KOSMO-AnnuaReport2006 (1.9MB).pdf - Bursa Malaysia

KOSMO TECHNOLOGY INDUSTRIAL BERHAD (615599-T) 2006 ANNUAL REPORT 

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

CORPORATE VISION & MISSION 

OUR VISION 

To become a leading Malaysian corporation with a strong Research & 

Development (R&D) foundation to enable the creation of a global brand 

name and world-class products. 

OUR MISSION 

To empower the group with a strong R&D foundation in each of our 

business areas. 

To offer products with a global appeal and which are able to increase 

customers’ confidence in the group. 

To maximise customer satisfaction through the application of advanced 

technologies and continuous research. 

To provide an employee training programme aimed at developing their 

professional skills and expertise. 

To optimise productivity and thereby enhance shareholders’ value. 

COVER RATIONALE 

The circuit board pattern suggests the components of making the final 

product is intertwined in achieving its vision, much like the subsidiaries of 

Kosmo Technology providing the support it needs to power its way into 

the future. It is also the embodiment of technology, where their ultimate 

use will be to ease the tasks and responsibilities of its human creators and 

end-users. At the same time, work hand-in-hand in making a vision, 

become a reality. 

The overall concept, enhanced by the clean white background, emphasizes 

the desire and drive of Kosmo Technology in creating an impact through 

its motto - Fuelled by R&D, Driven by Technology, Providing for the Global 

Community.

CONTENTS 

2 

3 

4 

6 

8 

12 

18 

25 

28 

30 

32 

34 

36 

41 

80 

81 

88 

95 

96 

KOSMO TECHNOLOGY INDUSTRIAL BERHAD 

Corporate Information 

Group Corporate Structure 

Board Of Directors 

Profile Of Directors 

Chairman’s Statement 

Group Managing Director’s Operational Review 

Statement On Corporate Governance 

Audit Committee Report 

Statement On Internal Control 

Statement On Directors’ Responsibilities 

Additional Disclosure 

In The News 

Calendar Of Events 

Financial Statements 

List Of Property 

Analysis Of Shareholdings 

Annexture A: Proposed Amendments To Articles Of Associations 

Notice Of Fourth Annual General Meeting 

Statement Accompanying Notice Of Fourth Annual General Meeting 

Proxy Form 

1

2 ANNUAL REPORT 2006 

CORPORATE INFORMATION 

BOARD OF DIRECTORS 

Dato' Dr. Nik Abd. Rashid @ Nik Idris bin Ismail 

Independent Non-Executive Director/ Chairman 

Dato' Mukhriz Mahathir 

Independent Non-Executive Director 

Ravindran a/l Sivasubramaniam 

Non-Executive Director 

Norhamzah bin Nordin 

Group Managing Director 

Mohd Azham bin Mohd Noor 

Group Executive Director 

Mohamad Nassir bin Mohd Kassim 

Chief Financial Officer 

AUDIT COMMITTEE 

Dato' Dr. Nik Abd. Rashid 

@ Nik Idris bin Ismail (Chairman) 

Dato' Mukhriz Mahathir (Member) 

Ravindran a/l Sivasubramaniam (Member) 

NOMINATION COMMITTEE 

Dato' Mukhriz Mahathir (Chairman) 

Dato' Dr. Nik Abd. Rashid 

@ Nik Idris bin Ismail (Member) 


REMUNERATION COMMITTEE 

Ravindran a/l Sivasubramaniam (Chairman) 

Norhamzah bin Nordin (Member) 

Dato' Mukhriz Mahathir (Member) 

ESOS COMMITTEE 

Mohd Azham bin Mohd Noor (Chairman) 

Mohamad Nassir bin Mohd Kassim (Member) 


MANAGEMENT TEAM 

Kosmo Technology Industrial Berhad 







Kosmo Mobile Manufacturing Sdn. Bhd. 

Mohd Noordin bin Abdul Karim 

Chief Executive Officer 

Nagatrend Sdn. Bhd. & Nagatrend 

Engineering Sdn. Bhd. 

Nik Mohd Zaharin bin Dato' Dr. Nik Abd. Rashid 


Kosmo Motor Company Sdn. Bhd. 



Zainuddin bin Zainal 

General Manager, Operations 

Ahmad Yasmin bin Yahya 

General Manager, Sales 

COMPANY SECRETARIES 

Kuan Hui Fang (MIA 16876) 

Tan Ai Peng (MAICSA 7018419) 

AUDITORS 

Messrs. Shamsir Jasani Grant Thornton 

(Audit Firm No. 0737) 

Level 11-1, Faber Imperial Court 

Jalan Sultan Ismail, P.O. Box 12337 

50774 Kuala Lumpur 

SOLICITORS 

Enolil Loo Advocates & Solicitors 

Unit 1627 Block A, Damansara Intan 

No. 1 Jalan SS20/27 

47400 Petaling Jaya 

Selangor Darul Ehsan 

PRINCIPAL BANKER 

CIMB Bank Berhad 

Lot 1.6, Level 1, Wisma HICOM 

No. 2, Jalan U1/8, Persiaran Kerjaya 

40000 Shah Alam, Selangor Darul Ehsan 

REGISTERED OFFICE 

Level 14, Uptown 1 

No.1 Jalan SS21/58 

Damansara Uptown 



Tel: 03-7725 2888 

Fax: 03-7725 7791/7792/7793 

BUSINESS ADDRESS 

No. 3 Jalan Pelukis U1/46 

Temasya Industrial Park, Glenmarie 

40150 Shah Alam 


Tel: 03-5569 5928 

Fax: 03-5569 3729 

REGISTRAR 

PFA Registration Services Sdn Bhd (19234-W) 

Level 13, Uptown 1 

No.1, Jalan SS21/58 




Tel: 03-7725 4888 

Fax: 03-7722 2311 

STOCK EXCHANGE LISTING 

Second Board 

Bursa Malaysia Securities Berhad 

(“Bursa Securities”)


3 

GROUP CORPORATE STRUCTURE 

As at 31 December 2006


BOARD OF DIRECTORS 









Dato’ Dr. Nik Abd. Rashid 

@ Nik Idris bin Ismail 

Independent Non-Executive Director / Chairman 


Dato’ Mukhriz Mahathir 


5


PROFILE OF DIRECTORS 

Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail 


Malaysian 

Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail, aged 66 was appointed 

to the Board on 17 June 2005, as an Independent Non-Executive 

Director / Chairman of the Company. He is also the Chairman of the 

Audit Committee and a member of the Nomination Committee. 

Dato’ Dr. Nik obtained his Degree in Economics from University Malaya 

in 1970, and subsequently obtained his Master of Business 

Administration (Internal Marketing & Management) from Indiana 

University and his Doctorate in Business Administration from the 

University of Kentucky in 1974. He began his extensive career with 

Universiti Kebangsaan Malaysia in 1972 where he was the Head of the 

Faculty of Economics & Management and Deputy Dean of the same 

department from 1977 until 1979. From 1982 until 1988, he held the 

positions of Professor and Deputy Vice Chancellor of the University. 

Dato’ Dr Nik later went on to become Director of the Bureau of 

Consultancy & Development from 1992 until 1996, President of Kolej 

Ikram from 1998 until 1999 and Chairman of the college until 2000. 

Dato’ Mukhriz Mahathir, aged 42, was appointed to the Board on 17 

June 2005 as an Independent Non-Executive Director of the Company. 

He is also the Chairman of the Nomination Committee and a member 

of the Audit and Remuneration Committees. 

He studied Business Administration at Sophia University, Tokyo, Japan 

and obtained his Bachelor of Science in Business Administration and 

Management - Marketing from Boston University, USA in 1989. He 

accumulated over 10 years’ experience in business and project 

development at Bank of Tokyo-Mitsubishi Ltd, Kuala Lumpur and was 

once the Senior Advisor to the President of the bank. Besides being the 

founder, he is also the Chairman and Managing Director of Opcom 

Holdings Berhad, a key player in the fibre optic cable industry in 

Malaysia and listed on the MESDAQ market. 




Norhamzah bin Nordin, aged 42, who has been the Group Managing 

Director of Hexariang Sdn. Bhd. (“Hexariang”) a wholly owned 

subsidiary of Kosmo since 1997, was appointed to the Board on 17 

June 2005 as Group Managing Director of the Company. He is also a 

member of the Remuneration Committee. 

He graduated from Northeastern University in Boston, United States of 

America (USA) with a Bachelor of Science Degree in Electrical 

Engineering and Economics in 1988. He began his career as a Project 

Coordinator in Peremba / Landmarks Bhd, a company involved in 

construction that same year. Subsequently, he joined Allied Resources 

Sdn. Bhd., another company involved in construction, as a Technical 

Director in 1992. After a year, he left and became the Executive Director 

Currently he is also the Chairman of Besta Distributors Sdn. Bhd., Besta 

Food Services Sdn. Bhd., Nagatrend Sdn. Bhd., Pointflex Sdn. Bhd. and 

Coat and Seal Teknik (M) Sdn. Bhd. He does not hold any other 

directorship in any other public companies. He is father of Nik Mohd 

Zaharin bin Dato’ Dr. Nik Abd. Rashid, a director of two wholly-owned 

subsidiaries of the Company (“ Kosmo Tech”). Dato’ Dr. Nik does not 

hold any shares in Kosmo Tech. 

He has not been convicted for any offences within the past 10 years 

and does not have any conflict of interest with the Company. He 

attended all the six (6) Board meetings, five (5) Audit Committee 

meetings and one (1) Nomination Committee meeting held during the 

financial year. 

Dato’ Mukhriz Mahathir 



He is also a Director on the Board of several other listed companies 

namely Reliance Pacific Berhad and Ajiya Berhad, both listed on the 

Main Board of Bursa Malaysia Securities Berhad. He does not have any 

family relationship with any Directors and /or substantial shareholders 

of the Company or any direct / indirect interest in any business 

arrangement involving the Company. 



attended four (4) Board meetings, four (4) Audit Committee meetings, 

two (2) Remuneration Committee meetings and one (1) Nomination 

meeting held during the financial year. 

of Nagatrend Sdn. Bhd. between 1993 and 1997. From then on, he 

became the Group Managing Director of the Nagatrend Group. 

He is also a director of all companies within the Group and does not 

hold any other directorship in any other public companies. He is a 

substantial shareholder of the company and his shareholdings in the 

Company are disclosed in the Shareholdings of Directors on page 41. 



attended all the six (6) Board meetings and two (2) Remuneration 

Committee meetings held during the financial year.

Mohd Azham bin Mohd Noor, aged 41, who was appointed to the 

Board of Hexariang in 1997, was appointed to the Board of Kosmo Tech 

as the Group Executive Director on 17 June 2005. 

He obtained his Bachelor of Commerce degree from the University of 

Newcastle, Australia in 1990. He started his career as an Accounts 

Executive in Federal Auto Holdings Bhd., a company involved in motor 

vehicle sales and distribution, from 1991 to 1992. He later joined MMC 

Marketing Sdn. Bhd., a company involved in International trading, as a 

Marketing Executive for three years. In 1995, he became the Business 

Development Manager in Nagatrend Sdn. Bhd. before joining Queda 

Corporation Sdn. Bhd., a company involved in international coal 

trading, from 1996 to 1997. He then became the General Manager of 




Mohamad Nassir bin Mohd. Kassim, aged 41, has been a Director of 

the Company since 28 May 2003. On 3 April 2006, he was 

redesignated from Non- Executive Director to Chief Financial Officer 

of the Company. 

He obtained his Master of Business Administration from Eastern 

Michigan University in 1989, having obtained his Bachelor’s degree 

in Accounting and Information System from the same university in 

1987. Upon graduation, he worked as a Junior Accountant in Ann 

Arbor, Michigan, USA until 1990. He then joined Permata Merchant 

Bank Berhad, now known as Affin Merchant Bank Berhad as 

Investment Analyst until he was promoted to Fund Manager in 1994. 

Ravindran a/l Sivasubramaniam, aged 45, has been a Director of the 

Company since its incorporation on 28 May 2003. He is Chairman of 

the Remuneration Committee and member of the Audit and 

Nomination Committees. 

He is an Accountant, having obtained his qualification from the 

Association of Chartered Certified Accountants of the United Kingdom 

and the Chartered Institute of Management Accountants in 1986. He 

served in Malayan Banking Berhad from 1981 to 1989 and gained 

substantial merchant banking experience where he was involved in 

the setting-up of merchant operations overseas, as well as extensive 

experience in the corporate advisory field, whereby he handled the 

merger and acquisition activities of the MBF Group. He was formerly a 

director of a public listed company, SCK Group Bhd., and national vice 

president of the Kabaddi Association of Malaysia, which is associated 

with the National Sports Council and the Olympic Council of Malaysia. 

He currently sits on the board of trustee of charitable organisations 

such as Cheras Hindu Sangam. He is now the Chief Executive Officer of 

KOSMO TECHNOLOGY INDUSTRIAL BERHAD 7 

PROFILE OF DIRECTORS 

(CONT’D) 




Business Development of Nagatrend Group in 1997 and in July 2005, 

assumed the position of Chief Executive Officer of Kosmo Motor 

Company Sdn. Bhd., the commercial vehicle arm of the Group. He is 

also a director of other companies within the Group. He does not hold 

any other directorship in any other public companies. 

He is a substantial shareholder of the Company and his shareholdings 

in the Company are disclosed in the Shareholdings of Directors on 

page 41. 



attended all the six (6) Board meetings held during the financial year. 

In 1997, the Investment Division of Affin Merchant Bank Berhad was 

corporatised to Affin Fund Management Sdn Bhd and he was 

seconded there until February 2000. He later joined Maybank 

Investment Management Sdn. Bhd as Senior Fund Manager, before 

becoming the Executive Director of Professional Capital 

Management Sdn Bhd in 2002. 

He does not hold any other directorship in any public companies. He 

has not been convicted for any offences within the past 10 years nor 

has he any conflict of interest with the Company. He attended all the 

six (6) Board meetings during the financial year. 



Micon Technology Sdn. Bhd., an electronics manufacturing company, 

and has interest in several companies both in Malaysia and overseas 


which are in the information technology, education and 

manufacturing sectors. 

He does not hold any other directorship in any public companies. His 

shareholdings in the Company are disclosed in the Shareholdings of 

Directors on page 41. 

He does not have any family relationship with any Directors and / or 

any substantial shareholders of the Company with direct / indirect 

interest in any business arrangement involving the Company. He has 

not been convicted for any offences within the past 10 years and does 

not have any conflict of interest with the Company. He attended all the 

six (6) Board meetings, five (5) Audit Committee meetings, one (1) 

Remuneration Committee and one (1) Nomination Committee 

meetings during the financial year.


CHAIRMAN’S STATEMENT 

Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail 


“Dear Shareholders, 

On behalf of the Board of Directors, I have great 

pleasure in presenting the 2006 Annual Report 

and the Audited Financial Statements of Kosmo 

Technology Industrial Berhad (“Kosmo Tech”) and 

its Group of Companies (“the Group”) for the 

financial year ended 31 December 2006.”

BUSINESS AND FINANCIAL REVIEW 

2006 - A Year of Acquisitions and Breakthrough Developments 

Alhamdulillah, Praise be to Allah the Almighty, that the Group has 

persisted through the year in our respective fields, in order to realise 

our business objectives and also to fulfill our responsibilities to you, our 

shareholders. 

The Company was listed on 30 June 2005 on the second Board of Bursa 

Malaysia Securities Berhad (“Bursa Securities”), and we have been 

fortunate to have the exceptional dexterity of the Group Managing 

Director, Norhamzah Nordin, and his team in leading the Group to 

ensure that our debut did not pass by unnoticed. Their vision, passion 

and determination to succeed have provided the much required 

foundation to support and strengthen the employees’ dedication and 

teamwork. Through our different subsidiaries, the Group has 

succeeded in charting a few breakthrough developments this year 

which can make us proud to be Malaysians. 

The Company’s first landmark decision for the year 2006 was to enter 

the rapidly developing mobile telecommunications industry in the 

local and global markets. It was noted that, despite strong mobile 

phone sales in Malaysia, with more than 4 million units sold in 2005 

alone,there was no domestic mobile phone developer and manufacturer. 

The Company carried out a thorough research to analyse this 

relatively new industry and study its intricacies before finally deciding 

it was time for Malaysia to present a local player and become the 13th 

country to produce this smart device for world consumption. 

Hence, on 6 January 2006, the Company made an announcement to 

Bursa, on the acquisition of 30 per cent share in Malaysia’s first and only 

full-fledged mobile phone Research and Development (R&D) 

company, M Dot Mobile Sdn Bhd (“M.Mobile”).The Company signed a 

share purchase agreement to acquire 1.8 million ordinary shares in the 

MSC Malaysia-status company for RM11 million and entered into a 

strategic collaboration agreement to develop mobile phones which 

would be sold in Malaysia and around the world. Following this pact, 

the Company has been able to exercise a greater influence in the 

mobile phone maker’s business direction, apart from allowing it to 

share in the future growth and profits of M.Mobile. 

And it was with pride that I and my fellow directors welcomed the 

arrival of our beloved Prime Minister, YAB Dato’ Seri Abdullah Haji 

Ahmad Badawi on 24 February 2006 at the Mandarin Oriental Hotel, 



(CONT’D) 

Kuala Lumpur, where he would go on to proclaim how happy he was 

with M.Mobile’s determination to place Malaysia on the global mobile 

communications map by introducing the M10, the company’s first 

model and Malaysia’s first hand phone. 

M.Mobile’s feat was not the only ‘first’ in the Company’s Hall of Fame 

last year. A few months later, our 100% wholly owned automotive 

subsidiary, Kosmo Motor Company Sdn Bhd (“Kosmo Motor”) added 

another feather to our cap when the company successfully introduced 

its own locally designed Compressed Natural Gas (“CNG”) bus chassis 

prototype. This first Malaysian design was unveiled during the Kuala 

Lumpur International Motor Show (“KLIMS”) 2006, which attracted 

some 330,000 visitors (from www.maa.org.my) between 26 May to 4 

June 2006 at the Putra World Trade Centre, Kuala Lumpur. Remaining 

true to the Group tagline of “Fuelled by R&D, Driven by Technology, 

Providing for the Global Community”, Kosmo Motor’s breakthrough 

project was made possible through its collaboration with reputable 

Asian associates, namely Yangzhou Yaxing of China and Doosan 

Infracore of South Korea. 

The Company announced yet another acquisition on 25 May 2006 of a 

27.6 per cent stake in Loremo AG (“Loremo”) a German carmaker and 

automotive R&D company devoted to produce economically and 

ecologically friendly cars. Subsequently, on 25 Aug 2006, the 

acquisition was revised to a 20 per cent stake. As a major shareholder 

of Loremo, the Company now expects to play a significant role in the 

latter’s business development while at the same time leveraging on 

Loremo’s expertise to enhance Kosmo Motor’s R&D capabilities. 

The new relationship presented Kosmo Motor with another 

opportunity to shine at its inaugural participation in the 2006 KLIMS 

through the unveiling of the revolutionary Loremo L22.This four seater, 

with a fuel efficiency rate of 1.5 litres of diesel per 100 kilometres, 

attracted and enticed the endless crowds to the Kosmo Motor booth 

during the 10-day exhibition not only because of its eye-catching 

design and friendly-on-the-pocket promises but also because a 

Malaysian company had become part of this pioneering venture. 

AN OVERVIEW OF THE MALAYSIAN BUSINESS ENVIRONMENT 

2006 - A Significant Year for the Malaysian Economy 

Malaysia’s total trade for the year exceeded RM1.069 trillion, allowing 

the nation entry into the league of top exporting nations such as 

Taiwan, South Korea, Japan, Germany and the Netherlands, and the



(CONT’D) 

country’s trade surplus rose to RM108.46 billion, an 8.7% increase from 

RM99.78 billion in 2005.The overall sentiment throughout the country 

was that of new optimism, new prospects and of new conquests. 

(Source: NST article, 4 March 2007) 

In this positive environment, the Prime Minister launched the Ninth 

Malaysia Plan (“9MP”) to steer the country into the future with another 

structured fifteen-year term blueprint aiming for an equitable nation. 

The first five years, dubbed the National Mission, highlights five key 

thrusts; firstly, to move the economy up the value chain; secondly to 

raise the capacity for knowledge and innovation, and nurture first class 

mentality; thirdly to address persistent socio-economic inequalities 

constructively and productively; fourthly to improve the standard and 

sustainability of the quality of life and the last objective being to 

strengthen the country’s institutional and implementation capacity by 

establishing a more effective implementing and monitoring mechanism. 

The first and second thrusts of the 9MP to move the economy up the 

value chain and increase the country’s capacity for knowledge and 

innovation respectively provide immediate and direct opportunities 

for Kosmo Tech’s contributions. The former cites among its main 

emphasis to “generate new sources of wealth in technology and 

knowledge intensive sectors” whilst the latter aims to “nurture top 

quality R&D, science and innovation”, among its other goals. The 

identified areas of focus overlap with Kosmo Tech’s overarching vision 

of becoming a leading Malaysian corporation with a strong R&D 

foundation to enable the creation of a global brand name and worldclass 

products. Guided by the mission to empower itself with a strong 

R&D foundation, the company has continuously selected high 

technology projects which bring together expertise from different 

disciplines and in various levels of proficiency. In our own small way, we 

hope that Kosmo Tech will be able to play a role in supporting the new 

Malaysia Plan towards the country’s march to realise Vision 2020. 

CORPORATE DEVELOPMENT 

2006 - Performance of Kosmo Tech Group 

The various developments and activities implemented within the 

Group have resulted in the Group recording a total revenue of RM96.40 

million for the financial year ended 31 December 2006, as compared to 

RM85.14 million in the same period last year.The profit before taxation 

decreased slightly from RM20.11 million in financial year 2005 to 

RM17.96 million in 2006. However, this year’s profit after taxation 

increased to RM10.26 million from RM4.83 million last year.

As at 31 December 2006, total shareholders’ funds stood at RM59.22 

million with 7.98 sen fully diluted earning per share. 

Moving forward,the Group expects to further strengthen its position in 

the local and global markets, particularly in the mobile 

communications and commercial vehicle sectors, by constantly 

enhancing in-house R&D capabilities and seeking out more mutually 

beneficial strategic alliances. 

2006 - Another Year of Appreciation, Another Year of Expectations 

The year 2006 has brought valuable experiences to all of us within the 

Group; we learnt to adopt and adapt to the ways of the corporate 

world, we learnt to face the myriad challenges and obstacles in the 

local and global markets, and we also learnt that, contrary to the 

mathematical formula of the shortest way to a destination is a straight 

line, the path to success is not straight and nor is it short. 

Our progress through the year has been made much smoother, thanks 

to the guidance and assistance provided by the numerous 

government ministries and agencies as well as the relevant regulatory 

bodies. My fellow directors and I would like to record our highest 

appreciation to all of them, as we close this chapter of our journey and 

open a new one in which we hope to witness your continued support. 

To our valued shareholders, business partners and clients, may I record 

our sincere appreciation for your faith in us and for believing in the 

unique strengths of the Group - a Malaysian team offering high quality, 

high technology local innovations to the global world. 

ACKNOWLEDGEMENT AND APPRECIATION 

Dear Shareholders, 

The first leg of the Company’s journey is now complete. I am indebted 

to all my fellow Board members who shared their views and opinions 

each time we deliberated a business decision. I am grateful for their 

insights and ideas as we discussed the future of the company. I would 

also like to express my appreciation to the Management Team who 

have relentlessly pursued the goals laid out at the company’s inception 

and who have tirelessly led the workforce in the right direction. For the 

sake of the Company and all in the group, let us continue to strive for 

excellence in realising our vision of becoming a leading Malaysian 

company with world-class products and services. 



(CONT’D) 

Last but not least, the Group has been blessed with faithful employees 

who have worked hard and shown their commitment towards making 

the company’s dreams a reality.They have learnt to omit the words ‘no’ 

and ‘cannot’ from their vocabulary, and they have genuinely displayed 

the true essence of the ‘Malaysia Boleh’ spirit. 

On behalf of the Board, I would like to extend our sincere thanks and 

appreciation to the management and staff for their loyalty and 

continuing commitment and dedication to the Group, and I look 

forward to several more years of working with you. I would also like to 

take this opportunity to thank my fellow Directors for their advice and 

continued support. 

The Board also wishes to express its gratitude to our valued 

shareholders, customers, suppliers, financial institutions, government 

authorities and business associates for their co-operation and 

continuous support and confidence. 

As an inspiration to work towards a better year next year, I would like to 

share with you this quotation from the American industrialist and 

pioneer of the assembly-line production method, Henry Ford, 

“Coming together is a beginning. Keeping together is progress. 

Working together is success.” 

Insya Allah. 

DATO’ DR. NIK ABD. RASHID @ NIK IDRIS BIN ISMAIL 

Independent Non-Executive Director / Chairman


GROUP MANAGING DIRECTOR’S OPERATIONAL REVIEW 



“On behalf of the Board of Directors of Kosmo 

Technology Industrial Berhad, I have great 

pleasure in presenting the Annual Report and 

Financial Statements of the Group for the 

financial year ended 31 December 2006.”



(CONT’D) 

The Kosmo Technology Industrial Berhad Group of Companies (“the 

Group”) recorded a better performance this year from that of 2005, 

resulting from the increased activities of all the subsidiaries and 

associate company. As explained by the Chairman in his statement on 

page 28, the Group’s overall profit of RM10.26 million was mainly 

contributed by the automotive division in the Group. Our main thrust 

of harnessing technology and enhancing our R&D foundation 

continues to be the core driving factor in our daily operations. 

There have been several new developments within the Group and 

quite a few alliances have been sealed with leaders of industries from 

overseas, which have further strengthened the Group’s reputation as 

a new Malaysian corporate citizen with global aspirations and 

universal appeal. 

REPORTS ON THE MAIN ACTIVITIES OF INDIVIDUAL SUBSIDIARIES 

Outlook and Prospects 

Kosmo Motor Company Sdn. Bhd. 

The automotive arm of the Group, Kosmo Motor Company Sdn. Bhd. 

(“Kosmo Motor”),which positions itself as a full-fledged commercial vehicle 

manufacturer with design capabilities, has proven worthy of its aspiration 

with the two major highlights of the year.These are the unveiling of the first 

CNG bus chassis prototype to be designed and developed by a Malaysian 

company and the sneak peak at the Loremo L22, an affordable, 

environmentally-friendly car which will be jointly produced with Loremo 

AG of Germany. Production is scheduled for 2008 and Kosmo Motor hopes 

to see the L22 plying Malaysian highways by 2010. 

The company entered 2006 on an optimistic note, having been 

appointed in January as the exclusive importer and distributor of 

China’s FOTON commercial vehicle in the Malaysian market. This was 

shortly followed in March 2006 by Fiat’s appointment of Kosmo Motor 

as the franchise holder of its commercial vehicle range.With these two 

global brands, Kosmo Motor now has the potential to supply the full 

range of commercial vehicles from vans to trucks and buses to local 

and international clients. 

In April 2006, Kosmo Motor received the much anticipated licence 

from the Ministry of International Trade and Industry (MITI) which 

permitted the company to manufacture bus chassis and bus body kit 

as part of its undertaking, and it was soon after this that Malaysia was 

introduced to the first prototype CNG bus chassis designed and 

developed by Malaysians for the global community. 

During the second half of 2006, having secured MITI’s approval in 

September to import and assemble commercial vehicles from China, 

Kosmo Motor was appointed the licensed assembler for FOTON 

commercial vehicles to be sold in South East Asia. Intent on fulfilling 

the company’s mission to introduce Malaysian technology to the 

world, another exciting opportunity presented itself when the 

KOSMO brand of CNG city buses caught the attention of senior 

officials from government and quasi government authorities in Peru. 

The increasing concerns of global warming has led to many countries 

and companies exploring alternative fuels and new ways of doing 

things as a united effort to protect our earth. The introduction of 

KOSMO CNG buses is therefore very timely and the company is 

poised to offer this world-class product to fulfil the needs in 

environmentally-conscious markets. As a first step into the global 

market, Kosmo Motor appointed Diaveco SAE of Peru to become its 

distributor for the green public transportation vehicle in Peru, with 

limited rights in other South American countries. 

According to the Malaysian Automotive Association statistics, there 

were a total of 70,384 commercial vehicles registered between 

January and June of 2006, as compared to a total of 97,820 units for 

the whole year in 2005 and 70,948 in 2004. These figures indicate an 

increasing demand for commercial vehicles and with its original 

Made-In-Malaysia CNG bus chassis completing the range of 

commercial vehicles on offer, Kosmo Motor is confident of acquiring 

a bigger share of the local market in the months to come. 

In view of this, the company has moved to its new premises in Berjaya 

Park, Section 32, Shah Alam, which houses the headquarters as well as 

the bus chassis manufacturing plant, the central warehouse and also 

the Sales, Service and Spare Parts (3S) centre for all vehicles sold by 

Kosmo Motor. The year ended on a high note with the company’s 

official handing over of the first 30 Kosmo diesel city buses to Syarikat 

Prasarana Negara Berhad for its Rapid KL service. 

Business Plans for 2007 

For the coming year, Kosmo Motor expects to ramp up its R&D efforts 

on four more bus chassis namely the 7m, 9m, 10.5m and 11m variants 

of the 12m buses, as well as CNG variants for all types. The current 

range offers 12m Diesel City Bus, 12m CNG Bus, 12m Diesel Express 

and Stage bus, which are targeted for sale in the local and 

international markets. Also in the pipeline are plans to study the 

feasibility of bringing in trucks and other models, which may be of 

interest to local commercial enterprises and also those in other



(CONT’D) 

ASEAN countries. Kosmo Motor has begun preparations to provide a 

wider range of such vehicles by offering not only Foton Alpha View 

models with Euro 2 engine, but also Fiat Ducato and Fiat Doblo vans 

with Euro 4 engines. The Foton Forland model in the light duty 

category is also expected to be well-received, along with the CNG 

converted Foton Alpha View model. 

The company has received various enquiries from prospective local 

and international clients; including local city bus and express bus 

operators and countries such as Peru, Bolivia, Bangladesh, Egypt, 

Pakistan, Tunisia, Benin and Kenya. 

NAGATREND SDN. BHD. 

This stalwart of the Group continued its substantial contribution to 

overall profits, making up 29% of group revenue and 35% of net profit 

(2005: 54% of revenue, 52% of net profit). Meanwhile, its subsidiary 

Nagatrend Engineering Sdn Bhd, which provides various auto 

engineering services contributed 32% to overall net profit and 20% to 

overall revenue (2005:27% to Group net profit,27% to Group revenue). 

Apart from its engineering services, Nagatrend is a well known 

designer and supplier of various auto accessories and components, 

ranging from safety kits and storage compartments, fire 

extinguishers, warning triangles, inner rear view mirrors and step 

plates as well as car care products such as grooming kits, coolants and 

lubricants.The company also owns the Intellectual Property rights for 

many of these locally developed products. Being the oldest and 

longest established company in the Group, Nagatrend’s reputation 

has strengthened over the years to earn it a renowned clientele 

including some of the giants in the local and international auto 

industry such as Proton and Perodua, Honda, Toyota, Hyundai and 

others. 

This past year, the Nagatrend division advanced into ‘greener’ areas 

with its NGV section. It received, in May 2006, certification from the 

Department of Occupational Safety and Health (DOSH) for the 57 litre 

NK cylinders to be fitted into passenger cars and another certification 

from the Road Transport Department (JPJ) which enabled the 

company to run an NGV workshop through Altospektra Sdn Bhd. 

Later in the same month, following a successful exhibition of NGV cars 

at the KLIMS 2006, Nagatrend succeeded in converting the first 

vehicle into a full NGV mode of transport. As a testimony of its worldclass 

technology and first-class quality service, Nagatrend secured its 

first fleet order for NGV conversion in December 2006.



(CONT’D) 

The coming year looks promising for Nagatrend and Nagatrend 

Engineering Sdn Bhd, with various new projects lined up for several 

industry giants, and the company hopes to be able to maintain its 

substantial share of profit contribution. Supplying automotive 

accessories as well as lubricants and car care products to local OEMs, 

supplying NGV retrofitting products to the local market and 

providing Central Inventory Management services for OEMs as well as 

Integrated Facilities Management services are some of the activities 

which will keep Nagatrend busy throughout 2007. 

Another subsidiary company, Kosmo Mobile Manufacturing Sdn. 

Bhd., has since become solely focused on manufacturing mobile 

phones for the Group’s associate company, M Dot Mobile Sdn. Bhd. 

KOSMO MOBILE MANUFACTURING SDN. BHD. 

Established in 1997 as Nagatrend Plastic Sdn. Bhd., this company used 

to specialise in plastic injection moulding for the automotive industry 

before diversifying into mobile phone manufacturing in October 

2005. Originally focusing on manufacturing phones for M.Mobile, the 

company was named Kosmo Mobile Manufacturing Sdn. Bhd. 

(“Kosmo Mobile”) and upon inception, it became the first locally 

owned mobile phone manufacturing company in the country. The 

company’s vision is “to become a reputable mobile phone 

manufacturer with original design manufacturing (ODM) and original 

equipment manufacturing (OEM) capabilities”. 

Kosmo Mobile’s main focus is currently on communications 

technology as it strives to be the region’s best mobile phone 

manufacturer by the year 2010, offering a wide range of services 

including design, sourcing, new product introduction, supply change 

management, global manufacturing and excellent after-sales service. 

Kosmo Mobile is committed to continuously improve and develop its 

operating procedures, processes and systems to enhance the 

company’s competitiveness and that of our customers. 

Kosmo Mobile’s state-of-the-art plant in Seksyen 15, Shah Alam, has a 

two million-per-year production capacity with lines that are flexible 

enough to produce multiple models. There are five main assembly lines, 

five test lines,two PCB assembly lines and two packing lines.The company 

is currently in the process of fulfilling the ISO 9001:2000 requirements.



(CONT’D) 

For 2007, Kosmo Mobile aims to become the sole OEM for M.Mobile, 

assembling all models planned for this year and re-packaging semiknocked 

down (SKD) and completely knocked down (CKD) units.The 

company is also geared up to support M.Mobile in setting up its 

assembly plants in Saudi Arabia, Iran and Zambia to support 

M.Mobile’s joint venture partnerships in the abovementioned 

countries. 

Kosmo Mobile posted a net profit of RM3.04 million on total revenue 

of RM42.45 million in 2006 and expects to perform better in 2007 

with the numerous projects lined up for the year. 

M DOT MOBILE SDN. BHD. (M.MOBILE) 

As a 30% owned associate company of Kosmo Tech, M.Mobile posted 

a loss of RM1.23 million in its maiden year of commercialisation. In 

line with its aim to become a pioneer in the local mobile 

communications technology sector, M.Mobile succeeded in 

introducing its first model within eight months of commencing R&D 

work and when it did so, M.Mobile not only became the 13th mobile 

phone producing country in the world but also the only one in the 

South East Asian region. 

Other milestones achieved by this fledgling but resourceful company 

are: 

• February 2006 - Official launching of M10 

• April 2006 - M.Mobile, through its sole distributor VC 

Communications Sdn. Bhd., held the ‘Konsert Aura & Karnival 

M.Mobile’ at Stadium Negara, in appreciation of its customers’ 

loyal support and also as a brand-building exercise 

• September 2006 - launch of M10 Hajj, in collaboration with 

Tabung Haji Technologies Sdn. Bhd., dedicated to provide useful 

guides and information on the Umrah and Haji pilgrimages 

• October 2006 - held the i-Metro prize giving ceremony for Harian 

Metro readers who sent in the best MMS to the newspaper’s icommunity 

For 2007, M.Mobile plans to introduce 14 new models including 3G 

phones and a Smartphone for the sophisticated mobile phone users 

of the 21st century. The company will also aggressively widen its 

product reach to include other countries in the West Asian, African 

and Eastern European continents. 

FUTURE PLANS AND PROSPECTS 

The Group’s total number of employees has risen this year to 111, 

from 103 in 2005, and the number is expected to increase by the end 

of the year to help achieve the Group’s business objectives for 2007. 

The move into high technology sectors and the various efforts in 

developing original designs for mobile phones and commercial 

vehicles, apart from the auto accessories, will hopefully help to 

further strengthen the Group’s position as a local company with a 

strong emphasis on R&D. 

There will be several new developments in 2007 within the Kosmo 

Tech group, which we believe would mutually benefit all our 

stakeholders and thus, we look forward to your constant support. 

ACKNOWLEDGEMENT AND APPRECIATION 

On behalf of the Board of Kosmo Technology Industrial Berhad, I 

would like to take this opportunity to express my deep appreciation 

to my fellow directors, management and staff for their loyal, 

undivided commitment and dedication during the year and I look 

forward to their continued invaluable contribution to the Group in 

the future. 

I also wish to thank our valued shareholders, bankers, customers, 

suppliers, business associates and government agencies for their 

continued support to the Group. 

NORHAMZAH BIN NORDIN 

Group Managing Director


17


STATEMENT ON CORPORATE GOVERNANCE 

INTRODUCTION 

The Board of Directors of the Company acknowledges and 

endorses the importance of enhancement of corporate 

governance requirements, outlined in the Malaysian Code of 

Corporate Governance (“the Code”) and Listing Requirements of 

Bursa Securities. It is the Board’s responsibility and commitment 

to ensure that the principles and best practices of the Code are 

observed, and that the high standards of Corporate Governance 

are being practised throughout the Group (Company and its 

subsidiary companies), thereby safeguarding the assets of the 

Group and its shareholders’ investments. Ongoing evaluation will 

be carried out from time to time to reassess and refine the 

governance framework towards enhancing the Group’s business 

growth and corporate accountability. 

The Board is pleased to disclose below the Group’s application 

and the extent of its compliance with the best practices of the 

Code throughout the financial year ended 31 December 2006. 

PRINCIPLES OF CORPORATE GOVERNANCE 

A. BOARD OF DIRECTORS 

i ) The Board 

The Company operates under the overall control of the 

Board, which is ultimately accountable for the strategic 

directions of the Group’s activities and competent 

management of the Group’s business operations and 

performance, as well as enhancing its risk management 

processes and structures. 

The Executive Directors frequently attend the Group’s 

management meetings wherein operational details and 

other issues were discussed and considered. For financial 

year ended 31 December 2006, the Board had met on six 

(6) occasions. All proceedings from the meetings are 

minuted and signed by the chairman of the meetings. 

The Board has scheduled at least five (5) meetings for the 

next financial year, to consider proposals or other matters 

that require the Board’s immediate attention. The Board 

will have a formal schedule of matters specifically 

reserved for its attention to ensure that it exercises full 

control over significant strategic, financial, operational 

and compliance matters including the review and 

approval of quarterly results. 

ii) Board Balance 

The Board consists of six (6) Directors, comprising three (3) 

Executive Directors, one (1) Non-Executive Director and 

two (2) Independent Non-Executive Directors. They are 

responsible for the strategic direction and control of the 

Company. 

The composition of Independent Non-Executive Directors 

make up one-third of the Board as set out in the Listing 

Requirements of Bursa Securities, which requires at least 

two (2) Directors or one-third of the Board of Directors, 

whichever is higher, and who are Independent Directors. 

The Board retains full control over the Company and 

monitors the Management. The Board of Directors 

meetings are chaired by the Chairman whose role is 

clearly separate from the role of the Group Managing 

Director.This is to ensure a balance of power and authority. 

The Group Managing Director, together with the Group 

Executive Director and the Chief Financial Officer, is 

responsible for implementing the policies and decisions of 

the Board, overseeing and managing the day-to-day 

operations as well as the development and implementation 

of the company’s business and corporate strategies. 

The presence of Independent Non-Executive Directors 

brings an additional element of check and balance to the 

Board, and is crucial in providing independent views, 

advice and judgement to the Board in the interest of the 

shareholders and stakeholders.

The Company believes that the mix of industry-specific 

knowledge and broad commercial experience allows the 

Board to provide clear and effective leadership to the 

Company, besides allowing an independent judgement of 

many aspects of the Company’s strategy and performance. 

iii) Supply of Information 

Board meetings are structured with a pre-set agenda 

providing the Directors with relevant and timely 

information to enable them to properly deliberate the 

matters before the meetings. Board papers which contain 

updates on operational, financial and corporate 

developments are circulated in advance of meetings to 

provide the Directors with sufficient time to obtain further 

explanation, clarification, if so required and to facilitate 

informed decision-making. 

The Board has direct access to the senior management 

including the Company Secretary for information 

pertaining to the Company’s affairs and may, if necessary 

obtain independent professional advice from external 

consultants. 

The Company Secretary’s responsibility is to ensure that 

the Board proceedings are adhered to at all times during 

meetings and would advise the Board on matters relating 

to corporate governance issues and directors’responsibilities 

in compliance with the relevant legislations and regulations. 

In addition, the Board exercises control on matters that 

requires its approval through Directors’ Resolutions. 



(CONT’D) 

iv) Board Meetings 

The Board held six (6) meetings during the financial year 

to discuss the performance of the Group. The agenda of 

each Board meeting is circulated to all the Directors in 

advance for their perusal and understanding. The 

attendance of the Board members are as follows:- 

Name of Directors Designation No. of meetings 

attended 

Dato’ Dr. Nik Abd. Rashid @ Independent Non-Executive 6/6 

Nik Idris bin Ismail Director / Chairman 

Dato’ Mukhriz Mahathir Independent Non-Executive Director 4/6 

Norhamzah bin Nordin Group Managing Director 6/6 

Mohd Azham bin Mohd Noor Group Executive Director 6/6 

Mohamad Nassir bin 

Mohd Kassim 

Chief Financial Officer 6/6 

Ravindran a/l 

Sivasubramaniam 

Non-Executive Director 6/6 

v) Appointments to the Board 

The Board believes that the current composition of the 

Board brings the required skills and core competencies 

for the Board to discharge its duties effectively. The Code 

endorses, as good practice, a formal procedure for 

appointments to the Board with the Nomination 

Committee making recommendations to the Board. In line 

with this, the Company had on 25 August 2005 set up a 

Nomination Committee. 

The appointment of any additional Director is made when 

necessary. In the process of nominating and appointing 

new Directors, due consideration is given to experience 

and mixed expertise for an effective Board. The Company 

Secretary will ensure that all appointments are properly 

made, and that legal and regulatory requirements are met. 

vi) Re-election of Directors 

In accordance with the Company’s Articles of Association, 

all Directors who are appointed by the Board are subject 

to election by shareholders at the coming Annual General



(CONT’D) 

Meeting (“AGM”) after their appointment. The Articles of 

Association also provide that one-third of the Directors 

for the time being shall retire from office and provided 

always that all Directors shall retire from office once at 

least in every three (3) years. A retiring Director shall retain 

office until the close of the meeting at which he retires 

and shall be eligible for re-election. This provides an 

opportunity for Shareholders to renew their mandate.The 

election of each Director is voted on separately. 

The Articles of Association also provide that all directors 

including the Group Managing Director shall retire from 

office at least once every three years but shall be eligible 

for re-election. 

Details of Directors seeking re-election at the Fourth AGM 

are disclosed in the Statement Accompanying Notice of 

AGM on page 94 of this Annual Report. 

vii) Director’s Training 

All Directors have attended the necessary training 

programmes during the financial year. The Directors will 

continue to undergo the relevant training programmes to 

enhance their skills and knowledge on an annual basis. 

viii) Board Committees 

The Board has delegated specific responsibilities and 

duties to its three Committees: namely the Audit 

Committee, Nomination Committee and Remuneration 

Committee, which operate under their respective defined 

Terms of Reference.These Committees, which do not have 

executive powers, will deliberate and examine particular 

issues and report to the Board with their 

recommendations.The ultimate responsibility for the final 

decision, however, lies with the entire Board. 

Audit Committee 

The Company’s Audit Committee comprises two (2) Independent 

Non-Executive Directors and one (1) Non-Executive Director, one 

of whom is a qualified accountant. The composition and terms of 

reference for this Committee, and the summary of its activities 

carried out during the financial year ended 31 December 2006, 

are presented on page 24 to 26 of this Annual Report. 

The Committee members are:- 

1. Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail Chairman 

2. Dato’ Mukhriz Mahathir Member 

3. Ravindran a/l Sivasubramaniam Member 

The primary objective of the Audit Committee is to assist the 

Board in fulfilling its responsibilities relating to the accounting 

and reporting practices of the Group. The Audit Committee 

reviews issues of accounting policy and presentation of external 

financial reporting and ensures an objective and appropriate 

relationship is maintained with the external auditors. 

Nomination Committee 

The Nomination Committee was formed on 25 August 2005, 

comprising three (3) Non-Executive Directors, two (2) of whom 

are independent. 

The Committee members are :- 

1. Dato’ Mukhriz Mahathir Chairman 

2. Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail Member 


The duties and responsibilities of the Nomination Committee are:- 

1) Identifiying, nominating, reviewing and making 

recommendations of individuals to the Board of Directors of 

the Company ; 

2) Prescribing the role and function of nominated Director ; 

3) Making recommendations to the Board of Directors on the 

appointment of the various committees of the Board ; 

4) Assessing Directors on required mix of skills and experience 

and other qualities including core competencies, which Non- 

Executive Directors should bring to the Board ; 

5) Considering and examining such other matters as the 

Nomination Committee deems appropriate. 

In its deliberation, the members of the committee shall be 

guided by:- 

1) The specific requirements of the role of the Directors to be 

appointed ; 

2) The qualification, experience and background of the 

candidates identified ;


STATEMENT ON CORPORATE GOVERNANCE (cont’d) 

3) The recommendation, if any, of candidates for directorships 

proposed by the Managing Director, and Director or 

shareholder, and ; 

4) The core principles of Corporate Governance ; 

During the financial year ended 31 December 2006, the 

Nomination Committee met once and the meeting was attended 

by all members. 

Remuneration Committee 

The Board had also set up a Remuneration Committee on 25 

August 2005, and the members are: - 

1. Ravindran a/l Sivasubramaniam Chairman 

2. Dato’ Mukhriz Mahathir Member 

3. Norhamzah bin Nordin Member 

The principle objective of the Remuneration Committee is to 

assist the Board of Directors in its responsibilities in assessing the 

remuneration packages of the Managing Director and Executive 

Directors of the Company. 

The Board of Directors shall elect the Remuneration Committee 

members from amongst themselves. The Remuneration 

Committee shall consist of not less than two (2) members, 

comprising wholly or mainly of non-executive directors. 

The duties and responsibilities of the Remuneration Committee are:- 

1) To review and assess the remuneration packages of the 

Managing Director and Executive Director of the Company 

and to make recommendations on the same to the Board of 

Directors. 

2) To ensure the levels of remuneration be sufficiently attractive 

and able to retain Directors needed to run the Company 

successfully. 

3) To structure the remuneration package by taking into 

account the market rates so as to link rewards to corporate 

and individual performance. 

4) To review the Company’s Managing Director and Executive 

Directors’ service contracts when necessary. 

5) To review and recommend to the Board the remuneration of 

the Non-Executive Directors 

21 

6) To act in line with the directions of the Board of Directors; and 

7) To consider and examine such other matters as the 

Remuneration Committee considers appropriate. 

In discharging the above duties and responsibilities, the Executive 

Directors and Non-Executive Directors shall abstain from 

deliberations and voting decisions in respect of their respective 

remuneration. 

During the financial year ended 31 December 2006, the 

Remuneration Committee met twice and all members attended 

the meeting. 

Employees Share Option Scheme (ESOS) Committee 

The Kosmo Tech Group ESOS Committee was established to 

administer Kosmo Tech’s Employee Share Option Scheme. The 

Committee’s principal function is to ensure that the scheme is 

administered in accordance with the by-laws approved by the 

shareholders of the Company. 

The members of the ESOS committee are:- 

1. Mohd Azham bin Mohd Noor Chairman 

2. Mohamad Nassir bin Mohd Kassim Member 


B. DIRECTORS’ REMUNERATION (“DR”) 

i) The Level and make-up of remuneration 

The Board as a whole reviews annually, the levels of 

remuneration offered for Directors to ensure that they are 

sufficient to attract and retain Directors with relevant 

experience and expertise required to manage the Group 

successfully, while taking into consideration at the same 

time, the state of the economy in general and the 

performance of the industry of the Group in particular. 

In the case of Executive Directors, the component parts of 

remuneration are structured to link rewards to corporate 

and individual performance. As for the case of Non- 

Executive Directors, the levels of remuneration reflect the 

experience and level of responsibilities undertaken by the 

particular Non-Executive Director concerned.



(CONT’D) 

ii) Procedure 

The Remuneration Committee is responsible for 

recommending to the Board the policy framework of 

executive remuneration and the fixing of the 

remuneration of individual Directors. The Director 

concerned will abstain from deliberation and decision in 

respect of his own remuneration package. 

iii) Disclosure 

The details of Directors’ Remuneration paid or payable to 

all the Directors of the Company who served during the 

financial year ended 31 December 2006 are as follows:- 

Aggregate remuneration of Directors categorized into the 

following components: 

Category of Remuneration Executive Non- Total 

Directors Executive 

Directors 

(RM’000) 

(RM’000) (RM’000) 

a) Salaries and other 

Emoluments 

786,000 786,000 

b) Fees 225,000 225,000 

c) Bonuses 

d) Estimated value of 

benefits-in-kind 

Total 1,111,000 

The number of Directors in the Group whose total 

remuneration fall within the respective bands is analysed 

as follows:- 

Remuneration band Executive Non- Total 

(RM) 

1 - 50,000 

Directors Executive 

Directors 

50,001 - 100,000 

100,001 - 150,000 

150,001 - 200,000 

3 3 

200,001 - 250,000 

250,001 - 300,000 

300,001 - 350,000 

2 2 

350,001 - 400,000 1 1 

C. SHAREHOLDERS AND INVESTORS 

i) Shareholders’ Communication and Investor Relation 

The Group recognises the importance of having a direct 

line of communication with its Shareholders and investors 

through timely dissemination of information on the 

Group’s performance and major developments through 

the appropriate channels of communication. 

• The Annual Report and relevant circulars 

• The various disclosures and announcements to Bursa 

Malaysia Securities Berhad including quarterly 

financial results; and 

• Periodic discussions with financial analysts and fund 

managers on the Group’s operations, financial 

performances and other strategic issues. However, any 

Information that may be regarded as sensitive 

material information will only be disclosed upon 

compliance with the relevant rules and regulation. 

ii) Annual General Meeting (“AGM”) 

The forthcoming AGM is the Company’s second AGM as a 

listed company. The meeting will provide shareholders 

with the opportunity to raise questions pertaining to 

issues in the Annual Report, Audited Financial Statements 

and corporate developments in the Group and / or the

usinesses of the Group as well as resolutions being 

proposed. The Chairman as well as the Group Managing 

Director and / or the external auditor, if so required, will 

respond to Shareholders’queries and questions at the AGM. 

D. ACCOUNTABILITY AND AUDIT 

i) Financial Reporting 

The Directors have the responsibility to present a true and 

balanced assessment of the Group’s performance and 

prospect in the annual report to shareholders and 

quarterly reports to Bursa Malaysia Securities Berhad. The 

Board is also responsible for ensuring that the Financial 

Statements prepared are drawn up in accordance with 

the provisions of the Companies Act, 1965 and the 

applicable approved accounting standards in Malaysia. 

The Board is assisted by the Audit Committee in 

scrutinising information for disclosure to ensure accuracy, 

adequacy and completeness. 

The quarterly financial results and Audited Financial 

Statements were reviewed by the Audit Committee and 

approved by the Board before being released to Bursa 

Malaysia Securities Berhad. The details of the Company 

and the Group’s financial statements for financial year 

ended 31 December 2006 are set out from pages 42 to 80. 

ii) Internal Control and Risk Management 

The Board has overall responsibility for maintaining a 

sound system of internal controls, to safeguard 

shareholders’ investments and the Company’s assets. The 

Board acknowledges that the internal control system is 

devised to cater for the particular needs of the Group as 

well as risk management; such controls by their nature 

can only provide reasonable assurance but not absolute 

assurance against material misstatements, loss or fraud. 

The Group’s Statement on Internal Control which provides 

an overview of the Group’s state of internal control is set 

out in page 28 of this Annual Report. 



(CONT’D) 

iii) Relationship with External Auditors 

The Board of Directors and the Management maintain a 

formal and transparent relationship with the Group’s 

Auditors in seeking their professional advice and opinion 

with regard to the Group’s compliance with the relevant 

approved accounting standard. The Auditors will be 

invited for the meetings of the Audit Committee or Board 

as and when the need arises. 

The role of the Audit Committee in relation to the External 

Auditors is set out in the report of the Audit Committee in 

pages 24 to 27 of this Annual Report. 

Statement of Compliance 

The Company has complied throughout the financial year with all 

the Best Practices of Corporate Governance set out in Part 2 of the 

Code. Given the current composition of the Board that reflects a 

strong independent element and the separation of roles among the 

Executive Directors, the Board does not consider it necessary at this 

juncture to nominate a Senior Independent Non-Executive Director.


AUDIT COMMITTEE REPORT 

The Audit Committee was established to assist the Board in ensuring the effectiveness of the Group’s system of internal control. The Board of 

Directors is pleased to present the Audit Committee report for the financial year ended 31 December 2006. 

MEMBERS 

The Audit Committee is comprised of three (3) members of the Board of which two (2) are Independent Non-Executive Directors and one (1) is 

a Non-Executive Director. Kosmo has complied with paragraph 15.10 of the Listing requirements of Bursa Securities, which requires the majority 

of the Audit Committee to be Independent Directors. 

The members of the Audit Committee are as follows: 

Names Designation Directorship 

Dato’ Dr. Nik Abd. Rashid Chairman Independent Non-Executive Director 

@ Nik Idris bin Ismail 

Dato’ Mukhriz Mahathir Member Independent Non-Executive Director 

Ravindran a/l Sivasubramaniam Member Non-Executive Director 

Member of the Malaysian Institute of Accountants (MIA) 

CONSTITUTION 

The Audit Committee of the Company was established by the Board on 17 June 2005. 

CONDUCT OF MEETINGS 

The Company was listed on the Second Board of Bursa Securities on 30 June 2005. A total of five (5) meetings were held during the financial 

year ended 31 December 2006, and the attendances of the members are as follows: 

Name of Directors No. of meetings attended 

1. Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail 5/5 

2. Dato’ Mukhriz Mahathir 4/5 

3. Ravindran a/l Sivasubramaniam 5/5 

The senior members of the management or representative of external auditors may attend any particular audit committee meeting at the 

Committee’s invitation, specific to the relevant matters. 

The Company Secretary shall act as the secretary of the Audit Committee and shall be responsible for drawing up the agenda and circulating it 

to committee members prior to each meeting. The Company Secretary shall also be responsible for preparing and keeping the minutes of the 

meetings of the Audit Committee. 

TERMS OF REFERENCE OF AUDIT COMMITTEE 

Composition of the Audit Committee 

Members 

The Committee shall be appointed by the Board from amongst the Directors of the Company and shall be composed of:a. 

not fewer than three (3) members ; 

b. a majority of whom are independent directors ; 

c. at least one (1) member of the Audit Committee ; 

i) must be a member of the Malaysian Institute of Accountants (“MIA”) 

ii) 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



(CONT’D) 

(b) he must be a member of one of the association of accountants specified in Part 11 of 1st schedule of the Accountants Act 1967. 

iii) fulfills such other requirements as prescribed by Bursa Securities 

d. no alternate Director shall be appointed as an Audit Committee member; and 

e. one of the Audit Committee members, who is an independent director, shall be appointed Audit Committee Chairman by members of the 

Audit Committee. 

QUORUM 

The majority of the members who must be Independent Directors present shall form a quorum.The minimum quorum for the Audit Committee 

meetings is two (2) members present, and in such case, both of them must be independent directors to constitute a quorum. 

AUTHORITY 

The Audit Committee is granted the authority to investigate any activity, within its terms of reference and have the resources which are required to 

perform its duties, as well as full and unrestricted access to any information pertaining to the Company and its subsidiaries. 

The Audit Committee is empowered to obtain independent professional advice as necessary to assist the Audit Committee in fulfilling its responsibility. 

The Audit Committee shall also have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity. 

The Audit Committee may regulate its own procedures, in particular:a. 

the calling of meetings, including the convening of such meetings with external auditors, without any executive board member(s) 

present / any Directors and employees can only attend such meetings upon Audit Committee’s invitation 

b. the notice to be given of such meetings 

c. the voting and proceedings of such meetings 

d. the keeping of minutes ; and 

e. the custody, production and inspection of such minutes. 

FUNCTIONS AND DUTIES 

The duties and functions of the Committee shall be:- 

1 To recommend the nomination of a person and persons as external auditors and to review the re-appointment and/or resignation 

of the external auditor, the scope and general extent of the external auditors’ audit examination and ensure co-ordination between 

internal and External auditors. The external auditor’s fee is arranged and reviewed by the Committee. 

2 To review the quarterly results and annual financial statements before submission to the Board, to consider on matters such as:- 

• going concern assumption ; 

• any changes in accounting policies and practices ; 

• significant adjustments resulting from the audit; 

• compliance with accounting standards ; 

• compliance with stock exchange and legal requirements; 

• major judgemental areas. 

3 To review the following and report the same to the Board:- 

(a) With external auditor, the audit plan, the evaluation of the system of internal controls and audit report; 

(b) The assistance given by the employees of the Company to the external auditor; 

(c) The adequacy of the scope, functions and resources of the internal audit functions and that it has the necessary authority to carry 

out its work;



(CONT’D) 

(d) The internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and 

whether or not appropriate action is taken on the recommendations of the internal audit function; 

(e) Any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, 

procedures or course of conduct that raises questions of management integrity. 

INTERNAL AUDIT FUNCTION 

The Audit Committee approves the internal audit plan. The scope of Internal Audit covers the audit of all units and operations, including 

reviewing the effectiveness of the systems of controls in the Company and its subsidiaries. 

The role of the Internal Audit Department is to provide independent and objective reports on the state of internal control and compliance with 

policies and procedures. It is the responsibility of the internal audit team to provide the Audit Committee with independent and objective 

reports on the state of risk management, control and governance processes pertaining to the various operating units within the Group and the 

extent of compliance of the units with the Group’s policies, procedures and relevant statutory requirements. 

The achievements of such objectives involve the following activities to be carried out by the internal audit department: 

• Identifying the principal risks that the Group faces covering various aspects of the businesses which include operational, financial or 

other compliance requirements and human resources. 

• Ascertaining the extent to which the Group’s assets are accounted for and safeguarded. 

• Conducting investigation or special reviews requested by the Audit Committee and/or Management on an ad-hoc basis. 

• Evaluating and improving the existing systems of internal control within the Group by reviewing its adequacy and effectiveness on an 

ongoing basis. 

SUMMARY OF ACTIVITIES 

During the financial year ended 31 December 2006, the Committee carried out its duties in accordance with its established Terms of Reference. 

The main activities undertaken by the Committee were as follows:a. 

Reviewed the unaudited quarterly reports on the consolidated results and financial statements prior to tabling of the same to the Board of 

Directors. 

b. Reviewed with external auditors their scope of work and audit plan for the year. 

c. Reviewed the adequacy of the existing policies, procedures and systems of internal control of the Group. 

d. Reviewed with external auditors the results of the audit and the audit report and recommend the same for Board of Directors’ approval. 

e. Reviewed the annual report and the audited financial statements of the Company prior to submission to the Board for their 

consideration and approval. The review was to ensure that the audited financial statements were drawn up in accordance with the 

provisions of the Companies Act, 1965 and the applicable approved accounting standards in Malaysia. 

f. Discussed and recommended the appointment of internal auditors for the Board of Director’s approval . 

g. Reviewed with internal auditors the overall scope of the Internal Audit plan and the findings and recommendations from the audit work 

carried out by the Internal Audit functions. 

h. Reviewed the Group’s compliance with the Listing Requirements of the Bursa Securities, Financial Reporting Standards (FRS) and 

other relevant legal and regulatory requirements. 

i. Reviewed the related party transactions entered by the Group and the Statement of Internal Control for inclusion in the Annual Report. 

j. Reviewed the extent of the Group’s compliance with the provisions set out under the Malaysian Code on Corporate Governance 

for the purpose of preparing the Statement of Corporate Governance to be included in the Annual Report. 

The Audit Committee carried out its duties in accordance with its Terms of Reference during the year.



(CONT’D) 

STATEMENT ON ESOS 

The Audit Committee has verified that during the financial year ended 31 December 2006, the allocation of share options pursuant to the ESOS 

to eligible Directors and employees has been made in accordance with the criteria of allocation of share options set out in the By-Laws and 

guidelines governing the ESOS. 

The breakdown of option shares offered to the Non-Executive Directors pursuant to the ESOS in respect of the financial year ended 

31 December 2006 are as below:- 

Amount of options Amount of options 

Name of Director offered exercised 

Dato’ Dr. Nik Abd. Rashid @ Nik Idris Bin Ismail 200,000 0 

Dato’ Mukhriz Mahathir 200,000 0 

Ravindran a/l Sivasubramaniam 200,000 0


STATEMENT ON INTERNAL CONTROL 

INTRODUCTION 

The Board of Directors is pleased to outline the following statement 

on the state of internal control of the Company and its subsidiaries 

(“the Group”) for the financial year ended 31 December 2006. The 

system of internal control is based on an ongoing process designed to 

identify the principal risks of the Group’s policies, goals and objectives 

and to evaluate the nature and extent of those risks and manage 

them efficiently and effectively. This statement was prepared in 

accordance with paragraph 15.27 (b) of the Listing Requirements of 

Bursa Securities, and the Statement of Internal Control: Guidance for 

Directors of Public Listed Companies issued by the Institute of Internal 

Auditors Malaysia and adopted by Bursa Securities. 

THE BOARD’S RESPONSIBILITY 

The Board acknowledges its overall responsibility for the Group’s 

system of internal control and risk management which includes the 

establishment of an appropriate control environment and 

framework as well as reviewing its adequacy and integrity. 

The Board recognises the need to have a formal ongoing process for 

identifying, evaluating and managing the significant risks faced by 

the Group.The Board also recognises that a good control system will 

assist the achievement of corporate objectives. However, in view of 

the limitations inherent in any system of internal control, the system 

is designed to manage rather than to eliminate the risk of failure to 

achieve corporate objectives. It can only be relied on to provide 

reasonable and not absolute assurance against material 

misstatement of management or financial information against any 

financial losses or fraud. The concept of reasonable assurance also 

recognises that the cost of control procedures should not exceed 

the expected benefits. 

The Company is committed to maintain a sound internal control 

system to safeguard the Company’s assets and shareholders’ 

investments. The Board is pleased to outline below, the nature and 

scope of the Company’s internal control during the year. 

The responsibility for reviewing the adequacy and integrity of the 

internal control system has been delegated to the Audit Committee 

and this committee obtains the assurance of the adequacy and 

integrity of the internal control system, through independent 

reviews conducted by the internal audit function, external auditors 

and Management. In order to achieve a sound internal system, the 

Board provides a control environment and a framework that is 

conducive to these objectives. 

POLICIES AND PROCEDURES 

The Group is progressively developing and enhancing its group 

operating policies and procedures to address the changing 

environment of its business operations and practices, and has 

developed flow charts to ensure that their reporting and 

compliance objectives are met,and that all personnel receive a clear 

message regarding their role in the internal control system. 

The key processes carried out to review the adequacy and integrity 

of the internal control system include conducting regular 

Management meetings between the Group Managing Director, the 

Group Executive Director and the Chief Financial Officer and all the 

Senior Management of all the subsidiary companies, to deliberate 

on operational matters and issues and gauge the effectiveness of 

strategies implemented. 

KEY ELEMENTS OF INTERNAL CONTROL PROCESSES 

The Board recognises that continual effectiveness, adequacy and 

integrity of the internal control system are important elements to 

enable good corporate governance. 

A well-defined Group organisation structure with proper lines of 

responsibilities are properly delegated to the Board committees, the 

Group’s Management and operating units of the Group. The key 

responsibilities are properly segregated in order that no employee 

has total control of any transaction. 

Clearly documented Standard Operating Procedures Manuals 

outline the policies and procedures for day to day operations. 

An annual budget is prepared to facilitate monitoring of the Group’s 

financial performance and the review of actual monthly 

performance against the budget. 

An appropriate accounting and reporting system to ensure proper 

and correct recording of financial data and key business indicator 

for management review and action. 

The internal audit function, which reports directly to the Audit 

Committee, conducts reviews on the system of internal control and 

the effectiveness of the process management in place to identify, 

manage and report risks. Weaknesses are properly communicated 

to management and staff to ensure prompt corrective actions are 

taken.

Reporting from the external auditor to the Audit Committee on 

audit findings and highlighting of areas to improve (if any). 

The Audit Committee holds regular meetings to deliberate on 

findings and recommendations for improvement by both the 

internal and external auditors on the state of the internal control 

system, and reports back to the Board. 

The Management meetings were conducted on periodical basis, to 

discuss on operational, financial, corporate and key Management 

issues. The matters discussed are as follows; 

• Financing and cash flow performance. 

• Progress on business development, sales, billing and 

collections, and loan documentation processes. 

• Feedback on the progress of development projects 

undertaken by the individual subsidiary and highlights on 

the shortcomings and problems, together with proposed 

corrective actions. 

• Regular updates of internal procedures and policies, or to 

resolve operational deficiencies. 

• Monitoring of physical security and systems 

implementation to minimise operational risks. 

INTERNAL AUDIT FUNCTION 

The Audit Committe reviewed and approved the internal audit plan 

and scope of internal audit covers the audits of all units and 

operations, including subsidiaries. The Internal audit team 

undertakes internal audit review based on the approved audit plan 

that is developed after risk assessment and taken into consideration 

the concerns of management. The internal audit reports are 

submitted to the Audit Committee, which reviews the findings with 

Management at the Audit Committee Meetings. 

The Audit Committee has resposibility for the development and 

maintenance of the internal control framework and determining 

that all major issues reported have been satisfactorily resolved. 

RISK MANAGEMENT FRAMEWORK AND INTERNAL AUDIT 

FUNCTION 

The Board recognises that an important element for a sound system 

of internal control is to have in place a risk management framework, 

in order to identify principal risks and implement appropriate 

controls to manage such risks. The day to day managing of risk lies 

with the respective Heads of Department and this task is being 

reviewed to further update and identify significant risks and 


STATEMENT ON INTERNAL CONTROL 

(CONT’D) 

corresponding controls in order to develop an enterprise-wide Risk 

Management Framework. Once this framework is formalised, 

monthly management meetings will identify these risks and 

corresponding internal controls, to be communicated to Senior 

Management. 

The Heads of Department are responsible for managing key risks, 

applicable to their areas of business activities on a continuous basis.Any 

operational matters and issues are regularly reviewed and resolved by 

the Management team at the monthly management meeting. 

REPORTING AND REVIEW 

The Group’s Management team conducted monthly monitoring 

and review of operational and financial results for all businesses 

within the Group, including monitoring and reporting thereon, of 

performance against management’s plan and targets. 

The Group’s system of internal control is regularly reviewed for its 

effectiveness in managing principal risks.The internal audit function 

focuses on areas of priority, and when any significant weaknesses 

have been identified, improvement measures are recommended to 

strengthen its internal control system.The internal audit reports are 

tabled at Audit Committee meetings on a quarterly basis, to monitor 

the Group’s progress in achieving the Group’s objectives. 

The Group’s Management team communicate regularly to monitor 

operational and financial performance as well as formulating action 

plans to address any areas of concern. Scheduled and ad-hoc 

meetings are held at operational and management levels to 

identify, discuss and resolve business and operational issues. 

CONCLUSION 

The Board is of the opinion that the system of internal control that 

has been instituted throughout the Group is satisfactory and has 

not resulted in any material losses that would require disclosure in 

the Group’s Annual Report. Notwithstanding this, the Board will 

continue to review the control procedures to ensure the 

effectiveness and adequacy of the internal control system of the 

Group.


STATEMENT ON DIRECTORS’ RESPONSIBILITIES 

The Directors are required to ensure that the Financial Statements of the Company and the Group are prepared and drawn up in 

accordance with the applicable “approved accounting standards” of Malaysia, the Listing Requirements of Bursa Securities and the 

provisions stated in the Companies Act, 1965, which give a true and fair view of the state of affairs of the Company and the Group, at the 

end of the financial year and of the results and cash flow position for the financial year ended 31 December 2006. 

In preparing the financial statements, the Directors have selected and applied consistently relevant and appropriate accounting policies, 

made reasonable judgements and estimates that are reasonable and prudent, and on a going concern basis. 

The Directors are also responsible for ensuring that the Company and the Group keep accounting records which disclose with reasonable 

accuracy the financial status of the Company and the Group, at any time and which enable them to confirm that the financial statements 

comply with the requirements of the provisions of the Companies Act, 1965 and the applicable approved accounting standards in 

Malaysia. In addition, the Directors have the general responsibility for taking reasonable steps to safeguard the assets of the Company and 

the Group to prevent and detect fraud and other irregularities.


31


ADDITIONAL DISCLOSURE 

(Pursuant to the Listing Requirements) 

The information set out below is disclosed in accordance with the 

Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa 

Securities”): 

1. SHARE BUY-BACKS DURING THE FINANCIAL YEAR 

The Company did not carry out any share buy-back exercise 

during the financial year ended 31 December 2006. 

2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES 

As at 31 December 2006, a total of 2,383,000 option shares have 

been granted pursuant to the Employees’ Share Option Scheme. 

None of these have been exercised.The Company has not issued 

any warrants or convertible securities during the financial year 

ended 31 December 2006. 

3. AMERICAN DEPOSITORY RECEIPTS (ADR)/GLOBAL 

DEPOSITORY RECEIPT (GDR) 

The Company has not sponsored any ADR / GDR programme 

during the financial year ended 31 December 2006. 

4. SANCTIONS/PENALTIES 

There were no sanctions and/or penalties imposed on the 

Company and its subsidiaries, directors and management by the 

relevant regulatory bodies during the financial year ended 31 

December 2006 other than the following:- 

On 15 November 2006, Bursa Securities had publicly 

reprimanded the Company for breach of paragraph 8.15(1) of 

the Listing Requirements for its failure to comply with the public 

shareholding spread requirement by 21 May 2006.The Company 

had only complied with the prescribed percentage public 

shareholding spread requirement pursuant to Paragraph 8.15(1) 

of the LR on 22 September 2006. 

Paragraph 8.15(1) of the Listing Requirements stipulates a listed 

issuer must have at least 25% of its issued and paid-up capital in 

the hands of a minimum number of 1,000 public shareholders 

holding not less than 100 shares each. 

Bursa Securities had imposed the public reprimand pursuant to 

Paragraph 16.17 of the Listing Requirements after taking into 

consideration all the circumstances of the case. 

5. NON-AUDIT FEES 

Non-audit fee amounting to RM840.00 was paid to the External 

Auditors for the financial year ended 31 December 2006. 

6. VARIATION IN RESULT 

The Company did not release any profit estimate, forecast or 

projection during the financial year. There was no significant 

variance between the results of the financial year and the 

unaudited results previously announced. 

7. PROFIT GUARANTEE 

There were no profit guarantee given by the Company and its 

subsidiaries during the financial year ended 31 December 2006. 

8. REVALUATION POLICY OF LANDED PROPERTIES 

The Company has not adopted a revaluation policy on its landed 

properties. 

9. MATERIAL CONTRACTS 

There were no material contracts including contracts relating to 

any loans entered into by the Company and its subsidiaries 

involving Directors and substantial shareholders’ interests 

during the financial year.

10. RELATED PARTY TRANSACTIONS 

At an Extraordinary General Meeting held on 15 June 2006, the 

Company obtained Shareholders’ Mandate to allow the Group to 

enter into recurrent related party transactions of a revenue or 

trading nature. 

In accordance with Section 4.1.5 of Practice Note No. 12/2001 of 

the Listing Requirements, the details of recurrent related party 

transactions conducted during the financial year ended 31 

December 2006 pursuant to the Shareholders’ Mandate are 

disclosed as follows: 

Name of Related Interested Nature of Value 

Company Party Director/Major Transactions of 

within the Shareholder/Persons RM’000 

Kosmo Tech Connected to them 

Group 

Nagatrend Kosmo Interest Director:- Trading of 8,860,000 

Sdn. Bhd. Kars Norhamzah bin Nordin automotive 

Sdn. Bhd. Mohd Azham bin parts and 

Mohd Noor accessories 

Interested Major 

Shareholder:- 

Kosmo Seraya Sdn. Bhd. 

Kosmo Altospektra Interest Director: Rental of 24,000 

Mobile Sdn. Bhd. Norhamzah bin Nordin demo vehicles 

Manufacturing Mohd Azham bin 

Sdn. Bhd. - Mohd Noor 

Interested Major 

Shareholder: 

Kosmo Seraya Sdn. Bhd. 


ADDITIONAL DISCLOSURE 

(CONT’D)


IN THE NEWS


35 

IN THE NEWS 

(CONT’D)


CALENDAR OF EVENTS 

February ‘06 - M.Mobile Launch May ‘06 - KLIMS 

Above: 

The Prime Minister was happy to be informed that Malaysia had become the 13th handphone 

producing country with M.Mobile’s successful launch of its first model, the M10. 

Above: 

The Prime Minister receiving a special gold coloured custom-made M10 as a token of 

M.Mobile’s appreciation. 

Above: 

Dato’ Dr. Nik, together with the President of the Malaysian Automotive Association (MAA) 

Datuk Aishah Ahmad and Norhamzah posing beside the KOSMO CNG, the first CNG bus 

chassis prototype to be designed and developed by a Malaysian company 

Left: 

The L22 got the thumbs-up from 

the Kosmo Tech group employees 

on duty at the Kuala Lumpur 

International Motorshow 2006. 

Below: 

Dato’ Dr. Nik got up close and 

personal with the Loremo L22, an 

affordable fuel-efficient car being 

developed by Loremo AG of 

Germany, a company in which 

Kosmo Tech owns 20% equity.

Above: 

The Directors of Kosmo Tech attended to shareholders’ questions at the 3rd Annual General 

Meeting held at The Saujana hotel in Subang, Selangor. 

Above and below: 

An Extraordinary General Meeting was held the week after at the company’s corporate 

heaquarters. 



(CONT’D) 

June ‘06 - AGM September ‘06 - M10 Hajj 

June ‘06 - EGM 

Above: 

The Kosmo Tech Chairman, Dato’ Dr. Nik Abd. Rashid, and Norhamzah accompany the 

Chairman of Lembaga Tabung Haji, Tan Sri Dato’ Zainol Mahmood, as the latter officially 

launched the M10 Hajj phone with useful information on the Muslim Hajj and Umrah rituals. 

Below: 

The deal is sealed - M.Mobile collaborated with Tabung Haji Technologies to provide the M10 

Hajj for Muslim pilgrims.



(CONT’D) 

October ‘06 - Buka Puasa 

Above and below: 

The Kosmo Tech group held a Buka Puasa event for clients, suppliers and media at the Head 

Office, in conjunction with M.Mobile’s i-Metro prize giving ceremony. Special guests at the 

event were children from Rumah Bakti Hulu Klang orphanage, who also received food 

hampers and new school bags. 

Above: 

Mawi, M.Mobile’s Brand Ambassador, presented a beaming winner of the i-Metro MMS contest 

with an M.Mobile goodie bag as the Chairman and CEO, Norhamzah, looks on. 

Below: 

The jubilant winners later received the added bonus of a group photograph with Norhamzah 

and Mawi.

November ‘06- Hari Raya Open House 



(CONT’D)

40 ANNUAL REPORT 2006

42 

46 

46 

47 

48 

49 

50 

51 

54 

Directors’ Report 

Statement By Directors 

Statutory Declaration 

Report Of The Auditors To The Members 

Of Kosmo Technology Industrial Berhad 

Balance Sheet 

Income Statements 

Statement Of Changes In Equity 

Cash Flow Statements 


FINANCIAL STATEMENTS 

Notes To The Financial Statements 

41

42 


DIRECTORS’ REPORT 


The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 

31 December 2006. 

PRINCIPAL ACTIVITIES 

The principal activity of the Company is investment holding. 

The principal activities of the subsidiary companies and associate company are disclosed in Notes 11 and 12 to the Financial Statements. 

There were no significant changes in the nature of principal activities of the Company, its subsidiary companies and associate company during the 

financial year. 

FINANCIAL RESULTS 

Group Company 

2006 2006 

RM RM 

Profit/(loss) for the financial year 

DIVIDENDS 

There were no dividends paid or declared by the Company since the end of the previous financial year. 

RESERVES AND PROVISIONS 

There were no material transfers to or from reserves or provisions during the financial year. 

ISSUE OF SHARES 

During the financial year, the following shares were issued:- 

Number of shares 

10,259,322 (454,709) 

Date of issue Class of shares at RM1.00 per share Purpose of issue 

23.6.2006 Ordinary 85,900 Conversion of ICULS into new ordinary shares 














There were no debentures issued during the financial year. 

IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS 

On 23 June 2005, a total of RM8,396,618 nominal value of 2% 3-year Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) was issued. 

The salient terms and feature of the ICULS are disclosed in Note 6 to the Financial Statements. 

The ICULS were issued and listed on Bursa Malaysia Securities Berhad on 23 June and 30 June 2005 respectively.


The movement of ICULS of the Company during the financial year are as follows:- 

At At 

1.1.2006 Conversion 31.12.2006 

First issued 8,396,618 (1,600,049) 6,796,569 

INFORMATION ON THE FINANCIAL STATEMENTS 

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:- 

(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied 

themselves that there were no bad debts to be written off and adequate allowance had been made for doubtful debts; and 

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business including their values as shown in the 

accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise. 

At the date of this report, the Directors are not aware of any circumstances:- 

(a) which would render it necessary to write off any bad debts or the amount of the allowance for doubtful debts in the financial statements of the 

Group and of the Company inadequate to any substantial extent; or 

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

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

or inappropriate. 

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the 

financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet its obligations as and when 

they fall due. 

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

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

other person; or 

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

OTHER STATUTORY INFORMATION 

The Directors state that:- 

At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or the financial statements which would 

render any amount stated in the financial statements misleading. 

In the opinion of the Directors:- 

(a) the results of operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or 

event of a material and unusual nature; and 

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material 

and unusual nature likely to affect substantially the results of operations of the Group and of the Company for the current financial year in which 

this report is made. 

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) 

The Employees’ Share Option Scheme was approved by the Securities Commission on 19 July 2006 and has a tenure of five (5) years from the date of 

the launch or implementation of the scheme which shall expire on 5 November 2011. 

The main features of the ESOS are as follows:- 

(a) the eligible persons are employees who have been confirmed as an employee of the Group and the employee must have served for a continuous 

period of at least one (1)year. 

(b) the total number of shares to be offered shall not exceed 15% of the issued and paid-up ordinary share capital of the Company at any point of 

time during the existence of the ESOS. 

(c) the ESOS shall be for a minimum of 100 ordinary shares and a maximum of 50% ordinary shares in multiples of 100 ordinary shares. 

(d) the ESOS shall be in force for a period of five (5) years and renewable for a further five years (subject to the approval of the Board). 

43 


(CONT’D)

44 



(CONT’D) 

EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) (cont’d) 

(e) the ESOS is personal to the grantee and is non-assignable. 

(f ) the option price shall be determined at a discount of not more than 50% from the weighted average market price of the Company’s ordinary 

shares of RM0.10 each for five (5) market days preceding the date of offer and shall in no event be less than the par value of the shares. 

The movement of options over unissued shares of the Company granted under the ESOS during the financial year are as follows:- 

Option Price At At 

RM 1.1.2006 Granted Exercised 

31.12.2006 

First Grant 1.00 - 2,383,000 - 2,383,000 

SIGNIFICANT EVENTS 

The significant events during the financial year and subsequent to the balance sheet date are disclosed in Note 26 to the Financial Statements. 

DIRECTORS 

The Directors in office since the date of the last report are as follows:- 

Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail (Independent Non-Executive Chairman) 

Norhamzah bin Nordin (Group Managing Director) 

Mohd Azham bin Mohd Noor (Group Executive Director) 

Dato’ Mukhriz Mahathir (Independent Non-Executive Director) 

Mohamad Nassir bin Mohd Kassim (Executive Director) 

Ravindran a/l Sivasubramaniam (Non-Executive Director) 

According to the Register of Directors’ shareholdings, the beneficial interests of those who were Directors at the end of the financial year in the shares 

of the Company are as follows:- 

Ordinary shares of RM1.00 each 

At At 

Company 1.1.2006 Bought Sold 31.12.2006 

Direct interest 

Norhamzah bin Nordin 6,520,000 - - 6,520,000 

Mohd Azham bin Mohd Noor 5,000,000 3,600,000 - 8,600,000 

Ravindran a/l Sivasubramaniam 1 1,000,000 - 1,000,001 

Mohamad Nassir bin Mohd Kassim 1 - - 1 

Indirect interest 

Norhamzah bin Nordin 51,700,000 850,000 (9,748,000) 42,802,000 

Ravindran a/l Sivasubramaniam - 5,000,000 - 5,000,000 

No other Directors at the end of the financial year held any interest in the shares of the Company or its related corporations during the financial year. 

DIRECTORS’ BENEFITS 

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors 

of the Company to acquire benefits by means of the acquisition of shares in the Company or any other body corporate. 

Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than those disclosed in Note 21 

to the Financial Statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a 

member, or with a company in which he has a substantial financial interest.

AUDIT COMMITTEE 

The members of the Audit Committee are:- 

• Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail (Chairman) 

• Dato’ Mukhriz Mahathir 

• Ravindran a/l Sivasubramaniam 

The functions of the Audit Committee are to review accounting policies, internal controls, financial results and annual financial statements of the Group 

and of the Company on behalf of the Board of Directors. 

In performing its functions, the Committee reviewed the overall scope of external audit. It met with the Group’s auditors to discuss the results of their 

examinations and their evaluation of the system of internal controls of the Group and of the Company. The Audit Committee also reviewed the 

assistance given by the officers of the Group and of the Company to the auditors. 

The Committee reviewed the financial statements of the Company and the consolidated financial statements of the Group as well as the auditor’s 

report thereon. 

AUDITORS 

Messrs Shamsir Jasani Grant Thornton have expressed their willingness to continue in office. 

On behalf of the Board 

................................................................... ) 

NORHAMZAH BIN NORDIN ) 

) 

) 

) 

) 

) 

) DIRECTORS 

) 

) 

) 

) 

) 

................................................................... ) 

MOHD AZHAM BIN MOHD NOOR ) 

Kuala Lumpur 

25 April 2007 


45 


(CONT’D)

46 


STATEMENT BY DIRECTORS 

In the opinion of the Directors, the financial statements set out on pages 42 to 80 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 state of affairs of the Group and of the Company as at 31 December 2006, and of the results and cash flows of the Group and of the Company for 

the financial year then ended. 

On behalf of the Board of Directors 

................................................................. ................................................................. 

NORHAMZAH BIN NORDIN MOHD AZHAM BIN MOHD NOOR 

Kuala Lumpur 

25 April 2007 

STATUTORY DECLARATION 

I, Norhamzah bin Nordin, being the Director primarily responsible for the financial management of Kosmo Technology Industrial Berhad, do solemnly 

and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 42 to 80 are correct and I make this solemn 

declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. 

Subscribed and solemnly declared by ) 

the abovenamed at Kuala Lumpur in ) 

the Federal Territory this day of ) 

25 April 2007 

Before me: 

) ................................................................... 

NORHAMZAH BIN NORDIN 

Commissioner for Oaths

We have audited the financial statements set out on pages 42 to 80 of Kosmo Technology Industrial Berhad. 

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 these 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 conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia.These standards require that we plan and perform 

the audit to obtain all the information and explanations, which we consider necessary to provide us with sufficient evidence to give reasonable 

assurance that the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant to the 

amounts and disclosures in the financial statements.An audit includes an assessment of the accounting principles used and significant estimates made 

by the 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 have been 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 state of affairs of the Group and of the Company as at 31 December 2006 and of the results and cash flows of the Group and of the 

Company for the financial year ended on that date; and 

(ii) 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 

b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and by the subsidiary 

companies have been properly kept in accordance with the provisions of the said Act. 

We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are 

in form and content appropriate and proper for the purposes of preparation of the consolidated financial statements and we have received satisfactory 

information and explanations required by us for those purposes. 

The auditors’reports on the financial statements of subsidiary companies were not subject to any qualification and did not include any comment made 

under Section 174 (3) of the Act. 

SHAMSIR JASANI GRANT THORNTON DATO’ N.K. JASANI 

(NO. AF : 0737) CHARTERED ACCOUNTANT 

CHARTERED ACCOUNTANTS (NO: 708/03/08(J/PH) ) 

PARTNER 

Kuala Lumpur 

25 April 2007 


REPORT OF THE AUDITORS TO THE MEMBERS OF 


47

48 


BALANCE SHEET 

AS AT 31 DECEMBER 2006 

Group Company 

Note 2006 2005 2006 2005 

RM RM RM RM 

SHARE CAPITAL 5 122,499,951 120,899,902 122,499,951 120,899,902 

2% IRREDEEMABLE CONVERTIBLE 

UNSECURED LOAN STOCKS (ICULS) 6 6,204,493 7,868,477 6,204,493 7,868,477 

ACCUMULATED LOSS (69,482,051 (79,741,373) (15,459,272) (15,004,563) 

SHAREHOLDERS’ FUNDS 59,222,393 49,027,006 113,245,172 113,763,816 

NON-CURRENT LIABILITIES 

Deferred taxation 7 483,600 295,600 - - 

Bank borrowings 8 57,500,000 50,828,884 57,500,000 50,000,000 

Finance creditors 9 631,148 872,264 - - 

2% Irredeemable convertible unsecured 

loan stocks (ICULS) 6 368,881 448,883 368,881 448,883 

118,206,022 101,472,637 171,114,053 164,212,699 

REPRESENTED BY: 

NON-CURRENT ASSETS 

Property, plant and equipment 10 14,497,840 12,369,980 - - 

Investment in subsidiary companies 11 - - 102,000,002 100,000,002 

Investment in associate company 12 9,767,614 - 11,000,000 - 

Other investments 13 5,238,425 5,001,925 5,236,500 5,000,000 

Development costs 14 21,337,827 194,439 - - 

Fixed deposits with licensed banks 15 5,163,112 8,924,272 - - 

Total non-current assets 

CURRENT ASSETS 

56,004,818 26,490,616 118,236,502 105,000,002 

Inventories 16 1,753,451 1,093,162 - - 

Trade receivables 17 63,606,643 30,092,764 - - 

Other receivables 18 21,941,806 25,066,644 100,000 16,963,233 

Amount due from subsidiary companies 11 - - 53,869,599 24,538,418 

Tax recoverable 251,450 251,450 - - 

Cash and bank balances 12,221,748 37,523,093 12,619 18,692,249 

Total current assets 

LESS: CURRENT LIABILITIES 

99,775,098 94,027,113 53,982,218 60,193,900 

Trade payables 16,797,212 5,330,746 - - 

Other payables 19 2,959,880 2,488,350 1,104,667 981,203 

Bank borrowings 8 6,435,217 4,455,565 - - 

Tax payable 11,381,585 6,770,431 - - 

Total current liabilities 37,573,894 19,045,092 1,104,667 981,203 

Net current assets 62,201,204 74,982,021 52,877,551 59,212,697 

118,206,022 101,472,637 171,114,053 164,212,699 

The accompanying notes form an integral part of the financial statements.

Group Company 

1.1.2006 30.6.2005 

to to 

Note 31.12.2006 31.12.2005 2006 2005 

RM RM RM RM 

Revenue 20 96,404,687 85,137,520 - - 

Cost of sales 20 (71,832,886) (62,060,405) - - 

Gross profit 24,571,801 23,077,115 - - 

Other income 2,320,646 1,456,804 3,637,185 - 

Selling and distribution expenses (1,203,283) (565,258) - (53,104) 

Administrative expenses (7,601,437) (3,011,478) (446,828) (288,230) 

Other expenses (131,588) (852,037) - - 

Profit/(Loss) from operations 17,956,139 20,105,146 3,190,357 (341,334) 

Finance costs (2,596,831) (2,649,526) (3,645,066) (1,867,323) 

Share of loss in associate company (1,232,386) - - - 

Profit/(Loss) before taxation 21 14,126,922 17,455,620 (454,709) (2,208,657) 

Taxation 22 (3,867,600) (5,228,874) - - 

Profit/(Loss) after taxation 10,259,322 12,226,746 (454,709) (2,208,657) 

Pre-acquisition profit - (7,395,607) - 

Profit/(loss) for the financial year 10,259,322 4,831,139 (454,709) (2,208,657) 

Attributable to: 

Equity holder of the Company 

Earnings per share attributable to equity 

holders of the Company (sen) 

10,259,322 4,831,139 (454,709) (2,208,657) 

-Basic 23 8.44 7.93 

-Diluted 23 7.98 7.42 

The accompanying notes form an integral part of the financial statements. 


49 

INCOME STATEMENTS 

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2006

50 


STATEMENT OF CHANGES IN EQUITY 

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2006 

Attributable to equity holders of the Company 

Non-distributable Distributable 

Unappropriated 

profit/ 

Share (Accumulated Total 

capital ICULS loss) Equity 

Group RM RM RM RM 

Balance as at 1 January 2005 2 - (1,000) (998) 

Issued pursuant to the Restructuring Scheme (Note 2) 120,899,900 - - 120,899,900 

Goodwill written-off arising from acquisition of subsidiary companies - - (71,776,606) (71,776,606) 

Settlement of scheme creditors by way of issuance of ICULS - 7,947,735 (8,396,618) (448,883) 

Shares issued for exchange of Nauticalink Berhad’s shares - - (1,999,900) (1,999,900) 

Restructuring expenses written-off - - (2,398,388) (2,398,388) 

Interest expenses - ICULS - (79,258) - (79,258) 

Profit for the financial year - - 4,831,139 4,831,139 

Balance as at 31 December 2005 120,899,902 7,868,477 (79,741,373) 49,027,006 

Conversion of ICULS 1,600,049 (1,520,047) - 80,002 


Profit for the financial year - - 10,259,322 10,259,322 


Company 

Balance as at 1 January 2005 2 - (1,000) (998) 

Issued pursuant to the Restructuring Scheme (Note 2) 120,899,900 - - 120,899,900 

Settlement of scheme creditors by way issuance of ICULS - 7,947,735 (8,396,618) (448,883) 

Shares issued for exchange of Nauticalink Berhad’s shares - - (1,999,900) (1,999,900) 

Restructuring expenses written-off - - (2,398,388) (2,398,388) 


Loss for the financial year - - (2,208,657) (2,208,657) 


Conversion of ICULS 1,600,049 (1,520,047) - 80,002 

Interest expenses - ICULS (143,937) - (143,937) 

Loss for the financial year - - (454,709) (454,709) 


The accompanying notes form an integral part of the financial statements.


Group Company 

1.1.2006 30.6.2005 

to to 

Note 31.12.2006 31.12.2005 2006 2005 

RM RM RM RM 

CASH FLOWS FROM OPERATING ACTIVITIES 

Profit/(Loss) before taxation 

Adjustments for :- 

14,126,922 17,455,620 (454,709) (2,208,657) 

Allowance for doubtful debts 78,338 180,000 - - 

Depreciation 2,077,890 735,715 - - 

Gain on disposal of property, plant and equipment (251,624) (42,797) - - 

Interest income (213,735) (109,971) (3,637,123) - 

Interest expenses 4,445,058 2,579,969 3,644,700 1,866,977 

Pre-acquisition profit - (7,395,607) - - 

Inventories written off 36,041 - - - 

Allowance for slow moving inventories 24,666 - - - 

Share of loss in associate company 1,232,386 - - - 

Operating profit/(loss) before working capital changes 21,555,942 13,402,929 (447,132) (341,680) 

Changes in working capital:- 

Inventories (720,996) (377,523) - - 

Receivables (30,409,780) (4,470,543) 16,863,233 (16,320,279) 

Payables 11,135,628 (7,279,535) (844,550) (600,251) 

Director - (20,000) - - 

Subsidiary companies - - (25,694,058) (13,638,420) 

Cash generated from/(used in) operations 1,560,794 1,255,328 (10,122,507) (30,900,630) 

Interest paid (3,620,981) (1,721,727) (2,820,623) (1,008,735) 

Interest received 213,735 109,971 - - 

Tax recoverable/(paid) 931,554 (5,050,405) - - 

Net cash used in operating activities (914,898) (5,406,833) (12,943,130) (31,909,365) 

CASH FLOWS FROM INVESTING ACTIVITIES 

Acquisition of subsidiaries, net of cash acquired A - 1,004,568 - - 

Restructuring expense - (2,398,388) - (2,398,388) 

Development expenditure (21,143,388) (194,439) - - 

Purchase of property, plant and equipment B (4,252,107) (2,208,672) - - 

Proceeds from disposal of property, plant and equipment 456,661 42,800 - - 

Investment in bonds - (5,000,000) - (5,000,000) 

Investment in shares (236,500) - (236,500) - 

Investment in associate company (11,000,000) - (11,000,000) - 

Investment in subsidiary company - - (2,000,000) - 

Net cash used in investing activities (36,175,334) (8,754,131) (13,236,500) (7,398,388) 

CASH FLOWS FROM FINANCING ACTIVITIES 

Placement of fixed deposits with licensed banks (410,516) (8,924,272) - - 

Repayment of finance creditors (565,442) (197,223) - - 

Drawndown of term loans 7,500,000 50,000,000 7,500,000 50,000,000 

Repayment of term loans (452,145) (166,932) - - 

Drawndown of bankers’ acceptance 432,072 - - - 

Repayment of bankers’ acceptance (169,057) - - - 

Proceeds from issuance of shares - 8,000,000 - 8,000,000 

Drawndown of trust receipts 1,322,290 - - - 

Withdrawal of fixed deposits with licensed bank 4,114,077 - - - 

Net cash from financing activities 11,771,279 48,711,573 7,500,000 58,000,000 

51 

CASH FLOW STATEMENTS 

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2006

52 



FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2006 (CONT’D) 

Group Company 

1.1.2006 30.6.2005 

to to 

Note 31.12.2006 31.12.2005 2006 2005 

RM RM RM RM 

CASH AND CASH EQUIVALENTS 

Net(decrease)/increase (25,318,953) 34,550,609 (18,679,630) 18,692,247 

Brought forward 34,550,611 2 18,692,247 2 

Carried forward 

C 9,231,658 34,550,611 12,619 18,692,249 

NOTES TO THE CASH FLOW STATEMENTS 

A. ACQUISITION OF SUBSIDIARY COMPANIES 

The fair value of assets acquired and liabilities assumed of the subsidiary companies acquired in previous financial year were as follows: 

Group 

2005 

RM 

Bank borrowings (2,478,899) 

Bank overdrafts (4,859,209) 

Cash and bank balances 3,195,570 

Deferred taxation (7,600) 

Deposits with licensed financial institutions 2,668,207 

Director (20,000) 

Hire purchase creditors (615,636) 

Inventories 715,639 

Other investment 1,925 

Payables (16,502,056) 

Property, plant and equipment 2,735,064 

Receivables 50,018,901 

Tax payable (6,628,512) 

Share of net assets acquired 28,223,394 

Goodwill 71,776,606 

Cost of investment 

Non-cash purchase consideration 

100,000,000 

-share capital (100,000,000) 

Company’s cash flow on acquisition 

Cash and cash equivalents acquired 

- 

-cash and bank balances 3,195,570 

-deposits with licensed financial institution 2,668,207 

-bank overdrafts (4,859,209) 1,004,568 

Group’s cash inflow on acquisition, net of cash and cash equivalents acquired 1,004,568



FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2006 (CONT’D) 

B. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT 

The Group acquired property, plant and equipment with an aggregate cost of RM4,410,787 (2005: RM10,370,634) of which RM158,680 (2005: 

RM661,962) were acquired by means of hire purchase and Nil (2005: RM7,500,000) were acquired by issuance of share capital. Cash payments of 

RM4,252,107 (2005: RM2,208,672) were made to purchase the property, plant and equipment. 

C. CASH AND CASH EQUIVALENTS 

Cash and cash equivalents included in the cash flow statements comprise the following balance sheets amounts:- 

Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Cash and bank balances 12,221,748 37,523,093 12,619 18,692,249 

Bank overdrafts (Note 8) (2,990,090) (2,972,482) - - 

9,231,658 34,550,611 12,619 18,692,249 

53

54 


NOTES TO THE FINANCIAL STATEMENTS 

31 DECEMBER 2006 

1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS 

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 MASB Approved Accounting Standards in Malaysia for Entities Other Than Private Entities. 

2. FINANCIAL RISK MANAGEMENT POLICIES 

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s 

business whilst managing its risks.The Group operates within policies that are approved by the Board of Directors and the Group’s policy is not to 

engage in speculative transactions. 

The main areas of financial risks faced by the Group and the policy in respect of the major areas of treasury activity are set out as follows:- 

(a) Foreign currency risk 

The Group is exposed to foreign currency risk as a result of its normal operating activities, both external and intra-group where the currency 

denomination differs from the local currency, Ringgit Malaysia (RM). The Group’s policy is to minimise the exposure of overseas activities to 

transaction risk by matching local currency income against local currency costs. 

(b) Interest rate risk 

The Group’s policy is to borrow principally on the floating rate basis but to retain a proportion of fixed rate debt. The objectives for the mix 

between fixed and floating rate borrowings are set to reduce the impact of an upward change in interest rates while enabling benefits to be 

enjoyed if interest rates fall. 

(c) Credit risk 

The credit risk is controlled by the application of credit approvals, limits and monitoring procedures. An internal credit review is conducted if 

the credit risk is material. 

(d) Market risk 

For key product purchases, the Group establishes floating and fixed price levels that the Group considers acceptable and enters into physical 

supply agreements, where necessary, to achieve these levels. The Group does not face significant exposure from the risk of changes in price 

levels. 

(e) Liquidity and cash flow risks 

The Group seeks to achieve a balance between certainty of funding even in difficult times for the markets or the Group and a flexible, costeffective 

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. 

3. SIGNIFICANT ACCOUNTING POLICIES 

(a) Accounting convention 

The financial statements of the Group and of the Company are prepared under the historical cost convention, unless otherwise indicated in 

the other significant accounting policies. 

The financial statements of the Group and of the Company are presented in its functional currency, Ringgit Malaysia (RM). 

(b) Adoption of Financial Reporting Standards (“FRS”) 

The following applicable FRSs have been adopted by the Group and the Company effective for financial period beginning on or after 1 January 2006:- 

FRS 2 Share-based Payment 

FRS 3 Business Combinations 

FRS 101 Presentation of Financial Statements 

FRS 102 Inventories 

FRS 107 2004 Cash Flow Statements 

FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors 

FRS 110 Events After the Balance Sheet Date 

FRS 112 2004 Income Taxes 

FRS 114 2004 Segment Reporting



31 DECEMBER 2006 (CONT’D) 

3. SIGNIFICANT ACCOUNTING POLICIES (cont’d) 

(b) Adoption of Financial Reporting Standards (“FRS”) cont’d) 

FRS 116 Property, Plant and Equipment 

FRS 118 2004 Revenue 

FRS 119 2004 Employee Benefits 

FRS 121 The Effect of Changes in Foreign Exchange Rates 

FRS 123 2004 Borrowing Costs 

FRS 127 Consolidated and Separate Financial Statements 

FRS 128 Investments in Associates 

FRS 132 Financial Instruments : Disclosure and Presentation 

FRS 133 Earnings Per Share 

FRS 134 Interim Financial Reporting 

FRS 136 Impairment of Assets 

FRS 137 2004 Provisions, Contingent Liabilities and Contingent Assets 

FRS 138 Intangible Assets 

The adoption of FRS 2, 101, 102, 1072004, 108, 110, 1122004, 1142004, 116, 1182004, 1192004, 121, 1232004, 127, 128, 132, 133, 134, 136, 1372004 and 138 

do not have significant financial impact on the Group and the Company. 

The Group and the Company have not adopted the following:- 

(a) FRSs that are mandatory for financial periods beginning on or after 1 October 2006:- 

(i) FRS 117 - Leases 

(ii) FRS 124 - Related Party Disclosures 

FRS 117 is not relevant to the Company’s operations. 

(b) FRSs and amendment that are mandatory for financial periods beginning on or after 1 January 2007:- 

(i) FRS 6 - Exploration for and Evaluation of Mineral Resources 

FRS 6 is not relevant to the Group’s and Company’s operations. 

(ii) Amendment to FRS 1192004: Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures 

Amendment to FRS 1192004 is not relevant to the Group’s and Company’s operations. 

(c) Deferred FRS 139 - Financial Instruments: Recognition and Measurement 

The Malaysian Accounting Standards Board has yet to announce the effective date of this standard. 

(c) Significant Accounting Estimates and Judgements 

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements.They affect the application 

of the Group’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on 

an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable 

under the circumstances. 

(i) Key sources of estimation uncertainty 

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have significant 

risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:- 

Impairment of goodwill 

The Group determines whether goodwill are impaired at least once annually. This requires the estimation of the value in use of the cashgenerating 

units to which goodwill are allocated. Estimating the value in use requires the Group to make an estimate of the expected future 

cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. 

55

56 





(i) Key sources of estimation uncertainty (cont’d) 

Income taxes 

The Group is exposed to income taxes in numerous jurisdictions. Significant judgement is involved in determining the Group-wide 

provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during 

the ordinary course of business.The Group recognised tax liabilities based on estimates of whether additional taxes will be due.Where the 

final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax 

and deferred tax provisions in the period in which such determination is made. 

Depreciation of property, plant and equipment 

Property, plant and equipment are depreciated in a straight-line basis over their useful life. Management estimated the useful life of these 

assets to be within 5 years except for the long leasehold land which is 50 years. Changes in the expected level of usage and technological 

developments could impact the economic useful life and the residual values of these assets, therefore future depreciation charges could 

be revised. 

Amortisation and development costs 

The development costs are amortised in a straight-line basis over the life span of the developed assets. Management estimated the useful 

life of these assets to be within 3 years. Changes in the technological developments could impact the economic useful life and the residual 

values of these assets, therefore future amortisation charges could be revised. 

The Group carried out impairment test based on a variety estimation including the value-in-use of Cash Generating Unit (“CGU”) to which 

the development costs are allocated. Estimating the value-in-use requires the Company to make an estimate of the expected future cash 

flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying 

amount of development costs of the Group as at 31 December 2006 is RM21,337,827 (2005: RM194,439). 

(d) Basis of consolidation 

The Group financial statements consolidate the audited financial statements of the Company and all its subsidiary companies, which have 

been prepared in accordance with the Group’s accounting policies. 

All inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated; unrealised losses are 

also eliminated on consolidation unless cost cannot be recovered. 

The financial statements of the Company and its subsidiary companies are all drawn up to the same reporting date. 

Acquisition of subsidiary companies is accounted for using the purchase method. The cost of an acquisition is measured as the fair value of 

the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the 

acquisition. Identifiable assets acquired and 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 excess of the cost of the business combination over the group’s interest in the net fair value of the identifiable assets, liabilities and 

contingent liabilities represents goodwill. Goodwill is accounted for in accordance with the accounting policy for goodwill stated in Note 3 (l). 

Any excess of the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of business 

combination is recognised as income on the date of acquisition. 

Minority interests represent the portion of profit or loss and net assets in subsidiary companies not held by the Group. They are presented in 

the consolidated balance sheet within equity, separately from the parent shareholders’equity, and are separately disclosed in the consolidated 

income statement. 

Subsidiary companies are consolidated using the purchase method of accounting from the date on which control is transferred to the Group 

and are no longer consolidated from the date that control ceases. 

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets 

together with any unamortised balance of goodwill on acquisition and exchange differences.





(e) Subsidiary companies 

A subsidiary company is a company in which the Group or the Company either directly or indirectly owns a power to govern the financial and 

operating policies of an enterprise so as to obtain benefits from its activities. 

Investment in subsidiary companies is stated at cost. Where an indication of impairment exists, the carrying amount of the subsidiary 

companies is assessed and written down immediately to their recoverable amount. 

(f ) Associate companies 

An associate company is a company in which the Company or the Group is in the position to exercise significant influence over its financial 

and operating policies through management participation but not to exert control over those policies. 

Investment in associate companies are accounted for in the consolidated financial statements using equity accounting which involves 

recognising in the income statement the Group’s share of the results of associate companies based on audited financial statements of the 

associate companies. The Group’s investment in associate companies are carried in the balance sheet at an amount that reflects its share of 

the net assets of the associate companies. Equity accounting is discontinued when the carrying amount of the investment in an associate 

company reaches zero, unless the Group has incurred obligations or guaranteed obligations in respect of the associate company. 

Investment in associate companies is stated at cost. Where an indication of impairment exists, the carrying amount of the associate company 

is assessed and written down immediately to their recoverable amount. 

(g) Foreign currency translation 

Transaction in foreign currencies are recorded in Malaysian Ringgit at rates of exchange ruling at the date of the transactions. Foreign 

currencies monetary assets and liabilities are translated at balance sheet date. 

Gains and losses from conversion of short term assets and liabilities, whether authorised or unrealised, are included in the income statement 

as they arise. 

All other foreign exchange differences are taken to the income statement in the financial year in which they arise. 

(h) Property, plant and equipment and depreciation 

Property, plant and equipment are stated at cost less accumulated depreciation. All property, plant and equipment are stated at historical cost 

less accumulated depreciation and less any impairment losses. Depreciation on property, plant and equipment is provided on a straight line 

method in order to write off each property, plant and equipment over its estimated useful lives. 

The principal annual depreciation rates used are as follows:- 

Long leasehold land and building 2% 

Computers 20% 

Plant and machineries 20% 

Furniture and fittings 20% 

Office equipment 20% 

Motor vehicles 20% 

Renovations 20% 

Restoration cost relating to an item of the property, plant and equipment is capitalised only if such expenditure is expected to increase the 

future benefits from the existing property, plant and equipment beyond its previous assessed standard of performance. 

Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. 

Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an 

arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. 

The residual values, useful life 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. 

57

58 





(h) Property, plant and equipment and depreciation (cont’d) 

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or 

disposal. Any gain or loss arising on derecognition of the asset is included in the income statements in the financial year the asset is derecognised. 

(i) Inventories 

Inventories are stated at the lower of cost and net realisable value after adequate allowance has been made for deteriorated, obsolete and 

slow moving inventories. 

Cost of raw materials is determined using weighted average method. Cost of work-in-progress and finished goods is determined using the 

first-in-first-out basis, which approximates the actual cost and includes direct materials, labour and an appropriate proportion of 

manufacturing overheads. 

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated 

costs necessary to make the sale. 

(j) Investments 

Investment is shown at cost and allowance is only made where, in the opinion of the Directors, there is a diminution in value. Diminution in 

the value of an investment is recognised as an expense in the period in which the diminution is identified. 

Marketable securities are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investment. 

Cost is derived using the weighted average basis. Market value is calculated by reference to stock exchange quoted selling prices at the close 

of business on the balance sheet date. Increases or decreases in the carrying amount of marketable securities are credited or charged to the 

income statement. 

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

(k) Research and development costs 

Expenditure on research activities is recognised as an expense in the period in which it is incurred. 

Research and development cost are expensed in the period in which they are incurred except when the cost incurred on development project 

are recognised as development assets to the extent that such expenditure is expected to generate future economic benefits. 

Development cost initially recognised as an expense is not recognised as an asset in subsequent periods. 

Capitalised development cost, considered to have finite useful life, is amortised on a systematic basis over their expected useful lives which is 

3 years commencing from the time when the product is available for sale and assessed for impairment whenever there is an indication that 

the development cost may be impaired. Should the product or project be aborted, the relative expenditure will be charged to the income 

statement in the period in which such decision is made. 

The amortisation period and the amortisation method for the development cost with a finite useful life are reviewed at least at each financial year end. 

The amortisation expense on development cost with finite useful life is recognised in the income statement in the expenses category. 

(l) Deferred tax assets and liabilities 

Deferred tax liabilities and assets are provided for under the liability method at the current tax rate in respect of all temporary differences 

between the carrying amount of an asset or liability in the balance sheet and its tax base including unused tax losses and capital allowances. 

A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available against which the deductible 

temporary differences can be utilised. The carrying amount of a deferred tax asset is reviewed at each balance sheet date. If it is no longer 

probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying 

amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such 

reductions will be reversed to the extent of the taxable profit. 

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on 

tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except 

when it arises from a transaction which is recognised 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.





(m) Goodwill 

Goodwill represents the excess of the cost of acquisition of subsidiary company acquired over the Group’s share of the fair values of their 

separable net assets at the date of acquisition. 

The goodwill arose from the listing of and quotation for the Company on the Second Board of Bursa Malaysia in the previous year is written 

off immediately against the unappropriated profit. Other goodwill will be retained in the Group’s balance sheet and subject to annual 

impairment review. 

(n) Receivables 

Receivables are carried at anticipated realisable value. Bad debts are written off in the year in which they are identified. An estimate is made 

for doubtful debts based on a review of all outstanding amounts at the financial year end. 

(o) Payables 

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. 

(p) Cash and cash equivalents 

Cash and cash equivalents comprise cash on hand, balances with banks, short term demand deposits and highly liquid investments which are 

readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. 

(q) Assets acquired under hire purchase and lease agreements 

The cost of property, plant and equipment acquired under hire purchase arrangements is capitalised. The depreciation policy on these assets 

is similar to that of the Group’s property, plant and equipment depreciation policy. Outstanding obligation due under the hire purchase 

agreements after deducting finance expenses are included as liabilities in the financial statements. Finance charges on hire purchase 

agreements are allocated to income statement over the period of the respective agreements. 

(r) Revenue recognition 

Revenue from the sale of goods is recognised upon delivery of goods. 

Income from rental and interest are included in the income statement when the right to receive has been established. 

(s) Financial instruments 

Financial instruments carried on the balance sheet include cash and bank balances, investments, receivables, payables and borrowings. The 

particular recognition methods adopted are disclosed in the individual accounting policy statements associated with each item. 

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. Distribution 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 set off the recognised amounts and intends either to settle 

on a net basis, or to realise the asset and settle the liability simultaneously. 

(t) Impairment of assets 

At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication of impairment. 

Intangible assets with indefinite useful life such as goodwill is tested for impairment at least once annually or more frequently if events or 

changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. 

If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an 

impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. 

Recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and 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. Impairment losses of continuing operations are 

recognised in the income statement in those expense categories consistent with the function of the impaired asset. 

An impairment loss is recognised as an expense in the income statement immediately, unless the asset is carried at a revalued amount. Any 

impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any unutilised previously recognised revaluation 

surplus for the same asset. 

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(t) Impairment of assets (cont’d) 

An assessment is made at each balance sheet date as to whether there is any indication that previously recognised impairment losses for an 

asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A 

previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable 

amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no 

impairment loss been recognised for the asset in prior years. 

All reversals of impairment losses are recognised as income immediately in the income statement unless the asset is carried at revalued 

amount, in which case the reversal in excess of impairment loss previously recognised through the income statement is treated as revaluation 

increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the revised carrying amount of the asset, less 

any residual value, on a systematic basis over its remaining useful life. 

An impairment loss recognised for goodwill shall not be reversed in a subsequent period. 

(u) Interest-bearing borrowings 

Interest-bearing borrowings are recorded at the amount of proceeds received. 

All borrowing costs are recognised as expenses in the income statement in the year in which they are incurred. 

(v) Borrowing costs 

Borrowing costs attributable to the acquisition, construction or production of an asset during periods when activities necessary to prepare the 

asset for its intended use are in progress, are capitalised as a component of the cost of the asset. Such capitalisation ceases when substantially 

all activities necessary to prepare the asset for its intended use are completed. 

All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred. 

(w) Employee benefits 

(i) Short term benefit 

Wages, salaries, bonuses and social security contributions are recognised as an expense 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 recognised 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 recognised when the absences occur. 

(ii) Defined contribution plan 

The Company’s contribution to defined contribution plan are charged to the income statement in the year in which they relate. 

(iii) Equity Compensation benefits 

The Employee Share Option Scheme (“ESOS”) allows the Group’s employees to acquire shares of the Company. No compensation cost or 

obligation is recognised. When the options are exercised, equity is increased by the amount of the proceeds received. 

(x) Segmental results 

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a 

reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, 

inventories, intangibles and property, plant and equipment, net of provision and accumulated depreciation and amortisation. While most of 

such assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include deferred income 

taxes. 

(y) Intersegment transfer 

Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment transactions are the same 

as those charged for similar goods to parties outside of the Group at arm’s length transactions.These transfers are eliminated on consolidation. 

(z) Dividends 

Dividends on ordinary shares are accounted for in shareholders’ equity as an appropriation of unappropriated profits in the period in which 

they are declared and approved.




4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION 

The principal activity of the Company is investment holding. 

The principal activities of the subsidiary companies and associate company are disclosed in Notes 11 and 12 to the financial statements. 

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

Berhad. The registered office of the Company is located at Level 14, Uptown 1, No. 1, Jalan SS 21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor 

Darul Ehsan. 

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 25 April 2007. 

5. SHARE CAPITAL 

Group and Company 

2006 2005 

RM RM 

Authorised:- 

Ordinary shares of RM1 each 

Brought forward 500,000,000 100,000 

Created during the financial year - 499,900,000 


Issued and fully paid :- 

Ordinary shares of RM1 each 

500,000,000 500,000,000 

Brought forward 

Issued during the financial year 

120,899,902 2 

Conversion of ICULS - 120,899,900 

1,600,049 - 

Carried forward 122,499,951 120,899,902 

6. 2% 3-YEAR IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS 2005/2008 (“ICULS”) 

Group and Company 

2006 2005 

RM RM 

Brought forward 8,396,618 - 

Issued during the financial year - 8,396,618 

Conversion into ordinary shares (1,600,049) - 

6,796,569 8,396,618 

Less: Interest expense (223,195) (79,258) 


Analysed into:- 

6,573,374 8,317,360 

Equity component 7,868,477 7,947,735 

Less: Conversion into ordinary shares (1,520,047) - 

Less: Interest expense (143,937) (79,258) 

6,204,493 7,868,477 

Liability component 448,883 448,883 

Less: Conversion into ordinary shares (80,002) - 

368,881 448,883 

Carried forward 6,573,374 8,317,360 

The ICULS are issued pursuant to settlement of debts owing to the scheme creditors of Nauticalink Berhad (“NB”). 

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The salient features of ICULS are as follows:- 

(i) Conversion price 

The conversion of each ICULS into ordinary shares is at conversion price of RM1.00 each. 

(ii) Conversion period 

The ICULS can be converted into new ordinary shares at the option of the holder from the date of issuance of ICULS and the date of listing of 

the ICULS up to but excluding the maturity date, which is three (3) years from the date of issue. 

(iii) Redeemability 

It is not redeemable for cash. Unless previously converted, all outstanding ICULS will be mandatory converted into new ordinary shares at the 

conversion price at the maturity date of the ICULS. 

(iv) Coupon rate 

The ICULS bear a coupon rate of 2% per annum and payable semi-annually in arrears. 

On issuance of the ICULS which contain both liability and equity element, the fair value of the liability portion is determined using a market interest 

rate for an equivalent financial instrument and the Company is using 6% per annum as the discounting factor.These amounts are carried as liability 

until extinguished on conversion or maturity of the ICULS.The remaining proceeds are allocated to the conversion option which is recognised and 

included in shareholders’ equity. 

The ICULS were issued on 23 June 2005 and listed on Bursa Malaysia on 30 June 2005. 

7. DEFERRED TAXATION 

Group 

2006 2005 

RM RM 

Brought forward 295,600 - 

Addition through acquisition of subsidiaries - 7,600 

Transferred from income statements 188,000 288,000 

Carried forward 483,600 295,600 

The balance in the deferred taxation is made up of temporary differences arising from:- 

Group 

2006 2005 

RM RM 

Carrying amount of property, plant and equipment in excess of their tax base 483,600 295,600

8. BANK BORROWINGS 




Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Secured 

Trust receipts 1,513,562 - - - 

Term loans 58,231,565 51,183,710 57,500,000 50,000,000 

Bankers’ acceptance 1,200,000 1,128,257 - - 

Bank overdrafts 2,990,090 2,972,482 - - 

63,935,217 55,284,449 57,500,000 50,000,000 

Repayable not later than one year 

- Trust receipts 1,513,562 - - - 

- Term loans 731,565 354,826 - - 

- Bankers’ acceptance 1,200,000 1,128,257 - - 

- Bank overdrafts 2,990,090 2,972,482 - - 

Repayable later than one year and not later than five years 

6,435,217 4,455,565 - - 

- Term loans 57,500,000 50,828,884 57,500,000 50,000,000 

63,935,217 55,284,449 57,500,000 50,000,000 

The term loans of the subsidiary companies comprise the following:- 

Term loan I 

A term loan from a licensed bank amounting to RM52,000 which bears interest at the rate of 2% above Bank’s Base Lending Rate (BLR) per annum. 

It is repayable by sixty equal monthly instalments of RM2,169 each until the full settlement of the loan. 

Term loan II 

A term loan from the same licensed bank amounting to RM1,167,000 which bears interest at the rate of 2% above Bank’s Base Lending Rate (BLR) 

per annum. The loan is repayable by sixty equal monthly instalments of RM22,561 each until the full settlement of the loan. 

The above term loan I was combined with term loan II effective on 26th July 2006 amounting to RM1,086,249.38 with the same licensed bank at 

the rate of 4.8% per annum. The loan is repayable by twelve equal monthly instalment of RM94,863.23 each. 

Term loan III 

The term loan bears interest at the rate of 5.0% (2005: 5.0%) per annum above Bank Negara Malaysia funding rate and is repayable by monthly 

instalments. 

Term loan IV 

The unsecured term loan bears interest at the rate of 6.5% - 7.13% (2005: 7.5%) per annum and repayable in one lump sum on the last day of the 

tenor of the facility. 

The term loan I and II of the subsidiary company are guaranteed by Credit Guarantee Corporation Berhad (CGC) under the New Principal 

Guarantee Scheme (NPGS) and secured by way of a Corporate Guarantee of the Company. 

The term loan I, II and III, bank overdraft, trust receipt and bankers’acceptance are secured by way of an open debenture creating a first fixed charge 

on the subsidiary companies’ property, plant and equipment and a first floating charge over the whole of the subsidiary companies’ undertakings 

and other properties and assets of the subsidiary companies and a lien over their fixed deposits as mentioned in Note 15 to the Financial 

Statements. 

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64 




8. BANK BORROWINGS (cont’d) 

Term loan III is under the Tabung Usahawan Baru funded by Bank Negara Malaysia and secured by way of a Corporate Guarantee of the Company 

and a subsidiary company. 

All the above loans facilities of the subsidiary companies are jointly and severally guaranteed by certain Directors of the Company and of the subsidiary 

companies. 

Interest on bank overdrafts is charged at rates of 5.00% to 8.75% (2005:3.50% to 6.00%) per annum. 

Bankers’ acceptance is charged at a fixed rate of 1.50% (2005: 1.50%). 

Term loan of the Company is under the Primary Collaterised Loan Obligation Programme by a licensed bank managed by an asset management 

company and secured by way of subscribing of the bond issue by Capone Berhad. The interest bears at the rate of 6.5% to 7.3% (2005: 7.13%) per 

annum and repayable in one lump sum on the last day of the maturity of the loan. 

9. FINANCE CREDITORS 

Group 

2006 2005 

RM RM 

Hire purchase creditors 880,623 1,146,950 

Finance lease creditors - 140,435 

Minimum instalment payment 

880,623 1,287,385 

- within 1 year 290,602 460,989 

- after 1 year but not later than 5 years 733,791 1,051,601 

- more than 5 years 16,932 20,636 

1,041,325 1,533,226 

Interest in suspense (160,702) (245,841) 

Present value 

880,623 1,287,385 

- within 1 year 249,475 415,121 

- after 1 year but not later than 5 years 619,797 854,900 

- more than 5 years 11,351 17,364 

880,623 1,287,385 

The amount payable within one year has been included in other payables.




10. PROPERTY, PLANT AND EQUIPMENT 

Long 

Furniture, 

fittings, 

office 

equipment, 

Leasehold renovation 

land and Plant and Motor and other Total Total 

Group building machinery vehicle equipment 2006 2005 

Cost RM RM RM RM RM RM 

Brought forward 7,500,000 3,220,185 1,219,056 9,238,570 21,177,811 - 

Additions through acquisition 

of subsidiaries - - - - - 10,923,640 

Additions - 3,233 178,006 4,229,548 4,410,787 10,370,634 

Disposals - (1,147,355) (171,714) - (1,319,069) (116,463) 

Carried forward 7,500,000 2,076,063 1,225,348 13,468,118 24,269,529 21,177,811 

Accumulated depreciation 

Brought forward 

Additions through acquisition 

37,500 2,971,331 363,471 5,435,529 8,807,831 - 

of subsidiaries - - - - - 8,188,576 

Charge for the financial year 150,000 89,348 201,864 1,636,678 2,077,890 735,715 

Disposals - (1,008,142) (105,890) - (1,114,032) (116,460) 


Net carrying amount 

187,500 2,052,537 459,445 7,072,207 9,771,689 8,807,831 

2006 7,312,500 23,526 765,903 6,395,911 14,497,840 - 

2005 

Depreciation charge for the 

financial period ended 

7,462,500 248,854 855,585 3,803,041 - 12,369,980 

31 December 2005 37,500 55,379 120,999 521,837 - 735,715 

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10. PROPERTY, PLANT AND EQUIPMENT (cont’d) 

Analysis of land and building as at 31 December:- 

Long Long 

leasehold leasehold Total Total 

land building 2006 2005 

Cost RM RM RM RM 

Brought forward/carried forward 3,310,000 4,190,000 7,500,000 7,500,000 

Accumulated depreciation 

Brought forward 16,550 20,950 37,500 - 

Charge for the financial year 66,200 83,800 150,000 37,500 


Net carrying amount 

82,750 104,750 187,500 37,500 

2006 3,227,250 4,085,250 7,312,500 - 

2005 3,293,450 4,169,050 - 7,462,500 

Depreciation charge for the financial period 

ended 31 December 2005 16,550 20,950 - 37,500 

(a) The long leasehold land and building of the Group are pledged to licensed banks for banking facilities granted to a subsidiary company. 

(b) The net carrying amount of property, plant and equipment of the Group which are financed by hire purchase facilities amounted to RM1,025,977 

(2005: RM350,342). 

11. INVESTMENT IN SUBSIDIARY COMPANIES 

Group 

2006 2005 

RM RM 

Unquoted shares - At cost 102,000,002 100,000,002 

The particulars of the subsidiary companies, all incorporated in Malaysia, are as follows:- 

Effective 

Place of equity 

Name of Company incorporation interest Principal activities 

2006 2005 

% % 

1. Kosmo Motor Company Malaysia 100 100 Import, assembly, distribution 

Sdn. Bhd. and maintenance of commercial vehicles 

2. Hexariang Sdn. Bhd. Malaysia 100 100 Investment holding company 

. Subsidiary company of Kosmo Motor Company Sdn. Bhd.:- 

1.1 Duta Ocean Sdn. Bhd Malaysia 100 - Dormant 

Subsidiary companies of Hexariang Sdn. Bhd.: 

2.1 Nagatrend Sdn. Bhd. Malaysia 100 100 Manufacture and sale of car accessories




11. INVESTMENT IN SUBSIDIARY COMPANIES (cont’d) 

Place of 

Effective 

equity 


2006 2005 

% % 

Subsidiary company of Nagatrend Sdn. Bhd.:- 

2.1.1. Nagatrend Malaysia 100 100 Manufacture and sale of car accessories 

Engineering Sdn. Bhd. and acts as general contractor 

2.2 Kosmo Mobile Malaysia 100 100 Manufacture of plastic injection and moulded 

Manufacturing Sdn. Bhd. parts, assembly sale of car accessories and 

manufacturing of mobile phones 

The amount due from subsidiary companies are unsecured and bears no interest except for a temporary loan of RM46,908,869 (2005: Nil) to 

subsidiary companies which bears interest at the rate of 7.75% (2005: Nil) per annum and no scheme of repayment has been arranged. 

12. INVESTMENT IN ASSOCIATE COMPANY 

Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Unquoted shares, at cost 11,000,000 - 11,000,000 - 

Less: Share of results (1,232,386) - - - 

Net investment 9,767,614 - 11,000,000 - 

Details of associates are as follows:- 

Place of 

Effective 

equity 


2006 2005 

% % 

M Dot Mobile Sdn. Bhd. Malaysia 30 - Design, develop and sale of mobile phones 

The summarised financial information of the associate company is as follows:- 

Company 

2006 2005 

RM RM 

Assets and liabilities 

Current assets 32,920,642 - 

Non-current assets 44,600,774 - 

Total assets 77,521,416 - 

Current liabilities 76,491,100 - 

Non-current liabilities 260,091 - 

Total liabilities 76,751,191 - 

Revenue 26,666,040 - 

Loss for the financial year (4,107,953) - 

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12. INVESTMENT IN ASSOCIATE COMPANY (cont’d) 

Group 

2006 2005 

RM RM 

Represented by:- 

Share of net liabilities 231,068 - 

Goodwill on acquisition 9,536,547 - 

Net investment 9,767,614 - 

13. OTHER INVESTMENTS 

Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Quoted shares in Malaysia, at cost 12,500 12,500 - - 

Less: Allowance for diminution in value (10,575) (10,575) - - 

Arising from acquisition of subsidiaries 1,925 1,925 - - 

Unquoted shares in Germany, at cost 236,500 - 236,500 - 

Unquoted bonds in Malaysia, at cost 5,000,000 5,000,000 5,000,000 5,000,000 

5,238,425 5,001,925 5,236,500 5,000,000 

Market value of quoted shares in Malaysia 6,950 3,000 - - 

The investment in bonds is pledged for the term loans of the Company. 

14. DEVELOPMENT COSTS 

Group 

2006 2005 

RM RM 

Cost/Net carrying amount 

Brought forward 194,439 - 

Development costs incurred during the financial year 21,143,388 194,439 

Carried forward 21,337,827 194,439 

Development cost is costs incurred for developing and constructing bus chassis in order to sell to the government and other customers and 

developing of new mobile phones and developing of natural gas vehicles (NGV). 

Included in the development costs are the following expenses incurred during the financial year:- 

2006 2005 

RM RM 

Interest expenses 2,167,220 - 

Rental 315,000 - 

The management of the Company carried out a review of the recoverable amount of its development costs during the financial year. The review 

did not lead to any recognition of impairment loss. 

The recoverable amount was based on value-in-use and was determined at the cash generating unit (“CGU”). In determining value-in-use for the 

CGU, cash flows were discounted at rates of ranging from 6% to 8% on a pre-tax basis.

15. FIXED DEPOSITS WITH LICENSED BANKS 

Group 

All fixed deposits with licensed banks are pledged to the banks for banking facilities granted to subsidiary companies. 

16. INVENTORIES 




Group 

2006 2005 

RM RM 

At cost:- 

Raw material 286,591 101,336 

Work-in-progress - 86,047 

Finished goods 1,491,526 905,779 

1,778,117 1,093,162 

Less: Allowance for slow moving inventories (24,666) - 

1,753,451 1,093,162 

17. TRADE RECEIVABLES 

Group 

2006 2005 

RM RM 

Trade receivables 63,786,643 30,272,764 

Less: Allowance for doubtful debts (180,000) (180,000) 

63,606,643 30,092,764 

Included in trade receivables is an amount of RM21,175,800 (2005: Nil) and Nil (2005: RM240,489) due from associate company and due from 

companies in which certain directors have interest respectively. 

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18. OTHER RECEIVABLES 

Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Deposits for acquisition of M Dot Mobile Sdn. Bhd. - 11,000,000 - 11,000,000 

Deposits for work to be carried out by M Dot Mobile Sdn. Bhd. - 4,000,000 - 4,000,000 

Sundry deposits 498,204 268,560 100,000 100,000 

Companies in which certain Directors have interest 385,676 122,221 - 

Prepayments 340,300 1,491,613 - 46,560 

Income accrued 227,343 178,244 - - 

Receivable from disposal of motor vehicles - 858,749 - - 

Deposits to suppliers 3,591,265 3,310,160 - 

Deposits to Hyundai venture - 1,816,671 - 1,816,671 

Non-trade receivables 16,974,300 2,013,870 - 2 

Staff advance 3,056 6,556 - - 

22,020,144 25,066,644 100,000 16,963,233 

Less: Allowance for doubtful debts (78,338) - - - 

21,941,806 25,066,644 100,000 16,963,233 

Included in non-trade receivables is an amount of RM15,000,000 (2005: Nil) to part finance the mobile phone project carried out by M Dot Mobile 

Sdn. Bhd. 

19. OTHER PAYABLES 

Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Sales tax payables 3,626 12,293 - - 

Finance creditors 249,475 415,121 - - 

Accrual of expenses 589,054 752,637 29,012 11,800 

Amount due to a corporate shareholder - 321,121 - - 

Accrual of interest expense 968,014 937,500 968,014 937,500 

Non-trade payables 934,490 49,678 107,641 31,903 

Provision for assembly line 215,221 - - - 

2,959,880 2,488,350 1,104,667 981,203

20. REVENUE AND COST OF SALES 




Group 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 

RM RM 

Revenue 

Plastic injection moulded parts and car accessories 58,522,601 85,137,520 

Mobile phones 28,491,800 - 

Bus chassis and bodykit 9,390,286 - 

96,404,687 85,137,520 

Cost of sales 

Plastic injection moulded parts and car accessories 39,912,874 62,060,405 

Mobile phones 23,773,925 - 

Bus chassis and bodykit 8,146,087 - 

71,832,886 62,060,405 

21. PROFIT/(LOSS) BEFORE TAXATION 

Profit/(Loss) before taxation has been determined after charging/(crediting) amongst other items the following:- 

Group Company 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 2006 2005 

RM RM RM RM 

Allowance for doubtful debts 78,338 180,000 - - 

Allowance for slow moving inventories 

Audit fee 

24,666 - - - 

- current year 

Directors’ remuneration 

67,800 53,000 10,000 10,000 

-fee 775,200 144,000 220,000 144,000 

- other emoluments 631,155 598,168 124,400 44,500 

Depreciation 

Interest expenses 

- hire purchase / 

2,077,890 735,715 - - 

finance lease 63,457 64,906 - - 

- term loans 3,728,406 1,938,110 3,637,123 1,862,500 

- bank overdrafts 343,382 259,096 - - 

- trade finance 302,237 175,797 - - 

- loan stocks - 137,583 - - 

- ICULS 7,576 4,477 7,576 4,477 

Inventories written off 36,041 - - - 

Rental of premises 165,370 566,200 - - 

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21. PROFIT/(LOSS) BEFORE TAXATION (cont’d) 

Group Company 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 2006 2005 

RM RM RM RM 

Rental of computers 5,517 - - - 

Rental of equipments 20,410 - - - 

Gain on disposal of property, plant and equipment (251,624) (42,797) - - 

Loss/(Gain) on foreign exchange - realised 123,065 (345,598) 31,296 - 

Lease rental income (223,938) (263,257) - - 

Interest income 

- fixed deposits (213,735) (109,971 - - 

- subsidiary companies - - (3,637,123) - 

Rental income (470,000) (724,718) - - 

22. TAXATION 

Group 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 

RM RM 

Provision for the current financial year 3,679,600 5,233,000 

Overprovision in prior years - (292,126) 

Transferred to deferred taxation 188,000 288,000 

3,867,600 5,228,874 

A reconciliation of income tax expenses applicable to profit before taxation at the statutory tax rate to the income tax expenses at the effective 

tax rate of the Group is as follows:- 

Group 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 

RM RM 

Profit before taxation 14,126,922 17,455,620 

Taxation at Malaysian statutory tax rate of 28% 

Tax effects in respect of: 

3,955,538 4,887,574 

Expenses not deductible for tax purposes 

Change in tax rate for the first tranche of chargeable 

1,015,040 753,426 

income (120,000) (120,000) 

Overprovision in prior year - (292,126) 

Tax saving from pioneer status (982,978) - 

Effective tax expenses 3,867,600 5,228,874 

There is no provision for taxation for the Company as there is no chargeable income. 

However, the above amounts are subject to approval by the Inland Revenue Board of Malaysia.




23. EARNINGS PER SHARE 

Group 

(a) Basic earnings per share 

Basic earnings per share of the Group is based on the net profit attributable to shareholders for the year and the weighted average number 

of shares in issue during the year as follows:- 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 

Net profit for the year (RM) 10,259,322 4,831,139 

Weighted average number of ordinary shares in issue 121,607,725 60,946,801 

Basic earning per share (sen) 8.44 7.93 

(b) Diluted earnings per share 

For the purpose of calculating diluted earnings per shares, the net profit attributable to shareholders and the weighted average number of 

shares in issue during the year are as follows:- 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 

Net profit for the financial year (RM) 10,259,322 4,831,139 

After-tax effect of interest on ICULS (RM) 5,454 3,223 

After-tax effect of interest on ESOS (RM) 7,897 - 

Adjusted net profit for the financial year (RM) 10,272,674 4,834,362 

Weighted average number of share in issue 

Effect of dilution:- 

121,607,725 60,946,801 

ICULS 6,796,569 4,232,818 

ESOS 365,611 - 

Adjusted weighted average number of share in issue and issueable 128,769,905 65,179,617 

Diluted earning per share (sen) 7.98 7.42 

24. EMPLOYEE BENEFITS EXPENSE 

Group Company 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 2006 2005 

RM RM RM RM 

Staff costs 3,185,853 2,088,017 - - 

73

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25. MATERIAL LITIGATION 

A subsidiary company has brought a claim against Geka Gunther Kash Gmbh (“GEKA”), Stealths Synnergy Sdn. Bhd., Mohamad Bin Abdullah, Zulkifli 

Bin Kamaruddin and Edmi Saufi Bin Mohd Saufi for breach of contract and unlawful termination of agency and manufacturing rights and against 

the other four defendants for collaborating with GEKA. The claim made by the subsidiary company amounted to RM300,000 plus legal costs. The 

matter is under negotiation for settlement by both parties. 

26. SIGNIFICANT EVENTS 

a) On 6 January 2006, the Company announced to Bursa Malaysia that the Company proposed acquisition of 1,800,000 ordinary shares of RM1.00 

each representing 30% equity interest in M Dot Mobile Sdn Bhd (formerly known as Silver Starhill Sdn Bhd) (“M.Mobile”) from Mobile Knight 

(M) Sdn Bhd for a total purchase consideration of RM11,000,000. 

(b) On 6 March 2006, the Company announced to Bursa Malaysia that the Company proposed to have share split involving the sub-division into 

ten (10) new ordinary shares of RM0.10 each from the existing ordinary shares of RM1.00 each held in the Company. On 29 March 2006, the 

application for waiver from having comply with Para 13.06 (b) and Item 6 of Appendix 13C of the Listing Requirements of Bursa Malaysia, 

which is one of the conditions for proposed share split, was rejected by Bursa Malaysia. 

(c) On 9 January 2007, the Company announced to Bursa Malaysia that the Company has signed a Facility Agreement on 8 January 2007 with RHB 

Investment Bank Berhad (formerly known as RHB Sakura Merchant Banker Berhad) (“the Lender”) and Prima Uno Berhad (“the issuer”) for 

unsecured fixed term loan facility under Primary Collateralised Loan Obligation Programme up to the maximum amount of RM30 million (“the Facility”). 

27. SUMMARY EFFECTS OF ACQUISITION 

(a) In the previous year, the effects of the acquisition of Hexariang Sdn. Bhd. group of companies on the financial results of the Group are as 

follows:- 

Group 

2005 

RM 

Revenue 85,137,520 

Other operating income 1,456,804 

Operating cost (66,921,941) 

Profit before taxation 19,672,383 

Taxation (5,228,874) 

Net profit for the financial year 14,443,509 

Pre-acquisition profit (7,395,607) 

Increase in Group’s net profit 7,047,902

27. SUMMARY EFFECTS OF ACQUISITION (cont’d) 

(b) The effects of the acquisition on the financial position at the financial year end are as follows:- 




Property, plant and equipment 12,369,980 

Inventories 1,093,162 

Receivables 38,196,175 

Fixed deposits with licensed banks 8,924,272 

Cash and bank balances 18,830,844 

Investments 1,925 

Payables (30,961,190) 

Bank borrowings (5,284,449) 

Finance creditors (1,287,385) 

Deferred taxation (295,600) 

Tax payable (6,518,981) 

Increase in Group’s net assets 35,068,753 

28. FINANCIAL INSTRUMENTS 

(a) Interest rate risk 

The interest rate risk that financial instruments’ values will fluctuate as a result of changes in market interest rates and the effective weighted 

average interest rates on classes of financial assets and financial liabilities are as follows:- 

Less than More than 

Effective 

interest rate 

1 year 1 to 5 years 5 years Total during the year 

RM RM RM RM 

Group 

2006 

Financial assets 

Fixed deposits with licensed banks - 5,163,112 - 5,163,112 2.50% - 4.00% 

2005 


Fixed deposits with licensed banks - 8,924,272 - 8,924,272 2.50% - 3.70% 

Group 

2006 

Financial liabilities 

Trust receipts 1,513,562 - - 1,513,562 7.75% - 9.25% 

Term loans 731,565 57,500,000 - 58,231,565 4.80% - 7.13% 

Bank overdrafts 2,990,090 - - 2,990,090 5.00% - 8.75% 

Bankers’ acceptance 1,200,000 - - 1,200,000 1.50% 

Finance creditors 249,475 619,797 11,351 880,623 2.50% - 6.27% 

ICULS - 368,881 - 368,881 2.00% 

Group 

2005 

RM 

75

76 




28. FINANCIAL INSTRUMENTS (cont’d) 

Less than More than 

Effective 

interest rate 

1 year 1 to 5 years 5 years Total during the year 

RM RM RM RM 

2005 


Term loans 354,826 50,828,884 - 51,183,710 2.50% - 7.50% 

Bank overdrafts 2,972,482 - - 2,972,482 3.50% - 6.00% 

Bankers’ acceptance 1,128,257 - - 1,128,257 3.40% 

Finance creditors 415,121 854,900 17,364 1,287,385 3.90% - 5.75% 

ICULS - 448,883 - 448,883 2.00% 

Company 

2006 


Amount due from subsidiary companies 53,869,599 - - 53,869,599 7.75% 


Term loans - 57,500,000 - 57,500,000 6.50% -7.13% 

ICULS - 368,881 - 368,881 2.00% 

2005 


Term loans - 50,000,000 - 50,000,000 7.50% 

ICULS - 448,883 - 448,883 2.00% 

(b) Credit risk 

The maximum credit risk associated with recognised financial assets is the carrying amount shown in the balance sheet. 

The Group has no significant concentration of credit risk other than as set out below:- 

2006 

(i) 33% of trade receivables at the balance sheet date was due from the associate company, M Dot Mobile Sdn. Bhd. 

(ii) 68% of other receivables at the balance sheet date was due from M Dot Mobile Sdn. Bhd. 

2005 

(i) 38% and 39% of trade receivables at the balance sheet date were due from Enrichford Sdn. Bhd. and Virarich PMC Sdn. Bhd. respectively. 

(ii) 59% of other receivables at the balance sheet date was due from M Dot Mobile Sdn. Bhd. 

The Company has no significant concentration of credit risk other than as set out below:- 

2005 

(i) 86% of other receivables at the balance sheet date was due from M Dot Mobile Sdn. Bhd.




28. FINANCIAL INSTRUMENTS (cont’d) 

(c) Fair values 

The carrying amounts of financial assets and liabilities of the Group and Company as at the balance sheet date approximated their fair values 

except as set out below:- 

2006 2005 

Carrying Carrying 

amount Fair value amount Fair value 

RM RM RM RM 

Group 

Unquoted shares in associate company 9,767,614 * - - 

Quoted investments in Malaysia 1,925 6,950 1,925 3,000 

Investment in bonds 5,000,000 # 5,000,000 # 

ICULS 6,573,374 5,390,167 8,317,360 7,475,053 

Unquoted investment 

Company 

236,500 # - - 

Unquoted shares in associate company 11,000,000 * - - 

Unquoted shares in subsidiary companies 102,000,002 * 100,000,002 * 

Unquoted investment 236,500 # - - 

Investment in bonds 5,000,000 # 5,000,000 # 

ICULS 6,573,374 5,390,167 8,317,360 7,475,053 

* It was not practicable within the constraints of timeliness and cost to estimate these fair values reliably. However, at the end of the financial 

year, the net assets reported by the subsidiary companies and associate company were as follows:- 

2006 2005 

RM RM 

Group 

Unquoted shares in associate company 

Company 

770,225 - 

Unquoted shares in subsidiary companies 49,210,409 35,271,296 

Unquoted shares in associate company 770,225 - 

# It was not practicable within the constraints of timeliness and cost to estimate these fair values reliably. However, at the end of the financial 

year, the fair value of the unquoted investment and the investment in bonds are assumed to be the same as carrying amount as the variances, 

if any, are immaterial in the context of the financial statements. 

77

78 




29. SIGNIFICANT RELATED PARTY TRANSACTIONS 

Company in which certain Directors have Interest 

Group 

1.1.2006 30.6.2005 

to to 

31.12.2006 31.12.2005 

RM RM 

Purchases - 5,904 

Sales 28,491,800 24,453,050 

Lease rental income 36,648 36,956 

Rental income - 36,000 

The Directors of the Company are of the opinion that the terms of transactions have been entered on a negotiated basis. 

30. SEGMENTAL REPORTING 

(i) Primary segmental reporting - Business 

The Group is organised into four major business segments as follows:- 

Business segments Business activities 

Investment holding Investment holding 

Car accessories Manufacturing and sale of plastic injection mould, car accessories 

Mobile phones Manufacturing and sale of mobile phones 

Automotive Manufacturing and assembly of bus chassis and bus bodykit 

2006 Investment Car Mobile 

holding accessories phones Automotive Eliminations Consolidation 

Revenue RM RM RM RM RM RM 

External revenue - 58,522,601 28,491,800 9,390,286 96,404,687 

Intersegment revenue - 2,585,801 - - (2,585,801) - 

Total revenue 

Results 

- 61,108,402 28,491,800 9,390,286 96,404,687 

Segment results 3,578,456 13,669,235 4,254,149 (122,313) (3,637,123) 17,742,404 

Interest income - 213,735 - - 213,735 

Unallocated corporate expenses - - - - - 

Profit/(Loss) from operations 3,578,456 13,882,970 4,254,149 (122,313) 17,956,139 

Share loss of associate company - - - (1,232,386) (1,232,386) 

Interest expense 

Profit/(Loss) from ordinary 

(3,645,329) (1,012,644) (1,303,298) (272,683) 3,637,123 (2,596,831) 

activities before taxation (66,873) 12,870,326 2,950,851 (394,996) 14,126,922 

Taxation 

Profit/(Loss) for the 

- (3,451,530) (416,070) - (3,867,600) 

financial year (66,873) 9,418,796 2,534,781 (394,996) 10,259,322

30. SEGMENTAL REPORTING (cont’d) 

(i) Primary segmental reporting - Business (cont’d) 




Investment Car Mobile 


Results RM RM RM RM RM RM 

2005 

Revenue 

External revenue - 85,137,520 - - 85,137,520 

Intersegment revenue - 3,083,771 - - (3,083,771) - 

Total revenue - 88,221,291 - - 85,137,520 

Results 

Segment results (526,922) 20,530,203 - (8,106) 19,995,125 

Interest income - 109,971 - - 109,971 

Unallocated corporate expenses - - - - - 

(Loss)/Profit from operations (526,922) 20,640,174 - (8,106) 20,105,146 

Interest expense (2,005,074) (644,452) - - (2,649,526) 

(Loss)/Profit from ordinary 

activities before taxation (2,531,996) 19,995,722 - (8,106) 17,455,620 

Taxation - (5,228,874) - - (5,228,874) 

Net (loss)/profit after taxation (2,531,996) 14,766,848 - (8,106) 12,226,746 

Pre-acquisition profit - (7,395,607) - - (7,395,607) 

(Loss)/Profit for the financial year (2,531,996) 7,371,241 - (8,106) 4,831,139 

2006 

Other information 

Segment assets 5,982,531 126,094,230 7,732,015 12,203,526 146,012,302 

Investment in associate company 11,000,000 - - - (1,232,386) 9,767,614 

Tax recoverable - - - - - 

Consolidated assets 16,982,531 120,094,230 7,732,015 12,203,526 157,779,916 

Segment liabilities 58,858,182 25,301,980 - 532,176 84,692,338 

Tax payable - 11,381,585 - - 11,381,585 

Deferred taxation - 483,600 - - 483,600 

Consolidated liabilities 58,858,182 37,167,165 - 532,176 96,557,523 

79

80 




30. SEGMENTAL REPORTING (cont’d) 

(i) Primary segmental reporting - Business (cont’d) 

2006 Investment Car Mobile 


RM RM RM RM RM RM 


Capital expenditure - 3,715,763 - 695,024 4,410,787 

Depreciation 

2005 


- 2,028,010 - 49,880 2,077,890 

Segment assets 45,068,544 74,474,427 - 723,308 120,266,279 

Tax recoverable - 251,450 - - 251,450 

Consolidated assets 45,068,544 74,725,877 - 723,308 120,517,729 

Segment liabilities 31,022,313 32,670,966 - 731,412 64,424,692 

Tax payable - 6,770,431 - - 6,770,431 

Deferred taxation 295,600 - - - 295,600 

Consolidate liabilities 31,023,313 20,060,637 - 731,412 71,490,723 

Capital expenditure - 10,370,634 - - 10,370,634 

Depreciation - 735,715 - - 735,715 

No reporting by geographical segment is presented as the Group operated predominantly in Malaysia. 

31. CONTINGENT LIABILITY 

Group Company 

2006 2005 2006 2005 

RM RM RM RM 

Corporate guarantee to secure banking facility 

granted to subsidiary companies 

Corporate guarantee to secure banking 

- - 19,350,000 - 

facility granted to associate company 27,500,000 - 27,500,000 - 

LIST OF PROPERTY 

AS AT 4 JUNE 2007 

Date of Acquisition Location Description Existing Use Tenure / Approximate Area Net Book Value 

Age of Building (Sq Ft) as at 31.12.06 

RM 

7 August 2003 Lot 1839 Jalan Gergaji 15/14 Land and Office and Leasehold 87,120 7,312,500 

Seksyen 15, 40200 Shah Alam Industrial Building Factory (Expiring on 26.03.2071) 

Selangor Darul Ehsan 23 years

Authorised Share Capital : RM500 million 

Issued and Paid Up Capital : RM122,505,051 million 

Type of Shares : Ordinary Shares of RM1.00 each 

Voting Rights : One (1) vote per Ordinary Share 

SHAREHOLDINGS DISTRIBUTION - ORDINARY SHARES 

No. of No. of % of 

Size of Holdings Shareholders Shares Held Issued Capital 

Less than 100 12 493 0.000 

100 - 1,000 1,231 407,393 0.333 

1,001 - 10,000 1,469 7,359,215 6.007 

10,001 - 100,000 427 12,998,849 10.611 

100,001 - 6,125,251 (*) 65 41,876,801 34.184 

6,125,252 and above (**) 6 59,862,300 48.865 

Total 3,210 122,505,051 100.000 

Remarks : * Less than 5% of Issued Shares 

** 5% and above of Issued Shares 

SUBSTANTIAL SHAREHOLDERS WITH HOLDINGS OF 5% AND ABOVE 

AS AT 4 MAY 2007 

Name No. of Ordinary % Issued 

Shares Held Capital 

1 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 

EXEMPT AN FOR DEUTSCHE BANK AG LONDON (PB PRIAM) 

15,285,300 12.477 

2 KOSMO SERAYA SDN BHD 13,707,000 11.188 

3 CIMSEC NOMINEES (TEMPATAN) SDN BHD 

CIMB BANK FOR KOSMO SERAYA SDN BHD (SFD) 

11,000,000 8.979 

4 CIMSEC NOMINEES (TEMPATAN) SDN BHD 

CIMB BANK FOR KOSMO SERAYA SDN BHD (PB) 

6,800,000 5.550 

5 TA NOMINEES (TEMPATAN) SDN BHD 

PLEDGED SECURITIES ACCOUNT FOR KOSMO SERAYA SDN BHD 

6,550,000 5.346 

6 OSK NOMINEES (TEMPATAN) SDN BERHAD 

OSK CAPITAL SDN BHD FOR NORHAMZAH BIN NORDIN 

6,520,000 5.322 

SUMMARY 

TOTAL NO. OF HOLDERS 6 

TOTAL HOLDINGS 59,862,300 

TOTAL PERCENTAGE (%) 48.865 


81 

ANALYSIS OF SHAREHOLDINGS 

AS AT 4 MAY 2007

82 


DIRECTORS’ SHAREHOLDINGS 


No. of Ordinary Shares of RM1.00 each 

Name of Directors Direct No. of Shares Indirect No. of Shares 

Held % Held % 

1 Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail - - - - 

2 Norhamzah bin Nordin 6,520,000 5.323 42,802,000 34.94 

3 Mohd Azham bin Mohd Noor 8,050,000 6.571 - - 

4 Dato’ Mukhriz Mahathir - - - - 

5 Mohamad Nassir bin Mohd Kassim 1 - - - 

6 Ravindran a/l Sivasubramaniam 6,000,001 4.897 - - 

No. of Ordinary Shares of RM1.00 each 

Name No. of Option % * 

1 Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail 200,000 8.39 

2 Norhamzah bin Nordin 200,000 8.39 

3 Mohd Azham bin Mohd Noor 200,000 8.39 

4 Dato’ Mukhriz Mahathir 200,000 8.39 

5 Mohamad Nassir bin Mohd Kassim 200,000 8.39 

6 Ravindran a/l Sivasubramaniam 200,000 8.39 

* Percentage is computed based on the total number of share options granted by the Company of 2,383,000. 

LIST OF TOP 30 SHAREHOLDERS 




1 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 15,285,300 12.477 



3 CIMSEC NOMINEES (TEMPATAN) SDN BHD 11,000,000 8.979 

CIMB BANK FOR KOSMO SERAYA SDN BHD (SFD) 

4 CIMSEC NOMINEES (TEMPATAN) SDN BHD 6,800,000 5.550 

CIMB BANK FOR KOSMO SERAYA SDN BHD (PB) 

5 TA NOMINEES (TEMPATAN) SDN BHD 6,550,000 5.346 


6 OSK NOMINEES (TEMPATAN) SDN BERHAD 6,520,000 5.322 

OSK CAPITAL SDN BHD FOR NORHAMZAH NORDIN 

7 PERBADANAN NASIONAL BERHAD 5,680,000 4.636 


OSK CAPITAL SDN BHD FOR MOHD AZHAM BIN MOHD NOOR 

9 HSBC NOMINEES (ASING) SDN BHD 3,662,200 2.989 

“UBS AG ZURICH FOR BADEEB, AHMED MOHAMMED S”




10 TA NOMINEES (TEMPATAN) SDN BHD 3,550,000 2.897 



PLEDGED SECURITIES ACCOUNT FOR RAVINDRAN A/L SIVASUBRAMANIAM 

12 AIBB NOMINEES (TEMPATAN) SDN BHD 2,850,000 2.326 

PLEDGED SECURITIES ACCOUNT FOR MOHD AZHAM MOHD NOOR 


PLEDGED SECURITIES ACCOUNT FOR RAVINDRAN A/L SIVASUBRAMANIAM 



OSK CAPITAL SDN BHD FOR RAVINDRAN A/L SIVASUBRAMANIAM 

16 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 913,200 0.745 

DEUTSCHE BANK AG LONDON 

17 TAN POH HAR 779,100 0.635 

18 GUNANANTHAN A/L NITHYANANTHAM 750,000 0.612 

19 GOH SOCK SIN 429,400 0.350 

20 CHOO HUI YOW 422,000 0.334 

21 HLB NOMINEES (TEMPATAN) SDN BHD 410,100 0.334 

PLEDGED SECURITIES ACCOUNT FOR BONG SIAK KEE 

22 AMSEC NOMINEES (TEMPATAN) SDN BHD 402,600 0.328 

PLEDGED SECURITIES ACCOUNT FOR HENRY WAN 

23 JF APEX NOMINEES (TEMPATAN) SDN BHD 388,800 0.317 

PLEDGED SECURITIES ACCOUNT FOR CHIANG PING-CHUNG 

24 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 385,000 0.314 

DEUTSCHE BANK AG LONDON FOR GLG EMERGING MARKETS FUND 

25 CIMSEC NOMINEES (TEMPATAN) SDN BHD 381,000 0.311 

CIMB BANK FOR LIEW SIEW LING (MQ0010) 

26 LIEW SIEU FAH 380,000 0.310 

27 AZIZ BIN AYOB 350,000 0.285 

28 AMSEC NOMINEES (TEMPATAN) SDN BHD 338,500 0.276 

PLEDGED SECURITIES ACCOUNT FOR LEE CHOON HOOI 

29 CIMSEC NOMINEES (TEMPATAN) SDN BHD 323,000 0.263 

CIMB BANK FOR LIEW CHOON GUAN @ LIEW SOON GUAN 

30 GAN AH HUAT 318,000 0.259 

83 

LIST OF TOP 30 SHAREHOLDERS 

AS AT 4 MAY 2007 (CONT’D)

84 


STATISTICS ON CONVERTIBLE SECURITIES 


ANALYSIS OF THE 2% 3-YEAR IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (ICULS) HOLDINGS 

Category No. of holders No. of ICULS held % of issued ICULS 

1 - 99 6 307 0.004 

100 - 1,000 38 16,604 0.244 

1,001 - 10,000 18 69,316 1.021 

10,001 - 100,000 8 232,239 3.420 

100,001 - 339,572 0 0 0.000 

339,573 and above (**) 2 6,473,003 95.311 

Total 72 6,791,469 100.00 

Remarks : * Less than 5% of Issued ICULS 

** 5% and above of Issued ICULS 

DIRECTORS’ SHAREHOLDINGS OF ICULS 


Name of Directors Direct No. of ICULS No. of ICULS Indirect No. of ICULS % 

Held % Held 

1 Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail - - - - 

2 Norhamzah bin Nordin - - - - 

3 Mohd Azham bin Mohd Noor - - - - 

4 Dato’ Mukhriz Mahathir - - - - 

5 Mohamad Nassir bin Mohd Kassim - - - - 

6 Ravindran a/l Sivasubramaniam


LIST OF TOP 30 HOLDERS OF ICULS 


Name Holdings % 

1 DB (MALAYSIA) NOMINEE (ASING) SDN BHD 6,108.500 89.943 


2 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD 364,503 5.367 

EON BANK BERHAD 

3 TAN GEOK LAN 50,074 0.737 

4 TEH CHIN GUAN 38,200 0.562 

5 TAN LAI HOCK 35,000 0.515 

6 OSK NOMINEES (TEMPATAN) SDN BERHAD 28,465 0.419 

EXEMPT AN FOR GRANT THORNTON CONSULTING SDN. BHD. 

7 YAP PAK LEONG 26,000 0.382 

8 CHEONG TECK CHONG 20,000 0.294 

9 HDM NOMINEES (TEMPATAN) SDN BHD 18,500 0.272 

PLEDGED SECURITIES ACCOUNT FOR KHO MIANG HAW (M05) 

10 JF APEX NOMINEES (TEMPATAN) SDN BHD 16,000 0.235 

PLEDGED SECURITIES ACCOUNT FOR OLIVER VISWANATHAN (MARGIN) 

11 UNITED OVERSEAS NOMINEES (TEMPATAN) SDN BHD 10,000 0.147 

PLEDGED SECURITIES ACCOUNT FOR YAP PAK LEONG (MKK) 

12 TAY YANG HUANG 6,500 0.095 

13 CHOY WENG KIM 6,000 0.088 

14 BOUNTY LEISURE SDN. BHD. 5,000 0.073 

15 CHANG TECK MACK 5,000 0.073 

16 CHIA PENG SUN 5,000 0.073 

17 MAYBAN NOMINEES (TEMPATAN) SDN BHD 5,000 0.073 

PLEDGED SECURITIES ACCOUNT FOR TAN YAN @ TAN CHUI HWA 

18 TA NOMINEES (TEMPATAN) SDN BHD 4,000 0.058 

PLEDGED SECURITIES ACCOUNT FOR SIEW KEE CHUAN 

19 TAN CHEH LIN 4,000 0.058 

20 LOW KU CHOO 3,000 0.044 

21 NG WAI LENG 3,000 0.044 

22 CHONG CHIN FONG 2,000 0.029 

23 KOO (KOH) AH MOY 2,000 0.029 

24 MAYBAN NOMINEES (TEMPATAN) SDN BHD 2,000 0.029 

PLEDGED SECURITIES ACCOUNT FOR KONG AH THEN 

25 ONG CHOON THIAM 2,000 0.029 

26 FARRAH BINTI MOHAMED ARIS 1,900 0.027 

27 SOH MIEO LING 1,600 0.023 

28 GERALD GLESPHY A/L G.M PERARA 1,316 0.019 

29 CHEN YAT KHIUN 1,000 0.014 

30 FOO JADE DEED 1,000 0.014 

85

86 


PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION 

ANNEXTURE A 

Article No. Existing Articles Amended Articles 

To delete the definition in Article 2 

To amend the definitions in Article 2 

“Approved Market Place” 

A stock exchange that is specified to be an approved market place 

in the Securities Industry (Central Depositories) (Exemption) (No. 

2), Order 1998. 

“Bursa Depository” 

“the Depository” 

Bursa Malaysia Depository Sdn. Bhd. (165570-W) 

Bursa Malaysia Depository Sdn. Bhd. (165570-W) including any 

further change to its name. 

“Depositor” 

“Depositor” 

A holder of a securities account. 

A holder of a securities account established by the Depository. 

“Bursa Securities” or “the Securities Exchange” 

“Bursa Securities” 

Bursa Malaysia Securities Berhad (35998-W). 

Bursa Malaysia Securities Berhad (35998-W) including any further 

change to its name. 

“Market Days” 

“Market Days” 

Any day between Mondays and Fridays which is not a market Days on which the stock market of Bursa Securities is opened for 

holiday of the Securities Exchange or Public holiday. 

trading in securities. 

Relevant Articles The term “Securities Exchange” wherever it appears in the Articles of Association be replaced with the term “Bursa Securities”. 

The term “Bursa Depository” wherever it appears in the Articles of Association be replaced with the term “the Depository”. 

To amend Article 6 Subject to the Act, any preference share 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 ordinary shares at any time and the 

Company shall not issue preference shares ranking priority above 

preference shares already issued, but may issue preference shares 

ranking equally therewith. Preference shareholders must be 

entitled to a return of capital in preference to holders of ordinary 

shares when the Company is wound up and shall have the same 

rights as ordinary shareholders as regards receiving notices, 

reports and audited accounts and attending general meetings of 

the Company PROVIDED always that preference shareholders shall 

not have the right to vote at any general meeting of the Company 

except on each of the following circumstances:- 

(a) when the dividend or part of the dividend on the share is in 

arrears for more than six (6) months; 

(b) on a proposal to reduce the Company’s share capital; 

(c) on a proposal for the disposal of the whole of the 

Company’s property, business and undertaking; 

(d) on a proposal that affects rights attached to the share; 

(e) on a proposal to wind up the Company; and 

(f ) during the winding up of the Company. 

Subject to the Act, any preference share 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 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 PROVIDED always that preference shareholders shall 

not have the right to vote at any general meeting of the Company 

except on each of the following circumstances: 

(a) when the dividend or part of the dividend on the share is in 

arrears for more than six (6) months; 

(b) on a proposal to reduce the Company’s share capital; 

(c) on a proposal for the disposal of the whole of the Company’s 

property, business and undertaking; 

(d) on a proposal that affects rights attached to the share; 

(e) on a proposal to wind up the Company; and 

(f ) during the winding up of the Company.



ANNEXTURE A (CONT’D) 


To amend Article 16 Subject to the Act, the Central Depositories Act and Rules, the 

Company shall: 

(a) within fifteen (15) market days of the final applications 

closing date for a public issue, rights issue or for an offer for 

sale or such other period as may be prescribed by the 

Securities Exchange; and 

(b) within ten (10) market days of: 

(i) the books closing date for bonus issue; or 

(ii) the date of receipt of a notice of the exercise of an 

option together with the requisite payment under a 

share scheme for employees; or 

(iii) the date of receipt of subscription form together with 

the requisite payment for the conversion or exercise of 

the convertible security. 

or such other period as may be prescribed by the Securities 

Exchange, 

allot and/or issue securities, dispatch a notice of allotment to 

allottees or the employees (for the case of share scheme for 

employees) or the holder of the convertible security (for the case 

of conversion) or successful applicant, as the case may be, and 

make an application for the quotation of such securities. 

To amend Article 33 The Register of Members may be closed at such time and for such 

period as the Directors may from time to time determine PROVIDED 

ALWAYS that they shall not be closed for more than thirty (30) days in 

any year. Any notice of intention to fix a books closing date and the 

reason there for shall be published in a daily newspaper circulating 

in Malaysia and shall also be given to the Securities Exchange, such 

notice shall state the books closing date, which shall be at least 

twelve (12) clear market days after the date of announcement to the 

Securities Exchange, and the address of the share registry at which 

documents will be accepted for registration. In relation to such 

closure, the Company shall give written notice, in accordance with 

the Rules to issue the appropriate Record of Depositors. 

87 

Subject to the provisions of the Act, the Central Depositories Act 

and the Rules, the Company shall allot/issue securities, dispatch 

notices of allotment to successful allottees and make an 

application for the quotation of such securities in accordance with 

the period prescribed by Bursa Securities. 

The Register of Members may be closed at such time and for such period 

as the Directors may from time to time determine PROVIDED ALWAYS 

that they shall not be closed for more than thirty (30) days in any year.Any 

notice of intention to fix a books closing date and the reason there for 

shall be published in at least one nationally circulated Bahasa Malaysia or 

English daily newspaper and shall be given to Bursa Securities. Such 

notice shall state the books closing date, which shall be at least ten (10) 

market days after the date of announcement to Bursa Securities or such 

period as may be prescribed by Bursa Securities, and the address of the 

share registry at which documents will be accepted for registration. In 

relation to such closure, the Company shall give written notice, in 

accordance with the Rules to issue the appropriate Record of Depositors.

88 





To amend Article 35(1) 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 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 (hereinafter referred 

to as “the Foreign Register”), to the register of holders maintained 

by the Registrar of the Company in Malaysia (hereinafter referred 

to as “the Malaysian Register”) provided that there shall be no 

change in the ownership of such securities. 

To delete Article 35 (2) For the avoidance of doubt, no company which fulfils the 

requirements of subparagraphs (1)(a) and (b) above shall allow 

any transmission of securities from the Malaysian Register into the 

Foreign Register. 

To amend Article 60 A meeting of the Company called for the passing of a special 

resolution and an annual general meeting shall be called by 

twenty-one (21) days’ notice in writing at the least. Any other 

meetings of the Company shall be called by fourteen (14) days’ 

notice in writing at the least, PROVIDED that a meeting of the 

Company shall, notwithstanding that it is called by a shorter notice 

than that specified in this Article, be deemed to have been duly 

called if it is so agreed:- 

(i) in the case of an annual general meeting, by all the members 

entitled to attend and vote thereat; and 

(ii) in the case of an extraordinary general meeting, by that 

number or majority in number of the members having a right 

to attend and vote thereat as is required by the Act. 

The notices convening meetings shall specify the place, day and 

hour of the meeting. 

Any notice of meeting called to consider special business shall be 

accompanied by a statement regarding the effect of any proposed 

resolution in respect of such special business. 

PROVIDED also that the accidental omission to give notice to, or 

the non-receipt of notice by, any person entitled shall not 

invalidate the proceedings at any general meeting. 

NOTWITHSTANDING the foregoing at least fourteen (14) days’ 

notice or twenty-one (21) days’ notice in the case where any 

special resolution is proposed or where it is an annual general 

meeting of every such general meeting shall also be given by 

advertisement in at least one daily national newspaper and in 

writing to each Stock Exchange on which the Company is listed. 

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 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. 

A meeting of the Company called for the passing of a special 

resolution and an annual general meeting shall be called by 

twenty-one (21) days’ notice in writing at the least. Any other 

meetings of the Company shall be called by fourteen (14) days’ 

notice in writing at the least, PROVIDED that a meeting of the 

Company shall, notwithstanding that it is called by a shorter notice 

than that specified in this Article, be deemed to have been duly 

called if it is so agreed:- 

(i) in the case of an annual general meeting, by all the members 

entitled to attend and vote thereat; and 

(ii) in the case of an extraordinary general meeting, by that 

number or majority in number of the members having a right 

to attend and vote thereat as is required by the Act. 

NOTWITHSTANDING the foregoing, the notice shall specify the 

place, day and hour of the meeting and, in the case of special 

business shall also specify the general nature of that business and 

shall be accompanied by a statement regarding the effect of any 

proposed resolution in respect of such special business. Notice of 

every such meeting shall be given and an advertisement of such 

meetings in at least one nationally circulated Bahasa Malaysia or 

English daily newspaper and in writing to each stock exchange on 

which the Company’s shares are listed must be made. 

The accidental omission to give notice to, or the non-receipt of 

notice by, any person entitled shall not invalidate the proceedings 

at any general meeting.





To amend Article 61(2) The Company shall also request the Bursa 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”). 

To amend Article 79 The instrument appointing a proxy and the power of attorney or 

other authority, if any, under which it is signed or a notarised copy 

of that power or authority shall be deposited at the office of the 

Company or at such other place as is specified for that purpose in 

the notice convening the meeting, not less than forty-eight (48) 

hours before the time appointed for holding the meeting or 

adjourned meeting at which the person named in the instrument 

proposes to vote, or in the case of a poll, not less than twenty-four 

(24) hours before the time appointed for the taking of poll, and in 

default the instrument of proxy shall not be treated as valid. 

To amend Article 82 The first Directors shall be NARIMAH BINTI JUNUS and JAYA 

KUMAR A/L MANIAM. All the Directors of the Company shall be 

natural persons and the number of Directors shall not be less than 

two (2). 

To amend Article 85 No person not being a retiring Director shall be eligible for 

election to the office of Director at any general meeting unless 

some member intending to propose him has, at least eleven (11) 

clear days before the meeting, left at the Office of the Company a 

notice in writing duly signed by the nominee, giving his consent to 

the nomination and signifying his candidature for the office, or the 

intention of such member to propose him, PROVIDED THAT in the 

case of a person recommended by the Directors, for election, nine 

(9) clear days’ notice only shall be necessary, and notice of each 

and every candidature for election to the Board of Directors shall 

be served on the registered holders of shares at least seven (7) 

clear days prior to the meeting at which the election is to take 

place. 

To amend Article 90 The Directors shall have power at any time, and from time to time 

to appoint any person to be a Director, either to fill a casual 

vacancy or as an addition to the existing Directors, but so that the 

total number of Directors shall not at any time exceed the number 

so fixed in accordance with these Articles. Any Director so 

appointed shall hold office only until the next annual general 

meeting, and shall then be eligible for re-election but shall not be 

taken into account in determining the Directors who are to be 

retire by rotation at that meeting. 

89 

The Company shall also request the Depository in accordance 

with the Rules of the Depository, to issue a Record of Depositors, 

as at the latest date which is reasonably practicable which shall in 

any event be not less than 3 market days before the general 

meeting (hereinafter referred to as “the General Meeting Record of 

Depositors”). 

The instrument appointing a proxy and the power of attorney or 

other authority, if any, under which it is signed or a notarised copy 

of that power or authority shall be deposited at the office of the 

Company or at such other place as is specified for that purpose in 

the notice convening the meeting, not less than forty-eight (48) 

hours before the time appointed for holding the meeting or 

adjourned meeting at which the person named in the instrument 

proposes to vote, or in the case of a poll, not less than twenty-four 

(24) hours before the time appointed for the taking of poll, and in 

default the instrument of proxy shall not be treated as valid. 

A member shall not be precluded from attending and voting in 

person at any general meeting after lodging the form of proxy but 

however such attendance shall automatically revoke the proxy’s 

authority. 

The first Directors shall be NARIMAH BINTI JUNUS and JAYA 

KUMAR A/L MANIAM. The number of Directors shall not be less 

than two (2). 

No person not being a retiring Director shall be eligible for 

election to the office of Director at any general meeting unless a 

member intending to propose him has, at least eleven (11) clear 

days before the meeting, left at the Office of the Company a notice 

in writing duly signed by the nominee, giving his consent to the 

nomination and signifying his candidature for the office, or the 

intention of such member to propose him for election, PROVIDED 

THAT in the case of a person recommended by the Directors, for 

election, nine (9) clear days’ notice only shall be necessary, and 

notice of each and every candidature for election to the Board of 

Directors shall be served on the registered holders of shares at 

least seven (7) clear days prior to the meeting at which the 

election is to take place. 

The Directors shall have power at any time, and from time to time 

to appoint any person to be a Director, either to fill a casual 

vacancy or as an addition to the existing Directors. Any Director so 

appointed shall hold office only until the next annual general 

meeting, and shall then be eligible for re-election but shall not be 

taken into account in determining the Directors who are to be 

retire by rotation at that meeting.

90 





To amend Article 94 The office of a director shall become vacant if the director:- 

(a) has a Receiving Order in Bankruptcy made against him or makes 

any arrangement or composition with his creditors generally; 

(b) becomes prohibited from being a Director by reason of any order 

made under the Act or contravenes Section 130 of the Act; 

(c) ceases to be a Director by virtue of the Act; 

(d) becomes of unsound mind or a person whose person or estate is 

liable to be dealt with in any way under the law relating to mental 

disorder; 

(e) resigns his office by notice in writing to the Company and 

deposited at the Office of the Company; 

(f) absents himself from more than 50% of the total Board of 

Directors’meeting during a financial year,unless an exemption or 

waiver is obtained from the Securities Exchange; 

(g) is removed by a resolution of the Company in general meeting 

and in the case of an alternate or substitute Director by a 

resolution of the Directors. 

To amend Article 106 The Directors may meet together for the dispatch of business, adjourn 

and otherwise regulate their meetings as they think fit. Any Director 

may at any time and the Secretary shall on the requisition of any one 

of the Directors summon a meeting of the Directors. 

To amend Article 107 It shall not be necessary to give any Director or Alternate Director,who has 

not got an address in Malaysia, registered with the Company, notice of a 

meeting of the Directors. Unless otherwise, determined by the Directors 

from time to time a seven (7) days’notice of all Directors’meetings shall be 

given to all Directors and their Alternate Directors who have a registered 

address in Malaysia,except in the case of an emergency,where reasonable 

notice of every Directors’ meeting shall be given in writing. The notice of 

each Directors’ meeting shall be deemed to be served two (2) days 

following that on which a properly stamped letter containing the notice is 

posted. The Directors may also hold a meeting of directors at two (2) or 

more venues within or outside Malaysia using any technology that enable 

the Directors as a whole to participate for the entire duration of the 

meeting;and that all information and documents for the meeting must be 

made available to all Directors prior to or at the meeting. A minutes of the 

proceedings of such meeting is sufficient evidence of the proceedings to 

which it relates. 

To amend Article 130 The Company shall also keep at the Office registers which shall be 

open to the inspection of any member without charge and to any 

other person on payment for each inspection of a prescribed fee all 

such matters required to be registered under the Act,and in particular:- 

The office of a director shall become vacant if the director:- 

(a) has a Receiving Order in Bankruptcy made against him or makes 

any arrangement or composition with his creditors generally, 

during his term of office; 

(b) becomes prohibited from being a Director by reason of any order 

made under the Act or contravenes Section 130 of the Act; 

(c) ceases to be a Director by virtue of the Act; 

(d) becomes of unsound mind or a person whose person or estate is 

liable to be dealt with in any way under the law relating to mental 

disorder during his term of office; 

(e) resigns his office by notice in writing to the Company and 

deposited at the Office of the Company; 

(f) is removed by a resolution of the Company in general meeting 

and in the case of an alternate or substitute Director by a 

resolution of the Directors. 

The Directors may meet together for the dispatch of business, adjourn 

and otherwise regulate their meetings as they think fit.Any Director may 

at any time and the Secretary shall on the requisition of any one of the 

Directors summon a meeting of the Directors. The Directors may hold a 

meeting of directors at two (2) or more venues within or outside Malaysia 

using any technology that enable the Directors as a whole to participate 

for the entire duration of the meeting; and that all information and 

documents for the meeting must be made available to all Directors prior 

to or at the meeting. A minutes of the proceedings of such meeting is 

sufficient evidence of the proceedings to which it relates. 

It shall not be necessary to give any Director or Alternate Director,who 

has not got an address in Malaysia, registered with the Company, 

notice of a meeting of the Directors. Unless otherwise, determined by 

the Directors from time to time a seven (7) days’ notice of all Directors’ 

meetings shall be given to all Directors and their Alternate Directors 

who have a registered address in Malaysia, except in the case of an 

emergency, where reasonable notice of every Directors’ meeting shall 

be given in writing. The notice of each Directors’ meeting shall be 

deemed to be served two (2) days following that on which a properly 

stamped letter containing the notice is posted. The Company may in 

addition to or where appropriate instead of serving a notice or 

document by post, send a copy of such notice or document using 

electronic communications to the address provided by the Directors 

as the address to which the electronic communications may be sent. 

Where a notice or document is sent using electronic communication, 

service of the notice or document shall be deemed to be effected by 

properly addressing and transmitting the notice of document. 

The Company shall also keep at the Office registers which shall be 

open to the inspection of any member without charge and to any 

other person on payment for each inspection of a prescribed fee all 

such matters required to be registered under the Act,and in particular:-





To amend Article 130 (cont’d) (a) a register of substantial shareholders and of information received 

in pursuance of the requirements under Sections 69O(1) and 

69O(4) of the Act; and 

(b) a register of the particulars of each of the Directors’shareholdings 

and interest as required under Section 113 of the Act. 

To amend Article 134 The Directors shall from time to time in accordance with Section 169 of 

the Act cause to be prepared and laid before the Company in general 

meeting such profit and loss accounts, balance sheets and report as 

are referred to in the section. The interval between the close of a 

financial year of the Company and the issue of the annual audited 

accounts the directors’ and auditors’ reports shall not exceed four (4) 

months. A copy of each such documents shall not less than twentyone 

(21) days before the date of the meeting be sent to every member 

of and to every holder of debentures of the Company and to every 

other person who is entitled to receive notices from the Company 

under the provision of the Act or of these Articles. The requisite 

number of copies of each such document shall at the same time be 

forwarded to each stock exchange upon which the Company is listed. 

Provided that this Article shall not require a copy of these documents 

to be sent to any person of whose address the Company is not aware 

or outside Malaysia but any member to whom a copy of these 

documents has not been sent shall be entitled to receive a copy free of 

charge on application at the Office of the Company. 

To amend Article 145 Any dividend, interest or other money payable in cash in respect of 

shares may be paid by cheque or warrant sent through the post 

directed to the registered address of the holder. Every such cheque or 

warrant shall be made payable to the order of the person to whom it 

is sent, and the payment of any such cheque or warrant shall operate 

as a good discharge to the Company in respect of the dividend 

represented thereby, notwithstanding that it may subsequently 

appear that the same has been stolen or that the endorsement 

thereon has been forged.Every such cheque or warrant shall be sent at 

the risk of the person entitled to the money thereby represented. 

91 

(a) a register of substantial shareholders and of information received 

in pursuance of the requirements under Sections 69O(1) and 

69O(4) of the Act; and 

(b) a register of the particulars of each of the Directors’shareholdings 

and interest as required under Section 134 of the Act. 

The Directors shall from time to time in accordance with Section 169 of 

the Act cause to be prepared and laid before the Company in general 

meeting, such profit and loss accounts, balance sheets and reports as 

are referred to in the Act. The interval between the close of a financial 

year of the Company and the issue of annual audited accounts, the 

directors’ and auditors’ report shall not exceed four (4) months. A copy 

of each such document in printed form or in CD-ROM form or in such 

other form of electronic media, shall not less than twenty one (21) days 

before the date of the meeting be sent to every Member of, and to 

every holder of debentures of the Company and to every other person 

who is entitled to receive notices from the Company under the 

provision of the Act or of these Articles.The requisite number of copies 

of each such document as may be required by Bursa Securities or other 

stock exchange(s), if any, upon which the Company’s shares may be 

listed,shall at the same time be likewise sent to Bursa Securities or other 

stock exchange(s) provided that this Article shall not require a copy of 

these documents to be sent to any person of whose address the 

Company is not aware or outside Malaysia but any Member to whom a 

copy of these documents has not been sent shall be entitled to receive 

a copy,free of charge on application at the Office of the Company.In the 

event that the annual report is sent in CD-ROM form or such form of 

electronic media and a Member requires a printed form of such 

documents, the Company shall send such documents to the Member 

within four (4) market days from the date of receipt of the Members’ 

request or such period as may be prescribed by Bursa Securities. 

Any dividend, interest or other moneys payable in cash in respect of 

shares may be paid by cheque or warrant sent through the post to the 

last registered address of the member or person entitled thereto or by 

direct transfer or such other mode of electronic means (subject to the 

provision of the Act, the Central Depositories Act and the Rules, the 

Listing Requirements and/or other regulatory authorities) to the bank 

account of the holders whose name appear in the Register or Record 

of Depositors respectively. Every such cheque or warrant or payment 

by direct transfer shall be made payable to the order of the person to 

whom it is sent or to such person as the holder or person or persons 

entitled to the share in consequence of the death or bankruptcy of the 

holder may direct and the payment of the cheque or warrant or by 

such electronic means shall be a good discharge to the Company 

regardless that it may subsequently appear that the cheque or warrant 

has been stolen or that the endorsement thereon has been forged or 

of any discrepancy given by the member in the details of the bank 

account(s). Every such cheque or warrant shall be sent at the risk of the 

person entitled to the money represented thereby.


NOTICE OF THE FOURTH ANNUAL GENERAL MEETING 

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of the Company will be held at The Saujana Ballroom, Saujana Resort, Jalan Lapangan Terbang 

SAAS, 40150 Shah Alam, Selangor Darul Ehsan on Tuesday, 26 June 2007 at 10.00 a.m. for the following purposes:-- 

AGENDA 

Ordinary Business 

1. To receive the Audited Financial Statements for the year ended 31 December 2006 together with the Directors’ and Auditors’ 

reports thereon. 

2. To re-elect the following Directors who retire pursuant to Article 83 of the Articles of Association of the Company:- 

(i) Mohamad Nassir bin Mohd Kassim 

(ii) Dato’ Dr. Nik Abd Rashid @ Nik Idris bin Ismail 

3. To re-appoint Messrs Shamsir Jasani Grant Thornton as Auditors of the Company and to authorise the Directors to fix their 

remuneration. 

Special Business 

To consider, and if thought fit, pass with or without modifications, the following Ordinary/Special Resolutions: 

4. ORDINARY RESOLUTION I 

AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 

“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant 

governmental/regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies 

Act, 1965, to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the 

Directors may deem fit provided that the aggregate number of shares 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.” 

5. ORDINARY RESOLUTION II 

PROPOSED SHAREHOLDERS’ MANDATE AND ADDITIONAL MANDATE TO ENTER INTO RECURRENT RELATED PARTY 

TRANSACTIONS 

“THAT, subject always to the Listing Requirements of Bursa Malaysia Securities Berhad, the Company and/or its subsidiaries shall 

be mandated to enter into the category of recurrent transactions of a revenue or trading nature with the related parties as 

specified in Section 2 of the Circular to Shareholders dated 4 June 2007 subject further to the following:i. 

the transactions are in the ordinary course of business and are on terms not more favourable than those generally available to 

the public and not to the detriment of the minority shareholders; 

ii. disclosure will be made of a breakdown of the aggregate value of transactions conducted pursuant to the Mandate during the 

financial year based on the following information in the Company’s Annual Report and in the Annual Reports for subsequent 

financial years that the Mandate continues in force:a. 

the type of the recurrent related party transactions made; and 

b. the names of the related parties involved in each type of the recurrent related party transactions made and their 

relationship with the Company 

THAT such authority shall commence immediately upon the passing of this Ordinary Resolution until:a. 

the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it will lapse, unless by 

a resolution passed at the meeting, the authority is renewed; 

(Resolution 1) 





(Resolution 6)


b. the expiration of the period within which the next AGM after this date is required to be held pursuant to Section 143(1) of 

the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the 

Companies Act, 1965); or 

c. revoked or varied by resolution passed by the shareholders in general meeting, 

whichever is the earlier. 

THAT the Directors of the Company be authorised to complete and do all such acts and things as they may consider 

expedient or necessary to give effect to the Proposed Shareholders’ Mandate.” 

6. SPECIAL RESOLUTION 

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION OF THE COMPANY 

“THAT the Proposed Amendments to the Articles of Association of the Company as set out in Annexture A be and is 

hereby approved and adopted. 

THAT the Directors of the Company be and are hereby authorised to carry out all the necessary formalities in effecting the 

Proposed Amendments to the Articles of Association of the Company.” 

7. To transact any other ordinary business for which notice has been given. 

By Order of the Board 

KUAN HUI FANG 

TAN AI PENG 

Secretaries 

Petaling Jaya 

4 June 2007 

NOTICE OF THE FOURTH ANNUAL GENERAL MEETING 

(CONT’D) 

93 


Notes: 

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or attorney or other duly authorised representative to attend and vote in his stead. A proxy may but need 

not be a member of the Company and Section 149(1) (b) of the Companies Act, 1965 shall not apply to the Company. 

2. A member may appoint up to two (2) proxies and the proportion of his shareholdings to be represented by each proxy must be specified.Where the member of the Company is an authorised 

nominee as defined under the Securities Industry (Central Depository) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of 

the Company standing to the credit of the said securities account. 

3. The instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney and in the case or corporation shall be either under 

the common seal or signed by its attorney or by an officer on behalf of the corporation. 

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 14, Uptown 1, No. 1 Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, 

Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjourned thereof. 

EXPLANATORY NOTES ON SPECIAL BUSINESS 

Resolution 5 - Authority to issue shares pursuant to Section 132D of the Companies Act, 1965 

This ordinary resolution is proposed pursuant to Section 132D of the Companies Act, 1965, and if passed, will give the Directors of the Company, from the date of the above Annual General 

Meeting, authority to issue and allot shares from the unissued share capital of the Company for such purposes as the Directors deem fit and in the interest 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. 

Resolution 6 - Proposed Shareholders’ Mandate 

The proposed ordinary resolution, if passed, will authorise the Company and each of its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature in the 

ordinary course of business. This authority, unless revoked or varied by the Company at general meeting, will expire at the conclusion of the next Annual General Meeting of the Company. 

Resolution 7 - Proposed Amendments to Articles of Association of the Company 

The proposed special resolution, if passed, will render the Articles of Association of the Company to be in line with the Listing Requirements of Bursa Malaysia Securities Berhad as well as to facilitate 

some administrative issues. 

The Annexture A referred to in the proposed resolution is enclosed together with the 2006 Annual Report.


STATEMENT ACCOMPANYING NOTICE OF FOURTH ANNUAL GENERAL MEETING 

(Pursuant to Paragraph 8.28 (2) of the Listing Requirements of Bursa Malaysia Securities Berhad) 

1. Details of the place, date and hour of the Fourth Annual General Meeting of Kosmo Technology Industrial Berhad are as follows: 

Venue : The Saujana Ballroom, Saujana Resort 

Jalan Lapangan Terbang, SAAS, 

40150 Shah Alam, 

Selangor Darul Ehsan. 

Date : Tuesday, 26 June 2007 

Time : 10.00 a.m. 

2. Details of the Directors who are standing for re-election 

The Directors who are standing for re-election pursuant to Article 83 of the Company’s Articles of Association are:- 

• Mohamad Nassir bin Mohd Kassim 

• Dato’ Dr. Nik Abd. Rashid @ Nik Idris bin Ismail 

The other details of the Directors who are standing for re-election are on pages 10 and 85. 

3. Details of attendance of the Directors at Board Meetings held during the financial year ended 31 December 2006 

The details of attendance of Directors at Board meetings are disclosed under the Statement on Corporate Governance on page 19.

FORM OF PROXY 

I/We 

[Full name in block, NRIC No./Company No.] 

of 

being a member / members of Kosmo Technology Industrial Berhad, hereby appoint:- 

Full Name (in Block) NRIC / Passport No. Proportion of Shareholdings 

No. of Shares % 

Address 

and / or (delete as appropriate) 

Full Name (in Block) NRIC / Passport No. Proportion of Shareholdings 

No. of Shares % 

Address 

or failing him, the Chairman of the Meeting as my / our proxy to vote for me / us and on my / our behalf at the Fourth Annual General Meeting of the Company to be held 

at The Saujana Ballroom, Saujana Resort, Jalan Lapangan Terbang SAAS, 40150 Shah Alam, Selangor Darul Ehsan on Tuesday, 26 June 2007 at 10.00 a.m. or any adjournment 

thereof, and to vote as indicated below:- 

RESOLUTION FOR AGAINST 

1 Audited Financial Statements for the financial year ended 31 December 2006 

2 Re-election of Mohamad Nassir Bin Mohd Kassim as Director 

3 Re-election of Dato’ Dr. Nik Abd Rashid @ Nik Idris Bin Ismail as Director 

4 Re-appointment of Messrs Shamsir Jasani Grant Thornton as Auditors 

5 Authority to allot shares 

6 Proposed Shareholders’ Mandate 

7 Amendment to the Articles of Association 

Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific direction, your proxy will vote or 

abstain as he thinks fit. 

Signed this _________________ day of _____________________________ 2007. 

Notes: 

No of shares held CDS Account No. 

- - 

(Incorporated in Malaysia) 

Signature of Shareholder / Common Seal 

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or attorney or other duly authorised representative to attend and vote in his stead. A proxy may but need not be a 

member of the Company and Section 149(1) (b) of the Companies Act, 1965 shall not apply to the Company. 

2. A member may appoint up to two (2) proxies and the proportion of his shareholdings to be represented by each proxy must be specified. Where the member of the Company is an authorised nominee 

as defined under the Securities Industry (Central Depository) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing 

to the credit of the said securities account. 

3. The instrument appointing a proxy shall be in writing and in the case of an individual shall be signed by the appointor or by his attorney and in the case of a corporation shall be either under the common 

seal or signed by its attorney or by an officer on behalf of the corporation. 

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Level 14, Uptown 1, No. 1 Jalan SS21/58, Damansara Uptown, 47400 Petaling Jaya, Selangor Darul Ehsan 

not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjourned thereof. 

Tel:

Company Secretary 

Kosmo Technology Industrial Berhad 

Level 14, Uptown 1, No.1 Jalan SS21/58 




Affix 

Stamp


No. 3, Jalan Pelukis U1/46, Temasya Industrial Park, Glenmarie 

40150 Shah Alam, Selangor Darul Ehsan, Malaysia 

Tel: (603) 5569 5928 / 3550 | Fax: (603) 5569 3729 / 3560 

www.kosmotech.com.my

KOSMO-AnnuaReport2006 (1.9MB).pdf - Bursa Malaysia

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