Extracted from Annual Report 2008

In the midst of these circumstances, the Boustead Group has remained resilient, registering an increase in profit after tax of RM668 million compared with the previous year's RM655million. Despite the challenging market conditions, the Group has realised most of its targets in delivering positively to the bottom-line.

I am pleased once again to present you with our annual report for the year ended 31 December 2008.

Economic Landscape

The global economy has been hard hit particularly the European and American zones which saw amassive falling out of their equity markets, which then led to an unprecedented impact on their respective economies. Leading nations in Asia have not been spared in the aftermath of what took place in theWestern economies.

TheMalaysian economy for 2008 has also seen a tightening in certain sectors. Global uncertainties haunt us, even as the Government has put in place stimulus packages. We expect such good measures to mitigate the global economic fallout that has yet to reach our shores completely.

The domestic economy underpinned by Malaysia's rich diversified sources of revenue along with strong fiscal measures such as keeping interest rates lowand extending sectoral assistance will augur well in preparing for what may come ourway. In addition, the real economy is in good shape despite the local capital market having softened to some extent.

Financial Performance

Our Plantation and Property Divisions took center stage in delivering record profits while the Heavy Industries Division delivered another year of strong profit accompanied by satisfactory results from the Manufacturing and Services Division. The Trading Division recorded a loss as a result of extreme volatility in crude oil prices globally. The Finance and Investment Divisionwas also hitwith amodest loss due to funding cost of investments acquired and impairment losses.

Profit after tax increased to RM668 million compared with RM655 million a year ago. Profit attributable to shareholders jumped significantly to RM579 million compared with RM478 million last year. These improvements were due to the drop in minority interests and lower tax expenses as a result of a write back of deferred tax. Tax exemption was granted by the Inland Revenue Department for our vessel construction project. We recorded a pre-tax profit of RM679 million compared with RM829 million last year.

Earnings per share ended at 91 sen (2007: 79 sen) and net assets per share was RM4.47 (2007: RM3.75). Shareholders' funds stood at RM2.9 billion for the year ended 31 December 2008 comparedwith RM2.4 billion a year ago.

Dividend

We are conscious of the gloomy economic backdrop that prevails. Being committed to provide investors with positive yields which are hard to come by during such times, the Group ismaintaining a dividend payout of 30 sen per share. To date, dividends totaling 17.5 sen have been paid. The remaining 12.5 senwill be paid on 18May 2009 to shareholders on the register as at 30 April 2009.

Human Capital Development

Boustead has the responsibility of ensuring that our employees have the relevant skills to contribute positively to the Group's performance. In view of this, we completed various training programmes to provide our staff with the necessary skills to ensure they reach their potential. This year, we introduced new developmental programmes for our non-executive employees specifically secretaries, supervisors, clerical and non-clerical staff.

We believe that experience is the father ofwisdom. As such, we remain committed to continuing our Internship Programme. In line with this, we recruited a batch of unemployed graduates as interns to provide them with hands-on training to equip them with sufficient skills and knowledge to gain employment in the future. We also provided them with classroom style training sessions as well as mentorship with our managers.

The current volatile economic landscape has also brought into focus the need to be more prudent and vigilant particularly froma human resource perspective. We expect our employees to be conscientious and ensure their work performance is never compromised. Commitment and efficiency has always been a priority area and we will continue on this course given the fact that the Group is insistent on ensuring future growth.

Outlook

With so much already analysed about the year 2009 accompanied by inflation risk and economic imbalances, it might be hard to remain positive. Nevertheless, we shall remain positive.

Malaysia has seen many challenges in its 51 years of independence. I am certain we will weather through 2009 as well. Your Group is built on a strong foundation which will most certainly see us through the volatility of the coming year. Suffice to note, we will increase productivity and deliver another year of satisfactory returns.

Acknowledgement

Our growth to date has been a collective effort. I would like to express my sincere appreciation to my fellow Board members for their support and contribution. My condolences to the family of our director, the late Tuan Hj. Johari Muhamad Abbas who passed away in May 2008. Allahyarham Tuan Hj. Johari was a worthy Board member and advisor to the Group. We have benefited from his vast knowledge and his counsel will be greatly missed.

As we conclude the financial year, my appreciation to the management teamand our employees for their dedication and commitment. I extend my deepest gratitude to our shareholders, financiers, business partners, consultants and relevant approving authorities who have cooperated and worked alongside with the Group to achieve our goals.

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