BASIS OF PREPARATION

The Interim Financial Report has been prepared using historical cost basis except for certain financial assets and liabilities.
The Interim Financial Report is unaudited and has been prepared in accordance with the requirements of FRS 134, Interim Financial Reporting and paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities Berhad.

The Interim Financial Report should be read in conjunction with the Audited Annual Financial Statements for the year ended 31 March 2008. The explanatory notes attached to the Interim Financial Report provide an explanation of the events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the year ended 31 March 2008.

Changes in Accounting Policies

The significant accounting policies adopted are consistent with those of the Audited Annual Financial Statements for the year ended 31 March 2008 except for the early adoption of Financial Reporting Standard (FRS) 139, Financial Instruments: Recognition and Measurement beginning on 1 April 2008.

The adoption of the abovementioned FRS does not result in significant changes in accounting policies of the Group, other than as highlighted below:

FRS 139, Financial Instruments: Recognition and Measurement

In line with PETRONAS Group of Companies, the company voluntarily adopts FRS139 for the financial year beginning 1 April 2008, to enable the company’s financial statements to be comparable with other multinational companies and in accordance with International Financial Reporting Standards (IFRS). FRS 139 provides guidance for the measurement of financial instruments. Depending on the categorization applied for each individual financial asset and liability, some financial assets and liabilities will need to be fair valued and others will need to be stated at amortised cost. The amortised cost of a financial asset of financial liability is the amount at which the financial asset of financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment of uncollectibility. FRS 139 prescribed prospective application for first time adoption.

AUDIT QUALIFICATION

Not applicable.

SEASONAL OR CYCLICAL FACTORS

The Group’s operations in relation to sales volume is not significantly affected by seasonal or cyclical fluctuations of the business/industry.

None.

There were no material changes in accounting estimates in the current quarter.

Outstanding commitments in respect of capital expenditure at balance sheet date not provided for in the Interim financial Report are:-

ISSUANCE OR REPAYMENT OF DEBTS AND EQUITY SECURITIES

None.

During the nine months period ended 31 December 2008, the following dividend payments were made:

1. A final dividend of 33 sen per ordinary share less tax at 25% amounting to RM245,879,865 (2007: 20 sen per ordinary share less tax at 27% amounting to RM145,044,284) was paid on 26 August 2008 in respect of financial year ended 31 March 2008.
2. An interim dividend of 12 sen per ordinary share less tax at 25% amounting to RM89,410,860 (2007: interim dividend of 12 sen per ordinary share less tax at 27% amounting to RM87,026,570) was paid on 10 sen per share less tax at 28% amounting to RM71,528,688) was paid on 24 December 2008 in respect of financial year ending 31 March 2009.

SEGMENTAL INFORMATION

The Group’s principal activity is domestic marketing of petroleum products. Segment reporting is deemed not necessary.

PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment except for freehold land are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Freehold land is stated at cost less accumulated impairment losses, if any.

EVENTS AFTER BALANCE SHEET DATE

In the opinion of the Directors, no transaction or event of a material or unusual nature had occurred between 31 March 2008 and the date of this announcement.

CHANGES IN THE COMPOSITION OF THE GROUP

Lub Dagangan Sdn Bhd (“LDSB”), previously an associate of PDB with 20% equity interest has become a wholly owned subsidiary effective 23 January 2009.

CONTINGENT LIABILITIES

None.

Group revenue for the quarter ended 31 December 2008 decreased by RM145.4 million to RM5,561.4 million from the results of the corresponding period last year. The decrease is a result of lower sales volume. However, group revenue for the year-to-date ended 31 December 2008 rose by RM3,741.2 million to RM19,992.6 million from the results of the corresponding period last year as a result of higher average selling price.

The Group revenue for the current quarter decreased by 27.7% to RM5,561.4 million from RM7,690.2 million in the preceding quarter. The decrease in revenue is mainly due to lower average selling price.

The Directors are of the opinion that revenue is expected to remain satisfactory and market leadership will be maintained with continuous strategic marketing initiatives. However, profits will be impacted by fluctuations in petroleum product costs following uncertainties in the international oil prices and the global economy.

The effective tax rate is higher than the statutory tax rate due to certain expenses disallowed for tax purposes.

UNQUOTED INVESTMENTS AND PROPERTIES

There were no disposals of unquoted securities and no material gains or losses from disposal of properties during the financial period.

QUOTED INVESTMENTS

There were no investments in quoted securities during the financial period.

As previously announced, the Company has entered into an agreement for the Sale and Purchase of shares in Lub Dagangan Sdn Bhd (“LDSB”) with Natpet (M) Sdn Bhd and Yasmin Jurumuda Sdn Bhd whereby the Company will acquire 5,600,000 shares in LDSB representing a 80% equity interest in LDSB at a total cash consideration of RM16.24 million. The parties have performed their respective obligations under the agreement and the transaction was completed on 23 January 2009. With the completion of the transaction LDSB shall become a wholly owned subsidiary of the Company. The full payment of the purchase price has been made as agrees between the parties.

There were no borrowings as at the date of this report.

There are no off balance sheet risks as at the date of this report that may materially affect the position or business of the Group.

MATERIAL LITIGATION

The Company is pursuing legal action against a customer for recovery of trade receivables amounting to RM31.7 million.

No dividend has been declared for the quarter.

Basic earning per share are derived based on the profit attributable to shareholders of the Company and based on the number of ordinary shares outstanding during the period.