Contents drop in the revenue for the Division was mainly due to lower revenue from our Thermoforming...

ContentsCorporate Structure 02

Chairman’s Statement 03

Penyata Pengerusi 08

Board Of Directors 14

Group Financial Highlights 21

Corporate Information 22

Executive Committee 24

Audit Committee Statement 24

Nomination Committee 28

Remuneration Committee 29

Notice Of Annual General Meeting 30

Statement Accompanying 34Notice Of Annual General Meeting

Corporate Governance Statement 35

Statement On Internal Control 44

Other Disclosures 45

Analysis Of Shareholdings 48

Particulars Of Properties 51

Financial Statements 53

Proxy Form 137

CORPORATE STRUCTURE

Note: The above corporate structure does not include dormant subsidiaries of the TRB Group.

TEXCHEM RESOURCES BHD. (16318-K) ANNUAL REPORT 200702

TEXCHEM RESOURCES BHD.Company No. 16318-K

ASSOCIATES M.A.C. Technology (Malaysia) Sdn. Bhd.Texchem Corporation Sdn. Bhd.

INDUSTRIAL DIVISION Texchem Materials Sdn. Bhd.New Material (Malaysia) Sdn. Bhd.PT. Texchem IndonesiaTexchem Malaysia Sdn. Bhd.Texchem Materials (Thailand) Ltd.Texchem Singapore Private LimitedTexchem Trading (Wuxi) Co., Ltd.

PACKAGING DIVISION Texchem-Pack Holdings (S) Ltd.Eye Graphic Sdn. Bhd.

Eye Graphic (Vietnam) Co., Ltd.Texchem-Pack (Bangi) Sdn. Bhd.(formerly known as Sanko Kasei (M) Sdn. Bhd.)

Texchem-Pack (M) Bhd.Texchem-Pack (Johor) Sdn. Bhd.Texchem-Pack (KL) Sdn. Bhd.

Texchem-Pack (Vietnam) Co., Ltd.Texchem-Pack (PP) Sdn. Bhd.Texchem-Pack (Thailand) Co., Ltd.Texchem-Pack (Wuxi) Co., Ltd.

Texchem Polymers Sdn. Bhd.

FAMILY CARE DIVISION Fumakilla Malaysia BerhadTechnopia (Thailand) Ltd.Technopia Vietnam Pte. Ltd.Ting Tai Industries (Malaysia) Sdn. Bhd.

Blood Protection Company (Malaysia)Sdn. Bhd.Myanmar Texcorp Limited

PT. Technopia Jakarta

FOOD DIVISION Sushi Kin Sdn. Bhd.Texchem Food Sdn. Bhd.

A.S.K. Andaman LimitedSea Master Trading Co. Sdn. Bhd.

Ocean Pioneer Food Sdn. Bhd.Seapack Italia S.r.l.

CHAIRMAN’S STATEMENT

ANNUAL REPORT 2007 TEXCHEM RESOURCES BHD. (16318-K) 03

Tan Sri Dato’ Seri Fumihiko KonishiChairman & CEO

Dear Shareholders,

I am pleased to report that the Texchem Resources Bhd. (“TRB”)Group has delivered yet another successful and profitable yearfor 2007, reinforcing our capability of being resilient and resourcefulin times of great challenges.

GLOBAL CHALLENGESThe year 2007 witnessed a further surge in oil prices which hitabove the USD100 per barrel psychological mark in December2007. Such a dramatic increase in oil prices had also sparked acorresponding increase in other commodity prices resulting ina chain reaction affecting other segments of the world economy.Our TRB Group, having rapidly transitioned ourselves from adomestic operator into an international player in recent years isnow faced with formidable global challenges like any otherinternational companies.

FINANCIAL RESULTS DELIVERYIn spite of this, I am pleased to report that for the year underreview, our Group recorded a revenue of RM1.26 billion and aprofit before tax of RM29.4 million, compared with the previousyear’s figures of RM1.27 billion and RM22.5 million respectively.This represented an increase in pre-tax profit by 30.6% while theslight decline in revenue was due to the disposal of a subsidiary,Texchem Consumers Sdn. Bhd., in May 2007, which had a turnoverof RM180.3 million in 2006. Our net profit after tax and minorityinterest was RM18.1 million compared to RM16.3 million in theprevious year which is considered commendable under the severeglobal challenges experienced.

On the back of this accomplishment, the Board of Directors hasdeclared an increased gross dividend rate of 12% less tax ascompared to 10% less tax in the previous year to reward ourshareholders. This represents a net dividend cover ratio of 1.65and an attractive gross dividend yield of approximately 9.4% p.a.to investors.

An increased gross dividend rate of 12% less tax ascompared to 10% less tax in the previous year, representinga net dividend cover ratio of 1.65 and an attractive gross

dividend yield of approximately 9.4% p.a. to investors.


CHAIRMAN’S STATEMENT (cont’d)

INDUSTRIAL DIVISIONThe Industrial Division went through another challenging year in 2007, by registering an increase of 5.0% in revenue and12.0% in operating profit. The year under review witnessed volatile price movements for most chemicals and plastic resins.Tight supply situation also resulted in certain chemicals and polymers hitting record high prices, creating a difficult businessenvironment for us. We had to endure further margin pressure as not all increase in cost could be passed on to ourcustomers. A loyal and growing customer base and great teamwork were the main ingredients for our success in 2007.

In fourth quarter of 2007, the acquisition of New Material (Malaysia) Sdn. Bhd. (“NMM”) from Mitsui Bussan Frontier Co.,Ltd. (formerly known as New Material Service Inc.) has further expanded our business horizon into electronic componentsand metal products. We foresee that the addition of NMM will definitely boost our domestic revenue and at the same timepresent opportunities for us to expand into neighbouring countries.

Our operations in Indonesia and China are still in their gestation stages and are progressing within expectation. We wereable to steadily enlarge our customer base in Indonesia while in China we continued to seek out new supply sources. Weare hopeful these two markets will contribute positively to the Division in the near future.

In line with the Group’s vision, Industrial Division will continue to seek new growth opportunities from our overseasoperations. Nonetheless, we will still continue to put in effort to strengthen our position at home base, Malaysia.

PACKAGING DIVISION2007 was a year of challenge and change for Packaging Division. Against the backdrop of intense competition and risingraw material cost, we maintained a steady focus on operational efficiency, broke into new markets through strategicpartnerships and acquisitions, and built upon our relationship with existing customers. I am pleased to report that, as aresult of these initiatives, the Division was able to turn in another profitable year.

For the year under review, the Division recorded operating profit of RM14.8 million on a revenue of RM227.9 million. Thedrop in the revenue for the Division was mainly due to lower revenue from our Thermoforming and Injection Mouldingproduct segments, which saw a decrease of 4% and 19% respectively.

Year 2007 also saw the Packaging Division’s efforts diversifying into some strategic product lines. The medical product lineat the newly acquired Texchem-Pack (Bangi) Sdn. Bhd. (formerly known as Sanko Kasei (M) Sdn. Bhd.) is one of the strategicinitiatives of our expansion. The Division has also acquired the remaining shares of Eye Graphic Sdn. Bhd. so that it is nowa wholly-owned subsidiary of Texchem-Pack Holdings (S) Ltd.

We expect the business environment in 2008 to remain competitive due to the escalating raw material prices and keencompetition. To address the challenges ahead, we will focus on increasing our customer base in all sectors while taking adefensive stance in reviewing our customer mix and contribution, and reducing lower value-added activities. We will alsocontinue to look for ways to improve our operational efficiency and keep a tight rein on costs.

We remain committed to the Division’s strategy to grow our business through a strong emphasis on design and manufacturingtechnology. For the coming year, we will increase our marketing efforts in a continuous bid to capture a greater share ofthe automotive and medical markets, and focus more resources on R&D to build upon the momentum achieved to-date.



FAMILY CARE DIVISIONThe Family Care Division’s performance fell slightly behind the previous year due to the disruption in sales and distributionafter the disposal of Texchem Consumers Sdn. Bhd. to DKSH Holdings (Malaysia) Berhad in the second quarter of 2007which affected Fumakilla Malaysia Berhad’s performance. The Division recovered to its normal performance track in thefourth quarter as the divisional management stabilised the supply chain with DKSH Holdings (Malaysia) Berhad. For year2007, Family Care Division registered total revenue of RM 156.6 million and operating profit of RM12.1 million.

Year 2007 was an eventful year for Family Care Division. Apart from disposal of Texchem Consumers Sdn. Bhd. the Divisionhas also launched its new Jumbo Liquid as well as a facelift on all aerosol products. Over the region, Family Care Divisioncontinued its steady progress. In September 2007, TRB completed the acquisition of approximately 30% equity interest inPT Technopia Jakarta (“PTTJ”) from Texchem Corporation Sdn. Bhd. The acquisition will strengthen the Division’s strategicpresence in the region.

Political events and floods in Myanmar posed some challenges to our operations in Myanmar. However, the disruptionwas minimal and the team in Family Care Division managed to contend the negative business environment and move onwith its operations.

Family Care Division will continue its market development and market penetration strategies in year 2008. Despiteunfavourable business conditions, the strategies have proven to be successful in maintaining its leadership in householdinsecticides markets in many countries in the Asean region. Research and Development capability is another key asset ofFamily Care Division. The leading position in the market would not be possible without the relentless effort by the greatteamwork of Family Care Division. All in all, Family Care Division will continue its growing momentum and perform in linewith expectations.

FOOD DIVISIONThe Food Division made a successful turnaround in 2007. It was a good year for Food Division which saw the Divisionrecording revenue of RM303.1 million. This represents a 16.1% increase in the revenue in comparison with year 2006. TheFood Division also registered an operating profit of RM3.5 million.

The turnaround of the Food Division was contributed by a multi-facets strategy by the Division’s management where bothinternal and external factors affecting the business were rightly managed and controlled. The main contributor to theturnaround was the decision to cease all trawler boats operation in Myanmar where in previous year was hit by high dieselcost and low returns. Expansion in sales channels also contributed to the increase in top line.

Year 2007 also witnessed the management’s true capabilities in managing the procurement functions where the rawmaterial costs were reduced tremendously and provided a better margin for products. The Division’s decision to introducenew value added products for export market was proven wise as well when the efforts helped to further elevate the topline of the Division.

Sushi King Restaurant chain continued to perform beyond expectations. Introduction of direct procurement and costrationalisations delivered better margin for the business. Sushi King has expanded its operation across the South China Seawith two new restaurants in Kuching, Sarawak. The two new restaurants signified a great milestone for Sushi King in thejourney of becoming the most popular family restaurant chain in Malaysia.

06


The year 2008 is expected to pose new challenges. However, the Division remains optimistic and believes that furthertrailing down the path of operation efficiency and sourcing capability improvement will build a stronger foundation to facechallenges lying ahead.

CORPORATE DEVELOPMENTS & STRATEGYIt is our strategy to maximise group revenue through expansion of our overseas operations and new organic investmentsin Malaysia.

These were done through strategic alliances, and acquisitions to complement or increase involvement in the core businessesof our Group.

In 2007, we had successfully undertaken the following corporate exercises in line with the above strategy:

- On 16 February 2007, Texchem-Pack Holdings (S) Ltd. (“TXPHS”) acquired the remaining 49% equity interest in EyeGraphic Sdn. Bhd. (“EGSB”) for RM3.5 million which was satisfied by way of a share swap thus increasing TXPHSownership position to 100%. This move allowed TXPHS to streamline the management and control of EGSB, thusboosting TXPHS’ profit.

- On 28 February 2007, TXPHS acquired a 30% equity stake in M.A.C. Technology (Malaysia) Sdn. Bhd. (“MAC”) for RM7.1million. MAC manufactures ceramic and injection moulded plastic components for various hi-tech industries and thisprovides TXPHS with an excellent opportunity to tap into the automotive plastic components industry.

- On 25 May 2007, TXPHS acquired an additional 40% stake in Texchem-Pack (Bangi) Sdn. Bhd. (previously known asSanko Kasei (M) Sdn. Bhd.) by way of a share swap for RM4.5 million thus making it a 91% subsidiary. This acquisitionallowed TXPHS to further expand its injection moulding capability.

- On 31 May 2007, TRB disposed of its 100% equity stake in Texchem Consumers Sdn. Bhd. to DKSH Holdings (Malaysia)Berhad for a sales consideration of RM16.0 million thus reaping a capital gain of RM6.2 million. This was in line withour Group’s strategy of disposing of its non-core assets whenever the opportunity arises.

- On 7 August 2007, TRB acquired a 30% equity stake in PTTJ from Texchem Corporation Sdn. Bhd. to enable our FamilyCare Division to expand its core business of mosquito coils and household insecticides manufacturing in Indonesia.

- On 25 October 2007, Texchem Materials Sdn. Bhd., a wholly- owned subsidiary of TRB, acquired a 100% equity stakein New Material (Malaysia) Sdn. Bhd. for RM3.0 million from Mitsui Bussan Frontier Co., Ltd. (formerly known asNew Material Service Inc.) which would enable our Industrial Division to further expand its existing core businessof industrial materials trading.

DEVELOPMENT OF HUMAN CAPITAL AND TALENT POOLWe believe the key to our long record of success is the solid relationship with our people and the people around us. Weare always grateful for the harmonious environment within the Group, enabling us to face challenges effectively and to reapthe rewards. Nevertheless, we shall continue to look into ways of enhancing the competencies and capabilities of our people.We will ensure that we have the right people, the right structures and the right organisational culture that will drive us todeliver strong operating performances on a sustainable basis.


07


CORPORATE SOCIAL RESPONSIBILITYAs part and parcel of our Corporate Social Responsibility (“CSR”) undertaking, we will continue with our participation invarious community programmes as we have done in the past. Our CSR programmes had helped strengthened the goodrapport with our stakeholders and the community at large thus enhancing our corporate image, reputation and the Texchembrand.

STRONG FINANCIAL MANAGEMENTMindful of the economic uncertainties and challenges ahead, we will strive to further strengthen our balance sheet whichwill enable us to generate strong free cash flows to reward our shareholders with healthy consistent dividends while balancingthe need to reinvest for future growth. In this context, we had also managed to reduce TRB Group’s gearing ratio to 0.93from 1.12 at the beginning of 2007.

OUTLOOK AND FUTURE PROSPECTSThe future offers tremendous growth opportunities as well as challenges in each of our operating landscapes. We are ontrack to build the TRB Group as a leading regional player in its various core businesses with the following strategic thrusts:

- Maximise Group revenue growth through expansion of overseas operations and organic investments in MalaysiaThis will be done through careful mergers and acquisitions to seek new technology, new alliances, new markets,and to diversify our products base.

- Become an efficient low unit cost operatorWe will strive to make all our operations lean through proper cost management and increase productivity for profit.

- Further develop our core values to differentiate ourselves from our competitorsOur core values of not compromising on human capital and talent pool development, focusing on the customerand strong financial management are the key differentiators for our success in enhancing shareholders’ value.

With these in place, we are confident that our TRB Group will continue to have bright prospects despite strong challengesahead .

APPRECIATIONI wish to express my deep appreciation to the management and all employees for their untiring commitment, dedicationand loyalty in contributing to the continuing success of the Group. My sincere appreciation also goes to all our shareholders,customers, suppliers and other stakeholders for their support and confidence in the TRB Group.

Tan Sri Dato’ Seri Fumihiko KonishiChairman & CEO

ANNUAL REPORT 2007 TEXCHEM RESOURCES BHD. (16318-K)


penyata pengerusi

Para pemegang saham yang dihormati,

Saya dengan sukacitanya ingin melaporkan bahawa Kumpulan Texchem Resources Bhd. (“TRB”) telahberjaya mencapai satu lagi tahun yang menguntungkan untuk 2007, mengukuhkan keupayaan kamiuntuk bertahan dan bertindak bijak dalam keadaan yang penuh cabaran.

CABARAN GLOBALTahun 2007 telah menyaksikan peningkatan lagi dalam harga minyak yang mencapai lebih daripadaUSD100 setong dalam bulan Disember 2007. Peningkatan sebegini dramatik pada harga minyak telahjuga mencetuskan peningkatan yang serupa dalam harga komoditi lain dan mengakibatkan tindakbalasrantaian ke atas segmen lain dalam ekonomi dunia. Kumpulan TRB, yang telah melalui peralihan yangpantas daripada pengusaha domestik ke peringkat antarabangsa dalam tahun kebelakangan ini, kiniberhadapan dengan cabaran global yang sukar sebagaimana yang dihadapi oleh syarikat-syarikatantarabangsa yang lain.

KEPUTUSAN KEWANGANNamun begitu, saya dengan sukacitanya ingin melaporkan bahawa dalam tahun dibawah kajian, KumpulanSyarikat kami merekodkan pendapatan berjumlah RM1.26 bilion dan keuntungan sebelum cukai berjumlahRM29.4 juta berbanding dengan tahun lepas, iaitu masing-masing berjumlah RM1.27 bilion dan RM22.5juta. Ini merupakan peningkatan dalam keuntungan sebelum cukai sebanyak 30.6% manakala sedikitpenurunan dalam pendapatan adalah disebabkan oleh pelupusan salah satu anak syarikat, TexchemConsumers Sdn. Bhd. pada bulan Mei 2007, yang menghasilkan pendapatan berjumlah RM180.3 jutapada tahun 2006. Keuntungan bersih selepas cukai dan kepentingan minoriti adalah RM18.1 juta berbandingdengan RM16.3 juta pada tahun sebelumnya, satu pencapaian yang harus dipuji memandangkan pelbagaicabaran global yang serius yang telah diharungi.

Berdasarkan pencapaian ini, pihak Lembaga Pengarah telah mengumumkan kadar dividen kasar sebanyak12% ditolak cukai berbanding dengan 10% ditolak cukai pada tahun sebelumnya, sebagai ganjaran kepadapara pemegang saham. Ini merupakan nisbah bersih dividen pulangan (dividend cover ratio) sebanyak1.65 dan kadar dividen hasil kasar yang menarik iaitu kira-kira 9.4% setahun kepada para pelabur.

BAHAGIAN INDUSTRIBahagian Industri telah mengharungi satu lagi tahun yang mencabar pada tahun 2007, dengan merekodkanpeningkatan sebanyak 5.0% dalam pendapatan dan 12.0% dalam keuntungan operasi. Tahun dibawahkajian telah menyaksikan pergerakan harga yang tidak menentu bagi kebanyakan bahan kimia dan resinplastik. Situasi penawaran yang ketat juga menyebabkan sesetengah bahan kimia dan polimer mencapaiharga tinggi, menjadikan persekitaran perniagaan amat sukar bagi kami. Kami terpaksa menanggung

Pihak Lembaga Pengarah telah mengumumkan kadar dividen kasarsebanyak 12% ditolak cukai berbanding dengan 10% ditolak cukai padatahun sebelumnya. Ini merupakan nisbah bersih dividen pulangan sebanyak1.65 dan kadar dividen hasil kasar yang menarik iaitu kira-kira 9.4%setahun kepada para pelabur.


penyata pengerusi (samb.)

tekanan keuntungan memandangkan tidak semua peningkatan dalam kos boleh dipindahkan kepadapelanggan kami. Sumber pelanggan setia yang semakin bertambah serta semangat berpasukan yang baikadalah intipati utama kejayaan kami pada tahun 2007.

Pada suku keempat tahun 2007, pemerolehan New Material (Malaysia) Sdn. Bhd. (“NMM”) daripadaMitsui Bussan Frontier Co., Ltd. (dahulu dikenali sebagai New Material Service Inc.) telah mengembangkanlagi bidang perniagaan kami ke arena komponen elektronik dan produk logam. Kami menjangka denganadanya NMM, pendapatan domestik kami pasti akan meningkat dan pada masa yang sama memberipeluang kepada kami untuk berkembang ke negara-negara jiran.

Operasi kami di Indonesia dan China masih di peringkat permulaan dan mampu mecapai kemajuanseperti yang dijangkakan. Kami telah berjaya menambah sumber pelanggan di Indonesia sementara diChina pula kami meneruskan pencarian sumber penawaran baru. Kami yakin kedua-dua pasaran iniakan menyumbang secara positif kepada Bahagian ini pada masa akan datang.

Selaras dengan visi Kumpulan Syarikat, Bahagian Industri akan terus mencari peluang pertumbuhan barudaripada operasi kami di luar negara. Walau bagaimanapun, kami akan tetap meneruskan usaha untukmengukuhkan kedudukan kami di negara sendiri, Malaysia.

BAHAGIAN PEMBUNGKUSANTahun 2007 merupakan tahun penuh cabaran dan perubahan untuk Bahagian Pembungkusan. Denganpersaingan yang sengit serta kos bahan mentah yang semakin meningkat, kami telah mengekalkan fokusyang kukuh ke atas kecekapan operasi, menembusi pasaran baru melalui perkongsian strategik danpemerolehan, dan membina hubungan erat dengan pelanggan sedia ada. Dengan gembiranya saya inginmelaporkan, sebagai hasil kepada inisiatif-inisiatif tersebut, Bahagian Pembungkusan telah berjayamencapai satu lagi tahun yang menguntungkan.

Dalam tahun dibawah kajian, Bahagian ini telah merekodkan keuntungan operasi berjumlah RM14.8 jutaatas pendapatan sebanyak RM227.9 juta. Penurunan dalam pendapatan Bahagian ini adalah terutamanyadisebabkan pendapatan yang rendah daripada segmen produk Thermoforming dan Acuan Suntikan(Injection Moulding), yang menyaksikan pengurangan masing-masing sebanyak 4% dan 19%.

Tahun 2007 juga menyaksikan usaha Bahagian Pembungkusan memperkembangkan sayap ke beberapabarisan produk yang strategik. Barisan produk perubatan di Texchem-Pack (Bangi) Sdn. Bhd. (dahuludikenali sebagai Sanko Kasei (M) Sdn. Bhd.) yang baru diperolehi, adalah salah satu daripada usaha yangdilakukan. Bahagian ini juga telah memperolehi baki syer Eye Graphic Sdn. Bhd. untuk menjadikannyaanak syarikat yang dimiliki sepenuhnya oleh Texchem-Pack Holdings (S) Ltd.

Kami menjangkakan persekitaran perniagaan pada tahun 2008 akan kekal kompetitif disebabkan hargabahan mentah yang meningkat dan persaingan yang semakin sengit. Untuk menangani cabaran yangakan datang, kami akan fokus untuk menambah pangkalan pelanggan dalam semua sektor di sampingmengambil kedudukan defensif dalam menyemak pencampuran pelanggan dan sumbangan masing-masing, dan mengurangkan aktiviti-aktiviti yang bernilai rendah. Kami juga akan terus mencari jalanuntuk memperbaiki kecekapan operasi dan pengawalan ketat ke atas kos.



Kami kekal komited kepada strategi Bahagian Pembungkusan untuk mencapai pertumbuhan perniagaanmelalui penekanan kuat ke atas teknologi rekabentuk dan pembuatan. Untuk tahun yang akan datang,kami akan meningkatkan aktiviti pemasaran untuk mendapatkan lebih bahagian pasaran perubatan danautomotif, dan fokus lebih sumber kepada Penyelidikan and Pembangunan untuk terus membina atasmomentum yang telah dicapai setakat ini.

BAHAGIAN PENJAGAAN KELUARGAPrestasi Bahagian Penjagaan Keluarga agak menurun sedikit berbanding tahun sebelumnya disebabkangangguan dalam sistem pengedaran dan jualan selepas pelupusan Texchem Consumers Sdn. Bhd. kepadaDKSH Holdings (Malaysia) Berhad dalam suku kedua tahun 2007 dan ini telah memberi kesan kepadaprestasi Fumakilla Malaysia Berhad. Bahagian ini kembali ke prestasi normal dalam suku keempat apabilapengurusan Bahagian berjaya menstabilkan operasinya dengan DKSH Holdings (Malaysia) Berhad. Untuktahun 2007, Bahagian Penjagaan Keluarga merekodkan keseluruhan perolehan berjumlah RM156.6 jutadan keuntungan operasi sebanyak RM12.1 juta.

Tahun 2007 merupakan tahun penuh peristiwa untuk Bahagian Penjagaan Keluarga. Selain daripadapelupusan Texchem Consumers Sdn. Bhd., Bahagian ini juga telah melancarkan produk Jumbo Liquidbaru di samping menukar wajah baru untuk kesemua produk aerosolnya. Di kawasan serantau, BahagianPenjagaan Keluarga terus menunjukkan progres yang stabil. Dalam bulan September 2007, TRB telahmelengkapkan pemerolehan kira-kira 30% kepentingan ekuiti dalam PT Technopia Jakarta (“PTTJ”)daripada Texchem Corporation Sdn. Bhd. Pemerolehan tersebut akan menguatkan lagi penguasaanBahagian Penjagaan Keluarga di lokasi serantau yang strategik.

Kejadian banjir dan peristiwa yang melibatkan politik di Myanmar telah membawa pelbagai cabarankepada operasi di Myanmar. Namun begitu, gangguan tersebut adalah agak minimum dan pasukan dalamBahagian Penjagaan Keluarga berjaya mengekang persekitaran perniagaan yang negatif tersebut danmeneruskan operasinya.

Bahagian Penjagaan Keluarga akan meneruskan strategi pembangunan pasaran dan penembusan pasaranpada tahun 2008. Walaupun dengan persekitaran perniagaan yang tidak menggalakkan, strategi tersebutterbukti berkesan dalam mengekalkan Bahagian ini sebagai peneraju dalam pasaran racun seranggakegunaan rumah dalam banyak negara di rantau ini. Keupayaan Penyelidikan dan Pembangunan adalahsatu lagi aset utama Bahagian Penjagaan Keluarga. Kedudukan utama di pasaran serantau tidak mungkintercapai tanpa usaha berterusan dari pasukan kerja yang hebat dari Bahagian Penjagaan Keluarga. Secarakeseluruhannya, Bahagian Penjagaan Keluarga akan meneruskan momentum pertumbuhannya danmempersembahkan prestasi selaras dengan jangkaan.

BAHAGIAN MAKANANBahagian Makanan telah berjaya dalam usaha pemulihan semula (turnaround) dalam tahun 2007. Iamerupakan tahun yang baik untuk Bahagian Makanan yang menyaksikan Bahagian ini merekodkanpendapatan berjumlah RM303.1 juta. Ini merupakan peningkatan sebanyak 16.1% dalam pendapatanberbanding dengan tahun 2006. Bahagian Makanan juga merekodkan keuntungan operasi berjumlahRM3.5 juta.



Pemulihan semula Bahagian Makanan adalah disumbangkan oleh strategi pelbagai-sudut oleh pengurusanBahagian di mana kedua-dua faktor dalaman dan luaran perniagaan telah berjaya dikawal dan diuruskandengan baik. Penyumbang utama kepada pemulihan semula ini adalah keputusan untuk menghentikankesemua operasi bot pukat tunda di Myanmar yang mana pada tahun sebelumnya operasi tersebutberhadapan dengan masalah kos diesel yang tinggi dan mendapat pulangan rendah. Pengembangandalam saluran jualan juga turut menyumbang kepada peningkatan pendapatan.

Tahun 2007 juga menyaksikan keupayaan sebenar pihak pengurusan Bahagian Makanan dalam menguruskanfungsi pembelian di mana harga bahan mentah telah dapat dikurangkan dengan banyak sekali dan inimemberi margin yang lebih kepada produk. Keputusan Bahagian ini untuk memperkenalkan produkbaru dengan nilai tambah untuk pasaran ekspot juga terbukti bijak apabila usaha tersebut membantumeningkatkan lagi pendapatan Bahagian ini.

Rangkaian Restoran Sushi King terus menunjukkan pencapaian yang memberangsangkan dan melepasijangkaan. Pengenalan kaedah pemerolehan terus dan rasionalisasi kos telah membolehkan pencapaianmargin yang lebih baik. Sushi King telah mengembangkan operasinya merentasi Laut Cina Selatan dengandua restoran baru di Kuching, Sarawak. Dua restoran baru tersebut adalah petanda peristiwa pentingbagi perjalanan Sushi King untuk menjadi rangkaian restoran keluarga paling terkenal di Malaysia.

Tahun 2008 dijangka akan memberi cabaran baru. Namun, Bahagian ini tetap optimis dan yakin bahawadengan kecekapan operasi dan peningkatan kebolehan penyumberan akan membina asas yang lebihkukuh untuk menghadapi semua cabaran yang mendatang.

STRATEGI & PEMBANGUNAN KORPORATAdalah menjadi strategi kami untuk memaksimumkan pendapatan Kumpulan Syarikat melaluipengembangan operasi luar negara dan pelaburan organik baru di Malaysia.

Ini dilakukan melalui pakatan strategik, dan pemerolehan untuk melengkapi atau meningkatkan penglibatandalam perniagaan teras Kumpulan Syarikat kami.

Pada tahun 2007, kami telah berjaya menjalankan beberapa aktiviti korporat selaras dengan strategi yangtersebut di atas:

- Pada 16 Februari 2007, Texchem-Pack Holdings (S) Ltd. (“TXPHS”) memperoleh baki kepentinganekuiti sebanyak 49% dalam Eye Graphic Sdn. Bhd. (“EGSB”) dengan RM3.5 juta yang telahdisempurnakan melalui pertukaran saham, justeru meningkatkan kedudukan pemilikan TXPHSkepada 100%. Langkah ini membolehkan TXPHS menyelaraskan pengurusan dan kawalan ke atasEGSB, lantas melonjakkan keuntungan TXPHS.

- Pada 28 Februari 2007, TXPHS memperoleh kepentingan ekuiti sebanyak 30% dalam M.A.C.Technology (Malaysia) Sdn. Bhd. (“MAC”) dengan RM7.1 juta. MAC membuat komponen acuansuntikan plastik (injection moulded plastic) dan seramik untuk pelbagai industri berteknologi tinggidan ini menyediakan TXPHS dengan peluang yang amat baik untuk menembusi industri komponenplastik automotif.



- Pada 25 Mei 2007, TXPHS memperoleh tambahan sebanyak 40% kepentingan dalam Texchem-Pack(Bangi) Sdn. Bhd. (dahulu dikenali sebagai Sanko Kasei (M) Sdn. Bhd.) melalui pertukaran sahamberjumlah RM4.5 juta menjadikannya 91% anak syarikat milik TXPHS. Perolehan ini membolehkanTXPHS mengembangkan kemampuan acuan suntikannya.

- Pada 31 Mei 2007, TRB melupuskan 100% kepentingan ekuiti dalam Texchem Consumers Sdn. Bhd.kepada DKSH Holdings (Malaysia) Berhad untuk pertimbangan jualan berjumlah RM16.0 juta, denganpendapatan modal berjumlah RM6.2 juta. Ini adalah selaras dengan strategi Kumpulan Syarikat untukmelupuskan aset bukan-teras apabila peluang sedemikian muncul.

- Pada 7 Ogos 2007, TRB memperoleh 30% kepentingan ekuiti dalam PTTJ daripada TexchemCorporation Sdn. Bhd. untuk membolehkan Bahagian Penjagaan Keluarga mengembangkan perniagaanterasnya iaitu ubat nyamuk dan racun serangga untuk kegunaan isi rumah di Indonesia.

- Pada 25 Oktober 2007, Texchem Materials Sdn. Bhd., anak syarikat yang dimiliki sepenuhnya olehTRB telah memperoleh 100% kepentingan ekuiti dalam New Material (Malaysia) Sdn. Bhd. dengannilai RM3.0 juta daripada Mitsui Bussan Frontier Co., Ltd. (dahulu dekenali sebagai New MaterialService Inc.), yang membolehkan Bahagian Industri mengembangkan perniagaan teras sedia adadalam dagangan bahan-bahan industri.

PEMBANGUNAN MODAL INSAN DAN KUMPULAN BAKATKami percaya bahawa kunci kepada rekod kejayaan kami yang panjang adalah hubungan erat denganpekerja kami dan masyarakat sekeliling kami. Kami sentiasa bersyukur dengan persekitaran yang harmonidalam Kumpulan Syarikat, yang membolehkan kami berhadapan dengan cabaran dengan berkesan danmendapat ganjarannya. Namun begitu, kami terus berusaha mencari cara terbaik untuk meningkatkandaya persaingan dan keupayaan pekerja kami. Kami akan memastikan kami mempunyai pekerja yangsesuai, struktur yang tepat dan budaya organisasi yang betul yang akan memacu kami untuk menghasilkanprestasi operasi yang kukuh serta berdaya mampan.

TANGGUNGJAWAB SOSIAL KORPORATSebagai sebahagian daripada Tanggungjawab Sosial Korporat (“TSK”), kami akan terus menyertai pelbagaiprogram masyarakat sebagaimana tahun-tahun sebelumnya. Program TSK kami telah membantumengukuhkan hubungan erat dengan para pemegang taruh dan masyarakat amnya justeru meningkatkanreputasi dan imej korporat kami serta jenama Texchem.

PENGURUSAN KEWANGAN YANG KUKUHDengan menyedari terdapat cabaran dan ketidaktentuan dalam ekonomi akan datang, kami akan berusahauntuk mengukuhkan lagi penyata kira-kira yang akan membolehkan kami menjana aliran tunai bebasyang kukuh sebagai ganjaran kepada para pemegang saham dengan dividen yang konsisten dan sihatdi samping menyeimbangi keperluan untuk melabur semula untuk pertumbuhan akan datang. Dalamkonteks ini, kami juga berjaya mengurangkan nisbah penggearan (gearing ratio) Kumpulan TRB daripada1.12 pada permulaan tahun 2007 kepada 0.93.



TINJAUAN DAN PROSPEK MASA DEPANMasa hadapan memberi kedua-dua peluang pertumbuhan dan juga cabaran yang hebat dalam setiapsituasi operasi kami. Kami berada di landasan yang betul untuk membangunkan Kumpulan TRB sebagaipeneraju utama kawasan serantau dalam pelbagai teras perniagaan dengan dorongan strategik sepertiberikut:

- Maksimumkan pertumbuhan pendapatan Kumpulan Syarikat melalui pengembangan operasi luarnegara dan pelaburan organik di Malaysia.Ini akan dilakukan dengan penggabungan dan pemerolehan yang dibuat secara teliti untukmencari teknologi baru, pakatan baru, pasaran baru, dan dengan mempelbagaikan asas produkkami.

- Menjadi pengendali kos rendah yang cekap.Kami akan berusaha untuk menjadikan kesemua operasi kami berhemah melalui pengurusankos yang sesuai dan peningkatan produktiviti untuk keuntungan.

- Membangunkan lagi nilai teras kami untuk membezakan kami daripada para pesaing kami.Nilai teras kami yang tidak akan mengambil mudah dari segi modal insan dan pembangunankumpulan bakat, berfokus kepada pelanggan dan pengurusan kewangan yang kukuh adalahpembeza utama kepada kejayaan kami dalam meningkatkan nilai para pemegang saham.

Dengan kesemua ini tersusun rapi, kami yakin Kumpulan TRB akan terus mempunyai prospek cerahwalaupun menghadapi cabaran yang kuat pada masa akan datang.

PENGHARGAANSaya ingin merakamkan setinggi-tinggi penghargaan kepada pihak pengurusan dan semua pekerja diatas komitmen yang mendalam, dedikasi dan kesetiaan yang tidak berbelah bahagi dalam menyumbangkankejayaan berterusan Kumpulan Syarikat. Penghargaan ikhlas juga ditujukan kepada para pemegangsaham, pelanggan, pembekal dan pemegang taruh yang lain di atas sokongan dan keyakinan merekapada Kumpulan TRB.

Tan Sri Dato’ Seri Fumihiko KonishiPengerusi dan Ketua Pegawai Eksekutif


BOARD OF DIRECTORS


1 2 4 5 6 7 8

3

from left to right

1 Yap Kee KeongExecutive Director

2 Danny Goon Siew CheangIndependent Non-Executive Director

3 Brian Tan Guan HooiExecutive Director

4 Lee Siew Khee, JeffreyPresident & Chief Operating Officer

5 Dato’ Nazir Ariff bin Mushir AriffIndependent Non-Executive Director

6 Tan Sri Dato’ Seri Fumihiko KonishiChairman & Chief Executive Officer

7 Wong Kin ChaiExecutive Director

8 Yong Yoon Fook, DickIndependent Non-Executive Director


BOARD OF DIRECTORS (cont’d)

TAN SRI DATO’ SERI FUMIHIKO KONISHI

Tan Sri Dato’ Seri Fumihiko Konishi, a Japanese, aged 64, is the Founder of the Texchem Group ofCompanies. He is the Chairman and Chief Executive Officer of Texchem Resources Bhd. (“TRB”) andhas been appointed to the Board since 20 February 1974.

Tan Sri Dato’ Seri Konishi obtained a Bachelor of Pharmacy Degree from Tokyo University of Pharmacyand Life Sciences and since 1968, has been domiciled in Malaysia for more than 30 years.

Tan Sri Dato’ Seri Konishi’s entrepreneurial quality has played an important role in the growth ofthe Texchem Group from its small existence to a diversified manufacturing, services and tradinggroup today. Besides being actively involved in the business, he is also instrumental in bringing inand promoting many other Japanese joint-venture groups to Penang and Malaysia.

In recognition of such efforts, Tan Sri Dato’ Seri Konishi was granted permanent residency statusby the Malaysian Government in 1990. In 1991, he was bestowed the Darjah Johan Negeri (D.J.N.)by the Governor of Penang; the Darjah Setia Pangkuan Negeri (D.S.P.N.) in 1994, the Darjah GemilangPangkuan Negeri (D.G.P.N.) in 2000 and Darjah Kebesaran Panglima Setia Mahkota (P.S.M.) by theSupreme Ruler in 2007. In 2001, he was bestowed an honorary fellowship by the Limkokwing Instituteof Creative Technology. Tan Sri Dato’ Seri Konishi is the Chairman of the Executive Committee anda Member of the Remuneration Committee.

Tan Sri Dato’ Seri Konishi also sits on the Board of Fumakilla Malaysia Berhad (“FMB”), Texchem-Pack (M) Bhd. and Texchem-Pack Holdings (S) Ltd.

Save as disclosed in the Analysis of Shareholdings section of this Annual Report, he does not haveany family relationship with any Director of TRB. He has personal interest via Texchem Holdings Sdn.Bhd. ("THSB"), Texchem Corporation Sdn. Bhd. (“Texcorp”), a subsidiary of THSB and Texcorp’ssubsidiaries and/or associated companies (“the Related Companies”) in the business arrangementsinvolving the Related Companies with TRB and TRB’s subsidiaries.

He has not been convicted of any offences within the past 10 years. Tan Sri Dato’ Seri Konishi attendedall Board Meetings held during the financial year ended 31 December 2007.


MR LEE SIEW KHEE, JEFFREY

Mr Lee Siew Khee, Jeffrey, a Malaysian, aged 53, is the President and Chief Operating Officer of TRB.He was appointed to the Board on 15 January 1986. He graduated from University of Malaya in 1979with a Bachelor of Science (Honours) Degree in Chemistry.

Mr Jeffrey Lee joined TRB in 1979 and was promoted to Marketing Director in 1986. He has wideexperience in the field of marketing particularly in the sales of plastics and chemicals. He waspromoted to Managing Director on 1 September 1993 and thereafter promoted to be President andChief Operating Officer on 1 April 2004. He is also a member of the Executive Committee. He wasa Member of the Audit Committee until he resigned on 8 October 2007.

Mr Jeffrey Lee also sits on the Board of Texchem-Pack (M) Bhd. and Texchem-Pack Holdings (S) Ltd.He does not have any family relationship with any Director and/or major shareholder of TRB, norany personal interest in any business arrangements involving the Company.

He has not been convicted of any offences within the past 10 years. Mr Jeffrey Lee attended all BoardMeetings held during the financial year ended 31 December 2007.

MR WONG KIN CHAI

Mr Wong Kin Chai, a Malaysian, aged 48, is an Executive Director of TRB. He was appointed to theBoard on 1 January 2005. He holds a Bachelor of Science (Honours) Degree in Chemistry from theUniversity of Malaya. In 1994, he obtained his Masters in Business Administration from the Universityof Malaya.

Mr Wong Kin Chai joined the TRB Group in 1984. Over the years, he was promoted to DeputyManaging Director, Managing Director and Chief Operating Officer of Texchem Materials Sdn. Bhd.On 1 April 2004, he was promoted to the position of President and Chief Executive Officer of TexchemMaterials Sdn. Bhd. He is also a Member of the Executive Committee.

Mr Wong Kin Chai does not sit on the Board of any other public companies. He does not have anyfamily relationship with any Director and/or major shareholder of TRB, nor any personal interest inany business arrangements involving TRB.

He has not been convicted of any offences within the past 10 years. Mr Wong Kin Chai attended allBoard Meetings held during the financial year ended 31 December 2007.



MR YAP KEE KEONG

Mr Yap Kee Keong, a Malaysian, aged 43, is an Executive Director of TRB. He was appointed to theBoard on 1 January 2006. He holds a Bachelor of Science (Honours) Degree in Physics from theUniversity of Malaya and Masters of Business Administration from the University of Portsmouth, UK.

Mr Yap Kee Keong joined TRB in 1988. He was appointed as a Director of Texchem-Pack (M) Bhd.in January 1999 and then promoted to Executive Vice President in July 2004. He has more than 19years of experience in the sales, marketing and distribution of industrial raw materials and has alsobeen actively involved in the electronics packaging manufacturing sector. He was appointed as aDirector of Texchem Materials Sdn. Bhd. in November 1999 and re-designated to Executive Directorin January 2003. He has since resigned as Executive Director but remains as a Non-Executive Directorof Texchem Materials Sdn. Bhd. since July 2004. He is currently the President and Chief ExecutiveOfficer of Texchem-Pack (M) Bhd. He is also a Member of the Executive Committee.

Mr Yap Kee Keong also sits on the Board of Texchem-Pack (M) Bhd. and Texchem-Pack Holdings (S)Ltd. He does not have any family relationship with any Director and/or major shareholder of TRB,nor any personal interest in any business arrangements involving TRB.

He has not been convicted of any offences within the past 10 years. Mr Yap Kee Keong attended four(4) out of five (5) Board Meetings held during the financial year ended 31 December 2007.

MR BRIAN TAN GUAN HOOI

Mr Brian Tan Guan Hooi, a Malaysian, aged 38, is an Executive Director of TRB. He was appointedto the Board on 1 January 2004. He holds a Bachelor of Accounting (First Class Honours) Degreefrom the University of Malaya in 1993. In 1998, he obtained a Masters in Business Administration(Distinction) from the University of Science, Malaysia. He is a Chartered Accountant registered withthe Malaysian Institute of Accountants.

Prior to joining the Texchem Group, he was attached to KPMG. In 1993, he joined Texcorp as a GroupAccountant and he moved on to assume the position of Business Manager in FMB in 1995. He wastransferred to the Presidential Department of Texcorp as the Assistant General Manager in 1999. In2000, he assumed the position of Deputy Managing Director and Chief Operations Officer and wasappointed as the Managing Director and Chief Executive Officer of FMB in January 2002. On 1 April2004, he was promoted to be President and Chief Executive Officer of FMB. He has assumed theposition of Deputy Chairman of FMB since his resignation as President and Chief Executive Officerof FMB on 1 January 2007. He is currently the President, Chief Executive Officer and ManagingDirector of Texchem Food Sdn. Bhd. since 1 January 2007. He is also a Member of the Executive Committee.

Mr Brian Tan also sits on the Board of FMB. He does not have any family relationship with any Directorand/or major shareholder of TRB, nor any personal interest in any business arrangements involvingTRB.



He has not been convicted of any offences within the past 10 years. Mr Brian Tan attended allBoard Meetings held during the financial year ended 31 December 2007.

DATO’ NAZIR ARIFF BIN MUSHIR ARIFF

Dato’ Nazir Ariff Bin Mushir Ariff, a Malaysian, age 61, is an Independent Non-Executive Director ofTRB.

He was appointed to the Board on 12 March 2003. He is the Chairman of the RemunerationCommittee and a Member of the Audit Committee of TRB.

He is an Accountant by training and a Fellow of the British Institute of Management. He attendedmanagement development programmes in United Kingdom, United States of America and Manila.He also received intensive training at the London Metals Exchange in London.

Dato’ Nazir was a former Director of the Kuala Lumpur Commodity Exchange. Currently, he is anExecutive Director of Ivory Properties Group. He is also a Director and Trustee of Socio-Economicand Environmental Research Institute. He is also the Non-Executive Director of Escoy Holdings Bhd.

He is the Chairman of the Malaysian International Chamber of Commerce & Industry (Penang andthe Northern Branch) and is also involved with many voluntary organisations in the State of Penang.He is the Past President of the Majlis Dato’ Dato’ Pulau Pinang, Past President and founder memberof the Penang Heritage Trust and a trustee of WWF Malaysia.

He does not have any family relationship with any Director and/or major shareholder of TRB, norany personal interest in any business arrangements involving TRB.

He has not been convicted of any offences within the past 10 years. Dato’ Nazir attended four (4)out of five (5) of the Board Meetings held during the financial year ended 31 December 2007.


MR DANNY GOON SIEW CHEANG

Mr Danny Goon Siew Cheang, a Malaysian, age 56, is an Independent Non-Executive Director of TRB.

He was appointed to the Board on 5 March 2001. He is the Chairman of the Audit Committee anda Member of the Remuneration Committee and the Nomination Committee.

He is a Chartered Accountant and worked with Coopers and Lybrand’s Penang and London officesfrom 1971 to 1979 before joining Kennedy Burkill & Company Berhad. He was its Managing Directorfrom 1986 to 2007. Mr Goon also sits on the Boards of Eng Teknologi Holdings Bhd. and Sungei AraEstates Bhd.

Mr Goon served as the Honorary Treasurer of the Penang Skills Development Centre (PSDC) fromits inception in 1989 till 2006. He was the Secretary and Treasurer of the Free Industrial Zone, Penang,Companies’ Association (FREPENCA) from 1982 to 2005 and of the Majlis Dato’ Dato’ Negeri PulauPinang from 1990 to 2007. He was the founder Secretary of the Squash Rackets Association of Penangin 1979 and continues to serve on its Management Committee. He has been the Chairman of TheSt Christopher’s International Primary School, Penang, since 1992.

Mr Goon does not have any family relationship with any Director and/or major shareholder of TRBnor any personal interest in any business arrangement involving TRB.

He has not been convicted of any offences within the past 10 years. Mr Goon attended all BoardMeetings held during the financial year ended 31 December 2007.

MR YONG YOON FOOK, DICK

Mr Yong Yoon Fook, Dick, a Malaysian, age 63, is an Independent Non-Executive Director of TRB.

He was appointed to the Board on 30 November 2001. He is the Chairman of the NominationCommittee and a Member of the Remuneration Committee of TRB. He is also a Member of the AuditCommittee of TRB with effect from 8 October 2007.

He holds a Law Degree from the University of Singapore. He was called to the Malayan Bar in January1969. He was the Legal Partner in the firm of K Ahmad & Yong up to December 2000. Now he isserving as a Consultant to K Ahmad & Yong as from 1 January 2001.

Mr Dick Yong does not sit on the Board of any other public companies.

Mr Dick Yong does not have any family relationship with any Director and/or major shareholder ofTRB nor any personal interest in any business arrangement involving TRB.

He has not been convicted of any offences within the past 10 years. Mr Dick Yong attended all BoardMeetings held during the financial year ended 31 December 2007.




Group Financial Highlights

2003 2004 2005 2006 2007RM’000 RM’000 RM’000 RM’000 RM’000

Revenue 785,611 1,056,797 1,195,459 1,267,657 1,257,012

Operating Profit 25,946 23,471 40,407* 40,694 47,427#

Profit Before Tax 9,399 10,455 26,688* 22,537 29,435#

Net Profit Attributable to Shareholders of the Company 4,425 3,930 18,655* 16,312 18,084#

Shareholders' Fund / Net Assets 159,827 159,177 165,424 171,842 177,663

No. of Ordinary Shares Issued (’000) 109,181 124,099 124,099 124,099 124,099

Net Assets Per Share (RM) 1.46 1.28 1.33 1.38 1.43

Net Tangible Assets 114,671 112,290 118,537 121,726 126,295

Net Tangible Assets Per Share (RM) 1.05 0.90 0.96 0.98 1.02

Net Dividends 7,206 7,062 8,935 8,997 10,945

Gross Dividends (%) 8 8 10 10 12

Earnings Per Share (sen) 3.68 3.24 15.03 13.14 14.57

* Includes Gain on Disposal of an Associate of RM6.6 Million# Includes Gain on Disposal of a Subsidiary and Trademark of RM6.8 Million

785,

611

1,05

6,79

7

1,19

5,45

9

1,26

7,65

7

1,25

7,01

2

0703 04 05 06

25,9

46

23,4

71

40,4

07

40,6

94 47,4

27

0703 04 05 06

OPERATING PROFIT(RM’000)

159,

827

159,

177

165,

424

171,

842 17

7,66

3

0703 04 05 06

REVENUE(RM’000)

SHAREHOLDERS’ FUND/NET ASSETS(RM’000)


CORPORATE INFORMATION

BOARD OF DIRECTORSNon-Independent

Tan Sri Dato’ Seri Fumihiko KonishiChairman and Chief Executive Officer

Lee Siew Khee, JeffreyPresident and Chief Operating Officer

Wong Kin ChaiExecutive Director

Yap Kee KeongExecutive Director

Brian Tan Guan HooiExecutive Director

Independent Non-Executive DirectorsDato’ Nazir Ariff bin Mushir Ariff

Danny Goon Siew CheangYong Yoon Fook, Dick

EXECUTIVE COMMITTEEChairman

Tan Sri Dato’ Seri Fumihiko Konishi

MembersLee Siew Khee, Jeffrey

Wong Kin ChaiYap Kee Keong

Brian Tan Guan Hooi

AUDIT COMMITTEEChairman

Danny Goon Siew Cheang

MembersDato’ Nazir Ariff bin Mushir Ariff

Yong Yoon Fook, Dick

NOMINATION COMMITTEEChairman

Yong Yoon Fook, Dick

MemberDanny Goon Siew Cheang

REMUNERATION COMMITTEEChairman

Dato’ Nazir Ariff bin Mushir Ariff

MembersTan Sri Dato’ Seri Fumihiko Konishi

Danny Goon Siew CheangYong Yoon Fook, Dick

COMPANY SECRETARIESJony RawJudy Gan See Kiat

REGISTERED OFFICELevel 18, Menara Boustead Penang39 Jalan Sultan Ahmad Shah, 10050 PenangTel. +604 229 6000Fax. +604 229 1430

REGISTRARSAGRITEUM Share Registration Services Sdn. Bhd.2nd Floor, Wisma Penang Garden42 Jalan Sultan Ahmad Shah, 10050 PenangTel. +604 228 2321Fax. +604 227 2391

AUDITORSKPMGChartered AccountantsPenangTel. +604 227 2288Fax. +604 227 1888

PRINCIPAL BANKERSMalayan Banking BerhadCIMB Bank BerhadHSBC Bank Malaysia BerhadRHB Bank BerhadHong Leong Bank Berhad

SOLICITORSPresgrave & MatthewsZaid Ibrahim & Co.

AUTHORISED CAPITALRM500,000,000

PAID-UP CAPITALRM124,099,235

STOCK EXCHANGE LISTINGBursa Malaysia Securities Berhad ( “Bursa Securities” )Main Board

WEBSITEwww.texchemgroup.com

SUBSIDIARIES


CORPORATE INFORMATION (cont’d)

Note: The above corporate information does not include dormant subsidiaries of the TRB Group.

INDUSTRIAL DIVISIONNew Material (Malaysia) Sdn. Bhd.

PT. Texchem IndonesiaTexchem Malaysia Sdn. Berhad

Texchem Materials Sdn. Bhd.Texchem Materials (Thailand) Ltd.

Texchem Singapore Private LimitedTexchem Trading ( Wuxi) Co., Ltd.

PACKAGING DIVISIONEye Graphic Sdn. Bhd.

Eye Graphic ( Vietnam) Co., Ltd.Texchem-Pack (Bangi) Sdn. Bhd.

(formerly known as Sanko Kasei (M) Sdn. Bhd.)

Texchem-Pack Holdings (S) Ltd.Texchem-Pack ( Johor) Sdn. Bhd.

Texchem-Pack (KL) Sdn. Bhd.Texchem-Pack (M) Bhd.

Texchem-Pack (PP) Sdn. Bhd.Texchem-Pack (Thailand) Co., Ltd.Texchem-Pack ( Vietnam) Co., Ltd.

Texchem-Pack ( Wuxi) Co., Ltd.Texchem Polymers Sdn. Bhd.

FAMILY CARE DIVISIONBlood Protection Company (Malaysia) Sdn. Bhd.Fumakilla Malaysia BerhadMyanmar Texcorp LimitedPT. Technopia JakartaTechnopia (Thailand) LimitedTechnopia Vietnam Pte. Ltd.Ting Tai Industries (Malaysia) Sdn. Berhad

FOOD DIVISIONA.S.K. Andaman LimitedOcean Pioneer Food Sdn. Bhd.Sea Master Trading Co. Sdn. Bhd.Seapack Italia S.r.l.Sushi Kin Sdn. Bhd.Texchem Food Sdn. Bhd.

ASSOCIATES

M.A.C. Technology (Malaysia) Sdn. Bhd.Texchem Corporation Sdn. Bhd.

executive commitTee

TERMS OF REFERENCE

To assist the Board in decision-making by undertaking the necessary business deliberations and operational activitiesnecessary for the day to day running of the organisation and to seek necessary board approvals where applicable.

Audit Committee Statement


TERMS OF REFERENCE

ObjectiveThe principal objective of the Audit Committee is to assist the Board of Directors of the Company and its subsidiaries indischarging its duties and responsibilities to ensure good corporate governance, business and public accountability.

MembershipThe Audit Committee shall be appointed by the Board from amongst their members and shall consist of no fewer than three(3) Non-Executive Directors, the majority of whom shall be Independent Directors.

All members of the Audit Committee shall be financially literate and at least one (1) member should be a member of anaccountancy association or body.

The Audit Committee shall elect a Chairman from amongst their members who shall be an Independent Non-ExecutiveDirector. In the absence of the Chairman, the remaining members present shall amongst themselves elect a Chairman whomust be an Independent Director to chair the meeting. In the event of any vacancy in the Audit Committee resulting inthe non-compliance with the above, the Board of Directors shall fill the vacancy within three (3) months.

MeetingsThe Audit Committee shall meet not less than four (4) times a year or any such additional meetings as the Chairman shalldecide in order to fulfill its duties. However, the Audit Committee shall meet with the external auditors without the executiveBoard members present at least twice (2) a year and whenever necessary.

In order to form a quorum, the majority of members present must be Independent Directors. Questions arising at anymeeting of the Audit Committee shall be decided by a majority of votes of the members present, and in the case of equalityof votes, the Chairman of the Audit Committee shall have a second or casting vote.

The Chief Financial Officer, the Head of Internal Audit, and representatives of the external auditors shall normally attendmeetings. Other Board members and employees may attend meetings upon the invitation of the Audit Committee.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the Chairman,the Chief Executive Officer, the Chief Financial Officer, the Head of Internal Audit and the external auditors in order to bekept informed of matters affecting the Group.

Audit Committee Statement (cont’d)


AuditorsThe external auditors of the Company and its subsidiaries may also request the Chairman of the Audit Committee to convenea meeting to consider any matter which the auditors consider should be brought to the attention of the Directors orshareholders.

MinutesThe Head of Internal Audit shall act as Secretary to the Audit Committee. The Minutes of each Audit Committee meetingshall be kept at the registered office and distributed to each member of the Audit Committee and also to the other membersof the Board. The Audit Committee Chairman shall report on each meeting to the Board.

The Minutes of meetings of the Audit Committee shall be signed by the Chairman of the meeting at which the proceedingswere held or by the Chairman of the next succeeding meeting.

AuthorityThe Audit Committee is authorised by the Board:

• To investigate any activity within its terms of reference. It is authorised to seek any information it requires fromany employee and all employees are directed to co-operate with any request made by the Committee;

• To obtain external, legal or independent professional advice and to secure the attendance of such external advisorswith relevant experience if considered necessary;

• To convene meetings with the external auditors, the internal auditors or both, without the presence of other directorsand employees, whenever deemed necessary;

• To have direct communication channels with the external auditors and persons carrying out the internal auditfunction or activity.

DUTIES AND RESPONSIBILITIES

The duties and responsibilities of the Audit Committee shall be:

1) To review with the external auditors:• their audit plan;• their evaluation of the system of internal controls;• their audit reports;• their management letters and management responses;• the adequacy of the co-operation given by the Company’s officers in the course of audit;

2) To review:• the interim and annual financial statements of the Company and of the Group and recommend to the Board

of Directors for consideration; any related party transactions or conflict of interest situations that may arisewithin the Company or Group including any transaction, procedure or course of conduct that raises questionsof management integrity.



3) To consider and recommend to the Board, the appointment of the external auditors, the audit fee and any questionof resignation or dismissal.

4) To do the following, in relation to the internal audit function:• Review the adequacy of the scope, functions, competency and resources of the internal audit function, and that

it has the necessary authority to carry out its work;• Review the internal audit programme and results of the internal audit process and, where necessary, ensure that

appropriate actions are taken on the recommendations of the internal audit function;• Review any appraisal or assessment of the performance of members of the internal audit function;• Approve any appointment or termination of senior staff members of the internal audit function; and• Take cognisance of resignations of internal audit staff members and provide the resigning staff members an

opportunity to submit his reasons for resigning.

5) To consider any other functions as may be agreed between the Audit Committee and the Board of Directors.

AUDIT COMMITTEE REPORT

MembershipThe composition of the Audit Committee was as follows:

Mr. Danny Goon Siew CheangChairman, Independent Non-Executive Director

Dato’ Nazir Ariff bin Mushir AriffIndependent Non-Executive Director

Mr. Yong Yoon Fook, Dick (Appointed on 8 October 2007)Independent Non-Executive Director

Mr. Lee Siew Khee, Jeffrey (Resigned on 8 October 2007)Executive Director

MeetingsDuring the year, the Audit Committee convened a total of six (6) meetings, one of which was a meeting with the externalauditors without the presence of management.

All meetings were held with sufficient notification and with agendas being distributed to the members.

Mr. Danny Goon Siew Cheang and Dato’ Nazir Ariff bin Mushir Ariff attended all six (6) meetings whilst Mr. Lee Siew Khee,Jeffrey attended all the five (5) meetings held in the presence of management. Mr.Yong Yoon Fook, Dick attended theone (1) meeting held after his appointment.


Summary of Activities during the Financial YearDuring the year, the Audit Committee discharged its duties in accordance with its terms of reference as follows:

a) Reviewed the external auditors’ scope of work and audit plans for the year. Prior to the audit, representatives fromthe external auditors presented their audit strategy and plan,

b) Considered the interim financial statements of the Company and the Group to ensure adequate disclosure ofinformation. The consideration and discussion of the draft audited annual financial statements were conducted withrepresentatives from the Finance Department and the external auditors,

c) Recommended to the Board of Directors for the consideration of the interim and annual financial statements sopresented,

d) Reviewed with the external auditors, the audit issues and other matters arising from the audit,

e) Reviewed that the recurrent related party transactions were within the limits approved by the Company’s shareholders,

f) Reviewed the internal auditors’ scope of work and audit plan for the year,

g) Reviewed the risk management and internal audit reports and management’s responses, and

h) Appraised the activities of the Internal Audit Department to ensure adequate monitoring of the internal controlsystems.

Internal Audit FunctionThe Group has an inhouse Internal Audit Department, whose internal audit function is independent of the Group’s businessactivities, operating entities and divisions.

The Head of Internal Audit undertakes regular and systematic audit of the Group’s operating entities and divisions, reviewingthe system of internal controls including enterprise risk management and governance processes so as to provide independentand objective assurance that such systems are effective and are operating satisfactorily, highlighting weaknesses andmaking appropriate recommendations to management for improvement. The Internal Audit also investigates complaintsmade on matters affecting the Group’s operations.

The Internal Audit Department provides the Audit Committee with regular, independent and objective reports on the stateof internal controls of the Group. The Department also ensures management’s compliance with the Group’s establishedpolicies and plans.

In 2007, the total cost of the Internal Audit function comprising staff payroll, travelling, office rental and all incidental costsamounted to approximately RM617,000.


NOMINATION COMMITTEE


TERMS OF REFERENCE

ObjectiveIn accordance with the Malaysian Code on Corporate Governance, the Nomination Committee is set up to providerecommendations to the Board candidates for all directorships of Texchem Resources Bhd. to be filled by the shareholdersor the Board. Final decision on the appointment of any directors of Texchem Resources Bhd. shall be made by the Board.

The Nomination Committee shall be responsible in ensuring the appropriate Board balance and size, and that the Boardhas a required mix of responsibility, skills and experience. An annual review of the mix of skills, experience and other corecompetencies of the Board shall be made by the Nomination Committee.

Size and CompositionThe Nomination Committee shall comprise wholly of Non-Executive Directors, the majority of whom are independent. Themembers of the Nomination Committee shall elect a Chairman from amongst any of its members.

MeetingsThe Nomination Committee shall meet as and when is necessary. The quorum for any meetings shall be two (2) memberssubject to any laws, guidelines or rules that may be imposed by the Bursa Malaysia Securities Berhad and/or any otherrelevant authority.

SecretaryThe Company Secretary shall act as Secretary to the Nomination Committee and shall be responsible for keeping minutesof meetings of the Nomination Committee and circulating them to the Nomination Committee members.

Duties and Responsibilities1) To review regularly the Board structure, size and composition and make recommendations to the Board with regard

to any adjustments thereof and/or the appointment of Directors, as the Nomination Committee deems necessary.

2) To consider, in making its recommendations, candidates for directorships proposed by the President/ManagingDirector/Chief Executive Officer of Texchem Resources Bhd. and within the bounds of practicability, by any other seniorexecutive or any other Director or shareholder of Texchem Resources Bhd. as well as make recommendations to putin place the plans for succession, in particular for the Chairman/President and the Managing Director/Chief ExecutiveOfficer.

3) To assist the Board to review the required mix of skills and experience and other qualities including core competencieswhich Non-Executive Directors should bring to the Board and to assess the effectiveness of the Board, any othercommittees of the Board and the contributions of each individual Director of Texchem Resources Bhd., based on theprocess and procedures laid out by the Board.

4) To recommend to the Board for continuation or discontinuation in service of directors as an Executive Director or Non-Executive Director.

5) To recommend Directors who are retiring by rotation to be put forward for re-election.

6) To recommend to the Board, the directors to fill the seats on any committees of the Board.

7) To recommend to the Board the employment of the services of such advisers as it deems necessary to fulfill the Board’sresponsibilities.

8) To carry out other responsibilities, functions or assignments as may be defined by the Board from time to time.

TERMS OF REFERENCE

ObjectivesIn accordance with the Malaysian Code on Corporate Governance, the Remuneration Committee is set up to providerecommendations to the Board on the remuneration of the Executive Directors in all its forms such that the componentparts of remuneration are structured to link rewards to corporate and individual performance.

Executive Directors should play no part in decisions on their own remuneration while the remuneration of the Non-ExecutiveDirectors should be a matter for the Board as a whole to determine. The individuals concerned should abstain fromdiscussion of and voting on their own remuneration.

Size and CompositionThe Remuneration Committee shall consist wholly or mainly of Non-Executive Directors. The members of the RemunerationCommittee shall elect a Chairman from amongst its members who shall be a Non-Executive Director.

MeetingsThe Remuneration Committee shall meet as and when is necessary. The quorum for any meetings shall be two (2) Non-Executive Directors subject to any laws, guidelines or rules that may be imposed by the Bursa Malaysia Securities Berhadand/or any other relevant authority.

SecretaryThe Company Secretary shall act as Secretary of the Remuneration Committee and shall be responsible for keeping minutesof meetings of the Remuneration Committee and circulating them to the Remuneration Committee members.

Duties and Responsibilities1) To determine and agree with the Board the framework or broad policy for the remuneration, in all forms, of the Executive

Directors and/or any other persons as the Committee is designated to consider by the Board, drawing from outsideadvice as necessary.

2) To determine and recommend to the Board any performance related pay schemes for the Executive Directors and/orany other persons as the Committee is designated to consider by the Board.

3) To determine the policy for and scope of service agreements for the Executive and Non-Executive Directors, terminationpayment and compensation commitments.

4) To produce any required reports as may be required from time to time.

5) To recommend to the Board the appointment of the services of such advisers or consultants as it deems necessary tofulfill its responsibilities.

6) To carry out other responsibilities, functions or assignments as may be defined by the Board from time to time.

Remuneration ComMittee


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Thirty-Fourth Annual General Meeting of the Company will be held at Ballroom 1,Level 2, G Hotel, 168A Persiaran Gurney, 10250 Penang on Thursday, 22 May 2008 at 10.30 a.m. for the following purposes :-

1. To receive the Audited Financial Statements for the financial year ended 31 December 2007 together with the Reportsof the Directors and Auditors thereon (Please refer to Note A);

2. To re-elect the following Directors retiring pursuant to Article 123 of the Company’s Articles of Association and who,being eligible, offer themselves for re-election;

(i) Wong Kin Chai Resolution 1(ii) Danny Goon Siew Cheang Resolution 2(iii) Yong Yoon Fook, Dick Resolution 3

3. To approve the Directors’ remuneration for the financial year ended 31 December 2007; Resolution 4

4. To re-appoint Messrs KPMG as Auditors for the ensuing year and to authorise the Directors to fix their remuneration;Resolution 5

5. SPECIAL BUSINESS

To consider and if deemed fit to pass the following Resolutions:

ORDINARY RESOLUTIONS

(A) Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Natureand Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or TradingNature and for the provision of financial assistance (“Proposed Mandate”) Resolution 6

THAT, approval be and is hereby given to the Company and/or its subsidiaries

(1) pursuant to paragraph 10.09 of the Bursa Malaysia Securities Berhad Listing Requirements, to

(a) enter into new Recurrent Related Party Transactions of a Revenue or Trading Nature; and(b) renew the shareholders’ mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

for any of the aforesaid companies to enter into and to give effect to the specified Recurrent RelatedParty Transactions;

all with the specified classes of the Related Parties as outlined in item 2.4 of the Circular to the shareholdersin relation to the Proposed Mandate dated 30 April 2008, which are necessary for the TRB Group's day-to-dayoperations provided that the transactions are in the ordinary course of business and are on normal commercialterms which are not more favourable to the related parties than those generally available to the public and notto the detriment of the minority shareholders; and

(2) pursuant to paragraphs 8.23 and 10.09 read with Practice Notes 12/2001 and 14/2002 of the Bursa MalaysiaSecurities Berhad Listing Requirements, to enter into the recurrent transactions for the provision offinancial assistance as specified in item 2.3 of the Circular to the shareholders in relation to the Proposed Mandatedated 30 April 2008 provided that the provision of financial assistance is fair and reasonable to the Companyand is not to the detriment of the Company and its shareholders;



NOTICE OF ANNUAL GENERAL MEETING (cont’d)

and provided further that disclosure for all such transactions is made in the annual report of the aggregate valueof all such transactions conducted pursuant to the shareholders' mandate during the financial year where :-

(a) the consideration, value of the assets, capital outlay or costs of the aggregated transaction is equal toor exceeds RM1 million; or

(b) any one of the percentage ratios of such aggregated transactions is equal to or exceeds 1%;

whichever is the higher;

AND THAT such approval shall continue to be in force until:-

(i) the conclusion of the next Annual General Meeting ("AGM") of the Company following this AGM, atwhich time it will lapse, unless by a resolution passed at the AGM, such authority is renewed;

(ii) the expiration of the period within which the next AGM of the Company is required to be held pursuantto Section 143(1) of the Companies Act, 1965 (“the Act”) (but shall not extend to such extension as maybe allowed pursuant to Section 143(2) of the Act); or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is the earlier;

AND THAT the Directors of the Company and/or its subsidiaries be and are hereby authorised to complete anddo all such acts and things as they may consider expedient or necessary to give effect to the Proposed Mandate.

(B) Power to Issue Shares pursuant to Section 132D, Companies Act, 1965 Resolution 7

THAT subject always to the Companies Act, 1965, Articles of Association of the Company and approvals fromthe relevant statutory or regulatory authorities, where such approval is necessary, full authority be and is herebygiven to the Directors pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Companyat any time until the conclusion of the next Annual General Meeting and upon such terms and conditions andfor such purposes as the Directors may, in their absolute discretion deem fit provided that the aggregate numberof shares to be issued pursuant to this Resolution does not exceed 10% of the issued share capital of theCompany.

BY ORDER OF THE BOARD

JONY RAWJUDY GAN SEE KIATCompany Secretaries

PenangDate : 30 April 2008

NOTES :

A. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does notrequire a formal approval of the shareholders and hence, is not put forward for voting.

1. A Member of the Company entitled to attend and vote at the meeting may appoint up to two (2) proxies to attend andvote instead of him/her. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b)of the Companies Act, 1965 shall not, apply to the Company. If a Member appoints two (2) proxies, the appointmentsshall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

2. To be effective:

(a) the instrument appointing a proxy; and(b) the authority (if any) under which it is executed or a copy of such authority certified notarially or in some other

way approved by the Directors of the Company, must be deposited at the Registered Office of the Company,Level 18, Menara Boustead Penang, 39 Jalan Sultan Ahmad Shah, 10050 Penang, Malaysia at least forty-eight (48)hours before the time for holding the meeting.

3. If the Proxy Form is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain ashe/she thinks fit.

4. If the Proxy Form is returned without the name of the proxy indicated, the Proxy Form shall be invalid.

5. Where the person appointing the proxy is a corporation, the form must be either under seal or under the hand of aduly authorised officer or attorney of the corporation.

6. Explanatory notes on Special Business:-

(a) Ordinary Resolution (Resolution 6)Paragraph 10.09 of the Bursa Malaysia Securities Berhad Listing Requirements states that with regard to relatedparty transactions involving recurrent transactions of a revenue or trading nature which are necessary for itsday-to-day operations, the public listed company may seek a shareholders’ mandate.

In addition, paragraphs 8.23 and 10.09 read with Practice Notes 12/2001 and 14/2002 of the Bursa MalaysiaSecurities Berhad Listing Requirements state that with regard to recurrent transactions due to the pooling offunds within the listed company’s group of companies via a centralised treasury management function or suchsimilar arrangements which entails the provision of financial assistance by the listed company and/or its unlistedsubsidiaries on a short or medium term basis which is a term not exceeding 3 years, the public listed companymay seek a shareholders’ mandate.

This Ordinary Resolution, if passed, will authorise the Company and/or each of its subsidiaries to enter into

(i) recurrent related party transactions of a revenue or trading nature with the mandated related partiesas identified in item 2.3 of the Circular to the shareholders in relation to the Proposed Mandate dated30 April 2008, which are necessary for the TRB Group’s day-to-day operations, provided that suchtransactions are in the ordinary course of business and are on normal commercial terms which are notmore favourable to the related parties than those available to the public and not to the detriment of theminority shareholders; and





(ii) recurrent transactions with the mandated parties as identified in item 2.4 of the Circular to the shareholdersin relation to the Proposed Mandate dated 30 April 2008, provided that such transactions are fair andreasonable to the Company and is not to the detriment of the Company and its shareholders.

This authority, unless revoked or varied by the Company at general meeting, will expire at the conclusion ofthe next AGM of the Company.

(b) Ordinary Resolution (Resolution 7)The Ordinary Resolution no. 7, if passed, will give the Directors of the Company, from the date of this AGM,authority to issue and allot ordinary shares from the unissued share capital of the Company up to an aggregateof not exceeding 10% of the issued share capital of the Company for the time being pursuant to Section 132Dof the Act. This authority unless revoked or varied at a general meeting, will expire at the next AGM.

Statement Accompanying Notice OFAnnual General Meeting


Directors who are seeking re-election at the Thirty-Fourth Annual General Meeting of the Company

Messrs Wong Kin Chai, Danny Goon Siew Cheang and Yong Yoon Fook, Dick are standing for re-election and reappointment.

Please refer to their respective particulars stated in the Profile of Directors’ section. Further details of their shareholdingsinformation are listed in the Analysis of Shareholdings (under the Directors’ Shareholdings) and Directors’ Report for theyear ended 31 December 2007 (under Directors of the Company).

The Board of Directors continues with its commitment to achieve and maintain the highest standards of corporate governancethroughout the Group. The Board views corporate governance as synonymous with three key concepts; namely transparency,accountability as well as corporate performance.

The Board is entirely committed to the maintenance of high standards of corporate governance by supporting andimplementing the prescriptions of the principles and best practices set out in Parts 1 and 2 respectively of the MalaysianCode on Corporate Governance (Revised 2007) [the “Revised Code”]. In addition, the Board follows global developmentsof internationally recognised corporate governance practices and though the Board is in compliance with many respectsalready, it continually reviews the Group’s corporate governance processes and strives to make appropriate adjustmentsto reflect its position as a good corporate citizen. The key intent is to adopt the substance behind good governance andnot merely the form, with the aim of ensuring Board effectiveness in enhancing shareholder value.

The Board is pleased to provide the following statements, which outline the main corporate governance practices that werein place throughout the financial year, unless otherwise stated.

Compliance StatementThe Group has complied throughout the year ended 31 December 2007 with all the best practices of corporate governanceset out in Part 2 of the Revised Code save as explained below:-

• Given the current composition of the Board, in particular the strong and independent element, the Board does notconsider it necessary to have the role of the Chairman and Chief Executive Officer separated or to nominate a recognisedSenior Independent Non-Executive Director to which any matters of concern may be raised to the Board.

• The Audit Committee had only met once with the external auditors without the presence of the executive boardmembers, instead of twice as required by the Revised Code which took effect only from 1 October 2007. This will becomplied with from the year 2008.

Principles StatementThe following statement sets out how the Company has applied the principles in Part 1 of the Revised Code. The principlesare dealt with under the following headings: Board of Directors, Directors’ remuneration, Shareholders and Accountabilityand Audit.

A. BOARD OF DIRECTORS

Board ResponsibilitiesThe Group acknowledges the pivotal role played by the Board of Directors in the stewardship of its direction andoperations, and ultimately the enhancement of long-term shareholder value. To fulfil this role, the Board is responsiblefor the overall corporate governance of the Group, including its strategic direction, establishing goals for managementand monitoring the achievement of these goals.

The Board has a formal schedule of matters reserved to itself for decision, which includes the acquisition and divestmentpolicy, approval of major capital expenditure projects, consideration of significant financial matters and it reviews thefinancial and operating performance of the Group. The schedule ensures that the governance of the Group is in itshands.


CORPORATE GOVERNANCE STATEMENT

A. BOARD OF DIRECTORS (cont’d)

MeetingsThe Board ordinarily meets at least four (4) times a year with additional meetings convened when urgent and importantdecisions need to be taken in between the scheduled meetings. During the financial year ended 31 December 2007,the Board met on five (5) occasions; where it deliberated upon and considered various matters.

The Board also receives documents on matters requiring its consideration prior to and in advance of each meeting andvide circular resolutions. The Board papers and papers accompanying circular resolutions are comprehensive andencompass both quantitative and qualitative factors so that informed decisions are made. All proceedings from theBoard meetings are minuted and signed by the Chairman of the meeting.

Details of each existing Director’s meeting attendances during the financial year are as follows:

Meetings Attended (Out Of 5)

Tan Sri Dato’ Seri Fumihiko Konishi Chairman and Chief Executive Officer 5/5

Lee Siew Khee, Jeffrey President and Chief Operating Officer 5/5

Wong Kin Chai Executive Director* 5/5

Yap Kee Keong Executive Director* 4/5

Brian Tan Guan Hooi Executive Director* 5/5

Dato’ Nazir Ariff bin Mushir Ariff Independent Non-Executive Director 4/5

Danny Goon Siew Cheang Independent Non-Executive Director 5/5

Yong Yoon Fook, Dick Independent Non-Executive Director 5/5

* Redesignated as an Executive Director from Non-Executive Director with effect from 22 February 2008.

Board CommitteesThe Board of Directors delegates certain responsibilities to the Board Committees, as follows:

Board Committee Key Functions

Executive Committee Explained in the Executive Committee:Terms of Reference section of this Annual Report.

Audit Committee Explained in the Audit Committee:Terms of Reference section of this Annual Report.

Remuneration Committee Explained in the Remuneration Committee:Terms of Reference section of this Annual Report.

Nomination Committee Explained in the Nomination Committee:Terms of Reference section of this Annual Report.

All committees have written terms of reference. These committees are formed in order to enhance business andoperational efficiency as well as efficacy. Prior to the establishment of the committees, part of their function was assumedby the Board as a whole. The Board retains full responsibility for the direction and control of the Company and theGroup.

CORPORATE GOVERNANCE STATEMENT (cont’d)



Board BalanceAs at the date of this statement, the Board consists of eight (8) members; comprising three (3) independent non-executive Directors and five (5) executive Directors. A brief profile of each Director is presented in the Profile of Directorssection of this Annual Report.

The concept of independence adopted by the Board is in tandem with the definition of an Independent Director inparagraph 1.01 of the Listing Requirements (“Listing Requirements”) of the Bursa Malaysia Securities Berhad (“BursaSecurities”) and Practice Note 13/2002 of Bursa Securities’ Listing Requirements. The key elements for fulfilling thecriteria are the appointment of independent Directors who are not members of management (non-executive) and whoare free of any relationship which could interfere with the exercise of independent judgement or the ability to act inthe best interests of the Company. The Board complies with paragraph 15.02 of the Listing Requirements which requiresthat at least two Directors or one-third of the Board of Directors of the Company, whichever is the higher, are independentDirectors.

The Directors, with their different backgrounds and specialisations, collectively bring with them a wide range of experienceand expertise in areas such as finance, corporate affairs, legal, marketing and operations. The executive Directors areresponsible for implementing the policies and decisions of the Board, overseeing the operations as well as co-ordinatingthe development and implementation of business and corporate strategies. The independent non-executive Directorsbring to bear objective and independent judgement to the decision making of the Board and provide a capable checkand balance for the executive Directors. Together with the executive Directors who have intimate knowledge of thebusiness, the Board is constituted of individuals who are committed to business integrity and professionalism in all itsactivities and have a proper understanding of and competence to deal with the current and emerging business issues.

The roles of Chairman and the Chief Executive Officer are combined. The Chairman and Chief Executive Officer isresponsible for running the Board and ensures that all Directors receive sufficient relevant information on financial andnon-financial matters to enable them to participate actively in Board decisions and also for the day to day managementof the business as well as implementation of Board policies and decisions.

The Revised Code recommends the appointment of a senior independent non-executive director to whom concernsmay be conveyed. As explained in the compliance statement above, the Board has not appointed any independent non-executive Director to fulfil the role, given the strong and independent element on the Board.

The Board is satisfied that the current Board composition fairly reflects the interests of minority shareholders in theCompany.

Supply of InformationThe Board recognises that the decision making process is highly contingent on the quality of information furnished.As such, all Directors have unrestricted access to any information pertaining to the Company and the Group.

The Chairman ensures that all Directors have full and timely access to information with Board papers distributed inadvance of meetings. This ensures that Directors have sufficient time to appreciate issues to be deliberated at the Boardmeeting and expedites the decision making process.




Supply of Information (cont’d)

Every Director has also unhindered access to the advice and services of the Company Secretaries. The Board believesthat the current Company Secretaries are capable of carrying out his/her duties to ensure the effective functioning ofthe Board. In the event that the Company Secretaries fail to fulfil his/her functions effectively, the terms of appointmentpermit his/her removal and appointment of a successor only by the Board as a whole.

The Executive Committee, Audit Committee, Remuneration Committee and Nomination Committee play a pivotal rolein channelling pertinent operational and assurance related issues to the Board. The Committees partly function as afilter to ensure that only pertinent matters are tabled at the Board level. There is also a formal procedure sanctionedby the Board of Directors, whether as a full board or in their individual capacity, for Directors to obtain independentprofessional advice at the Company’s expense.

Appointments To The Board

Nomination CommitteeThe Nomination Committee comprised the following members during the year:

Yong Yoon Fook, Dick - Chairman, Independent Non-Executive DirectorDanny Goon Siew Cheang - Independent Non-Executive Director

The Nomination Committee consists entirely of non-executive Directors, all of whom are independent.

The Nomination Committee is empowered by the Board and its terms of reference are to bring to the Boardrecommendations as to the appointment of new Directors. The Committee also keeps under review the Board structure,size and composition as well as considering the Board succession planning.

The Nomination Committee systematically assesses the effectiveness of the Board, the committees of the Board andthe contribution of each individual Director on an annual basis. All assessments and evaluations carried out by theNomination Committee in the discharge of all its functions are documented.

The Nomination Committee met twice during the financial year. The Chairman and Chief Executive Officer was invitedby the Chairman of the Nomination Committee, to attend the meeting.

The Terms of Reference of the Nomination Committee is set out in the Nomination Committee : Terms of Referencesection of this Annual Report.

Appointment ProcessThe Board through the Nomination Committee’s annual appraisal believes that the current composition of the Boardbrings the required mix of skills and core competencies required for the Board to discharge its duties effectively.

New appointees will be considered and evaluated by the Nomination Committee. The Committee will then recommendthe candidates to be approved and appointed by the Board. The Company Secretary will ensure that all appointmentsare properly made, and that legal and regulatory obligations are met.




Directors’ TrainingThe Board through the Nomination Committee ensures that it recruits to the Board only individuals of sufficient calibre,knowledge and experience to fulfil the duties of a Director appropriately. All Directors have attended and successfullycompleted the Mandatory Accreditation Programme (MAP) conducted currently by Bursatra Sdn Bhd. During the yearunder review, the Directors have attended various training programmes and seminars as set out below, to enhance theirknowledge and expertise:

Number Of Directors Name Of Seminar Number Of Days Who Attended

Tax Practitioner Update & Tax Planning for 2007 1 1

The Effective Leader as a Coach 1 1

Service Excellence 1 1

Refrigeration Seminar 2007 1 1

Forum on Proposed Private Entity Reporting Standards 1/2 1

Conference in “Corporate Governance:Recent Updates & Roles of Auditors” 1 1

Tax Implications of 2008 Budget & PracticalApplication of the Latest Tax Developments 1 1

2008 Budget Dialogue 1/2 1

Technical Seminar Financial ReportingStandards Seminar 2007 2 1

Updates on the Companies (Amendment)Act 2007 - Impact on the Directors 1/2 8

The Directors will continue to undergo other relevant training programmes to further enhance their skills and knowledgewhere relevant.

Re-ElectionThe Articles of Association provide that at least one-third of the Board are subject to retirement by rotation at eachAnnual General Meeting (‘AGM’). The Directors to retire in each year are the Directors who have been longest in officesince their appointment or re-appointment. A retiring Director is eligible for re-appointment. This provides an opportunityfor shareholders to renew their mandates. The election of each Director is voted on separately. To assist shareholdersin their decision, sufficient information such as personal profile and the shareholdings in the Group of each Directorstanding for election are furnished in a separate statement accompanying the Notice of the AGM.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordancewith Section 129(6) of the Companies Act 1965.



B. DIRECTORS’ REMUNERATION

Remuneration CommitteeThe Remuneration Committee comprised the following members during the year:

Dato’ Nazir Ariff bin Mushir Ariff - Chairman, Independent Non-Executive DirectorDanny Goon Siew Cheang - Independent Non-Executive DirectorYong Yoon Fook, Dick - Independent Non-Executive DirectorTan Sri Dato’ Seri Fumihiko Konishi - Executive Director

The Remuneration Committee met once during the financial year. The meeting was attended by all the members of theRemuneration Committee.

The Remuneration Committee consists mainly of non-executive Directors, the majority of whom is independent.

The Remuneration Committee is responsible for inter alia recommending to the Board the remuneration frameworkfor Directors as well as the remuneration packages of executive Directors. The Terms of Reference of the RemunerationCommittee is set out in the Remuneration Committee : Terms of Reference section of this Annual Report.

The executive Directors during the year, did not participate directly in any way in determining their individual remuneration.The Board as a whole determines the remuneration of non-executive Directors with individual Directors abstainingfrom decisions in respect of their individual remuneration. In deciding an appropriate level of fees for each non-executiveDirector, the Board considered the responsibility and time commitments taking into account the number of Boardmeetings, special meetings and the time required for reading Board and other papers, as well as the membership andchairmanship of Board committees.

The policy practised on Directors’ remuneration by the Remuneration Committee is to provide the remunerationpackages necessary to attract, retain and motivate Directors of the quality required to manage the business of theCompany and to align the interest of the Directors with those of the shareholders.

Further details of Directors’ remuneration are set out below and in the Notes to the financial statements.





B. DIRECTORS’ REMUNERATION (cont’d)

Details Of The Directors’ RemunerationDetails of the nature and amount of each major element of the remuneration for the year 2007 of each Director of theCompany holding office during the financial year 2007 are as follows:

1. Aggregate remuneration of Directors categorised into appropriate components:

In RM Fees Salaries Bonus & Benefits Others TotalIncentives In Kind

Executive Directors

- Company* 600,000 691,800 172,950 43,585 220,665 1,729,000

- Subsidiaries 1,291,275 1,062,600 251,245 23,394 245,580 2,874,094

Subtotal 1,891,275 1,754,400 424,195 66,979 466,245 4,603,094

Non-Executive Directors**

- Company* 540,000 - - - 70,000 610,000

- Subsidiaries 1,189,945 984,000 443,220 77,173 214,278 2,908,616

Subtotal 1,729,945 984,000 443,220 77,173 284,278 3,518,616

Total 3,621,220 2,738,400 867,415 144,152 750,523 8,121,710

* Subject to shareholders’ approval at this coming Annual General Meeting.** 3 out of the 5 Non-Executive Directors are Executive Directors at the various subsidiaries of the Company. They

have been re-designated as Executive Directors of the Company with effect from 22 February 2008.

2. Number of Directors whose remuneration falls into the following bands:-

Number of DirectorsExecutive Non-Executive

RM100,001 to RM150,000 - 3

RM950,001 to RM1,000,000 - 1 ***

RM1,050,001 to RM1,100,000 - 1 ***

RM1,100,001 to RM1,150,000 - 1 ***

RM1,750,001 to RM1,800,000 1 -

RM2,850,001 to RM2,900,000 1 -

*** These Non-Executive Directors are Executive Directors at the various subsidiaries of the Company. They have beenre-designated as Executive Directors of the Company with effect from 22 February 2008.

Executive Directors (including the Non-Executive Directors who have been re-designated as Executive Directors of theCompany with effect from 22 February 2008) receive bonuses based on the achievement of specific goals related to theperformance of the Group (including operational results). Independent Non-Executive Directors during the year, do notreceive any performance related remuneration.

C. SHAREHOLDERS

The company continues to build shareholders’ confidence by maintaining an active dialogue with them with the intentionof giving shareholders as much as possible, a clear and complete picture of the Company’s performance and position.

The key element of the Company’s dialogue with its shareholders is the opportunity to gather views of, and answerquestions from, both individual and institutional shareholders on all issues relevant to the Company at the AGM. It isalso a requirement for the Company to send the Notice of the AGM and related papers to shareholders at least twentyone (21) days before the meeting. At the AGM, shareholders are encouraged to ask questions both about the resolutionsbeing proposed or about the Group’s operations in general. Where it is not possible to provide immediate answers,the Chairman will undertake to furnish the shareholder with a written answer after the AGM. The Chairman of the Boardalso addresses the shareholders on the review of the Group’s operations for the financial year and outlines the prospectsof the Group for the subsequent financial year.

The Company also holds briefing for institutional investors and investment analysts. Press conferences are also heldto brief members of the media on key events of the Company. In addition, throughout the year, the Company hasprogrammes for meetings or interviews with the investment community or press. The Company also institutionalisedan Investors’ Newsletter which is sent to the investment community, shareholders and the press. This Investors’Newsletter provides updates on the Group’s results and developments of the core business divisions on a quarterlybasis.

The Company’s website, www.texchemgroup.com provides a comprehensive avenue for information dissemination,such as dedicated sections on corporate information including financial information, press releases and company news.Shareholders are able to put questions to the Company through its email published in the website and the Companywill reply accordingly.

While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, it ismindful of legal and regulatory framework governing the release of material and price-sensitive information. Suchmaterial and price-sensitive information are not released unless it has been duly announced or made public throughproper channels.

D. ACCOUNTABILITY AND AUDIT

Financial ReportingThe Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performanceand prospects at the end of the financial year, primarily through the annual and interim financial statements to shareholdersas well as the Chairman’s Statement in the Annual Report. The Board is assisted by the Audit Committee to oversee theGroup’s financial reporting processes and the quality of its financial reporting.



D. ACCOUNTABILITY AND AUDIT (cont’d)

Directors’ Responsibility Statement in Respect of The Preparation of The Audited Financial StatementsThe Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of theGroup and of the Company as at the end of the financial year and of the results of their operations and cash flows forthe year ended on that date. The Directors have ensured that the financial statements of the Group and of the Companyare drawn up in accordance with the requirements of the applicable approved Financial Reporting Standards issued bythe Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965.

In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policiesand made reasonable and prudent judgements and estimates. The Directors also have a general responsibility for takingreasonable steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

State of Internal ControlsThe Statement on Internal Control set out in that particular section of the Annual Report provides an overview on thestate of internal controls within the Group.

Relationship with External AuditorsThe external auditors of the Company fulfil an essential role on behalf of Company’s Shareholders in giving an assuranceto the shareholders of the reliability of the financial statements of the Group.

The external auditors have an obligation to bring to the attention of the Board of Directors, the Audit Committee andCompany’s management any significant weaknesses in the Company’s systems of reporting, internal control andcompliance with approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board andregulatory requirements. The external auditors of the Company are invited to attend all of the Audit Committee’smeetings. During the year, the non-audit fees incurred by the Company and its subsidiaries for services rendered bythe external auditors of the Company and its affiliated firms was approximately RM292,000 for reviewing of groupconsolidated financial statements and Statement on Internal Control and providing corporate tax advisory services,preparation, review and submission of tax returns.

The key features underlying the relationship of the Audit Committee with the external auditors are included in the AuditCommittee’s terms of reference as detailed in the Audit Committee Statement in this Annual Report.

A summary of the activities of the Audit Committee during the financial year are set out in the Audit Committee Statement.



Statement on Internal Control


The Board is ultimately responsible for the Group’s system of internal controls, financial or otherwise which should providereasonable assurance regarding the achievement of the Group’s objectives in:

• Effectiveness and efficiency of operations• Reliability of financial information• Compliance with laws and regulations

The Board recognises that reviewing of the Group’s system of internal controls is a concerted and ongoing process, designedto manage, rather than eliminate the risk of failure to achieve corporate objectives. Accordingly, it can only provide reasonablebut not absolute assurance against material misstatement or loss. The system of internal controls includes, inter-alia, financial,budgetary, organisational, operational and compliance controls.

In order to achieve a strong control environment, the Group has established an organisational structure with defined linesof responsibility and delegation of authority. A hierarchical reporting system has been established which includes theestablishment of appropriate authority limits, proper segregation of staff duties, annual budgeting, the monthly reportingof variances between the actual and budgeted results for corrective action to be taken and human resource managementpolicies.

Reviewing the Group’s system of internal controls with the aim to strengthen the control environment is carried out regularlyby the Internal Audit and the respective Divisional management in conjunction with the Audit Committee.

In recognising its stewardship responsibilities, the Group has in place an Enterprise Risk Management system as:

• An integral part of the Group’s management practice• A continuous and ongoing process• A logical and systematic method of identifying, analyzing, assessing, treating and monitoring of the significant risks

affecting the Group’s business and achievement of its objectives

The respective Divisional Management is primarily responsible for the identification and management of significant risksaffecting their business units together with the design and implementation of suitable risk controls. These risks may beassociated with a variety of internal or external factors including control breakdowns, disruption in information systems,competition, natural catastrophe and regulatory requirements. For the purpose of risk management, they are classified intotwo categories namely those that are catastrophic in nature and those that hinder the achievement of the short-termobjectives of the Group.

The Group has an inhouse Internal Audit Department to provide regular, independent and objective assurance to the Boardand Audit Committee that:

• The internal controls of the Group are appropriate for its business and operating as intended• Suitable controls are in place to manage major risks• Management responses to these risks are acceptable

During internal audit assignments, the Internal Audit Department also undertook, wherever relevant, the following:

• Assessment of operating efficiencies• Ensure compliance with the Group’s policies and relevant legislations

There were no material losses incurred during the current financial year as a result of weaknesses in internal control.

This Statement is issued in accordance with a resolution of Directors dated 15 April 2008.

Other Disclosures


CORPORATE SOCIAL RESPONSIBILITY STATEMENT

TRB believes that sustainable corporate success requires the highest standard of corporate behaviour including measuringup to public expectations on corporate social responsibilities. In 2007, TRB continues with this commitment as a good andresponsible corporate citizen.

Contribution to the community is important in TRB’s view as without the community, a company cannot sustain itsbusinesses. In 2007, to foster and enhance goodwill and unity amongst the community, TRB had supported variousorganisations, bodies and events such as the Malaysian Plastics Manufacturers Association, Majlis Sukan Negeri Pulau Pinang,Penang Japanese Association in conjunction with the Bon Odori and Sakura Charity Festival and the annual ThaipusamFestival. In addition, to promote and instill an appreciation of arts and culture in the community, TRB also supported theactivities of the Penang State Cultural Council. On a more personal level, a Blood Donation Campaign was organised duringthe year by one of TRB’s subsidiaries as part of its contribution to the community. Alongside that, Aedes awareness campaignswere organised throughout the year in collaboration with the Ministry of Health and the Ministry of Education to instillawareness amongst the younger generation of the dangers of Aedes to promote and improve the quality of life in thecommunity.

To further contribute to the community, since 1994, TRB had provided educational scholarships to facilitate selecteddeserving underprivileged university students to enable them to accomplish their dream of pursuing a tertiary educationin specified science and engineering related courses. TRB continues with this vision and commitment in year 2007 bycontinuing with this support for four students, who had graduated in year 2007. The younger generation are also notexempted, as one of TRB’s subsidiaries in collaboration with many child care centres and kindergartens, had organisededucational programmes for them with the objective of instilling consciousness in the younger generation of the importanceof having a healthy lifestyle.

TRB Group recognises that various of its activities have an impact on the environment. Consequently, at various plants,TRB Group continues to ensure strict compliance with the environmental laws governing plant operations and maintenancein areas relating to environmental standards, emission standards, noise level management and treatment of plant effluentsand waste water. In particular, a waste management awareness programme was conducted by one of TRB’s subsidiaries incollaboration with the Department of Environment under the Ministry of Natural Resources and Environment in 2007 tocreate awareness amongst employees of the importance of waste management and to inculcate the Group’s practice ofenvironmentally friendly waste management policy. Further, an educational environmental awareness programme forsecondary school students was also conducted by another subsidiary of TRB as part of the Group’s commitment to promoteenvironmental issues. Eight of TRB Group’s plants are certified to the international environmental management systemsstandard, ISO 14001:2004 Environmental Management System.

Shareholders of any company are a company’s lifeline since shareholders are stakeholders who believe in the company andhave invested their hard-earned monies to support the company. As the TRB Group values all its shareholders who haveinvested into TRB, TRB takes its duties and responsibilities to them seriously. In line with this and to continually be moretransparent more and more, since 2004, TRB had sent newsletters to its shareholders to keep them updated on thedevelopments of the TRB Group so that its shareholders can make informed decisions. These efforts continue in year 2007.

People are crucial in any company’s continuing growth and success. TRB Group recognises this and as a large workforceof the Group are female staff, in October 1989, the Texchem Ladies’ Club was incepted, of which all ladies of the TRB Groupare automatically members of, with the objective of grooming female staff to be all rounders who are professional in allaspects in their day-to-day dealings, recognised and respected in the company and community. In year 2007, continuingwith this tradition, to achieve the Texchem Ladies’ Club’s objectives, various activities were organised such as Fine Dining

Other Disclosures (cont’d)


CORPORATE SOCIAL RESPONSIBILITY STATEMENT (cont’d)

Etiquette and grooming to develop its members’ personal grooming, fine dining skills and table manners to enable themto be confident when attending any social functions of this nature, English for Business Classes to enhance its members’public communication and presentation skills, singing classes and cooking lessons to develop the talent and culinary skillsrespectively, of its members, health related activities and health screening to promote healthy living, team building activities,various arts and craft making activities as well as a charity drive and community services activities to instil a sense of careand concern towards the less fortunate.

Communication between management and employees of the TRB Group is also crucial to the Group’s success. For thispurpose, an in-house magazine called ‘Texview’ has been published on a quarterly basis since October 1989 to promotesuch communication. Besides, informing the employees of the happenings and developments in the Group, employeesare free to share their creative ideas and air their views on various issues such as poems, new sport activities, various learningexperiences and new self-developments.

To further foster recreational fellowship and sportsmanship amongst the employees and the management of TRB who playsgolf, an Annual Golf Tournament has been held by the TRB Group since September 1997. This promotes friendly competitionand camaraderie amongst all golfers who have participated in the said tournament. In 2007, the TRB Group held its annualgolf tournament at The Penang Golf Resort wherein 36 persons had participated, out of which 34 are employees andmanagement staff of the TRB Group.

The Group is committed to providing and maintaining a healthy and safe work environment for its employees. OccupationalSafety and Health committees implement and ensure continuous improvements in health and safety in the Group’s businessoperations. External trainers are invited to provide courses to staff in emergency first-aid training. Other training sessionsorganised included safe forklift driving, electrical safety and fire fighting. At the corporate head office of the TRB Group,safety system checks and drills are regularly conducted on all safety related equipment.

Going forward, as a socially responsible citizen of the business community, TRB is determined to become more engagedin being socially responsible by approaching the process of Corporate Social Responsibility as part of how the TRB Groupfamily normally works and thinks.

STATUS OF UTILISATION OF PROCEEDS FROM THE PROPOSED ISSUANCE OF PRIVATE DEBT SECURITIESOF UP TO RM100 MILLION

The Company had obtained an approval dated 3 February 2005 from the Securities Commission for the issuance of privatedebt securities of up to RM100 million (“Proposed PDS Programme”) which was at that material time made up of CommercialPapers (“CPs”) of up to RM60 million and/or Medium Term Notes (“MTNs”) of up to RM100 million.

Subsequently, the Company had applied to the Securities Commission on 16 October 2006 for the removal of the CPs sub-limit of RM60 million and change the CPs’ limit to RM100 million. On 10 November 2006, the Securities Commission hadapproved the said removal and change whereby the Proposed PDS Programme can now consist of CPs of up to RM100million and/or MTN of up to RM100 million.

Pursuant to the Proposed PDS Programme as revised on 10 November 2006, the Company has todate issued only CPsamounting to RM70 million.


Other Disclosures (cont’d)

STATUS OF UTILISATION OF PROCEEDS FROM THE PROPOSED ISSUANCE OF PRIVATE DEBT SECURITIESOF UP TO RM100 MILLION (cont’d)

As at 15 April 2008, the proceeds from the CPs issued were utilised as follows:RM’000

Repayment of bank borrowings 60,010Professional fees and related expenses 897Working capital 9,093

70,000

PARTICULARS OF MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTSDURING THE FINANCIAL YEAR.

During the financial year, the following is the material contract involving Directors’ and major shareholders’ interest(not being contracts entered into in the ordinary course of business):

1. Share Sale Agreement dated 13 June 2007 between TRB and Texchem Corporation Sdn. Bhd. (“Texcorp”) for theacquisition of 442 shares of USD5,000 each in PT. Technopia Jakarta (“PTTJ”) representing approximately 30% ofthe issued and paid-up share capital of PTTJ by TRB from Texcorp at a cash consideration of RM8,415,470.

Analysis of shareholdingsAs At 8 April 2008


Authorised Capital - RM500,000,000Issued and Paid-up Capital - RM124,099,235Class of Shares - Ordinary shares of RM1.00 eachVoting Rights - On a show of hands - One vote for every shareholder

- On a poll - One vote for every ordinary share heldNumber of Shareholders - 3,175

SHAREHOLDINGS STATISTICS

No. of No. of PercentageSize of Holdings Shareholders Shares %

Less than 100 123 5,713 0.005100 - 1,000 265 186,761 0.1501,001 - 10,000 2,226 8,429,134 6.79210,001 - 100,000 513 11,971,693 9.647100,001 to less than 5% of issued shares 44 44,974,746 36.2415% and above of issued shares 4 58,531,188 47.165

Total 3,175 124,099,235 100.000


Analysis of shareholdings (cont’d)As At 8 April 2008

THIRTY LARGEST SHAREHOLDERS

No. of % ofNo. Name Shares Shares

1 CIMB Group Nominees (Tempatan) Sdn. Bhd. 33,408,551 26.921Pledged Securities Account for Texchem Holdings Sdn. Bhd. (49857 PEGM)

2 Texchem Corporation Sdn. Bhd. 10,814,509 8.7143 AMSEC Nominees (Tempatan) Sdn. Bhd. 8,000,000 6.446

Pledged Securities Account for Texchem Corporation Sdn. Bhd.4 CIMB Group Nominees (Asing) Sdn. Bhd. 6,308,128 5.083

Texchem Holdings Sdn. Bhd. for Fumihiko Konishi (49857 PEGM)5 Amanah Raya Nominees (Tempatan) Sdn. Bhd. 5,500,000 4.432

Skim Amanah Saham Bumiputera6 HDM Nominees (Tempatan) Sdn. Bhd. 5,061,800 4.079

Pledged Securities Account for Texchem Corporation Sdn. Bhd. (M01)7 Alliancegroup Nominees (Tempatan) Sdn. Bhd. 3,850,600 3.103

Pheim Asset Management Sdn. Bhd. for Employees Provident Fund8 Bank Perusahaan Kecil & Sederhana Malaysia Berhad 2,905,900 2.3429 Mayban Securities Nominees (Tempatan) Sdn. Bhd. 2,772,468 2.234

Malayan Banking Berhad for Texchem Holdings Sdn. Bhd. (25H)10 Mayban Nominees (Tempatan) Sdn. Bhd. 2,727,533 2.198

Pledged Securities Account for Texchem Holdings Sdn. Bhd. (407013500997)11 Blood Protection (Holding) Co. Ltd. 2,339,884 1.88512 Atsuko Konishi 2,215,694 1.78513 Man Bin Mat 2,051,500 1.65314 HDM Nominees (Tempatan) Sdn. Bhd. 1,622,400 1.307

Pledged Securities Account for Texchem Corporation Sdn. Bhd. (M01)15 Mika Konishi 1,431,414 1.15316 Mari Konishi 1,431,414 1.15317 West Country Sdn. Bhd. 1,102,000 0.88818 Koperasi Angkatan Tentera Malaysia Berhad 1,100,000 0.88619 CIMB Group Nominees (Asing) Sdn. Bhd. 999,702 0.806

Rapro Pack Co. Ltd. (49749 HDOF)20 CIMB Group Nominees (Asing) Sdn. Bhd. 719,785 0.58

JSP Corporation (49534 HDOF)21 Fumihiko Konishi 623,890 0.50322 Loh Phoy Yen Holdings Sdn. Bhd. 550,000 0.44323 Fumakilla Limited Japan 436,194 0.35124 Chang Eun, Ra 426,250 0.34325 Neo Aik Kheng 376,750 0.30426 United Formula Sdn. Bhd. 369,300 0.29827 Yutaka Yamanaka 359,893 0.2928 Cheang Lai Seong 350,000 0.28229 Tan Ng Tee @ Tan Cheng Yew 339,350 0.27330 Marco Andrighetto 288,750 0.233

TOTAL 100,483,659 80.968

Analysis of shareholdings (cont’d)As At 8 April 2008


SUBSTANTIAL SHAREHOLDINGS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT8 APRIL 2008

No. of Shares Held in the CompanyNo. Name Direct % Deemed %

1 Texchem Holdings Sdn. Bhd. 38,940,054 # 31.38 25,498,709 * 20.55

2 Texchem Corporation Sdn. Bhd. 25,498,709 ## 20.55 - -

3 Tan Sri Dato’ Seri Fumihiko Konishi 6,932,018 ### 5.59 69,517,285 ** 56.02

DIRECTORS’ INTEREST IN SHARES AS AT 8 APRIL 2008

No. of Shares Held in the CompanyNo. Name of Directors Direct % Deemed %

1 Tan Sri Dato’ Seri Fumihiko Konishi 6,932,018 ### 5.59 69,517,285 ** 56.02

2 Yap Kee Keong 8,250 0.01 - -

3 Brian Tan Guan Hooi 6,039 Negligible - -

The details of the Directors’ interest (including the interests of the spouses and/or children of the Directors) in the Company’srelated corporations as at 8 April 2008 of those who were or are Directors during the financial year and the period commencingfrom 1 January 2008 until 8 April 2008, are the same as the details of the Directors’ interest (including the interests of thespouses and/or children of the Directors) in the Company’s related corporations as at 31 December 2007, disclosed in theDirectors’ Report under the Financial Statements Section of this Annual Report.

# held partly by Mayban Nominees (Tempatan) Sdn. Bhd., Mayban Securities Nominees (Tempatan) Sdn. Bhd. andCIMB Group Nominees (Tempatan) Sdn. Bhd.

## held partly by HDM Nominees (Tempatan) Sdn. Bhd. and AMSEC Nominees (Tempatan) Sdn. Bhd.

### held partly by CIMB Group Nominees (Asing) Sdn. Bhd.

* Texchem Holdings Sdn. Bhd. is deemed to have an interest in 25,498,709 shares in the Company held by TexchemCorporation Sdn. Bhd. by virtue of Section 6A(4)(c) of the Companies Act, 1965.

** Tan Sri Dato’ Seri Fumihiko Konishi is deemed to have an interest in the 69,517,285 shares in the Company heldby Texchem Corporation Sdn. Bhd., Texchem Holdings Sdn. Bhd., his wife, Puan Sri Datin Seri Atsuko Konishi andhis daughters, Ms Mika Konishi and Ms Mari Konishi by virtue of Section 6A(4)(c) read with Section 122A of theCompanies Act, 1965.

In accordance with Section 6A(4)(c) of the Companies Act, 1965, a person shall be deemed to have an interest in a sharewhere a body corporate has an interest in a share and that person, or the associates of that person or that person and hisassociates are entitled to exercise or control the exercise of not less than fifteen per centum of the votes attached to thevoting shares in the body corporate.


Approximate Date of Net BookAge of Expiry Acquisition/ Value

Location Tenure Area Description Building Date * Revaluation (RM'000)

Texchem Materials Sdn. Bhd.No 6 & 6A, Jalan Tampoi 7/4 Freehold 110,462 Office & 19 years N/A 2 September 6,218Kawasan Perusahaan Tampoi sq ft Warehouse 199981200 Johor BahruJohor Darul Takzim

No 5102, Leasehold 2 Office & Between 6 December 9 February 4,110Jalan Permatang Pauh 99 years acres Warehouse 27 to 35 2069 1999Seberang Perai Utara years13400 Penang

Texchem-Pack (M) Bhd.No. 1465, Mukim 11 Leasehold 4 Factory & Between 29 June *1 December 8,364Lorong Perusahaan Maju 6 60 years acres Office 6 to 15 years 2052 1994Fasa 4, Kawasan PerindustrianPerai,13600 Perai, Penang

Blok F107, Leasehold 700 sq ft Flat 12 years 22 April 31 March 72Units No: 4-2 & 4-15 99 years each 2092 1996Jalan Pelangi 2, Taman Pelangi 13600 Perai, Penang

Texchem-Pack (KL) Sdn. Bhd.No.1, Persiaran Perusahaan Leasehold 15,581 Factory & 18 years 30 May *31 March 6,635Seksyen 23, 40000 Shah Alam 99 years sq m Office 2098 1992Selangor Darul Ehsan

Texchem-Pack (PP) Sdn. Bhd.Part of Lot 1241, Phase III Leasehold 3.78 Factory & Between 27 August *26 April 4,051Bayan Lepas, Free Industrial 60 years acres Office 8 to 28 years 2041 1983Zone,11900 Penang

Texchem-Pack ( Johor) Sdn. Bhd.No. 3, Jalan Mutiara 7 Freehold 42,188 Factory & Between N/A 21 October 4,471Taman Perindustrian Plentong sq ft Office 11 to 12 years 199881750 Masai, Johor Darul Takzim

Eye Graphic Sdn. Bhd.5, Lorong Perusahaan Maju 11 Freehold 1,073 Factory & 11 years N/A 16 April 1,031Taman Perusahaan Pelangi sq m Office 199613600 Prai, Penang

Texchem-Pack (Bangi) Sdn. Bhd.(formerly known as Sanko Kasei(M) Sdn. Bhd.)Lot 3, Jalan P/6 Leasehold 0.81 ha Factory, 16 years 29 September *7 September 5,869Kawasan Perindustrian Bangi 99 years Office 2086 200443650 Bandar Baru Bangi & StoreSelangor Darul Ehsan

Texchem-Pack (Thailand)Co., Ltd.234-237 Moo 2 Freehold 34,648 Factory & 14 years N/A 3 May 2007 10,994Bang Pa-in Industrial Estate sq m OfficeBang Pa-in, Ayutthaya13160 Thailand

PArticulars of propertiesHeld As At 31 December 2007


PArticulars of properties (cont’d)Held As At 31 December 2007

Approximate Date of Net BookAge of Expiry Acquisition/ Value

Location Tenure Area Description Building Date * Revaluation (RM'000)

Fumakilla Malaysia BerhadNo. 256, Mukim 1 Leasehold 2,821 Factory & 24 years 3 February *31 December 1,328Lorong Perusahaan 10 60 years sq m Office 2035 1994Prai Industrial Park 13600 Prai, Penang

Plot 256, Leasehold 286,248 Factory & Between 7 March 2042 *31 December 12,613Tingkat Perusahaan 5 60 years acres Office 25 to 28 6 March 2041 1994Kawasan Perindustrian Perai 2 years 3 February13600 Perai, Penang 2035

Flat Units No: C-2-1 to C-2-8 Freehold 1,200 16 units of 12 years N/A 12 February 839(inclusive) and Flat Units sq m Three (3) 1996No. C-3-1 to C-3-8 (inclusive) BedroomLorong Binjai, Taman Belimbing II Low Medium14000 Bukit Mertajam, Penang Cost Flats

Technopia (Thailand) Ltd.323 Moo 6 Freehold 28,800 Factory & 8 years N/A 12 October 7,547Ratchasima-Chokchai Road sq m Warehouse 1999Suranaree Industrial Project Nong Rawiang SubdistrictMuang DistrictNakhonratchasima ProvinceThailand

Ting Tai Industries (Malaysia)Sdn. BerhadLot 885, Kg Kelewek Leasehold 12,141 Factory 18 years 26 October *15 March 679Jalan Jedok, 17500 66 years sq m 2062 1995Tanah MerahKelantan Darul Naim

Sea Master Trading Co.Sdn. Bhd.47, Jalan Tembikai Freehold 111 3-storey 19 years N/A 1 July 1995 502Taman Mutiara sq m Shophouse14000 Bukit Mertajam, Penang

No. 2446, Mk1 Leasehold 1 acre Factory 25 years 25 July 15 July 1,054Solok Perusahaan Satu 2042 1983Kawasan Perindustrian Perai13600 Prai, Penang

No.12, Jalan Tepi Sungai Leasehold 1,385 Factory with 8 years 28 June 15 July 62736400 Hutan Melintang sq m Cold Room 2086 2004Perak Darul Ridzuan & Office

Ocean Pioneer Food Sdn. Bhd.31-P, Jalan Pelantar Leasehold 1.23 Factory 30 years 28 November 29 November 649Pantai Remis acres 2054 199434900 Perak Darul Ridzuan

FINANcialStatements

Directors’ Report 54

Statement By Directors 60

Statutory Declaration 61

Report Of The Auditors To The Members 62

Consolidated Balance Sheet 63

Consolidated Income Statement 64

Consolidated Statement Of Changes In Equity 65

Consolidated Cash Flow Statement 67

Balance Sheet 71

Income Statement 72

Statement Of Changes In Equity 73

Cash Flow Statement 74

Notes To The Financial Statements 76

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Companyfor the year ended 31 December 2007.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding.

The principal activities of the subsidiaries are stated in Note 5 to the financial statements.

There has been no significant change in the nature of these activities during the financial year.

RESULTSGroup Company

RM RMProfit attributable to :

Shareholders of the Company 18,084,461 23,380,398Minority interest 3,884,994 -

21,969,455 23,380,398

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the year except as disclosed in the financialstatements.

DIVIDENDS

Since the end of the previous financial year, the Company paid :

i) A second interim dividend of 5% per share less 27% tax, totalling RM4,529,616 in respect of the financial year ended31 December 2006 on 17 January 2007;

ii) A first interim dividend of 6% per share less 27% tax, totalling RM5,435,547 in respect of the financial year ended 31December 2007 on 29 August 2007; and

iii) A second interim dividend of 6% per share less 26% tax, totalling RM5,510,006 in respect of the financial year ended31 December 2007 on 10 January 2008.

No final dividend has been recommended by the Directors for the financial year ended 31 December 2007.


Directors’ ReportFor The Year Ended 31 December 2007


Directors’ Report (cont’d)For The Year Ended 31 December 2007

DIRECTORS OF THE COMPANY

Directors who served since the date of the last report are :

Tan Sri Dato’ Seri Fumihiko Konishi, PSM, DGPN, DSPN, DJNLee Siew Khee, JeffreyWong Kin ChaiYap Kee KeongBrian Tan Guan HooiDato’ Nazir Ariff Bin Mushir Ariff, DMPN, DSPN, PKT, PJM, JPDanny Goon Siew CheangYong Yoon Fook, Dick

DIRECTORS’ INTERESTS

The interests and deemed interests in the shares in the Company and its related corporations (other than wholly-ownedsubsidiaries) of those who were Directors at year end (including the interests of the spouses and/or children of the Directors)as recorded in the Register of Directors’ Shareholdings are as follows :

Balance at Balance at % as at1.1.2007 Bought (Sold) 31.12.2007 31.12.2007

The Company Ordinary shares of RM1 each

- Direct interestTan Sri Dato’ Seri Fumihiko Konishi 6,932,018 - - 6,932,018 5.59Yap Kee Keong 8,250 - - 8,250 NegligibleBrian Tan Guan Hooi 6,039 - - 6,039 Negligible

- Deemed interestTan Sri Dato’ Seri Fumihiko Konishi 71,048,985 - @(1,566,500) 69,482,485 55.99

Related corporations

Tan Sri Dato’ Seri Fumihiko Konishi- Direct interest

Ocean Pioneer Food Sdn. Bhd. ****1,000 - - **** 1,000 0.02Texchem-Pack (Bangi) Sdn. Bhd.(formerly known as Sanko Kasei (M) Sdn. Bhd.) * 1,000 - - ## 1,000 0.01

Yap Kee Keong- Direct interest

Texchem-Pack (Bangi) Sdn. Bhd.(formerly known as Sanko Kasei (M) Sdn. Bhd.) * 1,000 - - ## 1,000 0.01



DIRECTORS’ INTERESTS (cont’d)


Ordinary shares of RM1 eachBrian Tan Guan Hooi- Direct interest

Texchem Homey Sdn. Bhd.~ - ^ + 1 - + 1 0.33

Wong Kin Chai- Direct interest

Texchem-Pack (Bangi) Sdn. Bhd.(formerly known as Sanko Kasei (M) Sdn. Bhd.) * 1,000 - - ## 1,000 0.01

Ordinary shares of Kyats 1,000 eachTan Sri Dato’ Seri Fumihiko Konishi- Direct interest

Myanmar Texchem Limited ** 1 - - ** 1 0.20Myanmar Sea Master Company Limited **** 1 - - **** 1 0.18

Brian Tan Guan Hooi- Direct interest

Myanmar Texcorp Limited ### 1 - - ### 1 0.33

Ordinary shares of USD 1 eachTan Sri Dato’ Seri Fumihiko Konishi- Direct interest

PT. Texchem Indonesia ** 1 - - ** 1 Negligible

Ordinary shares of Thai Baht 100 eachRelated corporations

Tan Sri Dato’ Seri Fumihiko Konishi- Direct interest

Texchem Materials (Thailand) Ltd. ** 1 - - ** 1 NegligibleTechnopia (Thailand) Limited *** 1 - - *** 1 NegligibleTexchem Consumers (Thailand) Ltd. *** 1 - - *** 1 NegligibleTexchem-Pack (Thailand) Co., Ltd. # 1 - - # 1 Negligible

Lee Siew Khee, Jeffrey- Direct interest

Texchem Materials (Thailand) Ltd. ** 1 - - ** 1 Negligible

Yap Kee Keong- Direct interest

Texchem Materials (Thailand) Ltd. ** 1 - - ** 1 NegligibleTexchem-Pack (Thailand) Co., Ltd. # 1 - - # 1 Negligible



DIRECTORS’ INTERESTS (cont’d)


Ordinary shares of Thai Baht 100 eachBrian Tan Guan Hooi- Direct interest

Texchem Consumers (Thailand) Ltd. *** 1 - - *** 1 NegligibleTechnopia (Thailand) Limited *** 1 - - *** 1 Negligible

Wong Kin Chai- Direct interest

Texchem Materials (Thailand) Ltd. ** 1 - - ** 1 Negligible

By virtue of his interests in the shares in the Company, Tan Sri Dato’ Seri Fumihiko Konishi is also deemed to be interestedin the shares in the Company’s related corporations to the extent the Company has an interests.

@ Disposal of shares* Shares held in trust for Texchem Resources Bhd.** Share held in trust for Texchem Materials Sdn. Bhd.*** Share held in trust for Fumakilla Malaysia Berhad**** Shares held in trust for Sea Master Trading Co. Sdn. Bhd.# Share held in trust for Texchem-Pack (M) Bhd.## Shares held in trust for Texchem-Pack Holdings (S) Ltd.### Share held in trust for Blood Protection Company (Malaysia) Sdn. Bhd.+ Share held in trust for Texchem Food Sdn. Bhd.~ Incorporated on 3 August 2007^ Issuance of new shares

Tan Sri Dato’ Seri Fumihiko Konishi is deemed to have an interest in the above shares in Texchem Resources Bhd. heldby Texchem Corporation Sdn. Bhd., Texchem Holdings Sdn. Bhd., his wife, Puan Sri Datin Seri Atsuko Konishi and hisdaughters, Ms Mika Konishi and Ms Mari Konishi by virtue of Section 6A(4)(c) read with Section 122A of the CompaniesAct, 1965.

In accordance with Section 6A (4)(c) of the Companies Act, 1965, a person shall be deemed to have an interest in a sharewhere a body corporate has an interest in a share and that person, or the associates of that person or that person and hisassociates are entitled to exercise or control the exercise of not less than fifteen per centum of the votes attached to thevoting shares in the body corporate.

In accordance with Article 123 of the Articles of Association, Mr Wong Kin Chai, Mr Danny Goon Siew Cheang and Mr YongYoon Fook, Dick retire by rotation from the Board at the forthcoming Annual General Meeting and, being eligible, offerthemselves for re-election.

None of the other Directors holding office at 31 December 2007 had any interest in the ordinary shares in the Companyand its related corporations during the financial year.



DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive anybenefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directorsas shown in the financial statements of the Company and its related corporations) by reason of a contract made by theCompany or a related corporation with the Director or with a firm of which the Director is a member, or with a companyin which the Director has a substantial financial interest other than those transactions between the Company and its relatedcorporations with companies in which a Director is deemed to have a substantial financial interest as disclosed in Note 24to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of theCompany to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other bodycorporate, except where the benefit is acquired through the Company.

ISSUE OF SHARES AND DEBENTURES

There were no changes in the issued and paid-up share capital of the Company and no debentures were in issue duringthe financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the year.

OTHER STATUTORY INFORMATION

Before the balance sheets and income statements of the Group and of the Company were made out, the Directors tookreasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

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

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

i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in theGroup and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the Group and in the Company’s financial statementsmisleading, or

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

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Transcript of Contents drop in the revenue for the Division was mainly due to lower revenue from our Thermoforming...