BASIS OF PREPARATION

The lnterim Financial Report has been prepared using historical cost basis except for certain financial assets and liabilities.

The lnterim Financial Report is unaudited and has been prepared in accordance with the requirements of FRS 134, lnterim Financial Reporting and paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities Berhad.

Changes in Accounting Policies

At the beginning of the current financial year, the Group had adopted the following Financial Reporting Standards (FRSs) as issued by Malaysian Accounting Standards Board which is effective for annual periods beginning on or after 1 July 2007:

1. FRS 107, Cash Flow Statements;
2. FRS 112, Income Taxes;
3. FRS 118, Revenue;
4. FRS 134, lnterim Financial Reporting; and
5. FRS 137, Provisions, Contingent Liabilities and Contingent Assets.

The Group has also early adopted the following FRS and IC lnterpretations for the annual period beginning 1 April 2008 which are effective for annual periods beginning 1 January 2010:

1. FRS 139, Financial Instruments: Recognition and Measurement;
2. IC Interpretation 9, Reassessment of Embedded Derivatives; and
3. IC Interpretation 10, lnterim Financial Reporting and Impairment.

The adoption of the abovementioned FRSs and IC Interpretations 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 Group voluntarily adopts FRS139 for the financial year beginning 1 April 2008 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 categorisation 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 or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation 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 or uncollectibility. FRS 139 prescribed prospective application for first time adoption.

On adoption of FRS 139, the Group measures financial assets and financial liabilities at its fair value upon initial recognition. After initial recognition, the financial assets and financial liabilities are measured at amortised cost using the effective interest rate method.

AUDIT QUALIFICATION

Not applicable.

SEASONAL OR CYCLICAL FACTORS

The Group's operations in relation to sales volume are 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 year ended 31 March 2009, 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 (2006/07: 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 (2007/08: interim dividend of 12 sen per ordinary share less tax at 27% amounting to RM87,026,570) was paid on 24 December 2008 in respect of financial year ended 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 2009 and the date of this announcement.

CHANGES IN THE COMPOSITION OF THE GROUP

As previously announced, 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 March 2009 was RM4,375.0 million, a decrease of RM1,'675.2 million from the results of the corresponding period last year. The decrease was a result of lower average selling price and lower sales volume. However, year-to-date group revenue was RM24,367.6 million, an increase of RM2,066.0 million from the results of last year. This was contributed mainly by the higher average selling price during the first half of the year.

The Group revenue for the current quarter decreased by 21.3% to RM4,375.0 million from RM5,561.4 million in the preceding quarter. The decrease in revenue was mainly due to lower average selling price.

The Directors are of the opinion that demand conditions are expected to be challenging but market leadership is projected to be maintained with continuous strategic marketing efforts and initiatives. However, profits for the next financial year 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 year.

QUOTED INVESTMENTS

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

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 had performed their respective obligations under the agreement and the transaction was completed on 23 January 2009. With the completion of the transaction, LDSB is now a wholly owned subsidiary of the Company.

Particulars of the Group's borrowings are as follows:

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.

The Board has declared an interim dividend of 12 sen per share less tax at 25% for the six months ended 30 September 2008 amounting to RM89,410,860 paid on 24 December 2008 (2008: 12 sen per share less tax at 27% amounting to RM87,026,570).

The Directors propose a final dividend of 33 sen per share less tax at 25% amounting to RM245,879,865 (2008: 33 sen per share less tax at 25% amounting to RM245,879,865) to shareholders to be tabled at the next Annual General Meeting, payable on a date to be announced later.

Basic earnings per share is derived based on the profit attributable to shareholders of the Company and based on the number of ordinary shares outstanding as at 31 March.