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									Contents


                 section one:

                 21 ANNUAL GENERAL
                          ST

                    MEETING
                 Venue   :	 CempakaRaya	Room,	

All In All,      	
                 	
                         	 Hotel	Equatorial	Kuala	Lumpur,	
                         	 Jalan	Sultan	Ismail,	
   A Good Year   	       	 50250	Kuala	Lumpur	
                 Date    :	 Friday,	29	June	2007
                 Time    :	 3.00	p.m.
                 	 1   Notice of Annual General Meeting


                 section two:                                section three:
                 INTEGRAX GROUP                              FINANCIALS 2006
                 	 2   Chairman’s Report                     22 Definitions
                  5 Profiles of Directors                    23 Directors’ Report
                 	 7 Group Structure /                       26 Statement by Directors
                     Group Organisation
                                                             26 Statutory Declaration
                 	 8 Lumut Port
                                                             27 Report of the Auditors
                  9 Profile of Senior Management                to the Members
                 10 Lekir Bulk Terminal (LBT)                28 Consolidated Balance Sheet
                 12 Lumut Maritime Terminal (LMT)            29 Consolidated Income Statement
                 14 Resources                                30 Balance Sheet of the Company
                 17 Analysis of Shareholdings                31 Income Statement of the Company
                 20 Group Quarterly Results                  32 Consolidated Statement of
                 20 5-Year Financial Summary                    Changes in Equity
                                                             32 Statement of Changes
                                                                in Equity of the Company
                                                             33 Consolidated Cash Flow Statement
                                                             35 Cash Flow Statement of the Company
                                                             37 Notes to the Financial Statements
                                                             68 Properties owned by the Group


                                                             section four:
                                                             GOVERNANCE 2006
                                                             69 Corporate Governance Statement
                                                             74 Audit Committee Report
                                                             78 Statement on Internal Control



                                                             section five:
                                                             FORM OF PROXY


                                                                         2006   annual report   
       Notice of Annual General Meeting


NOTICE IS HEREBY GIVEN	that	the	Twenty-First	Annual	General	Meeting	of	the	Company	will	be	held	at	CempakaRaya	Room,	Hotel	Equatorial	Kuala	Lumpur,	
Jalan	Sultan	Ismail,	50250	Kuala	Lumpur	on	Friday,	29	June	2007	at	3.00	p.m.	for	the	following	purposes:-
1)	     To	receive	and	consider	the	Audited	Financial	Statements	for	the	financial	year	ended	31	December	2006	together	with	                                                Ordinary	Resolution	1
        the	Reports	of	the	Directors	and	Auditors	thereon.
2)	     To	approve	the	payment	of	a	final	tax	exempt	dividend	of	0.8	sen	per	share	and	taxable	gross	dividend	of	1.2	sen	per	                                                Ordinary	Resolution	2
        share	in	respect	of	the	financial	year	ended	31	December	2006	as	recommended	by	the	Directors.
3)	     To	re-elect	the	following	Directors	retiring	in	accordance	with	Article	80	of	the	Company’s	Articles	of	Association:
        i)	    HARUN	HALIM	RASIP                                                                                                                                             Ordinary	Resolution	3
        ii)	   AMIN	HALIM	RASIP	                                                                                                                                             Ordinary	Resolution	4
4)	     To	approve	the	Directors’	fees	of	RM800,000	for	the	financial	year	ended	31	December	2006.                                                                           Ordinary	Resolution	5
5)	     To	re-appoint	Messrs	KPMG	as	Auditors	of	the	Company	and	to	authorise	the	Directors	to	fix	their	remuneration.                                                       Ordinary	Resolution	6
6)	     As	special	business,	to	consider	and	if	thought	fit,	to	pass,	with	or	without	any	modifications,	the	following	resolution:-
        Proposed Authority To Allot Shares Pursuant To Section 132D of The Companies Act, 1965                                                                               Ordinary	Resolution	7
        “That	 pursuant	 to	 Section	 132D	 of	 the	 Companies	 Act,	 1965,	 and	 subject	 always	 to	 the	 approval	 of	 the	 relevant	
        authorities,	the	Directors	be	and	are	hereby	authorised	to	issue	shares	in	the	Company	to	such	persons	at	any	time	
        until	the	conclusion	of	the	next	Annual	General	Meeting	and	upon	such	terms	and	conditions	and	for	such	purposes	
        as	the	Directors	may,	in	their	absolute	discretion	deem	fit,	provided	that	the	aggregate	number	of	shares	to	be	issued	
        does	not	exceed	10%	of	the	issued	share	capital	of	the	Company	for	the	time	being,	and	that	the	Directors	be	and	are	
        also	authorised	to	obtain	the	approval	for	the	listing	of	and	quotation	for	the	additional	shares	so	issued	on	the	Bursa	
        Malaysia	Securities	Berhad.”	
7)	     To	transact	any	other	business	of	which	due	notice	shall	have	been	given.	



By	Order	of	the	Board

CHAN MAY YEE
Secretary

Kuala	Lumpur
7	June	2007

Notes:
1.	   A	proxy	may	but	does	not	need	to	be	a	member	of	the	Company	and	Section	149(1)(b)	of	the	Companies	Act,	1965	(“the	Act”)	shall	not	apply.
2.	   The	instrument	appointing	a	proxy	must	be	deposited	at	the	Registered	Office	of	the	Company	at	17th	Floor	–	Tower	Block,	Kompleks	Antarabangsa,	Jalan	Sultan	Ismail,	50250	Kuala	Lumpur,	
      Malaysia	not	less	than	48	hours	before	the	time	appointed	for	holding	the	meeting.
3.	   A	member	shall	be	entitled	to	appoint	more	than	one	proxy	to	attend	and	vote	at	the	same	meeting.	The	provisions	of	Section	149(1)(c)	of	the	Act	shall	not	apply	to	the	Company.
4.	   Where	a	member	appoints	more	than	one	proxy	the	appointments	shall	be	invalid	unless	he	specifies	the	proportions	of	his	holdings	to	be	represented	by	each	proxy.	
5.	
 	    If	the	appointor	is	a	corporation,	this	form	must	be	executed	under	its	common	seal	or	under	the	hand	of	its	attorney.
6.	   Profiles	of	the	Directors	(together	with	their	attendance	in	Board	Meetings)	standing	for	re-election	as	Directors	of	the	Company	for	Ordinary	Resolutions	3	and	4	are	shown	on	page	5	of	the	2006	
      Annual	Report.
7.	   Explanatory	Notes	on	Special	Business
	     Ordinary	Resolution	7	–	Proposed	Authority	To	Allot	Shares	Pursuant	To	Section	132D	Of	The	Companies	Act,	1965
	     The	ordinary	resolution	proposed	in	Agenda	6	above,	if	passed,	will	empower	the	Directors	of	the	Company	from	the	date	of	the	above	meeting	until	the	next	Annual	General	Meeting,	unless	
      previously	revoked	or	varied	at	a	general	meeting,	to	issue	shares	in	the	Company	up	to	an	aggregate	number	not	exceeding	10%	of	the	issued	share	capital	of	the	Company	for	the	time	being	
      for	such	purposes	as	they	consider	would	be	in	the	interest	of	the	Company.




                1   2006     annual report
     Chairman’s Report


1.0 INTRODUCTION                                                                      BY CARGO TYPE
	
	    For	and	behalf	of	the	Board	of	Directors,	I	present	to	you	this	Annual	
     Report	for	the	financial	year	ended	2006	for	your	kind	attention	and	            FWT                                 YEAR                % change
     consideration.                                                                                                 2006           2005
                                                                                      –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
		
	    This	 year	 we	 have	 reorganized	 our	 Annual	 Report	 a	 little	 and	 now	     Conventional	/	break	bulk	   67,995	       23,563	        188.6
     have	a	number	of	Sections	so	as	to	provide	Shareholders	with	more	               Liquid	bulk	                563,927	       531,869	         6.0
     information	that	is	hopefully	easier	to	read.	Please	use	the	contents	           LMT	Dry	bulk	              1,539,073	     1,530,084	        0.6
     page	to	navigate	your	way	through	the	Annual	Report.	It	also	includes	           LBT	Dry	Bulk	              5,442,317	     4,881,301	       11.5
     pictures	and	location	plans	of	our	assets	and	interests	so	as	to	give	           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     you	a	better	appreciation	of	their	nature,	condition	and	their	locations.	       Total                      7,613,312      6,966,817         9.3
                                                                                      –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                      –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     Regretfully	we	still	have	not	organized	a	corporate	website	but	we	have	
     just	recently	commissioned	someone	to	now	do	this	and	we	will	make	
     every	effort	to	ensure	it	provides	its	visitors	with	up	to	date	information	     BY INDUSTRY SECTOR
     as	to	the	Company	and	its	ongoing	projects.
		                                                                                    FWT                                 YEAR                % change
	    Please	 do	 not	 hesitate	 to	 raise	 any	 issues,	 questions	 or	 concerns	                                   2006           2005
     you	may	have	on	any	matter	to	do	with	this	Annual	Report	and	on	the	             –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     Group	at	the	forthcoming	Annual	General	Meeting.                                 Chemicals	                  108,625	        53,481	       103.1
                                                                                      Mining	                     434,803	       444,722	       (2.2)
2.0 COMMENTARY ON THE 2006 RESULTS AND                                                Agriculture	                768,427	       708,760	        8.4
    FINANCIAL POSITION                                                                Construction	Materials	     821,019	       843,887	       (2.7)
	
                                                                                      Energy	                    5,442,317	     4,881,301	      11.5
     The	Operating	Profit	we	generated	was	predictably	steady	on	an	EBIT	
     basis	 but	 the	 year’s	 final	 numbers	 were	 impacted	 by	 an	 increased	      Others	                      38,121	        34,666	        10.0
                                                                                      –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     depreciation	charge	arising	as	a	consequence	of	the	application	of	              Total                      7,613,312      6,966,817         9.3
     FRS	116:	Property,	Plant	and	Equipment.                                          –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                      –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     		
     Profit	 before	 Taxation	 on	 a	 year-on	 year	 basis	 increased	 by	 some	      12 months ended                     2006              2005           % change
     14.7%	due	to	a	hefty	jump	of	some	120.3%	in	the	contribution	from	our	
                                                                                      Percentage	Import	                  78.8	             79.2	            (0.5)
     associate	company,	LMTSB,	which	achieved	some	decent	industrial	
     property	sales	and	a	9.3	%	increase	in	cargo	throughput	on	a	year-               Percentage	Export	                  21.2	             20.8	             1.9
     on	year	basis.
     	
     Profit	 after	 Taxation	 increased	 by	 25.3	 %	 year-on-year	 with	 the	 tax	   We	have	experienced	an	overall	increase	in	cargo	throughput	of	9.3%	this	2006	
     charge	being	affected	again	by	Deferred	Tax	accounting	adjustments.	             as	compared	to	2005	largely	due	to	increases	in	coal	imports	for	the	energy	
     All	of	the	above	gave	you	an	overall	increase	in	Profit	for	the	Year	of	         sector	of	11.5%	and	an	increase	in	cargo	emerging	from	the	agriculture	sector	
     29.5%	on	a	year-on-year	basis.                                                   of	8.4%	most	of	which	was	liquid	bulk	in	nature.	The	other	sectors	did	reasonably	
     	                                                                                well	though	the	mining	and	construction	materials	sectors	marginally	failed	to	
     With	respect	to	our	financial	position	we	continue	to	exhibit	a	strong	          exceed	their	2005	figures	notwithstanding	a	4Q	2006	surge	in	the	construction	
     current	asset	ratio	and	a	very	reasonable	overall	gearing	.Changes	of	           materials	sector.	All	in	all,	a	good	year.
     note	are	an	increase	in	Other	Investments	as	we	began	late	in	the	year	
     to	pay	in	our	investment	towards	a	20.01%	interest	in	PGMC.                      Lumut Port Industrial Property
                                                                                      In	2006,	LMTSB	sold	125.6	acres	compared	to	79.96	acres	in	2005.This	was	on	
3.0 DIVIDEND                                                                          the	back	of	increased	interest	in	processing	and	storage	activities	for	the	palm	
	                                                                                     oil	sector	and	in	petroleum	distribution	sector	which	is	a	new	sector	for	us	and	
	    While	we	have	a	stream	of	projects	to	cater	for	from	our	cash	flow	going	        one	that	promises	to	raise	our	overall	throughput	in	years	to	come.
     forward	into	2007	and	2008	which	will	be	partially	supplemented	by	full	
     or	partial	disposals	from	our	finite	investment	strategy,	we	are	taking	         Marine Services
     the	view	that	we	should	maintain	a	dividend	stream.	Accordingly	the	
     Board	of	Directors	will	recommend	a	final	dividend	of	2%	in	total	from	          This	has	proven	to	be	a	steady	but	small	contributor	to	overall	profitability.
     our	tax	exempt	and	non-tax	exempt	sources.
                                                                                      Resources
4.0 COMMENTARY ON 2006 ACTIVITIES                                                     During	 the	 year	 under	 review	 we	 embarked	 on	 implementing	 our	 “finite	
                                                                                      investment”	strategy	with	a	view	to	providing	some	upside	benefit	(and	of	
     Lumut Port Operations                                                            course,	associated	risk)	to	our	otherwise	steady	and	safe	port	businesses.	As	
	
     Set	out	below	are	the	cargo	statistics	for	Lumut	Port	in	Freight	Weight	         our	first	project	of	such	nature,	we	agreed	to	inject	by	way	of	three	tranches	
     Tonnes	(“FWT”)	by	type	and	broad	industry	sector:                                over	a	period	of	approximately	6	months,	approximately	USD12Million	for	a	
                                                                                      20.01%	stake	in	PGMC	in	the	Republic	of	the	Philippines.	PGMC’s	activities	
                                                                                      are	the	extraction	of	nickel	ore	from	three	deposits	and	the	smelting	of	some	
                                                                                      of	such	ore,	at	its	two	smelters	into	ferronickel.	Additional	detail	is	provided	
                                                                                      elsewhere	in	this	Annual	Report.




                                                                                                                                  2006    annual report   2
  Chairman’s Report                        (Continued)




   Mining	 of	 the	 deposits	 since	 our	 entry	 has,	 however,	 proven	 to	 be	         highly	mechanized	handling	system	to	and	on	deep	water	berths	that	can	
   problematic	with	heavy	rains	affecting	mining	and	loading	operations	                 accommodate	the	larger	vessels	used	for	such	cargoes.	At	time	of	writing,	
   throughout	the	last	5	months	of	2006	exacerbated	by	an	outrageous	                    initial	estimates	indicate	capital	expenditure	of	up	to	RM	80	Million	at	LBT.	
   and	 illegal	 attempt	 to	 subvert	 PGMC’s	 contractual	 rights	 over	 its	           As	is	the	case	with	LMTSB,	LBTSB	is	reasonably	well	placed	to	deal	with	
   Palawan	deposit	which	has	been	contested	vigorously	in	the	courts	                    the	cash	requirements	of	such	capital	expenditure	programme	through	the	
   and	 in	 the	 political	 arena.	 Fortunately	 things	 have	 since	 got	 a	 lot	       use	of	retained	earnings	and	debt.
   better	in	2007.
                                                                                         Naturally	all	the	above	comments	bear	the	usual	caveats.
   The	nickel	price	on	the	London	Metal	Exchange	at	time	of	agreement	
   was	circa	USD12,000	per	MT.	At	time	of	writing	this	Report	and	giving	                Shareholders	should	also	take	note	that	there	have	been	changes	effective	
   us	a	warm	fuzzy	feeling	is	the	fact	that	the	nickel	price	is	now	in	excess	           this	year	in	senior	personnel	involved	in	the	oversight	of	the	Group’s	Port	
   of	USD50,000	per	MT.                                                                  Operations	at	Lumut	Port.	
   During	 2006	 we	 also	 had	 a	 look	 at	 a	 number	 of	 oil	 and	 gas	 field	        After	14	years	of	overseeing	the	development	and	running	of	Lumut	Port,	
   possibilities	located	in	such	disparate	locations	as	Australia,	Indonesia,	           Kwek	Chee	Wah,	its	COO,	and	I,	as	its	CEO,	have	relinquished	our	positions	
   Yemen	and	the	United	Kingdom.	In	all	we	failed	to	close	for	reasons	                  to	 M.Ramachandran	 and	 Amin	 Halim	 Rasip	 as	 COO	 and	 CEO	 of	 Lumut	
   that	we	bid	too	low	or	failed	to	come	to	agreement.	We	may	have	been	                 Port	respectively.	This	is	in	the	interests	of	timely	succession,	to	permit	the	
   too	prudent	but	we	think	that	if	one	cannot	get	something	at	the	price	               adoption	of	new	strategies	as	seen	by	new	eyes	and	to	enable	more	time	to	
   one	is	happy	with	then	it	is	best	not	to	do	it	at	all.                                be	spent	on	building	the	Group’s	interests	overseas.
   Corporate Developments                                                                Kwek	and	Rama	were	both	recruited	by	myself	and	we	have	worked	alongside	
                                                                                         each	other	since	the	very	beginnings	of	LMT	and	then	again	on	LBT	at	the	
   During	2006	we	incorporated	a	wholly	owned	subsidiary	in	Mauritius	
                                                                                         stage	when	an	organization	and	the	port	facilities	did	not	exist.	It	was	not	easy	
   to	 deal	 with	 investments	 in	 India.	 It	 has	 yet	 to	 be	 utilized	 for	 such	
                                                                                         in	the	early	years	where	we	had	to	build	an	organization	from	scratch	and	
   purposes.
                                                                                         overcome	many	difficulties	to	secure	cargo	over	time.	On	the	first	day	LMT	
                                                                                         opened	for	business	we	had	Zero	cargo!	It	was	an	arduous	effort	to	get	the	
                                                                                         cargo	base	we	have	now	and	I	well	remember	how	Kwek	was	indefatigable	
5.0 GOING FORWARD                                                                        in	the	face	of	many	obstacles	and	the	scepticism	of	many	parties.	I	learnt	
                                                                                         a	great	deal	from	Kwek	about	ports	for	which	I	am	grateful	to	him.	Most	of	
   Lumut Port Operations
                                                                                         all,	however,	it	is	Kwek’s	enduring	passion	for		and	belief	in	Lumut	Port	and	
   We	 anticipate	 a	 good	 year	 in	 2007	 with	 some	 growth	 in	 cargo	               his	tireless	efforts	on	a	24	hour	basis	over	the	past	14	years	for	which	the	
   throughput	 after	 accounting	 for	 the	 normal	 fluctuations	 between	               Shareholders,	the	Group	and	I	must	extend	our		thanks	to	him.
   Quarters.	 Significantly	 we	 also	 see	 2007	 as	 the	 “warm-up”	 year	 to	
   some	growth	in	cargo	throughput	moving	into	2008	and	thereafter	at	                   Fortunately,	Kwek	will	continue	to	be	involved	with	the	Group	on	a	retained	
   the	LMT	with	a	number	of	cargo	generating	activities	coming	on-stream	                advisory	basis	to	deal	with	promotion	and	marketing	in	all	our	port	interests	
   within	the	LPIP	focused	around	the	export	of	bio	diesel	and	palm	oil	                 now	and	in	the	future.
   derivatives	through	2007	and	2008.	
                                                                                         New Port Developments
   At	 time	 of	 writing,	 the	 nameplate	 bio	 diesel	 capacity	 planned	 and	
   being	implemented	within	LPIP	in	2007	and	2008	amounts	to	some	                       We	 have	 spent	 the	 last	 three	 years	 on	 the	 learning	 curve	 for	 new	 port	
   300,000	MTPA.                                                                         developments	 in	 countries	 other	 than	 Malaysia.	 We	 have	 looked	 at	 and	
                                                                                         investigated	many	port	prospects	in	India,	Indonesia,	Iran,	Yemen,	Vietnam,	
   Such	 cargo	 potential	 will	 be	 further	 supplemented	 by	 the	 coming	             China,	Papua	New	Guinea,	Australia	and	the	Philippines.	There	has	been	no	
   on-stream	of	a	petroleum	product	storage	and	distribution	facility	by	                dearth	of	opportunities	and	the	uppermost	concern	is	always	to	close	on	one	
   Petronas	Dagangan	Berhad,	expected	to	commence	construction	in	                       or	more	that	possess	the	right	terms	and	conditions,	has	inherent	viability,	
   2007	that	may	yield	a	cargo	throughput	of	500,000	KLPA	with	growth	                   has	the	legal	protection	required	and	has	the	prospects	for	growth	within	
   thereafter	in	response	to	the	demand	for	such	products.                               the	 port	 sector	 in	 which	 we	 can	 claim	 to	 have	 the	 necessary	 experience	
                                                                                         and	expertise,	which	is	that	of	Greenfield	multipurpose	ports	with	related	
   In	response	to	this	we	will	have	to	take	on	our	share	of	the	capital	                 land	developments.
   expenditure	required	which	needs	to	be	put	into	place	within	LMT	to	
   ensure	that	all	this	cargo	can	be	transported	efficiently	to	and	from	                To	date	we	have	yet	to	meet	a	fully	investigated	port	prospect	that			meets	
   the	berths	through	pipelines	and	to	put	into	place	an	additional	berth	               our	criteria.	Fortunately	we	have	several	prospects	that	are	still	within	the	
   to	deal	with	dangerous	petroleum	products	in	addition	to	other	liquid	                investigation	stage.	The	investigation	stage	can	take	some	time,	up	to	2	years	
   cargoes.	LMT	is	well	placed	to	deal	with	the	cash	requirements	of	such	               and	 more,	 as	 there	 are	 many	 vested	 parties	 involved	 from	 governmental	
   capital	expenditure	programme	through	the	use	of	retained	earnings	                   authorities	 to	 port	 users.	 We	 have	 even	 walked	 away	 from	 a	 number	 of	
   and	 debt.	 It	 is	 anticipated	 that	 such	 capital	 expenditure	 over	 time	        possibilities	that	looked	good	and	where	a	deal	was	imminent	but	that	did	
   would	amount	up	to	some	RM22	Million	at	LMT.	This	is	in	addition	to	                  not	give	us	all	the	necessary	factors	of	safety.
   the	capital	expenditure	that	would	occur	in	normal	circumstances.
                                                                                         Port	 prospects	 under	 investigation	 stages	 currently	 include	 several	 in	
   With	the	realization	of	the	abovementioned	throughput	at	LMT,	thought	                Indonesia	where	infrastructure	needs	are	critical	and	another	in	Papua	New	
   has	 to	 be	 and	 has	 been	 given	 to	 undertaking	 a	 rationalization	 as	          Guinea.	A	key	issue	in	Indonesia	is	the	necessary	legislation	required	for	port	
   between	the	two	terminals,	LMT	and	LBT	,	to	fulfil	(a)	the	interests	of	              projects	undertaken	by	corporates	though	it	must	be	said	that	Indonesia	is	
   cargo	and	vessel	owners	in	lowering	their	shipping	costs	through	the	                 making	gratifying	progress	with	respect	to	investment,	taxation,	employment	
   use	of	larger	vessels	and	(b)	to	optimize	the	utilization	of	the	capabilities	        and	port	legislation.
   of	LMT	and	LBT	to	the	mutual	benefit	of	LMTSB	and	LBTSB	respectively	
   through	cargo	and	berth	dedication	and	(c)	to	mitigate	environmental	                 Recently	on	15th	February	2007	we	signed	an	agreement	with	a	Propinsi-
   issues	within	LPIP		in	the	future.	This	applies	particularly	to	the	handling	         owned	company	to	assess,	fund,	build	and	operate	a	liquid	terminal	in	the	
   of	dry	bulk	cargo	and	liquid	bulk	cargo	categories.                                   Propinsi	Jawa	Timur	which	prospects	are	promising	given	the	import	and	
                                                                                         logistical	needs	of	Jawa	Timur.	On	the	10th	May	2007	we	signed	another	
   To	be	able	to	handle	any	consequential	increase	in	dry	bulk	cargo	                                                                                             	
                                                                                         agreement	to	investigate	a	port	and	an	800	hectare	industrial	development	
   throughput	at	LBT,	further	capital	expenditure	will	be	required	at	LBT	               project	in	Nanggroe	Aceh	Darussalam.	We	expect	more	such	prospects	in	
   for	the	installation	of	a	high	capacity	loading	capability	to	deal	with	              the	future	in	Indonesia	and	elsewhere.
   certain	dry	bulk	cargoes	that	would	most	benefit	from	the	use	of	      	




            2006    annual report
     Chairman’s Report                        (Continued)




Lumut Port Industrial Park
While	2006	was	a	good	year	for	industrial	property	sales,	we	approach	2007	                6.0 OVERALL APPROACH
knowing	that	we	have	a	shrinking	land	bank	to	deal	with	going	forward.	The	                    Our	overall	strategy	moving	forward	with	a	mix	of	higher	risk	projects	
prospects	currently	of	expanding	this	land	bank	in	a	contiguous	manner	are	                    mixed	with	lower	risk	projects	remains	in	place.	From	our	acquisition	
currently	remote	and	our	current	strategy	is	to	extract	as	much	value	as	we	                   of	INDX	you	can	ascertain	that	we	also	look	to	spreading	out	all	risk	
can	out	of	the	balance.	Prices	for	land	at	LPIP	have	increased	by	some	25%	                    by	 employing	 the	 use	 of	 the	 equity	 markets	 where	 an	 opportunity	
over	the	last	6	months	which	helps.	LPIP	is	still	the	best	deal	in	Peninsula	                  exists	and	when	we	can.
Malaysia	 for	 parties	 requiring	 land	 next	 to	 an	 international	 standard	 port	
facility.	We	take	the	view	that	the	increasing	cargo	throughput	anticipated	
in	future	will	go	some	way	to	dealing	with	property	income	shortfalls	going	               7.0 COMMENT ON THE EXCLUSION OF RELATED PARTY
forward.	The	real	solution,	however,	lies	in	bringing	on-stream	other	port-                    TRANSACTIONS FROM EGM CIRCULAR
related	property	projects	elsewhere.
                                                                                               We	 have	 seen	 some	 significant	 changes	 in	 our	 shareholdings	 with	
Marine Services                                                                                the	 reduction	 of	 interests	 held	 by	 parties	 connected	 with	 the	 State	
                                                                                               Government	of	Perak	to	less	than	10%	and	the	entry	of	a	number	of	
This	year	we	desire	to	progress	our	interest	in	expanding	this	profit	centre	by	               foreign	investment	funds.	We	welcome	this.	As	a	consequence	of	the	
extending	this	business	into	the	region.	The	potential	for	an	economic	short	                  diminished	stake	by	parties	related	to	the	State	Government	of	Perak	
sea	haul	capability	is	still	very	significant	in	South	East	Asia.		                            our	need	for	approval	by	shareholders	at	an	EGM	in	respect	to	certain	
                                                                                               transactions	that	were	deemed	Related	Party	Transactions	because	
Resources                                                                                      of	such	stake	has	become	unnecessary.
Consistent	with	our	“finite”	investment	approach	in	this	area	we	are	pulling	
out	all	stops	in	efforts	to	get	our	interest	in	PGMC	into	a	more	liquid	form	by	           8.0 THE STATE OF FRS
seeking	a	listing	on	an	exchange	that	makes	sense	in	the		short	term.	To	this	
end	we	looked	at	several	listed	companies	on	the	Philippine	Stock	Exchange	                    As	we	have	done	in	past	years,	we	provide	our	Chief	Financial	Officer	
with	a	view	to	doing	a	reverse	takeover	but	none	of	the	deals	available	had	                   an	opportunity	to	vent	in	respect	to	FRS:	The	FRS	deluge	continues	
merit	in	terms	of	timing	or	dilution	or	tidiness.	Accordingly	the	plan	now	is	to	              unabated	 and	 companies	 (and	 to	 be	 fair,	 even	 auditors)	 continue	
list	one	of	the	smelters	owned	by	PGMC	as	an	interim	step	while	keeping	the	    	              to	 struggle	 with	 its	 demands	 and	 the	 increased	 costs	 involved	 in	
mining	activities	separate	within	PGMC.	The	key	value	of	PGMC	has	always	       	              complying	with	FRS.	Recently	the	MASB	was	forced	to	climb	down	
been	in	the	relatively	lower	capital	cost	of	its	smelters	and	the	established	                 from	its	perch	by	the	Ministry	of	Finance	in	respect	to	the	accounting	
technology	it	employs	for	smelting.	                                                           treatment	for	future	income	tax	benefits	that,	if	one	thinks	that	deferred	
                                                                                                                                                                                	
                                                                                               tax	 is	 a	 sensible	 thing	 to	 do,	 was	 the	 correct	 call	 by	 the	 Ministry.	
We	continue	to	look	at	resource	opportunities	and	are	convinced	that	the	                      Nonetheless	the	spat	did	make	one	wonder	what	thought	the	Ministry	
commodities	boom	has	time	to	run.                                                              had	put	into	making	FRS	prescriptive	and	part	of	the	law	of	the	land	
                                                                                               years	ago	thus	disembowelling	a	Board’s	view	on	what	is	true	and	fair.	
Dr.	 Kenneth	 Courtis,	 the	 founding	 chairman	 of	 Asia	 Capital	 Partners	 and	             By	now	it	has	surely	have	dawned	on	people	that	FRS	is	very	much	
former	managing	director	of	Goldman	Sachs	Asia	has	been	quoted	in	May	                         part	of	this	20	year	old	globalization	thing	(and	that	includes	the	stuff	
2007	as	saying:	“We	are	still	in	the	first	phase	of	the	commodities	boom”	                     such	as	WTO,	Free	Trade,	Open	Markets,	FTA’s,	TRIPS,	GATS,	the	spin	
pointing	to	continued	strong	demand	from	China,	India,	a	resurgence	from	                      of	Governance	and	Transparency	and	so	on).
a	strengthening	Japan	and	emerging	economies	such	as	Vietnam,	which	
will	have	a	population	bigger	than	Japan	by	2020.                                              Many	nations	must	have	felt	significant	pressure	then	and	now	to	toe	
                                                                                               the	 line	 and	 our	 leaders	 must	 have	 thought	 it	 prudent	 to	 pick	 and	
Corporate Developments                                                                         choose	what	they	would	resist.	Perhaps	FRS	was	an	issue	that	was	
In	1Q	2007	we	have	started	the	process	of	incorporating	a	wholly	owned	                        thought	not	important	enough,	but	did	they	have	to	give	it	the	force	
subsidiary	in	the	Philippines	named	Integrax	Philippines,	Inc	for	purposes	of	                 of	 law?	 Of	 more	 concern	 going	 forward	 is	 the	 more	 insidious	 stuff	
holding	our	investment	in	PGMC	and	other	resource	projects	as	may	come	                        emerging	from	globalization	and	the	apparent	lack	of	open	knowledge	
along	in	due	course	in	the	Philippines.                                                        about	all	of	this.	However	credit	should	be	given	when	it	is	due	and	
                                                                                               some	 minds	 are	 surely	 at	 work	 to	 look	 after	 our	 common	 interests.	
In	2Q	2007	we	acquired	a	32.56%	interest	in	P.T	IndoExchange	Tbk	(“INDX”),	                    One	would	only	wish	it	was	more	publicly	evident	so	we	could	get	to	
a	company	listed	on	the	Jakarta	Stock	Exchange.	This	stake	cost	us	Rph100	                     know	where	we	are	going.
per	share	(RM0.04	sen,	equivalent)	or	approximately	RM1.6	Million.	We	are	                 	
in	the	process	of	implementing	a	tender	offer	for	shares	we	do	not	already	                9.0 FRS AND THE COMPANY
own	at	a	price	of	Rph110	per	share,	being	the	highest	price	transacted	by	
any	party	prior	to	triggering	a	tender	offer,	in	accordance	with	the	rules	that	               Shareholders	should	expect	some	volatility	in	our	results	going	forward	
exist	in	Indonesia.                                                                            stemming	from	changes	in	the	basis	of	calculation	of	depreciation.	We	
                                                                                               got	hit	with	increased	depreciation	charges	this	year	as	a	consequence	
INDX	 was	 previously	 engaged	 unsuccessfully	 in	 IT	 activities	 and	 has	                  of	the	dictates	of	the	FRS	and	our	auditors’	own	prudence.	Nonetheless	
minimal	activities	currently.	It	is	relatively	small	with	about	300	shareholders.	     	       the	basis	of	calculation	of	depreciation	will	be	re-assessed	annually	
Our	 intention	 is	 to	 utilise	 INDX	 to	 take	 on	 projects	 in	 Indonesia,	 together	       so	the	prospect	of	increased	cargo	throughput	will	have	an	impact	on	
with	the	Company,	consistent	with	our	areas	of	interest	and	experience	and	                    the	depreciation	number	and	thereby	affect	results.
other	opportunities	as	may	present	themselves.	We	intend	that	INDX	retain	a	
large	Indonesian	shareholder	base	and	a	significant	public	spread	to	permit	               10.0 EXPRESSION OF GRATITUDE AND THANKS
investors	to	participate	in	INDX	projects.	We	anticipate	that	the	process	of	
“tidying	up”,	resetting	its	capital	base	and	structure	and	getting	it	set	to	take	             On	behalf	of	the	Board	of	Directors	let	me	express	our	gratitude	and	
off	will	be	about	3	to	6	months.	The	quoted	last	done	price	per	share	at	time	                 thanks	to	our	management	and	staff	who	have	worked	hard	and	for	
of	writing	was	Rph	170	per	share.                                                              long	hours	all	year,	to	our	contractors	and	suppliers,	to	our	business	
                                                                                               partners	and	associates	and	to	our	Bondholders	for	their	good	faith	
                                                                                               and	finally	to	our	shareholders	who	have	remained	steadfast.	
                                                                                               Terima	Kasih	and	Thank	You


                                                                                               HARUN BIN HALIM RASIP
                                                                                           	   Chairman



                                                                                                                                       2006    annual report    
Profiles of Directors




                               Harun bin Halim Rasip                                             Amin Halim Rasip
                               Chairman,	Co-Chief	Executive                                      Executive	Director	and	Co-Chief	Executive


                               Malaysian,	 aged	 53,	 Chairman,	 Co-Chief	 Executive	            Malaysian,	 aged	 52,	 Executive	 Director	 and	 Co-Chief	
                               (Ports	and	Other	Business)	and	Chief	Financial	Officer,	          Executive	 (Marine	 and	 Other	 Business),	 appointed	 to	
                               appointed	to	the	Board	on	29	May	2001.	He	is	a	member	            the	Board	on	29	May	2001.	
                               of	the	Audit	Committee	of	the	Board.
                                                                                                 He	graduated	from	the	University	of	Newcastle,	Australia	
                               He	graduated	from	the	University	of	Western	Australia	            in	1977	with	a	Bachelor	of	Engineering	Degree	in	Naval	
                               with	a	Bachelor	of	Commerce	Degree	(Accounting).	He	              Architecture.	He	also	holds	a	Master	of	Science	Degree	
                               then	 articled	 with	 Price	 Waterhouse	 in	 Perth,	 Western	     from	 the	 Massachusetts	 Institute	 of	 Technology	 (MIT)	
                               Australia	 for	 admission	 to	 the	 Institute	 of	 Chartered	     in	 United	 States	 of	 America	 where	 he	 specialised	 in	
                               Accountants	 in	 Australia.	 He	 returned	 to	 Price	 Water-      Financial	Engineering.	
                               house,	 Kuala	 Lumpur	 in	 1978	 and	 left	 in	 1983.	 He	
                               was	 thereafter	 involved	 in	 the	 activities	 of	 the	 Halim	   His	core	strengths	include	extensive	technical	design	
                               Rasip	Holdings	Sdn	Bhd	(“HRH”)	Group	as	Managing	                 knowledge	 and	 ‘hands	 on’	 practical	 operational	
                               Director	in	the	functions	of	promotion,	finance,	business	        experience	in	several	engineering	disciplines,	acquired	
                               development	 and	 management.	 He	 is	 deemed	 a	                 from	 over	 20	 years	 involvement	 in	 various	 sectors	
                               connected	 party	 to	 HRH,	 a	 major	 shareholder	 of	            including	ship	design,	ship	repair,	ship	management,	
                               Integrax.	                                                        steel	 fabrication,	 maintenance	 systems,	 control	
                                                                                                 systems,	quality	assurance,	manufacturing,	integrated	
                               He	is	a	member	of	the	Institute	of	Chartered	Accountants	         logistics	systems,	system	reliability,	survey,	hook	up	
                               in	Australia	and	Malaysian	Institute	of	Accountants.              and	commissioning,	subsea	engineering,	offshore	oil	
                                                                                                 and	gas	industry	and	consultancy.
                               He	 is	 a	 member	 of	 the	 Executive	 Committee	 of	 the	
                               Federation	 of	 Public	 Listed	 Companies	 Bhd	 (FPLC)	           His	 commercial	 financial	 and	 business	 creation	
                               since	2004,	besides	being	a	member	of	its	Technical	&	            strengths	have	been	involved	in	the	past	and	present	
                               Regulatory	Committee	and	Accounting	Standards	Sub-                activities	 of	 HRH	 Group	 being	 shipowning,	 ship	
                               Committee	since	2003.	On	27	July	2006,	he	resigned	               management,	fabrication,	maintenance,	manufacturing,	
                               as	the	Non-Executive	Chairman	of	Landmarks	Berhad	                oil	and	gas	industry	services	and	logistics.
                               and	a	Non-Independent	and	Non-Executive	Director	of	
                               Shangri-la	Hotels	(Malaysia)	Berhad.                              He	 is	 deemed	 a	 connected	 party	 to	 HRH,	 a	 major	
                                                                                                 shareholder	of	Integrax.	He	does	not	hold	directorships	
                               He	 is	 deemed	 interested	 in	 various	 related	 party	          in	any	other	public	company.	He	is	deemed	interested	
                               transactions.	He	is	the	elder	brother	of	Encik	Amin	Halim	        in	various	related	party	transactions.	He	is	the	younger	
                               Rasip.	His	indirect	interest	in	the	shares	of	Integrax	is	        brother	of	Encik	Harun	Halim	Rasip.	His	indirect	interest	
                               disclosed	in	the	Directors’	Report	shown	on	page	24	of	           in	the	shares	of	Integrax	is	disclosed	in	the	Directors’	
                               the	2006	Annual	Report.                                           Report	shown	on	page	24	of	the	2006	Annual	Report.

                               He	attended	all	the	six	(6)	Board	of	Directors’	meetings	         He	attended	all	the	six	(6)	Board	of	Directors’	meetings	
                               held	 during	 the	 financial	 year	 ended	 31	 December	          held	 during	 the	 financial	 year	 ended	 31	 December	
                               2006.	He	has	not	been	convicted	for	offences	within	the	          2006.	He	has	not	been	convicted	for	offences	within	the	
                               past	ten	years	other	than	for	traffic	offences,	if	any.	          past	ten	years	other	than	for	traffic	offences,	if	any.	




       2006   annual report
     Profiles of Directors                     (Continued)




Nelson Gylding Dorrell Borch                                 YB Dato’ Ir. Onn bin Hamzah                                  Stanislaw Wassylko
Independent	Non-Executive	Director                           Non-Independent	and	Non-Executive	Director                   Independent	Non-Executive	Director


Canadian,	 aged	 45,	 Independent	 Non-Executive	            Malaysian,	 aged	 59,	 Non-Independent	 and	 Non-            Australian,	 aged	 60,	 Independent	 Non-Executive	
Director,	 appointed	 to	 the	 Board	 on	 5	 April	 2001.	   Executive	 Director,	 appointed	 to	 the	 Board	 on	 11	     Director,	appointed	to	the	Board	on	21	June	2004.	
He	 is	 the	 Chairman	 of	 the	 Audit	 Committee	 and	       April	2003.	                                                 He	 is	 the	 Chairman	 of	 the	 Nomination	 Committee	
Remuneration	 Committee	 and	 a	 member	 of	 the	                                                                         and	 a	 member	 of	 the	 Audit	 Committee	 and	
Nomination	Committee	of	the	Board.                           He	graduated	from	the	University	of	Tasmania	with	           Remuneration	Committee	of	the	Board.
                                                             a	 Bachelor	 of	 Engineering	 (Electrical)	 Degree.	
He	obtained	his	Bachelor	of	Science	(Civil)	Degree	          He	registered	as	a	Professional	Engineer	with	the	           After	 Matriculating	 he	 graduated	 from	 Frankston	
from	University	of	British	Columbia	in	1986.		Upon	          Board	of	Engineers	Malaysia	(B.E.M)	since	1974.		            Teachers	 College	 (Monash	 University)	 with	 a	
completion	of	his	Bachelor	Degree,	he	joined	CBR	                                                                         Trained	Primary	Teachers	Certificate.		He	has	more	
Ocean	 Construction	 Supplies	 Ltd.,	 Vancouver,	            He	 was	 appointed	 as	 a	 Director	 of	 Techart	            than	 30	 years	 of	 international	 working	 experience	
British	Columbia	as	a	Technical	Services	Engineer	           Sdn	 Bhd	 since	 1984,	 a	 company	 engaged	 in	             in	 oil	 and	 gas,	 maritime	 and	 construction	 related	
before	 being	 promoted	 to	 Manager	 Masonry	 and	          providing	 Engineering	 and	 Project	 Management	            sectors.
Packaged	Materials	Division	in	1989.	Subsequently,	          Consultancy.
he	 joined	 CBR	 Tilbury	 Cement	 Ltd.,	 Delta,	 British	                                                                 He	has	managed	and	is	involved	in	several	foreign	
Columbia	in	1993	as	Sales	and	Distribution	Manager	          He	 was	 the	 Teluk	 Intan	 UMNO	 Division	 (1995-           companies	incorporated	in	Australia	and	Singapore	
British	 Columbia	 and	 Alaska.	 	 In	 early	 1994,	 he	     2005)	Chief	and	is	currently	State	Assemblyman	for	          providing	consultancy	and	engineering	services	to	
was	 relocated	 from	 Canada	 to	 Kuala	 Lumpur	 to	         Changkat	Jong,	Perak.	                                       the	international	oil	and	gas	industry	and	maritime	
set	up	and	manage	Terra	Geotechnics	Sdn.	Bhd.,	               	                                                           industry.	
a	 joint	 venture	 Civil	 /	 Geotechnical	 Engineering	      He	 is	 the	 nominee	 Director	 of	 Perbadanan	
Consultancy	 Practice	 as	 the	 Chief	 Executive	            Kemajuan	Negeri	Perak,	a	shareholder	of	Integrax.	           He	 attended	 all	 the	 six	 (6)	 Board	 of	 Directors’	
Officer	/	Managing	Partner.	His	responsibilities	            He	is	also	an	Independent	Non-Executive	Director	            meetings	held	during	the	financial	year	ended	31	
included	management,	procurement	and	execution	              of	IRM	Group	Berhad.	Save	as	disclosed,	he	has	              December	2006.
of	 project	 consultancy	 work	 and	 financial	 and	         no	 family	 relationship	 with	 any	 Director	 or	 major	
general	management	of	the	joint	venture	company.	       	    shareholder	of	Integrax	and	he	does	not	have	any	            He	 has	 no	 family	 relationship	 with	 any	 Director	
He	 left	 Terra	 Geotechnics	 Sdn.	 Bhd.	 in	 2001	 to	      conflict	of	interest	with	the	Company.	                      and	/	or	major	shareholder	and	he	does	not	have	
become	 an	 Executive	 Director	 in	 P.T.	 Indocement	                                                                    any	 conflict	 of	 interest	 with	 the	 Company.	 He	 has	
Tunggal	Prakasa	based	in	Jakarta,	Indonesia.	                He	 attended	 all	 the	 six	 (6)	 Board	 of	 Directors’	     not	been	convicted	for	offences	within	the	past	ten	
                                                             meetings	held	during	the	financial	year	ended	31	            years	other	than	for	traffic	offences,	if	any.	Currently,	
He	attended	five	(5)	out	of	six	(6)	Board	of	Directors’	     December	 2006.	 He	 has	 not	 been	 convicted	 for	         he	does	not	hold	directorships	in	any	other	public	
meetings	held	during	the	financial	year	ended	31	            offences	 within	 the	 past	 ten	 years	 other	 than	 for	   company	 incorporated	 in	 Malaysia.	 His	 direct	
December	2006.                                               traffic	offences,	if	any.		                                  interest	in	the	shares	of	Integrax	is	disclosed	in	the	
                                                                                                                          Directors’	 Report	 shown	 on	 page	 24	 of	 the	 2006	
He	 has	 no	 family	 relationship	 with	 any	 Director	                                                                   Annual	Report.	
and	/	or	major	shareholder	and	he	does	not	have	
any	 conflict	 of	 interest	 with	 the	 Company.	 He	 has	
not	been	convicted	for	offences	within	the	past	ten	
years	other	than	for	traffic	offences,	if	any.	Currently,	
he	does	not	hold	directorships	in	any	other	public	
company	 incorporated	 in	 Malaysia.	 His	 direct	
interest	in	the	shares	of	Integrax	is	disclosed	in	the	
Directors’	 Report	 shown	 on	 page	 24	 of	 the	 2006	
Annual	Report.	




                                                                                                                                           2006   annual report    6
Group Structure




                                                           Ports & Related
                      Investment                              Property              Marine Services                   Resources
                                                            Development




                    Integrax                                 Pelabuhan                 Radikal                     Platinum Group
                Resources Pte. Ltd.                        Lumut Sdn. Bhd.         Rancak Sdn. Bhd.               Metals Corporation
                        100%                                   100%                     100%                           20.01%

                                                           Lekir Bulk                                          3 Dormant Malaysian
               Integrax Mauritius Ltd.                 Terminal Sdn. Bhd.                                          Companies
                        100%                                    80%                                                    100%

                      Integrax                           Lumut Maritime
                   Philippines, Inc.                   Terminal Sdn. Bhd.
                        100%                            50% less 1 share

               P.T. Integrax Indonesia
                                                      LMT Capital Sdn. Bhd.
                        100%                                   100%
                 (in process of formation)




Group Organisation
                                                                        CHAIRMAN AND
                                                                      BOARD OF DIRECTORS




                   Remuneration                              Nomination                           Audit and Risk
                    Committee                                Committee                         Management Committee



                                                                                                 Statutory Auditor
                                                                                                External Consultants




                                    Co-Chief Executive /                                              Co-Chief
                                    Chief Finance Officer                                             Executive




                 Support                     Resources /            Port            Port               Lumut               Marine
                 Services                    Investments           Projects        Project              Port               Services



                                               Project              Project
                                             Managers /           Managers /
                                              Advisors             Advisors



                  Legal /                     Finance /                             Project             C.O.O
                                                                Administration    Managers /
                 Corporate                   Accounting                            Advisors           Lumut Port




      2006   annual report
          Lumut Port




                                                                                                                     Lumut Maritime
                                                                                                                        Terminal
                                                 Taiwan




                                                                                                                                                                                            T
                                                                                                                              MANJUNG




                                                                                                                                                                                       LU AY
                                                                                                                                                                                         MU
                                                                                                                                                                                 IPO IGHW
                                                                                                                                                                                    H-
                 Myanmar




                                                                                                                                                                                   H
  India                    Laos
                                                                                                                                                  R




                                                                                                         SELA
                                                                                                                                             VE
                                                          Philippines
                                                                                                                                    G   RI
                        Thailand                                                                                          D IN D IN




                                                                                                          T DI
                                                                                                                             LUMUT
            LUMUT                                                                              PANGKOR
                                                                                                ISLAND
                                                                                                                                                                          SITIAWAN




                                                                                                               ND
   Sri
  Lanka                      Malaysia                                                                                 Lumut Port
                                                                        Papua                                       Industrial Park




                                                                                                             ING
                                   Singapore                            New
                                                                        Guinea

                                     Indonesia



                                                                                                            Lekir Bulk Terminal


                                                                                        STRAITS
                                                                                          OF
                                                                                        MALACCA




FACILITIES AND SERVICES                                                                Terminal Location Coordinates
                                                                                       Terminal	Location	Coordinates	are	as	follows:
Lumut	 Port	 is	 located	 on	 the	 west	 coast	 of	 Peninsular	 Malaysia	 in	 the	
State	 of	 Perak	 directly	 off	 the	 Straits	 of	 Malacca.	 Lumut	 Port	 comprises	
two(2)	 terminals,	 Lekir	 Bulk	 Terminal	 (LBT)	 and	 Lumut	 Maritime	 Terminal	      Terminal Location
                                                                                       Coodinates                         Latitude                        Longitude
(LMT).	Strategically	located	to	serve	nearer	trades	within	South-East	Asia,	
Myanmar,	Bangladesh,	India,	Sri	Lanka,	Pakistan,	and	farther	trades	with	              LMT 	                              04°	15.3’	N	                   100°	39.6’	E
the	Far	East	region,	Australia	/	Pacific	region,	Africa/Mid	East	region	and	           LBT	                               04°	08.7’	N	                   100°	37.3’	E
EU	region.
                                                                                       Pilot Station
                                                                                       Located	 at	 latitude	 4°	 10.5	 minutes	 north	 and	 longitude	 100°	 35	 minutes	
                                                                                       east	 (south	 of	 Pulau	 Pangkor).	 The	 Pilot	 Station	 is	 within	 10.5	 nautical	
                                                                                       miles	of	Lumut	Maritime	Terminal	and	within	3	nautical	miles	of	Lekir	Bulk	
                                                                                       Terminal.




                                                                                                                                        2006          annual report   
Lumut Port


                              PROFILE OF SENIOR MANAGEMENT




                                          M. Ramachandran                                                   Lian Ka Siew
                                              Chief	Operating	Officer                                Head	of	Division	–	Corporate	Services

                              Currently	 the	 Chief	 Operating	 Officer	 and	 has	         Joined	 the	 Company	 in	 April	 2006	 as	 the	 Head	
                              been	 the	 	 Operations	 Manager	 of	 LMTSB	 since	          of	 Division	 –	 Corporate	 Services.	 His	 role	 in	 the	
                              June	1994.	He	is	a	member	of	Chartered	Institute	            Company	 includes	 overseeing	 the	 Accounts	 and	
                              of	Transport,	United	Kingdom.	His	responsibilities	          Finance	Department,	Human	Resource	Department	
                              apart	 from	 overseeing	 daily	 operations	 and	 port	       and	Procurement	Departments.
                              business	 development	 and	 marketing,	 include	             Lian	 graduated	 from	 the	 Malaysian	 Institute	 of	
                              planning,	 development	 of	 systems,	 operational	           Certified	Public	Accountants	(MICPA)	while	he	was	
                              procedures	/	controls	/	tariff	and	terms	of	business	        articled	 with	 Coopers	 and	 Lybrand	 (now	 known	
                              and	implementation	of	the	same	and	determining	              as	 PricewaterhouseCoopers)	 Kuala	 Lumpur	 from	
                              organization,	 operational	 and	 productivity	               1989	 till	 1994.	 After	 his	 articleship,	 Lian	 held	 a	
                              standards.                                                   few	 senior	 finance	 and	 accounts	 position	 with	
                                                                                           listed	companies	in	the	property	development	and	
                                                                                           manufacturing	industry.	Apart	from	being	a	member	
                                                                                           of	 MICPA,	 Lian	 is	 also	 a	 member	 of	 Malaysian	
                                                                                           Institute	of	Accountants.




                                     Revindran a/l Radaandi                                              Izudin Bin Ismail
                                             Support	Services	Manager                                        Operations	Manager

                              Support	Services	Manager	of	LMTSB	since	May	                 Currently	 the	 Operations	 Manager	 and	 has	 been	
                              2002.	He	holds	a	Bachelor	of	Science	Engineering	            the	Assistant	Manager	(Marine)	since	August	2002.	
                              in	 Electrical	 and	 a	 Certificate	 in	 Electrical	 /	      He	 holds	 a	 master	 (D1MC)	 in	 Nautical	 Studies	
                              Electronics	 from	 Singapore	 Port	 Institute.	 He	          (Science)	 from	 Maritime	 Academy	 Malaysia.	 His	
                              reports	 directly	 to	 the	 Chief	 Operating	 Officer	 of	   main	 responsibilities	 are	 overseeing	 planning,	
                              LMTSB.	 His	 primary	 responsibilities	 include	 total	      coordination	 and	 managing	 daily	 port	 operations	
                              plant	maintenance,	recruitment,	training,	projects	          of	 LBT	 and	 LMT	 on	 the	 Performance,	 Custody,	
                              and	 contractor	 assessment,	 determination	 of	             Marine,	Safety	and	Security	matters,	including	port	
                              productivity	 and	 efficiency	 of	 plant	 and	 project	      business,	 liaison	 with	 customers	 and	 government	
                              development	of	LBT	and	LMT.                                  agencies,	port	development	projects,	development	
                                                                                           of	 operational	 procedures	 and	 supervision	 of	
                                                                                           project	and	special	cargoes.




      2006   annual report
      Lekir Bulk Terminal (LBT)


LBT DEVELOPMENT HISTORY                                                                   DKSB Project Team

Consequent	to	the	in-principle	indicative	approval	of	the	State	Government	               Project	Directors	-	First	Island	   :	 Harun	Halim	Rasip	and	
of	 Perak	 of	 the	 Lekir	 Coastal	 Development	 Project	 (“Lekir	 Coastal	 Project”)	    	                                   	 Ahmad	Jauhari	Yahya
in	1996,	two	companies	were	formed	by	three	partners	to	promote,	develop	                 Employer’s	Representative	          :	 Terra	Geotechnics	Sdn.	Bhd.
and	 implement	 the	 Lekir	 Coastal	 Project,	 which	 comprised	 two	 related	            Contractor	                         :	 Van	Oord	ACZ
developments:
Desa Kilat Sdn. Bhd. (DKSB)                                                               LBT	 executed	 a	 Jetty	 Terminal	 Usage	 Agreement	 with	 TNB	 Janamanjung	
The	promotion	and	development	of	the	Lekir	Coastal	Project	comprising	the	                Sdn.	 Bhd.	 in	 August	 1999	 for	 the	 provision	 of	 coal	 unloading	 and	 delivery	
reclamation	of	land	from	the	sea	in	the	form	of	islands	and	the	sale	of	these	            services	 to	 the	 Power	 Station,	 thus	 securing	 an	 anchor	 customer.	 LBT	
islands.	Total	area	available	for	reclamation	was	20,000	acres.                           commenced	the	construction	of	Phase	I	of	the	dry	bulk	terminal	in	May	2000,	
                                                                                          comprising	 berths	 able	 to	 accommodate	 Capemax	 and	 Panamax	 vessels	
Lekir Bulk Terminal Sdn. Bhd. (LBT)                                                       with	water	depths	alongside	of	20m	ACD,	a	2,000m	trestle,	2	grab	discharge	
                                                                                          cranes,	 mechanised	 handling	 equipment	 and	 controls	 and	 appropriate	
The	 promotion	 and	 development	 of	 a	 very	 deep	 water	 bulk	 terminal,	
                                                                                          onshore	support	facilities.
complementary	in	nature	to	LMT	and	the	Lekir	Coastal	Project.
                                                                                          In	 30	 June	 2000,	 LBT	 achieved	 financial	 close	 with	 the	 issue	 of	 an	 RM445	
The	founding	promoters	of	DKSB	and	LBT	were:
                                                                                          million	 Serial	 Bond	 rated	 AA3	 by	 Rating	 Agency	 Malaysia	 Bhd	 on	 a	 non-
Perbadanan Kemajuan Negeri Perak                                                          recourse	project	finance	basis.
Halim Rasip Holdings Sdn. Bhd.
Malakoff Berhad
                                                                                          LBT Project Team (Phase I)
The	current	shareholders	of	DKSB	and	LBT	are:
                                                                                          Project	Director	                   :	 Harun	Halim	Rasip
                                                                                          Employer’s	Representative	          :	 Amin	Halim	Rasip
DKSB
                                                                                          Financial	Advisors	                 :	 HSBC	Investment	Bank	Plc
The	founding	promoters                                                                    Lead	Manager	                       :	 HSBC	Bank	Malaysia	Bhd.
                                                                                          Legal	Advisors	                     :	 Wong	&	Partners
LBT                                                                                       Insurance	Advisors	                 :	 Bradstock	Insurance	Brokers	Sdn.	Bhd.
Integrax	Berhad	&	Malakoff	Berhad                                                         Engineering	Consultants	            :	 GHD	Pty	Ltd,	Australia
                                                                                          Contractor	                         :	 Leighton	Contractors	(Malaysia)	Sdn.	Bhd.		
DKSB	 commenced	 reclamation	 of	 the	 First	 Island	 (of	 325	 hectares)	 in	 July	      	                                   	 with	sub-contractor	Koch	Transporttechnik	
1997	 in	 waters	 of	 depth	 0.5m	 to	 2.0m	 ACD.	 The	 scope	 of	 works	 included	       	                                   	 GmbH
reclamation	 of	 land,	 slope	 protection	 and	 the	 construction	 of	 a	 bunded	
enclosed	body	of	water.

The	First	Island	was	completed	on	31	August	1999,	and	was	handed	over	to	
its	purchasers,	TNB	Janamanjung	Sdn.	Bhd.	for	the	purposes	of	construction	
and	 operation	 of	 a	 coal-fired	 2,100	 MW	 Power	 Station,	 and	 LBT,	 for	 the	
purposes	 of	 its	 very	 deep	 water	 bulk	 terminal,	 pursuant	 to	 Site	 Acquisition	
Agreements	executed	in	January	1999.




                                                                                                                                        2006   annual report    10
     Lekir Bulk Terminal (LBT)                         (Continued)




Nature of Terminal	                    Common	User	Port	designed	to	handle	dry	bulk	and	liquid	bulk.	Gazzetted	Customs	Port.

Port Operation Working Hours           3	Shifts,	24	Hours	Per	Day,	365	Days	Per	Year.

Administrative Working Hours           Mondays	to	Fridays 08:30	am	-	17:00	pm
	                                      Saturdays	08:30	am	-	12:00	noon
	                                      Closed	Sundays	and	Public	Holidays

Navigable Channel                      Directly	off	The	Straits	of	Malacca
	                                      Minimum	Depth	–	20m	at	all	times

Berths	                                South Berths
	                                      Length	                   	 530m
	                                      Draft	                    	 20m	ACD
	                                      North Berths
	                                      Length	                   	 250m
	                                      Draft	                    	 18m	ACD

Vessel / Size / Parameters             Vessels	/	Maximum	180,000	DWT
	                                      Barges	/	Minimum	7,000	DWT

Services To Vessels	                   Tuggage	required,	Pilotage	compulsory
	                                      Port	Agency	available	           	

Dry Bulk Facilities                    Storage
                                       Open	storage	area	of	200,000	sq.	metres	that	can	be	equipped	with	appropriate	stacking	and	reclaiming	equipment		
                                       for	integration	into	existing	transfer	station	system.	Estimated	storage	capacity	up	to	1.5	million	MT.

                                       This	storage	capability	excludes	the	adjacent	dedicated	coalyard	serving	the	adjacent	power	station.

                                       Unloading Equipment
                                       2	Grab	shipunloaders	with	1,500	mt/hour	rated	capacities	feeding	2	import	conveyors,	with	each	conveyor	having	3,800	
                                       MT	/	hour	rated	capacity	(inclusive	of	provision	for	extra	grab	unloader	in	future),	integrated	with	a	transfer	station	system	
                                       with	alternative	routing	capability.

                                       Direct Transhipment Capability
                                       Direct	transhipment	at	berth	possible	using	existing	unloaders	for	direct	ship	/	barge	to	ship	/	barge	transfer	between	
                                       north	 and	 south	 berths,	 with	 estimated	 transhipment	 capacity	 of	 between	 500	 MT	 -	 700	 MT	 /	 hour	 for	 each	 unloader	
                                       (total	1,000	MT	-	1,400MT/hour).

                                       Ship Loading Capability
                                       Plans	for	future	export	berth	for	vessels	/	barges	with	15m	ACD	water	alongside,	with	export	conveyors	integrated	with	
                                       existing	transfer	station	system.	Loading	rate	of	2,500	MT	/	hour	contemplated.

                                       Mobile Equipment
                                       Wheel	loaders,	dozers,	mobile	feed	/	stacker,	etc.	to	suit	requirements.

Liquid Bulk Facilities	                Pipeline	wayleaves	and	tank	areas	available	for	direct	vessel-to-plant	/	tank	transfer	by	negotiation.




          11   2006    annual report
     Lumut Maritime Terminal (LMT)




LMT DEVELOPMENT HISTORY
Subsequent	 to	 execution	 of	 the	 Privatisation	 Agreement	 with	 the	 State	         Since	1995	the	LMT	Terminal	has	improved	and	extended	its	facilities	with	
Government	of	Perak	in	February	1993,	construction	of	LMT	commenced	in	                 additional	 open	 and	 covered	 storage,	 handling	 equipment	 and,	 in	 2001,	
November	1993	on	a	turnkey	design-build	basis.                                          an	extension	to	the	Main	Berth	of	280m,	with	depth	alongside	of	12m	ACD,	
                                                                                        resulting	in	a	total	overall	straight-line	berth	length	of	500m.
The	scope	of	works	included	the	filling	of	some	70	acres,	a	200m	marginal	
wharf,	 a	 58m	 marginal	 barge	 berth,	 open	 and	 covered	 storage	 facilities,	      LMT PROJECT TEAM (PHASE II)
appropriate	infrastructure	and	an	administrative	building	for	a	value	for	RM60	
million.                                                                                Project	Director	          :	Harun	Halim	Rasip
                                                                                        Project	Engineer	          :	Yeo	Siew	Chin
It	 was	 completed	 in	 July	 1995	 and	 was	 officially	 opened	 on	 24	 July	 1995	   Employer’s	Representative	 :	Amin	Halim	Rasip
by	 the	 Prime	 Minister	 of	 Malaysia,	 Dato	 Seri	 Dr.	 Mahathir	 Mohamad	 in	 the	   Funding	Provider	          :	International	Investment	Ltd.
presence	 of	 the	 Chief	 Minister	 of	 Perak,	 Tan	 Sri	 Ramli	 Ngah	 Talib,	 many	    Contractor	                :	Leighton	Contractors	(Malaysia)	
dignitaries,	over	12,000	citizens,	4	helicopters,	1	float	plane,	a	100	foot	yacht	      	                          	 Sdn.	Bhd.
and	the	12,000	DWT	MV	KOTA	MAWAR	being	the	first	vessel	alongside.


LMT PROJECT TEAM (PHASE I)
Project	Director	          :	Harun	Halim	Rasip
Employer’s	Representative	 :	Lim	Boon	Hong
Advisors	                  :	Amin	Halim	Rasip	/	Don	Rabinowe
Lead	Banker	               :	Bank	Bumiputra	Malaysia	Bhd.	for		
	                          	 a	syndicate	of	six	financial	institutions		
	                          	 on	a	non-recourse	project	finance	basis.
Contractor	                :	Ipco	Contractors	Sdn.	Bhd.




                                                                                                                                  2006   annual report   12
     Lumut Maritime Terminal (LMT)                                   (Continued)




Nature of Terminal		                                                                                                                                         	
                                       Common	User	Port	designed	and	equipped	to	handle	dry	bulk,	liquid	bulk,	containers,	all	conventional	cargo	and	project	
	                                      cargoes.
							                                Gazzetted	Customs	Port.

Port Operation Working Hours	          3	Shifts,	24	Hours	Per	Day,	365	Days	Per	Year.

Administrative Working Hours           Mondays	to	Fridays,	08:30	am	-	17:00	pm	
	                                      Saturdays,	08:30	am	-	12:00	noon
	                                      Closed	Sundays	and	Public	Holidays

Navigable Channel	                     Within	Dindings	River	off	the	Straits	of	Malacca	
	                                      Minimum	depth	–	9m
	                                      Maximum	depth	–	12m	at	high	tide

Berths	                                South Berths
	                                      Length	                                     200m
	                                      Draft	                                      10m	ACD
                                       North Berths
	                                      Length	                                     280m
	                                      Draft	                                      12m	ACD
	                                      Barge	Berths
	                                      Two	barges	longitudinally	moored
	                                      Draft	                                      3.5m	ACD

Vessel / Size / Parameters	            Vessels	/	maximum	35,000	DWT	alongside
	                                      >	35,000	DWT	with	lighterage
	                                      Barges	/	maximum	8,000	DWT
	                                      LOA	/	maximum	230m

Services to Vessels                    Tuggage	required
	                                      Pilotage	compulsory
	                                      Port	Agency	available

Container Facilities                   Storage
	                                      Container	Yard	storage	of	6,000	sq.	metres
	                                      Reefer	Points	(by	nego.)
                                       Equipment
	                                      High	Stacker	1	                             Prime	Movers	4
	                                      Trailers:	6	x	40	ft	/	14	x	20	ft	           Mobile	Crane	1

Dry Bulk Facilities                    Storage
	                                      Covered	Storage	8,000	sq.	metres.
	                                      Open	Storage	100,000	sq.	metres.
	                                      Leased	areas	for	specialised	cargo	owner	/	
	                                      operated	facilities	and	conveyor	way	leaves	
	                                      by	negotiation.
 	
                                       Mobile Equipment
	                                      Wheel	Loaders	/	Excavators	                  11
	                                      Tipper	Trucks	                               15
	                                      Hoppers	38	cbm	                               4
	                                      Mobile	Conveyors	 150	mt/hr	                  3
	                                      	                 300	mt/hr	                  2
	                                      Grabs:	 -	5	cbm		                             4
	                                      	       -	8	cbm	                              4

Liquid Bulk Facilities	                Pipeline	wayleaves	and	tank	areas	available	for	direct	vessel-to-plant	/	tank	transfer	by	negotiation.

Conventional Cargo Facilities	         Storage
	                                      Covered	storage	6,200	sq.	metres.
	                                      Dedicated Storage
	                                      Leased	areas	available	for	specialised	cargo	storage	/	re-packing	owner	operated	facilities	by	negotiation.
	                                      Equipment
	                                      Mobile	Cranes	                      Capacities	on	request
	                                      Forklifts	                          To	suit
	                                      Gear	                               To	suit




          1   2006    annual report
                                            Luzon
      Resources                             Strait



                                                        Babuyan Islands
                                               Aparni
          South
         China Sea
                                  San           Luzon
                                Fernando
                                                Bagulo                                                                 ISABELA
                                                                                Philippine
                                                                                   Sea
                                               Angeles
                                                  Quezen City
                                                                                                                      PALAWAN
                                    MANILA
                                                 Batangas
                                                                      Legaspi
                                            Mindoro
                                                                                                                      SURIGAO
                                                                                   Samar

                                                               Panay          Leyte
                                                             Iloilo
                                                                               City                           MANTICAO SMELTER
                                                                         Bacolod
                                                                             Cebu
               Puerto
             Princesa                                         Negros

                                                                                      Butuan
                Palawan
                                                                                    Iligan
                                Sulu Sea
                                                                                        Davao
                                                                                                                 ILIGAN SMELTER
                                             Zamboanga
                                                                  Basilan              Mount                     0      100     200km
                                                                  Island                Apo
   MALAYSIA                                                                                    Mindanao          0            100          200mi
                                                 Jolo

MINING DEPOSITS
PALAWAN – TORONTO AND PLUTO                                            ORE RESOURCES – DMT
Extraction	Activities	began	2005                                       INTERNAL ESTIMATES ONLY SEPTEMBER 2006
                                                                       SOURCE: PGMC
LUZON – ISABELA                                              Celebes
Extraction	Activities	Planned	2007                            Sea                                   PALAWAN         LUZON     SURIGAO
MINDANAO – SURIGAO                                                      Classification                  TOTAL     ISABELA      CAGA - 4       TOTAL
                                                                       _____________________________________________________________________________
Extraction	Activities	began	2007
                                                                       MEASURED	RESERVES	             	8,720,710		    	6,374,750		    	12,708,735		        	27,804,195		
                                                                       INDICATED	RESOURCE	                935,633		   	4,928,250		      	7,855,270		       	13,719,153		
                                                               INDONESIA
                                                                       INFERRED	RESOURCE	                   	–		 	19,713,000		        –		 	19,713,000
                                                                       _____________________________________________________________________________
                                                                       TOTAL	INTERNAL	ESTIMATE	      9,656,343		 	31,016,000		 	20,564,005		 	61,236,348	
                                                                       _____________________________________________________________________________
                                                                       _____________________________________________________________________________

                                                                       Nickel	cut-off	grade:	1.25%
Surigao	–	Opening	access	road     Palawan	shipside	loading




                                                                                                                                    2006   annual report     1
   Resources             (Continued)




                                                               Manticao	Smelter



Smelters                     ESTIMATED
                             CURRENT CAPACITY
________________________________________________
 	
IIigan	     	                4	million	pounds
Manticao	   	                5	million	pounds


IIigan	        Commenced	              May	2007

Manticao	      Commencing	             3rd	Quarter	2007


Smelting	Technology	available	in	Philippines	with	technical	
assistance	from	Japan	and	South	America.




                                                               Manticao	Smelter




                                                                  Iligan	Smelter




          1   2006   annual report
  Resources                    (Continued)




FeNi PRODUCTION FLOWSHEET




    8,540 WMT/Mo Ni Ore                   Punta Silum Pier with 30                   Weighing, sampling, to Smelter existing                 Sundrying, Blending at                        Shaded Storage Area at
   from Palawan by LCT /                 MT cap. Boom Crane clam                                  Trucksale                                Stockyard Area with 63,300                        2,600 MT Capacity
        Dead Barge                                  shell                                                                                            DMT




                                                                                                                      Preheating Zone                                       Calcining Zone
                                                                                                                          o       o                                             o        o
                                                                                                                       700 C - 750 C                                        1000 C - 1200 C
                                         coal
                                                                                                   Feed Rate
                                                                                                   16.6 T/Hr.
                                                                                                                                                              - kiln ( L=55M, ø = 2.6M )
                                                                                                                                                              - residence time. 55mins

                                                                                                                                                                                              Calcine surge
      50mm Vib. Screen                        Blending Station 3 - units 60 T cap. Ni Ore Bins &                                                                                               bin 40 MT
  w/ Jaw crusher at 80 T/Hr                   1 - unit 50 T cap. Coal Bin w/ Travelling Conveyor

                                                                                                                               dust collection
                                                                                                                               system w/ screw
                                                                                                                               conveyor




                                                                                                                                                                                                        agitator
                                                                                                                                                                           - metal ( 20% Nickel )
                                                                                                                                                                                                               CaC2
                                                                                                                                                                           - 2 taps/day @ 13.75

                                                                                                                                                                                                          laddle refining
     calcine bucket           over head travelling              over head calcine bins                      - slag (9.6 T/tap)
                                                                                                                                                    furnace        27.5 T/day = 5.5 t/day Ni
    10T capacity w/           crane 20 T capacity                40 T capacity (each)                       - 6 taps/day
                                                                                                                                                                   1.145 T/Hr = 0.23 T/day Ni
     Travelling Car                                                     900oC                                                               - shell ø = 10.22M
                                                                                                                                            - electrode ø = 1.29 M
                                                                                                                                                         o
                                                                                                                                              temp.1600 C




  casting machine             ingot (25kgs)               storage                                     crating                                       loading                                  shipment
                                                                                                    - 1 T/crate




                                                                                                                                                                        2006      annual report          16
     Analysis Of Shareholdings As At 30 April 2007


Authorised share capital                       :   RM470,000,000
Issued and paid-up capital                     :   RM300,805,917
Class of share                                 :   Ordinary Shares of RM1.00 each
Voting rights                                  :   One vote per ordinary share on a poll
                                                   One vote per shareholder on a show of hands


Breakdown of ShareholdingS
1)   analysis by size of shareholdings
                                                                                                no. of                               no. of                      % of issued
      Size of Shareholdings                                                                  Shareholders                            Shares                     Share Capital
        1 - 99                                                                                                     57                         2,186                               0.00
        100 - 1,000                                                                                          1,355                    1,314,866                                   0.44
        1,001 - 10,000                                                                                       2,521                  11,028,659                                    3.66
        10,001 - 100,000                                                                                         691                21,020,581                                    6.99
        100,001 to less than 5% of issued shares                                                                   96               80,337,661                                  26.71
        5% and above of issued shares                                                                                 5           187,101,964                                   62.20
                                                                                           ------------------------------   ------------------------------   ------------------------------
        Total                                                                                        4,725                     300,805,917                            100.00
                                                                                           ===============                  ===============                  ===============


2)   list of thirty largest shareholders as in the register of Members and the record of depositors

                                                                                                                                                                % of issued
        no. name                                                                                                              no. of Shares                    Share Capital

        1        CIMB Group Nominees (Tempatan) Sdn Bhd
                 Pledged Securities Account for Halim Rasip Holdings Sdn Bhd                                                        53,526,057                                  17.79

        2        Halim Rasip Holdings Sdn Bhd                                                                                       45,833,042                                  15.24

        3        HSBC Nominees (Asing) Sdn Bhd
                 Exempt an for JPMORGAN Chase Bank, National Association (Bermuda)                                                  38,510,100                                  12.80

        4        RC Nominees (Tempatan) Sdn Bhd
                 Kuda Sejati Sdn Bhd                                                                                                24,945,217                                    8.29

        5        HSBC Nominees (Asing) Sdn Bhd
                 Exempt an for Credit Suisse                                                                                        24,287,548                                    8.07

        6        DB (Malaysia) Nominee (Tempatan) Sendirian Berhad
                 Icapital. Biz Berhad                                                                                                 9,894,700                                   3.29

        7        Employees Provident Fund Board                                                                                       7,388,500                                   2.46

        8        ECM Libra Avenue Nominees (Asing) Sdn Bhd
                 DBS Vickers (Hong Kong) Limited for CIM Global Property Fund Limited                                                 7,300,000                                   2.43

        9        Jurukapal Marine Services Sdn Bhd                                                                                    5,920,000                                   1.97




            17    2006   annual report
     Analysis Of Shareholdings As At 30 April 2007                  (Continued)




2)   list of thirty largest shareholders as in the register of Members and the record of depositors (Continued)
                                                                                                                      % of issued
       no. name                                                                               no. of Shares          Share Capital

       10   MIDF Sisma Nominees (Tempatan) Sdn Bhd
            Pledged Securities Account for Jurukapal Marine Services Sdn Bhd                     4,720,000                     1.57

       11   Nor’aini Binti Hashim                                                                4,347,826                     1.45

       12   Rozia Hanis Binti Tun Hussein                                                        3,943,912                     1.31

       13   Lekir Group One Sdn Bhd                                                              3,722,347                     1.24

       14   Mayban Nominees (Tempatan) Sdn Bhd
            Mayban Trustees Berhad for Public Ittikal Fund                                       2,503,000                     0.83

       15   Malaysia Nominees (Tempatan) Sendirian Berhad
            Great Eastern Life Assurance (Malaysia) Berhad                                       2,000,073                     0.66

       16   Kuala-Vest Sdn Bhd                                                                   1,917,160                     0.64

       17   RHB Capital Nominees (Tempatan) Sdn Bhd
            Pledged Securities Account for Sow Gek Pong                                          1,762,100                     0.59

       18   AMMB Nominees (Tempatan) Sdn Bhd
            Amtrustee Berhad for SBB Dana Al Ihsan                                               1,751,700                     0.58

       19   Yeoh Ah Tu                                                                           1,335,500                     0.44

       20   Yeoh Ah Tu                                                                           1,005,100                     0.33

       21   Mayban Nominees (Tempatan) Sdn Bhd
            Pledged Securities Account for Yeoh Ah Tu                                              916,000                     0.30

       22   Universal Trustee (Malaysia) Berhad
            Mayban Balanced Trust Fund                                                             900,000                     0.30

       23   Yeoh Ah Tu                                                                             890,000                     0.30

       24   Lim Yong Kang                                                                          883,500                     0.29

       25   Kenanga Nominees (Tempatan) Sdn Bhd
            Pledged Securities Account for Gan Ah Kow @ Gan Sung Chet                              768,000                     0.26

       26   Mayban Nominees (Tempatan) Sdn Bhd
            Mayban Trustees Berhad for Hidden Treasures Fund                                       685,000                     0.23

       27   HLB Nominees (Tempatan) Sdn Bhd
            Pledged Securities Account for Wong Yee Hui                                            640,900                     0.21

       28   Optimum Capital Sdn Bhd                                                                517,000                     0.17

       29   Citigroup Nominees (Tempatan) Sdn Bhd
            Pledged Securities Account for Susy Ding                                               506,300                     0.17

       30   Tay Teck Ho                                                                            450,000                     0.15




                                                                                                   2006   annual report   18
     Analysis Of Shareholdings As At 30 April 2007                      (Continued)




3)   list of substantial shareholders
       no. name of shareholder                                                               direct interest                indirect / deemed interest
                                                                                      no. of Shares            %             no. of Shares           %
       1.        Halim Rasip Holdings Sdn Bhd                                          99,359,099          33.03                           -             -
       2.        Rozia Hanis binti Tun Hussein                                          4,173,912              1.39           99,359,099*1         33.03
       3.        Harun bin Halim Rasip                                                             -               -         113,721,446*2         37.80
       4.        Amin bin Halim Rasip                                                              -               -         113,721,446*   2
                                                                                                                                                   37.80
       5.        Kuda Sejati Sdn Bhd                                                   25,300,543              8.41                        -             -
       6.        Perbadanan Kemajuan Negeri Perak                                                  -               -          25,300,543*   3
                                                                                                                                                    8.41
       7.        Utilico Emerging Markets Limited                                      38,510,100          12.80                           -             -

	    Notes:
	    *	1	 Deemed	interested	by	virtue	of	her	shareholding	in	Halim	Rasip	Holdings	Sdn	Bhd
	    *	2	 Deemed	interested	by	virtue	of	their	shareholdings	in	Halim	Rasip	Holdings	Sdn	Bhd,	Jurukapal	Marine	Services	Sdn	Bhd	and	Lekir	Group	One	Sdn	Bhd
	    *	3		 Deemed	interested	by	virtue	of	its	shareholding	in	Kuda	Sejati	Sdn	Bhd


4)   directors’ shareholdings as at 30 april 2007
       no. name of director                                                                  direct interest                indirect / deemed interest
                                                                                      no. of Shares            %             no. of Shares           %
       1.        Nelson Gylding Dorrell Borch                                              7,000                   0                       -             -
       2.        Stanislaw Wassylko                                                      467,000               0.15                        -             -
       3.        Harun bin Halim Rasip                                                         -                   -         113,721,446*   1
                                                                                                                                                   37.80
       4.        Amin bin Halim Rasip                                                          -                   -         113,721,446*   1
                                                                                                                                                   37.80
       5.        YB Dato’ Ir Onn bin Hamzah                                                    -                   -                       -             -

	    Notes:
	    *	1	 Deemed	interested	by	virtue	of	their	shareholdings	in	Halim	Rasip	Holdings	Sdn	Bhd,	Jurukapal	Marine	Services	Sdn	Bhd	and	Lekir	Group	One	Sdn	Bhd




            19    2006   annual report
        Group Quarterly Results


Year ended 31 deCeMBer
                                                                                                                                                                                     Year ended 31
   rM’000                                                    1st Quarter                       2nd Quarter                   3rd Quarter              4th Quarter                   december 2006
                                                            (Unaudited)                       (Unaudited)                   (Unaudited)              (Unaudited)                          (audited)

   Revenue                                                        21,626                           23,129                             23,085                  22,912                          90,752
   Other income                                                        533                                  191                         191                     191                            1,107
   Operating profit                                               13,923                           13,937                             14,064                   8,512                          35,978
   Share of profit after tax of associate                             3,516                           3,927                            1,800                   2,428                          11,851
   Profit before tax                                              13,410                           14,232                             12,362                   7,646                          47,830
   Taxation                                                       (2,904)                          (3,157)                            (2,654)                  2,189                          (6,526)
   Profit after tax                                               10,506                           11,075                              9,708                   9,835                          41,304
   Minority interest                                              (1,240)                          (1,247)                            (1,410)                 (1,630)                         (5,527)
   Profit attributable to shareholders                                9,266                           9,828                            8,298                   8,205                          35,777
   Basic earnings per share (sen)                                      3.08                                 3.27                        2.76                    2.73                            11.9




        5-Year Financial Summary


rM million                                               rM million                                                                            sen

   50                                                      500                                                                              30.0
                                                                                                                             448.26




   40                                                      400                                                                              25.0
                                                                                                                   419.99
                                                                                                   390.25
                                                                                     366.26
                                                 35.77




   30                                                      300                                                                              20.0
                                                                        285.53
                                         27.62
                                 23.42




   20                                                      200                                                                              15.0
                         21.06




                                                                                                                                                       12.5




                                                                                                                                                                                                11.9
   10                                                      100                                                                              10.0
              10.53




                                                                                                                                                                  9.8




                                                                                                                                                                                        9.7
                                                                                                                                                                              7.9




              ‘02        ‘03     ‘04     ‘05     ‘06                    ‘02         ‘03            ‘04             ‘05       ‘06                      ‘02        ‘03         ‘04        ‘05     ‘06

                      profiT aTTriBUTaBle                                        ShareholderS’ fUndS                                                          earningS per Share
                       To ShareholderS




                                                                                                                                                              2006      annual report    20
Financials	2006


                                                  Page


Definitions	                                         22


Directors’	Report	                               23	-25


Statement	by	Directors	                              26


Statutory	Declaration	                               26


Report	of	the	Auditors	to	the	Members	               27


Consolidated	Balance	Sheet		                         28


Consolidated	Income	Statement	                       29


Balance	Sheet	of	the	Company	                        30


Income	Statement	of	the	Company	                     31


Consolidated	Statement	of	Changes	in	Equity		        32


Statement	of	Changes	in	Equity	of	the	Company	       32


Consolidated	Cash	Flow	Statement	                33	-	34


Cash	Flow	Statement	of	the	Company	              35	-	36


Notes	to	the	Financial	Statements	               37	-	67


Properties	owned	by	the	Group	                       68




          2006   annual report
     Definitions


In this annual report and financial statements, unless otherwise stated, the following abbreviations shall have the following meanings:-

“Act”                           : Companies Act, 1965,

“IRPL”                          : Integrax Resources Pte Ltd (Company No. 200410224 H), a wholly-owned subsidiary of Integrax

“Group”                         : Integrax and its subsidiaries

“Integrax” or “the Company” : Integrax Berhad (Company No. 49317-W)

“IML”                           : Integrax (Mauritius) Limited ( Company No. 62055 C1 / GBL), a wholly-owned subsidiary of Integrax

“ICPS”                          : Irredeemable convertible preference shares of RM0.10 each in Integrax

“ICULS”                         : 3% irredeemable convertible unsecured loan stocks 2003/2005

“Ordinary Share(s)”             : Ordinary share(s) of RM1.00 each in Integrax

“HRH”                           : Halim Rasip Holdings Sdn. Bhd. (Company No. 64655-T)

“JMS”                           : Jurukapal Marine Services Sdn. Bhd. (Company No. 183955-W)

“LBTSB”                         : Lekir Bulk Terminal Sdn. Bhd. (Company No. 414060-T), an 80% owned subsidiary of PLSB

“LBT Serial Bonds”              : 12½ years zero coupon Serial Bonds of RM445 million issued by LBTSB

“LBT RCCPS”                     : Redeemable cumulative convertible preference share(s) of RM0.01 each in LBTSB issued at a premium of RM0.99 each

“LBT RNCPS”                     : Redeemable non-cumulative convertible preference share(s) of RM0.01 each in LBTSB issued at a premium of
                                  RM0.99 each

“LGI”                           : Lekir Group One Sdn. Bhd. (Company No. 445689-P)

“LMTSB”                         : Lumut Maritime Terminal Sdn. Bhd. (Company No. 180480-D)

“LMT RPS”                       : Redeemable preference share(s) of RM0.01 each in LMTSB issued at a premium of RM0.99 each which is convertible to
                                  ordinary shares of RM1.00 each in LMTSB by agreement of all LMTSB’s shareholders

“LMTC”                          : LMT Capital Sdn. Bhd. (Company No. 488241-T), a wholly-owned subsidiary of LMTSB

“LMTC RPS”                      : Redeemable preference share(s) of RM1.00 each in LMTC issued at a premium of RM9,999 each

“MASB”                          : Malaysian Accounting Standards Board

“PGMC”                          : Platinum Group Metals Corporation, an investment by the Group in the Republic of the Philippines

“PKS”                           : Petrokapal Sdn Bhd (Company No. 30921-D)

“PLSB”                          : Pelabuhan Lumut Sdn. Bhd. (Company No. 168205-M), a wholly-owned subsidiary of Integrax

“RM” and “sen”                  : Ringgit Malaysia and sen respectively

“RRSB”                          : Radikal Rancak Sdn Bhd (Company No. 576210-X), a wholly-owned subsidiary of Integrax

“SKSB”                          : Segmen Kembara Sdn Bhd (Company No. 685897-K) a wholly-owned subsidiary of Integrax

“TKSB”                          : Trek Kembara Sdn Bhd (Company No. 701742-W) a wholly-owned subsidiary of Integrax

“WKSB”                          : Wijaya Kristal Sdn Bhd (Company No. 708247-M) a wholly-owned subsidiary of Integrax




                                                                                                                           2006   annual report   22
      Directors’ Report For The Year Ended 31 December 2006


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


PRINCIPAL ACTIVITIES
The Company remains an investment holding company and the principal activities of the subsidiaries are as stated in Note 5 to the financial statements. There
has been no significant change in the nature of these activities during the financial year.


RESULTS
                                                                                                                              Group              Company
                                                                                                                                RM                    RM
Profit for the year attributable to:-
   Shareholders of the Company                                                                                              35,777,113              9,548,463
   Minority interest                                                                                                          5,526,875                   -
                                                                                                                            –––––––––––         –––––––––––
                                                                                                                             41,303,988           9,548,463
                                                                                                                            –––––––––––
                                                                                                                            –––––––––––         –––––––––––
                                                                                                                                                –––––––––––

RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the financial statements.


DIVIDENDS
Since the end of the previous financial year, the Company paid a first and final tax exempt dividend of approximately 2 sen per share amounted to
RM 6,016,118 in respect of financial year ended 31 December 2005 on 31.7.2006.

The Directors have yet to deliberate on the dividend to be paid for the year under review.


DIRECTORS OF THE COMPANY
Directors who served since the date of the last report are:

Harun bin Halim Rasip
Amin bin Halim Rasip
Nelson Gylding Dorrell Borch
Dato’ Che On @ Onn bin Hamzah
Stanislaw Wassylko




            23   2006   annual report
     Directors’ Report For The Year Ended 31 December 2006                  (Continued)




DIRECTORS’ INTERESTS
The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who
were Directors at year end as recorded in the Register of Directors’ Shareholdings are as follows:


                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                                  Number of ordinary shares of RM1.00 each
                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                            At                                                  At
Direct interest                                                                          1.1.2006           Bought             (Sold)       31.12.2006
                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Company
Nelson Gylding Dorrell Borch                                                                   7,000                -                    -               7,000
Stanislaw Wassylko                                                                          467,000                 -                    -             467,000


                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                                  Number of ordinary shares of RM1.00 each
                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                            At                                                  At
Deemed interest                                                                          1.1.2006           Bought             (Sold)       31.12.2006
                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Company
Harun bin Halim Rasip*                                                                113,721,446                   -                    -        113,721,446
Amin bin Halim Rasip*                                                                 113,721,446                   -                    -        113,721,446


LBTSB
Harun bin Halim Rasip*                                                                    54,400,000                -                    -         54,400,000
Amin bin Halim Rasip*                                                                     54,400,000                -                    -         54,400,000


                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                                    Number of LBT RCCPS of RM0.01 each
                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                            At                                                  At
Deemed interest                                                                          1.1.2006           Bought             (Sold)       31.12.2006
                                                                                      ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
LBTSB
Harun bin Halim Rasip*                                                                    16,000,000                -                    -         16,000,000
Amin bin Halim Rasip*                                                                     16,000,000                -                    -         16,000,000


* Deemed interest by virtue of their shareholdings in JMS, HRH and/or for LGI.

By virtue of their deemed interest in the shares of the Company, Encik Harun bin Halim Rasip and Encik Amin bin Halim Rasip are deemed interested in the
shares of the subsidiaries during the financial year to the extent that the Company has an interest.

Other than as disclosed above, none of the other Directors holding office at 31 December 2006 had any interest in the shares of the Company and of its
related corporations during the financial year.

DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included
in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made
by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a
substantial financial interest, other than certain Directors who have significant financial interests in companies which traded with certain companies in the
Group in the ordinary course of business as disclosed under Note 27 to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by
means of the acquisition of shares in or debentures of the Company or any other body corporate.


                                                                                                                           2006   annual report   24
       Directors’ Report For The Year Ended 31 December 2006                   (Continued)




ISSUE OF SHARES AND DEBENTURES
There were no changes in the issued and paid-up capital of the Company during the financial year.


OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the year.


OTHER STATUTORY INFORMATION
Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i)     there are no bad debts to be written off and no provision need to be made for doubtful debts, and

ii)    all current assets have been stated at the lower of cost and net realisable value.

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

i)     that would render it necessary to write off any bad debts or provide for any doubtful debts, or

ii)    that would render the value attributed to the current assets in the Group and in the Company financial statements misleading, or

iii)   which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or
       inappropriate, or

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

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

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

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

No contingent liability or other liability of any company in the Group, other than those stated in Note 25, has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability
of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year ended 31 December 2006 have not been
substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval
between the end of that financial year and the date of this report.


AUDITORS
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:




(Signed)                                                                                          (Signed)


HARUN BIN HALIM RASIP                                                                             AMIN BIN HALIM RASIP
Kuala Lumpur,
Date: 20 April 2007



             25     2006   annual report
     Statement By Directors Pursuant To Section 169(15) Of The Companies Act, 1965


In the opinion of the Directors, the financial statements set out on pages 28 to 67 are drawn up in accordance with the provisions of the Companies Act, 1965
and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a
true and fair view of the state of affairs of the Group and of the Company at 31 December 2006 and of the results of their operations and cash flows for the
year ended on that date.

Signed in accordance with a resolution of the Directors:




(Signed)                                                                                      (Signed)


HARUN BIN HALIM RASIP                                                                         AMIN BIN HALIM RASIP
Kuala Lumpur,
Date: 20 April 2007




     Statutory Declaration Pursuant To Section 169(16) Of The Companies Act, 1965



I, Harun bin Halim Rasip, the Director primarily responsible for the financial management of Integrax Berhad, do solemnly and sincerely declare that the
financial statements set out on pages 28 to 67 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously
believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.


Subscribed and solemnly declared by the                )
above named HARUN          BIN HALIM RASIP             )                (Signed)
in Kuala Lumpur on 20 April 2007                       )




Before me:




(Signed)


SOH AH KAU
Commissioner for Oaths
Kuala Lumpur




                                                                                                                          2006   annual report   26
      Report Of The Auditors To The Members Of Integrax Berhad
      (Company No. 49317-W) (Incorporated in Malaysia)




We have audited the financial statements set out on pages 28 to 67. The preparation of the financial statements is the responsibility of the Company’s
Directors.

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

We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by the Directors, as well as evaluating the overall financial statements presentation. We believe our audit provides a reasonable basis for our opinion.

In our opinion:

(a)    the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting
       standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of:

       i)    the state of affairs of the Group and of the Company at 31 December 2006 and the results of their operations and cash flows for the year ended
             on that date; and

       ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company;
             and

(b)    the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and the subsidiaries of which we
       have acted as auditors have been properly kept in accordance with the provisions of the said Act.

The subsidiaries in respect of which we have not acted as auditors are identified in Note 5 to the financial statements and we have considered their financial
statements and the auditors’ reports thereon.

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

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




(Signed)                                                                                      (Signed)


KPMG                                                                                          HEW LEE LAM SANG
Firm Number: AF 0758                                                                          Partner
Chartered Accountants                                                                         Approval Number: 1862/10/07(J)


Kuala Lumpur,
Date: 20 April 2007




               27   2006   annual report
      Consolidated Balance Sheet As At 31 December 2006


                                                                                  NOTE          2006                  2005
                                                                                                RM                     RM
Assets
   Property, plant and equipment                                                   3      374,347,417            385,546,765
   Intangible assets                                                               4      128,029,993            128,029,993
   Investment in associates                                                        6       75,590,749             73,217,052
   Other investments                                                               7       45,354,999             10,029,999
                                                                                         ––––––––––––            ––––––––––––
Total non-current assets                                                                  623,323,158            596,823,809
                                                                                         ––––––––––––            ––––––––––––
   Receivables, deposits and prepayments                                           8       25,357,340             22,056,610
   Cash and cash equivalents                                                       9      112,298,155            136,514,482
                                                                                         ––––––––––––            ––––––––––––
Total current assets                                                                      137,655,495            158,571,092
                                                                                         ––––––––––––            ––––––––––––
Total assets                                                                              760,978,653            755,394,901
                                                                                         ––––––––––––
                                                                                         ––––––––––––            ––––––––––––
                                                                                                                 ––––––––––––
Equity
   Share capital                                                                  10      300,805,917            300,805,917
   Reserves                                                                       10       45,405,990             46,891,043
   Retained earnings                                                                      102,056,846             72,295,851
                                                                                         ––––––––––––            ––––––––––––
Total equity attributable to shareholders of the Company                                  448,268,753            419,992,811
Minority interest                                                                          36,785,976             31,259,101
                                                                                         ––––––––––––            ––––––––––––
Total equity                                                                              485,054,729            451,251,912
                                                                                         ––––––––––––            ––––––––––––
Liabilities
   LBT Serial Bonds (secured)                                                     11      108,376,830            134,285,558
   Deferred tax liabilities                                                       12       41,656,650             36,360,486
   Payables and accruals                                                          13       71,271,329             71,520,025
   Preference share capital                                                       14             40,000                 40,000
   Preference share capital premium account                                       15        3,960,000                 3,960,000
                                                                                         ––––––––––––            ––––––––––––
Total non-current liabilities                                                             225,304,809            246,166,069
                                                                                         ––––––––––––            ––––––––––––
   Payables and accruals                                                          13       24,603,252             26,059,629
   LBT Serial Bonds (secured)                                                     11       25,908,728             31,844,182
   Current tax liabilities                                                                      107,135                 73,109
                                                                                         ––––––––––––            ––––––––––––
Total current liabilities                                                                  50,619,115             57,976,920
                                                                                         ––––––––––––            ––––––––––––
Total liabilities                                                                         275,923,924            304,142,989
                                                                                         ––––––––––––            ––––––––––––
Total equity and liabilities                                                              760,978,653            755,394,901
                                                                                         ––––––––––––
                                                                                         ––––––––––––            ––––––––––––
                                                                                                                 ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


                                                                                         2006    annual report   28
     Consolidated Income Statement For The Year Ended 31 December 2006


                                                                                  Note       2006            2005
                                                                                              RM              RM
Revenue                                                                           17      90,751,921      88,774,452
Cost of sale                                                                              (28,116,815)    (26,454,254)
                                                                                         ––––––––––––    ––––––––––––
Gross profit                                                                              62,635,106      62,320,198
Administrative expenses                                                                   (12,375,169)     (7,954,426)
Other operating expenses                                                                     (931,504)       (453,396)
Other operating income                                                                      1,106,874        682,800
                                                                                         ––––––––––––    ––––––––––––
Results from operating activities                                                 18      50,435,307      54,595,176
Interest income                                                                             3,673,579       2,826,193
Finance costs                                                                     20      (18,130,576)    (21,082,746)
                                                                                         ––––––––––––    ––––––––––––
Operating profit                                                                          35,978,310      36,338,623
Share of profit after tax of equity accounted associates                                  11,851,297        5,379,127
                                                                                         ––––––––––––    ––––––––––––
Profit before tax                                                                         47,829,607      41,717,750
Tax expense                                                                       21       (6,525,619)     (8,743,826)
                                                                                         ––––––––––––    ––––––––––––
Profit for the year                                                                       41,303,988      32,973,924
                                                                                         ––––––––––––
                                                                                         ––––––––––––    ––––––––––––
                                                                                                         ––––––––––––
Attributable to:
   Shareholders of the Company                                                            35,777,113      27,625,723
   Minority interest                                                                        5,526,875       5,348,201
                                                                                         ––––––––––––    ––––––––––––
Profit for the year                                                                       41,303,988      32,973,924
                                                                                         ––––––––––––
                                                                                         ––––––––––––    ––––––––––––
                                                                                                         ––––––––––––
Basic earnings per ordinary share (sen):                                          22             11.9               9.7
                                                                                         ––––––––––––
                                                                                         ––––––––––––    ––––––––––––
                                                                                                         ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


           29     2006   annual report
      Balance Sheet As At 31 December 2006


                                                                                  Note          2006                  2005
                                                                                                RM                    RM
Assets
   Property, plant and equipment                                                   3            462,417              3,119,666
   Investment in subsidiaries                                                      5      138,009,498           137,509,500
   Receivables, deposits and prepayments                                           8      190,396,353           134,645,660
   Other investments                                                               7       16,000,000            16,000,000
                                                                                         ––––––––––––           ––––––––––––
Total non-current assets                                                                  344,868,268           291,274,826
                                                                                         ––––––––––––           ––––––––––––
   Receivables, deposits and prepayments                                           8       10,368,397            10,093,823
   Cash and cash equivalents                                                       9        5,279,759            56,296,459
                                                                                         ––––––––––––           ––––––––––––
Total current assets                                                                       15,648,156            66,390,282
                                                                                         ––––––––––––           ––––––––––––
Total assets                                                                              360,516,424           357,665,108
                                                                                         ––––––––––––
                                                                                         ––––––––––––           ––––––––––––
                                                                                                                ––––––––––––
Equity
   Share capital                                                                  10      300,805,917           300,805,917
   Reserves                                                                       10       46,705,593            46,705,593
   Retained earnings                                                                       10,579,319                7,046,974
                                                                                         ––––––––––––           ––––––––––––
Total equity                                                                              358,090,829           354,558,484
                                                                                         ––––––––––––           ––––––––––––
Liabilities
   Payables and accruals                                                          13        2,325,631                3,033,515
   Current tax liabilities                                                                       99,964                73,109
                                                                                         ––––––––––––           ––––––––––––
Total current liabilities                                                                   2,425,595                3,106,624
                                                                                         ––––––––––––           ––––––––––––
Total liabilities                                                                           2,425,595                3,106,624
                                                                                         ––––––––––––           ––––––––––––
Total equity and liabilities                                                              360,516,424           357,665,108
                                                                                         ––––––––––––
                                                                                         ––––––––––––           ––––––––––––
                                                                                                                ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


                                                                                         2006   annual report   30
     Income Statement For The Year Ended 31 December 2006


                                                                                  Note       2006            2005
                                                                                             RM               RM
Revenue                                                                           17      15,040,000      10,677,035


Other income                                                                                1,899,075       1,193,300
Administrative expenses                                                                    (2,758,209)     (2,013,396)
Other expenses                                                                               (931,504)       (503,896)
                                                                                         ––––––––––––    ––––––––––––
Results from operating activities                                                 18      13,249,362        9,353,043
Interest income                                                                              862,673        1,254,903
Finance costs                                                                     20                -        (484,229)
                                                                                         ––––––––––––    ––––––––––––
Profit before tax                                                                         14,112,035      10,123,717
Tax expense                                                                       21       (4,563,572)     (3,463,594)
                                                                                         ––––––––––––    ––––––––––––
Profit for the year                                                                         9,548,463       6,660,123
                                                                                         ––––––––––––
                                                                                         ––––––––––––    ––––––––––––
                                                                                                         ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


           31     2006   annual report
       Consolidated Statement Of Changes In Equity For The Year Ended 31 December 2006


                                           <––––––––––––––––––– Attributable to shareholders of the company –––––––––––––––––––>
                                            <––––––––––––––––––– Non-Distributable –––––––––––––––––––––> Distributable
                                                                              Capital
Group                                          Share            Share       redemption Translation                                    Retained                   Minority           Total
                                               capital         premium        reserve    reserve          ICPS         ICULS          earnings      Total        interest          equity
                                                RM                 RM          RM            RM            RM            RM             RM          RM               RM             RM
At 1 January 2005                          268,851,692       51,246,048       165,000             -     1,037,070    24,266,564    44,690,578 390,256,952        25,910,900 416,167,852
Conversion of ICULS to ordinary shares      22,936,231        3,440,469             -             -              - (24,266,564)              -     2,110,136                -     2,110,136
Conversion of ICPS to ordinary shares         9,017,994       (7,980,924)           -             -    (1,037,070)             -             -               -              -               -
Redemption of LBT RNCPS                                  -              -      20,450             -              -             -       (20,450)              -              -               -
Profit for the year                                      -              -           -             -              -             -   27,625,723     27,625,723      5,348,201      32,973,924
                                           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 December 2005                        300,805,917       46,705,593       185,450             -              -             -   72,295,851 419,992,811        31,259,101 451,251,912
                                           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Foreign exchange translation differences                 -              -           -   (1,485,053)              -             -             -    (1,485,053)               -    (1,485,053)
Profit for the year                                      -              -           -             -              -             -   35,777,113     35,777,113      5,526,875      41,303,988
                                           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
Total recognised income and expense
    for the year                                         -              -           -   (1,485,053)              -             -   35,777,113     34,292,060      5,526,875      39,818,935
Dividends to shareholders                                -              -           -             -              -             -   (6,016,118) (6,016,118)                  -    (6,016,118)
                                           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 December 2006                        300,805,917       46,705,593       185,450   (1,485,053)              -             - 102,056,846 448,268,753         36,785,976 485,054,729
                                           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                           –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                               Note 10                       Note 10        Note 10      Note 10       Note 16                                       Note 10




       Statement Of Changes In Equity For The Year Ended 31 December 2006

                                                 <––––––––––––––––––––––––– Non-Distributable –––––––––––––––––––––––––>Distributable
                                                         Share                  Share                                                                Retained
Company                                                  capital               premium                   ICPS                 ICULS                  earnings                     Total
                                                             RM                   RM                      RM                     RM                         RM                     RM
At 1 January 2005                                 268,851,692                51,246,048               1,037,070            24,266,564                    386,851            345,788,225
Conversion of ICULS to ordinary shares             22,936,231                 3,440,469                          -        (24,266,564)                           -               2,110,136
Conversion of ICPS to ordinary shares                9,017,994                (7,980,924)             (1,037,070)                       -                        -                          -
Profit for the year                                                -                    -                        -                      -            6,660,123                   6,660,123
                                                 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 December 2005                               300,805,917                46,705,593                          -                      -            7,046,974              354,558,484
Profit for the year                                                -                    -                        -                      -            9,548,463                   9,548,463
Dividends to shareholders                                          -                    -                        -                      -           (6,016,118)                 (6,016,118)
                                                 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
At 31 December 2006                               300,805,917                46,705,593                          -                      -           10,579,319              358,090,829
                                                 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                         Note 10                                        Note 10                Note 16




The notes on pages 37 to 67 are an integral part of these financial statements.


                                                                                                                                                  2006   annual report      32
     Consolidated Cash Flow Statement For The Year Ended 31 December 2006


                                                                                  Note       2006            2005
                                                                                             RM               RM
Cash flows from operating activities
   Profit before tax                                                                       47,829,607      41,717,750
   Adjustments for:
      Depreciation of property, plant and equipment                                 3       8,707,031       4,393,391
      Share of profit after tax of equity accounted associates                            (11,851,297)     (5,379,127)
      Finance costs                                                                20     18,130,576      21,082,746
      Interest income                                                                      (3,673,579)     (2,826,193)
      Gain on disposal of property, plant and equipment                                      (321,275)              -
      Property, plant and equipment written-off                                                 1,785               -
                                                                                         ––––––––––––    ––––––––––––
   Operating profit before changes in working capital                                      58,822,848      58,988,567
   Changes in working capital:
   Payables and accruals                                                                     (306,627)       675,275
   Receivables, deposits and prepayments                                                    8,157,174       7,790,915
                                                                                         ––––––––––––    ––––––––––––
   Cash generated from operations                                                          66,673,395      67,454,757
   Tax paid                                                                                (4,546,552)     (1,120,006)
                                                                                         ––––––––––––    ––––––––––––
   Net cash from operating activities                                                      62,126,843      66,334,751
                                                                                         ––––––––––––    ––––––––––––
Cash flows from investing activities
   Interest received                                                                        3,673,579       2,826,193
   Acquisition of property, plant and equipment                                     3         (13,785)     (2,833,608)
   Acquisition of other investments                                                 7     (35,325,000)              -
   Proceeds from disposal of property, plant and equipment                                  2,825,592               -
   Redemption of LBT RNCPS                                                                          -      (1,104,300)
   Share of LBT RCCPS dividend paid to minority shareholders                                        -        (288,000)
   Share of LBT RNCPS dividend paid to minority shareholders                                        -        (119,265)
                                                                                         ––––––––––––    ––––––––––––
   Net cash used in investing activities                                                  (28,839,614)     (1,518,980)
                                                                                         ––––––––––––    ––––––––––––
Cash flows from financing activities
   Redemption of LBT serial bonds                                                         (50,000,000)    (50,000,000)
   (Increase) / Decrease in debt service reserve account                                  (18,635,319)     17,260,000
   Dividends paid to shareholders                                                          (6,016,118)              -
   ICULS interest paid                                                                              -        (484,229)
                                                                                         ––––––––––––    ––––––––––––
   Net cash used in financing activities                                                  (74,651,437)    (33,224,229)
                                                                                         ––––––––––––    ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


           33   2006    annual report
     Consolidated Cash Flow Statement For The Year Ended 31 December 2006                              (Continued)




                                                                                                           Note             2006                  2005
                                                                                                                            RM                    RM
Net (decrease) / increase in cash and cash equivalents                                                                (41,364,208)            31,591,542


Cash and cash equivalents at 1 January                                                                       (i)      111,069,482             79,477,940


Effect of foreign currency translation in consolidation                                                                (1,487,438)                       -
                                                                                                                     ––––––––––––            ––––––––––––
Cash and cash equivalents at 31 December                                                                     (i)       68,217,836            111,069,482
                                                                                                                     ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––
i) Cash and cash equivalents


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


                                                                                                           Note             2006                  2005
                                                                                                                            RM                    RM
   Cash and bank balances                                                                                     9        22,470,836             24,554,482
   Deposits (excluding deposits pledged and deposits held in a Debt Service Reserve account)                  9        45,747,000             86,515,000
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                       68,217,836            111,069,482
                                                                                                                     ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


                                                                                                                     2006    annual report   34
     Cash Flow Statement For The Year Ended 31 December 2006


                                                                                  Note       2006            2005
                                                                                              RM              RM
Cash flows from operating activities
   Profit before tax                                                                       14,112,035      10,123,717
   Adjustments for:
      Depreciation of property, plant and equipment                                3         164,932          97,110
      Dividend income                                                                     (15,040,000)    (10,677,035)
      Finance costs                                                                                 -        484,229
      Gain on disposal of property, plant and equipment                                      (321,275)              -
      Property, plant and equipment written off                                                 1,785               -
      Interest income                                                                        (862,673)     (1,254,903)
                                                                                         ––––––––––––    ––––––––––––
   Operating loss before changes in working capital                                        (1,945,196)     (1,226,882)
   Changes in working capital:
   Payables and accruals                                                                     (707,942)       772,420
   Receivables, deposits and prepayments                                                     (474,383)     (1,447,612)
                                                                                         ––––––––––––    ––––––––––––
   Cash used in operating activities                                                       (3,127,521)     (1,902,074)
   Dividend received                                                                        6,084,000       7,687,465
   Tax paid                                                                                  (391,417)       (394,433)
                                                                                         ––––––––––––    ––––––––––––
   Net cash from operating activities                                                       2,565,062       5,390,958
                                                                                         ––––––––––––    ––––––––––––
Cash flows from investing activities
   Interest received                                                                         862,673        1,254,903
   Acquisition of property, plant and equipment                                    3          (13,785)       (809,113)
   Increase in investment in subsidiaries                                                    (499,998)     (1,500,000)
   Proceeds from disposal of property, plant and equipment (net)                            2,825,592               -
   Redemption of LBT RNCPS                                                                          -        966,293
                                                                                         ––––––––––––    ––––––––––––
   Net cash from / (used in) investing activities                                           3,174,482         (87,917)
                                                                                         ––––––––––––    ––––––––––––
Cash flows from financing activities
   Dividends paid to shareholders of the Company                                           (6,016,118)              -
   ICULS interest paid                                                                              -        (484,229)
   Decrease / (Increase) in advances to / from subsidiary                                 (50,740,126)       435,440
                                                                                         ––––––––––––    ––––––––––––
   Net cash used in financing activities                                                  (56,756,244)        (48,789)
                                                                                         ––––––––––––    ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


           35   2006    annual report
      Cash Flow Statement For The Year Ended 31 December 2006                     (Continued)




                                                                                                           Note            2006                   2005
                                                                                                                           RM                     RM
Net (decrease) / increase in cash and cash equivalents                                                               (51,016,700)                5,254,252


Cash and cash equivalents at 1 January                                                                       (i)      56,296,459             51,042,207
                                                                                                                    ––––––––––––           ––––––––––––
Cash and cash equivalents at 31 December                                                                     (i)       5,279,759             56,296,459
                                                                                                                    ––––––––––––
                                                                                                                    ––––––––––––            ––––––––––––
                                                                                                                                           ––––––––––––
i)   Cash and cash equivalents


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

                                                                                                           Note            2006                   2005
                                                                                                                           RM                     RM
     Cash and bank balances                                                                                  9              79,759           12,796,459
     Deposits with licensed banks                                                                            9         5,200,000             43,500,000
                                                                                                                    ––––––––––––           ––––––––––––
                                                                                                                       5,279,759             56,296,459
                                                                                                                    ––––––––––––
                                                                                                                    ––––––––––––           ––––––––––––
                                                                                                                                           ––––––––––––




The notes on pages 37 to 67 are an integral part of these financial statements.


                                                                                                                    2006   annual report    36
      Notes To The Financial Statements


Integrax Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of the Bursa Malaysia Securities
Berhad. The address of its registered office and principal place of business is as follows:-

Registered office/Principal place of business
17th Floor Tower Block
Kompleks Antarabangsa
Jalan Sultan Ismail
50250 Kuala Lumpur

The consolidated financial statements as at and for the year ended 31 December 2006 comprise the Company and its subsidiaries (together referred to as
the Group) and the Group’s interest in its associate. The financial statements of the Company as at and for the year ended 31 December 2006 do not include
other entities.

The Company is principally engaged in investment holding while the principal activities of other Group entities are stated in Note 5 to the financial
statements.


1.   BASIS OF PREPARATION
      (a) Statement of compliance

           The financial statements of the Group and of the Company have been prepared in accordance with applicable approved accounting standards
           for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB), accounting principles generally accepted in
           Malaysia and the provisions of the Companies Act, 1965.

           The MASB has issued a number of new and revised Financial Reporting Standards (FRSs) which are applicable to the Group effective for accounting
           periods beginning on or after 1 January 2006. The MASB has also issued FRS 124, Related Party Transaction, and FRS 117, Leases which are
           applicable for annual periods commencing on or after 1 October 2006, Amendments to FRS 121, The Effects of Changes in Foreign Exchange
           Rates – Net Investment in a Foreign Operation, which are applicable for annual periods commencing on or after 1 July 2007 and FRS 139, Financial
           Instruments: Recognition and Measurement but for which the MASB has yet to announce the effective date of this standard.

           The Group has not early adopted the standards above and by virtue of the exemption provided specifically in these respective standards, the
           impact of applying these standards on these financial statements upon first adoption of these standard as required by paragraph 30(b) of FRS 108,
           Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed.

           The adoption of the FRSs has no impact to the financial statements of the Group and of the Company.

           The financial statements were approved by the Board of Directors on 20 April 2007.

      (b) Basis of measurement

           The financial statements have been prepared on the historical cost basis.

      (c) Functional and presentation currency

           These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional currency. All financial information presented in
           RM has been rounded to the nearest Ringgit, unless otherwise stated.

      (d) Use of estimates and judgements

           The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of
           accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

           Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
           the estimate is revised and in any future periods affected.

           In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the
           most significant effect on the amount recognised in the financial statements are described in the following notes:-

           • Note 3 - depreciation of property, plant and equipment
           • Note 4 - valuation of recoverable amount for cash generating unit



            37    2006   annual report
     Notes To The Financial Statements                                 (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES
     The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied
     consistently by Group entities, unless otherwise stated.

     (a) Basis of consolidation

         (i)	 Subsidiaries

             Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the power to govern the
             financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently
             are exercisable are taken into account.

             The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the
             date that control ceases.

             Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses.

         (ii)	 Minority	interest

             Minority interests at the balance sheet date, being the portion of the net assets of subsidiaries attributable to equity interests that are not owned
             by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated balance sheet and statement of changes
             in equity within equity, separately from equity attributable to the equity shareholders of the Company. Minority interests in the results of the
             Group are presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between minority
             interests and the equity shareholders of the Company.

             Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the excess, and any further losses applicable
             to the minority, are charged against the Group’s interest except to the extent that the minority has a binding obligation to, and is able to, make
             additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is allocated all such profits until the
             minority’s share of losses previously absorbed by the Group has been recovered.

         (iii)	Associates

             Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and
             operating policies.

             Associates are accounted for in the consolidated financial statements using the equity method. The consolidated financial statements include
             the Group’s share of the income and expenses of the equity accounted associates, after adjustments to align the accounting policies with those
             of the Group, from the date that significant influence commences until the date that significant influence ceases.

             When the Group’s share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long
             term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation
             or has made payments on behalf of the investee.

             Investments in associates are stated in the Company’s balance sheet at cost less impairment losses, if any.

         (iv)	Transactions	eliminated	on	consolidation	

             Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the
             consolidated financial statements.

             Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s
             interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
             of impairment.




                                                                                                                               2006    annual report   38
     Notes To The Financial Statements                                (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)
     (b) Foreign currency

         (i)	 Foreign	currency	transactions

              Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the
              transaction.

              Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at
              the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are
              retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising
              on retranslation are recognised in the income statement.

         (ii)	 Operations	denominated	in	functional	currencies	other	than	Ringgit	Malaysia

              The assets and liabilities of operations in functional currencies other than RM, including goodwill and fair value adjustments arising on
              acquisition, are translated to RM at exchange rates at the balance sheet date. The income and expenses of foreign operations are translated
              to RM at exchange rates at the dates of the transactions.

              On disposal, accumulated translation differences are recognised in the consolidated income statement as part of the gain or loss on sale.

         (iii)	Net	investment	in	foreign	operations

              Exchange differences arising from monetary items that in substance form part of the Company’s net investment in foreign operations, are
              recognised in the Company’s income statement. Such exchange differences are reclassified to equity in the consolidated financial statements
              only when the loan is denominated in either the functional currency of the Company or the foreign operation. Deferred exchange differences
              are released to the income statement upon disposal of the investment.

     (c) Property, plant and equipment

         (i)	 Recognition	and	measurement

              Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

              Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of
              materials and direct labour, any other costs directly attributable to bringing the assets to working condition for its intended use, and the costs
              of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality
              of the related equipment is capitalised as part of that equipment.

              The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair
              value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a
              willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without
              compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items.

              When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major
              components) of property, plant and equipment.

         (ii)	 Subsequent	costs

              The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the
              future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day
              servicing of property, plant and equipment are recognised in the income statement as incurred.




         39    2006   annual report
     Notes To The Financial Statements                                   (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)
     (c) Property, plant and equipment (Continued)

         (iii)	Depreciation

             Leasehold land is amortised in equal instalments over the period of the lease of ninety-nine years. Buildings and renovation are depreciated
             over the period of 50 years and 3 years respectively.

             The estimated useful lives and depreciation method of other items of property, plant and equipment for current and comparative periods are
             as follows:-

             Industrial building, civil         -      Gross Post Construction dry bulk cargo throughput expressed in metric tonnes to-date allocated over
             works and infrastructure                  a prudent estimate of the total gross post construction throughput capacity expressed in metric tonnes
                                                       over 50 years.

             Plant and machinery, tools         -      Gross Post Construction dry bulk cargo throughput expressed in metric tonnes to date allocated over
             office equipment and furniture            a prudent estimate of the total gross post construction throughput capacity expressed in metric tonnes
                                                       over 30 years

             The estimation of the total gross post construction throughput capacity is based on the historical actual throughput and the estimated throughput
             over the estimated useful lives. As such, this involves estimation uncertainty and critical judgement as the actual throughput in the future might
             differ from the estimated future throughput capacity.

             Depreciation methods, useful lives and residual rates are reassessed at each reporting date.

         (iv)	Change	in	estimates

             Estimates in respect of certain items of plant and equipment were revised in 2006 (see note 3).

     (d) Intangible assets

         (i)	 Goodwill

             Goodwill arises on the acquisition of subsidiaries and associates.

             For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the fair values
             of the net identifiable assets and liabilites.

             With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Group’s interest in
             the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

             Goodwill is allocated to cash-generating units and is tested annually for impairment or more frequently if events or changes in circumstances
             indicate that it might be impaired.

             In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment. The entire
             carrying amount of the investment is tested for impairment when there is objective evidence of impairment.

             Acquisition	of	minority	interest

             Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess of the cost of the additional investment over the
             carrying amount of the net assets acquired at the date of exchange.

             Goodwill is allocated to cash generating units and is tested annually for impairment or more frequently if events or changes in circumstance
             indicate it might be impaired.




                                                                                                                            2006   annual report   40
     Notes To The Financial Statements                                     (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)
     (e) Investment in equity securities

           Investments in equity securities are recognised initially at purchase price plus attributable transaction costs.

           Subsequent to initial recognition, investments in non-current equity securities are stated at cost less allowance for diminution in value.

           Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities, the allowance for
           diminution in value is recognised as an expense in the financial year in which the decline is identified.

     (f)   Receivables

           Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is
           established.

           Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

           Receivables are not held for the purpose of trading.

     (g) Cash and cash equivalents

           Cash and cash equivalents consist of cash in hand, balances and deposits with banks and highly liquid investments which have an insignificant
           risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts, pledged
           deposits and cash held in a Debt Service Account maintained by a subsidiary for the settlement of its Serial Bonds.

     (h) Impairment of assets

           The carrying amounts of assets are reviewed at each reporting date to determine whether there is any indication of impairment.

           If any such indication exists then the assets’ recoverable amounts are estimated. For goodwill and intangible assets that have indefinite useful lives,
           recoverable amount is estimated at each reporting date.

           An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit
           is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are
           recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount
           of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

           The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use,
           the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
           value of money over an appropriate period of time inclusive of the ascertainable residual value of such assets and the risks specific to the asset and
           such other methods as may be appropriate.

           An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed
           at each reporting date for any indications that the losses have decreased or no longer exists. An impairment loss is reversed if there has been
           a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
           amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
           recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised.




           41   2006   annual report
     Notes To The Financial Statements                                  (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)
     (i)   Share capital

           (i)	 Shares	issue	expenses

               Incremental costs directly attributable to issue of shares and share options classified as equity are recognised as a deduction from equity.

           (ii)	 Preference	share	capital

               Preference share capital is classified as equity if it is non-redeemable, or is redeemable but only at the Company’s option, and any dividends
               are discretionary. Dividends thereon are recognised as distributions within equity. Preference share capital is classified as a liability if it is
               redeemable on a specific date or at the option of the shareholders, or if dividend payments are not discretionary. Dividends thereon are
               recognised as interest expense in the income statement.

     (j)   Compound financial instruments

           Compound financial instruments issued by the Company comprise convertible notes that can be converted to share capital at the option of the
           holder, and the number of shares to be issued does not vary with changes in their fair value.

           The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity
           conversion option. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a
           whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in
           proportion to their initial carrying amounts.

           Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective
           interest method. The equity component of a compound financial instrument is not remeasured subsequent to initial recognition.

     (k) Loans and borrowings

           Loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income
           statement over the period of the loans and borrowings using the effective interest method.

     (l)   Employee benefits

           Short	term	employee	benefits

           Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted
           basis and are expensed as the related service is provided.

           The Group’s contribution to the Employee’s Provident Fund are charged to the income statements in the year to which they relate. Once the
           contributions have been paid, the Group has no further payment obligations.

     (m) Provisions

           A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and
           it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected
           future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

     (n) Payables

           Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another
           financial asset to another entity.




                                                                                                                               2006   annual report   42
     Notes To The Financial Statements                                  (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)
     (o) Revenue

           (i)	 Port	services

                Income from port services is recognised in the income statement once the service is rendered. Income arising from the fixed portion of the port
                service revenue is recognised on an accrual basis.

           (ii)	 Dividend	income

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

           (iii)	Interest	income

                Interest income is recognised in the income statement as it accrues, taking into account the effective yield on the asset.

           (iv)	Office	facility

                Office facility fees are recognised in the income statement upon the facility is provided. Office facility revenue is recognised on an accrual
                basis.

           (v)	 Rental	income

                Rental income is recognised in the income statement as it accrues.

     (p) Lease payments

           Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives
           received are recognised as an integral part of the total lease expense, over the term of the lease.

     (q) Financing costs

           Bond	interest

           This represents interest on LBT Serial Bonds comprising 19 series of zero coupon bonds up to the aggregate nominal value of RM445 million,
           principal and interest combined, which were issued by one of the subsidiary companies to finance the development of the dry bulk terminal.

           During	construction	period

           All interest on the LBT Serial Bonds that were directly attributable to the project development during the period of construction up to 27 December
           2002 were capitalised as Project Development Costs and subsequently allocated appropriately towards property, plant and equipment for
           amortisation in accordance with Note 2(c)(iii).

           Post	construction	period

           All interest on the LBT Serial Bonds that are incurred and directly attributable to the project development after completion of the construction of the
           dry bulk terminal are recognised as an expense in the period in which it is incurred.

     (r)   Tax expense

           Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items
           recognised directly in equity, in which case it is recognised in equity.

           Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet
           date, and any adjustment to tax payable in respect of previous years.




           43    2006    annual report
     Notes To The Financial Statements                                   (Continued)




2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)
     (r)   Tax expense (Continued)

           Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and
           liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences:
           the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
           neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary
           differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date.

           Deferred tax liability is recognised for all taxable temporary differences.

           A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference
           can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related
           tax benefit will be realised.

     (s) Earnings per share

           The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss
           attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted
           EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
           outstanding for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

     (t)   Segment reporting

           A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in
           providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are
           different from those of other segments.


3.   PROPERTY, PLANT AND EqUIPMENT
                                                                                                               Industrial         Plant and
                                                                                                              buildings,          machinery,
                                               Long term                                  Buildings           civil works        tools, office
                                               leasehold              Freehold              and                   and           equipment and
     Group                                        land                  land             renovation         infrastructure          furniture               Total
                                                   RM                     RM                  RM                  RM                   RM                    RM
     Cost
     At 1 January 2005                         18,758,729              565,912            1,975,000         155,029,293          218,642,323           394,971,257
     Additions                                            -                     -           603,613                      -          2,229,995               2,833,608
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2005 / 1 January 2006      18,758,729              565,912            2,578,613         155,029,293          220,872,318           397,804,865
     Additions                                            -                     -                   -                    -             13,785                 13,785
     Disposals                                            -           (565,912)          (2,095,155)                     -                    -         (2,661,067)
     Write off                                            -                     -                   -                    -              (2,100)                (2,100)
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2006                       18,758,729                       -           483,458         155,029,293          220,884,003           395,155,483
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––




                                                                                                                                2006   annual report   44
     Notes To The Financial Statements                                  (Continued)




3.   PROPERTY, PLANT AND EqUIPMENT (Continued)
                                                                                                              Industrial         Plant and
                                                                                                             buildings,          machinery,
                                              Long term                                  Buildings           civil works        tools, office
                                              leasehold             Freehold               and                   and           equipment and
     Group (Continued)                           land                 land              renovation         infrastructure          furniture              Total
                                                  RM                   RM                   RM                   RM                   RM                   RM
     Depreciation
     At 1 January 2005:
       Accumulated depreciation                  537,071                       -           133,249            2,110,115            5,084,274            7,864,709
     Depreciation for the year                   189,480                       -            84,884            1,201,861            2,917,166            4,393,391
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2005 / 1 January 2006:
        Accumulated depreciation                 726,551                       -           218,133            3,311,976            8,001,440           12,258,100
     Depreciation for the year                   189,480                       -           137,652            2,398,890            5,981,009            8,707,031
     Disposals                                            -                    -          (156,750)                     -                    -           (156,750)
     Write off                                            -                    -                   -                    -                (315)                (315)
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2006:
       Accumulated depreciation                  916,031                       -           199,035            5,710,866           13,982,134           20,808,066
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     Carrying amounts
     At 1 January 2005                        18,221,658              565,912            1,841,751         152,919,178          213,558,049          387,106,548
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2005 / 1 January 2006     18,032,178              565,912            2,360,480         151,717,317          212,870,878          385,546,765
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2006                      17,842,698                       -           284,423         149,318,427          206,901,869          374,347,417
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––


                                               Freehold                                                      Furniture              Office
     Company                                     land              Buildings           Renovation           and fittings          equipment               Total
                                                  RM                  RM                    RM                   RM                   RM                   RM
     Cost
     At 1 January 2005                           565,912            1,975,000                      -                    -                    -          2,540,912
     Additions                                            -           195,155              408,458              130,681               74,819              809,113
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2005 / 1 January 2006        565,912            2,170,155              408,458              130,681               74,819            3,350,025
     Additions                                            -                    -                   -                    -             13,785               13,785
     Disposals                                   (565,912)         (2,095,155)                     -                    -                    -         (2,661,067)
     Write off                                            -                    -                   -                    -              (2,100)              (2,100)
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2006                                   -            75,000             408,458              130,681               86,504              700,643
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––




            45   2006    annual report
     Notes To The Financial Statements                                  (Continued)




3.   PROPERTY, PLANT AND EqUIPMENT (Continued)
                                                 Freehold                                                     Furniture              Office
     Company (Continued)                           land              Buildings          Renovation           and fittings          equipment                Total
                                                    RM                  RM                   RM                   RM                   RM                    RM
     Depreciation
     At 1 January 2005:
       Accumulated depreciation                            -          133,249                      -                    -                    -              133,249
     Depreciation for the year                            -             39,500              45,384                 6,074                6,152                97,110
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2005 / 1 January 2006:
        Accumulated depreciation                           -          172,749               45,384                 6,074                6,152               230,359


     Depreciation for the year                            -              1,500             136,152               13,068               14,212                164,932
     Disposals                                            -          (156,750)                     -                    -                    -              (156,750)
     Write off                                            -                    -                   -                    -                (315)                  (315)
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2006:
       Accumulated depreciation                            -            17,499             181,536               19,142               20,049                238,226
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     Carrying amounts
     At 1 January 2005                           565,912            1,841,751                      -                    -                    -             2,407,663
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2005 / 1 January 2006        565,912            1,997,406              363,074              124,607               68,667               3,119,666
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     At 31 December 2006                                   -            57,501             226,922              111,539               66,455                462,417
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                             ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––


     (a) Security

          Property, plant and equipment of the Group with net book value amounting to RM373,885,000 (2005 - RM382,427,099) have been charged to
          banks as security for LBT Serial Bonds (see note 11).

     (b) Change in estimates

          During the year ended 31 December 2006, the Group reassessed the estimated useful lives and depreciation methods of its property, plant and
          equipment and this has resulted in a change in the estimated total gross post construction throughput capacity of the industrial building, civil works
          and infrastructure and also plant and equipment and tools. The effect of these changes is an increase in depreciation charge of RM3,766,209. The
          effect in subsequent periods is not disclosed as it is impracticable, and the effect will be reassessed at each reporting date.




                                                                                                                               2006   annual report   46
     Notes To The Financial Statements                                 (Continued)




4.   INTANGIBLE ASSETS
     Goodwill on consolidation
                                                                                                                                                      Group
                                                                                                                                                       RM
     At cost
     Balance at 1 January 2005 / 31 December 2005 / 31 December 2006                                                                               128,029,993
                                                                                                                                                   –––––––––––
                                                                                                                                                   –––––––––––
     Impairment testing for cash-generating unit containing goodwill

     The carrying amount of goodwill is attributable to the acquisition a subsidiary, PLSB:

                                                                                                                                           Group
                                                                                                                                 2006                 2005
                                                                                                                                 RM                    RM
     Carrying amount:
     At 31 December                                                                                                          128,029,993           128,029,993
                                                                                                                             –––––––––––
                                                                                                                             –––––––––––           –––––––––––
                                                                                                                                                   –––––––––––

     The annual impairment test was done to the goodwill based on its recoverable amount. The recoverable amount is the present value of all foreseeable
     future shareholders distributable profits after tax discounted at the shareholders’ required rate of return, or the risk discount rate plus the Net Assets
     Value. The projections of future shareholder’s distributable profits are based on best estimate assumptions derived from the operating unit experience.


5.   INVESTMENTS IN SUBSIDIARIES
     (a) Investment in subsidiaries
                                                                                                                                         Company
                                                                                                                                 2006                 2005
                                                                                                                                 RM                    RM
            At cost:
              Unquoted shares                                                                                                138,009,498           137,509,500
                                                                                                                             –––––––––––
                                                                                                                             –––––––––––           –––––––––––
                                                                                                                                                   –––––––––––
     Details of subsidiaries are as follows:
                                                          Country of                              Effective
                                                        Incorporation                         Ownership Interest               Principal Activities
                                                                                              2006          2005
                                                                                               %             %
     Name of Subsidiary
     PLSB                                                  Malaysia                           100            100               Investment holding
     RRSB                                                  Malaysia                           100            100               Provision of tuggage services
     IRPL*                                                Singapore                           100            100               Investment holding
     IML*                                                  Mauritius                          100               -              Dormant
     SKSB                                                  Malaysia                           100               -              Dormant
     TKSB                                                  Malaysia                           100               -              Dormant
     WKSB                                                  Malaysia                           100               -              Dormant

     Subsidiary of PLSB
     LBTSB                                                 Malaysia                             80            80               Development, ownership and
                                                                                                                               management of a dry bulk
                                                                                                                               terminal
     * Not audited by KPMG




            47   2006   annual report
     Notes To The Financial Statements                               (Continued)




6.   INVESTMENTS IN ASSOCIATES
                                                                                                                                          Group
                                                                                                                               2006                    2005
                                                                                                                               RM                      RM
     At cost:
       Unquoted shares in Malaysia                                                                                        70,590,502               70,590,502
       Share of post-acquisition reserves                                                                                 24,689,905               12,838,608
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                          95,280,407               83,429,110
     Less: Dividends                                                                                                     (19,689,858)             (10,212,058)
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                          75,590,749               73,217,052
                                                                                                                        ––––––––––––
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                                                ––––––––––––
     Represented by:
     Group’s share of net assets of other than goodwill                                                                   37,769,535               35,395,838
     Goodwill on acquisition                                                                                              37,821,214               37,821,214
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                          75,590,749               73,217,052
                                                                                                                        ––––––––––––
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                                                ––––––––––––
     Summary of financial information on associates:


                         Country of                   Effective                                          Profit /           Total                     Total
                       incorporation              ownership interest                 Revenues            (Loss)            assets                  liabilities
                                                2006             2005                 (100%)             (100%)            (100%)                    (100%)
     2006                                        %                 %                    RM                 RM                  RM                      RM


     LMTSB                Malaysia            50% less          50% less
                                            one (1) share     one (1) share          70,877,704        23,702,597        187,431,596              111,874,192*

     LMTC                 Malaysia            50% less          50% less
                                            one (1) share     one (1) share                   #                     #                 #                          #
                                                                                     ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                     70,877,704        23,702,597        187,431,596              111,874,192
                                                                                     ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                     ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
     2005

     LMTSB                Malaysia            50% less          50% less
                                            one (1) share     one (1) share          46,045,742        10,760,405        174,234,685            103,424,678*
     LMTC                 Malaysia            50% less          50% less
                                            one (1) share     one (1) share                   #                     #                 #                          #
                                                                                     ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                     46,045,742        10,760,405        174,234,685            103,424,678*
                                                                                     ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                                     ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––


     # LMTC is held as an associate through LMTSB. The financial information is consolidated with LMTSB.

     * Included in total liabilities is preference share premium of RM 19,800,000.




                                                                                                                        2006    annual report     48
     Notes To The Financial Statements                            (Continued)




6.   INVESTMENTS IN ASSOCIATES (Continued)
     Details of Associate Companies:


                                        Country of
     Name of Company                  Incorporation           Effective Ownership Interest        Principal Activities
                                                              2006                   2005
                                                                %                     %
     LMTSB                              Malaysia             50% less               50% less       Development of an integrated privatised project
     (held through PLSB)                                  one (1) share           one (1) share    encompassing ownership and operations of multi-
                                                                                                   purpose port facilities, operation and maintenance of
                                                                                                   a bulk terminal, sales and rental of port related land
                                                                                                   and other ancillary activities

     LMTC                               Malaysia             50% less               50% less      Dormant
     (held through LMTSB)                                 one (1) share           one (1) share


7.   OTHER INVESTMENTS
                                                                                                                                        Group
                                                                                                                            2006                  2005
                                                                                                                             RM                    RM
     Non-current
     LMT RPS                                                                                                             10,029,999             10,029,999
     Unquoted shares                                                                                                     35,325,000                      -
                                                                                                                       ––––––––––––         ––––––––––––
     Balance at 31 December                                                                                              45,354,999             10,029,999
                                                                                                                       ––––––––––––
                                                                                                                       ––––––––––––         ––––––––––––
                                                                                                                                            ––––––––––––


     Unquoted shares amounting to RM 35,325,000 relates to equity investment in PGMC of 2,084,583,332 Redeemable Class B shares. As at 31 December
     2006, this investment represents 17.25% of PGMC’s equity. PGMC is not equity accounted for as at 31 December 2006 as the investment had not
     been fully completed and the redemption feature of the investment had not expired. Subsequent to year end, on 13 February 2007, the Group further
     increased its shareholding to 2,501,562,695 Redeemable Class B shares representing 20.01% of PGMC’s equity.

                                                                                                                                    Company
                                                                                                                            2006                  2005
                                                                                                                             RM                    RM
     Non-current
     LBT RCCPS                                                                                                           16,000,000             16,000,000


     LBT RNCPS                                                                                                                      -             966,293
     Less: Redemption of LBT RNCPS                                                                                                  -             (966,293)
                                                                                                                       ––––––––––––         ––––––––––––
     Balance at 31 December                                                                                              16,000,000             16,000,000
                                                                                                                       ––––––––––––
                                                                                                                       ––––––––––––         ––––––––––––
                                                                                                                                            ––––––––––––




          49   2006   annual report
     Notes To The Financial Statements                                (Continued)




8.   RECEIVABLES, DEPOSITS AND PREPAYMENTS
                                                                                               Group                                      Company
                                                                                        2006              2005                     2006                   2005
                                                                                        RM                 RM                      RM                      RM
     Non-current
     Non-trade
     Amount due from subsidiaries                                                              -                 -           190,396,353            134,645,660
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––             ––––––––––––
                                                                                                                            ––––––––––––            ––––––––––––
                                                                                                                                                    ––––––––––––
     Current
     Trade
     Trade receivables                                                                 8,913,938         8,535,530                         -                     -
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––             ––––––––––––
                                                                                                                            ––––––––––––            ––––––––––––
                                                                                                                                                    ––––––––––––
     Current
     Non-trade
     Other receivables, deposits and prepayment                                      16,443,402         13,521,080              2,454,606                1,980,223
     Amount due from subsidiaries                                                              -                 -              7,913,791                8,113,600
                                                                                    ––––––––––––   ––––––––––––             ––––––––––––            ––––––––––––
                                                                                     16,443,402         13,521,080            10,368,397             10,093,823
                                                                                    ––––––––––––   ––––––––––––             ––––––––––––            ––––––––––––
                                                                                     25,357,340         22,056,610            10,368,397             10,093,823
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––             ––––––––––––
                                                                                                                            ––––––––––––            ––––––––––––
                                                                                                                                                    ––––––––––––
     Amount	due	from	subsidiaries

     Included in the non-current amounts due from subsidiaries are balances arising from the acquisition of LMT RPS and LMTSB ordinary shares by PLSB
     from the Company and the disposal of the LBT RCCPS from PLSB to the Company. The non-current amount due from subsidiaries is unsecured, interest
     free and is not repayable within the next 12 months except by agreement between the companies.

     The current amount due from subsidiaries are unsecured, interest free and have no fixed term of repayment.


9.   CASH AND CASH EqUIVALENTS
                                                                                               Group                                      Company
                                                                                        2006              2005                     2006                   2005
                                                                                        RM                 RM                      RM                      RM


     Cash and bank balances                                                          22,478,155         24,554,482                  79,759           12,796,459
     Deposits with licensed banks                                                    89,820,000        111,960,000              5,200,000            43,500,000
                                                                                    ––––––––––––   ––––––––––––             ––––––––––––            ––––––––––––
                                                                                    112,298,155        136,514,482              5,279,759            56,296,459
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––             ––––––––––––
                                                                                                                            ––––––––––––            ––––––––––––
                                                                                                                                                    ––––––––––––


     Included in fixed deposits of the Group is an amount of RM5,000 (2005 - RM5,000) which has been pledged by LBTSB with a bank for guarantee
     facilities for the purpose of a bond required by Kastam Diraja Malaysia in respect of its dry bulk terminal’s customs legal landing point status.

     Included in deposits with licensed banks and cash and bank balances are amounts of RM44,068,000 (2005 - RM25,440,000) and RM7,319 (2005 - Nil)
     respectively held in a Debt Service Reserve Account maintained by LBTSB for the settlement of its Serial Bonds.




                                                                                                                            2006    annual report   50
   Notes To The Financial Statements                                (Continued)




10. CAPITAL AND RESERVES
                                                                                                                                  Group and Company
                                                                                                                                2006                 2005
                                                                                                                                 RM                   RM
   Authorised:
     Ordinary shares of RM1.00 each
       Balance at 1 January                                                                                                 470,000,000          470,000,000


     ICPS of RM0.10 each
       Balance at 1 January                                                                                                  30,000,000           30,000,000
                                                                                                                           ––––––––––––         ––––––––––––
       Balance at 31 December                                                                                               500,000,000          500,000,000
                                                                                                                           ––––––––––––
                                                                                                                           ––––––––––––         ––––––––––––
                                                                                                                                                ––––––––––––
   Issued and paid up:
     Ordinary shares of RM1.00 each
       Balance at 1 January                                                                                                 300,805,917          268,851,692
       Nil / Conversion of 10,370,700 ICPS to new ordinary shares of RM1.00 each
            during the year on the basis of one (1) ordinary share for every 1.15 ICPS held                                             -          9,017,994
       Nil / Conversion of 26,376,700 ICULS to new ordinary shares of RM1.00 each
            during the year on the basis of one (1) ordinary share for every 1.15 ICULS held                                            -         22,936,231
                                                                                                                           ––––––––––––         ––––––––––––
       Balance at 31 December                                                                                               300,805,917          300,805,917
                                                                                                                           ––––––––––––
                                                                                                                           ––––––––––––         ––––––––––––
                                                                                                                                                ––––––––––––
     ICPS of RM0.10 each
       Balance at 1 January                                                                                                             -          1,037,070
       Nil / Conversion of 10,370,700 ICPS to new ordinary shares of RM1.00 each
            during the year on the basis of one (1) ordinary share of every 1.15 ICPS held                                              -          (1,037,070)
                                                                                                                           ––––––––––––         ––––––––––––
                                                                                                                                        -                    -
                                                                                                                           ––––––––––––
                                                                                                                           ––––––––––––         ––––––––––––
                                                                                                                                                ––––––––––––
       Balance at 31 December                                                                                               300,805,917          300,805,917
                                                                                                                           ––––––––––––
                                                                                                                           ––––––––––––         ––––––––––––
                                                                                                                                                ––––––––––––
   The ICPS present in the previous year had the following rights attached to them:

   (a) The registered holder of the ICPS had the right to convert the ICPS into new ordinary shares of the Company of RM1.00 each at a conversion rate
       of one (1) ordinary share for every 1.15 ICPS held;

   (b) The ICPS was convertible into new ordinary shares of the Company up to and including 12 September 2005; and

   (c) The ICPS did not bear any dividend and was not entitled to any rights, bonus, issues, allotment and/or any other distributions that maybe declared
       by the Company. The ICPS holders were not entitled to voting rights except where the rights of the ICPS were affected or on a resolution for the
       winding up of the Company.

   All outstanding ICPS were fully converted to 9,017,994 ordinary shares at the end of the previous financial year.

   Translation reserve

   The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations as well as
   from the translation of liabilities that hedge the Company’s net investment in a foreign subsidiary.

   Section 108 tax credit

   Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frank all of its
   distributable reserves at 31 December 2006 if paid out as dividends.



        51   2006   annual report
    Notes To The Financial Statements                                  (Continued)




10. CAPITAL AND RESERVES (Continued)
    Capital redemption reserve

    The capital redemption reserve was created as a consequence of the redemption of the LBT RNCPS by transferring the required nominal amount
    redeemed from retained profits.

    Minority interests

    This consists of the minority shareholders’ proportion of ordinary share capital and reserves of LBTSB, net of their share of LBTSB’s goodwill on
    consolidation.


11. LBT SERIAL BONDS (SECURED)
                                                                                                                                            Group
                                                                                                                                   2006                  2005
                                                                                                                                   RM                    RM
    Bond liability is payable as follows:-


    Less than one year                                                                                                         25,908,728            31,844,182
    More than one year                                                                                                        108,376,830           134,285,558
                                                                                                                             ––––––––––––           ––––––––––––
                                                                                                                              134,285,558           166,129,740
                                                                                                                             ––––––––––––
                                                                                                                             ––––––––––––           ––––––––––––
                                                                                                                                                    ––––––––––––

    The LBT Serial Bonds are secured, to the Trustee for the bondholders, by the following:

    (i)     A debenture incorporating a fixed and floating charge over LBTSB’s entire assets, both present and future.

    (ii)    A fixed charge over LBTSB’s eligible investments and over the Debt Service Reserve Account and Security Account.

    (iii)   A fixed charge over LBTSB’s interest and benefit to its insurance policies

    (iv)    A fixed charge over LBTSB’s interest and benefits to its Project Agreements.

    The LBT Serial Bonds average effective interest rate determined by reference to the yield to maturity is 8% (2005: 8%) per annum.

    The main covenants of the LBT Serial Bonds facility are as follows:-

    (i)     Required level of Debt to Equity Ratio does not exceed 3:1;

    (ii)    Required minimum Debt Service Cover Ratio of 1.1:1;

    (iii)   Open and maintain a Debt Service Reserve Account with a bank with a minimum rating of AA from Rating Agency of Malaysia or its equivalent
            from Malaysia Rating Corporation Berhad for the purpose of (iv) below; and

    (iv)    Ensure that there is paid to the credit of the Debt Service Reserve Account an amount at least equal to the nominal value of the bond that it to
            mature within any forthcoming period of 6 months at a date that is at least 6 months prior to such bond maturity date and shall further ensure that,
            until the final Maturity Date, the Debt Service Reserve Requirement is met at all times.




                                                                                                                            2006    annual report   52
   Notes To The Financial Statements                                  (Continued)




12. DEFERRED TAx LIABILITIES
   Recognised deferred tax assets and liabilities

   Deferred tax assets and liabilities are attributable to the following:-

                                                                                                                                             Group
                                                                                                                                   2006                 2005
                                                                                                                                   RM                    RM
   Liabilities
   Property, plant and equipment
     - capital allowance                                                                                                        53,915,600           51,672,712


   Assets
   Unabsorbed capital allowance                                                                                                (12,258,950)          (15,312,226)
                                                                                                                             ––––––––––––         ––––––––––––
                                                                                                                                41,656,650           36,360,486
                                                                                                                             ––––––––––––
                                                                                                                             ––––––––––––         ––––––––––––
                                                                                                                                                  ––––––––––––

   In recognising the deferred tax assets attributable to the unabsorbed capital allowance, the Directors made an assumption that there will not be
   any substantial change (more than 50%) in the shareholders before these assets are utilised. If there is substantial change in the shareholders, the
   unabsorbed capital allowance carry forward will not be available to the Group.

   Deferred tax liabilities and assets are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and
   where the deferred taxes relate to the same tax authority. The unabsorbed capital allowance at year end carried forward of RM 47,149,811 is subject to
   agreement by the Inland Revenue Board.


   Movement in temporary differences during the year
                                                                                    Recognised                                Recognised
                                                                                     in income                                 in income
                                                                     At              statement                At               statement                 At
                                                                  1.1.2005            (note 21)           31.12.2005            (note 21)            31.12.2006
                                                                    RM                   RM                   RM                   RM                    RM
   Property, plant and equipment
     - Capital allowances                                         43,165,157           8,507,555           51,672,712            3,126,611           54,799,323


   Unabsorbed capital allowance                                  (14,386,964)           (925,262)         (15,312,226)           2,169,553           (13,142,673)
                                                               ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                                  28,778,193           7,582,293           36,360,486            5,296,164           41,656,650
                                                               ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                               ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––




        53   2006   annual report
   Notes To The Financial Statements                              (Continued)




13. PAYABLES AND ACCRUALS
                                                                                           Group                                    Company
                                                                                    2006             2005                    2006                      2005
                                                                                    RM                RM                     RM                         RM
   Non-current
   Non-trade
   Other payables and accruals                                                   71,271,329        71,520,025                        -                        -
                                                                                ––––––––––––
                                                                                ––––––––––––   ––––––––––––
                                                                                               ––––––––––––           ––––––––––––
                                                                                                                      ––––––––––––            ––––––––––––
                                                                                                                                              ––––––––––––
   Current
   Trade
   Trade payables                                                                  6,002,654        5,639,407                        -                        -


   Non-trade
   Other payables and accruals                                                   18,600,598        20,420,222                852,263                  1,560,205
   Amount due to subsidiary                                                                -                -            1,473,368                    1,473,310
                                                                                ––––––––––––   ––––––––––––           ––––––––––––            ––––––––––––
                                                                                 24,603,252        26,059,629            2,325,631                    3,033,515
                                                                                ––––––––––––
                                                                                ––––––––––––   ––––––––––––
                                                                                               ––––––––––––           ––––––––––––
                                                                                                                      ––––––––––––            ––––––––––––
                                                                                                                                              ––––––––––––


   The amount due to subsidiary is unsecured, interest free and with no fixed terms of repayment.

   Included in other payables and accruals of the Group are amounts relating to bond interest accruals as follows:-

                                                                                                                             2006                      2005
                                                                                                                             RM                         RM
   Repayable in less than one year                                                                                      18,091,272                18,155,818
   More than one year                                                                                                   71,271,329                71,520,025
                                                                                                                      ––––––––––––            ––––––––––––
                                                                                                                        89,362,601                89,675,843
                                                                                                                      ––––––––––––
                                                                                                                      ––––––––––––            ––––––––––––
                                                                                                                                              ––––––––––––

14. PREFERENCE SHARE CAPITAL
                                                                                                                                         Group
                                                                                                                             2006                      2005
                                                                                                                             RM                         RM
   Authorised:
     Redeemable Non-cumulative Convertible Preference Shares of RM0.01 each (LBT RNCPS)                                  1,000,000                    1,000,000
     Redeemable Cumulative Convertible Preference Shares of RM0.01 each (LBT RCCPS)                                      1,000,000                    1,000,000
                                                                                                                      ––––––––––––            ––––––––––––
                                                                                                                         2,000,000                    2,000,000
                                                                                                                      ––––––––––––
                                                                                                                      ––––––––––––            ––––––––––––
                                                                                                                                              ––––––––––––




                                                                                                                      2006    annual report      54
   Notes To The Financial Statements                                (Continued)




14. PREFERENCE SHARE CAPITAL (Continued)
                                                                                                                                       Group
                                                                                                                           2006                  2005
                                                                                                                            RM                    RM
   Issued and fully paid
         LBT RNCPS
           Balance at 1 January                                                                                                    -              11,043
           Redemption during the year                                                                                              -             (11,043)


           Balance at 31 December                                                                                                  -                    -
         LBT RCCPS                                                                                                           40,000               40,000
                                                                                                                      ––––––––––––         ––––––––––––
           Balance at 31 December                                                                                            40,000               40,000
                                                                                                                      ––––––––––––
                                                                                                                      ––––––––––––         ––––––––––––
                                                                                                                                           ––––––––––––


   On 19 August 2005, LBTSB redeemed all its outstanding 2,045,000 LBT RNCPS at a redemption price of RM1.00 each.

   The LBT RCCPS have the following rights:-

   (i)     The right to receive a fixed cumulative preferential dividend of 10% per annum on the redemption value.

   (ii)    The right to redemption at the nominal amount and a premium of RM0.99 per share at any time before the expiry of 15 years from 21 May 2002 at
           the discretion of LBTSB.


15. PREFERENCE SHARE CAPITAL PREMIUM ACCOUNT
                                                                                                                                       Group
                                                                                                                           2006                  2005
                                                                                                                            RM                    RM
   The share premium account arose from the following:-
         Nil / 1,104,300 LBT RNCPS at a premium of RM 0.99 each
           Balance at 1 January                                                                                                    -           1,093,257
           Redemption during the year                                                                                              -           (1,093,257)


           Balance at 31 December                                                                                                  -                    -


   4,000,000 LBT RCCPS at premium of RM0.99 each                                                                          3,960,000            3,960,000
                                                                                                                      ––––––––––––         ––––––––––––
           Balance at 31 December                                                                                         3,960,000            3,960,000
                                                                                                                      ––––––––––––
                                                                                                                      ––––––––––––         ––––––––––––
                                                                                                                                           ––––––––––––




           55   2006   annual report
   Notes To The Financial Statements                                (Continued)




16. ICULS
   On 31 March 2003, the Company issued RM47,194,000 nominal value new ICULS for the acquisition of the LMTC RPS. The conversion period of the
   ICULS was from 31 March 2003 to the Maturity Date of the ICULS on 24 December 2005. The ICULS were not redeemable for cash except upon the
   occurrence of a default.

   The registered holder of the ICULS had the right to convert the ICULS into new ordinary shares of the Company of RM1.00 each at a conversion rate of
   one (1) ordinary share for every 1.15 ICULS held.

   The ICULS had a coupon rate of 3% per annum. The coupon rate was payable annually in arrears on the anniversary of the date of issuance except for
   the last interest payment. The last interest payment was made on the maturity date and was calculated from the date of the following previous interest
   payment up to the maturity date.

   The liability portion represents the present value of the total interest payable at the coupon rate of 3% per annum.
                                                                                                                          Group / Company
                                                                                                       Equity                 Liability
                                                                                                     Component              Component                   Total
                                                                                                         RM                       RM                    RM


   Balance as at 1 January 2005                                                                      24,266,564               2,110,136             26,376,700


   Conversion of ICULS into ordinary shares                                                          (24,266,564)            (2,110,136)            (26,376,700)
                                                                                                  ––––––––––––             ––––––––––––            ––––––––––––
   Balance at 31 December 2005                                                                                 -                          -                     -
                                                                                                  ––––––––––––
                                                                                                  ––––––––––––             ––––––––––––
                                                                                                                           ––––––––––––            ––––––––––––
                                                                                                                                                   ––––––––––––
   All ICULS were fully converted to ordinary shares at the end of the previous financial year.


17. REVENUE
                                                                                             Group                                       Company
                                                                                      2006              2005                      2006                  2005
                                                                                      RM                 RM                       RM                    RM


   Gross dividend income from subsidiaries                                                   -                 -             15,040,000             10,677,035
   Port operations income                                                          84,380,109        82,697,740                           -                     -
   Provision of tug services                                                         6,371,812        6,076,712                           -                     -
                                                                                  ––––––––––––    ––––––––––––             ––––––––––––            ––––––––––––
                                                                                   90,751,921        88,774,452              15,040,000             10,677,035
                                                                                  ––––––––––––
                                                                                  ––––––––––––    ––––––––––––
                                                                                                  ––––––––––––             ––––––––––––
                                                                                                                           ––––––––––––            ––––––––––––
                                                                                                                                                   ––––––––––––




                                                                                                                           2006    annual report   56
   Notes To The Financial Statements                                  (Continued)




18. RESULTS FROM OPERATING ACTIVITIES
                                                                                               Group                           Company
                                                                                        2006            2005            2006             2005
                                                                                        RM               RM             RM               RM
   Results from operating activities is arrived at after charging:-


     Auditor’s remuneration
        - audit work                                                                     46,296          43,400          18,000           18,000
        - non-audit work                                                                 10,000            2,500          5,000                 -
     Depreciation of property, plant and equipment                                     8,707,031       4,393,391        164,932           97,110
     Property, plant and equipment written off                                            1,785                -          1,785                 -
   Personnel expenses
        - Contributions to Employee provident fund                                       32,428          14,387          32,428           14,387
        - Salaries and allowances                                                       263,142         130,500         263,142          130,500
     Rental - Tug hire                                                                 4,854,500       4,851,500                -               -
     Tax expense on dividend declared                                                    32,058         (169,510)               -               -
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––     ––––––––––––
                                                                                                                    ––––––––––––    ––––––––––––
                                                                                                                                    ––––––––––––
   and after crediting:-


     Gain on disposal of property, plant and equipment                                  321,275                -        321,275                 -
     Management fees                                                                    600,000         600,000         600,000          880,000
     Office facility fees                                                               165,600          82,800         165,600           82,800
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––     ––––––––––––
                                                                                                                    ––––––––––––    ––––––––––––
                                                                                                                                    ––––––––––––


19. KEY MANAGEMENT PERSONNEL COMPENSATION
                                                                                               Group                           Company
                                                                                        2006            2005            2006             2005
                                                                                        RM               RM             RM               RM
   Directors’ fees                                                                      800,000         900,000         800,000          820,000
   Directors’ allowance                                                                   9,500          21,500                 -               -
                                                                                    ––––––––––––   ––––––––––––     ––––––––––––    ––––––––––––
                                                                                        809,500         921,500         800,000          820,000
                                                                                    ––––––––––––
                                                                                    ––––––––––––   ––––––––––––
                                                                                                   ––––––––––––     ––––––––––––
                                                                                                                    ––––––––––––    ––––––––––––
                                                                                                                                    ––––––––––––




        57   2006    annual report
   Notes To The Financial Statements                                   (Continued)




20. FINANCE COSTS
                                                                                                Group                              Company
                                                                                         2006             2005              2006                   2005
                                                                                         RM                RM               RM                      RM
   Interest
        - LBT Serial Bonds interest expense                                           17,842,576        20,270,762                  -                     -
        - ICULS                                                                                 -         484,229                   -              484,229
   Share of LBT RCCPS dividend to minority shareholders (net of tax)                     288,000          288,000                   -                     -
   Share of LBT RNCPS dividend to minority shareholders (net of tax)                            -          39,755                   -                     -
                                                                                     ––––––––––––   ––––––––––––     ––––––––––––            ––––––––––––
                                                                                      18,130,576        21,082,746                  -              484,229
                                                                                     ––––––––––––
                                                                                     ––––––––––––   ––––––––––––
                                                                                                    ––––––––––––     ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––


21. TAx ExPENSE
   (a) Components of tax expense

                                                                                                Group                              Company
                                                                                         2006             2005              2006                   2005
                                                                                         RM                RM               RM                      RM
        Current tax expense
        Malaysian - current year                                                        1,159,600        1,118,327      4,563,572                 3,427,379
                    - prior year                                                                -          43,206                   -               36,215
        Overseas - current year                                                           69,855                 -                  -                     -


        Deferred tax expense
        Deferred tax recognised in the income statement (Note 12)                       5,296,164        7,582,293                  -                     -
                                                                                     ––––––––––––   ––––––––––––     ––––––––––––            ––––––––––––
                                                                                        6,525,619        8,743,826      4,563,572                 3,463,594
        Share of tax of equity accounted associates                                     4,559,474        1,982,655                  -                     -
                                                                                     ––––––––––––   ––––––––––––     ––––––––––––            ––––––––––––
                                                                                      11,085,093        10,726,481      4,563,572                 3,463,594
                                                                                     ––––––––––––
                                                                                     ––––––––––––   ––––––––––––
                                                                                                    ––––––––––––     ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––




                                                                                                                     2006    annual report   58
    Notes To The Financial Statements                              (Continued)




21. TAx ExPENSE (Continued)
    (b) Reconciliation of effective tax expense

                                                                                             Group                                 Company
                                                                                     2006              2005                 2006                   2005
                                                                                     RM                 RM                   RM                     RM
        Profit before tax                                                          47,829,607        41,717,750           14,112,035             10,123,717
        Share of tax of equity accounted associates                                 4,559,474         1,982,655                     -                     -
                                                                                 ––––––––––––    ––––––––––––          ––––––––––––         ––––––––––––
                                                                                   52,389,081        43,700,405           14,112,035             10,123,717
                                                                                 ––––––––––––
                                                                                 ––––––––––––    ––––––––––––
                                                                                                 ––––––––––––          ––––––––––––
                                                                                                                       ––––––––––––         ––––––––––––
                                                                                                                                            ––––––––––––
        Tax at Malaysian tax rate of 28%                                           14,668,943        12,236,113            3,951,370              2,834,700
        Effect of tax rates in foreign jurisdiction                                   29,916                  -                     -                     -
        Effect of change in tax rate*                                              (4,120,250)                -                     -                     -
        Non-deductible expenses                                                      412,895           835,287               570,355               591,400
        Effect of lower tax rate                                                      (80,000)          (80,000)                    -                     -
        Other items                                                                  173,589         (2,308,125)              41,847                  1,279
                                                                                 ––––––––––––    ––––––––––––          ––––––––––––         ––––––––––––
                                                                                  11,085,093         10,683,275            4,563,572              3,427,379
        Under provision in prior year                                                       -           43,206                      -               36,215
                                                                                 ––––––––––––    ––––––––––––          ––––––––––––         ––––––––––––
                                                                                  11,085,093         10,726,481            4,563,572              3,463,594
                                                                                 ––––––––––––
                                                                                 ––––––––––––    ––––––––––––
                                                                                                 ––––––––––––          ––––––––––––
                                                                                                                       ––––––––––––         ––––––––––––
                                                                                                                                            ––––––––––––


       * In the Malaysian Budget 2007, it was announced that the corporate income tax rate will be reduced to 27% in 2007 and to 26% in 2008. Consequently
        deferred tax assets and liabilities are measured using these tax rates.


22. EARNINGS PER SHARE
    Basic earnings per share

    The calculation of basic earnings per share at 31 December 2006 was based on the profit attributable to ordinary shareholders of RM35,777,113
    (2005 - RM27,625,723) and a weighted average number of ordinary shares outstanding during the year of 300,805,917 (2005 - 283,901,324).

    Weighted average number of ordinary shares

                                                                                                                                        Group
                                                                                                                            2006                   2005
    Issued ordinary shares at 1 January                                                                                 300,805,917             268,851,692
    Effect of shares issued from January to December                                                                                -            15,049,632
                                                                                                                       ––––––––––––         ––––––––––––
    Weighted average number of ordinary shares at 31 December                                                           300,805,917             283,901,324
                                                                                                                       ––––––––––––
                                                                                                                       ––––––––––––         ––––––––––––
                                                                                                                                            ––––––––––––


                                                                                                                                        Group
                                                                                                                            2006                   2005
                                                                                                                             Sen                    Sen
    Basic earnings per share                                                                                                11.9                    9.7
                                                                                                                       ––––––––––––
                                                                                                                       ––––––––––––         ––––––––––––
                                                                                                                                            ––––––––––––




         59   2006    annual report
   Notes To The Financial Statements                                 (Continued)




23. SEGMENT REPORTING
   Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business segments, is based on
   the Group’s management and internal reporting structure. Inter-segment pricing is determined based on negotiated terms.

   Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
   Unallocated items mainly comprise interest-earning assets and revenue and interest-bearing loans, borrowings, financial instruments and expenses.

   Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one
   period.

   Business	segments

   The Group comprises the following main business segments:-

   Port operations                   Ownership and operation of 2 port facilities, Lumut Maritime Terminal (port facility for dry and liquid bulk, breakbulk
                                     and containers) and Lekir Bulk Terminal (port facility for dry and liquid bulk) comprising Lumut Port

   Marine services                   Provision of tuggage services

   Investment holding                Investment in ordinary shares of subsidiary companies, LBT RNCPS (which were fully redeemed in 2005), LBT
                                     RCCPS, LMT RPS and other unquoted shares

   Industrial property               Sale of industrial property

   Geographical	segments

   No segment information on the basis of geographical segments is presented as all of the external customers and segment assets are located in
   Malaysia.


   Group                                    Port                    Marine         Investment           Industrial
   2006                                  operations                services          holding             property          Eliminations         Consolidated
                                             RM                      RM               RM                   RM                   RM                    RM
   Business	segments
   Revenue from external customers       84,380,109            6,371,813                      -                    -                    -         90,751,922
   Inter-segment revenue                            -                    -         15,040,000                      -        (15,040,000)                     -
   Share of revenue of associate         23,617,227                      -                    -         11,814,538                      -         35,431,765
                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
   Gross segment revenue                107,997,336            6,371,813           15,040,000           11,814,538          (15,040,000)         126,183,687
   Share of revenue of associate        (23,617,227)                     -                    -        (11,814,538)                     -        (35,431,765)
                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
   Total segment revenue                 84,380,109            6,371,813           15,040,000                      -        (15,040,000)          90,751,922
                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
   Segment result                        50,793,556            1,505,033           13,186,381                      -        (15,040,000)          50,444,970
                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
   Unallocated expenses                                                                                                                                (9,663)
   Results from operating activities                                                                                                              50,435,307
   Interest income                                                                                                                                 3,673,579
   Financing costs                                                                                                                               (18,130,576)
                                                                                                                                                 –––––––––––
   Operating profit                                                                                                                               35,978,310
   Share of profit after tax of
     equity accounted associates                                                                                                                  11,851,297
                                                                                                                                                 –––––––––––
   Profit before taxation                                                                                                                         47,829,607
   Tax expense                                                                                                                                    (6,525,619)
                                                                                                                                                 –––––––––––
   Net profit for the year                                                                                                                        41,303,988
                                                                                                                                                 –––––––––––
                                                                                                                                                 –––––––––––




                                                                                                                         2006   annual report    60
    Notes To The Financial Statements                              (Continued)




23. SEGMENT REPORTING (Continued)
    Group                                       Port             Marine          Investment      Industrial
    2006                                     operations         services           holding        property       Others          Eliminations     Consolidated
                                                 RM                RM               RM              RM               RM               RM               RM
    Business	segments
    Segment assets                          604,697,383         1,658,433        79,028,346                -           3,742                  -     685,387,904
        Investment in associate               60,472,599                  -               -      15,118,150                -                  -      75,590,749
                                            ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Total assets                            665,169,982         1,658,433        79,028,346      15,118,150            3,742                  -     760,978,653
                                            ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                            ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Total liabilities                       274,433,509           521,462           966,553                -           2,400                  -     275,923,924
                                            ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                            ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Capital expenditure                                 -                 -          13,785                -               -                  -          13,785
    Depreciation of property,
      plant and equipment                      8,542,099                  -         164,932                -               -                  -       8,707,031



    Group                                  Port                 Marine             Investment           Industrial
    2005                                operations             services              holding             property          Eliminations           Consolidated
                                           RM                    RM                    RM                  RM                  RM                     RM
    Business	segments
    Revenue from external customers      82,697,740            6,076,712                     -                   -                       -          88,774,452
    Inter-segment revenue                         -                    -            10,677,035                   -             (10,677,035)                  -
    Share of revenue of associate        21,697,691                    -                     -           1,320,575                       -          23,018,266
    	                                   ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Gross segment revenue               104,395,431            6,076,712            10,677,035            1,320,575            (10,677,035)        111,792,718
    Share of revenue of associate       (21,697,691)                   -                     -           (1,320,575)                     -         (23,018,266)
    	                                   ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Total segment revenue                 82,697,740            6,076,712          10,677,035                      -         (10,677,035)         88,774,452
                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Segment result                       55,035,875            1,184,575            9,067,388                     -         (10,677,035)          54,610,803
                                        ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Unallocated expenses                                                                                                                                (15,627)
    Results from operating activities                                                                                                               54,595,176
    Interest income                                                                                                                                  2,826,193
    Financing costs                                                                                                                                 (21,082,746)
                                                                                                                                                   –––––––––––
    Operating profit                                                                                                                                36,338,623
    Share of profit after tax of
      equity account associates                                                                                                                      5,379,127
                                                                                                                                                   –––––––––––
    Profit before tax                                                                                                                               41,717,750
    Tax expense                                                                                                                                      (8,743,826)
                                                                                                                                                   –––––––––––
    Profit for the year                                                                                                                             32,973,924
                                                                                                                                                   –––––––––––
                                                                                                                                                   –––––––––––




           61   2006    annual report
    Notes To The Financial Statements                               (Continued)




23. SEGMENT REPORTING (Continued)
    Group                                         Port             Marine         Investment     Industrial
    2005                                       operations         services          holding       property         Others        Eliminations Consolidated
                                                   RM               RM               RM              RM              RM              RM                RM
    Business	segments
    Segment assets                             602,308,596       1,867,427        77,987,763               -         14,063                -      682,177,849
      Investment in associate                   59,305,812                   -              -    13,911,240                 -              -       73,217,052
                                              ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Total assets                               661,614,408       1,867,427        77,987,763     13,911,240          14,063                -      755,394,901
                                              ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                              ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    Total liabilities                          301,983,096         520,579         1,636,314               -          3,000                -      304,142,989
                                              ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                              ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––


    Capital expenditure                          2,024,495                   -       809,113               -                -              -           2,833,608
    Depreciation of property
      plant and equipment                        4,296,281                   -         97,110              -                -              -           4,393,391


24. FINANCIAL INSTRUMENTS
    The main risks arising from the Group’s and Company’s financial instruments are credit risk and interest rate risk. The Board reviews the normal practice
    adopted by the Group for managing each of these risks which are summarised as below:-

    Credit risk

    At the balance sheet date, the Group has no significant exposure to credit risk.

    The Group’s primary exposure to credit risk arises through its trade receivables. Appropriate informal credit evaluations were performed on customers
    prior to entering into contractual agreements with them or with customers requiring credit over a certain amount. The exposure to credit risk is monitored
    by management on an on-going basis.

    At the balance sheet date, 93% (2005: 94%) of the trade receivables are owed by TNB Janamanjung Sdn. Bhd. which is the current sole customer of
    LBTSB. The maximum exposure to credit risk is represented by the carrying amount of each financial asset presented on the balance sheet.

    Interest rate risk

    The Group and the Company place cash balances with reputable licensed banks to generate interest income for the Group and the Company. The
    Group and the Company manage its interest rate risk by placing such balances on varying maturities ranging from 1 week to 12 months and interest
    rate terms with interest rates ranging from 2.6% to 3.2%.




                                                                                                                          2006    annual report   62
    Notes To The Financial Statements                                      (Continued)




24. FINANCIAL INSTRUMENTS (Continued)
    Effective	interest	rates	analysis

    In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates
    at the balance sheet date and the periods in which they mature:-
                                        Average
    Group                               effective                        Less                                                                               More
                                        interest                         than              1-2            2-3             3-4               4-5             than
    2006                                   rate          Total          1 year            years          years           years             years           5 years
                                            %             RM             RM                RM             RM              RM                RM                RM
    Fixed rate instruments
    Fixed deposits and REPO
       with licensed banks                  3.0       89,820,000       89,820,000                  -              -               -                -               -
    LBT Serial Bonds                        8.0     (134,285,558)     (25,908,728)       (23,954,076)   (22,146,889)    (20,476,045)     (18,087,616)    (23,712,204)
    Preference share capital               10.0          (40,000)               -                  -              -               -                -         (40,000)
    Preference share
       capital premium                     10.0       (3,960,000)                 -                -               -               -                -      (3,960,000)
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                     (48,465,558)      63,911,272      (23,954,076)     (22,146,889)    (20,476,045)     (18,087,616)     (27,712,204)
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    2005
    Fixed rate instruments
    Fixed deposits and REPO
       with licensed banks             2.2 - 3.7     111,960,000     111,960,000                   -              -               -                -               -
    LBT Serial Bonds                         8.0    (166,129,740)    (31,844,182)        (25,908,728)   (23,954,076)    (22,146,889)     (20,476,045)    (41,799,820)
    Preference share capital               10.0          (40,000)              -                   -              -               -                -         (40,000)
    Preference share
       capital premium                     10.0       (3,960,000)                  -               -               -               -                -      (3,960,000)
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                     (58,169,740)      80,115,818      (25,908,728)     (23,954,076)    (22,146,889)     (20,476,045)     (45,799,820)
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––


                                        Average
    Company                             effective                        Less                                                                               More
                                        interest                         than              1-2            2-3             3-4               4-5             than
    2006                                   rate          Total          1 year            years          years           years             years           5 years
                                            %             RM              RM               RM             RM              RM                RM               RM
    Fixed rate instruments
    Fixed deposits and REPO
       with licensed banks                 3.16        5,200,000        5,200,000                  -               -               -                -                -
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                       5,200,000        5,200,000                 -                -                -                -               -
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
    2005
    Fixed rate instruments
    Fixed deposits and REPO
       with licensed banks              2.4-2.7       43,500,000      43,500,000                   -               -               -                -                -
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                      43,500,000       43,500,000                 -                -                -                -               -
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
                                                    ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––




           63   2006   annual report
   Notes To The Financial Statements                               (Continued)




24. FINANCIAL INSTRUMENTS (Continued)
   Fair values

   Recognised	financial	instruments

   In respect of cash and cash equivalents, trade and other receivables, amounts due from subsidiaries and associate, trade and other payables, the
   carrying amounts approximate fair value due to the relatively short term nature of these financial instruments.

   The aggregate fair values of the other financial assets and liabilities carried on the balance sheet as at 31 December are shown below:-

                                                                                                2006                                     2005
                                                                                   Carrying                 Fair          Carrying                    Fair
   Group                                                                           amount                  value          amount                     value
                                                                                     RM                     RM                 RM                    RM
   Financial assets
   Other long term unquoted investments
     - LMT RPS                                                                    10,029,999                     ###      10,029,999                      ###
     - Unquoted shares                                                            35,325,000                     ###                 -                    ###
                                                                                 ––––––––––––          ––––––––––––     ––––––––––––            ––––––––––––
                                                                                  45,354,999                        -     10,029,999                          -
                                                                                 ––––––––––––
                                                                                 ––––––––––––          ––––––––––––
                                                                                                       ––––––––––––     ––––––––––––
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                                                ––––––––––––
   Financial liabilities
   Secured LBT Serial Bonds                                                      134,285,558                       #     166,129,740                          #
   Bond interest accruals                                                         89,362,601                       ##     89,675,843                         ##
   Preference share capital and share premium held
     by minority shareholders:
     - LBT RCCPS                                                                    4,000,000                 ####         4,000,000                   ####
                                                                                 ––––––––––––          ––––––––––––     ––––––––––––            ––––––––––––
                                                                                 227,648,159                        -    259,805,583                          -
                                                                                 ––––––––––––
                                                                                 ––––––––––––          ––––––––––––
                                                                                                       ––––––––––––     ––––––––––––
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                                                ––––––––––––


                                                                                                2006                                     2005
                                                                                   Carrying                 Fair          Carrying                    Fair
   Company                                                                         amount                  value          amount                     value
                                                                                     RM                     RM                 RM                    RM
   Financial liabilities
   Other long term unquoted investments
     - LBT RCCPS                                                                  16,000,000                 #####        16,000,000                  #####
                                                                                 ––––––––––––          ––––––––––––     ––––––––––––            ––––––––––––
                                                                                  16,000,000                        -     16,000,000                          -
                                                                                 ––––––––––––
                                                                                 ––––––––––––          ––––––––––––
                                                                                                       ––––––––––––     ––––––––––––
                                                                                                                        ––––––––––––            ––––––––––––
                                                                                                                                                ––––––––––––




                                                                                                                        2006   annual report    64
    Notes To The Financial Statements                                     (Continued)




24. FINANCIAL INSTRUMENTS (Continued)
    #           It is not practicable to estimate the fair value of this financial liability representing the nominal amount of 12 (2005: 14) series of bonds issued by
                a subsidiary company to finance the development of the dry bulk terminal. This liability is carried at its original cost of RM134,285,558 (2005:
                RM166,129,740) on the balance sheet.

                The main covenants of the LBT Serial Bonds facility are disclosed in Note 11 to the financial statements.

    ##          It is not practicable to estimate the fair value of this financial liability representing the interest payable on LBT Serial Bonds incurred up to 31
                December 2006. This liability is carried at its original cost of RM 89,362,601 (2005: RM89,675,843) in the balance sheet.

    ###         It is not practicable to estimate the fair valued of the investment representing 50% less one (1) share of the issued and paid-up LMT RPS capital
                of this unquoted company and the investment in unquoted shares of PGMC. These investments is carried at its original cost of RM10,029,999
                (2005: RM10,029,999) and RM 35,325,000 (2005: RM nil) in the balance sheet respectively.

                The LMT RPS are non-cumulative and may be redeemed out of the retained profits of LMTSB at LMTSB’s shareholders’ option.

    ####        It is not practicable to estimate the fair value of these financial liabilities representing 20% of the issued and paid-up LBT RCCPS capital. These
                financial liabilities are carried at its original cost as stated above on the balance sheet.

                The principal terms of the LBT RCCPS is disclosed in Note 14 to the financial statements.

    #####       It is not practicable to estimate the fair value of this investment representing 80% of the issued and paid-up LBT RCCPS capital. This investment
                is carried at its original cost of RM16,000,000 (2005: RM16,000,000) in the balance sheet.

                As at 31 December 2006, the net tangible assets reported by this unquoted company was RM183,929,881 (2005:RM156,295,507).

                The principal terms of the LBT RCCPS are disclosed in Note 14 to the financial statements.

    As at the balance sheet date, there are no unrecognised financial instruments.


25. CONTINGENCIES
    The Directors are of the opinion that provisions are not required in relation to the Company’s interest in LBTSB, whereby a right is granted to its single
    minority shareholder to sell (put) to the Company its 20% stake or 13,600,000 ordinary shares of RM1.00 each in LBTSB at fair value after and upon
    the redemption of all classes of preference shares issued by LBTSB after 15 years provided it remains the sole beneficial owner of the 20% stake.
    The Directors are of the opinion that the amount is not capable of reliable measurement.


26. CAPITAL AND OTHER COMMITMENTS
                                                                                                                                                  Group
                                                                                                                                       2006                  2005
                                                                                                                                        RM                    RM
    Other investments
    Contracted but not provided for and payable:
    Within one year                                                                                                                   6,400,000                      -
                                                                                                                                  ––––––––––––
                                                                                                                                  ––––––––––––         ––––––––––––
                                                                                                                                                       ––––––––––––
    Capital commitment amounting to USD1,726,000 for other investments relates to the final tranche of Redeemable Class B shares in PGMC to be
    subscribed under the shareholder’s agreement.




           65    2006   annual report
   Notes To The Financial Statements                              (Continued)




27. INTER COMPANY AND RELATED PARTY TRANSACTIONS
   Controlling related party relationships are in respect of:-

   (i)    The Company’s subsidiaries as disclosed in Note 5.

   (ii)   The Directors of the Company, Harun Halim Rasip and Amin Halim Rasip, who deemed to be interested by virtue of their shareholdings in HRH,
          JMS and LGI.

   (a) Significant inter-company transactions of the Company are as follows:-

                                                                                                                                   Company
                                                                                                                            2006                   2005
                                                                                                                             RM                     RM
          Subsidiary	companies	
          Redemption of LBT RNCPS                                                                                                   -              940,700
          Ordinary dividend receivable from PLSB                                                                         9,312,000                5,292,000
          Ordinary dividend receivable from RRSB                                                                            430,700               1,209,600
          Preference dividend receivable from LBTSB                                                                      1,152,000                1,185,865
          Management fee receivable from PLSB                                                                                       -              280,000
          Administrative fee receivable from LBTSB                                                                          187,200                180,000
                                                                                                                     ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––
   (b) Significant non-trade inter company and related party balances

          Outstanding significant non-trade related party balances at 31 December 2006 (in addition to related party disclosures mentioned elsewhere in
          the financial statements) are as follows:-

                                                                                           Group                                   Company
                                                                                    2006            2005                    2006                   2005
                                                                                    RM              RM                      RM                      RM
          Amounts owing by/(to)
            - PLSB                                                                         -               -          139,319,684            140,217,660
            - RRSB                                                                         -               -                230,791               1,209,600
            - LBTSB                                                                        -               -             2,304,000                1,332,000
            - IRPL                                                                         -               -            56,455,669                        -
            - SKSB                                                                         -               -                (489,946 )                    -
            - TKSB                                                                         -               -                (491,955 )                    -
            - WKSB                                                                         -               -                (491,467 )                    -
                                                                                ––––––––––––
                                                                                ––––––––––––   ––––––––––––
                                                                                               ––––––––––––          ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––
          Amount owing by LMTSB                                                     100,000        202,106                  100,000                202,106
            Redemption of LBT RNCPS                                                        -               -                        -              940,700
                                                                                ––––––––––––
                                                                                ––––––––––––   ––––––––––––
                                                                                               ––––––––––––          ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––
          Amounts owing to related parties - HRH, a company in which
           certain Directors (Harun bin Halim Rasip and Amin bin
           Halim Rasip) have substantial financial interest                                -       (163,153)                        -              (163,153)
          Amount owing by related party - PKS, a company wholly
           owned by HRH                                                                    -         82,800                         -               82,800
                                                                                ––––––––––––
                                                                                ––––––––––––   ––––––––––––
                                                                                               ––––––––––––          ––––––––––––
                                                                                                                     ––––––––––––            ––––––––––––
                                                                                                                                             ––––––––––––
          The amounts owing by subsidiary companies and associate are interest free, unsecured and have no fixed terms of repayment.




                                                                                                                     2006    annual report   66
   Notes To The Financial Statements                                  (Continued)




27. INTER COMPANY AND RELATED PARTY TRANSACTIONS (Continued)
   (c) Significant related party transactions

       Set out below are the significant related party transactions in the normal course of business for the financial year (in addition to related party
       disclosures mentioned elsewhere in the financial statements). The related party transactions described below were carried out on terms and
       conditions not more materially different from those obtainable in transactions with unrelated parties.

                                                                                                Group                                   Company
                                                                                        2006               2005                2006               2005
                                                                                        RM                  RM                     RM              RM
       (i)    Transactions with companies in which certain Directors
                 (Harun bin Halim Rasip and Amin bin Halim Rasip)
                 have interests:


              Office rental and supporting service charges paid to HRH                         -          (300,000)                      -        (300,000)


              Office facilities fees receivable from PKS, a company
                wholly owned by HRH                                                     165,600             82,800             165,600             82,800


       (ii)   Transactions with associated company - LMTSB


              Management fee receivable                                                 600,000            600,000             600,000            600,000


              Operations and maintenance fees payable                                (23,262,315)       (21,602,754)                     -               -


              Tuggage services receivable                                              6,371,813         6,076,712                       -               -


              LMTC RPS dividend receivable                                                     -                  -                      -        898,810
                                                                                    ––––––––––––
                                                                                    ––––––––––––    ––––––––––––
                                                                                                    ––––––––––––          ––––––––––––
                                                                                                                          ––––––––––––       ––––––––––––
                                                                                                                                             ––––––––––––

28. SUBSEqUENT EVENTS
   On 27 March 2007, the Group announced the incorporation of a wholly-owned subsidiary named Integrax Philippines, Inc (“IP”) in the Republic of the
   Philippines with a capital of 9,600,000 shares of One (1) Peso each. The intended principal activity of IP is to be the investment entity of the Company
   to hold its equity interest in Platinum Group Metals Corporation and for future investments into the Republic of Philippines.

   On 30 March 2007 and 2 April 2007, the Company purchased a total of 39,940,000 fully paid up shares representing 32.56% of the issued and paid up
   capital of PT Indoexchange Tbk (“INDX”), a company listed on the Jakarta Stock Exchange from Asean Small Cap Fund and several other shareholders
   at a price of Rph100 per share. A Tender Offer for the balance of shares in INDX not already owned by the Company is required to be made in
   compliance with Indonesian capital market regulations and laws.




        67    2006   annual report
          Properties Owned By The Group As At 31 December 2006


                                                                                                              Land area /                                      Net book
                                                                                                            (built-up area)           Tenure /                  value
 No.         Lot No. / Location                    Description                  Date of Acquisition          (sq. metres)        (Age of building)                  RM

     1.      H.S. (D) 17396              Bulk terminal, berths, trestle and       25 February 2002           1,088,866.727            99 years                167,161,125
             P.T. 24776                  mechanical handling equipment                                          (4,662)              Leasehold
             Mukim of Sitiawan              and structures, office and                                                                Expiring
             District of Manjung                   maintenance                                                                       24/2/2101
             Perak Darul Ridzuan          buildings, land and waterbody                                                               (4 years)

     2.      H.S. (D) 75362                    3 units low cost flats               19 May 1995                   190                 Freehold                  57,501
             P.T. 2193                                                                                           (190)               (11 years)
             Mukim of Setul
             District of Seremban


Notes:
1.        No revaluation was done on the abovementioned properties.
2.        Property No. 2 is currently not being utilised for any purpose and property no. 1 is being utilised for bulk terminal activities.
3.        List excludes industrial properties on which are located the port facilities of the Lumut Maritime Terminal owned by Lumut Maritime Terminal Sdn Bhd,
          an associate company set out below:


                                                                                                           Approximate
                                                                                                            Land Area                             Tenure /
 No.         Description of Title/Mukim                                  Description                          (acres)                      (Age of building)

     1.      H.S(D)Dgs 7105, PT6973                            Wharfs, Open Storage Areas,                     72.54                    Leasehold – 99 years
             Mukim Lumut                                       Warehouses & Office building                                        Expiring on 21 December 2094
                                                                                                                                                 (12 years)

     2       H.S(D)Dgs 6247, PT2273                                      Waterbody                             27.46                    Leasehold – 99 years
             Mukim Lumut                                                                                                           Expiring on 18 December 2093




                                                                                                                                    2006      annual report    68
    Corporate Governance Statement


A.	 Introduction
    The Board of Directors is committed to ensuring that the highest standards of corporate governance is practiced throughout the Group as a fundamental
    part of discharging their responsibilities to protect and enhance shareholders value and the financial performance of the Group.

    The Directors are pleased to set out below how the Company has applied the principles set out in Part 1 of the Malaysian Code on Corporate Governance
    (“Code”). Except for matters specifically identified, the Board of Directors has complied with the best practices set out in the Code.


B.	 Board	of	Directors
    1)	 Composition	and	Board	Balance

        An effective Board leads and controls the Group. The Board currently has five (5) members, comprising two (2) Executive Directors and three (3)
        Non-Executive Directors. The Independent Non-Executive Directors are Mr Nelson Gylding Dorrell Borch and Mr Stanislaw Wassylko. The Board
        complies with paragraph 15.02 of the Listing Requirements which requires that at least two directors or one-third of the Board, whichever is the
        higher, are independent Directors. No individual or group of individuals dominates the Board’s decision making.

        Encik Harun Halim Rasip is the Chairman, a Co-Chief Executive and Chief Financial Officer of the Company. The Board is mindful of the several
        roles held by him but is of the opinion that there are sufficient independent-minded Directors on the Board who are fully aware and cognizant of
        their responsibilities and liabilities as independent directors to provide the necessary check and balance. He, as a rule, also abstains from all
        deliberations and voting on matters that he is directly or deemed interested.

        Together, the Directors bring a wide range of business and financial experience to direct the expanding Group. A brief profile of each Director is
        set out on pages 5 to 6 of this report.

    2)	 Meetings

        During the financial year, the Board held six (6) meetings. The attendance record of Directors at Board Meetings held during the financial year
        ended 31 December 2006 can be found in the Profile of Directors on pages 5 to 6.

    3)	 Supply	of	information	to	the	Board	members

        All Directors are provided with an Agenda with Board papers on a timely basis prior to the meeting to enable them to deliberate on an informed
        basis on the issues to be raised at the meeting. The Board papers includes, among others, the following details:-

        •     minutes of meetings of all Committees of the Board
        •     operational and financial reporting of the Group
        •     business development of the Group
        •     Audit Committee reporting
        •     regulatory and other administrative matters

        All proceedings of Board Meetings are minuted and signed by the Chairman of the Meeting in accordance with the provision of Section 156 of the
        Companies Act, 1965.

        The Directors have unrestricted access to all information within the Group whether as a full board or in their individual capacity, in furtherance of
        their duties.

        The Directors also have access to the advice and services of the Company Secretary and independent professional advice should the need arise.
        The newly appointed Directors are encouraged to visit the Group’s operating sites to familiarise themselves with the operations of the Group.




         69   2006      annual report
    Corporate Governance Statement                                      (Continued)




B.	 Board	of	Directors	(Continued)
    4)	 Directors’	training	

        Directors are encouraged to attend continuous education programmes to keep them abreast of changes in legislations and regulations that affect
        business operations. All the Directors have attended and completed the Mandatory Accreditation Programme (MAP).

        Following the repeal of Practice Note No 15/2003 on Continuing Education Programme (CEP) prescribed by BMSB, the Board of Directors of each
        listed issuers has a duty to evaluate and determine the training needs of its Directors on a continuous basis. The training must be one that aids the
        Director in the discharge of his duties as a Director.

        During the year, the Directors did not attend any BMSB sponsored CEP programmes but Directors have been encouraged, in their individual
        capacities, to attend various conferences, dialogues and seminars whenever possible to deepen their knowledge of various sectors and the
        existing economic climate.

    5)	 Re-election	of	Directors

        In accordance with the Company’s Articles of Association, all newly appointed Directors are subject to re-election by shareholders at the first
        Annual General Meeting (“AGM”) after their appointments. At every AGM one-third (1/3) of the existing Directors will retire from office and all
        Directors retire from office once at least every three years but shall be eligible for re-election. Directors who attain an age over seventy (70) years
        retire at every AGM pursuant to Section 129(6) of the Companies Act, 1965.

        The names of the Directors who are standing for re-election at the forthcoming Twenty-First Annual General Meeting of the Company are shown on
        page 1 of this report. The relevant information of the retiring Directors can be found in the Profile of Directors.

    6)	 Audit	Committee

        The composition and terms of reference of the Audit Committee together with its report are presented on pages 74 to 77 of this report.

    7)	 Nomination	Committee

        The Nomination Committee was formed on 26 February 2002, and is responsible to ensure that the Directors of the Board comprise persons that
        provide the required mix of responsibilities, business skills and experience. The Nomination Committee also assists the Board in reviewing on an
        annual basis the appropriate balance and size of Non-Executive participation and in establishing procedures and processes towards an annual
        assessment of the effectiveness of the Board as a whole, the Committees of the Board and the contribution of each individual Director.

        The Nomination Committee comprises the following members:
        1)    Stanislaw Wassylko                  -      Chairman
        2)    Nelson Gylding Dorrell Borch        -      Member

        During the financial year, the Committee held one (1) meeting to review the appropriate balance and size of the Board and assessed the effectiveness
        of the Board as a whole. No new appointments were made to the Board for the financial year under review. Re-appointment or re-election of
        Directors at the AGM is recommended by this Committee to the Board for its approval.




                                                                                                                              2006   annual report   70
    Corporate Governance Statement                                                                                           (Continued)




B.	 Board	of	Directors	(Continued)
	   8)	 Remuneration	Committee

        The Remuneration Committee was formed on 26 February 2002, and is responsible to ensure that the remuneration packages necessary to attract,
        retain and motivate Directors of the quality required to manage the business of the Company and to align the interest of the Directors with those of
        the shareholders are in place.

        The following Directors are members of the Remuneration Committee:
        1)         Nelson Gylding Dorrell Borch*                                      -          Chairman
        2)         Stanislaw Wassylko*                                                -          Member
                   (* Independent Non-Executive Director)

        For the financial year ended 31 December 2006, the Committee held one (1) meeting.

    9)	 Directors’	remuneration

        The Board as a whole determines the remuneration of Non-Executive Directors with individual Directors abstaining from decisions in respect of
        their individual remuneration.

        The details of the remuneration of each Director during the period are as follows:

        	                                                                                 Salaries	                             Fees	                           Bonus	and	                         Benefits	                              Total	                            Total
        	                                                                                         	                                  	                           Incentives	                         in	kind	                             2006	                              2005
        	                                                                                     RM	                                RM	                                    RM	                              RM	                               RM	                                RM
        ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                   Executive	Directors*
                   Harun Halim Rasip                                                                    -                    340,000                                          -                                   -                    340,000                            340,000
                   Amin Halim Rasip                                                                     -                    340,000                                          -                                   -                    340,000                            340,000
        ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                   Non-Executive	Directors
                   Mohd Sofian Jaafar                                                                   -                                  -                                  -                                   -                                  -                      20,000
                   (resigned on 5 July 2005)
                   Nelson Gylding Dorrell Borch                                                         -                      40,000                                         -                                   -                      40,000                             40,000
                   YB Dato’ Ir. Onn Hamzah                                                              -                      40,000                                         -                                   -                      40,000                             40,000
                   Stanislaw Wassylko                                                                    -                      40,000                                         -                                   -                      40,000                             40,000
         ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        -                    800,000                                          -                                   -                    800,000                            820,000
         ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

        * Payable to HRH
            Non-Executive Directors do not receive any performance related remuneration. The Directors’ fees payable to Directors is determined by the Board and
            recommended for the approval of shareholders.




         71       2006         annual report
    Corporate Governance Statement                                        (Continued)




C.	 Shareholders
	   1)	 Dialogue	between	the	Company	and	Investors

        The Board and Management convey information about the Company performance, corporate strategy and other matters affecting
        shareholders’ interests through the distribution of annual reports, circulars and corporate announcements released to BMSB.

        In addition, information on the development of Lumut Port can be accessed from the website at www.lumutport.com. The Company holds
        occasional briefings with fund managers, institutional investors and investment analysts.

        Presentations, where appropriate, will be made with a question and answer session to explain and provide a rationale of the Group’s strategy,
        performance and major developments to shareholders during the Annual General Meeting.

        Shareholders may contact Encik Harun Halim Rasip for any enquiries at (email) harunhalimrasip@integrax.com.my, (tel) 603-21417166
        (fax) 603-21412995. At all times, shareholders may contact the Company Secretary for information.

	   2)	 Annual	General	Meeting

        In accordance with the Company’s Articles of Association, Notice of Annual General Meeting for each financial year end together with the related
        papers were sent out to shareholders at least 21 days before the date of the meeting.

        At the Annual General Meeting, shareholders are encouraged to ask questions both about the resolution being proposed or about the Group’s
        operations, plans and prospects in general. The Executive Directors and where appropriate, the Chairman of the Board, will respond to shareholders’
        questions during the meeting. Where appropriate, the Chairman will undertake to provide a written answer to any significant question that cannot
        be readily answered at the meeting.

        Each item of special business included in the Notice of Annual General Meeting will be accompanied by a full explanation of the effects of a
        proposed resolution. Separate resolutions are proposed for substantially separate issues at each meeting and the Chairman shall declare the
        number of proxy votes received both for and against each separate resolution.
        The Company will provide shareholders, upon written request, with a summary of the discussions held at the Annual General Meeting.

D.	 Accountability	and	Audit
	   1)	 Financial	Reporting
        The Board takes responsibility for presenting a balanced and understandable assessment of the Group’s position and prospects each time it
        releases its quarterly and annual financial statements to shareholders. The Audit Committee will assist the Board to oversee the Group’s financial
        reporting processes and the quality of its financial reporting.

	   2)	 Internal	Control
        The Group’s Internal Control Statement is set out on page 78.

	   3)	 Relationship	with	the	Auditors
        The role of the Audit Committee in relation to the external auditors is stated on page 76.

    4)	 Directors’	responsibility	statement	for	preparing	the	Annual	Financial	Statements

        The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which are to be made out in
        accordance with the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting
        Standards Board and to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and of the
        results and cash flows of the Group and Company for the financial year.




                                                                                                                        2006   annual report   72
    Corporate Governance Statement                                                                                          (Continued)




D.	 Accountability	and	Audit	(Continued)
        In preparing the financial statements for the financial year ended 31 December 2006, the Directors have:
        •         used appropriate accounting policies and applied them consistently;
        •         made judgements and estimates that are reasonable and prudent;
        •         stated whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
                  financial statements.
        •         prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries, that
                  the Group and Company have adequate resources to continue in operational existence for the foreseeable future.

        The Directors have responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy the
        financial position of the Group and Company and which enable them to ensure that the financial statements comply with the Companies Act, 1965.
        The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group, and to detect
        and prevent fraud and other irregularities.

E.	 Other	Information
	   1)	 Options,	warrants	or	convertible	securities
        The Company did not issue/exercise any options or warrants and convertible securities during the financial year.

	   2)	 Imposition	of	sanctions	and/or	penalties
        There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any relevant
        regulatory bodies during the financial year.

	   3)	 Non-audit	fees
        During the financial year, non-audit fees paid to the external auditors amounted to RM10,000 (2005: RM2,500). This fee is in respect of the services
        rendered in connection with the Internal Control Statement Review of the Company and the preparation of net operating cash flow of a subsidiary
        company as disclosed in Note 18 to the financial statements.

	   4)	 Material	contracts
        There were no material contracts entered by the Company and its subsidiaries involving Directors’ and major shareholders’ interests during the
        financial year other than the transactions as disclosed in Note 27 to the financial statements.

	   5)	 Recurrent	Related	Party	Transactions	(“RRPT”)	of	Revenue	Nature
        The details of recurrent related party transactions conducted during the financial year ended 31 December 2006 pursuant to the Shareholders’
        Mandate are as follows:

           	 	                                          	                                                   	                                                	                                Interested	Director	                                Actual	Value	from	
           Transacting	entity	                          	                                                   Nature	of	                                       Nature	of	                       and	Interested	                                     1	January	2006	to
           in	the	Group	                                Related	Party	                                      Transaction	                                     Relationship	                    Major	Shareholders	                                 31	December	2006
        -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            RRSB                                        Perbadanan Kemajuan                                Provision of tuggage                             Note 1                           - YB Dato’ Ir Onn                                    RM6,371,813
                                                        Negeri Perak (“PKNP”)                              and related services                                                                 bin Hamzah
                                                                                                           to LMTSB by RRSB                                                                  - Kuda Sejati Sdn Bhd
                                                                                                                                                                                             - PKNP

        Note 1
        RRSB is a wholly-owned subsidiary of Integrax. Kuda Sejati Sdn Bhd is a wholly-owned subsidiary of PKNP and a substantial shareholder of
        Integrax. Perak Corporation Berhad (“PCB”) is the holding company of LMTSB. PKNP is the holding company of PCB. YB Dato’ Ir Onn bin Hamzah
        is a representative of PKNP on the Board of Integrax Berhad.




         73      2006         annual report
          Audit Committee Report


MEMBERS	OF	ThE	AuDIT	COMMITTEE
Chairman	of	the	Committee
Nelson Gylding Dorrell Borch, Independent Non-Executive Director

Members	of	the	Committee
Harun Halim Rasip (MIA 1232)
Stanislaw Wassylko, Independent Non-Executive Director

Secretary	
Chan May Yee

Meetings
During the financial year ended 31 December 2006, four (4) Audit Committee meetings were held. A record of the attendance to these meeting is as follows:

	              	                                                                                                                                                                                                                               No.	of	Meetings
          Name	of	Committee	Member	                                                                                                                                                                                            Attended/held	during	his	office
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
          Nelson Gylding Dorrell Borch                                                                                                                                                                                                                      3/4
          Harun Halim Rasip                                                                                                                                                                                                                                 4/4
          Stanislaw Wassylko                                                                                                                                                                                                                                4/4


TERMS	OF	REFERENCE
1.	 Appointment/Composition
          The members of the Committee shall be appointed by the Board and their period of appointment shall be concurrent with their tenure in the Board.
          The Audit Committee shall consist of not less than 3 members of whom a majority shall be Independent Directors and the Independent Director is one who:

          a)       is not an Executive Director of the Company or any related corporation (hereinafter each corporation shall be referred to as “the said Corporation”);

          b)       has not been within the last 2 years and is not an officer (except as non-executive director) of the said Corporation. For this purpose, “officer”
                   shall have the meaning given in Section 4 of the Companies Act, 1965;

          c)       is not a major shareholder of the said Corporation;

          d)       is not a relative of any Executive Director, officer or major shareholder of the said Corporation. For this purpose, “relative” means the spouse,
                   parent, brother, sister, child (including adopted or step child) and the spouse of such brother, sister or child;

          e)       is not acting as a nominee or representative of any Executive Director or major shareholder of the said Corporation;

          f)       has not been engaged as a professional adviser by the said Corporation under such circumstances as prescribed by the Exchange or
                   is not presently a partner, director (except as an independent director) or major shareholder, as the case may be, of a firm or corporation which
                   provides professional advisory services to the said Corporation under such circumstances as prescribed by the Exchange; or

          g)       has not engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange or is not presently
                   a partner, director or major shareholder, as the case may be, of a firm or corporation (other than subsidiaries of the Company) which has
                   engaged in any transaction with the said Corporation under such circumstances as prescribed by the Exchange.




                                                                                                                                                                                                                                      2006         annual report              74
    Audit Committee Report                        (Continued)




1.	 Appointment/Composition	(Continued)
         At least one member of the Committee must be a member of the Malaysian Institute of Accountants or if he is not a member of the Malaysian
         Institute of Accountants, he must have at least 3 years’ working experience and:

         a)    he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or
         b)    he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967;

         OR fulfills such other requirements as prescribed by the Exchange.

         No alternate director can be a member of the Committee. A quorum shall be 2 members and a majority of members present must be independent
         directors.

         The members of an Audit Committee shall elect a Chairman from among their number who shall be an independent director.

         The Board shall, within 3 months of a vacancy occurring in the Audit Committee which results in the number of members reduced to below 3,
         appoint such number of new members as may be required to make up the minimum number of 3 members.

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

2.	 Meetings
    Meetings shall be held not less than four times a year. In addition, the Chairman may call a meeting of the Committee if a request is made by any
    Committee member, the Company’s Chairman or the internal or external auditors if they consider it necessary.

    Meetings will be attended by the members of the Committee and the Company Secretary who shall act as the Secretary of the Committee.

    Participants may be invited from time to time to attend the meeting depending on the nature of the subject under review. These participants may include
    the Directors, General Managers, Division Heads, representatives from the Finance and Internal Audit Departments and external auditors. However, at
    least once a year the Committee shall meet with the external auditors.

3.	 Authority
    The Committee is authorised by the Board to carry out the duties mentioned below. It has unrestricted access to all of the Group’s records, resources
    and personnel to enable it to discharge its duties. It is also authorised by the Board to seek outside legal or other independent advice and to secure
    attendance of outside experts if it considers necessary.

    The Committee shall be empowered to convene meetings with the external auditors without presence of the executive members of the Committee,
    whenever deemed necessary.

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

    The Committee shall promptly report to the Exchange of a matter reported by the Audit Committee to the Board of Directors of the Company which has
    not been satisfactorily resolved resulting in a breach of Bursa Malaysia Listing Requirements.




         75   2006    annual report
   Audit Committee Report                          (Continued)




4.	 Duties
   a)   To discuss and liaise with external auditors the scope of their audit plan to ensure the smooth implementation of the audit of the Group and
        to review and evaluate their findings on internal control system and audit reports on the financial statements;

   b)   To assist in the development of an environment in which controls can operate effectively and to keep under review the effectiveness of internal
        control systems and the findings of internal auditors;

   c)   To provide a forum for non-executive directors to improve their understanding of the Group’s operations to enable them to perform a more
        active role;

   d)   To review the quarterly and year-end financial statements, prior to the approval by the Board of Directors, focusing particularly on:
        •     Any changes in major policies and practices;
        •     Significant adjustments arising from the audit;
        •     The going concern assumption; and
        •     Compliance with accounting standards and other legal requirements.

   e)   To discuss problems and reservations arising from the interim and final audits, and any matter the auditor may wish to discuss (in the absence
        of management where necessary);

   f)   To review any related party transactions and conflict of interest situation that may arise within the Company and the Group;

   g)   To review the assistance given by the employees of the Company and the Group to the external auditors;

   h)   To review and assess the appropriateness of the Group’s accounting policies and the adequacy of management reporting requirements;

   i)   To do the following for internal audit function now undertaken by external consultants:
        •     review the adequacy of the scope, functions and resources of the internal audit function;
        •     review the internal audit programme and results of the internal audit process and where necessary ensure that appropriate action is
              taken on the recommendations of the internal audit function;
        •     review any appraisal or assessment of the performance of the internal audit function; and
        •     approve any appointment or termination of the internal audit function.

   j)   To review the Group’s business ethics and compliance with the law;

   k)   To perform any other such functions as may be agreed by the Audit Committee and the Board;

   l)   Upon the request of the external auditors, the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any
        matter the external auditors believes should be brought to the attention of the Directors or shareholders;

   m) To consider the appointment of the external auditors, audit fees and any questions of resignation or dismissal;

   n)   To recommend the nomination of a person or persons as external auditors; and

   o)   To consider the proceedings of the Risk Management Committee (“RMC”), review the methodology and processes adopted by the RMC
        in its deliberations on an ongoing basis and review its findings for appropriate recommendations to the Board.

5.	 Minutes
   The Secretary shall maintain minutes of the proceedings of the meetings and circulate such minutes to all members of the Committee.

6.	 Procedures	of	The	Audit	Committee
   a)		 Calling	of	meetings
        The members may meet together for the despatch of business, adjourn and otherwise regulate their meetings as they think fit, provided that
        they shall have a minimum of four meetings in a financial year. The Secretary shall on the requisition of a member summon a meeting of the
        Audit Committee.




                                                                                                                          2006   annual report   76
     Audit Committee Report                            (Continued)




     	b)	 Notice	of	meeting

          Notice of a meeting of the Audit Committee shall be given to all the members in writing. Unless otherwise determined by the Board of Directors from
          time to time, seven (7) days’ notice shall be given, except in the case of an emergency, shorter notice may be given.

     c)	 Voting	and	proceeding	of	meeting

          The decision of the Audit Committee shall be by a majority of votes and the determination by a majority of the members shall for all purposes be deemed
          a determination of the Audit Committee. In case of an equality of votes, the Chairman of the meeting shall have a second or casting vote.

          Circular Resolutions signed by all the members shall be valid and effective as if it had been passed at a meeting of the Audit Committee.

     d)	 Keeping	of	minutes

          The members shall cause minutes to be made of all proceedings of the Audit Committee. Such minutes shall be signed by the Chairman of the
          meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.

     e)	 Custody,	production	and	inspection	of	minutes

          The minutes of proceedings of the Audit Committee shall be kept by the Secretary at the registered office of the Company, and shall be open to the
          inspection of any member of the Committee or any member of the Board of Directors.


SuMMARy	OF	ACTIVITIES	OF	ThE	COMMITTEE	DuRING	ThE	FINANCIAl	yEAR
The activities undertaken by the Audit Committee for the financial year were as follows:-

a)   Reviewed the quarterly financial statements and annual report, prior to the approval by the Board of Directors, focusing particularly on:
     •    any changes in major policies and practices;
     •    significant adjustments arising from the audit;
     •    the going concern assumption; and
     •    compliance with accounting standards and other legal requirements.

b)   Reviewed the related party transactions and conflict of interest situation that had arisen within the Company and the Group;
c)   Reviewed and assessed the appropriateness of the Group’s accounting policies and the adequacy of management reporting requirements;
d)   Considered the appointment of the external auditors and audit fees;
e)   Undertaking group risk management assessment measures and making recommendations to the Board in relation thereto;
f)   Discussed and liaised with external auditors of scope of their audit plan prior to commencement of audit;
g)   Discussed and reviewed with external auditors their evaluation of internal control systems of the Group; and
h)   Reviewed the internal audit programme and results of the internal audit process and ensured appropriate actions were taken on the
     recommendations by the internal auditors.


INTERNAl	AuDIT	FuNCTION
During the year the Group ceased to have, for its port operations and industrial land activities, an in-house internal audit capability as it was determined that
external consultants would be able to undertake such function more effectively. This is also now consistent with the mode adopted for all the other activities
of the Group. As such it is independent. The principal role of the external consultants is to undertake independent, regular and systematic reviews of the
systems of internal control so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively. It is the responsibility
of the Chief Financial Officer, with the input of external consultants, to provide the Audit Committee with independent and objective reports on the state of
internal control of the various business segments with the Group and the extent of compliance of the business segments with the Group’s established policies
and procedures as well as relevant statutory requirements.

Further details of the activities of the internal audit function are set out in the Statement on Internal Control on page 78.




           77   2006   annual report
     Statement On Internal Control

INTRODuCTION
We, the Board of Directors, are required to give you a statement in this Annual Report on the state of the internal control system in effect within the Group
to safeguard your investment and the Group’s assets. This is to be done in accordance with, inter alia, the Malaysian Code on Corporate Governance and
Paragraph 15.27(b) of the BMSB Listing Requirements in accordance with BMSB’s Statement on Internal Control: Guidance for Directors of Public Listed
Companies. We are pleased to provide the following statement outlining the nature and scope of internal controls of the Group during the year.

1.	 Board	Responsibility	
     1.1 We affirm our responsibility for the Group’s systems of internal control and risk management and the responsibility to review the adequacy
         and integrity of such systems.

     1.2 It should be noted however, that such systems are designed to manage, not eliminate, the risk of failure to achieve business objectives and
         that any system can only provide a reasonable, not absolute assurance against material misstatement or loss.

     1.3 We confirm that we have had systems of internal control and risk management in place during the year necessary to identify, evaluate, monitor
         the efficacy of internal controls and manage significant risks effected directly by the Chief Financial Officer reporting to the Audit Committee
         and the Board in conjunction with external consultants. In the previous year an internal audit function existed for our port operation business
         but in the interests of greater effectiveness this function was closed and an external consultant was engaged.

2.	 Risk	Management	Framework
     2.1 The Audit Committee responsibilities include the work of monitoring the internal control system and risk management of all the businesses
         under our management. In fulfilling the risk management responsibility the Audit Committee reports, on a quarterly basis, to the Board with an
         overall risk profile assessment within a Risk Management Framework approved by the Board on an overall Group basis. Such a risk profile is
         prepared and amended by the Chief Financial Officer in conjunction with senior management and an external consultant as appropriate for each
         business segment of the Group in accordance with their individual Risk Management Framework. The Audit Committee will use the risk profile to
         direct and require the Chief Financial Officer to monitor risk and implement approved measures (together with key management) to permit risk
         management to be more effective and timely.
     2.2 The Chief Executives responsible for each business segment will be its Risk Officer with the Chief Financial Officer of the Company as Chief
          Risk Officer of the Group.

3.	 Internal	Audit
     3.1 The Group has available to it an internal audit function conducted by the internal audit function of a shareholder and by external consultants for the
         Port Operation and Industrial Properties business segments and utilises the services of an external consultant to fulfil the internal audit function for other
         business segments and at Company level. The foregoing and the authority levels present in each business segment provides the Board and the Audit
         Committee with much of the assurances it requires regarding the adequacy and efficiency of the systems of internal controls.

     3.2 The Chief Financial Officer, the Company Secretary, external consultants and advisers with key management staff further provided support to
         the Audit Committee in their review and deliberations in regard to corporate regulatory compliance issues and other regulatory compliances
         issues relating to the Group’s business activities which are reported to the Board on an as and when required basis.

4.	 Other	Risk	and	Control	Processes
     4.1 We perceive that all aspects of risk management, internal audit, a formalised organisational hierarchy, formalised authority levels, health,
         safety, security, human resource management, environmental matters, accepted industry standards of quality and performance and the
         importance of the customer satisfaction are interlinked and should be incorporated into an overall quality and control system. This process
         has been substantially completed but, as it fundamentally is an ongoing process, it continues to require improvement and adjustment to
         changing business conditions.

     4.2 The Chief Financial Officer reports to the Board at every Board meeting on significant changes in the business and financial domestic/foreign
         environment as well as maintains continuous close interaction, in between Board meetings, with all our five (5) Board members and the
         Company’s appointed Advisers and Consultants in respect of all business initiatives, strategies and new projects being undertaken at
         Company and subsidiary/associate company levels.

5.	 Weaknesses	in	Internal	Controls	That	Result	in	Material	losses
     5.1 There were no material losses incurred during the year as a result of weaknesses in internal control and the Board and management continue
         to take measures to strengthen the control environment within the Group.




                                                                                                                                 2006   annual report   78
Notes




  79   2006   annual report
      Form Of Proxy

I/We, …………………………………………………………………………………………………................................................................................……………...

of……………………………………………………………………….................................................................................………………..………………...........…..

being a *member/members of Integrax Berhad hereby appoint Mr/Ms/Madam/Miss………...................................................................................…………..

of……………………………………………………………………………………………………………………..................................................................................

or failing him/her…………………………………………………………………………………………………...................................................................................

of……………………………………………………………………………………………………………………..................................................................................
as my/our proxy to vote for me/us and on my/our behalf at the Twenty-First Annual General Meeting of the Company to be held at CempakaRaya Room,
Hotel Equatorial Kuala Lumpur, Jalan Sultan Ismail, 50250 Kuala Lumpur on Friday, 29 June 2007 at 3.00 p.m. and at any adjournment thereof.


My/Our proxy(ies) is/are to vote as indicated below:-


 No.	 Relating	to:-	                                                                       	                                                   For		                 Against

 1.      Receiving of the Audited Financial Statements and Reports                         (Ordinary Resolution 1)

 2.      Payment of final tax exempt dividend and taxable gross dividend                   (Ordinary Resolution 2)

 3.      Re-election of Harun Halim Rasip                                                  (Ordinary Resolution 3)

 4.      Re-election of Amin Halim Rasip                                                   (Ordinary Resolution 4)

 5.      To approve payment of Directors’ fees                                             (Ordinary Resolution 5)

 6.      Re-appointment of Messrs KPMG as Auditors                                         (Ordinary Resolution 6)

 7.      Proposed authority to allot shares pursuant to
         Section 132D of the Companies Act, 1965                                           (Ordinary Resolution 7)

Please indicate with an “X” in the space provided, how you wish your vote to be cast. In the absence of specific directions, the proxy may vote or abstain at his/her discretion.




Dated ………….day of ………………….2007


                                                                                               No. of Shares           : __________________________________


                                                                                               CDS Account No : __________________________________
………………………………..........……………
Signature/Common Seal of Shareholder(s)


Notes
1. A proxy may but does not need to be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply.
2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 17th Floor – Tower Block, Kompleks Antarabangsa, Jalan Sultan Ismail,
   50250 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting.
3. A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting. The provisions of Section 149(1)(c) of the Act shall not apply to
   the Company.
4. Where a member appoints more than one proxy the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
5. If the appointor is a corporation, this form must be executed under its common seal or under the hand of its attorney.




                                                                                                                                             2006    annual report    80
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                                            Stamp
The	Company	Secretary
Integrax Berhad               (49317 – W)

17th Floor – Tower Block
Kompleks Antarabangsa
Jalan Sultan Ismail
50250 Kuala Lumpur
Malaysia




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