SUNWAY INFRASTRUCTURE BERHAD
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LAPOR
AN SUNWAY INFRASTRUCTURE BERHAD
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HU (405897-V)
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TContents
Corporate Information 2
Profile Of Directors 3–6
Chairman’s Statement / Penyata Pengerusi 7 – 11
Three-Year Group Financial Summary 12
Corporate Governance Statement 13 – 19
Terms Of Reference Of Risk Management Committee 20 – 21
Audit Committee Report 22 – 28
Statement On Internal Control 29 – 31
Financial Statements 33 – 73
Additional Compliance Information 74 – 75
Recurrent Related Party Transactions 76
Directors’ Interests In Shares, Warrants And 77
Cumulative Non-Convertible Redeemable Preference Shares
Of The Company And Its Subsidiary Companies
Analysis Of Shareholdings 78 – 79
Analysis Of Warrantholdings 80 – 81
Notice Of 8th Annual General Meeting 82 –87
Statement Accompanying Notice Of Annual General Meeting 88
Form Of Proxy
SUNWAY INFRASTRUCTURE BERHAD 1
(405897-V)Corporate Information
BOARD OF DIRECTORS PRINCIPAL PLACE OF BUSINESS
Chairman, Plaza Tol Sungai Balak
Non-Independent Executive Director KM28.3A, Lebuhraya Kajang SILK
Tan Sri Dato' Seri (Dr) Cheah Fook Ling 43000 Kajang
Selangor Darul Ehsan
Deputy Chairman, Malaysia
Non-Independent Non-Executive Director
Datuk Razman M Hashim Tel No : (03) 8921 0000
Fax No : (03) 8921 0001
Non-Independent Non-Executive Directors
Dato' Tan Kia Loke
Yau Kok Seng
Liew Kiam Woon SHARE REGISTRAR
Sunway Management Sdn Bhd (50661-X)
Independent Non-Executive Directors Level 16, Menara Sunway
Dato' Seri Syed Zainol Rashid Jamalullail Jalan Lagoon Timur
Dato' Ir Hj Ibrahim Bin Hj Yakub Bandar Sunway
46150 Petaling Jaya
Selangor Darul Ehsan
Malaysia
AUDIT COMMITTEE
Dato' Seri Syed Zainol Rashid Jamalullail Tel No : (03) 5639 8889
(Chairman) Fax No : (03) 5639 9507
Dato' Ir Hj Ibrahim Bin Hj Yakub
Yau Kok Seng
AUDITORS
Ernst & Young
RISK MANAGEMENT COMMITTEE Chartered Accountants
Dato' Tan Kia Loke (Chairman)
Yau Kok Seng
Mark Victor Rozario SOLICITORS
Khor Wei Moon
Lee Hishammuddin Allen & Gledhill
Ng Lai Ping
PRINCIPAL BANKERS
COMPANY SECRETARIES Public Bank Berhad
Puan Sri Datin Seri (Dr) Susan Cheah Seok Cheng HSBC Bank Malaysia Berhad
(MIA 5601)
Tan Kim Aun (MAICSA 7002988)
Lee Suan Choo (MAICSA 7017562)
STOCK EXCHANGE LISTING
Main Board of Bursa Malaysia Securities Berhad
REGISTERED OFFICE
Level 16, Menara Sunway
Jalan Lagoon Timur WEBSITE ADDRESS
Bandar Sunway www.sunway.com.my
46150 Petaling Jaya
Selangor Darul Ehsan
Malaysia
Tel No : (03) 5639 8889
Fax No : (03) 5639 9507
2 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Profile Of Directors
Tan Sri Dato’ Seri (Dr) Cheah Fook Ling
Chairman, Non-Independent Executive Director
Tan Sri Dato’ Seri (Dr) Cheah Fook Ling, Malaysian, aged 60, is the Founder of the
Sunway Group and Chairman of Sunway Infrastructure Berhad (“SunInfra”),
Sunway Holdings Incorporated Berhad and Sunway City Berhad which are a
conglomerate of companies that are listed individually on the Main Board of Bursa
Malaysia Securities Berhad.
A Certified Public Accountant by profession, he was appointed a Board member
of the Financial Reporting Foundation by the Minister of Finance in July 1997. He
sits on the Board of The National Kidney Foundation and the Board of Trustees of the Malaysian Liver
Foundation. In 1995, he was appointed a member of the Malaysian Business Council and in 1996, he was
honoured with the Chairmanship of Malaysian Industry-Government Group for High Technology (MIGHT)
for Construction and Housing. He was appointed an EXCO member to the Malaysian Tourism Action Council
by the Minister of Tourism Malaysia. In recognition of his outstanding contribution to education, the Minister
of Education appointed him to the Higher Education Council in 1998. He was also conferred Honorary
Doctorates by 8 leading universities worldwide and was voted the Property Man of the Year (Malaysia) 1993
as well as the CEO of the Year (Malaysia) 1996.
He was appointed to the Board of SunInfra as Non-Executive Chairman on 10 June 2002 and was
subsequently appointed as Executive Chairman on 1 August 2003.
His current directorships in other public companies include Sunway Holdings Incorporated Berhad, Sunway
City Berhad and Federation of Public Listed Companies Berhad.
He attended all of the 8 Board Meetings held in the financial year.
Datuk Razman M Hashim
Deputy Chairman, Non-Independent Non-Executive Director
Datuk Razman M Hashim, Malaysian, aged 66, is a member of the Australian
Institute of Bankers. He has more than 34 years of experience in the banking
industry. He joined the Standard Chartered Bank Malaysia Berhad in 1964 and
served in various capacities including secondments to the Bank’s branches in
London, Europe, Hong Kong and Singapore. In 1994, he was appointed as
Executive Director/Deputy Chief Executive of the Standard Chartered Bank
Malaysia Berhad.
He was appointed to the Board of SunInfra on 12 February 1996 and was subsequently appointed as Non-
Executive Deputy Chairman on 10 June 2002.
His current directorships in other public companies include Sunway City Berhad, Ranhill Berhad, Multi-
Purpose Holdings Berhad, Affin Bank Berhad and OYL Industries Berhad.
He attended 7 out of the 8 Board Meetings held in the financial year.
SUNWAY INFRASTRUCTURE BERHAD 3
(405897-V)Profile Of Directors (Cont’d)
Dato’ Tan Kia Loke
Non-Independent Non-Executive Director
Dato’ Tan Kia Loke, Malaysian, aged 54, attained a Bachelor of Science (Honours)
Degree in Civil Engineering from the University of Strathclyde, United Kingdom in
1977. He is a Registered Professional Engineer with the Board of Engineers,
Malaysia, a Fellow of the Institution of Engineers, Malaysia and Honorary Advisor
of the Master Builders Association of Malaysia.
He is currently the Senior Managing Director of Sunway Construction Sdn Bhd, the
construction arm of Sunway Holdings Incorporated Berhad (“SunInc”) Group and
has more than 28 years’ experience in the construction industry.
He was appointed to the Board of SunInfra on 14 October 1996 and also serves as Chairman of the Risk
Management Committee.
His current directorships in other public companies include SunInc and Malaysian South-South Corporation
Berhad.
He attended all of the 8 Board Meetings held in the financial year.
Yau Kok Seng
Non-Independent Non-Executive Director
Yau Kok Seng, Malaysian, aged 45, is an Accountant by profession with more than
20 years of experience in auditing, accounting, corporate finance and general
management. Prior to joining the Sunway Holdings Incorporated Berhad
(“SunInc”) Group of Companies, he was with Ernst & Young, an international
accounting firm, where he qualified as a Certified Public Accountant. In 1988, he
was posted to its London office for 3 years.
He joined the SunInc Group as Head of Corporate Finance in 1992 and was
subsequently promoted as the Group Finance Director in 1995. In April 2001, he
was promoted as Managing Director of SunInc.
He was appointed to the Board of SunInfra on 17 June 2002 and also serves as a Member of the Audit and
Risk Management Committees. He was appointed as the Managing Director of SunInfra on 1 March 2003
and subsequently redesignated to Non-Independent Non-Executive Director on 10 April 2003.
His current directorships in other public companies include SunInc, Sunway Medical Centre Berhad, Gopeng
Berhad and Federation of Public Listed Companies Berhad.
He attended all of the 8 Board Meetings held in the financial year.
4 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Profile Of Directors (Cont’d)
Liew Kiam Woon
Non-Independent Non-Executive Director
Liew Kiam Woon, Malaysian, aged 41, graduated from the University of Oregon,
United States of America in 1987, majoring in Business Administration. He started
his career as a Business Development Executive with MBF Factors Sdn Bhd in
1987 for 2 years. He then joined LFE Engineering Sdn Bhd (“LFE”) in 1990 as a
Project Coordinator to oversee the projects undertaken by Loong Fuat Engineering
(JB) Sdn Bhd, a subsidiary of LFE located in Johor Bahru.
In 2000, he was appointed as Executive Director of LFE and assumed a more
prominent and important role, that is, to secure more contracts for the LFE Group and to ensure the smooth
running of the operations of the Group in Malaysia as well as in overseas.
On 15 September 2003, he assumed the position of Executive Director of LFE Corporation Berhad, the
holding company of the LFE Group.
He was appointed to the Board of SunInfra on 17 June 2002. His current directorship in other public
company includes LFE Corporation Berhad.
He attended 6 out of the 8 Board Meetings held in the financial year.
Dato’ Seri Syed Zainol Rashid Jamalullail
Independent Non-Executive Director
Dato’ Seri Syed Zainol Rashid Jamalullail, Malaysian, aged 52, studied Commerce
and Marketing in Australia and in the United Kingdom. He also attained a Higher
National Diploma in Business Studies, Marketing & Advertising from the College
for the Distributive Trades, London.
He has more than 10 years of experience in International Business Development,
being the Malaysian affiliate of the Larive Group BV, Netherlands. The company
specialises in market research and business development.
He is the Executive Chairman of Enersave Water Sdn Bhd, a water and wastewater treatment company based
in Shah Alam, Selangor Darul Ehsan. He is the President of Semada (Thai) Co. Ltd, a company which
specialises in trade and business development between Malaysia and Thailand.
He was appointed to the Board of SunInfra on 9 August 2002 and also serves as Chairman of the Audit
Committee. He has no directorships in other public companies.
He attended 7 out of the 8 Board Meetings held in the financial year.
SUNWAY INFRASTRUCTURE BERHAD 5
(405897-V)Profile Of Directors (Cont’d)
Dato’ Ir Hj Ibrahim Bin Hj Yakub
Independent Non-Executive Director
Dato’ Ir Hj Ibrahim Bin Hj Yakub, Malaysian, aged 59, graduated from Portsmouth
Polytechnic, United Kingdom, with a Bachelor of Science Degree majoring in Civil
Engineering. He is a Member of the Institution of Engineers, Malaysia, the Board
of Engineers, Malaysia and the Road Engineering Association of Malaysia. He is
also a Senior Director of a major engineering consultancy firm and Director of a
few private companies in Malaysia.
He began his career with JKR, Kelantan as a Building Engineer in 1974. In 1978,
he held the position of Deputy Superintendent Engineer for the East-West Highway, Jeli, Kelantan before
being promoted to Senior Executive Engineer at JKR Seberang Prai, Penang. Subsequently in 1983, he was
promoted to Deputy Director of JKR Kelantan. He was a Director of Development of Universiti Kebangsaan
Malaysia, Selangor from 1986 to 1991.
He was appointed as Deputy Director of Federal Development Department, Sabah in 1991 and subsequently
as Director of Planning of JKR headquarters, Kuala Lumpur in 1996. Subsequently in 1996, he was appointed
as Director of JKR, Selangor and held the position until his retirement in 2001.
He was appointed to the Board of SunInfra on 9 August 2002 and also serves as a Member of the Audit
Committee. He has no directorships in other public companies.
He attended all of the 8 Board Meetings held in the financial year.
Notes:
1. Family Relationship with Director and/or Major Shareholder
None of the Directors has any family relationship with any director and/or major shareholder of
SunInfra.
2. Conflict of Interest
None of the Directors has any conflict of interest with SunInfra Group.
3. Conviction for Offences
None of the Directors has been convicted for offences within the past 10 years other than traffic
offences, if any.
4. Attendance of Board Meetings
The attendance of the Directors at Board of Directors’ Meetings is disclosed in the Corporate
Governance Statement.
6 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Chairman’s Statement / Penyata Pengerusi
Bagi pihak Lembaga Pengarah
Sunway Infrastructure Berhad
(“SunInfra”), saya dengan sukacitanya
membentangkan Laporan Tahunan
dan Penyata Kewangan Syarikat dan
Kumpulan bagi tahun kewangan
berakhir 31 Disember 2004.
PRESTASI KEWANGAN
Tahun Kewangan (“TK”) 2004 membawa kepada
pencapaian suatu mercutanda penting bagi
SunInfra berikutan siapnya lebuhraya bertol
pertama kami, Lebuhraya SILK KAJANG yang
On behalf of the Board of Directors of seterusnya memulakan operasi kutipan tol pada
Sunway Infrastructure Berhad Julai 2004. Lebuhraya SILK KAJANG sepanjang 37
km ini membantu melegakan kesesakan lalulintas
(“SunInfra”), I present the Annual
di pusat bandar Kajang disamping
Report and Audited Financial menghubungkan secara strategik beberapa pusat
Statements of the Company and the populasi utama di bahagian tenggara Lembah
Group for the financial year ended Kelang dengan rangkaian-rangkaian lebuhraya
31 December 2004. lain di persekitarannya. Ianya juga turut berfungsi
sebagai suatu sistem jalanraya utama yang
menghubungkan Balakong, Sungai Long, Bangi,
FINANCIAL PERFORMANCE Kajang, Semenyih, Putrajaya dan Serdang di
negeri Selangor Darul Ehsan.
Financial Year (“FY”) 2004 marks a significant
milestone for SunInfra as our first toll road, KAJANG Namun demikian, aliran trafik bermula dengan
SILK Highway was completed and opened for tolling agak perlahan pada TK yang diulas. Kumpulan
in July 2004. The 37km KAJANG SILK Highway mencatatkan perolehan berjumlah RM8.481 juta
helps to alleviate traffic congestion in Kajang town dan kerugian sebelum cukai sebanyak RM35.941
centre and strategically links major population juta berbanding perolehan RM241,000 dan
centres in the south-eastern part of the Klang Valley kerugian sebelum cukai RM4.04 juta pada TK
with the other highway networks in the region. It will sebelumnya. Kerugian yang lebih tinggi ini adalah
also function as a major road linking Balakong, disebabkan terutamanya oleh kos kewangan dan
Sungai Long, Bangi, Kajang, Semenyih, Putrajaya perbelanjaan operasi yang tidak sepadan dengan
and Serdang in Selangor Darul Ehsan. perolehan daripada kutipan tol.
Nonetheless, the traffic volume was off to a slow
start during the FY under review. The Group reported
revenue of RM8.481 million and pre-tax loss of
RM35.941 million as compared to revenue of
RM241,000 and pre-tax loss of RM4.04 million in
the previous FY. The higher loss was mainly due to
finance costs and operating expenditure incurred
which were correspondingly not matched by
revenue from toll collection.
SUNWAY INFRASTRUCTURE BERHAD 7
(405897-V)Chairman’s Statement / Penyata Pengerusi (Cont’d)
Official Opening of KAJANG SILK Highway
OPERATIONS REVIEW ULASAN OPERASI
3 out of the 4 toll plazas were opened for tolling in 3 daripada 4 plaza tol telah dibuka untuk operasi
July 2004 and the remaining toll plaza at Sungai kutipan pada Julai 2004 dan plaza tol di Sungai
Long was still undergoing toll-free period as at 31 Long masih sedang menjalani tempoh tol percuma
December 2004. The KAJANG SILK Highway, pada 31 Disember 2004. Lebuhraya KAJANG SILK
despite the slow start, has registered a traffic telah mencatatkan pertumbuhan aliran trafik
volume growth of 30% since its opening. With the sehingga 30% sejak pembukaannya. Dengan
commencement of tolling operations of the bermulanya operasi kutipan tol di Lebuhraya
KAJANG SILK Highway in July 2004, the Group has KAJANG SILK tersebut pada Julai 2004, Kumpulan
focused and geared up its resources towards telah menumpu dan menjanakan penggunaan
meeting the objectives to be a service orientated sumber-sumbernya bagi mencapai objektif untuk
toll highway concessionaire that is acknowledged menjadi sebuah syarikat konsesi lebuhraya tol
as an efficient and safe highway network operator. berorientasikan perkhidmatan yang dapat diiktiraf
To this end, the Group has devoted much attention sebagai pengendali rangkaian lebuhraya yang
to ensure the convenience, comfort and safety of efisien dan selamat. Sehingga kini, Kumpulan telah
commuters travelling along the KAJANG SILK
memberikan banyak tumpuan bagi memastikan
Highway. Public facilities such as rest areas, petrol
kemudahan, keselesaan dan keselamatan para
kiosks, “surau”, public telephones, toilets and
pengguna di Lebuhraya KAJANG SILK.
parking bays are provided at the 5 lay-bys along the
Kemudahan-kemudahan awam seperti kawasan
KAJANG SILK Highway whilst additional petrol
rehat, stesen petrol, surau, telefon awam dan
kiosks and recreational facilities are being planned
tempat letak kereta disediakan di 5 lokasi
and constructed.
sepanjang Lebuhraya KAJANG SILK dan lebih
The KAJANG SILK Highway was installed with banyak lagi stesen petrol dan kemudahan rekreasi
various state-of-the-art equipment and Intelligent sedang dirancang dan dibina.
Transport System (ITS) applications. Variable
message signs, surveillance cameras, congestion
8 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Chairman’s Statement / Penyata Pengerusi (Cont’d)
detector system, enhanced variable actuation Lebuhraya KAJANG SILK telah dilengkapi dengan
system and Traffic Control and Surveillance System pelbagai peralatan canggih dan terkini serta
were some of the ITS features installed to maintain aplikasi Sistem Pengangkutan Pintar atau
effective traffic control and safety. Informative “Intelligent Transport System” (ITS). Papantanda
signages and road markings were also installed to pelbagai pesanan, kamera pengawasan, sistem
clearly display and guide the commuters through pengesan kesesakan, sistem penggerak “enhanced
their journey. For added comfort and security to variable actuation” dan Sistem Kawalan dan
stranded motorists who require assistance, a Pemantauan Trafik adalah antara beberapa ciri ITS
24-hour surveillance team patrols the entire yang digunakan untuk memastikan kawalan dan
KAJANG SILK Highway and on standby to respond keselamatan trafik dijalankan dengan berkesan.
promptly to motorists during emergencies. Papantanda maklumat dan petanda-petanda
jalanraya yang mencukupi telah turut dipasang
Toll revenue from the KAJANG SILK Highway is the untuk memberikan maklumat dan panduan yang
major contributor to the Group’s bottom line. The jelas kepada para pengguna sepanjang perjalanan
Group will continue to explore options available to mereka. Untuk keselesaan dan keselamatan
strengthen its financial position and reduce the tambahan khususnya bagi pengguna yang
overall gearing and funding cost of the Group memerlukan bantuan, suatu pasukan peronda 24-
which will put it on a firmer footing to profitability jam ditugaskan untuk menjalankan rondaan
in the coming years. Prudent management with sepanjang Lebuhraya KAJANG SILK dan bersedia
focus given on improving service levels and use of memberikan bantuan segera kepada para pengguna
the KAJANG SILK Highway, enhancing operational pada waktu kecemasan.
efficiency and cost effectiveness are high on the list
of priorities for the immediate term. Perolehan dari kutipan tol Lebuhraya KAJANG SILK
Notwithstanding, continuous and concerted efforts ini adalah penyumbang utama terhadap untungrugi
were undertaken to attract new users to use the operasi Kumpulan. Pengurusan yang teliti dengan
KAJANG SILK Highway through greater public tumpuan untuk memperbaiki tahap perkhidmatan
awareness and user familiarisation programmes at dan penggunaan Lebuhraya KAJANG SILK ini,
different catchment areas like Putrajaya, Semenyih, meningkatkan efisiensi operasi dan keberkesanan
Cheras, Bangi, Kajang, Sungai Long, Balakong, etc. kos adalah antara perkara utama yang ditekankan
untuk jangkamasa terdekat ini. Sambil itu, usaha-
usaha berterusan dan padu sedang diambil untuk
menarik pengguna-pengguna baru Lebuhraya
KAJANG SILK menerusi peningkatan tahap
kesedaran awam dan program-program suaikenal
pengguna di kawasan-kawasan tumpuan lain
seperti Putrajaya, Semenyih, Cheras, Bangi, Kajang,
Sungai Long, Balakong dan lain-lain.
KAJANG SILK Highway’s Operation Office
Official Opening of KAJANG SILK Highway
SUNWAY INFRASTRUCTURE BERHAD 9
(405897-V)10 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Chairman’s Statement / Penyata Pengerusi (Cont’d)
FUTURE OUTLOOK TINJAUAN MASA HADAPAN
The Malaysian economy expanded by an average Ekonomi Malaysia telah berkembang secara
of 7.1% for 2004 and the growth prospect remains puratanya pada kadar 7.1% dalam 2004 dan
favourable in 2005. Demand for properties and prospek pertumbuhan ini dijangka menggalakkan
passenger cars is expected to remain firm supported pada 2005. Permintaan terhadap sektor hartanah
by stable employment conditions and rising dan kenderaan penumpang dijangka akan kekal
disposable income coupled with favourable kukuh, disokong oleh keadaan-keadaan pekerjaan
financing conditions, low inflation and interest yang stabil serta peningkatan lebihan pendapatan
rates. The interchanges at Jalan Balakong-Mines untuk dibelanjakan disamping keadaan-keadaan
Resort junction to ease traffic congestion at the kewangan yang menggalakkan serta kadar inflasi
existing Balakong traffic light junction when dan kadar faedah yang rendah. Persimpangan di
completed in 2006 will provide shorter and more sekitar kawasan Jalan Balakong-Mines Resort yang
efficient access to Sungei Besi Highway from the sedang dibangunkan untuk melegakan kesesakan
KAJANG SILK Highway. The KAJANG SILK lalulintas di persimpangan lampu isyarat Balakong
Highway functions as a major road linking sekarang ini akan menyediakan akses yang lebih
Balakong, Sungai Long, Cheras, Bangi, Kajang, mudah dan efisien untuk ke Lebuhraya Sungei Besi
Semenyih, Putrajaya and Serdang. It offers high dari Lebuhraya KAJANG SILK ini apabila siap pada
travel convenience, accessibility and would spur tahun 2006. Lebuhraya KAJANG SILK berfungsi
commercial development and urbanisation around sebagai jalanraya utama yang menghubungkan
the vicinity of the KAJANG SILK Highway in the Balakong, Sungai Long, Cheras, Bangi, Kajang,
years ahead. Such economic activity along the Semenyih, Putrajaya dan Serdang. Ianya
KAJANG SILK corridor will generate higher daily menyediakan kemudahan perjalanan, kemudahan
traffic volume on the KAJANG SILK Highway. akses serta akan memangkin aktiviti pembangunan
komersial dan urbanisasi di sekitar kawasan
ACKNOWLEDGEMENT Lebuhraya KAJANG SILK pada tahun-tahun akan
datang. Aktiviti-aktiviti ekonomi sedemikian
On behalf of the Board of Directors, I would like to sepanjang koridor KAJANG SILK pastinya akan
thank all our valued customers, shareholders, meningkatkan kepesatan trafik harian di Lebuhraya
bankers, various government authorities and KAJANG SILK.
business associates for their unwavering support
and confidence with the Group and also to our PENGHARGAAN
employees for their hard work, contributions and
dedications. Bagi pihak Lembaga Pengarah, saya ingin
mengucapkan terima kasih kepada para pelanggan,
para pemegang saham, bank-bank, pihak-pihak
berkuasa kerajaan serta rakan-rakan perniagaan
kami yang dihargai di atas sokongan dan keyakinan
padu mereka kepada Kumpulan disamping ucapan
Tan Sri Dato’ Seri (Dr) Cheah Fook Ling penghargaan kepada kesemua kakitangan kami di
Executive Chairman atas segala usaha, sumbangan dan sikap penuh
dedikasi mereka.
13 May 2005
Tan Sri Dato’ Seri (Dr) Cheah Fook Ling
Pengerusi Eksekutif
13 Mei 2005
SUNWAY INFRASTRUCTURE BERHAD 11
(405897-V)Three-Year Group Financial Summary
2004 2003 2002
RM ‘000 RM ‘000 RM ‘000
REVENUE 8,481 241 –
Loss before taxation (35,282) (4,040) (3,255)
Taxation (659) (478) 775
Loss after taxation (35,941) (4,518) (2,480)
LOSS ATTRIBUTABLE TO SHAREHOLDERS (35,941) (4,518) (2,480)
Property, plant and equipment 3,221 1,250 1,375
Expressway development expenditure 1,244,631 1,065,890 564,324
Deferred tax assets – 2,072 2,486
Current assets 91,504 250,009 468,127
TOTAL ASSETS 1,339,356 1,319,221 1,036,312
Current liabilities 14,606 116,559 87,110
Long-term borrowings 834,896 756,516 665,666
Deferred income 330,176 250,509 167,014
TOTAL LIABILITIES 1,179,678 1,123,584 919,790
TOTAL NET ASSETS 159,678 195,637 116,522
SHARE CAPITAL 90,000 90,000 60,000
SHAREHOLDERS’ FUNDS 159,695 195,637 116,522
LOSS PER SHARE (SEN) (20.0) (3.6) (2.0)
NET TANGIBLE ASSETS PER SHARE (SEN) 88.7 108.7 97.1
12 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Corporate Governance Statement
The Board is committed to ensure that good corporate governance is practised throughout the Group with
the ultimate objective of protecting and enhancing shareholders’ value and the financial performance of the
Company and of the Group.
The Board is committed to implementing the Malaysian Code on Corporate Governance (“the Code”)
wherever applicable in the best interest of the shareholders of the Company.
A. DIRECTORS
THE BOARD AND ITS RESPONSIBILITIES
The Board leads and controls the Group. It regularly meets to perform its main functions, amongst others,
as follows:-
• Setting the objectives, goals and strategic plans for the Group with a view to maximising shareholders’
value.
• Adopting and monitoring progress of the Company’s strategies, budgets, plans and policies.
• Overseeing the conduct of the Group’s businesses to evaluate whether the businesses are properly
managed.
• Identifying principal risks of the Group and ensuring the implementation of appropriate systems to
mitigate and manage these risks. The Board through the Risk Management Committee, sets, where
appropriate, objectives, performance targets and policies to manage the key risks faced by the Group.
• Considering Management’s recommendations on key issues including acquisitions, divestments,
restructuring, funding and significant capital expenditure.
• Human resources planning and development.
• Reviewing the adequacy and integrity of the Company’s internal control systems and management
information systems, including systems for compliance with applicable laws, regulations, rules,
directives and guidelines.
The Board delegates certain responsibilities to the Board Committees, all of which operate within defined
terms of reference.
BOARD COMPOSITION
The Board currently consists of seven (7) members, two (2) or one-third (1/3) are Independent Non-Executive
Directors. The composition reflects a balance of Executive and Non-Executive Directors with a mix of
suitably qualified and experienced professionals in the fields of construction and building materials, civil
engineering, accountancy, finance, banking, business administration and development. This
combination of different professions and skills working together enables the Board to effectively lead and
control the Company. The Board composition also fairly reflects the investment in the Company by
shareholders other than the significant shareholder.
A brief profile of each Director is presented on pages 3 to 6 of the Annual Report.
SUNWAY INFRASTRUCTURE BERHAD 13
(405897-V)Corporate Governance Statement (Cont’d)
MEETINGS AND SUPPLY OF INFORMATION
Unless there are urgent matters, the Board normally meets quarterly to review financial, operational and
business performances. Notices and agenda of meetings duly endorsed by the Executive Chairman together
with relevant board papers are normally given at least one (1) week prior to the meetings for the Directors to
study and evaluate the matters to be discussed.
The board papers provided include inter alia, financial results, business plan and budget, progress report on
the Company’s developments, minutes of meetings of Board Committees and other operational and financial
issues for the Board’s information and/or approval.
All Directors are entitled to information pertaining the Company. In addition, all Directors have direct access
to the advice and services of the joint Company Secretaries. They are also permitted to seek independent
advice whenever deemed necessary, at the Company’s expense.
There is a formal procedure approved by the Board for all Directors, whether as a full Board or in their
individual capacity, to obtain independent professional advice, when necessary, at the Company’s expense.
The Board met eight (8) times for the financial year ended 31 December 2004 and the attendance of the
respective Directors is as follows:-
Total No. of Percentage of
Meetings Attendance
Name of Directors Attended (%)
Tan Sri Dato’ Seri (Dr) Cheah Fook Ling (Executive Chairman) 8/8 100
Datuk Razman M Hashim 7/8 88
Dato' Tan Kia Loke 8/8 100
Yau Kok Seng 8/8 100
Liew Kiam Woon 6/8 75
Dato' Seri Syed Zainol Rashid Jamalullail 7/8 88
Dato' Ir Hj Ibrahim Bin Hj Yakub 8/8 100
14 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Corporate Governance Statement (Cont’d)
DIRECTORS’ TRAINING
All the Directors had attended the Mandatory Accreditation Programme prescribed by Bursa Malaysia
Securities Berhad (“Bursa Securities”). During the year under review, the Directors had also attended various
continuing education programmes and seminars organised by the relevant regulatory authorities and
professional bodies in order to equip themselves to effectively discharge their duties as Directors.
All Directors were constantly updated by the Company Secretary on changes to the relevant guidelines on
the statutory and regulatory requirements.
RETIREMENT BY ROTATION AND RE-ELECTION
The Company’s Articles of Association provides that one-third (1/3) of the Board are subject to retirement by
rotation at each Annual General Meeting. Each Director shall retire at least once every three (3) years but
shall be eligible for re-election. The Directors to retire in each year are those who have been longest in office
since their last election or appointment.
To assist the shareholders in their decision, sufficient information such as personal profile, attendance of
meetings and the shareholdings of each Director standing for re-election are disclosed in the Statement
Accompanying the Notice of the Annual General Meeting.
BOARD COMMITTEES
The Board has set up the following Committees and will periodically review their terms of reference and
operating procedures. The Committees are required to report to the Board on all their deliberations and
recommendations and such reports are incorporated in the minutes of the Board Meetings.
1. Audit Committee
The Audit Committee is set up to play an active role in assisting the Board in discharging its governance
responsibilities. The composition of the Audit Committee, its terms of reference, attendance of meetings
and a summary of its activities are set out on pages 22 to 28 of the Annual Report.
SUNWAY INFRASTRUCTURE BERHAD 15
(405897-V)Corporate Governance Statement (Cont’d)
2. Risk Management Committee
The Risk Management Committee comprises Dato’ Tan Kia Loke as Chairman, Yau Kok Seng, Mark
Victor Rozario, Khor Wei Moon and Ng Lai Ping.
The Risk Management Committee is tasked with the responsibility to oversee the risk management
activities of the Group, approving appropriate risk management procedures and measurement
methodologies across the organisation as well as identification and management of strategic business
risks of the Group. The terms of reference of the Risk Management Committee are set out on pages 20
and 21 of the Annual Report.
During the year under review, a meeting was held to adopt the terms of reference, to discuss and
consider the risk measurement parameters and the preliminary risk assessment.
The Risk Management Committee reports directly to the Board on a quarterly basis on its deliberations
and recommendations.
B. DIRECTORS’ REMUNERATION
The remuneration of the Executive Director is structured on the basis of linking rewards to corporate and
individual performance. For Non-Executive Directors, the level of remuneration reflects the experience and
level of responsibilities.
The Board as a whole resolves on the fees for the Non-Executive Directors with individual Directors
abstaining from decisions in respect of their individual remuneration. The fees payable to the Non-Executive
Directors are subject to the approval of shareholders.
The breakdown of the Directors’ remuneration during the financial year is as follows:-
Executive Non-Executive Total
Director Directors
RM RM RM
Fees – 36,000 36,000
Other Emoluments – 24,500 24,500
Salaries and Other Remuneration 336,000 – 336,000
Total: 336,000 60,500 396,500
16 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Corporate Governance Statement (Cont’d)
The number of Directors whose remuneration falls under the following bands:-
Range of Remuneration Executive Non-Executive Total
Director Directors
Below RM50,000 – 3 3
RM300,001 to RM350,000 1 – 1
Total: 1 3 4
C. SHAREHOLDERS
DIALOGUE BETWEEN THE COMPANY AND INVESTORS
The Board values constant dialogue and is committed to clear communication with its shareholders and
investors. In this respect, as part of the Group’s active investor relations program, discussions and dialogues
are held with fund managers, financial analysts, shareholders and the media to convey information about the
Group’s performance, corporate strategy and other matters affecting shareholders’ interests.
In addition to published Annual Report and Quarterly Reports announced to Bursa Securities, the Group has
established a website at http://www.sunway.com.my from which investors and shareholders can access for
information.
While the Company endeavours to provide as much information as possible to its shareholders and
stakeholders, it is mindful of the legal and regulatory framework governing the release of material and price-
sensitive information.
ANNUAL GENERAL MEETING
The annual general meeting of the Company provides the principal forum for dialogue and interaction
between the Board and the shareholders. The participation of shareholders, both individuals and institutional
at general meetings on clarifications of pertinent and relevant information is encouraged.
SUNWAY INFRASTRUCTURE BERHAD 17
(405897-V)Corporate Governance Statement (Cont’d)
D. ACCOUNTABILITY AND AUDIT
FINANCIAL REPORTING
In presenting the annual financial statements, annual report and quarterly announcement of results to
shareholders, the Board aims to provide a balanced and understandable assessment of the Group’s financial
position, performance and prospects. The Board is assisted by the Audit Committee to oversee the Group’s
financial reporting processes and the quality of its financial reporting.
INTERNAL CONTROL
The Statement on Internal Control set out on pages 29 to 31 of the Annual Report provides an overview of
the state of internal controls within the Group.
RELATIONSHIP WITH THE AUDITORS
The Board maintains, via the Audit Committee, an active, transparent and professional relationship with its
Auditors. The role of the Audit Committee in relation to the External Auditors is disclosed in the Audit
Committee Report set out on pages 22 to 28 of the Annual Report.
E. DIRECTORS’ RESPONSIBILITY STATEMENT ON ANNUAL AUDITED FINANCIAL
STATEMENTS
The Directors are responsible in the preparation of the Annual Audited Financial Statements to give a true
and fair view of the state of affairs, results and cash flows of the Company and of the Group at the end of the
financial year.
In preparing the financial statements, the Directors will ensure that suitable accounting policies have been
applied consistently, and that reasonable and prudent judgments and estimates have been made. All
applicable approved accounting standards and provisions of the Companies Act, 1965 have been complied
with.
The Directors are also responsible for ensuring that proper accounting and other records are kept which
disclose with reasonable accuracy, the financial position of the Company and of the Group and which
enables them to ensure that the financial statements comply with the relevant statutory requirements.
18 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Corporate Governance Statement (Cont’d)
F. COMPLIANCE WITH THE CODE
The Group has complied substantially with the principles and best practices outlined in the Code except for
the following:-
1. Appointment of Senior Independent Non-Executive Director
The Board has not found it necessary to identify a Senior Independent Non-Executive Director to whom
concerns relating to the affairs of the Group may be conveyed, as there are a number of experienced
and competent senior independent directors on the Board. In addition, the Executive Chairman
encourages full deliberation of issues affecting the Group by all members of the Board.
2. Formation of Nomination Committee
The Code endorses as a good practice, a formal procedure for appointment to the Board based on the
recommendation of a Nomination Committee. The Code, however, states that this procedure may be
performed by the Board as a whole.
In place of a Nomination Committee, the suitability of candidates for appointment to the Board will be
considered and approved by the entire Board to ensure that the resulting mix of experience and
expertise of members of the Board is sufficient to address the issues affecting the Group. During the year
under review, there were no new appointments to the Board.
The Board will also undertake the role of a Nomination Committee to assess the effectiveness of the
Board as a whole and the Committees of the Board as well as to assess the contribution of each
individual Director. The Board will be implementing a process to carry out this role.
3. Formation of Remuneration Committee
Following a review of the need to establish a Remuneration Committee as recommended by the Code,
the Board concluded that the determination of Directors’ remuneration is a matter for the Board as a
whole. However, Directors will not participate in decisions concerning their own remuneration
packages and Directors’ fees must be approved by the shareholders at the Annual General Meeting of
the Company.
SUNWAY INFRASTRUCTURE BERHAD 19
(405897-V)Terms Of Reference Of Risk Management Committee
1. MEMBERSHIP
(a) The Risk Management Committee (“RMC”) shall be appointed by the Board and shall comprise
not fewer than three (3) in number.
(b) The members of the RMC shall elect a Chairman from among their number.
(c) In the event of any vacancy in the RMC resulting in the number of members being reduced to
below three (3), the Board shall, within three (3) months fill the vacancy.
(d) The Board shall have the discretion as it deems fit to rescind and/or revoke the appointment of
` any person(s) in the RMC.
2. ROLES AND FUNCTIONS
The RMC has the overall responsibility for overseeing the risk management activities of the
Group, approving appropriate risk management procedures and measurement methodologies
across the organisation as well as identification and management of strategic business risks of the
Group. Its primary roles include the following:-
(a) To champion and promote the Enterprise Risk Management and to ensure that the risk
management process and culture are embedded throughout the Group.
(b) To ensure the implementation of the objectives outlined in the Risk Management Policy and
compliance with them.
(c) To provide routine quarterly reporting and update the Board on key risk management issues
as well as ad-hoc reporting and evaluation on investment proposals.
(d) To work with the Group Financial Controller and Group Internal Audit Department in the
preparation of the Statement on Internal Control for inclusion in the Company’s Annual
Report and to recommend the same for the approvals of the Audit Committee and Board.
20 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Terms Of Reference Of Risk Management Committee (Cont’d)
2.1 Routine Roles and Responsibilities
(a) Review the effectiveness of overall risk management at the enterprise level.
(b) Follow-up on management action plans based on the status of implementation compiled by the
management.
(c) Identify new strategic risks including corporate matters eg. regulatory, business development,
etc.
(d) Review the enterprise risk scorecard and determine the risks to be escalated to the Board on a
quarterly basis.
2.2 Ad-Hoc Roles and Responsibilities
(a) Propose to the Board, the monetary threshold and nature of proposed investments that require
the RMC’s evaluation and endorsement before submission to the Board.
(b) Review proposals/feasibility studies prepared by project sponsor which meet the requisite
threshold before recommending to the Board for final decision.
3. MEETINGS
(a) The RMC shall meet at least quarterly in a year. However, additional meetings may be called at
any time at the RMC Chairman’s discretion.
(b) The quorum for the meeting shall be two (2) members.
4. REPORTING
The Chairman of the RMC shall report the proceedings of each Committee Meeting to the Board.
5. SECRETARY
The Secretary to the RMC shall be the Group Financial Controller/Chief Financial Officer.
SUNWAY INFRASTRUCTURE BERHAD 21
(405897-V)Audit Committee Report
FORMATION
The Audit Committee was formed by the Board of Directors at its meeting on 16 August 2002.
The objective of the Audit Committee is to assist the Board of Directors in fulfilling its fiduciary
responsibilities relating to internal controls, financial and accounting records and policies as well as financial
reporting practices of the Company and its subsidiaries (“the Group”).
COMPOSITION
The members of the Audit Committee during the financial year were:-
1. Dato’ Seri Syed Zainol Rashid Jamalullail - Chairman
(Independent Non-Executive Director)
2. Dato’ Ir Hj Ibrahim Bin Hj Yakub
(Independent Non-Executive Director)
3. Yau Kok Seng
(Non-Independent Non-Executive Director)
MEETINGS AND ATTENDANCE
The Audit Committee held five (5) meetings during the financial year. The attendance of the Committee
members was as follows:-
Name of Committee Member Number of Meetings Attended
Dato’ Seri Syed Zainol Rashid Jamalullail 5/5
Dato’ Ir Hj Ibrahim Bin Hj Yakub 5/5
Yau Kok Seng 5/5
The Company Secretaries, the Internal Auditors and the Chief Financial Officer were present at all meetings.
At three (3) of the meetings, the External Auditors were present.
TERMS OF REFERENCE
1. Membership
1.1 The Committee shall be appointed by the Board of Directors from amongst the Directors of the
Company and shall consist of not less than three (3) members.
1.2 The majority of the members including the Chairman of the Committee shall be Independent
Directors as defined in Chapter 1 of the Listing Requirements of Bursa Malaysia Securities Berhad
(“Bursa Securities”).
22 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Audit Committee Report (Cont’d)
1.3 The Committee shall include at least one (1) person:-
(a) who is a member of the Malaysian Institute of Accountants; or
(b) who must have at least three (3) years’ working experience and:-
(i) have passed the examinations specified in Part I of the 1st Schedule of the Accountants
Act, 1967; or
(ii) is a member of one (1) of the Associations specified in Part II of the 1st Schedule of the
Accountants Act, 1967; or
(c) who must have at least three (3) years’ post qualification experience in accounting or finance
and:-
(i) has a degree/masters/doctorate in accounting or finance; or
(ii) is a member of one (1) of the professional accountancy organisations which has been
admitted as a full member of the International Federation of Accountants; or
(d) who must have at least seven (7) years’ experience being a chief financial officer of a
corporation or having the function of being primarily responsible for the management of the
financial affairs of a corporation.
1.4 No Alternate Director shall be appointed as a member of the Committee.
1.5 The members of the Committee shall elect a Chairman from amongst their number.
1.6 If a member of the Committee resigns, dies or for any reason ceases to be a member with the
result that the number of members is reduced below three (3), the Board shall, within three (3)
months appoint such number of new members as may be required to make up the minimum of
three (3) members.
1.7 The terms of office and performance of the Committee and each of its members shall be reviewed
by the Board no less than once every three (3) years. However, the appointment terminates when
a member ceases to be a Director.
2. Meetings
2.1 The quorum for a Committee Meeting shall be at least two (2) members, the majority present must
be Independent Directors.
2.2 The Committee shall meet at least four (4) times a year and such additional meetings as the
Chairman shall decide.
2.3 Notwithstanding paragraph 2.2 above, upon the request of any member of the Committee,
non-member Directors, the Internal or External Auditors, the Chairman shall convene a meeting
of the Committee to consider the matters brought to its attention.
SUNWAY INFRASTRUCTURE BERHAD 23
(405897-V)Audit Committee Report (Cont’d)
2.4 The External Auditors have the right to appear and be heard at any meeting of the Committee and
shall appear before the Committee when required to do so.
2.5 The non-member Directors and employees of the Company and of the Group shall normally
attend the meetings to assist in its deliberations and resolutions of matters raised. However, at
least once a year, the Committee shall meet with the External Auditors without the presence of
the executive members of the Committee.
2.6 The Internal Auditors shall be in attendance at all meetings to present and discuss the audit
reports and other related matters as well as the recommendations relating thereto and to
follow-up on all relevant decisions made.
2.7 The Company Secretary shall act as Secretary of the Committee and shall be responsible, with the
concurrence of the Chairman, for drawing up and circulating the agenda and the notice of
meetings together with the supporting explanatory documentation to members prior to each
meeting.
2.8 The Secretary of the Committee shall be entrusted to record all proceedings and minutes of all
meetings of the Committee.
2.9 In addition to the availability of detailed minutes of the Committee Meetings to all Board
members, the Committee at each Board Meeting, will report a summary of significant matters and
resolutions.
3. Rights and Authority
The Committee is authorised to:-
3.1 Investigate any matter within its terms of reference.
3.2 Have adequate resources required to perform its duties.
3.3 Have full and unrestricted access to information, records and documents relevant to its activities.
3.4 Have direct communication channels with the External and Internal Auditors.
3.5 Engage, consult and obtain outside legal or other independent professional advice and to secure
the attendance of outsiders with relevant experience and expertise it considers necessary.
4. Functions and Duties
4.1 To review and recommend for the Board’s approval, the Internal Audit Charter which defines the
independent purpose, authority, scope and responsibility of the internal audit function in the
Company and the Group.
24 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Audit Committee Report (Cont’d)
4.2 To review the following and report to the Board:-
(a) With the External Auditors:-
(i) the audit plan and audit report and the extent of assistance rendered by employees of
the Auditee;
(ii) their evaluation of the system of internal controls;
(iii) the audit fee and on matter concerning their suitability for nomination, appointment
and re-appointment and the underlying reasons for resignation or dismissal as Auditors;
(iv) the management letter and management’s response; and
(v) issues and reservations arising from audits.
(b) With the Internal Audit Department:-
(i) the adequacy and relevance of the scope, functions and resources of Internal Audit and
the necessary authority to carry out its work;
(ii) the audit plan of work programme and results of internal audit processes including
recommendations and actions taken;
(iii) the extent of cooperation and assistance rendered by employees of Auditee; and
(iv) the appraisal of the performance of the internal audit including that of the senior staff
and any matter concerning their appointment and termination.
(c) The quarterly results and year end financial statements prior to the approval by the Board,
focusing particularly on:-
(i) changes and implementation of major accounting policies and practices;
(ii) significant and unusual issues;
(iii) going concern assumption; and
(iv) compliance with accounting standards, regulatory and other legal requirements.
(d) The major findings of investigations and management response.
(e) The propriety of 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.
SUNWAY INFRASTRUCTURE BERHAD 25
(405897-V)Audit Committee Report (Cont’d)
4.3 To report any breaches of the Listing Requirements which have not been satisfactorily resolved,
to Bursa Securities.
4.4 To prepare the Audit Committee Report for inclusion in the Company’s Annual Report covering:-
(a) the composition of the Committee including the name, designation and directorship of the
members;
(b) the terms of reference of the Committee;
(c) the number of meetings held and details of attendance of each member;
(d) a summary of the activities of the Committee in the discharge of its functions and duties; and
(e) a summary of the activities of the internal audit function.
4.5 To review the following for publication in the Company’s Annual Report:-
(a) the disclosure statement of the Board on:-
(i) the Company’s applications of the principles set out in Part I of the Malaysian Code on
Corporate Governance; and
(ii) the extent of compliance with the best practices set out in Part II of the Malaysian Code
on Corporate Governance, specifying reasons for any area of non-compliance and the
alternative measures adopted in such areas.
(b) the statement on the Board’s responsibility for the preparation of the annual audited financial
statements.
(c) the disclosure statement on the state of the internal controls system of the Company and of
the Group.
(d) the statement by the Audit Committee on the verification of allocation of share options to the
Group’s eligible employees in compliance with the criteria set out in the Bylaws of the
Company’s Employees’ Share Option Scheme, at the end of each financial year.
(e) other disclosures forming the contents of annual report spelt out in Part A of Appendix 9C of
the Listing Requirements of Bursa Securities.
The above functions and duties are in addition to such other functions as may be agreed to from time
to time by the Committee and the Board.
26 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Audit Committee Report (Cont’d)
5. Internal Audit Department
5.1 The Head of the Internal Audit Department shall have unrestricted access to the Committee
Members and report to the Committee whose scope of responsibility includes overseeing the
development and the establishment of the internal audit function.
5.2 In respect of routine administrative matters, the Head of Internal Audit Department shall report
to the Group Executive Chairman or his designate.
ACTIVITIES OF THE COMMITTEE FOR YEAR 2004
The summary of the activities of the Committee in the discharge of its duties and responsibilities included the
following:-
(a) Reviewed the adequacy and relevance of the scope, functions, resources, risk based internal audit plan
and results of the internal audit processes with the Internal Audit Department.
(b) Reviewed the audit activities carried out by the Internal Audit Department and the audit reports to
ensure corrective actions were taken in addressing the risk issues reported.
(c) Reviewed with the assistance of the Internal Audit Department and management, the adequacy,
appropriateness and compliance of the procedures established to monitor recurrent related party
transactions.
(d) Reviewed with the Internal Audit Department, the Internal Audit Strategic Plan which encompassed its
vision, mission, strategies and action plan towards building a robust and focused internal audit team.
(e) Reviewed with the External Auditors, the audit plan of the Company and of the Group for the year
(inclusive of risk and audit approach, system evaluation, audit fees, issues raised and management
responses) prior to the commencement of the annual audit.
(f) Reviewed the extent of assistance rendered by management and issues and reservations arising from
audits with the External Auditors without the presence of management staff and the executive member
of the Committee.
(g) Reviewed the financial statements, the audit report, issues and reservations arising from statutory audit
with the External Auditors.
(h) Reviewed and discussed the Management Accounts with management.
(i) Reviewed the quarterly results and year end financial statements with management for recommendation
to the Board of Directors for approval and release to Bursa Securities.
(j) Reviewed all related party transactions entered into by the Company and the Group at the Committee’s
quarterly meetings to ensure that the transactions entered into were at arm’s length basis and on normal
commercial terms.
SUNWAY INFRASTRUCTURE BERHAD 27
(405897-V)Audit Committee Report (Cont’d)
(k) Reviewed and approved the Circular to Shareholders and the statement by the Audit Committee in
respect of the proposed Shareholders’ Mandate for Recurrent Related Party Transactions.
(l) Reviewed any conflict of interest situation that may arise within the Company or Group including any
transaction, procedure or course of conduct that raises questions of management integrity.
(m) Discussed the implications of any latest changes and pronouncements on the Company and the Group,
which were issued by the accountancy, statutory and regulatory bodies.
(n) Reported to the Board on significant issues and concerns discussed during the Committee’s meetings
together with applicable recommendations. Minutes of meetings were tabled, discussed and noted by
all Board members.
(o) Reviewed and approved the Audit Committee Report for inclusion in the Company’s 2003 Annual
Report.
(p) Reviewed the disclosure statements on compliance of the Malaysian Code on Corporate Governance
and the state on internal controls as well as the Directors’ Responsibility Statement on the annual
audited financial statements for inclusion in the Company’s 2003 Annual Report.
INTERNAL AUDIT ACTIVITIES REPORT FOR YEAR 2004
The summary of the activities of the Internal Audit Department was as follows:-
(a) Prepared the annual audit plan for the approval of the Audit Committee.
(b) Regularly performed risk based audits on strategic business units of the Company and of the Group,
which covered reviews of the internal control system, accounting and management information system
and risk management.
(c) Issued audit reports to the Committee and management identifying weaknesses and issues as well as
highlighting recommendations for improvements.
(d) Acted on suggestions made by the Committee and/or senior management on concerns over operations
or controls.
(e) Followed up on management corrective actions on audit issues raised by the External Auditors.
(f) Reported to the Committee on review of the adequacy, appropriateness and compliance with the
procedures established to monitor recurrent related party transactions.
(g) Reviewed on the appropriateness of the disclosure statements in regard to compliance with the
Malaysian Code on Corporate Governance and the state on internal controls as well as the Audit
Committee Report.
(h) Attended Committee’s meetings to table and discuss the audit reports and followed up on matters raised.
28 SUNWAY INFRASTRUCTURE BERHAD
(405897-V)Statement On Internal Control
INTRODUCTION
The Malaysian Code on Corporate Governance stipulates that the Board of Directors of listed companies
should maintain a sound system of internal control to safeguard shareholders' investment and Group assets.
Set out below is the Board of Directors ("the Board") of Sunway Infrastructure Berhad's ("the Group")
Statement on Internal Control as a Group, made in compliance with Paragraph 15.27 of the Listing
Requirements of Bursa Malaysia Securities Berhad and the Statement on Internal Control: Guidance for
Directors of Public Listed Companies.
THE BOARD'S RESPONSIBILITY
The Board places importance on, and is committed to maintaining a sound system of internal control and
effective risk management practices in the Group to ensure good corporate governance. The Board affirms
its responsibility for reviewing the adequacy and integrity of the Group's system of internal control and
management information systems, including systems for compliance with applicable laws, rules, directives,
guidelines and risk management practices.
Notwithstanding, as with any internal control system, the Group's system of internal control is designed to
manage rather than eliminate the risk of failure to achieve business objectives. It follows, therefore, that the
system of internal control can only provide reasonable but not absolute assurance against material
misstatement or loss.
THE GROUP'S SYSTEM OF INTERNAL CONTROL
Monitoring Mechanisms and Management Style
Scheduled periodic meetings of the Board, Board Committees and management represent the main platform
by which the Group's performance and conduct is monitored.
The daily running of the business is entrusted to the Chief Operating Officer and his management team.
Under the purview of the Chief Operating Officer, the heads of department are empowered with the
responsibility of managing their respective operations. The Chief Operating Officer actively communicates
the Board's expectations to management at management meetings as well as through attendance at various
operations meetings. At these meetings, operational and financial risks are discussed and dealt with.
The Board is responsible for setting the business direction and for overseeing the conduct of the Group's
operations. Through these mechanisms the Board is informed of all major control issues pertaining to internal
controls, regulatory compliance and risk taking.
Enterprise Risk Management Framework
In dealing with its stewardship responsibilities, the Board recognises that effective risk management is part of
good business management practice. The Board acknowledges that all areas of the Group's activities involve
some degree of risks and is committed to ensuring that the Group has an effective risk management
framework which will allow the Group to be able to identify, evaluate and manage risks that affect the
achievement of the Group's business objectives within defined risk parameters in a timely and effective
manner.
SUNWAY INFRASTRUCTURE BERHAD 29
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