Board of Directors.

4. Explanatory Notes on Special Business:

(a) Proposed issue of options to Tan Boon Lee

Pursuant to Bye-Laws of the IGB Group Employee Share Option Scheme 2003 (‘Scheme’), prior authority
has to be obtained from the shareholders in order for the Directors to offer and to grant to the full time
Executive Director, options to subscribe for new shares pursuant to the Scheme. The Executive Director who
will benefit from the Scheme must abstain from exercising his voting rights for this resolution.

(b) Authority to Directors to issue shares

The Ordinary Resolution proposed under item 6(ii), if passed, will empower the Directors to issue shares in
the Company up to an amount not exceeding in total ten per cent (10%) of the issued capital of the Company
for such purposes as they consider would be in the interest of the Company in order to avoid any delay and
cost involved in convening a general meeting to approve such issue of shares. This authority, unless revoked
or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

(c) Proposed Shareholders’ Mandate for Recurrent Transactions

The Ordinary Resolution proposed under item 6(iii), if passed, will allow IGB Group to enter into
Recurrent Transactions pursuant to paragraph 10.09 of the Listing Requirements. Further information on
the Proposed Shareholders’ Mandate for Recurrent Transactions is set out in the Circular to Shareholders dated
30 April 2004, which is despatched together with the Company’s Annual Report 2003. The Interested Related
Parties as detailed in Section 2.3 of the aforesaid Circular have agreed that IGB may table one resolution to obtain
the general mandate for all its Recurrent Transactions even if such Recurrent Transactions involve several different
related parties or categories or classes of related parties. Further, the Interested Related Parties have agreed to abstain
from voting on the Ordinary Resolution.

Annual Report 2003 9

 NOTICE OF A N N U A L G E N E R A L M E E T I N G (CONT’D)

Statement Accompanying Notice of Annual General Meeting

1. Directors retiring by rotation pursuant to Article 85 of the Article of Association

• Mr Tan Boon Seng retires by rotation pursuant to Article 85 of the Articles of Association, and being eligible,
offers himself for re-election.
• Datuk Dr. Abdul Samad bin Haji Alias retires by rotation pursuant to Article 85 of the Articles of Association,
does not offer himself for re-election.

Directors retiring by rotation pursuant to Article 89 of the Articles of Association

The following Directors retire by rotation pursuant to Article 89 of the Articles of Association, and being eligible,
offer themselves for re-election:

• Mr Tan Boon Lee

• Madam Tan Lei Cheng
• Madam Pauline Tan Suat Ming
• Mr Tony Tan @ Choon Keat
• Mr Tan Kai Seng
• Datuk Abdul Habib bin Mansur
• Dato’ Haji Megat Muhaiyadin bin Megat Hassan

Details of Directors who are standing for re-election are set out in the Profile of the Board of Directors. Information
relating to the Directors’ securities holdings in the Company and its subsidiaries is set out in the Directors’ Report.

2. Details of attendance of Directors at Board Meetings

There were four (4) Board meetings held during the financial year ended 31 December 2003. Details of attendance
of the Directors are set out in the Profile of the Board of Directors.

3. Fortieth Annual General Meeting

Date : Monday, 31 May 2004

Time : 3.00 p.m.

Venue : Bintang Ballroom,

Level 5, Cititel Mid Valley,
Mid Valley City,
Lingkaran Syed Putra,
59200 Kuala Lumpur

Annual Report 2003 10

 D esa Damansara 2

Annual Report 2003 11

Ke n n y Vale

Annual Report 2003 12

CORPORATE I N F O R M A T I O N

Annual Report 2003 13

 CORPORATE I N F O R M A T I O N

BOARD OF DIRECTORS NOMINATION COMMITTEE

Independent Non-Executive Chairman Chairman
Tan Sri Abu Talib bin Othman Tan Sri Abu Talib bin Othman
Members
Managing Director Datuk Dr. Abdul Samad bin Haji Alias
Robert Tan Chung Meng Dato’ Seri Khalid Ahmad bin Sulaiman
Pauline Tan Suat Ming
Executive Directors
Tan Boon Seng
Tan Boon Lee REMUNERATION COMMITTEE
Chua Seng Yong, alternate to Robert Tan Chung Meng Chairman
Tan Sri Abu Talib bin Othman
Senior Independent Non-Executive Director Members
Dato’ Seri Khalid Ahmad bin Sulaiman Robert Tan Chung Meng
Datuk Dr. Abdul Samad bin Haji Alias
Independent Non-Executive Directors
Datuk Dr. Abdul Samad bin Haji Alias EXECUTIVE COMMITTEE
Tan Kai Seng Chairman
Tan Boon Seng
Non-Independent Non-Executive Directors Members
Tan Lei Cheng Robert Tan Chung Meng
Pauline Tan Suat Ming Tan Boon Lee
Tony Tan @ Choon Keat Pauline Tan Suat Ming
Datuk Abdul Habib bin Mansur
Dato’ Haji Megat Muhaiyadin bin Megat Hassan
SHARE & ESOS COMMITTEE
Members
COMPANY SECRETARIES Robert Tan Chung Meng
Tina Chan Lai Yin Tan Boon Seng
Mary Wong Datuk Dr. Abdul Samad bin Haji Alias

AUDIT COMMITTEE REGISTERED OFFICE

Chairman Penthouse
Dato’ Seri Khalid Ahmad bin Sulaiman Menara IGB
Members No. 1, The Boulevard
Datuk Dr. Abdul Samad bin Haji Alias Mid Valley City
Tan Kai Seng Lingkaran Syed Putra
Robert Tan Chung Meng 59200 Kuala Lumpur
Telephone : 03-22898989 Facsimile : 03-22898802

Annual Report 2003 14

REGISTRAR
IGB Corporation Berhad
[Share Registration Department]
23rd Floor
Menara IGB
No. 1, The Boulevard
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Telephone : 03-22898989 Facsimile : 03-22898983

AUDITORS
PricewaterhouseCoopers
11th Floor
Wisma Sime Darby
Jalan Raja Laut
50350 Kuala Lumpur

PRINCIPAL BANKERS
HSBC Bank Malaysia Berhad
Citibank Berhad
Malayan Banking Berhad
RHB Sakura Merchant Bankers Berhad

STOCK EXCHANGE LISTING

Bursa Malaysia, Main Board

S eri Maya

Annual Report 2003 15

Leisure & Entertainment at Mid Valley City

Annual Report 2003 16

PROFILE OF T H E B O A R D O F D I R E C T O R S

Annual Report 2003 17

 PROFILE OF T H E B O A R D O F D I R E C T O R S

The Board of Directors of IGB Corporation Berhad (‘IGB’) comprises an Independent Non-Executive Chairman,
a Managing Director, two Executive Directors and eight Non-Executive Directors, three of whom are independent.

The Board meets quarterly and additional Board Meetings are held as and when required. The Board met four times during
the year ended 31 December 2003.

Particulars of the Directors are as follows:

Tan Sri Abu Talib bin Othman

Independent Non-Executive Chairman

Malaysian, aged 66, joined the Board of IGB on 18 July 1995. He was appointed Chairman on 30 May 2001. He is also the
Chairman of the Nomination Committee and Remuneration Committee of IGB.

He is a Barrister-at-law and has served in various capacities in the judicial and legal service of the Government of Malaysia. He
was the Attorney General of Malaysia from 1980 until his retirement in October 1993.

He is also presently the Chairman and/or a Director of several public companies such as British American Tobacco (Malaysia)
Berhad, Sime Darby Berhad, CYL Corporation Berhad, Alliance Merchant Bank Berhad, Alliance Bank Malaysia Berhad,
Alliance Capital Asset Management Berhad, Alliance Unit Trust Management Berhad and MUI Continental Insurance Berhad.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convicted of any offence in the past ten years.

He has attended all the four Board meetings of the Company held for the financial year ended 31 December 2003.

Robert Tan Chung Meng

Managing Director

Malaysian, aged 52, was appointed Joint Managing Director of IGB on 18 December 1995 and subsequently re-designated to
Managing Director on 30 May 2001. He is also a member of the Executive Committee, Audit Committee, Remuneration
Committee and Share & ESOS Committee of IGB.

He has vast experience in the property and hotel industry. After studying Business Administration in the United Kingdom, he
was attached to a Chartered Surveyor’s firm for one year. He has also developed a housing project in Central London before
returning to Malaysia. He has been involved in various development projects carried out by IGB and Tan & Tan
Developments Berhad, in particular the Mid Valley Project. He is also presently the Chairman of Wah Seong Corporation
Berhad which has interest in the industrial sectors including oil and gas, infrastructure related products, industrial
engineering, construction material and property.

He is a major shareholder of IGB by virtue of his substantial shareholdings in Gold IS Berhad, Tan Kim Yeow Sdn. Bhd. and
Wah Seong (Malaya) Trading Co. Sdn. Bhd., all of whom are major shareholders of IGB. He is a brother of Pauline Tan Suat
Ming and Tony Tan @ Choon Keat and a nephew of Dato’ Tan Chin Nam, all of whom are major shareholders and/
or directors of IGB. He is a cousin of Tan Boon Seng, Tan Lei Cheng and Tan Boon Lee, all of whom are directors and
shareholders of IGB.

Annual Report 2003 18

 PROFILE OF T H E B O A R D O F D I R E C T O R S (CONT’D)

He has no conflict of interest with the Company, other than those disclosed in Notes to the Financial Statements. He has not
been convicted of any offence in the past ten years.

He has attended all the four Board meetings of the Company held for the financial year ended 31 December 2003.

Tan Boon Seng

Executive Director

Malaysian, aged 48, joined IGB in 1980 as General Manager. He was appointed to the Board of IGB on 20 December 1990,
Managing Director in 1991, re-designated as Joint Managing Director in 1995, and subsequently re-designated as Executive
Director on 30 May 2001. He is the Chairman of the Executive Committee, and also a member of the Share & ESOS
Committee of IGB.

He holds a Master of Arts from Cambridge University.

He is also the Chairman and Managing Director of Lee Hing Development Limited, and a Director of South China Holdings
Limited, South China Brokerage Co. Limited, South China Industries Limited, Wo Kee Hong (Holdings) Limited and Star
Cruise Limited, all listed on The Stock Exchange of Hong Kong Limited.

He is a son of Dato’ Tan Chin Nam, who is a major shareholder of IGB, and is a brother of Tan Lei Cheng and Tan Boon
Lee, who are directors and shareholders of IGB. He is a cousin of Robert Tan Chung Meng, Pauline Tan Suat Ming and Tony
Tan @ Choon Keat, all of whom are directors and major shareholders of IGB.

He has no conflict of interest with the Company and he has not been convicted of any offence in the past ten years.

He has attended all the four Board meetings of the Company held for the financial year ended 31 December 2003.

Tan Boon Lee

Executive Director

Malaysian, aged 40, was appointed to the Board of IGB on 10 June 2003 as an Executive Director. He is the Chief Executive
Officer of the Hotel division, and also a member of the Executive Committee of IGB.

He holds a Bachelor of Economics from Monash University, Australia and a Masters in Business Administration from Cranfield
School of Management, United Kingdom. He has 18 years experience in the property and hotel industry, giving management
and technical assistance to hotel and hospitality projects in Malaysia and Asia. Presently, he is the President of Malaysian
Association of Hotel Owners (MAHO).

He also sits on the Board of Gold IS Berhad.

He is a son of Dato’ Tan Chin Nam, who is a major shareholder of IGB, and is a brother of Tan Boon Seng and Tan Lei Cheng,
who are directors and shareholders of IGB. He is a cousin of Robert Tan Chung Meng, Pauline Tan Suat Ming and Tony Tan
@ Choon Keat, all of whom are directors and major shareholders of IGB.

Annual Report 2003 19

 PROFILE OF T H E B O A R D O F D I R E C T O R S (CONT’D)

He has no conflict of interest with the Company and he has not been convicted of any offence in the past ten years.

He has attended the two Board meetings of the Company held for the financial year ended 31 December 2003, since his
appointment on the Board.

Datuk Dr. Abdul Samad bin Haji Alias

Independent Non-Executive Director

Malaysian, aged 61, was appointed as a Director of IGB on 12 April 1983 and also served as the Chairman of the Audit
Committee until his resignation on 30 May 2001. However, he remains as a member of the Audit Committee, and also serves
as a member of the Nomination Committee, Remuneration Committee and Share & ESOS Committee of IGB.

He graduated from the University of Western Australia with a Bachelor of Commerce degree. He is a member of the Malaysian
Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He is also a member of the Financial
Reporting Foundation, a Fellow of the Institute of Chartered Accountants in Australia and an Associate Member of the
Chartered Institute of Bankers, United Kingdom. He is currently an Advisor to Ernst & Young, Malaysia.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convicted of any offence in the past ten years.

Of the four Board meetings of the Company held for the financial year ended 31 December 2003, he attended all except for
one which he had extended his apologies.

Dato’ Seri Khalid Ahmad bin Sulaiman

Senior Independent Non-Executive Director

Malaysian, aged 68, was appointed as a Director of IGB on 18 June 1982. He is the Chairman of the Audit Committee, and
also a member of the Nomination Committee of IGB.

He studied at the University of Leicester, England and was called to the Bar at Middle Temple in 1964. He worked as Legal
Advisor to the statutory body (MARA) for three years before setting up his own legal practice in Penang in 1969. He was
also the Penang State Executive Councillor from 1974 to 1982. Presently, he sits on the Advocates & Solicitors
Disciplinary Board.

He also sits on the Board of Hong Leong Credit Berhad and HLG Capital Berhad.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convicted of any offence in the past ten years.

He has attended all the four Board meetings of the Company held for the financial year ended 31 December 2003.

Annual Report 2003 20

 PROFILE OF T H E B O A R D O F D I R E C T O R S (CONT’D)

Tan Lei Cheng

Non-Independent Non-Executive Director

Malaysian, aged 47, was appointed to the Board of IGB on 10 June 2003 as an Non-Independent Non-Executive Director.

She holds a Bachelor of Commerce from the University of Melbourne, Australia and a Bachelor of Law from King’s College,
London (LLB Hons.). She is also a member of Lincoln’s Inn and was admitted to the English Bar in 1983.

She has 23 years of experience in the property industry and the corporate sector. She was the Chief Executive Officer of
Tan & Tan Developments Berhad from March 1985, a property development company that was listed on Bursa Malaysia
until Gold IS Berhad took over its listing on 8 May 2002, following the completion of the merger between IGB, Tan & Tan
Developments Berhad and Gold IS Berhad. She is presently the Executive Chairman and Chief Executive Officer of Gold IS
Berhad.

She is a daughter of Dato’ Tan Chin Nam, who is a major shareholder of IGB, and is a sister of Tan Boon Seng and Tan Boon
Lee, who are directors and shareholders of IGB. She is a cousin of Robert Tan Chung Meng, Pauline Tan Suat Ming and Tony
Tan @ Choon Keat, all of whom are directors and major shareholders of IGB.

She has no conflict of interest with the Company and she has not been convicted of any offence in the past ten years.

She has attended the two Board meetings of the Company held for the financial year ended 31 December 2003, since her
appointment on the Board.

Pauline Tan Suat Ming

Non-Independent Non-Executive Director

Malaysian, aged 59, was appointed to the Board of IGB on 10 June 2003 as an Non-Independent Non-Executive Director.
She is also a member of the Executive Committee and Nomination Committee of IGB.

She holds a Bachelor of Science (Honours) in Biochemistry from the University of Sussex, England and is also an Associate of
the Chartered Institute of Secretaries and Administrators. She worked as a chemist in Malayan Sugar Manufacturing Co.
Berhad from 1969 to 1972. She joined Tan Kim Yeow Sdn. Bhd. as an Executive Director in 1976 and joined Wah Seong
Group of Companies in 1983.

She also sits on the Board of Wah Seong Corporation Berhad and Gold IS Berhad.

She is a major shareholder of IGB by virtue of her substantial shareholdings in Gold IS Berhad, Tan Kim Yeow Sdn. Bhd.
and Wah Seong (Malaya) Trading Co. Sdn. Bhd., all of whom are major shareholders of IGB. She is a sister of Robert Tan
Chung Meng and Tony Tan @ Choon Keat, and a niece of Dato’ Tan Chin Nam, all of whom are directors and/or major
shareholders of IGB. She is a cousin of Tan Boon Seng, Tan Lei Cheng and Tan Boon Lee, all of whom are directors
and shareholders of IGB.

She has no conflict of interest with the Company, other than those disclosed in Notes to the Financial Statements. She has not
been convicted of any offence in the past ten years.

She has attended the two Board meetings of the Company held for the financial year ended 31 December 2003, since her
appointment on the Board.

Annual Report 2003 21

 PROFILE OF T H E B O A R D O F D I R E C T O R S (CONT’D)

Tony Tan @ Choon Keat

Non-Independent Non-Executive Director

Malaysian, aged 55, was appointed to the Board of IGB on 15 July 2003 as an Non-Independent Non-Executive Director.

He holds a Bachelor Degree in Chemical Engineering from the University of Surrey, England and a Master in Business
Administration from the University of California, Berkeley, USA.

He also sits on the Board of Parkway Holdings Limited in Singapore as Deputy Chairman, and Lee Hing Development
Limited in Hong Kong.

He is a major shareholder of IGB by virtue of his substantial shareholdings in Gold IS Berhad, Tan Kim Yeow Sdn. Bhd. and
Wah Seong (Malaya) Trading Co. Sdn. Bhd., all of whom are major shareholders of IGB. He is a brother of Robert Tan Chung
Meng and Pauline Tan Suat Ming, and a nephew of Dato’ Tan Chin Nam, all of whom are directors and/or major
shareholders of IGB. He is a cousin of Tan Boon Seng, Tan Lei Cheng and Tan Boon Lee, all of whom are directors and
shareholders of IGB.

He has no conflict of interest with the Company, other than those disclosed in Notes to the Financial Statements. He has not
been convicted of any offence in the past ten years.

He has attended the two Board meetings of the Company held for the financial year ended 31 December 2003, since his
appointment on the Board.

Tan Kai Seng

Independent Non-Executive Director

Singaporean, aged 53, was appointed to the Board of IGB on 15 July 2003 as an Independent Non-Executive Director. He is
also a member of the Audit Committee of IGB.

He is a Certified Public Accountant, Singapore and a Fellow Member of the Association of Chartered Certified Accountants,
United Kingdom.

Mr Tan started his career with Price Waterhouse Singapore in 1973 and joined Parkway Properties as its Financial Controller
in 1980. In 1988, he was appointed to the Board of Parkway Holdings Limited, a Group with significant interests in private
healthcare investment and management.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convicted of any offence in the past ten years.

He has attended the two Board meetings of the Company held for the financial year ended 31 December 2003, since his
appointment on the Board.

Annual Report 2003 22

 PROFILE OF T H E B O A R D O F D I R E C T O R S (CONT’D)

Datuk Abdul Habib bin Mansur

Non-Independent Non-Executive Director

Malaysian, aged 60, was appointed as a Director of IGB on 13 June 2003, and is a representative of Permodalan Nasional
Berhad, a major shareholder of IGB.

He holds a B.A. (Hons) from the University of Malaya, an Advance Diploma in Development Administration from the
University of Manchester and a Master degree in Public Policy and Administration from the University of Wisconsin.

He has thirty years experience in both the State and Federal levels of administration when he joined the Administrative and
Diplomatic Service. His last posting was the State Secretary of Perak during 1995 to 1999 before his retirement.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convided of any offence in the past ten years.

He has attended the two Board meetings of the Company held for the financial year ended 31 December 2003, since his
appointment on the Board.

Dato’ Haji Megat Muhaiyadin bin Megat Hassan

Non-Independent Non-Executive Director

Malaysian, aged 57, was appointed as a Director of IGB on 19 September 2003, and is a representative of Permodalan
Nasional Berhad, a major shareholder of IGB.

He graduated from the University of Malaya with Bachelor of Arts degree in 1971, a post-graduate Diploma in International
and National Development from the Institute of Social Studies The Hague, Netherlands in 1975, a Master in Management
from the Brandeis University, Massachusettes, United States, and was a Hubert Humphrey Fellow in 1982.

He joined the Malaysian Administrative and Diplomatic Services from 1971 until his retirement in April 2003. He had
served as Assistant Secretary (Development) in the Ministry of Culture, Youth and Sports, Principal Assistant Director
(Establishment Division) and Deputy Director (Training & Career Development Division) in the Public Services
Department, Regional Director of the National Institute of Public Administration (INTAN), Director of Kedah State
Development, Director-General of Fisheries Development Authority, Federal Secretary of Sarawak, Secretary-General in
the Ministry of Works and Chairman of the Malaysian Highway Authority.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convicted of any offence in the past ten years.

He has attended the one Board meeting of the Company held for the financial year ended 31 December 2003, since his
appointment on the Board.

Annual Report 2003 23

 PROFILE OF T H E B O A R D O F D I R E C T O R S (CONT’D)

Chua Seng Yong

Alternate Director to Managing Director

Malaysian, aged 42, is the Executive Assistant to the Managing Director of IGB. He joined IGB as Financial Controller in
1994 and has more than 16 years experience in property and hotel industry. He was appointed to the Board of IGB on 30
November 1999 as an alternate to Robert Tan Chung Meng.

He graduated with an Economics degree from Monash University, Australia in 1984. He is also an associate member of the
Australia Society of Accountants. He attained his Masters in Business Administration from Cranfield School of Management,
United Kingdom in 1992.

He does not have any family relationship with any directors and/or major shareholders of the Company and has no conflict of
interest with the Company. He has not been convicted of any offence in the past ten years.

He has attended all the four Board meetings of the Company held for the financial year ended 31 December 2003.

Details of attendance of Directors at Board Meetings

During the financial year, a total of four (4) Board meetings were held and the details of attendance are as follows:

Attendance

Tan Sri Abu Talib bin Othman 4

Robert Tan Chung Meng 4
Tan Boon Seng 4
Tan Boon Lee 2
Datuk Dr. Abdul Samad bin Haji Alias 4
Dato’ Seri Khalid Ahmad bin Sulaiman 4
Tan Lei Cheng 2
Pauline Tan Suat Ming 2
Tony Tan @ Choon Keat 2
Tan Kai Seng 2
Datuk Abdul Habib bin Mansur 2
Dato’ Haji Megat Muhaiyadin bin Megat Hassan 1
Chua Seng Yong 4

Annual Report 2003 24

STATEMENT OF D I R E C T O R S ’ R E S P O N S I B I L I T I E S

Annual Report 2003 25

 STATEMENT OF D I R E C T O R S ’ R E S P O N S I B I L I T I E S

in respect of the Audited Financial Statements

The Directors are required by law to prepare financial statements for each financial year which give a true and fair view of
the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of
the Group and of the Company for the financial year then ended.

The Directors consider that, in preparing the financial statements for the financial year ended 31 December 2003, the
Group has used appropriate accounting policies and applied them consistently and made judgements and estimates that
are reasonable and prudent. The Directors also consider that all applicable approved accounting standards have been
followed and confirm that the financial statements have been prepared on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep accounting records which disclose with
reasonable accuracy at any time the financial position of the Group and of the Company and which enable them to ensure that
the financial statements comply with the provisions of the Companies Act, 1965 and the applicable approved accounting
standards of Malaysia.

Annual Report 2003 26

REPORT OF T H E A U D I T C O M M I T T E E

Annual Report 2003 27

 REPORT OF T H E A U D I T C O M M I T T E E

Terms of Reference
The terms of reference of the Audit Committee (‘AC’) are set out on pages 30 to 32.

Memberships and Meetings

The AC comprises three independent non-executive Directors and the Managing Director. The composition of the AC is as
listed below:

(1) Dato’ Seri Khalid Ahmad bin Sulaiman, Chairman, Senior Independent Non-Executive Director
(2) Datuk Dr. Abdul Samad bin Haji Alias, Independent Non-Executive Director
(3) Tan Kai Seng, Independent Non-Executive Director (appointed on 15 July 2003)
(4) Robert Tan Chung Meng, Managing Director (appointed on 30 May 2003)

During the financial year, a total of four (4) AC Meetings were held and the details of attendance are as follows:

Attendance
Dato’ Seri Khalid Ahmad bin Sulaiman 4
Datuk Dr. Abdul Samad bin Haji Alias 2
Tan Kai Seng 2
Robert Tan Chung Meng 2

Summary of Activities
In line with the terms of reference of the AC, the following activities were carried out by the AC during the year ended 31
December 2003 in discharging its functions:

(1) Review of the external auditors’ scope of work and their audit plan.
(2) Review with the external auditors the results of their audit, the audit report and internal control recommendations
in respect of control weaknesses noted in the course of their audit.
(3) Review of the internal control procedures.
(4) Review of the quarterly unaudited financial results announcements prior to recommending for the approval of
the Board of Directors.
(5) Review of the Group’s risk management policy and framework.
(6) Review of the Group’s procedures in respect of the related party transactions.
(7) Review of the Company’s compliance with the Listing Requirements, the applicable approved accounting standards
issued by the Malaysian Accounting Standards Board and other relevant legal and regulatory requirements.

Annual Report 2003 28

 REPORT OF T H E A U D I T C O M M I T T E E (CONT’D)

Internal Audit Function

The Group has a well established Internal Audit Department, which reports to the AC and assists the Board of Directors in
monitoring and managing risks and internal controls. The AC approves the internal audit plan prior to the commencement of
the new financial year. The scope of Internal Audit covers the audits of all units and operations, including subsidiaries.

The Internal Audit Department has adopted a risk-based approach towards the planning and conduct of audits which is
consistent with the Group’s established framework in designing, implementing and monitoring of its control systems. The
Group’s established monitoring process and controls self-assessment approach is in alignment with the practice of generating
an embedded risk management capability and acceptable risk culture within the organization.

The system of internal control was satisfactory and has not resulted in any material losses, contingencies or uncertainties that
would require disclosure in the Group’s annual report.

The Boulevard,Mid Valley Megamall

Annual Report 2003 29

 TERMS OF R E F E R E N C E O F T H E A U D I T C O M M I T T E E

Membership
• The members of the AC shall be appointed by the Board of Directors upon the recommendations of the Nomination
Committee and shall consist of not less than three members, a majority of whom shall be independent Directors. If
membership for any reason falls below three members, the Board of Directors shall, within three months of that event,
appoint such number of new members as may be required to fulfil the minimum requirement.

• The members of the AC shall elect a Chairman from among their number who shall be an independent Director.

• No alternate Director shall be appointed as a member of the AC.

• At least one member of the AC must be a member of the Malaysian Institute of Accountants or alternatively a person who
must have at least three years of working experience and have passed the examinations specified in Part 1 of the 1st
Schedule of the Accountants Act 1967 or is a member of one of the associations specified in Part II of the said Schedule.

• The Board shall review the terms of office of each of the AC at least once in three years.

Objectives
The primary objectives of the AC are:
• ensure transparency, integrity and accountability in the Group’s activities so as to safeguard the rights and interests of
the shareholders.

• provide assistance to the Board in discharging its responsibilities relating to the Group’s management of principal risks,
internal controls, financial reporting and compliance of statutory and legal requirements.

• maintain through regularly scheduled meetings, a direct line of communication between the Board, senior management,
internal auditors and external auditors.

Meetings and Minutes

• Meetings shall be held not less than four times a year, and shall normally be attended by the Head of Finance and Head of
Internal Audit. The presence of external auditors may be requested, if required. Other members of the Board may attend
meetings upon the invitation of the AC. At least once a year, the AC shall meet with the external auditors without any
executive Board members present.

• Unless otherwise determined by the AC members, three (3) days’ notice specifying the place, date and hour of the AC
Meeting and the matters to be discussed thereat shall be given to all the AC members. The external auditors and the
internal auditors may request a meeting by notifying the Company Secretary if they consider it necessary.

• The quorum for each meeting shall be two members present in person, of whom two must be independent Directors. In
the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members
present.

• The AC may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of
votes of the members present, and in the case of an equality of votes, the Chairman shall have a second or casting vote.

Annual Report 2003 30

 TERMS OF R E F E R E N C E O F T H E A U D I T C O M M I T T E E (CONT’D)

• The Company Secretary shall be the Secretary of the AC.

• The AC shall cause minutes to be made of all proceedings at all meetings of the AC. The minutes of any meeting of the
AC, if purporting to be signed by the Chairman of such meeting, or by the Chairman of the next succeeding meeting, shall
be receivable as prima facie evidence of the matters stated in such minutes. Minutes of each meeting shall be distributed to
members of the Board. The Chairman of the AC shall report on each meeting to the Board.

Authority
The AC have the following authority as empowered by the Board:
(a) to investigate any matter within its terms of reference;
(b) have the resources which are required to perform its duties;
(c) have full and unrestricted access to any information and personnel pertaining to the Group;
(d) have direct communication channels with the external and internal auditors; and
(e) to obtain independent professional advice as necessary.

Responsibilities and duties

In fulfilling its primary objectives, the AC shall undertake the following responsibilities and duties:

• Review and discuss with the external auditors of the following:

(a) the audit plan (including the nature and scope of audit and to ensure co-ordination of audit where more than one
audit firm is involved), prior to the commencement of audit;
(b) their audit report;
(c) their evaluation of the system of internal controls;
(d) problems and reservations arising from the interim and final external audits, and any matters the external auditors may
wish to discuss (in the absence of management, where necessary); and
(e) their management letter and management’s response.

• Review the quarterly results and year end financial statements, prior to submission to the Board for approval, focusing
particularly on:
(a) going concern assumptions;
(b) changes in or implementation of major accounting policy changes;
(c) major judgemental areas, significant and unusual events; and
(d) compliance with accounting standards, regulatory and other legal requirements.

• Review any related party transaction and conflict of interest situation that may arise within the Company or the Group,
including any transaction, procedure or course of conduct that raises questions of management integrity, and to ensure
that the Directors report such transactions annually to the shareholders vide the annual report.

• Review the following in respect of internal auditors:

(a) adequacy of the scope and plan, functions and resources of the internal audit function and that it has the necessary
authority to carry out its work;
(b) internal audit programme, processes and results of the internal audit programme, processes or investigation, and
ensure that appropriate actions are taken on the recommendations of the internal audit function;
(c) effectiveness of the system of internal controls;

Annual Report 2003 31

 TERMS OF R E F E R E N C E O F T H E A U D I T C O M M I T T E E (CONT’D)

(d) major findings of internal audit investigations and management’s response;

(e) review any appraisal or assessment of the performance of the staff of the internal audit function;
(f ) approve any appointment or termination of senior staff member of the internal audit function; and
(g) note resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his/
her reason for resignation.

• Consider and recommend the nomination and appointment, the audit fee and any questions of resignation, dismissal or
re-appointment of the external auditors.

• Report promptly to the Bursa Malaysia on any matter reported by it to the Board of Directors which has not been
satisfactorily resolved resulting in the breach of the Listing Requirements.

• Review all prospective financial information provided to the regulators and/or the public.

• Prepare reports, if the circumstances arise or at least once a year, to the Board summarising the work performed in fulfilling
the AC’s primary responsibilities.

• Act on any matters as may be directed by the Board.

Annual Report 2003 32

CHAIRMAN’S S T A T E M E N T

Annual Report 2003 33

 CHAIRMAN’S S T A T E M E N T

It is my pleasure, on behalf of the Board of Directors, to present to you the Annual Report and Audited Financial Statements
of the Group and of the Company for financial year ended 31 December 2003.

The year under review witnessed the occurrence of several events which adversely affected the global business climate. The Iraq
War, acts of terrorism and the SARS epidemic have all exerted a collective toll on many business sectors. Despite all the
unhelpful happenings, our Group has performed reasonably well.

Financial Results
For the year under review, Group revenue reached a new high of RM532.2 million, a growth of 31% over the previous year.
Pre-tax profit was RM184.4 million, a 61% increase from RM114.5 million recorded in the previous year. This takes into
account the gain from the disposal of IJM Corporation Berhad (“IJM”) to Tronoh Mines Malaysia Berhad (“TMMB”). If we
exclude the gain, pre-tax profit was RM105.3 million, up 3% from the previous year’s RM102.2 million.

Dividends
I am pleased to announce that the Board of Directors is pleased to recommend a final dividend of 5%, comprising 3% less tax
and 2% tax exempt. Together with the interim dividend of 5% less tax paid earlier in the year, the total dividend paid for the
year stands at 10%.

Corporate Developments
In June 2002, the Company entered into negotiations with TMMB to acquire the Group’s entire 19.58% stake in IJM. On 30
September 2003, the deal was finally completed.

On 12 November 2003, the Company entered into a tripartite agreement with Amtek Engineering Ltd (“Amtek”) and Kris
Components Bhd (“Kris”) whereby IGB will acquire Kris from Amtek and dispose of Mid Valley City Sdn Bhd (“MVC”),
owner of Mid Valley Megamall, to Kris and Kris in turn, dispose of its assets to Amtek except cash. The move will enable IGB
to unlock the value of its investment in MVC whilst still keeping it within the Group. At the same time, shareholders’ value
will be enhanced with the injection of our property investment business in the retail sector into a listed vehicle.

Operational Highlights
Property development, one of the key contributors to Group revenue, continued to be relatively active with the launch of three
more residential projects ie, Tanamera, Seri Maya Phase 3 and MeadowBank Villas. And through Tan & Tan Developments
Berhad, we entered into a joint-venture with Landmarks Berhad for a residential development in the popular Wangsa Maju
township in Kuala Lumpur. The year started on a low note for hotels in light of the SARS epidemic. However, quick remedial
action and sheer hardwork saw a pick-up in the latter half. Mid Valley Megamall celebrated its fifth anniversary in the face of
growing competition from several new mega retail developments in the Klang Valley. Despite this, Mid Valley Megamall
continued to record commendable rental returns and enjoy high levels of patronage. For asset management and construction,
both divisions registered positive growth.

Prospects
Rising consumer and business confidence, stronger economic fundamentals and the excellent performance of the Barisan
Nasional in the General Elections all point to a more positive year for the country and for business in general.

Annual Report 2003 34

 CHAIRMAN’S S T A T E M E N T (CONT’D)

Prospects (cont’d)

The Group will aim to build on its reputation as one of the leading players in the property sector by continuing to create
innovative lifestyle properties that are increasingly gaining favour with an ever more discerning customer base. We shall also
explore all opportunities to partner with parties, such as the one with Landmarks Berhad, which provide the synergies that will
ensure outstanding developments.

With work on Mid Valley Phase 2 scheduled to commence in fourth quarter 2004, the challenge remains to maintain its
position as a leading shopping destination for both Klang Valley residents and visitors to the city. This will be achieved by
capitalizing on its ‘City within a City’ concept, location and healthy mix of quality tenants.

After SARS and the bird flu scare in early 2004, worldwide tourism looks to be on the rebound and if there are no more
surprises, the trend is expected to continue for the rest of the year. The Hotels division is poised to take advantage of this
positive climate to increase occupancy whilst exploring new growth markets to expand the MiCasa, SuCasa and Cititel brands.

Although the domestic economic outlook is looking much more positive, the global scenario remains uncertain. However, the
Board is confident that with the Group’s strong fundamentals and astute management, we are well-prepared to take advantage
of business opportunities that will emerge and that the Group’s performance will grow from strength to strength.

Boardroom
Datuk Dr Abdul Samad bin Haji Alias has decided not to seek re-election. We thank him for his contribution to the Group’s
growth during his tenure and wish him success in his future endeavours.

Acknowledgement & Appreciation

Oh behalf of the Board, I wish to express our sincere thanks and appreciation to the management and staff for their hardwork,
support and dedication to the Group during the year, and to our business partners, customers, tenants, financiers and
shareholders for their strong and continued support. I also wish to record my thanks to my fellow Directors for their advice
and support.

TAN SRI ABU TALIB BIN OTHMAN

Chairman
20 April 2004

Annual Report 2003 35

Kiosk at Mid Valley Megamall

Annual Report 2003 36

REVIEW OF O P E R A T I O N S

Annual Report 2003 37

 REVIEW OF O P E R A T I O N S

Dear Shareholders,

Your Company turned in a commendable performance for financial year ended 31 December 2003 with Group revenue at
RM532.2 million, up 31% from RM405.7 million in the previous year and pretax profit rising 61% to RM184.4 million
from RM114.5 million in 2002. The improved results can be attributed to higher contribution by the various business sectors
i.e property development, Mid Valley City, hotels, asset management and construction, as well as an exceptional gain from the
divestment in IJM Corporation Berhad (‘IJM’). For hotels, the business environment was particularly challenging in the first
half of 2003 in light of the SARS outbreak which affected global travel; especially in the Asia region and in turn, the hospitality
industry across the board.

On the corporate front, we are pleased to finally conclude the divestment of IJM to Tronoh Mines Malaysia Berhad for
RM382.5 million on 30 September 2003. At the same time, we are very excited about the agreement with Amtek Engineering
Ltd (‘Amtek’) and Kris Components Bhd (‘Kris’) as its conclusion, which we hope will take place by the middle of 2004, will
take us a step closer to becoming a development and holding company focused on development with key assets which generate
recurring income under a separate entity that is still part of the Group.

A summary of the divisions’ performance follows:

PROPERTY DEVELOPMENT

The property development division expanded its portfolio with the setting up of a joint-venture company with Landmarks
Berhad, through Tan & Tan Developments Berhad, to develop an urban residential estate in Wangsa Maju, Selangor Darul
Ehsan. Considered one of the most attractive parcels in the area, the 129.7 acre site is ideal for a development of low-density
homes and will offer a new lifestyle option to Klang Valley residents. The combined experience and creativity of two
award-winning property lifestyle developers will ensure an outstanding project which future residents, the city and Malaysia
can be proud of. To be developed over an 8 to 10-year period, the project is scheduled to be launched in end 2004.

Three projects went on the market during the year. Tanamera, a small gated enclave of 146 townhouses and semi-detached
homes located in Subang Jaya, recorded 85% in sales within the first month of launch. The other projects were Seri Maya
Phase 3 located in Jalan Jelatek, with 437 ‘Havanna’ condominium units and the final phase of Sri Bukit Persekutuan
consisting of 24 ‘MeadowBank Villas’ bungalows priced from RM3.2 million to RM5 million each. At the time of reporting,
15 units have been sold at RM54.0 million.

Three developments were also completed during the financial year 2003. These were Desa Damansara Phase 2 condominium,
201 terraced houses at Kundang Jaya, and 330 starter homes in Eka Matahari, Negeri Sembilan.

The Group ended the year with another feather to its cap when the Company was nominated the top property developer in
2003 by The Edge business weekly.

Annual Report 2003 38

 REVIEW OF O P E R A T I O N S (CONT’D)

MID VALLEY CITY

Mid Valley City continues to optimize opportunities for growth and the planning construction of new components are in blue
print stage.

The original vision of creating an alternative commercial hub to the traditional city centre districts is still very much the centre
of our focus and the continuing success of the existing developments within Mid Valley City looks very positive in the near
future.

Retail
Mid Valley Megamall (‘Megamall’) continues to enjoy the support and patronage of our retail partners and an increasing
number of customers year on year.

2003 was another benchmark year with substantial increases in the patronage and the gross turnover of the Megamall.

Our commitment to the long term success of the Megamall is reflected in the ongoing improvements to the environment, to
the tenant mix and the maintenance of an aggressive marketing programme in excess of 12 major promotions a year.

Planning for the second retail component to the city has commenced.

Traffic Infrastructure
Major improvements to the traffic infrastructure are underway to reduce the inconvenience to the inhabitants and the visitors
to the city.

A new carpark building on parcel 3 will house 1,000 cars and will be commissioned in 2004. In conjunction with the new
ingresses and egresses to the city, planned reductions to the waiting times to enter and exit the city are expected.

Public transportation facilities will be significantly enhanced with the construction of a dedicated public bus terminal and the
commissioning of a new KTM Commuter halt adjacent to the North Entrance to the Megamall.

Offices
Existing office spaces within the city are enjoying occupancy rates in excess of the Klang Valley average. Construction of an
additional 495,000 sq. ft. of offices on parcel 4 is underway and is scheduled for completion in 2005.

Hospitality
In addition to the existing Cititel Mid Valley which continues to perform above expectation, 2 new modules are under
construction, a 4-star, 380 room business and leisure hotel and a 480,000 sq. ft. serviced apartment complex with 220 keys.
Both developments are expected to be completed in 2005.

Annual Report 2003 39

 REVIEW OF O P E R A T I O N S (CONT’D)

HOTELS

As mentioned earlier, the SARS outbreak impacted significantly on the international travel with hospitality industry in the
Asian region bearing the brunt with hotel occupancies dropping to the low ‘teens’ in April and May.

The 11 properties under the hotels division namely, Renaissance Kuala Lumpur Hotel, New World Hotel Saigon, MiCasa
Hotel Apartments Kuala Lumpur, MiCasa Hotel Apartments Phnom Penh, MiCasa Hotel Apartments Yangon, SuCasa
Service Apartments Kuala Lumpur, Stanford Kuala Lumpur, Cititel Mid Valley Kuala Lumpur, Pangkor Island Beach Resort,
St Giles London and St Giles Heathrow, did not come out unscathed. However, appropriate measures taken to contain
overheads and expenses and to ensure customer services were not affected proved effective resulting in a gradual recovery in the
second half to turn in slightly below budget performances.

Besides SARS, the two UK properties were affected by London’s micro economy, the Iraq war, terrorism threats and exchange
rate fluctuations. The decline of the US dollar against the British pound further suppressed US and Australia visitor arrivals.
On the plus side, the rising Euro made the UK more affordable for EU visitors and thus enabled us to increase our share of the
European market by 6%. The market also became more competitive in light of increased capacity and the opening of new
hotels in London’s Docklands. Occupancy surpluses that traditionally overflowed into the Heathrow area are now moving to
the Docklands instead.

Our Asia-based properties will continue with the cost containment exercise undertaken during SARS and barring any
unforeseen or adverse circumstances, should be back on track to record more favourable results in the coming year. The
strategy for our London hotels will be to focus on sales to the domestic and European markets and to maintain the high
customer service levels consumers have come to expect from the St Giles group.

ASSET MANAGEMENT

Given the soft commercial property market, the division turned in a commendable performance with 100% occupancy for the
26-storey Menara IGB and 90% for Menara Tan & Tan.

We also continued to explore avenues to achieve higher occupancy for Ampwalk, the shopping-cum-office complex on Jalan
Ampang’s Embassy Row, and Plaza Permata on Jalan Kampar.

CONSTRUCTION

The construction activities of the Group are spearheaded by wholly-owned subsidiary, Ensignia Construction Sdn Bhd
(‘Ensignia’).

The year under review saw the successful completion of in-house development, Desa Damansara Phase 2 condominium, and
two external clients; the College of Allied Health Sciences at Sungei Buloh Hospital and Jusco Shopping Centre in Permas
Jaya, Johor Bahru. The Jusco project was completed in a record four months.

Ensignia’s order book, which stood at RM430 million as at 31 December 2003, continues to grow reflecting an increase
in property projects within the Group and the confidence of clients such as Jaya Jusco Stores Berhad in the company’s
capabilities.

Annual Report 2003 40

 REVIEW OF O P E R A T I O N S (CONT’D)

MANPOWER DEVELOPMENT

Without doubt, the Group’s success can be attributed to a staff force who has worked diligently and unselfishly to ensure their
work ethics and quality is of the highest standards. For this reason, the Company continues to allocate a significant portion of
its resources towards ensuring the on-going upgrading of skills and competencies at all levels.

Numerous training programmes, both in-house and external, were undertaken during the year with the primary objective
being to strengthen customer service levels, communication abilities and enhance teamwork throughout the organisation.
The success of our human resource development efforts is seen in the Group’s ability to achieve; and in some cases, surpass, its
overall financial and corporate targets.

In an endeavour to create an environment for greater and clearer communication, two Toastmaster clubs were initiated for
interested staff to hone their public speaking and inter-communication skills. The clubs are run by senior management staff
while costs for venue and fees, as levied by the international body, are taken care of by the Company.

We are also cognisant of our responsibility to the communities in which we operate. Our annual scholarship award
programme provides financial and mentoring support to poor students throughout the country, to help them towards
a tertiary education. Every sponsored candidate is appointed a mentor so the student enjoys continuous support; at the
educational and practical training levels. Graduating students in turn, are offered permanent employment placement within
the Group.

The coming year will see the Group continue its focus on developing and enhancing the skills of our people, both to harness
their energy and talents towards achieving our long-term goals and to ensure we care for, and retain, our best assets.

MOVING FORWARD

As the outlook brightens for the country as a whole, it is hoped the government will maintain the current housing incentives
to enable the property industry to sustain its growth momentum. All these, coupled with an increasing receptiveness to good
lifestyle concepts and popularity of gated and guarded community developments bode well for the property development
division, which will remain a key contributor to the Group. The biggest challenge will be to manage the escalating costs of
building materials and shortage of selected materials to ensure minimal impact on existing and future projects.

Barring any unforeseen circumstances, the tripartite agreement with Amtek and Kris should be completed by mid-2004. The
deal will enable IGB to unlock the fair value of its investment in Mid Valley City Sdn Bhd (‘MVC’) whilst still maintaining it
within the Group, thereby enhancing shareholders’ value through the injection of MVC into a listed vehicle. MVC’s eventual
public-listed status will also provide the Malaysian public the opportunity to invest in a company with a steady dividend
stream and to participate in the Megamall’s continuing success as one of the country’s premier shopping destinations. Without
doubt, the Company’s vision for Mid Valley City and commitment to its development will ensure its continued contribution
to the Group’s long-term growth.

Annual Report 2003 41

 REVIEW OF O P E R A T I O N S (CONT’D)

CONCLUSION

I would like to express my thanks to the management and staff for their continued dedication and commitment to the
delivery of quality products and services in the respective business areas. To my fellow Board members, especially Datuk Dr
Abdul Samad who has decided not to seek re-election, your wise counsel and support is much appreciated.

ROBERT TAN CHUNG MENG

Managing Director
20 April 2004

Annual Report 2003 42

STATEMENT ON C O R P O R A T E G O V E R N A N C E

Annual Report 2003 43

 STATEMENT ON C O R P O R A T E G O V E R N A N C E

The Board of Directors (‘Board’) is pleased to report on the application by the Company of the principles contained in the
Malaysian Code of Corporate Governance (‘Code’) and the extent of compliance with the best practices of the Code as
required under Bursa Malaysia Listing Requirements (‘Listing Requirements’). These principles and best practices have been
applied throughout the year ended 31 December 2003 and are regularly audited and reviewed to ensure transparency and
accountability. The only area of non-compliance with the Code is the recommended disclosure of details of the remuneration
of each director. Details of the Directors’ remuneration are set out by applicable bands of RM50,000, which complies with
the disclosure requirements under the Listing Requirements. The Board is of the view that the transparency and accountability
aspects of corporate governance as applicable to Directors’ remuneration are appropriately served by the band disclosure made.

THE BOARD

(a) Board responsibility

The Board has always recognized the need for good corporate governance to protect and enhance long term
shareholder value and the financial performance of the Company. An indication of the Board’s commitment is
reflected in the conduct of regular Board meetings and the incorporation of various processes and systems as well as
the establishment of relevant committees which also meet regularly.

(b) Board balance

The Board, led by an independent non-executive Chairman, has twelve members, comprising nine non-executive
Directors and three executive Directors, with four of the nine non-executive Directors being independent Directors.
The Board comprises of an appropriate balance of non-executive and executive Directors with diverse experience and
expertise required for the effective stewardship of the Company and independence in decision making at Board level.
A brief description on the background of each Director is presented in the Profile of the Board of Directors.

The roles of the Chairman of the Board and the Managing Director are distinct and separated with responsibilities
clearly defined to ensure a balance of power and authority. Generally, the Chairman of the Board is responsible for
ensuring Board effectiveness and conduct, whilst the Managing Director oversees the day-to-day management of the
Group and together with the executive Directors ensure that strategies, policies and matters approved by the Board
and/or the Exco are effectively implemented.

The presence of independent non-executive Directors fulfils a pivotal role in corporate accountability. Essentially,
independent non-executive Directors provide unbiased and independent views, advice and judgement in the decision
making process. As and when a potential conflict of interest arises, the Director concerned would declare his interest
and abstain from the decision-making process.

Dato’ Seri Khalid Ahmad bin Sulaiman has been appointed by the Board as the senior independent non-executive
Director of the Board to whom any concerns may be conveyed.

Annual Report 2003 44

 STATEMENT ON C O R P O R A T E G O V E R N A N C E (CONT’D)

(c) Board Meetings

The Board meets on a scheduled basis once every quarter with additional meetings held as and when urgent issues and
important decisions are required to be taken between the scheduled meetings.

The agenda for each Board meeting, together with detailed reports on operational, financial and corporate
developments as well as minutes of meetings of the Board Committees, and any proposition paper to be tabled at
the meeting, are circulated to the Directors for their perusal well in advance of the Board meeting date. Senior
management staff may be invited to attend the Board meetings to provide the Board with detailed explanations and
clarifications on certain matters that are tabled to the Board.

The Board met four (4) times during the financial year ended 31 December 2003. Details of each Director’s
attendance of the Board meetings are disclosed under their respective sections in the Profile of the Board of Directors.

In addition to the quarterly Board papers, the Board is also notified of any corporate announcements released to
Bursa Malaysia and the impending restriction in dealing with the securities of the Company at least one month prior
to release of the quarterly financial results announcement. The Board is also kept informed of the various requirements
and updates issued by the various regulatory authorities.

The Directors have full access to senior management and the services of the Company Secretaries to enable them
to discharge their duties. The Directors may also seek independent professional advice, where necessary, in the
furtherance of their duties at the Group’s expense.

(d) Directors’ Training

All members of the Board have attended and successfully completed the Mandatory Accreditation Programme
conducted by the Research Institute of Investment Analysts Malaysia. The Directors will continue to attend
Continuing Education Programme (‘CEP’), to ensure that they obtain a minimum of 72 CEP points by 31 December
2004, or in accordance with any subsequent deadline imposed by Bursa Malaysia. Directors are also encouraged to
attend continuous education programmes and seminars to further enhance their skills and knowledge where relevant.

(e) Re-election of Directors

In accordance with the Company’s Articles of Association (‘Articles’), Directors who are appointed by the Board are
subject to election by shareholders at the first opportunity after their appointment. The Articles also provide that at
least one-third of the remaining Directors be subject to re-election by rotation at each Annual General Meeting
(‘AGM’) provided always that all Directors retire from office at least once every three years but shall be eligible
for re-election.

Details of directors seeking re-election at the forthcoming AGM are disclosed in the Statement Accompanying
Notice of AGM.

DIRECTORS’ REMUNERATION

The Company has adopted the objective as recommended by the Code to determine the remuneration of the Directors so as
to ensure that the Company attracts and retains the Directors needed to run the Group efficiently. The component parts of
their remuneration are structured so as to link rewards to corporate and individual performance in the case of executive

Annual Report 2003 45

 STATEMENT ON C O R P O R A T E G O V E R N A N C E (CONT’D)

Directors. In the case of non-executive Directors, the level of remuneration reflects the experience and responsibilities
undertaken by the individual non-executive Director concerned.

The Remuneration Committee reviews annually and recommends to the Board, the Company’s remuneration policy for
executive Directors to ensure that the executive Directors are rewarded appropriately for their contributions to the Company’s
growth and profitability. The non-executive Directors’ remuneration will be a matter to be decided by the Board as a whole
with the Director concerned abstaining from deliberations and voting on decisions in respect of his individual remuneration.
Generally, the non-executive Chairman is paid a monthly allowance while the non-executive Directors are paid annual fees
and attendance allowance for each meeting that they attend.

The aggregate remuneration of Directors categorized into appropriate components as at 31 December 2003 are as follows:

* ** ***
In RM Salaries Fees Other Emoluments Benefits-in-kind Total
Executive Directors 1,029,000 - 459,237 30,042 1,518,279
Non-Executive Directors 84,000 98,990 - 5,460 188,450

* Fees include: annual fees and meeting allowances

** Other Emoluments include: bonuses, incentives, retirement benefits, provisions for leave and allowances.
*** Benefits-in-kind include: rental payments, motor vehicle, club membership and personal expenses.

The aggregate remuneration of Directors analyzed into bands as at 31 December 2003 are as follows:

Range of Remuneration Executive Non-Executive

Below RM50,000 9
RM50,001 to RM100,000
RM100,001 to RM150,000 1 1
RM150,001 to RM200,000 2
RM200,001 to RM250,000
RM250,001 to RM300,000
RM300,001 to RM350,000 1
RM350,001 to RM400,000
RM400,001 to RM450,000
RM450,001 to RM500,000
RM500,001 to RM550,000
RM550,001 to RM600,000
RM600,001 to RM650,000
RM650,001 to RM700,000
RM700,001 to RM750,000 1

Notes:
1. For security and confidentiality reasons, the details of Directors’ remuneration are not shown with reference to Directors individually.
2. Salaries, Other Emoluments and Benefits-in-kind paid to the executive Directors also include those who had resigned during the financial period under review.
3. Remuneration paid to an alternate Director who is a full time employee of the Group has been placed according to the classification of the principal Director.
4. Annual fees and meeting allowances of the non-executive Directors also include those who had resigned during the financial period under review.

Annual Report 2003 46

 STATEMENT ON C O R P O R A T E G O V E R N A N C E (CONT’D)

THE BOARD COMMITTEES

The following Board Committees have been established to assist the Board in discharging their duties, each of which operate
under clearly defined terms of reference regarding its objectives, duties and responsibilities, authority, meeting and
membership:

(a) Executive Committee (‘Exco’)

The Exco has full authority as delegated by the Board to oversee the conduct of the Group’s core business or existing
investments and to review and/or implement strategic plan for the Group with restricted authority given by way of
limits determined by the Board, and to undertake such function and all matters as may be approved or delegated by
the Board from time to time.

The Exco meets regularly to review the management’s reports on progress of business operations as well as to assess and
approve the management’s proposal that require the Exco’s approval. Special Exco meetings are also held on an ad-hoc
basis to review the Company’s quarterly financial statements, or matters that require the Exco’s approval.

The Exco has held 9 meetings during the period. The members of the Exco during the year, and their attendance at the
meetings, were as follows:

Name of member No. of meetings attended

Tan Boon Seng, Chairman of Exco 9
Robert Tan Chung Meng 9
Tan Boon Lee (appointed on 10 June 2003) 6
Pauline Tan Suat Ming (appointed on 10 June 2003) 6

(b) Audit Committee (‘AC’)

The AC reviews issues of accounting policy and presentation for external financial reporting, monitors the work of the
internal audit function and ensure an objective and professional relationship is maintained with the external auditors.
The AC has full access to the auditors both internally and externally who, in turn, have access at all times to the
Chairman of the AC. The AC meets with the external auditors without any executive present at least once a year.

With an independent component of 75%, the composition of the AC is fully compliant with the Code and the Listing
Requirements, which require the majority of directors on the AC to be independent and that one director is a MIA
member. The AC met 4 times during the financial year ended 31 December 2003.

Full details of the composition, the terms of reference and the activities of the AC during the financial year
ended 31 December 2003 are set out in the Report of the Audit Committee.

(c) Nomination Committee (‘NC’)

The NC recommends suitable candidates for appointments to the Board of the Company, including Committees of
the Board. In addition, the NC assesses the effectiveness of the Board, the Committees of the Board and the
contribution of each individual Director on an annual basis, and reviews succession plans for members of the Board.

Annual Report 2003 47

 STATEMENT ON C O R P O R A T E G O V E R N A N C E (CONT’D)

The NC meets as and when required.

The NC has held only one meeting during the period which was attended by all members except Datuk Dr. Abdul
Samad bin Haji Alias. The members of the NC during the year were as follows:

Name of member
Tan Sri Abu Talib bin Othman, Chairman of NC
Dato’ Seri Khalid Ahmad bin Sulaiman
Datuk Dr. Abdul Samad bin Haji Alias
Pauline Tan Suat Ming (appointed on 10 June 2003)

(d) Remuneration Committee (‘RC’)

The RC recommends to the Board the policy framework on terms of employment of and on all elements of the
remuneration of executive Directors and senior executives of the Company. The RC is authorized to approve the
annual bonus and salary increment of the executive Directors and senior executives of the Company. The RC meets as
and when required.

The RC has held 2 meetings during the period. The members of the RC during the year, and their attendance at the
meetings, were as follows:

Name of member No. of meetings attended

Tan Sri Abu Talib bin Othman, Chairman of RC 2
Datuk Dr. Abdul Samad bin Haji Alias 1
Robert Tan Chung Meng 2

(e) Share & ESOS Committee

The Share & ESOS Committee is responsible for regulating and approving securities transactions and registrations,
and for implementing and administering the ESOS of the Company. The members of the Share & ESOS Committee
during the year were as follows:

Name of member
Tan Boon Seng
Robert Tan Chung Meng
Datuk Dr. Abdul Samad bin Haji Alias

(f ) Risk Management Committee (‘RMC’)

The RMC comprises the members of the Exco with the Managing Director acting as the adviser and the Internal
Audit Department as the risk facilitator. The RMC is authorized by the Board to review and articulate the strategies
and policies relating to the management of the Company risk and ensure that risk policies and procedures are aligned
to the business strategies and risk return directions of the Board and are properly implemented.

Annual Report 2003 48

 STATEMENT ON C O R P O R A T E G O V E R N A N C E (CONT’D)

INVESTORS RELATIONS AND SHAREHOLDERS’ COMMUNICATION

The Board acknowledges the need for shareholders and investors to be well informed of the Group’s performance, corporate
strategy and major developments. In addition to the mandatory reporting and public announcements of the Group’s quarterly
results to Bursa Malaysia, press releases and announcements for public dissemination are made periodically to capture any
significant corporate event or product launch that would be of interest to investors and members of the public.

The AGM of the Company represents the principal forum for dialogue and interaction with shareholders, and the Board
encourages shareholders to raise any questions that they may have in relation to the Company’s financial performance and its
business operations. Directors and the external auditors are available to provide explanations to all shareholders’ queries during
the AGM. Where appropriate, the Chairman will undertake to provide a written answer to any significant question that
cannot be readily answered on the spot. After the conclusion of each AGM, executive Directors and senior management had
all the while voluntarily conduct a question-and-answer session with the press, in addition to the constant dialogues with
analysts, institutional shareholders and investors, to provide constructive communications on any matters concerning the
Group such as its past performance, its results and its intended future performance and other relevant concerns. However, any
information that may be regarded as undisclosed material information about the Group will not be disclosed to any party until
after the prescribed announcement to Bursa Malaysia has been made.

ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

The Directors are responsible for ensuring that financial statements are drawn up in accordance with the provisions of
the Companies Act, 1965 and applicable approved accounting standards in Malaysia. In presenting the financial
statements, the Company has used appropriate accounting policies, consistently applied and supported by reasonable
and prudent judgements and estimates. The Directors also strive to ensure that financial reporting presents a fair and
understandable assessment of the Company’s position and prospects. Quarterly financial statements were reviewed by
the Audit Committee and approved by the Board prior to release to Bursa Malaysia and Securities Commission.

The Statement by Directors made pursuant to Section 169 of the Companies Act, 1965, is set in this Annual Report.

(b) Internal Control

The Board has overall responsibility for maintaining a sound system of internal control to provide reasonable
assurance of effective and efficient operations and compliance with laws and regulations, as well as with the internal
procedures and guidelines.

Information on the Group’s internal control is presented in the Statement of Internal Control.

(c) Relationships with the Auditors

The Board maintains a formal and transparent professional relationship with the auditors, through the AC.

The role of the AC in relation to the internal and external auditors is described in the Report of the
Audit Committee.

This statement is made in accordance with a resolution of the Board of Directors dated 18 March 2004.

Annual Report 2003 49

T h i s p a g e i n t e n t i o n a l l y l e f t b l a n k

Annual Report 2003 50

STATEMENT OF I N T E R N A L C O N T R O L

Annual Report 2003 51

 STATEMENT OF I N T E R N A L C O N T R O L

RESPONSIBILITY

The Board of Directors recognizes the importance of maintaining a sound system of internal control and risk management
practices to safeguard shareholders’ investment and the company’s assets. Therefore, the Board affirms its overall responsibility
for the Group’s approach to assessing risk and the systems of internal control, and for reviewing the adequacy and effectiveness
of the Group’s internal control systems and management information systems, including systems for compliance with
applicable laws, regulations, rules, directives and guidelines. The review covers financial, operational and compliance controls,
and risk management procedures of the Group, except for associates and joint ventures. However, such procedures are
designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and
not absolute assurance against material errors, misstatement, losses or fraud.

The role of executive management is to implement the Board’s policies on risk and control and present assurance on
compliance with these policies. Further independent assurance is provided by an internal audit function, which operates
across the Group, and the external auditors. All employees are accountable for operating within these policies.

RISK ASSESSMENT

The Board has taken steps during the year to implement a formal ongoing process for identifying, evaluating, managing and
reviewing any changes in the risks faced by the businesses in the Group. The Risk Management Committee comprise members
of the Executive Committee with the Managing Director as the advisor.

Group Internal Audit, as the risk facilitator, continue to involve all business and functional units of the Group in identifying
significant risks impacting the achievement of business objectives of the Group. It also involved the assessment of the impact
and likelihood of such risks and of the effectiveness of controls in place to manage them.

Steps are being taken to embed internal control and risk management further into the operations of the business and to deal
with areas of improvement which come to the management’s and the Board’s attention.

INTERNAL CONTROL

Whilst the Board maintains full control and direction over appropriate strategic, financial, organizational and compliance
issues, it has delegated to executive management the implementation of the systems of internal control within an established
framework.

The main elements in the internal control framework include:

• An organizational structure with formally defined lines of responsibility and delegation of authority;
• Established procedures for planning, capital expenditure, information and reporting systems, and for monitoring
the Group’s businesses and their performances;
• Review by operating divisions of their annual operating budgets and capital plans with the relevant executive directors
prior to submission to the Board for approval;
• Quarterly comparison of operating divisions’ actual financial performance with budget;
• Operating policies and procedures which are subject to regular review and improvement;
• Regular reporting of accounting and legal developments to the Board; and
• Appointment of employees of the necessary caliber to fulfill their allotted responsibilities.

Annual Report 2003 52

 STATEMENT OF I N T E R N A L C O N T R O L (CONT’D)

The Internal Audit function, which is centrally controlled, monitors compliance with policies and standards and the
effectiveness of internal control structures across the whole Group. The work of the internal audit function is focused on areas
of priority as identified by risk analysis and in accordance with an annual audit plan approved each year by the Audit
Committee. The head of this function reports to the Audit Committee. The Audit Committee receives a full report on
the function’s work and findings and regular updates on specific issues.

The external auditors are engaged to express an opinion on the financial statements. They review and test the systems of
internal control and the data contained in the financial statements to the extent necessary to express their audit opinion.
Findings arising from the audit are discussed with management and reported to the Audit Committee.

The directors through the Audit Committee have reviewed the effectiveness of the Group’s system of internal control. A
number of minor internal control weaknesses were identified during the period, all of which have been, or are being addressed.
None of the weaknesses have resulted in any material losses, contingencies, or uncertainties that would require disclosure in
the Group’s annual report.

This statement is made in accordance with a resolution of the Board of Directors dated 18 March 2004.

Annual Report 2003 53

T h i s p a g e i n t e n t i o n a l l y l e f t b l a n k

Annual Report 2003 54

ANALYSIS OF SHARE/WARRANT 1999/2004/IRREDEEMABLE
CONVERTIBLE PREFERENCE SHARE 2002/2007
HOLDINGS as at 1 April 2004

Annual Report 2003 55

 ANALYSIS OF S H A R E / W A R R A N T 1 9 9 9 / 2 0 0 4 / I R R E D E E M A B L E
CONVERTIBLE PREFERENCE SHARE 2002/2007 HOLDINGS
as at 1 April 2004

Class of shares : Ordinary Shares of RM0.50 each (‘Shares’)

Voting rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

DISTRIBUTION OF SHAREHOLDINGS

No. of holders Holdings Total holdings %

172 Less than 100 6,415 0.00

4,027 100 - 1,000 2,927,018 0.25
16,052 1,001 - 10,000 64,158,317 5.48
4,146 10,001 - 100,000 102,843,203 8.79
375 100,001 to less than 5% of issued Shares 568,925,450 48.62
3 5% and above of issued Shares 431,307,909 36.86
24,775 TOTAL 1,170,168,312 100.00

THIRTY LARGEST SHAREHOLDERS

(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Shares %

1. Gold IS Berhad 238,807,909 20.41

2. Amanah Raya Nominees (Tempatan) Sdn Bhd 121,500,000 10.38
- Skim Amanah Saham Bumiputera
3. UOBM Nominees (Tempatan) Sdn Bhd 71,000,000 6.07
- UOB Labuan for Gold IS Berhad
4. Employees Provident Fund Board 50,546,925 4.32
5. Permodalan Nasional Berhad 42,571,998 3.64
6. IJM Corporation Berhad 37,102,500 3.17
7. M & A Nominee (Asing) Sdn Bhd 32,382,750 2.77
- Montego Assets Limited
8. Malaysia Nominees (Tempatan) Sendirian Berhad 29,401,300 2.51
- Great Eastern Life Assurance (Malaysia) Berhad
9. Multistock Sdn Bhd 27,000,000 2.31
10. HSBC Nominees (Asing) Sdn Bhd 20,365,500 1.74
- HPBS SG for Kenderlay Ltd
11. UOBM Nominees (Asing) Sdn Bhd 17,970,455 1.54
- United Overseas Bank Nominees (H.K.) Limited for HK 28 Limited
12. Wah Seong (Malaya) Trading Co. Sdn Bhd 17,093,433 1.46
13. Tan Chin Nam Sdn Bhd 15,509,169 1.33
14. Tan Kim Yeow Sdn Bhd 14,962,604 1.28
15. Insas Plaza Sdn Bhd 11,853,250 1.01
16. Tan Chin Nam Sdn Bhd 11,400,000 0.97
17. M & A Nominee (Asing) Sdn Bhd 9,750,000 0.83
- Dawnfield Pte Ltd

Annual Report 2003 56

 ANALYSIS OF S H A R E / W A R R A N T 1 9 9 9 / 2 0 0 4 / I R R E D E E M A B L E
CONVERTIBLE PREFERENCE SHARE 2002/2007 HOLDINGS
a s a t 1 A p r i l 2 0 0 4 (CONT’D)

THIRTY LARGEST SHAREHOLDERS (CONT’D)

(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Shares %

18. Mayban Nominees (Asing) Sdn Bhd 8,425,150 0.72

- DBS Bank for Timbarra Services Limited
19. Citicorp Nominees (Asing) Sdn Bhd 6,777,900 0.58
- GSI for WF Asia Fund Limited
20. Wah Seong Enterprises Sdn Bhd 6,665,642 0.57
21. BBL Nominees (Tempatan) Sdn Bhd 6,355,813 0.54
- Pledged securities account for Dato’ Tan Chin Nam
22. HSBC Nominees (Asing) Sdn Bhd 6,199,000 0.53
- CMBLSA for Invesco GT Asia Enterprise Fund
23. M & A Nominee (Asing) Sdn Bhd 5,838,800 0.50
- Pedigree Limited
24. HSBC Nominees (Asing) Sdn Bhd 5,640,700 0.48
- MSCO NY for Tiedemann Global Emerging Markets L.P.
25. Tentang Emas Sdn Bhd 4,759,750 0.41
26. Scanstell Sdn Bhd 4,056,000 0.35
27. Malaysia Nominees (Tempatan) Sdn Bhd 3,989,200 0.34
- Great Eastern Life Assurance (Malaysia) Berhad
28. Cartaban Nominees (Asing) Sdn Bhd. 3,912,800 0.33
- Investors Bank and Trust Company for Ishares, Inc.
29. Ke-zan Nominees (Tempatan) Sdn Bhd 3,910,000 0.33
- Kim Eng Securities Pte Ltd for Tan Kim Yeow Sdn Bhd
30. HSBC Nominees (Asing) Sdn Bhd 3,360,000 0.29
- Invesco Asia Trust Plc
TOTAL 839,108,548 71.71

SUBSTANTIAL SHAREHOLDERS (as per Register of Substantial Shareholders)

No. of Shares held

Name Direct % Indirect %

1. Gold IS Berhad 309,807,909 26.48 27,000,000 2.31

2. Amanah Raya Nominees (Tempatan) Sdn Bhd 121,500,000 10.38 - -
- Skim Amanah Saham Bumiputera
3. Dato’ Tan Chin Nam 9,742,113 0.83 412,390,340 35.24
4. Robert Tan Chung Meng 1,401,893 0.12 398,276,575 34.04
5. Pauline Tan Suat Ming 158,603 0.01 398,276,575 34.04
6. Tony Tan @ Choon Keat - - 398,276,575 34.04
7. Tan Chin Nam Sdn Bhd 30,987,544 2.65 381,456,096 32.60
8. Tan Kim Yeow Sdn Bhd 19,359,604 1.65 378,916,971 32.38
9. Wah Seong (Malaya) Trading Co. Sdn Bhd 25,096,858 2.14 352,303,238 30.11

Annual Report 2003 57

 ANALYSIS OF S H A R E / W A R R A N T 1 9 9 9 / 2 0 0 4 / I R R E D E E M A B L E
CONVERTIBLE PREFERENCE SHARE 2002/2007 HOLDINGS
as at 1 April 2004

Type of securities : Warrants 1999/2004 (‘Warrants’)

Voting rights : One vote per warrant holder on a show of hands or one vote per warrant on a poll in respect of
meeting of warrant holders

DISTRIBUTION OF WARRANT HOLDINGS

No. of holders Holdings Total holdings %

138 Less than 100 7,614 0.00

643 100 - 1,000 389,105 0.22
4,672 1,001 - 10,000 15,144,438 8.52
848 10,001 - 100,000 25,428,699 14.30
127 100,001 to less than 5% of issued Warrants 81,341,090 45.74
1 5% and above of issued Warrants 55,518,000 31.22
6,429 TOTAL 177,828,946 100.00

THIRTY LARGEST WARRANT HOLDERS

(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Warrants %

1. Gold IS Berhad 55,518,000 31.22

2. IJM Corporation Berhad 7,420,500 4.17
3. HSBC Nominees (Asing) Sdn Bhd 5,500,000 3.09
- MSCOIL for Rize Consultants Limited
4. HSBC Nominees (Asing) Sdn Bhd 3,670,500 2.06
- BNY Brussels for JF Asean Fund
5. Wah Seong (Malaya) Trading Co. Sdn Bhd 3,612,205 2.03
6. HSBC Nominees (Asing) Sdn Bhd 3,543,000 1.99
- HPBS SG for Kenderlay Ltd
7. CIMSEC Nominees (Tempatan) Sdn Bhd 3,111,600 1.75
- CIMB for Khue Yen Lin
8. Mayban Nominees (Asing) Sdn Bhd 3,097,750 1.74
- DBS Bank for Timbarra Services Limited
9. Multistock Sdn Bhd 2,872,900 1.62
10. JF Apex Nominees (Tempatan) Sdn Bhd 2,171,400 1.22
- Pledged securities account for Lim Soo Ming
11. Dato’ Tan Chin Nam 1,924,125 1.08
12. Citicorp Nominees (Asing) Sdn Bhd 1,800,000 1.01
- MLPFS for Arnold Tin Chee
13. Tan Kim Yeow Sdn Bhd 1,753,500 0.99
14. HSBC Nominees (Asing) Sdn Bhd 1,644,000 0.92
- HSBCIT HK for JF Malaysia Fund
15. DB (Malaysia) Nominee (Asing) Sdn Bhd 1,250,000 0.70
- UBS AG Singapore for JKC & Partners Corporation
16. SLW Sdn Bhd 1,180,936 0.66

Annual Report 2003 58

 ANALYSIS OF S H A R E / W A R R A N T 1 9 9 9 / 2 0 0 4 / I R R E D E E M A B L E
CONVERTIBLE PREFERENCE SHARE 2002/2007 HOLDINGS
as at 1 April 2004

THIRTY LARGEST WARRANT HOLDERS (CONT’D)

(without aggregating securities from different securities accounts belonging to the same person)

Name No. of Warrants %

17. Citicorp Nominees (Tempatan) Sdn Bhd 1,083,000 0.61

- Pledged securities account for Susy Ding
18. CIMSEC Nominees (Tempatan) Sdn Bhd 1,050,000 0.59
- CIMB for Yong Poh Kon
19. HSBC Nominees (Tempatan) Sdn Bhd 1,045,000 0.59
- HSBC (M) Trustee Bhd for Prudential Dana Al-Ilham
20. Citicorp Nominees (Tempatan) Sdn Bhd 1,000,000 0.56
- CMS Dresdner Asset Management Sdn Bhd for Malaysian Assurance Alliance Bhd
21. HSBC Nominees (Asing) Sdn Bhd 961,600 0.54
- MSCO NY for Tiedemann Global Emerging Markets L.P.
22. Thong & Kay Hian Nominees (Asing) Sdn Bhd 920,000 0.52
- UOB Kay Hian Pte Ltd for Chuah Chee Leng Gerald
23. Ong Siew Kin 907,000 0.51
24. CIMSEC Nominees (Tempatan) Sdn Bhd 850,000 0.48
- CIMB for Loh Wee Hian
25. Goh Sin Liong 805,000 0.45
26. Wah Seong Enterprises Sdn Bhd 768,421 0.43
27. Tentang Emas Sdn Bhd 707,250 0.40
28. CIMSEC Nominees (Tempatan) Sdn Bhd 700,000 0.39
- CIMB for Foong Choong Heng
29. Low Chu Mooi 664,500 0.37
30. Mayban Nominees (Tempatan) Sdn Bhd 627,100 0.35
- Pledged securities account for Chung Teik Keong
TOTAL 112,159,287 63.07

Type of securities : Irredeemable Convertible Preference Shares 2002/2007 of RM1.00 each (‘ICPS’)
Voting rights : One vote per ICPS holder on a show of hands or one vote per ICPS on a poll in respect of
meeting of ICPS holders

DISTRIBUTION OF ICPS HOLDINGS

No. of holders Holdings Total holdings %

4 Less than 100 201 0.00

3,159 100 - 1,000 2,142,124 1.20
1,278 1,001 - 10,000 4,222,711 2.37
173 10,001 - 100,000 5,380,923 3.01
62 100,001 to less than 5% of issued ICPS 58,096,800 32.56
6 5% and above of issued ICPS 108,602,077 60.86
4,682 TOTAL 178,444,836 100.00

Annual Report 2003 59

 ANALYSIS OF S H A R E / W A R R A N T 1 9 9 9 / 2 0 0 4 / I R R E D E E M A B L E
CONVERTIBLE PREFERENCE SHARE 2002/2007 HOLDINGS
as at 1 April 2004

THIRTY LARGEST ICPS HOLDERS

(without aggregating securities from different securities accounts belonging to the same person)

Name No. of ICPS %

1. Tan Chin Nam Sdn Bhd 25,076,369 14.05

2. Permodalan Nasional Berhad 20,964,500 11.75
3. UOBM Nominees (Asing) Sdn Bhd 19,332,455 10.83
- United Overseas Bank Nominees (H.K.) Limited for HK 28 Limited
4. Gold IS Berhad 18,128,421 10.16
5. Wah Seong (Malaya) Trading Co. Sdn Bhd 12,893,228 7.23
6. Tan Kim Yeow Sdn Bhd 12,207,104 6.84
7. SLW Sdn Bhd 7,511,800 4.21
8. HSBC Nominees (Asing) Sdn Bhd 6,262,000 3.51
- HPBS SG for Kenderlay Ltd
9. Mayban Nominees (Asing) Sdn Bhd 3,044,000 1.71
- DBS Bank for Timbarra Services Limited
10. Insas Plaza Sdn Bhd 3,020,100 1.69
11. Wah Seong Enterprises Sdn Bhd 2,823,535 1.58
12. AMMB Nominees (Tempatan) Sdn Bhd 2,750,000 1.54
- Pledged securities account for Wah Seong (Malaya) Trading Co. Sdn Bhd
13. BBL Nominees (Tempatan) Sdn Bhd 2,735,188 1.53
- Pledged securities account for Dato’ Tan Chin Nam
14. Dato’ Tan Chin Nam 2,170,500 1.22
15. Employees Provident Fund Board 1,736,700 0.97
16. Malaysian National Reinsurance Berhad 1,632,000 0.91
17. Tentang Emas Sdn Bhd 1,223,500 0.69
18. Scanstell Sdn Bhd 1,164,000 0.65
19. BBL Nominees (Tempatan) Sdn Bhd 1,150,000 0.64
- Pledged securities account for Tan Chin Nam Sdn Bhd
20. BBL Nominees (Tempatan) Sdn Bhd 1,000,000 0.56
- Pledged securities account for Wah Seong (Malaya) Trading Co. Sdn Bhd
21. Ke-zan Nominees (Asing) Sdn Bhd 966,500 0.54
- Kim Eng Securities Pte Ltd for S P I Pte Ltd
22. Dasar Mutiara (M) Sdn Bhd 965,793 0.54
23. Mayban Nominees (Tempatan) Sdn Bhd 954,800 0.54
- Mayban Trustees Berhad for Balanced Returns Fund
24. Wah Seong Enterprises Sdn Bhd 951,500 0.53
25. Mayban Nominees (Tempatan) Sdn Bhd 900,000 0.50
- Pledged securities account for Wah Seong (Malaya) Trading Co. Sdn Bhd
26 Pauline Tan Suat Ming 846,316 0.47
27. Tan Boon Lee 834,328 0.47
28. Tan Lei Cheng 752,953 0.42
29. Multistock Sdn Bhd 729,100 0.41
30. Derek Homes Sdn Bhd 681,000 0.38
TOTAL 155,407,690 87.09

Annual Report 2003 60

LIST OF PROPERTIES

Annual Report 2003 61

 LIST OF PROPERTIES held by IGB Corporation Berhad Group as at 31 December 2003

Location Tenure Year Age of Titled Description/ Date of Net Book

Lease Building Hectareage Existing use Acquisition/ Value
Expiring (Years) Revaluation* RM’000

Commercial Properties

No. 6 Jalan Kampar Freehold - 20 1.99 25-storey office 31-1-2002 37,349

50400 Kuala Lumpur building known as
Plaza Permata

P.T. 1 Sec 44 Kuala Lumpur Leasehold 2073 - 0.30 Land for future 31-1-2002 7,632
development

Mid Valley City - - 4 - 629-room Business 31-1-2002 50,035

Lingkaran Syed Putra Class Hotel known as
Kuala Lumpur Cititel Mid Valley

Mid Valley City - - 4 1.97 17-levels office 31-1-2002 44,088

Lingkaran Syed Putra building known as
Kuala Lumpur Menara IGB

Lot Nos. 3577 to 3580, 3588, Freehold - 18 45.14 250-room hotel 31-1-2002 91,426
3590, 3592, 3593, 3599 to known as “Pangkor
3604, 3726, 3727, 3740, Island Beach Resort”
3594, 3741, 3744 to 3748,
3760, 3761, 3939, 3731,
3566, 354 & 355
Mukim Lumut,
Pangkor Island

Lot Nos. 34, 19, 21, 23 & 25, Freehold - - 3.19 Part of land currently
3978, 24, 25, 26, 2377, 37 under development at
& 38 Kuala Lumpur Mid Valley City

Lot Nos. 40 & 302 Leasehold 2085 - 15.53 Part of land currently
Kuala Lumpur under development at
Mid Valley City

Lot No. 200 Kuala Lumpur Leasehold 2024 - 0.30 Part of land currently
under development at
Mid Valley City

Lot Nos. PT10, PT9, PT20, Leasehold 2099 - 0.85 Part of land currently
PT 46, PT45, PT43, PT44 under development at
Kuala Lumpur Mid Valley City

A. The above 19.87 hectares of land in Mid Valley City is being developed into the following :

Gross built-up
Area (sf )

i) Development rights for 5 office towers with built up area of (1.11m sf ) 1,106,498
ii) Parcel 2 vacant commercial land for future development (5.05m sf ) 5,052,501
iii) Parcel 3 vacant commercial land for future development (1.68m sf ) 1,685,714 251,523,684
iv) Parcel 4 vacant land for residential development (1.37m sf ) 1,374,993

B. Mid Valley Megamall 5,422,606 1,480,000,000

C. Unsold Signature Office 2,024 343,425
1,731,867,109

Annual Report 2003 62

 LIST OF PROPERTIES held by IGB Corporation Berhad Group as at 31 December 2003

(CONT’D)

Location Tenure Year Age of Titled Description/ Date of Net Book

Lease Building Hectareage Existing use Acquisition/ Value
Expiring (Years) Revaluation* RM’000

Micasa Hotel Apartments Freehold - 14 1.39 245-room hotel 31-1-2002 100,000

386 Jalan Tun Razak apartments
Kuala Lumpur

Menara Tan & Tan Freehold - 10 0.45 Office building of 31-1-2002 95,469
207 Jalan Tun Razak 350,000 sq ft lettable
Kuala Lumpur area

Stanford Hotel Freehold - 10 0.11 145-room 3-star hotel 31-1-2002 33,000

Jalan Tuanku Abdul Rahman with 4-level shopping
Kuala Lumpur podium of 41,338 sq
ft lettable area

MiCasa Hotel Apartments 30 years 2026 4 0.78 143-units 6-storey 31-1-2002 43,803
17 Kaba Aye Pagoda Road leasehold hotel apartment, with
Yangon hotel facilities and
offices

Residential Properties

PN 1765 Lot 123 Sec 44 Leasehold 2074 - 0.40 Land for future 31-1-2002 18,835
Kuala Lumpur development

Grant 26068 Lot 15 Sec 88A Freehold - - 0.19 Land for future 31-1-2002 3,817
Kuala Lumpur development

Grant 27066 Lot 16 Sec 88A Freehold - - 0.19 Land for future -31-1-2002 2,573
Kuala Lumpur development

Grant 45542 Lot 53591 Freehold - - 1.42 Land currently under 31-1-2002 5,160
Mukim & District of development into
Kuala Lumpur 132 units of luxury
(formerly known as Lot 4815) condominiums

CT 16118 Lot No. 40 Freehold - - 0.15 Land for future 31-1-2002 879
Sec 88A Kuala Lumpur development

PT 290 Mukim Morib, Selangor Leasehold 2094 - 8.09 Land for future 31-1-2002 1,447
development

Lot Nos. 1529, 1743 & 3484 Freehold - - 25.54 Land for future 31-1-2002 1,491
Mukim Rawang, Selangor development

6 Jalan Stonor Freehold - 44 0.58 Land for future 31-1-2002 9,139

Kuala Lumpur development

3 Lorong Stonor Freehold - 34 0.32 Bungalow 31-1-2002 4,053

Kuala Lumpur

15 & 17 Jalan Damai Freehold - - 1.28 Residential 31-1-2002 2,413

Kuala Lumpur development

31 & 33 Jalan Damai Freehold - 34 0.22 Residential 31-1-2002 4,591

Kuala Lumpur development

Annual Report 2003 63

LIST OF PROPERTIES held by IGB Corporation Berhad Group as at 31 December 2003

(CONT’D)

Location Tenure Year Age of Titled Description/ Date of Net Book

Lease Building Hectareage Existing use Acquisition/ Value
Expiring (Years) Revaluation* RM’000

1 Lorong Damai Kiri 13 Freehold - 34 0.21 Bungalow 31-1-2002 1,485

Kuala Lumpur

Lots 760, 4006 & 4104 Freehold - - 1.80 Residential 31-1-2002 17,090
Mukim of Kuala Lumpur development
Wilayah Persekutuan
(Kenny Vale)

Lots 7190 & 7191 Freehold - - 6.78 Residential 31-1-2002 23,657

Mukim of Petaling development
Selangor (Bukit Belimbing)

PT 164 HS(D) 183870 & Freehold - - 7.58 Mixed development 31-1-2002 8,478
PT165 HS(D) 183871
Mukim of Damansara
Selangor (Shah Alam)

20, 20A, 20B & 20C Freehold - 19 0.41 Linked houses 31-1-2002 9,232
Jalan Ampang Hilir
Kuala Lumpur

85 Jalan Ampang Hilir Freehold - 24 0.22 Bungalow 31-1-2002 4,330

Kuala Lumpur

Lots 1054, 1384,4068 and Freehold - - 6.56 Mixed development 31-1-2002 86,802
part of lots 1059 and and the
adjoining lots 429 and 4068
along Jalan Jelatek Mukim
Hulu Klang, Daerah Gombak,
Selangor

PT 61 Mukim of Tanah Rata Leasehold 2074 - 0.81 Land for future 31-1-2002 505
Cameron Highlands development

PT 899K Freehold - - 4.23 Beach frontage land 31-1-2002 4,212

Mukim of Chendering for future development
District of Kuala Terengganu

Lot 704 Mukim Si Rusa Freehold - - 1.62 Beach frontage land 31-1-2002 1,013
Port Dickson for future development

Lot 1025 Mukim Si Rusa Freehold - - 1.03 Beach frontage land 31-1-2002 915
District of Port Dickson for future development

Lots 378 & 1611 Freehold - - 10.46 Land for development 31-1-2002 39,043
Mukim Ulu Klang
District of Gombak

HSD 19460 PT4609 Freehold - - 15.27 Residential development 31-1-2002 28,681

HSD 19461 PT4610,
HSD 10462 PT4611
Taman Melawati,
Mukim Setapak,
Daerah Gombak, Selangor

Annual Report 2003 64

 LIST OF PROPERTIES held by IGB Corporation Berhad Group as at 31 December 2003

(CONT’D)

Location Tenure Year Age of Titled Description/ Date of Net Book

Lease Building Hectareage Existing use Acquisition/ Value
Expiring (Years) Revaluation* RM’000

PN 20219 Lot 26413 Leasehold 2089 & 2090 52.48 Residential development 6-3-2003 2,843
Mukim Setapak, District of
Kuala Lumpur
PN 11201 Lot 3538
Mukim of Ulu Kelang, District
of Kuala Lumpur

PT 1865 Mukim Ampang Leasehold 2085 - 1.49 Land for development 31-1-2002 39,070
Daerah Wilayah Persekutuan

Lot 15256 Freehold - - 344.0 Approved mixed 31-1-2002 135,732

Mukim of Labu, District of development for
Seremban, Negeri Sembilan residential and
(JV with Koperasi Peneroka commercial use
-Peneroka Rancangan Felcra
Sendayan Labu Berhad)

Apartments

Desa Kudalari Freehold - 23 - 2 condominium units 31-1-2002 718

3 Lorong Kuda
Kuala Lumpur

Seri Bulan Freehold - 8 - 2 apartment units 31-1-2002 296

Port Dickson

Desa U-Thant Freehold - 14 - 7 condominiums units 31-1-2002 8,631

14 Jalan Taman U-Thant
Kuala Lumpur

A208 First Floor Freehold - 22 0.01 1 apartment unit 31-1-2002 365

Tanjung Biru Condominium
Port Dickson, Port Dickson

Agricultural Properties

Bentong Hills Freehold - - 266.43 Approved mixed 31-1-2002 5,259

Mukim of Tras development for orchard
District of Raub, Pahang and commercial use

Lot 365 Freehold - - 3.58 Land for future 31-1-2002 920

Mukim of Pasir Panjang development
District of Port Dickson

Lots L.O. 1218-60, 153, 154, Freehold - - 32.78 Land for future 31-1-2002 913
1217-60, 156-160 development
Mukim of Tras
District of Raub, Pahang

Annual Report 2003 65

T h i s p a g e i n t e n t i o n a l l y l e f t b l a n k

Annual Report 2003 66

5 YEARS G R O U P F I N A N C I A L H I G H L I G H T S

Annual Report 2003 67

 5 YEARS G R O U P F I N A N C I A L H I G H L I G H T S

1999 2000 2001 2002 2003

REVENUE RM ‘000 131,068 312,505 199,880 405,689 532,166

PROFIT BEFORE TAXATION RM ‘000 32,309 45,951 61,926 114,493 184,358

EARNINGS FOR THE YEAR RM ‘000 39,639 16,185 47,815 67,685 147,533

ISSUED SHARE CAPITAL (RM0.50) RM ‘000 296,397 296,977 296,995 572,074 581,805

SHAREHOLDERS’ FUNDS * RM ‘000 1,250,084 1,261,051 1,292,944 1,941,821 2,098,803

TOTAL ASSETS RM ‘000 2,244,467 2,072,933 2,101,911 3,262,457 3,228,158

EARNINGS PER SHARE (Basic) * sen 4.1 1.7 4.9 6.2 12.9

NET TANGIBLE ASSETS PER SHARE RM 2.1 2.1 2.1 1.7 1.8

GROSS DIVIDENDS PER SHARE sen 1.0 2.5 2.5 1.5 5.0

DIVIDEND RATE % 2.0 5.0 5.0 3.0 10.0

* Comparative earnings for the year and shareholders’ funds have been restated to comply with the requirements of
MASB 25 as disclosed in note 34 to the financial statements.

Annual Report 2003 68

REPORT AND FINANCIAL STATEMENTS

Annual Report 2003 69

T h i s p a g e i n t e n t i o n a l l y l e f t b l a n k

Annual Report 2003 70

 CONTENTS
REPORTS AND FINANCIAL STATEMENTS
M id Valley Megamall

Directors’ report
72 - 79

Financial statements

Income statements
80

Balance sheets
81 - 82

Consolidated statement of changes in equity

83 - 84

Company statement of changes in equity

85 - 86

Cash flow statements

87 - 88

Notes to the financial statements

89 - 137

Statement by Directors
138

Statutory Declaration
139

Report of the auditors

to the members
140 - 141

Annual Report 2003 71

 DIRECTORS’ REPORT for the financial year ended 31 December 2003

The Directors have pleasure in submitting their report to the members together with the audited financial statements of the
Group and Company for the financial year ended 31 December 2003.

Principal activities and corporate information

The principal activities of the Company during the financial year are those of investment holding and property development.
The principal activities of the Group mainly consist of property development, property investment, property holding and
property management, hotel operation, construction and investment holding. There have been no significant changes in the
nature of these activities during the financial year.

The number of employees at the end of the financial year amounted to 1678 (2002: 1666) employees in the Group and 149
(2002: 127) employees in the Company.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Board of
Bursa Malaysia.

The address of the registered office of the Company is as follows:

Penthouse, Menara IGB

No. 1, The Boulevard, Mid Valley City
Lingkaran Syed Putra, 59200 Kuala Lumpur

Financial results
Group Company
RM ‘000 RM ‘000

Profit after taxation 142,716 45,605

Minority interests 4,817 0

Net profit for the financial year 147,533 45,605

Dividends

Dividends paid, declared or proposed since the end of the Company’s previous financial year are as follows:
RM ‘000
(a) In respect of the financial year ended 31 December 2002, as shown in the Directors’ report of that
financial year, a final dividend of 3% less tax at 28% paid on 15 July 2003. 12,357

(b) In respect of the financial year ended 31 December 2003, an ICPS 2002/2007 dividend of 1% less
tax at 28% paid on 30 June 2003. 1,285

(c) In respect of the financial year ended 31 December 2003, an interim dividend of 5% less tax at 28%
paid on 12 January 2004. 20,944

(d) In respect of the financial year ended 31 December 2003, a proposed final dividend of 3% less tax
at 28% and 2% tax exempt which, subject to the approval of members at the forthcoming Annual
General Meeting of the Company on 30 May 2004, will be paid on 30 July 2004 to shareholders
registered on the Company’s Register of Members at the close of business on 30 June 2004. 24,203

Annual Report 2003 72

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

Reserves and provisions

All material transfers to or from reserves or provisions during the financial year have been disclosed in the financial statements.

Issue of shares

(a) Ordinary shares of RM0.50 each (‘IGB shares’)

During the financial year, the Company’s issued and fully paid-up share capital was increased from RM572,074,018.50 to
RM581,805,518.50 by way of an issue of 19,463,000 new IGB Shares for cash on the exercise of options pursuant to the
IGB Group Employee Share Option Scheme 2003 at an issue price of RM0.93 each.

The newly issued shares rank pari passu in all respects with the existing issued shares of the Company except that they are not
entitled to any dividends, rights, allotments and/or other distributions unless the allotment of the new IGB Shares is made on
or prior to the entitlement date of such dividends, rights, allotments and/or other distributions.

(b) IGB Group Employee Share Option Scheme 2003 (‘ESOS’)

On 15 August 2003, the Company granted 40,742,000 new ESOS to eligible employees at an exercise price of RM0.93
per share.

The main features of the ESOS are set out in note 11 to the financial statements.

The movements during the financial year in the number of options over the shares of the Company are as follows:

Number of Options
At 1 January 2003 0
Granted 40,742,000
Exercised (19,463,000)
Lapsed (408,000)
At 31 December 2003 20,871,000

The Company has been granted exemption by the Companies Commission of Malaysia vide their letter dated 28 February
2004 from having to disclose the list of option holders and their holdings pursuant to Section 169 (11) of the Companies Act,
1965 except for information of employees who were granted 500,000 options and above.

Other than the Directors’ options disclosed under the Directors’ interest below, the list of employees of the Company and its
subsidiaries who were granted 500,000 options and above under the ESOS is as follows:

Annual Report 2003 73

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

(b) IGB Group Employee Share Option Scheme 2003 (‘ESOS’)(cont’d)

No. of
options
Name granted

Lai Meng 1,000,000

Tan Boon Gark 1,000,000
Tan Eng Wah 1,000,000
Anuar Phauzi bin Abdullah @ Antony Patrick Barragry 500,000
Lau Soon Woh 500,000
Teh Boon Ghee 500,000
Cheah Wing Choong 500,000
Teh Ah Bee 500,000
Timothy Liew Thau Ee 500,000
Chai Lai Sim 500,000
Dato’ Lim Hock Kheng 500,000
Chong Chin Chin 500,000
Chong Kim Chuan @ Chong Leong Cheng 500,000
Shahrin Chin bin Abdullah 500,000

Directors

The Directors in office since the date of the last report are:
Tan Sri Abu Talib bin Othman
Robert Tan Chung Meng
Tan Boon Seng
Dato’ Seri Khalid Ahmad bin Sulaiman
Datuk Dr. Abdul Samad bin Haji Alias
Tan Boon Lee (appointed on 10 June 2003)
Tan Lei Cheng (appointed on 10 June 2003)
Pauline Tan Suat Ming (appointed on 10 June 2003)
Abdul Habib bin Mansur (appointed on 13 June 2003)
Tony Tan @ Choon Keat (appointed on 15 July 2003)
Tan Kai Seng (appointed on 15 July 2003)
Dato’ Haji Megat Muhaiyadin bin Megat Hassan (appointed on 19 September 2003)
Tan Boon Gark (resigned on 30 May 2003)
Lai Meng (resigned on 30 May 2003)
Osman bin Haji Ismail (resigned on 12 September 2003)
Chua Seng Yong (alternate to Robert Tan Chung Meng)

Dr. Abdul Samad bin Haji Alias, the Director retiring pursuant to Article 85 of the Company’s Articles of Association, has
expressed his wish not to stand for re-election at the forthcoming Annual General Meeting.

In accordance with Article 85 of the Company’s Articles of Association, Tan Boon Seng retires by rotation at the forthcoming
Annual General Meeting and, being eligible, offers himself for re-election.

Annual Report 2003 74

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

Directors’ interests

According to the Register of Directors’ Shareholdings, particulars of interests of Directors who held office at the end of the
financial year in shares, Warrants 1999/2004, ICPS 2002/2007 and share options in the Company are as follows:

In the Company Number of Ordinary Shares of RM0.50 each

1 January /
Date of
appointment Addition Disposal 31 December
Tan Sri Abu Talib bin Othman
Direct 250,000 0 0 250,000
Robert Tan Chung Meng
Direct 1,401,893 0 0 1,401,893
Indirect 433,174,400 5,202,800 40,100,625 398,276,575
Tan Boon Seng
Direct 352,110 0 0 352,110
Tan Boon Lee
Direct 844,328 200,000 0 1,044,328
Dato’ Seri Khalid Ahmad bin Sulaiman
Direct 320,181 0 0 320,181
Indirect 187,875 0 0 187,875
Tan Lei Cheng
Direct 835,953 40,000 0 875,953
Indirect 0 965,793 0 965,793
Chua Seng Yong
Direct 232 500,000 50,000 450,232
Pauline Tan Suat Ming
Direct 158,603 0 0 158,603
Indirect 437,261,400 1,115,800 40,100,625 398,276,575
Tony Tan @ Choon Keat
Indirect 437,261,400 1,115,800 40,100,625 398,276,575
Tan Kai Seng
Direct 47,000 0 0 47,000

In the Company Number of Warrants 1999/2004

1 January /
Date of Disposal/
appointment Addition Exercised 31 December
Robert Tan Chung Meng
Direct 234,000 0 0 234,000
Indirect 78,519,237 460,000 8,750,625 70,228,612
Tan Lei Cheng
Direct 57,000 0 0 57,000
Pauline Tan Suat Ming
Direct 83,437 0 0 83,437
Indirect 78,979,237 0 8,750,625 70,228,612
Tony Tan @ Choon Keat
Indirect 78,979,237 0 8,750,625 70,228,612
Tan Kai Seng
Direct 42,000 0 0 42,000

Annual Report 2003 75

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

Directors’ interests (cont’d)

In the Company Number of ICPS 2002/2007

1 January /
Date of
appointment Addition Disposal 31 December
Tan Sri Abu Talib bin Othman
Direct 250,000 0 0 250,000
Robert Tan Chung Meng
Direct 372,893 0 0 372,893
Indirect 55,197,288 1,051,000 0 56,248,288
Tan Boon Seng
Direct 352,110 0 0 352,110
Dato’ Seri Khalid Ahmad bin Sulaiman
Direct 320,181 0 0 320,181
Chua Seng Yong
Direct 232 0 0 232
Tan Boon Lee
Direct 888,328 0 0 888,328
Tan Lei Cheng
Direct 772,953 0 0 772,953
Indirect 0 965,793 0 965,793
Pauline Tan Suat Ming
Direct 87,416 758,900 0 846,316
Indirect 55,593,288 655,000 0 56,248,288
Tony Tan @ Choon Keat
Indirect 55,593,288 655,000 0 56,248,288
Tan Kai Seng
Direct 5,000 0 0 5,000

In the Company Number of options (ESOS) over ordinary shares of RM0.50 each

1 January Granted Exercised 31 December

Robert Tan Chung Meng 0 2,000,000 0 2,000,000
Tan Boon Seng 0 1,000,000 0 1,000,000
Chua Seng Yong 0 500,000 500,000 0

By virtue of Robert Tan Chung Meng’s, Pauline Tan Suat Ming’s and Tony Tan @ Choon Keat’s interests in shares in the
Company, they are deemed to have interest in the shares in the subsidiaries to the extent the Company has an interest.

Other than as disclosed above, none of the other Directors holding office at the end of the financial year held any interests in
the shares, warrants, ICPS 2002/2007 and share options in the Company or its related corporations during the financial year.

Directors’ benefit

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than the fees
and other emoluments paid or payable as disclosed in note 6 to the financial statements) by reason of a contract made by the
Company or by a related corporation with the Director or with a firm of which he is a member, or with a company in which
he has a substantial financial interest, except as disclosed in note 32 to the financial statements.

Annual Report 2003 76

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

Directors’ benefit (cont’d)

Except as disclosed above, neither during nor at the end of the financial year was the Company or any of its related
corporations a party to any arrangement whose object was to enable the Directors of the Company to acquire benefits
by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

Statutory information on the financial statements

Before the income statements and balance sheets were made out, the Directors took reasonable steps:

(a) to ascertain that proper 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 all known bad debts had been written off and that adequate allowance
had been made for doubtful debts; and

(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business
their values as shown in the accounting records of the Group and Company had 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:

(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the
financial statements of the Group and Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and Company
misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and
Company misleading or inappropriate.

No contingent or other liability 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 affect the ability of the Group or
Company to meet their obligations when they fall due.

At the date of this report, there does not exist:

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

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

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 which would render any amount stated in the financial statements misleading.

In the opinion of the Directors:

(a) the results of the Group’s and Company’s operations during the financial year were not substantially affected by any
item, transaction or event of a material and unusual nature except as disclosed in the income statements; and

Annual Report 2003 77

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

Statutory information on the financial statements (cont’d)

(b) 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 to affect substantially the results of the operations of
the Group and Company for the financial year in which this report is made.

Significant events

(a) Disposal of shares and warrants in an associate, IJM Corporation Berhad (‘IJM’)

On 25 September 2003, the disposals of IJM shares and warrants were completed and the full proceeds of RM382
million were received on 30 September 2003.

(b) IGB Group Employee Share Option Scheme 2003 (‘ESOS’)

The ESOS was approved by the shareholders on 30 May 2003. On 15 August 2003, a total of 40,742,000 new
ordinary shares of RM0.50 each under the ESOS were granted to eligible employees at an exercise price of
RM0.93 per share.

(c) Corporate exercise of Mid Valley City Sdn Bhd (‘MVC’)

On 16 October 2003, it was announced to Bursa Malaysia that the Company had on 16 October 2003
signed a tripartite Memorandum of Understanding (‘MOU’) with Amtek Engineering Ltd (‘Amtek’) and
Kris Components Berhad (‘Kris’) whereby the Company shall enter into the following conditional sale and
purchase agreements:

(i) a conditional sale and purchase agreement with Amtek for the Company to acquire 32,805,000 ordinary
shares of RM1.00 each representing approximately 41.84% equity interest in Kris as at the date of the MOU,
from Amtek for a cash consideration of RM91,197,900 or RM2.78 per Kris share (‘Proposed Acquisition’);
and

(ii) a conditional sale and purchase agreement with Kris for the Company to sell and/or procure the sale of
approximately 99.5% equity interest in MVC to Kris for a disposal consideration to be determined and
agreed upon later between the Company and Kris to be satisfied by cash, new Kris shares at an issue price
of RM2.50 per share and/or other new securities to be issued by Kris (‘Proposed Disposal’).

On 12 November 2003, it was announced to Bursa Malaysia that the Company had on 12 November 2003
agreed on the terms of the Proposed Acquisition and the Proposed Disposal and had on the same date entered
into the following conditional sale and purchase agreements:

(i) a conditional sale and purchase agreement with Amtek for the Company to acquire 32,805,000 ordinary
shares of RM1.00 each representing approximately 41.84% equity interest in Kris as at the date of the MOU,
from Amtek for a cash consideration of RM91,197,900 or RM2.78 per Kris share (‘Proposed Acquisition’);

Annual Report 2003 78

 DIRECTORS’ REPORT for the financial year ended 31 December 2003 (cont’d)

(c) Corporate exercise of Mid Valley City Sdn Bhd (‘MVC’) (cont’d)

(ii) a conditional sale and purchase agreement with Kris for the Company to sell 289,045,160 ordinary shares of
RM1.00 each representing approximately 96.35% equity interest in MVC to Kris for a total consideration of
RM992,190,396 to be satisfied by cash of RM98,735,038 and 243,933,623 new Kris shares at an issue price
of RM2.50 per share and 2,836,213 new Kris Redeemable Preference Shares of RM0.10 each (‘Kris RPS’) at
an issue price of RM100.00 per Kris RPS; and

(iii) a conditional sale and purchase agreement with Kris for the Company to sell 9,558,121 ordinary shares
of RM1.00 each in MVC representing approximately 3.19% equity interest in MVC to Kris for a total
consideration of RM32,809,604 to be satisfied by cash of RM3,264,962 and 8,066,377 new Kris shares at an
issue price of RM2.50 per share and 93,787 new Kris RPS at an issue price of RM100.00 per Kris RPS.

The principal conditions precedent to the above Proposals, which are inter-conditional are as follows:

(i) the approvals of the relevant authorities, including among others, the Securities Commission, Foreign
Investment Committee and Ministry of International Trade and Industry, as well as the Bursa Malaysia having
been obtained;

(ii) the approvals from the shareholders of the Company, Kris and Amtek (where applicable) having been
obtained;

(iii) the completion of legal and financial due diligence by the respective parties; and

(iv) any other relevant approvals or consents having been obtained.

As at the date of this report, all the above conditions precedent have not been met, except for the approval from the
Ministry of International Trade and Industry received on 11 March 2004.

Auditors

The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with their resolution dated 20 April 2004.

Robert Tan Chung Meng

Managing Director

Dato’ Seri Khalid Ahmad bin Sulaiman

Director

Kuala Lumpur

Annual Report 2003 79

 INCOME STATEMENTS for the financial year ended 31 December 2003

Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Revenue 4 532,166 405,689 25,115 11,239

Cost of sales (359,069) (264,074) (13,904) (644)
Gross profit 173,097 141,615 11,211 10,595
Other operating income 18,197 27,601 28,859 71,561
Administrative expenses (64,581) (61,591) (17,697) (13,994)
Other operating expenses (20,653) (7,623) (1,451) (51,446)
Profit from operations 5 106,060 100,002 20,922 16,716
Finance costs 7 (65,543) (66,218) (12,346) (15,005)
Share of results of associates 64,823 68,448 0 0
Gain from disposal of associates 79,018 12,261 40,686 0
Profit from ordinary activities before tax 184,358 114,493 49,262 1,711
Tax: 8
- Company and subsidiaries (30,171) (23,044) (3,657) (12,487)
- Associates (11,471) (20,325) 0 0
(41,642) (43,369) (3,657) (12,487)
Profit/(loss) from ordinary activities after tax 142,716 71,124 45,605 (10,776)
Minority interests 4,817 (3,439) 0 0
Net profit/(loss) for the financial year 147,533 67,685 45,605 (10,776)

Earnings per ordinary share (sen) 9

- Basic 12.86 6.19
- Diluted 11.51 5.50

Dividends per ordinary share (sen) 10 5.00 1.50 5.00 1.50

Annual Report 2003 80

 BALANCE SHEETS as at 31 December 2003

Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Capital and reserves

Share capital 11 581,805 572,074 581,805 572,074
1% Irredeemable Convertible
Preference shares 11 178,445 178,445 178,445 178,445
Share premium 402,215 393,846 402,215 393,846
Revaluation and other
reserves 12 79,095 53,160 29,258 29,258
Retained earnings 13 857,243 744,296 502,411 491,392
Shareholders’ equity 2,098,803 1,941,821 1,694,134 1,665,015
Minority interests 55,377 77,955 0 0
Non current liabilities
Term loans 14 193,593 349,925 0 49,711
Murabahah Underwritten
Notes and Syndicated
Fixed Rate Loan 14 180,000 245,000 0 0
Deferred taxation 15 74,533 75,645 1,600 1,600
448,126 670,570 1,600 51,311
2,602,306 2,690,346 1,695,734 1,716,326
Represented by:
Non current assets
Property, plant and
equipment 16 1,266,732 1,302,228 3,401 3,359
Real property assets 166,617 160,224 25,225 38,335
Subsidiaries 17 0 0 992,585 936,723
Associates 18 572,134 833,125 216,841 248,986
Other investments 19 45,981 51,226 3,900 2,900
Deferred taxation 15 4,659 16,725 0 0
2,056,123 2,363,528 1,241,952 1,230,303

Current assets
Development properties
and expenditure 20 522,886 443,950 0 0
Inventories 21 76,187 58,382 37,348 37,348
Marketable securities 22 12,715 12,715 9,461 9,461
Trade and other receivables 23 144,229 139,026 14,503 20,416
Amounts owing by subsidiaries 24 0 0 893,534 733,941
Amounts owing by associates 25 163,627 142,766 95,999 73,569
Deposits with licensed banks 26 194,846 75,134 71,138 34,018
Cash and bank balances 26 57,545 26,956 615 7,170
1,172,035 898,929 1,122,598 915,923

Annual Report 2003 81

 BALANCE SHEETS as at 31 December 2003 (cont’d)

Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Less: Current liabilities
Trade and other payables 27 342,084 272,457 76,267 29,687
Amounts owing to subsidiaries 24 0 0 517,936 267,755
Amounts owing to associates 25 69,558 37,787 9,269 9,269
Bank borrowings 14
- Bank overdrafts 5,795 12,911 887 3,110
- Others 198,868 217,985 59,711 111,349
Tax 9,547 30,971 4,746 8,730
625,852 572,111 668,816 429,900
Net current assets 546,183 326,818 453,782 486,023
2,602,306 2,690,346 1,695,734 1,716,326

Annual Report 2003 82

 Issued and fully paid 1% Irredeemable
ordinary shares of Convertible Preference
Note RM0.50 each Shares of RM1.00 each Non-distributable Distributable
Revaluation
Number of Nominal Number Nominal Share and other Retained
shares value of shares value premium reserves earnings Total
Group ‘000 RM’000 ‘000 RM’000 RM’000 RM’000 RM’000 RM’000
year ended 31 December 2003

At 1 January 2003
- As previously reported 1,144,148 572,074 178,445 178,445 393,846 55,182 740,631 1,940,178
- Prior year adjustments 34 0 0 0 0 0 (2,022) 3,665 1,643
- As restated 1,144,148 572,074 178,445 178,445 393,846 53,160 744,296 1,941,821
Net profit 0 0 0 0 0 0 147,533 147,533
Issue of shares:
- Employees’ share options 11 19,463 9,731 0 0 8,369 0 0 18,100

Annual Report 2003

83
Currency translation differences 0 0 0 0 0 (1,046) 0 (1,046)
Reserves arising on acquisition
of subsidiaries 33 0 0 0 0 0 26,981 0 26,981
Net gain not recognised in 0 0 0 0 0 25,935 0 25,935
income statement
Dividends for the financial
year ended 10
- 31 December 2002 0 0 0 0 0 0 (12,357) (12,357)
- 31 December 2003 0 0 0 0 0 0 (22,229) (22,229)
At 31 December 2003 1,163,611 581,805 178,445 178,445 402,215 79,095 857,243 2,098,803
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the financial
 Issued and fully paid 1% Irredeemable
ordinary shares of Convertible Preference
Note RM0.50 each Shares of RM1.00 each Non-distributable Distributable
Revaluation
Number of Nominal Number Nominal Share and other Retained
shares value of shares value premium reserves earnings Total
Group ‘000 RM’000 ‘000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2002
- As previously reported 593,989 296,995 0 0 252,622 64,462 666,097 1,280,176
- Prior year adjustments 34 0 0 0 0 0 (2,022) 14,790 12,768
year ended 31 December 2003 (cont’d)

- As restated 593,989 296,995 0 0 252,622 62,440 680,887 1,292,944

Net profit 0 0 0 0 0 0 67,685 67,685
Issue of shares:
- Acquisition of Tan & Tan 166,549 83,274 0 0 333,097 0 0 416,371

Annual Report 2003

- Bonus issue 380,269 190,134 0 0 (190,134) 0 0 0
- Employees’ share options 3,341 1,671 0 0 1,069 0 0 2,740

84
Share issue cost 0 0 0 0 (2,808) 0 0 (2,808)
Issue of 1% Irredeemable
Convertible Preference Shares 0 0 178,445 178,445 0 0 0 178,445
Currency translation differences 0 0 0 0 0 3,313 0 3,313
Goodwill arising on
acquisition of subsidiaries 0 0 0 0 0 (12,593) 0 (12,593)
Net loss not recognised in
income statement 0 0 0 0 0 (9,280) 0 (9,280)
Dividends for the financial year
ended 31 December 2001 0 0 0 0 0 0 (4,276) (4,276)
At 31 December 2002 1,144,148 572,074 178,445 178,445 393,846 53,160 744,296 1,941,821
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the financial
 Issued and fully paid 1% Irredeemable
ordinary shares of Convertible Preference
Note RM0.50 each Shares of RM1.00 each Non-distributable Distributable
Number of Nominal Number Nominal Share Revaluation Retained
31 December 2003 (cont’d)

shares value of shares value premium reserves earnings Total

Company ‘000 RM’000 ‘000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2003 1,144,148 572,074 178,445 178,445 393,846 29,258 491,392 1,665,015
Net profit 0 0 0 0 0 0 45,605 45,605
Dividends for the financial
year ended: 10
- 31 December 2002 0 0 0 0 0 0 (12,357) (12,357)
- 31 December 2003 0 0 0 0 0 0 (22,229) (22,229)

Annual Report 2003

Issue of shares:

85
- Employees’ share options 11 19,463 9,731 0 0 8,369 0 0 18,100
At 31 December 2003 1,163,611 581,805 178,445 178,445 402,215 29,258 502,411 1,694,134
COMPANY STATEMENT OF CHANGES IN EQUITY for the financial year ended
 Issued and fully paid 1% Irredeemable
ordinary shares of Convertible Preference
RM0.50 each Shares of RM1.00 each Non-distributable Distributable
Number of Nominal Number Nominal Share Revaluation Retained
31 December 2003 (cont’d)

shares value of shares value premium reserves earnings Total

Company ‘000 RM’000 ‘000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2002 593,989 296,995 0 0 252,622 29,258 506,444 1,085,319

Net loss 0 0 0 0 0 0 (10,776) (10,776)
Dividend for the financial year
ended 31 December 2001 0 0 0 0 0 0 (4,276) (4,276)
Issue of shares:
- Acquisition of Tan & Tan 166,549 83,274 0 0 333,097 0 0 416,371

Annual Report 2003

- Bonus issue 380,269 190,134 0 0 (190,134) 0 0 0

86
- Employees’ share options 3,341 1,671 0 0 1,069 0 0 2,740
Share issue cost 0 0 0 0 (2,808) 0 0 (2,808)
Issue of 1% Irredeemable
Convertible Preference Shares 0 0 178,445 178,445 0 0 0 178,445
At 31 December 2002 1,144,148 572,074 178,445 178,445 393,846 29,258 491,392 1,665,015
COMPANY STATEMENT OF CHANGES IN EQUITY for the financial year ended
 CASH FLOW STATEMENTS for the financial year ended 31 December 2003

Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Operating activities
Receipts from customers 487,716 383,692 2,185 2,020
Payments to contractors, suppliers and
employees (400,333) (305,093) (43,669) (30,356)
Cash flow from/(used in) operations 87,383 78,599 (41,484) (28,336)
Interest paid (66,059) (61,916) (9,351) (12,917)
Income taxes paid (25,232) (8,837) (1,539) (2,013)
Net cash (used in)/generated from
operating activities (3,908) 7,846 (52,374) (43,266)
Investing activities
Acquisition of subsidiaries 33 (9,272) (50,000) (9,272) (50,000)
Cash acquired from acquisition of subsidiaries 33 11 (1,206) 0 0
Proceeds from sale of shares in an associate 382,381 36,248 69,505 0
Interest received 3,151 5,444 1,647 1,423
Purchase of property, plant and equipment (18,916) (6,639) (582) (2,046)
Proceeds from sale of property, plant and equipment 454 8,306 76 207
Investment in associates (398) (2,140) (360) (1,140)
Investment in other investments (3,004) 0 (1,000) 0
Dividends received from subsidiaries 0 0 569 0
Dividends received from associates 5,312 31,657 4,019 4,410
Dividends received from investments 2,208 654 165 220
Repayments from subsidiaries 0 0 386,703 62,507
Repayments to subsidiaries 0 0 (369,696) (2,392)
Advances to subsidiaries 0 0 (38,738) (66,436)
Advances from subsidiaries 0 0 138,459 42,490
Repayments from associates 15,534 8,639 8,187 8,581
Advances to associates (7,629) (82) (7,629) (52)
Advances from associates 27,400 0 0 0
Repayments to associates 0 (25,222) 0 (1,461)
Net cash generated from/(used in) investing
activities 397,232 5,659 182,053 (3,689)

Annual Report 2003 87

 CASH FLOW STATEMENTS for the financial year ended 31 December 2003 (cont’d)

Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Financing activities
Proceeds from shares issued by the 11 18,100 2,740 18,100 2,740
Company
Share issue cost paid 0 (2,808) 0 (2,808)
Repayments of bank borrowings (300,998) (144,605) (101,349) (50,855)
Receipts of bank borrowings 60,549 95,619 0 35,000
Dividends paid (13,642) (10,691) (13,642) (10,691)
Fixed deposits held as security for bank
guarantee facility (6,924) (11,004) (6,500) 0

Net cash used in financing activities (242,915) (70,749) (103,391) (26,614)

Foreign currencies exchange difference
on opening balances 84 113 0 0
Net increase/(decrease) in cash and cash
equivalents during the financial year 150,493 (57,131) 26,288 (73,569)
Cash and cash equivalents at beginning
of financial year 78,175 135,306 38,078 111,647
Cash and cash equivalents at end of
financial year 26 228,668 78,175 64,366 38,078

Annual Report 2003 88

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003

1. Principal activities

The principal activities of the Company during the financial year are those of investment holding and property development.
The principal activities of the Group mainly consist of property development, property investment, property holding and
property management, hotel operation, construction and investment holding. There have been no significant changes in the
nature of these activities during the financial year.

2. Summary of significant accounting policies

The following accounting policies have been used consistently in dealing with items considered material in relation to the
financial statements, except for the accounting policy on deferred tax as disclosed in note 2(p) to the financial statements
below.

(a) Basis of preparation of the financial statements

The financial statements of the Group and Company have been prepared under the historical cost convention except
as disclosed in this summary of significant accounting policies.

The financial statements of the Group and Company comply with the applicable approved accounting standards in
Malaysia and the provisions of the Companies Act, 1965. The new applicable accounting standards adopted in
these financial statements are as follows:

(i) MASB 25 ‘Income Taxes’

(ii) MASB 27 ‘Borrowing Costs’
(iii) MASB 28 ‘Discontinuing Operations’
(iv) MASB 29 ‘Employee Benefits’

With the exception of MASB 25 (note 34 to the financial statements), there are no changes in accounting policy
that affect net profits or shareholders’ equity as the Group was already following the recognition and measurement
principles in those standards. Comparatives have also been adjusted and extended to conform to changes
in presentation due to the requirements of the new applicable accounting standards that have been
applied retrospectively.

The preparation of financial statements in conformity with the provisions of the Companies Act, 1965 and the
applicable approved accounting standards in Malaysia requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reported period. Although these estimates
are based on the Directors’ best knowledge of current events and actions, actual results may differ from those estimates.

Annual Report 2003 89

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made
up to the end of the financial year. Subsidiaries are those enterprises in which the Group has power to exercise control
over the financial and operating policies so as to obtain benefits from their activities. Subsidiaries are consolidated
from the date on which control is transferred to the Group and are no longer consolidated from the date that control
ceases. Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method of
accounting, the results of the subsidiaries acquired or disposed of during the financial year are included in the
consolidated income statement from the date of acquisition or up to the date of their disposal. Inter-company
transactions are eliminated on consolidation and consolidated financial statements reflect external transactions only.
Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting
policies with those of the Group.

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

(c) Goodwill on consolidation

Goodwill or capital reserve arising on consolidation represents the excess or deficit of purchase price over the fair value
of the net assets of subsidiaries at the date of acquisition. Goodwill or capital reserve arising on consolidation is written
off against reserves in the year of acquisition.

(d) Subsidiaries

Investments in subsidiaries are stated at cost. An allowance is made when the Directors are of the opinion that there is
a permanent diminution in the value of the investments. See accounting policy in note 2(v) to the financial statements
on impairment of assets.

(e) Associates

Associates are those enterprises in which a long term equity interest of between 20 to 50 percent is held and where the
Group exercises significant influence through management participation.

Investments in associates are stated at cost or valuation. An allowance is made when the Directors are of the opinion
that there is a permanent diminution in the value of the investments. See accounting policy in note 2(v) to the
financial statements on impairment of assets.

The Group’s share of profits less losses of associates is included in the consolidated income statement and the Group’s
share of post-acquisition retained profits and reserves are added to the cost or valuation of investments in the
consolidated balance sheet. These amounts are taken from the latest audited financial statements of associates with the
same financial year end as the Company and where the financial year ends are not coterminous, the amounts are taken
from the management financial statements made up to the financial year end of the Group. 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.

Annual Report 2003 90

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(f ) Investments

Investments in quoted and unquoted shares held as long term investments are stated at cost. An allowance is made
when the Directors are of the opinion that there is a permanent diminution in value of the investments. Permanent
diminution in the value of an investment is recognised as an expense in the financial year in which diminution is
identified. See accounting policy in note 2(v) to the financial statements on impairment of assets.

Short term investments in quoted shares are stated at the lower of cost and market value on the aggregate portfolio
basis at the balance sheet date. Increases/decreases in the carrying amount are credited/charged to the income
statement.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount is charged or
credited to the income statement.

(g) Property, plant and equipment

Freehold land is stated at cost or valuation. All other property, plant and equipment except for hotel properties are
stated at cost less accumulated depreciation. The valuations are performed by independent professional valuers.
Freehold land of the Group has not been revalued since the last revaluation in 1996. The Directors applied the
transitional provisions of International Accounting Standards (“IAS”) No.16 (Revised) Property, Plant and
Equipment as adopted by the Malaysian Accounting Standards Board which allows these assets to be stated at their
1996 valuation. Accordingly, these assets have been stated at their last revalued amount.

Financing costs on specific identifiable borrowings used to finance the acquisition of property, plant and equipment
are capitalised and carried forward as part of property, plant and equipment. Capitalisation of borrowing costs cease
when assets are ready for their intended use.

Hotel properties are stated at Directors’ valuation based on independent valuers’ reports. Additions subsequent to the
date of valuation are stated at cost. It is the Group’s policy to appraise the hotel properties once in every five years by
independent professional valuers based on their open market values with additional valuations in the intervening years
where market conditions indicate that the carrying values on the revalued assets are materially different from the
market values. Any surplus or deficit arising therefrom will be dealt with in the Revaluation Surplus Account. A deficit,
on individual hotel basis, is set off against the Revaluation Surplus Account only to the extent of a surplus credited
from the previous revaluation of the hotel properties and the excess of the deficit is charged to the income statement.

No depreciation is provided for the hotel properties as it is the Group’s practice to maintain these properties in such
condition that the residual value is so high that depreciation would be insignificant. The related maintenance
expenditure is dealt with in the income statement.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in profit/
(loss) from operations. On disposal of revalued assets, amounts in revaluation reserve relating to those assets are
transferred to retained earnings.

Annual Report 2003 91

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(h) Depreciation

Freehold land and capital work-in-progress are not depreciated.

Other lands have not been classified according to their tenure pending finalisation with the relevant authorities.
Depreciation has been provided over their estimated useful life of 99 years.

Leasehold land is amortised in equal instalments over the period of the respective leases that range from 30 to 99 years.

Depreciation on other property, plant and equipment is calculated to write-off their cost on a straight line basis over
their estimated useful lives of the assets concerned. The annual rates are:

Buildings 2
Plant and machinery 10 - 20
Motor vehicles 20
Office furniture, fittings and equipment 12.5 - 33 1/3

Included in the office furniture, fittings and equipment are operating assets of subsidiaries engaged in the hotel
business such as furnishing, linen, crockery and cutlery.

(i) Real property assets

Real property assets consisting of land held for future development are stated at cost of acquisition including all related
costs incurred subsequent to the acquisition on activities necessary to prepare the land for its intended use.

Such assets are transferred to development properties and expenditure when significant development work is to be
undertaken and is expected to be completed within the normal operating cycle.

(j) Construction contracts

When the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are
recognised over the period of the contract as revenue and expenses respectively. The Group uses the percentage of
completion method to determine the appropriate amount of revenue and costs to recognise in a given period; the stage
of completion is measured by reference to the proportion that contract costs incurred for work performed to date bear
to the estimated total costs for the contract.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the
extent of contract costs incurred that is probable will be recoverable; contract costs are recognised when incurred.

When it is probable that contract costs will exceed total contract revenue, the expected loss is recognised as an expense
immediately.

Annual Report 2003 92

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(j) Construction contracts (cont’d)

The aggregate of the costs incurred and the profit/loss recognised on each contract is compared against the progress
billings up to the period end. Where costs incurred and recognised profits (less recognised losses) exceed progress
billings, the balance is shown as amounts due from customers on construction contracts under receivables, deposits
and prepayments. Where progress billings exceed costs incurred plus recognised profits (less recognised losses), the
balance is shown as amounts due to customers on construction contracts under payables.

(k) Revenue recognition

Income from property development is recognised on the percentage of completion method based on units sold, and
where the outcome of the development projects can be reliably estimated. Anticipated losses are provided for in full.

Income from construction contracts (including joint venture projects) is recognised on the percentage of completion
method in cases where the outcome of the contract can be reliably estimated. In all cases, anticipated losses are
provided for in full.

Dividend income from investments is taken up as income when the shareholders’ right to receive payment is
established.

Hotel revenue is recognised upon delivery of products and customer acceptance, and performance of services, net of
sales taxes and discounts.

Management fees, project management fees and rental income are recognised on accrual basis.

Interest income is recognised on accrual basis unless collectibility is in doubt in which case the recognition of such
income is suspended.

(l) Development properties and expenditure

Development properties and expenditure are stated at cost and consist of freehold and leasehold land, development
expenditure plus attributable profit less progress billings and provision for foreseeable losses.

The related development costs common to the whole project comprise finance charges on borrowings directly related
to the financing of development and direct costs of construction. Costs charged to the income statement are in respect
of properties sold and comprised proportionate land and development costs. The recognition of property development
revenue and expenses is similar to that of construction contracts. See accounting policy in note 2(j) to the financial
statements on construction contracts.

Development properties are classified as current assets when significant development work have been undertaken and
are expected to be completed within the normal operating cycle.

Annual Report 2003 93

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(m) Inventories

All inventories are valued at the lower of cost and net realisable value.

Costs of unsold properties comprise proportionate cost of land and development expenditure.

Costs of hotel operating supplies are determined on a first-in, first-out basis. Allowance is made for all deteriorated,
damaged, obsolete or slow-moving inventories.

(n) Receivables

Known bad debts are written off and specific allowance is made for any considered to be doubtful of collection.

(o) Foreign currencies

The financial statements are presented in Ringgit Malaysia.

Foreign currency transactions are converted into Ringgit Malaysia at the rates of exchange ruling on the transaction
dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into
Ringgit Malaysia at rates of exchange ruling on that date. Exchange differences are reflected in the income statement.

Income statements of foreign entities are translated into the Group’s reporting currency at average exchange rates for
the financial year and balance sheets are translated at exchange rates ruling at the balance sheet date. Exchange
differences arising from the retranslation of the net investment in foreign subsidiaries and associates are taken to
Exchange Fluctuation Reserve in shareholders’ equity. On disposal of the foreign entity, such translation differences
are recognised in the income statement as part of the gain or loss on disposal.

The principal closing rates used in translation of foreign currency amounts are as follows:

Foreign currency 2003 2002

RM RM

1 US Dollar 3.800 3.800

1 Singapore Dollar 2.232 2.153
1 Sterling Pound 6.756 5.919
1 Hong Kong Dollar 0.489 0.487
1 Australian Dollar 2.845 2.135

(p) Income taxes

Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates and
include all taxes based upon the taxable profits, including withholding taxes payable by foreign subsidiary, associate or
joint venture on distributions of retained earnings to companies in the Group, and real property gains taxes payable on
disposal of properties.

Annual Report 2003 94

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(p) Income taxes (cont’d)

Deferred tax is recognised in full, using the liability method, on temporary differences arising between the amounts
attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.

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

Deferred tax is recognised on temporary differences on investments in subsidiaries, associates and joint ventures except
where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.

Tax rates enacted or substantively enacted by the balance sheet date are used to determined deferred tax.

(q) Cash and cash equivalents

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

(r) Financial instruments

(i) Financial instruments recognised on the balance sheet

The particular recognition method adopted for financial instruments recognised on the balance sheet is
disclosed in the individual policy statements associated with each item.

(ii) Fair value estimation for disclosure purposes

The fair value of publicly traded securities except for quoted associates is based on quoted market prices at the
balance sheet date.

In assessing the fair value of non-traded financial instruments, the Group uses a variety of methods and makes
assumptions that are based on market conditions existing at each balance sheet date.

The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current
market interest rate for each type of the financial liabilities of the Group.

The face values, less any estimated credit adjustments, for financial assets and liabilities with a maturity of less
than one year are assumed to approximate their fair values.

Annual Report 2003 95

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(s) Share capital

(i) Classification

Ordinary shares and 1% Irredeemable Cumulative Preference Shares (‘ICPS 2002/2007’) with automatic
conversion on maturity date are classified as equity.

The Group has taken advantage of the transitional provisions of MASB 24 ‘Financial Instruments: Disclosures
and Presentation’, which allows financial instruments that contain both a liability and an equity element issued
prior to 1 January 2003 to be stated based on predominant component part.

(ii) Share issue cost

External costs directly attributable to the issue of new shares are shown as a deduction, net of tax, in equity
from the proceeds.

(iii) Dividends

Dividends on ordinary and preference shares are recognised as liabilities when declared.

(t) Borrowings

(i) Classification

Borrowings are initially recognised based on the proceeds received. In subsequent periods, borrowings are
stated at amortised cost using the effective yield method. Any difference between proceeds (net of transaction
costs) and the redemption value is recognised in the income statement over the period of the borrowings.

(ii) Capitalisation of borrowings cost

Borrowing costs incurred to finance the construction of property, plant and equipment are capitalised as part
of the cost of the asset during the period of time that is required to complete and prepare the asset for its
intended use. Borrowing costs incurred to finance property development activities and construction contracts
are accounted for in a similar manner. All other borrowing costs are expensed.

(u) Leases

Leases of assets where a significant portion of the risk and rewards of ownership are retained by the lessor are classified
as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged
to the income statement on the straight line basis over the lease period.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the
lessor by way of penalty is recognised as an expense in the period in which termination takes place.

Annual Report 2003 96

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

(v) Impairment of assets

Property, plant and equipment and other non-current assets, including intangible assets, are reviewed for impairment
losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s net selling price and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest level for which there is separately identifiable cash flows.

The impairment loss is charged to the income statement unless it reverses a previous revaluation in which case it is
charged to the revaluation surplus. Any subsequent increase in recoverable amount is recognised in the income
statement unless it reverses an impairment loss on a revalued asset in which case it is taken to revaluation surplus.

(w) Employee benefits

(i) Short term employee benefits

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

(ii) Equity compensation benefits

Details of the Group’s Employees’ Share Option Scheme are set out in note 11 to the financial statements. The
Group does not make a charge to the income statement in connection with share options granted. When the
share options are exercised, the proceeds received, net of any transaction costs, are credited to the share capital
and share premium.

(iii) Defined contribution plans

The Group’s contribution to defined contribution plans are charged to the income statement in the period to
which they relate. Once the contibutions have been paid, the Group has no further payment obligations.

(x) Segment reporting

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business segments provide
products or services that are subject to risk and returns that are different from those of other business segments.
Geographical segments provide products or services within a particular economic environment that is subject to risks
and returns that are different from those components operating in other economic environments.

Segment revenues, expenses, assets and liabilities are those amounts resulting from the operating activities of a segment
that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the
segment. Segment revenues, expenses, assets and segment liabilities are determined before intragroup balances and
intragroup transactions are eliminated as part of the consolidation process, except to the extent that such intragroup
balances and transactions are between group enterprises within a single segment.

Annual Report 2003 97

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

3. Financial Risk Management Objectives and Policies

The Group’s activities expose it to a variety of financial risks, including foreign currency exchange risk, interest rate
risk, market risk, credit risk, liquidity and cash flow risk. The Group’s overall financial risk management objective is to
ensure that the Group creates value for its shareholders. The Group focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group. Financial risk
management is carried out through risk reviews, internal control systems, insurance programmes and adherence to
the Group’s financial risk management policies. The management regularly review these risks and approves the
treasury policies, which covers the management of these risks.

(i) Foreign currency exchange risk

The Group operates internationally and is exposed to various currencies. Foreign currency transactions give
rise to foreign exchange exposure.

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in
which the property or investment is located or by borrowing in currencies that match the future revenue
stream to be generated from its investments. Foreign exchange exposures in transactional currencies other than
functional currencies of the operating entities are kept to an acceptable level.

(ii) Interest rate risk

The Group’s income and operating cash flows are substantially independent of changes in market interest
rates. Interest rate exposure arises mainly from the Group’s borrowings and deposits. The Group manages its
interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings.

(iii) Market risk

The Group faces exposure to the risk from changes in debt and equity prices. However, management regularly
reviews these risks and takes proactive measures to mitigate the potential impact of such risks.

For key product purchases, the Group establishes price levels that the Group considers acceptable and enters
physical supply agreement, where necessary, to achieve these levels.

(iv) Credit risk

Credit risk arises when derivative instruments are used or sales are made on deferred credit term. The Group
controls these risks by the application of credit approvals, limits and monitoring procedures. Credit risks are
minimised and monitored by strictly limiting the Group’s associations to business partners with high
creditworthiness. Trade receivables are monitored on an ongoing basis via Group management reporting
procedures. The Group does not have any significant exposure to any individual customer or counterparty nor
does it have any major concentration of credit risk related to any financial instruments.

Concentrations of credit risk with respect to trade receivables are limited due to the Group’s large number of
customers, who are dispersed over a broad spectrum of industries and businesses. The Group’s historical
experience in collection of trade receivables falls within the recorded allowances. Due to these factors,
management believe that no additional credit risk beyond amounts allowed for collection losses is inherent in
the Group’s trade receivables.

Annual Report 2003 98

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

3. Financial Risk Management Objectives and Policies (cont’d)

(v) Liquidity and cash flow risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to
ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management,
the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements.
In addition, the Group strives to maintain available banking facilities of a reasonable level to its overall debt position.
As far as possible, the Group raises committed funding from both capital markets and financial institutions and
prudently balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

4. Revenue
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Investment income 3,067 654 6,531 8,916

Rental and rent related income 164,887 138,723 2,304 479
Sale of property 16,280 0 16,280 0
Sale of development properties
billed to stages of completion 187,359 124,004 0 1,844
Sale of services 62,565 56,683 0 0
Sale of goods 23,151 22,136 0 0
Construction contract revenue 74,857 63,489 0 0
532,166 405,689 25,115 11,239

Annual Report 2003 99

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

5. Profit from operations

Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Profit from operations is stated after charging:
Allowance for doubtful debts of:
- Subsidiaries 0 0 0 48,500
- Trade and other receivables 3,248 187 0 0
Allowance for diminution in value of:
- Marketable securities 0 1,915 0 1,915
- Unquoted investment 8,249 0 0 0
Auditors’ remuneration:
- Current financial year 445 521 115 115
- Overaccrual in prior year (55) 0 0 0
Construction contract costs 66,875 53,289 0 0
Depreciation of property, plant and equipment 45,783 41,009 540 540
Hire of plant and equipment 1,481 1,624 0 0
Loss on disposal of property, plant and equipment 471 0 0 0
Office rent 513 482 913 994
Staff cost (includes Directors’ remuneration as
disclosed in note 6 to the financial statements
and exclude Defined contibution retirement plan) 44,334 44,252 8,317 7,473
Defined contribution retirement plan 3,440 3,170 965 876
Unrealised exchange losses 3,379 3 0 0
Write off of property, plant and equipment 646 627 0 0

And crediting:
Bad debts recovered 164 55 0 0
Dividends received (gross) from:
- Subsidiaries:
- Unquoted in Malaysia 0 0 720 2,541
- Associates:
- Quoted in Malaysia 0 0 5,582 1,996
- Unquoted 0 0 0 4,073
- Quoted investments:
- In Malaysia 3,067 306 229 306
- Outside Malaysia 0 348 0 0
Interest income
- Subsidiaries 0 0 25,178 66,866
- Others 3,151 5,444 1,481 1,423
Profit on disposal of property, plant
and equipment 241 3,967 76 205
Realised exchange gain 46 3,094 0 2,556
Rental income 142 231 0 0
Write back of allowance for doubtful debts 557 0 0 0
Write back of allowance for diminution in value
of other investments 0 2,072 0 0

Annual Report 2003 100

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

6. Directors’ remuneration
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Fees:
- Directors of the Company 99 114 99 74
- Other Directors 42 76 0 0
Other emoluments:
- Directors of the Company 1,951 1,988 1,572 1,964
- Other Directors 1,828 924 0 0
Defined contribution retirement plan 348 375 127 222
Benefits-in-kind 78 100 36 63
4,346 3,577 1,834 2,323

The Directors’ remuneration has been included in staff cost as disclosed in note 5 to the financial statements.

Executive Directors of the Company have been granted options under the ESOS on the same terms and conditions as those
offered to other employees of the Group (note 11 to the financial statements) are as follow:

Number of
Options
At 1 January 2003 0
Granted 3,500,000
Exercised (500,000)
At 31 December 2003 3,000,000

Number of
shares
Fair value of shares issued at 31
at share issue date Exercise price December
Exercise date RM/share RM/share 2003
31.10.2003 - 06.12.2003 1.47 - 1.50 0.93 500,000

2003
RM’000
Ordinary share capital - at par 250
Share premium 215
Proceeds received on exercise of share options 465

Fair value at exercise date of shares issued 743

Annual Report 2003 101

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

7. Finance costs
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Finance costs are stated after
charging:
Interest expense on borrowings 62,221 61,552 12,346 13,820

8. Tax
Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
In Malaysia
Income tax - current
- Company and subsidiaries (13,637) (10,147) (3,657) (3,757)
- Associates (10,550) (17,521) 0 0
Income tax - prior years (8,913) (6,599) 0 (8,730)
Deferred taxation 15 (7,572) (6,262) 0 0
(40,672) (40,529) (3,657) (12,487)
Outside Malaysia
Income tax - current
- Subsidiaries (49) (36) 0 0
- Associates (921) (2,804) 0 0
(970) (2,840) 0 0
(41,642) (43,369) (3,657) (12,487)

The explanation of the relationship between tax expense and profit from ordinary activities before tax is as follows :

Group Company
2003 2002 2003 2002
% % % %
Numerical reconciliation between the average
effective tax rate and the Malaysian tax rate
Malaysian tax rate 28 28 28 28

Tax effects of :
- different tax rates in other countries (5) (2) 0 0
- expenses not deductible for tax purposes 12 15 7 314
- income not subject to tax (18) (13) (28) (122)
- current year’s tax losses not recognised 4 6 0 0
- previously unrecognised tax losses (3) (2) 0 0
- under accrual in prior years 5 6 0 510
Average effective tax rate 23 38 7 730

Tax savings of the Group during the year due to the recognition of previously unrecognised tax losses amounted to RM1,843,580
(2002: RM2,289,860).

Annual Report 2003 102

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

9. Earnings per ordinary share

(a) Basic earnings per ordinary share

Basic earnings per ordinary share of the Group is calculated by dividing the net profit for the financial year by the weighted
average number of ordinary shares in issue during the financial year.
As restated*
2003 2002

Net profit for the financial year (RM’000) 147,533 67,685

Weighted average number of ordinary shares in issue (‘000) 1,146,921 1,093,598
Basic earnings per ordinary share (sen) 12.86 6.19

(b) Diluted earnings per ordinary share

In the diluted earnings per ordinary share calculation, the ICPS 2002/2007 is assumed to have been converted into ordinary
shares. In respect of warrants and share options, a calculation is done to determine the number of ordinary shares that could
have been acquired at market price (determined as the average annual share price of the Company’s share) based on the
monetary value of the subscription rights attached to outstanding warrants and share options. This calculation serves to
determine the ‘bonus’ element to the ordinary shares outstanding for the purpose of computing the dilution. No adjustment
is made to net profit for the period for the warrants and share options calculation.
As restated*
2003 2002

Net profit for the financial year (RM’000) 147,533 67,685

Incremental earnings for ICPS 2002/2007 1,285 0
148,818 67,685

Weighted average number of ordinary shares in issue (‘000) 1,146,921 1,093,598

Adjustments for ICPS 2002/2007(‘000) 134,169 134,169
Adjustments for warrants (‘000) 9,802 3,344
Adjustments for share options (‘000) 2,531 0
Weighted average number of ordinary shares for diluted earnings per
ordinary share (‘000) 1,293,423 1,231,111

Diluted earnings per ordinary share (sen) 11.51 5.50

* The comparatives have been restated to take into account of prior year adjustments as disclosed in note 34 to the
financial statements.

Annual Report 2003 103

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

10. Dividends

Dividends declared or proposed in respect of the financial years ended 31 December are as follows:

Group and Company

2003 2002
Gross Amount of Gross Amount of
dividend dividend, dividend dividend,
per share net of tax per share net of tax
Sen RM’000 Sen RM’000
Ordinary shares
Interim dividend of 5% less tax at 28%
(2002 : Nil) 2.50 20,944 0 0
Proposed final dividend of 3% less tax and 2%
tax exempt (2002: final dividend of 3% less tax
at 28%) 2.50 24,203 1.50 12,357
5.00 45,147 1.50 12,357
ICPS 2002/2007
Final dividend of 1% less tax at 28%
(2002 : Nil) 1.00 1,285 0 0

At the forthcoming Annual General Meeting on 31 May 2004, a final dividend in respect of the financial year ended 31
December 2003 of 3% less tax at 28% and 2% tax exempt amounting to RM24,203,110 will be proposed for shareholders’
approval. These financial statements do not reflect this final dividend which will be accrued as a liability in the financial year
ending 31 December 2004 when approved by shareholders.

11. Share capital

Group and Company
2003 2002
Ordinary shares of RM0.50 each: RM’000 RM’000
Authorised
At 1 January/31 December 1,000,000 1,000,000

1% Irredeemable Convertible Preference Shares 2002/2007 of RM1.00 each:

Authorised
At 1 January/31 December 200,000 200,000

(a) Ordinary shares of RM0.50 each (‘IGB shares’)

During the financial year, the Company’s issued and fully paid-up share capital was increased from RM572,074,018.50 to
RM581,805,518.50 by way of an issue of 19,463,000 new IGB Shares for cash on the exercise of options pursuant to the
ESOS at an issue price of RM0.93 each.

Annual Report 2003 104

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

11. Share capital (cont’d)

(a) Ordinary shares of RM0.50 each (‘IGB shares’) (cont’d)

The newly issued shares rank pari passu in all respects with the existing issued shares of the Company except that they are not
entitled to any dividends, rights, allotments and/or other distributions unless the allotment of the new IGB Shares is made on
or prior to the entitlement date of such dividends, rights, allotments and/or other distributions.

(b) 1% Irredeemable Convertible Preference Shares of RM1.00 each (‘ICPS 2002/2007’)

The salient terms of the ICPS 2002/2007 are as follows :

(i) The ICPS 2002/2007 shall be irredeemable;

(ii) The holders of the ICPS 2002/2007 shall have the right to receive to the extent that there are sufficient net profits after
taxation available for distribution for the relevant financial year including retained profits and distributable reserves
brought forward as determined by the Directors and in priority to any payment in respect of any other class of shares
in the capital of the Company a fixed cumulative preferential dividend at the rate of one per cent per annum (less any
tax liability) and such preferential dividend to be payable annually in arrears not later than six months from the
relevant financial year end;

(iii) Each ICPS 2002/2007 holder shall have the right at any time between the hours of 9.00 a.m. and 5.00 p.m. on any
Market Day commencing from 18 April 2004 and expiring on 17 April 2007 to convert the whole of the nominal
value of the ICPS 2002/2007 held by him or such part thereof as he may specify in the Notice of Conversion into
ordinary and fully paid-up IGB Shares at the conversion price of RM1.33 per ordinary IGB Share; and

(iv) The ICPS 2002/2007 shall, if not converted by 17 April 2007, be automatically converted into new IGB Shares at the
Conversion Price of RM1.33 per ordinary IGB Share on 18 April 2007.

(c) Warrants 1999/2004

On 30 December 1999, there was a Rights Issue of 118,558,714 new IGB shares with 118,558,714 warrants attached at an
issue price of RM1.05 for each new IGB shares with one warrant attached on the basis of one new IGB share with one warrant
attached for every four existing IGB shares held. Each Warrant carries the right to subscribe for one new ordinary share at the
Exercise Price of RM1.50 for a period of five years from the date of issue of the Warrant. Pursuant to the bonus issue of new
IGB shares on 18 April 2002, the exercise price and the number of warrants were adjusted from RM1.50 to RM1.00 and from
118,558,214 to 177,837,221 respectively.

The number of unexercised warrants as at 31 December 2003 is 177,837,221 (2002: 177,837,221).

(d) IGB Group Employee Share Option Scheme 2003 (‘ESOS’)

On 15 August 2003, the Company granted 40,742,000 new ESOS to eligible employees at an exercise price of RM0.93 per share.

The main features of the ESOS are as follows:

(i) The eligibility for participation in the ESOS shall be at the discretion of the ESOS Committee, appointed by the
Board of Directors;

(ii) The total number of new IGB Shares to be offered under the ESOS shall not exceed 10% of the total issued and paid-up
share capital of the Company at any point of time during the existence of the ESOS which shall be in force
for a period of five years expiring on 14 August 2008;

Annual Report 2003 105

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

11. Share capital (cont’d)

(d) IGB Group Employee Share Option Scheme 2003 (‘ESOS’) (cont’d)

(iii) The number of shares under options or option price or both so far as the option remain unexercised shall be adjusted
following any issue of additional shares in the issued share capital of the Company by way of rights issue, capitalisation
of profits or reserves or any sub-division and consolidation of the Company’s shares;

(iv) The option price at which the employees are offered to take up shares under the ESOS is the weighted average
market price of the shares of the Company as quoted in the Daily Official List issued by Bursa Malaysia
for the five market days preceding the respective dates of offer of the options with an allowance for a discount of not
more than 10% therefrom at the ESOS committee’s discretion or the par value of the shares of the
Company of RM0.50, whichever is higher; and

(v) The persons to whom the options have been granted have no right to participate by virtue of the options in any share
issue of any other company.
The movements in the number of options over the shares of the Company during the financial year are as follows:

Number of Options
At 1 January 2003 0
Granted 40,742,000
Exercised (19,463,000)
Lapsed (408,000)
At 31 December 2003 20,871,000

2003
Number of share options vested at balance sheet date 50,000

Details relating to options exercised during the financial year are as follows:

Fair value of shares Number of shares

at share issue date Exercise price issued at 31
Exercise date RM/share RM/share December 2003
31.10.2003 - 06.12.2003 1.47 - 1.50 0.93 19,463,000

2003
RM’000
Ordinary share capital - at par 9,731
Share premium 8,369
Proceeds received on exercise of share options 18,100

Fair value at exercise date of shares issued 28,902

Annual Report 2003 106

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

12. Revaluation and other reserves

The revaluation and other reserves comprise:

Group Company
Non-distributable 2003 2002 2003 2002
Note RM’000 RM’000 RM’000 RM’000

Exchange fluctuation reserves 17,519 18,565 0 0

Surplus on revaluation of properties 39,776 39,776 0 0
Surplus on revaluation of investment
in an associate 29,258 29,258 29,258 29,258
Capitalisation of revenue reserves
in an associate 686 686 0 0
87,239 88,285 29,258 29,258
Goodwill arising on consolidation (8,144) (35,125) 0 0
79,095 53,160 29,258 29,258
Total revaluation and other reserves:

At 1 January
- As previously reported 55,182 64,462 29,258 29,258
- Prior year adjustments 34 (2,022) (2,022) 0 0
- As restated 53,160 62,440 29,258 29,258
Exchange fluctuation reserves
arising in the financial year (1,046) 3,313 0 0
Reserve/(goodwill) arising on consolidation 33 26,981 (12,593) 0 0
At 31 December 79,095 53,160 29,258 29,258

The non-distributable reserves are not distributable as cash dividends.

13. Retained earnings

Subject to agreement by the Inland Revenue Board, the Company has sufficient tax credit under Section 108 of the Income
Tax Act, 1967 to frank the payment of net dividends of approximately RM87,561,000 (2002: RM82,576,000) out of its
distributable reserves of RM502,411,000 (2002: RM491,392,000) as at 31 December 2003 without incurring any additional
tax liabilities. The Company also has tax exempt income as at 31 December 2003 amounting to RM124,700,000 (2002:
RM124,700,000) available for distribution as tax exempt dividends to shareholders.

Annual Report 2003 107

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

14. Bank borrowings

Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Current
Unsecured
Short term loans 30,000 76,095 0 26,000
Bank overdrafts 924 5,628 887 3,110
Secured
Current portion of term loans 107,368 61,600 49,711 60,349
Short term loans 41,500 80,290 10,000 25,000
Syndicated Fixed Rate Loan 20,000 0 0 0
Bank overdrafts 4,871 7,283 0 0
204,663 230,896 60,598 114,459
Non-current
Unsecured
Term loans 94,330 42,000 0 0
Secured
Term loans 99,263 307,925 0 49,711
Murabahah Underwritten Notes
and Syndicated Fixed Rate Loan 180,000 245,000 0 0
373,593 594,925 0 49,711
Total repayable 578,256 825,821 60,598 164,170

Currency exposure profile of bank borrowings is as follows:

- US Dollar 21,095 5,500 0 0

- Ringgit Malaysia 557,161 820,321 60,598 164,170
578,256 825,821 60,598 164,170

The secured term loans, bank overdrafts and short term loans obtained by the Group and Company respectively are secured by
way of deposits of securities with market value of not less than the facility amount and fixed registered charges over certain
lands and buildings, hotel properties, lands under development properties and inventories of the Group as disclosed in notes
16, 18, 19, 20 and 21 to the financial statements respectively.

Annual Report 2003 108

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

14. Bank borrowings (cont’d)

Group Company
2003 2002 2003 2002
% per % per % per % per
annum annum annum annum

Weighted average effective finance

rates at balance sheet date:
Bank overdrafts 7.33 7.68 7.50 7.29
Short term loans 4.15 4.35 4.27 5.04
Term loans 7.49 8.26 7.50 7.32
Syndicated Fixed Rate Loan 9.50 9.50 0 0
Murabahah Underwritten Notes 0 4.40 0 0

Group borrowings : maturity and exposure to finance rate risk

Later Later
than 1 than 2
year and years and
Not later not later not later Later
than 1 than 2 than 5 than 5
year years years years Total
Group RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2003
- Fixed finance rate 69,711 100,000 120,000 20,000 309,711
- Floating finance rate 134,952 32,465 90,757 10,371 268,545
204,663 132,465 210,757 30,371 578,256
At 31 December 2002
- Fixed finance rate 40,350 80,211 151,500 60,000 332,061
- Floating finance rate 190,546 76,375 191,839 35,000 493,760
230,896 156,586 343,339 95,000 825,821

Annual Report 2003 109

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

14. Bank borrowings (cont’d)

Company borrowings : maturity and exposure to finance rate risk

Later Later
than 1 than 2
year and years and
Not later not later not later Later
than 1 than 2 than 5 than 5
year years years years Total
Company RM’000 RM’000 RM’000 RM’000 RM’000

At 31 December 2003
- Fixed finance rate 49,711 0 0 0 49,711
- Floating finance rate 10,887 0 0 0 10,887
60,598 0 0 0 60,598
At 31 December 2002
- Fixed finance rate 40,350 49,711 0 0 90,061
- Floating finance rate 74,109 0 0 0 74,109
114,459 49,711 0 0 164,170

Estimated fair values

The carrying amounts of bank overdrafts, revolving credits and term loans with floating finance rates at balance sheet date
approximated their fair values. The fair value of other borrowings with fixed finance rate at balance sheet date was as follows :

Group Group
2003 2002
Carrying Fair Carrying Fair
Amount Value Amount Value
RM’000 RM’000 RM’000 RM’000

Bank borrowings 309,711 317,434 332,061 349,467

Murabahah Underwritten Notes and Syndicated Fixed Rate Loan

A subsidiary has been granted loan facilities by financial institutions for purpose of financing the construction of Phase 1 of
Mid Valley up to a maximum of RM450.0 million comprising two (2) programmes, namely:

(a) Murabahah Underwritten Notes Issuance Facility (‘MUNIF’) up to a maximum of RM250.0 million under the
Islamic financing contract of Al-Murabahah; and

(b) Syndicated Fixed Rate Loan (‘SFRL’) of RM200.0 million.

Annual Report 2003 110

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

14. Bank borrowings (cont’d)

During the financial year, the mortgage was discharged and the security of the bank facilities was replaced by a bank
guarantee to facilitate the re-alienation process of Mid Valley land;

(b) Corporate Guarantee from the Company and subordination of all shareholders’ loan to the subsidiary;

(c) Debenture over the assets of the subsidiary; and

(d) Legal assignments of:

(i) all sales and purchases and tenancy agreements, the contractors’ performance bonds and insurance contracts;

(ii) Mid Valley project account; and

(iii) the subsidiary’s rights on building contracts, design and drawings of Mid Valley.

The MUNIF has been repaid and cancelled during the financial year. As at 31 December 2003, the amount drawn down of
RM200 million (2002: RM200 million) for purpose of financing the construction of Phase 1 of Mid Valley from SFRL
facilities is repayable by ten (10) half-yearly instalments of RM20 million each, commencing at the beginning of the seventh
year from the first drawn down on 16 March 1998.

Annual Report 2003 111

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

15. Deferred taxation

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when the deferred taxes relate to the same tax authority. The following amounts, determined after
appropriate offsetting, are shown in the balance sheet:

Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Deferred tax assets 4,659 16,725 0 0

Deferred tax liabilities:
- subject to income tax (53,886) (54,998) (1,600) (1,600)
- subject to capital gains tax (20,647) (20,647) 0 0
(74,533) (75,645) (1,600) (1,600)
At 31 December (69,874) (58,920) (1,600) (1,600)

Group Company
2003 2002 2003 2002
Note RM’000 RM’000 RM’000 RM’000

At 1 January
- As previously reported (60,563) (1,617) (1,600) (1,600)
- Prior year adjustments 34 1,643 12,768 0 0
- As restated (58,920) 11,151 (1,600) (1,600)
Charged/(credited) to income
statement: 8
- property, plant and equipment (5,015) (10,500) 0 0
- tax losses (2,395) 4,543 0 0
- others (162) (305) 0 0
(7,572) (6,262) 0 0
Arising from acquisition of subsidiary (3,382) (63,809) 0 0
At 31 December (69,874) (58,920) (1,600) (1,600)

Annual Report 2003 112

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

15. Deferred taxation (cont’d)

Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Subject to income tax

Deferred tax assets (before offsetting)
Tax losses 26,013 28,408 0 0
Others 617 779 0 0
26,630 29,187 0 0
Offsetting (21,971) (12,462) 0 0
Deferred tax assets (after offsetting) 4,659 16,725 0 0

Deferred tax liabilities (before offsetting)

Property, plant and equipment (44,193) (30,731) (1,600) (1,600)
Development property expenditure (30,674) (35,739) 0 0
Real property assets (990) (990) 0 0
(75,857) (67,460) (1,600) (1,600)
Offsetting 21,971 12,462 0 0
Deferred tax liabilities (after offsetting) (53,886) (54,998) (1,600) (1,600)

Subject to capital gains tax

Deferred tax liabilities
Hotel properties (19,722) (19,722) 0 0
Others (925) (925) 0 0
(20,647) (20,647) 0 0

The amount of deductible temporary differences and unused tax losses (both of which have no expiry date) for which no
deferred tax asset is recognised in the balance sheet are as follows :

Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Deductible temporary differences 211 227 0 0

Tax losses 45,553 40,125 0 0

Annual Report 2003 113

 16. Property, plant and equipment
Office
furniture,
Group Freehold Leasehold Other Hotel Plant and Motor fittings and Capital work-
land land lands Buildings properties machinery vehicles equipment in-progress Total
2003 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000
At 1 January
At cost 163,808 7,514 48,253 619,349 158,733 213,627 5,730 63,160 81,140 1,361,314
At valuation 26,999 0 0 0 64,427 0 0 0 0 91,426
Additions 0 0 0 0 124 1,061 528 6,387 10,816 18,916
Additions arising from acquisition
of subsidiary 0 0 67,061 0 0 0 0 0 0 67,061
31 December 2003 (cont’d)

Reclassification 0 0 0 0 0 (4,920) 0 4,920 0 0

Reclassification to development
properties (note 20 to the
financial statements) (4,373) 0 0 0 0 0 0 0 (69,987) (74,360))
Write off 0 0 0 0 0 0 (3) (155) (592) (750)
Disposals 0 0 0 0 0 0 (1,324) (1,874) 0 (3,198)
At 31 December 186,434 7,514 115,314 619,349 223,284 209,768 4,931 72,438 21,377 1,460,409

Accumulated Depreciation

Annual Report 2003

At 1 January 0 993 1,413 40,628 0 66,095 4,048 37,335 0 150,512
Charge for the financial year 0 262 539 15,016 0 21,283 534 8,149 0 45,783
Write off 0 0 0 0 0 0 (2) (102) 0 (104)

114
Disposals 0 0 0 0 0 0 (1,022) (1,492) 0 (2,514)
At 31 December 0 1,255 1,952 55,644 0 87,378 3,558 43,890 0 193,677

Net Book Value

At 31 December 2003
At cost 159,435 6,259 113,362 563,705 158,857 122,390 1,373 28,548 21,377 1,175,306
At valuation 26,999 0 0 0 64,427 0 0 0 0 91,426
186,434 6,259 113,362 563,705 223,284 122,390 1,373 28,548 21,377 1,266,732

Net Book Value

At 31 December 2002
At cost 163,808 6,521 46,840 578,721 158,733 147,532 1,682 25,825 81,140 1,210,802
At valuation 26,999 0 0 0 64,427 0 0 0 0 91,426
NOTES TO THE FINANCIAL STATEMENTS for the financial year ended

190,807 6,521 46,840 578,721 223,160 147,532 1,682 25,825 81,140 1,302,228
 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

16. Property, plant and equipment (cont’d)

Office furniture,
Company Plant and Motor fittings and
Buildings machinery vehicles equipment Total
2003 RM ‘000 RM ‘000 RM ‘000 RM ‘000 RM ‘000
At Cost
At 1 January 1,932 5,621 890 2,952 11,395
Additions 0 0 0 582 582
Disposals 0 0 (231) (16) (247)
At 31 December 1,932 5,621 659 3,518 11,730

Accumulated Depreciation
At 1 January 270 5,256 688 1,822 8,036
Charge for the financial year 39 65 48 388 540
Disposals 0 0 (231) (16) (247)
At 31 December 309 5,321 505 2,194 8,329

Net Book Value

At 31 December 2003 1,623 300 154 1,324 3,401

At 31 December 2002 1,662 365 202 1,130 3,359

(a) Valuation

(i) Freehold land

The freehold land of a subsidiary stated at valuation was revalued on 8 August 1996 by the Directors based on
valuations carried out by independent professional valuers based on a fair market value basis.

The net book value of freehold land of the Group that would have been included in the financial statements
had this not been revalued and carried at cost is RM3,419,000 (2002:RM3,419,000).

(ii) Hotel properties

The hotel properties of the Group stated at valuation were last revalued on 1 November 2001 by the Directors
based on valuations carried out on a fair market value basis by Elvin Fernandez, member of the Institute of
Surveyors, Malaysia, a partner with Khong & Jaafar Sdn Bhd, an independent qualified valuer.

The net book value of hotel properties that would have been included in the financial statements had they not
been revalued is at cost of RM50,423,351 (2002:RM50,423,351).

The hotel properties stated at valuation of RM64,427,000 (2002:RM64,427,000) have been charged as
security for certain term loan facilities as disclosed in note 14 to the financial statements.

(b) Land and buildings, plant and machinery and capital work-in-progress at net book value of RM834,977,000
(2002:RM844,795,000) have been charged as security for certain term loan facilities as disclosed in note 14 to the
financial statements.

Annual Report 2003 115

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

17. Subsidiaries
Company
2003 2002
RM ‘000 RM ‘000

Unquoted shares, at cost 995,642 939,780

Allowance for diminution in value (3,057) (3,057)
992,585 936,723
Details of subsidiaries are set out in note 36 to the financial statements.

18. Associates
Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000
Quoted, at cost
Shares
- In Malaysia 66,239 220,616 38,841 66,531
Warrants
- In Malaysia 0 4,815 0 4,815

Unquoted shares
At cost
- In Malaysia 330,157 329,759 128,000 127,640
- Outside Malaysia 124,643 124,643 0 0
At valuation
- In Malaysia 50,000 50,000 50,000 50,000
571,039 729,833 216,841 248,986
Group’s share of post
acquisition reserves and retained
earnings less losses 31,066 159,776 0 0
602,105 889,609 216,841 248,986
Allowance for diminution in value (29,971) (56,484) 0 0
572,134 833,125 216,841 248,986

Group’s share of net assets 572,134 833,125

Group’s share of contingent liabilities 1,745 15,091

Market value of quoted investments

Shares
- In Malaysia 69,557 419,685 56,482 112,641
Warrants
- In Malaysia 0 30,353 0 30,353
69,557 450,038 56,482 142,994

Annual Report 2003 116

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

18. Associates (cont’d)

Investments in associates of the Group at cost of RM66,239,000 (2002: RM220,616,000) and of the Company at cost of
RM38,841,000 (2002: RM66,531,000) have been charged as security for certain banking facilities as disclosed in note 14 to
the financial statements.

The Group’s investment in an associate was revalued by the Directors in 1992 on the basis of its underlying net assets value.
The revaluation surplus of RM29,258,000 has been credited to revaluation reserve. Other than this investment, the Company
has not adopted a policy of revaluing its investment in associates. The investment at valuation has not been restated to cost as
the amount is not material compared with the Group’s net assets.

Details of associates are set out in note 37 to the financial statements.

19. Other investments

Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000
At cost
Quoted shares
- Outside Malaysia 36,239 36,239 0 0
Unquoted shares
- In Malaysia 11,788 8,788 3,900 2,900
- Outside Malaysia 46,343 46,339 0 0
94,370 91,366 3,900 2,900
Allowance for diminution in value (48,389) (40,140) 0 0
45,981 51,226 3,900 2,900
Market value of quoted investments
- Outside Malaysia 30,147 32,830

The quoted investments have been charged as security for certain banking facilities as disclosed in note 14 to the financial
statements. The market value at balance sheet date of these investments approximated their fair value.

20. Development properties and expenditure

Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000
Land and development expenditure,
at cost 867,569 530,520 0 0
Attributable profit
less foreseeable losses 100,977 36,633 0 0
968,546 567,153 0 0
Progress payments received
and receivable (421,253) (123,203) 0 0
547,293 443,950 0 0
Transfer of unsold completed
development units to inventories (24,407) 0 0 0
522,886 443,950 0 0

Annual Report 2003 117

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

20. Development properties and expenditure (cont’d)

Included in the Group’s land and development expenditure, at cost, are amounts reclassified from property, plant and
equipment of RM74,360,000 as disclosed in note 16 to the financial statements.

Land and development expenditure of the Group at cost of RM319,825,000 (2002: RM277,875,000) have been charged as
security for certain term loan and overdraft facilities as disclosed in note 14 to the financial statements.

Included in the Group’s development properties and expenditure costs are interest capitalised during the financial year of
RM15,044,502 (2002 : RM9,001,811).

21. Inventories
Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000
At cost
Inventories of unsold properties 74,386 56,217 37,348 37,348
Consumables 25 186 0 0
Finished goods 974 692 0 0
Hotel operating supplies 802 1,287 0 0
76,187 58,382 37,348 37,348

Inventories of unsold properties of the Group at cost of RM8,974,710 (2002: RM13,258,634) have been charged as security
for certain term loan facilities as disclosed in note 14 to the financial statements.

22. Marketable securities

Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000
At cost
Quoted shares:
- In Malaysia 9,783 9,783 6,529 6,529
Warrants:
- In Malaysia 7,036 7,036 7,036 7,036
16,819 16, 819 13,565 13,565
Allowance for diminution in value (4,104) (4,104) (4,104) (4,104)
12,715 12,715 9,461 9,461
Market value of marketable securities
Quoted shares
- In Malaysia 8,801 9,431 8,801 9,431
Warrants
- In Malaysia 3,987 3,284 3,987 3,284
12,788 12,715 12,788 12,715

Annual Report 2003 118

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

23. Trade and other receivables

Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000

Trade receivables 110,992 77,663 1,568 1,450

Less: Allowance for doubtful debts (5,431) (2,740) (932) (932)
105,561 74,923 636 518
Other receivables 26,648 41,210 14,313 15,049
Less: Allowance for doubtful debts (1,599) (1,599) (1,094) (1,094)
25,049 39,611 13,219 13,955
Sundry deposits 5,901 3,944 351 349
Prepayments 1,602 1,373 297 1,022
Tax recoverable 6,116 19,175 0 4,572
144,229 139,026 14,503 20,416
The currency exposure profile of
trade receivables is as follows:
- Ringgit Malaysia 105,108 73,330 636 518
- US Dollar 453 1,422 0 0
- Singapore Dollar 0 171 0 0
105,561 74,923 636 518

Credit terms of trade receivables range from payment in advance to 30 days.

The Group’s trade receivables consist of amounts owing by purchasers of property development, office and commercial build-
ing tenants and hotel guests. The concentration of credit risk is limited due to the Group’s diversified business and large
number of customers. The Group’s historical experience in collection of trade receivables falls within the recorded allowances.
Due to these factors, management believe that no additional credit risk beyond amounts allowed for collection losses is
inherent in the Group’s trade receivables.

24. Amounts owing by/to subsidiaries

Company
2003 2002
RM ‘000 RM ‘000

Amounts owing by subsidiaries 958,866 799,273

Less: Allowance for doubtful debts (65,332) (65,332)
893,534 733,941

Amounts owing to subsidiaries 517,936 267,755

Amounts owing by/to subsidiaries represents advances and are unsecured, have no fixed terms of repayment. The
amounts owing by subsidiaries carry nominal interest (2002: nominal) except for an amount of RM396,251,668
(2002: RM418,950,056) which carry interest at a rate of 6% (2002: 6%) per annum. The amounts owing to subsidiaries are
interest free (2002 : nil)

Annual Report 2003 119

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

25. Amounts owing by/to associates

Group Company
2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000

Amounts owing by associates 167,104 146,243 99,476 77,046

Less: Allowance for doubtful debts (3,477) (3,477) (3,477) (3,477)
163,627 142,766 95,999 73,569

Amounts owing to associates 69,558 37,787 9,269 9,269

Amounts owing by/to associates represent advances and are unsecured and have no fixed terms of repayment. The amounts
owing to associates are interest free except for an amount of RM8,536,000 (2002: RM5,975,000) which bears interest at 3.8%
(2002: 3.8%) per annum. The amounts owing by associates are interest free (2002: nil).

26. Cash and cash equivalents

Cash and cash equivalents included in the cash flow statements comprised the following balance sheet amounts:

Group Company
2003 2002 2003 2002
Note RM ‘000 RM ‘000 RM ‘000 RM ‘000

Deposits with licensed banks 194,846 75,134 71,138 34,018

Cash and bank balances 57,545 26,956 615 7,170
Bank overdrafts 14 (5,795) (12,911) (887) (3,110)
246,596 89,179 70,866 38,078
Less: Fixed deposits held as security for
bank guarantee facility (17,928) (11,004) (6,500) 0
228,668 78,175 64,366 38,078
The currency exposure profile of cash and cash
equivalents is as follows:
- Ringgit Malaysia 202,106 49,425 32,789 4,060
- US Dollar 39,342 35,034 38,077 34,018
- Singapore Dollar 2,042 1,991 0 0
- Hongkong Dollar 456 18 0 0
- Australian Dollar 2,650 2,711 0 0
246,596 89,179 70,866 38,078

Included in the above is cash at bank amounting to RM30,965,822 and RM4,381 for the Group and Company (2002:
RM3,493,195 and RM4,381) respectively, which are maintained in designated Housing Development Accounts pursuant to
the Housing Developers (Control and Licensing) Act, 1966 and Housing Regulations, 1991 in connection with the property
development projects of the Group and Company.

Deposits of the Group and Company have an average maturity period of 6 days (2002: 18 days). Fixed deposits held as
security for bank guarantee facility of the Group and the Company are placed in term deposits and rolled-over every 30 days
(2002: 30 days). Bank balances are deposits held at call with banks.

Annual Report 2003 120

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

26. Cash and cash equivalents (cont’d)

The weighted average effective interest rates of deposits, bank and cash balances as at financial year end are as follows:

Group Company
2003 2002 2003 2002
% per % per % per % per
annum annum annum annum

Deposits with licensed banks

- Ringgit Malaysia 2.46 2.65 2.88 0
- US Dollar 0.81 0.94 0.81 0.94
- Singapore Dollar 0.41 0.56 0 0
- Hongkong Dollar 0.44 0.06 0 0
- Australian Dollar 3.88 3.85 0 0

27. Trade and other payables

Group Company
Note 2003 2002 2003 2002
RM ‘000 RM ‘000 RM ‘000 RM ‘000

Trade payables 158,966 99,804 10 10

Accruals 32,413 96,669 1,516 4,023
Dividend payable 20,944 0 20,944 0
Other payables 86,944 33,341 52,822 24,706
Tenants’ deposits received 36,928 36,618 975 948
Amounts due to customers on contracts 28 5,889 6,025 0 0
342,084 272,457 76,267 29,687
The currency exposure profile of
trade payables is as follows:
- Ringgit Malaysia 158,922 88,351 10 10
- US Dollar 44 11,378 0 0
- Singapore Dollar 0 54 0 0
- Hongkong Dollar 0 21 0 0
158,966 99,804 10 10

Credit terms of trade payables and amounts due to customers on contracts vary from no credit to 30 days.

Included in other payables is an advance of RM6,400,000 (2002: RM7,400,000) from a related party - Wah Seong (Malaya)
Trading Co. Sdn Bhd (note 32 to the financial statements). The advance is unsecured, has no fixed terms of repayment and
carries interest at a rate of 4.39% (2002: 4.39%) per annum.

Included in the trade payables are retention on contract sum of RM11,008,604 (2002: RM6,885,722).

Included in other payables is an amount of RM46,290,000 arising from the acquisition of additional equity interest in
Mid Valley City Sdn Bhd as disclosed in note 33 to the financial statements.

Annual Report 2003 121

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

28. Construction contracts

Group
Note 2003 2002
RM ‘000 RM ‘000

Costs incurred to-date 123,724 102,148

Attributable profit 3,624 1,155
127,348 103,303
Progress billings (133,237) (109,328)
(5,889) (6,025)

Amounts due to customers on contracts 27 (5,889) (6,025)

Retention on contracts included in progress billings 7,966 7,180

29. Segment reporting - Group

The Group is organised on a worldwide basis into four main business segments:

* Property development - development and sale of condominiums, bungalows, linked houses and shoplots.
* Property investment , property - rental income and service charge from retail and office buildings.
holding and property management
* Hotel - income from hotel operations.
* Construction - civil and building construction.

Other operations of the Group mainly comprise laundry, hospital and medical centre and investment holding, neither of
which are of a significant size to be reported separately.

Intersegment revenues comprise construction work for internal projects and office rental on an arms length basis under terms,
conditions and prices not materially different from transactions with unrelated parties.

Annual Report 2003 122

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

29. Segment reporting - Group (cont’d)

(a) Primary reporting format - business segment

Property
investment,
property
holding and
Property property
development management Hotel Construction Others Group
2003 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
Total revenue 223,970 169,907 72,511 118,031 4,712 589,131
Intersegment revenue (3,321) (6,143) 0 (43,174) (4,327) (56,965)
External revenue 220,649 163,764 72,511 74,857 385 532,166

Results
Segment results (external) 56,880 47,715 7,228 1,222 (10,136) 102,909
Unallocated income 3,151
Profit from operations 106,060
Finance costs (65,543)
Share of results of associates 7,288 137 35,032 20,662 1,704 64,823
Gain from disposal of associates 0 0 0 79,018 0 79,018
Profit from ordinary activities before tax 184,358
Tax (41,642)
Profit from ordinary activities after tax 142,716
Minority interests 4,817
Net profit for the financial year 147,533

Other information
Segment assets 898,488 1,034,850 432,588 56,096 39,156 2,461,178
Associates 191,426 24,518 294,561 0 61,629 572,134
Unallocated assets 194,846
Total assets 3,228,158

Segment liabilities 243,006 151,185 70,784 27,906 2,841 495,722

Unallocated liabilities 578,256
Total liabilities 1,073,978

Capital expenditure 1,289 63,122 20,462 1,031 73 85,977

Depreciation 1,083 33,985 10,357 337 21 45,783

Annual Report 2003 123

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

29. Segment reporting - Group (cont’d)

Property
investment,
property
holding and
Property property
development management Hotel Construction Others Group
2002 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
Total revenue 119,171 163,510 73,143 90,686 803 447,313
Intersegment revenue (14,160) (267) 0 (27,197) 0 (41,624)
External revenue 105,011 163,243 73,143 63,489 803 405,689

Results
Segment results (external) 26,767 45,639 20,486 894 772 94,558
Unallocated income 5,444
Profit from operations 100,002
Finance costs (66,218)
Share of results of associates 5,791 (38) 26,624 36,253 (182) 68,448
Gain from disposal of associates 0 0 12,261 0 0 12,261
Profit from ordinary activities before tax 114,493
Tax (43,369)
Profit from ordinary activities after tax 71,124
Minority interests (3,439)
Net profit for the financial year 67,685

Other information
Segment assets 743,369 1,078,706 435,243 39,636 57,244 2,354,198
Associates 207,270 32,174 238,496 294,898 60,287 833,125
Unallocated assets 75,134
Total assets 3,262,457

Segment liabilities 173,929 111,765 41,049 85,936 4,181 416,860

Unallocated liabilities 825,821
Total liabilities 1,242,681

Capital expenditure 2,449 5,152 1,877 1,200 0 10,678

Depreciation 1,092 31,408 8,348 161 0 41,009

Unallocated income represents interest income. Segment assets consist primarily of property, plant and equipment,
development property expenditure, investments, inventories, receivables, marketable securities and operating cash. Segment
liabilities comprise operating liabilities, taxation and deferred taxation.

Capital expenditure comprises additions to property, plant and equipment (note 16 to the financial statements).

Annual Report 2003 124

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

29. Segment reporting - Group (cont’d)

(b) Secondary reporting format - geographical segments

Although the Group’s business segments are managed on a worldwide basis, they operate in three main areas:

* Malaysia # - property development, property investment, property holding and property

management, hotel and construction
* Asia Pacific (other than Malaysia) - mainly hotel and investment
* United Kingdom - mainly hotel operation

#
Company’s home country
Total Capital
Revenue Assets Expenditure
RM ‘000 RM ‘000 RM ‘000
2003
Malaysia 526,871 3,041,595 85,834
Asia Pacific 5,295 90,451 143
United Kingdom 0 96,112 0
532,166 3,228,158 85,977
2002
Malaysia 400,839 3,018,669 10,678
Asia Pacific 4,850 119,285 0
United Kingdom 0 124,503 0
405,689 3,262,457 10,678

30. Contingent liabilities

Company
2003 2002
RM ‘000 RM ‘000
Corporate guarantees and secured guarantees of bank facilities
granted to subsidiaries 442,691 276,884

The secured guarantees of bank facilities are secured by way of deposits of marketable securities with market value of not less
than the facility amount and fixed registered charges over certain lands and buildings, hotel properties and development
properties of the Group.

At the date of these financial statements, no additional payments are anticipated.

31. Capital commitment

Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000

Capital expenditure authorised by

Directors but not contracted
- Property, plant and equipment 375 414 0 0

Annual Report 2003 125

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

32. Significant related party disclosures

In addition to related party disclosures mentioned elsewhere in the Directors’ report and financial statements, set out below are
other significant related party transactions and balances. The related party transactions described below are carried out on
terms and conditions obtainable in transactions with unrelated parties.

Group
2003 2002
(a) Associates RM’000 RM’000

Dividend income (gross):

- IJM Corporation Berhad 5,680 7,098
- Negara Properties (M) Berhad 1,391 706
- Hampshire Park Sdn Bhd 0 27,903
- Kumpulan Sierramas (M) Sdn Bhd 0 3,502
- Macroland Holdings Sdn Bhd 0 4,073

(Repayment from)/ Advances to:

- Great Union Properties Sdn Bhd 7,629 (8,565)
- Istaron Limited (15,530) (8,950)

Repayment to / (Advances from):

- Ravencroft Investments Incorporated 0 21,866
- Macroland Holdings Sdn Bhd 0 1,461
- Hampshire Park Sdn Bhd (24,800) 0
- Kumpulan Sierramas (M) Sdn Bhd (2,600) 0

(b) Other related parties Relationship

Wah Seong (Malaya) Trading Co. Sdn. Bhd. A company in which Robert Tan Chung Meng, a Director of
the Company, has substantial financial interest
Wah Seong Corporation Berhad A company in which Robert Tan Chung Meng, Pauline Tan Suat Ming,
Tony Tan @ Choon Keat, Directors of the Company, are substantial
shareholders
Cahaya Utara Sdn. Bhd. An associate of Wah Seong (Malaya) Trading Co. Sdn. Bhd.
STH Sri Bulatan Sdn. Bhd. A subsidiary of Wah Seong Corporation Behad
Petro-Pipe Concrete Piles Sdn. Bhd. A subsidiary of Wah Seong Corporation Berhad
Syn Tai Hung Trading Sdn. Bhd. A subsidiary of Wah Seong Corporation Berhad and related to
Robert Tan Chung Meng and Pauline Tan Suat Ming, Directors of
the Company and Dato’ Tan Chin Nam who are deemed majority
shareholders of the Company via corporations in which they have no
less than 15% shareholding
Sweat Club Sdn. Bhd. A subsidiary of Gold IS Berhad, a substantial shareholder of the
Company

Annual Report 2003 126

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

32. Significant related party disclosures (cont’d)

Group
2003 2002
RM’000 RM’000
Repayment of advances to:
- Wah Seong (Malaya) Trading Co. Sdn. Bhd. 1,000 6,600

Management/Marketing fee income from:

- Cahaya Utara Sdn. Bhd. 1,227 1,225

Purchases of building materials from:

- STH Sri Bulatan Sdn. Bhd. 0 1,458
- Petro-Pipe Concrete Piles Sdn. Bhd. 0 1,393
- Syn Tai Hung Trading Sdn. Bhd. 1,626 1,741

Rental income received/receivable from:

- Sweat Club Sdn. Bhd. 1,161 1,109

Significant outstanding balances arising from the above non-trade transactions during the financial year are as follows:

Group
Type of 2003 2002
transaction RM’000 RM’000
(i) Associate - Receivable

- Great Union Properties Sdn. Bhd. Advances 7,629 0

(ii) Associate - Payable

- Hampshire Park Sdn. Bhd. Advances 24,800 0

- Kumpulan Sierramas (M) Sdn. Bhd. Advances 2,600 0

Annual Report 2003 127

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

33. Acquisition of subsidiaries

(a) Acquisition of Mid Valley City Sdn Bhd (‘MVC’)

During the year, the Company acquired additional equity interest of 9.22% in MVC for total cash consideration of
RM55,561,607. As a result, the Company’s shareholding in MVC increased from 90.31% to 99.53% (note 36 to the financial
statements).

Details of fair value of net assets acquired, reserve on consolidation and cost of acquisition arising from the acquisition are as
follows :

At date of acquisition
RM’000

Fair value of net assets acquired 82,838

Reserve on consolidation* (27,276)
Cost of acquisition 55,562
Less : amount paid (9,272)
Balance to be paid (included in other payables-note 26 to the financial statements) 46,290

(b) Acquisition of Technoltic Engineering Sdn Bhd

The Company also acquired a 60% interest in Technoltic Engineering Sdn Bhd on 28 April 2003 at no cost. Subsequently
the Company subscribed for 300,000 new ordinary shares of RM1 each at par value.

Details of net liabilities acquired, goodwill and cash flow arising from the acquisition are as follows :

At date of acquisition
RM’000

Net liabilities acquired (295)

Goodwill* 295
Cost of acquisition 0

Purchase consideration 0
Less : Cash and cash equivalents of subsidiary acquired (11)
Cash inflow of the Group on acquisition (11)

* Reserve on consolidation, net of goodwill, arising from this acquisition of RM26,981,000 has been written off to reserves.

Annual Report 2003 128

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

34. Prior year adjustments

During the financial year, the Group changed its accounting policies to comply with MASB 25 ‘Income Taxes’.

In previous years, deferred tax was recognised for timing differences except when there was reasonable evidence that
such timing differences would not reverse in the foreseeable future. The tax effect of timing differences that resulted in a
debit balance or a debit to the deferred tax balance was not carried forward unless there was a reasonable expectation of
its realisation.

The Group has now changed its accounting policy to recognise deferred tax on temporary differences arising between the
amounts attributable to assets and liabilities for tax purposes and their carrying values in the financial statements. Defered tax
assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary
differences or unused tax losses can be utilised.

In addition, deferred tax is recognised on temporary differences arising on investments in subsidiaries, associates and joint
ventures except where timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.

This change in accounting policy has been accounted for retrospectively.

The new accounting policy has the effect of reducing the Group’s net profit for the financial year ended 31 December 2003 by
RM12,636,728. The other effects of the change on the Group’s financial statements are as follows :

Effect of
As previously change in As
reported policy restated
Group RM’000 RM’000 RM’000

At 1 January 2002 :
- Retained earnings 666,097 14,790 680,887
- Deferred tax (liability)/asset (1,617) 12,768 11,151
- Revaluation and other reserves 64,462 (2,022) 62,440

At 31 December 2002 :
- Retained earnings 740,631 3,665 744,296
- Deferred tax liability (60,563) 1,643 (58,920)
- Revaluation and other reserves 55,182 (2,022) 53,160

Year ended 31 December 2002

Tax - Company and subsidiaries 11,919 11,125 23,044
Profit from ordinary activities after tax 82,249 (11,125) 71,124
Net profit for the financial year 78,810 (11,125) 67,685

Annual Report 2003 129

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

35. Significant events

(a) Disposal of shares and warrants in an associate, IJM Corporation Berhad (‘IJM’)

On 25 September 2003, the disposals of IJM shares and warrants were completed and the full proceeds of RM382
million were received on 30 September 2003.

(b) Employees’ Share Option Scheme (‘ESOS’)

The ESOS was approved by the shareholders on 30 May 2003. On 15 August 2003, the total number of 40,742,000
new ordinary shares of RM0.50 each under the ESOS were granted to eligible employees at an exercise price
of RM0.93 per share.

(c) Corporate exercise of Mid Valley City Sdn Bhd (‘MVC’)

On 16 October 2003, it was announced to the Bursa Malaysia that the Company had on 16 October 2003 signed
a tripartite Memorandum of Understanding (‘MOU’) with Amtek Engineering Ltd (‘Amtek’) and Kris
Components Berhad (‘Kris’) whereby the Company shall enter into the following conditional sale and
purchase agreements:

(i) a conditional sale and purchase agreement with Amtek for the Company to acquire 32,805,000 ordinary
shares of RM1.00 each representing approximately 41.84% equity interest in Kris as at the date of the MOU,
from Amtek for a cash consideration of RM91,197,900 or RM2.78 per Kris share (‘Proposed Acquisition’);
and

(ii) a conditional sale and purchase agreement with Kris for the Company to sell and/or procure the sale of
approximately 99.5% equity interest in MVC to Kris for a disposal consideration to be determined and
agreed upon later between the Company and Kris to be satisfied by cash, new Kris shares at an issue price of
RM2.50 per share and/or other new securities to be issued by Kris (‘Proposed Disposal’).

On 12 November 2003, it was announced to the Bursa Malaysia that the Company had on 12 November 2003 agreed
on the terms of the Proposed Acquisition and the Proposed Disposal and had on the same date entered into the
following conditional sale and purchase agreements:

(i) a conditional sale and purchase agreement with Amtek for the Company to acquire 32,805,000 ordinary
shares of RM1.00 each representing approximately 41.84% equity interest in Kris as at the date of the MOU,
from Amtek for a cash consideration of RM91,197,900 or RM2.78 per Kris share (‘Proposed Acquisition’);

(ii) a conditional sale and purchase agreement with Kris for the Company to sell 289,045,160 ordinary shares of
RM1.00 each representing approximately 96.35% equity interest in MVC to Kris for a total consideration of
RM992,190,396 to be satisfied by cash of RM98,735,038 and 243,933,623 new Kris shares at an issue price
of RM2.50 per share and 2,836,213 new Kris Redeemable Preference Shares of RM0.10 each (‘Kris RPS’) at
an issue price of RM100.00 per Kris RPS; and

Annual Report 2003 130

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

35. Significant events (cont’d)

(c) Corporate exercise of Mid Valley City Sdn Bhd (‘MVC’) (cont’d)

(iii) a conditional sale and purchase agreement with Kris for the Company to sell 9,558,121 ordinary shares of
RM1.00 each in MVC representing approximately 3.19% equity interest in MVC to Kris for a total
consideration of RM32,809,604 to be satisfied by cash of RM3,264,962 and 8,066,377 new Kris shares at an
issue price of RM2.50 per share and 93,787 new Kris RPS at an issue price of RM100.00 per Kris RPS.

The principal conditions precedent to the above Proposals, which are inter-conditional are as follows :

(i) the approvals of the relevant authorities, including among others, the Securities Commission, Foreign
Investment Committee and Ministry of International Trade and Industry, as well as Bursa Malaysia
having been obtained;

(ii) the approvals from the shareholders of the Company, Kris and Amtek (where applicable) having been
obtained;

(iii) the completion of legal and financial due diligence by the respective parties; and

(iv) any other relevant approvals or consents having been obtained.

As at the date of this report, all the above conditions precedent have not been met, except for the approval from the
Ministry of International Trade and Industry received on 11 March 2004.

Annual Report 2003 131

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

36. Subsidiaries
Place of Group’s Interest (%)
Name of Company Principal Activities Incorporation 2003 2002

Abad Flora Sdn. Bhd. 1 Property Investment Malaysia 100.0 100.0

Amanbest Sdn. Bhd. 2 Dormant Malaysia 51.0 51.0
Amandamai Dua Sdn. Bhd. 3 Investment Holding Malaysia 100.0 100.0
Amandamai Satu Sdn. Bhd. 4 Property Development Malaysia 100.0 100.0
Angkasa Gagah Sdn. Bhd. 5 Property Development Malaysia 100.0 100.0
* Asian Equity Limited. 6 Investment Holding British Virgin Islands 55.0 55.0
Atar Deras Sdn. Bhd. 7 Property Investment and Malaysia 100.0 100.0
Development
* Auspicious Prospects Ltd. 8 Investment Holding Liberia 100.0 100.0
Bagan Ajam Estate Sendirian Berhad Property Development Malaysia 100.0 100.0
Belimbing Hills Sdn. Bhd. 9 Property Development Malaysia 100.0 100.0
* Bellegrove Pte. Ltd. 10 Dormant Singapore 100.0 100.0
* Beswell Limited 11 Investment Holding Hong Kong 100.0 100.0
Bintang Buana Sdn. Bhd. 12 Property Development Malaysia 90.0 90.0
Central Review (M) Sdn. Bhd. 13 Hotel Operation and Malaysia 100.0 100.0
Management
Cipta Klasik (M) Sdn. Bhd. 14 Property Investment Malaysia 100.0 100.0
Cititel Hotel Management Sdn. Bhd. Hotel Management Services Malaysia 60.0 60.0
City Beauty Sdn. Bhd. 15 Dormant Malaysia 100.0 100.0
Corpool Holdings Sdn. Bhd. Dormant Malaysia 100.0 100.0
Courtyard Sdn. Bhd. 16 Home Furnishing Malaysia 70.0 70.0
Danau Bidara (M) Sdn. Bhd. 17 Property Holding Malaysia 100.0 100.0
Dian Rezki Sdn. Bhd. Investment Holding Malaysia 100.0 100.0
Earning Edge Sdn. Bhd. 18 Investment Holding Malaysia 65.0 65.0
Ensignia Construction Sdn. Bhd. Investment Holding and Malaysia 100.0 100.0
Construction
Express Management Consultants Dormant Malaysia 100.0 100.0
Sdn. Bhd. 19
* Grapevine Investments Pte. Ltd. Investment Holding Singapore 100.0 100.0
Harta Villa Sdn. Bhd. 20 Property Holding Malaysia 100.0 100.0
ICDC Holdings Sdn. Bhd. Investment Holding Malaysia 100.0 100.0
ICDC Management Sdn. Bhd. 21 Dormant Malaysia 100.0 100.0
IEH Corporation Sdn. Bhd. Dormant Malaysia 100.0 100.0
IGB Project Management Services Project Management Malaysia 100.0 100.0
Sdn. Bhd. Services

Annual Report 2003 132

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

36. Subsidiaries (cont’d)

Place of Group’s Interest (%)
Name of Company Principal Activities Incorporation 2003 2002

IGB Properties Sdn. Bhd. 22 Property Investment and Malaysia 100.0 100.0
Management
IGB Real Estate Sdn. Bhd. 23 Dormant Malaysia 100.0 100.0
Innovation & Concept Development Co. Property Development Malaysia 100.0 100.0
Sdn. Bhd. 24
Intercontinental Aviation Services Investment Holding Malaysia 100.0 100.0
Sdn. Bhd.
Ipoh Garden Shopping Complex Sdn. Bhd. Dormant Malaysia 100.0 100.0
IT&T Engineering & Construction Investment Holding Malaysia 100.0 100.0
Sdn. Bhd.
Kemas Muhibbah Sdn. Bhd. 25 Property Development Malaysia 100.0 100.0
KennyVale Sdn. Bhd. 26 Property Development Malaysia 100.0 100.0
Kilat Security Sdn. Bhd. Dormant Malaysia 100.0 100.0
Kondoservis Sdn. Bhd. 27 Management Services to Malaysia 100.0 100.0
Condominiums
K Parking Sdn. Bhd. Dormant Malaysia 100.0 100.0
+ Lingame Company Limited Investment Holding Hong Kong 100.0 100.0
Lucravest Holdings Sdn. Bhd. Dormant Malaysia 100.0 100.0
* MiCasa Hotel Limited. 28 Hotelier Myanmar 65.0 65.0
Mid Valley City Sdn. Bhd. Property Investment and Malaysia 99.5 90.3
Management
Mid Valley City Developments Sdn. Bhd. Property Development Malaysia 100.0 100.0
(formerly known as Pebbles
Enterprise Sdn. Bhd.)
Mid Valley City Enterprise Sdn. Bhd. Hotelier Malaysia 100.0 100.0
(formerly known as Hai Aun Co. Sdn. Bhd.)
Mid Valley Food Management Sdn. Bhd. Dormant Malaysia 100.0 100.0
Mid Valley MC Sdn. Bhd. 29 Dormant Malaysia 99.5 90.3
Mid Valley Mulia Sdn. Bhd. 30 Dormant Malaysia 99.5 90.3
Mid Valley Properties Sdn. Bhd. 31 Dormant Malaysia 99.5 90.3
MIHR Sdn. Bhd. 32 Hotel Management and Malaysia 90.0 90.0
Consultancy
Murni Properties Sdn. Bhd. Property Development Malaysia 100.0 100.0
MVEC Exhibition and Event Services Provision of Exhibition Malaysia 100.0 100.0
Sdn. Bhd. Services
Nova Pesona Sdn. Bhd. 33 Property Development Malaysia 50.0 0
+
( 1 share)

Annual Report 2003 133

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

36. Subsidiaries (cont’d)

Place of Group’s Interest (%)
Name of Company Principal Activities Incorporation 2003 2002

OPT Ventures Sdn. Bhd. 34 Property Development Malaysia 70.0 70.0

Outline Avenue (M) Sdn. Bhd. 35 Property Development Malaysia 90.0 90.0
Pacific Land Sdn. Bhd. Investment Holding Malaysia 100.0 100.0
Pangkor Island Resort Sdn. Bhd. Hotelier Malaysia 100.0 100.0
Pekeliling Land Sdn. Bhd. Property Holding Malaysia 100.0 100.0
Pekeliling Property Sdn. Bhd. Dormant Malaysia 100.0 100.0
Penang Garden Sdn. Bhd. Dormant Malaysia 100.0 100.0
Permata Dunia Sdn. Bhd. 36 Investment Holding Malaysia 100.0 100.0
Permata Efektif (M) Sdn. Bhd. 37 Property Development Malaysia 83.0 83.0
Pinex Sdn. Bhd. 38 Dormant Malaysia 100.0 100.0
PIR Management Services Sdn. Bhd. 39 Dormant Malaysia 100.0 100.0
Plaza Permata Management Services Property Management Malaysia 100.0 100.0
Sdn. Bhd. Services
Prima Condominium Sdn. Bhd. Investment Holding Malaysia 100.0 100.0
Primanah Property Sdn. Bhd. Property Development Malaysia 100.0 100.0
Puncak Megah (M) Sdn. Bhd. Property Investment Malaysia 100.0 100.0
Reka Handal Sdn. Bhd. 40 Property Development Malaysia 75.0 75.0
Riraiance Enterprise Sdn. Bhd. Investment Holding Malaysia 100.0 100.0
Tanah Alam Sdn. Bhd. Property Development Malaysia 100.0 100.0
Tanah Permata Sdn. Bhd. 41 Hotelier Malaysia 100.0 100.0
Tanobi Sdn. Bhd. 42 Property Holding Malaysia 100.0 100.0
Tan & Tan Developments Berhad Property Development, Malaysia 100.0 100.0
Project Management
Services and
Investment Holding
Tan & Tan Realty Sdn. Bhd. 43 Property Investment Malaysia 80.0 80.0
T-Bond Construction Sdn. Bhd. 44 Construction Malaysia 100.0 100.0
Technoltic Engineering Sdn. Bhd. Servicing & Maintenance Malaysia 60.0 0
of Elevators
Teamwork M&E Sdn. Bhd. 45 Mechanical and Electrical Malaysia 100.0 100.0
Services to Condominiums
and Apartments
46
TTD Sdn. Bhd. Hotel Operation and Malaysia 100.0 100.0
Management
X-Speed Sdn. Bhd. Dormant Malaysia 100.0 100.0
X-Speed Skatepark Sdn. Bhd. 47 Dormant Malaysia 99.5 90.3

Annual Report 2003 134

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

36. Subsidiaries (cont’d)

Notes:

1-5, 7, 9, 12-17, 20, 26, 27, 32-35, 37, 38, 40, 42-46 - Held by Tan & Tan Developments Berhad.
6 - Held by Pacific Land Sdn. Bhd. and TTD Sdn. Bhd. 35.0% and 20.0% respectively.
8 - Held by Lingame Company Limited.
10 - Held by Auspicious Prospects Ltd.
11 - Held by Pacific Land Sdn. Bhd.
18 - Held by Pacific Land Sdn. Bhd. and TTD Sdn. Bhd. 45.0% and 20.0% respectively.
19, 21 & 24 - Held by ICDC Holdings Sdn. Bhd.
22, 23 & 41 - Held by IT & T Engineering & Construction Sdn. Bhd.
25 - Held by IGB Project Management Services Sdn. Bhd.
28 - Held by Earning Edge Sdn. Bhd.
29-31 & 47 - Held by Mid Valley City Sdn. Bhd.
36 - Held by Corpool Holdings Sdn. Bhd.
39 - Held by Pangkor Island Resort Sdn. Bhd.

+ Companies audited by member firms of PricewaterhouseCoopers International

* Companies not audited by PricewaterhouseCoopers

37. Associates
Place of Group’s Interest (%)
Name of Company Principal Activities Incorporation 2003 2002

* Aroma Laundry and Dry Cleaners Commercial Laundrette Malaysia 20.0 20.0
Sdn. Bhd. 1
* Crystal Centre Properties Investment Holding Hong Kong 45.0 45.0
(International) Ltd. 2
DMV Sdn. Bhd.3 Property Development Malaysia 50.0 29.9
Gleneagles Hospital (Kuala Lumpur) Investment in and Malaysia 30.0 30.0
Sdn. Bhd. 4 Management of a
Private Hospital
Gleneagles Medical Centre Property Development Malaysia 30.0 30.0
(Kuala Lumpur) Sdn. Bhd. 5 and Investment Holding
in Medical Centres
+ Grapevine Investments (Hong Kong) Investment Holding Hong Kong 50.0 50.0
Limited. 6
Great Union Properties Sdn. Bhd. Hotelier Malaysia 50.0 50.0
* Great Union Properties (S) Pte. Ltd. 7 Hotel Marketing Singapore 50.0 50.0

Annual Report 2003 135

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

37. Associates (cont’d)

Place of Group’s Interest (%)
Name of Company Principal Activities Incorporation 2003 2002

* Gunung Lang Development Sdn. Bhd. Property Development Malaysia 30.0 30.0
Hampshire Park Sdn. Bhd. 8 Property Development Malaysia 50.0 50.0
* Hicom Tan & Tan Sdn. Bhd. 9 Property Development Malaysia 50.0 50.0
IJM Corporation Berhad. 10 Construction, Property Malaysia 0 19.5
Development and
Investment Holding
* Istaron Limited. 11 Investment Holding Hong Kong 50.0 50.0
Johan Kekal Sdn. Bhd. Property Development Malaysia 50.0 50.0
Kumpulan Sierramas (M) Sdn. Bhd. 12 Property Development Malaysia 47.0 47.0
Kundang Properties Sdn. Bhd. Property Development Malaysia 50.0 50.0
* Kyami Pty. Ltd. 13 Property Management Australia 40.0 40.0
and Development
* MIHR Consulting Sdn. Bhd. 14 Hotel Consultancy Malaysia 31.5 31.5
* Macroland Holdings Sdn. Bhd. Property Development Malaysia 30.0 30.0
* Negara Properties (M) Berhad. 15 Property Development Malaysia 24.6 24.6
* New Commercial Investments Investment Holding British Virgin Islands 49.6 49.6
Limited. 16
Permata Alasan (M) Sdn. Bhd. 17 Property Development Malaysia 50.0 50.0
and Property Investment
Rapid Alpha Sdn. Bhd. 18 Construction Malaysia 50.0 50.0
* Ravencroft Investments Incorporated. 19 Investment Holding British Virgin Islands 49.5 49.5
* Saigon Inn Hotel Co. 20 Hotelier Vietnam 33.8 33.8
* Sierramas Landscape Services Sdn. Bhd. 21 Landscaping and Malaysia 47.0 47.0
Horticulture
* St Giles Hotel Ltd. 22 Hotelier United Kingdom 49.5 49.5
* St Giles Hotel (Heathrow) Ltd. 23 Hotelier United Kingdom 49.6 49.6
SuCasa Sdn. Bhd. 24 Hotelier and Operator Malaysia 40.0 40.0
of Service Apartments
Sukatan Garisan Sdn. Bhd. 25 Dormant Malaysia 50.0 50.0
* Tentang Emas Sdn. Bhd. 26 Investment Holding Malaysia 49.0 49.0
* Weian Investments Pte. Ltd. 27 Property Development Singapore 49.0 49.0
and Trading

Annual Report 2003 136

 NOTES TO THE FINANCIAL STATEMENTS for the financial year ended
31 December 2003 (cont’d)

37. Associates (cont’d)

Notes:

1, 4, 5, 8, 9, 12, 13, 17, 24, 26 - Held by Tan & Tan Developments Berhad.
2 - Held by Istaron Limited.
3 - Held by Tan & Tan Developments Berhad and IGB Corporation Berhad 33.3% and 16.7% respectively.
6, 27 - Held by Grapevine Investments Pte. Ltd.
7 - Held by Great Union Properties Sdn. Bhd.
10 - Previously held by IGB Corporation Berhad, Riraiance Enterprise Sdn. Bhd. and International Aviation
Services Sdn. Bhd.3.54%, 13.21% and 2.75% respectively.
11 - Held by Pacific Land Sdn. Bhd.
14 - Held by MIHR Sdn. Bhd.
15 - Held by IGB Corporation Berhad and Intercontinental Aviation Services Sdn. Bhd 20.0% and 4.6% respectively.
16 - Held by Pacific Land Sdn. Bhd. and TTD Sdn. Bhd. 31.53% and 18.02% respectively.
18 - Held by Ensignia Construction Sdn. Bhd.
19 - Held by Pacific Land Sdn. Bhd., Beswell Limited and TTD Sdn. Bhd. 27.72%, 7.65% and 14.10% respectively.
20 - Held by Crystal Centre Properties (International) Ltd.
21 - Held by Kumpulan Sierramas (M) Sdn. Bhd.
22 - Held by Pacific Land Sdn. Bhd., Beswell Limited and TTD Sdn. Bhd. 27.72%, 7.65% and 14.10% respectively.
23 - Held by Pacific Land Sdn. Bhd. and TTD Sdn. Bhd. 31.53% and 18.02% respectively.
25 - Held by Johan Kekal Sdn. Bhd.

+ Companies audited by member firms of PricewaterhouseCoopers International

* Companies not audited by PricewaterhouseCoopers

38. Approval of financial statements

The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on
20 April 2004.

Annual Report 2003 137

 STATEMENT BY DIRECTORS pursuant to Section 169(15) of the Companies Act, 1965

We, Robert Tan Chung Meng and Dato’ Seri Khalid Ahmad Bin Sulaiman, two of the Directors of IGB Corporation Berhad,
state that, in the opinion of the Directors, the financial statements set out on pages 80 to 137 are drawn up so as to exhibit a
true and fair view of the state of affairs of the Group and Company as at 31 December 2003 and of the results and cash flows
of the Group and Company for the financial year ended on that date in accordance with the applicable approved accounting
standards in Malaysia and the provisions of the Companies Act, 1965.

Signed on behalf of the Board of Directors in accordance with their resolution dated 20 April 2004.

Robert Tan Chung Meng

Managing Director

Dato’ Seri Khalid Ahmad bin Sulaiman

Director

Annual Report 2003 138

 STATUTORY DECLARATION pursuant to Section 169(16) of the Companies Act, 1965

I, Chai Lai Sim, the officer primarily responsible for the financial management of IGB Corporation Berhad, do solemnly and
sincerely declare that the financial statements set out on pages 80 to 137 are, in my opinion, 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.

Chai Lai Sim

Subscribed and solemnly declared by the abovenamed Chai Lai Sim at Kuala Lumpur on 20 April 2004.

Before me:

Phang Yoke Lin

Commissioner for Oaths

Annual Report 2003 139

 REPORT OF THE AUDITORS to the members of IGB Corporation Berhad
for the financial year ended 31 December 2003

We have audited the financial statements set out on pages 80 to 137. These financial statements are the responsibility of the
Company’s Directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with approved auditing standards in Malaysia. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by Directors, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and the
applicable approved accounting standards in Malaysia so as to give a true and fair view of:

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

(ii) the state of affairs of the Group and Company as at 31 December 2003 and of the results and cash flows of the
Group and Company for the financial year ended on that date;
and

(b) the accounting and other records and the registers required by the Act 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 Act.

Annual Report 2003 140

 REPORT OF THE AUDITORS to the members of IGB Corporation Berhad
for the financial year ended 31 December 2003

The names of the subsidiaries of which we have not acted as auditors are indicated in note 36 to the financial statements. We
have considered the financial statements of these subsidiaries and the auditors’ reports thereon.

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 auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include
any comment made under subsection 3 of Section 174 of the Act.

PricewaterhouseCoopers
(AF: 1146)
Chartered Accountants

Shirley Goh
(No. 1778/08/04(J))
Partner of the firm

Kuala Lumpur
20 April 2004

Annual Report 2003 141

T h i s p a g e i n t e n t i o n a l l y l e f t b l a n k

Annual Report 2003 142

ADDITIONAL C O M P L I A N C E I N F O R M A T I O N

Annual Report 2003 143

 ADDITIONAL C O M P L I A N C E I N F O R M A T I O N

The following information is presented in compliance with Bursa Malaysia Listing Requirements:

1. Sanction and/or penalties

There were no sanctions and/or penalties imposed on IGB and its subsidiaries, Directors or
management by the relevant regulatory bodies during the financial year.

2. Non-audit fees
The amount of non-audit fees paid and payable to the external auditors by IGB and its
subsidiaries for the financial year ended 31 December 2003 are as follows:

RM
PWC Taxation Services Sdn Bhd 175,545
PricewaterhouseCoopers 0
175,545

3. Recurrent related party transactions of a revenue or trading nature (‘Recurrent Transactions’)

At an Extraordinary General Meeting on 30 May 2003, the Company had obtained a shareholders’ mandate to allow
IGB Group to enter into Recurrent Transactions.

In accordance with paragraph 10.09(1)(b), Part E, Chapter 10 and Section 4.1.5 of Practice Note No. 12/2001 of
Bursa Malaysia Listing Requirements, the details of the Recurrent Transactions conducted during the financial
year ended 31 December 2003 pursuant to the shareholders’ mandate are as follows:

Annual Report 2003 144

ADDITIONAL C O M P L I A N C E I N F O R M A T I O N (CONT’D)

Nature of Aggregate
Transacting Parties Interested Related Parties Transactions value (RM)

Syn Tai Hung Trading Interested Directors ■

Sale and 1,625,924.94
Sdn Bhd [a 100% Robert Tan Chung Meng (RTCM)1 purchase of
subsidiary of Wah Seong Tan Boon Seng (TBS)2 construction
Corporation Berhad Tan Lei Cheng (TLC)3 materials
(WSCB)] Tan Boon Lee (TBL)4
Pauline Tan Suat Ming (PTSM)5
Tony Tan @ Choon Keat (TTCK)6

Interested Major Shareholders

RTCM
Dato’ Tan Chin Nam (DTCN)7
PTSM
TTCK
Wah Seong (Malaya) Trading Co.
Sdn Bhd (WST)8
Gold IS Berhad (Gold IS)9
Tan Kim Yeow Sdn Bhd (TKY)10
Tan Chin Nam Sdn Bhd (TCN)11

Interested Persons Connected

Wah Seong Enterprises Sdn Bhd
(WSE)12
Multistock Sdn Bhd (MSB)13
Tentang Emas Sdn Bhd (TE)14
Smooth Operation Sdn Bhd (SO)15
TKY Investment Pte Ltd (TKYI)16
Scanstell Sdn Bhd (SCSB)17

Annual Report 2003 145

ADDITIONAL C O M P L I A N C E I N F O R M A T I O N (CONT’D)

Nature of Aggregate
Transacting Parties Interested Related Parties Transactions value (RM)

Gold IS Berhad Group Interested Directors ■

Leasing of 2,108,819.25
of Companies (Gold IS Group) RTCM, TBS, TLC, TBL, PTSM, properties
TTCK ■
Information 51,927.00
❖ Gold IS Berhad technology
❖ Diversified Healthcare Interested Major Shareholders services
Services Sdn Bhd RTCM, DTCN, PTSM, TTCK,
❖ Ecofen Marketing WST, Gold IS, TKY, TCN
Sdn Bhd
❖ Gold Information Interested Persons Connected
Systems Sdn Bhd WSE, MSB, TE, SO, TKYI, SCSB
❖ Hoe Pharmaceuticals
Sdn Bhd
❖ Living Tree Pharmacy
Sdn Bhd
❖ Sweat Club Sdn Bhd

Subsidiaries and Interested Directors ■

Management, 3,087,919.32
Associates of IGB RTCM, TBS, TLC, TBL, PTSM, consultancy
TTCK, and/or support
❖ Cititel Hotel Management Chong Kim Chuan (CKC)18 services
Sdn Bhd (CHM) Ivo R. Nekvapil (Ivo)19 ■
Leasing of 125,882.40
❖ Courtyard Sdn Bhd (CSB) Gabrielle Tan Hui Chween (GTHC)20 properties
❖ Great Union Properties ■
Home 98,899.24
Sdn Bhd (GUP) Interested Major Shareholders furnishing
❖ Hampshire Park Sdn Bhd RTCM, DTCN, PTSM, TTCK, ■
Mechanical 1,382,681.00
(HP) WST, Gold IS, TKY, TCN, CKC and electrical
❖ MIHR Sdn Bhd (MIHR) Ivo, WST, works
❖ MIHR Consulting Sdn Bhd Wah Seong Manufacturing Sdn. Bhd.
(MIHRC) (WSM)21
❖ New Commercial
Investments Limited (NCIL) Interested Persons Connected
❖ Ravencroft Investment Inc. WSE, MSB, TE, SO, TKYI, SCSB
(RII)
❖ St. Giles Hotel Limited
(SGHL)
❖ SuCasa Sdn Bhd (SSB)
❖ Tan & Tan Realty Sdn Bhd
(TTR)
❖ Technoltic Engineering
Sdn Bhd (TESB)

Annual Report 2003 146

ADDITIONAL C O M P L I A N C E I N F O R M A T I O N (CONT’D)

Nature of Aggregate
Transacting Parties Interested Related Parties Transactions value (RM)

Tan Chin Nam Sdn Bhd Interested Directors ■

Leasing of 6,842.28
(TCN) DTCN, TBS, TLC, TBL properties

Interested Major Shareholders

DTCN, WST, Gold IS, TCN

Interested Persons Connected

WSE, MSB, TE, SO, SCSB

Cahaya Utara Sdn Bhd Interested Directors ■

Management, 1,226,504.00
(CUSB) RTCM, TBS, TLC, TBL, PTSM, consultancy
TTCK and/or support
services
Interested Major Shareholders ■
Mechanical 3,500.00
RTCM, DTCN, PTSM, TTCK, and electrical
WST, Gold IS, TKY, TCN works

Interested Persons Connected

WSE, MSB, TE, SO, TKYI, SCSB

Wah Seong (Malaya) Trading Interested Directors ■

Leasing of 40,074.00
Co. Sdn Bhd (WST) RTCM, TBS, TLC, TBL, PTSM, properties
TTCK

Interested Major Shareholders

RTCM, DTCN, PTSM, TTCK,
WST, Gold IS, TKY, TCN

Interested Persons Connected

WSE, MSB, TE, SO, TKYI, SCSB

Jeyaratnam & Chong (J&C) Interested Directors ■

Home 1,100.00
DTCN, TBS, TLC, TBL furnishing
■
Leasing of 101,664.00
Interested Major Shareholders properties
DTCN, WST, Gold IS, TCN ■
Legal advisory 229,349.83
services
Interested Persons Connected
WSE, MSB, TE, SO, SCSB

Annual Report 2003 147

 ADDITIONAL C O M P L I A N C E I N F O R M A T I O N (CONT’D)

Nature of Interest

1 RTCM is a common director of IGB, NCIL, RII, SGHL, CUSB, WST, TKY, WSE, TKYI and WSCB. He is a common major shareholder of IGB,
Gold IS, TKY and WSCB via his direct/indirect shareholdings in Gold IS, MSB, TKY, WST, WSE, TE, SO, TKYI and WSM. He is a brother of
PTSM and TTCK, both of whom are directors and major shareholders of IGB.

2 TBS is a common director of IGB and WST. He is a son of DTCN, an interested major shareholder of IGB, Gold IS and WSCB. He is a brother of
TLC and TBL, both of whom are directors and shareholders of IGB and brother-in-law to Chong Kim Weng, the senior partner of J&C. He is also
a shareholder of IGB.

3 TLC is a common director of IGB, Gold IS, HP, TCN and TTR. She is a daughter of DTCN, an interested major shareholder
of IGB, Gold IS and WSCB. She is a sister of TBS and TBL, both of whom are directors and shareholders of IGB. She is the
spouse of Chong Kim Weng, the senior partner of J&C. She is also a shareholder of IGB.

4 TBL is a common director of IGB, Gold IS, GUP, MIHR, SSB, TCN, MSB and TE. He is a son of DTCN, an interested major
shareholder of IGB, Gold IS and WSCB. He is a brother of TBS and TLC, both of whom are directors and shareholders of IGB
and brother-in-law to Chong Kim Weng, the senior partner of J&C. He is also a shareholder of IGB.

5 PTSM is a common director of IGB, Gold IS, WST, TKY, WSE, TE, SO, TKYI and WSCB. She is a common major shareholder of IGB, Gold IS, TKY
and WSCB via her direct/indirect shareholdings in Gold IS, MSB, TKY, WST, WSE, TE, SO, WSM and TKYI. She is a sister of RTCM and TTCK,
both of whom are directors and major shareholders of IGB.

6 TTCK is a director of IGB, TKY, TKYI and WSE. He is a common major shareholder of IGB, Gold IS, TKY and WSCB via his direct/indirect
shareholdings in Gold IS, MSB, TKY, WST, WSE, TE, SO, WSM and TKYI. He is a brother of RTCM and PTSM, both of whom are directors and
major shareholders of IGB.

7 DTCN is a director of TCN, WST and WSE. He is a common major shareholder of IGB, Gold IS and WSCB via his direct/indirect shareholdings
in Gold IS, MSB, TCN, WST, WSE, TE, SO, WSM and SCSB. DTCN is the father of TBS, TLC and TBL, and father-in-law to Chong Kim Weng,
the senior partner of J&C.

8 WST is a common major shareholder of IGB, Gold IS, WSCB, CHM and TTR via its direct/indirect shareholdings in corporations where it has no less
than 15% shareholding and a person connected to RTCM, DTCN, PTSM, TTCK, TCN and TKY.

9 Gold IS is a major shareholder of IGB and a person connected to RTCM, DTCN, PTSM, TTCK, TKY, TCN and WST.

10 TKY is a common major shareholder of IGB, Gold IS and WSCB via its direct/indirect shareholdings in corporations where it has no less than 15%
shareholding and a person connected to RTCM, PTSM, TTCK and WST.

11 TCN is a common major shareholder of IGB, Gold IS and WSCB via its direct/indirect shareholdings in corporations where
it has no less than 15% shareholding and a person connected to DTCN and WST.

12 WSE is a shareholder of IGB and a subsidiary of WST.

13 MSB is a shareholder of IGB and a 100% subsidiary of Gold IS.

14 TE is a shareholder of IGB and a subsidiary of WST.

15 SO is a shareholder of IGB and a 100% subsidiary of WST.

16 TKYI is a shareholder of IGB and a 100% subsidiary of TKY.

17 SCSB is a shareholder of IGB and a 100% subsidiary of TCN.

18 CKC is a director and major shareholder of CSB. He is a shareholder of IGB and also a brother of Chong Kim Weng, the senior partner of J&C.

19 Ivo is a common director and major shareholder of MIHR and MIHRC.

20 GTHC was a director of TESB within the preceding twelve (12) months prior to the date of this Circular. She is a daughter of RTCM, who is a director
and major shareholder of IGB, Gold IS, TKY and WSCB.

21 WSM is a 100% subsidiary of WST and major shareholder of NCIL, RII and SGHL.

Annual Report 2003 148

 IGB CORPORATION BERHAD (5745-A)

PROXY F O R M

I/We (full name in block capitals) ...................................................................................................................

NRIC No./Company No. .........................................................................................................................
CDS Account No. .................................................................................................................................................
of (full address) .........................................................................................................................................
............................................................................................................................................................
being a member of IGB CORPORATION BERHAD hereby appoint (full name as per NRIC in block capitals)
............................................................................................................................................................
NRIC No. ................................................................................................................................................
of (full address) ........................................................................................................................................
or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Fortieth Annual
General Meeting of the Company to be held at Bintang Ballroom, Level 5, Cititel Mid Valley, Mid Valley City, Lingkaran
Syed Putra, 59200 Kuala Lumpur on Monday, 31 May 2004 at 3.00 p.m. and at any adjournment thereof. My/Our proxy
is to vote as indicated below:

No. Resolutions For Against

1. Adoption of Reports and Audited Financial Statements
2. Declaration of Final Dividend
3. Re-election of Tan Boon Seng
4. Re-election of Tan Boon Lee
5. Re-election of Tan Lei Cheng
6. Re-election of Pauline Tan Suat Ming
7. Re-election of Tony Tan @ Choon Keat
8. Re-election of Tan Kai Seng
9. Re-election of Datuk Abdul Habib bin Mansur
10. Re-election of Dato’ Haji Megat Muhaiyadin bin Megat Hassan
11. Re-appointment of PricewaterhouseCoopers as auditors
12. Proposed issue of options to Tan Boon Lee
13. Authority to Directors to issue shares
14. Proposed Shareholders’ Mandate for Recurrent Transactions

Dated this day of 2004 Signature of shareholder No. of shares held

Notes:
1. A member entitled to attend and vote at the meeting may appoint a proxy to vote in his stead. A proxy may but need not be a member of the
Company. The instrument appointing a proxy, in the case of an individual, shall be signed by the appointer or his attorney and in the case of
a corporation, either under seal or under the hand of an officer or attorney duly authorized in writing. The instrument appointing a proxy
must be deposited at the Registered Office of the Company not less than 48 hours before the time appointed for holding the Annual General
Meeting or at any adjournment thereof, or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll.
2. Unless voting instructions are indicated in the spaces provided above, the proxy may vote or abstain as he/she thinks fits.

Annual Report 2003 149

2nd fold here

affix
stamp
The Company Secretary here
IGB CORPORATION BERHAD (5745-A)

Penthouse, Menara IGB,

No. 1, The Boulevard,

Mid Valley City,

Lingkaran Syed Putra,
59200 Kuala Lumpur,

Malaysia

1st fold here

Annual Report 2003 150