NOTICE OF ANNUAL GENERAL MEETING 2 – 3

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING 4

CORPORATE INFORMATION 5

CORPORATE STRUCTURE 6

FINANCIAL HIGHLIGHTS 7

PROFILE OF DIRECTORS 8 – 10

CHAIRMAN’S STATEMENT 11 – 12

STATEMENT ON CORPORATE GOVERNANCE 13 – 16

AUDIT COMMITTEE REPORT 17 – 18

STATEMENT ON INTERNAL CONTROL 19

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RELATION TO FINANCIAL STATEMENT 20

OTHER INFORMATION REQUIRED BY THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD 21 – 22

ANALYSIS OF SHAREHOLDINGS 23 – 25

LIST OF PROPERTIES 26 – 30

FINANCIAL STATEMENTS 31 – 94

PROXY FORM

CONTENTS

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NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will be held at Serindit Room, Equatorial Hotel, No. 1, Jalan Bukit Jambul, 11900 Penang on Thursday, 16 June 2005 at 11.30 a.m.

AGENDA

1 To receive and adopt the Directors’ Report, Audited Financial Statements and the Auditors’ Report for the year ended 31 December 2004.

Resolution 1

2 To approve the payment of a first and final dividend of 2 sen per share less 28% income tax for the year ended 31 December 2004. Resolution 2

3 To approve the payment of Directors’ fees amounting to RM100,000.00 for the year ended 31 December 2004. Resolution 3

4 To approve the payment of Director’s Remuneration amounting to RM6,000.00 to a non-executive director. Resolution 4

5 To re-elect the following Directors retiring in accordance with Article 76 of the Company’s Articles of Association :-

i. Dato’ Lim Cheah Chooi Resolution 5

ii Dato’ Seri Kamal Mohd Hashim bin Che Din Resolution 6

iii. Lim Kim Guan Resolution 7

6 To re-appoint Messrs. Wong Liu & Partners as Auditors and to authorise the Directors to fix their remuneration. Resolution 8

7 As Special Business

To consider, and if thought fit, pass with or without modification the following Ordinary Resolution :-

Authority to issue shares pursuant to Section 132D of the Companies Act 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to issue shares in the Company, at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this Resolution in any one financial year does not exceed 10% of the issued capital of the Company for the time being and THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.” Resolution 9

8 To transact any other business of which due notice shall have been given.

NOTICE OF ANNUAL GENERAL MEETING

U N I M E C H G R O U P B E R H A D ( 4 0 7 5 8 0 - X ) • A N N U A L R E P O R T 2 0 0 4 • 3

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT subject to the approval of the shareholders at the Eighth Annual General Meeting , a first and final dividend of 2 sen per share less 28% income tax in respect of the financial year ended 31 December 2004 will be paid on 28 July 2005 to depositors registered in the Record of Depositors on 7 July 2005.

A depositor shall qualify for the entitlement only in respect of :-

a) Shares transferred into the depositor’s securities account before 4.00 p.m. on 7 July 2005 in respect of transfers; and

b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

By Order of the Board

GOH SIEW SIEW MAICSA 7012512

KELSOM BEE BINTI ALI LS 03815 Secretaries

Date: 25 May 2005

NOTES :-

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him/her. A proxy may but need not be a member of the Company and if the proxy is not a member of the Company, the proxy shall be an advocate or an approved company auditor or a person approved by the Registrar of Companies.

2. The Form of Proxy must be deposited at the Company’s Registered Office at Wisma Unimech, 4934, Jalan Chain Ferry, 12100 Butterworth not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

3. A member shall be entitled to appoint more than one proxy (subject always to a maximum of two (2) proxies at each meeting) to attend and vote at the same meetings. 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.

4. Where a member 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.

5. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

EXPLANATORY NOTES ON SPECIAL BUSINESS

Resolution pursuant to Section 132D of the Companies Act, 1965

Subject to the exceptions provided in the aforesaid section of the Companies Act, 1965, the Directors would have to call for a General Meeting to approve the issue of new shares even though the number involved is less than 10% of the issued capital.

In order to avoid any delay and cost involved in convening a General Meeting to approve such issue of shares, it is thus considered appropriate that the Directors be now authorized to issue new shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for the time being for such purposes as they consider would be in the best interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

NOTICE OF ANNUAL GENERAL MEETING (cont’d)

1. Directors who are standing for election or re-election at the 8th Annual General Meeting of the Company are:- (i) Dato Lim Cheah Chooi (ii) Dato’ Seri Kamal Mohd Hashim bin Che Din (iii) Lim Kim Guan

2. Details of attendance of Directors at Board Meeting There were four (4) Board Meetings held during the financial year ended 31 December 2004 and all the Board Meetings were held at Wisma Unimech, 4934 Jalan Chain Ferry, 12100 Butterworth, Penang except for the 2nd Board Meeting which was held at Bayan Room, Cititel Penang. The attendance of each Director and schedule of the Board Meeting is shown below:

Name of Directors Meeting Attendance 25 Feb 04 17 June 04 11 Sept 04 30 Nov 04

Dato’ Lim Cheah Chooi ✓ ✓ ✓ ✓

Dato’ Seri Kamal Mohd Hashim bin Che Din ✓ ✓ ✓ –

Siew Fook Kheong ✓ ✓ ✓ ✓

Lim Kim Guan – ✓ – ✓

Ngoi Foo Sing ✓ ✓ ✓ ✓

Han Mun Kuan ✓ ✓ ✓ ✓

Abdul Rafique bin Abdul Karim ✓ ✓ – ✓

Lee Yoke Khay ✓ ✓ ✓ ✓

Dato’ Tan King Tai @ Tan Khoon Hai ✓ ✓ ✓ ✓

Norman bin Abdul Rahman ✓ ✓ ✓ ✓

Notes: Dato’ Seri Kamal was in Kuala Lumpur attending a Board Meeting on 30 Nov, 2004. Mr. Lim Kim Guan was on business trip in China on 25 Feb and 11 Sept, 2004. Encik Abdul Rafique bin Abdul Karim was on business trip to China on 11 Sept 2004.

3. Profiles of the Directors standing for election:

Name Dato’ Lim Cheah Chooi

Dato’ Seri Kamal Mohd Hashim bin Che Din

Lim Kim Guan

Age 56 67 51

Nationality Malaysian Malaysian Malaysian

Qualification Professional Professional

Board Position Executive Chairman / Managing Director

Independent Non-Executive Chairman

Executive Director

Working experience 29 years 39 years 21 years

Occupation Executive Chairman Non-Executive Chairman Deputy Managing Director

Other Directorship of public companies

None Star Publications (Malaysia) BerhadEden Enterprises (M) Sdn Bhd

None

Securities holdings In the Company and its subsidiaries (as at 22 April 2005)

41,814,500* 666,666 10,094,306*

Family relationship with any Director and/ or major shareholder of the company

He is the brother ofMr. Lim Kim Guan

None He is the brother ofDato’ Lim Cheah Chooi

List of convictions for offences within the past 10 years other than traffic offences (if any)

None None None

* Certain shares are held through nominee companies.

4) The 8th Annual General Meeting of the company will be held at Serindit Room, Equatorial Hotel Penang, No. 1 Jalan Bukit Jambul, 11900 Penang on Thrusday, 16 June 2005 at 11.30 a.m.

STATEMENT ACCOMPANYING

NOTICE OF ANNUAL GENERAL MEETING

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U N I M E C H G R O U P B E R H A D ( 4 0 7 5 8 0 - X ) • A N N U A L R E P O R T 2 0 0 4 • 5

BOARD OF DIRECTORS

Dato’ Lim Cheah Chooi, Executive Chairman and Managing Director

Dato’ Seri Kamal Mohd Hashim Bin Che Din, Deputy Chairman, Independent Non-Executive Director

Siew Fook Kheong, Deputy Managing Director and Group General Manager

Lim Kim Guan, Deputy Managing Director

Ngoi Foo Sing, Executive Director

Han Mun Kuan, Executive Director

Abdul Rafique bin Abdul Karim, Independent Non-Executive Director

Lee Yoke Khay, Independent Non-Executive Director

Dato’ Tan King Tai @ Tan Khoon Hai, Independent Non-Executive Director

Norman bin Abdul Rahman, Independent Non-Executive Director

Registered Office

Wisma Unimech, 4934, Jalan Chain Ferry12100 ButterworthTel : 04 332 8823 (8 lines) Fax : 04 332 5491

e-mail : sales@unimech.com.my

website : www.unimech.com.my

RegistrarPlantation Agencies Sdn BerhadStandard Chartered Bank ChambersLebuh Pantai10300 Pulau PinangTel : 04 262 5333 Fax : 04 262 2018

Company SecretariesGoh Siew Siew (MAICSA 7012512)Kelsom Bee Bt Ali (LS 03815)

Principal BankersHong Leong Bank BerhadUnited Overseas Bank BerhadHSBC Bank Malaysia BerhadMalayan Banking Berhad

SolicitorTeh & Lee

AuditorWong Liu & Partners

Stock Exchange ListingSecond Board of Bursa Malaysia Securities Berhad

CORPORATE INFORMATION

corporateinformation

6 • U N I M E C H G R O U P B E R H A D ( 4 0 7 5 8 0 - X ) • A N N U A L R E P O R T 2 0 0 4

85%UME Service & Trading Sdn Bhd

60%Unimech Valve Technology Sdn Bhd

29%TM Unimech Co Ltd

51%Unimech Greenaire (Aust) Pty Ltd

51%Performance Coatings Technology & Engineering Sdn Bhd

70%Unimech Instrument & Control Sdn Bhd

60%Luxurious Construction Sdn Bhd

70%Unimech International Sdn Bhd[formerly known as Purcoat International (M) Sdn Bhd]

81%Unimech BuildTech Sdn Bhd

100%UNIMECH ENGINEERING

(JB) SDN BHD

38%Multiplex Instrumentation & Control Equipment Services PHILS, Inc.

100%ARITA VALVE MFG

(M) SDN BHD

100%ARITA VALVE

(TIANJIN) CO LTD

100%ARITA FLANGES

INDUSTRIES SDN BHD

51%UNIJIN INSTRUMENTSINDUSTRIES SDN BHD

28%RIGEL METAL CRAFT

(M) SDN BHD

80% JUJUR BERNAS

SDN BHD

51%UNIMECH

INTERNATIONAL INC.

100%SUZHOU SKYLINE

MACHINERY TECHNOLOGY CORP.,LTD.

100%Q-FLEX INDUSTRIES

(M) SDN BHD

100%Unimech Engineering (Ktn) Sdn Bhd

20%TM Unimech Co Ltd

100%MULTIPLEX CONTROL & ENGINEERING SERVICES

PTE LTD

100%UNIMECH ENGINEERING

(M) SDN BHD

85%Unimech Greenhealth

International Sdn Bhd [formerly known as

GoodAire (M) Sdn Bhd]

50%Xiamen Greenaire

International Trading Co. Ltd.

100% ARITA ENGINEERING

SDN BHD

51% PT Arita

Prima Indonesia

70%PT Ragam Teknik

70%PT Arita Prima

Teknindo

70%PT Arindo

Prima Lestari

70%PT Arita

Prima Gemilang

70%PT Arita Prima

Perkasa

100%UNIMECH PROJECTS

SDN BHD

75%Inventive Potentials Sdn Bhd

61%Unimech Engineering (Vietnam) Sdn Bhd

40% Premium Heights Sdn Bhd

100% UNIMECH ENGINEERING

(KL) SDN BHD

51%TCE Casting Sdn Bhd

51%Unimech Engineering (Korea) Ltd

40%Ningbo Haike Metal Products Co Ltd

60%Senior Industries Resources Co Ltd

80%UNIMECH WORLDWIDE (SHANGHAI) SDN BHD

70%PT Primasawit Teknik Berjaya

CORPORATE STRUCTURE

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100%GREEN ACRE GARDEN

SDN BHD

U N I M E C H G R O U P B E R H A D ( 4 0 7 5 8 0 - X ) • A N N U A L R E P O R T 2 0 0 4 • 7

2000RM’000

2001RM’000

2002RM’000

2003RM’000

2004RM’000

Turnover 66,013 67,869 70,295 89,007 88,852

Profit before taxation and exceptional items 10,934 8,716 10,887 6,436 6,822

Exceptional items (703) (213) – – –

Profit before taxation after exceptional items 10,231 8,503 10,887 6,436 6,822

Taxation (3,962) (1,991) (2,882) (1,840) (1,717)

Profit after taxation 6,269 6,512 8,005 4,596 5,105

Minority interests (202) (196) (274) (578) (548)

Profit after taxation and minority interests 6,067 6,316 7,731 4,018 4,557

No. of ordinary shares assumed in issued (‘000) 34,598 41,000 60,312 61,091 67,200

*Gross earning per share (sen) 12.47 10.37 9.02 5.27 5.08

*Net earning per share (sen) 7.64 7.94 6.41 3.29 3.39

FINANCIAL HIGHLIGHTS

�

��

��

��

��

��

��

��

��

2000 2001 2002

7,731

6,3166,067

PROFIT AFTER TAXATION AND MINORITY INTERESTS (RM’000)

2003

4,0184,557

2004

�

��

��

��

��

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89,007

70,29567,86966,013

TURNOVER (RM’000)

88,852

2000 2001 2002 2003 2004

*The number of shares has been adjusted to reflect the splitting of the Company’s Shares from par value of RM1 each to par value of RM0.50 each, which was completed on 9 August 2004.

8 • U N I M E C H G R O U P B E R H A D ( 4 0 7 5 8 0 - X ) • A N N U A L R E P O R T 2 0 0 4

PROFILE OF DIRECTORS

Dato’ Lim Cheah Chooi, Malaysian aged 56, is the Executive Chairman and Managing Director and founder of the UGB Group. He has more than twenty-nine (29) years of experience in manufacturing, trading and engineering in relation with the valves, pipe fitting, burner application and steam engineering systems. His invaluable experience and ultimate management knowledge with the business connections established in Malaysia and overseas over the years has helped the Group in achieving its growth tremendously.

He is responsible for the overall business development of the Group and also sits on the Board of several private limited companies. He is the Chairman for the Remuneration Committee of UGB and also a brother of Mr. Lim Kim Guan.

Dato’ Lim Cheah Chooi was appointed to the Board of UGB on 6 March 2000.

Dato’ Seri Kamal Mohd Hashim, Malaysian aged 67, is the Deputy Chairman and Independent Non-Executive Director of UGB. He has more than thirty-nine (39) years of business experience. He is also the Executive Director of Star Publications (Malaysia) Berhad, a company listed on the Bursa Malaysia. He is also Director of Eden Enterprises (M) Berhad, a company listed on the Bursa Malaysia. He is the Chairman of Yayasan Pencegahan Jenayah Malaysia (MAYC). He is the Chairman of Lembaga Pelawat Hospital, Pulau Pinang. He is one of the trustees of Yayasan Budi Penyayang Malaysia (Penyayang) and Chairman of Rumah Mesra Kanak-Kanak. He was appointed as the Honorary Consul of the Netherlands of Kedah, Penang, Perak and Perlis in March 2000 and sits on the Board of several private limited companies. He is also the Chairman of the Nomination Committee of UGB.

Dato’ Seri Kamal Mohd Hashim was appointed to the Board of UGB on 6 March 2000.

Siew Fook Kheong, Malaysian aged 45, is the Deputy Managing Director and General Manager of UGB. He has more than twenty-two (22) years experience in corporate management, business development and finance. He is responsible for the Group’s corporate planning, business development, finance, audit and overall management. He is a member of the Chartered Institute of Management Accountants (U.K.) and a member of The Institute of Internal Auditors Malaysia. Presently he also sits on the Board of several private limited companies.

Siew Fook Kheong was appointed to the Board of UGB on 6 March 2000.

Profile of Directors

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PROFILE OF DIRECTORS (cont’d)

Lim Kim Guan, Malaysian aged 51, is the Deputy Managing Director of UGB. He obtained a Bachelor Degree of Science from the Universiti Sains Malaysia. He has been with the UGB Group for more than twenty-one (21) years and has been instrumental in developing the growth of the UGB Group through his vast experience and technical expertise in marketing strategies and product development. He also sits on the Board of several private limited companies. He is the brother of Dato’ Lim Cheah Chooi.

Lim Kim Guan was appointed to the Board of UGB on 6 March 2000.

Ngoi Foo Sing, Malaysian aged 56, Managing Director of UME(KL) and Executive Director of UGB. He has more than twenty-eight (28) years of experience in boiler repair works and installation. He is actively involved in the operation and strategic business planning of the company and plays a vital role in overseeing the business operations of the Group in the central region of West Malaysia. He also sits on the Boards of several private limited companies.

Mr. Ngoi Foo Sing was appointed to the Board of UGB on 6 March 2000.

Han Mun Kuan, Malaysian aged 52, is the Managing Director of UME(JB) and Executive Director of UGB. With over twenty-three (23) years of experience in the Group, he has gained vast experience in the maintenance, installation and testing of valves and piping systems. He is responsible for the overall business operation of the UGB Group and the southern region of Peninsular Malaysia.

Han Mun Kuan was appointed to the Board of UGB on 6 March 2000.

Abdul Rafique bin Abdul Karim, Malaysian aged 49 is the Independent Non-Executive Director and a member of the Remuneration and Nomination Committee of UGB. He is an experienced businessman. After completing his Higher School Certificate in 1974, he joined his family business. In 1975, he incorporated Syarikat Manora Sdn. Bhd., venturing into construction and property development. In 1983, owing to his active involvement in the local commercial community, he was selected by the government to undertake an Entrepreneurial Development Course at International Small Business Institute of Management in the USA. In 1988 he was elected to the committee of the Penang Malay Chamber of Commerce. In 1990 he was appointed as the Chamber’s Vice-President and subsequently served as the Deputy President from 1995 until early 2004. He was also an Executive Council Member of the National Malay Chamber of Commerce from 1998 to 2004. He is also a member of various business and social organisations. He sits on the Board of a number of private limited companies.

Abdul Rafique bin Abdul Karim was appointed to the Board of UGB on 6 March 2000.

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Norman bin Abdul Rahman, Malaysian aged 51, is the Independent Non Executive Director of UGB. He is an experienced Oil and Gas industry professional for more than twenty-four (24) years. He is a Mechanical Engineer by profession but has been involved in management and marketing since joining the industry. He began his career in 1978 as an external auditor in Price Waterhouse & Co, a public accounting and auditing firm. In 1979, he joined Petroliam Nasional Berhad (“Petronas”) as an Operations Engineer. In 1982, he was transferred to Petronas Dagangan Sdn Bhd (subsequently converted to Petronas Dagangan Bhd) as Head of Depot Operations and was subsequently promoted to Senior Manager. In 1995, he was appointed as the Country Manager in Petronas Thailand Co Ltd and Executive Director for Petronas Unique Petroleum Co Ltd. He headed the petroleum marketing activities in Thailand. In 1997, he was appointed as the Head of Market Development for Petronas Lubricants worldwide. He left the Petronas Group in 1998 to do his own business in the oil and gas industry for both the international and domestic markets. He sits on the boards of several other private limited companies.

Norman bin Abdul Rahman was appointed to the Board of UGB on 1 April 2000.

Lee Yoke Khay, Malaysian aged 54, is the Independent Non-Executive Director and a member of the Remuneration and Nomination Committee of UGB. He is an Advocate and Solicitor. He graduated in law and was awarded the degree of Barrister-at-Law by the Honourable Society of Lincoln’s Inn, London, England. He was called to the Malaysian Bar in 1979 and is now one of the partners in a law firm in Penang. He also holds directorships in other private limited companies, acts as legal advisor to various local Chinese temples, guilds and associations and sits on the Board of Schools Director of various schools in Penang.

Lee Yoke Khay was appointed to the Board of UGB on 6 March 2000.

Dato’ Tan King Tai @ Tan Khoon Hai, Malaysian aged 50, is the Independent Non-Executive Director of UGB and the Chairman of the Audit Committee. He is a member of the Institute of Certified Public Accountants, Ireland and is currently the committee member of the Institute of Commercial and Industrial Accountants, Malaysia. He obtained his Master of Business Administration majoring in Accounting and Finance from Clayton University, Missouri, United States of America in 1999. He has over 26 years of experience in the fields of auditing, accounting and company secretarial services. He is the Executive Director of Pensonic Holdings Berhad since 1995 and the Executive Director of UDS Capital Bhd since 2004, both these companies are listed on Bursa Malaysia. He also sits on the Boards of several other private limited companies.

Dato’ Tan King Tai @Tan Khoon Hai was appointed to the Board of UGB on 6 March, 2000.

PROFILE OF DIRECTORS (cont’d)

Note:

1. None of the Directors of UGB have been convicted of any offences other than traffic offences within the past ten years.

2. Other than disclosed in the financial statements, there is no conflict of interest that the Directors have with Group.

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CHAIRMAN’S STATEMENT

On behalf of the Board of Directors of Unimech Group Berhad, I am pleased to present the Annual Report of the Group for the financial year ended 31 December 2004.

Industry Trend And Development

During the financial year 2004, the Group has consolidated its business both in the domestic and overseas market while the domestic market was undergoing a transitional period of political and economic changes.

In spite of the political and economical changes, the Group has maintained Gross revenue at RM89 million and managed to improve its gross margin. As a result, the Group has achieved a gross profit of RM27 million, as compared to RM23 million which is 16% higher than the previous year.

In the overall profit performance, the Group has achieved a net profit after tax and after minority interest of RM4.56 million, as compared to RM4.02 million which is 13.43% higher than the previous year.

The Board of Directors have met several times during the financial year to discuss and adopt various business strategies to improve on the Group’s business. The vision of the Board proved to be vital and effective as evidenced from the improvement of the profit as achieved by the Group.

The Group’s manufactured products, especially the industrial and resident valves, rubber bellow, pressure gauges and other related products, have now been well accepted and is able to continually compete in the world market, specifically in Asia Pacific, Middle East and North America regions. In the year 2004, the Group has exported approximately 60% of its manufactured products to all these countries.

During the last quarter of the financial year 2004, the Group has also positioned its presence in Australia and the United States by incorporating a subsidiary each in Sydney and Dallas respectively.

With these new incorporations in Australia and United States, the Group has widened up its business network in addition to its existing links in Singapore, Indonesia, Thailand, Vietnam and China.

By having a larger business network, the Group has now many added advantages to plan with its manufacturing facilities in Malaysia and China for the existing and upcoming markets globally.

In general, the Board of Directors is very confident of its business prospects and development while the Group is experiencing the positive respond and return. Group’s Performance

The Group recorded a turnover of RM89 million for the financial year ended 31 December 2004, maintaining the same revenue of the previous year.

The Group has earned a profit before tax of RM6.8 million, an increase of 6% as compared to the previous year.

CHAIRMAN’S STATEMENT (cont’d)

The improved profit performance of the Group is mainly due to the various business strategies being applied in the domestic market and the increase in sales for the overseas market.

The Board of Directors is positive and confident that the Group’s business should bring better return and higher yield in the following years.

Corporate Development

During the year 2004, we have initiated the following corporate exercise :-

• The Proposed Share Split of each Ordinary Share of RM1.00 par held in Unimech into two (2) new Ordinary Shares of RM0.50 each in Unimech which has been announced on 25 May 2004 and completed on 9 August 2004.

Prospects and Future Outlook

The Group’s core business, being the engineering specialist in chilled water, heat and steam system and manufacturer of the industrial and residential valves and accessories for all industrial sectors, has positioned its market share steadily since the year 1977.

The Group has advanced into another higher level by moving to petrol chemical, and oil & gas industries in year 2004. And this plan has taken off positively by beginning with an exclusive agency of NEWAY valves in Malaysia.

The Board of Directors confidently believes that the Group’s business shall continue to grow through the existing business strategy and global networking.

Dividend

The Board of Directors has recommended for shareholders’ approval at the forthcoming Annual General Meeting, a first and final gross dividend of 2 sen per share less tax at 28% for the financial year ended 31 December 2004.

Acknowledgment

On behalf of the Board of Directors and Management of Unimech Group Berhad, I wish to express my sincere appreciation to our shareholders, employees, business partners, customers, and various governmental authorities for their cooperation throughout the year and look forward to their continuing support for the year ahead.

Dato’ Lim Cheah ChooiExecutive Chairman and Managing Director

5 May 2005

Chairman’s Statement12 • U N I M E C H G R O U P B E R H A D ( 4 0 7 5 8 0 - X ) • A N N U A L R E P O R T 2 0 0 4