HALIM MAZMIN BERHAD · 2012-04-19 · HALIM MAZMIN BERHAD (330820-P) ... Main Board of Bursa Malaysia Securities Berhad ... – one of the largest international ship classification

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HALIM MAZMIN BERHAD (330820-P)

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Halim Mazmin Berhad (“HMB”) traces its roots back

to 26 years ago when the dawn of the nation’s

offshore oil and gas industries opened opportunities

for local companies to engage in ship agency and

husbanding services.

Swiftly emerging as the country’s largest ship

agency for tankers of world’s oil majors calling at

local ports, soon the foundation for shipowning for

HMB was laid.

HMB, which started off as a joint endeavour

between Tan Sri Dato’ Seri Halim Mohammad,

and his wife, Puan Sri Datin Seri Mazmin Noordin,

is now a leading player in the Malaysian shipping

industry, offering excellent and quality service to its

customers.

Right on course, the path to progress of HMB

received a further boost with its transfer to the

Main Board of Bursa Malaysia Securities Berhad

(“Bursa Securities”) on 17 January 2002, signaling

its expanding role in the nation’s international trade.

TheSeeds of Success

Halim & Mazmin:

Contents

3 Five-Year Financial Highlights

4 Group Corporate Structure

5 Corporate Information

6 Profile of Board of Directors

12 Senior Management

13 Chairman’s Statement

20 Network of Office And Main Ports Of Call

22 List of Vessels/Investment Property

23 Terms of Reference of The Audit Committee

26 Statement on Internal Control

28 Corporate Governance Statement

34 Directors’ Responsibility Statement

35 Directors’ Report And Financial Statements

88 Analysis of Shareholdings

91 Notice of Annual General Meeting and Notice

of Dividend Entitlement

95 Statement Accompanying Notice of Annual

General Meeting

96 Appendix A

Proxy Form

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To own, operate ships and engage in shipping and related synergistic activities consistent with our aspiration to be a reputable, profitable and a Company excelling to international standards and upholding universal values in business practice

s To uphold the principle that the needs and interests of the clients always come first.

s To maintain a strong tradition and culture of excellence in our work by adopting standards and services that are hallmarks of professionalism.

s To adopt a strategic patnership approach with our clients and business associates that rewards all in an open, equitable and forthright manner.

s To ensure sustainability of the Company by constantly looking for opportunities and business activities that are viable and synergistic with our core competencies.

s To promote good corporate citizenry and contribute towards fulfillment of national objectives and aspirations in the making of a maritime Malaysia.

s To ensure financial sustainability and stability in the performance of the Company.

s To ensure good shareholders’ value and stable returns on investment.

s To constantly seek to enhance staff skill, expertise, professionalism and motivation.

corporate values

corporate goals

mission statement

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Five-Year Financial Highlights

ATTRIBUTABLE TO EQUITY

HOLDERS OF THE COMPANY (RM)

Year ended 31 December

2006 2005 2004 2003 2002 (Restated) (Restated) (Restated) (Restated)

REVENUE (RM) 39,306,476 54,661,684 127,093,338 131,201,239 132,763,463

PROFIT BEFORE TAX (RM) 5,390,684 79,044,559 67,613,788 32,116,126 39,638,669

PROFIT FOR THE YEAR 5,379,077 48,338,494 65,467,366 28,582,306 33,044,953

PAID UP CAPITAL (RM) 159,000,000 160,675,360 160,675,360 69,927,000 68,690,000

SHAREHOLDERS’ EQUITY (RM) 284,591,829 310,472,931 285,892,216 189,437,750 156,867,713

BASIC EARNINGS PER SHARE (SEN) 2.00 15.00 23.00 41.00 48.00

RETURN ON EQUITY 1.9% 15.6% 22.9% 15.1% 21.1%

RETURN ON ASSETS 1.2% 11.5% 11.1% 5.1% 5.6%

NET ASSETS PER SHARE (RM) 0.91 0.97 0.93 2.85 2.48

DIVIDEND RATE 10% 12% 14% 7% 7%

DIVIDEND PAYOUT (RM) 15,681,011 18,905,389 22,494,550 5,664,743 4,810,190

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HALIM MAZMIN BERHAD(330820-P)

Subsidiary

Associate

Ship Management Ship broking and Ship chartering

Dormant/Ceased OperationShip-owning

100% Prima Shipmanagement Sendirian Berhad (228397-A)

100% Prima Shipbrokers Sdn. Bhd. (154466-H)

100% AHS Marine Sdn. Bhd. (236935-D)

100% Colorado Shipping Sdn. Bhd. (617807-X)

100% Colville Shipping Sdn. Bhd. (617813-U)

100% OHM Tankers Sdn. Bhd. (205507-D)

100% Emerald Equity Sdn. Bhd. (382912-K)

100% Jubilee Shipping Sdn. Bhd. (432623-H)

100% Meridian Tankers Sdn. Bhd. (205509-P)

100% OHM Bulk Services Sdn. Bhd. (137049-M)

100% Patriot Shipping Sdn. Bhd. (432630-K)

100% Prima Delima Sdn. Bhd. (369369-D)

100% Splendid Shipping Sdn. Bhd. (519789-M)

100% Sterling Shipping Sdn. Bhd. (519847-K)

100% Meridian Shipping Sdn. Bhd. (183163-W)

48.15% Kemaman Heavy Industries Sdn. Bhd. (386026-D)

Group Corporate Structure

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Corporate Information

Board of DirectorsTan Sri Dato’ Seri Halim Bin MohammadExecutive Chairman and Managing Director

Puan Sri Datin Seri Mazmin Binti NoordinExecutive Director

Dato’ Seri Sulaiman Bin Mohd AminDeputy Chairman Independent Non-Executive Director

Mr. Patrick Lim Keng LeeSenior Independent Non-Executive Director

Dato’ Edris @ Idris Bin Haji WahedIndependent Non-Executive Director

Mr. Ee Beng WatIndependent Non-Executive Director

Dato’ Abdul Kadir Bin Mohd DeenIndependent Non-Executive Director

Tuan Haji Mazlan Bin NordinNon-Independent Non-Executive Director

General (R) Dato’ Seri Mohd Azumi Bin MohamedNon-Independent Non-Executive Director

Audit CommitteeDato’ Edris @ Idris Bin Haji Wahed ChairmanIndependent Non-Executive Director

Tan Sri Dato’ Seri Halim Bin MohammadExecutive Chairman and Managing Director



Company SecretariesMs. Coral Hong Kim HeongMs. Lim Seck Wah

Senior Management

Mr. Panchacharam RamasamyDirector, Business Development

En. Hisham Bin HalimGeneral Manager, Group Operations

Cik Mariana Binti HalimGeneral Manager, Corporate Affairs & Business Development

Mr. Chung Kin MunGeneral Manager, Finance

En. Othman Bin SamatAssistant General Manager, Business Development

Captain Arshad Mahmood BhattiSenior Manager, Shipping Operations

En. Che Khamsah Bin Che OthmanSenior Manager, Shipping Agency

Ms. Tan Chon HueyManager, Finance

Ms. Low Peck ChenManager, Finance

En. Abdul Rashid Bin Abu BakarAssistant Manager, Special Events & Functions

Stock Exchange ListingMain Board of Bursa Malaysia Securities BerhadTransferred to Main Board on 17 January 2002Listed on Second Board on 28 February 1996Stock Code : 7102Stock Name : HalimSector : Trading/Services

Place and date of Incorporation and DomicileIncorporated in Malaysia on 16 January 1995

RegistrarMega Corporate Services Sdn. Bhd.15-2, Faber Imperial CourtJalan Sultan Ismail50250 Kuala LumpurTel No: 603-26924271Fax No: 603-27325399

Registered Office49, The BoulevardMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel No: 603-27305000Fax No: 603-27305050Website: www.halimazmin.com

AuditorsOng & WongChartered Accountants

SolicitorsMessrs Joseph & Partners

Principal BankersAffin Bank BerhadCIMB Bank BerhadMalayan Banking BerhadPublic Bank Berhad

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Tan Sri Dato’ Seri Halim Bin Mohammad, a Malaysian, aged 56, is the Founding Director of the companies in Halim Mazmin Berhad (“HMB”) Group. After completing his GCE “O” level in 1968, he pursued a sea-going career as a Cadet Navigating Officer with MISC Berhad and served as a Deck Officer on several types of ships.

In 1975, he joined Harisson & Crossfield and later, in 1978, left for Esso Production where he served on board a storage tanker, off Terengganu shore. In 1982 he left Esso to pursue his own business.

His success in forging the growth of HMB as an important player in the national maritime industry saw him being appointed, in 1994, by the Honorable Minister of Transport, as a Board Member of the Port of Kemaman, Terengganu.

In the international arena, he was acknowledged for his experience and vast knowledge when he was elected by the Paris-based Bureau Veritas – one of the largest international ship classification societies – as a member of its Sub-Committee for Asia-Australia. He also sits as a Board Member of the UK-based North of England P&I Club.

In 2001, he was elected as a Fellow of the Chartered Institute of Logistics & Transport (UK).

In 2003, he was made a Fellow of Malay Chamber of Commerce, City of Kuala Lumpur and received the award from His Majesty the Yang Di-Pertuan Agong.

In 2003, he was appointed to head the Maritime Committee of the Malaysian Industry-Government Group for High Technology (MIGHT). He also has been appointed as Chairman of the Malaysia External Trade Development Corporation (MATRADE) and sits as a Board Member of the Universiti Teknologi Malaysia.

In 2004, he was appointed as Chairman of the Technical Resource Group Logistics to draw up the Industrial Master Plan 3 (2006 - 2020). In 2007, he was appointed as Board member of Malaysian Logistics Council.

For his services to the nation and contributions to the industry, he was, in 1995, conferred the Darjah Kebesaran Dato’ Paduka Mahkota Terengganu (D.P.M.T) by DYMM Sultan of Terengganu and later, in 1999, he was conferred the Darjah Kebesaran Mahkota Selangor (D.P.M.S) by DYMM Sultan of Selangor. These two awards carry the title of “Dato”.

In 2000, His Majesty the Yang Di-Pertuan Agong (the King of Malaysia) conferred on him the Darjah Kebesaran Panglima Setia Mahkota (P.S.M.) which carries the title of “Tan Sri”. In July 2005, he was conferred the Darjah Seri Setia Sultan Mizan Zainal Abidin by DYMM Sultan of Terengganu, which carries the title of “Dato’ Seri”.

In April 2005, he was commissioned as a Honorary Captain of RMNRV of Royal Malaysian Navy. In August 2005, University of Malaya conferred him a Honorary Degree of Doctor of Business honoris causa (HonsDBus). He is also an Adjunct Professor at the same University.

He is currently the Executive Chairman and Managing Director of HMB. He holds directorships in various subsidiaries of HMB and other private companies. He is also a member of the Audit Committee of HMB.

YBhg. Tan Sri Dato’ Seri Halim Bin Mohammad is related to two (2) of the Directors of HMB, namely YBhg. Puan Sri Datin Seri Mazmin Binti Noordin (his spouse) who serves as Executive Director of HMB and Tuan Haji Mazlan Bin Nordin (his brother-in-law) who serves as HMB’s Non-Independent/Non-Executive Director.

Tan Sri Dato’ Seri Halim Bin MohammadExecutive Chairman and Managing Director

Profile of Board of Directors

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Puan Sri Datin Seri Mazmin Binti Noordin, a Malaysian, aged 56. She is also the Founding Director of the companies in Halim Mazmin Berhad (“HMB”) Group. She completed her early education at Sekolah Menengah Convent, Klang, Selangor.

Upon completion of her secondary education in 1970, she left for New Zealand to pursue a course in Business Studies at Auckland Technical Institute.

In 1973, she returned home to join Boustead Shipping Agencies Sdn Bhd (“Boustead”) at their Port Klang Branch.

She left Boustead in 1982 to team up with her husband, Tan Sri Dato’ Seri Halim Bin Mohammad, to set up their own business. Puan Sri Datin Seri Mazmin is actively involved in management and is a director of most of the companies in HMB Group. She also sits on the Board of several other private companies.

YBhg. Puan Sri Datin Seri Mazmin Binti Noordin is related to two (2) of the Directors of HMB, YBhg. Tan Sri Dato’ Seri Halim Bin Mohammad (her spouse) who serves as HMB’s Executive Chairman and Managing Director and Tuan Haji Mazlan Bin Nordin (her brother) who serves as HMB's Non-independent/Non-executive Director.

Puan Sri Datin Seri Mazmin Binti NoordinExecutive Director

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Dato’ Seri Sulaiman Bin Mohd AminDeputy Chairman

Independent Non-Executive Director

Dato’ Seri Sulaiman Bin Mohd Amin, a Malaysian, aged 77, was appointed to the Board on 26 February 1999. He began his career in the civil service and held several appointments in the public sector since 1950 before being promoted into the Administrative and Diplomatic Service, then known as Malayan Civil Service (MCS), and held various positions in the Malaysian Government Services.

In the late quarter of 1969 after the May 13 incident, he was picked to head the Ministry of Youth, Culture and Sports as its permanent Secretary. In late 1970, he was appointed as the first head of the Department of Public Complaints Bureau in the Prime Minister’s Department. In late 1972, he was seconded to Keretapi Tanah Melayu where he served as its Deputy General Manager for two (2) years. He was then appointed as Deputy Secretary General of the Ministry of Energy, Science & Technology, and subsequently in the same capacity in the Ministry of Public Works & Utilities. After that he was promoted as Secretary General to the Ministry of Culture, Youth and Sports for the second times from 1977. He was made the State Secretary of Selangor in 1981 and upon his retirement in early 1984, he was invited by Permodalan Nasional Berhad (“PNB”) to serve as its nominee on the Board of several companies owned by PNB.

He is presently the Chairman of Berjaya Capital Berhad, a public company listed on the Main Board of Bursa Malaysia Securities Berhad. He also holds directorships in various subsidiaries of the Berjaya Group of Companies and other private companies.

YBhg. Dato’ Seri Sulaiman does not have any family relationship with any other Directors and/or a major shareholder of the Company and has no conflict of interest with the Company.

Mr. Patrick Lim Keng Lee, a Malaysian, aged 54, was appointed to the Board on 20 November 1995. He was appointed as the Senior Independent Non-Executive Director of HMB on 19 November 2003. He received his education from St. Xavier’s Institution, Penang.

He was formerly the Managing Director of P&O Nedlloyd for Malaysia and Brunei from 1991 till 2006. He has over 33 years container shipping experience and has held various senior management positions.

Mr. Lim is a Fellow of the Chartered Institute of Logistics & Transport, London as well as a Fellow of the Institute of Chartered Shipbrokers, London and holds a Masters of Business Administration from Heriot-Watt University, United Kingdom. Mr. Lim is a member of the Audit Committee of HMB.

Mr. Lim does not have any family relationship with any other Directors and/or major shareholder of the Company and has no conflict of interest with the Company.

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Dato’ Edris @ Idris Bin Haji Wahed Independent Non-Executive Director

Dato’ Edris @ Idris Bin Haji Wahed, a Malaysian, aged 65, was appointed to the Board on 22 May 1997. He obtained his Diploma in Police Science from University Kebangsaan Malaysia and the p.s.c. of Maktab Turus Angkatan Tentera Malaysia.

He has had a long tenure of service with the Royal Malaysian Police where among others, has served as the Chief of IGP’s Secretariat, Assistant Director of Management and the Chief Police of Terengganu Darul Iman. He was conferred with Federal and States awards and among others, the Darjah Sultan Mahmud Terengganu, Darjah Indera Mahkota Pahang, Darjah Kepahlawan Pasukan Polis, Johan Setia Mangku Negara and Ahli Mangku Negara. YBhg. Dato’ Edris is also the Chairman of the Audit Committee of HMB.

YBhg. Dato’ Edris does not have any family relationship with any other Directors and/or a major shareholder of the Company and has no conflict of interest with the Company.

Tuan Haji Mazlan Bin NordinNon Independent Non-Executive Director

Tuan Haji Mazlan Bin Nordin, a Malaysian, aged 54, was appointed to the Board on 20 November 1995. He completed his education at Anderson School in Ipoh in 1972 after obtaining Higher School Certificate. He then joined Din’s Trading Sendirian Berhad (“DTSB”), a forwarding, trading, warehousing company, as a Manager in its Freight Forwarding Division. In 1980, he was promoted to the position of General Manager in the same division and was given the task of developing the company’s trucking and heavylift division.

In 1983, he left DTSB to further his studies and obtained a Certificate in Business Administration from Arizona International Business Institute in the United States of America. Upon his return, he rejoined DTSB as Managing Director and held the responsibility to oversee the warehousing, freight forwarding and trucking divisions. In this position, he was responsible to the Board on contract management and supervision of international freight forwarding for various projects to clients within Malaysia and the Asean region. Currently, he is still attached to DTSB as Managing Director and has served the company for 32 years since 1973.

Tuan Haji Mazlan is related to two (2) of the Directors of Halim Mazmin Berhad (“HMB”), Puan Sri Datin Seri Mazmin Binti Noordin (his sister) who serves as HMB’s Executive Director and Tan Sri Dato’ Seri Halim Bin Mohammad (his brother-in-law) who is the Executive Chairman and Managing Director of HMB.

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Mr. Ee Beng Wat, a Malaysian, aged 58, was appointed to the Board on 21 January 2002 and is a member of the Audit Committee of Halim Mazmin Berhad (“HMB”).

He is a fellow of the Institute of Chartered Accountants in England and Wales (ICAEW) and is also a member of the Malaysian Institute of Accountants (MIA). He holds a Dealer’s Representative License under the Securities Industry Act 1983.

He began his career as Group Internal Auditor with Harper Gilfillan (M) Bhd from 1977 to 1980. In 1980, he joined Malaysia Container Bhd as Chief Financial Officer cum Company Secretary and left in 1981. He was appointed a Partner in K.K. San & Liew from 1982 to 1984. He left the partnership and joined Rashid Hussain Securities Sdn Bhd as General Manager from 1985 to 1988. Subsequently in 1989 he was appointed Company Secretary and Senior Vice President for Corporate Affairs in Rashid Hussain Berhad. In 1991, he joined Botly Securities Sdn. Bhd. as General Manger and was later promoted as Chief Executive Officer and Executive Director until his retirement in 2004.

He is currently with TA Securities Holdings Bhd (Ipoh Branch) as President of Dealings. Mr. Ee does not have any family relationship with any other Directors, and/or a major shareholder of the Company and has no conflict of interest with the Company.


Dato’ Abdul Kadir Bin Mohd DeenIndependent Non-Executive Director

Dato’ Abdul Kadir Bin Mohd Deen, a Malaysian, aged 63, was appointed to the Board on 20 August 2004. He holds B.A. (HONS) from University of Lancaster, United Kingdom.

He had held various positions at Ministry of Foreign Affairs, Malaysia for 34 years, among others were Assistant Secretary; Principal Assistant Secretary (SEA I); and, Under Secretary (East and South Asia). YBhg. Dato’ Abdul Kadir had also served at the Embassy of Malaysia in Manila, Kuwait, the United Nation in New York, Beijing and Tokyo. In 1992, he was appointed High Commissioner of Malaysia to Sri Lanka and Maldives; and was later transferred as High Commissioner to South Africa in 1997. In 1999, he was appointed Ambassador of Malaysia to the Federal Republic of Germany; concurrently accredited to Switzerland and Greece. He is presently the Chairman of MMC Metrail Sdn. Bhd.

In 1997, YBhg. Dato’ Abdul Kadir was conferred the Darjah Dato’ Paduka Mahkota Perak (DPMP) and Kesatria Mangku Negara (KMN).

YBhg. Dato’ Abdul Kadir does not have any family relationship with any other Directors and/or a major shareholder of the Company and has no conflict of interest with the Company.

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Other Information

None of the Directors have been convicted for any offence in the past ten years. Details of the Directors’ attendance at Board meetings are set out in the Corporate Governance Statement of this Annual Report 2006.

General (R) Dato’ Seri Mohd Azumi Bin MohamedNon-Independent Non-Executive Director

General (R) Dato’ Seri Mohd Azumi Bin Mohamed, a Malaysian, aged 59, was appointed to the Board on 18 April 2007. He received his early military training at the Officer Cadet School Portsea Australia and the United States Army Infantry School. He attended the Joint Services Staff College Australia and the National Defense University Washington DC graduating with a Master of Science in Natural Resources and Strategy and a Graduate Diploma in Strategy to prepare himself for Higher Command.

General (R) Dato’ Seri Mohd Azumi Bin Mohamed rose through the ranks to become General and was promoted to Chief of the Army in the year 2003. Highlights of his military career include command of the;

• 10 Parachute Brigade, the Army’s response to the Malaysian Armed Forces (“MAF”) Rapid Deployment Force.

• First Infantry Division in Sabah/Sarawak with the rank of Leftenant General.

• Service with the United Nation Military Observation Mission in Iraq/Kuwait following the First Gulf War, where he assisted the Foran Commission in the return of war property and drew the policing plan of the Demilitarized Zone.

• Colonel Operations in the Department of Army where he had responsibility in the deployment of the MAF in United Nation peacekeeping duties in Bosnia Herzegovina, Somalia, and Cambodia.

• Represented Malaysia at the United Nation Troop Contributing Meeting in Zagreb.

• Military Assistant and Principal Staff Officer to the Chief of Defense Forces.

General (R) Dato’ Seri Mohd Azumi Bin Mohamed is presently an Independent Non-Executive Director, Member of the Audit Committee and Remuneration Committee of both Atlan Holdings Berhad and RC Group (Holdings) Limited (a company incorporated in Hong Kong and listed on the Alternative Investment Market (AIM) of London Stock Exchange); a director in Idris Hydraulic (Malaysia) Berhad; he also sits on the Board of Advisor of Natural Resources Indonesia, a company that specializes in promoting investments in Indonesia.

General (R) Dato’ Seri Mohd Azumi Bin Mohamed does not have any family relationship with any other Directors and/or any major shareholders of the Company but he is deemed as a related party to YBhg. Tan Sri Dato’ Seri Halim Bin Mohammad by virtue of the consultancy services provided by him to a company controlled by Tan Sri Dato’ Seri Halim Bin Mohammad.

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Hisham Bin HalimGeneral Manager, Group Operations

Mariana Binti HalimGeneral Manager, Corporate Affairs & Business Development

Chung Kin MunGeneral Manager, Finance

Panchacharam RamasamyDirector, Business Development

Senior Management

Che Khamsah Bin Che OthmanSenior Manager, Shipping Agency

Tan Chon HueyManager, Finance

Low Peck ChenManager, Finance

Abdul Rashid Bin Abu BakarAssistant Manager, Special Events & Functions

Othman Bin SamatAssistant General Manager,

Business Development

Capt Arshad Mahmood BhattiSenior Manager, Shipping Operations

Coral Hong Kim HeongCompany Secretary

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We have

maintained a

prudent approach

to investment

in ships

Chairman’s Statement

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Courtesy, Northport, Malaysia

On behalf of the Board of Directors, I am pleased

to present the Annual Report of Halim Mazmin

Berhad (“HMB”) for the financial year ended 31

December 2006.

For the year under review we managed to

record a profit, albeit at a lower level than the

past years. The sustainability of the profitability

of the Company was notwithstanding that during

the year the scale of our shipping operation, and

therefore the volume of our total business, was

reduced considerably on account of the fact that

we operated with fewer ships than we did in the

previous years. Despite our desire to acquire

additional ships, or replace some of the ships that

we had disposed off when ship prices soared to

record levels, we refrained from new investments

because ship prices continued to remain high.

We have maintained a prudent approach to

investment in ships in the last 11 years since our

Company was listed on Bursa Malaysia and we

continued to exercise the same restrain in not

willing to venture into this market.

For the financial year 2006, total revenue

generated by HMB was RM39.31 million,

declining from RM54.66 million. Profits before tax

totaled RM5.39 million compared with RM79.04

million (restated) in the previous year.

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OverviewCourtesy, Westport, Malaysia

OVERVIEW OF GLOBAL TRADE

AND SHIPPING

The world economy was on course for another

good year after four years of robust growth. The

International Monetary Fund reported the global

economy expanded by 5.4 per cent in 2006.

According to the World Trade Organisation

(WTO) preliminary report, the expansion of about

5 per cent in 2006 marked four straight years

of solid global growth, the most “balanced and

consistent” growth period in decades.

The world merchant fleet expanded to 960 million

DWT at the beginning of 2006, up 7.2 per cent,

one of the highest increases in recent years.

(Source:UNCTAD Review of Maritime Transport

2006). The fleet of oil tankers and dry bulk

carriers, which together made up 72.9 per cent

of the total world fleet, increased by 5.4 per cent,

and 7.9 per cent respectively. There was 13.3 per

cent increase from 98.1 to 111.1 million DWT in

the container ship fleet and a 7.5 per cent rise to

24.2 million DWT from 22.5 million DWT in the

liquefied gas carrier fleet.

OVERVIEW OF THE MALAYSIAN

ECONOMY

The year also marked the launching of two major

national development plans, namely the Ninth

Malaysia Plan (2006-2010) and the Third Industrial

Master Plan (2006-2020).

Malaysia’s economy chalked up a growth rate of

5.9 per cent in 2006 (Source: Bank Negara). The

trade value breached the magic trillion Ringgit

barrier for the first time with exports totaling

RM589 billion and imports totaling RM434

billion.

In line with the performance of the trade, cargo

volumes at local ports registered satisfactory

increase. Total throughput handled by principal

ports in the country was 320 million tones,

compared with 273 million tones. Container

throughput in 2006 increased to 13.6 million

TEUs compared with 12.0 million TEUs in 2005.

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Shipping traffic at principal ports rose to 64,028

ship calls in 2006 compared with 62,508 ship calls

the previous year.

During the year Malaysian merchant fleet

expanded largely on account of deliveries of

several LNG carriers, Ultra Large Crude Carriers,

Aframax tankers and offshore supply vessels.

Total Malaysian fleet at the end of 2006 was

12 million dwt (Source: Malaysian Shipowners’

Association).

COMPANY OVERVIEW

We continued to operate with 4 ships during the

year, the same number of ships we had at the

end of 2005. The fleet during the year consisted

of 2 clean product tankers and 2 container ships.

The financial performance was thus based on

the operation and performance of these ships

in the charter as well as carrying cargoes on the

spot market. The container ships, which trade

globally calling several major ports around the

world, continued with the charters with reputable

charterers and continued to perform well.

The clean product tankers were deployed in the

carriage of petroleum products in domestic and

regional waters.

We positioned ourselves well with view to

expanding our fleet during the year. Our position

was favoured by the substantial capital gains the

Company made from the disposal of some of our

ships the previous years. Our cash reserves during

the year stood at RM281.07 million at the end

of the financial year under review. However, we

were cautiously optimistic on the performance

of the ship and freight markets that continued

to show signs of instability. Our fears were not

unfounded.

A Very Large Crude Oil Carrier

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During the year under review, freight rates in

container shipping fell by 8 per cent as supply

rose and demand slacked by 13 per cent (Source:

Containerisation International). The market

further slacked by 11 per cent in the first quarter

of 2007, confirming our doubts that the cyclical

market had yet to settle down.

In the tanker market, ship prices prevailed at

high levels as did the freight rates but offered

no comfort on long-term concerns on returns on

investment. As a Company committed to long-

term view of investments rather than being given

in to speculative spree, HMB adopted a policy to

“wait-it-out” and seize window of opportunity

when the clouds of uncertainty clears.

During the year under review, the Company

signed a five-year facility agreement for an

unsecured fixed rate term loan facility of up to

maximum aggregate principal amount of RM46

million. The purpose of the Facility was for

working capital and general corporate purposes

of the Company.

FINANCIAL PERFORMANCE

During the year under review, HMB Group

achieved a turnover of RM39.31 million compared

to RM54.66 million in the previous year. The sale

of 2 vessels in 2005 resulted in the lower turnover

in the current year.

A Capesize Bulkcarrier

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REVENUE ANALYSIS

Reflecting the scope of our shipping operation,

the share of contributions by container ships to

the total revenue went up to 82 per cent, from

62 per cent in 2005 while the share revenue

contributions from the operations of our tankers

fell to 18 per cent from 29 per cent the previous

year.

2006 2005

RM’000 % RM’000 %

Tankers 6,996 18 16,023 29

Containers 32,310 82 33,704 62

Bulk carrier - - 4,867 9

Non-shipping - - 67 -

A profit after tax of RM5.38 million was recorded

for the year in review compared with RM79.03

million (restated) posted in the previous year.

However, after adjusting for one-off gain on

disposal of vessels in 2005 amounting to RM72.77

million, the profit after tax from normal operations

was approximately RM6.26 million (restated) in

the previous year.

HMB Group has a cash reserve of RM281.07

million (2006) compared to RM250.68 million

(2005). Net assets per share was RM0.91 (2006)

compared to RM0.97 (2005 restated).

A First and Final Tax Exempt Dividend of 5 sen

per share of RM0.50 each was proposed by the

Board of Directors in respect of the financial year

ended 31 December 2006. We have endeavoured

to reward loyal shareholders with satisfactory

dividend notwithstanding the lower turnover that

we recorded during the year under review.

The proposed dividend payout for the current

year is estimated at RM15.68 million compared

with RM18.91 million paid out for year ended 31

December 2005.

PROSPECTS AND CHALLENGES

Bank Negara is confident the economic strength

seen through last year will be sustained in 2007

as the more diversified Malaysian economy will

provide a strong foundation for further growth.

The outlook for 2007 remains favourable

and because of the economy’s flexibility,

the country has a greater resilience to

withstand external shocks.

S.Y. Lili Marleen

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I would like to express my deepest gratitude to

the Board of Directors for their valued advice,

support and cooperation during the year. On this

note, I would like to thank our non-independent

non-executive Director, YBhg. General (R) Dato’

Sri Abdullah Bin Ahmad who has resigned from

the Board, for his services rendered to the Board

and Company.

On behalf of the Board, I would also like to

welcome the appointment of YBhg. General

(R) Dato’ Seri Mohd Azumi Bin Mohamed as

non-independent non-executive Director to the

Board of HMB.

Thank you.

Tan Sri Dato’ Seri Halim Bin Mohammad

Executive Chairman and

Managing Director

The global economic outlook for 2007

remains broadly positive, in particular

with the explosive growth of

economies in the Asian region. On

account of the sustained expansion

of the global trade and economy,

demand for shipping services is

expected to be maintained at a high

level. Thus although supply of shipping

capacity has been forecast at high levels, the

demand for shipping will absorb the capacity with

continued stability in ship prices, freight market

and charter hire market. The rates in the dry bulk

cargo market are expected to remain firm.

It will be prudent on our part to keep a close

watch on the development in the shipping market

and remain on the sideline for the moment while

waiting for window of opportunity to emerge for

us to take advantage of attractive ship prices for

acquisition presenting with a more stable freight

market condition.

APPRECIATION

On behalf of the Board, I wish to place on record

my appreciation to all management and staff of

HMB Group, including our committed ship masters

and crew members of our fleet of ships.

I would also like to thank our valued clients,

shareholders, relevant Government agencies,

business associates and bankers for their

continued support and assistance.

STS Puteri Mahsuri

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List of VesselsName of Vessel Type Year Built GRT DWT

Meridian Vega Product Tanker 1991 3,885 6,979

Meridian Mira Product Tanker 1994 3,581 6,012

Cap Colville Containership 1997 17,613 24,066

(1,510 TEU)

Cap Colorado Containership 1997 17,613 24,066

(1,510 TEU)

Investment PropertyLocation Description Tenure Land area Net book value

Precinct 5.3 Seksyen 14 Vacant land for development Leasehold 5,814 sq.metres RM 5.38mil

Pusat Bandar, Shah Alam, of office and commercial (99 years expiring

Selangor Darul Ehsan. complex on 11.5.2100)

List of Vessels and Investment Property

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AuditCommittee

ChairmanYBhg. Dato’ Edris @ Idris Bin Haji WahedIndependent Non-Executive Director

MembersYBhg. Tan Sri Dato’ Seri Halim Bin MohammadExecutive Chairman and Managing Director



A. Terms of Reference

i. Composition The Board of Directors shall elect an Audit Committee from

amongst themselves (pursuant to a resolution of the Board of Directors) comprising not less than three (3) members where majority of them shall be independent/non-executive members of the Board.

At least one member of the Audit Committee must be a member of the Malaysian Institute of Accountants or if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and:

a. he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or

b. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967.

No alternate director can be a member of the Audit Committee. The member of an Audit Committee shall elect a chairman from amongst their members who shall be an independent director.

All members of the Audit Committee including the Chairman will hold office only as long as they serve as Directors of the Company. Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith.

The Board shall review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether the Audit Committee and members have carried out their duties in accordance with their terms of reference.

In the event of any vacancy in the Audit Committee resulting in the non-compliance of the composition as detailed above, the Board shall fill the vacancy within three (3) months.

ii. ObjectivesThe primary objectives of the Audit Committee are:

a. To provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to business ethics, policies and practices, financial reporting and auditing;

b. To provide greater emphasis on the audit functions by increasing the objectivity and the independence of the external and internal auditors and providing a forum for discussion that is independent of the management.

iii Authority of the Audit Committee The Committee is authorized by the Board to investigate

any activity within its terms of reference. It is authorized to seek any information it requires from any sources or any employee and all employees are directed to co-operate with any request made by the Committee so as to ensure that the Committee has full and unrestricted access to any information pertaining to the Group.

The Audit Committee shall be empowered to convene meetings with the external auditors without the presence of the executive members of the Audit Committee, whenever deemed necessary. The Committee shall have direct communication channels with the external auditors and person(s) carrying out the internal audit functions or activity, if any.

The Committee is empowered by the Board to engage persons having special competence as necessary to assist the Committee in fulfilling its responsibilities.

Terms of Reference of the Audit Committee

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iv Duties and responsibilitiesa. To meet with management and the external auditors

to discuss the scope of their audit plan, to evaluate the audit report on the financial statements and the results of the audit before recommending for approval by the Board;

b. To meet with the internal and external auditors concerning any comments they may have with respect to improving the internal control system;

c. To review the adequacy of the scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work;

d. To review the internal audit plan and results of the internal audit process and where necessary ensure that appropriate action is taken on the recommendations of the internal audit function;

e. To review the quarterly and year-end financial statements of the Company, focusing particularly on:

• changes in or implementation of major accounting policy changes;

• significant and unusual events; and• compliance with accounting standards and other

legal requirements.

f. To assist the Board on the appointment and resignation of the external auditors, to recommend the nomination of persons as external auditors, the audit fees and to evaluate the basis of billings, if necessary;

g. To review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

h. To promptly report to Bursa Securities of matters reported by the Audit Committee to the Board of Directors of the Company which has not been satisfactorily resolved resulting in a breach of the Bursa Securities Listing Requirements;

i. Any other functions, which may be agreed by the Audit Committee and the Board of Directors.

v. Meetings No other directors or employees shall attend the Audit

Committee meeting except by invitation. The Audit Committee shall not hold less than three (3) meetings a year and the quorum for each meeting shall be two (2) and the majority of the members present must be independent directors.

Attendance of a meeting may be by being present in person or through participating by means of tele-video conferencing.

Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the other members of the Board. The Committee Chairman shall report on each meeting to the Board.

The Company Secretary shall act as the Secretary to the Audit Committee.

vi. Procedures of Audit Committee Notice of a meeting of the Audit Committee shall be given

to all members in writing via facsimile or by hand delivered or by courier.

The Committee may deal with matters by way of a circular resolution in lieu of convening a formal meeting.

The Chairman of the Audit Committee shall be the Chairman of the meeting. If at any meeting the Chairman is not present, the members present may choose one of their members who is an independent director to be the Chairman of the meeting. Upon request of the external auditor, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matter the external auditor believes should be brought to the attention of the directors and shareholders.

The decision of the Audit Committee shall be by a majority of votes. In case of an equality of votes, the Chairman of the meeting shall have a second or casting vote.

Minutes of each meeting shall be kept by the Secretary and distributed to each member of the Audit Committee. The Chairman shall as soon as reasonably practicable report on each meeting to the Board. All minutes of meetings shall be open to inspection by the Audit Committee and the Board of Directors.

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B. Activities of the Audit Committee for the Financial

Year ended 31 December 2006

For the financial year under review, the Audit Committee

met four (4) times. The details of the attendance of each

member of the Audit Committee are as per table below:

In discharging their duties, the Audit Committee had

undertaken the following activities:

i. reviewed the unaudited quarterly financial results of

the Group prior to the Board’s approval;

ii. reviewed the Company’s compliance with the prevailing

laws, regulations and accounting standards;

iii. reviewed the internal audit plans, which included

the Capital Asset Management, Treasury Cycle, Cash

Management and Wrap up of findings for quarter one

2006;

iv. reviewed the internal audit reports, which highlighted

the audit issues recommendations with regards to

system and controls weaknesses noted in the course

of audit and the management’s responses thereto;

and

v. reviewed the recurrent related party transactions to

ascertain that the transactions are conducted at arm’s

length and on normal commercial terms.

Number ofMeetings Attended

Dato’ Edris @ Idris Bin Haji Wahed 4/4

Tan Sri Dato’ Seri Halim Bin Mohammad 4/4

Mr. Patrick Lim Keng Lee 4/4

Audit Committee Members

C. Internal Audit Function

The Committee acknowledges the need for an effective

system of internal controls covering all aspects of activities

including the mapping and management of risk in which

the Group may be exposed to.

The Group’s Internal Audit function is independent of the

activities or operations of other operating units, its principle

role is to undertake independent, regular and systematic

reviews of the system of internal control so as to provide

reasonable assurance that such system continues to operate

satisfactorily and effectively. The Internal Audit function

reports directly to the Audit Committee and assists the

Board in monitoring the internal controls to mitigate the

risks. Mr. Ee Beng Wat 4/4

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INTRODUCTION

Paragraph 15.27 (b) of the Bursa Malaysia Securities Berhad Listing Requirements

requires a listed entity to include a statement of internal control in the Annual Report.

The Malaysian Code on Corporate Governance provides that listed companies should

maintain a sound system of internal controls to safeguard shareholders’ investments

and the Group’s assets.

The Board of Directors (“the Board”) recognizes the vital role internal controls play in

creating transparency, accountability and in safeguarding the assets of the Company,

acknowledges its responsibility for ensuring the presence of sound and effective internal

control and risk management practices. However, it should be noted that any system of

internal control can only provide reasonable and not absolute assurance against material

misstatement or loss.

In striving for continuous improvement, the Board will put in place appropriate action

plans, when necessary, to further enhance the Group’s systems of internal control.

SYSTEMS OF INTERNAL CONTROL

The following key processes have been established in reviewing

the adequacy and integrity of the Group’s system of internal

controls:

Clear Lines of Accountability and Reporting Within the Organization

Key responsibilities and accountability in the organizational

structure is clearly defined, with clear reporting lines up to the

Board and its Committees. Established delegation of authority

sets out the appropriate authority levels for decision-making,

including matters requiring Board approval.

Strategic Business Planning Processes

Appropriate business plans have been established within

which the Group’s business objectives, strategies and

targets are articulated. Business planning and budgeting is

undertaken annually, to establish plans and targets against

which performance is monitored on an ongoing basis.

Formalized and Documented Policies and Procedures

Internal policies and procedures which are set out in a series

of clearly documented standard operating manuals covering a

majority of areas within the Group are maintained and subject

to review as and when necessary.

Financial Performance

The preparation of periodic and annual results and the state of

affairs, as published to shareholders, are reviewed and approved

by the Board. The full year financial statements are also audited

by the external auditors.

Statement on Internal Control

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Ship Management

The Ship Management Division, which reports regularly to

the Management conducts regular audits on the Group

vessels’ physical and operational conditions, as well as

matters pertaining to the manning of the vessels. The audits

are designed to ensure vessel integrity and that regular

maintenance are being performed to enhance safety and

reliability of the vessels at all times. The audit also assesses the

crews’ discipline and competency.

In addition, HMB’s vessels are subjected to stringent audits

and vetting to meet the various regulatory and commercial

requirements. These include vetting by oil majors and audits

by the Malaysian Maritime Authority and ship classification

societies to qualify for the international safety management

certification under the relevant Codes.

INTERNAL AUDIT FUNCTION

The periodic reviews carried out by the Internal Audit

function on processes and state of internal controls as part of

its internal audit plan are reported to the Board through the

Audit Committee.

The systems of internal control described in this statement

are considered by the Board to be adequate and the risks are

considered by the Board to be at an acceptable level within the

context of the business environment throughout the Group’s

business. However, such systems do not eliminate the possibility

of human error, collusion or deliberate circumvention of control

procedures by employees and others, nor the occurrence of

unforeseeable circumstances due to poor judgment in decision

making. Nevertheless, the systems of internal control that exist

throughout the financial year provide a level of confidence on

which the Board relies for assurance.

CONCLUSION

The Board is of the view that there is no significant breakdown

or weaknesses in the system of internal control of the Group

for the financial year ended 31 December 2006. The Group

continues to take the necessary measures to ensure that

the system of internal control is in place and functions

effectively.

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Tan Sri Dato’ Seri Halim Bin Mohammad 4/4

Puan Sri Datin Seri Mazmin Binti Noordin 4/4

Dato’ Seri Haji Sulaiman Bin Mohd Amin 4/4

Dato’ Edris @ Idris Bin Haji Wahed 4/4

Tuan Haji Mazlan Bin Nordin 4/4

Mr. Patrick Lim Keng Lee 4/4

Mr. Ee Beng Wat 4/4

Dato’ Abdul Kadir Bin Mohd Deen 4/4

General (R) Dato’ Sri Abdullah Bin 3/4 Ahmad @ Dollah Bin Amad (resigned on 30 April 2007)

A. THE BOARD OF DIRECTORS

i. Duties of Board of Directors The Group is headed by an effective Board which leads

and controls the activities of the Group. The Board

of Directors has overall responsibility for corporate

governance, strategic planning, formulation of policies

and overseeing the investments and business of the

Company.

ii. Board Meetings The Board meets at least four (4) times a year, with

additional meetings convened as necessary. During the

financial year, the Board met four (4) times. Details of

each Director’s attendance are as follows:

The Board of Directors is committed to ensuring that the highest standards of corporate governance are practiced throughout

the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial

performance of Halim Mazmin Berhad.

The following statement explains the manner in which the Group has applied the principles, and the state of compliance with

the Best Practice provisions of the Malaysian Code of Corporate Governance (“Code”) throughout the financial year ended 31

December 2006.

Board papers are issued in sufficient time to enable the

Directors to obtain further explanation or clarification,

where necessary, in order to be properly briefed before

the meeting. All Directors have access to the advice and

services of the Company Secretaries and all information

within the Company. Where necessary, the Directors

may engage independent professionals for advice on

specialized issues at the Company’s expense to enable

them to discharge their duties with full knowledge of

the cause and effect.

iv. Board Composition and Balance The Board currently has nine (9) members

comprising:-

(a) Executive Chairman who is also the Managing

Director

(b) Deputy Chairman who is an Independent

Non-Executive Director

(c) Executive Director

(d) Four (4) Independent Non-Executive Directors

(e) Two (2) Non-Independent Non-Executive Directors

The Board has appointed Mr. Patrick Lim Keng Lee as the

Senior Independent Non-Executive Director, to whom

any concerns may be conveyed.

The brief profile on each and every Director is set out

in the Profile of the Board of Directors.

The presence of five (5) Independent Non-Executive

Directors out of nine (9) Directors comply with Bursa

Securities Listing Requirements and fulfill a pivotal role

in corporate accountability by providing a broader view,

independent and balanced assessment of proposals

from Executive Directors and the management team of

the Company. The Executive Chairman’s responsibility

is to ensure the effectiveness of the Board and to

provide general strategic business directions for the

organization.

Corporate Governance Statement

iii. Supply of Information to the Board All Directors are provided with an agenda and a set

of Board papers prior to each Board meeting which

comprises the quarterly financial results and other

relevant information to enable the Board to discharge

their duties and responsibilities. The agenda and

Directors Number of meetings attended

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• Preparation and Presentation of Quarterly Interim Financial Reporting Under the New FRS Regime

Dato’ Seri Haji Sulaiman Bin Mohd Amin Dato’ Edris @ Idris Bin Haji Wahed Tuan Haji Mazlan Bin Nordin Mr. Patrick Lim Keng Lee Mr. Ee Beng Wat General (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad

YBhg. Dato’ Abdul Kadir Bin Mohd Deen was registered

for a CEP course scheduled in November 2006.

However, the course was cancelled by the organizer.

Due to his tight schedule, another course could not be

arranged prior to the year end.

B. BOARD COMMITTEES

i. Audit Committee The Audit Committee consists of four (4) members,

out of which three (3) are Independent Non-Executive

Directors. One of the three (3) Independent Non-

Executive Directors is a member of the Malaysian

Institute of Accountants. This is in compliance with

Bursa Securities Listing Requirements.

The main objectives of the Audit Committee and its

terms of reference are as detailed in the Terms of

Reference of the Audit Committee of the Annual

Report.

ii. Nomination Committee The Board is regularly reviewing the structure, size and

composition of the Directors and is involved in the

process of assessing existing Directors and identifying,

nominating, recruiting, appointing and orientating new

Directors.

The Board itself currently functions as a nomination

committee until such time that the size of the

Board justifies the establishment of an independent

nomination committee.

iii. Remuneration Committee The Board presently determines the policy on executive

remuneration and fixing the remuneration packages of

individual directors. The Board itself currently functions

as a remuneration committee. As described above,

the Board shall establish an independent remuneration

committee at such time that it views as suitable.

Although all the Directors have an equal responsibility

for the Company’s operations, the role of these

Independent Non-Executive Directors is particularly

important as they provide unbiased and independent

views, advice and judgment.

v. Appointment and Re-election of Directors In accordance with the Company’s Articles of

Association, all Directors who are appointed by the

Board are subject to re-election by the shareholders at

the Annual General Meeting (“AGM”) subsequent to

their appointment.

The Articles of Association of the Company also provides

that at least one third of the remaining Directors are

subject to re-election by rotation at each AGM. All

Directors to retire from office at least once in every three

(3) years on a rotation basis and are eligible to offer

themselves for re-election at the Company’s AGM.

vi. Directors’ Training In view of the changing laws, regulations and business

environment, the Directors are encouraged to attend

continuous training to further their knowledge and to

equip themselves to effectively discharge their duties

as directors.

All members of the Board have attended the Mandatory

Accreditation Programme (“MAP”) as prescribed by

Bursa Securities Listing Requirements.

The Board attends the Continuing Education Programme

(“CEP”) from time to time, where necessary, to equip

themselves with the knowledge to discharge their duties

more effectively. The Directors attended the following

courses:

Course Attended

• Take Over and Mergers: Issues and Challenges

Tan Sri Dato’ Seri Halim Bin Mohammad Puan Sri Datin Seri Mazmin Binti Noordin

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(RM’000)

Category Other Allowances

Executive Directors 40 616 410

Non-Executive Directors 144 - -

Total 184 616 410

Also, the shareholders, investors and members of

the public may access the Company’s website at

www.halimazmin.com to obtain the latest information

of the Group.

E. ACCOUNTABILITY AND AUDIT

i. Financial Reporting The Board is responsible to ensure the financial

statements represent a true, clear and fair assessment

of the Company and Group’s financial positions and

prospects in all its quarterly results, announcements and

annual reports. A statement on Directors’ Responsibility

is set out in the Annual Report.

ii. Internal Controls The Directors are mindful of their responsibilities in

relation to the maintenance of a sound system of

internal controls which provides reasonable assessment

and review of the Company’s effectiveness to safeguard

shareholders’ investment and Group’s assets. The Board

is continuously reviewing the adequacy and integrity of

its system of internal controls.

A Statement on Internal Control is set out in the Annual

Report.

iii. Relationship with External Auditors The Board through its Audit Committee maintains a

transparent relationship with the external auditors in

seeking their professional advice and towards ensuring

compliance with the accounting standards.

The role of the Audit Committee in relation with the

external auditors is set out in the Terms of Reference

of the Audit Committee of the Annual Report.

F. ADDITIONAL COMPLIANCE INFORMATION

i. Utilization of Proceeds The utilization of proceeds from the private placement

of 14,606,800 new ordinary shares of RM1.00 each at

an issue price of RM1.58 each and the disposal of two

(2) container vessels, namely MSC Tasmania and MSC

America for the financial year ended 31 December 2006

are set out in item G of this Statement.

Number of Directors

Executive Non-Executive

Less than RM50,000 - 7

RM150,001 to RM200,000 1 -

RM850,001 to RM900,000 1 -

C. DIRECTORS’ REMUNERATION

The Company pays annual fees to the Directors. The

Directors’ fees are approved by shareholders at the AGM

based on the recommendation from the Board. The

Board as a whole determines the remuneration of each

Director.

The aggregate remuneration of the Directors categorized

into appropriate components is as follows:

The remuneration paid to the Directors, analyzed into the

following bands, is as follows:

D. SHAREHOLDERS

i. Investors’ Relations and Shareholders’ Communication

The Board recognizes the value of dialogue with investors

and shareholders and the importance of accountability

to them. As such, the Board is disseminating proper,

timely and adequate information to the investors and

shareholders through annual report, announcements,

circulars to shareholders and press releases.

ii. AGM At the Company’s AGM, shareholders have direct access

to the Board and are given the opportunity to enquire

about the Company’s activities and performance.

Members of the Board as well as the external auditors

of the Company are present to answer questions raised

at the meeting. A press conference is normally held

immediately after the meeting where the Executive

Chairman answers questions on the Group’s activities

and performance.

Fees Salaries

Range of remuneration

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ii. Share Buy-Back During the financial year ended 31 December 2006, the Company bought back the following shares:

viii.Profit Guarantees During the year, there were no profit guarantees given

by the Company.

ix. Material Contracts During the year, there were no material contracts

outside the ordinary course of business entered into

by the Company and its subsidiaries which involved

Directors’ and major shareholders’ interests.

x. Revaluation of Landed Properties The Company does not have a revaluation policy on

landed properties.

xi. Recurrent Related Party Transactions Statement The breakdown of the aggregate value of the recurrent

transactions which the Group has entered into during

the financial year 2006 pursuant to a mandate given by

the shareholders on 31 May 2006 are set out in Note

28 to the financial statements of the Annual Report.

iii. Options, Warrants or Convertible Securities The Company has not issued any options, warrants or

convertible securities during the financial year.

iv. American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme

The Company did not sponsor any ADR or GDR

programme during the financial year.

v. Imposition of Sanctions/Penalties There were no sanctions and/or penalties imposed

on the Company and its subsidiaries, Directors or

management by the relevant regulatory bodies.

vi. Non-audit Fees The amount of non-audit fees paid to external auditors

for the financial year ended 31 December 2006 is

RM1,000.

vii. Variation in Results There are no material variation between the audited

results for the financial year ended 31 December 2006

and the unaudited results for the financial year ended

31 December 2006 of the Group.

* On 24 November 2006, the Company cancelled 3,350,720 shares out of the Treasury Shares Account of 7,730,500 shares, resulting in the issued shares of the Company adjusted to 318,000,000 shares of RM0.50 each.

Month Consideration Highest Price Lowest Price Average Price No. of Shares (RM) (RM) (RM) (RM) Bought Back

January 241,253 0.740 0.715 0.744 324,400

February 1,159,418 0.755 0.735 0.746 1,554,600

March 124,032 0.755 0.740 0.748 165,800

April 684,516 0.825 0.780 0.810 845,400

May 1,402,424 0.825 0.725 0.817 1,717,600

June 351,514 0.725 0.700 0.716 490,800

July 5,937 0.710 0.710 0.715 8,300

August - - - - -

September 188,540 0.675 0.640 0.674 279,600

October 126,827 0.710 0.670 0.684 185,300

November 305,438 0.705 0.650 0.682 447,600

December - - - - -

Sub total for year 2006 4,589,899 0.825 0.640 0.763 6,019,400Balance b/f from 2005 1,263,228 0.745 0.680 0.738 1,711,100

Total 5,853,127 - - - 7,730,500Shares cancelled * (3,350,720)

Total Number Of Shares Retained In Treasury 4,379,780

32 33


A N N U A L R E P O R T 2 0 0 6


A N N U A L R E P O R T 2 0 0 6

ORIGINAL UTILIZATION TIMEFRAME

UTILIZATION AS REVISED FINANCIAL YEAR ENDED / ENDING 31 DECEMBER

APPROVED BY SC UTILIZATION 2004 2005 2006 RM’000 RM’000 RM’000 RM’000 RM’000 PROPOSED ACTUAL PROSPOSED ACTUAL PROSPOSED ACTUAL WORKING CAPITAL:- - FLEET DRY-DOCK 8,500 3,000 - - 1,339 1,339 1,661 1,661- FLEET OPERATING COSTS* 13,919 19,442 5,000 5,000 14,419 14,442^ - -ESTIMATED EXPENSES RELATING

660 637 660 587 - 50 - -TO THE CORPORATE PROPOSAL#

TOTAL 23,079 23,079 5,660 5,587 15,758 15,831 1,661 1,661

* The fleet operating costs include insurance for the vessels, crew costs, and repair and maintenance costs.

^ An amount of RM23,000 being the unutilized amount allocated under the estimated expenses relating to the Private Placement has been applied towards paying for fleet operating costs in the financial year ended 31 December 2005.

# Corporate Proposal involving Private Placement, bonus issue (completed on 27 October 2004) and share split (completed on 2 December 2004).

G. COMPLIANCE TO SECURITIES COMMISSION’S (“SC”) REQUIREMENTS

The Company is required by SC to make the following

disclosures in relation to the following corporate exercises:

i. Private Placement of 14,606,800 new ordinary shares at an issue price of RM1.58 each (“Private Placement”)

Pursuant to SC’s letter approving the Private Placement

dated 29 June 2004, HMB is required to disclose the status

of the utilization arising from the Private Placement in its

quarterly and annual reports until the proceeds are fully

utilized. The Board of Directors of HMB had on 12 August

2005, approved the following:

(a) the extension of time frame for the completion of the

utilization of the Private Placement proceeds from

31 December 2005 to within the first half of 2006.

(b) that any unutilized amount allocated under the

estimated expenses relating to the Private Placement

to be applied towards paying for fleet operating

costs.

The proceeds arising from the Private Placement have been

fully utilized in the first quarter ended 31 March 2006 as

follows:

32 33


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A N N U A L R E P O R T 2 0 0 6

ii. Disposal of Two (2) Container Vessels, Namely MSC Tasmania and MSC America, (“MSC Disposals”)

Pursuant to the SC’s approval for:

(a) the MSC Disposals not being deemed disposals

that would result in a significant change in

business direction of HMB (vide their letter dated

4 January 2005);

(b) the modification of the corresponding disclosure

requirements (vide their letter dated 21 February

2005); and

(c) subsequently, for the variation to the utilization of

proceeds (vide their letter dated 13 July 2005).

HMB is required to disclose the following in its quarterly

results and annual reports:

(d) the basis and justification for the disposal price,

future plans of the Group, and declaration

of interest by the directors and substantial

shareholders of HMB and persons connected

with them in the MSC Disposals; and

(e) the status of utilization of the MSC Disposals

proceeds until the proceeds have been fully

utilized.

Disclosure on the matters relating to part (d) above was

set out in HMB’s Annual Report for the year ended 31

December 2004.

At present, the MSC Disposals proceeds have been

partially utilized for the repayment of HMB’s banking

facility of RM25.6 million on 22 July 2005 (as approved

by the SC vide their letter dated 13 July 2005). Save for

the payment, there is no specific utilization identified

for the MSC Disposals proceeds. In the interim, the

balance of proceeds of RM134.8 million has been

placed in fixed deposits.

34


A N N U A L R E P O R T 2 0 0 6

The Directors are responsible to ensure that the financial statements of the Group and of the

Company for each financial year are drawn up in accordance with the applicable MASB approved

accounting standards in Malaysia for entities other than private entities ("applicable approved

accounting standards"), the provisions of the Companies Act, 1995 ("the Act") and the Bursa

Securities listing Requirements ("Listing Requirements").

Directors' Responsibility Statement

The Directors have to ensure that the financial statements give a true and fair view of the state of affairs of the Group and of

the Company.

In preparing those financial statements, the Directors are required to:

i. adopt appropriate accounting policies and apply them consistently;

ii. make judgments and estimates that are reasonable and prudent; and

iii. state whether applicable approved accounting standards have been followed, subject to any material departures disclosed

and explained in the financial statements.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy at any time the

financial position of the Group and the Company and to enable them to ensure that the financial statements comply with

the applicable approved accounting standards, the Act, and Listing Requirements. They have a general responsibility for

taking such steps as are reasonably open to them to safeguard the assets of the Group, to detect and prevent fraud and other

irregularities.

35


A N N U A L R E P O R T 2 0 0 6

Directors' Report and Financial Statements

DIRECTORS' REPORT 36

STATEMENT BY DIRECTORS AND STATUTORY DECLARATION 40

REPORT OF THE AUDITORS 41

BALANCE SHEETS 42

INCOME STATEMENTS 43

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 44

STATEMENT OF CHANGES IN EQUITY 45

CASH FLOW STATEMENTS 46

NOTES TO THE FINANCIAL STATEMENTS 49


A N N U A L R E P O R T 2 0 0 6

36 37


A N N U A L R E P O R T 2 0 0 6

The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2006.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are as set out in Note 5 to the financial statements. There have been no significant changes in these activities during the financial year except as disclosed in Note 5 to the financial statements.

RESULTS

Group Company RM RM

Profit before tax 5,390,684 7,744,336Income tax expense (11,607) -Profit for the year 5,379,077 7,744,336

In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature other than the effects arising from the changes in accounting policies due to the adoption of the new and revised Financial Reporting Standards (“FRSs”) which has resulted in a decrease in the Group’s and the Company’s profit for the year by RM1,161,999 and RM5,544,000 respectively as disclosed in Note 26 to the financial statements.

DIVIDEND

During the financial year, the Company paid a first and final tax exempt dividend of 6 sen per ordinary share of RM0.50 each, amounting to RM18,905,389 in respect of the financial year ended 31 December 2005.

The directors now recommend a first and final tax exempt dividend of 5 sen per ordinary share of RM0.50 each in respect of the financial year ended 31 December 2006 which, subject to the approval of the shareholders at the forthcoming Annual General Meeting of the Company, will be paid to shareholders whose names appear in the Record of Depositors on a date to be determined by the directors. Based on the outstanding issued and paid up share capital as at 31 December 2006 of 318,000,000 ordinary shares of RM0.50 each net of 4,379,780 treasury shares of RM0.50 each, the proposed first and final tax exempt dividend of 5 sen per ordinary share of RM0.50 each amounts to RM15,681,011. Such dividend, if approved by the shareholders will be accounted for in the shareholders’ equity as an appropriation of retained profit in the financial year ending 31 December 2007.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

ISSUE OF SHARES

During the financial year, there was no issue of shares.

Directors' Report for the year ended 31 December 2006


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A N N U A L R E P O R T 2 0 0 6

TREASURY SHARES

During the financial year, the Company repurchased 6,019,400 ordinary shares from the open market at an average price of RM0.76 per share. The total consideration paid for the repurchase including transaction costs was RM4,589,899 and this was financed by internally generated funds. On 24 November 2006, the Company cancelled 3,350,720 shares repurchased and an amount equivalent to their par value of RM1,675,360 was transferred to the capital redemption reserve in accordance with the requirement of Section 67A 3(E) of the Companies Act, 1965.

The remaining repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965, and are disclosed in Note 14 to the financial statements.

SHARE OPTION

During the financial year, the Company did not grant any option to any person to take up the unissued shares of the Company.

DIRECTORS

The directors who served since the date of the last report and at the date of this report are:

Tan Sri Dato’ Seri Halim Bin MohammadPuan Sri Datin Seri Mazmin Binti NoordinTuan Haji Mazlan Bin NordinMr Patrick Lim Keng LeeDato’ Edris @ Idris Bin Haji WahedDato’ Seri Haji Sulaiman Bin Mohd AminMr Ee Beng WatDato’ Abdul Kadir Bin Mohd DeenGeneral (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad

In accordance with Article 89 of the Articles of Association, General (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad, Dato’ Abdul Kadir Bin Mohd Deen and Mr Patrick Lim Keng Lee retire from the board at the forthcoming Annual General Meeting and being eligible offer themselves for re-election.

In accordance with Section 129 of the Companies Act, 1965, Dato’ Seri Haji Sulaiman Bin Mohd Amin retires at the forthcoming Annual General Meeting and being eligible offers himself for re-election.


A N N U A L R E P O R T 2 0 0 6

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A N N U A L R E P O R T 2 0 0 6

DIRECTORS’ INTERESTS IN SHARES

According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in shares in the Company during the financial year were as follows:

Number of ordinary shares of RM0.50 each

Balance at Balance at 1.1.2006 Bought Sold 31.12.2006

(Direct Interest)Tan Sri Dato’ Seri Halim Bin Mohammad 105,390,000 371,000 - 105,761,000Puan Sri Datin Seri Mazmin Binti Noordin 66,036,600 - - 66,036,600

By virtue of their interests in the shares of the Company, Tan Sri Dato’ Seri Halim Bin Mohammad and Puan Sri Datin Seri Mazmin Binti Noordin are also deemed to have an interest in the shares of all the subsidiaries of the Company to the extent the Company has an interest.

Other than as disclosed above, none of the directors in office at the end of the financial year had any interest in the shares of the Company or its subsidiaries during the financial year.

There were no significant changes in the above interests in the Company or its subsidiaries during the period from 31 December 2006 to 13 April 2007 except for Tan Sri Dato’ Seri Halim Bin Mohammad having acquired an additional 4,633,300 shares.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member or with a company in which the director has a substantial financial interest except as disclosed in Note 28 to the financial statements.

Neither during nor at the end of the financial year was the Company a party to any arrangements which object was to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

OTHER STATUTORY INFORMATION

a. Before the Income Statements and Balance Sheets of the Group and of the Company were made out, the directors took reasonable steps:

(i) 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 have satisfied themselves that there were no known bad debts and that adequate allowance had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realize their book values in the ordinary course of business had been written down to an amount which they might be expected so to realize.

b. At the date of this report, the directors are not aware of any circumstances:

(i) which would render the amount written off as bad debts, or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent;


A N N U A L R E P O R T 2 0 0 6

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A N N U A L R E P O R T 2 0 0 6

OTHER STATUTORY INFORMATION (CONT'D)

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

(iii) which have arisen which render adherence to the existing methods of valuation of assets or liabilities in the financial statements of the Group and of the Company misleading or inappropriate; and

(iv) not otherwise dealt with in this report or in the financial statements of the Group and of the Company, that would render any amount stated in the respective financial statements misleading.

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

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

(ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year.

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

e. No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report, which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS

There were no material significant events during the financial year that require disclosure in the financial statements.

SUBSEQUENT EVENTS

There were no material events subsequent to the balance sheet date that require disclosure in or adjustments to the financial statements.

AUDITORS

The Auditors, ONG & WONG, have indicated their willingness to continue in office.

Signed in accordance with a resolution of the directors

TAN SRI DATO’ SERI HALIM BIN MOHAMMADDirector

PUAN SRI DATIN SERI MAZMIN BINTI NOORDINDirector

Dated: 13 April 2007 Kuala Lumpur


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A N N U A L R E P O R T 2 0 0 6

Statement by Directors and Statutory Declaration

STATEMENT BY DIRECTORS(Pursuant to Section 169[15] of the Companies Act, 1965)

We, TAN SRI DATO’ SERI HALIM BIN MOHAMMAD and PUAN SRI DATIN SERI MAZMIN BINTI NOORDIN, being two of the directors of HALIM MAZMIN BERHAD, do hereby state that, in the opinion of the directors, the financial statements set out on pages 42 to 87 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB approved accounting standards in Malaysia for entities other than private entities so as to give a true and fair view of the states of affairs of the Group and of the Company as at 31 December 2006 and of the results of their operations, changes in equity and cash flows of the Group and of the Company for the financial year ended on that date.

Signed in accordance with a resolution of the directors

TAN SRI DATO’ SERI HALIM BIN MOHAMMADDirector

PUAN SRI DATIN SERI MAZMIN BINTI NOORDINDirector


STATUTORY DECLARATION(Pursuant to Section 169[16] of the Companies Act, 1965)

I, CHUNG KIN MUN, being the officer primarily responsible for the financial management of HALIM MAZMIN BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 42 to 87 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declaration Act, 1960.

Subscribed and solemnly declared by ) the abovenamed, at Kuala Lumpur ) in Wilayah Persekutuan on )13 April 2007 ) CHUNG KIN MUN

Before me,Kok Poo HimNo. W386Commissioner for Oaths


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A N N U A L R E P O R T 2 0 0 6

Report of the Auditors

REPORT OF THE AUDITORS TO THE MEMBERS OF HALIM MAZMIN BERHAD (Incorporated in Malaysia)

We have audited the financial statements set out on pages 42 to 87. These financial statements are the responsibility of the Company’s directors.

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

We have 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 policies used and significant estimates made by directors as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

a. the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB approved accounting standards in Malaysia for entities other than private entities, 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 of the Group and of the Company; and

(ii) the state of affairs of the Group and of the Company at 31 December 2006 and of the results of the operations and cash flows of the Group and of the 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 for which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

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

The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under Subsection (3) of Section 174 of the Companies Act, 1965.

ONG & WONGAF 0241Chartered Accountants

ONG KONG LAI494/06/08(J/PH)Partner of Firm



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A N N U A L R E P O R T 2 0 0 6

Group Company Note 2006 2005 2006 2005 RM RM RM RM (Restated) ASSETS Non-current assets Property, plant and equipment 3 124,009,093 143,923,946 128,741 279,321Investment property 4 5,382,675 5,382,675 - -Investments in subsidiaries 5 - - 41,351,955 41,351,955Investment in associate 6 8,256,888 8,278,250 8,878,000 8,878,000Other investments 7 14,650,000 10,050,000 14,650,000 10,050,000 152,298,656 167,634,871 65,008,696 60,559,276Current assets Inventories 235,065 67,537 - -Trade receivables 8 248,436 343,100 - -Other receivables 9 2,448,800 1,069,322 1,487,145 457,279Amount due from subsidiaries 10 - - 96,249,768 116,839,044Marketable securities 11 21,921,503 229,526,567 21,921,503 229,526,567Cash and bank balances 12 259,147,914 21,149,659 253,500,608 13,871,932 284,001,718 252,156,185 373,159,024 360,694,822 TOTAL ASSETS 436,300,374 419,791,056 438,167,720 421,254,098 EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital 13 159,000,000 160,675,360 159,000,000 160,675,360Treasury shares 14 (3,367,714) (1,263,228) (3,367,714) (1,263,228)Share premium 5,326,531 7,811,944 5,326,531 7,811,944Reserves 15 123,633,012 143,248,855 91,731,772 101,217,465Total equity 284,591,829 310,472,931 252,690,589 268,441,541 Non-current liabilities Borrowings 16 106,042,473 100,067,812 106,000,000 100,000,000

Current liabilities Trade payables 17 1,246,844 3,280,142 - -Other payables 18 4,372,314 5,865,599 1,211,664 822,634Amount due to subsidiaries 10 - - 38,265,467 51,989,923Borrowings 16 40,046,914 104,572 40,000,000 - 45,666,072 9,250,313 79,477,131 52,812,557 Total liabilities 151,708,545 109,318,125 185,477,131 152,812,557TOTAL EQUITY AND LIABILITIES 436,300,374 419,791,056 438,167,720 421,254,098

Balance SheetsAs at 31 December 2006

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


A N N U A L R E P O R T 2 0 0 6

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A N N U A L R E P O R T 2 0 0 6

Group Company Note 2006 2005 2006 2005 RM RM RM RM (Restated)

Revenue 20 39,306,476 54,661,684 14,048,000 20,472,000Cost of sales (28,017,426) (38,244,677) - -Gross profit 11,289,050 16,417,007 14,048,000 20,472,000

Other income 21 8,782,099 81,004,868 8,429,946 31,788,725Administrative expenses (7,463,103) (8,553,500) (2,294,222) (2,133,699)Other expenses (748,486) (1,310,760) (6,003,215) (448,481)Profit from operations 11,859,560 87,557,615 14,180,509 49,678,545

Finance costs (6,447,514) (8,468,197) (6,436,173) (6,495,245)Share of loss of associate (21,362) (44,859) - -Profit before tax 22 5,390,684 79,044,559 7,744,336 43,183,300

Income tax expense 23 (11,607) (15,096) - -Profit for the year 5,379,077 79,029,463 7,744,336 43,183,300 Attributable to: - Equity holders of the Company 5,379,077 48,338,494 7,744,336 43,183,300- Minority interest - 30,690,969 - -Profit for the year 5,379,077 79,029,463 7,744,336 43,183,300 Basic earnings per share attributable to equity holders of the Company (sen) 24 2 15 Net dividend per share (sen) 25 5 6 5 6

Income StatementsFor the year ended 31 December 2006

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


A N N U A L R E P O R T 2 0 0 6

44 45


A N N U A L R E P O R T 2 0 0 6

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310,

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f ado

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1

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7

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26(c)

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-

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viden

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129,

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anne

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44Cons

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A N N U A L R E P O R T 2 0 0 6

44 45


A N N U A L R E P O R T 2 0 0 6

State

men

t of

Cha

nges

in E

qui

ty

For

the

year

ended

31 D

ecem

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2006

The

anne

xed

notes

form

an

integ

ral p

art o

f the

se fi

nanc

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tatem

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HA

LIM

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n

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l

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s p

rem

ium

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rve

p

rofi

t eq

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RM

R

M R

M R

M

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M

RM

At 1

Janu

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2005

1

60,6

75,3

60

-

7,8

11,9

44

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80,5

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15

249,

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019

Prof

it fo

r the

yea

r, re

pres

entin

g

tota

l rec

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inco

me

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pens

e fo

r the

yea

r

-

-

-

-

43

,183

,300

43

,183

,300

Divi

dend

25

-

-

-

- (2

2,49

4,55

0)

(22,

494,

550)

Treas

ury

shar

es:

14

-

purc

hase

d

-

(1,2

63,2

28)

-

-

-

(1

,263

,228

)At

31

Dece

mbe

r 200

5 1

60,6

75,3

60

(1,

263,

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7,81

1,94

4

- 10

1,21

7,46

5 26

8,44

1,54

1

At

1 Ja

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06

160

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(

1,26

3,22

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811,

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-

101,

217,

465

268,

441,

541

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it fo

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pres

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tota

l rec

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inco

me

and

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-

-

-

-

7

,744

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7,

744,

336

Divi

dend

25

-

-

-

- (1

8,90

5,38

9)

(18,

905,

389)

Treas

ury

shar

es:

14

-

purc

hase

d

-

(4,5

89,8

99)

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-

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(4

,589

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elle

d

(1,6

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60)

2

,485

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)

1,

675,

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-

-At

31

Dece

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6 1

59,0

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(3,

367,

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5,32

6,53

1

1,

675,

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9

0,05

6,41

2 25

2,69

0,58

9


A N N U A L R E P O R T 2 0 0 6

46 47


A N N U A L R E P O R T 2 0 0 6

Group Company Note 2006 2005 2006 2005 RM RM RM RM (Restated) CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 5,390,684 79,044,559 7,744,336 43,183,300Adjustments for: Gain on investments (1,712,230) (2,259,512) (1,712,230) (26,093,009) Gain on disposal of property, plant and equipment - (72,772,003) - - Depreciation of property, plant and equipment 13,506,542 15,776,908 198,707 232,971 Net unrealized foreign exchange losses/(gains) 266,896 (30,861) 5,544,074 5,086 Share of loss of associate 21,362 44,859 - - Interest expense 6,447,514 8,468,197 6,436,173 6,495,245 Interest income (6,749,105) (5,973,353) (6,717,716) (5,695,716)Operating profit before working capital changes 17,171,663 22,298,794 11,493,344 18,127,877(Increase)/Decrease in inventories (167,528) 118,666 - -(Increase)/Decrease in receivables (1,304,935) 6,736,616 14,015,410 98,907,344(Decrease)/Increase in payables (3,526,583) (19,257,551) (13,335,426) 6,852,322Cash generated from operations 12,172,617 9,896,525 12,173,328 123,887,543Tax refund/(paid) 8,513 (53,699) - -Interest paid (6,447,514) (8,468,197) (6,436,173) (6,495,245)Interest received 6,749,105 5,973,353 6,717,716 5,695,716Net cash generated from operating activities 12,482,721 7,347,982 12,454,871 123,088,014 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment B (1,535,874) (3,299,235) (48,127) (114,101)Proceeds from disposal of property, plant and equipment - 149,747,544 - -Distribution of assets from subsidiary - - - 23,879,133Deconsolidation of subsidiary C - (10,886) - -Acquisition of investment (4,600,000) - (4,600,000) -Proceeds from disposal of marketable securities 209,317,294 23,014,500 209,317,294 23,014,500Acquisition of marketable securities - (250,500,000) - (250,500,000)Dividend received from marketable securities - 218,445 - 218,445Net cash generated from/(used in) investing activities 203,181,420 (80,829,632) 204,669,167 (203,502,023)

Cash Flow Statements For the year ended 31 December 2006


A N N U A L R E P O R T 2 0 0 6

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Group Company Note 2006 2005 2006 2005 RM RM RM RM (Restated) CASH FLOWS FROM FINANCING ACTIVITIES Share bought back (4,589,899) (1,263,228) (4,589,899) (1,263,228)Dividend paid to equity holders of the Company (18,905,389) (22,494,550) (18,905,389) (22,494,550)Dividend paid to minority shareholder of subsidiary - (19,600,000) - -Distribution of assets to minority shareholder of subsidiary - (22,942,696) - -Proceeds from term loan 46,000,000 - 46,000,000 -Repayment of term loans - (129,275,978) - -Repayment of hire purchase and lease financing (109,997) (32,401,999) - (10,954)Deposit pledged to licensed bank (32,909) (251,000) - -Net cash generated from/(used in) financing activities 22,361,806 (228,229,451) 22,504,712 (23,768,732)Net increase/(decrease) in cash and cash equivalents 238,025,947 (301,711,101) 239,628,750 (104,182,741)Effects of exchange rate changes (60,601) 30,861 (74) (5,086)Cash and cash equivalents at beginning of year 20,651,584 322,331,824 13,871,932 118,059,759Cash and cash equivalents at end of year A 258,616,930 20,651,584 253,500,608 13,871,932

NOTE

A. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

Group Company 2006 2005 2006 2005 RM RM RM RM Deposits with licensed banks 253,371,211 16,107,273 252,840,227 13,337,998 Deposit pledged with licensed bank (Note 12) (530,984) (498,075) - - Cash and bank balances 5,776,703 5,042,386 660,381 533,934 258,616,930 20,651,584 253,500,608 13,871,932


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B. ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT

During the financial year, the Group and the Company acquired the property, plant and equipment by:

Group Company 2006 2005 2006 2005 RM RM RM RM Cash 1,535,874 3,299,235 48,127 114,101 Finance lease 27,000 47,349 - - 1,562,874 3,346,584 48,127 114,101

C. DECONSOLIDATION OF SUBSIDIARY

(i) Effects on financial results There was no material effect on the financial results of the Group resulting from this deconsolidation.

(ii) Effects on financial position The effect of this deconsolidation on the financial position of the Group was as follows:

2005 RM Other receivable 100,000 Bank balance 10,886 Other payables and accruals (100,000) Provision for taxation (367) Net assets as at 16 December 2005 10,519 Less: Net assets belong to minority interest (5,154) Net assets belong to the Group 5,365 Less: Amount recoverable from deconsolidated subsidiary (5,365) Increase in Group’s net assets -

(iii) Effects on cash flow statement The effect of this deconsolidation on the cash flow statement of the Group was as follows:

2005 RM Bank balances of deconsolidated subsidiary on 16 December 2005 10,886 Net cash outflow due to deconsolidation (10,886)


A N N U A L R E P O R T 2 0 0 6

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A N N U A L R E P O R T 2 0 0 6

1. GENERAL

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are as set out in Note 5.

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

The registered office is located at 49, The Boulevard, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

2. ACCOUNTING POLICIES

The accounting policies adopted by the Group and the Company are consistent with those adopted in the previous years except for the adoption of the following new/revised FRSs effective for financial year beginning 1 January 2006:

FRS 2 Share-based PaymentFRS 3 Business CombinationsFRS 5 Non-current Assets Held for Sale and Discontinued OperationsFRS 101 Presentation of Financial StatementsFRS 102 InventoriesFRS 108 Accounting Policies, Changes in Estimates and ErrorsFRS 110 Events after the Balance Sheet DateFRS 116 Property, Plant and EquipmentFRS 121 The Effects of Changes in Foreign Exchange RatesFRS 127 Consolidated and Separate Financial StatementsFRS 128 Investment in AssociatesFRS 132 Financial Instruments: Disclosure and PresentationFRS 133 Earnings Per ShareFRS 136 Impairment of AssetsFRS 138 Intangible AssetsFRS 140 Investment Property

For this set of financial statements, the Group and the Company have chosen not to early adopt the following FRSs:

FRS Effective for financial periods beginning on or afterFRS 117 Leases 1 October 2006FRS 124 Related Party Disclosures 1 October 2006FRS 139 Financial Instruments: Recognition and Measurement Deferred

The Group and the Company are not required to disclose the possible impact of applying FRS 117, 124 and 139 on these financial

statements by virtue of exemptions provided under these FRSs.

The adoption of FRS 2, 5, 102, 108, 110, 116, 127, 128, 132, 133, 136 and 140 does not have significant financial impact on the Group and the Company. The significant effects of the changes in accounting policies resulting from the adoption of the new/revised FRSs and change in accounting policy for dry-docking costs are disclosed in Note 26.

Notes to the Financial Statements 31 December 2006


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A N N U A L R E P O R T 2 0 0 6

2. ACCOUNTING POLICIES (CONT'D)

a. Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia for entities other than private entities issued by the Malaysian Accounting Standards Board (“MASB”). The financial statements have been prepared under the historical cost convention, except where otherwise stated in the respective accounting policies.

The financial statements are presented in Ringgit Malaysia (“RM”).

b. Subsidiaries and Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the power, directly or indirectly, to exercise control over the financial and operating policies so as to obtain benefits from their activities.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairment losses, if any. On disposal of such investments, the difference between the net disposal proceeds and their carrying amounts is included in the income statement. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).

(ii) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the financial year. The results of the subsidiaries are consolidated using the acquisition method.

Under the acquisition method, 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. The cost of acquisition is measured as the aggregate of fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. Any difference between the cost of acquisition and the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognized as goodwill or negative goodwill. The accounting policy on goodwill and negative goodwill is disclosed in Note 2(d).

Intragroup transactions, balances and resulting unrealized gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealized losses are eliminated on consolidation unless costs cannot be recovered. Consistent accounting policies are applied for transactions and events in similar circumstances.

Minority interest represents the portion of profit or loss and net assets in subsidiaries not held directly or indirectly by the Group. Minority interest is measured at the minority’s share of the fair values of the identifiable assets and liabilities at the acquisition date and the minority’s equity since then.


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b. Subsidiaries and Basis of Consolidation (cont'd)

(ii) Basis of Consolidation (cont'd)

In prior years, certain subsidiaries of the Group, from past business combinations occurred before 1 January 2006, were presented under the merger method. Effective 1 January 2006, the merger method is prohibited under FRS 3 Business Combinations. However, the Group adopted exemption on business combinations provided under FRS 1 First-time Adoption of Financial Reporting Standards by electing not to apply FRS 3 retrospectively and continued to account for the past business combinations under the merger method. As such, the results of subsidiaries are presented as if the merger had been effected throughout the current and previous years. On consolidation, the cost of merger is cancelled with the nominal values of shares received. Any resulting credit difference is classified as equity and regarded as a non-distributable reserve. Any resulting debit difference is deducted directly from equity. Subsidiaries that are consolidated under the merger method and the impact of adopting FRS 1 exemption are disclosed in Note 5 and Note 26(a) respectively.

c. Associate

Associate is an entity in which the Group has a long term equity interest and voting rights of between 20% and 50% to exercise significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the associate but not in control over those policies.

Investment in associate is accounted for in the consolidated financial statements using the equity method. The Group’s investment in associate is recognized in the consolidated balance sheet at cost plus the Group’s share of post-acquisition net results of the associate less impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).

The Group’s share of results of the associate is recognized in the consolidated income statement from the date that significant influence commences until the date that significant influence ceases. Any unrealized gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. Consistent accounting policies are applied for transactions and events in similar circumstances.

Goodwill relating to an associate is included in the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the fair value of the associate’s net identifiable assets and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the results of the associate in the period in which the investment is acquired.

In the Company’s separate financial statements, investment in associate is stated at cost less impairment losses, if any. On disposal of such investments, the difference between the net disposal proceeds and their carrying amounts is included in the income statement.


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d. Goodwill

For acquisitions occurred prior to 1 January 2006, goodwill acquired in a business combination represents the excess of the cost of the acquisition of subsidiaries over the Group’s interest in the fair values of the net identifiable assets (including intangible assets) at the date of acquisition. With the adoption of FRS 3 Business Combinations beginning 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiaries.

Goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is no longer amortized. Instead it is allocated to

cash-generating units (“CGUs”) which are expected to benefit from the synergies of the business combination. Each CGU represents the lowest level at which the goodwill is monitored and is not larger than a segment based on either the Group’s primary or secondary reporting format. The carrying amount of goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Negative goodwill, which represents the excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired over the cost of the acquisition of the subsidiaries, is recognized immediately in the income statement.

e. Foreign Currencies

The individual financial statements of each entity in the Group are measured using the functional currency. The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.

(i) Foreign Currency Transactions

In preparing the individual financial statements, transactions in currencies other than the entity’s functional currency (“foreign currencies”) are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary assets and liabilities denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the exchange rate prevailing at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated at exchange rates at the date when the fair value is determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at balance sheet date are recognized in the income statement except for those arising on monetary items that form part of the Group’s net investment in foreign operation.

(ii) Net Investment in Foreign Operations

Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation, where that monetary item is denominated in either the functional currency of the reporting entity or the foreign operation, are initially taken directly to the foreign currency translation reserve within the equity until the disposal of the foreign operation, at which time they are recognized in the income statement. If exchange differences arise in a currency other than the functional currency of either the reporting entity or the foreign operation, such items are recognized in the income statement for the period.

Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation, regardless of the currency of the monetary item, are recognized in the income statement of the Company or the foreign operation, as appropriate.


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e. Foreign Currencies (cont'd)

(iii) Foreign Operations

The results and financial position of the Group’s foreign operations are translated into presentation currency (RM) as follows:

- Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date;

- Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and

- All resulting exchange differences are taken to a foreign currency translation reserve within equity and are subsequently recognized in the income statement upon disposal of the foreign operations.

Goodwill and fair value adjustments arising from the acquisition of a foreign operation on or after 1 January 2006 are treated as assets and liabilities of the foreign operation and are translated at the closing rate at the balance sheet date. For acquisition prior to 1 January 2006, the exchange rates as at the date of initial acquisition were used.

The closing rates used in the translation of foreign currency monetary assets and liabilities and the financial statements of foreign operations are as follows:

2006 2005 RM RM

Singapore Dollar 2.32 2.27 United States Dollar 3.53 3.78


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f. Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the income statement when they are incurred.

Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).

Vessel and other property, plant and equipment are depreciated to their residual values over their estimated useful lives using the straight-line method. Dry-docking costs are recognized when incurred and allocated over the period until the next dry-docking. The annual rates of depreciation used for the major groups of property, plant and equipment are as follows:

Vessel 18 years - 25 years Dry-docking 24 months - 36 months Office and other equipment 20% - 25% Motor vehicles 20% Renovation 20%

The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognized in the income statement.


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g. Impairment of Assets

The carrying amount of the Group’s assets, other than investment property and inventories, are reviewed at each balance sheet date to determine whether there are any indications of impairment. If any such indications exist, the asset’s recoverable amount is estimated to determine the amount of impairment loss. The policies on impairment of assets are summarized as follows:

(i) Goodwill

Goodwill that has an indefinite useful life is tested annually for impairment or more frequently if events or changes in circumstances indicate that it might be impaired. For impairment testing, goodwill from business combinations is allocated to CGUs which are expected to benefit from the synergies of the business combination.

The recoverable amount is determined for each CGU based on its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognized in the income statement when the carrying amount of the CGU, including the goodwill, exceeds the recoverable amount of the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis. An impairment loss on goodwill is not reversed in subsequent periods.

(ii) Other Assets

Other assets such as property, plant and equipment, investments in subsidiaries and associate are reviewed for objective indications of impairment at each balance sheet date or whenever there is any indication that these assets may be impaired. Where such indications exist, impairment loss is determined as the excess of the asset’s carrying value over its recoverable amount (greater of value in use or fair value less costs to sell) and is recognized in the income statement. Any reversal of an impairment loss for these assets is recognized in the income statement. The carrying amount is increased to its revised recoverable amount, provided that the amount does not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

If an asset is carried at a revalued amount, impairment loss is treated as a revaluation decrease to the extent of previously recognized revaluation surplus for the same asset. Any subsequent reversal is treated as a revaluation increase.

h. Investment Property

Investment property includes leasehold land which is held to earn rental income or for capital appreciation or both. Investment property is measured initially at its cost, including transaction cost. Subsequent to initial recognition, property is measured at fair value, with any changes recognized in the income statement. Fair value of investment property is determined either by independent professional valuers or by management based on their judgments and estimates. Management’s estimates have been made with reference to current prices in an active market for similar properties in the same location and condition and subject to similar lease and other contracts.

Investment property is derecognized when either it has been disposed off or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognized in the income statement.


A N N U A L R E P O R T 2 0 0 6

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i. Inventories

Inventories which comprise bunker and lubricant stocks are held for own consumption and are stated at lower of cost and net realizable value. Cost is determined on a first-in, first-out basis and comprises purchase cost and other direct charges.

j. Financial Instruments

Financial instruments comprise financial assets, financial liabilities and off-balance sheet financial instruments. Financial instruments are recognized in the balance sheet when the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as liability are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

(i) Cash and Cash Equivalents

Cash and cash equivalents comprise bank balances, cash in hand and short term highly liquid assets that are readily convertible to cash without significant risk of changes in value net of outstanding bank overdrafts.

(ii) Marketable Securities

Marketable securities comprise quoted securities which are managed by external fund managers for the purpose of short term capital gains. They are carried at market value, determined based on quoted market prices. Increases or decreases in the carrying amount of marketable securities are recognized in the income statement. On disposal of marketable securities, the difference between net disposal proceeds and the carrying amount is recognized in the income statement.

(iii) Other Investments

Other investments comprise unquoted securities that are acquired and held for yield or capital growth and are usually held to maturity. Other investments are stated at cost, adjusted for amortization of premium net of accretion of discount, where applicable, to maturity dates, less impairment losses. On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is recognized in the income statement.

(iv) Receivables

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

(v) Payables and Interest Bearing Borrowings

Payables are stated at the fair value of the consideration to be paid in the future for goods and services received. Interest bearing borrowings are stated at the amount of proceeds received, net of transaction costs. After initial recognition, interest bearing borrowings are subsequently stated at amortized cost using the effective interest method.

Borrowing costs are recognized in the income statement in the period in which they are incurred.


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j. Financial Instruments (cont'd)

(vi) Equity Instruments

Ordinary shares are classified as equity in the balance sheet. Costs directly attributable to the issuance of new equity shares are taken to equity as a deduction from the proceeds.

Dividends on ordinary shares are accounted for as an appropriation of retained profits in the period in which they are approved.

When the Company repurchases its own equity shares, the amount of the consideration paid, including directly attributable costs, is recognized in equity. Shares repurchased are held as treasury shares and presented as a deduction from equity. No gain or loss is recognized in the income statement on the sale, re-issuance or cancellation of the treasury shares. When treasury shares are re-issued by resale, the difference between the sales consideration and the carrying amount is recognized in equity.

(vii) Derivative Financial Instruments

Derivative financial instruments are off-balance sheet financial instruments whose values change in response to changes in prices or rates (such as foreign exchange rate and interest rate) of the underlying instruments.

k. Assets Held Under Hire Purchase and Finance Lease

Assets acquired under hire purchase or finance lease agreements are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the hire purchase and finance leases, less accumulated depreciation and impairment losses. These assets are depreciated in accordance with the depreciation policy as disclosed in Note 2(f).

Outstanding obligation due under the hire purchase or finance lease agreements after deducting finance costs are included as liabilities in the financial statements. The finance costs of the hire purchase or finance lease are charged to the income statement over the periods of respective agreements so as to produce a constant periodic rate of interest on the remaining balance of the liabilities for each period.


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l. Income Tax

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

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized. Deferred tax is not recognized if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognized in the income statement, except when it arises from a transaction which is recognized directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

m. Provisions for Liabilities

Provisions for liabilities are recognized when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.

n. Employee Benefits

(i) Short Term Benefits

Wages, salaries, bonuses and social security contributions (“Socso”) are recognized as expenses in the year in which the associated services are rendered by employees of the Company. Short term accumulating compensated absences such as paid annual leave are recognized when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognized when the absences occur.

(ii) Defined Contribution Plans

As required by law, companies in Malaysia make contributions to the Employees Provident Fund (“E.P.F.”). Such contributions are recognized as an expense in the income statement as incurred.


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o. Revenue Recognition

Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably.

(i) Freight/Charter Income

Revenue from all voyages, completed and uncompleted, up to the balance sheet date are included in the operating results for the year. For voyages that remained uncompleted as at the balance sheet date, the freight receivable for cargoes loaded onto the vessel up to the balance sheet date and their relevant discharging costs are accrued in the income statement. The time charter equivalent of income from ship chartering activities is recognized on a time proportion basis.

(ii) Interest Income

Interest is recognized on an accrual basis that reflects the effective yield on the asset.

(iii) Dividend Income

Dividend income is recognized when the right to receive payment is established.

(iv) Management Fee

Revenue arising from provision of management services is recognized as and when the services are rendered.

p. Critical Judgments Made in Applying Accounting Policies

In the preparation of the financial statements, management has been required to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the financial statements in the period in which the estimate is revised and in any future periods affected.

In the process of applying the accounting policies as described above, management is of the view that there are no instances of application of judgments which are expected to have significant effect on the amounts recognized in the financial statements.


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3. PROPERTY, PLANT AND EQUIPMENT

As at Exchange As at 1.1.2006 Addition Disposal differences 31.12.2006 RM RM RM RM RM

(Restated) Group 2006

Cost Vessels 213,440,287 - - (9,525,333) 203,914,954Dry-docking 4,355,373 1,485,897 - (185,173) 5,656,097Office and other equipment 2,165,890 76,977 - - 2,242,867Motor vehicles 2,230,094 - - - 2,230,094Renovation 376,574 - - - 376,574 222,568,218 1,562,874 - (9,710,506) 214,420,586

As at Charge for Exchange As at 1.1.2006 the year Disposal differences 31.12.2006 RM RM RM RM RM

(Restated) Accumulated Depreciation Vessels 73,350,177 10,705,899 - (1,693,473) 82,362,603Dry-docking 1,079,221 2,441,601 - (45,848) 3,474,974Office and other equipment 1,832,295 158,186 - - 1,990,481Motor vehicles 2,006,023 200,856 - - 2,206,879Renovation 376,556 - - - 376,556 78,644,272 13,506,542 - (1,739,321) 90,411,493

As at 31.12.2006 RM

Net Book Value Vessels 121,552,351Dry-docking 2,181,123Office and other equipment 252,386Motor vehicles 23,215Renovation 18 124,009,093


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3. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

As at Exchange As at 1.1.2005 Addition Disposal differences 31.12.2005 RM RM RM RM RM

Group (cont’d) 2005 (Restated)

Cost Vessels 318,840,889 - (105,400,602) - 213,440,287Dry-docking 6,094,717 3,185,372 (4,924,716) - 4,355,373Office and other equipment 2,004,678 161,212 - - 2,165,890Motor vehicles 2,230,094 - - - 2,230,094Renovation 376,574 - - - 376,574 329,546,952 3,346,584 (110,325,318) - 222,568,218

As at Charge for Exchange As at 1.1.2005 the year Disposal differences 31.12.2005 RM RM RM RM RM

Accumulated Depreciation Vessels 89,329,620 12,337,698 (28,317,141) - 73,350,177Dry-docking 3,021,242 2,982,695 (4,924,716) - 1,079,221Office and other equipment 1,642,956 189,339 - - 1,832,295Motor vehicles 1,738,847 267,176 - - 2,006,023Renovation 376,556 - - - 376,556 96,109,221 15,776,908 (33,241,857) - 78,644,272 As at 31.12.2005 RM

Net Book Value Vessels 140,090,110Dry-docking 3,276,152Office and other equipment 333,595Motor vehicles 224,071Renovation 18 143,923,946


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As at As at 1.1.2006 Addition Disposal 31.12.2006 RM RM RM RM Company 2006 Cost Motor vehicle 481,050 - - 481,050Office equipment 1,710,709 48,127 - 1,758,836 2,191,759 48,127 - 2,239,886 As at Charge for As at 1.1.2006 the year Disposal 31.12.2006 RM RM RM RM Accumulated Depreciation Motor vehicle 384,840 96,209 - 481,049Office equipment 1,527,598 102,498 - 1,630,096 1,912,438 198,707 - 2,111,145 As at 31.12.2006 RM Net Book Value Motor vehicle 1Office equipment 128,740 128,741


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As at As at 1.1.2005 Addition Disposal 31.12.2005 RM RM RM RM Company (cont’d) 2005 Cost Motor vehicle 481,050 - - 481,050Office equipment 1,596,608 114,101 - 1,710,709 2,077,658 114,101 - 2,191,759 As at Charge for As at 1.1.2005 the year Disposal 31.12.2005 RM RM RM RM Accumulated Depreciation Motor vehicle 288,630 96,210 - 384,840Office equipment 1,390,837 136,761 - 1,527,598 1,679,467 232,971 - 1,912,438 As at 31.12.2005 RM Net Book Value Motor vehicle 96,210Office equipment 183,111 279,321

The net book value of motor vehicles of the Group and of the Company acquired under hire purchase agreements amounted to RM23,200 (2005: RM156,413) and RMNil (2005: RM96,210) respectively.

The net book value of office equipment of the Group acquired under finance lease agreements amounted to RM119,246 (2005: RM140,155).


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4. INVESTMENT PROPERTY

Group 2006 2005 RM RM Leasehold land, at fair value 5,382,675 5,382,675

Details of the leasehold land are disclosed in List of Vessels/Investment Property of the Annual Report.

5. INVESTMENTS IN SUBSIDIARIES Company 2006 2005 RM RM Unquoted shares, at cost: At 1 January 41,351,955 41,402,955 Deconsolidated during the year - (51,000) At 31 December 41,351,955 41,351,955

The shares of all subsidiaries are held directly by the Company. Details of the subsidiaries are as follows:

Country of Principal incorporation activities 2006 2005

* AHS Marine Sdn. Bhd. Malaysia Ship-owning 100% 100% * OHM Tankers Sdn. Bhd. Malaysia Ship-owning 100% 100% Colville Shipping Sdn. Bhd. Malaysia Ship-owning 100% 100% Colorado Shipping Sdn. Bhd. Malaysia Ship-owning 100% 100% * Prima Shipbrokers Sdn. Bhd. Malaysia Ship broking and ship chartering 100% 100% * Prima Shipmanagement Sendirian Berhad Malaysia Ship management 100% 100% * Meridian Shipping Sdn. Bhd. Malaysia Ceased operation 100% 100% * OHM Bulk Services Sdn. Bhd. Malaysia Ceased operation 100% 100%

Jubilee Shipping Sdn. Bhd. Malaysia Ceased operation 100% 100% Patriot Shipping Sdn. Bhd. Malaysia Ceased operation 100% 100% Splendid Shipping Sdn. Bhd. Malaysia Dormant 100% 100% Sterling Shipping Sdn. Bhd. Malaysia Dormant 100% 100% Emerald Equity Sdn. Bhd. Malaysia Dormant 100% 100% Meridian Tankers Sdn. Bhd. Malaysia Dormant 100% 100% Prima Delima Sdn. Bhd. Malaysia Dormant 100% 100% * Subsidiaries which are consolidated using the merger method.

Equity interest


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6. INVESTMENT IN ASSOCIATE

Group Company 2006 2005 2006 2005 RM RM RM RM Unquoted shares, at cost 8,878,000 8,878,000 8,878,000 8,878,000 Share of accumulated loss of associate (621,112) (599,750) - - 8,256,888 8,278,250 8,878,000 8,878,000 Represented by: Group’s share of net assets 8,256,888 8,278,250

There is no goodwill arising from the acquisition of the associate.

The shares of the associate are held directly by the Company. Details of the associate are as follows:

Country of Principal Equity interest incorporation activities 2006 2005

Kemaman Heavy Industries Sdn. Bhd. Malaysia Dormant 48.15% 48.15%

7. OTHER INVESTMENTS

Group and Company 2006 2005 RM RM Unquoted shares in Malaysia, at cost 50,000 50,000 Unquoted subordinated bonds in Malaysia, at cost 14,600,000 10,000,000 14,650,000 10,050,000

The Company has entered into three (3) Facility Agreements with local financial institutions and third parties under Primary Collateralized Loan Obligation Programs as disclosed in Note 16. As an integral part of the Facility Agreements, the Company is required to subscribe for the Variable Rate Asset Backed Subordinated Bonds (“VRABSBs”) issued by the third parties.

The VRABSBs are unquoted and represent 10% of the principal amount of the unsecured term loan facilities. Of the total RM14.6 million unquoted subordinated bonds, RM4,000,000 will mature in November 2007.


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8. TRADE RECEIVABLES

Group 2006 2005 RM RM Trade receivables 5,033,990 5,128,654 Allowance for doubtful debts (4,785,554) (4,785,554) 248,436 343,100 Of which, Amount due from a related party 189,442 189,442

The amount due from a related party is unsecured, interest free and has no fixed terms of repayment. Further details on related party transactions are disclosed in Note 28.

The Group’s normal trade credit term ranges from 14 to 30 (2005: 14 to 30) days.

9. OTHER RECEIVABLES Group Company 2006 2005 2006 2005 RM RM RM RM Other receivables 1,468,614 373,936 1,278,728 276,832 Deposits 601,403 258,601 208,417 180,447 Prepayments 287,958 325,840 - - Tax receivable 90,825 110,945 - - 2,448,800 1,069,322 1,487,145 457,279

10. AMOUNT DUE FROM/(TO) SUBSIDIARIES

These balances are unsecured, interest free and have no fixed terms of repayment, except for an amount of approximately RM525,984 (2005: RM498,075) due from subsidiaries which bears interests at 3.70% (2005: 3.70%) per annum.

11. MARKETABLE SECURITIES

Group and Company 2006 2005 RM RM Unit trusts quoted in Malaysia, at market value 21,921,503 229,526,567


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12. CASH AND BANK BALANCES

Group Company 2006 2005 2006 2005 RM RM RM RM Deposits with licensed banks 253,371,211 16,107,273 252,840,227 13,337,998 Cash on hand and at bank 5,776,703 5,042,386 660,381 533,934 259,147,914 21,149,659 253,500,608 13,871,932

Deposits with licensed banks comprise fixed deposits and short term deposits. The maturity of the deposits as at the end of the financial year ranges from 8 to 285 (2005: 5 to 365) days.

Included in these balances is an amount of RM530,984 (2005: RM498,075) which has been pledged as security for banking facility extended to a subsidiary.

13. SHARE CAPITAL

Group and Company 2006 2005 Authorized Number of ordinary shares of RM0.50 each 400,000,000 400,000,000 RM RM Ordinary shares of RM0.50 each 200,000,000 200,000,000 Issued and fully paid Number of ordinary shares of RM0.50 each At 1 January 321,350,720 321,350,720 Cancelled during the year (Note 14) (3,350,720) - At 31 December 318,000,000 321,350,720

RM RM Ordinary shares of RM0.50 each At 1 January 160,675,360 160,675,360 Cancelled during the year (Note 14) (1,675,360) - At 31 December 159,000,000 160,675,360


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14. TREASURY SHARES

Group and Company 2006 2005

Number of ordinary shares of RM0.50 each At 1 January 1,711,100 - Repurchased during the year 6,019,400 1,711,100 Cancelled during the year (3,350,720) - At 31 December 4,379,780 1,711,100 RM RM Ordinary shares of RM0.50 each At 1 January 1,263,228 - Repurchased during the year 4,589,899 1,263,228 Cancelled during the year (2,485,413) - At 31 December 3,367,714 1,263,228

The shareholders of the Company by an ordinary resolution passed in the Annual General Meeting held on 31 May 2006, renewed their approval for the Company’s plan to repurchase its own ordinary shares.

During the financial year, the Company repurchased 6,019,400 (2005: 1,711,100) ordinary shares from the open market at an average price of RM0.76 (2005: RM0.74) per share. The total consideration paid for the repurchase including transaction costs were RM4,589,899 (2005: RM1,263,228). The repurchased transactions were financed by internally generated funds.

On 24 November 2006, the Company cancelled 3,350,720 shares repurchased and an amount equivalent to their par value of RM1,675,360 was transferred to the capital redemption reserve in accordance with the requirement of Section 67A 3(E) of the Companies Act, 1965. The remaining considerations of RM2,485,413 (i.e. premium and transaction costs) for the shares repurchased were offset against share premium.

The remaining repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965.

Of the total 318,000,000 (2005: 321,350,720) issued and fully paid ordinary shares as at the respective financial year end, 4,379,780 (2005: 1,711,100) are held as treasury shares by the Company. The number of outstanding ordinary shares in issue after the setoff is therefore 313,620,220 (2005: 319,639,620) ordinary shares of RM0.50 each.


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15. RESERVES

Group Company 2006 2005 2006 2005 RM RM RM RM (Restated) Non-distributable Capital redemption reserve At 1 January - - - - Cancellation of treasury shares 1,675,360 - 1,675,360 - At 31 December 1,675,360 - 1,675,360 - Other reserves Reserve on consolidation At 1 January 17,934,873 17,934,873 - - Effects of adopting FRS 3 (17,934,873) - - - At 31 December - 17,934,873 - - Foreign currency translation reserve At 1 January - - - - Foreign currency translation (7,764,891) - - - At 31 December (7,764,891) - - - Total other reserves (7,764,891) 17,934,873 - - Total non-distributable reserves (6,089,531) 17,934,873 1,675,360 - Distributable

Retained profit At 1 January as previously stated 122,037,830 96,957,384 101,217,465 80,528,715 prior year adjustments 3,276,152 2,512,654 - - as restated 125,313,982 99,470,038 101,217,465 80,528,715 Effects of adopting FRS 3 17,934,873 - - -

143,248,855 99,470,038 101,217,465 80,528,715 Profit for the year 5,379,077 48,338,494 7,744,336 43,183,300 Dividend (18,905,389) (22,494,550) (18,905,389) (22,494,550) At 31 December 129,722,543 125,313,982 90,056,412 101,217,465 Total Reserves 123,633,012 143,248,855 91,731,772 101,217,465


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16. BORROWINGS

Group Company 2006 2005 2006 2005 RM RM RM RM Current Hire purchase and finance lease liabilities (Note 19) 46,914 104,572 - - Term loans (unsecured) 40,000,000 - 40,000,000 - Repayable within one year 40,046,914 104,572 40,000,000 - Non-current Hire purchase and finance lease liabilities (Note 19) 42,473 67,812 - - Term loans (unsecured) 106,000,000 100,000,000 106,000,000 100,000,000 Repayable between two to five years 106,042,473 100,067,812 106,000,000 100,000,000 Total Borrowings Hire purchase and finance lease liabilities (Note 19) 89,387 172,384 - - Term loans (unsecured) 146,000,000 100,000,000 146,000,000 100,000,000 146,089,387 100,172,384 146,000,000 100,000,000

In prior years, the Company entered into a Facility Agreement with Affin Bank Berhad and Alliance Investment Bank Berhad for an unsecured fixed rate term loan of RM40,000,000 and RM60,000,000 respectively under a Primary Collateralized Loan Obligation Program. During the financial year, the Company entered into a similar Facility Agreement with Alliance Investment Bank Berhad for an unsecured fixed rate term loan of RM46,000,000.

The unsecured term loans are for a tenor of five (5) years, of which an amount of RM40,000,000 is repayable in one lump sum in November 2007. As an integral part of the Facility Agreements, the Company is required to subscribe for the VRABSBs issued by third parties as disclosed in Note 7.

17. TRADE PAYABLES

Included in trade payables is an amount of RM26,142 (2005: RM73,027) due to related parties. These balances are unsecured, interest free with repayment in accordance with normal trading terms. Further details on related party transactions are disclosed in Note 28.

The normal trade credit term granted to the Group ranges from 14 to 90 (2005: 14 to 90) days.


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18. OTHER PAYABLES

Group Company 2006 2005 2006 2005 RM RM RM RM Other payables 1,868,928 2,600,837 117,141 149,427 Accruals 2,503,386 3,264,762 1,094,523 673,207 4,372,314 5,865,599 1,211,664 822,634 Of which, Amount due to related parties 40,362 43,407 40,362 43,407 The amount due to related parties are unsecured, interest free and have no fixed terms of repayment. Further details on related party transactions

are disclosed in Note 28.

19. HIRE PURCHASE AND FINANCE LEASE LIABILITIES

Group 2006 2005 RM RM Minimum lease payment not later than one year 52,041 114,578 later than one year and not later than five years 44,442 72,823 96,483 187,401 Future finance costs (7,096) (15,017) Present value of hire purchase and finance lease liabilities 89,387 172,384 Present value of hire purchase and finance lease liabilities not later than one year (Note 16) 46,914 104,572 later than one year and not later than five years (Note 16) 42,473 67,812 89,387 172,384

The Group has hire purchase and finance lease contracts for various property, plant and equipment as disclosed in Note 3.

20. REVENUE

Group Company 2006 2005 2006 2005 RM RM RM RM Freight/Charter income 39,306,476 54,661,684 - - Dividend income from subsidiaries - - 13,880,000 20,400,000 Management fee from subsidiaries - - 168,000 72,000 39,306,476 54,661,684 14,048,000 20,472,000


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21. OTHER INCOME

Group Company 2006 2005 2006 2005 RM RM RM RM Gain on disposal of property, plant and equipment - 72,772,003 - - Gain on investments 1,712,230 2,259,512 1,712,230 26,093,009 Interest income 6,749,105 5,973,353 6,717,716 5,695,716 Others 320,764 - - - 8,782,099 81,004,868 8,429,946 31,788,725

22. PROFIT BEFORE TAX

The following items have been charged/(credited) in arriving at profit before tax:

Group Company 2006 2005 2006 2005 RM RM RM RM (Restated) Auditors’ remuneration Current year’s provision 30,500 41,000 4,000 4,000 Overprovision in prior year - (145) - - Depreciation of property, plant and equipment (Note 3) 13,506,542 15,776,908 198,707 232,971 Directors’ remuneration Fee 184,000 184,000 184,000 184,000 Other emoluments - Directors of the Company 1,026,112 1,026,417 850,772 671,171 - Other directors of subsidiary - 285,221 - - Finance costs Hire purchase and finance lease 11,341 826,527 - 71 Term loans 6,436,173 7,641,670 6,436,173 6,495,174 Net foreign exchange losses/(gains) Realized 481,590 1,341,623 459,141 443,395 Unrealized 266,896 (30,861) 5,544,074 5,086 Rental of premises 1,502,855 1,260,000 - - Staff and crew costs E.P.F. 271,452 339,396 67,822 23,611 Socso 24,325 25,763 3,395 1,539 Salaries, allowances and others 9,011,335 10,377,549 578,372 231,766

Further details on directors’ remuneration are set out in Corporate Governance Statement of the Annual Report.


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23. INCOME TAX EXPENSE

Group Company 2006 2005 2006 2005 RM RM RM RM (Restated) Current year’s tax charge 14,466 18,675 - - Overprovision in prior year (2,859) (3,579) - - 11,607 15,096 - -

Group Company 2006 2005 2006 2005 % % % % Applicable tax rate 28 28 28 28 Tax effect of: Expenses not deductible for tax purposes 67 6 23 3 Income not subject to tax (121) (36) (57) (32) Unrecognized deferred taxation assets 26 2 6 1 Average effective tax rate - - - -

The income of the Group derived from the operations of sea-going Malaysian registered ships is tax exempt under Section 54A of the Income Tax Act, 1967. The taxation charge of the Group is attributable to other income and does not contain any deferred taxation in prior year.

Subject to agreement with the Inland Revenue Board, the Company has the following: Company 2006 2005 RM RM Unabsorbed tax losses 5,053,000 3,922,000 Unabsorbed capital allowances 1,533,000 1,471,000 Section 108 42,000 42,000 Tax exempt account 199,387,000 201,003,000

The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and tax exempt account to frank payment of dividends

out of its entire retained profit.


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24. EARNINGS PER SHARE

The basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company by the weighted average number of ordinary shares of RM0.50 each in issue during the financial year excluding the weighted average treasury shares held by the Company.

Group 2006 2005 (Restated) Profit for the year attributable to equity holders of the Company (RM) 5,379,077 48,338,494 Number of ordinary shares in issue at 1 January 319,639,620 321,350,720 Effect of shares bought back and held as treasury shares (3,927,267) (134,438) 315,712,353 321,216,282 Basic earnings per share (sen) 2 15

There was no dilutive effect on the shares of the Group during the current and previous financial year. The comparative basic earnings per share have been restated as a result of changes in accounting policies as disclosed in Note 26.

25. DIVIDENDS

2006 2005 Net dividend Net dividend

per share Amount per share Amount Sen RM Sen RM Recognized during the year First and final tax exempt dividend paid 6 18,905,389 7 22,494,550 Proposed for approval at AGM First and final tax exempt dividend payable 5 15,681,011 6 19,178,377

At the forthcoming Annual General Meeting, a first and final tax exempt dividend in respect of the financial year ended 31 December 2006 of 5 sen per share (2005: 6 sen per share) amounting to a dividend payable of RM15,681,011 will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained profit in the financial year ending 31 December 2007.


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26. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS

The accounting policies disclosed in Note 2 have been applied in preparing the financial statements for the year ended 31 December 2006. The impact resulting from changes in accounting policies arising from the adoption of the new/revised FRSs and the change in accounting policy in respect of the accounting treatment of dry-docking costs are summarized below:

a. FRS 3 Business Combinations, FRS 136 Impairment of Assets and FRS 138 Intangible Assets

The new FRS 3 has resulted in consequential amendments to two other accounting standards, namely FRS 136 and FRS 138.

Goodwill

In prior years:- positive goodwill was recognized as a deduction from equity. Such goodwill has not been retrospectively capitalized and

amortized over its estimated useful life as it was impractical to reinstate; and

- negative goodwill was presented as other reserves (or reserve on consolidation). To the extent that it related to expectations of future losses and expenses that were identified in the Group’s plan for the acquisition and can be measured reliably but which did not represent identifiable liabilities, that portion of negative goodwill was recognized in the income statement when the future losses and expenses were recognized. Any remaining negative goodwill, not exceeding the fair values of the non-monetary assets acquired, was recognized in the income statement over the remaining weighted average useful life of those assets; negative goodwill in excess of the fair values of those assets was recognized in the income statement immediately.

With effect from 1 January 2006, in accordance with FRS 3 and FRS 136, positive goodwill is carried at cost less accumulated impairment losses and is now tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired. Any impairment loss is recognized in income statement when the carrying amount of the CGU to which the goodwill has been allocated exceeds its recoverable amount, and subsequent reversal is not allowed. Under the FRS 3, when positive goodwill was previously recognized as a deduction from equity, the Group is not allowed to recognize that goodwill in income statement when it disposes of all or part of the business to which that goodwill relates or when a CGU to which the goodwill relates becomes impaired.

If the fair value of the net identifiable assets acquired in a business combination exceeds the consideration paid (i.e. an amount arises which would have been known as negative goodwill under the previous accounting policy), the excess is recognized immediately in the income statement as it arises.

In accordance with the exemption on business combinations under FRS 1: First-time Adoption of Financial Reporting Standards, the Group has elected not to apply FRS 3 retrospectively on past business combinations. As a result, positive goodwill of RM218,156 that previously deducted from equity was not recognized in the opening FRS balance sheet and it will not be transferred to the income statement if the Group disposes of the subsidiary or if the investment in the subsidiary becomes impaired.

In accordance with the transitional provisions of FRS 3, the carrying amount of negative goodwill that arose from past business combinations shall be derecognized at the beginning of 1 January 2006 with a corresponding adjustment to the opening balance of retained profit. As such, the existing negative goodwill as at 1 January 2006 of RM17,934,873 was derecognized with a corresponding increase in retained profit.


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26. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENTS (CONT’D)

a. FRS 3 Business Combinations, FRS 136 Impairment of Assets and FRS 138 Intangible Assets (cont’d)

Merger deficit

In prior years:- merger deficit arose from merger accounting was presented as merger adjustment and was recognized as a deduction from

equity.

Prior to the implementation of FRS 3, six (6) subsidiaries of the Group were presented under merger accounting whilst other subsidiaries were presented under acquisition accounting under MASB 21: Business Combinations. Effective 1 January 2006, merger accounting is prohibited under FRS 3. All business combinations within the scope are to be accounted for using the acquisition method.

However, the Group adopted FRS 1 exemption on business combinations by electing not to apply FRS 3 retrospectively, and continued to account for the past business combinations that occurred before 1 January 2006 under the merger method. The resultant merger deficit of RM7,983,789 was deducted directly from equity as in the Group’s previous financial statements.

b. FRS 101 Presentation of Financial Statements

In prior years:- minority interest at the balance sheet date was presented in the consolidated balance sheet separately from liabilities and as a

deduction from net assets;

- minority interest in the results of the Group for the year was also separately presented in the income statement as a deduction before arriving at the profit attributable to shareholders; and

- the Group’s share of taxation of associate accounted for using the equity method was included as part of the Group’s income tax expense in the consolidated income statement.

With effect from 1 January 2006, in order to comply with the revised FRS 101, minority interest at the balance sheet date are presented in the consolidated balance sheet within equity, separate from the equity attributable to the equity holders of the Company, and minority interest in the results of the Group for the year are presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between the minority interest and the equity holders of the Company. The revised FRS 101 also requires disclosure, on the face of the statement in changes in equity, total recognized income and expenses for the year, showing separately the amounts attributable to equity holders of the Company and to minority interest.

The share of taxation of associate is now included in the respective shares of profit or loss reported in the consolidated income statement before arriving at the Group’s profit or loss before tax.

The current year’s presentation of the Group’s financial statements is based on the requirements of revised FRS 101, with the comparative figures restated to conform to the current year’s presentation.


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c. FRS 121: The Effects of Changes in Foreign Exchange Rates

Change in functional currency of the Group’s subsidiaries

In prior years:- items included in the financial statements of each of the Group’s entities are measured using the functional currency, which is

Ringgit Malaysia (“RM”); and

- the consolidated financial statements are presented in RM, which is the Company’s functional and presentation currency.

Effective 1 January 2006, the functional currency of two (2) containership-owning subsidiaries (collectively known as “foreign operations”) of the Group has been changed from RM to United States Dollar (“USD”) as the charter hire, crew cost as well as spare parts and other costs of providing the charter are now mainly denominated and settled in USD.

Under the revised FRS 121, the translation procedures applicable to the new functional currency are applied prospectively from the date of the change. As such, the foreign operations translate all items into the new functional currency using the exchange rate of RM3.78 per one unit USD as at 1 January 2006. The resulting translated amounts for non-monetary items are treated as their historical cost.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the year or in previous financial statements are recognized in the income statement in the year in which they arise, except that exchange differences arising on a monetary item that forms part of the Company’s net investments in the foreign operations are recognized in the income statement in the separate financial statements of the Company or the individual financial statements of the foreign operations, as appropriate. In the consolidated financial statements of the Group, such exchange differences are recognized initially as foreign currency translation reserve and recognized in the income statement upon disposal of the net investments.

d. Change in Accounting Policy for Dry-docking Costs

In prior years:- dry-docking costs were recognized in income statement as and when incurred.

The management is of the opinion that dry-docking costs represent inspection and overhaul cost, which enhance the useful lives of the vessels, should be capitalized. The accounting policy for dry-docking costs has been changed effective 1 January 2006.

Dry-docking costs, when incurred, are capitalized as a separate component of the vessels and are allocated until next dry-docking over a period ranges from 24 months to 30 months.

This change in accounting policy has been applied retrospectively in accordance with FRS 108 Accounting Policies, Change in Estimates and Errors. Certain comparative figures have been restated and the opening balances of property, plant and equipment and retained profit as at 1 January 2006 have been adjusted accordingly.


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The above changes in accounting policies have resulted in the following impact on property, plant and equipment, retained profit, other reserves, minority interest and results of the Group and of the Company:

Effects on Balance Sheets Group 2006 2005 RM RM Effects on opening Property, Plant and Equipment At 1 January as previously stated 140,647,794 230,364,256 Effects of changing accounting policy for dry-docking costs (Note 26(d)) 3,276,152 3,073,475 At 1 January as restated 143,923,946 233,437,731 Effects on opening Retained Profit

At 1 January as previously stated 122,037,830 96,957,384 Effects of changing accounting policy for dry-docking costs (Note 26(d)) 3,276,152 2,512,654 Effects of adopting FRS 3 (Note 26(a)) 17,934,873 - At 1 January as restated 143,248,855 99,470,038 Effects on opening Other Reserves

At 1 January as previously stated 17,934,873 17,934,873 Effects of adopting FRS 3 (Note 26(a)) (17,934,873) - At 1 January as restated - 17,934,873 Effects on opening Minority Interest

At 1 January as previously stated - 11,296,060 Effects of changing accounting policy for dry-docking costs (Note 26(d)) - 560,821 At 1 January as restated - 11,856,881

Effects on Income Statements for the year Group Company 2006 2005 2006 2005 RM RM RM RM Profit for the year Before changes in accounting policies 6,541,076 78,826,786 13,288,336 43,183,300 Effects of changing accounting policy for dry-docking costs (Note 26(d)) - capitalization of dry-docking costs 1,485,897 3,185,372 - - - depreciation of dry-docking costs (2,441,601) (2,982,695) - - Effects of adopting FRS 121 (Note 26(c)) (206,295) - (5,544,000) - After changes in accounting policies 5,379,077 79,029,463 7,744,336 43,183,300 Profit attributable to minority interest Before changes in accounting policies - 31,251,790 Effects of changing accounting policy for dry-docking costs (Note 26(d)) - depreciation of dry-docking costs - (560,821) After changes in accounting policies - 30,690,969


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Effects on Basic Earnings per Share

The changes in accounting policies did not materially affect the basic earnings per share attributable to equity holders of the Company.

Comparative Figures The following comparative figures of the Group have been restated and reclassified for the effects of adopting the above changes in

accounting policies and to conform to current year’s presentation:

As Dry- previously FRS docking Re- As stated 101 costs classified restated

Note 26(b) Note 26(d)

RM RM RM RM RM Group Balance Sheet as at 31 December 2005 Property, plant and equipment 140,647,794 - 3,276,152 - 143,923,946 Reserves 139,972,703 - 3,276,152 - 143,248,855 Income Statement for the year ended 31 December 2005 Cost of sales (39,758,114) - 202,677 1,310,760 (38,244,677) Gross profit 14,903,570 - 202,677 1,310,760 16,417,007 Other expenses - - - (1,310,760) (1,310,760) Profit from operations 87,354,938 - 202,677 - 87,557,615 Share of loss of associate (39,551) (5,308) - - (44,859) Profit before tax 78,847,190 (5,308) 202,677 - 79,044,559 Income tax expense (20,404) 5,308 - - (15,096) Profit for the year 78,826,786 - 202,677 - 79,029,463 Profit attributable to minority interest 31,251,790 - (560,821) - 30,690,969 Profit attributable to equity holders of the Company 47,574,996 - 763,498 - 48,338,494

The following comparative figures of the Company have been reclassified to conform to current year’s presentation:

As previously Re- As

stated classified restated RM RM RM Company Income Statement for the year ended 31 December 2005 Administrative expenses (2,582,180) 448,481 (2,133,699) Other expenses - (448,481) (448,481)


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27. DEFERRED TAXATION

As at 31 December 2006, the amount of estimated net deferred tax assets of the Group and of the Company at current tax rate, which are not recognized in the financial statements, are as follows:

Group Company 2006 2005 2006 2005 RM RM RM RM

Temporary difference on property, plant and equipment (19,000) 131,000 (15,800) (14,500) Unabsorbed capital allowances 429,000 416,000 429,300 412,000 Unabsorbed tax losses 4,231,000 2,196,000 1,414,800 1,098,000 4,641,000 2,743,000 1,828,300 1,495,500

28. RELATED PARTY TRANSACTIONS

In addition to the transactions disclosed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

Group Company 2006 2005 2006 2005 RM RM RM RM Nature of transactions and relationships: Expenditure incurred Airfare City Connections Travel Sdn. Bhd. (“CCTSB”) 436,468 588,157 344,611 89,753 Agency and crew attendance fees OHM Maritime Sdn. Bhd. (“OMSB”) 27,280 28,647 - - OHM Maritime Services Pte. Ltd. (“OMSPL”) 26,052 10,058 - - Hotel accommodation Langkawi Permai Sdn. Bhd. (“LPSB”) 18,406 29,722 18,406 29,722 Rental of premises Mentari Muara Sdn. Bhd. (“MMSB”) 1,502,855 1,260,000 - - Income earned Freight/Charter income Prima Shipping Sdn. Bhd. (“PSSB”) - 10,546,340 - -

Corporate Governance Statement


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28. RELATED PARTY TRANSACTIONS (CONT’D)

The outstanding balances arising from the above transactions as at 31 December are as follows:

Group Company 2006 2005 2006 2005 RM RM RM RM Amount due to CCTSB 39,024 21,229 39,024 1,338 Amount due to OMSB 2,900 1,200 - - Amount due to OMSPL 4,932 - - -

CCTSB, OMSB, PSSB and MMSB are deemed related to the Group and the Company as two directors of the Company, namely Tan Sri Dato’ Seri Halim Bin Mohammad and Puan Sri Datin Seri Mazmin Binti Noordin have interests.

LPSB is deemed related to the Group and the Company as a director of the Company, namely Tan Sri Dato’ Seri Halim Bin Mohammad has interests.

OMSPL is deemed related to the Group and the Company as two key management personnel of the Group, namely Hisham Bin Halim and Othman Bin Samat have interests.

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

29. FINANCIAL INSTRUMENTS

a. Financial Risk Management Policies

The Group’s financial risk management policies seek to ensure that adequate financial resources are available for development of the Group’s businesses whilst managing its risks. The Group has operated within clearly defined guidelines that are approved by the Board of Directors and the Group’s policy is not to engage in speculative transactions.

b. Foreign Currency Risk

The Group is exposed to foreign currency risk, which refers to adverse exchange rate movements on foreign currency positions originating from trading activities and from the Group’s investments and retained profit in its subsidiaries, whose functional currencies are not in Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar (“USD”) and Singapore Dollar (“SGD”).

The Group uses derivative financial instruments such as forward foreign exchange contracts to hedge material foreign currency transac-tion exposures. Where possible, the Group maintains a natural hedge by borrowing in the currencies that match the future revenue stream to be generated from its investments.


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29. FINANCIAL INSTRUMENTS (CONT’D)

b. Foreign Currency Risk (cont'd)

During the financial year, the Group had entered into short term forward foreign exchange contracts to hedge trade receivables that denominated in USD. The outstanding contract amount and maturity profile of the forward foreign exchange contracts as at balance sheet date are as follows:

Contract Maturity Currency amount RM

Forward foreign exchange contracts 1 month USD 1,754,328

The amount represents future cash flows under the contract to sell USD at various maturity dates.

c. Interest Rate Risk

The interest rate exposure of the Group arises primarily from interest bearing borrowings. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings. The Group’s interest bearing financial assets are mainly short term in nature and have been placed in fixed deposits and marketable securities.

The effective interest rates of financial assets and financial liabilities as at financial year end are as follows:

2006 2005 Carrying Effective Carrying Effective amount interest rate amount interest rate RM % RM %

Group

Financial Assets Floating rate Deposits with licensed banks 253,371,211 3.60 - 4.06 16,107,273 2.65 - 4.19 Unquoted subordinated bonds 14,600,000 - 10,000,000 2.13 - 23.73

Financial Liabilities Fixed rate Hire purchase and finance lease liabilities 89,387 7.91- 9.31 172,384 8.06 - 10.69 Term loans 146,000,000 7.46 - 8.36 100,000,000 8.09 - 8.36

Company

Financial Assets Floating rate Deposits with licensed banks 252,840,227 3.60 - 4.06 13,337,998 2.65 - 4.19 Unquoted subordinated bonds 14,600,000 - 10,000,000 2.13 - 23.73

Financial Liabilities Fixed rate Term loans 146,000,000 7.46 - 8.36 100,000,000 8.09 - 8.36


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d. Credit Risk

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. This is done through reference to published credit ratings by prime financial institutions. In the absence of published ratings, an internal credit review is conducted if the credit risk is material. The maximum credit risk associated with recognized financial assets is the carrying amount shown in the balance sheet.

The Group does not have any significant exposure to any single customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

e. Liquidity Risk

The Group seeks to achieve a balance between certainty of funding even in difficult times for the markets or the Group and a flexible, cost-effective borrowing structure. This is to ensure that at the minimum, all projected net borrowing needs are covered by committed facilities. Also, the objective for debt maturity is to ensure that the amount of debt maturing in any one year is not beyond the Group’s means to repay and refinance.

f. Fair Values

The fair values of financial assets and financial liabilities which are not carried at fair values on the balance sheets of the Group and of the Company are presented as follows:

2006 2005 Carrying Fair Carrying Fair amount value amount value RM RM RM RM

Group Financial Assets Other investments

- Unquoted shares 50,000 (1) 50,000 (1)

- Unquoted subordinated bonds 14,600,000 11,626,437 10,000,000 7,775,510

Financial Liabilities Hire purchase and finance lease liabilities 89,387 79,009 172,384 151,177 Term loans 146,000,000 116,264,368 100,000,000 77,755,103

Derivatives Forward foreign exchange contracts - 1,693,440 - -

Company Financial Assets Other investments

- Unquoted shares 50,000 (1) 50,000 (1)

- Unquoted subordinated bonds 14,600,000 11,626,437 10,000,000 7,775,510 Amount due from subsidiaries 96,249,768 (2) 116,839,044 (2)

Financial Liabilities

Amount due to subsidiaries 38,265,467 (2) 51,989,923 (2)

Term loans 146,000,000 116,264,368 100,000,000 77,755,103


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f. Fair Values (cont’d)

(1) It is not practical to estimate the fair value of the non-current unquoted shares because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.

(2) It is not practical to estimate the fair values of amounts due to/from subsidiaries due principally to the lack of fixed repayment term entered into by the parties involved and without incurring excessive costs. However, the Company does not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the values that would eventually be received or settled.

The following methods and assumptions were used to estimate the fair value at each class of financial instruments for which it is practicable to estimate the value:

(i) Cash and Cash Equivalents, Trade and Other Receivables/Payables

The carrying amounts approximate fair values due to the short maturity periods of these instruments.

(ii) Marketable Securities

The carrying amounts are recognized at fair value as the instruments are determined by reference to quoted market prices at the close business on the balance sheet date.

(iii) Other Investments – Unquoted Subordinated Bonds

The fair value of the unquoted subordinated bonds is estimated using discounted cash flow technique based on discount rates that are not supported by observable market rates. Management believes the estimated fair value is reasonable and the most appropriate at the balance sheet date.

(iv) Borrowings

The fair value of the borrowings is estimated using discounted cash flow technique based on current lending rates offered to the Group and the Company for borrowings of similar remaining maturities.

(v) Forward Foreign Exchange Contracts

The fair value of a forward foreign exchange contract is the amount the Group or the Company will receive or pay to terminate the contract as at balance sheet date. The fair value of the forward foreign exchange contract is estimated with reference to spot rates as at balance sheet date.

(vi) Other Financial Assets and Liabilities

The fair value of other financial assets and liabilities of the Group and of the Company is deemed to be equal to their carrying value unless stated otherwise in the relevant notes to the financial statements.


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30. SEGMENT INFORMATION

During the financial year, the Group principally operates in Malaysia in the following main business segments:

- Tankers shipping;- Container shipping; and- Other activities which include ship management and ship broking activities and provision of management services to subsidiaries.

The Group has not operated in bulk carrier shipping since the disposal of vessel in March 2005.

a. Business Segment

Inter-segment revenue comprise revenue to other business segment carried out on an arm’s length basis.

Segment results represent segment revenue less segment expenses. Unallocated expenses represent corporate operating and administrative expenses. Unallocated income represent income derived from unallocated assets such as interest bearing short term deposits and other investments.

Segment assets consist primarily of property, plant and equipment, investment property, inventories, receivables and cash and bank balances, exclude interest bearing short term deposits, other investments, taxation assets and investment in associate. Segment liabilities comprise mainly payables exclude items such as interest bearing borrowings and taxation. Unallocated liabilities consist of accruals on corporate operating and administrative expenses.

Capital expenditure comprise additions to property, plant and equipment.

Shipping Shipping Shipping Non

- Tankers - Container - Bulk carrier - shipping Elimination Consolidation

RM RM RM RM RM RM

2006

Revenue

External sales 6,996,164 32,310,312 - - - 39,306,476

Inter-segment sales - - - 14,822,000 (14,822,000) -

Total revenue 6,996,164 32,310,312 - 14,822,000 (14,822,000) 39,306,476

Results

Segment results (2,253,925) 12,925,707 - 14,735,813 (14,118,545) 11,289,050

Unallocated expenses (8,211,589)

Unallocated income 8,782,099

Profit from operations 11,859,560

Finance costs (6,447,514)

Share of loss of associate - - - (21,362) - (21,362)

Profit before tax 5,390,684

Income tax expense (11,607)

Profit for the year 5,379,077

Minority interest -

Profit attributable to equity 5,379,077

holders of the Company


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30. SEGMENT INFORMATION (CONT’D)

a. Business Segment (cont’d)



RM RM RM RM RM RM

2006

Assets

Segment assets 22,342,302 119,540,613 - 181,503,014 (187,181,168) 136,204,761

Investment in associate - - - 8,878,000 (621,112) 8,256,888

Unallocated assets 291,838,725

Total Assets 436,300,374

Liabilities

Segment liabilities 16,457,430 81,413,916 - 51,528,641 (145,101,970) 4,298,017

Unallocated liabilities 147,410,528

Total Liabilities 151,708,545

Other Information

Capital expenditure - 1,485,897 - 76,977 - 1,562,874

Depreciation 3,756,150 9,159,865 - 351,982 238,545 13,506,542



RM RM RM RM RM RM

2005 (Restated)

Revenue

External sales 16,023,097 33,704,018 4,867,092 67,477 - 54,661,684

Inter-segment sales - - - 21,260,546 (21,260,546) -

Total revenue 16,023,097 33,704,018 4,867,092 21,328,023 (21,260,546) 54,661,684

Results

Segment results (711,730) 15,607,327 (75,035) 21,983,113 (20,386,668) 16,417,007

Unallocated expenses (9,864,260)

Unallocated income 81,004,868

Profit from operations 87,557,615

Finance costs (8,468,197)

Share of loss of associate - - - (44,859) - (44,859)

Profit before tax 79,044,559

Income tax expense (15,096)

Profit for the year 79,029,463

Minority interest (30,690,969)

Profit attributable to equity 48,338,494

holders of the Company


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30. SEGMENT INFORMATION (CONT’D)

a. Business Segment (cont’d)



RM RM RM RM RM RM

2005 (Restated)

Assets

Segment assets 32,287,361 130,192,091 110,886 208,948,744 (216,397,564) 155,141,518

Investment in associate - - - 8,878,000 (599,750) 8,278,250

Unallocated assets 256,371,288

Total Assets 419,791,056

Liabilities

Segment liabilities 16,520,372 102,177,113 100,367 63,995,929 (174,546,392) 8,247,389

Unallocated liabilities 101,070,736

Total Liabilities 109,318,125

Other Information

Capital expenditure 1,661,772 1,523,600 - 161,212 - 3,346,584

Depreciation 4,865,036 8,435,030 2,050,527 439,647 (13,332) 15,776,908

b. Geographical Segment

The Group’s secondary format by geographical location is not shown as the activities of the Group are predominantly in Malaysia.

31. AUTHORIZATION FOR ISSUE

The financial statements of the Company for the financial year ended 31 December 2006 were authorized for issue in accordance with a resolution of the Board of Directors on 13 April 2007.

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B. SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS

DIRECT INTEREST INDIRECT INTEREST

No. of Shares % No. of Shares %

1 Tan Sri Dato’ Seri Halim Bin Mohammad 110,394,300 35.20 66,036,600A 21.06

2 Puan Sri Datin Seri Mazmin Binti Noordin 66,036,600 21.06 110,394,300B 35.20

Notes A Deemed interested by virtue of his spouse, Puan Sri Datin Seri Mazmin Binti Noordin

B Deemed interested by virtue of her spouse, Tan Sri Dato’ Seri Halim Bin Mohammad

SHAREHOLDER

A. ANALYSIS BY SIZE OF HOLDINGS

Authorized Share Capital : RM200,000,000.00

Issued and Paid-up Share Capital : RM159,000,000.00

Number of Shares Issued : 318,000,000

Number of Shares Retained in Treasury : 4,379,780

Class of Shares : Ordinary Shares of RM0.50 each

Number of Shareholders : 1,911

Voting Rights : 1 vote per ordinary share

SIZE OF SHAREHOLDINGS NO. OF HOLDERS NO. OF SHARES PERCENTAGES

Less Than 100 Shares 24 1,214 0.00

100 To 1,000 Shares 162 135,170 0.04

1,001 To 10,000 Shares 1,102 5,817,138 1.85

10,001 To 100,000 Shares 537 14,845,076 4.73

100,001 To Less Than 5% Of Issued Shares 83 103,640,922 33.05

5% And Above Of Issued Shares 3 189,180,700 60.32

TOTAL 1,911 313,620,220 100

Analysis of Shareholding as at 30 March 2007

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C. DIRECTORS’ INTERESTS AS PER REGISTER OF DIRECTORS’ SHAREHOLDING

Notes

A Deemed interested by virtue of his spouse, Puan Sri Datin Seri Mazmin Binti Noordin

B Deemed interested by virtue of her spouse, Tan Sri Dato’ Seri Halim Bin Mohammad

C Deemed interested by virtue of his spouse, Puan Zaimah Binti Ahmad

DIRECT INTEREST INDIRECT INTEREST

No. of Shares % No. of Shares %

1 Tan Sri Dato’ Seri Halim Bin Mohammad 110,394,300 35.20 66,036,600A 21.06

2 Puan Sri Datin Seri Mazmin Binti Noordin 66,036,600 21.06 110,394,300B 35.20

3 Dato’ Seri Haji Sulaiman Bin Mohd Amin - - - -

4 Dato’ Edris @ Idris Bin Haji Wahed - - - -

5 Dato’ Abdul Kadir Bin Mohd Deen - - - -

6 General (R) Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad - - - -

(resigned on 30 April 2007)

7 Tuan Haji Mazlan Bin Nordin - - 89,000c 0.03

8 Mr. Patrick Lim Keng Lee - - - -

9 Mr. Ee Beng Wat - - - -

DIRECTOR

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D. TOP 30 SECURITIES ACCOUNT HOLDERS

NO SHAREHOLDER NO. OF SHARES %

1 Halim Bin Mohammad 104,616,000 33.36

2 Mazmin Binti Noordin 57,009,600 18.18

3 HSBC Nominees (Asing) Sdn Bhd 27,555,100 8.79

- Exempt An For Credit Suisse (Sg Br-Tst-Asing)

4 HDM Nominees (Asing) Sdn Bhd 11,700,000 3.73

- Glasgow Global Fund Limited Pcc For Glasgow Global Gamma Fund


- UBS AG Zurich For Southaven Holdings Ltd

6 Mazmin Binti Noordin 9,027,000 2.88

7 KAF Trustee Berhad 6,499,800 2.07

- KAF Fund Management Sdn Bhd For Malaysian Assurance Alliance Berhad

8 Employees Provident Fund Board 6,426,780 2.05

9 KAF Nominees (Tempatan) Sdn.Bhd. 6,052,200 1.93

- KAF Fund Management Sdn Bhd For Abu Talib Bin Othman

10 Citigroup Nominees (Asing) Sdn Bhd 5,865,000 1.87

- GSI For Myan Equity Corp

11 Halim Bin Mohammad 5,778,300 1.84

12 Amanah Raya Nominees (Tempatan) Sdn Bhd 4,000,000 1.28

- Public Islamic Opportunities Fund

13 Yeoh Kean Hua 2,710,000 0.86

14 Lee Chee Ming 2,662,560 0.85


- Public Islamic Dividend Fund


- Den Norske Bank For Fearnley Fonds Asa

17 TA Nominees (Tempatan) Sdn Bhd 1,824,080 0.58

- Pledged Securities Account For Oh Kim Sun


- Public Smallcap Fund

19 Pm Nominees (Tempatan) Sdn Bhd 1,600,000 0.51

- PCB Asset Management Sdn Bhd For Mui Continental Insurance Berhad

20 Anamullah S/O Hamidullah 1,303,400 0.42

21 RHB Nominees (Asing) Sdn Bhd 1,224,400 0.39

- Kripalson International Ltd

22 AMMB Nominees (Tempatan) Sdn Bhd 1,000,000 0.32

- KAF Fund Management Sdn Bhd (7/862-1)

23 PRB Nominees (Tempatan) Sdn. Bhd. 971,574 0.31

- Rubber Industry Smallholders Development Authority

24 Quarry Lane Sdn Bhd 900,000 0.29

25 Bank Kerjasama Rakyat Malaysia Berhad 889,200 0.28

- As Beneficial Owner

26 Neoh Choo Ee & Company, Sdn. Berhad 780,000 0.25

27 Suresh Emmanuel Abishegam 647,600 0.21

28 Bank Kerjasama Rakyat Malaysia Berhad 594,000 0.19

29 Jagdish Singh Dhaliwal 585,000 0.19

30 Bimsec Nominees (Tempatan) Sdn Bhd 540,000 0.17

- Syarikat Takaful Malaysia Berhad

TOTAL 279,754,194 89.22

Note The analysis of shareholdings is based on the issued and paid-up capital of the Company after deducting 4,379,780 Treasury Shares

held as at 30 March 2007.

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NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting (“AGM”) of the Company will be held at Westside, Rooms 1, 2 and 3, Level 8, Boulevard Hotel, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur on Wednesday, 30 May 2007 at 10.30 a.m. for the following purposes:

AGENDA

As Ordinary Business

Notice of Annual General Meeting and Notice of Dividend Entitlement

1. To receive the audited financial statements of the Company for the financial year ended 31 December 2006 and the Reports of the Directors and Auditors thereon. Please refer to Note A.

2. To approve the payment of a First and Final Tax Exempt Dividend of 5 sen per ordinary share of RM0.50 each in respect of the financial year ended 31 December 2006.

3. To approve the payment of Directors’ fees of RM184,000 in respect of the financial year ended 31 December 2006.

4. To re-elect the following Directors retiring pursuant to Article 89 of the Company’s Articles of Association:

4.1 Mr. Patrick Lim Keng Lee

4.2 YBhg. Dato’ Abdul Kadir Bin Mohd Deen

5. To re-elect YBhg. (R) Dato' Seri Mohd Azumi Bin Mohamed, who retires pursuant to Article 93 of the Company's Articles of Association.

6. To re-appoint Messrs Ong & Wong as Auditors and to authorize the Board of Directors to fix

their remuneration.

As Special Business

To consider and, if thought fit, to pass the following resolutions as Ordinary and Special Resolutions with or without any modifications:

7. Authority To Allot Shares Pursuant To Section 132D Of The Companies Act, 1965

”THAT subject to Section 132D of the Companies Act, 1965, and approvals from the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue new 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 issued pursuant to this resolution does not exceed 10% of the issued capital of the Company for the time being and that such authority shall continue in force until the conclusion of the next AGM of the Company.”

8. Proposed Renewal Of Authority For The Purchase By The Company Of Its Own Shares Up To 10% Of Its Issued And Paid–Up Capital

”THAT, subject always to the Companies Act, 1965, the provisions of the Memorandum

and Articles of Association of the Company, the requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and all other applicable laws, guidelines, rules and regulations, the Company be and is hereby authorized, to the fullest extent permitted by law, to purchase such amount of ordinary shares of RM0.50 each in the Company as may be determined by the Directors of the Company from time to time through the Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that:

Ordinary Resolution 1








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(i) the aggregate number of shares purchased does not exceed 10% of the total issued and paid-up share capital of the Company as quoted on the Bursa Securities as at the point of purchase;

(ii) an amount not exceeding the Company’s audited retained profit of RM90,056,412 and/or the share premium account of RM5,326,531 for the financial year ended 31 December 2006 at the time of the purchase(s) will be allocated by the Company for the purchase of own shares; and

(iii) the Directors of the Company may decide either to retain the shares purchased as treasury shares or cancel the shares or retain part of the shares so purchased as treasury shares and cancel the remainder.

AND THAT the authority conferred by this resolution will commence immediately and will, subject to renewal thereat, expire at the conclusion of the next Annual General Meeting of the Company following the passing of this Ordinary Resolution (unless earlier revoked or varied by an Ordinary Resolution of the shareholders of the Company in general meeting) but shall not prejudice the completion of purchase(s) by the Company or any person before that aforesaid expiry date and in any event, in accordance with the provisions of the guidelines issued by Bursa Securities or any other relevant authorities;

AND THAT authority be and is hereby given unconditionally and generally to the Directors of the Company to take all such steps as are necessary or expedient (including without limitation, the opening and maintaining of central depository account(s) under the Securities Industry (Central Depositories) Act, 1991, and the entering into of all other agreements, arrangements and guarantee with any party or parties) to implement, finalize and give full effect to the aforesaid purchase with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities and with the fullest power to do all such acts and things thereafter (including without limitation, the cancellation or retention as treasury shares of all or any part of the purchased shares or to resell the shares or distribute the shares as dividends) in accordance with the Companies Act, 1965, the provisions of the Memorandum and Articles of Association of the Company and the requirements and/or guidelines of the Bursa Securities and all other relevant governmental and/or regulatory authorities.”

9. To Consider And If Thought Fit, To Pass The Following Resolution In Accordance With Section 129(6) Of The Companies Act, 1965:

“THAT YBhg. Dato’ Seri Sulaiman Bin Mohd Amin being over the age of 70 years and retiring in accordance with Section 129 (6) of the Companies Act, 1965, be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting.”

10. Proposed Amendments To The Articles Of Association Of Halim Mazmin Berhad

”THAT the alterations, modifications, additions and deletions to the Articles of Association of Halim Mazmin Berhad as detailed in Appendix A attached with the Annual Report 2006 to shareholders, be and are hereby approved.”

11. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 1965.

Special Resolution 1

Special Resolution 2

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NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

Subject to the approval of the shareholders, a First and Final Tax Exempt Dividend of 5 sen per ordinary share of RM0.50 each for the year ended 31 December 2006 will be paid on 18 June 2007 to Depositors registered in the Record of Depositors at the close of business at 5.00 p.m. on 7 June 2007.

A depositor shall qualify for entitlement only in respect of: a) shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 7 June 2007, in respect of ordinary transfers; and b) shares bought on Bursa Securities on a cum entitlement basis according to the Rules of the Bursa Securities.

By Order of the Board

Coral Hong Kim Heong (MAICSA 7019696)Lim Seck Wah (MAICSA 0799845)Company Secretaries

Kuala Lumpur8 May 2007

Notes:

A. This Agenda item is meant for discussion only as the provision of Section 169 (1) of the Companies Act, 1965 and the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company. The provisions of Section 149(1)(a) and 149(1)(b) of the Companies Act, 1965 (the Act) shall not apply to the Company.

2. The instrument appointing a proxy must be deposited at the registered office of the Company not less than forty eight (48) hours before the time appointed for the meeting.

3. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. The provision of Section 149(1)(c) of the Act shall apply to the Company.

4. Where a member appoints more than one proxy (subject always to a maximum of two (2) proxies at each meeting), the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

5. In the case of a corporate member, the instrument appointing a proxy must be executed under its Common Seal or under the hand of its attorney.

6. Where a member of the Company is an Authorized Nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

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7. Explanatory Notes on Special Business

(a) Ordinary Resolution 7 – Authority to Allot Shares Pursuant to Section 132D of the Companies Act, 1965

This resolution is proposed pursuant to Section 132D of the Companies Act, 1965, if passed, will give the flexibility and authority to the Directors of the Company, from the date of the above AGM, to issue and allot shares in the Company up to and not exceeding in total 10% of the issued and paid-up share capital of the Company for the time being, for such purposes as they consider would be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next AGM of the Company.

(b) Ordinary Resolution 8 – Proposed Renewal of Authority for the Purchase by the Company of Its Own Shares up to 10%

The proposed renewal of shareholders’ mandate for the Company to purchase its own shares, if passed, will empower the Directors to purchase the Company’s shares up to 10% of the issued and paid-up share capital of the Company by utilising the funds allocated which shall not exceed the total retained profits and share premium of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

Detailed information on the Proposed Share Buy-Back is set out in the Share Buy-Back Statement dated 8 May 2007 which is dispatched together with Annual Report 2006.

(c) Special Resolution 1 – Re-appointment of YBhg. Dato’ Seri Sulaiman Bin Mohd Amin as Director Pursuant to Section

The re-appointment of YBhg. Dato’ Seri Sulaiman Bin Mohd Amin, a person over the age of 70 years as Director of the Company to hold office until the conclusion of the next AGM shall take effect if the proposed Special Resolution 1 has been passed by a majority of not less than three-fourths (3/4) of such members as being entitled to vote in person or, by proxy, at a general meeting of which not less than 21 days’ notice specifying the intention to propose the resolution has been duly given to the members of the Company.

(d) Special Resolution 2 – Proposed Amendments to the Articles of Association

The Special Resolution on proposed amendments to the Articles of Association, if approved, will render the Articles of Association of Halim Mazmin Berhad to be consistent with the new requirement under Chapter 7 of the Listing Requirements of Bursa Malaysia Securities Berhad.

129(6) of the Companies Act, 1965

of Its Issued and Paid –up Capital

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The rest of this page is intentionally left blank

Further details of Directors who are standing for re-election, namely Mr. Patrick Lim Keng Lee, YBhg. Dato’ Abdul Kadir Bin Mohd Deen, YBhg. General (R) Dato’ Seri Mohd Azumi Bin Mohamed and YBhg. Dato' Seri Sulaiman Bin Mohd Amin and their interests in securities of the Company and its subsidiaries are set out in the Profiles of Directors and Analysis of Shareholdings of this Annual Report.

Statement Accompanying Notice of Annual General Meeting

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PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The Articles of Association of the Company are proposed to be amended in the following manner:

1. AMENDMENT TO ARTICLE 2

To delete the following interpretations in the existing Article 2 and substituted as follows:

Existing Article 2 New Article 2 Words Meanings Words Meanings

Central Depository The Malaysian Central Depository Bursa Malaysia Depository Sdn Bhd Depository Sdn Bhd

Exchange The Kuala Lumpur Stock Exchange Bursa Malaysia Securities Exchange Berhad

Approved Market A stock exchange which is Deleted - Place specified to be an approved market place in the Securities Industry (Central Depositories) Exemption (No. 2) Order, 1998

All reference to the abovementioned interpretations throughout the whole Articles of Association be changed accordingly.


Article 10 is amended by deleting the following sentences:

“but the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time” appearing in lines 5 to 7.

Existing Article 10

Subject to the Act, the provision of these Articles, any preference shares may with the sanction of an Ordinary Resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed but the total nominal value of the issued preference shares shall not exceed the total nominal value of the issued ordinary shares at any time and the Company shall not issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equally therewith. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and audited accounts, and attending general meetings of the Company. Preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the Company’s share capital, or winding up, or sanctioning a sale of the whole of the Company’s property, business and undertaking, or where any proposition to be submitted to the meeting directly affects their rights and privileges, or when the dividend or part of the dividend on the preference shares is in arrears for more than six (6) months or during the winding up of the Company. The holder of a preference share shall be entitled to a return of capital in preference to holders of ordinary shares when the Company is wound up.

New Article 10

Subject to the Act, the provision of these Articles, any preference shares may with the sanction of an Ordinary Resolution, be issued on the terms that they are, or at the option of the Company are liable, to be redeemed and the Company shall not issue preference shares ranking in priority above preference shares already issued, but may issue preference shares ranking equally therewith. Preference shareholders shall have the same rights as ordinary shareholders as regards receiving notices, reports and audited accounts, and attending general meetings of the Company. Preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the Company’s share capital, or winding up, or sanctioning a sale of the whole of the Company’s property, business and undertaking, or where any proposition to be submitted to the meeting directly affects their rights and privileges, or when the dividend or part of the dividend on the preference shares is in arrears for more than six (6) months or during the winding up of the Company. The holder of a preference share shall be entitled to a return of capital in preference to holders of ordinary shares when the Company is wound up.

Appendix A

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To delete the existing Article 37 in its entirety and to adopt the following new Article 37:

New Article 37

Transmission of Securities

Where:(a) the Securities of the Company are listed on another

stock exchange; and(b) the Company is exempted from compliance

with Section 14 of the Central Depositories Act or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act, 1998 as the case may be, under the Rules of the Depository in respect of such Securities,

the Company shall, upon request of a Securities holder, permit a transmission of Securities held by such Securities holder from the register of holders maintained by the registrar of the Company in the jurisdiction of the other stock exchange, to the register of holders maintained by the registrar of the Company in Malaysia and vice versa provided that there shall be no change in the ownership of such Securities.

Existing Article 37

Transmission of Securities From Foreign Register

Where:(a) the Securities of the Company are listed on an

Approved Market Place; and(b) the Company is exempted from compliance

with Section 14 of the Central Depositories Act or Section 29 of the Securities Industry (Central Depositories) (Amendment) Act, 1998 as the case may be, under the Rules of the Central Depository in respect of such Securities,

the Company shall, upon request of a Securities holder, permit a transmission of Securities held by such Securities holder from the register of holders maintained by the registrar of the Company in the jurisdiction of the Approved Market Place to the register of holders maintained by the registrar of the Company in Malaysia subject to the following conditions:(i) there shall be no change in the ownership of such

securities; and(ii) the transmission shall be executed by causing such

Securities to be credited directly into the Securities Account of such Securities holder.

Nothing herein shall allow the transfer from the register of holders in Malaysia to the jurisdiction of the Approved Market Place.


Article 62 is amended by deleting the words “a date” and replace with the phrase “the latest date which is reasonably practicable which shall in any event be” appearing in line 3.

Existing Article 62 (4th paragraph)

The Company shall request the Central Depository in accordance with the Rules, to issue a Record of Depositors as at a date not less than three (3) market days before the general meeting (hereinafter referred to as the “General Meeting Record of Depositors”). Subject to the Securities Industry (Central Depositories) (Foreign Ownership) Regulations 1996 (where applicable), the General Meeting Record of Depositors shall be the final record of all Depositors who shall be deemed to be the registered holders of the shares of the Company eligible to be present and vote at such meetings.

New Article 62 (4th paragraph)

The Company shall request the Depository in accordance with the Rules, to issue a Record of Depositors as at the latest date which is reasonable practicable which shall in any event be not less than three (3) market days before the general meeting (hereinafter referred to as the “General Meeting Record of Depositors”). Subject to the Securities Industry (Central Depositories) (Foreign Ownership) Regulations 1996 (where applicable), the General Meeting Record of Depositors shall be the final record of all Depositors who shall be deemed to be the registered holders of the shares of the Company eligible to be present and vote at such meetings.

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5. AMENDMENT TO ARTICLE 97 (d)

Article 97 (d) is amended by deleting item (d) in its entirety which read as follows:

“if he absent from more than 50% of the total board of directors’ meeting held during a financial year.”

Existing Article 97

Subject to Section 122 (6) and (7) of the Act, the office of a Director shall be vacated in any of the following events, namely:-a. if he resigns from office by writing under his hand

left at the Office;b. if he becomes bankrupt or compound with his

creditors;c. if he is found to be a lunatic or becomes of

unsound mind;d. if he absent from more than 50% of the total

board of directors’ meeting held during a financial year;

e. if a notice in writing signed by the holders of at least three-quarters of the issued shares of the Company is given to the Company requiring such Director to resign; and

f. if he ceases to be or if prohibited from being a Director by virtue of the Act.

New Article 97

Subject to Section 122 (6) and (7) of the Act, the office of a Director shall be vacated in any of the following events, namely:-a. if he resigns from office by writing under his hand

left at the Office;b. if he becomes bankrupt or compound with his

creditors;c. if he is found to be a lunatic or becomes of unsound

mind;d. deleted;e. if a notice in writing signed by the holders of at least

three-quarters of the issued shares of the Company is given to the Company requiring such Director to resign; and

f. if he ceases to be or if prohibited from being a Director by virtue of the Act.

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*I/We………………………………………………………………………………………….........................(name of shareholder) of…………………………………………………………………..…………………………………………..................(full address)being a member(s) of HALIM MAZMIN BERHAD hereby appoint …………………………………...……...........(name of proxy)of ………………………………………………………………………………………………………………...............(full address) or failing him/her …………………....................... …...……………………(name of proxy) of ……………………………………………………..................………………..............................................................................................................(full address) or failing him/her, the *Chairman of the meeting as *my/our proxy to vote and act for *me/us on *my/our behalf, at the Twelfth Annual General Meeting of the Company to be held at Westside, Rooms 1, 2, and 3, Level 8, Boulevard Hotel, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur on Wednesday, 30 May 2007 at 10.30 a.m. or at any adjournment thereof.

The proportion of *my/our holding to be represented by *my/our proxies are as follows:

(The next paragraph must be completed if two proxies are appointed)

First Proxy: % Second Proxy: % 100 %

Please indicate with an “X” in the appropriate space how you wish your votes to be cast. Unless otherwise instructed, the proxy will vote as he thinks fit.

Dated this………..day of ……………………..2007

………….…………………………………………….Signature/Common Seal of Shareholder

Notes:1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be

a member of the Company. The provisions of Section 149(1)(a) and 149(1)(b) of the Companies Act, 1965 (the Act) shall not apply to the Company.2. The instrument appointing a proxy must be deposited at the registered office of the Company not less than forty eight (48) hours before the time appointed

for the meeting. 3. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting. The provision of Section 149(1)(c) of the Act

shall apply to the Company.4. Where a member appoints more than one proxy (subject always to a maximum of two (2) proxies at each meeting), the appointment shall be invalid unless

he specifies the proportions of his holdings to be represented by each proxy.5. In the case of a corporate member, the instrument appointing a proxy must be executed under its Common Seal or under the hand of its attorney.6. Where a member of the Company is an Authorised Nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least

one proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

* Please delete where not applicable

No. RESOLUTIONS FOR AGAINST

1. Payment of a First and Final Tax Exempt Dividend of 5 sen per ordinary share of RM0.50 each in respect of the financial year ended 31 December 2006

2. Payment of Directors’ fees of RM184,000 in respect of the financial year ended 31 December 2006

3. Re-election of Mr. Patrick Lim Keng Lee

4. Re-election of YBhg. Dato’ Abdul Kadir Bin Mohd Deen

5. Re-election of YBhg. General (R) Dato’ Seri Mohd Azumi Bin Mohamed

6. Re-appoint Messrs Ong & Wong as Auditors and to authorize the Board of Directors to fix their remuneration

7. Authority to allot shares pursuant to Section 132D of the Companies Act, 1965

8. Renewal of authority for the purchase by the Company of its own shares up to 10% of its issued and paid–up capital

9. Re-election of YBhg. Dato’ Seri Sulaiman Bin Mohd Amin pursuant to Section 129(6) of the Companies Act, 1965

10. Proposed amendments to the Articles of Association of Halim Mazmin Berhad

HALIM MAZMIN BERHAD(330820-P)

Proxy Form

No. of Shares Held

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