OUR VISION OUR MISSION. TO BE the reputable regional partner in mail, express delivery, logistics services and related financial solutions.

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2 OUR VISION TO BE the reputable regional partner in mail, express delivery, logistics services and related financial solutions. OUR MISSION DEVELOP and provide quality, reliable, timely and innovative services to all our customers and partners. PROVIDE logistics and related business solutions through our competencies, systems and networks. NURTURE and sustain conducive working and learning environment for our people through teamwork and shared values. SAFEGUARD and maximize shareholders value through prudent business decisions and sound financial management. CONSTANTLY STRIVE to be a caring corporate citizen by supporting nation building and community services. COVER RATIONALE Accelerating the momentum The cover design depicts the need to accelerate Pos Malaysia s momentum in its transformation journey. Just like the caterpillar s transformation to a beautiful butterfly, Pos Malaysia s increased momentum in changing will also results in exciting outcomes eventually. In 2006, the Company focused on various efforts to accelerate the change momentum. These efforts are covered in the 2006 Annual Report.

3 Contents Notice of the 75th 02 Annual General Meeting Group Structure 05 Corporate Information 06 Board of Directors 08 Profile of Directors 10 Senior Management 20 Chairman s Statement 22 Board of Directors 27 Pos Malaysia Berhad Corporate Structure 28 Pos Malaysia Berhad 2006 State Managers 29 Pos Malaysia Berhad Calendar of Events Corporate Highlights 38 Operations Review Stamp Issues 54 Corporate Governance Statement 56 Statement of Internal Control 64 Directors Responsibility Statement 66 Additional Compliance Information 67 Audit Committee Report 69 Financial Statements 73 Top 10 Properties Owned 124 Analysis of Shareholdings 126 Form of Proxy

4 2 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 NOTICE OF THE 75TH ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN THAT the 75th Annual General Meeting of Pos Malaysia & Services Holdings Berhad will be held at the Manhattan Ballroom, Berjaya Times Square Hotel & Convention Center, No. 1 Jalan Imbi, Kuala Lumpur on Thursday, 28 June 2007 at a.m. for the following purposes: AS ORDINARY BUSINESS: 1. To receive the Directors Report and Statement of Directors, the Audited Financial Statements and the Report of the Auditors for the financial year ended 31 December (Ordinary Resolution 1) 2. To re-elect the following Directors who retire in accordance with Article 102 of the Company s Articles of Association, and being eligible, offered themselves for re-election: (a) Tan Sri Adam Kadir (b) Mr. Segarajah Ratnalingam (Ordinary Resolution 2) (Ordinary Resolution 3) 3. To re-elect the following Directors who retire in accordance with Article 109 of the Company s Articles of Association, and being eligible, offered themselves for re-election: (a) Puan Salmah binti Sharif (b) Encik Faisal bin Ismail (c) Dato Idrose bin Mohamed 4. To re-appoint Messrs KPMG as Auditors of the Company for the ensuing year and to authorise the Directors to fix their fees. (Ordinary Resolution 4) (Ordinary Resolution 5) (Ordinary Resolution 6) (Ordinary Resolution 7) AS SPECIAL BUSINESS: To consider and, if thought fit, pass the following resolutions, with or without modifications, as ordinary resolutions: 5. Directors Fees That the payment of the Directors fees of RM252,000 for the financial year ended 31 December 2006 be approved. (Ordinary Resolution 8)

5 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT NOTICE OF THE 75TH ANNUAL GENERAL MEETING continued 6. Power to allot and issue shares pursuant to Section 132D of the Companies Act, 1965 That the Directors of the Company, pursuant to Section 132D of the Companies Act, 1965 be authorised, to allot and issue shares in the Company at such time until the conclusion of the next Annual General Meeting and for such consideration and such terms and conditions as they shall in their absolute discretion deem fit in accordance with the provisions of the Articles of Association of the Company provided always that the aggregate number of new shares to be issued shall not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being, subject always to the approvals of the regulatory authorities. (Ordinary Resolution 9) 7. To transact any other business of which due notice has been given. By Order of the Board, Sabrina Albakri Abu Bakar (LS8508) Company Secretary Kuala Lumpur 6 June 2007

6 4 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 NOTICE OF THE 75TH ANNUAL GENERAL MEETING continued Notes: 1. A member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote in his stead. Where a member appoints two or more proxies to attend the Meeting, the member shall specify the proportion of his shareholdings to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the corporation s seal or under the hand of an officer or attorney duly authorised. 3. The instrument appointing a proxy must be deposited at the Company s Share Registrar s office at Tenaga Koperat Sdn Bhd, 20th Floor, Plaza Permata (formerly known as IGB Plaza), Jalan Kampar, Off Jalan Tun Razak, Kuala Lumpur not less than forty eight (48) hours before the time set for the Meeting or any adjournment thereof. 4. Additional Notes on Special Business: 4.1 Resolution on Directors Fees The proposed Ordinary Resolution No. 8 is in accordance with the Company s Articles of Association and if passed, will authorise the payment of Director s fees to Directors of the Company for their services during the financial year ended 31 December Resolution pursuant to Section 132D of the Companies Act, 1965 The proposed Ordinary Resolution No. 9 if passed, is to give the Directors of the Company flexibility to issue and allot shares for such purposes as the Directors in their absolute discretion consider to be in the interest of the Company, without having to convene a general meeting. This authority will expire at the next Annual General Meeting of the Company.

7 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT GROUP STRUCTURE as at 31 March 2007 POS MALAYSIA & SERVICES HOLDINGS BERHAD (491-K) 100% POS MALAYSIA BERHAD 100% Datapos (M) Sdn Bhd 100% PosLaju (M) Sdn Bhd 100% Virtual Pos Sdn Bhd 100% Pos Logistics-Fulserve Sdn Bhd 100% Pos Takaful Agency Sdn Bhd 100% PMB Properties Sdn Bhd 100% Philately Pos Malaysia Sdn Bhd 55% Digicert Sdn Bhd 100% PSH INVESTMENT HOLDING (BVI) LTD 100% PSH CAPITAL PARTNERS SDN BHD 100% Prestige Future Sdn Bhd 100% PSH VENTURE CAPITAL SDN BHD 100% PSH Express Sdn Bhd 100% PSH PROPERTIES SDN BHD 100% Effivation Sdn Bhd 100% Real Riviera Sdn Bhd 100% PSH ALLIED BERHAD 100% PSH MERCHANDISE SDN BHD 100% PSH MANAGEMENT SDN BHD ASSOCIATE OF POS MALAYSIA & SERVICES HOLDINGS BERHAD PSH Aviation Sdn Bhd (49%) ASSOCIATES OF POS MALAYSIA BERHAD (PMB) Elpos Print Sdn Bhd (40%) CEN Sdn Bhd (42.5%) PosPay Exchange Sdn Bhd (50%) (Formerly known as RMEX Payment Services Sdn Bhd) Wholly-owned Subsidiaries Sub-Subsidiaries

8 6 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE INFORMATION BOARD OF DIRECTORS Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) Dato Zukri bin Samat (Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) (Appointed w.e.f. 1 April 2007) Datuk Abu Huraira bin Abu Yazid (Executive Director/Group Chief Operating Officer) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Puan Salmah binti Sharif (Non-Independent Non-Executive Director) (Appointed w.e.f. 4 August 2006) Encik Faisal bin Ismail (Non-Independent Non-Executive Director) (Appointed w.e.f. 27 September 2006) Mr. Koshy Thomas (Non-Independent Non-Executive Director) (Alternate Director to Mr. Segarajah Ratnalingam) Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Datuk Alias bin Ali (Independent Non-Executive Director) (Resigned w.e.f. 21 February 2007) Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) Dato Ng Kam Cheung (Independent Non-Executive Director) (Resigned w.e.f. 1 March 2007) COMPANY SECRETARY Sabrina Albakri binti Abu Bakar (LS 8508) AUDIT COMMITTEE Mr. Wee Hoe Gooi Hoe Soon (Chairman/Independent Non-Executive Director) (Redesignated as Chairman w.e.f. 3 July 2006) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) (Appointed w.e.f. 8 March 2007) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Datuk Alias bin Ali (Independent Non-Executive Director) (Resigned w.e.f. 21 February 2007) Dato Ng Kam Cheung (Independent Non-Executive Director) (Resigned w.e.f. 1 March 2007) REMUNERATION COMMITTEE Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) (Appointed w.e.f. 24 April 2007) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Puan Salmah binti Sharif (Non-Independent Non-Executive Director) (Appointed w.e.f. 14 September 2006) Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) Dato Zukri bin Samat (Independent Non-Executive Director) (Ceased w.e.f. 12 June 2006) NOMINATING COMMITTEE Puan Sri Datuk Nazariah binti Mohd Khalid (Chairperson/Independent Non-Executive Director) (Appointed w.e.f. 12 June 2006 as Member and subsequently redesignated as Chairman on 21 February 2007) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Puan Salmah binti Sharif (Non-Independent Non-Executive Director) (Appointed w.e.f. 8 March 2007) Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Datuk Alias bin Ali (Independent Non-Executive Director) (Resigned w.e.f. 21 February 2007) PERFORMANCE MANAGEMENT COMMITTEE Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) (Appointed w.e.f. 24 April 2007) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Dr. R. Hanafi bin Abdullah (Head of Group Human Resource and Administration) (Effective 1 March 2007) Tuan Haji Nadza Abdul (Head of Corporate Planning and Strategic Business)

9 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE INFORMATION continued Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) Dato Zukri bin Samat (Independent Non-Executive Director) (Ceased w.e.f. 12 June 2006) Dato Ng Kam Cheung (Independent Non-Executive Director) (Resigned w.e.f. 1 March 2007) Puan Rugayah Yasmin binti Dato Ibrahim (Deputy General Manager, Human Resource and Administration) (Ceased w.e.f. 1 March 2007) TRANSFORMATION COMMITTEE Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) (Appointed w.e.f. 12 June 2006) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) (Appointed w.e.f. 8 March 2007) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Dato Ng Kam Cheung (Independent Non-Executive Director) (Resigned w.e.f. 1 March 2007) Dato Zukri bin Samat (Independent Non-Executive Director) (Ceased w.e.f. 12 June 2006) OPTION COMMITTEE Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) (Appointed w.e.f. 24 April 2007) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) TENDER BOARD COMMITTEE Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) (Appointed w.e.f. 12 June 2006) Dato Zukri bin Samat (Independent Non-Executive Director) Encik Faisal bin Ismail (Non-Independent Non-Executive Director) (Appointed w.e.f. 8 March 2007) Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Datuk Alias bin Ali (Independent Non-Executive Director) (Resigned w.e.f. 21 February 2007) REGISTERED OFFICE Level 33, Menara Dayabumi Jalan Sultan Hishamuddin Kuala Lumpur Tel: Fax: SHARE REGISTRAR Tenaga Koperat Sdn Bhd 20 th Floor, Plaza Permata Jalan Kampar, Off Jalan Tun Razak Kuala Lumpur Tel: Fax: AUDITORS KPMG Chartered Accountants BANKERS Malayan Banking Berhad CIMB Bank Berhad STOCK EXCHANGE LISTING Bursa Malaysia Securities Berhad, Main Board

10 8 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 BOARD OF DIRECTORS From left to right 1 Encik Faisal bin Ismail Non-Independent Non-Executive Director 2 Datuk Abu Huraira bin Abu Yazid Executive Director/Group Chief Operating Officer 4 Tan Sri Adam Kadir Chairman/Independent Non-Executive Director 5 Mr. Segarajah Ratnalingam Non-Independent Non-Executive Director 3 Puan Salmah binti Sharif Non-Independent Non-Executive Director

11 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT Puan Sri Datuk Nazariah binti Mohd Khalid Independent Non-Executive Director 7 Mr. Wee Hoe Gooi Hoe Soon Independent Non-Executive Director 8 Dato Idrose bin Mohamed Group Managing Director / Chief Executive Officer 10 Puan Sabrina Albakri binti Abu Bakar Company Secretary Not in the picture: Mr. Koshy Thomas Non-Independent Non-Executive Director (Alternate Director to Mr. Segarajah Ratnalingam) 9 Dato Zukri bin Samat Independent Non-Executive Director

12 10 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 PROFILE OF DIRECTORS Tan Sri Adam Kadir Chairman Independent Non-Executive Director Tan Sri Adam Kadir, 64, a Malaysian, is the Chairman of the Company and an Independent Non-Executive Director. He was appointed to the Board and made Chairman on 1 March, Tan Sri Adam is the Chairman of the Remuneration Committee, Transformation Committee, Performance Management Committee, Option Committee and Tender Board Committee. Tan Sri Adam holds a Master of Laws degree in Commercial and Corporate Laws from the University of London. He had earlier obtained a Master of Science from Ohio University, U.S.A., in 1973 after graduating with a Bachelor of Arts degree from the University of Malaya in He completed a programme in Advanced Management in Harvard University Business School, U.S.A., in Tan Sri Adam was elected a Member of Parliament (MP) in 1986 and made a Parliamentary Secretary to the Ministry of Land and Regional Development in He subsequently became a Senator and President of the Senate in Between 1994 and 1996, he was President of both the International Parliamentary Union (IPU) and Commonwealth Parliamentary Association, Malaysia Chapter. In 1997, he returned to Wineka Group after the expiry of his term in the Senate. Tan Sri Adam began his illustrious career as a Producer in the then Ministry of Broadcasting & Information in 1967, after his graduation. He joined the Selangor Economic Development Corporation (PKNS) as Assistant Secretary in He left to join Aseambankers in 1973 as Manager, Project Development. He moved on to PERNAS Group of Companies as General Manager and Director from 1975 to From , he became an Entrepreneur with his own business enterprise called Wineka Group. Tan Sri Adam was the Chairman of Jengka Sdn Bhd, a Pahang comprehensive timber complex, from 1983 to He sat on the Board of various companies whilst an entrepreneur including PBS Multinational Merchant Bank, Malaysia General Investments Corporation Berhad, Federal Agricultural Marketing Authority (FAMA) and Lembaga Perusahaan Pertanian Pahang. Tan Sri Adam does not have any family relationship with any director and/or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Tan Sri Adam attended all twentyseven (27) Board meetings held during the financial year under review.

13 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT PROFILE OF DIRECTORS continued Puan Sri Datuk Nazariah binti Mohd Khalid Independent Non-Executive Director Puan Sri Datuk Nazariah binti Mohd Khalid, 57, a Malaysian, is an Independent Non-Executive Director. She was appointed to the Board on 14 April, Puan Sri Datuk Nazariah is the Chairperson of the Nominating Committee, member of the Audit Committee, Transformation Committee and Tender Board Committee. Puan Sri Datuk Nazariah graduated with a B.A. (Honours) from the University of Tasmania, Australia and holds a Master of Business Administration from Michigan State University, U.S.A. She joined the Malaysian Civil Service in 1972 and served in various capacities prior to her last position as the Director General of the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) in the Prime Minister s Department. Puan Sri Datuk Nazariah does not have any family relationship with any director and/or substantial shareholders of the Company or any conflict of interest with the Company. She has not been convicted of any offence within the past 10 years. Since the appointment of Puan Sri Datuk Nazariah, she attended sixteen (16) out of seventeen (17) Board meetings held subsequent to her appointment during the financial year under review.

14 12 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 PROFILE OF DIRECTORS continued Dato Zukri bin Samat Independent Non-Executive Director Dato Zukri bin Samat, 49, a Malaysian, is an Independent Non- Executive Director. He was appointed to the Board on 8 March, He is a member of the Tender Board Committee. Dato Zukri holds an MBA degree from the University of Hull, United Kingdom. He is currently the Managing Director of Bank Islam Malaysia Berhad. He is a former Executive Director of Investment, Khazanah Nasional Berhad ( Khazanah ), the investment arm of the Government of Malaysia. He joined Khazanah on 13 February, Prior to that, he was the Managing Director of Pengurusan Danaharta Nasional Berhad ( Danaharta ), a national asset management company. He joined Danaharta in October 1998 as General Manager, Operations Division and was later promoted to Director of Operations on 1 August, 2001, assuming direct line responsibility for all loan recovery activities of Danaharta. He was then appointed by the Minister of Finance as the Managing Director of Danaharta on 1 July, 2003 until 31 December, 2005 when Danaharta ceased its operations. Dato Zukri has extensive experience in the banking sector having served in both local and international financial institutions in various capacities. Prior to joining Danaharta, he served in Credit Agricole Indosuez Labuan as the General Manager. He also worked in Commerce International Merchant Bankers Berhad (now known as CIMB Investment Bank Berhad) for a significant period of time, his last position being Deputy General Manager of the Capital Markets Department where he was responsible for transactions involving Private Debt Securities, project finance, corporatisation and privatisaton of state-owned companies. Dato Zukri does not have any family relationship with any director and/ or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Since the appointment of Dato Zukri, he attended nineteen (19) out of twenty-three (23) Board meetings held subsequent to his appointment during the financial year under review.

15 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT PROFILE OF DIRECTORS continued Dato Idrose bin Mohamed Group Managing Director / Chief Executive Officer Dato Idrose bin Mohamed, 51, a Malaysian, is the Group Managing Director/Chief Executive Officer of the Company. He was appointed to the Board on 1 April, Dato Idrose is a member of the Remuneration Committee, Option Committee and Performance Management Committee. Dato Idrose holds a Bachelor degree in Civil Engineering from UiTM. He started his career with the Public Works Department in In January 1983, he joined Malaysian Highway Authority (MHA) as a Civil Engineer and then served in various positions and was involved in the development of expressways. He was appointed as MHA s Northern Region Director in November 1991, a position he held prior to leaving the Government service to join UEM Group Berhad (formerly known as United Engineers (Malaysia) Berhad) as Head of Engineering & Operations for the North-South Expressway Central Link project in August, He became the Managing Director of Projek Lebuhraya Utara-Selatan Berhad on 1 July, Subsequently, Dato Idrose resigned as Managing Director of PLUS Expressways Berhad and Projek Lebuhraya Utara-Selatan (PLUS) with effect from 1 April, Dato Idrose does not have any family relationship with any director and/ or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Dato Idrose did not attend any Board meetings held during the financial year under review as he was not a Director during the said period. Particulars of other directorships in public companies : *Pos Malaysia Berhad

16 14 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 PROFILE OF DIRECTORS continued Datuk Abu Huraira bin Abu Yazid Executive Director/Group Chief Operating Officer Datuk Abu Huraira bin Abu Yazid, 54, a Malaysian, was appointed to the Board as Non-Executive Director of the Company on 9 August, On 8 October, 2001 he was redesignated as Executive Director of the Company. Datuk Abu is a Business Administration Graduate of University Malaya and was in the card business for the past 20 years. He commenced his career in Maybank Berhad in 1976 and was responsible for establishing and managing its card business in This was also the first full-fledged card centre in Malaysia. Consequently, he was headhunted to set up and manage other credit card centres: The Chase Manhattan Bank Credit Card Centre (1986), Citibank Berhad Bankcard Centre (1988), Public Bank Card Services Division - last position was the General Manager of Public Bank Card Services Division (1991). On 1 August, 2000, he was appointed Chief Executive Officer of Bank Simpanan Nasional and remained in that position until July, Datuk Abu does not have any family relationship with any director and/ or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Datuk Abu attended twenty-six (26) out of twenty-seven (27) Board meetings held during the financial year under review. Particulars of other directorships in public companies: *Pos Malaysia Berhad *Transmile Group Berhad *Pos Malaysia Holdings Berhad

17 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT PROFILE OF DIRECTORS continued Mr. Wee Hoe Gooi Hoe Soon Independent Non-Executive Director Mr. Gooi Hoe Soon, 47, a Malaysian, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 18 March, 2001 as a Non-Independent Non- Executive Director and redesignated as an Independent Non-Executive Director of the Company on 3 July, Mr. Gooi is the Chairman of the Audit Committee and a member of the Remuneration Committee, Nominating Committee, Performance Management Committee, Transformation Committee and Option Committee. Mr. Gooi is a member of the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants. He has more than 20 years experience in the fields of accounting and corporate finance and was Finance Director of several private and public listed companies. He has been instrumental in the successful implementation of several corporate exercises, which include merger and acquisition and corporate debt restructuring exercises undertaken by public listed companies. He was appointed to the Board of Directors of Avenue Capital Resources Berhad as a Non-Executive Director in 1999 and subsequently appointed as the Group Managing Director in 2001 and Deputy Chairman in 2004, holding this last position until Mr. Gooi does not have any family relationship with any director and/ or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Mr Gooi attended twenty-four (24) out of twenty-seven (27) Board meetings held during the financial year under review. Particulars of other directorships in public companies: *Hup Seng Industries Berhad

18 16 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 PROFILE OF DIRECTORS continued Mr. Segarajah Ratnalingam Non-Independent Non-Executive Director Mr. Segarajah Ratnalingam, 54, a Malaysian, is a Non-Independent Non-Executive Director. He was appointed to the Board on 26 October, He is a member of the Audit Committee, Remuneration Committee, Performance Management Committee, Transformation Committee and Option Committee. Mr. Segarajah holds a Bachelor of Economics (Honours) degree from the University of Malaya. Mr. Segarajah began his career in the Ministry of Defence when he joined the Malaysian Administrative and Diplomatic Service upon his graduation in He served the Ministry of Defence in various positions until 1995 when he was posted to the Ministry of Finance. He is currently the Under Secretary of the Financial Management Advisory Division, Ministry of Finance. Mr. Segarajah does not have any family relationship with any director and/or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Mr. Segarajah attended all twentyseven (27) Board meetings held during the financial year under review. Particulars of other directorships in public companies: * Percetakan Nasional Malaysia Berhad

19 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT PROFILE OF DIRECTORS continued Puan Salmah binti Sharif Non-Independent Non-Executive Director Puan Salmah binti Sharif, 46, a Malaysian, is a Non-Independent Non- Executive Director. She was appointed to the Board on 4 August, She is a member of the Remuneration Committee and the Nominating Committee. Puan Salmah holds a Bachelor of Law from the Universiti Teknologi MARA and was admitted as an Advocate and Solicitor at the High Court of Malaya in She began her career as a Legal Officer with Malaysian Industrial Estates Sdn Bhd (a subsidiary of the Malaysian Industrial Development Finance Berhad) from 1987 to 1988 and was promoted to Company Secretary in She became the Company Secretary and Legal Adviser of Khazanah Nasional Berhad in November, 1994 and in September, 2004 she was redesignated as the Director of Legal and Support. Puan Salmah does not have any family relationship with any director and/or substantial shareholders of the Company or any conflict of interest with the Company. She has not been convicted of any offence within the past 10 years. Since the appointment of Puan Salmah, she attended all ten (10) Board meetings held subsequent to her appointment during the financial year under review. Particulars of other directorships in public companies: *Time Engineering Berhad

20 18 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 PROFILE OF DIRECTORS continued Encik Faisal bin Ismail Non-Independent Non-Executive Director Encik Faisal bin Ismail, 43, a Malaysian, is a Non-Independent Non-Executive Director. He was appointed to the Board on 27 September, He is a member of the Tender Board Committee. Encik Faisal is a Chartered Accountant with the Institute of Chartered Accountants in England and Wales. He is also a member of the Malaysian Institute of Accountants. Encik Faisal is the Group Managing Director of Pantai Holdings Berhad. Encik Faisal started his career in 1983 with Touche Ross & Co, London (now Deloitte Touche & Tohmatsu) where he articled for 4 years and qualified as a Chartered Accountant. He returned to Malaysia to work in Hanafiah Raslan & Mohammad for 2 years before joining Peremba at the invitation of Peremba s Chairman. He then joined Landmarks Berhad (listed on Bursa Malaysia under Hotels) in 1991 and was an Executive Director in Landmarks Berhad from 2000 to In Encik Faisal s 14- year career in Landmarks Group, Encik Faisal accumulated significant experience in hotels, property investment, property development, IPP, healthcare and some experience in banking. After Landmarks Berhad, Encik Faisal joined BinaFikir Sdn Bhd as Executive Director and later Khazanah Nasional Berhad as a Director in the Investments Division. He joined Pantai Holdings Berhad as its Group Managing Director on 15 May Encik Faisal does not have any family relationship with any director and/ or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years. Since the appointment of Encik Faisal, he attended all six (6) Board meetings held subsequent to his appointment during the financial year under review. Particulars of other directorships in public companies: * Pos Malaysia Berhad * Pantai Holdings Berhad

21 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT PROFILE OF DIRECTORS continued Mr. Koshy Thomas Non-Independent Non-Executive Director (Alternate Director to Mr. Segarajah Ratnalingam) Mr. Koshy Thomas, 50, a Malaysian, is a Non-Independent Non-Executive Director. He was appointed to the Board as Alternate Director to Mr. Segarajah Ratnalingam on 4 February, Mr. Koshy graduated in 1979 with a Bachelor of Economics Degree from the University of Malaya. He later obtained a Post Graduate Diploma in Public Management from the National Institute of Public Administration, Kuala Lumpur in He also obtained a Post Graduate Certificate in Human Services (Monitoring and Evaluation) from RMIT University in Melbourne, Australia in Mr. Koshy began his career soon after his graduation as Assistant Secretary (Loans and Finance Division) in the Ministry of Finance to He joined the Ministry of Agriculture as Senior Assistant Secretary (Monitoring and Evaluation Division) in In 1996, he was posted to the Ministry of Finance as Senior Assistant Secretary (Tax Analysis Division). He was then appointed as the Principal Assistant Secretary, Head of Program Evaluation Section of the Financial Management Advisory Division, Ministry of Finance. He is currently the Deputy Under Secretary, Tax Analysis Division, Ministry of Finance. Mr. Koshy does not have any family relationship with any director and/ or substantial shareholders of the Company or any conflict of interest with the Company. He has not been convicted of any offence within the past 10 years.

22 20 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 SENIOR MANAGEMENT Standing from left to right 1 Tuan Haji Nadza Abdul Head, Corporate Planning & Strategic Business 2 Dr R. Hanafi bin Abdullah Head, Group Human Resource and Administration 3 Datin Rohaiza binti Hashim Head, Corporate Communications 5 YM Raja Shahreen bin Raja Othman Head, Finance 6 Encik Bahaman bin Kamaruzzaman Chief Transformation Officer 7 Encik Muhd Firdaus bin Azharuddin Chief Operating Officer, PosLaju & PSH Express 4 Tuan Haji Ithnin bin Talib Head, Security & Investigation

23 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT Datuk Abu Huraira bin Abu Yazid Executive Director / Group Chief Operating Officer 9 Dato Idrose bin Mohamed Group Managing Director / Chief Executive Officer 10 Tuan Haji Mohd. Derus bin Harun Chief Operating Officer, Datapos (M) Sdn Bhd 11 Encik Mohd. Zarif bin Hashim Chief Operating Officer, PosMel & PosLogistik 12 Encik Mohd. Rosdeen bin Hassan Chief Information Officer 13 Puan Sabrina Albakri binti Abu Bakar Head, Legal and Secretarial

24 22 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CHAIRMAN S STATEMENT DEAR SHAREHOLDERS, CUSTOMERS & EMPLOYEES, It gives me great pleasure to present the annual report of your Company for the financial year ended 31 December Tan Sri Adam Kadir Chairman The management and staff of your Company have delivered yet another year of commendable performance in Revenue increased by 4% to RM822 million, Profit Before Tax increased by 44% to RM212 million, Profit After Tax increased by 10% to RM160 million and finally Earnings Before Interest, Depreciation & Amortisation increased by 5% to RM149 million. All these are record financial achievements that have never before been attained by your Company. Our group revenue increased mainly because PosMel, our strategic business unit in the mail business which accounts for 69% of revenue, chalked a 4% revenue increase due to its aggressive marketing efforts. The significant jump in the Group s profit before tax is attributable to nonoperational activities such as higher interest income from cash deposits, reversal of impairment loss and effect of reclassification of our shareholding in Transmile Group Berhad from an associate company to an investment. Your Board and Management realise that sustaining the outstanding financial performance will not be easy. For years, the slowing down of the postal industry, competition from alternative electronic services, deregulation and critical public perception of our services have always been present. In our mail business, not even our unparalleled reach and competitive price of our business can stop alternative services such as , SMS and the internet from competing for customers. In our courier business, PosLaju is facing competition from foreign and local express delivery service providers. The post office counter businesses have become less attractive to some segments of society as bill payments and other transactions can now be conducted through various competing channels, such as banks, online channels and even mobile phones. It is against this backdrop of increasingly difficult industry setting that your Company continues to perform well and show strong results. This outcome would probably have not been possible had it not been for the way your Company has developed the staff to face competition. EMPLOYEE DEVELOPMENT Pos Malaysia aspires to be an employer of choice. Since 2003, we have tried to inculcate new work culture to employees, emphasizing competency, integrity, good customer service and innovation of ideas. They are constantly being reminded that how they do their work ultimately has an impact on the company s profitability.

25 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CHAIRMAN S STATEMENT continued In 2006, your Company continued to appraise its senior management using the Key Performance Indicators. In 2007, the KPIs will be cascaded further to all executives in the Group, so that their performance will be benchmarked against their own preagreed individual goals. To incentivise the employees, in 2006 we revised the salary structure of both the non-executives and executives and improved some of their benefits. In addition, we will increase training programmes for employees so that they will be equipped with the right skills and competency. BUSINESS PERFORMANCE PosMel has been aggressively marketing some of the value-added products such as Pos Ekspres (prepaid express-delivery envelope), parcels, admail (advertising mail) and direct mail. As proof that mail as a communication medium is still relevant, the overall mail volume in 2006 actually increased in 2006 by 1.9% compared to the previous year. The bulk of this volume is driven by business mail, rather than personal letters. In 2006, PosLaju began to practice yield management, wherein Management shifted focus to highvalue delivery items, rather than highquantity ones. As a result, PosLaju s revenue stabilised at RM130 million, even when the number of items handled declined by almost 15%. We hope that the yield management effort will lead to fruition in The jewel in the Group which is not fully exploited yet is our extensive network of post offices and outlets. With 671 post offices and more than 5,494 postal outlets (Pos Mini, postal agents, stamp vendors etc), our reach is wider than the largest bank in the country. PosNiaga has been increasing its product offerings such that now products or services of 128 agencies are available at its retail counters. In 2006, the volume of transactions handled by PosNiaga increased by 5% to 99 million. Now customers not only can pay various types of bills or renew road tax and licences, but also buy unit trusts and insurance. Your Company has even accepted credit cards for customers to pay for certain transactions at our post offices. Your Company also made further inroads in e-commerce. Last year, we acquired a stake in PosPay Exchange Sdn Bhd, an online micro payment service provider, to complement our internet online portal, PosOnline. Three banks - namely Hong Leong Bank, CIMB Bank and Bank Rakyat have collaborated with us and allowed their account holders to transact through PosOnline.

26 24 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CHAIRMAN S STATEMENT continued We are glad to note that our online payment transactions last year had increased by fourfolds to an average of 25,000 a month. In February 2007, we launched our online shopping mall called PosNiaga eshop where online customers could purchase, among others, consumer products, gifts, computer accessories, books and magazines. FLAGSHIP PROJECTS Central to our transformation plans are the flagship projects. Their objective is to enhance operational capabilities. The capital expenditure for the various projects in 2007 alone is expected to be around RM240 million. In May 2007, we rolled out an enhanced track and trace system for PosLaju under the PITTIS (Pos Integrated Track and Trace Information System) project. The completion of PITTIS enables centralised handling of data relating to courier items. It also streamlines the standard operating procedures so as to make PosLaju more customeroriented. We are proud to share with you that in 2006, PosLaju won the Readers Digest Gold Trust Award under the air freight/courier category. This is in recognition of the high standard of service provided by PosLaju. Last year, we invested RM69 million to acquire a 22-acre land in Shah Alam for our new mail processing centre ( MPC ). This is a significant milestone for the REMOSS (Reconfiguration of Mail Operations and Systems Study) project. The new MPC, targeted to be operational in 2009, will serve as the national hub for mail and parcel sorting by using advanced technologies and machines. Through increased automation, we hope to minimise sorting errors while our customers will benefit from timely and more accurate delivery of letters and parcels. PANTAS (Pos Automated Network Transaction Acceptance System) is a project to replace the front-end (point of sale) and back-end systems at all our post offices including the increase of corporate network bandwidth. The new system will enable us to consolidate and better manage data from all the post offices, thus reducing overhead costs. Upon completion of PANTAS project in mid-2008, PosNiaga will be able to introduce new products and services at their counters quicker. The customers will also experience shorter waiting time at our counters.

27 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CHAIRMAN S STATEMENT continued CUSTOMER SATISFACTION We are always keen to improve the level of our service delivery to our customers. In 2006, we engaged an independent researcher to conduct the second annual survey on our customer satisfaction, covering the entire country. The results show that our customer satisfaction has improved across all our major businesses: for our mail business, 76% of the customers were satisfied with our services (2005: 75%); for our courier business, 78% of our customers were satisfied (2005: 76%); and for our post office business, 78% (2005: 76%). Interestingly, the survey also revealed that our customers view the quality of service as the main concern - not so much the price. Your Company also improved the performance in one key area: letter delivery service standard. This figure increased substantially from 85% in 2005 to 90% in We hope that with continuous improvement in our capabilities, this service standard can be increased to a world-class standard of 94% by CORPORATE DEVELOPMENT To the shareholders, the highlight for 2006 must surely be the capital repayment exercise. We will return to you our surplus cash amounting to more than RM800 million. This exercise will also transfer our listing status to our main operating company, Pos Malaysia Berhad ( PMB ). The boards of directors will then be consolidated from two boards presently to one. Having one board of directors will simplify high-level decision making and help accelerate the implementation of our various transformation plans. Management targets the third quarter of 2007 for completion of this exercise. This is one of the many initiatives that we are putting into practice, as called for by the Government in their various colour-coded books for GLCs. As a testament to your Company s willingness to change, our rate of implementation and compliance to the colour-coded books is more advanced than some of our fellow GLCs. PROSPECT The next 3 years will be crucial and exciting. Crucial because this is when all our transformation initiatives should come to fruition. Exciting because the customers will enjoy the benefits of better services which we hope will lead to increased earnings. So, we think that we are on the right path to face the challenges ahead, to remain relevant, to seek growth in new businesses and consequentially to create value for our shareholders.

28 26 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CHAIRMAN S STATEMENT continued The industry outlook does not appear easy, but your Directors, management and staff will remain committed to deliver what they had promised. ACKNOWLEDGEMENT In October 2006, Datuk Abdul Majid Hussein stepped down from his position as the Chairman of Pos Malaysia Berhad. On behalf of the Board and management, I would like to thank him for his invaluable contributions. I would also like to express utmost appreciation to our previous Group Managing Director/Chief Executive Officer, Dato Ikmal Hijaz Hashim, who left us in February 2007 upon his appointment as the first CEO of the Iskandar Regional Development Authority. During his tenure, he laid down the initiatives for our transformation plans and shaped our business plans and strategy, bringing your Company to where it is now. Logically, a succession took place. I believe the shareholders would like to welcome Dato Idrose Mohamed who was appointed as the new GMD/CEO in April I am sure given his wealth of experience coming from another distinguished GLC, he will guide us and lead the Group to greater heights. The board and management will give him their full support. I would like to thank the management and staff for their hard work and loyalty. Finally, I would like to express my appreciation to the shareholders who have supported us and I hope you will still be with us to enjoy the results of our transformation journey. Thank you. Yours sincerely, TAN SRI ADAM KADIR Chairman

29 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BOARD OF DIRECTORS POS MALAYSIA BERHAD From left to right 1 Dato Idrose bin Mohamed Managing Director (Appointed w.e.f. 18 April 2007) 2 Datuk Abu Huraira bin Abu Yazid Executive Director/Group Chief Operating Officer 3 Encik Faisal bin Ismail Director (Appointed w.e.f. 29 September 2006) 4 Dato Krishnan a/l Chinapan Director 5 Dr Azizah binti Arifin Director 6 Datuk Low Seng Kuan Director

30 28 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE STRUCTURE Pos Malaysia Berhad as at 31 March 2007 MANAGING DIRECTOR ASSOCIATES SUBSIDIARIES STRATEGIC BUSINESS UNITS SUPPORT SERVICES 42.5% CEN Sdn Bhd 40% Elpos Print Sdn Bhd 100% Datapos (M) Sdn Bhd 55% Digicert Sdn Bhd PosMel Mail Business PosNiaga Retail Business Human Resources & Administration Information & Communication Technology Corporate Finance 50% PosPay Exchange Sdn Bhd (formerly known as RMEX Payment Sdn Bhd) 100% Pos Takaful Agency Sdn Bhd 100% Pos Logistic - Fulserve Sdn Bhd 100% PosLaju (M) Sdn Bhd PosLaju Courier Business PosLogistik Logistics Business Philately Philatellic Business Corporate Planning & Strategic Business Internal Audit Corporate Communications Programme Management Office Customer Service Security & Investigation 100% Virtual Pos Sdn Bhd 100% PMB Properties Sdn Bhd Property, Procurement & Contract Legal & Secretarial Risk Management 100% Philately Pos Malaysia Sdn Bhd

31 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT STATE MANAGERS POS MALAYSIA BERHAD 1. Encik Jaafar Abdul Rahman Kedah/Perlis 2. Tuan Haji Abdul Hadi Hamid Pulau Pinang 3. Encik Mohd Azizi Mohd Sanusi Perak 4. Encik Wan Sharpudin Wan Ramli Selangor 5. Tuan Haji Mohd Aziz Sulong WP Kuala Lumpur 6. Encik Lee Pow Choy Negeri Sembilan 7. Tuan Haji Sazali Muhd Din Melaka 8. Encik Shahri Jikun Johor 9. Encik Ahsim Jamat Pahang 10. Encik Quek Lim Tiong Terengganu 11. Encik Anuwar Md Akhir Kelantan 12. Encik Othman Abdullah Sarawak 13. Tuan Haji Othman Dari Sabah

32 30 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CALENDAR OF EVENTS FEBRUARY 2006 POS MALAYSIA AND UNIVERSITI SAINS MALAYSIA FORMED STRATEGIC PARTNERSHIP Pos Malaysia and Universiti Sains Malaysia (USM) officially launched a strategic partnership on 6 February 2006 for Pos Malaysia to provide Corporate Mail Management Services to USM. Under this cooperation, the Corporate Mail Management service will provide more efficient and reliable means for USM in organising and coordinating their daily mailing needs. During the signing ceremony, USM was represented by its Vice Chancellor, Prof. Datuk Dzulkifli Abdul Razak, while Pos Malaysia was represented by its Chairman, Tan Sri Adam Kadir and its Executive Director/ Group Chief Operating Officer, Datuk Abu Huraira Abu Yazid. 14 FEBRUARY 2006 POS MALAYSIA ISSUED STAMPS TO COMMEMORATE THE 100 TH ANNIVERSARY OF THE NATIONAL AUDIT INSTITUTION Pos Malaysia issued a collection of stamps and First Day Cover to commemorate the 100 th Anniversary of the National Audit Institution on Monday, February 14 th These commemorative stamps and First Day Cover were launched by Yang di Pertuan Agong Tuanku Syed Sirajuddin ibni Almarhum Tuanku Syed Putra Jamalullail at Putrajaya Convention Centre, Putrajaya. 24 MARCH 2006 RAPIDKL S MONTHLY TRAVEL CARD NOW SOLD AT 98 POST OFFICES Pos Malaysia and Rangkaian Pengangkutan Integrasi Deras Sdn. Bhd. (RAPID KL) officially launched a strategic partnership on 24 March 2006 to provide a convenient method and venue for the public to purchase RAPID KL s Monthly Travel Card (MTC) at selected post offices. RAPID KL was represented by its Chief Executive Officer, Mr. Rein Westra, while Pos Malaysia was represented by Dato Ikmal Hijaz Hashim, Managing Director/ Chief Executive Officer and Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer. 17 APRIL 2006 I-TALK AND RING RING CARD NOW AVAILABLE AT 61 POST OFFICES On 17 April 2006, Pos Malaysia and Telekom Malaysia launched a strategic partnership to provide a convenient method and venue for the public to purchase I-Talk Card and Ring Ring Card at selected post offices. Telekom Malaysia was represented by Dato Adnan Rofiee, Chief Operating Officer of TM Retail, while Pos Malaysia was represented by Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer.

33 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CALENDAR OF EVENTS 2006 continued 3 MAY 2006 ONLINE STRATEGIC BUSINESS PARTNERSHIP BETWEEN POS MALAYSIA BERHAD AND CIMB BANK Pos Malaysia and CIMB Bank launched a strategic partnership to provide a convenient method for customers to pay bills and other transactions online. BCB-CIMB Bank was represented by Dato Nazir Razak, Chief Executive of CIMB Group, while Pos Malaysia Berhad was represented by Dato Ikmal Hijaz Hashim, Managing Director / Chief Executive Officer, and Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer MAY 2006 MALAYSIA HOSTED THE ASIAN-PACIFIC POSTAL UNION MEETINGS (APPU) 2006 FROM MAY 9 TO 12 For the second time, Malaysia became the host for the Asian-Pacific Postal Union Meetings (APPU) 2006 that was held at the Shangri-La Hotel, Kuala Lumpur from 9 May to 12 May Jointly organized by the Ministry of Energy, Water and Communications, Pos Malaysia, as well as the Malaysian Commission of Multimedia and Communications, the meeting witnessesed a gathering of more than 120 postal officials from twenty nine countries within the Asian Pacific rim focusing on ideas to step up cooperation among APPU members towards strengthening Asian Pacific capabilities for global leadership in postal and express services. Deputy Minister of Energy, Water and Communications YB Dato Shaziman Abu Mansur, officiated the opening ceremony of the Asian-Pacific Postal Union Meetings (APPU) JUNE 2006 POS MALAYSIA AND SINGPOST LAUNCHED JOINT PROMOTION TO BOOST CROSS-BORDER MAIL TRAFFIC Pos Malaysia and Singapore Post launched a joint promotion on cross border mail targeted at business customers in Malaysia and Singapore for a period of one year commencing 1 st June Through this joint promotion, businesses from both sides of the causeway will enjoy attractive rates for selected classes of mail originating from both countries.

34 32 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CALENDAR OF EVENTS 2006 continued 13 JUNE 2006 POS MALAYSIA & SERVICES HOLDINGS BERHAD S ANNUAL GENERAL MEETING The 74 th Annual General Meeting for Pos Malaysia & Services Holdings Berhad was held at Legend Hotel Kuala Lumpur on 13 th June JULY 2006 CELEBRATING FELDA S 50 TH ANNIVERSARY THROUGH COMMEMORATIVE STAMPS AND FIRST DAY COVER In conjunction with the 50 th Year Celebration of the Federal Land Development Authority (FELDA), a set of commemorative stamps were issued and launched by YAB Dato Seri Najib Tun Razak, Deputy Prime Minister of Malaysia on 5 th July Also present at the launch were Tan Sri Adam Kadir, Chairman of Pos Malaysia & Services Holdings Berhad and Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer. 11 JULY 2006 POS MALAYSIA AND NATIONWIDE EXPRESS FORMED STRATEGIC BUSINESS PARTNERSHIP Pos Malaysia and Nationwide Express Sdn. Bhd. officially launched a strategic partnership to provide a convenient method and venue for the customers to purchase stamps and philatelic items at Nationwide Express offices on 11 th July At the signing of agreement ceremony, Nationwide Express was represented by its Chief Executive Officer, Cik Rozilawati Haji Basir, while Pos Malaysia was represented by Datuk Abdul Majid Hj Hussein, Chairman of Pos Malaysia Berhad, Dato Ikmal Hijaz Hashim, Managing Director/ Chief Executive Officer, as well as Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer.

35 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CALENDAR OF EVENTS 2006 continued 18 JULY 2006 COMMEMORATIVE STAMPS ON SULTAN AZLAN SHAH GALLERY ISSUED IN CONJUNCTION WITH HIS ROYAL HIGHNESS SULTAN AZLAN SHAH S BIRTHDAY Pos Malaysia issued a set of commemorative stamps featuring the Sultan Azlan Shah Gallery in conjunction with the birthday of His Royal Highness DYMM Sultan Azlan Muhibbuddin Shah ibni Al-Marhum Sultan Yussuf Izzuddin Shah Ghafarullahu-lah, the Paduka Seri Sultan of Perak. His Royal Highness graciously launched the stamps at Istana Iskandariah in Kuala Kangsar. The launch was also attended by DYMM Raja Permaisuri Perak, DYTM Raja Muda Perak, DYAM Raja DiHilir Perak, DYAM Raja Puan Muda Perak, Menteri Besar Perak and close friends of His Royal Highness. Also present were Tan Sri Adam Kadir, Chairman of Pos Malaysia & Services Holdings Berhad and Dato Ikmal Hijaz Hashim, Group Managing Director/Chief Executive Officer of Pos Malaysia. 10 AUGUST 2006 STRATEGIC ALLIANCE BETWEEN POS MALAYSIA AND E-PAY (M) TO PROVIDE BETTER CONVENIENCE FOR MOBILE PHONE USERS On 10 August 2006, Pos Malaysia and E-Pay (M) Sdn. Bhd. officially launched a strategic alliance to provide a convenient method and venue for the customers especially mobile phone users to purchase prepaid reloads at post offices and mini post offices. Pos Malaysia was represented by Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer, while E-Pay (M) Sdn. Bhd. was represented by Mr. Simon Loh, Managing Director. Also present at the ceremony were Datuk Abdul Majid Haji Hussein, Chairman of Pos Malaysia Berhad and Dato Hassan Haji Said, Executive Director of E-Pay (M) Sdn. Bhd.

36 34 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CALENDAR OF EVENTS 2006 continued 15 AUGUST 2006 SPECIAL STAMPS AND FIRST DAY COVER TO CELEBRATE MALAYSIA S MYRIAD OF FESTIVALS On 15 th August 2007, Pos Malaysia issued a set of special stamps and First Day Cover on Malaysian Festivals. The stamp was launched by YB Datuk Patinggi Tan Sri Dr George Chan Hong Nam, Deputy Chief Minister I, who is also the Minister of Industrial Development and Minister of Agriculture Modernization, Sarawak. The special stamps featured the original drawings by children during a Drawing Competition organised by Pos Malaysia Berhad earlier of the year. Also present during the launching ceremony were Tan Sri Adam Kadir, Chairman of Pos Malaysia & Services Holdings Berhad, and Datuk Abu Huraira Abu Yazid, Executive Director/ Group Chief Operating Officer. 9 OCTOBER 2006 SPECIAL STAMPS ON EXOTIC SEMI-AQUATIC ANIMALS LAUNCHED DURING WORLD POSTAL DAY 2006 In conjunction with World Postal Day 2006, Pos Malaysia issued a set of special stamps and First Day Cover on Semi Aquatic Animals on 9 th October Launched by YAB Dato Haji Abdul Ghani Othman, the Menteri Besar of Johor, the special stamps and First Day Cover feature a collection of images on semi-aquatic animals. Aso present at the launch were Datuk Abdul Majid Hj Hussein, Chairman of Pos Malaysia Berhad and Dato Ikmal Hijaz Hashim, Managing Director/ Chief Executive Officer of Pos Malaysia. 10 OCTOBER 2006 STRATEGIC COOPERATION LAUNCHED BETWEEN POS MALAYSIA AND YAYASAN RESTU Pos Malaysia and Yayasan Restu officially launched a strategic alliance to provide a convenient and efficient method for the delivery of the Holy Quran and Islamic art products to the customers across the country on 10 th October The signing ceremony was witnessed by YAB Dato Seri Abdullah Ahmad Badawi, the Prime Minister of Malaysia and YAB Dato Seri Dr Mohd Khir Toyo, the Menteri Besar of Selangor.

37 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CALENDAR OF EVENTS 2006 continued 2 NOVEMBER 2006 POS MALAYSIA CELEBRATED HARI RAYA AIDILFITRI AND DEEPAVALI WITH STAFF, CORPORATE CLIENTS AND MEDIA REPRESENTATIVES Pos Malaysia celebrated Hari Raya Aidilfitri and Deepavali with over 4,000 staff, corporate clients and media representatives at its headquarters in Dayabumi Complex. Organised on two consecutive days, the event was held on 2 nd and 3 rd November 2006 of which the former was for corporate clients and media representatives and the latter for the management and staff of Pos Malaysia. 4 DECEMBER 2006 DEPUTY PRIME MINISTER OF MALAYSIA LAUNCHED THE COMMEMORATIVE STAMPS ON THE 25 th GENERAL ASSEMBLY OF THE WORLD VETERANS FEDERATION Pos Malaysia issued a set of commemorative stamps and First Day Cover on the The 25 th General Assembly of the World Veterans Federation on 4 December The commemorative stamps and First Day Cover feature a collection of images related to the World Veterans Federation and was launched by YAB Dato Seri Najib Tun Razak, Deputy Prime Minister of Malaysia during the opening of the WVF General Assembly at Kuala Lumpur Convention Centre. 19 DECEMBER 2006 POS MALAYSIA ESTABLISHED STRATEGIC INTERNATIONAL COOPERATION WITH VENEZUELA POST (IPOSTEL) Pos Malaysia and Postal Telegraphic Institute of Venezuela (IPOSTEL) signed a Memorandum of Understanding (MOU) to establish feasibility study to step up bilateral cooperation in supporting trade and goods flow between Asian and Central/South America regions. The signing ceremony was held on 19 th December 2006 in Caracas in conjunction with the official visit of the Prime Minister of Malaysia YAB Dato Seri Abdullah Ahmad Badawi to Venezuela. The ceremony was also witnessed by the President of Venezuela, Mr Hugo Chavez. At the signing ceremony of the MOU, IPOSTEL was represented by its Vice President, Mr. Daniel Guillermo while Pos Malaysia was represented by its Chairman, Tan Sri Adam Kadir. 28 DECEMBER 2006 POS MALAYSIA SUPPORTS MALAYSIA S POLE-TO-POLE EXPEDITION 2006 / 2007 VIA SPECIAL EDITION STAMPS AND EXCLUSIVE POSTCARDS A set of special stamps and First Day Cover on the Poleto-Pole Expedition (The South Pole Experience) as well as exclusive postcards on the North Pole : Pole-to-Pole Mission 2006/2007 were issued on 28 th December The stamps, First Day Cover and postcards were launched by YAB Dato Seri Mohd Najib Tun Abdul Razak, Deputy Prime Minister of Malaysia.

38 POS 36 MALAYSIA IN THE NEWS POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006

39 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT POS MALAYSIA IN THE NEWS

40 38 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE HIGHLIGHTS SHARE PRICE PRICE PER SHARE (RM)

41 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE HIGHLIGHTS continued REVENUE The Group recorded operating revenue of RM821.8 million in 2006, a growth of RM34.8 million or 4.4% over the previous year of RM787.0 million. The increase in revenue was primarily due to higher contribution from PosMel being the major revenue contributor in the Group, by RM20.9 million or 4.0%, in line with the continuous growth in overall mail volume by 1.9% to 1.3 billion items. Further increase was also attributed to higher revenue from PosLaju and PosNiaga by RM8.3 million or 6.8% and RM5.7 million or 6.0% respectively. This was consistent with higher contribution per courier item in PosLaju and the increase in no. of transaction by 4.5 million or 4.8%, handled by PosNiaga. SHAREHOLDERS FUND Shareholders fund grew by RM113.1 million or 7.2% to RM1,685.7 million mainly due to higher profit for the year of RM160.3 million which was mitigated by dividend paid during the year amounted to RM55.6 million.

42 40 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE HIGHLIGHTS continued TOTAL TANGIBLE ASSET Total tangible asset increased by RM68.1 million or 3.4% to RM2,074.0 million in 2006, mainly attributed to the increase in cash and cash equivalents and investments by RM20.9 million and RM36.9 million respectively. Cash and cash equivalent improved on the back of positive results posted by the Group in Whilst investments grew by RM36.9 million mainly due to the one-off gain on dilution of an associate and the share of results of an associates amounted to RM22.8 million and RM21.5 million respectively. EARNINGS PER SHARE (BASIC) Earnings per share increased by 8.7% to sen in 2006, consistent with the increase in profit after taxation by RM14.9 million or 10.2% to RM160.3 million in 2006.

43 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE HIGHLIGHTS continued PROFITABILITY ANALYSIS Profit before taxation for the financial year ended 2006 of RM211.8 million reflected a significant increase of RM64.9 million or 44.2% over the RM146.9 million recorded in The growth in revenue by RM34.8 million or 4.4% over the previous year of RM787.0 million has facilitate the improvement in the Group s pre-tax profit. However, operating profit has decreased slightly by RM3.6 million or 3.5% due to the increase in operating cost by RM38.5 million or 5.6%. This was primarily due to the effect of the revision in salary structure under the new Collective Agreement of RM30.9 million to the Group s operating cost, offsetting the impact of the VSS exercise, which was completed during the year. Further increase in operating cost was also attributed to higher transportation cost by RM28.8 million or 34.7%, in line with the higher air transport charges and increase in fuel cost. Excluding the impact of the new salary structure, the Group would have posted an operating profit of RM129.9 million, an improvement of RM27.3 million or 26.6% over the previous year of RM102.7 million. In spite of the decrease in operating profit, the Group s profit before taxation has continued to improve mainly due to the increase in interest income by RM11.0 million or 30.3% which was driven by higher placement and average interest rate in 2006 and the gain on dilution of an associate of RM22.8 million, resulted from the private placement exercise undertaken by the associate which diluted the Group s equity interest in the associate. Further increase in profit before taxation was also attributed to the reversal of impairment loss on investment of RM11.3 million as opposed to a provision made in the preceding year of RM18.4 million. Profit after taxation of RM160.3 million for the financial year ended 2006 represents a lower increase of RM14.9 million or 10.2% compared to the significant increase in profit before taxation. This is consistent with higher effective tax rate in 2006 of 27.3% as opposed to only 5.0% in 2005, consistent with reversal of overprovision for tax of RM9.8 million and higher tax exempt income in 2005.

44 42 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE HIGHLIGHTS continued NET TANGIBLE ASSETS PER SHARE Net tangible assets per share improved by 5.9% to RM3.25 per share, in line with the increase in shareholders fund by RM113.1 million to RM1,685.7 million in REVENUE PER EMPLOYEE & MANPOWER COST PER EMPLOYEE Revenue per employee has improved by 4.9% on the back of higher operating revenue by 4.4% in 2006 as compared to previous year. The manpower cost per employee in turn has increased by 1.4%, consistent with the impact from the revision in salary structure under the new Collective Agreement of RM30.9 million, offsetting the impact of the VSS exercise, which was completed during the year

45 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE HIGHLIGHTS continued REVENUE PER SBU PosMel remains as the highest revenue provider for the Group, contributing 69% of the Group s total revenue. BREAKDOWN OF COST Staff related cost continues to be the biggest component of total operating cost, which constitutes 59.7% of total operating costs. This is however, lower than last year s contribution of 62.5%, mainly attributed to higher transportation cost which currently contributes 15.4% of total operating costs compared to 12.1% in 2005, due to higher air transport charges and increase in fuel cost.

46 44 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 GROUP MANAGING DIRECTOR / CHIEF EXECUTIVE OFFICER S OPERATIONS REVIEW Dato Idrose bin Mohamed Group Managing Director / Chief Executive Officer POSMEL The mail division was still the main revenue driver accounting for 69% of the Group s revenue for The overall mail volume continued its increasing trend, growing by 1.9% to 1.3 billion items. Letter Mail Letter mail recorded volume growth of 1.6% for the year of Even though electronic media is widely used today, mail remains relevant and is still trusted and relied upon by the public. PosEkspres 2006 saw the volume for PosEkspres grew by 7%, the same growth rate as the year before. PosMel also made a marketing breakthrough by selling prepaid PosEkspres envelopes at Shell Select stations in the Klang Valley. Parcel Parcel recorded a volume growth of 2% in A track and trace system was installed to enhance the reliability of this service. The investment proved fruitful when we managed to form a strategic partnership with a Japanese company to deliver business-tobusiness (B2B) parcel in Malaysia. Direct Mail Marketing/Creative Mail Creative Mail is one product that has great growth potential. During the year, a number of interactive seminars were conducted to educate organisations and companies on the effectiveness of using Creative Mail as a marketing tool. Relatively new to the Malaysian market, Creative Mail has received positive feedback from clients and is expected to grow in the future. Advertising Mail (Admail) Admail recorded a significant volume growth of 55% in 2006 compared to previous year. Despite the numerous competitors for this product, Admail continues to grow due to the reliability and the countrywide coverage of our advertising mail service. Corporate Mailroom Solution (CMS) This is another service that has been receiving positive interest and feedback from major organisations. To date, there are more than 30 mailrooms located across Malaysia serving campuses and high-rise office buildings. PosMel also provides dedicated personnel working in corporate mailrooms. There are already plans to set up more mailrooms with one-stop centre features that would cater to all the postal needs of specific organisations.

47 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT GROUP MD / CEO S OPERATIONS REVIEW continued National Mail and Parcel Hub With the completion of the network reconfiguration study in 2005, Pos Malaysia entered into the implementation phase with the purchase of a 22-acre land and building in Section 21, Shah Alam. This facility is being turned into the National Mail Processing Centre (MPC) that will serve as the hub for sorting of mails and parcels for the whole of Malaysia. The National MPC is part of the effort to transform our mail processing activities to world class standards. A few of our existing MPCs will be consolidated in order to achieve economies of scale especially in the utilisation of machines. Future Focus With the infrastructure progressively being put in place, PosMel will continue to emphasize on our last mile delivery to complete the improvements on the entire mail value chain. The training and development of PosMel s delivery team or postmen will have our continued focus as we believe in the development of human capital to eventually benefit our customers. We will also continue to foster closer relationship with the community as well as work closely with the Village Committees, Resident Groups and Development Committees. The MPC will help increase the automation level from the current 20% to an expected 70%.

48 46 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 GROUP MD / CEO S OPERATIONS REVIEW continued POSLAJU Although 2006 was a challenging year, PosLaju remains the market leader for the domestic market with revenue recorded at RM130.1 million. ANNUAL REVENUE FOR POSLAJU In line with our strategy to expand into the Business to Business (B2B) and Business to Customers (B2C) market segments, the revenue generated from corporate customers increased from RM68.6 million in 2005 to RM70.3 million in Our clients vary from automotive parts, manufacturing, banking and trading business. However, the revenue generated from document deliveries declined from RM63.4 million in 2005 to RM59.9 million in This is due to lower volume of credit cards renewal handled for financial institutions in PosLaju s strength lies in its 38-branch network and the support provided by 670 post offices countrywide. The number of PosLaju branches increased by 3 from 35 branches in The new PosLaju branches are located at Sitiawan, Klang and Rawang.

49 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT GROUP MD / CEO S OPERATIONS REVIEW continued PosLaju will continue to improve its operations and delivery services by expanding its fleet of vans and motorcycles. Its current fleet comprises 431 vans and 327 motorcycles operated by 944 delivery personnel. In 2006, PosLaju increased its value added services by introducing insurance coverage and better quality packaging products. These packaging materials include envelopes, boxes and tubes. REVENUE FOR DOCUMENT AND MERCHANDISE ITEMS New Development and Initiatives in 2007 PosLaju is embarking on a major business process re-engineering which involves re-designing the entire operations process, introducing new scanners and track and trace system via the PITTIS project. PosLaju will further expand its network and delivery coverage by opening about 5 more branches in We will also introduce new uniforms for our courier staff and is in the process of upgrading the service counters at all PosLaju centres.

50 48 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 GROUP MD / CEO S OPERATIONS REVIEW continued POSNIAGA Through our retail network, PosNiaga offers a wide range of postal, bill payment, remittance, renewal of road tax and driving licence as well as purchase of unit trust and insurance products. The number of transactions handled by PosNiaga in 2006 increased by 5% from the previous year to 99 million. The increase is mainly from collection of bill payment. In the 2007 Budget speech, the Prime Minister acknowledged Pos Malaysia as one of the main collection agents for Government agencies to facilitate the payment of bills, such as electricity, telephone and water bills and agreed to further extend the services at post offices to include bill payment of other Government agencies, such as quit rent, assessment rent and sewerage charges. POSNIAGA S TRANSACTION VOLUME In 2006, 15 new agencies subscribed to our counter services bringing the total number of agencies to 128. PosNiaga is also reaping the benefit of internet as online payment transactions grew from 5,000 to 25,000 a month. During the year, 3 banks established payment collaboration with PosOnline and 34 new agencies subscribed to the online services. One stop Payment Centre PosNiaga s key strategy is to continue to capitalise on its extensive network to offer postal and non-postal products and services as one stop payment centre for customers.

51 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT GROUP MD / CEO S OPERATIONS REVIEW continued In November 2006, Pos Malaysia obtained the approval from the Road Transport Department to offer the road tax and driving license renewal services at 96 more outlets, bringing the total number of outlets that can offer this service to 584 outlets. This signifies the trust given by the Government to Pos Malaysia as an important channel to improve the public service delivery system. Accessibility and Reachability of Post Office Outlets In 2006, 7 new post offices and 64 Pos Mini were opened. Pos Malaysia has the largest number of outlets, almost double the number of outlets owned by the largest local Bank in Malaysia. A total of 298 or approximately 31% of the combined total of 969 outlets are operated by third party entrepreneurs (known as Pos Mini ). These entrepreneurs sell postal products to complement their other business at their outlets. Apart from Pos Mini operators, there are also 291 Postal Agents ( Wakil Pos ) appointed by Pos Malaysia to sell selected postal products, such as stamps and postal order. Some of the post offices are now located in shopping complexes at the request of the establishments themselves who see the advantage of adding our postal products and services at these complexes. POSNIAGA S NETWORK REACH: Post Offices 671 Pos Mini 298 Postal Agents 291 Stamp Vendors 4,902 Mobile Post Offices 3 Post Offices that can handle renewal of road tax/ driving license Post Offices at shopping complex Post Offices with extended services until 10 pm Post Offices which open on Sundays (excluding Kelantan, Terengganu and Kedah) MAJOR DEVELOPMENTS Online Payment Pos Malaysia s internet transaction portal called PosOnline, established in July 2004, is available to all customers 24 hours a day, 7 days a week. Through PosOnline, customers can perform transaction from anytime and anywhere, as long as they have an internet access. During the year, Pos Malaysia entered into strategic partnerships with CIMB Bank, Bank Rakyat and PosPay to offer convenient payment options for customers to pay for their bills and perform other transactions through PosOnline. The collaboration allows the account holders of the respective banks to gain access to PosOnline by linking their online payment engines to PosOnline website. Customers of the said banks can now have access to over 60 payee corporations and make payment for their utility bills, telco postpaid bills, Astro bills, hire purchase installment payments, zakat and opening/ topping-up of Standing Order Deposit Account (SODA) for members.

52 50 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 GROUP MD / CEO S OPERATIONS REVIEW continued CONTINUOUS PROCESS IMPROVEMENTS Improved Mode of Payment at Post Offices To enhance the mode of payment for customers convenience, credit card payment for high value insurance transactions is now accepted at 12 pilot outlets. The rollout of credit card terminals to other outlets will be implemented in stages in Improved Customer Service The result of a survey conducted by an independent research company showed that 76% of PosNiaga s customers are generally satisfied with its counter services, an improvement of 5% from the previous year. PosNiaga will use the feedback from this survey to improve on areas that are most important to the customers. PosNiaga also embarked on Mesra Pelanggan campaign at all post offices to inculcate excellent service standards for our counter staff. Revenue Generation Activities From Current Business PosNiaga will continue to expand its fee based income activities. With the additional 96 post offices providing JPJ services, PosNiaga is able to expand revenue from handling more road tax and driving license renewals and cross sell with motor insurance policies. PosNiaga s market share of international remittance is presently very minimal but has good growth potential. Recognising tremendous growth in international remittance, PosNiaga is enhancing its payment system in order to compete with banks and other private operators to provide cheaper, faster and secured international remittance service for customers. Develop New Revenue Sources PosNiaga aims to cater to the untapped customer segments to provide financial products and services, including micro credit and other unit trust products. Our role will be to promote and market other banks/unit trust companies products and services at our post offices. PosNiaga is also evaluating the potential of offering other insurance and takaful products that is tailored for our walk-in customers. Invest in New Process Improvements PosNiaga is continuously looking at providing customer s convenience by expanding our payment channels. We are currently evaluating the potential installation of Self Service Terminals at busy outlets and other areas with high traffic. In our efforts to support our revenue growth initiatives, we are in the final stages of replacing a new counter system that is robust and efficient at all our post offices. With revenue generation activities and process improvements taking place, coupled with full support from our agencies and commitment from staff, we believe this would provide a strong foundation for us to achieve greater success. Outlook Moving forward, PosNiaga s focus is to capitalize on our network reach and achieve sustainable net income growth through revenue generation activities, optimizing costs as well as broadening the range of products and service offerings at our post offices.

53 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT GROUP MD / CEO S OPERATIONS REVIEW continued POSLOGISTIK 2006 has been a challenging year for PosLogistik as it continues to mature. During the year, PosLogistik started providing air transportation services between Peninsula Malaysia and selected destinations in East Malaysia previously done through a third party. With this niche capability, PosLogistik is committed to improve its service levels and simultaneously increase revenue due to the premium air cargo space provided by the air transportation services to Sabah and Sarawak sectors. In 2006, PosLogistik delivered more than 7,600 tonnes of postal products to Sabah and Sarawak while about 1,500 tonnes of cargo were delivered to its external customers at various destinations across the South China Sea. Range of Services Offered PosLogistik manages a fleet of more than 5 vans, 22 lorries and 4 aircrafts to serve its internal and external customers in 28 destinations in Malaysia. Its range of services include inbound and outbound logistics, custom clearance, import and export documentations, land and air transportation, distribution and break bulk channel as well as warehousing. PosLogistik s hub at Pusat Mel dan Kurier, KLIA is a complete one-stop center that encompasses all of the services offered. Besides serving internal customers, PosLogistik secured deals to service 21 external customers - 14 are customers of PMB and 7 others are PosLogistik s Customer s Sales Agent (CSA) for air cargo. Future Plans The next steps for PosLogistik are to expand on its current network of line haul and to serve other destinations, and increase the efficiency and service levels through an integrated systems approach. For 2007 and beyond, PosLogistik s strategy is to continue to market air cargo space and distribution services for the niche industries such as automotive, cosmetics and electronics, with an additional involvement in halal food logistic solutions.

54 52 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 GROUP MD / CEO S OPERATIONS REVIEW continued PSH EXPRESS SDN BHD PSH Express is involved in international courier business, operating under the brand name of asiaxpress TM. It offers a wide range of courier services such as Priority Xpress, Economy Xpress and Diplomatic Xpress to more than 232 international destination countries. It also offers domestic courier solutions and corporate mailing solutions. Customers also enjoy value-added services which include Customized Web-Based Systems Solutions, Money Back Guarantee, Pro-active Tracking, Customized Reporting, One-Point of Contact and shipment advisory. Financial Performance For 2006, asiaxpress TM recorded revenue of RM2.4 million, an improvement from RM0.3 million in International shipment contributed 97% of the total revenue. In line with its strategy to focus on corporate customers, asiaxpress TM has a clientele base which comprises ministries and government agencies, law firms, oil and gas companies, engineering and industrial chemical companies, and colleges. In 2006, asiaxpress TM initiated the project to open asiaxpress TM Worldwide Service Centres at selected post offices. Currently, asiaxpress TM Worldwide Service Centres are available at the Kuala Lumpur General Post Office, Subang Jaya Post Office and Kelana Jaya Post Office. These service centres were opened to extend the services of asiaxpress TM to walk-in customers to experience the asiaxpress TM service offerings and increase the number of asiaxpress TM touch points to its existing customers. Profit from operations improved by 803% to RM0.6 million in FY 2006 as compared to the preceding year.

55 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT GROUP MD / CEO S OPERATIONS REVIEW continued HUMAN RESOURCE The total workforce in 2006 was 15,189 of which executives and nonexecutives made up 2% and 98% respectively. Employee Relations The Collective Agreement between Pos Malaysia and the seven in-house unions representing the non-executive staff was completed and approved by the Ministry of Finance (MOF) in November The main area of focus was the payment of a 5% salary adjustment across the board and the adjustment of salary structure for various levels of non-executives staff. Terms and conditions of service for the executive staff were also revised and approved by the MOF in Key Human Capital Development Projects In line with the Government s effort to tackle unemployment, Pos Malaysia undertook the Graduate Management Programme (GMP). 106 graduates went through a 5 day evaluation at Institut Latihan Pos in Bangi where they were assessed on their skills, mental and physical abilities. 67 successful candidates were then selected to undergo a 4-monthtraining programme with the various SBUs and support departments. In 2006, 291 training courses were conducted at the Institut Latihan Pos, involving a total of 6,618 employees. The courses cover all areas such as management skills, technical, service quality, health, safety and computer applications.

56 54 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT STAMP ISSUES XVIII FIGO WORLD CONGRESS OF GYNECOLOGY AND OBSTETRICS 9TH FESPIC GAMES KUALA LUMPUR TH ANNIVERSARY DEWAN BAHASA DAN PUSTAKA FRESHWATER FISH SERIES III GALLERY SULTAN AZLAN SHAH 25TH GENERAL ASSEMBLY OF THE WORLD VETERANS FEDERATION FELDA 50 YEARS CELEBRATION 15TH ANNIVERSARY OF ASEAN-CHINA DIALOGUE RELATIONS

57 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT WILD DUCK SPECIES SEMI AQUATIC ANIMALS RARE FRUITS SERIES III POLE-TO-POLE EXPEDITION (THE SOUTH POLE EXPERIENCE) 100TH ANNIVERSARY NATIONAL AUDIT INSTITUTION MALAYSIAN TRADITIONAL COSTUMES MALAYSIAN FESTIVALS MOUNTAINS OF MALAYSIA

58 56 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE GOVERNANCE STATEMENT THE BOARD OF DIRECTORS of Pos Malaysia & Services Holdings Berhad ( PSH or the Company ) remains committed to improving corporate governance practices to ensure that the highest standards of corporate governance are practised throughout the PSH Group of Companies ( Group ) as a fundamental part of discharging the Board s responsibilities to protect and enhance shareholders value and the financial performance of the Group. The Board acknowledges that corporate governance is not merely an adoption of good and acceptable business practices but a continuous process that requires periodic reassessment and refinement of Board and management practices and systems. The Board is committed to ensuring that the Group has fundamental internal controls and processes in place to implement the principles and concepts of good governance and that they are followed consistently. In furtherance to the best practices and principles established under the Malaysian Code on Corporate Governance ( the Code ), the Board also recognizes and adopts the principles as contained in the Green Book launched by the Putrajaya Committee on Government Linked Companies High Performance (PCG) in April, The overarching objective of the Green Book is to raise the overall effectiveness of Boards of Government Linked Companies ( GLC ). The Board recognizes that improving its effectiveness is the core of the Company s transformation initiatives as a GLC. Realizing this importance, during the financial year under review, the Board had conducted a Board Effectiveness Assessment ( BEA ) with the assistance of a reputable external consultant to review the structure, processes and documentation with regards to the Board against market practice and against the Green Book best practices. Subsequent to the BEA, an Actionable Improvement Programme ( AIP ) containing key improvement initiatives has been developed to address gaps identified in the BEA. The Board is currently implementing the key improvement initiatives recommended under the AIP. The Board is now pleased to report to the shareholders on the manner how the Group has applied the Principles of the Code and the extent of compliance with the Best Practice provisions of the Code. A. BOARD OF DIRECTORS The Board, which is appointed by the shareholders is entrusted with dealing and controlling the Group and overseeing the business of the Group which includes optimizing long term financial returns and shareholders wealth creation. The Board is responsible for the Group s progress and for ensuring that the Group is managed to achieve this result. This is an active, not a passive responsibility with day-to-day responsibilities delegated to Management. The Board s function is to set the Group s strategic directions, its aims and objectives and to ensure that they are achieved. It is the ultimate decision making body in the Group and is the source of authority for the Management who run the Group s operations. The Board is therefore a link between the shareholders and the managers of the Group.

59 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT continued 1. Composition The Board currently consists of nine (9) members, comprising the Group Managing Director/Chief Executive Officer, the Executive Director/Group Chief Operating Officer, three (3) Non-Independent Non- Executive Directors and four (4) Independent Non- Executive Directors including the Chairman. The number of Independent Directors is in compliance with the Listing Requirements of Bursa Malaysia Securities Berhad ( the Listing Requirements ) which requires one-third of the Board to comprise Independent Directors. The Board members varied skill and breadth of experience, details as outlined in the Profile of Directors contained in this Annual Report, are relevant for the effective management of the Group s business. The Chairman is primarily responsible in providing leadership to the Board to ensure effectiveness of the Board. The Chairman also ensures that Board meetings are conducted in an orderly manner and that meeting agendas are effectively deliberated and decisions are arrived at after taking into account the interests of the shareholders, employees, customers and other stakeholders. On the other hand, the Group Managing Director/ Chief Executive Officer is under the control of the Board. He manages the overall business and oversees the day-to-day operations of the Group and is accountable to the Board for the overall organization, management and staffing of the Group and for its procedures in financial and operational matters, including conduct and discipline. As for the Independent Non-Executive Directors, they fulfill their role by exercising independent judgment and positive participation in the deliberations of the Board. They also play a pivotal role in the provision of unbiased and independent views, advice and judgment as well as safeguard the interests of other parties such as the minority shareholders and other stakeholders. The current size and composition of the Board is well balanced and the Board can effectively discharge its duties and responsibilities. 2. Board Meetings During the year ended 31 December 2006, twentyseven (27) Board Meetings were held. The record of attendance of the Board Members is disclosed as part of the Profile of Directors contained in this Annual Report. 3. Supply of Information All Directors are provided with an agenda together with Board papers and supporting documents detailing each item on the agenda prior to Board meetings. The Board papers are issued in advance to enable the Directors to obtain further information, where necessary, in order to be properly briefed before the meetings. In addition, there are matters reserved specifically for the Board s decision, including the approval of corporate plans and annual budgets, acquisitions and disposals of undertakings and properties of a substantial value, major investments and financial decisions and changes to the management and control structure within the Group, including key policies and procedures and delegated authority limits.

60 58 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE GOVERNANCE STATEMENT continued The Directors have access to all information within the Group whether as a full Board or individually, to the extent that the information required is pertinent to the discharge of their duties as Directors and is for the benefit of the Group. All Directors have access to the advice and services of the Company Secretary and may seek independent professional advice should the need arise. 4. Re-election of Directors In accordance with the Company s Articles of Association, all Directors shall retire from office at least once in each three (3) years and at least one-third of the number of directors is subject to retirement by rotation at each Annual General Meeting ( AGM ) but shall be eligible to offer themselves for re-election. Details of the Directors seeking re-election such as their age, qualification, working experience, other directorships of public companies and position in the Company are disclosed in the Profile of Directors contained in this Annual Report. 5. Directors Training As an integral element of the process of recruiting new Board members, new Directors will undergo appropriate orientation in respect of the business of the Group. Thereafter, the Directors will undergo further training from time to time in order to stay abreast with the latest developments and changes in laws and regulations, business environment and its challenges and to equip themselves with the necessary knowledge and know how to enable the Directors to fulfill their responsibilities and effectively discharge their duties. All the Directors have attended the Mandatory Accredition Programme and have attended the following seminars, briefings and forum in year 2006:- Improving Directors Performance, Leadership & Governance Preparing your 1 st Quarterly Interim Financial Statements Corporate Social Responsibility MICPA-Bursa Malaysia Business Forum 2006 Khazanah Megatrends Forum 2006 Global Regional Trends and Implications for Malaysia Robert S. Kaplan - Live in Kuala Lumpur MES Annual International Conference Results Based Budgeting, Kuala Lumpur Case Studies of Other Postal Organizations Turning Key Challenges into Key Success Factors - Experience of Other Postal Organisations Introduction to Islamic Finance & Products Islamic Corporate Financing & Islamic Legal Documentation Course Real Estate Investment Trust - The Next Investment Wave? Legal Mergers and Acquisition Training GLC Transformation Programme & Launching of Akademi Pengarah-Pengarah Malaysia World Postal Business Forum Courier & Parcel Despatch Forum Technology Workgroups Forum Doing Business in the Middle East Seminar on Arbitration Reputional Risk Management Trusted Business Advisor Dialog Series Risk Management Seminar Role of Internal Audit, Risk Management & Compliance International Currency Risk Management Another Asian Currency Crisis Possible?

61 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT continued 6. Board Committees In order to assist the Board in executing some of its responsibilities, the Board has delegated some of its responsibilities to the following Committees of the Board:- 6.1 Audit Committee Please refer to the Audit Committee Report of this Annual Report for information on the Audit Committee. 6.2 Remuneration Committee Members Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Puan Salmah binti Sharif (Non-Independent Non-Executive Director) The following Directors were also members of this Committee during the year under review but have now ceased to be members:- Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) Dato Zukri bin Samat (Independent Non-Executive Director) (Ceased w.e.f. 12 June 2006) Key Responsibilities Develop policies and recommend proposals for recruitment and retention of the Group Managing Director/ Chief Executive Officer and Senior Management. Establish Key Performance Indicators for the Group Managing Director/ Chief Executive Officer and Senior Management. Review business performance and individual performance of the Group Managing Director/Chief Executive Officer and Senior Management. 6.3 Nominating Committee Members Puan Sri Datuk Nazariah binti Mohd Khalid (Chairperson/Independent Non-Executive Director) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Puan Salmah binti Sharif (Non-Independent Non-Executive Director) The following Directors were also members of this Committee during the year under review but have now ceased to be members:- Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Datuk Alias bin Ali (Independent Non-Executive Director) (Resigned w.e.f. 21 February 2007) Key Responsibilities Propose new nominations for the Board and to fill seats on Board Committees. Review the Board s required mix of skills and experience and other qualities, including core competencies which nonexecutive directors should bring to the Board. Assess the effectiveness of the Board as a whole and the Board Committees and the contribution of each individual director.

62 60 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE GOVERNANCE STATEMENT continued 6.4 Performance Management Committee Members Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) Dr. R. Hanafi bin Abdullah (Head of Group Human Resource and Administration) Tuan Haji Nadza Abdul (Head of Corporate Planning and Strategic Business) The following Directors were also members of this Committee during the year under review but have now ceased to be members:- Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) Dato Zukri bin Samat (Independent Non-Executive Director) (Ceased w.e.f. 12 June 2006) Dato Ng Kam Cheung (Independent Non-Executive Director) (Resigned w.e.f. 1 March 2007) Key Responsibilities To implement the performance management for the PSH Group in accordance with the guidelines issued by the Putrajaya Committee on GLC High Performance (PCG). 6.5 Transformation Committee Members Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) The following Directors were also members of this Committee during the year under review but have now ceased to be members:- Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Dato Ng Kam Cheung (Independent Non-Executive Director) (Resigned w.e.f. 1 March 2007) Dato Zukri bin Samat (Independent Non-Executive Director) (Ceased w.e.f. 12 June 2006) Key Responsibilities To operationalize the transformation of the PSH Group as mandated and envisaged in the GLC Transformation Manual. To build the necessary capabilities and processes to provide direction and ensure that the monitoring progress of the transformation initiatives are carried out effectively.

63 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT continued 6.6 Option Committee Members Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Dato Idrose bin Mohamed (Group Managing Director/Chief Executive Officer) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) The following Director was also a member of this Committee during the year under review but has now ceased to be a member:- Dato Ikmal Hijaz bin Hashim (Group Managing Director/Chief Executive Officer) (Resigned w.e.f. 23 February 2007) Key Responsibilities Administer the Company s Employees Share Option Scheme ( ESOS ) in accordance with the objectives and regulations as stated in the ESOS Bye- Laws. Recommend to establish, amend and revoke any rules or arrangement relating to the ESOS. 6.7 Tender Board Committee Members Tan Sri Adam Kadir (Chairman/Independent Non-Executive Director) Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) Dato Zukri bin Samat (Independent Non-Executive Director) Encik Faisal bin Ismail (Non-Independent Non-Executive Director) The following Directors were also members of this Committee during the year under review but have now ceased to be members:- Datuk Abdul Majid bin Haji Hussein (Independent Non-Executive Director) (Resigned w.e.f. 31 October 2006) Datuk Alias bin Ali (Independent Non-Executive Director) (Resigned w.e.f. 21 February 2007) Key Responsibilities Examine and where appropriate, approve awards of contracts for supply of goods, works or services within limits authorised in the Discretionary Authority Limit. Review selection for the appointment for successful tenderer for both close and open tender applications.

64 62 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CORPORATE GOVERNANCE STATEMENT continued B. DIRECTORS REMUNERATION The fees payable to Non-Executive Directors are determined by the Board as a whole and any increase shall be subject to the approval by the shareholders at the Annual General Meeting ( AGM ). The Company reimburses reasonable expenses incurred by the Directors in the course of their performance of duties as Directors. The Board through the Remuneration Committee ensures that the level of remuneration to the Executive Directors are sufficient to attract and retain the Directors to manage the Group successfully. The level and make up of the remuneration is structured by the Remuneration Committee so as to link rewards with corporate and individual performance. The Remuneration Committee determines the performance contracts and targets and structure the rewards for the Executive Directors performance against these targets. Category (Director) Fees RM 000 Salaries & Bonus RM 000 Allowance RM 000 Total RM 000 Details of the Directors Remuneration for the financial year under review are as follows:- Executive Non- Executive TOTAL ,176 The number of Directors whose total remuneration during the financial year fall within the following bands are: Number of Directors Range of Remuneration Executive Non-Executive Below RM50, RM50,001 RM100, RM100,001 RM250,000-1 RM250,001 RM300, RM300,001 RM350, RM350,001 RM400, RM400,001 RM450, RM450,001 RM500, RM500,001 RM550, RM550,001 RM600, C. RELATIONSHIP WITH INVESTORS AND SHAREHOLDERS 1. Investor Relations and Shareholder Communication The Board acknowledges the importance of communication with investors. Major developments and events are duly and promptly announced via appropriate communication channels through timely dissemination of information which provides shareholders with an overview of the Group s performance and operations. This includes the distribution of annual reports, quarterly announcements, relevant circular and press releases. In addition, the Company conducts briefings and dialogues with financial analysts to keep potential investors informed of the activities of the Group. The Investors Relations Representative of the Board appointed during the financial year under review is Mr. Wee Hoe Gooi Hoe Soon.

65 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT continued In addition, during the financial year under review, the shareholders and the public could convey their concerns and queries to the Senior Independent Director, Datuk Alias bin Ali. However, pursuant to the resignation of Datuk Alias bin Ali on 21 February 2007, Puan Sri Datuk Nazariah binti Mohd Khalid is now the new Senior Independent Director of the Company. 2. General Meetings General meetings serve as the principal forum for communicating with the shareholders of the Company. At the AGM, shareholders have direct access to the Board and are given the opportunity and time to raise questions or seek further information regarding the Group s activities, financial performance and prospects. The Chairman, Board Members, Senior Management of the Company as well as the external auditors of the Company are available during the Meetings to provide responses to queries from the shareholders. D. ACCOUNTABILITY AND AUDIT 1. Financial Reporting The Company s financial statements are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board. In presenting the annual financial statements and quarterly announcement of results to shareholders, the Board aims to present a balanced and understandable assessment of the Group s position and prospects. In this regard, the Board also ensures that the Group uses acceptable accounting policies for its financial statements, consistently applied and supported by reasonable and prudent judgment and estimates. The Audit Committee assists the Board by first reviewing the financial statements to ensure completeness, accuracy and validity prior to adoption of the statements by the Board and subsequent release to the Bursa Malaysia Securities Berhad. The Board also approves the Company s Annual Budget and Business Plans and carries out periodic review on the progress made by the business units. The Directors Responsibility Statement in respect of the Audited Financial Statement as required under Paragraph 15.27(a) of the Listing Requirements is contained in this Annual Report. 2. Internal Control The Board has an overall responsibility for maintaining a sound system of internal control to provide reasonable assurance of the effectiveness of the Group s business operations and risk management. The Group s state of internal control is as set out in the Statement of Internal Control contained in this Annual Report. 3. Relationship with Auditors The Company through the Audit Committee has an appropriate and transparent relationship with the external auditors. In the course of audit of the Group s operations, the external auditors have highlighted to the Audit Committee and the Board, matters that require the Board s attention. The external auditors also reported on their findings pertaining to their annual audit to the Audit Committee. Further, whenever deemed necessary, the external auditors will meet the Audit Committee members without the presence of Management pursuant to Paragraph of the Listing Requirements. Pursuant to the requirement under Paragraph of the Listing Requirements, the Board is pleased to report that the Company has applied the principles set out in Part 1 of the Code and that the Board continues to adopt and comply with the best practices in corporate governance set out in Part 2 of the Code. (This Statement is made in accordance with a resolution of the Board of Directors dated 24 April, 2007.)

66 64 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 STATEMENT OF INTERNAL CONTROL Introduction THE BOARD OF DIRECTORS ( the Board ) as guided by the Bursa Malaysia Securities Berhad s Statement of Internal Control Guidance for Directors of Public Listed Companies is pleased to provide the following Director s Statement of Internal Control which outlines the nature and scope of internal control of the Group during the period under review. Responsibility The Board is responsible for ensuring that a sound system of internal control to safeguard shareholder s interest and Company s assets is maintained. The Board affirms its overall responsibility for the Group s system of internal control which includes the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity. As there are limitations that are inherent in any system of internal control, this system is designed to manage rather than eliminate risks that may hinder the achievement of the Group s business objectives. Accordingly, it can only provide reasonable but not absolute assurance against material misstatement or loss. The system of internal control covers all aspects of the business including strategic, financial, operational, compliance controls and risk management procedures. Risk Management Framework Policy The Board subscribes to the fact that an effective risk management practice is a critical component of a sound system of internal control. Accordingly, the Board confirms that there is in place a formal and on-going process to identify, evaluate and manage significant risks faced by the Group that may impede the achievement of the Group s objective throughout the year. Management is responsible for creating a risk-aware culture and for building the necessary knowledge for risk management. They also have the responsibility for managing risks and internal controls associated with the operations and ensuring compliance with the applicable laws and regulations. Among measures taken are: The Risk Management Committee meets to discuss and update the Corporate Risk Register (The Corporate Risk Register provides a comprehensive view of key details for every risk including Key Performance Indicators, Key Risk Indicators and Management Action plans). On-going efforts via risk awareness programmes to cascade Enterprise Risk Management framework to Strategic Business Units and State Management Offices Establishment of Risk Registers for Strategic Business Units and State Management Offices During the financial year ended 31 December 2006, the Risk Management Committee had convened meetings on 20 February 2006 and 4 September 2006 to discuss and update the Corporate Risk Register on any new potential risk to the Group. The Corporate Risk Register was subsequently reviewed and approved by the Audit Committee.

67 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT STATEMENT OF INTERNAL CONTROL continued Control Environment The control environment sets the tone of the organization and influencing the control consciousness of its Group personnel. It is the foundation for all components of internal control, providing discipline and structure. Control environment factors include the integrity, ethical values and competence of the Group personnel; management s philosophy and operating style; the way the management assigns authority and the responsibility, organize and develops its Group personnel; and the attention and direction provided by the Board of Directors. The Group is committed in ensuring that a proper control environment is maintained. Among the measures taken are regular internal audit visits to appraise and review the systems of internal controls to ensure that these controls are effective and working as intended. Other Key Elements Of Internal Control The other key elements of the Group s internal control systems are described below: The roles and responsibilities of the Board of Directors, Risk Management Committee, Business and Support Units and State offices in respect of Risk Management are defined in the Risk Management Policy. The lines of responsibility and frequency of reporting of risks are also defined in the Risk Management Policy. Operating policies and procedures, which incorporate regulatory and internal requirements, are prescribed in Operating Procedures and Circulars. The documents are updated as and when necessary to meet the continually changing operational needs. The Board meets at least quarterly to review the Group s operational and financial performance against approved budget, approve quarterly report to Bursa Malaysia Securities Berhad and deliberate on issues that require the Board s approval. In addition, the Board is also updated on the changes in the business environment that may adversely affect business performance and relevant actions taken. The Audit Committee, together with the Internal Audit Department provides an independent assessment on the adequacy, efficiency and effectiveness of the Group s internal control system and advises management on areas that require improvement. The monitoring, review and reporting arrangements in place give reasonable assurance that the structure of controls and its operations are appropriate to the Group s operations and that risks are at an acceptable level throughout the Group. However, the arrangements do not eliminate the possibility of human error or deliberate circumvention of control procedures by employees. The Board believes that the development of the system of internal control is an ongoing process and has taken steps throughout the year to improve its internal control system and will continue to do so. Weakness In Internal Control That Result In Material Losses To the best of the Board s knowledge, there were no material losses or material fraud incurred during the period under review as a result of weaknesses in internal control. Management continues to take measures to improve and strengthen the internal control environment. (This Statement is made in accordance with the resolution of the Board of Directors dated 24 April, 2007.)

68 66 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Paragraph 15.27(a) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors is required to include a statement in the Company s Annual Report explaining its responsibility for preparing the annual audited financial statements. In preparing the financial statements of the Company and the Group for the financial year ended 31 December 2006, the Directors are satisfied that the Company and the Group have used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates. The Directors are also satisfied that all applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act, 1965 have been complied. The Directors are responsible for ensuring that the Company and companies within the Group keep accounting records which disclose with reasonable accuracy the financial position of the Company and of the Group. In addition, the Directors are responsible to take such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. (This Statement is made in accordance with a resolution of the Board of Directors dated 24 April, 2007.)

69 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT ADDITIONAL COMPLIANCE INFORMATION 1. Utilisation of Proceeds During the financial year ended 31 December 2006, there were no proceeds raised by the Company from any corporate proposals. 2. Share buy-back During the financial year under review, the Company has not exercised any share buy-back permitted by Section 67A of the Companies Act, Options, warrants or convertible securities Employee Share Options Scheme The details of the ESOS are disclosed in page 107 of this Annual Report. Warrants During the financial year, the Company did not issue or exercise any warrants or convertible securities 4. American Depository Receipt (ADR)/Global Depository Receipt (GDR) During the financial year ended 31 December 2006, the Company did not sponsor any ADR or GDR. 5. Sanctions and/or Penalties During the financial year ended 31 December 2006, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies. 6. Variation in results There is no variance in the Company s audited financial results for the financial year ended 31 December 2006 from the unaudited results as previously announced. The Company has not released or announced any estimate profit, financial forecast and projection in the financial year ended 31 December Profit Guarantee During the financial year ended 31 December 2006, the Company did not give any profit guarantee. 8. Material contracts There were no material contracts entered into by the Company and its subsidiaries involving the directors and substantial shareholders, either still subsisting at the end of the financial year ended 31 December 2006 or entered into since the end of the previous financial year.

70 68 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 ADDITIONAL COMPLIANCE INFORMATION continued 9. Revaluation policy During the financial year ended 31 December 2006, the Company did not have any revaluation policy on landed properties. 10. Status of Corporate Proposals 10.1 The acquisition of the entire equity interest in Pos Malaysia Berhad ( PMB ) which was proposed in 2001 has been completed. This acquisition is still subject to transfer of final titles of land ownership for all types of subject properties including land categorized as federal reserve land with Federal Land Commissioner On 31 October 2006, CIMB Investment Bank Berhad (formerly known as Commerce International Merchant Bankers Berhad) announced on behalf of PSH that the Group proposed to undertake a proposal comprising the following key steps: Distribution by PSH of its entire equity interest in PMB to its shareholders which will result in the shareholders of PSH receiving one ordinary share of RM0.50 each in PMB for every one existing PSH share held; and Transfer of the listing status of PSH to PMB i.e. PSH will be de-listed while PMB assumes the listing status of PSH on the Main Board of Bursa Securities. All resolutions pertaining to this Corporate Proposal has been approved by the shareholders during the Extraordinary General Meeting held on 3 April Non-audit fees There was no non-audit fees payable to the external auditors, Messrs KPMG and its affiliate for the financial year ended 31 December Transfer of all assets (other than investment in PMB and cash) and liabilities (if any) of PSH to PMB; Distribution by PSH of RM1.50 per PSH share in cash to its shareholders;

71 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT AUDIT COMMITTEE REPORT The Board of Directors of Pos Malaysia & Services Holdings Berhad is pleased to present the report on the Audit Committee of the Board for the financial year ended 31st December MEMBERS AND MEETINGS The Audit Committee during the year comprised the Directors listed below. The Committee had seven (7) meetings during the financial year. Details of the members and the attendance of the meetings are as follows: a) Mr. Wee Hoe Gooi Hoe Soon (Independent Non-Executive Director) b) Mr. Segarajah Ratnalingam (Non-Independent Non-Executive Director) c) Datuk Mohamed Adnan bin Ali (resigned w.e.f. 11 April 2006) d) Datuk Abdul Majid bin Haji Hussein (resigned w.e.f. 31 October 2006) e) Datuk Alias bin Ali (resigned w.e.f. 21 February 2007) f) Dato Ng Kam Cheung (resigned w.e.f. 1 March 2007) Attendance Members of Meetings Chairman 5/5 Member 6/7 Member 2/2 Member 6/6 Member 4/7 Member 5/5 On 8 March 2007, Puan Sri Datuk Nazariah binti Mohd Khalid (Independent Non-Executive Director) was appointed as a member of the Committee Puan Sri Datuk Nazariah binti Mohd Khalid did not attend any Audit Committee meetings held during the financial year as she was not a member of the Audit Committee during the said period. ACTIVITIES OF THE COMMITTEE DURING THE YEAR During the year, the Audit Committee carried out its duties as set out in the terms of reference. The main issues discussed by the Audit Committee were as follows:- Review of the audit plans for the financial year 2006 to ensure adequate scope and coverage over the activities of the Group; Review of the audit reports for the Group and Company prepared by the internal and external auditors and consideration of the major findings by the auditors and management s responses thereto. The review included a meeting with the external auditors without the presence of the management of the Company to deliberate on the audit issues; Review of the quarterly and annual reports of the Group and the Company prior to submission to the Board of Directors for consideration and approval; Review of the related party transactions entered into by the Group and the Company and the disclosure of such transactions in the annual report of the Company; Review of the performance of external auditors and made recommendations to the Board on their appointment, scope of work and audit fees; Review of the Risk Management Scorecard prepared by management and recommendation for Board approval; Review of the verification of the Employees Share Option Scheme ( ESOS ) conducted by the Internal Audit Department. The Audit Committee is satisfied that the allocation of such options over ordinary shares pursuant to the Company s ESOS during the financial year ended 31 December 2006, has complied with the criteria set out in the ESOS byelaws.

72 70 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 AUDIT COMMITTEE REPORT continued INTERNAL AUDIT FUNCTION The Group has an Internal Audit Department whose principal responsibility is to undertake regular and systematic reviews of the systems of controls so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively in the Group and Company. The Audit Committee approves the internal audit plan prior to the commencement of a new financial year. The scope of the internal audit covers the audits of all units and operations, including subsidiaries. Throughout the financial year, audit assignments and follow-ups were carried out on units of operations and subsidiaries. These were carried out in accordance with the annual audit plan or as special ad-hoc audits at management s request. The resulting reports of the audits undertaken were presented to the Audit Committee and forwarded to the parties concerned for their attention and necessary action. The Management is responsible for ensuring that corrective actions on reported weaknesses and suggested improvements as recommended are taken within the required timeframe. TERMS OF REFERENCE The terms of reference of the Committee are as follows:- Composition of Committee The Committee shall be appointed by the Board of Directors amongst the Directors of the Company which fulfils the following requirements:- The Committee shall consists of not less than three members; A majority of the Committee must be Independent Directors; At least one member of the Committee: Must be a member of the Malaysian Institute of Accountants; or If he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years working experience and: He must have passed the examination specified in Part 1 of the 1 st Schedule of the Accountants Act 1967; or He must be a member of one of the associations of accountants specified in Part II of the 1 st Schedule of the Accountants Act The members of the Committee shall elect a Chairman from among themselves who shall be an Independent Director. No Alternate Director should be appointed as a member of the Committee. In the event of any vacancy in the Committee resulting in the non-compliance of the Listing Requirement of the Bursa Malaysia Securities Berhad pertaining to composition of audit committee, the Board of Directors shall within three months of that event fill the vacancy. Meetings Meetings shall be held not less than four (4) times a year and in addition to members of the Committee, will normally be attended by the Group Managing Director/Chief Executive Officer, Executive Director/Group Chief Operating Officer, Chief Financial Officer and Chief Internal Auditor. Other members of the Board, senior management and external auditors representatives may attend the meetings upon invitation of the Committee. The auditors, both internal and external, may request a meeting if they consider that one is necessary. The quorum shall be two (2) members, a majority of whom must be independent Directors. Minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board. The Chairman of the Committee shall report on each meeting to the Board. The Secretary to the Committee shall be the Company Secretary.

73 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT AUDIT COMMITTEE REPORT continued Rights and Authority The Committee is authorised by the Board: To investigate any activity within its terms of reference and shall have unrestricted access to both the internal and external auditors and to all employees of the Group; To have full and unrestricted access to information pertaining to the Group and the Company; To have direct communication channels with the internal and external auditors; To be able to obtain independent professional or other advice; and To have resources in order to perform its duties as set out in its terms of reference. Notwithstanding anything to the contrary, the Committee does not have executive powers and shall report to the Board of Directors on matters considered and its recommendation thereon, pertaining to the Group and the Company. Responsibility Where the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad, the Committee has the responsibility to promptly report such matter to Bursa Malaysia Securities Berhad. Review of the Committee The performance of the Committee and each of the members shall be reviewed by the Board of Directors at least once every three (3) years to determine whether the Committee and its members have carried out their duties in accordance with their Terms of Reference in the Corporate Governance Statement. Duties and Functions The duties and functions of the Committee are as follows:- To consider the appointment, resignation and dismissal of external auditors and the audit fees; To review the nature and scope of the audit with the internal and external auditors before the audit commences; To review the quarterly and annual financial statements of the Group and the Company focusing on the matters set out below, and thereafter to submit them to the Board:- Any changes in accounting policies and practices; Significant adjustments arising from the audit; The going concern assumption; Compliance with accounting standards and regulatory requirements. To discuss problems and reservations arising from the interim and final audits, and any matter the external auditors may wish to discuss; To review the audit reports prepared by the internal and external auditors, the major findings and management s responses thereto; To review the adequacy of the scope, functions and resources of the internal audit department and whether it has the necessary authority to carry out its work; To consider the report, major findings and management s response thereto on any internal investigations carried out by the internal auditors; To review the evaluation of the systems of internal control with the auditors; To review the assistance given by the Group s and the Company s employees to the auditors; To review related party transactions entered into by the Group and the Company to ensure that such transactions are undertaken on the Group s normal commercial terms and that the internal control procedures with regards to such transactions are sufficient; To oversee the Risk Management Process; To verify the allocation of options during the year pursuant to the Employees Share Option Scheme; To review any appraisal or assessment of the performance of executives in the internal audit department; and Any such other functions as may agreed to by the Committee and the Board. (This Statement is made in accordance with a resolution of the Board of Directors dated 24 April, 2007.)

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75 FINANCIAL STATEMENTS Directors Report 74 Statement by Directors 78 Statutory Declaration 78 Report of the Auditors 79 Balance Sheets 80 Income Statements 82 Statement of Changes in Equity 83 Cash Flow Statements 85 Notes to the Financial Statements 87

76 74 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 DIRECTORS Report for the year ended 31 December, 2006 The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31 December Principal activities The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries and associates are stated in Notes 6 and 7 respectively to the financial statements. There have been no significant changes in the nature of these activities during the financial year. Results Group RM 000 Company RM 000 Profit for the year 160,252 77,678 Reserves and provisions There were no material transfer to or from reserves and provisions during the year under review except as disclosed in the financial statements. Dividends Since the end of the previous financial year, the Company paid a first and final dividend of 10 sen per share and a special dividend of 5 sen per share on ordinary shares, less 28% income tax, amounting to RM55,645,240 in respect of the financial year ended 31 December 2005 on 8 August The Directors do not recommend final dividend to be paid for the financial year.

77 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT DIRECTORS REPORT (continued) Directors of the Company Directors who held office since the date of the last report are: Tan Sri Adam Kadir Puan Sri Datuk Nazariah binti Mohd Khalid Dato Zukri bin Samat Dato Idrose bin Mohamed (appointed on ) Datuk Abu Huraira bin Abu Yazid Mr. Wee Hoe Gooi Hoe Soon Mr. Segarajah Ratnalingam Pn. Salmah Sharif (appointed on ) Mr. Faisal bin Ismail (appointed on ) Mr. Koshy Thomas (alternate to Segarajah Ratnalingam) Datuk Abdul Majid bin Haji Hussein (resigned on ) Datuk Alias bin Ali (resigned on ) Dato Ikmal Hijaz bin Hashim (resigned on ) Dato Ng Kam Cheung (resigned on ) Tengku Zafrul bin Tengku Abdul Aziz (ceased to be Alternate Director to Mr. Wee Hoe Gooi Hoe Soon on ) The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end as recorded in the Register of Directors Shareholdings are as follows: Number of ordinary shares of RM1 each At At Bought Sold Datuk Abu Huraira bin Abu Yazid 50, ,600 (170,000) 321,600 Dato Ikmal Hijaz bin Hashim - 578, ,700 Number of options over ordinary shares of RM1 each At At Allocated Exercised Datuk Abu Huraira bin Abu Yazid 281, ,600* (441,600) - Dato Ikmal Hijaz bin Hashim 388, ,700* (578,700) - * These amounts have been granted in 2005 under the Performance Share Scheme and allocated/vested to the respective personnel in None of the other Directors holding office at 31 December 2006 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.

78 76 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 DIRECTORS REPORT (continued) Directors benefits Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors or the fixed salary of a full time employee of the Company or of related companies as shown in the financial statements of the Company) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest. There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate. Issue of shares During the financial year, the issued and paid-up share capital of the Company was increased from RM512,466,053 to RM517,908,053 by the issuance of 5,442,000 new ordinary shares of RM1.00 each by the Company for cash by virtue of the exercise of share options pursuant to the Company s Employee Share Option Scheme ( ESOS ). Details of the ESOS exercised are set out in Note 11(b) to the financial statements. The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company. Employee Share Option Scheme ( ESOS ) The Company had on 24 June 2003 established and implemented the ESOS for a period of 5 years expiring on 23 June The ESOS is governed by the ESOS Bye-laws which were approved by the shareholders on 15 August Subsequent amendments to the ESOS Bye-laws were approved by the shareholders on 16 December On 26 January 2005, the Company issued an additional ESOS expiring on 23 June The additional ESOS is governed by the amended ESOS Bye-laws which were approved by the shareholders on 16 December Details of the ESOS are set out in Note 11 (b) to the financial statements. Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issue of options pursuant to the Employees Share Option Scheme.

79 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT DIRECTORS REPORT (continued) Other statutory information Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) 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 the Group 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 financial statements misleading, or iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year. No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. In the opinion of the Directors, except for the gain on dilution of an associate as disclosed in Note 6 to the financial statements, the results of the operations of the Group and of the Company for the financial year ended 31 December 2006 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of the financial year and the date of this report. Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: Tan Sri Adam Kadir Datuk Abu Huraira bin Abu Yazid Kuala Lumpur, Date: 24 April 2007

80 78 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 STATEMENTS by Directors pursuant to section 169 (15) of the company act, 1965 We, Tan Sri Adam Kadir and Datuk Abu Huraira bin Abu Yazid, being two of the Directors of Pos Malaysia & Services Holdings Berhad, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 80 to 123 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2006 and of the results of their operations and cash flows for the year ended on that date. Signed in accordance with a resolution of the Directors: Tan Sri Adam Kadir Datuk Abu Huraira bin Abu Yazid Kuala Lumpur, Date: 24 April 2007 STATUTORY Declaration pursuant to section 169 (16) of the companies act, 1965 I, Raja Shahreen bin Raja Othman, the officer primarily responsible for the financial management of Pos Malaysia & Services Holdings Berhad, do solemnly and sincerely declare that the financial statements set out on pages 80 to 123 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 24 April 2007 Raja Shahreen bin Raja Othman Before me:

81 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT REPORT of the Auditors to the members of Pos Malaysia & Services Holdings Berhad We have audited the financial statements set out on pages 80 to 123. The preparation of the financial statements is the responsibility of the Company s Directors. It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report. We conducted our audit in accordance with approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall financial statements presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion: (a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board so as to give a true and fair view of: i) the state of affairs of the Group and of the Company at 31 December 2006 and of the results of their operations and cash flows for the year ended on that date; and ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; and (b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and the subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The audit report on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under subsection (3) of Section 174 of the Act. KPMG Firm Number: AF 0758 Chartered Accountants Johan Idris Partner Approval Number: 2585/10/08(J) Kuala Lumpur, Date: 24 April 2007

82 80 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 BALANCE Sheets at 31 December 2006 Group Company Note RM 000 RM 000 RM 000 RM 000 Assets Property, plant and equipment 3 348, ,725 53,074 53,774 Investment properties 4 15,071 15, Investments in subsidiaries , ,788 Investments in associates 6 2, ,878-98,000 Other investments 7 569, , , ,948 Total non-current assets 935, ,956 1,007,392 1,028,510 Other investments 7 57,942 47, Receivables, deposits and prepayments 8 125, ,371 66,356 49,320 Inventories 9 3,863 3, Current tax assets 1,271 8, Cash and cash equivalents , , , ,980 Total current assets 1,138,520 1,098, , ,300 Total assets 2,074,000 2,005,930 1,364,865 1,334,810 Equity Share capital , , , ,466 Reserves 12 1,167,755 1,060, , ,276 Total equity 1,685,663 1,572,517 1,296,314 1,265,742

83 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS AT 31 DECEMBER 2006 (continued) Group Company Note RM 000 RM 000 RM 000 RM 000 Liabilities Deferred tax liabilities 13 6,172 4, Total non-current liabilities 6,172 4, Payables and accruals , ,529 68,551 68,144 Current tax liabilities 17, Total current liabilities 382, ,453 68,551 69,068 Total liabilities 388, ,413 68,551 69,068 Total equity and liabilities 2,074,000 2,005,930 1,364,865 1,334,810 The notes on pages 87 to 123 are an integral part of these financial statements.

84 82 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME Statements for the year ended 31 December 2006 Group Company Note RM 000 RM 000 RM 000 RM 000 Revenue , ,026 99,971 29,101 Raw materials and consumables used (10,879) (6,897) - - Staff costs (431,590) (427,677) (3,232) (1,786) Rental, communication, and utilities (43,371) (40,943) (1,158) (1,107) Transportation (111,651) (82,870) - - Maintenance and supplies (38,346) (35,408) (151) (174) Depreciation for the year (40,705) (40,159) (1,004) (745) Other operating expenses (46,263) (50,400) (4,314) (2,759) Results from operating activities 99, ,672 90,112 22,530 Other operating income - interest income 47,451 36,428 21,655 15,586 - others 12,381 12, Reversal of/(allowance for) impairment loss on investments 11,320 (18,408) - - Provision for voluntary separation scheme 14 - (100,761) - - Reversal of pension and gratuity - 45, Loss on disposal of investment (2,775) - (2,775) - Gain on disposal of an associate - 47, Gain on dilution of an associate 6 22, Amortisation of negative goodwill - 6, Share of net results of equity accounted associates 21,536 14, Profit before tax , , ,992 38,116 Tax expense 17 (51,554) (1,550) (31,314) (9,981) Profit for the year 160, ,359 77,678 28,135 Earnings per share (sen) - basic diluted Proposed dividends per share (sen) The notes on pages 87 to 123 are an integral part of these financial statements.

85 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT STATEMENT of Changes In Equity for the year ended 31 December 2006 Attributable to shareholders of the Company Nondistributable Distributable Share Share Retained Capital premium profits Total Group Note RM 000 RM 000 RM 000 RM 000 At 1 January , , ,675 1,407,213 Profit for the year , ,359 Dividends (27,552) (27,552) Issue of shares - exercise of share option 10,524 3,307-13,831 - gain on sales of treasury shares - 33,666-33,666 At 31 December , , ,482 1,572,517 Profit for the year , ,252 Dividends (55,645) (55,645) Issue of shares - exercise of share option 5,442 3,097-8,539 At 31 December , , ,089 1,685,663 Note 11

86 84 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2006 (continued) Attributable to shareholders of the Company Nondistributable Distributable Share Share Retained Capital premium profits Total Note RM 000 RM 000 RM 000 RM 000 Company At 1 January , , ,124 1,217,662 Profit for the year ,135 28,135 Dividends (27,552) (27,552) Issue of shares - exercise of share option 10,524 3,307-13,831 - gain on sales of treasury shares - 33,666-33,666 At 31 December , , ,707 1,265,742 Profit for the year ,678 77,678 Dividends (55,645) (55,645) Issue of shares - exercise of share option 5,442 3,097-8,539 At 31 December , , ,740 1,296,314 Note 11 The notes on pages 87 to 123 are an integral part of these financial statements

87 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT CASH FLOW Statements for the year ended 31 December 2006 Group Company RM 000 RM 000 RM 000 RM 000 Cash flows from operating activities Profit before tax 211, , ,992 38,116 Adjustments for: Amortisation of premium Amortisation of negative goodwill - (6,273) - - Loss on disposal of marketable securities 2,721 1, Loss on disposal of unit trusts Loss in disposal of long term investments 2,775-2,775 - (Reversal of )/allowance for impairment loss on investments (11,320) 18, Depreciation for the year 40,705 40,159 1, Gain on disposal of property, plant and equipment (1,551) (878) - - Property, plant and equipment written off Inventories written off Allowance for doubtful debts 2,534 5, Gain on dilution of an associate (22,828) Gain on disposal of an associate - (47,464) - - Reversal of pension and gratuity - (45,907) - - Provision for voluntary separation scheme - 100, Interest income (47,451) (36,428) (21,655) (15,586) Dividend income (3,338) (5,956) (98,933) (28,206) Share of results of an associate (21,536) (14,877) - - Operating profit/(loss) before changes in working capital 153, ,945 (7,193) (4,331) Inventories (461) (2,304) - - Receivables, deposits and prepayments (1,092) 1,254 (16) (8,781) Payables and accruals 19,570 11, (953) Cash generated from/(used in) operations 171, ,353 (6,802) (14,065) Tax refund 1,336 2, ,682 Tax paid (26,955) (24,234) (5,492) (2,846) Payments made for the voluntary separation scheme (82,499) (18,262) - - Net cash generated from/(used in) operating activities 63, ,539 (11,890) (14,229)

88 86 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006 (continued) Group Company Note RM 000 RM 000 RM 000 RM 000 Cash flows from investing activities Net acquisition of investment in associate (3,000) Net disposal of long term investment - 41, Net acquisition of marketable securities (1,438) (3,677) - - Purchase of property, plant and equipment (42,983) (21,938) (305) (1,444) Proceeds from disposal of property, plant and equipment 1,572 1, Interest received 47,451 36,428 21,655 15,586 Net dividend received 2,691 4,555 71,231 20,308 Net cash generated from investing activities 4,293 57,431 92,581 34,450 Cash flows from financing activities Issue of shares - exercise of ESOS 8,539 13,831 8,539 13,831 - treasury shares - 114, ,051 Dividends paid to shareholders (55,645) (27,552) (55,645) (27,552) Net cash (used in)/generated from financing activities (47,106) 100,330 (47,106) 100,330 Net increase in cash and cash equivalents 20, ,300 33, ,551 Cash and cash equivalents at 1 January (i) 928, , , ,429 Cash and cash equivalents at 31 December (i) 949, , , ,980 i) Cash and cash equivalents Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts: Group Company Note RM 000 RM 000 RM 000 RM 000 Cash and bank balances , ,817 21,283 10,607 Deposits , , , , , , , ,980 The notes on pages 87 to 123 are an integral part of these financial statements.

89 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT NOTES TO THE Financial Statements Pos Malaysia & Services Holdings Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Board of the Bursa Malaysia Securities Berhad. The addresses of its registered office and principal place of business are as follows: Registered office/ Principal place of business Level 33, Menara Dayabumi Jalan Sultan Hishamuddin Kuala Lumpur The consolidated financial statements as at and for the year ended 31 December 2006 comprise the Company and its subsidiaries (together referred to as the Group) and the Group s interest in associates. The financial statements of the Company as at and for the year ended 31 December 2006 do not include other entities. The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiaries and associates are stated in Notes 6 and 7 respectively to the financial statements. 1. Basis of preparation (a) Statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting Standards Board (MASB) and the provisions of the Companies Act, The MASB has issued the following new and revised Financial Reporting Standards (FRSs) or Interpretation (IC) that are effective for annual periods beginning after 1 January 2006, and that have not been applied in preparing these financial statements: (i) FRS 117, Leases - This FRS is effective for annual periods beginning on or after 1 October By virtue of the exemption in paragraph 67B of FRS 117, the impact of applying FRS 117 on the financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed; (ii) (iii) FRS 124, Related Party Disclosures This FRS is effective for annual periods beginning on or after 1 October By virtue of the exemption in paragraph 22A of FRS 124, the impact of applying FRS 124 on the financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108 is not disclosed; FRS 139, Financial Instruments: Recognition and Measurement This FRS has been issued by the MASB but the MASB has yet to announce the effective date of this standard. By virtue of the exemption in paragraph 103AB of FRS 139, the impact of applying FRS 139 on the financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108 is not disclosed;

90 88 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 NOTES TO THE FINANCIAL STATEMENTS (continued) 1. Basis of preparation (continued) (a) Statement of compliance (continued) (iv) (v) Amendment to FRS , Employee Benefits - Actuarial Gains and Losses, Group Plans and Disclosures - Certain amendments made to FRS are effective for annual periods beginning on or after 1 January The adoption of these amendments does not have any significant impact on the financial statements of the Group and of the Company in the period of initial application. FRS 6, Exploration for and Evaluation of Mineral Resources - This FRS is effective for annual periods beginning on or after 1 January This standard is not applicable to the Group and the Company. All adoption of amendment to FRS and ICs announced by MASB on 15 February 2007 are either not applicable or do not have a significant impact on the financial statements of the Group and of the Company. The Group and the Company plans to apply FRS 117, FRS 124, and the Amendment to FRS initially for the annual period beginning 1 January The financial statements were approved by the Board of Directors on 24 April (b) Basis of measurement The financial statements have been prepared on the historical cost basis except for investment properties as explained in the respective accounting policy notes. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Company s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in Note 4 - valuation of investment properties.

91 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (continued) 2. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities, unless otherwise stated. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities controlled by the Group. Control exists when the Group has the power, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases. Subsidiaries are consolidated using the acquisition method of accounting. Investments in subsidiaries are stated in the Company s balance sheet at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale). (ii) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies. Associates are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). The consolidated financial statements include the Group s share of the income and expenses of the equity accounted associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Investments in associates are stated in the Company s balance sheet at cost less impairment losses, unless the investment is classified as held for sale (or included in a disposal group that is classified as held for sale).

92 90 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 NOTES TO THE FINANCIAL STATEMENTS (continued) (a) Basis of consolidation (continued) (iii) Transactions eliminated on consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Foreign currency differences arising on retranslation are recognised in the income statement. The closing rates used in the translation of foreign currency monetary assets and liabilities are as follows: RM RM 1US Dollar SGD EURO (c) Property, plant and equipment (i) Recognition and measurement Freehold land and capital work-in-progress are stated at cost. All other property, plant and equipment are stated at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. (ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

93 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (continued) (c) Property, plant and equipment (continued) (iii) Depreciation Depreciation is recognised in the income statement on a straight line basis over the estimated useful lives of each part of an item of property, plant and equipment. Freehold land and capital work-in-progress are not depreciated. Lease assets are depreciated over the shorter of the lease term and their useful lives. The estimated useful lives for the current and comparative years are as follows: Buildings 2% Building improvements and office renovations 10% - 50% Plant and machinery 5% - 10% Motor vehicles 15% - 25% Furniture and fittings, office and computer equipment 10% /3% (d) Investment properties Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both. These include land held for a currently undetermined future use. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties. Investment properties are stated at cost less impairment losses. The fair values of the investment properties determined by Jabatan Penilaian dan Perkhidmatan Harta ( JPPH ) are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows then is applied to the net annual cash flows to arrive at the property valuation. Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation, and the market s general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between the Group and the lessee; and the remaining economic life of the property. When rent reviews or lease renewals are pending with anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices have been served validly and within the appropriate time.

94 92 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 NOTES TO THE FINANCIAL STATEMENTS (continued) (e) Other investments - debt and equity securities Investments in debt and equity securities are recognised initially at fair value plus attributable transaction costs. Subsequent to initial recognition: Investments in non-current equity securities other than investments in subsidiaries and associates, are stated at cost less allowance for diminution in value, Investments in non-current debt securities are stated at amortised cost using the effective interest method less allowance for diminution in value, All current investments are carried at the lower of cost and market value, determined on an aggregate portfolio basis by category of investments. Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities and non-current debt securities other than investment in subsidiaries and associates, the allowance for diminution in value is recognised as an expense in the financial year in which the decline is identified. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statement. All investments in debt and equity securities are accounted for using settlement date accounting. Settlement date accounting refers to: a) the recognition of an asset on the day it is received by the entity, and b) the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered. (f) Receivables Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established. Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts. Receivables are not held for the purpose of trading. (g) Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the selling expenses. Inventories comprise mainly Pos 2020 merchandise, uniforms for postmen, insertion and mailing materials and digital certificates. The cost of inventories is determined on a weighted average basis. Expenditure on the production of postage stamps is expensed off in the financial year in which it is incurred and therefore no value for stamps on hand at balance sheet date is shown in the financial statements. However, for internal control purposes, inventories of postage stamps are accounted for at face value within a dedicated accounting sub-system.

95 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) (h) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value. (i) Impairment of assets The carrying amount of assets, except for inventories, deferred tax assets and financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statement in the year in which the reversals are recognised. (j) Payables Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another financial asset to another entity. (k) Revenue (i) Postal and its related services Postage, prepaid mail and courier revenue Postage, prepaid mail and courier revenue on demand are recognised in the income statement on cash basis. No provision is made in the financial statements for unearned revenue as at balance sheet date in respect of which the related postal service has not yet been provided. This is not in compliance with the accrual concept of accounting. However, the non-compliance is not expected to have a material effect on the financial statements of the Group and of the Company. Courier revenue on contract is recognised on an accrual basis. Commission revenue on remittances and agency services Commission revenue on remittances and agency services are recognised in the income statement upon the performance of services.

96 94 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) (k) Revenue (continued) International mail revenue Revenue from incoming international mail is recognised in the income statement upon performance of services. (ii) Printing and insertion services Revenue is recognised upon provision of services, net of sales taxes and discounts. (iii) Sale of digital certificates Revenue from the sales of digital certificates is recognised over the life of the digital certificates which range from twelve (12) to thirty six (36) months. Sales transactions involving an exchange of non-monetary assets are recognised as revenue at the fair value of the assets or services exchanged. (iv) Other operating income Interest income Interest income is recognised as it accrues, using the effective interest method. Dividend income Dividend income is recognised when the right to receive payment is established. (l) Lease payments Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. (m) Employee benefits (i) Short term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus or profitsharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The Group s contribution to the Employee s Provident Fund are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

97 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) (m) Employee benefits (continued) (ii) Share-based payment transactions The share option programme allows Group employees to acquire shares of the Company. In the previous year, share options granted to employees is not recognised as an employee cost. Following the adoption of FRS 2, Share-based Payment, the grant date fair value of share options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the options. The fair value of employee stock options is measured using a binomial lattice model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. (iii) Termination benefits Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to terminate employment before the normal retirement date. Termination benefits for voluntary redundancies are recognised if the Group has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. (n) Tax expense Tax expense comprises current and deferred tax. Tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax liability is recognised for all taxable temporary differences. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

98 96 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) (o) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees. (p) Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

99 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Property, plant and equipment Furniture and Government Furniture Building and fittings Government Building fittings Leasehold leasehold improvement Leasehold Plant leasehold improvement office and Capital Plant office and Capital Freehold Freehold land and land and land office and and land and Motor computer and office work-in and Group Motor land Buildings computer buildings buildings work-in renovations machinery vehicles equipment progress Total Group land RM 000 RM 000 Buildings RM 000 buildings RM 000 buildings RM 000 RM 000 renovations RM 000 machinery RM 000 RM 000 RM 000 vehicles equipment progress Total Cost RM 000 RM 000 RM 000 RM 000 RM 000 At 1 January 2005 RM 000 1,927 34,722 RM ,941 RM ,799 RM ,649 30,647 RM , ,428 9, ,695 Cost Additions At 1 January ,927 34, , ,799 64,649 30, , ,428-9,137 2, , ,574 14,716 21,938 Disposal Additions (3,659) - 2,474 (153) - (3,812) Reclassifications (349) 681 3,574-14, , Disposal Transfer (3,659) 189 (153) - 7, (3,812) 2,731 7,067 (17,762) - Written off Reclassifications (3,304) (349) (39,248) - (255) (42,807) Transfer ,241 At 31 December 2005/ 534 2,731 7,067 (17,762) - 1 January 2006 Written off 2,276 34, , ,799-71,060-31,662 84,198-76,668 (3,304) 5, , (39,248) (255) (42,807) Additions ,267 1,813 15,359 21,252 3,244 42,983 Disposal - At 31 December / (5,669) (14) - (5,683) Transfer 1 January , , ,793 1, ,799-71,060 - (2,508) - 31,662 84,198 76,668 5, ,014 Written off Additions (10,823) 1,267 (553) (11,376) 1,813 15,359 21,252 3,244 42,983 At 31 December 2006 Disposal 2,276 35, , ,799-74,193-33,475 93,888-87, (5,669) (14) - (5,683) 6, ,938 Transfer , (2,508) - Written off (10,823) (553) (11,376) At 31 December ,276 35, , ,799 74,193 33,475 93,888 87,083 6, ,938 ===== ===================================================== ==================== ======

100 98 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Property, plant and equipment (continued) Furniture and Government Building fittings Furniture and Leasehold leasehold improvement Government Building fittings Plant office and Capital Leasehold leasehold improvement Plant office and Capital Freehold land and land and and office Freehold land and land and and office and Motor computer work-in and Motor computer work-in Group land Buildings buildings buildings renovations machinery vehicles equipment progress Total Group land Buildings buildings buildings renovations machinery RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 vehicles equipment progress Total Accumulated depreciation RM 000 RM 000 RM 000 RM 000 RM 000 At 1 January ,284 14,422 54,103 42,935 23,047 73,292 70, ,328 RM 000 RM 000 RM 000 RM 000 RM 000 Accumulated depreciation Depreciation for the year ,683 9,335 6,791 2,015 5,472 13,168-40,159 At 1 January ,284 14,422 54,103 42,935 Disposals (3,637) (26) - (3,663) 23,047 73,292 70, ,328 Reclassifications - (6,840) 6, Depreciation for the year ,683 9,335 6,791 Written 2,015 off - 5,472-13, (3,296) 40, (39,239) Disposals (42,535) - (3,637) (26) - (3,663) At 31 December Reclassifications 2005/ - (6,840) 6, January ,139-23,945-63,438-46,430 25,062-75,127 44, ,289 Depreciation Written for off the year - 1,842-1,525-9,373-4,485 2,032-7,061 (3,296) 14,387-40, (39,239) - (42,535) Disposals (5,650) (12) - (5,662) Reclassifications - (1,140) 1, Written At off 31 December 2005/ (10,824) - (10,824) 1 January ,139 23,945 63,438 46,430 At 31 December 25, ,127 5,841 26,610 44,148 72,811-50, ,289 27,094 76,538 47, ,508 Depreciation for the year - 1,842 1,525 9,373 4,485 Carrying 2,032 amounts 7,061 14,387-40,705 At 1 January Disposals ,927 23,438-98, ,696-21,714 7,600-11,153-35,183 9, ,367 - (5,650) (12) - (5,662) At 31 December Reclassifications 2005/ - (1,140) 1, January ,276 29,583-88, ,361-24,630 6,600-9,071 32,520 5, ,725 Written off At 31 December ,276 29,273-86,481 (10,824) 137,988-23,278 (10,824) 6,381 17,350 39,384 6, ,430 At 31 December ,841 26,610 72,811 50,915 27,094 76,538 47, ,508 ===== =================================================== ====================== ====== Carrying amounts At 1 January ,927 23,438 98, ,696 21,714 7,600 11,153 35,183 9, ,367 ===== =================================================== ====================== ====== At 31 December 2005/ 1 January ,276 29,583 88, ,361 24,630 6,600 9,071 32,520 5, ,725 ===== =================================================== ====================== ====== At 31 December ,276 29,273 86, ,988 23,278 6,381 17,350 39,384 6, ,430

101 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Property, plant and equipment (continued) Leasehold Office Office Motor Company land renovations equipment vehicles Total RM 000 RM 000 RM 000 RM 000 RM 000 Cost At 1 January , ,670 Additions 53,000 1, ,444 Write off - (2,651) - - (2,651) At 31 December 2005/ 1 January ,000 1, ,463 Additions Write off - - (4) - (4) At 31 December ,000 1,353 1, ,764 Accumulated depreciation At 1 January , ,595 Depreciation for the year Write off - (2,651) - - (2,651) At 31 December 2005 / 1 January ,689 Depreciation for the year ,004 Write off - - (3) - (3) At 31 December , ,690 Carrying amounts At 1 January At 31 December 2005/ 1 January , ,774 At 31 December , ,074

102 100 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 3. Property, plant and equipment (continued) (a) The cost and carrying value of certain leasehold land and government leasehold land is not segregated from the cost and carrying value of the buildings as the required information are not available from the sales and purchase agreements. Similarly, information on unexpired lease period of less than fifty (50) years and of more than fifty (50) years is not available. (b) The title deeds for certain landed properties with net carrying value amounting to RM10,754,799 ( RM11,781,467) have yet to be issued in the name of certain subsidiaries at 31 December 2006 by the relevant authorities. (c) Government leasehold land and buildings: (i) (ii) Government leasehold land and buildings of RM210,799,000 (2005: RM210,799,000) are for a lease period of sixty (60) years commencing from 1 January The cost capitalised is in respect of the lease for the first thirty (30) years period as stipulated in the agreement signed between a subsidiary and the Government. The cost in respect of the remaining thirty (30) years lease period has not been agreed. However, this cost will be agreed upon finalisation of the agreement with the authorities, no later than 31 December 2020, and thereafter will be recognised accordingly. A subsidiary is also in the process of finalising lease agreements with the authorities for additional Government leasehold land and buildings currently in use, which are at present carried at nil values in the financial statements in the absence of Government valuation for these properties. These Government leasehold land and buildings will be recognised in the financial statements upon the valuations being finalised by the authorities. 4. Investment properties Group RM 000 RM 000 Freehold land 3,311 3,311 Leasehold land 11,760 11,760 At 1 January/31 December 15,071 15,071 Investment properties comprise of seven (7) pieces of vacant lands owned by Effivation Sdn. Bhd. 5. Investments in subsidiaries Company RM 000 RM 000 Unquoted shares, at cost 643, ,765 Allowance for diminution in value (17,977) (17,977) 625, ,788

103 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 5. Investments in subsidiaries (continued) Details of the subsidiaries, all of which incorporated in Malaysia, are as follows: Effective ownership interest Name of company Principal activities % % PSH Capital Partners Sdn. Bhd. Dormant Held by PSH Capital Partners Sdn. Bhd. Prestige Future Sdn. Bhd. Dormant PSH Management Sdn. Bhd. Dormant PSH Properties Sdn. Bhd. Property investment Held by PSH Properties Sdn. Bhd. Real Riviera Sdn. Bhd. Property investment Effivation Sdn. Bhd. Property investment PSH Venture Capital Sdn. Bhd. Investment holding Held by PSH Venture Capital Sdn. Bhd. PSH Express Sdn. Bhd. Air courier services and fulfilment business PSH Merchandise Sdn. Bhd. Dormant PSH Allied Berhad Dormant Pos Malaysia Berhad* Postal and its related services Held by Pos Malaysia Berhad Datapos (M) Sdn. Bhd. Printing and insertion of documents for mailing Digicert Sdn. Bhd. Sale of digital certificates Pos Takaful Agency Sdn. Bhd. Dormant Poslaju (M) Sdn. Bhd. Dormant Pos Logistic-Fulserve Sdn. Bhd. Dormant Virtual Pos Sdn. Bhd. Dormant Philately Pos Malaysia Sdn. Bhd. Dormant * Issued and fully paid share capital includes one Special Rights Redeemable Preference Share of RM1. The Special Rights Redeemable Preference Share confers the following rights: (a) The Special Rights Redeemable Preference Share issued to the Government of Malaysia would enable the Government of Malaysia through the Minister of Finance, (Incorporated) or its successors or any Minister, representative or any person acting on behalf, to ensure that certain major decisions affecting the operation of the subsidiary are consistent with the Government s policy. The Special Rights Redeemable Preference

104 102 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 5. Investments in subsidiaries (continued) shareholder is entitled to receive notices of meetings but does not carry any right to vote at such meetings of the subsidiary. He also has the right to require the subsidiary, to redeem the Special Rights Redeemable Preference Share at par at any time. (b) (c) Certain matters, in particular, the alteration of the Articles of Association of the subsidiary relating to the rights of the Special Rights Redeemable Preference shareholder, the dissolution of the subsidiary, any substantial acquisitions and disposal of assets, amalgamation, merger and takeover, appointment of foreign directors, creation or issue of any shares which when aggregate with all other existing issued shares, carry ten percent of total voting rights, require prior consent of the Special Rights Redeemable Preference shareholder. In a distribution of capital or a winding-up of the subsidiary, the Special Rights Redeemable Preference shareholder is entitled to the repayment of the capital paid-up on the Special Rights Redeemable Preference Share in priority to any repayment of capital to any other member. The Special Rights Redeemable Preference Share does not confer any right to participate in the capital or profits of the subsidiary. 6. Investments in associates Group Company RM 000 RM 000 RM 000 RM 000 Quoted shares in Malaysia, at cost - 253,000-98,000 Unquoted shares, at cost 3, Share of post acquisition profits less losses (778) 14, , ,878-98,000 Market value of quoted shares, in Malaysia - 429, ,208 During the financial year, there was the dilution of the investment in associate, Transmile Group Berhad, arising from the private placement exercise in November As a result of the dilution, the Group no longer has significant influence over the associate. Accordingly, the investment in associate is now accounted for as other investments as disclosed Note 7. As a result of the private placement, the Group recognised a gain on the dilution of an associate of RM22,828,000 ( Nil) during the year. The Group discontinued equity accounting of losses in certain associates as the losses exceeded the carrying amount of the investment. As at 31 December 2006, the share of loss in these associates for the financial year and cumulatively not accounted for was RM20,255,000 ( RM18,612,000) and RM14,055,000 ( RM12,412,000) respectively.

105 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 6. Investments in associates (continued) Summary financial information on associates: Group Effective Country ownership Profit / Total Total incorporation interest Revenues (Loss) assets liabilities (100%) (100%) (100%) (100%) 2006 % RM 000 RM 000 RM 000 RM 000 Elpos Print Sdn. Bhd. Malaysia 40 8, ,240 13,211 CEN Sdn. Bhd. Malaysia ,862 (4,560) 70,678 96,416 Pospay Exchange Sdn. Bhd. (formerly known as RMEX Payment Services Sdn. Bhd.) Malaysia 50 8 (1,991) 1,936 1,066 PSH Aviation Sdn. Bhd. Malaysia 49 - (9) 3 1, ,582 (5,836) 81, ,727 Elpos Print Sdn. Bhd. Malaysia 40 7, ,375 13,391 CEN Sdn. Bhd. Malaysia ,807 (15,835) 84, ,814 Transmile Group Berhad Malaysia ,078 74,847 2,044,742 1,094,630 PSH Aviation Sdn. Bhd. Malaysia 49 - (4) 4 1, ,366 59,179 2,137,757 1,214,861

106 104 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 7. Other investments Non-current Group Company RM 000 RM 000 RM 000 RM 000 Quoted shares in Malaysia, at cost 313,020 23,019 98,000 23,019 Less: Allowance for diminution in value - (3,224) - (3,224) 313,020 19,795 98,000 19,795 Unquoted private debt securities, at cost 246, , , ,670 Less: Amortisation of premiums (2,870) (2,120) (2,140) (1,517) 243, , , ,153 Unquoted shares in Malaysia, at cost 12,898 12,898 2,000 2, , , , ,948 Market value: Quoted shares in Malaysia 554,576 15, ,816 15,657 Unquoted private debt securities 245, , , , , , , ,557 Current Group RM 000 RM 000 Quoted shares in Malaysia, at cost 119, ,034 Less: Allowance for diminution in value (61,764) (73,129) 57,942 47,905 Market value: Quoted shares in Malaysia 57,942 47,905

107 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 8. Receivables, deposits and prepayments Group Company Note RM 000 RM 000 RM 000 RM 000 Current Trade Trade receivables 93,895 96, Less: Allowance for doubtful debts (14,700) (12,166) - - a 79,195 84, Non-trade Amount due from subsidiaries ,256 93,481 Less: Allowances for doubtful debts - - (49,168) (49,168) b ,088 44,313 Amounts due from associate c Other receivables 29,002 6,257 19,094 6 Deposits 4,712 4, Agency receivables 2,383 1, Interest receivable 7,922 10,330 2,678 4,505 Staff advances 2,698 3, ,754 26,259 22,268 5, , ,371 66,356 49,320 The currency exposure profile of trade and other receivables is as follows: - Ringgit Malaysia 96,933 76,891 66,356 49,320 - US Dollar 29,016 33, Note a 125, ,371 66,356 49,320 Credit terms of trade receivables other than international mail receivables range from 30 days to 60 days. The credit terms for international mail receivables range from 6 months to 18 months in accordance with the Universal Postal Union guidelines. Concentration of credit risk with respect to trade receivables are limited due to the Group s large number of customers whereby sufficient allowance has been made for debts that are doubtful in collection and credit evaluation policy has been adopted. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Group s trade receivables. Note b The amount due from subsidiaries is unsecured, interest free and has no fixed terms of repayment. Note c The amount due from associate is unsecured, interest free and has no fixed terms of repayment.

108 106 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 9. Inventories At cost: Group RM 000 RM 000 Postal uniforms and consumable 1, Pos 2020 merchandise Insertion and mailing materials Digital certificates, CD ROM and smart cards 1,292 1,574 3,863 3,402 During the financial year, inventories recognised as expenses in the income statement of the Group amounted to RM19,718,000 ( RM18,146,000). 10. Cash and cash equivalents Group Company RM 000 RM 000 RM 000 RM 000 Deposits are placed with: Licensed banks 46,700 91,773-67,073 Licensed finance companies - 17,000-4,000 Other financial institutions 764, , , , , , , ,373 Cash and bank balances 138, ,817 21,283 10, , , , ,980 Deposits, cash and bank balances are denominated in Ringgit Malaysia. The weighted average interest rates per annum of deposits as at balance sheet date were as follows: Group and Company % % Deposits with licensed banks Deposits with other financial institutions Deposits with licensed finance companies Deposits of the Group and of the Company have maturity period ranges from 30 to 365 days ( to 365 days).

109 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 11. Share capital Group and Company RM 000 RM 000 Authorised: Ordinary shares of RM1 each 1,000,000 1,000,000 Issued and fully paid: Ordinary shares of RM1 each: Opening balance 512, ,942 Issued during the year via exercise of share options 5,442 10,524 Closing balance 517, ,466 (a) During the financial year, the issued and paid-up share capital of the Company was increased from RM512,466,053 to RM517,908,053 by the issuance of 5,442,000 new ordinary shares of RM1.00 each by the Company for cash by virtue of the exercise of share options pursuant to the Company s Employee Share Option Scheme ( ESOS ). Details of the ESOS exercised are set out in Note 11 (b) below. The new ordinary shares issued during the financial year ranked pari passu in all respect with the existing ordinary shares of the Company. (b) Employee Share Option Scheme ( ESOS ) The Company had on 24 June 2003 established and implemented the ESOS for a period of 5 years expiring 23 June The ESOS is governed by the ESOS Bye-laws which were approved by the shareholders on 15 August Subsequent amendments to the ESOS Bye-laws were approved by the shareholders on 16 December On 26 January 2005, the Company issued an additional ESOS expiring on 23 June The additional ESOS is governed by the amended ESOS Bye-laws which were approved by the shareholders on 16 December The main features of the ESOS are as follows: The total number of new shares of the Company which may be made available under the ESOS shall not exceed fifteen per centum (15%) of the total issued and paid-up share capital (or such other higher percentage as may be permitted by the relevant regulatory authorities, from time to time) comprising ordinary shares of the Company at any one time. Any eligible employee shall be eligible to participate in the ESOS if, as at the Offer Date, such person is: (i) an employee, being a natural person who is a Malaysian citizen who has attained the age of eighteen (18) years and is employed full-time by and is on the payroll of a company within the Group (other than a company which is dormant) and who has been confirmed and has been in the employment in the Group for a continuous period of at least twelve (12) months on a full time basis including service during the probation period; or

110 108 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 11. Share capital (continued) (b) Employee Share Option Scheme ( ESOS ) (continued) (ii) an executive director, being a natural person who has attained the age of eighteen (18) years who is employed full-time or contractual basis by and is on the payroll of a company within the Group (other than a company which is dormant) and has been an executive director for a continuous period of at least twelve (12) months; and is not prohibited or disallowed by the relevant authorities from participating in the ESOS. The subscription price under the ESOS shall be set at the weighted average market price of the Company s shares as shown in the Daily Official List of the Bursa Malaysia Securities Berhad for the five (5) Market Days immediately preceding the Offer Date with an allowance for a discount of not more than ten per centum (10%) therefrom at the Option Committee s discretion, (or such other pricing mechanism as may be permitted by the Bursa Malaysia Securities Berhad or any other relevant regulatory authorities, from time to time) provided that the subscription price shall in no event be less than the par value of the Company s share. Subject to any adjustments, which may be made under the Bye-laws, the number of the new shares of the Company that may be offered, allotted and issued to any of the eligible employees of the Group who are entitled to participate in the ESOS shall be at the discretion of the Option Committee after taking into consideration the performance, seniority and length of service of the eligible employees in the Group subject to the following: (i) the number of the Company shares allocated, in aggregate, to the executive directors and senior management of the Group shall not exceed 50% of the total shares of the Company available under the ESOS; and (ii) the number of shares of the Company allocated to any individual executive director or employee who, either singly or collectively through persons connected with the employee, the executive director (as defined in paragraph 6.30A(4)(b) of the Listing Requirements) holds twenty per centum (20%) or more in the issued and paid-up share capital of the Company shall not exceed ten per centum (10%) of the total shares of the Company available under the ESOS. The new shares of the Company to be allotted upon any exercise of the option shall, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company (including in respect of voting, dividend, transfer and other rights and rights arising on a liquidation of the Company) save and except that the new shares of the Company will not rank for any dividends, rights, allotments and/or other distributions declared for payment to the shareholders of the Company appearing in its Register of Members or Record of Depositors the entitlement date of which precedes the date of allotment of the new shares of the Company to be issued upon exercise of the Option. The persons to when the options have been granted have no right to participate by virtue of the options in any share issue of any other company. Details of options over the ordinary shares of the Company granted under the ESOS are as follows: Grant Expiry Exercise Opening Closing date date price balance Allocated Subscribed Lapsed balance RM ,252 - (4,317) - 4, (255) * (870.3) - -

111 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 11. Share capital (continued) (c) Employee Share Option Scheme ( ESOS ) (continued) 12. Reserves * The amount has been granted in 2005 under the Performance Share Scheme and allocated/vested to the respective personnel on 8 December The ESOS cost is not material to the results of the Group and of the Company. Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt income to frank approximately RM40,273,000 ( RM10,565,000) of its retained profits at 31 December 2006 if paid out as dividends. 13. Deferred tax assets and liabilities Group RM 000 RM 000 Opening balance (4,960) (6,348) Recognised in the income statement (2,233) 1,478 Over/(under) provision in prior year 1,021 (90) Closing balance (6,172) (4,960) Deferred tax assets and liabilities are attributable to the following: Assets Liabilities Net Group RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Property, plant and equipment 1,102 2,155 (7,608) (8,577) (6,506) (6,422) Provisions 334 1, ,462 Net tax assets/ (liabilities) 1,436 3,617 (7,608) (8,577) (6,172) (4,960)

112 110 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 13 Deferred tax assets and liabilities (continued) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: Deferred tax (liabilities)/assets of the Group: Property, plant and equipment Provisions Total RM 000 RM 000 RM 000 At 1 January 2005 (7,255) 907 (6,348) Recognised in the income statement ,478 Over/(under) provision in prior year (90) - (90) _ At 31 December 2005/ At 1 January 2006 (6,422) 1,462 (4,960) Recognised in the income statement (1,106) (1,127) (2,233) Over/(under) provision in prior year 1,022 (1) 1,021 At 31 December 2006 (6,506) 334 (6,172) No deferred tax has been recognised for the following items: Group Company RM 000 RM 000 RM 000 RM 000 Deductible/(taxable) temporary differences 17 (408) Unabsorbed capital allowances 1,858 3,238 1,775 1,700 Unutilised tax losses 47,554 47,310 45,409 45,409 49,429 50,140 47,201 47,122 The unutilised tax losses and unabsorbed capital allowances do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group and the Company can utilise the benefits. The unutilised tax losses, unabsorbed capital allowances and deductible temporary differences amounting to approximately RM47,554,000 (2005: RM47,310,000), and RM1,858,000 (2005: RM3,238,000) and RM45,409,000 (2005: RM45,409,000) and RM1,775,000 (2005: RM1,700,000) respectively will not be available to the Group if there is substantial change in shareholders (more than 50%).

113 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 14. Payables and accruals Group Company Note RM 000 RM 000 RM 000 RM 000 Trade Trade payables a 37,973 38, Non-trade Amount due to associates b - 3, Amount due to subsidiary b ,635 67,598 Unpresented postal and money orders 67,757 70, Agency payables 115, , Money order payables 17,595 17, Service payables 29,609 25, Other accruals 85,213 76,878 1, Advances from subsidiary company s corporate shareholder c 2,728 3, Deposits received 8,366 7, Voluntary separation scheme d - 82, , ,896 68,551 68, , ,529 68,551 68,144 The currency exposure profile of trade and other payables is as follows: - Ringgit Malaysia 328, ,139 68,551 68,144 - US Dollar 35,417 35, EURO SGD , ,529 68,551 68,144 Note a Credit terms of international mail payables of the Group range from 6 months to 18 months in accordance with the Universal Postal Union guidelines. Note b The amounts due to associates and a subsidiary are unsecured, interest free and have no fixed terms of repayment Note c The advances from a subsidiary s corporate shareholder are unsecured, interest free and have no fixed terms of repayment.

114 112 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 14. Payables and accruals (continued) Note d - Voluntary separation scheme Group RM 000 RM 000 At 1 January 82,499 - Recognised in the income statement - 100,761 Payment during the year (82,499) (18,262) At 31 December - 82, Revenue Group Company RM 000 RM 000 RM 000 RM 000 Postal and its related services 796, , Printing and insertion services 14,917 16, Sale of digital certificates 9,221 4, Rental income Dividend income ,933 28,206 Management fees , ,026 99,971 29, Profit before tax Profit before taxation is stated after charging: Group Company RM 000 RM 000 RM 000 RM 000 Staff cost - salaries, bonuses and allowances 357, , defined contribution plan 43,702 44, others 28,242 33,692 1, Directors remuneration - fees other emoluments 1,689 1, Audit fees Property, plant and equipment written off Rental - office and computer equipment 761 1, land and buildings 11,070 9, machinery motor vehicles

115 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 16. Profit before tax (continued) Profit before taxation is stated after charging: (continued) Group Company RM 000 RM 000 RM 000 RM 000 Inventories written off Allowance for doubtful debts 2,534 5, Loss on disposal of long term investments 2,775-2,775 - Loss on disposal of marketable securities 2,721 1, Loss on disposal of unit trusts Operating licence fee 3,975 3, Unrealised foreign exchange loss Amortisation of premium and after crediting: Gain on disposal of property, plant and equipment 1, Dividend income (gross) 3,338 5, Dividends from a subsidiary (gross) ,232 27,505 Foreign exchange gain - realised 2, unrealised Rental income 2,805 3, Tax expense Group Company RM 000 RM 000 RM 000 RM 000 Income tax expense: Malaysian income tax 51,167 12,757 31,826 11,418 Over provision in prior years (825) (9,819) (512) (1,437) 50,342 2,938 31,314 9,981 Deferred tax expense: Relating to origination and reversal of temporary differences 2,233 (1,478) - - (Over)/under provision in prior years (1,021) ,212 (1,388) - - Total tax expense 51,554 1,550 31,314 9,981

116 114 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 17. Tax expense (continued) A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows: Group Company RM 000 RM 000 RM 000 RM 000 Profit before tax 211, , ,992 38,116 Calculated using Malaysian tax rate of - 28% 47,158 36,754 30,518 10,672-20% 2 (1) - - Tax exempt income (88) (35,209) - - Expenses not deductible for tax purposes 6,527 9,631 1, Utilisation of previously unrecognised deferred tax assets (301) Deferred tax assets not recognised ,400 11,279 31,826 11,418 Over provision of income tax in prior years (825) (9,819) (512) (1,437) (Over)/under provision of deferred tax in prior years (1,021) Total tax expense 51,554 1,550 31,314 9, Earnings per share (i) Basic earnings per share The calculation of basic earnings per share is based on the net consolidated profit attributable to ordinary shareholders of RM160,252,000 ( RM145,359,000) and the weighted average number of ordinary shares outstanding during the year of 514,987,000 ( ,756,000). Weighted average number of ordinary shares Group Issued ordinary shares at beginning of the year 512, ,942 Effect of shares issued during the year 2,521 5,814 Weighted average number of ordinary shares 514, ,756 Basic earning per share (sen)

117 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 18. Earnings per share (continued) (ii) Diluted earnings per share The calculation of diluted earnings per share is based on the consolidated net profit attributable to ordinary shareholders of RM160,252,000 ( RM145,359,000) and the weighted average number of ordinary shares outstanding during the year of 518,705,000 ( ,390,000). Weighted average number of ordinary shares (diluted) Group Weighted average number of ordinary shares as (i) 514, ,756 Effect of share options 3,718 6,634 Weighted average number of ordinary shares 518, ,390 Diluted earning per share (sen) Dividends Amount of Gross Amount of Gross dividend dividend dividend dividend net of tax per share net of tax per share RM 000 sen RM 000 sen Dividends paid 55, ,

118 116 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 20. Capital commitments Capital commitments for property, plant and equipment Group RM 000 RM 000 Approved and contracted - Subsidiaries 69,000 - Approved but not contracted - Subsidiaries 234, , Commitments and contingencies 303, ,647 (a) (i) Pursuant to the agreement entered into with Malayan Banking Berhad ( MBB ) on the sale of PhileoAllied Bank (Malaysia) Berhad and Phileo Allied Securities Sdn. Bhd. dated 30 August 2000 ( the Share Sale Agreement ) the Company and its subsidiary, PSH Allied Berhad ( PSHAB ) have given certain warranties, undertakings and obligations to MBB, which shall continue for a period of twenty four (24) months from the Completion Date of 31 January Save as disclosed in Note 21 (a)(iii) to (v) below, as at the date of the financial statements, there are no legal suits filed by MBB arising from the above warranties, undertakings and obligations. (ii) (iii) For the material litigation matters identified in the Share Sale Agreement, the Company and PSHAB have agreed to indemnify MBB to the extent of the amount stated in the final judgement (including taxed costs and costs of solicitors in defending the claims) if the claim for indemnify is received by the Company and PSHAB within 4 years from the Completion Date of 31 January On 18 January 2002, the Company and PSHAB ( the Defendants ) were served with a Writ of Summons and Statement of Claim by MBB ( the Plaintiff ) (Kuala Lumpur High Court Civil Suit D ). Subsequently, an Amended Writ of Summons and Amended Statement of Claim were served on the Defendants by the Plaintiff on 19 March The Plaintiff claims against the Defendants for: (1) a declaration that the Defendants are in breach of their warranties and undertakings under the Share Sale Agreement in failing to make specific disclosure of the condition of the loan and security documents in relation to the credit facility granted by Phileo Allied Credit & Leasing Sdn. Bhd. to Salient Growth Sdn. Bhd.; (2) a declaration that the Defendants are liable, jointly and severally, to indemnify the Plaintiff and keep indemnified the Plaintiff from and against all claims, demands, damages, losses (including loss of profit), costs, obligations, penalties, liabilities, fines and expenses sustained by the Plaintiff in respect of the Defendants, or either of the Defendants breach referred to in (1) above; (3) that the Plaintiff be indemnified as referred to in (2) above and be at liberty to apply for an assessment of the amount to be paid thereunder; (4) damages to be assessed;

119 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 21. Commitments and contingencies (continued) (5) that the cost of the action be borne by the Defendants; and (6) such further or other reliefs as the Court deems fit and proper. On 30 July 2002, the Defendants application to strike out Plaintiff s Writ of Summons was allowed with costs by the Senior Assistant Registrar. A Notice of Appeal to Judge In Chambers dated 6 August 2002 filed by the Plaintiff has been dismissed with costs on 25 April A Notice of Appeal to the Court of Appeal dated 20 May 2003 has been filed by the Plaintiff and the same is pending hearing of the said appeal. No hearing date has been fixed before the Court of Appeal. (iv) On 2 April 2003, the Company and PSH Allied Berhad ( Defendants ) were served with a Writ of Summons and Statement of Claim (Kuala Lumpur High Court Civil Suit No. D ) by MBB ( the Plaintiff ). The Plaintiff claims against the Defendants for the following: (1) a declaration that the Defendants are in breach of the warranties and undertakings under the Share Sale Agreement in failing to make specific disclosure of the condition of two margin accounts maintained by Zuhrah Sentosa Sdn. Bhd. and Ujung Prinsip Sdn. Bhd. respectively with Mayban Securities Sdn. Bhd. (2) a declaration that Defendants are liable, jointly and severally to indemnify the Plaintiff and keep indemnified the Plaintiff from and against all claims, demands, damages, losses (including loss of profit), costs, obligations, penalties, liabilities, fines and expenses sustained by the Plaintiff in respect of the Defendants or either of the Defendants breach referred to in (1) above; (3) that the Plaintiff be indemnified as referred to in (2) above and be at liberty to apply for an assessment of the amount to be paid thereunder; (4) special damages in the sum of RM41,790, as at 31 January 2000 with interest thereon at the rate of 12.25% per annum from 1 February 2000 until the date of full payment; (5) general damages; (6) interest on the sums payable as damages; (7) costs to be borne by the Defendants; and (8) such further or other reliefs as the Court deems fit and proper. On 16 June 2004, the Defendants application to strike out the Plaintiff s Writ of Summons was allowed with costs by the Senior Assistant Registrar. A Notice of Appeal to Judge In Chambers has been filed by the Plaintiff on 24 June 2004 to appeal against the decision of the Senior Assistant Registrar. The same was dismissed by the learned Judge on 26 April The Plaintiff has appealed to Court of Appeal vide Notice of Appeal dated 25 May 2005 in CA Civil Appeal No. W No hearing date has been fixed before the Court of Appeal.

120 118 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 21. Commitments and contingencies (continued) (v) On 2 April 2003, the Company and PSH Allied Berhad ( Defendants ) were served with a Writ of Summons and Statement of Claim (Kuala Lumpur High Court Civil Suit No. D ) by MBB ( the Plaintiff ). The Plaintiff claims against the Defendants for the following: (1) a declaration that the Defendants are in breach of the warranties and undertakings under the Share Sale Agreement in failing to make specific disclosure of the action instituted by Zainuddin bin Abu Bakar against Mayban Allied Berhad vide Kuala Lumpur High Court Suit No.D ; (2) a declaration that the Defendants are liable, jointly and severally, to indemnify the Plaintiff and keep indemnified the Plaintiff from and against all claims, demands, damages, losses (including loss of profit), costs, obligations, penalties, liabilities, fines and expenses sustained by the Plaintiff in respect of the Defendants or either of the Defendants breach referred to in (1) above; (3) that the Plaintiff be indemnified as referred to in (2) above and be at liberty to apply for an assessment of the amount to be paid thereunder; (4) special damages in the sum of RM6,021,462 with interest thereon at the rate of 8% per annum from 3 October 2000 until the date of full payment; (5) general damages; (6) interest on the sums payable as damages; (7) costs to be borne by the Defendants; and (8) such further or other reliefs as the Court deems fit and proper. On 16 June 2004, the Defendants application to strike out Plaintiff s Writ of Summons was allowed with costs by the Senior Assistant Registrar. A Notice of Appeal to Judge In Chambers has been filed by the Plaintiff on 24 June 2004 to appeal against the decision of the Senior Assistant Registrar. The same was dismissed by the learned Judge on 26 April The Plaintiff has appealed to Court of Appeal vide Notice of Appeal dated 25 May 2005 in CA Civil Appeal No. W No hearing date has been fixed before the Court of Appeal. (vi) A wholly-owned subsidiary of the Company, Prestige Future Sdn. Bhd. ( PFSB ) has on 4 December 2002 filed a Writ of Summons and a Statement of Claim against Tan Sri Datuk Dr Ting Pek Khiing ( the Defendant ) whereby the said subsidiary is seeking the following reliefs against the Defendant: (1) the sum of RM13,288, (comprising the principal sum of RM8,210, and interests) as at 14 November 2002; (2) interest at the rate of 13.5% per annum on the principal sum of RM8,210, from 15 November 2002 until the date of full payment; (3) costs on an indemnity basis; and (4) such further or other relief as the Honourable Court deems fit and just to grant. Trial has been fixed from 3 September 2007 and 5 September 2007 at the Kuala Lumpur High Court.

121 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 21. Commitments and contingencies (continued) (vii) PFSB has on 4 June 2004 made an application to the Court vide KL High Court (Commercial Division) Originating Summons No. D of 2004 for an order for specific performance directing Aspek Elit Sdn. Bhd. ( AESB ) to effect the transfer of the shares referred to in a Deed of Forbearance cum Settlement. On 3 November 2004, PFSB obtained an order in terms of its application. To give efficacy to the said Order, PFSB has on 4 May 2005 filed another application asking the Court to specify in the said Order, the time for which AESB is to comply with the said Order. AESB has on the other hand filed an application to set aside the said Order. Both applications have come up for hearing a few times and have now been adjourned pending the outcome of the suit set out in (vi) above. (b) The Company has given financial support to certain subsidiaries to meet all their liabilities due. 22. Segmental reporting The Group is organised into two main business segments solely operating in Malaysia: (a) Investment holding (b) Postal and its related services Other operations of the Group mainly comprise investment holding and property investment, neither of which is of a sufficient size to be reported separately. The Group operates principally in Malaysia. Hence segmental information by geographical location has not been presented. Postal and Investment its related holding services Others Total 2006 RM 000 RM 000 RM 000 RM 000 Revenue - 821, ,870 Results Segment results (11,588) 131, ,991 Interest income 47,451 Gain on dilution of an associate 22,828 Share of net results of equity accounted associates 21,536 Profit before taxation 211,806 Tax expense (51,554) Profit for the year 160,252

122 120 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 22. Segmental reporting (continued) Postal and Investment its related holding services Others Total 2006 RM 000 RM 000 RM 000 RM 000 Other information Segment assets 705,214 1,324,425 42,139 2,071,778 Investment in associates 2,222 Total assets 2,074,000 Segment liabilities 1, , ,337 Total liabilities 388,337 Capital expenditure ,678-42,983 Depreciation and amortisation , , Revenue - 786, ,026 Results Segment results (5,582) 94, ,331 Unallocated income 6,273 95,604 Interest income 36,428 Share of net results equity accounted associates 14,877 Profit before taxation 146,909 Tax expense (1,550) Profit for the year 145,359 Other information Segment assets 516,570 1,178,270 43,212 1,738,052 Investment in associates 267, ,878 Total assets 2,005,930

123 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 22. Segmental reporting (continued) Postal and Investment its related holding services Others Total 2005 RM 000 RM 000 RM 000 RM 000 Segment liabilities 1, , ,413 Total liabilities 433,413 Capital expenditure 1,444 20,494-21,938 Impairment losses - 18,408-18,408 Depreciation and amortisation , , Significant related party transactions In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are transactions with other related parties. The related party transactions have been transacted under the terms agreed between the parties. Name of company Transmile Air Services Sdn. Bhd. CEN Worldwide Sdn. Bhd. CEN Technology Sdn. Bhd. Relationship Subsidiary of Transmile Group Berhad, a former associate of the Company Subsidiary of CEN Sdn. Bhd., an associate of Pos Malaysia Berhad Joint venture company of CEN Sdn. Bhd., an associate of Pos Malaysia Berhad Group RM 000 RM 000 Air transportation service costs charged by Transmile Air Services Sdn. Bhd 9,814 37,634 Air transportation and handling services costs charged by CEN Worldwide Sdn. Bhd. 1,115 3,145 Purchase of paper based supplies from Elpos Print Sdn. Bhd. 3,628 3,973 Track-on System maintenance fee charged by CEN Technology Sdn. Bhd ,954

124 122 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS NOTES TO THE FINANCIAL STATEMENTS (continued) 24. Significant events (i) During the financial year, the Company made an announcement to Bursa Malaysia Securities Berhad that it intended to carry out the following proposals, subject to the approval of the relevant authorities: (a) (b) (c) (d) Proposed share split by Pos Malaysia Berhad ( PMB ) of its existing share capital of RM million comprising million ordinary shares of RM1.00 each to RM million comprising million ordinary shares of RM0.50 each ( PMB Shares ) and thereafter, the proposed bonus issue by way of capitalisation of such sums from the retained profits of PMB as at the date to be determined in the future by the allotment and issuance of additional PMB Shares to the Company, which would result in the number of the PMB Shares to be equal to the number of shares in the Company as at the Entitlement Date (the date, which is to be determined and announced later by the Board of Directors of the Company, as at the close of business on which the shareholders of the Company must be registered in the Record of Depositors with Bursa Malaysia Depository Sdn. Bhd.); Proposed disposal by the Company to PMB, of all the assets of the Company inclusive of its shareholding in six wholly-owned subsidiaries (other than its cash, a RM53 million leasehold property located in Brickfields, Bangsar held under Pajakan Negeri (WP) No for Lot 361 Seksyen 72 in Bandar and District of Kuala Lumpur, State of Wilayah Persekutuan registered in the name of the Company, its entire equity interest in PMB and PSH Investment Holding (BVI) Ltd.) and liabilities (if any) of the Company for the purchase consideration as stated in the Sale and Purchase Agreement dated 14 December 2006 between the Company and PMB, which shall be satisfied in cash by PMB to the Company and the settlement by PMB to the Company of all inter-company debts owing (net of provision of doubtful debts) by PMB and by the Company s other subsidiaries on behalf of those subsidiaries; Proposed issuance by the Company of two (2) new ordinary shares of RM1.00 each in the share capital of the Company ( 2 New PSH Shares ) at par on the Subscription Date (being a date after the Entitlement Date but before the effective date of the Proposal (b) above) to a trustee to be determined later ( Trustee ). The 2 New PSH Shares shall be held by the Trustee in trust for the benefit of PMB and subsequently be transferred to PMB for cash at par upon the completion of the Proposal (b) above; and Proposed transfer of the listing status of the Company on the Main Board of the Bursa Malaysia Securities Berhad to PMB and as a consequence of which, PMB will be listed and quoted on the Main Board of Bursa Malaysia Securities Berhad in place of the Company. Subsequent to the year-end, the shareholders have approved the Proposals (a), (b), (c) and (d) above in an extraordinary general meeting held on 3 April (ii) During the financial year, there was dilution of the investment in associate, Transmile Group Berhad, arising from the private placement exercise undertaken by the associate in November As a result of the dilution, the Group no longer has significant influence over the associate. Hence, the investment in associate is now accounted for as other investments in Note 7.

125 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS NOTES TO THE FINANCIAL STATEMENTS (continued) 25. Financial risk management objectives and policies The Group s and the Company s activities expose it to a variety of financial risk including foreign currency exchange risk, interest rate risk, credit risk, liquidity and cash flow risk. The Group s and the Company s overall financial risk management objectives is to ensure the continuous growth in profitability and enhance shareholders value in a competitive and changing environment. At the same time, the Group is focused in performing its Universal Services Obligation as provider of postal service throughout the country and to international destinations in an efficient and effective manner. Foreign currency risk The Group is exposed to currency exchange risk as a result of providing mail exchange service and remittance service. However the material portion of the exposure is in U.S Dollar and the Group ensures that the net exposure is kept to an acceptable level by monitoring the fluctuation of the foreign currency. Interest rate risk The Group s and the Company s income and operating cash flows are substantially independent of the changes in market interest rate except for the Group s and the Company s investment in fixed-rate debt securities which are exposed to a risk of change in their fair value due to changes in interest rates. The Group and the Company does not have any interest bearing borrowing. The Group and the Company short term deposits are placed at fixed rate investments which management endeavours to obtain the best rate available in the market. Credit risk The Group seeks to control credit risk by setting counter party limits and ensuring that services are made to customers with an appropriate credit history. The trade receivables are all collectible and adequate allowance for doubtful debts are provided for. At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. Liquidity and cash flow risk Prudent liquidity risk management implies maintaining sufficient liquid assets to meet financial commitments and obligations when they fall due at a reasonable cost. The Group and the Company ensures that liquidity requirement are met and surplus are within limits set to avoid liquidity surpluses which may result in loss of income opportunities.

126 124 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 TOP 10 PROPERTIES OWNED (as at 31 december 2006) Property Occupied by Pos Malaysia No Type Location Subject Property Registered / Beneficial Owner Existing Use / Description Tenure / Age of Building Land Area Gross Floor Area Valuation / Cost of Purchase (RM) Net Book Value as at 31 December 2006 (RM) 1 Alienated Land Pej Pos Besar Kuala Lumpur HS(D) 49280, PT 46 Sek 70, Bandar Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan, Kuala Lumpur Pesuruhjaya Tanah Persekutuan General Post Office / Eight Storey Building Leasehold 99 years expiring 27/01/2079 / Approximately 22 years 8496 sq mt (91,453 sq ft)» 44,519 sq mt 60,000, ,030, Building Mail and Courier Complex Mukim of Sepang, District of Sepang, State of Selangor Malaysia Airports (Sepang) Sdn. Bhd. Mail and Courier Complex Concession acres 201,600 sq. ft. 34,277, ,025, Alienated Land Ipoh Pajakan Negeri for Lot 2436N, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Leasehold 999 Years expiring on 30/12/ ,102sq ft Not applicable Alienated Land Ipoh Pajakan Negeri for Lot 2437N, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Leasehold 999 Years expiring on 30/12/ ,328 sq ft Not applicable Alienated Land Ipoh Pajakan Negeri 4738 for Lot 31448, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Leasehold 999 Years expiring on 30/12/ ,294sq ft Not applicable Alienated Land Ipoh Pajakan Negeri for Lot 35120, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Leasehold 999 Years expiring on 24/03/ ,985 sq ft Not applicable 15,071, Alienated Land Ipoh Pajakan Negeri for Lot 2351N, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Leasehold 999 Years expiring on 30/12/ ,144 sq ft Not applicable Alienated Land Ipoh GT No for Lot 31449, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Freehold Acquired 32,398 sq ft Not applicable Alienated Land Ipoh Pajakan Negeri for Lot 2740N, Town of Ipoh, Daerah Kinta,Perak Darul Ridzuan Effivation Sdn Bhd Vacant Land Leasehold 999 years expiring 30/12/ ,226 sq ft Not applicable 4 Registered Land Bukit Raja HS(D) 56783, PT 27615, Mukim of Kapar, District of Klang, State of Selangor Pos Malaysia Berhad Mail Centre and Office / Warehouse with attached three storey office Freehold approximately 9 years 8809 sq mt» 60,465 sq ft 10,300,000 15,002, Registered Land Larkin HS(D) , PT TLO 682, Bandar Johor Bahru, District of Johor Bahru, State of Johor Pos Malaysia Berhad Mail Centre, Johor Bahru / a Single Storey detached Warehouse with a double storey office annex and a Single storey detached office block and detached warehouse, etc Leasehold 60 years expiring 15/12/2021 / Not available 20,234 sq mt 6, sq mt 10,300,000 14,509,475.08

127 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT TOP 10 PROPERTIES OWNED (continued) (as at 31 december 2006) Property Occupied by Pos Malaysia No Type Location Subject Property Registered / Beneficial Owner Existing Use / Description Tenure / Age of Building Land Area Gross Floor Area Valuation / Cost of Purchase (RM) Net Book Value as at 31 December 2006 (RM) 6 Alienated Land Kota Kinabalu Town Lease Lot Location of Kota Kinabalu Town District of Kota Kinabalu, State of Sabah Pesuruhjaya Tanah Persekutuan Post Office / Eleven Storey Building Leasehold 99 years expiring 31/12/2074 / Approximately 20 ½ years 1.66 ac 145,083 sq ft 12,146, ,901, Building Persiaran Greenhill Real Riviera Office Building Leasehold years expiring as per note below- Approximately 11 years Acquired 2/08/1994 6,840 sq ft Not applicable 7,708, Registered Land Registered Land Bangi Bangi HS(D) 52880, PT 41029, Bandar Baru Bangi, District of Hulu Langat, State of Selangor HS(D) 52881, PT 41030, Bandar Baru Bangi, District of Hulu Langat, State of Selangor Pos Malaysia Berhad Mail Centre / Warehouse with attached office ( 2 Units) Leasehold 99 years expiring 19/08/2098 / Approximately 6 years Leasehold 99 years expiring 19/08/2098 / Approximately 6 years 6267 sq mt ( acres) 4206 sq mt ( acres) 22,000 sq ft 2,800, ,000 sq ft 2,400, ,399, Building Jalan Damansara Unit Nos. F08G/ 01,F10G/01,F11G/ 01,F12G/01,F13G/01, Phileo Damansara, Jalan Damansara, Petaling Jaya, State of Selangor PSH Properties Sdn.Bhd Office and Commercial units Freehold 15,509 sq ft 6,373, Registered Land Westport Lot 6, Sek 5, Mukim of Kelang, District of Klang, State of Selangor Central Spectrum (M) Sdn Bhd Vacant Land Leasehold 99 years / Not applicable 5.08 acres Not applicable 4,425,696 3,827, Notes: H.S (D) Ka PT years expiring on 20/12/2078 H.S (D) Ka PT years expiring on 20/12/2078 H.S (D) Ka 7534/79 PT years expiring on 20/12/2078 PN Lot 8619N 999 years expiring on 21/09/2894 PN Lot 8620N 999 years expiring on 21/09/2894 PN Lot 8621N 999 years expiring on 21/09/2894 For property No 3 revaluation was done on 1/06/2004 For property No 7 revaluation was done on 26/06/2004 For other properties, no revaluation was done.

128 126 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 ANALYSIS of Shareholdings INCOME STATEMENTS as at 30 April 2007 Authorised Capital : RM1,000,000,000 Issued and fully paid-up capital : RM519,937,353 Class of Rights : Ordinary shares of RM1.00 each Voting Rights : One vote for every ordinary share No. Shareholders : 30,066 Substantial Shareholders Shareholders Direct Indirect No. of shares % No. of shares % 1 Khazanah Nasional Berhad 156,145, ,852,377 (a) Employees Provident Fund Board 49,405, Aberdeen Asset Management Asia Limited 30,715, Aberdeen Asset Management PLC and its subsidiaries 36,771, Minister of Finance (Inc.) ,997,399 (b) Utilico Emerging Markets Limited 25,995, Notes: (a) (b) Deemed interested pursuant to Section 6A of the Companies Act, 1965 through its wholly owned subsidiary, Pantai Irama Ventures Sdn Bhd ( Pantai Irama ). Pantai Irama is deemed to have interest pursuant to Section 6A of the Companies Act, 1965 through its direct substantial shareholding in Pantai Holdings Berhad. The indirect shares are held under Glossmere Investments Limited and Seraya Sensa Sdn Bhd, which are subsidiaries of Pantai Holdings Berhad. Deemed interested through Khazanah Nasional Berhad. Distribution of Shareholdings Holdings No. of Shares % over Total Shares No.of Holders % over Total Holders Less than , , to 1,000 7,544, , ,001 to 10,000 36,501, , ,001 to 100,000 41,787, , ,001 to 25,996, ,312, ,996,868 and above 196,494, Total 519,937, ,

129 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS Analysis of shareholdings (continued) 30 Largest Registered Shareholders No. Name No. of Shares Percentage (%) 1 Khazanah Nasional Berhad 156,145, Employees Provident Fund Board 40,349, HSBC Nominees (Asing) Sdn Bhd -Exempt an for JPMorgan Chase Bank, National Association (BERMUDA) 25,995, HSBC Nominees (Asing) Sdn Bhd -Exempt an for BNP Paribas Securities Services (Convert in USD) 9,660, Seraya Sensa Sdn Bhd 8,630, HSBC Nominees (Asing) Sdn Bhd -RBC DIST for Edinburgh Dragon Trust PLC 7 HSBC Nominees (Asing) Sdn Bhd -Coutts BK Von Ernst SG for Glenmorgan Company Inc. 7,500, ,230, Valuecap Sdn Bhd 5,757, HSBC Nominees (Asing) Sdn Bhd -Exempt an for JPMorgan Chase Bank, National Association (U.S.A) 10 Amanah Raya Nominees (Tempatan) Sdn Bhd Kumpulan Wang Bersama 11 Citigroup Nominees (Asing) Sdn Bhd -Goldman Sachs International 12 Cartaban Nominees (Asing) Sdn Bhd -State Street London Fund XCB9 for Aberdeen Asian Smaller Companies Investment Trust PLC 13 Cartaban Nominees (Asing) Sdn Bhd -Investors Bank and Trust Company for Ishares, Inc 14 HSBC Nominees (Asing) Sdn Bhd -Exempt an for JPMorgan Chase Bank, National Association (Norges Bank) 15 Mayban Nominees (Tempatan) Sdn Bhd -Aberdeen Asset Management Sdn Bhd for the Employees Provident Fund Board (250416) 16 HSBC Nominees (Asing) Sdn Bhd -HSBC-FS for Aberdeen Malaysia Equity Fund 17 Amanah Raya Nominees (Tempatan) Sdn Bhd -Public Far-East Dividend Fund 18 Citigroup Nominees (Asing) Sdn Bhd -CBNY for DFA Emerging Markets Fund 4,707, ,625, ,526, ,400, ,056, ,048, ,946, ,785, ,557, ,313,

130 128 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS Analysis of shareholdings (continued) 30 Largest Registered Shareholders (continued) No. Name No. of Shares Percentage % 19 Cartaban Nominees (Asing) Sdn Bhd -State Street Luxembourg Fund AA35 for Allianz Global Investors Selections RCM Oriental Income Fund 3,225, Glossmere Investments Limited 3,221, Citigroup Nominees (Tempatan) Sdn Bhd -ING Insurance Berhad (INV-IL PAR) 3,123, Cartaban Nominees (Asing) Sdn Bhd -State Street London Fund XCP2 for Aberdeen Asian Income Fund Limited 3,000, DB (Malaysia) Nominee (Asing) Sdn Bhd -Deutsche Bank AG London 24 UOBM Nominees (Asing) Sdn Bhd -Exempt an for Natexis Bleichroeder Inc (Clients A/C) 2,879, ,800, BH Builders Sdn Bhd 2,779, HSBC Nominees (Asing) Sdn Bhd -Exempt an for J.P. Morgan Bank Luxembourg S.A. 27 HSBC Nominees (Asing) Sdn Bhd -Exempt an for JPMorgan Chase Bank, National Association (Netherlands) 28 Amanah Raya Nominees (Tempatan) Sdn Bhd -Public Savings Fund 29 Citigroup Nominees (Tempatan) Sdn Bhd -Exempt an for Prudential Assurance Malaysia Berhad 2,452, ,300, ,213, ,195, RHB Nominees (Tempatan) Sdn Bhd -RHB Asset Management Sdn Bhd for Kumpulan Wang Simpanan Pekerja 2,182, Total 333,606,

131 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT BALANCE SHEETS Analysis of shareholdings (continued) Directors Shareholdings as per Register of Directors Shareholdings (as at 30 April 2007) Direct Indirect Name of Directors Interest % Interest % Tan Sri Adam Kadir Puan Sri Datuk Nazariah binti Mohd Khalid Dato Zukri bin Samat Dato Idrose bin Mohamed Datuk Abu Huraira bin Abu Yazid 230, Mr. Wee Hoe Gooi Hoe Soon Mr. Segarajah Ratnalingam Puan Salmah binti Sharif Encik Faisal bin Ismail Mr. Koshy Thomas * * Mr. Koshy Thomas is the Alternate Director to Mr. Segarajah Ratnalingam Director s Option Holdings Granted Pursuant to the Employee Share Option Scheme (as at 30 April 2007) -Nil

132 130 POS MALAYSIA & SERVICES HOLDINGS BERHAD ANNUAL REPORT 2006 INCOME STATEMENTS This page is intentionaly left blank

133 POS MALAYSIA & SERVICES HOLDINGS BERHAD (491-K) CDS account no. of authorised nominee* Number of Shares Held PROXY form 75TH ANNUAL GENERAL MEETING I/We, NRIC (new) (FULL NAME OF SHAREHOLDERS AS PER NRIC/PASSPORT NO. IN BLOCK LETTERS) (old) of being a member of Pos Malaysia & Services Holdings Berhad, hereby appoint (FULL ADDRESS) (FULL NAME OF PROXY AS PER NRIC/PASSPORT NO. IN BLOCK LETTERS) NRIC (new) (old) of or failing him/her NRIC (new) (FULL ADDRESS) (FULL NAME OF PROXY AS PER NRIC/PASSPORT NO. IN BLOCK LETTERS) (old)/ of (FULL ADDRESS) or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us and on my/our behalf, at the 75th Annual General Meeting of the Company, to be held at the Manhattan Ballroom, Berjaya Times Square Hotel & Convention Centre, No.1 Jalan Imbi, Kuala Lumpur on Thursday, 28 June 2007 at 10 a.m. and at any adjournment thereof. My/our proxy is to vote as indicated below: No. Ordinary Resolutions For Against 1. Receive the Reports and Accounts. 2. Re-election of Tan Sri Adam Kadir as Director. 3. Re-election of Mr. Segarajah Ratnalingam as Director. 4. Re-election of Puan Salmah binti Sharif as Director. 5. Re-election of Encik Faisal bin Ismail as Director. 6. Re-election of Dato Idrose bin Mohamed as Director. 7. Re-appoinment of Messrs KPMG as the Company s auditors for the ensuing year. 8. Approval of Directors Fees. 9. Issue and allot new shares under Section 132D of the Companies Act, Please indicate with an ( X ) in the appropriate spaces as to how you wish your votes to be cast on the Ordinary Resolutions specified in the Notice of the 75th Annual General Meeting. If you do not do so, the Proxy may vote or abstain from voting at his discretion. Signed this day of 2007 Signature(s)/Common Seal of Shareholder(s) Notes: (i) A member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote in his stead. Where a member appoints two or more proxies to attend the Meeting, the member shall specify the proportion of his shareholdings to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. (ii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the corporation s seal or under the hand of an officer or attorney duly authorised. (iii) The instrument appointing a proxy must be deposited at the Company s Share Registrar s Office at Tenaga Koperat Sdn Bhd, 20th Floor, Plaza Permata (formely known as IGB Plaza), Jalan Kampar, Off Jalan Tun Razak, Kuala Lumpur not less than forty eight (48) hours before the time set for the Meeting or any adjournment thereof. * Applicable to shares held through a nominee account.

134 Fold here AFFIX STAMP The Share Registrar TENAGA KOPERAT SDN BHD ( V) 20th Floor, Plaza Permata (formely known as Plaza IGB) Jalan Kampar, Off Jalan Tun Razak Kuala Lumpur Fold here

135

136 VISI KAMI MENJADI rakan niaga serantau yang di percayai di dalam bidang mel, kurier, logistik dan perkhidmatan kewangan yang berkaitan. MISI KAMI MEMBENTUK dan menawarkan perkhidmatan yang berkualiti, dipercayai, menepati masa dan inovatif kepada semua para pelanggan dan rakan kongsi kami. MENYEDIAKAN khidmat logistik dan penyelesaian perniagaan berkaitan melalui kecekapan, sistem dan rangkaian kami. MEMELIHARA dan mengekalkan suasana kerja dan pembelajaran yang sesuai bagi warga kerja melalui kerja berkumpulan dan nilai-nilai dikongsi bersama. MELINDUNGI dan memaksimakan nilai para pemegang saham melalui keputusan perniagaan yang bijak dan pengurusan kewangan yang baik. SENTIASA BERUSAHA menjadi warga korporat yang prihatin dengan memberi sokongan kepada usaha pembangunan negara serta khidmat komuniti. RASIONAL KULIT HADAPAN MEMPERCEPATKAN MOMENTUM Corak kulit ini menggambarkan betapa pentingnya untuk Pos Malaysia mempercepatkan momentum transformasinya. Seperti mana si beluncas menjalani proses transformasi sebelum menjadi kupu-kupu yang cantik, usaha Pos Malaysia untuk mempercepatkan momentum perubahannya juga akan membuahkan hasil yang hebat akhirnya. Pada tahun 2006, Syarikat telah menumpukan perhatiannya kepada pelbagai usaha untuk mempercepatkan momentum perubahan mereka. Usaha-usaha ini dijelaskan di dalam Laporan Tahunan 2006.

137 Kandungan Notis Mesyuarat Agung 02 Tahunan ke-75 Struktur Kumpulan 05 Maklumat Korporat 06 Lembaga Pengarah 08 Profil Pengarah 10 Pengurusan Kanan 20 Mesej Daripada Pengerusi 22 Lembaga Pengarah 27 Pos Malaysia Berhad Struktur Korporat 28 Pos Malaysia Berhad Pengurus-Pengurus Negeri Urutan Peristiwa Pencapaian Korporat 38 Ulasan Operasi 44 Setem Keluaran Penyata Tadbir Urus Korporat 56 Penyata Kawalan Dalaman 65 Penyata Tanggungjawab 67 Pengarah Maklumat Pematuhan Tambahan 68 Laporan Jawatankuasa Audit 70 Penyata Kewangan Hartanah Utama Yang Dimiliki 126 Analisa Pegangan Saham 128 Borang Proksi

138 2 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 NOTIS MESYUARAT AGUNG TAHUNAN KE-75 NOTIS ADALAH DENGAN INI DIBERIKAN BAHAWA Mesyuarat Agung Tahunan ke- 75 Pos Malaysia & Services Holdings Berhad akan diadakan di Manhattan Ballroom, Berjaya Times Square Hotel & Convention Center, No. 1 Jalan Imbi, Kuala Lumpur pada hari Khamis, 28hb Jun 2007 pada pukul pagi untuk tujuan berikut: SEBAGAI URUSAN BIASA: 1. Untuk menerima Laporan Pengarah dan Penyata Pengarah, Penyata Kewangan yang Diaudit dan Laporan Juruaudit bagi tahun kewangan berakhir 31 Disember (Resolusi Biasa 1) 2. Untuk melantik semula para Pengarah berikut yang bersara menurut Artikel 102 Tataurusan Pertubuhan Syarikat, dan oleh kerana layak, menawarkan diri mereka untuk pelantikan semula: (a) Tan Sri Adam Kadir (b) Encik Segarajah Ratnalingam (Resolusi Biasa 2) (Resolusi Biasa 3) 3. Untuk melantik semula para Pengarah berikut yang bersara menurut Artikel 109 Tataurusan Pertubuhan Syarikat, dan oleh kerana layak, menawarkan diri untuk pemilihan semula: (a) Puan Salmah binti Sharif (b) Encik Faisal bin Ismail (c) Dato Idrose bin Mohamed 4. Untuk melantik semula Tetuan KPMG sebagai Juruaudit Syarikat bagi tahun berikutnya dan memberi kuasa kepada para Pengarah untuk menetapkan ganjaran mereka. (Resolusi Biasa 4) (Resolusi Biasa 5) (Resolusi Biasa 6) (Resolusi Biasa 7) SEBAGAI URUSAN KHAS: Untuk menimbang, dan jika difikirkan sesuai, meluluskan resolusi berikut, dengan atau tanpa modifikasi, sebagai resolusi biasa: 5. Yuran Pengarah Bahawa pembayaran yuran Pengarah sebanyak RM252,000 bagi tahun kewangan berakhir 31 Disember 2006 diluluskan. (Resolusi Biasa 8)

139 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN NOTIS MESYUARAT AGUNG TAHUNAN KE-75 sambungan 6. Kuasa untuk memperuntuk dan menerbitkan saham menurut Seksyen 132D Akta Syarikat 1965 Bahawa para Pengarah Syarikat, menurut Seksyen 132D Akta Syarikat 1965, diberi kuasa untuk memperuntuk dan menerbitkan saham dalam Syarikat pada masa tertentu, sehingga tamatnya Mesyuarat Agung Tahunan yang seterusnya, bagi balasan dan menurut terma dan peraturan yang mengikut pertimbangan muktamad mereka, adalah sesuai dan selaras dengan Tataurusan Pertubuhan Syarikat, dengan syarat bilangan agregat saham baru yang akan diterbitkan itu tidak boleh melebihi sepuluh peratus (10%) daripada modal saham terbitan dan berbayar Syarikat dan sentiasa tertakluk kepada kelulusan penguasa kawal atur. (Resolusi Biasa 9) 7. Untuk menjalankan sebarang urusan lain yang notis mengenainya telah diberi. Dengan Perintah Lembaga Pengarah, Sabrina Albakri Abu Bakar (LS8508) Setiausaha Syarikat Kuala Lumpur 6 Jun 2007

140 4 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 NOTIS MESYUARAT AGUNG TAHUNAN KE-75 sambungan Nota-nota: 1. Seorang ahli yang layak untuk hadir dan mengundi juga layak untuk melantik seorang atau lebih proksi untuk hadir dan mengundi bagi pihaknya. Jika seorang ahli melantik dua atau lebih proksi untuk menghadiri Mesyuarat, ahli tersebut perlu menentukan nisbah pegangan sahamnya yang akan diwakili oleh setiap proksi. Seorang proksi tidak semestinya seorang ahli Syarikat dan ahli boleh melantik sesiapa sahaja untuk menjadi proksinya tanpa pembatasan dan peruntukan Seksyen 149(1)(b) Akta Syarikat 1965 tidak dikenakan ke atas Syarikat. 2. Suratcara pelantikan proksi perlu dibuat secara bertulis di bawah tandatangan pelantik atau wakil beliau yang diberi kuasa secara bertulis atau, jika pelantik adalah sebuah perbadanan, sama ada di bawah meterai perbadanan tersebut atau di bawah tandatangan pegawai atau wakil yang diberi kuasa. 3. Suratcara pelantikan proksi hendaklah dihantar pejabat Pendaftar Saham di Tenaga Koperat Sdn Bhd, Tingkat 20, Plaza Permata (dahulunya dikenali sebagai Plaza IGB), Jalan Kampar, Off Jalan Tun Razak, Kuala Lumpur tidak lewat dari empat puluh lapan (48) jam sebelum masa yang ditetapkan untuk Mesyuarat atau sebarang penangguhannya. 4. Nota Tambahan mengenai Urusan Khas: 4.1 Resolusi ke atas Yuran Pengarah Resolusi Biasa No. 8 yang dicadangkan adalah selaras dengan Tataurusan Pertubuhan Syarikat dan jika diluluskan, akan memberi kebenaran kepada bayaran untuk yuran Pengarah kepada Pengarah Syarikat di atas perkhidmatan mereka sepanjang tahun kewangan berakhir 31 Disember Resolusi menurut Seksyen 132D Akta Syarikat 1965 Resolusi Biasa No. 9 yang dicadangkan, jika diluluskan, adalah untuk memberi fleksibiliti kepada para Pengarah Syarikat untuk menerbit dan memperuntuk saham untuk tujuan tertentu, yang menurut pertimbangan mutlak para Pengarah adalah untuk kepentingan Syarikat, tanpa perlu mengadakan mesyuarat agung. Kuasa ini akan tamat di Mesyuarat Agung Tahunan Syarikat akan datang.

141 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN STRUKTUR KUMPULAN Pada 31 Mac 2007 POS MALAYSIA & SERVICES HOLDINGS BERHAD (491-K) 100% POS MALAYSIA BERHAD 100% Datapos (M) Sdn Bhd 100% PosLaju (M) Sdn Bhd 100% Virtual Pos Sdn Bhd 100% Pos Logistics-Fulserve Sdn Bhd 100% Pos Takaful Agency Sdn Bhd 100% PMB Properties Sdn Bhd 100% Philately Pos Malaysia Sdn Bhd 55% Digicert Sdn Bhd 100% PSH INVESTMENT HOLDING (BVI) LTD 100% PSH CAPITAL PARTNERS SDN BHD 100% Prestige Future Sdn Bhd 100% PSH VENTURE CAPITAL SDN BHD 100% PSH Express Sdn Bhd 100% PSH PROPERTIES SDN BHD 100% Effivation Sdn Bhd 100% Real Riviera Sdn Bhd 100% PSH ALLIED BERHAD 100% PSH MERCHANDISE SDN BHD 100% PSH MANAGEMENT SDN BHD SYARIKAT-SYARIKAT BERSEKUTU POS MALAYSIA & SERVICES HOLDINGS BERHAD PSH Aviation Sdn Bhd (49%) SYARIKAT-SYARIKAT BERSEKUTU POS MALAYSIA BERHAD (PMB) Elpos Print Sdn Bhd (40%) CEN Sdn Bhd (42.5%) PosPay Exchange Sdn Bhd (50%) (Dahulu dikenali sebagai RMEX Payment Services Sdn Bhd) Subsidiari milik penuh Subsidiari

142 6 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 MAKLUMAT KORPORAT LEMBAGA PENGARAH Tan Sri Adam Kadir (Pengerusi/Pengarah Bebas Bukan Eksekutif) Puan Sri Datuk Nazariah binti Mohd Khalid (Pengarah Bebas Bukan Eksekutif) Dato Zukri bin Samat (Pengarah Bebas Bukan Eksekutif) Dato Idrose bin Mohamed (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Dilantik pada 1 April 2007) Datuk Abu Huraira bin Abu Yazid (Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan) Encik Wee Hoe Gooi Hoe Soon (Pengarah Bebas Bukan Eksekutif) Encik Segarajah Ratnalingam (Pengarah Bukan Bebas Bukan Eksekutif) Puan Salmah binti Sharif (Pengarah Bukan Bebas Bukan Eksekutif) (Dilantik pada 4 Ogos 2006) Encik Faisal bin Ismail (Pengarah Bukan Bebas Bukan Eksekutif) (Dilantik pada 27 September 2006) Encik Koshy Thomas (Pengarah Bukan Bebas Bukan Eksekutif) (Pengarah Pengganti kepada Encik Segarajah Ratnalingam) Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Datuk Alias bin Ali (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 21 Februari 2007) Dato Ikmal Hijaz bin Hashim (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Meletakkan jawatan pada 23 Februari 2007) Dato Ng Kam Cheung (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 1 Mac 2007) SETIAUSAHA SYARIKAT Puan Sabrina Albakri binti Abu Bakar (LS 8508) JAWATANKUASA AUDIT Encik Wee Hoe Gooi Hoe Soon (Pengerusi/Pengarah Bebas Bukan Eksekutif) (Dilantik sebagai Pengerusi pada 3 Julai 2006) Puan Sri Datuk Nazariah binti Mohd Khalid (Pengarah Bebas Bukan Eksekutif) (Dilantik pada 8 Mac 2007) Encik Segarajah Ratnalingam (Pengarah Bukan Bebas Bukan Eksekutif) Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Datuk Alias bin Ali (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 21 Februari 2007) Dato Ng Kam Cheung (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 1 Mac 2007) JAWATANKUASA IMBUHAN Tan Sri Adam Kadir (Pengerusi/Pengarah Bebas Bukan Eksekutif) Dato Idrose bin Mohamed (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Dilantik pada 24 April 2007) Encik Wee Hoe Gooi Hoe Soon (Pengarah Bebas Bukan Eksekutif) Encik Segarajah Ratnalingam (Pengarah Bukan Bebas Bukan Eksekutif) Puan Salmah binti Sharif (Pengarah Bukan Bebas Bukan Eksekutif) (Dilantik pada 14 September 2006) Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Dato Ikmal Hijaz bin Hashim (Pengarah Urusan Kumpulan/Ketua Pengawai Eksekutif) (Meletakkan jawatan pada 23 Februari 2007) Dato Zukri bin Samat (Pengarah Bebas Bukan Eksekutif) (Berhenti pada 12 Jun 2006) JAWATANKUASA PENCALONAN Puan Sri Datuk Nazariah binti Mohd Khalid (Pengerusi/Pengarah Bebas Bukan Eksekutif) (Dilantik pada 12 Jun 2006 sebagai ahli dan selanjutnya dijawatkan sebagai Pengerusi pada 21 Februari 2007) Encik Wee Hoe Gooi Hoe Soon (Pengarah Bebas Bukan Eksekutif) Puan Salmah binti Sharif (Pengarah Bukan Bebas Bukan Eksekutif) (Dilantik pada 8 Mac 2007) Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Datuk Alias bin Ali (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 21 Februari 2007) JAWATANKUASA PENGURUSAN PRESTASI Tan Sri Adam Kadir (Pengerusi/Pengarah Bebas Bukan Eksekutif) Dato Idrose bin Mohamed (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Dilantik pada 1 April 2007) Encik Wee Hoe Gooi Hoe Soon (Pengarah Bebas Bukan Eksekutif) Encik Segarajah Ratnalingam (Pengarah Bukan Bebas Bukan Eksekutif) Dr. R. Hanafi bin Abdullah (Ketua Sumber Manusia dan Pentadbiran Kumpulan) (Berkuatkuasa pada 1 Mac 2007) Tuan Haji Nadza Abdul (Ketua Perancangan Korporat & Perniagaan Strategik)

143 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN MAKLUMAT KORPORAT sambungan Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Dato Ikmal Hijaz bin Hashim (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Meletakkan jawatan pada 23 Februari 2007) Dato Zukri bin Samat (Pengarah Bebas Bukan Eksekutif) (Berhenti pada 12 Jun 2006) Dato Ng Kam Cheung (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 1 Mac 2007) Puan Rugayah Yasmin binti Dato Ibrahim (Timbalan Pengurus Besar Sumber Manusia dan Pentadbiran) (Berhenti pada 1 Mac 2007) AHLI JAWATANKUASA TRANSFORMASI Tan Sri Adam Kadir (Pengerusi/Pengarah Bebas Bukan Eksekutif) Puan Sri Datuk Nazariah binti Mohd Khalid (Pengarah Bebas Bukan Eksekutif) (Dilantik pada 12 Jun 2006) Encik Wee Hoe Gooi Hoe Soon (Pengarah Bebas Bukan Eksekutif) (Dilantik pada 8 Mac 2007) Encik Segarajah Ratnalingam (Pengarah Bukan Bebas Bukan Eksekutif) Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Dato Ng Kam Cheung (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 1 Mac 2007) Dato Zukri bin Samat (Pengarah Bebas Bukan Eksekutif) (Berhenti pada 12 Jun 2006) JAWATANKUASA OPSYEN Tan Sri Adam Kadir (Pengerusi/Pengarah Bebas Bukan Eksekutif) Dato Idrose bin Mohamed (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Dilantik pada 1 April 2007) Encik Wee Hoe Gooi Hoe Soon (Pengarah Bebas Bukan Eksekutif) Encik Segarajah Ratnalingam (Pengarah Bukan Bebas Bukan Eksekutif) Dato Ikmal Hijaz bin Hashim (Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif) (Meletakkan jawatan pada 23 Februari 2007) JAWATANKUASA LEMBAGA TENDER Tan Sri Adam Kadir (Pengerusi/Pengarah Bebas Bukan Eksekutif) Puan Sri Datuk Nazariah binti Mohd Khalid (Pengarah Bebas Bukan Eksekutif) (Dilantik pada 12 Jun 2006) Dato Zukri bin Samat (Pengarah Bebas Bukan Eksekutif) Encik Faisal bin Ismail (Pengarah Bukan Bebas Bukan Eksekutif) (Dilantik pada 8 Mac 2007) Datuk Abdul Majid bin Haji Hussein (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 31 Oktober 2006) Datuk Alias bin Ali (Pengarah Bebas Bukan Eksekutif) (Meletakkan jawatan pada 21 Februari 2007) PEJABAT BERDAFTAR Aras 33, Menara Dayabumi Jalan Sultan Hishamuddin Kuala Lumpur Telefon: Faksimili: PENDAFTAR Tenaga Koperat Sdn Bhd Tingkat 20, Plaza Permata Jalan Kampar, Off Jalan Tun Razak Kuala Lumpur Telefon: Faksimili: JURUAUDIT KPMG Akauntan Awam Bertauliah BANK-BANK UTAMA Malayan Banking Berhad CIMB Bank Berhad PENYENARAIAN BURSA SAHAM Papan Utama Bursa Malaysia Securities Berhad

144 8 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 LEMBAGA PENGARAH Dari kiri ke kanan 1 Encik Faisal bin Ismail Pengarah Bukan Bebas Bukan Eksekutif 2 Datuk Abu Huraira bin Abu Yazid Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan 4 Tan Sri Adam Kadir Pengerusi/Pengarah Bebas Bukan Eksekutif 5 Encik Segarajah Ratnalingam Pengarah Bukan Bebas Bukan Eksekutif 3 Puan Salmah binti Sharif Pengarah Bukan Bebas Bukan Eksekutif

145 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN Puan Sri Datuk Nazariah binti Mohd Khalid Pengarah Bebas Bukan Eksekutif 7 Encik Wee Hoe Gooi Hoe Soon Pengarah Bebas Bukan Eksekutif 8 Dato Idrose bin Mohamed Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif 9 Dato Zukri bin Samat Pengarah Bebas Bukan Eksekutif 10 Puan Sabrina Albakri binti Abu Bakar Setiausaha Syarikat Tiada di dalam gambar: Encik Koshy Thomas Pengarah Bukan Bebas Bukan Eksekutif (Pengarah Pengganti kepada Encik Segarajah Ratnalingam)

146 10 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PROFIL PENGARAH Tan Sri Adam Kadir Pengerusi Pengarah Bebas Bukan Eksekutif Tan Sri Adam Kadir, 64, seorang warganegara Malaysia, adalah Pengerusi Syarikat dan Pengarah Bebas Bukan Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah pada 1 Mac, Tan Sri Adam Kadir adalah Pengerusi Jawatankuasa Imbuhan, Jawatankuasa Transformasi, Jawatankuasa Pengurusan Prestasi, Jawatankuasa Opsyen dan Jawatankuasa Lembaga Tender. Tan Sri Adam Kadir memegang Ijazah Sarjana Undang-undang dalam Undang-undang Komersil dan Korporat dari University of London. Sebelum itu, beliau telah memperolehi Sarjana Sains dari Ohio University, Amerika Syarikat pada tahun 1973 setelah menamatkan pengajiannya dengan kelulusan Sarjana Muda Sastera dari Universiti Malaya pada tahun Beliau telah melengkapkan program Pengurusan Lanjutan di Harvard University Business School, Amerika Syarikat dalam tahun Tan Sri Adam Kadir telah dipilih sebagai Ahli Parlimen (MP) dalam tahun 1986 dan Setiausaha kepada Kementerian Tanah dan Pembangunan Wilayah pada tahun Seterusnya, beliau dipilih sebagai Senator dan Presiden Senat pada tahun Antara tahun 1994 dan 1996, beliau merupakan Presiden bagi keduadua Kesatuan Antara Parlimen (IPU) dan Persatuan Parlimen Komanwel, Bahagian Malaysia. Selepas tempoh perkhidmatannya di Senat tamat pada tahun 1997, beliau kembali ke Kumpulan Wineka. Tan Sri Adam Kadir memulakan kerjayanya pada tahun 1967 sebagai Penerbit di Kementerian Penyiaran & Penerangan selepas menamatkan pengajiannya. Beliau menyertai Perbadanan Kemajuan Negeri Selangor (PKNS) sebagai Penolong Setiausaha dalam tahun Beliau kemudiannya menyertai Aseambankers sebagai seorang Pengurus, Pembangunan Projek pada tahun 1973 dan seterusnya berpindah ke Kumpulan PERNAS sebagai Pengurus Besar dan Pengarah dari tahun 1975 hingga Dari tahun , beliau telah menjadi seorang usahawan dan memiliki syarikat perniagaannya sendiri iaitu Kumpulan Wineka. Tan Sri Adam Kadir adalah Pengerusi Jengka Sdn Bhd, sebuah kompleks perkayuan di Pahang, dari tahun 1983 hingga Beliau pernah menganggotai Lembaga Pengarah beberapa buah syarikat termasuk PBS Multinational Merchant Bank, Malaysia General Investments Corporation Berhad, Lembaga Pemasaran Pertanian Persekutuan (FAMA) dan Lembaga Perusahaan Pertanian Pahang. Tan Sri Adam Kadir tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Tan Sri Adam Kadir telah menghadiri kesemua dua puluh tujuh (27) mesyuarat Lembaga Pengarah yang diadakan pada tahun kewangan yang diulas.

147 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PROFIL PENGARAH sambungan Puan Sri Datuk Nazariah binti Mohd Khalid Pengarah Bebas Bukan Eksekutif Puan Sri Datuk Nazariah, 57, seorang warganegara Malaysia, adalah Pengarah Bebas Bukan Eksekutif. Beliau dilantik sebagai ahli Lembaga Pengarah pada 14 April, Puan Sri Datuk Nazariah adalah Pengerusi bagi Jawatankuasa Pencalonan dan ahli Jawatankuasa Audit, Jawatankuasa Transformasi serta Jawatankuasa Lembaga Tender. Puan Sri Datuk Nazariah berkelulusan Sarjana Muda Sastera (Kepujian) dari University of Tasmania, Australia dan memegang Ijazah Sarjana Pentadbiran Perniagaan dari Michigan State University, Amerika Syarikat. Pada tahun 1972, beliau menyertai Perkhidmatan Awam Malaysia dan telah memegang beberapa jawatan sebelum menjadi Ketua Pengarah Unit Pemodenan Tadbiran dan Perancangan Pengurusan Malaysia (MAMPU) di Jabatan Perdana Menteri. Puan Sri Datuk Nazariah tidak mempunyai hubungan kekeluargaan dengan mana-mana Pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Semenjak pelantikannya, Puan Sri Datuk Nazariah telah menghadiri enam belas (16) daripada tujuh belas (17) mesyuarat Lembaga Pengarah yang diadakan selepas pelantikan beliau pada tahun kewangan yang diulas.

148 12 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PROFIL PENGARAH sambungan Dato Zukri bin Samat Pengarah Bebas Bukan Eksekutif Dato Zukri bin Samat, 49, seorang warganegara Malaysia, adalah Pengarah Bebas Bukan Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah pada 8 Mac, Beliau adalah ahli Jawatankuasa Lembaga Tender. Dato Zukri memegang Ijazah MBA dari University of Hull, United Kingdom. Kini, beliau adalah Pengarah Urusan bagi Bank Islam Malaysia Berhad. Beliau pernah menyandang jawatan Pengarah Eksekutif, Pelaburan bagi Khazanah Nasional Berhad ( Khazanah ) syarikat pelaburan Kerajaan Malaysia. Beliau menyertai Khazanah pada 13 Februari, Sebelum itu, beliau adalah Pengarah Urusan Pengurusan Danaharta Nasional Berhad ( Danaharta ), sebuah syarikat pengurusan asset nasional. Beliau menyertai Danaharta pada Oktober 1998 sebagai Pengurus Besar, Bahagian Operasi dan seterusnya dilantik menjadi Pengarah Operasi pada 1 Ogos, 2001 untuk menguruskan semua aktiviti pemulihan pinjaman bagi Danaharta. Beliau kemudiannya dilantik oleh Menteri Kewangan sebagai Pengarah Urusan Danaharta pada 1 Julai, 2003 sehingga 31 Disember, 2005 apabila Danaharta menamatkan operasinya. Dato Zukri berpengalaman luas dalam sektor perbankan dan pernah memegang beberapa jawatan di insitusi kewangan tempatan dan antarabangsa. Sebelum menyertai Danaharta, beliau berkhidmat di Credit Agricole Indosuez Labuan sebagai Pengurus Besar. Beliau juga berkhidmat di Commerce International Merchant Bankers Berhad (sekarang ini dikenali sebagai CIMB Investment Bank Berhad) buat tempoh yang agak lama. Jawatan terakhir beliau di situ adalah sebagai Timbalan Pengurus Besar Bahagian Pasaran Modal di mana beliau bertanggungjawab ke atas urusniaga yang melibatkan Sekuriti Hutang Swasta, kewangan projek, pengkorporatan dan penswastaan syarikat-syarikat milik negeri. Dato Zukri tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Semenjak pelantikannya, Dato Zukri telah menghadiri sembilan belas (19) daripada dua puluh tiga (23) mesyuarat Lembaga Pengarah yang diadakan selepas pelantikan beliau pada tahun kewangan yang diulas.

149 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PROFIL PENGARAH sambungan Dato Idrose bin Mohamed Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif Dato Idrose bin Mohamed, 51, seorang warganegara Malaysia, adalah Pengarah Urusan Kumpulan/ Ketua Pegawai Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah pada 1 April, Dato Idrose adalah ahli Jawatankuasa Imbuhan, Jawatankuasa Opsyen dan Jawatankuasa Pengurusan Prestasi. Dato Idrose memegang Ijazah Sarjana Muda dalam Kejuruteraan Awam dari UiTM. Beliau memulakan kerjaya beliau di Jabatan Kerja Raya pada tahun Pada Januari 1983, beliau menyertai Lembaga Lebuhraya Malaysia (MHA) sebagai Jurutera Awam di mana beliau memegang beberapa jawatan dan turut terlibat dalam pembangunan lebuh raya. Seterusnya, beliau dilantik sebagai Pengarah Wilayah Utara (MHA) pada November 1991 dan terus memegang jawatan tersebut sehingga beliau meninggalkan perkhidmatan kerajaan untuk menyertai UEM Group Berhad (dahulunya dikenali sebagai United Engineers (Malaysia) Berhad) sebagai Ketua Kejuruteraan & Operasi bagi Projek Lebuhraya Lingkaran Tengah Utara-Selatan pada Ogos, Seterusnya, beliau dilantik sebagai Pengarah Urusan bagi Projek Lebuhraya Utara-Selatan Berhad pada 1 Julai Dato Idrose telah meletak jawatan sebagai Pengarah Urusan PLUS Expressways Berhad dan Projek Lebuhraya Utara-Selatan (PLUS) berkuatkuasa dari 1 April, Dato Idrose tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Dato Idrose tidak pernah menghadiri mana-mana Mesyuarat Lembaga Pengarah sepanjang tahun kewangan yang diulas kerana beliau bukan seorang Pengarah sepanjang tempoh tersebut. Butir-butir mengenai jawatan pengarah di syarikat awam lain: *Pos Malaysia Berhad

150 14 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PROFIL PENGARAH sambungan Datuk Abu Huraira bin Abu Yazid Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan Datuk Abu Huraira bin Abu Yazid, 54, seorang warganegara Malaysia, telah dilantik sebagai Pengarah Bukan Eksekutif Syarikat pada 9 Ogos Beliau telah dilantik semula sebagai Pengarah Eksekutif Syarikat pada 8 Oktober Datuk Abu adalah seorang Graduan Pentadbiran Perniagaan dari Universiti Malaya dan telah berkecimpung dalam bidang perniagaan kad kredit sejak 20 tahun lepas. Beliau memulakan kerjayanya di Maybank Berhad pada tahun 1976 dan bertanggungjawab untuk menubuh dan menguruskan perniagaan kad kredit pada tahun Ini juga merupakan pusat kad kredit lengkap yang pertama di Malaysia. Selepas itu, khidmat beliau telah digunakan untuk menubuh dan menguruskan pusat kad kredit lain seperti Pusat Kad Kredit - The Chase Manhattan Bank (1986), Pusat Kad Bank - Citibank Berhad (1988) serta Bahagian Perkhidmatan Kad Public Bank. Jawatan terakhir yang disandang adalah sebagai Pengurus Besar Bahagian Perkhidmatan Kad Public Bank (1991). Pada 1 Ogos 2000, beliau telah dilantik sebagai Ketua Pegawai Eksekutif Bank Simpanan Nasional dan terus memegang jawatan tersebut sehingga Julai Datuk Abu tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Datuk Abu telah menghadiri dua puluh enam (26) daripada dua puluh tujuh (27) mesyuarat Lembaga Pengarah yang diadakan pada tahun kewangan yang diulas. Butir-butir mengenai jawatan pengarah di syarikat awam lain: *Pos Malaysia Berhad *Transmile Group Berhad *Pos Malaysia Holdings Berhad

151 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PROFIL PENGARAH sambungan Encik Wee Hoe Gooi Hoe Soon Pengarah Bebas Bukan Eksekutif Encik Gooi Hoe Soon, 47, seorang warganegara Malaysia, adalah Pengarah Bebas Bukan Eksekutif. Beliau telah dilantik sebagai Pengarah Bukan Bebas Bukan Eksekutif pada 18 Mac, 2001 dan dilantik semula sebagai Pengarah Bebas Bukan Eksekutif Syarikat pada 3 Julai Encik Gooi adalah Pengerusi Jawatankuasa Audit dan ahli Jawatankuasa Imbuhan, Jawatankuasa Pencalonan, Jawatankuasa Pengurusan Prestasi, Jawatankuasa Transformasi dan Jawatankuasa Opsyen. Encik Gooi adalah seorang ahli Institut Akauntan Awam Bertauliah Malaysia dan Institut Akauntan Malaysia. Beliau mempunyai pengalaman lebih 20 tahun dalam bidang perakaunan dan kewangan korporat dan pernah menjadi Pengarah Kewangan beberapa buah syarikat persendirian dan awam. Beliau telah memainkan peranan penting dalam menjayakan pelaksanaan beberapa latihan korporat termasuk penggabungan dan pengambilalihan serta penyusunan semula hutang korporat beberapa syarikat awam. Beliau telah dilantik untuk menganggotai Lembaga Pengarah Avenue Capital Resources Berhad sebagai Pengarah Bukan Eksekutif pada tahun 1999 dan selepas itu dilantik sebagai Pengarah Urusan Kumpulan pada tahun 2001 dan Timbalan Pengerusi pada tahun Beliau memegang jawatan akhir tersebut sehingga Encik Gooi tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Encik Gooi telah menghadiri dua puluh empat (24) daripada dua puluh tujuh (27) mesyuarat Lembaga yang diadakan pada tahun kewangan yang diulas. Butir-butir mengenai jawatan pengarah di syarikat awam lain: *Hup Seng Industries Berhad

152 16 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PROFIL PENGARAH sambungan Encik Segarajah Ratnalingam Pengarah Bukan Bebas Bukan Eksekutif Encik Segarajah Ratnalingam, 54, seorang warganegara Malaysia, adalah Pengarah Bukan Bebas Bukan Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah pada 26 Oktober Beliau adalah ahli Jawatankuasa Audit, Jawatankuasa Imbuhan, Jawatankuasa Pengurusan Prestasi, Jawatankuasa Transformasi dan Jawatankuasa Opsyen. Encik Segarajah memegang Ijazah Sarjana Muda Ekonomi (Kepujian) dari Universiti Malaya. Encik Segarajah memulakan kerjayanya di Kementerian Pertahanan dengan menyertai Perkhidmatan Pentadbiran dan Diplomatik Malaysia setelah tamat pengajian dalam tahun Beliau memegang beberapa jawatan di Kementerian Pertahanan sehingga 1995 apabila beliau telah ditugaskan ke Kementerian Kewangan. Kini, beliau merupakan Setiausaha di Bahagian Penasihat Pengurusan Kewangan, Kementerian Kewangan. Encik Segarajah tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Encik Segarajah telah menghadiri kesemua dua puluh tujuh (27) mesyuarat Lembaga yang diadakan pada tahun kewangan yang diulas. Butir-butir mengenai jawatan pengarah di syarikat awam lain: * Percetakan Nasional Malaysia Berhad

153 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PROFIL PENGARAH sambungan Puan Salmah binti Sharif Pengarah Bukan Bebas Bukan Eksekutif Puan Salmah binti Sharif, 46, seorang warganegara Malaysia, adalah Pengarah Bukan Bebas Bukan Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah pada 4 Ogos, Beliau adalah Ahli Jawatankuasa Imbuhan dan Jawatankuasa Pencalonan. Puan Salmah memegang Ijazah Sarjana Muda Undang-undang dari Universiti Teknologi MARA dan telah dilantik sebagai Peguambela & Peguamcara di Mahkamah Tinggi Malaya pada tahun Beliau memulakan kerjaya beliau sebagai Pegawai Undang-undang di Malaysian Industrial Estates Sdn Bhd (syarikat subsidiari Malaysian Industrial Development Finance Berhad) dari tahun 1987 hingga 1988 dan dinaikkan pangkat menjadi Setiausaha Syarikat pada tahun Beliau menjawat jawatan Setiausaha Syarikat dan Penasihat Undang-undang bagi Khazanah Nasional Berhad pada November, 1994 dan kemudiannya dilantik semula sebagai Pengarah Undang-undang dan Sokongan pada September, Puan Salmah tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Semenjak pelantikan beliau, Puan Salmah telah menghadiri kesemua sepuluh (10) mesyuarat Lembaga Pengarah yang diadakan selepas pelantikan beliau pada tahun kewangan yang diulas. Butir-butir mengenai jawatan pengarah di syarikat awam lain: *Time Engineering Berhad

154 18 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PROFIL PENGARAH sambungan Encik Faisal bin Ismail Pengarah Bukan Bebas Bukan Eksekutif Encik Faisal bin Ismail, 43, seorang warganegara Malaysia, adalah Pengarah Bukan Bebas Bukan Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah pada 27 September Beliau adalah ahli Jawatankuasa Lembaga Tender. Encik Faisal adalah Akauntan Bertauliah di Institut Akauntan Bertauliah di England dan Wales. Beliau juga merupakan ahli Institut Akauntan Malaysia. Encik Faisal adalah Pengarah Urusan Kumpulan bagi Pantai Holdings Berhad. Encik Faisal memulakan kerjayanya pada tahun 1983 di Touche Ross & Co, London (sekarang dikenali sebagai Deloitte Touche & Tohmatsu) di mana beliau menjalani latihan kelayakan perakaunan selama 4 tahun dan lulus sebagai Akauntan Bertauliah. Sekembalinya beliau ke Malaysia, beliau telah berkhidmat di Hanafiah Raslan & Mohammad selama 2 tahun sebelum menyertai Peremba di bawah undangan Pengerusi Peremba. Seterusnya, beliau telah menyertai Landmarks Berhad, (disenaraikan di Bursa Malaysia di bawah kategori Hotel) pada tahun 1991 dan kemudiannya dilantik sebagai Pengarah Eksekutif Landmarks Berhad dari tahun 2000 hingga Sepanjang perkhidmatannya selama 14 tahun di dalam Kumpulan Landmarks, Encik Faisal telah menimba pengalaman yang luas dalam bidang perhotelan, pelaburan hartanah, pembangunan hartanah, IPP, jagaan kesihatan dan perbankan. Selepas berkhidmat di Landmarks Berhad, Encik Faisal menyertai BinaFikir Sdn Bhd sebagai Pengarah Eksekutif dan kemudiannya menyertai Khazanah Nasional Berhad sebagai Pengarah di Bahagian Pelaburan. Beliau menyertai Pantai Holdings Berhad sebagai Pengarah Urusan Kumpulan pada 15 Mei Encik Faisal tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas. Semenjak pelantikan beliau, Encik Faisal telah menghadiri kesemua enam (6) mesyuarat Lembaga Pengarah yang diadakan selepas pelantikan beliau pada tahun kewangan yang diulas. Butir-butir mengenai jawatan pengarah di syarikat awam lain: *Pos Malaysia Berhad *Pantai Holdings Berhad

155 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PROFIL PENGARAH sambungan Encik Koshy Thomas Pengarah Bukan Bebas Bukan Eksekutif (Pengarah Pengganti kepada Encik Segarajah Ratnalingam) Encik Koshy Thomas, 50, seorang warganegara Malaysia, adalah Pengarah Bukan Bebas Bukan Eksekutif. Beliau telah dilantik sebagai ahli Lembaga Pengarah sebagai Pengarah Pengganti kepada Encik Segarajah Ratnalingam pada 4 Februari Encik Koshy telah memperolehi Ijazah Sarjana Muda Ekonomi dari Universiti Malaya pada tahun Beliau kemudiannya memperolehi Diploma Lepas Ijazah dalam Pengurusan Awam dari Institut Negara Pentadbiran Awam, Kuala Lumpur pada tahun Beliau juga telah memperolehi Sijil Lepas Ijazah dalam Perkhidmatan Sumber Manusia (Pengawasan dan Penilaian) dari RMIT University, Melbourne, Australia pada tahun Encik Koshy memulakan kerjayanya di Kementerian Kewangan sebagai Penolong Setiausaha (Bahagian Pinjaman dan Kewangan) sehingga Beliau menyertai Kementerian Pertanian sebagai Penolong Setiausaha Kanan (Bahagian Pengawasan dan Penilaian) dalam tahun Pada tahun 1996, beliau telah ditugaskan ke Kementerian Kewangan sebagai Penolong Setiausaha Kanan (Bahagian Analisis Cukai). Seterusnya, beliau dilantik sebagai Penolong Setiausaha Utama, Ketua Seksyen Penilaian Program di Bahagian Penasihat Pengurusan Kewangan, Kementerian Kewangan. Kini, beliau merupakan Timbalan Setiausaha, Bahagian Analisis Cukai, Kementerian Kewangan. Encik Koshy tidak mempunyai hubungan kekeluargaan dengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, atau mempunyai sebarang konflik kepentingan dengan Syarikat. Beliau tidak pernah disabit dengan sebarang kesalahan sepanjang 10 tahun lepas.

156 20 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PENGURUSAN KANAN Berdiri dari kiri ke kanan 1 Tuan Haji Nadza Abdul Ketua Perancangan Korporat & Perniagaan Strategik 2 Dr R. Hanafi bin Abdullah Ketua Sumber Manusia dan Pentadbiran Kumpulan 3 Datin Rohaiza binti Hashim Ketua Komunikasi Korporat 5 YM Raja Shahreen bin Raja Othman Ketua Kewangan 6 Encik Bahaman bin Kamaruzzaman Ketua Pegawai Transformasi 7 Encik Muhd Firdaus bin Azharuddin Ketua Pegawai Operasi, PosLaju dan PSH Express Sdn Bhd 4 Tuan Haji Ithnin bin Talib Ketua Keselamatan dan Penyiasatan

157 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN Datuk Abu Huraira bin Abu Yazid Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan 9 Dato Idrose bin Mohamed Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif 10 Tuan Haji Mohd. Derus bin Harun Ketua Pegawai Operasi, Datapos (M) Sdn Bhd 11 Encik Mohd. Zarif bin Hashim Ketua Pegawai Operasi, PosMel dan PosLogistik 12 Encik Mohd. Rosdeen bin Hassan Ketua Pegawai Maklumat 13 Puan Sabrina Albakri binti Abu Bakar Ketua Perundangan dan Kesetiausahaan

158 22 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 MESEJ DARIPADA PENGERUSI Para Pemegang Saham, Pelanggan dan Kakitangan, Saya dengan sukacitanya membentangkan laporan tahunan Syarikat anda bagi tahun kewangan berakhir 31 Disember Tan Sri Adam Kadir Pengerusi Pada tahun 2006, pihak pengurusan dan kakitangan Syarikat anda telah mencapai satu lagi tahun yang cemerlang. Hasil telah meningkat sebanyak 4% kepada RM822 juta, Keuntungan Sebelum Cukai meningkat sebanyak 44% kepada RM212 juta, Keuntungan Selepas Cukai meningkat sebanyak 10% kepada RM160 juta dan Pendapatan Sebelum Faedah, Susutnilai & Pelunasan meningkat sebanyak 5% kepada RM149 juta. Kesemua ini merupakan pencapaian kewangan yang belum pernah dicapai oleh Syarikat anda. Peningkatan hasil kumpulan kita berpunca terutamanya dari perniagaan PosMel, unit perniagaan strategik kita dalam perniagaan mel. Ia menyumbang 69% daripada hasil, iaitu peningkatan hasil sebanyak 4% ekoran usahausaha pemasarannya yang agresif. Peningkatan ketara dalam keuntungan sebelum cukai Kumpulan berpunca dari aktiviti-aktiviti bukan operasi seperti pendapatan faedah lebih tinggi daripada deposit tunai, pembalikan kerugian terjejas dan kesan daripada pengkelasan semula pemegangan saham kita di dalam Transmile Group Berhad, daripada syarikat bersekutu kepada syarikat pelaburan. Lembaga Pengarah dan pihak Pengurusan anda menyedari bahawa pengekalan prestasi kewangan yang cemerlang ini bukanlah mudah. Ini adalah kerana penurunan prestasi industri pos, persaingan dari perkhidmatan elektronik alternatif, pembatalan kawal selia dan tanggapan kritikal orang awam terhadap perkhidmatan kita yang telah wujud sejak beberapa lamanya. Dari segi perniagaan mel, penguasaan kita yang tiada tandingannya serta harga kompetitif perniagaan kita masih gagal untuk menghalang perkhidmatan alternatif seperti e-mel, SMS dan internet daripada bersaing dengan kita. Dari segi perniagaan kurier, PosLaju menghadapi persaingan sengit daripada penyedia perkhidmatan penghantaran asing dan tempatan. Perniagaan di kaunter pejabat pos juga semakin hilang tarikan di kalangan segmen masyarakat tertentu memandangkan pembayaran bil dan lain-lain transaksi kini boleh dibuat melalui pelbagai saluran seperti bank, saluran dalam talian mahupun telefon bimbit. Di sebalik keadaan industri yang semakin kompleks ini, Syarikat terus menunjukkan prestasi yang cemerlang dengan keputusan yang baik. Pencapaian ini mungkin tidak dicapai tanpa usaha Syarikat anda yang telah menggalakkan kakitangan untuk cekal menghadapi persaingan. PEMBANGUNAN KAKITANGAN Pos Malaysia beriltizam untuk menjadi majikan yang terpilih. Sejak dari tahun 2003, kita telah mula memupuk budaya kerja baru di kalangan kakitangan dengan menekankan kecekapan, integriti, perkhidmatan pelanggan yang baik dan penghasilan idea-idea yang inovatif. Kakitangan kita sentiasa diingatkan bahawa cara mereka bekerja akan mempengaruhi pencapaian keuntungan syarikat.

159 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN MESEJ DARIPADA PENGERUSI sambungan Pada tahun 2006, Syarikat anda telah meneruskan penilaian prestasi pengurusan kanannya dengan menggunakan Petunjuk Prestasi Utama (KPI). Pada tahun 2007, KPI ini akan dipanjangkan untuk menilai prestasi eksekutif di dalam Kumpulan bagi menanda araskan prestasi dan matlamat secara individu. Sebagai insentif kepada kakitangan, kami telah mengkaji semula struktur gaji bagi kedua-dua kakitangan bukan eksekutif dan eksekutif pada tahun 2006 untuk menambah manfaat-manfaat mereka. Di samping itu, kita juga akan meningkatkan program-program latihan kakitangan bagi memantapkan kemahiran dan kecekapan mereka. PRESTASI PERNIAGAAN PosMel telah memasarkan beberapa produk nilai tambahannya seperti Pos Ekspres (sampul surat penghantaran ekspres berbayar), bungkusan, mel iklan (admail) dan mel langsung secara agresif. Keseluruhan jumlah mel pada tahun 2006 telah meningkat sebanyak 1.9% berbanding tahun lepas. Ini membuktikan bahawa mel masih kekal sebagai medium komunikasi yang relevan. Sebahagian besar daripada jumlah ini berpunca daripada surat perniagaan dan bukannya surat peribadi. Pada tahun 2006, PosLaju memperkenalkan pengurusan berhasil di mana pihak Pengurusan telah mengalihkan fokus mereka kepada produk-produk penghantaran berkualiti tinggi dan bukan yang berkuantiti tinggi. Oleh itu, hasil PosLaju kekal stabil pada RM130 juta meskipun bilangan produk yang dikendalikan menurun sebanyak hampir 15%. Kita berharap usaha pengurusan ini akan membuahkan hasil pada tahun Segmen terpenting Kumpulan yang belum dieksploitasi sepenuhnya adalah rangkaian pejabat pos yang luas. Dengan 670 pejabat pos dan lebih daripada 5,400 saluran lain (Pos Mini, ejen pos, penjual setem dan lain-lain), rangkaian kita adalah lebih luas daripada bank yang terbesar di dalam negara. PosNiaga telah meluaskan rangkaian produknya dan kini produk dan perkhidmatan bagi 128 agensi boleh didapati di kaunter-kaunter runcit mereka. Pada tahun 2006, jumlah transaksi yang dikendalikan oleh PosNiaga meningkat sebanyak 5% kepada 99 juta. Kini, pelanggan bukan sahaja boleh membayar pelbagai jenis bil atau memperbaharui cukai jalan dan lesen mereka, malahan mereka juga boleh membeli saham amanah dan insurans. Syarikat anda juga telah menerima penggunaan kad kredit untuk membayar transaksi-transaksi tertentu di pejabat-pejabat pos kami. Syarikat kita juga telah mencapai pembaharuan dalam perdagangan elektronik. Pada tahun lepas, kita telah memperolehi pegangan di dalam PosPay Exchange Sdn Bhd, penyedia perkhidmatan pembayaran mikro dalam talian, untuk memantapkan lagi portal dalam talian internet kita iaitu PosOnline.

160 24 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 MESEJ DARIPADA PENGERUSI sambungan Tiga buah bank Hong Leong Bank, CIMB Bank dan Bank Rakyat telah bekerjasama dengan kita untuk membenarkan pemegang-pemegang akaun mereka menjalankan transaksi melalui PosOnline. Kita berpuas hati dengan prestasi transaksi pembayaran dalam talian kita pada tahun lepas yang telah meningkat sebanyak empat kali ganda kepada purata 25,000 sebulan. Pada bulan Februari 2007, kita telah melancarkan pusat beli-belah dalam talian kita yang dinamakan PosNiaga eshop, di mana pelanggan dalam talian boleh membeli antara lain, produk-produk pengguna, hadiah, aksesori komputer, buku dan majalah. PROJEK-PROJEK UTAMA Projek-projek utama merupakan elemen utama dalam transformasi kami. Objektifnya adalah untuk mempertingkatkan keupayaan operasi. Perbelanjaan modal bagi pelbagai projek pada tahun 2007 dijangka berjumlah lebih kurang RM240 juta. Pada bulan Mei 2007, kita telah melaksanakan sistem kesan dan jejak untuk PosLaju di bawah projek PITTIS (Sistem Informasi Jejak dan Kesan Intergrasi Pos). Pelaksanaan PITTIS membolehkan pengurusan data berhubung perkaraperkara kurier dipusatkan. Ia juga menggaris arus prosedur operasi tetap untuk menjadikan PosLaju lebih berorientasikan pelanggan. Kita berbangga untuk menyatakan bahawa pada tahun 2006, PosLaju telah memenangi anugerah Readers Digest Gold Trust Award bagi kategori pengangkutan/kurier udara. Pada tahun lepas, kita telah melaburkan RM69 juta bagi memperolehi tanah seluas 22 ekar di Shah Alam untuk dijadikan pusat pemprosesan mel baru kita ( MPC ). Ini merupakan satu pencapaian penting bagi projek REMOSS (Kajian Konfigurasi Semula bagi Operasi dan Sistem Mel). MPC baru ini yang disasarkan siap untuk beroperasi pada tahun 2009, akan dijadikan pusat pengisihan mel dan bungkusan negara yang menggunakan teknologi dan jentera tercanggih. Peningkatan automasi diharap dapat meminimumkan kesilapan pengisihan dan memberi lebih kepuasan kepada pelangganpelanggan melalui penghantaran surat dan bungkusan yang lebih efisien dan tepat pada waktunya. Projek PANTAS (Sistem Penerimaan Rangkaian Transaksi Automatik Pos) dilaksanakan untuk menggantikan sistem awal (tempat jualan) dan sistem akhir di semua pejabat pos dan turut merangkumi peluasan rangkaian korporat. Sistem baru ini akan menggabung dan menguruskan data dari semua pejabat pos secara lebih baik dan seterusnya mengurangkan kos pengurusan. Apabila projek PANTAS ini lengkap pada pertengahan tahun 2008, PosNiaga boleh memperkenalkan produk dan perkhidmatan baru di kaunter-kaunter mereka dengan lebih cepat. Masa menunggu di kaunterkaunter kami juga akan berkurangan.

161 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN MESEJ DARIPADA PENGERUSI sambungan KEPUASAN PELANGGAN Kita sentiasa berusaha untuk memperbaiki tahap perkhidmatan penghantaran kepada pelanggan. Pada tahun 2006, kita telah mendapatkan perkhidmatan penyelidik bebas untuk menjalankan kajian tahunan kedua ke atas tahap kepuasan pelanggan kita yang merangkumi seluruh negara. Keputusannya menunjukkan bahawa kepuasan pelanggan dalam semua bahagian perniagaan utama kita telah meningkat: 76% (2005: 75%) daripada pelanggan berpuas hati dengan perkhidmatan perniagaan mel kita; 78% (2005: 76%) daripada pelanggan berpuas hati dengan perkhidmatan perniagaan kurier kita dan 78% (2005: 76%) daripada pelanggan berpuas hati dengan perkhidmatan pejabat pos kita. Apa yang menarik tentang kajian ini adalah pendedahan bahawa para pelanggan kita lebih mementingkan kualiti perkhidmatan daripada harga. Prestasi syarikat anda dari segi standard perkhidmatan penghantaran surat turut meningkat dengan ketara, daripada 85% pada tahun 2005 kepada 90% pada tahun Kita berharap bahawa peningkatan keupayaan yang berterusan dapat menaikkan standard perkhidmatan ini kepada 94% (taraf dunia) menjelang tahun PEMBANGUNAN KORPORAT Pada tahun 2006, peristiwa terpenting bagi pemegang-pemegang saham tentunya merupakan cadangan pembayaran balik modal yang telah dijalankan. Kita akan mengembalikan lebihan tunai berjumlah lebih RM800 juta kepada anda. Cadangan ini juga akan memindahkan status penyenaraian kami kepada syarikat operasi utama kami iaitu Pos Malaysia Berhad ( PMB ). Keduadua lembaga pengarah yang sedia ada akan digabungkan menjadi satu. Dengan adanya satu lembaga pengarah sahaja, proses membuat keputusan akan dipermudahkan dan turut membantu mempercepatkan pelaksanaan rancangan transformasi kita. Cadangan ini disasarkan siap pada suku ketiga tahun Ini adalah salah satu dari pelbagai inisiatif yang dilaksanakan, selaras dengan saranan Kerajaan di dalam buku-buku berkod warnanya bagi GLC. Kesanggupan Syarikat anda untuk berubah jelas terbukti melalui pelaksanaan dan pematuhan lebih tinggi terhadap buku-buku berkod warna ini berbanding lain-lain GLC. PROSPEK Tempoh 3 tahun seterusnya adalah amat penting dan mengujakan. Ianya penting kerana selepas tempoh ini, kesemua inisiatif transformasi kita akan selesai. Ianya turut mengujakan kerana pelanggan-pelanggan boleh memanfaatkan perkhidmatan lebih baik yang diharap dapat meningkatkan pendapatan kita. Jadi, kita yakin bahawa usaha kami untuk menghadapi cabaran di masa hadapan, untuk kekal relevan dan untuk menerokai perniagaan-perniagaan baru dan seterusnya mencipta nilai untuk pemegang-pemegang saham kita sedang berjalan lancar.

162 26 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 MESEJ DARIPADA PENGERUSI sambungan Walaupun keadaan industri di masa hadapan dijangka rumit, Lembaga Pengarah, pihak pengurusan dan kakitangan anda akan kekal komited untuk melunaskan janji-janji mereka. PENGHARGAAN Pada bulan Oktober 2006, Datuk Abdul Majid Hussein telah meletakkan jawatan sebagai Pengerusi Pos Malaysia Berhad. Bagi pihak Lembaga Pengarah dan pengurusan, saya ingin mengucapkan terima kasih atas sumbangan berharga beliau. Saya juga ingin merakamkan setinggitinggi penghargaan kepada bekas Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif, Dato Ikmal Hijaz Hashim yang telah meninggalkan kita pada bulan Februari 2007 untuk menerima pelantikannya sebagai Ketua Pegawai Eksekutif Lembaga Pembangunan Wilayah Iskandar yang pertama. Sepanjang perkhidmatannya, beliau telah merangka inisiatif-inisiatif bagi rancangan transformasi kita dan membentuk pelan dan strategi perniagaan yang telah meletakkan Syarikat di kedudukannya sekarang ini. Seperti biasa, proses penggantian turut dijalankan dan bagi pihak pemegangpemegang saham, saya ingin mengalualukan pelantikan Dato Idrose Mohamed sebagai Pengarah Urusan Kumpulan/ Ketua Pengawai Eksekutif baru pada bulan April Saya yakin pengalaman berharga yang beliau perolehi semasa berkhidmat di sebuah GLC yang terkemuka sebelum ini, akan berjaya memandu kami dan memimpin Kumpulan untuk menjadi lebih cemerlang. Lembaga Pengarah dan pihak pengurusan akan memberi sepenuh sokongan kepada beliau. Saya juga ingin mengucapkan terima kasih kepada pihak pengurusan dan kakitangan atas segala usaha dan kesetiaan mereka. Akhirnya, saya ingin merakamkan penghargaan saya kepada pemegangpemegang saham yang telah menyokong kami dan saya berharap anda akan kekal bersama kami untuk menikmati hasil rancangan transformasi kami. Terima kasih. Yang ikhlas, TAN SRI ADAM KADIR Pengerusi

163 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN LEMBAGA PENGARAH POS MALAYSIA BERHAD Dari kiri ke kanan 1 Dato Idrose bin Mohamed Pengarah Urusan (Dilantik pada 18 April 2007) 2 Datuk Abu Huraira bin Abu Yazid (Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan) 3 Encik Faisal bin Ismail Pengarah (Dilantik pada 29 September 2006) 4 Dato Krishnan a/l Chinapan Pengarah 5 Dr Azizah binti Arifin Pengarah 6 Datuk Low Seng Kuan Pengarah

164 28 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 STRUKTUR KORPORAT Pos Malaysia Berhad Pada 31 Mac 2007 PENGARAH URUSAN SYARIKAT BERSEKUTU SUBSIDIARI UNIT PERNIAGAAN STRATEGIK PERKHIDMATAN SOKONGAN 42.5% CEN Sdn Bhd 100% Datapos (M) Sdn Bhd PosMel Perniagaan Mel Sumber Manusia & Pentadbiran 40% Elpos Print Sdn Bhd 50% PosPay Exchange Sdn Bhd 55% Digicert Sdn Bhd 100% Pos Takaful Agency Sdn Bhd 100% Pos Logistic - Fulserve Sdn Bhd 100% PosLaju (M) Sdn Bhd PosNiaga Perniagaan Runcit PosLaju Perniagaan Ekspres PosLogistik Perniagaan Logistik Filateli Perniagaan Filateli Teknologi Maklumat & Komunikasi Kewangan Korporat Perancangan Korporat & Perniagaan Strategik Audit Dalaman Komunikasi Korporat Perkhidmatan Pengurusan Program Perkhidmatan Pelanggan Keselamatan & Penyiasatan 100% Virtual Pos Sdn Bhd 100% PMB Properties Sdn Bhd Hartanah, Perolehan & Kontrak Perundangan & Kesetiausahaan Pengurusan Risiko 100% Philately Pos Malaysia Sdn Bhd

165 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PENGURUS-PENGURUS NEGERI 2006 POS MALAYSIA BERHAD 1. Encik Jaafar Abdul Rahman Kedah/Perlis 2. Tuan Haji Abdul Hadi Hamid Pulau Pinang 3. Encik Mohd Azizi Mohd Sanusi Perak 4. Encik Wan Sharpudin Wan Ramli Selangor 5. Tuan Haji Mohd Aziz Sulong WP Kuala Lumpur 6. Encik Lee Pow Choy Negeri Sembilan 7. Tuan Haji Sazali Muhd Din Melaka 8. Encik Shahri Jikun Johor 9. Encik Ahsim Jamat Pahang 10. Encik Quek Lim Tiong Terengganu 11. Encik Anuwar Md Akhir Kelantan 12. Encik Othman Abdullah Sarawak 13. Tuan Haji Othman Dari Sabah

166 30 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 URUTAN PERISTIWA FEBRUARI 2006 POS MALAYSIA DAN UNIVERSITI SAINS MALAYSIA MEMBENTUK PERIKATAN STRATEGIK Pada 6 Februari, Pos Malaysia dan Universiti Sains Malaysia (USM) dengan rasminya melancarkan perikatan strategik di mana Pos Malaysia akan menyediakan Perkhidmatan Pengurusan Mel Korporat kepada USM. Di bawah kerjasama ini, perkhidmatan Pengurusan Mel Korporat akan membantu USM mengurus dan melaraskan keperluan mel harian mereka secara lebih efisien dan yakin. Di majlis menandatangani perikatan ini, USM telah diwakili oleh Prof. Datuk Dzulkifli Abdul Razak, Naib Canselor sementara Pos Malaysia pula diwakili oleh Tan Sri Adam Kadir, Pengerusi serta Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan. 14 FEBRUARI 2006 POS MALAYSIA MENGELUARKAN SETEM UNTUK MEMPERINGATI ULANG TAHUN KE-100 INSTITUSI AUDIT NEGARA Pos Malaysia mengeluarkan koleksi setem dan Sampul Surat Hari Pertama sempena Ulang tahun ke-100 Institusi Audit Negara pada 14hb Februari Setem kenang-kenangan dan Sampul Surat Hari Pertama ini telah dilancarkan oleh Yang di Pertuan Agong Tuanku Syed Sirajuddin ibni Almarhum Tuanku Syed Putra Jamalullail di Pusat Konvensyen Putrajaya, Putrajaya. 24 MAC 2006 KAD PERJALANAN BULANAN RAPID KL KINI DIJUAL DI 98 PEJABAT POS Pada 24 Mac 2006, Pos Malaysia dan Rangkaian Pengangkutan Integrasi Deras Sdn. Bhd. (RAPID KL) secara rasminya melancarkan perikatan strategik untuk memudahkan orang awam membeli Kad Perjalanan Bulanan RAPID KL (MTC) dengan menjualnya di pejabatpejabat pos terpilih. RAPID KL telah diwakili oleh Encik Rein Westra, Ketua Pegawai Operasi sementara Pos Malaysia telah diwakili oleh Dato Ikmal Hijaz Hashim, Pengarah Urusan/Ketua Pegawai Eksekutif dan Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan. 17 APRIL 2006 KAD I-TALK DAN RING RING KINI TERSEDIA DI 61 PEJABAT POS Pada 17 April 2006, Pos Malaysia dan Telekom Malaysia melancarkan perikatan strategik untuk memudahkan orang awam membeli Kad I-Talk dan Kad Ring Ring dengan menjualnya di pejabat-pejabat pos terpilih. Telekom Malaysia telah diwakili oleh Dato Adnan Rofiee, Ketua Pegawai Operasi bagi TM Retail sementara Pos Malaysia telah diwakili oleh Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan.

167 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN URUTAN PERISTIWA 2006 sambungan 3 MEI 2006 PERIKATAN PERNIAGAAN STRATEGIK DALAM TALIAN ANTARA POS MALAYSIA BERHAD DAN CIMB BANK Pos Malaysia dan CIMB Bank melancarkan perikatan strategik untuk menyediakan kaedah yang mudah bagi pelanggan membayar bil dan membuat transaksi lain dalam talian. BCB-CIMB Bank telah diwakili oleh Dato Nazir Razak, Ketua Pegawai Eksekutif bagi Kumpulan CIMB sementara Pos Malaysia Berhad telah diwakili oleh Dato Ikmal Hijaz Hashim, Pengarah Urusan/Ketua Pegawai Eksekutif dan Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan MEI 2006 MALAYSIA MENGANJURKAN MESYUARAT KESATUAN POS ASIA-PASIFIK (APPU) 2006 DARI 9 MEI HINGGA 12 MEI Buat kali keduanya, Malaysia menjadi tuan rumah kepada Mesyuarat Kesatuan Pos Asia-Pasifik (APPU) 2006 yang telah diadakan di Shangri-La Hotel, Kuala Lumpur dari 9 hingga 12 Mei Anjuran bersama Kementerian Tenaga, Air dan Komunikasi, Pos Malaysia juga Suruhanjaya Komunikasi dan Multimedia Malaysia, mesyuarat ini telah dihadiri oleh lebih daripada 120 pegawai pos dari dua puluh sembilan negara Asia Pasifik yang berkumpul untuk membincangkan peningkatan kerjasama di kalangan ahli-ahli APPU bagi mengukuhkan kedudukan Asia Pasifik dan seterusnya menerajui perkhidmatan pos dan ekspres global. Majlis pembukaan Mesyuarat Kesatuan Pos Asia Pasifik (APPU) 2006 ini telah dirasmikan oleh Timbalan Menteri bagi Kementerian Tenaga, Air dan Komunikasi, YB Dato Shaziman Abu Mansur. 5 JUN 2006 POS MALAYSIA DAN SINGPOST MELANCARKAN PROMOSI BERSAMA UNTUK MENINGKATKAN TRANSAKSI MEL ANTARA SEMPADAN Pos Malaysia dan Singapore Post melancarkan promosi bersama untuk menggalakkan transaksi mel antara sempadan di kalangan pelanggan perniagaan di Malaysia dan Singapura untuk tempoh satu tahun bermula dari 1hb Jun Di bawah promosi bersama ini, perniagaan dari kedua-dua negara akan menikmati kadar menarik untuk kelas-kelas mel terpilih yang berasal dari kedua-dua negara ini.

168 32 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 URUTAN PERISTIWA 2006 sambungan 13 JUN 2006 MESYUARAT AGUNG TAHUNAN POS MALAYSIA & SERVICES HOLDINGS BERHAD Mesyuarat Agung Tahunan ke-74 Pos Malaysia & Services Holdings Berhad telah diadakan di Hotel Legend Kuala Lumpur pada 13hb Jun JULAI 2006 MENYAMBUT ULANG TAHUN KE-50 FELDA DENGAN MENGELUARKAN SETEM KENANG-KENANGAN DAN SAMPUL SURAT HARI PERTAMA Sempena Ulang Tahun ke-50 Lembaga Kemajuan Tanah Persekutuan (FELDA), setem kenang-kenangan dan Sampul Surat Hari Pertama telah dikeluarkan dan dilancarkan oleh YAB Dato Seri Najib Tun Razak, Timbalan Perdana Menteri Malaysia pada 5hb Julai Pelancaran ini turut dihadiri oleh Tan Sri Adam Kadir, Pengerusi dan Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan. 11 JULAI 2006 POS MALAYSIA DAN NATIONWIDE EXPRESS MEMBENTUK PERIKATAN PERNIAGAAN STRATEGIK Pada 11hb Julai 2006, Pos Malaysia dan Nationwide Express Sdn. Bhd. secara rasminya melancarkan perikatan strategik untuk membolehkan pelanggan membeli setem dan produk filateli di pejabat-pejabat Nationwide Express. Di majlis menandatangani perikatan ini, Nationwide Express telah diwakili oleh Cik Rozilawati Haji Basir, Ketua Pegawai Eksekutif sementara Pos Malaysia pula diwakili oleh Datuk Abdul Majid Hj Hussein, Pengerusi Pos Malaysia Berhad, Dato Ikmal Hijaz Hashim, Pengarah Urusan/Ketua Pegawai Eksekutif serta Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif /Ketua Pegawai Operasi Kumpulan.

169 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN URUTAN PERISTIWA 2006 sambungan 18 JULAI 2006 SETEM KENANG-KENANGAN GALERI SULTAN AZLAN SHAH DIKELUARKAN SEMPENA ULANG TAHUN DULI YANG MAHA MULIA SULTAN AZLAN SHAH Pos Malaysia mengeluarkan setem kenang-kenangan bertemakan Galeri Sultan Azlan Shah sempena ulang tahun Duli Yang Maha Mulia Sultan Azlan Muhibbuddin Shah ibni Al-Marhum Sultan Yussuf Izzuddin Shah Ghafarullahu-lah, Paduka Seri Sultan Perak. Duli Yang Maha Mulia Sultan telah sudi melancarkan setem-setem tersebut di Istana Iskandariah di Kuala Kangsar. Pelancaran ini dihadiri oleh DYMM Raja Permaisuri Perak, DYTM Raja Muda Perak, DYAM Raja DiHilir Perak, DYAM Raja Puan Muda Perak, Menteri Besar Perak dan temanteman rapat Duli Yang Maha Mulia Sultan. Turut hadir adalah Tan Sri Adam Kadir, Pengerusi Pos Malaysia and Services Holdings Berhad dan Dato Ikmal Hijaz Hashim, Pengarah Urusan Kumpulan/Ketua Pegawai Eksekutif Pos Malaysia. 10 OGOS 2006 PERIKATAN STRATEGIK ANTARA POS MALAYSIA DAN E-PAY (M) UNTUK MENAMBAHKAN KEMUDAHAN BAGI PENGGUNA TELEFON MUDAH ALIH Pada 10 Ogos 2006, Pos Malaysia dan E-Pay (M) Sdn. Bhd. secara rasminya melancarkan perikatan strategik untuk membolehkan pelanggan terutamanya pengguna telefon mudah alih membeli kad tambah nilai prabayar di pejabat pos dan pejabat pos mini. Pos Malaysia telah diwakili oleh Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/Ketua Pegawai Operasi Kumpulan sementara E-Pay (M) Sdn. Bhd. telah diwakili oleh Encik Simon Loh, Pengarah Urusan. Datuk Abdul Majid Haji Hussein, Pengerusi Pos Malaysia Berhad dan Dato Hassan Haji Said, Pengarah Eksekutif E-Pay (M) Sdn. Bhd. turut menghadiri majlis ini.

170 34 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 URUTAN PERISTIWA 2006 sambungan 15 OGOS 2006 SETEM KHAS DAN SAMPUL SURAT HARI PERTAMA UNTUK MERAIKAN PERAYAAN-PERAYAAN DI MALAYSIA Pada 15hb Ogos 2007, Pos Malaysia telah mengeluarkan setem dan Sampul Surat Hari Pertama khas yang bertemakan Perayaan-Perayaan di Malaysia. Setem ini telah dilancarkan oleh YB Datuk Patinggi Tan Sri Dr George Chan Hong Nam, Timbalan Ketua Menteri 1 yang juga merupakan Menteri Pembangunan Perindustrian dan Menteri Pemodenan Pertanian, Sarawak. Setem khas ini bertemakan lukisan-lukisan yang telah dihasilkan oleh kanak-kanak di peraduan melukis anjuran Pos Malaysia pada tahun ini. Majlis pelancaran ini turut dihadiri oleh Tan Sri Adam Kadir dan Datuk Abu Huraira Abu Yazid, Pengarah Eksekutif/ Ketua Pegawai Operasi Kumpulan. 9 OKTOBER 2006 SETEM KHAS BERTEMAKAN HAIWAN EKSOTIK SEPARA AKUATIK DILANCARKAN PADA HARI POS SEDUNIA 2006 Sempena Hari Pos Sedunia 2006, Pos Malaysia telah mengeluarkan setem khas dan Sampul Surat Hari Pertama yang bertemakan Haiwan Separa Akuatik pada 9hb Oktober Setem dan Sampul Surat Hari Pertama ini bertemakan imej-imej haiwan separa akuatik dan telah dilancarkan oleh YAB Dato Haji Abdul Ghani Othman, Menteri Besar Johor. Majlis pelancaran ini turut dihadiri oleh Datuk Abdul Majid Hj Hussein, Pengerusi Pos Malaysia Berhad dan Dato Ikmal Hijaz Hashim, Pengarah Urusan/Ketua Pegawai Eksekutif Pos Malaysia. 10 OKTOBER 2006 PELANCARAN KERJASAMA STRATEGIK ANTARA POS MALAYSIA DAN YAYASAN RESTU Pada 10hb Oktober 2006, Pos Malaysia dan Yayasan Restu secara rasminya melancarkan perikatan strategik bagi menyediakan cara yang mudah dan efisien untuk menghantarkan Quran dan produk-produk seni Islam kepada pelanggan-pelanggan di seluruh negara. Majlis menandatangani perikatan ini telah disaksikan oleh YAB Dato Seri Abdullah Ahmad Badawi, Perdana Menteri Malaysia dan YAB Dato Seri Dr Mohd Khir Toyo, Menteri Besar Selangor.

171 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN URUTAN PERISTIWA 2006 sambungan 2 NOVEMBER 2006 POS MALAYSIA MENYAMBUT HARI RAYA AIDILFITRI DAN DEEPAVALI BERSAMA KAKITANGAN, PELANGGAN KORPORAT DAN WAKIL-WAKIL MEDIA Pos Malaysia telah menyambut Hari Raya Aidilfitri dan Deepavali bersama lebih 4,000 kakitangan, pelanggan korporat dan wakil media di ibu pejabatnya di Kompleks Dayabumi. Acara ini telah berlangsung selama dua hari berturut-turut iaitu pada 2hb November bersama pelanggan korporat dan wakil media dan pada 3hb November 2006 bersama pengurusan dan kakitangan Pos Malaysia. 4 DISEMBER 2006 SETEM KENANG-KENANGAN PERHIMPUNAN AGUNG PERSEKUTUAN VETERAN SEDUNIA Pos Malaysia telah mengeluarkan setem kenang-kenangan dan Sampul Surat Hari Pertama bertemakan Perhimpunan Agung Persekutuan Veteran Sedunia pada 4 Disember Setem kenang-kenangan dan Sampul Surat Hari Pertama ini bertemakan imej-imej yang berkaitan dengan Persekutuan Veteran Sedunia dan telah dilancarkan oleh YAB Dato Seri Najib Tun Razak, Timbalan Perdana Menteri Malaysia semasa pembukaan Perhimpunan Agung WVF di Pusat Konvensyen Kuala Lumpur. 19 DISEMBER 2006 POS MALAYSIA MEWUJUDKAN KERJASAMA ANTARABANGSA STRATEGIK DENGAN VENEZUELA POST (IPOSTEL) Pos Malaysia dan Postal Telegraphic Institute of Venezuela (IPOSTEL) telah menandatangani Memorandum Persefahaman untuk menjalankan kajian kebolehlaksanaan bagi meningkatkan kerjasama dua hala dan menggalakkan aliran perdagangan dan barang-barang antara rantau Asia dan Amerika Tengah/Selatan. Majlis menandatangani perjanjian ini telah diadakan pada 19hb Disember 2006 di Caracas, sempena lawatan rasmi Perdana Menteri Malaysia, YAB Dato Seri Abdullah Ahmad Badawi, ke Venezuela. Majlis ini turut disaksikan oleh Presiden Venezuela, Encik Hugo Chavez. Di majlis menandatangani Memorandum Persefahaman ini, IPOSTEL telah diwakili oleh Encik Daniel Guillermo, Naib Presiden sementara Pos Malaysia pula diwakili oleh Tan Sri Adam Kadir, Pengerusi Pos Malaysia & Services Holdings Berhad. 28 DISEMBER 2006 MENYOKONG EKSPEDISI KUTUB KE KUTUB MALAYSIA 2006 / 2007 MELALUI SETEM EDISI KHAS DAN POSKAD EKSKLUSIF Pada 28hb Disember 2006, setem khas dan Sampul Surat Hari Pertama yang bertemakan Ekspedisi Kutub ke Kutub (Pengalaman di Kutub Selatan) di samping poskad eksklusif bertemakan Kutub Utara: Misi Kutub ke Kutub 2006/2007, telah dikeluarkan. Setem, Sampul Surat Hari Pertama dan poskad ini telah dilancarkan oleh YAB Dato Seri Mohd Najib Tun Abdul Razak, Timbalan Perdana Menteri Malaysia.

172 BERITA-BERITA MENGENAI POS MALAYSIA

173 BERITA-BERITA MENGENAI POS MALAYSIA

174 38 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PENCAPAIAN KORPORAT HARGA SAHAM HARGA SAHAM (RM) JAN FEB MAC APR MEI JUN JUL AUG SEP OKT NOV DIS

175 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PENCAPAIAN KORPORAT sambungan HASIL Pada tahun 2006, Kumpulan telah mencatatkan hasil operasi sebanyak RM821.8 juta iaitu pertumbuhan sebanyak RM34.8 juta atau 4.4% berbanding RM787.0 juta pada tahun lepas. Peningkatan ini berpunca terutamanya oleh sumbangan lebih tinggi sebanyak RM20.9 juta atau 4.0% daripada PosMel yang juga merupakan penyumbang hasil terbesar Kumpulan. Peningkatan ini adalah sejajar dengan peningkatan berterusan dalam jumlah mel sebanyak 1.9% kepada 1.3 bilion item. Peningkatan ini turut disebabkan oleh sumbangan lebih tinggi dari PosLaju dan PosNiaga, masing-masing menyumbang 8.3 juta atau 6.8% dan RM5.7 juta atau 6.0%. Ini adalah sejajar dengan sumbangan lebih tinggi oleh setiap item kurier PosLaju dan peningkatan dalam bilangan transaksi yang diuruskan oleh PosNiaga iaitu sebanyak 4.5 juta atau 4.8%. DANA PEMEGANG SAHAM Dana pemegang saham bertambah sebanyak RM113.1 juta atau 7.2%, kepada RM1,685.7 juta. Ini berpunca terutamanya daripada keuntungan lebih tinggi bagi tahun ini sebanyak RM160.3 juta. Bayaran dividen berjumlah RM55.6 juta telah dibuat pada tahun ini.

176 40 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PENCAPAIAN KORPORAT sambungan JUMLAH ASET KETARA Pada tahun 2006, jumlah aset ketara meningkat sebanyak RM68.1 juta atau 3.4% kepada RM2,074.0 juta. Ini disebabkan terutamanya oleh peningkatan dalam tunai dan setara tunai serta dalam pelaburan, masing-masing sebanyak RM20.9 juta dan RM36.9 juta. Pada tahun 2006, tunai dan setara tunai meningkat, sejajar dengan keputusan positif yang dicatatkan oleh Kumpulan. Di samping itu, pelaburan meningkat sebanyak RM36.9 juta yang berpunca terutamanya oleh keuntungan yang diperolehi daripada pencairan syarikat bersekutu dan bahagian daripada syarikat bersekutu, masing-masing berjumlah RM22.8 juta dan RM21.5 juta. PENDAPATAN SESAHAM (ASAS) Pada tahun 2006, pendapatan sesaham meningkat sebanyak 8.7% kepada 31.12, sejajar dengan peningkatan keuntungan selepas cukai sebanyak RM14.9 juta atau 10.2% kepada RM160.3 juta pada tahun 2006.

177 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PENCAPAIAN KORPORAT sambungan ANALISIS KEUNTUNGAN Keuntungan sebelum cukai sebanyak RM211.8 juta bagi tahun kewangan berakhir 2006 menggambarkan peningkatan ketara sebanyak RM64.9 juta atau 44.2% berbanding RM146.9 juta yang dicatatkan pada tahun Pertumbuhan hasil sebanyak RM34.8 juta tau 4.4% berbanding RM787.0 juta pada tahun lepas telah memperbaiki keuntungan sebelum cukai Kumpulan. Bagaimanapun, keuntungan operasi menurun sedikit sebanyak RM3.6 juta atau 3.5% ekoran peningkatan dalam kos operasi sebanyak RM38.5 juta atau 5.6%. Ini berpunca terutamanya oleh penyemakan struktur gaji sebanyak RM30.9 juta yang dimasukkan di dalam kos operasi Kumpulan di bawah Perjanjian Kolektif baru, untuk mengimbangkan kesan latihan VSS yang telah tamat pada tahun ini. Kos operasi turut meningkat ekoran kos pengangkutan yang lebih tinggi sebanyak RM2.8 juta atau 34.7%, sejajar dengan caj pengangkutan air dan kos bahan api yang lebih tinggi. Jika kesan daripada struktur gaji baru tidak diambil kira, Kumpulan mungkin mencatatkan keuntungan operasi sebanyak RM129.9 juta iaitu peningkatan sebanyak RM27.3 juta atau 26.6% berbanding RM102.7 juta pada tahun lepas. Meskipun keuntungan operasi menurun, keuntungan sebelum cukai Kumpulan terus meningkat yang berpunca terutamanya oleh peningkatan dalam pendapatan faedah sebanyak RM11.0 juta atau 30.3% ekoran penempatan dan purata kadar faedah yang lebih tinggi pada tahun 2006 serta keuntungan yang diperolehi daripada pencairan syarikat bersekutu berjumlah RM22.8 juta. Pencairan ini berlaku ekoran latihan penempatan swasta yang dijalankan oleh syarikat bersekutu tersebut yang memerlukan kepentingan ekuiti Kumpulan di dalamnya dicairkan. Peningkatan dalam keuntungan sebelum cukai turut berpunca daripada pembalikan kerugian pelaburan sebanyak RM11.3 juta berbanding peruntukan yang dibuat untuknya sebanyak RM18.4 juta pada tahun sebelumnya. Keuntungan selepas cukai sebanyak RM160.3 juta bagi tahun kewangan berakhir 2006 mewakili penambahan lebih kecil sebanyak RM14.9 juta atau 10.2% berbanding peningkatan ketara dalam keuntungan sebelum cukai. Ini adalah konsisten dengan kadar cukai efektif yang lebih tinggi pada tahun 2006 iaitu sebanyak 27.3% berbanding hanya 5.0% pada tahun Ini pula adalah konsisten dengan pembalikan lebihan peruntukan cukai sebanyak RM9.8 juta serta pendapatan pengecualian cukai yang lebih tinggi pada tahun 2005.

178 42 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 PENCAPAIAN KORPORAT sambungan ASET KETARA BERSIH SESAHAM Aset ketara bersih sesaham bertambah sebanyak 5.9% kepada RM3.25 sesaham, sejajar dengan peningkatan dalam dana pemegang saham sebanyak RM113.1 juta kepada RM1,685.7 juta pada tahun HASIL SETIAP PEKERJA & KOS TENAGA KERJA SETIAP PEKERJA Pada tahun 2006, hasil setiap kakitangan meningkat sebanyak 4.9% disebabkan hasil operasi yang lebih tinggi sebanyak 4.4% berbanding tahun lepas. Kos tenaga kerja setiap kakitangan turut meningkat sebanyak 1.4%, sejajar dengan penyemakan struktur gaji sebanyak RM30.9 juta di bawah Perjanjian Kolektif baru, untuk mengimbangkan kesan latihan VSS yang telah tamat pada tahun ini.

179 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN PENCAPAIAN KORPORAT sambungan HASIL SETIAP SBU PosMel kekal sebagai penyumbang hasil tertinggi Kumpulan dengan sumbangan sebanyak 69% daripada jumlah hasil Kumpulan. PECAHAN KOS Komponen kos terbesar adalah kos berkaitan kakitangan yang membentuk 59.7% daripada jumlah kos operasi. Jumlah ini adalah lebih rendah daripada sumbangan tahun lepas sebanyak 62.5% dan berpunca terutamanya oleh kos pengangkutan lebih tinggi sebanyak 15.4% daripada jumlah kos operasi, berbanding 12.1% pada tahun 2005 ekoran caj pengangkutan udara dan kos bahan api yang lebih tinggi.

180 44 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF Dato Idrose bin Mohamed Pengarah Urusan Kumpulan / Ketua Pegawai Eksekutif POSMEL Bahagian mel kekal sebagai sumber hasil utama dan membentuk 69% daripada hasil Kumpulan bagi tahun Keseluruhan jumlah mel terus menunjukkan kenaikan dan meningkat sebanyak 1.9% kepada 1.3 bilion item. Mel Surat Mel surat mencatatkan pertumbuhan jumlah sebanyak 1.6% bagi tahun Meskipun media elektronik diguna secara meluas pada masa kini, mel kekal relevan dan tetap diyakini oleh orang awam. PosEkspres Pada tahun 2006, jumlah PosEkspres meningkat pada kadar pertumbuhan yang sama seperti tahun sebelumnya iaitu sebanyak 7%. PosMel turut melakukan beberapa pembaharuan dengan menjual sampul surat berbayar PosEkspres di stesen-stesen Shell di sekitar Lembah Kelang. Bungkusan Pada tahun 2006, bungkusan mencatatkan pertumbuhan sebanyak 2%. Sistem jejak dan kesan telah dipasang untuk mempertingkatkan kebolehupayaan perkhidmatan ini. Pelaburan tersebut terbukti membuahkan hasil apabila kami berjaya menjalinkan satu perikatan strategik dengan sebuah syarikat Jepun untuk menghantar bungkusan perniagaan ke perniagaan (B2B) di Malaysia. Mel Pemasaran Langsung/Mel Kreatif Produk Mel Kreatif berpotensi besar untuk meningkat. Dalam tahun ini, beberapa seminar interaktif telah dikendalikan untuk mendidik organisasi-organisasi dan syarikatsyarikat tentang keberkesanan menggunakan Mel Kreatif sebagai alat pemasaran. Meskipun agak baru di pasaran Malaysia, Mel Kreatif telah menerima maklumbalas yang positif daripada para pelanggan dan dijangka akan terus meningkat di masa hadapan. Mel Iklan (Admail) Pada tahun 2006, Mel Iklan (Admail) merakamkan pertumbuhan ketara sebanyak 55% berbanding tahun sebelumnya. Meskipun terdapat persaingan sengit bagi produk ini, Mel Iklan terus meningkat kerana perkhidmatan kami diyakini dan mempunyai liputan yang luas di seluruh negara. Perkhidmatan Mel Korporat (CMS) Perkhidmatan ini turut menarik minat dan menerima maklumbalas yang positif daripada organisasiorganisasi terkemuka. Setakat ini, terdapat lebih daripada 30 bilik mel di seluruh Malaysia yang menyediakan perkhidmatan kepada kampuskampus universiti dan bangunanbangunan pencakar langit. PosMel turut menyediakan kakitangan yang khusus untuk mengendalikan semua bilik mel korporat. Perancangan sedang dibuat untuk membina bilikbilik mel dengan ciri-ciri perkhidmatan setempat bagi memenuhi semua keperluan pos organisasi-organisasi tertentu.

181 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Pusat Mel dan Bungkusan Nasional Dengan penyempurnaan kajian konfigurasi semula rangkaian pada tahun 2005, Pos Malaysia telah memulakan fasa pelaksanaan dengan membeli bangunan dan tanah seluas 22 ekar di Seksyen 21, Shah Alam. Kawasan ini akan dibangunkan sebagai Pusat Pemprosesan Mel (MPC Nasional) yang akan berfungsi sebagai pusat isihan mel dan bungkusan bagi seluruh Malaysia. MPC Nasional baru ini adalah sebahagian daripada usaha kami untuk membawa aktiviti-aktiviti pemprosesan mel setara dengan standard dunia. Beberapa MPC yang sedia ada sekarang ini akan disatukan untuk memanfaatkan peluang skala ekonomi yang ada terutamanya di dalam kadar penggunaan mesin. Fokus di Masa Hadapan Sementara penyediaan infrastruktur dijalankan, PosMel akan terus menekankan peningkatan prestasi penghantaran untuk melengkapkan improvisasi keseluruhan rangkaian mel. Latihan dan pembangunan pasukan penghantaran atau posmen akan terus menjadi fokus utama kerana bagi kami, pembangunan tenaga manusia akan memberi manfaat kepada pelanggan yang dihargai. Kami juga akan terus membina pertalian rapat dengan komuniti di samping bekerjasama dengan Jawatankuasa-Jawatankuasa Desa, Kumpulan-Kumpulan Penduduk dan Jawatankuasa-Jawatankuasa Pembangunan. MPC ini dijangka dapat membantu meningkatkan tahap automasi daripada 20% kepada 70%.

182 46 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan POSLAJU Meskipun tahun 2006 adalah mencabarkan, PosLaju kekal sebagai pemimpin pasaran bagi pasaran domestik dengan mencatatkan hasil sebanyak RM130.1 juta. HASIL TAHUNAN POSLAJU Sejajar dengan strategi kami untuk meluaskan segmen pasaran bagi Perniagaan ke Perniagaan (B2B) dan Perniagaan ke Pelanggan (B2C), hasil yang dijana daripada pelanggan korporat meningkat daripada RM68.6 juta pada tahun 2005 kepada RM70.3 juta pada tahun Pelangganpelanggan kami terdiri daripada sektor automotif, perkilangan, perbankan dan perniagaan. Bagaimanapun, hasil yang dijana daripada penghantaran dokumen menurun daripada RM63.4 juta pada tahun 2005 kepada RM59.9 juta pada tahun Ini kerana institusiinstitusi kewangan menguruskan pembaharuan kad kredit pada jumlah yang lebih rendah dalam tahun Kelebihan PosLaju adalah terletak pada 38 buah rangkaian cawangannya yang turut mendapat sokongan dari 670 pejabat pos di seluruh negara.

183 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Bilangan cawangan PosLaju bertambah sebanyak 3 buah daripada 35 cawangan pada tahun Cawangan-cawangan baru PosLaju ini terdapat di Sitiawan, Klang dan Rawang. PosLaju akan terus memperbaiki perkhidmatan operasi dan penghantarannya dengan menambahkan bilangan van dan motosikal yang kini terdiri daripada 431 van dan 327 motosikal yang digunakan oleh 944 kakitangan penghantaran. HASIL UNTUK BARANG DAGANGAN DAN DOKUMEN Pada tahun 2006, PosLaju telah meningkatkan perkhidmatan nilai tambahannya dengan memperkenalkan perlindungan insurans dan produk pembungkusan yang lebih berkualiti. Bahan pembungkusan ini termasuk sampul surat, kotak dan tiub.

184 48 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Pembangunan dan Inisiatif Baru pada Tahun 2007 PosLaju akan memulakan proses penyusunan semula perniagaan yang melibatkan penyusunan semula keseluruhan proses operasi termasuk memperkenalkan pengimbas dan sistem jejak dan kesan baru melalui projek PITTIS. oleh PosNiaga pada tahun 2006 meningkat sebanyak 5% kepada 99 juta. Peningkatan ini terutamanya berpunca daripada penambahan kutipan pembayaran bil. Pada tahun 2006, 15 agensi baru telah memulakan perkhidmatan di kaunter kami untuk menambahkan bilangan agensi kepada 128 kesemuanya. BILANGAN TRANSAKSI POSNIAGA PosLaju akan meluaskan lagi rangkaian dan liputan penghantarannya dengan membuka 5 lagi cawangan pada tahun Kami juga akan memperkenalkan pakaian seragam baru untuk kakitangan kurier kami dan kini sedang meningkatkan taraf kaunterkaunter perkhidmatan di semua pusat PosLaju. POSNIAGA PosNiaga menawarkan perkhidmatan pos, pembayaran bil, kiriman wang, pembaharuan cukai jalan dan lesen memandu di samping pembelian amanah saham dan produk insurans melalui rangkaian runcit kami. Bilangan transaksi yang diuruskan

185 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Jumlah transaksi pembayaran bil dalam talian PosNiaga turut meningkat daripada 5,000 kepada 25,000 sebulan. Sepanjang tahun ini, 3 bank telah bekerjasama dengan PosOnline dan 34 agensi baru telah melanggani perkhidmatan dalam talian kami. Pusat Pembayaran Setempat Strategi utama PosNiaga adalah untuk memanfaatkan rangkaiannya yang luas untuk menjadi pusat pembayaran setempat bagi pelangganpelanggannya dengan menawarkan produk dan perkhidmatan pos dan bukan pos. Di dalam ucapan Belanjawan 2007, Perdana Menteri telah mengiktiraf Pos Malaysia sebagai salah satu agensi kutipan utama untuk mempermudahkan pembayaran bil seperti bil elektrik, telefon dan air dan turut bersetuju untuk melanjutkan perkhidmatan di pejabat-pejabat pos supaya turut merangkumi pembayaran bil lain seperti cukai tanah, cukai taksiran dan caj-caj pembetungan. Pada November 2006, Jabatan Pengangkutan Jalan memberi kelulusan kepada Pos Malaysia untuk menawarkan perkhidmatan pembaharuan cukai jalan dan lesen di 96 cawangan baru dan ini menjadikan bilangan cawangan yang menawarkan perkhidmatan ini kepada 584 kesemuanya. Ini membuktikan keyakinan Kerajaan terhadap Pos Malaysia sebagai saluran penting yang boleh membantu memperbaiki sistem penyampaian perkhidmatan awam. Cawangan Pejabat Pos Yang Mudah Dikunjungi Dan Mudah Dihubungi Pada tahun 2006, 7 pejabat pos dan 64 Pos Mini baru telah dibuka. Pos Malaysia memiliki bilangan cawangan yang terbesar, hampir dua kali ganda bilangan cawangan yang dimiliki oleh bank tempatan terbesar di Malaysia. 298 atau lebih kurang 31% daripada 969 jumlah cawangan kami dikendalikan oleh pengusaha pihak ketiga ( Pos Mini ). Pengusahapengusaha ini menjual produk-produk pos yang sesuai dengan perniagaan di cawangan-cawangan mereka Selain daripada pengendali Pos Mini, terdapat juga 291 ( Wakil Pos ) yang dilantik oleh Pos Malaysia untuk menjual produk-produk pos terpilih seperti setem dan wang pos. Beberapa buah pejabat pos telah ditempatkan di dalam kompleks belibelah. Ini dibuat atas permintaan pengurusan kompleks belibelah tersebut yang bertujuan memanfaatkan perkhidmatan dan produk pos di kompleks-kompleks mereka. LIPUTAN RANGKAIAN POSNIAGA: Pejabat Pos 671 Pos Mini 298 Wakil Pos 291 Penjual Setem 4,902 Pejabat Pos Bergerak 3 Pejabat Pos yang menguruskan pembaharuan cukai jalan/lesen memandu Pejabat Pos di kompleks beli-belah Pejabat Pos yang melanjutkan perkhidmatan sehingga 10 mlm Pejabat Pos yang dibuka pada hari Ahad (tidak termasuk Kelantan, Terengganu dan Kedah)

186 50 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan PERKEMBANGAN PENTING Pembayaran Dalam Talian Portal transaksi internet Pos Malaysia yang dikenali sebagai PosOnline telah ditubuhkan pada bulan Julai 2004 dan boleh digunakan oleh pelanggan 24 jam sehari, 7 hari seminggu. Pelanggan boleh melakukan transaksi melalui PosOnline pada bila-bila masa dan dari mana-mana sahaja asalkan mereka memiliki akses internet. Pada tahun ini, Pos Malaysia telah menyertai kerjasama strategik dengan CIMB Bank, Bank Rakyat dan PosPay untuk memberi pelanggan kemudahan membayar bil dan melakukan transaksi lain melalui PosOnline. Kerjasama ini memberi kemudahan kepada pemegang akaun bank masing-masing untuk mengakses PosOnline dengan menyambungkan enjin pembayaran mereka kepada laman web PosOnline. Para pelanggan bank-bank tersebut kini memiliki akses kepada lebih 60 syarikat penerima dan boleh membayar bil-bil mereka seperti bil utiliti, bil pascabayar telekomunikasi, bil Astro, pembayaran ansuran sewa beli, zakat dan membuka/menambah nilai Akaun Deposit Pesanan Tetap (SODA). PROSES PEMBANGUNAN YANG BERTERUSAN Mempertingkatkan Kaedah Pembayaran Di Pejabat Pos Demi kemudahan para pelanggan, kita telah memperluaskan kaedah pembayaran dan kini 12 cawangan perintis boleh menerima pembayaran melalui kad kredit untuk transaksi insurans bernilai tinggi. Penambahan terminal kad kredit di lain-lain cawangan akan dilaksanakan secara berperingkat pada tahun Mempertingkatkan Perkhidmatan Pelanggan Kaji selidik yang dilakukan oleh syarikat penyelidikan bebas menunjukkan bahawa 76% daripada pelanggan PosNiaga berpuas hati dengan perkhidmatan kaunternya. Ini merupakan peningkatan sebanyak 5% berbanding tahun lepas. PosNiaga akan menggunakan maklum balas daripada kaji selidik ini untuk memperbaiki bahagian-bahagian yang paling penting bagi pelanggan. PosNiaga turut memulakan kempen Mesra Pelanggan di semua pejabat pos untuk meningkatkan taraf perkhidmatan di kalangan kakitangan kaunter. Aktiviti Menjana Hasil Daripada Perniagaan Semasa PosNiaga akan terus meluaskan aktiviti pendapatan berasaskan yuran. Dengan penambahan 96 pejabat pos yang menawarkan perkhidmatan JPJ, PosNiaga boleh menambahkan hasil dengan menguruskan lebih banyak pembaharuan cukai jalan dan lesen memandu disamping menawarkan polisi-polisi insurans kenderaan. Buat masa ini, bahagian pasaran kiriman wang PosNiaga adalah kecil tetapi ia berpotensi untuk berkembang. Untuk memanfaatkan pertumbuhan ketara di dalam kiriman wang antarabangsa, PosNiaga sedang mempertingkatkan sistem pembayaran bagi bersaing dengan bank dan lain-lain pengendali swasta untuk menyediakan perkhidmatan kiriman wang antarabangsa yang lebih pantas, murah dan selamat untuk para pelanggan.

187 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Membangunkan Sumber Hasil Baru PosNiaga akan berusaha untuk memasuki segmen pelanggan yang belum diterokai dengan menawarkan produk dan perkhidmatan kewangan termasuk kredit mikro dan produk amanah saham lain. Peranan PosNiaga adalah untuk mempromosikan dan memasarkan produk dan perkhidmatan bank/syarikat amanah saham lain di pejabat-pejabat pos. PosNiaga juga sedang menilai potensi yang ada dalam penawaran produk insurans dan takaful lain yang dirangka khas untuk pelanggan yang datang berjumpa terus ( walk-in ) dengan kami. Melabur Di Dalam Pembaharuan Proses PosNiaga sentiasa berusaha untuk memudahkan para pelanggan dengan menambah saluran pembayaran. Kini PosNiaga sedang menilai kemungkinan memasang Terminal Layan Diri di cawangan-cawangan yang sibuk dan lain-lain bahagian bertrafik tinggi. Sebahagian usaha untuk menggalakkan pertumbuhan hasil termasuk menyediakan sistem kaunter baru yang kukuh dan efisien di semua pejabat pos kami. Kami akan menggunakan aktivitiaktiviti menjana hasil dan pembaharuan proses serta sokongan penuh agensiagensi kami dan komitmen yang diberi oleh kakitangan kami untuk mencapai lebih kejayaan. Pandangan Masa Depan Seterusnya, PosNiaga akan menumpukan perhatian untuk memanfaatkan liputan rangkaian kami dan mengekalkan pertumbuhan pendapatan melalui aktiviti-aktiviti menjana hasil, mengoptimumkan kos di samping meluaskan rangkaian produk dan perkhidmatan yang ditawarkan di pejabat-pejabat pos. POSLOGISTIK 2006 merupakan tahun yang mencabar bagi PosLogistik. Sepanjang tahun ini, PosLogistik mula menyediakan perkhidmatan pengangkutan udara antara Semenanjung dan destinasidestinasi terpilih di Malaysia Timur yang sebelum ini dikendalikan oleh pihak ketiga. Dengan keupayaan khusus ini, PosLogistik semakin komited untuk memperbaiki tahap perkhidmatannya dan pada masa yang sama berpeluang untuk menambahkan hasil dengan menawarkan ruang kargo udara premium oleh pengangkutan udaranya ke sektor Sabah dan Sarawak. Pada tahun 2006, PosLogistik telah menghantarkan lebih daripada 7,600 tan produk pos ke Sabah dan Sarawak manakala lebih kurang 1,500 tan kargo telah dihantar kepada pelanggan luar di pelbagai destinasi merentasi Laut Cina Selatan.

188 52 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN 2006 ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Perkhidmatan yang Ditawarkan PosLogistik menyediakan 5 van, 22 lori serta 4 pesawat udara untuk memenuhi keperluan para pelanggannya di 28 destinasi di Malaysia. Kami menawarkan rangkaian perkhidmatan yang luas. Antaranya termasuk logistik masuk dan keluar, pelepasan kastam, dokumentasi import dan eksport, pengangkutan darat dan udara, saluran pengagihan pukal di samping khidmat penyediaan gudang. Pusat PosLogistik di Pusat Mel dan Kurier, KLIA adalah pusat perkhidmatan setempat yang menawarkan semua perkhidmatan yang ada. Di samping menyediakan perkhidmatan kepada pelanggan di dalam negara, PosLogistik turut menyediakan perkhidmatan kepada 21 pelanggan luar iaitu 14 pelanggan PMB dan 7 Ejen Jualan Pelanggan Poslogistik (CSA) untuk kargo udara. Rancangan Masa Hadapan Seterusnya, PosLogistik akan mengambil langkah-langkah untuk meluaskan rangkaiannya dan menyediakan perkhidmatan ke destinasi-destinasi lain di samping meningkatkan tahap kecekapan dan perkhidmatan melalui pendekatan sistem bersepadu. Strategi PosLogistik bagi tahun 2007 dan tahun-tahun seterusnya adalah meneruskan pemasaran ruang kargo udara dan perkhidmatan pengagihan bagi industri-industri khusus seperti automotif, kosmetik dan elektronik di samping menawarkan penyelesaian logistik bagi makanan halal. Kami sedang berbincang dengan beberapa syarikat terkemuka di dalam pasaran untuk mendapatkan pelanggan luar yang baru. PSH EXPRESS SDN BHD PSH Express terlibat dalam kurier antarabangsa dan beroperasi di bawah jenama asiaxpress TM. Ia menawarkan rangkaian perkhidmatan kurier yang luas seperti Priority Xpress, Economy Xpress dan Diplomatic Xpress ke lebih 232 destinasi antarabangsa. Ia turut menawarkan penyelesaian kurier domestic dan penyelesaian mel korporat. Para pelanggan juga turut menikmati perkhidmatan nilai tambahan termasuk Sistem Penyelesaian Khusus Berasaskan Web, Jaminan Wang Dikembalikan, Penjejakan Proaktif, Laporan Khusus, Pusat Perhubungan Setempat dan khidmat nasihat berhubung penghantaran. Prestasi Kewangan Pada tahun 2006, asiaxpress TM telah mencatatkan hasil sebanyak RM2.4 juta berbanding RM0.3 juta pada tahun Penghantaran antarabangsa menyumbang sebanyak 97% daripada jumlah hasil. Keuntungan daripada operasi bertambah sebanyak 803% kepada RM0.6 juta pada tahun kewangan 2006 berbanding tahun sebelumnya. Sejajar dengan strateginya untuk menumpukan perhatian kepada pelanggan korporat, senarai pelanggan asiaxpress TM terdiri daripada kementerian dan agensiagensi kerajaan, firma-firma guaman, syarikat-syarikat minyak dan gas, syarikat kejuruteraan dan perindustrian kimia serta kolej-kolej. Pada tahun 2006, asiaxpress TM memulakan usaha untuk membuka Pusat Perkhidmatan Sedunia asiaxpress TM di pejabat-pejabat pos terpilih. Setakat ini, Pusat

189 POS MALAYSIA & SERVICES HOLDINGS BERHAD LAPORAN TAHUNAN ULASAN OPERASI PENGARAH URUSAN KUMPULAN / KETUA PEGAWAI EKSEKUTIF sambungan Perkhidmatan Sedunia asiaxpress TM telah dibuka di Pejabat Pos Besar Kuala Lumpur, Pejabat Pos Subang Jaya dan Pejabat Pos Kelana Jaya. Pusat-pusat perkhidmatan ini bertujuan memberi peluang kepada pelanggan yang datang ke pejabat Pos untuk menikmati pengalaman mengguna perkhidmatan asiaxpress TM disamping menambahkan bilangan lagi pusat perkhidmatan bagi pelangganpelanggan asiaxpress TM. SUMBER MANUSIA Jumlah kakitangan pada tahun 2006 adalah 15,189 orang yang terdiri daripada eksekutif dan bukan eksekutif, masing-masing membentuk 2% dan 98%. Perhubungan Kakitangan Perjanjian Bersama antara Pos Malaysia dan tujuh Kesatuan Dalaman Syarikat yang mewakili kakitangan bukan eksekutif telah disempurnakan dan diluluskan oleh Kementerian Kewangan (MOF) pada November Fokus utamanya adalah pembayaran pelarasan gaji sebanyak 5% bagi semua pekerja dan pelarasan struktur gaji untuk pelbagai peringkat kakitangan bukan eksekutif. Pada tahun 2006, terma dan syarat perkhidmatan bagi kakitangan esekutif turut disemak semula dan diluluskan oleh Kementerian Kewangan. Projek Pembangunan Modal Insan yang Penting Sejajar dengan usaha Kerajaan untuk menangani masalah pengangguran, Pos Malaysia telah menjalankan Program Pengurusan Siswazah (GMP). 106 siswazah telah menjalani penilaian selama 5 hari di Institut Latihan Pos di Bangi di mana kemahiran serta keupayaan mental dan fizikal mereka telah diuji. 67 calon yang berjaya telah dipilih untuk menjalani program latihan selama 4 bulan di SBU dan jabatan sokongan tertentu. Pada tahun 2006, 291 kursus latihan telah dijalankan di Institut Latihan Pos yang melibatkan 6,618 kakitangan. Kursus ini merangkumi semua bahagian seperti kemahiran pengurusan, teknikal, kualiti perkhidmatan, kesihatan, keselamatan dan pemakaian komputer.