Dialog2011 Main

(178694-V)

Annual Report 2011

Strength to Strength,We Deliver

Group’s 10-Year Financial Summary

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Revenue(RM’ million) 1,208.4 1,139.1 1,104.5 790.5 476.6 349.4 253.9 185.3 223.8 367.4

Profit before tax(RM’ million) 200.5 150.0 123.5 97.2 59.0 53.2 35.5 40.8 36.1 67.8

Profit after tax(RM’ million) 160.1 124.7 101.5 81.6 51.6 46.9 32.6 37.3 30.8 54.3

Net earnings per share(sen) 7.8 6.0 4.7 3.9 2.5 2.3 1.7 2.0 1.7 3.1

Shareholders’ equity(RM’ million) 583.1 477.5 440.6 379.2 324.5 313.6 291.2 275.8 223.5 196.8

Return on shareholders’equity (%) 28.7 25.8 22.4 21.5 15.4 14.8 11.5 14.9 14.7 31.7

Net cash dividendpayment (RM’ million) 61.2 54.6 37.5 32.1 22.5 20.9 18.7 16.7 11.6 10.3

Cash dividend rate,net of tax (%) 31.0 27.8 27.0 22.9 16.1 15.1 13.7 12.2 10.8 10.5

Dividend payout ratio(%) 40.2 46.2 40.8 42.4 45.6 46.7 57.3 44.7 37.6 19.0

Net assets per share(sen) 29.7 24.3 22.5 19.4 16.6 16.4 15.2 15.1 12.6 11.2

Cash per share(sen) 14.2 13.3 9.1 4.0 3.1 4.8 3.5 3.6 3.3 4.5

ContentsGroup’s 10-Year FinancialSummaryMission StatementDIALOG in BriefExecutive Chairman’s StatementBoard of DirectorsBoard of Directors’ ProfileSenior Management’s ProfileCorporate StructureQuality and SafetyReview of OperationsTechnology PartnersHuman Resource

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10162124253233

Calendar of EventsCorporate Social ResponsibilityShare PerformanceSchedule of Share Buy-BackEnhancing Shareholders’ValueShareholders’ InformationCorporate GovernanceStatementAudit Committee ReportInternal Control StatementCorporate InformationGroup Corporate Directory

3436404142

4346

52565960

List of PropertiesNotice of the 23rd AnnualGeneral Meeting andDividend EntitlementStatement Accompanying theNotice of the 23rd AnnualGeneral Meeting

Proxy Form

6165

68

•

STRENGTH TO STRENGTH, WE DELIVER

DIALOG, a leading integrated specialist technical services provider to oil, gas and petrochemical industry thatencompasses both upstream and downstream activities, focuses on growing its global presence. Spearheadingour expansionary drive is our single most important asset, our people – hardworking and committed talents whoare team players. As we continue to grow from strength to strength, we will always deliver... as evidenced by ourunrivalled performance, quality and reliability.

In addition to the cash dividends disclosed above, the Company also declared the followings:

1. Share dividend of one treasury share for every fifty ordinary shares held in respect of FY2006.

2. Special cash dividend of 10.8%, net of tax in respect of FY2006.

3. Share dividend of one treasury share for every fifty ordinary shares held in respect of FY2009.

Revenue (RM’ million)

367.4

02 03 04 05 06 07 08 09 10 11

223.8

185.3

253.9 349.4 476.6

790.5

1,104.5

1,139.1

1,20

8.4

Net EPS (sen)

3.1

02 03 04 05 06 07 08 09 10 11

1.7 2.0

1.7 2.3 2.5

3.9

4.7

6.0

7.8

67.8

02 03 04 05 06 07 08 09 10 11

36.1

40.8

35.5 53

.2 59.0

97.2

123.5 15

0.0

200.5

Profit before tax &Profit after tax (RM’ million)

54.3

30.8

37.3

32.6 46.9

51.6

81.6 101.5 124.7

160.1

PBT PAT

Shareholders’ equity (RM’ million)& Return on shareholders’ equity (%)

Net cash dividend payment (RM’ million)& Cash dividend rate, net of tax (%)

Net assets per share &Cash per share (sen)

Shareholders’ Equity ROE

Net assets per share Cash per shareNet cash dividend payment Cash dividend rate, net of tax

196.8

31.7

14.7

14.9

11.5 14

.8

15.4

21.5 22.4 25

.8 28.7

02 03 04 05 06 07 08 09 10 11

223.5 275.8

291.2

313.6

324.5 379.2 440.6

477.5

583.1

10.3

02 03 04 05 06 07 08 09 10 11

11.6 16

.7

18.7 20.9 22.5

32.1

37.5

54.6

61.2

10.5

10.8 12.2 13.7 15.1

16.1

22.9

27.0

27.8 31

.0

11.2

4.5

3.3 3.6

3.5 4.8

3.1 4.0

9.1

13.3 14

.2

02 03 04 05 06 07 08 09 10 11

12.6 15

.1

15.2 16.4

16.6

19.4

22.5 24.3

29.7

2

Mission Statement

We, at Dialog Group Berhad (DIALOG or the Group), shall continuouslyenhance our competitiveness, competence and leadership positions in theprovision of integrated specialist technical services to the oil, gas andpetrochemical industry, namely:

• Logistic Services – Tank Terminals & Supply Base• Specialist Products and Services• Plant Maintenance & Catalyst Services• Engineering & Construction• Fabrication• Upstream Services• ePayment Technology & Solutions

We shall honour our commitment to our clients based upon a corporate culture which is driven by a totalcommitment to quality, timely job completion and unfailing attention to health and safety and protection ofthe environment.

We shall, as a responsible and caring corporate citizen, always actively support the Nation’s aspirations andserve the best interest of the communities in which we work and live.

We shall continuously develop and retain a highly skilled, motivated and professional workforce which willgenerate the dynamics for extending the boundaries of our core competencies, thereby propelling theGroup’s business into strategic growth areas with a global reach and a diversified long term sustainableearnings base.

Dialog Group Berhad Annual Report 2011 3

DIALOG in Brief

Since its commencement in 1984, Dialog Group Berhad (DIALOG or the Group) has grown into one ofMalaysia’s leading integrated specialist technical services providers to the oil, gas and petrochemicalindustry. The services provided range from upstream to downstream activities encompassing:

• Logistic Services – Tank Terminals & Supply Base• Specialist Products and Services• Plant Maintenance & Catalyst Services• Engineering & Construction

Based in Kuala Lumpur, with offices and facilities in Malaysia, Singapore, Thailand, Indonesia, Vietnam, China, HongKong, Australia, Saudi Arabia, United Kingdom, USA, New Zealand and India, DIALOG has business interests andcustomers throughout the Asia Pacific region, the Middle East, Europe, Africa, USA and South America.

Among its customers are multi-national oil majors, national oil companies as well as multi-national engineering andservices providers.

DIALOG was first listed on 6 May 1996 on the Second Board of the Kuala Lumpur Stock Exchange (KLSE) under thesector of Trading/Services. Four years later on 21 March 2000, DIALOG was transferred to the Main Board of the KLSE[now known as Main Market, Bursa Malaysia Securities Berhad] and was included as a component stock of the KualaLumpur Composite Index from 22 April 2002 to 5 July 2009 prior to the conversion of the KLCI to FBM KLCI on6 July 2009.

• Fabrication• Upstream Services• ePayment Technology & Solutions

4

Executive Chairman’sStatement

The Group’s revenue has increasedby 6.1% to RM1.2 billion with a recordprofit after tax of RM160.1 million,representing a 28.4% increase

against RM124.7 million achieved inthe previous financial year.

NGAU BOON KEATExecutive Chairman


DEAR SHAREHOLDERS,

I am very pleased again to presentanother record achievement byDIALOG for the financial year underreview which ended 30 June 2011(FY2011). It had been an eventfulyear in which we ventured into manynew business developments.

FINANCIAL PERFORMANCE

The Group’s revenue has increasedby 6.1% to RM1.2 billion with arecord profit after tax of RM160.1million, representing a 28.4%increase against RM124.7 millionachieved in the previous financialyear. Basic earnings per share roseto 7.75 sen from 6.01 sen and returnon shareholders equity for FY2011was 28.7%. The Group’s balancesheet continued to strengthen withtotal net assets expanded by 22.1%to RM583.1 million from RM477.5million a year ago with net cashbalances stood strong at RM168.4million.

The results of all divisions for thecurrent year outperformed theprevious year, in particular theEngineering & Construction andPlant Maintenance Services, both inMalaysia and overseas. In addition,the commencement of operations byLangsat Terminal (One) Sdn Bhd inTanjung Langsat, Johor for Phase 1in September 2009 and for Phase 2in April 2010, together with theacquisition of Fitzroy EngineeringGroup Limited in April 2011 hadcontributed positively to the Group’sfinancial results in the FY2011.

DIVIDEND

For FY2011, the Board recommendsa final single tier dividend of 18%(FY2010 : 18%) per ordinary shareof RM0.10 each. The total netdividend declared for FY2011 is 31%per ordinary share of RM0.10 eachresulting in a total net payment ofapproximately RM61.2 million(FY2010 : net dividend of 27.8% withtotal net payment of RM54.6 million).

The total dividend payout ratio forFY2011 is 40.2% in line with theGroup’s dividend policy of havingat least 40% of its annual profitsattributable to shareholders. Thecompounded annual dividendgrowth rate since public listing in1996 is 29%.

BUSINESS DEVELOPMENT

Langsat Terminal (One) SdnBhd (LgT-1) had successfullycommenced operation of its Phase 1(130,000 m3) in September 2009and Phase 2 (270,000 m3) in April2010. The Phase 3 of LgT-1 hadalso been completed in August 2011,adding another 76,000 m3 of storagecapacity. LgT-1 has now a totalcapacity of 476,000 m3 for gasoline,diesel and fuel oil products.Construction of Langsat Terminal(Two) Sdn Bhd is progressingsmoothly and expected to beoperational by December 2011. It willhave a capacity of 171,000 m3

mainly for gasoline products. InOctober 2011, the Group together

with MISC Berhad had entered into aShareholders’Agreement with ChinaAviation Oil (Singapore) CorporationLtd to develop a 380,000 m3 oilstorage tank terminal facility withinthe vicinity of Tanjung Langsat Port,Johor.

In an effort to boost our fabricationcapability, the Group acquired afabrication and multi-disciplinedengineering company, FitzroyEngineering Group Limited (FEGL)specialising in the fabrication ofprocess equipments with specialalloy materials and offshorepetroleum production facilities duringthe financial year. With FEGL, weshould be able to take on bigger andadvanced fabrication jobs for ourjoint venture projects such as thosein the Pengerang IndependentDeepwater Terminal, the Small FieldRisk Service Contract (SFRSC) andother projects.

Development of the PengerangIndependent Deepwater Terminal(Terminal) has taken place. ThePhase 1, comprising of an initialstorage of approximately 1.3 millionm3, is progressing on schedule forcompletion in early 2014. Theplanning of other phases for theTerminal is being finalised and uponcompletion, will provide more than5.0 million m3 of storage, blendingand distribution services for oilproducts and LNG. The Terminal willbe equipped with jetty facilitiescapable of handling very large crudeoil carriers and Q-Max LNG carriers.

6

The construction of our integratedoffshore supply base at the JubailCommercial Port, Kingdom of SaudiArabia is progressing and expectedto be completed in December 2011.This base will serve as a one-stopintegrated offshore logistic hub andresources centre for oilfield services,equipment and supplies, supportingthe active and growing offshore oiland gas activities in the ArabianGulf. Upon operation, we areoptimistic that it will contributepositively to our Group’s results.

FY2011 also marked an importantmilestone as we and our partnersROC Oil Malaysia (Holdings) SdnBhd and PETRONAS Carigali SdnBhd were awarded the SmallField Risk Service Contract for theBalai Cluster Fields by PetroliamNasional Berhad (PETRONAS). Thedevelopment and production ofpetroleum from the Balai ClusterFields, located offshore Bintulu,Sarawak, will be carried out in 2phases. The pre-development phase

is scheduled to commence in 3Q2011 and is expected to take up to18 months with total cost estimatedto be between USD 200 – 250million.

On the successful completion of thepre-development phase andagreement on the economic viabilityof the fields, a field developmentprogramme will commence.Production from all the fields inthe cluster is planned to beonstream within 24 months fromcommencement of the developmentprogramme. The total cost of thedevelopment phase is estimated tobe between USD 650 – 700 million.

The participation of DIALOG in theSFRSC will propel DIALOG’sservices in the upstream oil and gasarena to a higher level.

HUMAN RESOURCEDEVELOPMENT

One of the key priorities in FY2011was to recruit the people required forour expanding growth. We endedour year with 2,248 employees,which represented a 39% increasefrom the previous year. We willcontinue to endeavor to create aworkforce that is a reflection of thediverse population of thecommunities in which we operate.Presently we are operating in 12countries with a diverse workforce of26 nationalities.

In order to support our worldwidebusinesses of different nature, it isimperative that our workforce be

equipped with the right skill sets,knowledge and experience. In thisconnection, a Human CapitalDevelopment Division is establishedto provide on-going training aimed toenrich and develop the capabilitiesof our talents. The “Young GraduateProgramme” first launched 14 yearsago, continues to groom freshtalents. This financial year, we haveemployed 28 (FY2010 : 24) freshgraduates from both local andforeign universities. This programmeis a critical part of our talent pooldevelopment strategy to nurture andturn these individuals into dynamicprofessionals to take up keypositions within the Group in future.

HEALTH, SAFETY &ENVIRONMENT

DIALOG is committed to stringentand high standard of Health, Safetyand Environment (HSE) conduct.The Group continues to improve itsoperational procedures to meet itsoverall HSE policy’s objectives aswell as customers’ expectation.

The recent loss of a technician whilecarrying out a routine inert entrywork at a client’s worksite inSingapore was most regrettable. Wehad immediately taken all necessarymeasures to eliminate potentialundesirable events in the future.

Committed to making sure weconform to industry best practices ofHSE at all times, the Group haveengaged in a review and upgradeexercise of the existing HSEManagement System (HSEMS).

Executive Chairman’s Statement

Signing the Development cum Joint VentureAgreement with The State Government ofJohor Darul Ta'zim and The StateSecretary, Johor (Incorporated).


The Group’s subsidiaries havesatisfactorily maintained complianceto ISO14001 and OSHAS18001management system requirements.

QUALITY ASSURANCE

The renewal of all internationalaccreditation and certification wasawarded to our subsidiaries; DialogE & C Sdn Bhd, Dialog Systems SdnBhd, Dialog Plant Services Sdn Bhd,Dialog Systems Pte Ltd and others,after another year of compliance.Other subsidiaries, Pacific AdvanceComposites Sdn Bhd and OverseasManufacturing (Johor) Sdn Bhdhave also received endorsementwith the successful completion oftheir ISO9001:2008 Re-AssessmentAudit by SIRIM QAS InternationalSdn Bhd and D.A.S Certification Ltdrespectively.

Dialog Systems Pte Ltd, Dialog PlantServices Pte Ltd and OverseasTechnical Engineering andConstruction Pte Ltd were grantedan upgrade to their qualitymanagement system havingadhered to the new ISO9001:2008certification.

The Group will remain committed toproviding and upholding the highestquality of products and services toour customers by securing andmaintaining the various qualityaccreditation and certification.

CORPORATE GOVERNANCE

DIALOG is committed to upholdingthe principles and best practicesascertained in the Malaysian Codeon Corporate Governance (Code).The Board will continue to promotecompliance to the Code in managingthe Group’s business affairs to attainhigh standards of transparency,accountability and integrity.

The Board believes that it isfundamental to align our corporategovernance framework with theCode to ensure the long termviability of our business ventures andcreate sustainable shareholders’value and the Group’s financialperformance as well as protectingstakeholders’ interests.

Our commitment to corporategovernance compliance is notconfined to managing businessventures but also to our ecosystem.The Board recently adopted thepractice to hold meetings in apaperless environment.

ENHANCINGSHAREHOLDERS’ VALUE

On 13 October 2011, DIALOG wasnamed the winner of the KPMGShareholder Value Award 2011under the energy and naturalresources sector for the secondconsecutive year. This award isrecognition for DIALOG’s exemplaryshareholder value creation byachieving the highest economicprofit per invested capital in theenergy and natural resourcescategory.

PROSPECTS

The International Energy Agency(IEA) forecast that worldwide oildemand would average 89.5 millionb/d for 2011 and 89.6 million b/d for2012. IEA’s forecast was based onInternational Monetary Fund’sassumptions of global economicgrowth of 4.2% in 2011 and 4.4% in2012.

At home, Malaysia’s economyshould be resilient and shielded frompossible external slow down as aresult of recent financial turbulence.Domestic demand for oil and gasconsumption is expected to remainstrong and the industry’s outlookfor oil and gas sector remainsrobust owing to the EconomicTransformation Programme in fullswing.

DIALOG Hari Raya Open House.

8

In upstream, PETRONAS isintensifying its efforts to build up thenational petroleum reserves and todrastically increase the production ofoil and gas. Future growth willcome from initiatives such asexploration and production, marginalfield development, brown fielddevelopment including enhance oilrecovery. In downstream, variousoil and gas projects are beingimplemented in Sabah andSarawak. PETRONAS and BASFare conducting a feasibility study fornew petrochemical plants inKuantan, Pahang. In addition,PETRONAS is undertaking adetailed feasibility study to developa USD20 billion Refinery &Petrochemical Integrated Complexin Pengerang, Johor.

The development in both upstreamand downstream sectors willgenerate tremendous opportunitiesfor the local oil and gas players. Inthis connection, the Group, beingan integrated specialist technicalservices provider, will benefit fromsuch opportunities.

The on-going expansion of tankterminals in Tanjung Langsat and thedevelopment of an IndependentDeepwater Terminal in Pengerangwill not only bring in short to mediumterm contribution from engineeringand construction activities but alsolong term recurring income when thetank facilities are operational.In addition, the Group is investingin the upstream oil and gasopportunities, including thedevelopment and production ofpetroleum under the SFRSC.

At the same time the Groupcontinues to grow its corebusinesses with recurring income,such as specialist products &services, engineering, procurement& construction and plantmaintenance services.

Barring any unforeseen circumstances,the Group is optimistic that itsperformance will be favourable forthe financial year ending 30 June2012.

ACKNOWLEDGEMENT

On behalf of the Board of Directors,it is my pleasure to welcomeEncik Ja’afar Bin Rihan as a newNon-Independent Non-ExecutiveDirector, representing theEmployees Provident Fund Board.With his vast experience ininvestment operations and banking,I am confident that Encik Ja’afar willcontribute significantly to DIALOG’scontinued growth.

The Board of Directors and I wouldlike to express our sincereappreciation to our customers,principals, technology partners andbusiness partners and associates fortheir continuous support andconfidence in the Group.

I also thank our shareholders fortheir confidence and continuedsupport and last but not least, I thankmy Board members for their counseland guidance and all employees ofDIALOG for their continuingdedication and commitment.

NGAU BOON KEATExecutive Chairman

Executive Chairman’s Statement

1st board meeting for the JV company, BCPetroleum Sdn Bhd, with Roc Oil Malaysia(Holdings) Sdn Bhd and PETRONASCarigali Sdn Bhd.

Standing (left to right):

Datuk Oh Chong Peng, Kamariyah Binti Hamdan, Chew Eng Kar, Dr Junid Bin

Abu Saham, Chan Yew Kai, Zainab Binti Mohd Salleh and Ja’afar Bin Rihan

Seated (left to right):

Ngau Boon Keat and Dato’ Mohamed Zakri Bin Abdul Rashid.


Board ofDirectors

10

Board ofDirectors’Profile

NGAU BOON KEAT is the co-founder and major shareholder of DIALOG andhas been with the Group since 1984. He was appointed to the DIALOG Boardon 2 January 1990 and is currently the Executive Chairman of DIALOG,Chairman of the Remuneration Committee and ESOS Committee. He is alsoa board member of Kertih Terminals Sdn Bhd, Centralised Terminals Sdn Bhd,Pengerang Independent Terminals Sdn Bhd and BC Petroleum Sdn Bhd. Heis also the founder and director of MyKasih Foundation and a director of WGC2012.

He is a Malaysian, aged 63, and holds a Bachelor Degree (Hons.) inMechanical Engineering from the University of Canterbury, New Zealand. Heis a member of the Institution of Engineers, Malaysia and the Institution ofEngineers, Singapore. He is also a Registered Professional Engineer with theBoard of Engineers, Malaysia.

He began his career in 1972 as a Refinery Engineer with Mobil Singapore PteLtd. He worked at Petronas Malaysia from 1975 to 1980 where he held variouspositions from Production Engineer to Engineering Manager. He has more than39 years of working experience in both upstream and downstream of the oil,gas and petrochemical industry.

Mr Ngau Boon Keat is a deemed major shareholder of DIALOG.

None of the Directors has any family relationship with any director and/or major shareholder ofDIALOG, any conflict of interest with DIALOG and any conviction for offences within the past 10years.

Ngau Boon KeatExecutive Chairman


Chan Yew KaiPresident and Chief Operating Officer

Dato’ Mohamed ZakriBin Abdul RashidIndependent Non-Executive Director

CHAN YEW KAI was appointed to the DIALOG Boardon 23 September 2005 and is currently the Presidentand Chief Operating Officer of DIALOG.

He is a Malaysian, aged 57 and holds a first classhonours degree in Chemical Engineering from theUniversity of Malaya. He is a member of the Institutionof Engineers, Malaysia and is a Professional Engineerregistered with the Board of Engineers, Malaysia. He isalso a Fellow of the Institute of Chemical Engineers,United Kingdom.

He joined DIALOG in 1993 as General Manager andwas later promoted as Director and Chief ExecutiveOfficer of Dialog Systems (Asia) Pte Ltd, overseeing theoperations of the Group’s Business Development,Marketing, Technical Services and Petroleum Retail andsubsequently appointed as Deputy Group ManagingDirector of DIALOG on 23 September 2005. He hasover 33 years of experience in the oil, gas andpetrochemical industry encompassing plant operations,project engineering and management, marketing andbusiness development. He was formerly with ICI for9 years and PETRONAS for 5 years.

DATO’ MOHAMED ZAKRI BIN ABDUL RASHID wasappointed to the DIALOG Board on 18 June 1999 andis an Independent Non-Executive Director. He is theChairman of the Audit Committee and NominationCommittee, and a member of the RemunerationCommittee and ESOS Committee.

He is a Malaysian, aged 68, and holds a Bachelor ofArts Degree with Honours and a Diploma in PublicAdministration from the University of Malaya. He alsoholds a Masters Degree in Public Administration fromthe University of Southern California, U.S.A.

He retired from government service in 1998 as theDirector General of the Department of Immigration ofMalaysia after having served the department for morethan 4 years. Previously he had served the Governmentin various capacities in the Ministry of Transport,Ministry of Finance and the Prime Minister’sDepartment for more than 30 years. He is also a directorof Hartalega Holdings Berhad.

12

Board ofDirectors’Profile

DR JUNID BIN ABU SAHAM wasappointed to the DIALOG Board on29 June 1995 and is an IndependentNon-Executive Director. He is amember of the Audit Committee,Nomination Committee andRemuneration Committee, and isalso the Chairman of the RiskAdvisory Committee.

He is a Malaysian, aged 69 andgraduated with Bachelor andMasters Degree in Economics fromthe University of Canterbury, NewZealand. He also holds a Ph.D.(Economics) from the University ofHull, United Kingdom.

He has vast working experience inaudit, banking, finance and businessconsulting spanning a period of overnearly 37 years. He was formerlywith Arab-Malaysian Merchant Bank(now known as AmInvestment BankBerhad) for 16 years, and for10 years as director of Kepner-Tregoe (M) Sdn Bhd, a constituentcompany of Kepner-Tregoe Inc.a Princeton, N.J. U.S.A. basedcorporate consulting and trainingfirm. Throughout his businessconsulting years, he has actedas corporate adviser to a numberof companies in the finance,information, communication andtechnology industries. Currently, heis also a director of IndustronicsBerhad, Master-Pack Group Berhadand Areca Capital Sdn Bhd, a fundmanagement company.

DATUK OH CHONG PENG wasappointed as an Independent Non-Executive Director of DIALOG on9 January 2009. He is also amember of the Audit Committee.

He is a Malaysian, aged 67. He is aqualified Chartered Accountant andis a Fellow of the Institute ofChartered Accountants in Englandand Wales. He is also a member ofthe Malaysian Institute of CertifiedPublic Accountants (MICPA) and theMalaysian Institute of Accountants.

He was a senior partner of Coopers& Lybrand (now known asPricewaterhouseCoopers), Malaysia(1974–1997). He was a CommitteeMember of the Kuala Lumpur StockExchange (1990–1996) and also apast President (1994–1996), CouncilMember (1981–2002) of the MICPAand was also a member of theMalaysian Accounting StandardsBoard (2003–2009).

His directorships in other publiccompanies includeAlliance FinancialGroup Berhad (Chairman), BritishAmerican Tobacco (Malaysia) Berhad,IJM Corporation Berhad, IJMPlantations Berhad, KumpulanEuroplus Berhad, Malayan FlourMills Berhad and Ingenious GrowthBerhad. He is a member of theLabuan Offshore Financial ServicesAuthority. He also serves on theListing Committee of BursaMalaysia.

CHEW ENG KAR is the Director,Corporate Services of DIALOG. Hewas appointed to the DIALOG Boardon 24 February 1998.

He is a Malaysian, aged 52, andholds a professional qualificationwith the Association of CharteredCertified Accountants, UnitedKingdom and is also a CharteredAccountant with the MalaysianInstitute of Accountants.

He has been with DIALOG since1992, where he joined as the GroupFinance Manager and was laterpromoted to General Manager,Group Finance before hisappointment to the Board. He hasmore than 27 years of workingexperience in corporate and financialmanagement.

Dr Junid Bin Abu SahamIndependent Non-Executive Director

Datuk Oh Chong PengIndependent Non-Executive Director

Chew Eng KarDirector, Corporate Services


JA’AFAR BIN RIHAN wasappointed as a Non-IndependentNon-Executive Director of theDIALOG Board on 25 November2010, representing EmployeesProvident Fund Board (EPF), whichis a substantial shareholder ofDIALOG.

He is a Malaysian, aged 43 andholds a first class honours degreein Economics from InternationalIslamic University, Selangor DarulEhsan. He is also a NationalMember of Malaysian FinancialMarket Association since 1995.

He is currently the General Managerof the Islamic InvestmentDevelopment Department of EPFand he joined EPF since 2008. Hewas a Vice-President of CalyonBank prior to him joining EPF. Hewas with Bank Negara Malaysia for15 years whereby he was activelyinvolved in the development ofIslamic Money Market and IslamicFinancial Market. His last positionheld with Bank Negara was asManager of Islamic Money Marketand Investment Operations andFinancial Market before he joinedCalyon Bank.

KAMARIYAH BINTI HAMDAN wasappointed as an IndependentNon-Executive Director of DIALOGon 27 July 2010. She is also amember of the Audit Committee.

She is a Malaysian, aged 60, andholds a Bachelor and a Master ofLaws degree from the University ofLondon, and a Barrister-at-Lawdegree from the Honourable Societyof Lincoln’s Inn.

She joined Petronas in 1979 as oneof its legal advisors and during her10 years tenure there, she alsohad the opportunity of headingthe Product Trading and SupplyDepartment of its then InternationalMarketing Division. She was alsoLegal Advisor and CompanySecretary to Petronas Gas Sdn Bhd(now Petronas Gas Berhad) in 1988.She left Petronas to be a Partner ofMah-Kamariyah & Partners from1989 to 2005 where she continuedto be actively involved in the oil andgas business.

She has over 26 years of workingexperience in various aspects oflegal matters in relation to oil andgas, general corporate advisory,corporate finance, banking, real andpersonal property transactions, jointventures, privatisation, engineering,procurement and constructioncontracts, technology transfers, etc.

ZAINAB BINTI MOHD SALLEH isthe Group Financial Controller andJoint Company Secretary ofDIALOG. She was appointed to theDIALOG Board on 15 May 2007.She is also the Secretary ofthe Nomination Committee,Remuneration Committee andESOS Committee.

She is a Malaysian, aged 45, andholds a Bachelor of Commerce inAccountancy from University of NewSouth Wales, Australia and is aChartered Accountant with theMalaysian Institute of Accountants.

She joined DIALOG in 1995 asAccountant and was later promotedto Group Financial Controller andJoint Company Secretary. Shehas over 23 years of workingexperience in auditing and financialmanagement. She was formerly withPrice Waterhouse (now knownas PricewaterhouseCoopers) for4 years and other companiesresponsible for financial and costmanagement accounting.

Ja’afar Bin RihanNon-Independent Non-Executive Director

Kamariyah Binti HamdanIndependent Non-Executive Director

Zainab Binti Mohd SallehGroup Financial Controller andJoint Company Secretary

GROWTH& VALUE

With the right business model driven by the right people in theright places, we are confident that we are on the right path toachieving sustainable growth and delivering long-term value.

16

Senior Management’s Profile (Malaysia)

MUSTAFFA KAMAL ABU BAKAR joined DIALOG in 2001 and is the Group ManagingDirector for the Malaysia business operations. He holds a Bachelor of Science Degree inMechanical Engineering from the Nevada-Reno University, USA. He has more than 24 yearsof working experience in the oil, gas and petrochemical industry. He was formerly withPETRONAS Carigali Sdn Bhd for 5 years and with other oil and gas related companies indesign consultancy, construction and fabrication, and maintenance & specialised services.

JAMAL KAMALUDIN joined DIALOG in 1995 and is the Chief Executive Officer, GroupLogistic and also acting as the Head of New Ventures. He is currently involved in DIALOG’sventures in tank terminals business on build, own and operate basis, both locally andoverseas. He holds a Bachelor of Science Degree in Chemical Engineering from the Universityof Aston, Birmingham, United Kingdom and is a Professional Engineer registered with theBoard of Engineers, Malaysia. He has more than 29 years of working experience in the oil,gas and petrochemical industry, in both upstream and downstream activities and was formerlywith Esso Production Malaysia Inc. for 13 years.

NG YEE SIANG joined DIALOG in 1991 and presently is the Technical Advisor to E&CDivision. He holds a Bachelor Degree in Engineering (Mechanical) from Monash University,Australia and is a Registered Professional Engineer with the Board of Engineers Malaysia. Hehas over 37 years of EPCC project management experience in both upstream/downstreamof the oil, gas and petrochemical industry. Prior to joining DIALOG, he worked with SingaporePetroleum Co. Refinery for 2 years, PETRONAS upstream exploration & production for13 years and 4 years as General Manager of Shapadu on hook up/commissioning work.

CHONG CHONG WOOI joined DIALOG in 1986 and is the Chief Executive Officer, MajorProjects. He holds a Bachelor of Science Degree in Civil Engineering from the University ofAston, Birmingham, United Kingdom. He has over 28 years of working experience in the oil,gas and petrochemical industry.

SUHAIMI MOHAMED joined DIALOG in 1997 and is the Director, East Coast Region andDirector of Dialog Services Sdn Bhd. He holds a Chemical Engineering Degree from theUniversity of Tennessee, USA. He has more than 24 years of working experience in plantturnaround and maintenance work and was formerly with PETRONAS.


MOHAMED NAFI BIN MOHD ZIN joined DIALOG in 2011 and is the Director, BusinessDevelopment. He holds a Masters Degree in Business Administration and a ChemicalEngineering Degree from the University of Tennessee, Knoxville, USA. He has over 27 yearsof working experience in the oil, gas and petrochemical industry, particularly in third partyinspection, certification and classification, wellhead manufacturing, developing cleandevelopment mechanism projects, engineering fabrication, pipes manufacturing and coating.He was formerly with PETRONAS and has also worked in other oil & gas companies.

HENG HIOK BOON joined DIALOG in 2010 and is the Head, Upstream Business. He holdsa Bachelor of Science Degree in Minerals Engineering from the University of Birmingham,England. He has more than 30 years of working experience as a petroleum engineer withShell Malaysia Exploration & Production Company.

A BAKAR A. WAHAB joined DIALOG in 2011 and is the Business Development Directorfor Upstream Business, which focuses primarily on the marginal field development. He holdsa Bachelor of Engineering Hons (Electrical) from Universiti Teknologi MARA. He has almost30 years of working experience in the oil, gas and petrochemical industry in various sectorsincluding construction, fabrication, offshore installation, hook up and commissioning, onshorepipeline installation and mature fields optimisation. He was formerly with PETRONAS,PETRONAS Carigali Sdn Bhd and also other oil and gas companies.

HO KAM YONG, EVELYN joined DIALOG in 2000 and is the Head of Risks Management,Retail Petroleum and ePetrol Commercial. She holds a Master of Business Administrationand a Bachelor Degree in Corporate Finance from University of North Texas, U.S.A. She hasmore than 19 years of working experience in the development of macro strategies and riskmanagement. Prior to joining DIALOG, she was a Strategic Planning Manager for the HongLeong Group Malaysia assisting the Executive Chairman in the development of macrostrategies to ensure future implications of all decisions are taken into consideration coveringall the risk factors.

JEFFREY GERARD PERERA joined DIALOG in 2008 and is the Managing Director ofthe ePetrol Group of companies. He is responsible for the development and commercialisationof integrated payment technology, systems, services and solutions, especially those relatingto MyKad use. He holds a Diploma in Banking Studies from the Institute of Bankers, Londonand has 29 years of working experience with HSBC Malaysia, where his last posting wasHead of Card Business. Prior to joining e-Petrol, he was Country Manager for VisaInternational in Malaysia, Brunei and Guam where he served for 4 years.

TAN LEK LEK joined DIALOG in 1995 and is the Director of Operations, Construction &Maintenance. He is also the Director of Technical Audit for the Group. He holds a BachelorDegree with Honours in Mechanical Engineering from the University of Malaya. He is amember of the Institution of Engineers, Malaysia and the Institution of Engineers, Singaporeand a Registered Professional Engineer in Malaysia and Singapore. He has more than 34years of multi discipline working experience in construction, commissioning and maintenanceof onshore and offshore oil and gas facilities, petrochemical plants, water and waste watertreatment plants, both locally and overseas.

18

Senior Management’s Profile (International)

LOY AH WEI joined DIALOG in 1986 and is the Director for Special Function for the Groupand Chairman of Dialog Plant Services Pte Ltd. He holds a Master of Science Degree fromthe University of Manchester, United Kingdom. He is a Chartered Engineer and is alsoregistered with the Singapore Professional Engineers’ Board. He has over 39 years of workingexperience in the oil, gas and petrochemical industry and was formerly with Mobil and WesternGeophysical for 3 years and 5 years, respectively.

JESSIE KU joined DIALOG in 2007 and is the Head of Human Resources, for the Group.She holds a Diploma in Personnel Management and has over 28 years of working experience.This was acquired in the operating environments of several multi-national companies withinthe manufacturing, consultancy and professional services sectors.

TOH CHEE SENG joined DIALOG in 1995 and is currently the Chief Executive Officer,International Business Operations (Specialist Products & Services). He holds a Bachelor ofScience Degree in Chemical Engineering from Mississippi State University, USA. He has morethan 16 years of working experience in the oil, gas and petrochemical industry.

PHILIP GALLACHER joined DIALOG in 2010 and is the Chief Executive Officer, GroupPlant Services. He has over 36 years of experience in the maintenance and shutdown in theoil, gas and petrochemical industry. He was formerly with ICI Engineering before moving intoProject Management with Kvaerner Oil & Gas and AMEC. He has worked in onshore andoffshore gaining international business management experience in Europe, the Middle Eastand South East Asia, and most recently in Malaysia and China as a General Manager.

RICHARD ELLIS joined DIALOG through the acquisition of Fitzroy Engineering Group Ltd,New Zealand in 2011. Richard is the Chief Executive Officer, Fabrication and has over 16years of working experience. He holds a Bachelor of Technology Mastering in Engineering andAutomation. He has 10 years working experience in the automated technology industryassisting the company to establish as an international leader in their field. He has extensiveexperience in project management, contract negotiation and global market.


ANDY COPLAND joined DIALOG in 1995 and is the General Manager of Dialog ServicesPty Ltd, Australia. He holds extensive inspection qualifications, a Certificate of QualityAssurance from New Zealand and is a Lead Quality Systems Auditor. He has over 25 yearsof worldwide working experience in a variety of roles in the oil, gas and petrochemical industry.

YOSHIYUKI HIRAOKA is the Managing Director of Dialog OTEC Pte Ltd and holds aBachelor Degree from Kogakuin University, Tokyo, Japan. He has over 40 years of workingexperience in engineering design and project management in the oil, gas and petrochemicalindustry and was formerly with Fuji Kantetsu Kogyo Co Ltd, Japan.

FRANCIS LAU ENG CHOON joined DIALOG in 2009 and is the General Manager,Maintenance for Dialog Engineering Pte Ltd and Dialog Plant Services Pte Ltd. He holds anAdvance Diploma in Business Management Studies and has over 27 years of workingexperience in the oil, gas and petrochemical industry where he was responsible for overallproject management & construction, integrated maintenance activities as well as planningand execution of plant shutdown & turnaround activities. He is also familiar with tower andvessel revamps and repairs.

MD NASIR BIN AHMAD joined DIALOG in 2009 and is the General Manager of JubailSupply Base Saudi Arabia. He holds a Bachelor of Science in Maritimes Studies andInternational Transport from University of Wales, Cardiff, United Kingdom and a Diploma inInternational Trade from University Darul Iman Terengganu, Malaysia. He has 15 years ofworking experience in the supply base business and fabrication industry. He was formerlywith Kemaman Supply Base for 12 years and with Mushtari of EPIC Group for a year.

ANDREW LAI joined DIALOG in 1986. He is the Head of FRP. He is responsible for thebusiness strategy and development of our locally-manufactured FIBERBOND® FRP Pipingsystem as well as specialty products and services covering Asia and Australia regions.

EDISON SINAGA joined DIALOG in 2000 and is the Country Manager and Director of PT.Dialog Sistemindo, Indonesia. He holds a Bachelor Degree in Chemical Engineering fromInstitute Technology Bandung, Indonesia. He has more than 18 years of working experiencein the oil, gas and petrochemical industry in Indonesia and was formerly with ICI.

20

Senior Management’s Profile (International)

TAN NGEE MENG joined DIALOG in 2007 and is the Country Manager for Dialog ServicesSaudi Arabia Company Limited. He has 18 years of working experience in Saudi Arabiacovering a variety of disciplines that includes logistics, procurement, sales and marketing ofindustrial products & services for the oil, gas and petrochemical industry.

CHANNARONG MISSITA joined DIALOG in 2010 and is the Operation Manager,Maintenance of Dialog Systems (Thailand) Ltd. He holds a Degree in Bachelor of Science inTechnical Education (Industrial Engineering) from Rajamangala Institute of Technology,Thailand. He has working experience in management of piping systems installation forbuildings, welding fabrication of machinery, pressure vessel and steel structures andconstruction of storage tanks. He also has 13 years of working experience on maintenanceand planned maintenance shutdown of the refinery and petrochemical plants and recently,he has been responsible for sales and marketing with leading companies to providemaintenance and turnaround of the country.

FANG MIN joined DIALOG in 2009 and is the Country Manager for China. He holds aBachelor Degree in Geology from Jianghan Petroleum Institute, Hubei, China and a MasterDegree in Economics from University of International Business and Economics, Beijing, China.He has more than 17 years of working experience in the oil, gas and petrochemical industry.He was formerly with CNOOC, Halliburton, Wood Mackenzie and ION in Beijing, China.

DAVID MORGAN joined Dialog Technivac in 1997 and is the General Manager for catalystservices in United Kingdom. He has a total of 27 years of worldwide working experience in theoil, gas and petrochemical industry. With his vast experience, he is responsible for theoperations of the growing catalyst market in United Kingdom, Europe and North Africa.

RAYMUNDO ALAMOS joined DIALOG in 2008 and is the General Manager for DialogServices, Inc for North America. He brings with him 20 years of working experience in theNorth American petrochemical and refinery catalyst field. His management skills have beendeveloped by managing established companies as well as being on the frontline of majorprojects throughout the USA and abroad.


Corporate Structure (as at 30 September 2011)

DIALOG GROUP BERHAD

30%KERTIH TERMINALS SDN BHD

51%PENGERANGTERMINALSSDN BHD

90%PENGERANGINDEPENDENTTERMINALS SDN BHD

50%TRACERCO ASIASDN BHD

100%DIALOG CORPORATESDN BHD

100%DIALOG EQUITYSDN BHD

100%DIALOG PENGERANGSDN BHD

40%LMK RESOURCES(MALAYSIA)SDN BHD

100%DIALOG PETROLEUMSDN BHD

100%DIALOG SYSTEMSSDN BHD

100%CORAK MERAHSDN BHD

100%DIALOG PLANTSERVICES SDN BHD

100%DIALOG E & CSDN BHD

100%SAGA DIALOGSDN BHD

100%DIALOG E & ISDN BHD

100%PACIFIC ADVANCECOMPOSITESSDN BHD

100%DIALOGFABRICATORSSDN BHD

100%DIALOG SYSTEMS(ASIA) PTE LTD

100%DIALOG ENERGYSDN BHD

55%CENTRALISEDTERMINALSSDN BHD

60%DIALOG SERVICESSDN BHD

100%DIALOG PROPERTIESSDN BHD

100%INFODASIA SDN BHD

100%DIALOG D & P SDN BHD

* The remaining 49% is held by EC-Dialog Pte Ltd

^ The remaining 49% is held by ePetrol Holding Sdn Bhd

80%LANGSAT TERMINAL(ONE) SDN BHD

80%LANGSAT TERMINAL(TWO) SDN BHD

17%EPETROL HOLDINGSDN BHD

51%^EPETROL SERVICESSDN BHD

100%DIALOG ATLASGLOBAL SDN BHD

51%*DIALOG CATALYSTSERVICES SDN BHD

100%DIALOG ENGINEERINGSDN BHD

100%DIALOGCONSTRUCTIONSDN BHD

100%DIALOG PETROLEUMTECHNICAL SERVICES(BEIJING) LIMITED

100%DIALOG SERVICESPTY LTD

51%DIALOGINTERNATIONAL(L) LTD

49%DIALOG SYSTEMS(THAILAND) LTD

90%PT. DIALOGSISTEMINDO

100%DIALOG SERVICESPTE LTD

100%DIALOG SYSTEMSPTE LTD

89%DIALOG ENGINEERINGPTE LTD

80%DIALOG OTEC PTE LTD

100%DIALOG (LABUAN) LTD

100%DIALOG SERVICES(HONG KONG) LIMITED

51%ANEWA ENGINEERINGPRIVATE LIMITED

90%FITZROYENGINEERING GROUPLIMITED

51%^EPETROL SYSTEMSSDN BHD

100%EMAS MERDUSDN BHD

100%TEMPO SETARASDN BHD

100%CORAK DAHLIASDN BHD

100%ORIENTAL VALLEYSDN BHD

100%SENYUM BESTARISDN BHD

100%CENDANA SUTERASDN BHD

100%IDAMAN TROPIKALSDN BHD

100%DIALOG MALLSDN BHD

99%ULTIMATETECHNOLOGY &SERVICES CO., LTD

100%OVERSEAS TECHNICALENGINEERING ANDCONSTRUCTIONPTE LTD

74%OTEC HOLDINGSPTE LTD

90%DIALOG PLANTSERVICES PTE LTD(fka TOH TECK SENGENGINEERING &CONSTRUCTION PTE LTD)

100%DIALOG OTECSDN BHD

40%EC-DIALOG PTE LTD

51%*DIALOG SERVICESEUROPE LIMITED

51%*DIALOG SERVICES, INC

51%CATALYST HANDLINGRESEARCH &ENGINEERING LIMITED

100%DIALOG TECHNIVACLIMITED

100%FITZROYENGINEERINGAUSTRALIAPTY LTD

50%FINELINE SERVICESLIMITED

57%GNT INTERNATIONALLIMITED

60%DIALOG SERVICESSAUDI ARABIACOMPANY LIMITED

100%OVERSEASMANUFACTURING(JOHOR) SDN BHD

49%OVERSEAS TECHNICALENGINEERING &CONSTRUCTION SDNBHD

32%BC PETROLEUMSDN BHD

LEADERSHIP& RELATIONSHIPS

We will continue to leverage on our unrivalled qualities – unrivalledtrack record and unrivalled expertise – with a view to growing ourleadership as well as strengthening our relationships with all ourcustomers across the markets that we serve.

24

Quality And Safety

QUALITY ASSURANCE &QUALITY CONTROL

Pacific Advance Composites SdnBhd and Overseas Manufacturing(Johor) Sdn Bhd have successfullygone through the ISO9001:2008Re-Assessment Audit by SIRIMQAS International Sdn Bhd andD.A.S Certification Ltd respectively.Dialog E & C Sdn Bhd, DialogPlant Services Sdn Bhd, DialogSystems Sdn Bhd, Dialog TechnivacLimited and Fitzroy EngineeringGroup Limited have successfullymaintained their respectiveISO9001:2008 certification.

Dialog Systems Pte Ltd, DialogPlant Services Pte Ltd andOverseas Technical Engineeringand Construction Pte Ltd havesuccessfully upgraded their qualitymanagement system to comply withthe new ISO9001:2008 certification.

On the Quality Control section,Dialog Plant Services Sdn Bhd hassuccessfully renewed the ASME“U”, “U2” and “S” certificates fromThe American Society ofMechanical Engineers (ASME) andthe “NB” and “R” certificates fromthe National Board of Boiler &Pressure Vessel Inspectors.Overseas Manufacturing (Johor)Sdn Bhd, is also the holder ofASME “U” and “U2” certificatesand; National Board “NB” and“R” certificates.

One of the continuous improvementprograms that has been put in placein the year is the structured SeniorManagement HSE Walkabout,which now forms part of Group’sscheduled HSE Inspection andAudit Plan. While emphasizingManagement’s commitment to HSE,the program aims to cultivatedeeper HSE awareness among theworkforce enabling employees atthe various worksites to haveaccess to interact directly with TopManagement on HSE matters if theywish to.

As the Group ventures into widerbusiness areas including upstreamworks, it presents even a greaterchallenge to maintain a high level ofHSE standard, which the Group willuphold. In view of this, we have alsoembarked on an exercise to reviewand upgrade our existing HSEManagement System (HSEMS) tokeep abreast with businessdevelopment and be in sync withevolvement of HSE best practices inthe industry. All our subsidiarieshave maintained complianceto ISO14001 and OSHAS18001system requirements. OurSpecialist Services & Productsgroup is working closely andcontinuously with our technologypartners in operations usingtechnologies that safeguard theenvironment, especially in thecontrol of dust and volatile organiccompounds (VOC) emissions.

Fitzroy Engineering Group Ltd isalso the holder of AmericanPetroleum Institute (API) MonogramLicense that meets API SpecQ1 withadditional API 5DP and API Spec7-1 product licenses.

On the composites pipe business,Pacific Advance Composites SdnBhd is the holder of ABS ProductType Approval (PTA) certificate andABS Manufacturing Assessment(MA) certificate, both were awardedby American Bureau of Shipping(ABS).

DIALOG has demonstrated aclear commitment to continuouslyproviding and upholding the highestquality of products and services toour customers by securing andmaintaining the various qualitycertifications.

HEALTH, SAFETY &ENVIRONMENT (HSE)

The Group’s operations in Malaysiahave clocked a total of 4.8 millionman-hours in financial year 2010/2011 and cumulative 5.6 millionman-hours without Lost Time Injury(LTI). However, our Singaporeoperations unfortunately lost onetechnician while he carried out inertentry work in a client’s worksite inSingapore in March 2011. We hadimmediately taken all necessarysteps to put in place stringentmeasures to eliminate suchundesirable event in the future.

25Dialog Group Berhad Annual Report 2011

Review of Operations

DIALOG once again improved on its previous year performance with a growthof 28.4% on its profits after tax. All the divisions for the current yearoutperformed the previous year’s results, in particular the Engineering &Construction and Plant Maintenance activities, both in Malaysia and overseas.

The commencement of operation by the Group’s jointly controlled entity,Langsat Terminal (One) Sdn Bhd in September 2009 for Phase 1 and April2010 for Phase 2 and the successful acquisition of Fitzroy Engineering GroupLimited, based in New Plymouth, New Zealand in April 2011 had alsostrengthened the Group’s results for the year ended 30 June 2011.

During the financial year under review, the Group has embarked on two majorprojects. It has started implementing the development of PengerangIndependent Deepwater Terminal projects in Pengerang, Johor and alsosecured the award of Small Field Risk Service Contract (SFRSC) fromPETRONAS. Overall, our businesses in tank terminals, engineering &construction, plant maintenance and specialist products and servicescontinued to contribute significantly to DIALOG’s consistent growth.

MALAYSIA OPERATIONS

Kertih Terminals Sdn Bhd (KTSB), an associate company, continued to registersustainable profits for FY2011. KTSB has a total of 42 tanks with a combinedstorage capacity of about 400,000 cubic meters (m³).

The development of Phase 3 for Langsat Terminal (One) Sdn Bhd (LgT-1), ajoint venture company with MISC Berhad (MISC) and Puma Energy AsiaPacific B.V. (Puma) has been completed in August 2011. With an addedcapacity of 76,000 m³ of storage for gasoline, biodiesel and drilling base oil androad tanker loading facility, LgT-1 now boasts a combined storage capacity of476,000 m³.

The development of Langsat Terminal (Two) Sdn Bhd (LgT-2), also a jointventure company with MISC and Puma was also well in progress andexpected to be operational by December 2011. LgT-2 has a total of 10 tanksfor gasoline products with a storage capacity of 171,000 m³.

476,000 m³ tank terminal facilities at TanjungLangsat, Johor.

26

During the financial year, the Groupcommenced the development of thefirst phase of the PengerangIndependent Deepwater Terminal(Terminal) project, which is jointlyundertaken with the State Secretary,Johor (Incorporated) and VopakTerminal Pengerang BV. The projectwill be developed on adjoiningonshore and seabed land locatedbetween TanjungAyam and TanjungKapal in Pengerang, Johor and shallcomprise an initial storage capacityof approximately 1.3 million m³together with six berths at jetty andis expected to be completed in2014.

The Terminal project is poised tobecome a regional petroleum hubowing to its strategic location andproximity to the international sealanes. The Terminal is a tankagefacility for handling, storing, blendingand distribution of crude oils andpetroleum products with marinefacilities. Capable of handling verylarge crude carriers (VLCC) with awater depth of up to 26 meters, it willbe the first deepwater terminal inSouth East Asia.

The financial year under review sawslower demand for Shell MDS’Synthetic GTL Sarapar and Saralinedrilling base fluids resulting in adownward trend for the sales ofdomestic specialist products andservices. The decline was due tolower activities in domestic drillingschedules. However, sales of otherspecialist products such as JohnsonMatthey process catalysts andabsorbents, specialised Lisega pipehangers, Enventure GlobalTechnology’s solid expandablemaintained its upward trend.

Long term Swellable Packerscontract with PETRONAS CarigaliSdn Bhd, Sarawak Shell Berhadand Sabah Shell Petroleum Co Ltdunder Package 3, specialisedpackers, were secured successfully.In addition, the team also acquiredsales for Jet Pump Package(Wellcom system) with PETRONASCarigali's Duyong Field Developmentand continued working on a fewmore potential projects.

The specialist products and servicesteam continued to identify newtechnologies/products and wassuccessful in securing an exclusivemarketing representation forAlderley Plc, to market fiscalmetering/custody transfer, producedwater treatment systems and controlsystems engineering.

The demand for specialty productsand services will increase, driven byvarious initiatives by the oil and gasindustry such as deepwater drilling,enhanced oil recovery andinnovative approaches to thedevelopment of new, mature andmarginal oil fields.

During the financial year, theEPCC Division was involved inthe engineering, procurement,construction and commissioning(EPCC) of the above mentionedLgT-1 Phase 3 and LgT-2 projects.In addition, in October 2010,the Group was awarded byPETRONAS Carigali Sdn Bhd(PCSB) the EPCC of BintuluCondensate Storage Tank (BCOT)and associated facilities.Construction works are progressingwell, with a project handover date bymiddle of next year.

Also in Bintulu, the team won anEPCC and associated works ofcooling tower project for AseanBintulu Fertilizer Sdn Bhd (ABF).The completion is slated for end of2011.

BCOT project – Piling and tank foundationactivities in progress.



Upon successful commissioned ofthe EPCC Mercury Removal Unit(MRU) Project at PetronasPenapisan (Terengganu) Sdn Bhd(PPTSB) in July 2010, the Groupwas awarded another EPCCMercury Removal Unit by NewfieldSdn Bhd in October 2010. Thefabrication of the facility was ontrack for mid July 2011 handover.For the MRU facilities, the ProcessTechnology and the supply ofMercury absorbent were fromJohnson Matthey.

The Group’s Plant MaintenanceDivision recorded a steady growth inrevenue for the current financialyear. A number of completed worksincluded shutdown projects atOPTIMAL Chemicals (Malaysia)Sdn Bhd in Kertih with whom wehave term contracts for generalmaintenance services and minorprojects. These contracts weresupported by our regional workshopin Kertih.

The Kertih workshop team alsocarried out tank cleaning andreplacement of high performancetrays projects for PPTSB. The teamalso completed reactor overhauls inBASF Gebeng as part of thecatalyst change out works.

A long term contract for hydro-blasting works with BASF PetronasChemicals Sdn Bhd (BASF),Gebeng was secured andsupported by our recentlyrefurbished Gebeng workshop tocater for hydro-blasting and generalplant maintenance services.

FIBERBOND® Advance CompositePiping System continued to gainrecognition from existing and newcustomers by virtue of its long termbenefits, safety record, provenreliability and well trained personnel.We have achieved an excellenttrack record to-date since 1998.

We continued works with PCSBto replace corroded carbon steel,alloy metal and GRE firewater pipesfor their existing platforms in Sabahand Sarawak waters.

Several new projects orders werereceived from Sarawak ShellBerhad E8, F13 and Brownfieldprojects and others.

FY2011 also marked an importantmilestone as we and our partnersROC Oil Malaysia (Holdings) SdnBhd and PETRONAS Carigali SdnBhd were awarded the Small FieldRisk Service Contract for the BalaiCluster Fields by PETRONAS. Thedevelopment and production of

petroleum from the Balai ClusterFields, located offshore Bintulu,Sarawak, will be carried out in2 phases. The pre-developmentphase is scheduled to commence in3Q 2011 and is expected to take upto 18 months with total cost isestimated to be between USD 200 –250 million.

On the successful completion ofthe pre-development phase andagreement on the economic viabilityof the fields, a field developmentplan will commence. Productionfrom all the fields in the cluster isplanned to be onstream within 24months from commencement of thedevelopment programme. The totalcost of the development phase isestimated to be between USD 650 –700 million.

Apart from the marginal fields nowawarded, this financial year saw theGroup actively pursuing othermature field opportunities toincrease and diversify its upstreamportfolio.

Construction activities at ABF cooling towerproject, Bintulu.

Bonding activity at Samarang PlatformPCSB-SBO.

28

In line with the growth aspirations,the Group and its business partner,LandOcean Energy Services Co.,Ltd. are tendering for subsurfaceconsultancy services to oil andgas companies, which included,amongst others, 2D and 3D seismicprocessing/re-processing, specialseismic attribute studies using ownproprietary technologies, integratedfield studies and field developmentplans.

Ongoing opportunities which wouldenhance and differentiate DIALOG’scapability were continuously beingpursued through collaborativeefforts in order to position the Groupas a One Stop fully integratedTechnical Services Provider for theupstream and downstream sectors.

In this financial year, the ePetroldivision successfully deployed aLoyalty Solution for the Sahabat1Malaysia, a loyalty programme incollaboration with MRewardsInternational and the Ministry ofInformation Communications andCulture in 2010. Its Welfare

Management Solution through theMyKasih Programme received anaward at 2010 CommonwealthAssociation for Public Administrationand Management (CAPAM)conference in Malta for theinnovative use of MyKad in thedisbursement of welfare aid, underthe category of Innovative Use ofTechnology in the Public Service.The technology has beenrecognised by the governmentagencies and our project initiativesare supported by Bank NegaraMalaysia, Multimedia DevelopmentCorporation Sdn Bhd (MDeC),Jabatan Pendaftaran Negara (JPN)and PEMANDU.

For the oil & gas sector, ePetrolprovides DIALOG the core solutionsin work planning and managementsystems, asset management andmaintenance systems, terminalstock accounting and controlsystems, fabrication quality controlsystems and other industry specificsolutions. These systems enabledDIALOG to benefit from betterefficiency and higher degree ofautomation.

INTERNATIONALOPERATIONS

The International operationsperformed well during the financialyear under review and contributedpositively to the Group’s FY2011results. While maintaining growth inexisting operating countries, theGroup has expanded its operation inNew Zealand, Australia, Thailand,India, China and Saudi Arabia.

The development of an integratedoffshore supply base in JubailCommercial Port, Kingdom of SaudiArabia kicked off in December 2010.Phase 1 of the developmentcovered access/berthing channeldeepening, the construction of a420-meter anchored sheet piledquay wall, diesel fuel and freshwater storage tanks with a totalcapacity of 19,400 m³, a workshop,a warehouse and an ancillarysupport facilities.

Upon completion of all activitieswhich is targeted for December2011, the initial phase will be able toconcurrently serve six offshoresupport vessels with length of a shipof 45 to 60 meters and a base areaof 45,440 square meters.

The International Marketing Divisioncontinued to show strong growth forFY2011. Increased customer basehelped push the sale of Shell MDS’Synthetic GTL Sarapar and Saralinedrilling base fluids, with secured firstorders from Petrochina, Chevronand Shell in China, Cairn in SriLanka and Rak Petroleum of UnitedArab Emirates.


Jubail Supply Base – Dredging onshore construction in progress.


Renewed orders from existingmarkets like PTTEP, Chevron,ConocoPhillips, Vico, Cairn Energy,ONGC, CPOC in Australia, India,Thailand, Myanmar, Indonesia andBrunei respectively remainedstrong, contributing positively to theGroup.

Bullish on potential market fordrilling base fluids in Australia, theGroup started to construct adedicated tankage facility inDampier, Western Australia whichcomprised of 11 storage tanks. Thepartial shipment of completed tankswere successfully loaded out inJune 2011 and the balance of tanksin August 2011. Site construction isin progress with target completionby December 2011.

The supply of Johnson Matthey’sAbsorbents for offshore gastreatment to Chevron andConocoPhillips in Indonesia, PTTEPgas fields and PTT onshore gasprocessing plants continued to gainstronger foothold, while demand forother types of absorbents andcatalysts for refineries remainedstrong.

Sales for Conoco LiquidPowerTMFlow Improvers from Indonesia,China and other markets remainedsteady for this period with theaddition of a number of newaccounts. Similarly, the Divisioncontinued to secure sales of otherproducts including Vikoma oil spillresponse equipment, Lisega pipehangers and support balls.

The very first contract for supplying140 units of Wellheads andChristmas trees to Sirikit Oil Field inThailand was also sealed during thecourse of the year.

To maintain profitable growth, theDivision is actively seeking newmarkets in Australia, Middle Eastand Africa while nurturing existingcustomers of the South East Asiawith diverse range of products andservices.

The Engineering and ConstructionDivision of international operationsremained extremely busy during thecourse of the year. Significantamount of engineering resourceswere allocated towards assisting theefforts of the Group’s major projects,for instance, the various terminals atTanjong Langsat and theindependent deepwater terminal atPengerang.

Singapore based internationalengineering team provided fullengineering support for EPCC,construction and fabrication projectsas well as for continual businessdevelopment. Projects comprised

the refinate spheres for Stolthavenon Jurong Island in Singapore,tanks and piping systems for theFuji Oil plant in Thailand, theTaganito tanks and thickeners in thePhilippines, various Vopakupgrading projects and many more.To meet the increased demand, itwas decided to reactivate the JohorDesign Centre based at Tebrau inSouthern Johor.

Construction projects continued toprogress positively. Those includedthe six spheres earlier mentioned,over fifty tanks and ten thickenersfor a mine in southern Philippines

Storage tanks to be located at Dampier,Western Australia being fabricated in Banting.

Construction of refinate spheres forStolthaven at Jurong Island.

30

which were being fabricated offsitefor field erection. The tanks andpiping systems for the Fuji Oil plantin Thailand were also successfullycompleted. Various upgrades forboth terminals and berths werecarried out for Vopak in Singapore.Work on the large tank at the BintuluCrude Oil Terminal was expected tocommence soon, as was the spherefor Kaneka.

The International Engineering armremained very active at theExxonMobil Singapore ParallelTrain Project on Jurong Island,undertaking many work packages.

The Division also participated in theturnaround shutdown of variousplants for Shell, ExxonMobil andSingapore Refining Company inSingapore as well as otherpetrochemical plant and powerstations.

There were increased demands formechanical maintenance work.Notably at Shell, the Maintenanceteam provided welding overlayservice for a number of older

vessels thereby extending the lifecycle of affected plants. At OilTanking, works to replace bottoms,sideshells and roofs of various tankswere performed, which was alsopart of the operator’s life-extensionprogramme.

In support of the Maintenance team,the Group’s fleet of vacuum truckswith related pumps and cleaningequipment had been busy de-sludging tanks and other vessels toprepare them for temporarydecommissioning to be followed bythe necessary repair. Together withthe civil engineering team whomaintained the foundations, theteam was able to offer a one-stopsingle-source responsibility servicefor tank maintenance and upgradingto our valued clients. Through thesesuccesses, the Division is now in aposition to offer similar ‘cleaning,repair and foundation upgrade’service to other terminal andtankage operators in the region.

To further add value to the de-sludging and tank cleaning services,en-situ de-watering service wasextended. The service allowed for areduced in the quantity of sludge forexternal treatment whichcontributed to significant cost savingfor plant operators.

Our specialist maintenancecapability was the refurbishment ofthe slide valves of the fluidisedcatalytic cracking unit for Singapore

Refining Company. A total ofthirteen valves including a 40-inchregenerated catalyst slide valve wascompletely overhauled and rebuiltwith new components.

The team completed part of theplant shutdown in conjunction withthe Singapore Operations team forExxon Mobil in Singapore. Currentlyin progress are tank cleaning andrepairs for VOPAK, Oil Tanking,SRC and Shell Seraya, and ShellBukom in Singapore. The team alsocompleted many catalyst change-out works in 14 different countries,including 3 new countries, ieShanghai, China, Bolivia andSakhalin Island, Russia.

FY2011 also saw higher revenueand profits contributions from ourteam in Saudi Arabia. The team hasexpanded range of specialisedindustrial services which covers BoltTorquing & Tensioning, FlangeManagement System, Pipe Cutting& Beveling, Flange Facing, TankPickling & Preservation, Pipe LineHydro testing & Valve Testing. Ourmajor activity is currently in theEastern & Western regions of SaudiArabia. We are currently offering ourservices to Saudi Aramco RefineryFacilities, Sabic Affiliates,CHEVRON Philips, SIPCHEM,Tasnee, SAHARA & Gulf Farabi.

FIBERBOND® Advance CompositePiping System also continued togain recognition from ourinternational customers. Severalnew projects orders were receivedfor Petrobras Guara FPSO fromModec International and Aibel

Catalysts reforming unit at Ineos,Grangemouth Scotland.



Thailand, Yetagun C projects fromThai Nippon Steel, and others.Installation activities have taken theteam beyond the boundaries ofMalaysia most notably China,Thailand, Vietnam, Singapore andBatam Island, Indonesia. Ourinstalled products are now operatingin Malaysia offshore and onshore,Maari field in New Zealand, MurphyOil Thunderhawk DeepwaterPlatform (Hull) in the Gulf of Mexico,Petrobras Tupi 1 FPSO in BrazilDeepwater, Song Doc field inVietnam, Hess operation inEquitorial Guinea (Africa) andExxonMobil East Areas Projects inNigeria.

During the year, the Group acquireda heavy fabrication and multi-disciplined engineering company,Fitzroy Engineering Group Limited(FEGL). FEGL owns a largefabrication yard facility situated onfour hectares of leased land in NewPlymouth, New Zealand with over9,000 square meters (m²) ofcovered workshops. The fabricationyard is linked to Port Taranaki’sdeepwater port by a wide loadheavy haul transport corridor. It alsohas a workshop and maintenanceteam with a workforce of 60 inBrisbane, Australia under FitzroyEngineering Australia and a plateprofiling company under FinelineServices in New Plymouth.

FEGL has an established trackrecord in New Zealand andAustraliafor high quality engineering and iswell-known for its reliability. Theintegration of FEGL into DIALOG’sfabrication business will provide the

Group with immediate access to theestablished New Zealand market aswell as provide growth opportunitieswithin the Australian market.

Since its acquisition, FEGL hassafely completed the two mostcritical heavy onshore lifts on theYolla MLE Accomodation andUtilities Project. Module M2 (liftweight: 85.5 tonnes) to M1A, andM3 (lift weight 92.8 tonnes) to M2.The complete Module weighing 610tonnes will be transported to PortTaranaki in October 2011 beforebeing shipped to the Bass Strait andinstalled on an existing platform.

To further strengthen the fabricationcapabilities in the region, the Groupacquired UTS, a fabricationcompany and workshop in Rayong,

Thailand with a total area of30,000 m² and fabrication shop areaof 1,600 m². We are in the midst toexpand the fabrication shop area to3,500 m². The expanded fabricationshop shall be fully equipped withoverhead cranes, plate bendingroller, computer numeric controlprofile cutters and blasting &painting facilities to provide one-stopservice from raw material to finishedproduct. This facility also includes awarehouse and maintenance shopfor a wide range of plantmaintenance facilities. Thisacquisition will allow us to increasethe range of plant maintenanceservices to a wider range ofcustomers in Thailand.

A NZD35 million offshore gas platform accommodation module is being built at FitzroyEngineering's fabrication yards.

SWELLABLE TECHNOLOGY

P R O C E S S S O L U T I O N S

Technology Partners

32

Human Resource (as at 30 June 2011)


Distribution byQualification No. %

Technical Degree 354 16

Technical Diploma 158 7

Technical Certificate 538 24

Non Technical Degree 182 8

Non Technical Diploma 103 5

Non Technical Certificate 55 2

Skilled Worker 676 30

Non Skilled Worker 182 8

Total Staff 2,248 100

30%

8%

2%

5%

16%

7%

24%

8%

Human Resource Growth

2,400

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

02002

518

368465 455

643

1,105

1,304

2,248

2003 2004 2005 2006 2007 2008 2009 2010 2011

1,5671,619

34

Calendar of Events

24 nov ‘1022nd Annual General Meeting,Eastin Hotel, Petaling Jaya.

11 jan ‘11Announcement of Pengerang Independent

Deepwater Terminal project under the

Economic Transformation Programme at

Putrajaya.

19 jan ‘11Ground Breaking for DIALOG Headquartersat Mutiara Damansara.

1-3 june ‘11The 13th Asian Oil, Gas & PetrochemicalEngineering Exhibition at Kuala LumpurConvention Centre.

2-3 june ‘11Budget 2012 & Business Plan Meeting at

Glenmarie Holiday Inn, Petaling Jaya.

11-12 june ‘11Team Building in Singapore.


19 april ‘11Corporate Integrity Pledge at PutrajayaInternational Convention Centre.

13 may ‘11Signing of Development Cum Joint Venture

Agreement with The State Government of

Johor Darul Ta'zim and The State Secretary,

Johor (Incorporated) at Malaysian Petroleum

Club.

6 july ‘11Signing of Shareholders Agreement withThe State Secretary, Johor (Incorporated) atJohor.

16 august ‘11Signing the Small Field Risk Service Contra

ct

for Balai Cluster Fields with PETRONAS,

Roc Oil Malaysia (Holdings) Sdn Bhd and

PETRONAS Carigali Sdn Bhd.

1 june ‘11Signing of Joint Venture Agreement withVOPAK at Malaysian Petroleum Club.

14 sept ‘11DIALOG Hari Raya Open House at SimeDarby Convention Centre.

COMMUNITY

MyKasih ‘Love My Neighbourhood’programme has become aprominent feature of DIALOG’sCorporate Social Responsibilitycampaign targeted at low incomehouseholds. In addition to thedistribution of food aid tounderprivileged families, DIALOGalso aims to rehabilitate thesefamilies through education and skillstraining; an objective that is alignedwith DIALOG’s corporate socialresponsibility philosophy to help theless privileged residing inneighbourhoods where the Grouphas business interest in.

DIALOG also provides thetechnology employed by theMyKasihprogramme. Through its subsidiary,ePetrol Services, DIALOG hasdeveloped the technology thatpioneered the innovative use of theMyKad as a tool to channel aiddirectly to target recipients. Thetechnology also effectively convertsMyKad into a payment instrument to

purchase and pay for essential fooditems at participating retail stores.DIALOG spends approximatelyRM1.0 million a year just to supportand administer the technology forthe MyKasih programme.

In financial year 2011, DIALOG hascontributed a sum of RM785,200 tosupport 755households in 12 locationsacross Malaysia where DIALOGoperates with food aid. The othercontributors of the Foundationinclude both local and internationalcorporations who share the sameideals for looking after ourcommunity like DIALOG. In total,MyKasih Foundation reaches out to9,538 households in 83 locationsacross Malaysia.

DIALOG established tuition centresfor school-going children of recipientfamilies in Kampung Kayu AraPetaling Jaya, Selayang, Puchong,Kerteh and Pasir Gudang, and haspledged RM280,000 to run thetuition classes in these locations forone year.

Under the supervision of MyKasihFoundation, DIALOG collaboratedwith MyHarapan Youth TrustFoundation to develop activities forMyKasih youth and teenagers, witha focus to bring about a change ofmindset leading to empowermentthrough skills training and capacitybuilding.RM70,000 was earmarkedfor this Youth Leader TrainingProgramme where our youthparticipated in an array of trainingsessions covering subjects such aspublic relations, media management,event management, pitching andprogramme management. 30MyKasih youth aged 17 to 25 years

Corporate Social Responsibility

DIALOG believes in carrying out its businessresponsibly in accordance with best businesspractices and by looking after the interest of thecommunity, its employees and the environment,and also fulfilling its broad range of responsibilitiesto stakeholders in the marketplace.

1

2

3

4

365


complemented by the AcademicAchievers Reward to encouragethese children to excel academically.RM36,736 was presented to 231school going children of DIALOG’semployees under these twoprogrammes.

The sports club organisedcompetitive and non-competitivegames throughout the year whichincluded weekly badminton andfutsal. An inter-division bowlingtournament took centre stage duringthis financial year with animpressive turnout of staff.

ENVIRONMENT

While DIALOG is reviewing andupgrading its HSE ManagementSystem (HSEMS) in line with its newventures including upstreamactivities, its significant subsidiarieshave continued to maintaincompliance to ISO14001 andOSHAS18001 system requirementsrespectively. The specialisedservices team also continued towork in synergy with our technologypartners applying technologies thatsafeguard the environment, mostnotably in the control of dust andvolatile organic compounds (VOC)emissions.

Our commitment to the environmentis reflected in every activity we carryout. More recently, the Board hasdecided to adopt a paperless culturewhen holding meetings, setting anew precedence for all divisionsacross DIALOG.

participated in a ‘Start-Up Camp’session held over four days in June2011.

To allow recipient mothers acquireskills for both employmentopportunities and incomegeneration, 18 mothers participatedin NAWEM’s (National Associationof Women Entrepreneurs ofMalaysia) skills training programmecovering floral design, traditionalcooking, tailoring and basic baking.DIALOG will continue to supportand sponsor programmes aimed atdeveloping the less privileged incommunities where it operates.

WORKPLACE

During the financial year 2011,DIALOG has taken on board 28 newemployees fresh out of universityunder its “Young GraduatesProgramme”.

The Group has always encouragedinternship residency. This financialyear, 32 undergraduate studentstook part in the internshipprogramme, aimed at exposingthese future talents to a result-based environment as workingadults.

The Annual School AssistanceProgramme continued to help lowerincome group employees managetheir finances during the ‘back-to-school’ period. The programme is

In supporting efforts to take bettercare of our ecosystem, employeesof DIALOG and MyKasihFoundation signed up for a treeplanting programme organised by aMyKasih programme donor incelebration of the Earth Hour. Thissimple act of kindness to nature hascollectively planted 530 mangroveseedlings of the Rhizophoraspecies.

Constant media reports hadundoubtedly increased ourawareness in nature conservation.A beach clean-up trip to Tioman notonly provided invaluable insight intothe complex coral reef ecosystembut also exposed our participants tothe environmental conundrumsfacing the oceans and its reefs daily.

MARKETPLACE

The Annual General Meetingremains the principal forum fordialogue and interaction betweenshareholders and our directors aswell as the management team.Throughout the year, DIALOGplayed host to numerous mediacommunicators, investment analystsand fund managers and providedthis fraternity with the latest andtimely information about DIALOG.

We remain committed to ourresponsible business practices andwould adhere to the highest ethicalstandards in our business approachand dealings with our customers,suppliers, the Government andstakeholders in general.

1. Tuition at Selayang.

2. MyHarapan Youth Camp in Selayang.

3. Skills training by Advisory Council ofMyKasih in Kayu Ara.

4. MyKasih Launching with ConocoPhillipsat Sungai Udang, Melaka.

5. Launching of food aid programme atGaint Bandar Kinrara in Puchong.

6. DIALOG’s Bowling Tournament.

7. Planting mangrove seedlings inconjunction with Earth Hour at KualaSelangor Nature Park.

6 7

PEOPLE& PERFORMANCE

As a dynamic organisation, we will continue to build a great team ofemployees by fostering the right work environment because webelieve that great people drive great performance.

40

Share Performance

SUMMARY OF MONTHLY SHARE INFORMATION FOR THE PERIOD FROM OCTOBER 2010 TO SEPTEMBER 2011

Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11

Opening Price (RM) 1.12 1.31 1.50 1.81 2.10 2.20 2.32 2.49 2.79 2.76 2.69 2.41Highest Price (RM) 1.31 1.57 1.89 2.29 2.42 2.40 2.58 2.84 2.88 2.76 2.79 2.50Lowest Price (RM) 1.11 1.29 1.48 1.81 2.04 2.13 2.30 2.42 2.62 2.41 2.20 1.79Closing Price (RM) 1.30 1.51 1.79 2.08 2.19 2.32 2.49 2.80 2.76 2.71 2.40 2.25Volume (BoardLot of 100 units) 1,384,432 1,526,439 1,608,763 3,337,614 2,025,688 2,058,579 1,753,343 1,216,152 1,218,012 1,394,553 2,546,856 2,116,040

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

0.00

0.35

0.70

1.05

1.40

1.75

2.10

2.45

2.80

3.15

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

VolumeFBM KLCIIndex

ClosingPrice

Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11

Volume Closing Price FBM KLCI Index


Schedule of Share Buy-Back

DISCLOSURE IN ANNUAL REPORTIN COMPLIANCE WITH APPENDIX 12D OF THE MAIN MARKET LISTING REQUIREMENTS

During FY2011, DIALOG purchased 4,488,300 of its own ordinary shares from the open market. All the sharespurchased were retained as treasury shares and none of the treasury shares held were resold nor cancelled by theCompany in FY2011. Details of the purchases of own shares for FY2011 are as follows:

Purchase Price Per ShareAverage Cost

No. Of Shares Lowest Highest Per Share* Total CostMonth Purchased RM RM RM RM

July 2010 1,500,000 1.040 1.080 1.057 1,585,814August 2010 1,600,000 1.070 1.090 1.090 1,744,441September 2010 – – – – –October 2010 300,000 1.120 1.120 1.124 337,309November 2010 – – – – –December 2010 1,038,300 1.580 1.600 1.597 1,658,237January 2011 50,000 2.100 2.100 2.109 105,451February 2011 – – – – –March 2011 – – – – –April 2011 – – – – –May 2011 – – – – –June 2011 – – – – –

TOTAL for FY2011 4,488,300 1.040 2.100 1.210 5,431,252

* Average cost per share is inclusive of transaction costs.

As at 30 June 2011, a total of 22,744,971 ordinary shares were held as treasury shares.

Subsequent to FY2011, between 1 July 2011 and 30 September 2011, the Company purchased an additional 90,000of its own ordinary shares from the open market for a total consideration of RM 229,669.

As a result, a balance of 22,834,971 ordinary shares was retained as treasury shares as at 30 September 2011.

42

Enhancing Shareholders’ Value

New Shares Cumulative Number Of Initial CostFinancial Issued To A Shares Held By A Of InvestmentYear Particulars Shareholder Shareholder Of A Shareholder

1996 Initial Public Offer at 1,000 RM2,750RM2.75 per share

2000 Bonus issue : 4 for 5 800 1,8002000 Bonus issue : 2 for 3 1,200 3,0002001 Bonus issue : 2 for 5 1,200 4,2002002 Bonus issue : 1 for 5 840 5,0402004 Bonus issue : 1 for 5 1,008 6,0482004 Share split of 1 into 10 – 60,4802006 Special share dividend : 1,209 61,689

1 for 502009 Special share dividend : 1,233 62,922

1 for 502010 Bonus issue: 2 for 5 25,168 88,090

Current Investment Of AShareholder

Total number of shares of RM0.10 each held 88,090Closing share price on 30 September 2011 RM2.25Market value of shares held RM198,203Cumulative gross dividends received/receivable (FY1996 to FY2011) RM18,040Total value as at 30 September 2011 RM216,243

Total returns over 16 years (gross) 7,763%Compounded annual growth rate (CAGR) from 1996 to 2011 34%


Shareholders’ Information as at 30 September 2011

Authorised Share Capital : RM250,000,000Issued and Paid-up Share Capital : RM199,636,433.30No. of Shareholders : 16,930Class of the Shares : Ordinary Shares of RM0.10 eachVoting Rights : One Vote per ordinary share (On a poll)

DISTRIBUTION SCHEDULE OF SHARES AS AT 30 SEPTEMBER 2011

No OfHolders Total Holdings Holdings * % *

2,075 Less than 100 98,915 0.012,050 100 to 1,000 1,265,040 0.068,640 1,001 to 10,000 38,452,322 1.953,293 10,001 to 100,000 100,887,381 5.11867 100,001 to less than 5% of issued shares 1,236,284,870 62.643 5% and above of issued shares 596,540,834 30.23

16,928 1,973,529,362 100.00

Note:* Excluding a total of 22,834,971 shares bought-back by Dialog Group Berhad and retained as treasury shares as at 30 September 2011.

THIRTY SECURITIES ACCOUNT HOLDERS HAVING THE LARGEST NUMBER OF ORDINARYSHARES AS AT 30 SEPTEMBER 2011

Name Of Account Holders Holdings % *

1. Citigroup Nominees (Tempatan) Sdn Bhd 235,313,445 11.92< Employees Provident Fund Board >

2. Cimsec Nominees (Tempatan) Sdn Bhd 190,551,540 9.66< Pledged Securities Account For Wide Synergy Sdn Bhd >

3. Cimsec Nominees (Tempatan) Sdn Bhd 170,675,849 8.65< Pledged Securities Account For Azam Utama Sdn Bhd >

4. Azam Utama Sdn Bhd 49,551,342 2.51

5. Lembaga Tabung Haji 35,037,300 1.78

6. Abdul Rashid Hussain 32,000,000 1.62

7. Citigroup Nominees (Tempatan) Sdn Bhd 26,639,700 1.35< Employees Provident Fund Board (Nomura) >

8. Amanahraya Trustees Berhad 25,018,900 1.27< Skim Amanah Saham Bumiputera >

9. Cimsec Nominees (Tempatan) Sdn Bhd 23,473,758 1.19< CIMB Bank For Ngau Boon Keat (MM0592) >

10. Hasanuddin Bin Abdul Hamid 22,442,536 1.14

44

Shareholders’ Information as at 30 September 2011

Name Of Account Holders Holdings % *

11. Amanahraya Trustees Berhad 21,837,700 1.11< Public Islamic Optimal Growth Fund >

12. F.I.T. Nominees (Asing) Sdn Bhd 21,194,940 1.07< Pledged Securities Account For Grandfine International Ltd (ZZ612-006) >

13. Amsec Nominees (Tempatan) Sdn Bhd 20,310,000 1.03< Impresif Matrik Sdn Bhd (7351-1501) >

14. Valuecap Sdn Bhd 18,030,000 0.9115. HSBC Nominees (Asing) Sdn Bhd 17,127,700 0.87

< HSBC-FS For LEGG Mason Western Aset Southeast Asia SpecialSituations Trust (201061) >

16. Cimsec Nominees (Tempatan) Sdn Bhd 16,574,400 0.84< CIMB For GMC Sdn Bhd (PB) >

17. Amanahraya Trustees Berhad 15,930,000 0.81< Public Islamic Select Treasures Fund >

18. Amanahraya Trustees Berhad 15,886,600 0.80< Public Index Fund >

19. HSBC Nominees (Asing) Sdn Bhd 15,702,700 0.80< Exempt An For JPMorgan Chase Bank National Association (Norges Bk Lend) >

20. Cimsec Nominees (Tempatan) Sdn Bhd 15,100,000 0.77< Pledged Securities Account For Impresif Matrik Sdn Bhd >

21. Citigroup Nominees (Tempatan) Sdn Bhd 13,865,329 0.70< Employees Provident Fund Board (KIB) >

22. Amanahraya Trustees Berhad 13,383,800 0.68< Public Islamic Select Enterprises Fund >

23. HSBC Nominees (Asing) Sdn Bhd 13,321,900 0.68< Exempt An For BNP Paribas Securities Services >

24. Citigroup Nominees (Tempatan) Sdn Bhd 13,231,906 0.67< Employees Provident Fund Board (CIMB Prin) >

25. Amanahraya Trustees Berhad 13,177,400 0.67< Amanah Saham Malaysia >

26. Amsec Nominees (Tempatan) Sdn Bhd 13,141,935 0.67< AmTrustee Berhad For CIMB Islamic Dali Equity Growth Fund (UT-CIMB-Dali) >

27 Amanahraya Trustees Berhad 12,849,400 0.65< PB Growth Fund >

28. Citigroup Nominees (Tempatan) Sdn Bhd 12,353,172 0.63< Exempt An For Prudential Fund Management Berhad >

29. HSBC Nominees (Asing) Sdn Bhd 12,338,200 0.63< Exempt An For JPMorgan Chase Bank National Association (Netherlands) >

30. Public Nominees (Tempatan) Sdn Bhd 12,138,000 0.62< Pledged Securities Account For GMC Sdn Bhd (S14) >

Notes:The above list is according to the Record of Depositors (without aggregating the number of ordinary shares from different securities accountsbelonging to the same person).

* Excluding a total of 22,834,971 shares brought-back by Dialog Group Berhad and retained as treasury shares as at 30 September 2011.


INFORMATION ON SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES)AS AT 30 SEPTEMBER 2011

Name Of Substantial Direct Interest Deemed InterestShareholders No. % * No. % *

Employees Provident Fund Board 310,808,539 1 15.75 – –

Azam Utama Sdn Bhd 220,954,162 1 11.20 – –

Wide Synergy Sdn Bhd 208,879,340 1 10.58 – –

Ngau Boon Keat 29,095,740 1 1.47 497,961,657 2 25.23

Notes:1 Shares are held in own name and/or nominee account(s).2 Deemed interested by virtue of his interest in Azam Utama Sdn Bhd, Wide Synergy Sdn Bhd, GMC Sdn Bhd and WRN Sdn Bhd and interests

held by his spouse and children.

* Excluding a total of 22,834,971 shares bought-back by Dialog Group Berhad and retained as treasury shares as at 30 September 2011.

DIRECTORS' SHAREHOLDINGS AS AT 30 SEPTEMBER 2011

Direct Interest Deemed InterestName Of Directors No. % * No. % *

Ngau Boon Keat 29,095,740 1 1.47 497,961,627 2 25.23

Chan Yew Kai 5,887,221 1 0.30 – –

Dato' Mohamed Zakri Bin Abdul Rashid 1,147,288 1 0.06 164,276 3 0.01

Dr Junid Bin Abu Saham 3,140,559 1 0.16 78,540 4 0.00

Datuk Oh Chong Peng – – – –

Chew Eng Kar 1,685,572 1 0.09 3,611,014 5 0.18

Kamariyah Binti Hamdan 736,962 1 0.04 101,959 3 0.01

Ja'afar Bin Rihan – – – –

Zainab Binti Mohd Salleh 1,585,185 1 0.08 – –

Notes:1 Shares are held in own name and/or nominee account(s)2 Deemed interested by virtue of his interest in Azam Utama Sdn Bhd, Wide Synergy Sdn Bhd, GMC Sdn Bhd and WRN Sdn Bhd and interests

held by his spouse and children.3 Deemed interested by virtue of his/her spouse's interest.4 Deemed interested by virtue of his son's interest.5 Deemed interested by virtue of his interest in CEKinvst Sdn Bhd.

* Excluding a total of 22,834,971 shares bought-back by Dialog Group Berhad and retained as treasury shares as at 30 September 2011.

46

Corporate Governance Statement

Dialog Group Berhad’s (DIALOG) Directors and Management continue to be committed in maintaining good corporategovernance by constantly having in place an effective Corporate Governance framework which is in line with theMalaysian Code on Corporate Governance. The principles and best practices of corporate governance are carriedout across the Group to ensure that high standards of transparency, accountability and integrity are attained inmanaging the Group’s business. The Board believes that having a strong corporate governance framework is the keyto enhancing sustainable shareholders’ value and the Group’s financial performance as well as protectingstakeholders’ interests.

BOARD OF DIRECTORS

Board Composition and Balance

The current Board has nine (9) members, comprising four (4) Independent Non-Executive Directors, one (1) Non-Independent Non-Executive Director and four (4) Executive Directors. Cik Siti Khairon Binti Shariff retired as anIndependent Director, effective 24 November 2010. Following Cik Siti Khairon’s retirement, Encik Ja’afar Bin Rihanwas appointed to the Board on 25 November 2010 as a Non-Independent Non-Executive Director, representingEmployees Provident Fund Board (EPF), which is a substantial shareholder of DIALOG.

DIALOG believes that the current Board’s composition and size is deemed to be an effective team for the Group.There is a good balance due to the presence of the four (4) Independent Non-Executive Directors and whereas allthe Non-Executive Directors are free of management obligations and free from any relationships that could materiallyinterfere with the exercise of their independent judgment.

The Independent Directors provide a strong independent element on the Board where all matters are reviewed withbalance and fairness. Among the non-executive directors is a representative from the Employees Provident Fund(EPF). His independent judgments together with the judgments of the Independent Directors are important in ensuringthat the strategies proposed by Management are fully discussed and intently deliberated, and thus ensuring in thelong term, the interest of all stakeholders of the Group is safeguarded.

The Directors with their different backgrounds and specialisation, collectively bring with them a wide range ofexperience and expertise from engineering, construction, marketing, accounting, finance, economics, legal, corporateto general management disciplines suitable for managing the Group’s businesses in the oil, gas and petrochemicalindustry. A brief profile of each Director is presented on pages 10 to 13 of this Annual Report.

Mr Ngau Boon Keat and Mr Chan Yew Kai are the Executive Chairman and President and Chief Operating Officerrespectively of the Group. Collectively, given their years of experience in the oil, gas and petrochemical industry andtheir track record capabilities to show leadership, entrepreneurship skills and business acumen, the Board believesthat this arrangement is in the best interest of the Group.

Dato’ Mohamed Zakri Bin Abdul Rashid has served the Group as a senior independent non-executive Director, andshould there be any concerns pertaining to the Group, he will be the main contact person. Any concerns or queriesmay be sent to the DIALOG’s registered address, or to Dato’ Mohamed Zakri’s email address [email protected].


Meetings

During the year under review (FY2011), six (6) meetings of the Board were held and all Directors have complied withthe requirement in respect of board meetings attendance as provided in the DIALOG’s Articles of Association.

Details of the Directors’ attendance from July 2010 to June 2011 are set out below:

No. Of Meetings Percentage OfName Attended Attendance (%)

Ngau Boon Keat 6/6 100Chan Yew Kai 6/6 100Dato’ Mohamed Zakri Bin Abdul Rashid 6/6 100Dr Junid Bin Abu Saham 6/6 100Datuk Oh Chong Peng 5/6 83Chew Eng Kar 6/6 100Kamariyah Binti Hamdan 6/6 100Ja’afar Bin Rihan 2/2* 100Siti Khairon Bt Shariff 4/4** 100Zainab Binti Mohd Salleh 6/6 100

* Encik Ja’afar Bin Rihan was appointed as a Director on 25 November 2010.** Cik Siti Khairon Binti Shariff retired as a Director effective 24 November 2010.

The Board has delegated specific responsibilities to six subcommittees, namely the Audit Committee, ManagementCommittee, Nomination Committee, Remuneration Committee, Risk Advisory Committee and Employees’ ShareOption Scheme (ESOS) Committee to assist the Board in managing the Group’s businesses.

Supply and Access to Information

Information supplied to the Board is relevant and timely. These information not only contains historical, bottom lineand financial oriented in nature, but are also broader in nature and of intrinsic value to enable the Board to reviewmatters to be deliberated and to participate in the discussions during meetings.

Information is provided to the Board in the form of quarterly financial results, progress reports of the core businesses,corporate development reports, regulatory updates, business development, audit reports, risk management reportsand updates on corporate social responsibility. Chief executive officers of various core businesses are invited toprovide additional insights and deliberations to their areas of responsibilities during the Board meetings.

Prior to the meetings of the Board and Board Committees, Board papers which include the agenda and reportsrelevant to the issues of the meetings covering the areas of quarterly financial results, progress reports of the corebusinesses, corporate development, regulatory updates, business development, audit reports, risk managementreports and updates on corporate social responsibility are circulated to all Directors.

All Directors have direct and unrestricted access to the advice and services of the Company Secretaries. This willensure that they have ready and unrestricted access to all information within the Group. The Directors are also ableto receive advice and services from the external auditors and other independent professionals upon their request.

48

Appointments to the Board

The Nomination Committee has been established to take on the responsibility of making recommendations forappointments to the Board. The Nomination Committee will annually evaluate the effectiveness of the Board andalso the performance of the Directors. They are also responsible for assessing the suitability of proposed boardmembers and to submit their recommendations to the Board.

The Nomination Committee comprises two independent non-executive directors. The committee is chaired by Dato’Mohamed Zakri Bin Abdul Rashid, while the other member is Dr Junid Bin Abu Saham.

For FY2011, the committee met twice to review the composition of the Board, the mix of skills and experience of theBoard members and their individual performance for the past year as well as new appointments to the Board.

Directors’ Training

For FY2011, the Directors have attended various seminars and briefings to enhance their knowledge with the latestdevelopment in the industry and to better enable them to fulfill their responsibilities. These seminars and trainingprogrammes range from many areas, which include key changes to the listing requirements, corporate governanceissues, financial reporting, tax, strategic planning, developments in the oil and gas industry, and economic outlook.The Board acknowledges that continuous education is essential for the Directors to keep abreast with the dynamicenvironment in which the Group operates. The Directors will continue to undergo relevant training programmes tofurther enhance their skills and knowledge as well as awareness of development in the industry that inevitably cancontribute to the development of the Group.

Re-election of Directors

DIALOG’s Articles of Association provides for all directors, including the managing director, to submit themselves forre-election at least once every three years. Directors appointed during the year are required to retire at the followingAnnual General Meeting (AGM) but are eligible for re-election.

DIRECTORS’ REMUNERATION

The Level and Make-up of Remuneration

The Group has a policy for remunerating directors for their responsibilities and contributions in leading and managingthe Group’s business operations. The remuneration package is structured to offer reward in tandem with the Group’sfinancials and the individual’s performance.

Remuneration Procedure

The Remuneration Committee is responsible for recommending to the Board a remuneration framework and package,for the Executive Directors and Senior Management, that are considered necessary to attract, retain and motivate keypersonnel needed for the continual success of the Group.

This Committee is chaired by Mr Ngau Boon Keat and comprises a majority of non-executive directors namely Dato'Mohamed Zakri Bin Abdul Rashid and Dr Junid Bin Abu Saham.



The Remuneration Committee met once during the FY2011.

The remuneration awarded to the Executive Directors consists of salary, allowance, employers' contribution to theEmployees Provident Fund, bonus, incentive, ESOS and other benefits accorded such as company cars, drivers,insurance, hospitalisation and club membership.

Non-Executive Directors' remuneration package includes directors’ fees, allowances and other benefits.

The directors’ remuneration for FY2011 is presented in DIALOG’s Audited Financial Statements on page 81. TheBoard considers that the transparency and accountability aspects of corporate governance as applicable to directors’remuneration are appropriately served by the “band disclosure” mode.

RELATION WITH SHAREHOLDERS

Dialogue Between DIALOG and Investors

The Group recognises the importance of effective constant open communication with shareholders and investors.Information on the Group’s business activities and financial performance is disseminated through various mediumsincluding announcements of quarterly results, annual report, forums, company visits, site visits, annual generalmeetings, exhibitions and other company activities.

DIALOG’s announcements of quarterly results and annual report are key channels of communication with itsshareholders and investors. DIALOG strives to keep its announcements of quarterly results and annual report asinformative, comprehensive, and user friendly as possible, as well as provide factual descriptions on businessoperations, figures and charts on the performance of the Group.

Interpersonal communication is also important to DIALOG. Therefore regular company and site visits, briefings,meetings, dialogues and teleconferences were conducted with institutional investors, fund managers, analysts,investors and media representatives to give them a better understanding of the business and financial performanceof the Group. In FY2011, the Chairman and the Executive Directors met with 219 representatives from various fundmanagement and investment companies, investment banks and other stakeholders.

DIALOG has an established homepage, www.dialogasia.com, where shareholders and investors can have access toinformation on the Group. The homepage is constantly updated to incorporate the latest developments of the Group.DIALOG’s quarterly financial results announcements, general announcements and press releases are also postedon the homepage. The homepage has an e-news section where shareholders and anyone who is interested mayregister to obtain DIALOG’s announcements via email. Investors’ queries relating to financial performance or companydevelopments can be directed to Mr Chew Eng Kar, Director, Corporate Services (Tel: 603 7946 6168 or Email:[email protected]) or Puan Zainab Mohd Salleh, Group Financial Controller (Tel: 603 7955 1199 or Email:[email protected]), and other company related queries can be directed to Ms Chay Siew Kim, CompanySecretary (Tel: 603 7946 6130 or Email: [email protected]).

50

Annual General Meeting

The AGM is an excellent opportunity for the Company’s shareholders to have a dialogue session with the Board ofDirectors. Shareholders are encouraged to attend and participate in a questions and answers session during theAGM. After the conclusion of the AGM, it is a practice of DIALOG to have about an hour of open discussion with itsshareholders on any issue with regard to the Group including issues of strategy and performance, and macro viewsof the oil, gas and petrochemical industry. An exhibition is usually held during the AGM where important informativecharts are displayed to explain to shareholders DIALOG’s core businesses, corporate strategies, performance andmajor developments.

CORPORATE SOCIAL RESPONSIBILITY

Whilst DIALOG is committed to carrying out its business responsibly in accordance with the best business practices,DIALOG is mindful of the interests of the community, its employees and the environment, and fulfilling itsresponsibilities to the marketplace. DIALOG's Directors remained committed to their involvement and contributionto our socially responsible initiatives targeting food aid and rehabilitation efforts. DIALOG’s support to community-based MyKasih Programme has now reached out to 755 households in 12 locations all over Malaysia where DIALOGoperates, and growing.

DIALOG is proud that the technology developed by one of its subsidiaries is now being adopted by more and morecorporations and individuals locally as well as those residing abroad. Provided to MyKasih Foundation at no cost toadminister the MyKasih Programme, the versatility of the technology, the accuracy and accountability of thedistribution system, all in alignment with the best practices in corporate governance, continued to attract and allowdonors to own and brand the MyKasih programme as their own.

In total, MyKasih Foundation reaches out to 9,538 households in 83 locations across Malaysia.

ACCOUNTABILITY AND AUDIT

Audit Committee

The members of the Audit Committee consist of four (4) Independent Non-Executive Directors. They are Dato’Mohamed Zakri Bin Abdul Rashid (Chairman), Dr Junid Bin Abu Saham, Datuk Oh Chong Peng and Puan KamariyahBinti Hamdan. For FY2011 the terms of reference of the Audit Committee is highlighted on pages 52 and 53.

Risk Management Framework

The Group’s risk management framework comprise of Risk Advisory Committee and Risk Management Committee,working very closely with the Group’s internal audit.

The Risk Advisory Committee is responsible for the establishment of policies and recommends measures thusproviding advice to the Audit Committee on Risk Management issues pertaining to the Group. The Risk AdvisoryCommittee also oversees the promotion of risk management related education and training for the Group’semployees. The Risk Advisory Committee is chaired by Dr Junid Bin Abu Saham. For financial year 2011, the RiskAdvisory Committee held one (1) meeting. There were various discussions on risk management, namely review ofthe Group’s Risk Management Policy and updates and review of risk management activities.

The Risk Management Committee is responsible for recommending the risk management policies to the Risk AdvisoryCommittee, setting procedures and oversee the whole risk management process and compliance. To promote abetter understanding of the importance of risk management, risk awareness sessions were also conducted at thebusiness and operational level as an ongoing process. For FY2011, the Risk Management Committee continued toreview key operational and project risks and the corresponding risk mitigating controls for adequacy and effectiveness.



The group has adopted a group wide risk management process for the assessment and management of risks. Wherea potential risk is assessed as material, it is reported and reviewed by the senior management.

Financial Reporting

The Board is committed to the preparation of financial statements that present a balanced and meaningful assessmentof the Group’s operations and prospects each time it releases its quarterly and annual financial results. The Board isassisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financialreporting.

Internal Control

The Internal Control System of the Group is considered to be adequate and has not experienced any material losses,contingencies or uncertainties during financial year 2011 that would require disclosure in the Group’s financialstatements. The Group will continue with the process of undertaking rigorous risk assessments on all existingbusinesses and new business opportunities.

The Internal Control Statement set out on pages 56 to 58 of this Annual Report provides an overview of the state ofinternal controls within the Group.

Relationship with the Auditors

Through the Audit Committee of the Board, the Group has established transparent and appropriate relationship withthe Group’s auditors. The Audit Committee had convened two (2) meetings with the external auditors without thepresence of executive directors and officers to discuss audit plans and findings.

DIRECTORS’ RESPONSIBILITY IN FINANCIAL REPORTING

The Board is satisfied that in preparing the financial statements of the Group for the financial year ended 30 June 2011,the Group has:

• Ensured compliance with the approved applicable accounting standards.• Adopted and consistently applied appropriate accounting policies• Made estimates and judgments which are reasonable and prudent

The Board is responsible for ensuring the proper maintenance of accounting records, disclosing with reasonableaccuracy the financial position of the Group. In addition, the Board is responsible for taking reasonable steps tosafeguard the assets of the Group and to detect as well as prevent fraud and other irregularities.

CONCLUSION

DIALOG has complied with the Code of Corporate Governance for the financial year under review save for thedisclosure of details of the remuneration of each director, which the Board is of the view that the transparency andaccountability aspects of corporate governance as applicable to directors’ remuneration are appropriately served bythe “band disclosure” mode.

52

Audit Committee Report

The Audit Committee (The Committee) provides assistance to the Board of Directors in ensuring that the financial,accounting records, internal control systems and the reporting practices of the Group are at the acceptable levelbased on the legislation and requirement set by the local authorities with regards to a listed company.

COMPOSITION

The current members of the Audit Committee are as follows:

(a) Dato’ Mohamed Zakri Bin Abdul Rashid(Chairman, Independent Non-Executive Director)

(b) Dr Junid Bin Abu Saham(Independent Non-Executive Director)

(c) Datuk Oh Chong Peng(Independent Non-Executive Director and a member of the Malaysian Institute of Accountants)

(d) Puan Kamariyah Binti Hamdan(Independent Non-Executive Director)(appointed effective 19 August 2010)

The Secretary of the Committee is Ms Chay Siew Kim, who is also the Joint Company Secretary.

TERMS OF REFERENCE

To fulfil its responsibilities and duties, the Committee shall review the following:

(a) The terms of reference for the Committee at least once every two (2) years;

(b) The audit scope and plan of the external auditors and the internal auditors, including any changes in the plannedscope of the audit plans;

(c) Significant audit findings during the financial year with Management, external auditors and internal auditors,including the status of previous audit recommendations;

(d) The external and internal audit reports to ensure that where major deficiencies in controls or procedures havebeen identified, appropriate and prompt remedial actions are taken by Management;

(e) Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activitiesor access to required information;

(f) Any nomination, appointment, resignation and performance of the external auditors;

(g) The Internal Audit Charter, budget and staffing;


(h) Business risk assessment and internal controls instituted;

(i) The establishment of an appropriate internal control framework, including information systems, and potentialenhancements;

(j) Investigation reports on any major defalcations, frauds and thefts within the Group;

(k) The quarterly results and year end financial statements, prior to the approval by the Board, focusing on:

• changes in or implementation of major accounting policies;• significant or unusual events; and• compliance with accounting standards and other legal requirements;

(l) Procedures in place to ensure that the Group is in compliance with the Companies Act, 1965, Main Market ListingRequirements of Bursa Malaysia Securities Berhad and other legislative and reporting requirements;

(m) Related party transactions and conflict of interest situations that may arise within the Company and/or the Groupincluding any transaction, procedures or course of conduct that raises questions of Management integrity;

(n) Any other activities consistent with its terms of reference, as the Committee or the Board deems necessary orappropriate;

(o) The appraisal or assessment of the internal audit function, approval of any appointment or termination of seniorstaff members and be informed of the staff movement within the internal audit function; and

(p) Where the Committee is of the view that a matter reported by it to the Board, has not been satisfactorily resolvedresulting in a breach of the requirement, the Committee must promptly report such matter to the Bursa MalaysiaSecurities Berhad.

TERM OF MEMBERSHIP

Members of theAudit Committee are appointed for an initial term of two (2) years after which they may be re-appointedon such terms as may be determined by the Board of Directors.

MEETINGS

The Audit Committee met six (6) times during the financial year 2011. The external auditors, other non-executivedirectors of the Company and the chief executive officers of the operating business units of the Group were invited,when appropriate, to attend the Audit Committee meetings to assist in its deliberations.

54

The details of attendance at the Audit Committee meetings during the financial year 2011 are as follows:

No. Name No. PercentageOf Meetings Of AttendanceAttended (%)

1 Dato’ Mohamed Zakri Bin Abdul Rashid 6/6 100%

2 Dr Junid Bin Abu Saham 6/6 100%

3 Datuk Oh Chong Peng 5/6 83%

4 Puan Kamariyah Binti Hamdan 5/5* 100%

* Puan Kamariyah Binti Hamdan was appointed as a member effective 19 August 2010.

AUTHORITY

The Committee shall have the authority to seek any information it requires from any officer or employee of the Groupand such officers or employees shall be instructed by the Board of the Company employing them to respond to suchenquiries. It is authorized to seek independent professional advice, as it considers necessary.

The Committee is authorised by the Board to investigate any activity within its responsibility and duties. TheCommittee shall submit a report to the Board detailing its findings and recommendations immediately after deliberatingon the findings of its enquires.

ACTIVITIES OF THE AUDIT COMMITTEE RELATING TO FINANCIAL YEAR 2011

The Audit Committee carried out the following activities in the discharge of its functions and duties for the financialyear 2011:

(a) Reviewed the quarterly and final audited financial statements of the Group;

(b) Reviewed the scope, functions and resources of the internal audit function;

(c) Reviewed and appraised the Group’s internal control systems and report to the Board of Directors on the InternalControl Statement of the Group;

(d) Reviewed the terms of reference of the audit committee, audit charter, audit procedures and audit plan;

(e) Reviewed the internal audit reports and adequacy and effectiveness of the management responses inimplementing the recommendations of the Internal Audit department;

(f) Reviewed the total risk management process for managing the risks associated with the Group’s businessactivities;

Audit Committee Report


(g) Reviewed related party transactions of the Group;

(h) Reviewed with the external auditors their audit scope, procedures and reporting requirements. Convened two (2)meetings with the external auditors without the presence of executive directors and officers; and

(i) Reviewed and verified the allocation of share options under the Dialog Group Employees’ Share Option Scheme(ESOS) as being in compliance with the criteria set out in the ESOS by-laws.

STATEMENT OF VERIFICATION ON ALLOCATION OF OPTIONS PURSUANT TO EMPLOYEES’SHARE OPTION SCHEME (ESOS)

TheAudit Committee has verified the allocation of options pursuant to the ESOS for the financial year 2011 and notedits compliance with the criteria for the allocation of options in accordance with the By-Laws of the Dialog Group ESOS.

INTERNAL AUDIT FUNCTION

The Board of Directors and theAudit Committee are assisted by the in-house Internal Audit Department in maintaininga sound system of internal controls. The Internal Audit Department reports to the Audit Committee in the performanceof its duties and is guided by its Audit Charter in its independent appraisal functions.

The primary role of internal audit is to provide independent assurance to the Board that:

(a) The Group’s policies and guidelines have been communicated, implemented and are working as intended; and

(b) Risk areas have been identified and there are effective internal control systems over all aspects of the Group’sbusiness and operations.

The Internal Audit Department is responsible for developing and monitoring an efficient and effective audit plan toprovide the Board with assurance that the systems of internal control of the Group achieve the following:

(a) The business is planned and conducted in an orderly, prudent, efficient and cost effective manner;

(b) Transactions and commitments are entered into in accordance with management’s authority;

(c) Management is able to safeguard the assets and control the liabilities of the Group, i.e. there are measures tominimise and to detect the loss from irregularities, frauds and errors; and

(d) The accounting and other records of the business provide complete, accurate and timely information.

During the financial year 2011, the Internal Audit Department conducted a total of eleven (11) audits and eight (8)follow-up/audit closure reviews. On-going actions were taken by the management to rectify the weaknesses identifiedin the reports. The direct costs incurred for the internal audit function in respect of the financial year 2011 amountedto RM338,714.

Going forward, the internal audit function will enhance its risk based auditing techniques, the level of staff expertise,internal controls and corporate governance processes to assist the Group to achieve its corporate goals.

56

Internal Control Statement

The Board of Directors affirms its responsibility for maintaining a sound and effective system of internal control. Thissystem is designed to:

(a) Safeguard shareholders’ investments and Group’s assets;

(b) Ensure that proper accounting records are maintained;

(c) Ensure that the financial information used within the business and for publication to the public is reliable; and

(d) Ensure compliance with applicable laws and regulation.

The internal control system is an ongoing process designed to meet the Group’s particular needs and to manage therisks associated with operations, financial and compliance.

The Directors are aware that internal controls can only provide reasonable and not absolute assurance against therisk of material errors, misstatement, fraud or occurrences of unforeseeable circumstances. The Directors constantlyreview the adequacy and integrity of the Group’s systems of internal control with the assistance of both the AuditCommittee and the Risk Advisory Committee. The Directors believe that the business and operation environment inDIALOG is conducive for the Group to accomplish its mission and business objectives.

KEY INTERNAL CONTROL PROCESSES

The key processes of the Group’s internal control include the following elements:

CONTROL ENVIRONMENT

Line of Reporting

Clear organisational structures with formally defined lines of responsibility and delegation of authority that act as acontrol mechanism in terms of lines of reporting and accountability.

Financial Authority Limits

Awell-defined financial limits of authority on all financial commitments for each level of management within the Group.The financial authority limits are subject to periodic review throughout the year so as to ensure their suitability forcontinuous implementation. Policies and procedures on such limits are documented to guide staff at all levels in theperformance of their duties.

RISK ASSESSMENT

Risk Management

The Group has in place a Risk Management Policy and practice which has taken into account ISO 31000:2009 RiskManagement Standard. The policy outlines a structured process to identify, analyse, evaluate, treat/mitigate as wellas monitor and report potential risks which may possibly be faced by the Group.

The Risk Advisory Committee (chaired by Dr Junid Bin Abu Saham, an Independent Non-Executive Director) and RiskManagement Committee are assisted by Risk Management Department, the operating unit which promotes andexecutes the risk management processes throughout the Group’s operations.


On a continuing basis, the Risk Management Department conducts risk awareness workshops and risk managementtrainings. The Risk Management Department also co-ordinates with all the operating units to regularly review andupdate the group risk register. Subsequently, potential major risks and mitigation plans and actions taken are reportedto the Risk Management Committee and Risk Advisory Committee. Refer to pages 50 and 51 (Corporate GovernanceStatement) for further details.

CONTROL ACTIVITIES

Internal Audit Function

Internal Audit Department is responsible to assist the Audit Committee in providing independent assessments on theadequacy, efficiency and effectiveness of internal control systems and ensuring operational compliance with standardoperating procedures within the Group.

The Internal Audit Department undertakes regular and systematic review of the internal controls, providing the AuditCommittee and the Board with sufficient independent assurance that the system of internal control is effective inidentifying and addressing potential risks.

Quality Management System Audit

Annual audit by internal and external quality auditors to ensure compliance with all requirements of the ISO 9001:2008certifications. The certifications serve as an assurance to customers of the delivery of the highest quality of productsand services by the Group.

Centralised Functions

Centralised control of selected key functions of the Group such as finance, accounts, contracting, procurement, legal,human resource, treasury and tax enables the management to minimise risk exposure and increase the efficiency andeffectiveness of business operations.

Human Resource Development

Proactive human resource development in recruitment, training and personal development of staffs at all levels.Training is provided on various areas of work such as knowledge on health and safety, technical training, both locallyand overseas to ensure staffs of all levels are proficient and competent in handling their job functions. Trainingprogrammes are also conducted for risk awareness and on implementation of total risk management process andprocedures as part of the Group’s efforts to foster a proactive risk management culture.

INFORMATION AND COMMUNICATION

Consolidated Financial Reporting

A financial system, which captures all financial transactions and generates periodic management financial reports formonitoring performance and for decision making.

Budgets and forecasts are used for planning, monitoring and controlling financial performance.

58

MONITORING

Management Visit

Directors and senior management conduct regular visits to project sites, overseas offices, customers and principals’offices to review the Group’s operations and gain better understanding to facilitate informed decision-making.

Third Party Audit

Third party audit is carried out by the project owners if required. These audit processes are conducted by joint venturepartners, alliance partners and also other relevant parties.

REVIEW OF THIS STATEMENT BY EXTERNAL AUDITOR

As required by the Bursa Securities’ Main Market Listing Requirements, the external auditors have reviewed thisStatement on Internal Control. Their review was performed in accordance with Recommended Practice Guide 5 (RPG5) issued by the Malaysian Institute of Accountants (MIA). Their review has been conducted to assess whether theStatement on Internal Control is both supported by the documentation prepared by or for the Directors andappropriately reflects the process the Directors have adopted in reviewing the adequacy and integrity of the systemof internal control for the Group.

RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or toform an opinion on the effectiveness of the Group’s risk and control procedures. Based on their review, the externalauditors have reported to the Board that nothing has come to their attention that causes them to believe that thisStatement is inconsistent with their understanding of the process the Board has adopted in the review of the adequacyand integrity of internal control of the Group.

CONCLUSION

The Internal Control System of the Group is considered to be adequate and has not experienced any material losses,contingencies or uncertainties during financial year 2011 that would require disclosure in the Group’s financialstatements. The Group will continue with the process of undertaking risk assessments on all existing businesses andnew business opportunities.

The Directors will continue to seek assurance on the effectiveness of the Group’s system of Internal Control and RiskManagement with a view to further enhance their effectiveness and to ensure new and additional risk arising fromchanges in the business and operating environment are adequately and timely dealt with.

Internal Control Statement


Corporate Information

BOARD OF DIRECTORS

Ngau Boon Keat (Executive Chairman)Chan Yew Kai (President and Chief Operating Officer)Dato’ Mohamed Zakri Bin Abdul Rashid (Independent Non-Executive Director)Dr Junid Bin Abu Saham (Independent Non-Executive Director)Datuk Oh Chong Peng (Independent Non-Executive Director)Chew Eng Kar (Director, Corporate Services)Kamariyah Binti Hamdan (Independent Non-Executive Director)Ja’afar Bin Rihan (Non-Independent Non-Executive Director)Zainab Binti Mohd Salleh (Group Financial Controller)

AUDIT COMMITTEE

Dato’ Mohamed ZakriBin Abdul Rashid(Chairman, IndependentNon-Executive Director)

Dr Junid Bin Abu Saham(Independent Non-ExecutiveDirector)

Datuk Oh Chong Peng(Independent Non-ExecutiveDirector)

Kamariyah Binti Hamdan(Independent Non-ExecutiveDirector)

JOINT COMPANYSECRETARIES

Zainab Binti Mohd SallehMIA 7672

Lim Hooi MooiMAICSA 0799764

Chay Siew KimMAICSA 7012266

REGISTERED OFFICE

109, Block G, Phileo Damansara 1No. 9, Jalan 16/1146350 Petaling JayaSelangor Darul EhsanMalaysiaTel No. : 6 03 7955 1199Fax No. : 6 03 7955 8989Homepage : www.dialogasia.com

SHARE REGISTRAR

Symphony Share RegistrarsSdn BhdLevel 6, Symphony HouseBlock D13, Pusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanMalaysiaTel No. : 6 03 7841 8000Fax No. : 6 03 7841 8008

STOCK EXCHANGE LISTING

Main Market of Bursa MalaysiaSecurities Berhad

AUDITORS

BDOChartered Accountants12th Floor, Menara Uni-Asia1008, Jalan Sultan Ismail50250 Kuala LumpurMalaysia

SOLICITORS

Mah-Kamariyah & Philip Koh3A07, Block BPhileo Damansara IINo. 15, Jalan 16/1146350 Petaling JayaSelangor Darul EhsanMalaysia

PRINCIPAL BANKERS

Public Bank BerhadRHB Bank BerhadMalayan Banking BerhadStandard Chartered Bank MalaysiaBerhad

60

Group Corporate Directory

MALAYSIA

Head Ofice109 Block GPhileo Damansara 1No. 9 Jalan 16/1146350 Petaling JayaSelangor Darul EhsanMalaysiaTel : 6 03 7955 1199Fax : 6 03 7955 8989Homepage :www.dialogasia.com

Terengganu OfficeLot 3739, Kg. LabohanMukim Kertih, Daerah Kemaman24300 KertihTerengganu Darul ImanMalaysiaTel : 6 09 826 6833Fax : 6 09 826 6827

MelakaOffice and WorkshopNo 15 & 17, Jalan TP4Tmn Perindustrian Bukit RambaiFasa 6, Mukim Bukit Rambai75250 MelakaMalaysiaTel : 6 06 351 9051Fax : 6 06 351 9070

Fabrication YardsLot 486Mukim Teluk Panglima GarangDaerah Kuala Langat42600 Selangor Darul EhsanMalaysiaTel : 6 03 3191 4068Fax : 6 03 3191 4081

Lot 1480, B12 Mukim SetulKawasan Perindustrian Nilai71800 NilaiNegeri Sembilan Darul KhususMalaysiaTel : 6 06 799 2557Fax : 6 06 799 2553

Plo 112, Jalan Firma 1/5Tebrau Industrial Estate81100 Johor BahruJohor Darul TakzimMalaysiaTel : 6 07 354 1068Fax : 6 07 354 1093

WorkshopsP.T. 8920 Kawasan Bukit LabohanMukim KertihDaerah Kemaman24300 KertihTerengganu Darul ImanMalaysiaTel : 6 09 826 6050Fax : 6 09 826 5969

Lot 6Kawasan Perindustrian GebengMukim Sg. Karang26080 KuantanPahang Darul MakmurMalaysiaTel : 6 09 580 1212Fax : 6 09 580 1213

SINGAPORE

Office10 Tuas Avenue 16Singapore 638931Tel : 65 6336 3377Fax : 65 6338 9929

INDONESIA

Office and WorkshopJl. Tekno BoulevardBlok B 6 A Jababeka 3Cikarang Utara - BekasiJawa Barat 17530IndonesiaTel : 62 21 8984 4541Fax : 62 21 8984 4542

THAILAND

Office65/10 Chaeng Wattana Soi 1Taladbangkhen, Laksi, Bangkok10210 ThailandTel : 66 2 973 5132Fax : 66 2 973 5133

Office and Workshop22/9 Soi Chaklukya 4Watchaklukya RoadTambol HuaypongAmphur Muang Rayong, Rayong21150 ThailandTel : 66 3868 5123

66 3868 558366 3868 5786

Fax : 66 3868 5124

CHINA

OfficeUnit 1608, Building GHuiyuan International MansionNo. 8, Bei Si Huan Zhong LuChaoyang DistrictBeijing 100101, ChinaTel : 86 10 8498 5849-16Fax : 86 10 8498 5849-15

VIETNAM

OfficeUnit 1225, 12th FloorPetro Vietnam Tower1-5 Le Duan StreetBen Thanh WardDistrict 1Ho Chi Minh CityVietnamTel : 84 8 5404 6868Fax : 84 8 5404 6568

HONG KONG

Office12F, The Lee Gardens33 Hysan AvenueCauseway BayHong KongTel : 852 2598 5234Fax : 852 2598 7500

INDIA

OfficeNo. 13/1, Techno Enclave, Sector - 1Hi-Tech City, Madhapur, Hyderabad500 081. A.P. IndiaTel : 91 40 4032 6770Fax : 91 40 4032 6780

SAUDI ARABIA

Office and WorkshopP.O. Box 10990Jubail Industrial City 31961Kingdom of Saudi ArabiaTel : 966 3340 7740/42Fax : 966 3340 7741

UNITED KINGDOM

OfficeUnit 4, Raven CloseBridgend Industrial EstateBridgend, CF31 3RFWales, United KingdomTel : 44 1656 645 856Fax : 44 1656 646 541

UNITED STATESOF AMERICA

Office1311 C Avenue ASouth Houston , TX 77587United States of AmericaTel : 1 832 668 5726Fax : 1 281 501 2741

AUSTRALIA

Office7 Burgary Court, Osborne ParkPerth, WA 6017AustraliaTel : 61 8 9244 9899Fax : 61 8 9244 9866

Office and WorkshopEnergyworks Portlink Industrial Park111 Benjamin PlaceLytton, QLD 4178AustraliaTel : 61 7 3900 4500Fax : 61 7 3348 2785

NEW ZEALAND

Office and WorkshopDevon Road, Private Bag 2053New Plymouth 4342New ZealandTel : 64 6 759 5252Fax : 64 6 759 5253


List of Properties as at 30 June 2011

Net BookDate of Approximate Land Area/ Value As At

Existing Acquisition By Age Of Build Up Area 30-Jun-11Use Tenure The Group Building (Sq. Ft.) RM ‘000

1 DIALOG CORPORATE SDN BHD Office Freehold 16-Aug-95 13 years 18,656 4,869G9-G, G9-1, G9-2, G9-3, G9-3A, land andG9-5, G9-6, G9-7 buildingBlock G, Phileo Damansara 1No. 9, Jalan 16/1146350 Petaling JayaSelangor Darul Ehsan

2 DIALOG CORPORATE SDN BHD Office Freehold 15-Jun-98 13 years 2,518 504Block G8-7, Phileo Damansara 1 land andNo. 9, Jalan 16/11 building46350 Petaling JayaSelangor Darul Ehsan

3 DIALOG FABRICATORS SDN BHD Fabrication Leasehold 28-Dec-90 20 years 232,625/ 3,038P.T. 1480, Lot B12, Mukim Setul Workshop land and 37,200Kawasan Perindustrian Nilai building71800 Seremban expiring onNegeri Sembilan Darul Khusus 20 Aug 2089

4 DIALOG FABRICATORS SDN BHD Regional Freehold 16-Jan-02 6 years 215,601 5,173Lot 3739, Mukim Kertih Office and land andDaerah Kemaman Workshop buidlingTerengganu Darul Iman

5 DIALOG FABRICATORS SDN BHD Vacant Leasehold 10-Jul-02 – 43,551 450Lot 5-HS (M)- PT 6337 landMukim Sungai Karang expiring onKuantan 16 Apr 2063Pahang Darul Makmur

6 DIALOG FABRICATORS SDN BHD Workshop Freehold 10-Jul-02 18 years 108,900 1,876Lot 6-HS (M)- PT 6338 land andMukim Sungai Karang buildingKuantanPahang Darul Makmur

7 SAGA DIALOG SDN BHD Vacant Leasehold 21-Jul-86 – 87,120 70HS (M) 418 PT 31 landBatu 4, Mukim Kapar expiring onDaerah Klang 25 Jul 2072Selangor Darul Ehsan

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8 ORIENTAL VALLEY SDN BHD Petrol Freehold 17-Mar-00 10 years 114,868 4,295Lot 1939, 18 1/4 Mile Station land andJalan Semenyih, Mukim Semenyih buildingDaerah Hulu Langat43000 KajangSelangor Darul Ehsan

9 CORAK DAHLIA SDN BHD Vacant Freehold 28-Apr-00 – 86,112 5,232Geran 1476, Lot 236 & landGeran 1477, Lot 237Mukim SerembanDaerah SerembanNegeri Sembilan Darul Khusus

10 DIALOG FABRICATORS SDN BHD Fabrication Land and 4-Jun-98 12 years 471,115 796PT 8920, Mukim Kertih Workshop buildingDaerah KemamanTerengganu Darul Iman

11 SENYUM BESTARI SDN BHD Petrol Freehold 26-May-00 7 years 113,256 15,374Lot 1011, Jalan Lingkaran Tengah 2 Station land andBatu 7 1/2, Ulu Klang building68000 AmpangSelangor Darul Ehsan

12 CENDANA SUTERA SDN BHD Petrol Leasehold 15-Sep-00 8 years 64,560 4,114Lot 15051, Jalan Langat-Banting Station land andKM8, Kampung Johan Setia buildingMukim Klang expiring on41300 Kelang 18 Jul 2075Selangor Darul Ehsan

13 IDAMAN TROPIKAL SDN BHD Petrol Freehold 16-Aug-01 9 years 76,235 3,561Lot 0001678 Station land andJalan Persiaran Senawang 1 buildingSenawang Industrial ParkMukim Ampangan70400 Daerah SerembanNegeri Sembilan Darul Khusus





14 DIALOG SERVICES PTE LTD Office cum Leasehold 10-Aug-04 26 years 54,704/ 3,30929, Gul Lane warehouse land and 19,334Singapore 629423 building

expiring on31 Mar 2019

15 OVERSEAS MANUFACTURING Vacant Leasehold 18-Apr-06 – 42,194 914(JOHOR) SDN BHD landPLO 111, Jalan Firma expiring on1/5, Tebrau Industrial Estate 14 Feb 205381100 Johor BahruJohor Darul Takzim

16 OVERSEAS MANUFACTURING Workshop Leasehold 18-Apr-06 18 years 60,497/ 2,258(JOHOR) SDN BHD & Office land and 3,782PLO 112, Jalan Firma building1/5, Tebrau Industrial Estate expiring on81100 Johor Bahru 5 Sep 2051Johor Darul Takzim

17 OVERSEAS TECHNICAL Studio Leasehold 18-Apr-06 32 years 700 620ENGINEERING AND Apartment land andCONSTRUCTION PTE LTD building259, Arcadia Road expiring on# 02-02, Hillcrest Arcadia 1 Dec 2074Singapore 289852

18 DIALOG PROPERTIES SDN BHD Vacant Freehold 2-Apr-07 – 53,508 29,378H.S. (D) 183243, PT No. 44584 landMukim of Sg. BulohDaerah PetalingSelangor Darul Ehsan

19 DIALOG FABRICATORS SDN BHD Fabrication Freehold 1-Mar-07 4 years 172,880/ 6,043Lot 486, Mukim Teluk Workshop land and 17,760Panglima Garang buildingDaerah Kuala LangatSelangor Darul Ehsan

64



20 DIALOG SYSTEMS PTE LTD Workshop Leasehold 5-Sep-07 22 years 86,115/ 3,73910 Tuas Avenue 16 & Office land 56,695Singapore 638931 expiring on

31 Mar 2019

21 DIALOG SERVICES SAUDI Workshop Leasehold 17-Jun-08 6 years 108,253/ 3,455ARABIA CO LTD & Office building on 38,000Section J, Block 5B rented landLot 4, Jubail 31951 expiring onKingdom Of Saudi Arabia 6 Aug 2018

22 DIALOG FABRICATORS SDN BHD Vacant Freehold 23-May-08 – 175,602 4,215Lot 487, Mukim Teluk landPanglima GarangDaerah Kuala LangatSelangor Darul Ehsan

23 DIALOG FABRICATORS SDN BHD Workshop Freehold 13-Aug-08 5 years 72,979/ 3,397No. 15 & 17, Jalan TP 4 & Office land and 29,202Taman Perindustrian buildingBukit Rambai, Fasa 675250, Melaka Bandaraya Bersejarah

24 ULTIMATE TECHNOLOGY & Workshop Freehold land 7-Apr-11 25 years 307,214/ 2,685SERVICES CO., LTD & Office and building 37,08422/9 Soi Chaklukya 4Watchaklukya RoadTambol HuaypongAmphur Muang RayongRayong 21150, Thailand

25 PT. DIALOG SISTEMINDO Workshop Freehold land 25-Oct-10 1 year 35,424/ 2,975Jl. Tekno Boulevard & Office and building 10,172Blok B 6 A Jababeka 3Cikarang Utara - BekasiJawa Barat 17530Indonesia



Notice of the Twenty-Third Annual General Meetingand Dividend Entitlement

NOTICE IS HEREBY GIVEN that the Twenty-Third Annual General Meeting of Dialog Group Berhad (Dialog orCompany) will be held at Eastin Hotel, 13, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan, Malaysia onThursday, 24 November 2011 at 10.00 a.m. to consider the following matters:

AGENDA

1. To receive and adopt the audited Financial Statements for the financial year ended 30 June 2011 together withthe Reports of the Directors and Auditors thereon. (Resolution 1)

2. To approve the payment of a Final Single Tier Cash Dividend of 18% per ordinary share of RM0.10 each inrespect of the financial year ended 30 June 2011.

(Resolution 2)

3. To re-elect Mr Chan Yew Kai, the director retiring pursuant to Article 96 of the Company’s Articles of Association.(Resolution 3)

4. To re-elect Dr Junid Bin Abu Saham, the director retiring pursuant to Article 96 of the Company’s Articles ofAssociation. (Resolution 4)

5. To re-elect Mr Chew Eng Kar, the director retiring pursuant to Article 96 of the Company’s Articles of Association.(Resolution 5)

6. To re-elect Encik Ja’afar Bin Rihan, the director retiring pursuant to Article 101 of the Company’s Articles ofAssociation. (Resolution 6)

7. To approve the payment of Directors’ fees of RM390,000 in respect of the financial year ended 30 June 2011(2010: RM295,000). (Resolution 7)

8. To re-appoint Messrs BDO as auditors of the Company and to authorise the Directors to fix their remuneration.(Resolution 8)

9. Special Business:-

To consider and if thought fit, to pass the following resolutions:-

(A) ORDINARY RESOLUTION 1– PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY.

“THAT, subject to the Companies Act, 1965, the Memorandum and Articles of Association of the Companyand the requirements of Bursa Malaysia Securities Berhad (Bursa Malaysia) and any other relevantauthorities, the Company be and is hereby authorised to purchase such number of ordinary shares ofRM0.10 each in the Company as may be determined by the Directors of the Company from time to timethrough Bursa Malaysia upon such terms and conditions as the Directors of the Company may deem fit inthe interest of the Company provided that the aggregate number of ordinary shares of RM0.10 eachpurchased pursuant to this resolution does not exceed ten percent (10%) of the total issued and paid-upshare capital of the Company (Proposed Renewal of Share Buy-Back Authority) and that an amount notexceeding the total audited retained profits and share premium account of the Company at the time ofpurchase, would be allocated by the Company for the Proposed Renewal of Share Buy-Back Authority.

66

THAT the authority conferred by this ordinary resolution will commence immediately upon passing of thisordinary resolution until the conclusion of the next Annual General Meeting of the Company (unless earlierrevoked or varied by ordinary resolution of the shareholders of the Company in a general meeting) or untilthe expiration of the period within which the next Annual General Meeting after that date is required by lawto be held.

THAT the Directors of the Company be and are hereby authorised to take all steps necessary to implement,finalise and to give full effect to the Proposed Renewal of Share Buy-Back Authority and THAT authority beand is hereby given to the Directors of the Company to decide in their discretion to either retain the ordinaryshares of RM0.10 each purchased pursuant to the Proposed Renewal of Share Buy-Back Authority astreasury shares and/or to resell the treasury shares and/or to distribute them as share dividends and/or tocancel them.” (Resolution 9)

(B) ORDINARY RESOLUTION 2– PROPOSED RENEWALOF SHAREHOLDERS’MANDATEAND NEW SHAREHOLDERS’MANDATE

FOR RECURRENT RELATED PARTY TRANSACTION OF A REVENUE OR TRADING NATURE

"THAT, subject to the Companies Act, 1965 (Act), the Memorandum and Articles of Association of theCompany and the requirements of Bursa Malaysia Securities Berhad and any other relevant authorities,approval be and is hereby given to the Company and/or its subsidiaries to enter into the Recurrent RelatedParty Transactions of a Revenue or Trading Nature (Recurrent Related Party Transactions) as set out inSection 2.5(I) of Part B (for the renewal of existing Recurrent Related Party Transactions) and Section 2.5(II)of Part B (for additional Recurrent Related Party Transaction) of the Circular to Shareholders dated 28October 2011 subject further to the following:-

(i) the Recurrent Related Party Transactions are in the ordinary course of business which are necessaryfor day-to-day operations and are on terms not more favourable to the related parties than thosegenerally available to the public and are not to the detriment of the minority shareholders of theCompany; and

(ii) disclosure is made in the annual report of the breakdown of the aggregate value of transactionsconducted during a financial year and that such approval shall, commence immediately upon thepassing of this ordinary resolution and continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (AGM) of the Company following theforthcoming AGM at which the Proposed Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature is approved, at which time it will lapse, unless by aresolution passed at the next AGM, the authority is renewed;

(b) the expiration of the period within which the next AGM after the date it is required to be heldpursuant to Section 143(1) of the Act (but must not extend to such extension as may be allowedpursuant to Section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders of the Company in a general meeting,

whichever is the earlier.

(iii) the Directors and/or any of them be and are hereby authorised to complete and do all such acts andthings (including executing such documents as may be required) to give effect to the transactionscontemplated and/or authorised by this ordinary resolution." (Resolution 10)

10. To transact any other ordinary business for which due notice shall have been given.



NOTICE IS ALSO HEREBY GIVEN that the Final Single Tier Cash Dividend of 18% per ordinary share of RM0.10each held in Dialog, if approved, will be paid and distributed respectively on 15 December 2011 to shareholderswhose names appear in the Record of Depositors at the close of business on 30 November 2011.

A depositor shall qualify for entitlement to the Final Single Tier Cash Dividend only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 30 November 2011 in respect ofordinary transfers.

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

By Order of the Board

ZAINAB BINTI MOHD SALLEH, MIA 7672LIM HOOI MOOI, MAICSA 0799764CHAY SIEW KIM, MAICSA 7012266Joint Company Secretaries

Petaling Jaya28 October 2011

Notes:

1. Appointment of proxy

(a) A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two (2) proxies to attend andvote in his stead. Where a member appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented byeach proxy. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories)Act 1991, may appoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds withordinary shares of the Company standing to the credit of the said securities account.

(b) A proxy need not be a member of the Company and a member may appoint any person to be his proxy, and the provisions of Section149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

(c) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if theappointer is a corporation under its Common Seal or the hand of its duly authorised officer or attorney.

(d) The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

(e) An instrument appointing a proxy must be deposited at the Registered Office of the Company at 109, Block G, Phileo Damansara 1,No. 9, Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before the time appointedfor holding the Meeting or any adjournment thereof.

2. Special Business – Item 9 of the Agenda

(a) The proposed Resolution No. 9, if passed, will empower Directors of the Company to purchase and/or hold up to ten percent (10%) ofthe issued and paid-up share capital of the Company. For further information on the Proposed Renewal of Share Buy-Back Authority,please refer to Part A of the Circular to Shareholders dated 28 October 2011 enclosed together with the Company's Annual Report 2011.

(b) The proposed Resolution No. 10, if passed, will enable the Company and Group to enter into the Recurrent Related Party Transactionsof a Revenue or Trading Nature which are necessary for the day-to-day operations, subject to the transactions being in the ordinarycourse of business and on terms which are not more favourable to the related parties than those generally available to the public andare not to the detriment of the minority shareholders of the Company. For further information on the Proposed Renewal of Shareholders’Mandate and New Shareholders’ Mandate for Recurrent Related Party Transaction of a Revenue or Trading Nature, please refer toPart B of the Circular to Shareholders dated 28 October 2011 enclosed together with the Company's Annual Report 2011.

68

Statement Accompanying the Notice of theTwenty-Third Annual General Meeting of the Company(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

• Details of individuals who are standing for election as Directors

No individual is seeking election as a Director at the Twenty-Third Annual General Meeting of the Company.


Proxy Form

I/We

I.C./Passport/Company No.

of

being a member of DIALOG GROUP BERHAD hereby appoint

(I.C./Passport No.)

of

or failing him, the Chairman of the Meeting as my/our proxy, to attend and vote for me/us on my/our behalf at theTwenty-Third Annual General Meeting of the Company to be held at Eastin Hotel, 13, Jalan 16/11, 46350 PetalingJaya, Selangor Darul Ehsan, Malaysia on Thursday, 24 November 2011 at 10.00 a.m. and at any adjournmentthereof.

No. Resolution For Against

1. To receive and adopt the audited Financial Statements for the financialyear ended 30 June 2011.

2. To approve the payment of a Final Single Tier Cash Dividend of 18% forthe financial year ended 30 June 2011.

3. To re-elect Mr Chan Yew Kai, the director retiring pursuant to Article 96 ofthe Company’s Articles of Association.

4. To re-elect Dr Junid Bin Abu Saham, the director retiring pursuant to Article96 of the Company’s Articles of Association.

5. To re-elect Mr Chew Eng Kar, the director retiring pursuant to Article 96 ofthe Company’s Articles of Association.

6. To re-elect Encik Ja’afar Bin Rihan, the director retiring pursuant to Article101 of the Company’s Articles of Association.

7. To approve the payment of Directors’ fees in respect of the financial yearended 30 June 2011.

8. To re-appoint Messrs BDO as auditors of the Company and to authorisethe Directors to fix their remuneration.

9. Special Business – Ordinary Resolution 1

10. Special Business – Ordinary Resolution 2

Dated this day of 2011

No. of Ordinary Shares Held

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

(178694-V)(Incorporated in Malaysia)

The Company SecretaryDIALOG GROUP BERHAD

(Company No. 178694-V)

109, Block G, Phileo Damansara 1No. 9, Jalan 16/1146350 Petaling JayaSelangor Darul Ehsan

Malaysia

Postage

Please fold here

Please fold here

Notes

(i) A member of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two (2) proxies to attend and votein his stead. Where a member appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, mayappoint at least one (1) proxy but not more than two (2) proxies in respect of each securities account it holds with ordinary shares of theCompany standing to the credit of the said securities account.

(ii) A proxy need not be a member of the Company and a member may appoint any person to be his proxy, and the provisions of Section149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if theappointer is a corporation under its Common Seal or the hand of its duly authorised officer or attorney.

(iv) The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.(v) An instrument appointing a proxy must be deposited at the Registered Office of the Company at 109, Block G, Phileo Damansara 1, No. 9,

Jalan 16/11, 46350 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than forty-eight (48) hours before the time appointed for holdingthe Meeting or any adjournment thereof.

(vi) Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he thinks fit.

(178694-V)

109, Block G, Phileo Damansara 1No. 9, Jalan 16/11, 46350 Petaling Jaya

Selangor Darul Ehsan, MalaysiaTel No. : 6 03 7955 1199Fax No. : 6 03 7955 8989

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