2002Annual Report CONTENTS LAPORAN TAHUNAN SOUTHERN
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SOUTHERN STEEL BERHAD5283-X LAPORAN TAHUNAN 2002 Annual report CONTENTS Corporate Information 02 Corporate Structure 03 Directors’ Profile 04 Corporate Governance Statement 09 Statement On Internal Control 11 Audit Committee Report 12 Disclosure Requirements Pursuant To The Listing Requirements Of The Kuala Lumpur Stock Exchange 14 Group Financial Highlights 15 Chairman’s Statement 16 Financial Statements 26 Properties Owned By Southern Steel And Its Subsidiaries 67 Analysis of Shareholdings 70 Notice Of Annual General Meeting 73 Notice Of Dividend Entitlement 75 Enclosed Form Of Proxy 79 Enclosed Kuala Lumpur Stock Exchange Complaint Form 81 Southern Steel Berhad 5283-X LAPORAN TAHUNAN 2002 02 Annual report CORPORATE INFORMATION Directors Registered Office Y Bhg Dato' Abdullah Mohd Yusof Level 3, 2723 Lorong Perusahaan 12 Chairman Prai Industrial Estate Dr Tan Tat Wai 13600 Prai, Penang Group Managing Director Telephone : 04 390 6540 YA Bhg Tun Dato' Seri Dr Lim Chong Eu Facsimile : 04 390 8060 Y Bhg Dato' Hj Shaharuddin Bin Hj Haron Principal Place Of Business Kwek Leng San 2435, Lorong Perusahaan 12, Prai Industrial Estate, Tang Hong Cheong 13600 Prai, Penang Soon Seong Keat Telephone : 04 390 6540 (resigned on 27 June 2002) Facsimile : 04 390 8060 Yap Peng Leong (appointed on 27 June 2002) Auditors Ang Kong Hua PricewaterhouseCoopers Chong Wai Siak Chartered Accountants 4th Floor, Wisma Penang Garden Chang Meng 42 Jalan Sultan Ahmad Shah (Alternate to Chong Wai Siak) 10050 Penang Executive Committee of Directors Registrar Dr Tan Tat Wai Chairman AGRITEUM Share Registration Services Sdn Bhd 2nd Floor, Wisma Penang Garden Kwek Leng San 42 Jalan Sultan Ahmad Shah Chong Wai Siak 10050 Penang Telephone : 04 228 2321 Chang Meng Facsimile : 04 227 2391 (Alternate to Chong Wai Siak) Secretary Lim Gim Siok Southern Steel Berhad 5283-X LAPORAN TAHUNAN 2002 Annual report 03 CORPORATE STRUCTURE 83.7% Southern Pipe Industry (Malaysia) Sdn Bhd 100% Brisk Steel Products Sdn Bhd 100% Southern Mesh Sdn Bhd 100% Southern PC Steel Holdings Sdn Bhd 100% Southern100% PC Southern Steel Sdn Mesh Bhd Sdn Bhd 100% Southern Wire Industries (Malaysia) Sdn Bhd 100% Cempaka100% Raya Southern Sdn Bhd Mesh Sdn Bhd 100% Southern Steel Management Sdn Bhd 70% Trend Staples100% Southern Industry MeshSdn Bhd Sdn Bhd 100% Asia Seamless Pipes Sdn Bhd 100% Southern Mesh Sdn Bhd 100% Southern Carrier Sdn Bhd 100% Southern Steel Holdings Sdn Bhd 100% Southern Steel Industries Sdn Bhd 100% Southern Steel Trading Sdn Bhd 100% Southern100% Steel Southern Bar Sdn Mesh Bhd Sdn Bhd 100% Southern Galvanised Wire Sdn Bhd 100% Southern Mesh Sdn Bhd Southern 100% Southern Coated Wire Sdn Bhd Steel Berhad 100% Gading Tunas Sdn Bhd 100% Southern Steel Properties Sdn Bhd 100% Danstil Sdn Bhd 100% Southern Precision Casting Sdn Bhd 100% Dowtech Sdn Bhd 100% Gading Julang Sdn Bhd 40.7% Southern NatSteel (Xiamen) Limited 40% NatSteel Trade International Pte Ltd 22.6% NatSteelVina Company Limited 50% Southern Oriental Sdn Bhd 50% Wujin Qianyang Steel Limited 27.5% Steel Industries (Sabah) Sdn Bhd 100% Southern Mesh Sdn Bhd Subsidiary Companies Associated Companies Southern Steel Berhad 5283-X LAPORAN TAHUNAN 2002 04 Annual report DIRECTORS’ PROFILES Y Bhg Dato' Abdullah Mohd Yusof Chairman, Independent Non-Executive Director Y Bhg Dato' Abdullah Mohd Yusof, aged 64, a Malaysian, is an Advocate and Solicitor, having his own legal practice since 1970. He graduated from the University of Singapore with a Bachelor of Laws (Honours) degree. He was appointed to the Board on 15 January 1986. He does not sit on any committees of the Company. He is also a Director of Jaya Jusco Stores Bhd, Sistem Televisyen Malaysia Berhad, Malaysia Mining Corporation Berhad, MMC Engineering Group Berhad, Tronoh Mines Malaysia Berhad, United Malayan Land Bhd and Pernas International Holdings Berhad, all public listed companies. Y Bhg Dato' Abdullah attended all Board meetings held during the financial year ended 31 December 2002. He does not hold any shares in the Company and its subsidiary companies, has no family relationship with any other Directors or major shareholder of the Company, has no conflict of interest with the Company and has no convictions for offences within the past ten years. Dr Tan Tat Wai Group Managing Director / Non-Independent Dr Tan Tat Wai, aged 56, a Malaysian, holds a Bachelor of Science degree in Electrical Engineering and Economics from the Massachusetts Institute of Technology and a PhD in Economics from Harvard University. He started his career with Bank Negara Malaysia in 1978 undertaking research in economic policies and subsequently as consultant to Bank Negara, World Bank and the United Nations University for several years. He served as the Secretary and a member on the Council of Malaysian Invisible Trade set up to formulate policies to reduce Malaysia's deficit in service trade. He was a member of the Government appointed Malaysian Business Council and currently, a member of the Penang Industrial Council, the Industrial Co-ordination Council (ICC) and the National Committee on Business Competitiveness (NCBC) set up by the Ministry of International Trade and Industry. He represents Malaysia as a member of the APEC Business Advisory Council (ABAC). He is also the Vice-President of Harvard Club of Malaysia. Dr Tan was appointed to the Board of the Company on 18 May 1984 and assumed the position of Managing Director in September 1990. He is the Chairman of the Executive Committee of Directors of the Company. His other directorships in public companies are as follows: • Director of Shangri-La Hotels (Malaysia) Berhad, a public listed company. • Director of NatSteel Ltd, a public listed company in Singapore. • Director of Titan Petrochemicals & Polymers Berhad, a public company. Dr Tan attended all Board meetings held during the financial year ended 31 December 2002. He has a direct shareholding of 10,000 ordinary shares and indirect shareholding of 21,870,876 ordinary shares in the Company. Dr Tan is the son of Y Bhg Dato' Seri Tan Hoay Eam, who resigned as a Director of the Company on 18 March 2002 and a deemed major shareholder of the Company. He has no conflict of interest with the Company and has no convictions for offences within the past ten years. Southern Steel Berhad 5283-X LAPORAN TAHUNAN 2002 Annual report 05 DIRECTORS’ PROFILES (CONTINUED) YA Bhg Tun Dato' Seri Dr Lim Chong Eu Non-Executive Director / Independent YA Bhg Tun Dato' Seri Dr Lim Chong Eu, aged 83, a Malaysian, is renowned as a leading statesman and holds the distinction of being the former Chief Minister of Penang. He has had a long and illustrious record as a political leader and representative of the people in many fields of national interests. He graduated with a Bachelor of Medicine and Bachelor of Surgery (M.B. Ch B.) from Edinburgh University of Scotland in 1944. YA Bhg Tun Dato' Seri Dr Lim was appointed to the Board of the Company on 6 December 1993. He is also the Chairman of the Audit Committee of the Company. His other directorships in public companies are as follows: • Chairman of Suiwah Corporation Bhd, a public listed company. • Chairman of Chin Well Holdings Berhad, a public listed company. • Director of Digi.Com Bhd, a public listed company. • Chairman of Berjaya Vacation Club Berhad, a public company. • Director of United Overseas Bank (Malaysia) Berhad, a public company. Of the five (5) Board meetings of the Company held during the financial year ended 31 December 2002, YA Bhg Tun Dato' Seri Dr Lim attended all except for two (2) for which he had extended his apologies. YA Bhg Tun Dato' Seri Dr Lim does not hold any shares in the Company and its subsidiary companies, has no family relationship with any other Directors or major shareholders of the Company, has no conflict of interest with the Company and has no convictions for offences within the past ten years. Y Bhg Dato' Hj Shaharuddin Bin Hj Haron Non-Executive Director / Independent Y Bhg Dato' Hj Shaharuddin Bin Hj Haron, aged 64, a Malaysian, is an Economics graduate from University Malaya and holds a Masters degree in Economics from the University of Pittsburgh, USA. Y Bhg Dato' Hj Shaharuddin Bin Hj Haron was appointed to the Board of the Company on 3 December 1993. He is also a member of the Audit Committee of the Company. Prior to joining the private sector, he had a long and chequered career in the civil service, gaining vast experience in the various departments he headed some of which are as the First Secretary of the Foreign Investment Committee (FIC), the Director-General of Insurance, Ministry of Finance and Ministry of Public Enterprise, Secretary-General, Ministry of International Trade and Industry and Secretary-General, Ministry of Domestic Trade and Consumer Affairs. He is also a Director of Malayan Flour Mills Berhad, Gopeng Berhad, Ladang Perbadanan-FIMA Berhad, Latitute Tree Holdings Berhad, Edaran Otomobil Nasional Berhad and Ajinomoto (Malaysia) Berhad, all public listed companies. Of the five (5) Board meetings of the Company held during the financial year ended 31 December 2002, Y Bhg Dato' Hj Shaharuddin Bin Hj Haron attended all except for one (1) for which he has extended his apologies. Y Bhg Dato' Hj Shaharuddin Bin Hj Haron does not hold any shares in the Company and its subsidiary companies, has no family relationship with any other Directors or major shareholders of the Company, has no conflict of interest with the Company and has no convictions for offences within the past ten years. Southern Steel Berhad 5283-X LAPORAN TAHUNAN 2002 06 Annual report DIRECTORS’ PROFILES (CONTINUED) Kwek Leng San Non-Executive Director / Non-Independent Mr Kwek Leng San, aged 47, a Singaporean, obtained a Bachelor of Science (Engineering) degree from University of London in 1978 and a Master of Science (Finance) degree from City University, London in 1979.