The Board assumes responsibility for leading and controlling the Group towards realising long term shareholders’ values. The Board has the overall responsibility for reviewing and adopting strategic plans for the Group, overseeing the conduct of the Group’s business, implementing an appropriate system of risk management and ensuring the adequacy and integrity of the Company’s system of internal control.

The Board meets on a quarterly basis, with additional meetings convened as necessary. During the financial year ended 31 December 2003, six (6) Board meetings were held. Details of attendance by Directors are set out in the Directors’ Profile.

The Board currently has seven (7) members comprising four (4) Executive Directors (which includes the Executive Chairman) and three (3) Independent Non-Executive Directors. All the Directors have an equal responsibility for the Group’s operations, but the role of the independent non-executive Directors is particularly important to ensure that the decisions made are fully discussed and examined taking into consideration the long-term interest of the shareholders and the Company.

The agenda will be prepared and circulated before each Board meeting. The Company Secretary maintains minutes of the Board meetings.

All directors have access to the advice and services of the Company Secretary who is responsible for ensuring that board procedures and the relevant rules and regulations are observed. Directors are entitled to seek independent professional advice about the Company's affairs at the Company's expense.

In accordance with the Company’s Articles of Association, one third (1/3) of the Directors shall retire from the Board and offer themselves for re-election. In practice, this means that every Director will stand for re-election at least once every three (3) years. Directors due to retire by rotation at the forthcoming Annual General Meetings are shown on page 3 of the Notice of Meeting (Ordinary Resolutions 3 to 4).

Recognizing the importance of timely dissemination of information to shareholders and other stakeholders, the Board is committed to ensure that the shareholders and other stakeholders are well informed of major developments of the Group and the information is communicated to them through the following methods:

(i) The Annual Report;

(ii) The various disclosures and announcements made to Bursa Malaysia Securities Berhad; and

(iii) Elba Holdings Berhad’s website at http://www.elbaholdings.com.my

The Company’s Annual General Meeting ("AGM") serves as a principal forum for dialogue with shareholders, which shareholders are encouraged to raise questions pertaining to the operations and financials of the Group. A copy of the Annual Report and notice of the AGM are sent to the shareholders at least twenty-one (21) days before the AGM. Extraordinary General Meetings ("EGM") is held as and when required.

The Directors are responsible to ensure that the financial statements prepared are drawn up in accordance with the provision of the Companies Acts, 1965; and applicable approved accounting standards in Malaysia. In presenting the annual financial statements and quarterly announcement to the shareholders, the Company has used appropriate accounting policies, consistently applied and supported by reasonable judgements and estimates.

The quarterly and annual financial results were reviewed by the Audit Committee and approved by the Board of Directors to ensure that they presented a balanced and understandable assessment of the Group before they were released to the BMSB. They are responsible to ensure the accurate and timely dissemination of financial and corporate announcements for greater accountability and transparency.

The Directors acknowledge responsibility of maintaining a reliable internal control system for the Group. This should be a continuing process including risk assessment, review of internal controls and internal audit checks on all companies of the Group. The purpose of this continuing process is to ensure that the Group’s assets are safeguard in the interest of preserving the investment of the shareholders. The Directors also acknowledge that the system of internal controls however can provide reasonable but not absolute assurance against misstatements, frauds and loss.

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While the Management has full responsibility in ensuring the effectiveness of internal control, which it establishes, the Board of Directors has the authority to assess the state of internal control, as it deems necessary. In doing so, the Board has the right to request for information and clarification from the Management as well as to seek inputs from the Audit Committee, external and internal auditors, and other experts at the expense of the Company

The Committee consists of two (2) independent directors and one (1) executive director.

The members of the Remuneration Committee are as follows:-

a) Haji Jamal Mohamed bin Haji A. M. Sickander - Chairman

b) Cheah Kean Guan

c) Yeoh Gar Beng

The terms of reference of the Remuneration Committee include the following:-

• To review, assess and recommend to the Board the remuneration packages of the executive directors in all forms, with or without other independent professional advice.

• To ensure the levels of remuneration are sufficiently attractive to retain directors needed to run the Group successfully.

• To structure the component parts of remuneration so as to link rewards to corporate and individual performance.

During the financial year, the paid-up capital of the Company has been increased from RM42,000,000 to RM42,725,000 as a result of the conversion of 725,000 warrants into ordinary shares of RM1.00 each per share.

The amount of non-audit fees paid to the external auditors for the financial year ended 31 December 2003 amounted to RM 10,320.00.

During the financial year, there were no profit estimates, forecasts, projection or unaudited results announced which differ by 10% or more from the audited results.

The Company and/or its subsidiaries do not have any material contracts involving the interest of its Directors and major shareholders during the financial year under review. This statement is made in accordance with a resolution of the Board of Directors dated 26 May 2004.