Notice of Annual General Meeting 2 Statement Accompanying Notice of Annual General Meeting 5 Corporate Information 6 Profile of the Board of Directors 7 Executive Deputy Chairman's Statement 10 Audit Committee Report 13 Statement on Corporate Governance 15 Statement on Internal Control 20 Directors' Responsibility Statement 22 Additional Compliance Information 23 Financial Statements 25 Analysis of Shareholdings 109 List of Thirty Largest Shareholders 110 List of Properties Held by PSCI Group 112 Appendix 1 Proxy Form Contents
Transcript
Notice of Annual General Meeting 2
Statement Accompanying Notice ofAnnual General Meeting 5
Corporate Information 6
Profile of the Board of Directors 7
Executive Deputy Chairman's Statement 10
Audit Committee Report 13
Statement on Corporate Governance 15
Statement on Internal Control 20
Directors' Responsibility Statement 22
Additional Compliance Information 23
Financial Statements 25
Analysis of Shareholdings 109
List of Thirty Largest Shareholders 110
List of Properties Held by PSCI Group 112
Appendix 1
Proxy Form
Contents
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NOTICE IS HEREBY GIVEN THAT the Thirty-Fifth Annual General Meeting of the Company will be held at 4th Floor, Menara Boustead, Jalan Raja Chulan, 50200 Kuala Lumpur on Wednesday, 27 June 2007 at 10.00 a.m. to transact the following businesses: -
AGENDA 1. Toreceive theAuditedFinancialStatements for thefinancial yearended31December2006and theReportsof
6. As Special Business to consider and if thought fit, to pass the following Ordinary Resolution, with or withoutmodifications:-
ORDINARY RESOLUTION - PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED ADDITIONAL SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
AND FURTHER THAT the Directors of the Company be authorised to complete and do all such acts and things(includingexecutingallsuchdocumentsasmayberequired)astheymayconsiderexpedientornecessarytogiveeffecttotheMandate." (Ordinary Resolution 7)
7. As Special Business to consider and if thought fit, to pass the following Special Resolution, with or withoutmodifications:-
SPECIAL RESOLUTION - PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION
Heisalawyerbyprofession,andisapartnerofthelawfirmofAzzat&Izzat. He graduated from the University of Cambridge with degrees inLawandinInternationalLawin1969andwasadmittedasaBarrister-at-LawoftheMiddleTemple,Londonin1970.PriortobeingadmittedasanadvocateandsolicitoroftheHighCourtofMalayain1979,heservedasanAdministrativeandDiplomaticOfficerwiththeMinistryofForeignAffairsMalaysia in various capacities. He is also presently a Director of AffinHoldings Berhad, Boustead Holdings Berhad, KPJ Healthcare Berhad,Pulai Springs Resort Berhad, Celcom (Malaysia) Berhad, VisdynamicsHoldingsBerhadandseveralotherprivatelimitedcompanies.Heservedas a member of the Securities Commission from 1 March 1993 to 21March1999.
He does not have any family relationship with any Director and/ormajorshareholdersofPSCI,noranypersonal interest inanybusinessarrangement involving the Company, other than the rendering ofprofessionalservicesto theGroupwhich iscarriedout in theordinarycourseofbusinessofAzzat&Izzat,ofwhichheisapartner.
From2002to2004,heservedasExecutiveDirectorandCEOofCahyaMataSarawakBerhad,adiversifiedpubliccompanylistedonBursaMalaysiaSecuritiesBerhad.Heiswell-versedincorporateaffairsandgovernanceissues and today, is active as Managing Director – Governance atColumbusCircleGovernanceSdnBhd,aspecialistfirmprovidingadviceandcounseltocompaniesintheareasofcorporategovernance,investorrelations,financialcommunications,riskmanagement,internalcontrolsandcorporate/financialstrategy.Between1990and2002,heservedasaNon-ExecutiveDirectorofBousteadHoldingsBerhad.HeisamemberoftheBoardofGovernorsofMalaysianInstituteofCorporateGovernance.
He does not have any family relationship with any Director and/ormajorshareholdersofPSCI,noranypersonal interest inanybusinessarrangementinvolvingtheCompany.
Y. BHG. DATUKAZZAT BINKAMALUDINNon-IndependentNon-Executive Director 62 years of age,Malaysian
MR. DAVID WILLIAM BERRYIndependentNon-Executive Director59 years of age, New Zealander and Permanent Resident of Malaysia
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He was appointed to the Board on 22 January 1998 as the ExecutiveDirector-Operations.Hewasre-designatedasNon-ExecutiveDirectorofPSCIon1September2006.
HegraduatedfromUniversityofMalayawithadegreeinEconomics(Hons)majoringinAccountancyandholdsaMasterofBusinessAdministrationin Finance from Leuven University, Belgium. He started his workingcareerintheMinistryofFinance,MalaysiaandheldvariouspositionsintheMinistryduringhiseleven(11)yearswiththeGovernment.
He joined Amanah Merchant Bank Berhad as Senior Manager ProjectFinancein1982andwassubsequentlypromotedtobeGeneralManagerBanking & Advisory Service in 1984. In 1987, he moved to KumpulanKewangan Berhad (KKB), the holding company of Amanah MerchantBankasaSeniorGeneralManager-Operation.DuringhisserviceswithKKB,hesatonvariousBoardsnamely,AmanahMerchantBank,MalaysiaDiscount Bhd, Amanah International Insurance Bhd, Malaysia CreditFinanceBhdandKKIndustriesBhd.
In1989,heassumedtheManagingDirector’spositioninMalaysiaCreditFinanceBhd.HedoesnothaveanyfamilyrelationshipwithanyDirectorand/or major shareholders of PSCI, nor any personal interest in anybusinessarrangementinvolvingtheCompany.
Hewasappointed to theBoardon8July1998.He isamemberof theAudit,RemunerationandNominationCommittees.
He holds a diploma in Automobile Engineering, Japan. He establishedhimself in the automobile sector for thirty (30) years and has servedcompanysuchasUMWToyota,Malaysia.HeisaDirectorofseveralprivatecompaniesandwasaDirectorofActacorpBerhad.Hewasalsoamemberof the Kuala Lumpur Dewan Bandaraya Advisory Council. He does nothaveanyfamilyrelationshipwithanyDirectorand/ormajorshareholdersofPSCI,noranypersonalinterestinanybusinessarrangementinvolvingtheCompany.
HeholdsaDiplomainBritishBankingfromCityofLondonCollege.Hehasmorethanthirty(30)yearsofexperienceinthebankingsector.DuringhisemploymentwithBankBumiputraMalaysiaBerhad,hehadtheprivilegetoserveastheHeadofCreditRecoveryandComplianceDivision,Retail&IslamicBankingDivision,AreaManagerofRegionalOfficeinWilayahPersekutuan/Selangor and Regional Office Johor/Melaka and also astheGeneralManagerofKualaLumpurmainbranch.Hedoesnothaveany family relationshipwithanyDirectorand/ormajorshareholdersofPSCI,noranypersonal interest inanybusinessarrangement involvingtheCompany.
EN. ISHAK BINOSMANNon-ExecutiveNon Independant Director 60 years of age,Malaysian
EN. IDRIS BIN ZAKARIAIndependentNon-Executive Director62 years of age, Malaysian
TN. HJ. MOHD NOORDIN BIN ABDULLAHIndependentNon-Executive Director66 years of age, Malaysian
ProfileofTheBoardofDirectors
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Dear Shareholder,
I am pleased to present our annual report in a year where the previous business and financial predicament that we
faced has finally turned a corner. With the achievements of our debt restructuring and regularisation exercise over
the past year, we are well poised to steer the Group and Company towards achieving profitability and a sustainable
viability.
Given our status as a Practice Note (“PN”) 17 company and our dire financial position, our major focus in the year
has been the restructuring and regularisation of the Group.
On 1 December 2005, the Company had announced that it was an affected listed issuer under PN 17 with the
prospect of imminent delisting from Bursa Malaysia Securities Berhad. To avoid delisting and ensuing liquidation,
the Company proposed a comprehensive Debt Restructuring Scheme to the creditor banks entailing a significant
waiver of outstanding debt. On 21 December 2006, the Group successfully submitted the Debt Restructuring and
Regulatisation Plan to Securities Commission (“SC”).
Subsequent to the submission, the Company achieved several significant milestones, including approvals from SC,
The Audit Committee shall be appointed by the Board from amongst the directors of the Company and shall number not less than three (3) members, a majority of whom shall be Independent Non-Executive Directors. The members of the Audit Committee shall elect a Chairman from amongst themselves who is an Independent Non-Executive Director.
The terms of office and performance of the Committee and each of its members shall be reviewed by the Board no less than once every three (3) years.
AUTHORITY
The Committee is authorised by the Board to investigate any activity within its terms of reference and shall have unrestricted access to any information it requires from any employees and all employees are directed to co-operate with any request made by the Committee. The Committee is also authorised by the Board to obtain external legal or other independent professional advice as necessary.
The Committee shall have direct access to the internal and external auditors and be able to convene meetings with external auditors excluding the attendance of the executive members of the Committee, whenever necessary.
DUTIES AND RESPONSIBILITY
The duties of the Committee shall be:-
• To consider the appointment, resignation and dismissal of external auditors and the audit fee.
• To discuss with the external auditors, prior to the commencement of audit, the nature and scope of audit and to ensure co-ordination of audit where more than one audit firm is involved.
• To review the quarterly announcements to the Bursa Malaysia Securities Berhad and year end annual financial statements before submission to the Board.
• To discuss problems and reservations arising from the interim and final external audits, and any matters the external auditors may wish to discuss (in the absence of management, where necessary).
• To review the external auditors’ management letter and management’s response.
• To do the following in respect of the internal audit function:-
- review the adequacy of scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work.
- review internal audit programme.- ensure co-ordination of external audit with internal audit.- consider the major findings of internal audit investigations and management’s response, and ensure that
appropriate actions are taken on the recommendations of the internal audit function.
• To monitor related party transactions entered into by the Company and the Group, and to ensure that the Directors report such transactions as necessary in accordance with the Bursa Malaysia Securities Berhad’s Listing Requirements.
• To review the effectiveness of internal control systems.
• To perform any other such function as may be agreed to by the Audit Committee and the Board.
MEETINGS AND MINUTES
Meetings shall be held not less than four times a year, or more frequently when necessary. The presence of internal and external auditors will be requested if required. Other Board members and employees may attend meetings upon the invitation of the Audit Committee. The external auditors may request a meeting if they consider it necessary. Written notice of the meeting together with the agenda shall be given to the members of the Committee and where applicable, the external auditors.
The Secretary to the Audit Committee shall be the Company Secretary. Minutes of each meeting shall be distributed to each member of the Board. The Chairman of the Committee shall report on each meeting to the Board.
During the financial year ended 31 December 200�, there were five (5) Audit Committee meetings held. The details of attendance of the Committee members are as follows:-
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
NAME OF DIRECTORS INDEPENDENT ATTENDANCE OF MEETINGS
Tn.Hj.MohdNoordinBinAbdullah Yes 4/5
Y.Bhg.DatukAzzatBinKamaludin No 5/5
Mr.DavidWilliamBerry# Yes 4/4
En.IdrisBinZakaria Yes 5/5
Notes:-#Appointedon23February2006.
During the financial year ended 31 December 200�, the activities undertaken by the Audit Committee included the following:
1. Reviewing the quarterly financial statements before announcements to the Bursa Malaysia Securities Berhad.
2. Reviewing the year-end financial statements together with external auditors’ management letter in relation to the audit and accounting issues arising from the audit and management’s response.
3. Discussing and reviewing the external auditors’ scope of work, audit plan and procedures.
�. Discussing and reviewing the state of internal control in the Company.
INTERNAL AUDIT FUNCTION
The Internal Audit Division is responsible for providing independent assessments for adequate, efficient and effective internal control systems to anticipate potential risks exposures over key business processes within the Group.
TheBoardcontinuestogivecloseconsiderationtomaintainingabalanceinitssize,compositionandspreadofexperienceand expertise. This balance enables the Board to provide effective leadership as well as independent judgement onbusinessdecisions,takingintoaccountthelongterminterestsoftheGroup’sshareholders,customers,suppliersandotherbusinessassociates.
InaccordancewiththerequirementoftheMalaysianCodeonCorporateGovernance,Tn.Hj.MohdNoordinBinAbdullahhas been appointed as the Senior Independent Non-Executive Director to be available to deal with concerns of theshareholdersoftheCompany.
AneffectiveBoardleadsandcontrolstheGroup.ThisentailsreviewingandadoptingstrategicplansfortheCompany,setting direction, overseeing the conduct of the business and managing the Company. Key matters such as theregularisation plans to address the Group’s PN17 status, approval of annual and quarterly results, acquisitions anddisposals,capitalexpenditures,budgets,materialcontractsandbusinessengagements,successionplanning for topmanagementarereservedfortheBoard.
TheBoardhasalsodelegatedcertainresponsibilitiestootherBoardcommittees,whichoperatewithinclearlydefinedterms of reference. Standing committees of the Board include the Audit Committee, the Nomination Committee,the Remuneration Committee and the EXCO Committee. The responsibilities of the Nomination Committee and the
The Board has approved a procedure to take independent professional advice in appropriate circumstances, at theCompany’sexpense.Before incurringsuchprofessional fees, theDirectorconcernedmustconsultwith theExecutiveDeputyChairmanoftheBoardorwithtwootherDirectors,oneofwhomisNon-Executive.
On appointment, Directors will receive information on the Company which include financial, corporate business andregulatory information. Information will be regularly updated through meetings or written circulars. Directors areencouraged to attend training courses at the Company’s expense to keep abreast with development in the marketplace.
All Directors of the Company have attended the Mandatory Accreditation Programme conducted by the ApprovedOrganiser.TheDirectorswillcontinuetoundergootherrelevanttrainingprogrammestofurtherenhancetheirknowledgeonacontinuousbasisincompliancewithPracticeNoteNo.15/2003oftheListingRequirementsoftheBursaMalaysiaSecuritiesBerhadontheContinuingEducationProgramme.
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1�1� 19
CorporateGovernance
Remuneration Committee (currently suspended)
The Board has established a Remuneration Committee consisting of the following Independent Non-ExecutiveDirectors:-
Thepolicyof theRemunerationCommittee is to rewardemployeescompetitively, taking intoaccountperformance,marketcomparisonsandcompetitivepressureintheindustry.Thecomponentpartsofremunerationarestructuredsoastolinkrewardstocorporateandindividualperformance,inthecaseofanyExecutiveDirector.InthecaseofNon-ExecutiveDirectors,thelevelofremunerationreflectstheexperienceandlevelofresponsibilitiesundertakenbytheparticularNon-ExecutiveDirectorsconcerned.
AteachAnnualGeneralMeeting,theBoardencouragesshareholderstoparticipateinthequestionandanswersessionpertainingtothebusinessactivitiesoftheGroup.TheExecutiveDeputyChairmanandwhereappropriate,theChairmanoftheAuditCommitteeisavailabletorespondtoshareholders’questionsduringthemeeting.Whereappropriate,theChairman will undertake to provide a written answer to any significant question, which cannot be readily answeredduringthemeeting.
Before the financial statements are drawn up, the Directors take all necessary steps to ensure that the Group hasusedalltheapplicableaccountingpoliciesconsistently,andthatthepoliciesaresupportedbyreasonableandprudentjudgementsandestimates.Allaccountingstandards,whichtheBoardconsiderstobeapplicable,arefollowed,subjecttoanyexplanationsandmaterialdeparturesdisclosedinthenotestothefinancialstatements.
The Board of Directors (“the Board”) is committed to maintaining a sound system of internal control to safeguardshareholders’investmentandtheGroup’sassets.
The Board has delegated certain responsibilities to other Board committees, which operate within clearly definedtermsofreference.StandingcommitteesoftheBoardincludetheAuditCommittee,theNominationCommitteeandRemunerationCommittee.
Duringthefinancialyear,theresponsibilitiesoftheNominationCommitteeandRemunerationCommitteehavebeensuspended due to its lack of resources under its current PN17 status. The Board delegated its responsibility to anExecutiveCommitteeoftheBoard,whichoverseesallaspectsoftheGroup’soperationsandespeciallytoexpeditetheregularisationplanstoitsPN17status.TheBoardfully intendstoreinstatetherespectivecommitteesfollowingthecompletionofitsPN17regularisationplans.
INTERNAL CONTROL
WhilsttheBoardmaintainsfullcontrolanddirectionoverappropriatestrategic,financial,organisationalandcomplianceissues, it has delegated to executive management the implementation of the systems of internal control within anestablishedframework.
• The role played by the Group Managing Director as the channel of communication between the Board and themanagement.TheGroupManagingDirectorwhoisempoweredtomanagethebusinessoftheGroupimplementstheBoard’sexpectationsofthesystemsofinternalcontrol.
• TheGroupManagingDirector, togetherwiththerespectivemanagementteam,attendedtovariousmanagementand operations meetings, and review financial and operations reports, in order to monitor the performance andprofitabilityoftheGroup’sbusinesses.TheGroupManagingDirectorandthemanagementteampractiseanopendoorpolicywherebymattersarisingarepromptlyandeffectivelydealtwithdrawingontheexperienceandknowledgeofemployeesthroughouttheGroup.
• The Group also has in place various support functions, which are centralised at Head Office. These compriseSecretarial,Legal,HumanResource,FinanceandTreasury. Thesesupportfunctionsmaintainconsistencyinthesetting and application of policies and procedures relating to these functions, and reduce duplication of efforts,therebyprovidingsynergytotheGroup.
designandoperationofsuitableinternalcontrols;- ensuringthataneffectivesystemofinternalcontrolsisinplace;- meeting defined reporting deadlines and ensuring compliance with policies, procedure and regulatory
requirement.
StatementonInternalControl
20
StatementonInternalControl
21
• Detailed budgeting process whereby key operating subsidiary companies prepare budgets for the coming year,whichareapprovedattheoperatinglevel.Actualperformancecomparedwithbudgetisreviewedperiodicallywithexplanationsofmajorvariances.
• Corporate values and code of conduct, which emphasise on ethical behaviour are set out in Group’s EmployeeHandbook.
The effectiveness of the Group’s system of internal controls will continue to be reviewed and updated by the BoardthroughtheAuditCommitteewhichinlinewiththechangesintheoperatingenvironment.TheBoardisoftheviewthatthecurrentsystemofinternalcontrolisinplacethroughouttheGroupandsufficienttosafeguardtheGroup’sinterest.
The Directors are responsible for ensuring that the Company keeps proper accounting records which disclose withreasonableaccuracyatanytimethefinancialpositionoftheGroupandoftheCompanyandwhichenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct,1965.TheDirectorshaveoverallresponsibilityfortakingsuchstepsthatarereasonablyopentothemtosafeguardtheassetsoftheGroupandtheCompanytopreventanddetectfraudandotherirregularities.
TheGroup’slandedpropertiesclassifiedunderproperty,plantandequipmentarenotrevalued,butarereviewedateachbalancesheetdate todetermine if there isany indicationof impairment.These landedpropertiesarestatedatcostlessaccumulateddepreciationandimpairment.Forlandedpropertiesclassifiedas investmentproperties, theGroupassessesthefairvalueattheendofeachfinancialyearandthechangeinfairvalueistakenasgainsorlossesintheincomestatements.
NON-AUDIT FEES
The amount of non-audit fees paid to the external auditors by the Group and by the Company for the financial yearamountedtoRM290,000andRM250,000respectively.
In accordance with Section 4.1.5 of Practice Note No. 12/2001 of the Bursa Malaysia Securities Berhad ListingRequirements,thedetailsofrecurrentrelatedpartytransactionsconductedduringthefinancialyearended31December2006pursuanttotheShareholders'Mandatearedisclosedasfollows:-
Related party Interested Director/ Nature of transactions Value of Interested Major transactions Shareholder RM’000
Number of Ordinary Shares of RM1 Each At AtThe Company 1.1.2006 Bought Sold 31.12.2006LaksamanaMadya(Rtd)Dato’SeriAhmadRamliBinHajiMohdNor 1,000 - - 1,000
Number of Warrants (W2/W3) (in units) At At 1.1.2006 Bought Sold 31.12.2006Affin Holdings Berhad DatukAzzatBinKamaludin 22,500 - - 22,500
Noneof theDirectors inofficeat theendof thefinancialyearhadany interest in theCompanyduring thefinancialyear.
ISSUE OF SHARES AND DEBENTURES
There were no changes in the issued and paid up capital of the Company during the financial year. There were nodebenturesissuedduringthefinancialyear.OTHER STATUTORY INFORMATION
(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accountingrecordsintheordinarycourseofbusinesshadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.
(ii) except for the effects arising from the change in accounting policies and from the implementation of theProposed Restructuring Scheme as disclosed in the notes to the financial statement, the results of theoperations of the Group and the Company for the financial year ended 31 December 2006 have not beensubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnaturenorhasanysuchitemtransactionoreventoccurredintheintervalbetweentheendofthatfinancialyearandthedateofthisreport.
WehaveconductedourauditinaccordancewithapplicableApprovedStandardsonAuditinginMalaysia.Thosestandardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.AnauditalsoincludesassessingoftheaccountingprinciplesusedandsignificantestimatesmadebytheDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditprovidesareasonablebasisforouropinion.
(ii) themattersrequiredbySection169oftheCompaniesAct,1965tobedealtwithinthefinancialstatements;and
(b) the accounting and other records and the registers required by the Act, to be kept by the Company have beenproperlykeptinaccordancewiththeprovisionsoftheAct.
(i) the Company is an affected issuer under PN17/2005 vide its announcement to Bursa Malaysia on 1 December2005;
(ii) theGroupandtheCompanyhaveincurredanetlossofRM93.2millionandRM52.7millionrespectivelyfortheyearended31December2006and,asofthatdate,theGroup’sandtheCompany’scurrentliabilitiesexceededitscurrentassetsbyRM593.2millionandRM270.9millionrespectively;
The ability of the Group and the Company to continue as a going concern is dependent on the successfulimplementationoftheproposedrestructuringschemeandtheimplementationoftheturnaroundplanstoreturntheGrouptoprofitibality.
The principal activities of the Company are investment holding, property holding and development. The principalactivitiesofthesubsidiarycompaniesaremainlyheavyengineeringconstruction,shiprepair,shipbuildingcontractor,shipengineeringandfabrication,supplyanddesignofelectronicsandsystemtechnologyinrelationtotheshippingandmarineindustry,marketinganddistributingExocetWeaponSystem,providing,supplyingandservicingBOFORSweaponsystems,design,manufacture,supply,integratedserviceandmaintenancerepairandoverhaulofthecommunicationsystemsandequipment.
On 17 October 2006, the High Court of Malaya had granted to the Company and its subsidiary companies, PenangShipbuilding & Construction Sdn Bhd (“PSC”), an order pursuant to Sections 176(1) and 176(10) of the CompaniesAct,1965uponapplicationmadebytheCompanyandPSC,thedetailsofwhichareinNote45(b).Inthisrespect,theDirectorsoftheCompanyproposetoimplementtheProposedRestructuringSchemeassetoutinNote6herewith.
The Proposed Restructuring Scheme has been submitted to Securities Commission on 21 December 2006 and theproposalwasapprovedbyrelevantauthorities,shareholdersandschemecreditorsassetoutinNote46tothefinancialstatements.
(i) FRS117-Leases (ii) FRS124-RelatedPartyTransactions(iii) FRS139-FinancialInstruments:RecognitionandMeasurement (iv) FRS6-ExplorationforandEvaluationofMineralResources(v) AmendmenttoFRS119:EmployeeBenefits-ActuarialGainsandLosses,GroupPlansandDisclosures(vi) AmendmenttoFRS121:TheEffectsofChangesinForeignExchangeRates-NetInvestmentinaForeign
Operation(vii) ICInterpretation1:ChangesinExistingDecommissioning,RestorationandSimilarLiabilities(viii)ICInterpretation2:Members’SharesinCo-operativeEntitiesandSimilarInstruments(ix) IC Interpretation 5: Rights to Interests arising from Decommissioning, Restoration and Environmental
In particular, information about significant areas of estimation uncertainty and critical judgements in applyingaccountingpoliciesthathavethemostsignificanteffectontheamountrecognisedinthefinancialstatementsaredescribedinthefollowingnotes:-
Fair value is arrived at by reference to market evidence of transaction prices for similar properties and isperformedbyregisteredindependentvaluershavinganappropriaterecognisedprofessionalqualificationandrecentexperienceinthelocationandcategoryofthepropertiesbeingvalued.
Intheabsenceofcurrentpricesinanactivemarket,thevaluationsarepreparedbyconsideringtheaggregateof theestimatedcashflowsexpected tobereceived fromrentingout theproperty.Ayield that reflects thespecificrisksinherentinthenetcashflowsthenisappliedtothenetannualcashflowstoarriveatthepropertyvaluation.FurtherdetailsofthecarryingamountaredisclosedinNote18tothefinancialstatements.
(iii) Useful lives of property, plant and equipment
The Group recognises construction revenue and costs, including rendering of services, in the incomestatementbyusingthestageofcompletionmethod.Thestageofcompletionisdeterminedbytheproportionthatcontractcostsincurredforworkperformedtodatebeartotheestimatedtotalcontractcosts.
Theaccountingpoliciessetoutbelowhavebeenappliedconsistently toallperiodspresented in thesefinancialstatements,andhavebeenappliedconsistentlybytheGroupandtheCompany,unlessotherwisestated.
Subsidiariesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatethatsuchcontrolceases.Inpreparingtheconsolidatedfinancialstatements, intragroupbalances, transactionsandunrealisedgainsor lossesareeliminated infull.Uniformaccounting policies are adopted in the consolidated financial statements for like transactions and events insimilarcircumstances.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
(c) Minority interests
Minorityinterestsatthebalancesheetdate,beingtheportionofthenetassetsofsubsidiariesattributabletoequity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, arepresentedintheconsolidatedbalancesheetsandstatementsofchangesinequitywithinequity,separatelyfromequityattributabletotheequityshareholdersoftheCompany.MinorityinterestsintheresultsoftheGroupispresentedonthefaceoftheconsolidatedincomestatementsasanallocationofthetotalprofitorlossfortheperiodbetweenminorityinterestsandtheequityshareholdersoftheCompany.
Associatecompaniesareentities inwhichtheGroup is inapositiontoexercisesignificant influence,butnotcontrol,overthefinancialandoperatingpoliciesthroughmanagementparticipation.
WhentheGroup’sshareof lossesexceeds its interest inanequityaccountedassociate, thecarryingamountof that interest (includingany long-term investments) is reduced toniland therecognitionof further lossesisdiscontinuedexcepttotheextentthattheGrouphasanobligationorhasmadepaymentsonbehalfoftheinvestee.
The Group has availed itself to the transitional provision when the MASB first adopted IAS 16, Property,PlantandEquipmentin1998.Certainlongtermleaseholdland,reclaimedlandandbuildingandshorttermleaseholdlandwererevaluedin1991and1997andnolatervaluationhasbeenrecordedfortheseproperty,plantandequipment(exceptinthecaseofimpairmentadjustmentsbasedonavaluation).
When significant parts of an item of property, plant and equipment have different useful lives, they areaccountedforasseparateitems(majorcomponents)ofproperty,plantandequipment.
Whentheuseofapropertychangesfromowned-occupiedtoinvestmentproperty,thepropertyisremeasuredto fair value and reclassified as investment property. Any gain arising on remeasurement is recogniseddirectlyinequity.Anylossisrecognisedimmediatelyintheincomestatement.
Investmentpropertiesarepropertieswhichareownedorheldunderaleaseholdinteresttoearnrentalincomeorforcapitalappreciationorforboth.Theseincludelandheldforacurrentlyundeterminedfutureuse.Investmentproperty was previously stated at revaluation with surplus recognised as revaluation reserve. Following theadoptionofFRS140,InvestmentProperties,allinvestmentpropertiesaremeasuredinitiallyandsubsequentlyatfairvaluewithanychangethereinrecognisedintheincomestatement.
Fair value is arrived at by reference to market evidence of transaction prices for similar properties and isperformedbyregisteredindependentvaluershavinganappropriaterecognisedprofessionalqualificationandrecentexperienceinthelocationandcategoryofthepropertiesbeingvalued.
Intheabsenceofcurrentpricesinanactivemarket,thevaluationsarepreparedbyconsideringtheaggregateof the estimated cash flows expected to be received from renting out the property. A yield that reflects thespecificrisksinherentinthenetcashflowsthenisappliedtothenetannualcashflowstoarriveatthepropertyvaluation.
Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meetingleasecommitmentsorlikelytobeinoccupationafterlettingvacantaccommodation,andthemarket’sgeneralperceptionoftheircreditworthiness;theallocationofmaintenanceandinsuranceresponsibilitiesbetweentheGroupandthelessee;andtheremainingeconomiclifeoftheproperty.Whenrentreviewsorleaserenewalsarependingwithanticipatedreversionaryincreases,itisassumedthatallnoticesandwhereappropriatecounter-noticeshavebeenservedvalidlyandwithintheappropriatetime.
(ii) Investment inunquotedsharesarestatedatcost less impairment losses.Thepolicy for recognitionandmeasurementofimpairmentlossesisinaccordancewithNote4(o).
Where the outcome of a construction contract involving the rendering of services can be reliably estimated,contractrevenueandcontractcostsarerecognisedasrevenueandexpensesrespectivelybyusingthestageofcompletionmethod.Thestageofcompletionismeasuredbyreferencetoproportionofcontractcostsincurredforworkperformedtodatetotheestimatedtotalcontractcosts.
Wheretheoutcomeofaconstructioncontractinvolvingtherenderingofservicescannotbereliablyestimated,contractrevenueisrecognisedtotheextentofcontractcosts incurredthat it isprobablewillberecoverable.Contractcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.
(ii) Finance leases and hire purchase - the Group as lessee
Assetsacquiredbywayofhirepurchaseorfinanceleasesarestatedatanamountequaltotheloweroftheirfairvaluesandthepresentvalueoftheminimumleasepaymentsattheinceptionoftheleases,lessaccumulated depreciation and impairment losses. The corresponding liability is included in the balancesheetasborrowings.Incalculatingthepresentvalueoftheminimumleasepayments,thediscountfactorusedistheinterestrateimplicitinthelease,whenitispracticabletodetermine;otherwise,theCompany’sincrementalborrowingrateisused.Anyinitialdirectcostsarealsoaddedtothecarryingamountofsuchassets.
The depreciation policy for leased assets is in accordance with that for depreciable property, plant andequipmentasdescribedinNote4(f)(iv).
(iii) Operating leases - the Group as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the term of therelevantlease.Theaggregatebenefitof incentivesprovidedbythelessor isrecognisedasareductionofrentalexpensesovertheleasetermonastraight-linebasis.
(iv) Operating leases – the Group as lessor
Assetsleasedoutunderoperatingleasesarepresentedonthebalancesheetsaccordingtothenatureoftheassets.Rentalincomefromoperatingleasesisrecognisedonastraightlinebasisoverthetermoftherelevantlease(Note4(v)).Initialdirectcostsincurredinnegotiatingandarranginganoperatingleaseareaddedto thecarryingamountof the leasedassetandrecognisedonastraight-linebasisover the leaseterm.
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NotestoTheFinancialStatements
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
For goodwill and intangible assets that have indefinite useful life and intangible assets or that are not yetavailableforuse,therecoverableamountisestimatedateachbalancedateormorefrequentlywhenindicatorsofimpairmentareidentified.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset otherthangoodwillisreversedif,andonlyif,therehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverable amount since the last impairment loss was recognised. The carrying amount of an asset otherthangoodwill is increased to its revised recoverableamount,provided that thisamountdoesnotexceed thecarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedinprofitorloss,unlesstheassetiscarriedatrevaluedamount,inwhichcase,suchreversalistreatedasarevaluationincrease.
Whereitisnotprobablethatanoutflowofeconomicbenefitswillberequired,ortheamountcannotbeestimatedreliably,theobligationisdisclosedasacontingentliability,unlesstheprobabilityofoutflowofeconomicbenefitsisremote.Possibleobligations,whoseexistencewillonlybeconfirmedbytheoccurrenceornon-occurrenceof one or more future events are also disclosed as contingent liabilities unless the probability of outflow ofeconomicbenefitsisremote.
Inpreparingthefinancialstatementsof the individualentities, transactions incurrenciesotherthantheentity’sfunctionalcurrency(foreigncurrencies)arerecordedinthefunctionalcurrenciesusingtheexchangeratesprevailingatthedatesofthetransactions.Ateachbalancesheetdate,monetaryitemsdenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthedatewhenthefairvaluewasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.
Goodwillandfairvalueadjustmentsarisingontheacquisitiononaforeignentityaretreatedasassetsandliabilitiesof the foreignentityonorafter1January2006andarerecorded in the functionalcurrencyoftheforeignoperationsandtranslatedattheclosingrateatthebalancesheetdate.Goodwillandfairvalueadjustmentswhicharoseontheacquisitionofforeignsubsidiariesbefore1January2006aredeemedtobeassetsandliabilitiesoftheparentcompanyandarerecordedinRMattheratesprevailingatthedateofacquisition.
Deferredtaxisprovidedfor,usingtheliabilitymethod.Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthat it isprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransactions,affectsneitheraccountingprofitsnortaxableprofit.
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51
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
(i) Contract revenue and profit on long term construction contracts are accounted for on the percentageof completion method by reference to the percentage of actual construction work completed and costincurred.
Termination benefits are payable when employment is terminated before the normal retirement date orwheneveranemployeeacceptsvoluntaryredundancyinexchangeforthesebenefits.TheGrouprecognisesterminationbenefitasaliabilityandanexpensewhenitisdemonstrablycommittedtoeitherterminatetheemploymentofcurrentemployeesaccordingtoadetailedplanwithoutpossibilityofwithdrawalorprovidingterminationbenefitsasaresultofanofferaremadetoencouragevoluntaryredundancy. Inthecaseofanoffermadetoencouragevoluntaryredundancy, themeasurementof terminationbenefits isbasedonthenumberofemployeesexpectedtoaccepttheoffer.Benefitsfallingduemorethantwelvemonthsafterbalancesheetdatearediscountedtopresentvalue.
(x) Borrowing costs
Allborrowingcostsarerecognisedintheincomestatementusingtheeffectiveinterestmethod,intheperiodin which they are incurred except to the extent that they are capitalised as being directly attributable to theacquisition,constructionorproductionofanassetwhichnecessarilytakesasubstantialperiodoftimetobepreparedforitsintendeduse.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditurefortheassetisbeingincurred,borrowingcostsarebeingincurredandactivitiesthatarenecessarytopreparetheassetforitsintendeduseorsaleareinprogress.Capitalisationofborrowingcostsissuspendedorceaseswhensubstantiallyalltheactivitiesnecessarytopreparethequalifyingassetfor its intendeduseorsaleareinterruptedorcompleted.
Operation(vii) ICInterpretation1:ChangesinExistingDecommissioning,RestorationandSimilarLiabilities(viii) ICInterpretation2:Members’SharesinCo-operativeEntitiesandSimilarInstruments(ix) ICInterpretation5: Rights to Interests arising from Decommissioning, Restoration and Environmental
RehabilitationFunds
52 53
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5. CHANGES IN ACCOUNTING POLICIES, EFFECTS AND CHANGES IN COMPARATIVES ARISING FROM THE ADOPTION OF NEW AND REVISED FRSs (CONT'D)
6.1 Proposed disposal of Menara PSCI (“Proposed Disposal”)
Proposeddisposalof three lotsof landheldunderGeranNo.27123LotNo.1199,GeranNo.27124LotNo.1197andGeranNo.27125LotNo.1198,Section13,all inTownofGeorgetown,NorthEastDistrict,StateofPulauPinangmeasuringapproximately71,817squarefeettogetherwithabuildingerectedthereon,knownas‘MenaraPSCI’,byPSCAssetHoldingsSdnBhd,awhollyownedsubsidiaryofPSCIndustriesBerhad(“PSCI”),toBousteadHoldingsBerhad(“Boustead”)foracashconsiderationofRM54million.
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6. PROPOSED RESTRUCTURING SCHEME (cont'd)
6.1 Proposed disposal of Menara PSCI (“Proposed Disposal”)(cont'd)
i. 3ordinarysharesofRM1.00eachintheissuedandpaid-upcapitaloftheCompanywhichareheldbyBousteadHoldingsBerhadwillbecancelled;and
ii. theremaining174,038,345ordinarysharesofRM1.00eachintheissuedandpaid-upcapitalofPSCIwillbereducedbyRM0.80persharetobecome174,083,345ordinarysharesofRM0.20each.
The Proposed Debt Settlement involving the Company and PSCSB will be implemented by way of a schemeofarrangementunderSection176oftheAct inrespectoftheamountowing(“SchemeDebt”)totheSchemeCreditorsofboththeCompanyanditswhollyownedsubsidiary,PSCSB.
(i) Waiver of any or all interests or (in the case of Scheme Debt based on Syariah principles) profit,compensationorequivalentaccruingontheoutstandingdebtaftertheCut-OffDateandanypenalties,charges,fees,costsandexpensesandindemnitypaymentobligationsor(inthecaseofSchemeDebtbasedonSyariahprinciples)othercompensation,penaltychargesorequivalent;
(ii) Fullsettlementofsecureddebtuptothecollateralvalueoftheoperatingassetsinthemannersetoutinsub-paragraphs(iii)and(iv)below,andtheportionoftheoutstandingdebtexceedingthecollateralvalueshallbereferredtoas“PartiallyUnsecuredDebt”;
(iv) Debt secured on operating assets shall be settled by way of issuance of Settlement Shares forthe secured debt to the extent of the collateral value of the operating assets or outstanding debtwhicheverislower;whereupon,theSecuredCreditorsshalldischarge(orotherwiseextinguish)itssecurity interestoverthesaidoperatingassetsandtitleandpossessiontoallSchemeAssetsthatareunderhirepurchaseorareotherwiseownedbytheSecuredCreditorsshallbetransferredtotheCompanyorPSCSB,andall interestoftheSchemeCreditorsinthesaidoperatingassetsshallbeextinguished;
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6. PROPOSED RESTRUCTURING SCHEME (cont'd)
6.3 Proposed debt settlement (cont'd)
6.3.1 Particulars(cont'd)
v. TheSettlementSharestobeallottedtotheSecuredCreditorswillberenouncedentirelybytheSchemeCreditorsforacashconsiderationofRM1.00perSettlementShare(asdetailedinSection6.3.4below);and
vi. ThePartiallyUnsecuredDebtshallbetreatedasanunsecureddebtandshallbesettledinamannersimilartothatfortheUnsecuredCreditorsassetoutbelow.
# Basedonthe lowerof theoutstandingdebtandthemarketvalueof theoperatingSchemeAssets,being the Pulau Jerejak Shipyard, plant and machinery which consist of 2 units of MHE-DemagoverheadcranesituatedatPulauJerejakShipyard,1unitofpassengerferrysituatedatPulauJerejakShipyardand1unitofsteelfloatingdocksituatedatPulauLangkawi,asappraisedbyCHWilliamsvidevaluationreportsdated17November2006and22November2006,respectively
(ii) Waiverofanyandallinterestsor(inthecaseofSchemeDebtbasedonSyariahprinciples)profit,compensationorequivalentaftertheCut-OffDateandanyandallpenalties,charges,fees,costsandexpensesandindemnitypaymentobligationsor(inthecaseofSchemeDebtbasedonSyariahprinciples)othercompensation,penaltychargesorequivalent,foralltheunsecureddebt;
(iii) Waiverof70%oftheprincipalamountofalltheunsecureddebtasattheCut-OffDateandsuchpost-waiver principal amount of the unsecured debt shall be referred to as the “RestructuredDebt”;
EachoftheSecuredCreditorsandUnsecuredCreditorsofPSCSBwhichhavethebenefitofacorporateguarantee from PSCI shall fully discharge and release PSCI from all its obligations under the saidcorporateguaranteeandalloutstandingamountshallbeandwillbedeemedtobefullyandirrevocablysettled,satisfied,releasedanddischargedasbetweenPSCIandsuchSecuredCreditorsandUnsecuredCreditors.
The settlement for the Partially Unsecured Debt and the Unsecured Creditors of PSCI and PSCSB issummarisedbelow:
Partially Unsecured Unsecured Unsecured Creditors of Creditors of Debt the Company PSCSB Total
* Boustead,subjecttotheapprovalofitsshareholders,hason28February2007givenitswrittenundertakingtoacquireupto144,007,607RenouncedShares. In theevent that theRenounceesotherthanBousteaddoesnotacquireitsportionoftheRenouncedShares,BousteadwillacquiretheentireRenouncedSharesanditsresultantshareholdingintheCompanywillbe71.62%
127,551,191 Settlement Shares will be renounced by the Scheme Creditors to Boustead; and 16,456,416Settlement Shares will be renounced to such other prospective investor(s) as the Board may identify andapprove.However,intheeventthatthereisnootherprospectiveinvestor(s)acquiringtheseSettlementShares,Bousteadhad,on28February2007,giventotheCompanytheirwrittenundertakingtoacquireuptotheentire144,007,607includingtheaforesaid16,456,416SettlementShares(“RemainingSettlementShares”).
OntheassumptionthatBousteaddoesnotacquiretheRemainingSettlementShares,Boustead’sshareholdingin the Company will increase from 32.5% equity interest to 65.0% equity interest, upon completion of theProposals.
On22January2007,Affin InvestmentBankBerhad,onbehalfofBoustead,hadsubmittedanapplication tothe Securities Commission ("SC") in respect of the Proposed Exemption. The SC had, vide its letter dated13February2007,stated that theSCwillconsider theProposedExemptionsubject to,amongstothers, theprovisionofcompetentindependentadvice(“IA”)totheshareholdersoftheCompanywhereintheappointmentoftheIAandcontentsoftheIACircularmusthavebeenapprovedandconsentedbytheSC.
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6. PROPOSED RESTRUCTURING SCHEME (cont'd)
6.5 Approvals required
6.5.1 TheProposedDisposalissubjecttoapprovalsfromthefollowing:- (i) TheSC;(ii) the SC (for and on behalf of Foreign Investment Committee (“FIC”)) under the FIC Guidelines
(Boustead,asthepurchaser);(iii) the shareholders of the Company at an Extraordinary General Meeting ("EGM") to be convened;
6.5.2 The Proposed Restructuring Scheme and the Proposed Exemption are subject to the followingapprovals: (i) theSCfortheProposedRestructuringSchemeandtheProposedExemption.(ii) theSC(forandonbehalfofFIC)undertheFICGuidelinesfortheProposedRestructuringScheme.(iii) theShareholdersoftheCompanyatanEGMtobeconvenedfortheProposedRestructuringScheme
Share Premium Account Cancellation pursuant to Section 64 and 60 of the Act, as well as therequisitesanctionoftheHighCourtofMalayafortheProposedDebtSettlementpursuanttoSection176oftheAct;
In prior year, a former subsidiary company wrote off the design and integrated logistics support system costsamountingtoRM455.3millionduetosignificantuncertaintyoveritsrealisationinthefutureandtherewouldbenoeconomicsbenefitstobeobtainedthereafter.Inaddition,aprovisionofRM606.9millionwasalsomadeinviewofthepossiblecostescalationinrelationtotheOPVproject.
** Included in the amount is RM23,467 (2005: RM Nil) in relation to a Director who was re-designated from anExecutiveDirectortoaNon-ExecutiveDirectorduringthefinancialyear.
Domesticcurrentincometaxiscalculatedatthestatutorytaxrateof28%(2005:28%)oftheestimatedassessableprofit for the year. The domestic statutory tax rate will be reduced to 27% from the current year’s rate of 28%,effectiveyearofassessment2007andto26%effectiveyearofassessment2008.
Equipment, fittings, renovation, Capital Land and Plant and vehicles and work in buildings machinery others progress TotalGroup RM’000 RM’000 RM’000 RM’000 RM’000
Equipment, fittings, renovation, Capital Land and Plant and vehicles and work in buildings machinery others progress TotalGroup (cont'd) RM’000 RM’000 RM’000 RM’000 RM’000
Analysisoflandandbuildings:- Long term leasehold Buildings, land and Short term jetties, reclaimed leasehold Yard slipways land land development and roads TotalGroup (Cont'd) RM’000 RM’000 RM’000 RM’000 RM’000
(a) Longtermleaseholdland,reclaimedlandandbuildingandshorttermleaseholdlandoftheGroupwererevaluedbytheDirectorsin1991and1997respectivelybasedonvaluationcarriedoutbyindependentprofessionalvaluersbased on existing use basis and has not been revalued since. The Group does not adopt a policy of regularrevaluation as required by FRS116, Property, Plant and Equipment and has availed itself to the transitionalprovisionunderIAS16(Revised):Property,PlantandEquipment.
(b) A subsidiary of the Group, included within construction and shipbuilding segment, has engaged a firm ofprofessionalstocarryoutareviewoftherecoverableamountofitsproperty,plantandequipmentduringthefinancialyearinrelationtotheGroup’sproposedrestructuringscheme.
Thelandisvaluedbyreferencetotransactionsofsimilarlandsinthesurroundingwithadjustmentsmadefordifferencesinlocation,terrain,sizeandshapeoftheland,tenure,titlerestrictions, ifanyandotherrelevantcharacteristics. The buildings are valued by reference to their depreciated replacement costs, that is, thereplacementcostnewlessanappropriateadjustmentfordepreciationorobsolescencetoreflecttheexistingconditionofthebuildingsatthedateofvaluations.
(d) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM4.95million (2005:RM32.96million)ofwhichRM0.13million (2005:RMNil)wasacquiredbymeansofhirepurchase.
The cost of shares in a subsidiary company which are pledged to the financial institutions for banking facilitiesgrantedtotheCompanyandacorporateshareholderareRM102,087,798(2005:RM102,087,798)andRM6,380,487(2005:RM6,380,487)respectively.
PenangShipbuilding 100 100 Heavy engineering construction, shiprepair andandConstruction shipbuilding,contractorandacommissionedagentSdnBhd#
SedapDevelopment 100 100 Propertydevelopment SdnBhd# SedapTrading 100 100 CeasedoperationsSdnBhd# EagacorpMarine 51 51 DormantSdnBhd# AsiaCoins - 100 DormantSdnBhd# PSCPetroleum 100 - DormantSdnBhd# Held by PSC Asset Holdings Sdn Bhd DesaPSC 100 100 ConstructionandbuildingcontractorSdnBhd#
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22. INVESTMENTS IN SUBSIDIARY COMPANIES (CONT'D) Detailsofthesubsidiaries,allofwhichwereincorporatedinMalaysiaunlessotherwisestated,areasfollows:
Proportion of Ownership Interest Name of Subsidiaries 2006 2005 Principal Activities (cont'd) % %
Held by Penang Shipbuilding & Construction Sdn Bhd PSCTemaShipyard 60 60 Ship repairing, engineering and metalled activities,Limited# andfabricationandotheractivitiesinconnection(Incorporatedin therewithRepublicofGhana)
PSCMiri 100 100 DormantSdnBhd# AlphaShanghai 100 100 Dormant(M)SdnBhd# Frigate-In-Support 100 100 DormantServicesSdnBhd# Held by Dominion Defence & Industries Sdn Bhd BurlingtonCapital 60 60 DormantSdnBhd# BurlingtonEngineering 60 60 Dormant&ConstructionSdnBhd# BurlingtonPromotions 100 100 Dormant&PublicationsSdnBhd# BurlingtonPlantations 100 100 DormantSdnBhd# Held by PSC Defence Technologies Sdn Bhd AeromarineMaintenance 70 70 Marketing and distributing Exocet Weapon SystemServicesSdnBhd#
AtlasDefence 70 70 Supply of electronics and system technology inTechnologySdnBhd# relationtotheshippingandmarineindustry PSCBoforsDefence 51 51 Providing,supplyingandservicingBOFORSweaponsSdnBhd# systems
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22. INVESTMENTS IN SUBSIDIARY COMPANIES (CONT'D) Detailsofthesubsidiaries,allofwhichwereincorporatedinMalaysiaunlessotherwisestated,areasfollows:
Proportion of Ownership Interest Name of Subsidiaries 2006 2005 Principal Activities (cont'd) % %
Held by PSC Defence Technologies Sdn Bhd (cont'd)
NavalandDefence 100 100 Design, manufacture, supply, integrate serviceCommunication and maintenance repair and overhaul of theSystemSdnBhd# communicationsystemsandequipment
The ability of the Company to continue as a going concern is dependent on the success of the approvaland implementation of the proposed restructuring scheme (as disclosed in Note 6 to the financialstatements),profitabilityandpositivecashflowgeneratedfromfutureoperationsandfinancialsupportoftheshareholders.
71 78 Net realisable value Consumables 2,064 2,801
2,135 2,879
During the financial year, there was a reversal of a write-down of inventories of RM0.02 million (2005: RM0.03million).Thereversalarosefromanincreaseinnetrealisablevalueasaresultofutilisationofinventoriesforcertainprojects.
(a) Credit risk The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading terms
with its customers are mainly on credit, except for, where payment in advance is normally required prior tocommencementofnewprojects.Thecreditperiodisgenerallyforaperiodofamonth,extendinguptothreemonthsformajorcustomers.TheGroupseekstomaintainstrictcontroloveritsoutstandingreceivablesandstrivestominimisecreditrisk.Overduebalancesarereviewedregularlybyseniormanagement.
The revaluation reserve relates to the revaluation of properties prior to its reclassification as investmentproperties.UpontheadoptionofFRS140,InvestmentPropertyasat1January2006,therevaluationreservebalancehasbeenreversed.
(b) Exchange fluctuation reserve
The exchange fluctuation reserve relates to exchange differences arising from translation of the financialstatementsofforeignoperationswhosefunctionalcurrenciesaredifferentfromthatoftheGroup’spresentationcurrency.It isalsousedtorecordtheexchangedifferencesarisingfrommonetarytermswhichformpartoftheGroup’snetinvestmentinforeignoperations,wherethemonetaryitemisdenominatedineitherfunctionalcurrencyofthereportingentityoftheforeignoperation.
35. HIRE PURCHASE AND FINANCE LEASE LIABILITIES (CONT'D)
The Group has defaulted in the repayment of RM8.8 million (2005: RM8.0 million) of the abovementioned hirepurchaseandfinanceleaseliabilitiesandthelenders(alsotheSchemeCreditorsundertheProposedRestructuringSchemeasdisclosedinNote6tothefinancialstatements)havetakenlegalactionagainsttheGroup.
Included in theGroup isRM6.5million (2005:RMNil) inrelation to the foreseeable loss fora freehold landofasubsidiarycompany,whichhadbeenpledgedforbankingfacilitiesgrantedtoacorporateshareholder,wherebyanorderforsalehadbeenobtained.
39. OPERATING LEASE ARRANGEMENTS The Group as lessee
The Group has entered into non-cancellable operating lease agreements for the use of land and buildings andequipment.Theseleaseshaveanaveragelifebetween1to3yearswithrenewaloptionincludedinthecontracts.TherearenorestrictionsplacedupontheGroupbyenteringintothelease.
44. SEGMENT INFORMATION SegmentinformationispresentedinrespectoftheGroup’sbusinesssegments.ThebusinesssegmentisbasedontheGroup’smanagementandinternalreportingstructure.
Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedonareasonablebasis.Unallocateditemscomprisemainlyinvestments(otherthaninvestmentproperty)and related revenue, loans and borrowings and related expenses, corporate assets (primarily the Company’sheadquarters)andheadofficeexpenses,andtaxassetsandliabilities.
Supplying of electronics and system technology inrelationtotheshippingandmarineindustry,marketingand distributing Exocet Weapon System, providing,supplying and servicing BOFORS weapon systems,design, manufacture, supply, integrate service andmaintenancerepairandoverhaulofthecommunicationsystemsandequipment.
Heavy engineering construction, shiprepair andshipbuilding,contractorandacommissionagent.
Propertyholding.
Supplying of equipment and machinery in relation tonavalships.
(ii) Allfurtherproceedingsinanyaction,orproceedingsagainstthecompanyandPSCSBincludingbutnotlimitedtowindingup,executionandarbitrationproceedingsalreadycommencedagainstthem,arerestrainedandstayedforaperiodof9monthseffective17October2006upto16July2007.
(d) On 21 December 2006, the Company had submitted its Proposed Restructuring Scheme to the SecuritiesCommissionassetoutinNote6tothefinancialstatements.
On 19 March 2007, the Securities Commission (“SC”) had approved the Proposed Disposal and ProposedRestructuringSchemesubjecttothefollowingconditions:
(i) theCompanyshouldrectifyandobtainapprovalfortheunapprovedstructuretogetherwiththecertificateoffitnesswithin12months from thedateof theSC’sapproval for theProposedDisposalandProposedRestructuringScheme;
(ii) theCompanyshouldmakequarterlyannouncementtoBursaMalaysiaonthestatusofsuchrectificationorapplication;and
The SC, vide the same letter, approved the Proposed Restructuring Scheme under the Guidelines on theAcquisitionofInterests,mergersandtakeoverbyLocalandForeignInterests.
(ii) Inyearended31December1998,asubsidiarycompanyhadenteredintoaSaleandPurchaseAgreementwithathirdpartyforthedisposalofapieceoflandheldbythesubsidiarycompanyforatotalconsiderationofRM15.2million.Asatyearended31December2005,RM1.0millionhadbeenreceived.ThebalanceofamountoutstandingofRM14.2millionwasprovidedforasdoubtfuldebtinyearended31December2005.
As at 31 December 2006, the titles to both pieces of land above still remain with the Company and the
ANALYSIS OF SHAREHOLDINGS BY RANGE GROUPS Size of Shareholdings Shareholdings Shareholdings No. of Shareholders Percentage Shareholders Percentage (%) (%)
BeneficialOwner In relation to Deposited Securities, the ultimate owner of the Deposited Securities who isthepersonwhoisentitledtoallrights,benefits,powersandprivilegesandissubjecttoallliabilities,dutiesandobligationsinrespectof,orarisingfrom,theDepositedSecuritiesanddoesnotincludeanomineeofanydescription.
CentralDepositoriesAct The Securities Industry (Central Depositories) Act, 1991, or any statutory modification,amendmentorre-enactmentthereofforthetimebeinginforce.
Secretary Any person appointed to perform the duties of the Secretary of the Company including anassistantordeputysecretaryoranypersonappointedtemporarily.
SecuritiesAccount An account established by the Depository for a Depositor for the recording of deposit ofsecurities and for dealing in such securities by the Depositor, as defined in the CentralDepositoriesActand/ortheRules.
Expressions referring to writing shall, unless the contrary intention appears, be construed as including references toprinting,lithography,photography,andothermodesofrepresentingorreproducingwordsinavisibleform.
3. Withoutprejudicetoanyspecialrightspreviouslyconferredontheholdersofanyexistingsharesorclassofshares,andsubjecttotheprovisionsoftheseArticlesandtheActandtotheprovisionsof any resolution of the Company, every issue of shares or options in the Company shall beapprovedbytheMembersingeneralmeetingandsuchsharesmaybeissuedbytheDirectors,whomayallot,orotherwisedisposeofsuchsharestosuchpersons,onsuchtermsandconditions,withsuchpreferred,deferredorotherspecialrights,andsubjecttosuchrestrictionsandatsuchtimes as the Directors may determine but the Directors in making any issue of shares shallcomplywiththefollowingconditions:-
(b) in thecaseofsharesofanyclass,other thanordinaryshares,nospecialrightsshallbeattacheduntilthesamehavebeenexpressedintheseArticles;
(c) no issueofsharesshallbemadewhichwillhave theeffectof transferringacontrollinginterestintheCompanytoanyperson,companyorsyndicatewithoutthepriorapprovaloftheMembersoftheCompanyingeneralmeeting;and
8. Subject to theAct,anypreferencesharesmaywith thesanctionofanordinaryresolution,beissuedonthetermsthattheyare,orattheoptionoftheCompanyareorwillbeliable,toberedeemedandtheCompanyshallnotissuepreferencesharesrankinginprioritytothepreferencesharesalreadyissued,butmayissuepreferencesharesrankingequallytherewith.Preferenceshareholdersshallhavethesamerightsasordinaryshareholdersasregardstoreceivingnotices,reportsandauditedaccounts,andattendinggeneralmeetingsoftheCompanyandshallalsohavetherighttovoteatanymeetingconvenedineachofthefollowingcircumstances:-
a) whenthedividendorpartofthedividendonthepreferencesharesisinarrearsformorethansix(6)months;
b) onaproposaltoreducetheCompany’ssharecapital;
c) on a proposal for the disposal of the whole of the Company’s property, business andundertaking;
9. Notwithstanding Article 11 hereof, the repayment of preference share capital other thanredeemablepreferenceshares,oranyalterationofpreferenceshareholders’rightsshallonlybemadepursuanttoaspecialresolutionofthepreferenceshareholdersconcerned,providedalways thatwhere thenecessarymajority forsuchaspecial resolution isnotobtainedat themeeting,consentinwriting,ifobtainedfromtheholdersofthree-fourths(3/4)ofthepreferencecapital concerned within two (2) months of the meeting, shall be as valid and effectual as aspecialresolutioncarriedatthemeeting.
10. Subjecttotheprovisionsofsection65oftheAct,alloranyoftherights,privilegesorconditionsforthetimebeingattachedorbelongingtoanyclassofsharesforthetimebeingformingpartofthesharecapitaloftheCompanymayfromtimetotimebemodified,affected,varied,extendedorsurrenderedinanymannerwiththeconsentinwritingoftheholdersofnotlessthanthree-fourths(3/4)oftheissuedsharesofthatclassorwiththesanctionofaspecialresolutionpassedat a separate meeting of the Members of that class. To every such separate meeting all theprovisionsoftheseArticlesastogeneralmeetingsoftheCompanyshallmutatismutandisapply,butsothatthenecessaryquorumshallbetwo(2)Membersoftheclassholdingorrepresentingbyproxy,one-third(1/3)ofthesharecapitalpaidorcreditedaspaidontheissuedsharesoftheclass,andeveryholderofsharesoftheclassinquestionshallbeentitledonapolltoone(1)voteforeverysuchshareheldbyhim.Toeverysuchspecialresolutiontheprovisionsofsection152oftheActshallwithsuchadaptationasarenecessaryapply.
11. TheCompanymaypayacommissiontoanypersoninconsiderationofhissubscribingoragreeingtosubscribe,whetherabsolutelyorconditionally,foranysharesintheCompany,providedthatthe rate per cent or the amount of procuring or agreeing to procure subscriptions, whetherabsoluteorconditional,ofthecommissionpaidoragreedtobepaidshallbedisclosedinthemannerrequiredbytheAct,thatsuchcommissionshallnotexceedtenpercent(10%)ofthepriceatwhichsuchsharesareissued,oranamountequivalenttosuchpercentage,andthattherequirementsofsection58oftheActshallbeobserved.Subjecttotheprovisionsofsection54
13. The Company may by notice in writing, require any Member of the Company, within suchreasonabletimeasisspecifiedinthenotice:-
a) to informtheCompanywhetherheholdsanyvotingsharesintheCompanyasbeneficialowner,AuthorisedNomineeorastrustee;and
b) ifheholdsthemastrusteeorAuthorisedNominee,toindicatesofarashecan,thepersonsforwhomheholdsthembynameandbyotherparticularssufficienttoenablethosepersonstobeidentifiedandthenatureoftheirinterest
16. TheDirectorsmaysellanysharessubjecttosuchlienatsuchtimeortimesandinsuchmannerastheythinkfit,butnosaleshallbemadeuntilsuchtimeasthemoneyinrespectofwhichsuchlienexistsorsomepartthereofareorispresentlypayableoraliabilityorengagementinrespectofwhichsuchlienexistsisliabletobepresentlyfulfilledordischarged,anduntilademandandnoticeinwritingstatingtheamountdueorspecifyingtheliabilityorengagementanddemandingpayment or fulfillment or discharge thereof, and giving notice of intention to sell in default,shallhavebeenservedonsuchMemberorthepersons(ifany)entitledbytransmissiontotheshares,anddefaultinpayment,fulfillmentordischargeshallhavebeenmadebyhimorthemforfourteen(14)daysaftersuchnotice.
20. The Directors may, subject to the provisions of these Articles, from time to time make suchcallsupontheMembersinrespectofallmoneysunpaidontheirshares(whetheronaccountofnominalvalueofthesharesorbywayofpremium)astheythinkfit,providedthatfourteen(14)daysnoticeatleastisgivenofeachcallandeachMembershallbeliabletopaytheamountofeverycallsomadeuponhimtothepersonsbytheinstalments(ifany)andatthetimesandplaces appointed by the Directors. A call may be revoked or postponed as the Directors maydetermine.
21. A call shall be deemed to have been made at the time when the resolution of the Directorsauthorisingsuchcallwaspassed.
27. Depository may refuse to register any transfer of Deposited Securities that does not complywith the Central Depositories Act and the Rules, no securities shall in any circumstances betransferredtoanyinfant,bankruptorpersonofunsoundmind.
30. Subject to the provisions of the Central Depositories Act and the Rules, every instrument oftransfershallbeinwritingandintheformapprovedintheRulesandshallbepresentedtotheDepositorywithsuchevidence (ifany)as theDepositorymayrequire toprove the titleof theintendingtransferorandthattheintendedtransfereeisaqualifiedperson.
TRANSMISSION OF SECURITIES
31. In the case of the death of a Member, the legal personal representative or representatives,theexecutorsoradministratorsof thedeceased,shallbe theonlyperson recognisedby theCompany as having any title to his securities. Any person becoming entitled to securities inconsequence of the death or bankruptcy of a Member may, subject to the Rules and Article31hereof,transferthesecuritiestohimselfortosomeotherpersonnominatedbyhimasthetransfereebutnothinghereincontainedshallreleasetheestateofadeceasedfromanyliabilityinrespectofanyshareswhichhadbeenheldbyhim.
32. Any person becoming entitled to securities in consequence of the death or bankruptcy ofa Member, may, upon such evidence being produced as may from time to time properly berequiredbytheRulesandsubjectashereinafterprovided,electeithertoberegisteredhimselfasholderofthesecuritiesortohavesomeotherpersonnominatedbyhimregisteredasthetransferee thereof,but theDepositoryshall ineithercase,have thesameright todeclineorsuspendregistrationastheywouldhavehadinthecaseofatransferofthesecuritiesbythatMemberbeforehisdeathorbankruptcy.Providedalwaysthatwherethesecuritiesisadepositedsecurities,atransferofthesecuritiesmaybesubjecttotheRulescarriedoutbytheperson(s)becomingsoentitled.
33. A person entitled to securities by transmission shall be entitled to receive, and may give adischargefor,anydividendsorothermoneyspayableinrespectofthesecurities,butheshallnotbeentitledinrespectofittoreceivenoticeofortoattendorvoteatmeetingsoftheCompanyor,saveasaforesaid,toexerciseanyoftherightsor,privilegesasaMemberunlessanduntilheshallbecomeaMemberinrespectofthesecurities.Ifthepersonbecomingentitledelectstohavethesecuritiestransferredtohim,theaforesaidnoticeshallbegiventotheDepositoryandsubjecttotheRules,atransferofthesecuritiesmaybecarriedoutbythepersonbecomingsoentitled.
TRANSMISSION OF SECURITIES TO/FROM BRANCH REGISTER
the Company shall, upon request of a securities holder, permit a transmission of securitiesheldbysuchsecuritiesholderfromtheregisterofholdersmaintainedbytheRegistraroftheCompanyinthejurisdictionoftheotherstockexchange,totheregisterofholdersmaintainedbytheRegistraroftheCompanyinMalaysiaandviceversaprovidedthatthereshallbenochangeintheownershipofsuchsecurities.
38. When any share has been forfeited in accordance with these Articles, notice of the forfeitureshall forthwith be given to the holder of the share or to the person entitled to the shares bytransmission,as thecasemaybe,andanentryof suchnoticehavingbeengiven,andof theforfeiturewiththedatethereof,shallforthwithbemadeintheRecordofDepositorsoppositetotheshare.
39. Notwithstanding any such forfeiture as aforesaid, the Directors may, at any time before theforfeitedsharehasbeenotherwisedisposedof,annultheforfeitureuponthetermsofpaymentofallcallsandinterestduethereonandallexpensesincurredinrespectoftheshareanduponsuchfurtherterms(ifany)astheyshallseefit.
41. A shareholder whose shares have been forfeited shall cease to be a Member but shallnotwithstanding,be liable topay to theCompanyallcallsmadeandnotpaidonsuchsharesat the time of forfeiture, and interest thereon at such rate not exceeding ten per cent (10%)perannumtothedateofpayment,inthesamemannerinallrespectsasiftheshareshadnotbeenforfeited,andtosatisfyall(ifany)theclaimsanddemandswhichtheCompanymayhaveenforcedinrespectofthesharesatthetimeofforfeiture,withoutanydeductionorallowanceforthevalueofthesharesatthetimeofforfeiture.
50. The Company may by special resolution reduce its share capital and any capital redemptionreserve fund or any share premium account in any manner authorised and subject to anyconditionsprescribedbytheAct.
52. The Directors may whenever they so decide by resolution convene an extraordinary generalmeetingoftheCompany.Inaddition,anextraordinarygeneralmeetingshallbeconvenedonsuchrequisitionasreferredtoinsection144oftheAct,oriftheCompanymakesdefaultinconveningameetingincompliancewitharequisitionreceivedpursuanttosection144,ameetingmaybeconvenedbytherequisitioniststhemselvesinthemannerprovidedinsection144oftheAct.
53. Subject to the provision of the Act relating to special resolutions and special notice and theListing Requirements, the notices convening meetings shall specify the place, day and hourof the meeting, and shall be given to all shareholders at least fourteen (14) days before themeetingoratleasttwenty-one(21)daysbeforethemeetingwhereanyspecialresolutionistobeproposedorwhereitisanannualgeneralmeeting.Anynoticeofameetingcalledtoconsiderspecial business shall be accompanied by a statement regarding the effect of any proposedresolutioninrespectofsuchspecialbusiness.Atleastfourteen(14)days’noticeortwenty-one(21)days’noticeinthecasewhereanyspecialresolutionisproposedorwhereitistheannualgeneralmeeting,ofeverysuchmeetingshallbegivenbyadvertisementinatleastonenationallycirculatedBahasaMalaysiaorEnglishdailynewspaperandinwritingtoeachstockexchangeuponwhichthecompanyislistedinthedailypress.
55. Allbusinessshallbespecialthatistransactedatanextraordinarygeneralmeeting,andalsoallthatistransactedatanannualgeneralmeeting,withtheexceptionofdeclaringadividend,the consideration of the financial statements, balance sheets, and reports of the Directorsand auditors, Directors’ fees, the election of Directors in the place of those retiring, and theappointmentandfixingoftheremunerationoftheauditors.
PROCEEDINGS AT GENERAL MEETING
56. NobusinessshallbetransactedatanygeneralmeetingunlessaquorumofMembersispresentat the time when the meeting proceeds to business. Save as herein otherwise provided, two(2)Memberspresentinpersonorbyproxy,orinthecaseofcorporationswhichareMembers,present by their representatives appointed pursuant to the provisions of these Articles andentitledtovoteshallbeaquorum.
58. The Chairman (if any) of the Board of Directors shall preside as Chairman at every generalmeetingoftheCompany.IfthereisnosuchChairmanorDeputyChairman,orifatanymeetingneithertheChairmannortheDeputyChairmanispresentwithinfifteen(15)minutesafterthetimeappointedforholdingthemeeting,orifneitherofthemiswillingtoactaschairman,theDirectorspresentshallchooseone(1)oftheirnumbertoact,orifone(1)Directoronlyispresentheshallpresideaschairmanifwillingtoact.IfnoDirectorispresent,orifeachoftheDirectors
Generalmeeting
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presentdeclinestotakethechair,thepersonspresentandentitledtovoteonapollshallelectone (1) of their number to be chairman. The election of the Chairman shall be by a show ofhands.
60. Atanygeneralmeetingaresolutionputtothevoteofthemeetingshallbedecidedonashowof hands unless a poll is (before or on the declaration of the result on the show of hands)demanded:-
Unlessapollissodemanded,adeclarationbytheChairmanthataresolutionhasonashowofhandsbeencarriedorcarriedunanimously,orbyaparticularmajority,orlost,andanentryto thateffect in thebookcontainingtheminutesof theproceedingsof theCompanyshallbeconclusiveevidenceofthefactwithoutproofofthenumberorproportionofthevotesrecordedinfavouroforagainsttheresolution.Thedemandforapollmaybewithdrawn.
61. Ifapollisdulydemanded,itshallbetakeninsuchmannerandeitheratonceorafteranintervaloradjournmentorotherwiseas theChairmandirects,andtheresultof thepollshallbe theresolutionofthemeetingsatwhichthepollwasdemanded,butapolldemandedontheelectionofaChairmanoronaquestionofadjournmentshallbetakenforthwith.Thedemandforapollshall not prevent the continuance of a meeting for a transaction of any business other thanthe question on which the poll has been demanded. The Chairman of the meeting may (andifsodirectedby themeetingshall)appointscrutineersandmay inaddition to thepowersofadjourningmeetingscontainedinArticle60adjournthemeetingtosomeplaceandtimefixedforthepurposeofdeclaringtheresultofthepoll.
63. Subjecttoanyrightsorrestrictionsforthetimebeingattachingtoanyclassorclassesofshares,atmeetingsofMembersorofclassesofMembers,eachMemberentitledtovotemayvoteinpersonorbyproxyorbyattorneyorbeingacorporationisrepresentedbyarepresentativeandon a show of hands. On resolution to be decided on a show of hands, every person presentwhoisaMember,whetheraholderofordinarysharesorpreferenceshares,whoispersonallypresentandentitledtovote,oraproxyoranattorneyorbeingacorporationisrepresentedbyanauthorisedrepresentativeofaMember,shallhaveone(1)vote.Onresolutiontobedecidedonapoll,everyMemberpresentinpersonorbyproxyorbyattorneyorotherdulyauthorisedrepresentativeforacorporationshallhaveone(1)voteforeverysuchshareheholds.
65. AMemberwhoisofunsoundmindorwhosepersonorestateisliabletobedealtwithinanywayunderthelawrelatingtomentaldisordermayvote,whetheronashowofhandsoronapoll,byhiscommitteeorbysuchotherpersonwhoproperlyhasthemanagementofhisestate,andanysuchcommitteeorotherpersonmayvotebyproxyorattorneyandanysuchcommitteeorotherpersonentitledunder thisArticlehereof to vote,mayvoteatanygeneralmeeting in respectthereofinthesamemannerasifhewastheregisteredholderofsuchsharesprovidedthatatleastforty-eight(48)hoursbeforethetimeofholdingthemeetingoradjournedmeeting,asthecasemaybeatwhichheproposestovote,heshallsatisfytheDirectorsofhisrighttovoteunlesstheDirectorsshallhavepreviouslyadmittedhisrighttovoteatsuchmeetinginrespectthereof.
68. The instrument appointing a proxy shall be in writing (in the common or usual form) underthehandoftheappointororofhisattorneydulyauthorisedinwritingor, iftheappointorisacorporation,eitherundersealorunderthehandofanofficerorattorneydulyauthorised.TheDirectorsmaybutshallnotbeboundtorequireevidenceoftheauthorityofanysuchattorneyorofficer.AproxymaybutneednotbeaMemberoftheCompanyandtheprovisionsofsection149(1)(b)oftheActshallnotapplytotheCompany.Theinstrumentappointingaproxyshallbedeemedtoconferauthoritytodemandorjoinindemandingapoll.
69. A Member may appoint not more than two (2) proxies to attend the same meeting. Where aMember appoints two (2) proxies, he shall specify the proportion of his shareholdings to berepresentedbyeachproxy.WhereaMemberoftheCompanyisanauthorisednomineeasdefinedundertheCentralDepositoriesAct,itmayappointatleastone(1)proxybutnotmorethantwo(2)proxiesinrespectofeachSecuritiesAccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidSecuritiesAccount.
70. The instrument appointing a proxy shall be in common or usual form as the Directors mayapprove. The proxy form must be in the manner which allows members of the Company toindicatehowhe/shewouldlikehis/herproxytovoteinrelationtoeachresolution.
71. The instrumentappointingaproxyandthepowerofattorneyorotherauthority, ifany,underwhichitissignedoranotariallycertifiedcopyofthatpowerorauthorityshallbedepositedbyhandatorbyfacsimiletransmissiontotheOfficeoftheCompany,oratsuchotherplacewithinMalaysiaasisspecifiedforthatpurposeinthenoticeconveningthemeeting,notlessthanforty-eight (48) hours before the time for holding the meeting or adjourned meeting at which thepersonnamedintheinstrumentproposedtovoteandindefaulttheinstrumentofproxyshallnotbetreatedasvalid.
72. Everypower,rightorprivilegehereingiveninthesepresentstoanyMemberoftheCompanytoconvene,attend,voteandinanywaytakepartinanymeetingoftheCompany,maybeexercisedin the event of such Member being out of Malaysia, by any attorney, whether a Member oftheCompanyornot,dulyappointedbysuchMemberfor thepurpose,byapowerofattorneyproducedattheOfficeoftheCompanyduringbusinesshoursnotlessthantwo(2)cleardaysbeforethesameisactedon.AndanyvotegivenorthingsdonebysuchattorneyshallbevalidnotwithstandingthepreviousdeathoftheMembergivingsuchpowerofattorneyorrevocationofsuchpowerofattorneybyothermeansprovidedno intimation inwritingofsuchdeathorrevocationsshallhavebeenreceivedattheOfficeoftheCompanybeforesuchvoteisgivenorthingdone.
73. A vote given in accordance with the terms of an instrument of proxy or attorney or authorityshallbevalid,notwithstandingthepreviousdeathorunsoundnessofmindoftheprincipalorrevocationof the instrumentofproxyorof theauthorityunderwhichthe instrumentofproxywasexecuted,orthetransferoftheshareinrespectofwhichtheinstrumentofproxyisgiven,ifnointimationinwritingofsuchdeath,unsoundnessofmind,revocationortransferasaforesaidhasbeenreceivedbytheCompanyattheOfficebeforethecommencementofthemeetingoradjournedmeetingorinthecaseofpollbeforethetimeappointedforthetakingofthepoll,atwhichtheinstrumentofproxyisused.
(b) fees payable to Directors shall not be increased except pursuant to a resolution passedatageneralmeeting,wherenoticeoftheproposedincreasehasbeengiveninthenoticeconveningthemeeting;
(c) any fee paid to an Alternate Director shall be such amount as shall be agreed betweenhimselfandtheDirectornominatinghimandshallbepaidoutoftheremunerationofthelatter.
86. TheDirectorsmayalsobepaidalltravelling,hotel,andotherexpensesproperlyincurredbytheminattendingandreturningfrommeetingoftheDirectorsoranycommitteeoftheDirectorsorgeneralmeetingsoftheCompanyorinconnectionwiththebusinessoftheCompany.AnyDirectororwhoservesonanycommitteeorwhootherwiseperformsserviceswhich in theopinionoftheDirectorsareoutsidethescopeoftheordinarydutiesofaDirector,maybepaidsuchextraremuneration.
87. Ifbyarrangementwith theDirectors,anyDirectorshallperformorrenderanyspecialdutiesoutsidehisordinarydutiesasaDirector inparticularwithout limiting to thegeneralityof theforegoingifanyDirectorbeingwillingshallbecalledupontoperformextraservicesortomakeanyspecialexertionsingoingorresidingawayfromhisusualplaceofbusinessorresidenceforanyofthepurposesoftheCompanyoringivingspecialattentiontothebusinessoftheCompanyasamemberofacommitteeofDirectors,theDirectorsmaypayhimspecialremuneration,inadditiontohisDirector’sfees,andsuchspecialremunerationmaybebywayofafixedsum,orotherwiseasmaybearrangedprovidedthatthespecialremunerationpayabletoNon-ExecutiveDirectorshallnotbywayofacommissiononorpercentageofprofitsorturnover.
88. A Director of the Company may be or become a Director or other officer of, or otherwiseinterestedin,anycompanypromotedbytheCompanyorinwhichtheCompanymaybeinterestedasshareholderorotherwise,andnosuchDirectorshallbeaccountabletotheCompanyforanyremunerationorotherbenefitsreceivedbyhimasaDirectororofficerof,orfromhisinterestin,suchothercompanyunlesstheCompanyotherwisedirects.
91. The business of the Company shall be managed by the Directors who may pay all expensesincurred inpromotingandregistering theCompany,andmayexerciseallsuchpowersof theCompanyasarenot,bytheActorbytheseArticles,requiredtobeexercisedbytheCompanyingeneralmeeting,subject,nevertheless,toanyoftheseArticles,totheprovisionsoftheAct,andtosuchregulations,beingnotinconsistentwiththeseArticlesorprovisionsoftheAct,asmay
(d) issuewarrantsascalloptionsonsuchtermsandsubjecttosuchconditionswhichmayberecommendedby theDirectorswhichconfersa right tosubscribe fornewsharesof theCompany.
93. TheDirectorsmayexerciseall thepowersof theCompany toborrowor raisemoney for thepurposeoftheCompany’soranyofitsrelatedcorporations’businessesonsuchtermsastheythink fit and may secure the repayment of the same by mortgage or charge upon the wholeoranypartoftheCompany’sundertakingandproperty(bothpresentandfuture)includingitsuncalled or unissued capital and may issue bonds, debentures and other securities whetherchargeduponthewholeorpartof theassetsof theCompanyorotherwisebut theDirectorsshallnotborrowanymoneyormortgageorchargeanyoftheCompany’soranyofthesubsidiarycompanies’ undertaking, property or any uncalled capital or to issue debentures and othersecuritieswhetheroutrightorassecurityforanydebt,liabilityorobligationofanunrelatedthirdparty.
94. The Directors may establish or arrange any contributory or non-contributory pension orsuperannuation scheme for the benefit of, or pay a gratuity, pension or emolument to anypersonwhoisorhasbeenemployedbyorintheserviceoftheCompanyoranysubsidiaryoftheCompany,ortoanypersonwhoisorhasbeenaDirectororotherofficerofandholdsorhasheldsalariedemployment in theCompanyoranysuchsubsidiary,andthewidow, familyordependantsofanysuchperson.TheDirectorsmayalsosubscribetoanyassociationorfundwhichtheyconsider tobe for thebenefitof theCompanyoranysuchsubsidiaryoranysuchpersonsasaforesaidandmakepaymentsforortowardsanyhospitalorscholasticexpensesandanyDirectorholdingsuchsalariedemploymentshallbeentitledtoretainanybenefitreceivedbyhimhereundersubjectonly,wheretheActrequires,toproperdisclosuretotheMembersandtheapprovaloftheCompanyingeneralmeeting.
96. The Directors may from time to time by power of attorney appoint any corporation, firm orpersonorbodyofpersons,whethernominateddirectlyorindirectlybytheDirectors,tobetheattorneyorattorneysoftheCompanyforsuchpurposesandwithsuchpowers,authorities,anddiscretions(notexceedingthosevestedinorexercisablebytheDirectorsundertheseArticles)andforsuchperiodandsubjecttosuchconditionsastheymaythinkfit,andanysuchpowersofattorneymaycontainsuchprovisionsfortheprotectionandconvenienceofpersonsdealingwithanysuchattorneyastheDirectorsmaythinkfitandmayalsoauthoriseanysuchattorneytodelegatealloranyofthepowers,authorities,anddiscretionsvestedinhim.
98. All cheques, promissory notes, drafts, bills of exchange, and other negotiable instruments,andallreceiptsformoneypaidtotheCompany,shallbesigned,drawn,accepted,endorsed,orotherwiseexecuted,asthecasemaybe,insuchmannerastheDirectorsfromtimetotimebyresolutiondetermine.
104. TheDirectorsshalldulycomplywiththeprovisionsoftheActandinparticulartheprovisionsinregardtokeepingaRegisterofDirectorsandSecretaries,aRegisterofMembers,aRegisterofCharges,aRegisterofDirectors’Shareholdings,RegisterofDebentureHolders,RegisterofSubstantialShareholdersandRegisterofOptionHoldersand inregard to theproductionandfurnishingofcopiesofsuchRegisters.
108. SubjecttotheseArticles,anyquestionarisingatanymeetingofDirectorsshallbedecidedbyamajorityofvotesandadeterminationbyamajorityofDirectorsshallforallpurposesbedeemedadeterminationoftheDirectors.IncaseofanequalityofvotesandsubjecttoArticle106theChairmanofthemeetingshallhaveasecondorcastingvote.Wheretwo(2)Directorsformaquorum,theChairmanofthemeetingatwhichonlysuchaquorumispresent,oratwhichonlytwo (2) Directors are competent to vote on the question at issue, shall not have a second orcastingvote.
110. EveryDirectorshallcomplywiththeprovisionsofSections131and135oftheActinconnectionwith the disclosure of his shareholding and interest in the Company and his interest in anycontractorproposedcontractwiththeCompanyand inconnectionwiththedisclosure,everydirector shall state the fact and the nature, character and extent of any office or possessionofanypropertywherebywhetherdirectlyor indirectlydutiesor interestsmightbecreated inconflictwithhisdutyorinterestasaDirectoroftheCompany.
111. TheremainingDirectorsmaycontinuetoactnotwithstandinganyvacancyintheirbody,butifandso longas theirnumber is reducedbelow theminimumnumberfixedbyorpursuant totheArticlesoftheCompanyasthenecessaryquorumofDirectors,theremainingDirectorsorDirector may, except in an emergency, act only for the purpose of increasing the number ofDirectorstothatminimumnumber,ortosummonageneralmeetingoftheCompany,butfornootherpurpose.
113. TheDirectorsmayestablishanycommittees, localboardsoragenciescomprisingone (1)ormorepersonsformanaginganyoftheaffairsoftheCompany,eitherinMalaysiaorelsewhere,andmaylaydown,varyorannulsuchrulesandregulationsastheymaythinkfitfortheconductofthebusinessthereof,andmayappointanypersonorpersonstobethememberormembersofanysuchcommitteeorlocalboardoragencyandmayfixtheirremunerationandmaydelegatetoanysuchcommitteeorlocalboardoragencyanyofthepowers,authoritiesanddiscretionsvestedintheDirectors,withpowertosub-delegate,andmayauthorisethememberofmembersofanysuchcommitteeorlocalboardoragencyoranyofthem,tofillanyvacanciestherein,andtoactnotwithstandingvacancies,andanysuchappointmentofdelegationmaybemadeuponsuchtermsandsubjecttosuchconditionsastheDirectorsmaythinkfit,andtheDirectorsmayremoveanypersonorpersonssoappointed,andmayannulorvaryanysuchdelegation,butnopersonorpersonsdealingingoodfaithandwithoutnoticeofanysuchannulmentorvariationshallbeaffectedthereby.Wheretwo(2)personsformaquorum,theChairmanofameetingofanysuchcommitteeoflocalboardoragencyatwhichonlysuchaquorumispresent,oratwhichonly two (2)personsarecompetent to vote in thequestionat issue,shallnothaveacastingvote.
117. A resolution inwritingsignedbyamajorityofallDirectorsshallbeasvalidandeffectualasif ithadbeenpassedatameetingof theDirectorsdulycalledandconstituted;provided thatwhereaDirectorhasanalternate,thensuchresolutionmayalsobesignedbysuchalternate.Allsuchresolutionsshallbedescribedas“Directors’CircularResolution”andshallbeforwardedor otherwise delivered to the Secretary without delay, and shall be recorded by him in theCompany’sMinutesBook.Anysuchresolutionmayconsistofseveraldocumentsinthelikeform,eachsignedbyoneormoreDirectors.AnysuchdocumentmaybeacceptedassufficientlysignedbyaDirectoriftransmittedtotheCompanybyanytechnologypurportingtoincludeasignatureand/orelectronicordigitalsignatureoftheDirector.
118. Notwithstanding any provisions to the contrary contained in these Articles but subject to thelaw,alloranyoftheDirectorsormembersofanycommitteeoftheDirectorsmayparticipateatameetingoftheDirectorsorthatcommitteebymeansoftelephoneorvideoconferencingorbymeansofothercommunicationequipmentwherebyallpersonsparticipatinginthemeetingareable toheareachotherandbeheard for theentiredurationof themeeting.Apersonsoparticipatingshallbedeemedtobepresentinpersonandshallbeentitledtovoteorbecountedinaquorumaccordingly.Anymeetingheldinsuchmannershallbedeemedtobeheldatsuchplaceasshallbeagreeduponbythepersonsattendingthemeetingorwherethelargestgroupofthoseparticipatingisassembledor,ifthereisnosuchgroup,wheretheChairmanofthemeetingthenis.
MANAGING DIRECTORS AND/OR EXECUTIVE DIRECTORS
119. TheDirectorsmayfromtimetotimeappointanyone(1)ormoreoftheirbodytobeManagingDirector or Deputy Managing Director and/or Executive Directors. If the appointment is for afixedterm,thattermshallnotexceedthree(3)years,anduponsuchconditionsastheDirectorsthinkfit,andmayvestinsuchManagingDirectororDeputyManagingDirectorand/orExecutiveDirectorsthepowerherebyvestedintheDirectorsgenerallyastheymaythinkfit,butprovidedalwaysthatsuchManagingDirector,DeputyManagingDirectorand/orExecutiveDirectorsshallbesubjecttothecontroloftheDirectors.
120. A Managing Director or Deputy Managing Director and/or Executive Directors shall, while hecontinuestoholdthatoffice,besubjecttoretirementbyrotation,andheshallbereckonedasaDirectorforthepurposeofdeterminingtherotationofretirementofDirectorsorinfixingthenumber of Directors to retire and subject to provisions of any contract between him and theCompanyshall,besubject to thesameprovisionsastoresignationandremovalastheotherDirectorsoftheCompanyandifheceasestoholdtheofficeofDirectorforanycauseshallipsofacto and immediately cease to be a Managing Director or Deputy Managing Director and/orExecutiveDirectors.
121. A Managing Director or Deputy Managing Director and/or Executive Directors shall, subjecttothetermsofanyagreemententeredintoinanyparticularcase,receivesuchremuneration(whetherbywayofsalary,commission,orparticipationinprofitsorpartlyinonewayandpartlyinanother)astheDirectorsmaydetermine.Suchremunerationmaynotincludeacommissiononorapercentageofturnover.
124. AnyDirectoror theSecretaryoranypersonappointedby theDirectors for thepurposeshallhavepowertoauthenticateanydocumentseffectingtheconstitutionoftheCompanyandanyresolution passed by the Company or the Directors and any books, records, documents andaccountsrelatingtothebusinessoftheCompany,andtocertifycopiesthereoforextractstherefromastruecopiesorextracts;andwhereanybooks,records,documentsoraccountsarekeptelsewherethanintheOffice,thelocalmanagerorotherofficeroftheCompanyhavingcustodythereofshallbedeemedtobeapersonappointedbytheDirectorsasaforesaid.
125. A document purporting to be a copy of a resolution of the Directors or any extract from theminutesofameetingoftheDirectorswhichiscertifiedassuchinaccordancewiththeprovisionsofArticle124,shallbeconclusiveevidenceinfavourofallpersonsdealingwiththeCompanyuponthefaiththereofthatsuchresolutionhasbeendulypassedor,asthecasemaybe,thatsuchextractisatrueandaccuraterecordofadulyconstitutedmeetingoftheDirectors.
127. TheDirectorsshallprovideforthesafecustodyoftheSeal,whichshallonlybeusedpursuanttotheauthorityoftheDirectorsorofacommitteeoftheDirectorsauthorisedbytheDirectorsin their behalf. The Directors may from time to time make such regulations as they think fitdeterminingthepersonsandthenumberofsuchpersonsinwhosepresencetheSealshallbeaffixedandunlessotherwisesodetermined,everyinstrumenttowhichtheSealisaffixedshallbesignedbyaDirectorandshallbecountersignedbytheSecretaryorbyasecondDirectororbysomeotherpersonappointedbytheDirectorsforthepurpose.
128. ForpurposeofsealingsharecertificatestobeissuedbytheCompany,theCompanyshallhaveaduplicatecommonsealwhichshallbeanexactreplicaofitscommonsealwiththeadditiononthefaceofitofthewords“ShareSeal”andacertificatesealedwithsuchduplicatesealbearingtheauthographicor facsimilesignatureofaDirector,countersignedby theSecretaryorbyasecondDirectororbysomeotherpersonappointedby theDirector for thepurpose,shallbedeemedtobesealedwiththeSeal.
130. TheDirectorsshallcauseproperaccountingandotherrecordstobekeptandshalldistributecopiesofthebalancesheetsandotherdocumentsasrequiredbytheActandshallfromtimeto timedeterminewhetherandtowhatextentandatwhat timesandplacesandunderwhatconditions or regulations the accounting and other records of the Company or any of themshallbeopenedtotheinspectionofMembersnotbeingDirectorsandnoMember(notbeingaDirector)shallhaveanyrightofinspectinganyaccountorbookorpaperoftheCompanyexceptasconferredbystatuteorauthorisedbytheDirectorsorbytheCompanyingeneralmeeting.
131. TheDirectorsshallfromtimetotimeinaccordancewithsection169oftheActandtheListingRequirements,causetobepreparedandlaidbeforetheCompanyingeneralmeetingsuchprofitand lossaccounts,balancesheetsand reportsasare referred to in thesaidsectionand theListingRequirements.TheintervalbetweenthecloseofafinancialyearoftheCompanyandtheissueoftheannualauditedaccounts,theDirectors’andAuditors’reportsshallnotexceedfour(4)months.Acopyoftheannualreportincludingsuchdocumentshallnotlessthantwenty-one(21)daysbeforethedateofthemeeting,providedalwaysthatitshallnotexceedsix(6)monthsfromthecloseofafinancialyearoftheCompanybesenttoeveryMemberof,andtoeveryholderofdebenturesoftheCompanyundertheprovisionsoftheActoroftheseArticles.TherequisitenumberofcopiesofeachofsuchdocumentasmayberequiredbyBursaSecuritiesorsuchotherstockexchange, ifany,uponwhichtheCompany’ssecuritiesmaybelisted,shallatthesametimebelikewisesenttoBursaSecuritiesandsuchotherstockexchange,ifany,providedthattheseArticlesshallnotrequireacopyofthesedocumentstobesenttoanypersonofwhose
139. Any general meeting declaring a dividend or bonus may direct payment of such dividend orbonuswhollyorpartlybythedistributionofspecificassetsandinparticularofpaid-upshares,debenturesordebenturestocksofanyothercompanyor inanyone(1)ormoreofsuchwaysandtheDirectorsshallgiveeffecttosuchresolution,andwhereanydifficultyarisesinregardtosuchdistribution,theDirectorsmaysettlethesameastheythinkexpedient,andfixthevaluefordistributionofsuchspecificassetsoranypartthereofandmaydeterminethatcashpaymentsshallbemadetoanyMembersuponthefootingofthevaluesofixedinordertoadjusttherightsofallpartiesandmayvestanysuchspecificassetsintrusteesasmayseemexpedienttotheDirectors.
140. (a) Anydividend,interestorothermoneypayableincashinrespectofsharesmaybepaidbychequeorwarrantsentthroughthepostdirecttotheregisteredaddressoftheholder.Everysuch cheque or warrant shall be made payable to the order of the person to whom it issent.
(b) SubjecttotheprovisionsoftheAct,theCentralDepositoriesActandtheRules,theListingRequirements and/or regulatory authorities, payment of dividend may be made by directtransferorsuchothermodeofelectronicmeanstothebankaccountoftheholderwhosenameappearintheRecordofDepositorsor,ifapersonisentitledtheretoinconsequenceofthedeathorbankruptcyoftheholder,tosuchpersonortothebankaccountofsuchpersonbywritingdirect.Thepaymentofanydividendbysuchelectronicmeansshall constitutegooddischargetotheCompanyinrespectofthedividendrepresentedtherebyregardlessofanydiscrepancygivenbytheMemberinthedetailsofthebankaccount(s).
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CAPITALISATION OF PROFITS
141. TheCompanyingeneralmeetingmayupontherecommendationoftheDirectorsresolvethatitisdesirabletocapitaliseanypartoftheamountforthetimebeingstandingtothecreditofanyoftheCompany’sreserveaccountsortothecreditoftheprofitandlossaccountorotherwiseavailable fordistribution,andaccordingly thatsuchsumbeset free fordistributionamongsttheMemberswhowouldhavebeenentitledtheretoifdistributedbywayofdividendandinthesameproportionsonconditionsthatthesamebenotpaid incashbutbeappliedeither inortowardspayingupanyamountsforthetimebeingunpaidonanysharesheldbysuchMembersrespectivelyorpayingupinfullunissuedsharesordebenturesoftheCompanytobeallottedanddistributed,creditedasfullypaiduptoandamongstsuchMembersintheproportionaforesaid,or partly in the one way and partly in the other, and the Directors shall give effect to suchresolution.Asharepremiumaccountandacapitalredemptionreservemay,forthepurposeofthisregulation,beappliedinaccordancewithsection60(3)oftheAct.
144. A notice may be given by the Company to any Member either personally or by sending it bypostorbycouriertohimathisregisteredaddressasappearing intheRecordofDepositors.Whereanoticeissentbypostorbycourier,serviceofthenoticeshallbedeemedtobeeffectedbyproperlyaddressing,preparingandpostingalettercontainingthenotice,andtohavebeeneffectedinthecaseofanoticeofameetingonthedayafterthedateofitsposting,andinanyothercaseatthetimeatwhichtheletterwouldbedeliveredintheordinarycourseofpost.Theaccidentalomissiontogiveanynoticeofanymeetingtoorthenon-receiptofanysuchnoticebyanyoftheMembersshallnotinvalidatetheproceedingsatanygeneralmeetingoranyresolutionpassedthereat.
(b) every person entitled to a share in consequence of the death or bankruptcy of aMemberwho,butforhisdeathorbankruptcy,wouldbeentitledtoreceivenoticeofthemeeting;
(c) theAuditorforthetimebeingoftheCompany;and
Powertocapitalise
Effectofresolutiontocapitalise
Translation
HownoticestobeservedtoMembers
Noticetopersonsentitledbytransmission
Personsentitledtonotice
CompanyNo.11106-V
(d) Bursa Securities and the other stock exchange, if any, on which the shares of theCompanyarelisted.
(2) Except as aforesaid no other person shall be entitled to receive notices of generalmeetings.
147. Everypersonwhobyoperationoflaw,transfer,transmissionorothermeanswhatsoevershallbecomeentitledtoanyshare,shallbeboundbyeverynoticeissuedinrespectofsuchshare,including notices issued to such person or persons whose names were, prior to his name,enteredintheRecordofDepositorsastheregisteredholderofsuchshare.
WINDING UP
148. If the Company is wound up, the liquidator may, with the sanction of a special resolution oftheCompany,divideamongsttheMembersinkindthewholeoranypartoftheassetsoftheCompany(whethertheyconsistofpropertyofthesamekindornot)andmayforthatpurposesetsuchvalueashedeemsfairuponanypropertytobedividedasaforesaidandmaydeterminehowthedivisionshallbecarriedoutasbetweentheMembersordifferentclassesofMembers.Theliquidatormay,withthelikesanction,vestthewholeoranypartofanysuchassetsintrusteesupontrustsforthebenefitofthecontributoriesastheliquidator,withthelikesanction,thinksfit,butsothatnoMembershallbecompelledtoacceptanysharesorothersecuritieswhereonthereisanyliability.
151. Every Director, Managing Director, agent, auditor, secretary, and other officer for the timebeingoftheCompanyshallbeindemnifiedoutoftheassetsoftheCompanyagainstanyliabilityincurredbyhimindefendinganyproceedings,whethercivilorcriminal, inwhichjudgmentisgiveninhisfavourorinwhichheisacquittedorinconnectionwithanyapplicationundertheActinwhichreliefisgrantedtohimbytheCourtinrespectofanynegligence,defaultbreachofdutyorbreachoftrust.
(4) If the Listing Requirements require these Articles to contain a provision and they do notcontainsuchaprovision,theseArticlesaredeemedtocontainthatprovision.
154. TheCompanyshallcomplywiththeprovisionsoftherelevantgoverningstatutes,regulationsandrulesasmaybeamended,modifiedorvariedfromtimetotime,oranyotherdirectiveorrequirement imposed by Bursa Securities, Approved Market Place, the Depository and otherappropriateauthoritiestotheextentrequiredby law,notwithstandinganyprovisions intheseArticlestothecontrary.
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