2006 annual report (2.3mb).pdfipmuda berhad (22 46-t) annual report 2006 contents notice of annual...

2 0 0 6 A n n u a l R e p o r t

IPMUDA BERHAD (22146 -T ) INCORPOR ATED IN MAL AYSIA

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annual report 2006

contents

Noticeofannualgeneralmeeting 02

Corporatedata 04

Directors’profile 05

Operationsstructure 09

Executivechairman’sstatement ��

Corporategovernancestatement �5

Auditcommitteereport �8

Statementoninternalcontrol 22

Financialstatements 23

Listofpropertiesheld 96

Statementofshareholdings �00

Formofproxy

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notice of annual general meeting

NOTICE IS HEREBY GIVEN that the Thirty Second Annual General Meeting of Ipmuda Berhad will be held atBonzaiARoom-Level4,SyuenHotel,88JalanSultanAbdulJalil,30300Ipoh,PerakDarulRidzuan,MalaysiaonTuesday,26June2007at11.00a.m.forthefollowingpurposes:-

ASORDINARYBUSINESS

1. ToreceiveandadopttheAuditedFinancialStatementsfortheyearended31December2006andtheDirectors’andAuditors’Reportsthereon.(Resolution 1)

2. ToapprovethepaymentofDirectors’Feesfortheyearended31December2006. (Resolution 2)

3. Tore-electthefollowingDirectorsretiringunderArticle101oftheCompany’sArticlesofAssociation:(a) TanSriAbuSahidBinMohamed(Resolution 3)(b) Dato’AbuTalibBinMohamed(Resolution 4)(c) Dato’MohamedFuadBinYon(Resolution 5)

4. ToappointAuditorsandtoauthorisetheDirectorstofixtheirremuneration. (Resolution 6)

ASSPECIALBUSINESS

5. Toconsiderand,ifthoughtfit,topassthefollowingOrdinaryResolution:

AuthoritytotheDirectorstoissueandallotsharespursuanttoSection132DoftheCompaniesAct,1965

“THATsubjectalwaystotheCompaniesAct,1965,theArticlesofAssociationoftheCompanyandtheapprovalsoftherelevantgovernmental/regulatoryauthorities,theDirectorsbeandareherebyempowered,pursuanttoSection132DoftheCompaniesAct,1965,to issueandallotshares intheCompanyatanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretiondeemfit,providedthattheaggregatenumberofsharesissuedpursuanttothisresolutiondoesnotexceed10%oftheissuedsharecapitaloftheCompanyforthetimebeingandthattheDirectorsbeandarealsoempoweredtoobtaintheapprovalfromBursaMalaysiaSecuritiesBerhadforthelistingofandquotationfortheadditionalsharessoissuedandthatsuchauthorityshallcontinueinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.”(Resolution 7)

BYORDEROFTHEBOARDCHANLAICHOONSecretaryIpoh,5June2007

NOTES:

1) AmemberoftheCompanyentitledtoattendandvoteattheabovementionedmeetingisentitledtoappointoneproxybutnotmorethantwoproxies,toattendandvoteinhisstead.SuchproxyneednotbeamemberoftheCompany,andwheretherearetwoproxies,thenumberofsharestoberepresentedbyeachproxymustbestated.

2) The instrumentappointingaproxy, in thecaseofan individual,shallbesignedby theappointerorbyhisattorneydulyauthorisedinwriting,andinthecaseofacorporation,shallbeeithergivenunderitscommonsealorunderthehandofanofficerorattorneyofthecorporationdulyauthorised.

3) TheinstrumentappointingtheproxymustbedepositedattheRegisteredOfficeoftheCompanyatBangunanIpmuda,12JalanDatuh,30000Ipoh,PerakDarulRidzuan,Malaysia,notlessthanforty-eight(48)hoursbeforethetimesetforholdingthemeetingoranyadjournmentthereof.

4) ExplanatoryNoteonSpecialBusinesstobetransacted:

TheOrdinaryResolution7isproposedpursuanttoSection132DoftheCompaniesAct,1965,andifpassed,willempowertheDirectorsoftheCompanyfromthedateoftheaboveAnnualGeneralMeeting,authoritytoissueandallotsharesfromtheunissuedsharecapitaloftheCompanyforsuchpurposesastheDirectorsdeemfitandintheinterestoftheCompany.Thisauthoritywill,unlessrevokedorvariedbytheCompanyingeneralmeeting,willexpireattheconclusionofthenextAnnualGeneralMeetingoftheCompany.

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annual report 2006

statement accompanying notice of annual general meeting

STATEMENTaccompanyingNoticeofThirty-SecondAnnualGeneralMeetingoftheCompanypursuanttoparagraph8.28(2)oftheListingRequirementsofBursaMalaysiaSecuritiesBerhad:

1. NameofDirectorswhoarestandingforre-election:

a) TanSriAbuSahidBinMohamed

b) Dato’AbuTalibBinMohamed

c) Dato’MohamedFuadBinYon

TanSriAbuSahidBinMohamedshareholdingsissetoutinpages100to102ofthisAnnualReport.Theother2DirectorsdonothaveanyshareholdingsintheCompany.TheProfileoftheseDirectorsaresetoutinpages5and7ofthisAnnualReport.

2. DetailsofattendanceofDirectorsatBoardMeetings

Five(5)BoardMeetingswereheldduringthefinancialyearfrom1January2006to31December2006.DetailsofattendanceoftheDirectorsattheBoardMeetingsareasfollows:

NameofDirectors NumberofMeetingsattended

a) TanSriAbuSahidBinMohamed 3/5

b) Dato’AbuTalibBinMohamed 5/5

c) Dato’MohamedFuadBinYon 3/5

3. Date,TimeandVenueoftheThirty-SecondAnnualGeneralMeeting

VenueBonzaiARoom-Level4,SyuenHotel88JalanSultanAbdulJalil30300Ipoh,PerakDarulRidzuanMalaysia

DateTuesday26June2007

Time11.00a.m.

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corporate data

BOARDOFDIRECTORS

TanSriAbuSahidbinMohamedExecutive Chairman

Dato’AbuTalibbinMohamedDeputy Chairman

Dato’LimHengSuanManaging Director/Chief Executive Officer

MrLeChingTai@LeeChenChongExecutive Director

Dato’AhmadBakribinShabdinIndependent Non-Executive Director

Dato’SiewMunChuangIndependent Non-Executive Director

EncikMaarofbinH.A.RahmanSenior Independent Non-Executive Director

Dato’LimAhLaiIndependent Non-Executive Director

Dato’MohamedFuadbinYonNon-Independent Non-Executive Director

EncikMohdFauzibinYon(Alternate Director to Tan Sri Abu Sahid bin Mohamed)

SECRETARY

ChanLaiChoonMAICSA0809269

REGISTEREDOFFICE

BangunanIpmuda12JalanDatuh30000IpohPerakDarulRidzuanTel:05-2538030Fax:05-2557727

REGISTRAR

SymphonyShareRegistrarsSdn.Bhd.Level26,MenaraMultiPurposeCapitalSquareNo.8JalanMunshiAbdullah50100KualaLumpurTel:03-27212222Fax:03-27212530/27212531

AUDITORS

Ernst&YoungLevel23A,MenaraMileniumJalanDamanlelaPusatBandarDamansara50490KualaLumpurMalaysia

PRINCIPALBANKERS

MalayanBankingBerhadCIMBBankBerhadRHBInvestmentBankBerhadBankMuamalatMalaysiaBerhadBankIslamMalaysiaBerhad

STOCKEXCHANGELISTING

BursaMalaysiaSecuritiesBerhadMainBoard(StockCode:5673)

HOMEPAGE

www.ipmuda.com.my

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directors’ profile

TANSRIABUSAHIDBINMOHAMEDExecutive Chairman (Age 54, Malaysian)

Tan Sri Abu Sahid bin Mohamed was appointed to theBoardon22April1997.HeisaMemberoftheExecutiveCommittee and the Investment Committee of theCompany.

Tan Sri Abu Sahid is presently the Group ExecutiveChairmanofMajuGroupofCompanies.

In1977,hestartedhisfirstcompany,MajuAlatGantiSdnBhd (“MAG”)whichwas involved in the tradingofmotorspare parts. Subsequently, MAG became the biggestMalaysparepartscompany,dealingwithboththeprivatesectorandtheGovernment.HewasVicePresidentoftheSelangor and Federal Territory Engineering and MotorPartsTradersAssociation,apositionheheldfrom1985to1987.HeisnowtheHonoraryPresidentoftheAssociation.Since then, Tan Sri Abu Sahid’s business interests havebroadened.TheGroupportfolio iswelldiversifiedandatpresent, its activities include construction and propertydevelopment, manufacturing of steel products, buildingmaterialsandfurniture,transportandhaulage,resortsaswellasengineering,fabricationandsecurityservices.

TanSriAbuSahidsitsontheboardofKonsortiumLapanganTerjayaSdnBhd,whichhasbeengiventheConcessionforthenewhighwaydirectlylinkingKualaLumpurtoPutrajayaandonwardstotheKualaLumpurInternationalAirport.

HeisamajorshareholderofIpmuda.

TanSriAbuSahidistheChairmanandmajorshareholderofKinsteelBhd,GroupExecutiveChairmanofBrightFocusBerhad, a director of Perwaja Berhad and an alternatedirector and major shareholder in Pulai Springs Berhad.TanSriAbuSahidisalsoadirectorofvariousotherprivatelimitedcompanies.

TanSriAbuSahidistheyoungerbrotherofDato’AbuTalibbinMohamed.

Save as disclosed above, he does not have any familyrelationship with any other Director and/or majorshareholderoftheCompanyanddoesnothaveanyconflictofinterestwiththeCompany.Hehasnotbeenconvictedofanyoffenceswithinthepast10years.

DATO’ABUTALIBBINMOHAMEDDeputy Chairman (Age 58, Malaysian)

Dato’ Abu Talib bin Mohamed was appointed to theBoardon22April1997.HeisaMemberoftheExecutiveCommitteeandInvestmentCommitteeoftheCompany.

He is a Fellow Member of the Chartered Institute ofManagementAccountantsofUnitedKingdomandalsoaMemberoftheMalaysianInstituteofAccountants.Dato’AbuTalibhasextensiveknowledgeof thesteel industryashewasformerlytheDirectorofOperationsforPerwajaSteelSdnBhdinKemaman,priortojoiningMajuHoldingsSdnBhd(“MajuHoldings”)asGroupExecutiveDirectorin1992.HehasbeentheGroupManagingDirectorofMajuHoldingssince1993.

Dato’AbuTalibisalsoadirectorofMycronSteelBerhad,KinsteelBhdaswellasadirectorofvariousotherprivatelimitedcompanies.

Dato’ Abu Talib is the brother of Tan Sri Abu Sahid binMohamed,whoisalsoaDirectorandmajorshareholderoftheCompany.

Save as disclosed above, he does not have any familyrelationship with any other Director and/or majorshareholder of the Company and does not have anyconflictof interestwith theCompany.Hehasnotbeenconvictedofanyoffenceswithinthepast10years.

DATO’LIMHENGSUANManaging Director/Chief Executive Officer (Age 42, Malaysian)

Dato’Limwasappointedto theBoardon15December2005.HeisaMemberoftheAuditCommittee,ExecutiveCommittee, Investment Committee and RemunerationCommittee.

HehadhistertiaryeducationintheUnitedKingdomandmajoredinAccountingandFinance.WhileintheU.K.hewas involved in variousbusinesses. In1997, he startedBonfield Limited, an international trading companyinvolved in the trading of raw materials such as scrapmetal,ironore,electrodeetc.forthesteelindustry.

Dato’ Lim is a deemed major shareholder of theCompany.

Save as disclosed above, he does not have any familyrelationship with any Director and/or any other majorshareholder of the Company and does not have anyconflictof interestwith theCompany.Hehasnotbeenconvictedofanyoffenceswithinthepast10years.

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directors’ profile (cont’d)

MRLECHINGTAI@LEECHENCHONGExecutive Director (Age 65, Malaysian)

Mr Lee Chen Chong was appointed to the Board on19 December 2001. He is a Member of the AuditCommittee.

Mr Lee is a Fellow Member of the Chartered Instituteof Bankers, London. He spent a total of 34 years incommercial and international banking both in local aswellasbanksoverseas.From1972to1984,hewastheChief Executive Officer of an overseas bank in the CityofLondon.In1985hereturnedtoMalaysiaandjoinedaMalaysian-FrenchjointventurebankinKualaLumpurasanExecutiveDirectorandwassubsequentlyelevatedtothepostofManagingDirectoruntil he relinquished thepostendof1993.ThenextfouryearshespenthistimeoverseasasCEO/DirectorofinternationalbanksinCzechRepublic, Hungary and Malta. He had been associatedwiththeMulti-PurposeGroupofCompaniessince1989andretiredasExecutiveDirectoroftheGroupendofyear2000.

He is adirector ofKrisAssetsHoldingsBerhad.Mr Leealsositsontheboardofotherprivatelimitedcompanies.

HedoesnothaveanyfamilyrelationshipwithanyDirectorand/ormajorshareholderoftheCompanyanddoesnothaveanyconflictofinterestwiththeCompany.Hehasnotbeenconvictedofanyoffenceswithinthepast10years.

DATO’AHMADBAKRIBINSHABDINIndependent Non-Executive Director (Age 63, Malaysian)

Dato’ Ahmad Bakri bin Shabdin was appointed to theBoardon16December1999.HeistheChairmanoftheAuditCommittee.

Dato’AhmadBakriholdsaBachelorofArtsdegreeanda Post-Graduate Diploma in Public Administration fromUniversityofMalayaandaMasterofArts inMarketingEducation degree from University of Lancaster. He wasformerlytheVice-President,CorporateAffairs&MarketingDepartmentoftheMultimediaDevelopmentCorporationSdnBhd.

Upongraduation fromUniversityofMalaya in1966,hejoined the civil service as Assistant District Officer inthe District Office in Kelang, Selangor and retired fromthecivilserviceinFebruary1999.Duringhis33yearsofservice, he held a number of positions, which includedDirector-GeneraloftheMalaysianTourismBoard,DeputySecretary-GeneralinthePrimeMinister’sDepartmentandSecretary-GeneralintheMinistryofYouthandSports.


DATO’SIEWMUNCHUANGIndependent Non-Executive Director (Age 54, Malaysian)

Dato’ Siew Mun Chuang, Malaysian was appointed totheBoardon21July1997.HeisaMemberoftheAuditCommitteeandNominationCommittee.HeisChairmanoftheRemunerationCommittee.

From1973to1979,hewaswithPriceWaterhouse&Coand thereafter was involved in the food and beverageindustry. He is currently the Managing Director of theOrientalGroupofRestaurants.


ENCIKMAAROFBINH.A.RAHMANSenior Independent Non-Executive Director (Age 51, Malaysian)

EncikMaarofbinH.A.Rahman,MalaysianwasappointedtotheBoardon2July2001.HeisaMemberoftheAuditCommitteeandRemunerationCommitteeandChairmanoftheNominationCommittee.

He holds a B.A. Management degree and Master ofBusinessAdministrationdegreefromWebsterUniversityGeneva,Switzerland.EncikMaarofhasatotalspanof15yearsofvariousmanagementlevelswithbothpublicandprivatesectorssuchasCityHallofKualaLumpur,FisheriesDevelopment Authority, Bloomingdale Advertising andMaserSdnBhd.

Currently, he is Managing Director of Libroff Sdn Bhdand has held the position since 1990. The principalactivitiesof LibroffSdnBhdareadvertising,marketing,communication and trading. He is a Director of LibroffIndustries Sdn Bhd, a construction company registeredwiththeTreasuryandLibroffCommunicationSdnBhd,aneventmanagementandcommunicationcompany.

HeisalsoanExecutiveDirectorofTunaiSetiaSdnBhd,a property development company currently developing20 acres of mix development project in Tampoi, JohorBharu.

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directors’ profile (cont’d)


DATO’LIMAHLAIIndependent Non-Executive Director (Age 54, Malaysian)

Dato’ Lim Ah Lai was appointed to the Board on 29October 2002 and has 30 years of experience in theconstructionindustry.

HedoesnothaveanyfamilyrelationshipwithanyDirectorand/ormajorshareholderoftheCompanyanddoesnothaveanyconflictofinterestwiththeCompanyandhasnotbeenconvictedofanyoffenceswithinthepast10years.

DATO’MOHAMEDFUADBINYONNon-Independent Non-Executive Director (Age 57, Malaysian)

Dato’MohamedFuadbinYonwasappointedtotheBoardon28February2004.HeisamemberoftheNominationCommittee.

HeisademographerbyprofessionhavingqualifiedfromUniversityCollegeCardiff,Wales,UnitedKingdom.Priorto joiningMaju,hehadmanagedcompanies involved inmanufacturing,managementandfinancialconsultancies,property development and construction. He was theManaging Director of Asian Management, Research& Consultancy Sdn Bhd from 1982 to 1985, ChiefExecutive Officer and Managing Director of MalaysianCarbonlessIndustriesSdnBhdfrom1985to1988,GroupChief Executive Officer of Melewar Computer group ofcompanies from 1989 to 1993, Group Chief ExecutiveOfficer of Maju Holdings Property Group of Companiesfrom 1993 to 1997, Group Chief Executive Officer ofIndera Development & Construction Sdn Bhd group ofcompanies from1997 to2000and theChairmanofFP&Strats IncorporatedSdnBhd from2000 to2003.HeiscurrentlyadirectorofMajuHoldingsSdnBhd(“MajuHoldings”). He is a representative of Maju Holdings, amajorshareholderoftheCompany.

HeisadirectorofKinsteelBhd,BrightFocusBerhadandPerwaja Berhad as well as a director of various otherprivatelimitedcompanies.HeisalsoaboardmemberofRISDAfrom01July2005andBenarisPropertySdnBhd(formerlyknownasWaktuCerahSdnBhd),asubsidiaryofRISDAeffective04January2006.

HeisthebrothertoEncikMohdFauzibinYon.


ENCIKMOHDFAUZIBINYONAlternate Director to Tan Sri Abu Sahid bin Mohamed (Age 56, Malaysian)

Encik Mohd Fauzi bin Yon was appointed as AlternateDirector to Tan Sri Abu Sahid bin Mohamed on 28February2004.

HeholdsaBachelorofEconomics(Honours)degreefromUniversityofMalaya.AftergraduatingfromUniversityofMalayain1975,hejoinedtheMinistryofForeignAffairs,Malaysia.HehadservedinvariousMalaysianDiplomaticMissionsabroadbetween1978and1993beforeoptingforretirementfromtheGovernmentservicein1995.Thelast position he held before his optional retirement attheMinistryofForeignAffairs,MalaysiawasasPrincipalAssistant Secretary covering political and economicaffairsoftheSouthEastAsianRegion.

Encik Mohd Fauzi Yon joined Maju Holdings Sdn Bhd(“MajuHoldings”)astheSpecialAssistanttotheGroupExecutive Chairman in August 1995 and is currently adirectorofMajuHoldings.HeisarepresentativeofMajuHoldings,amajorshareholderoftheCompany.

HeisadirectorofSDKMFibres,Wires&CablesBerhadandalsositsontheboardofvariousotherprivatelimitedcompanies.

HeisthebrothertoDato’MohamedFuadbinYon.


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annual report 2006

DEVELOPMENT

PerniagaanMajuRamadhanSdnBhd

TRADING GENERAL BUILDING PRODUCTS

IpmudaBerhad

IpmudaBuildermartSdnBhd

IpmudaSelatanSdnBhd

IpmudaTimuranSdnBhd

IpmudaUtaraSdnBhd

IpmudaTradingPteLtd

operations structure

TRADING SPECIALTY PRODUCTS

EdaranMaju-MudaSdnBhd

GlobalAlliedSdnBhd

IpmudaEdarSdnBhd

IpmudaTiles&SanitarywaresSdnBhd

IpmudaArchitecturalProductsSdnBhd

SPECIALIST CONTRACTING

ControlInstruments(M)SdnBhd

IpmudaEngineeringSdnBhd

JohnsonPacificPteLtd

JohnsonFluidEngineeringSdnBhd

WAREHOUSING

HomemartDistributionCentreSdnBhd

MANUFACTURING

PerakMetalIndustriesSdnBhd

Roset-BLGSdnBhd

HOME IMPROVEMENT

BetterLivingGrandSdnBhd

RosetInteriorsSdnBhd

INVESTMENTArmorMasterSdnBhd

GloriousFutureSdnBhd

ModularEquitySdnBhd

TorikiMetalEngineeringSdnBhd

VintageConsolidatedSdnBhd

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annual report 2006

“ On behalf of the Board of

Directors, I am pleased to

present the Annual Report

and Audited Financial

Statements of Ipmuda Berhad

and the Group for the

financial year ended

3�st December 2006. ”

chairman’s statement

INTRODUCTION

Despiteayearthatsawanunprecedentedhikeincrudeoilpricesandrawmaterialcosts,Malaysia’sGrossDomesticProduct(GDP)managedtogrow5.9%.Theconstructionsectorhoweverfailedtomeetitsgrowthtarget,andinsteadregisteredanegativegrowthof0.5%fortheyear.ThereleaseofthemuchanticipatedNinthMalaysianPlan(9MP)inMarch2006,sawtheGovernmentallocatingRM200billionfordevelopmentprojects.Theimplementationoftheprojectswasunfortunatelynotspeedyenoughtogeneratesufficientgrowthmomentumfortheconstructionsectorduringtheyear.Domesticpricesofsteelproducts,however,reboundedinthesecondquarteroftheyearduetotheuptrendininternationalsteelprices.

FINANCIALHIGHLIGHTS

Against thisbackground, theBoardconsiders theGroup’s result for2006tobesatisfactory.TheGroup’s turnoverincreasedby12%fromRM349.1millionin2005toRM398.1millionandtheGroup’sgrossprofitincreasedbyRM2.69million.TheGroup’saveragegrossprofitmargin,however,declinedslightly,from7.65%to7.38%duetoweakmarginsamongproductsofhigherweightageinthesalesmix.Operatingexpenseswerekeptundercontrolwhilethetighteningofcreditcontrolresultedinlowerprovisionfordoubtfuldebts.ThisresultedintheGroup’spre-taxprofitrisingtoRM2.4millioncomparedtoalossofRM8.3millioninprecedingyear.

Attheendof2006,theGroup’sshareholders’fundshadimprovedtoRM124.2million.

OPERATIONS

During the year, theGroupcontinuedwith its effort todiversify the incomebase. In2006, non-buildingmaterialsaccountedfor7.5%oftotalturnovercomparedto1%in2005.Significantinroadsweremadeinthetradingofferrousscrap,non-ferrousmaterial, fuel and lubricants. Theoutlays in theprevious year to improve retail outlets saw thecontribution from retail sales increasing by 16%. No new retail outlets were added during the year as the Groupconcentratedonserviceenhancementandfinetuningitsdeliverysystem.

DIVIDEND

TheBoardhasdecidednottodeclarepaymentofanydividendforthecurrentfinancialyear.Theboardwill,however,reviewthesituationwhenthefinancialpositionimproves.

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chairman’s statement (cont’d)

OUTLOOK

Thelocaleconomyisexpectedtoremainresilientandgrowby6%in2007.Domesticdemandwillbestronggiventhestableinterestrateregime,strongerringgit,resilientcommoditypricesandrisingconsumersentimentandincome.Theconstructionsector,soimportantforitsspilloverandmultipliereffectsonconsumerdemand,isexpectedtogrowby3%.AlthoughtherollingoutofprojectsundertheNinthMalaysianPlan(9MP)hasbeenabitslow,itisexpectedtoaccelerate inthesecondhalfof theyear.This, togetherwithpositivepolicychangesannouncedtoeaseforeignownershipofproperty inthecountryandtheabolitionofPropertyGainsTaxwilldefinitelyboostthepropertyandconstructionsectors.Thiswillalsoservetoincreasedemandandliftmarginsforbuildingmaterialplayers.Malaysia’ssteelconsumptionisexpectedtogrowby12%in2007beforeacceleratingtoabout15%in2008.TheGroupispoisedtoleverageonthestrategiclocationofitsoutletsandwarehousesthroughoutthePeninsulatoexploitopportunitiesarisingfromthebuoyanteconomy.

In cognisance of the increasingly competitive market place, the Group will strive to continuously improve itself inthekeyareasofservicequalityaswellascostefficiencytomaintainitsdominantpositioninthebuildingmaterialsindustry.TheGroupwillalsocontinuetoexploreprofitablebusinessesbothlocallyandregionallytoaddtotheGroup’sstable.

Barringanyunforeseencircumstances,theBoardanticipatestheperformanceoftheGroupin2007tobepositive.

ACKNOWLEDGEMENT

OnbehalfoftheBoard,Iwouldliketotakethisopportunitytoexpressmyappreciationtothemanagementandstafffortheirdedicationandcontributionduringtheyear.Ialsoacknowledgewiththanksthesupportandco-operationwehavereceivedfromourvaluedshareholders,customers,suppliers,bankersandotherbusinessassociates.

Thankyou.

TANSRIABUSAHIDMOHAMEDExecutiveChairman23May2007

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corporate governance statement

TheBoardofDirectors(Board)ofIpmudaBerhadisfullycommittedtotheprinciplesofcorporategovernanceintheMalaysianCodeonCorporateGovernance(Code).TheBoardispleasedtoreportonthemannertheGrouphasappliedtheprinciplesandtheextentofcompliancewiththebestpracticesofcorporategovernanceassetoutinPart1andPart2respectivelyoftheCode.

DIRECTORS

TheBoard

TheBoardhastheoverallresponsibilityforcorporategovernance,direction,formulationofpoliciesandoverseeingtheinvestmentandbusinessoftheGroup.Atotaloffive(5)Boardmeetingswereheldduringthefinancialyearended31December2006.DetailsofattendancebyDirectorsareasfollows:

Directors No.ofmeetings No.ofmeetings heldduringappointment attended

TanSriAbuSahidbinMohamed 5 3

Dato’AbuTalibbinMohamed 5 5

Dato’LimHengSuan 5 5

LeChingTai@LeeChenChong 5 5

Dato’MohamedFuadbinYon 5 3

Dato’AhmadBakribinShabdin 5 5

Dato’SiewMunChuang 5 4

Dato’LimAhLai 5 4

MaarofbinH.A.Rahman 5 5

MohdFauzibinYon 2 2(alternate Director to Tan Sri Abu Sahid bin Mohamed)

BoardBalance

TheBoardcurrentlyhasnine(9)members,comprisingthree(3)ExecutiveDirectors(includingtheExecutiveChairman)andsix(6)Non-ExecutiveDirectorswithfour(4)oftheDirectorsbeingIndependentDirectors.TheBoard’scompositioncompliedwiththeListingRequirements.

Together,theBoardhasagoodmixofbusiness,financial,banking,administrationandtechnicalexpertiseandexperiencetoleadandcontroltheGroup.AbriefprofileofeachDirectorsarepresentedonpages5to7oftheAnnualReport.

The roles of the Chairman and Managing Director/Chief Executive Officer are distinguished and separated. TheChairmanisprimarilyresponsiblefororderlyconductandworkingoftheBoardwhilsttheManagingDirector/ChiefExecutiveOfficerisresponsiblefortheoperations,businessdevelopmentandimplementationofpoliciesanddecisionssetbytheBoard.

ThepresenceofthefourIndependentNon-ExecutiveDirectorsfulfilsapivotalroleincorporateaccountability.AlthoughalltheDirectorshaveanequalresponsibilityfortheGroup’soperations,theroleoftheseIndependentNon-ExecutiveDirectorsisparticularlyimportantastheyprovideunbiasedandindependentviews,adviceandjudgement.

ThereisascheduleofmattersreservedfortheBoard’sdecision,whichincludestheapprovalofannualbudget,majorinvestmentandfinancialdecisionsandkeypolicies.

To facilitate the smooth transaction of business within the Company, the Board has established three (3) Boardcommittees,namelytheAuditCommittee,theNominationCommitteeandtheRemunerationCommittee.ThetermsofreferenceofeachCommitteehavebeenapprovedbytheBoardandwhereapplicable,complywiththerecommendationsoftheCode.

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corporate governance statement (cont’d)

AuditCommittee

The Audit Committee reviews issues of accounting policies, presentation for external financial reporting and thedeliberation of any audit findings of both the external and internal auditors arising from the Company’s financialstatementsandanyissuesraisedbytheauditors.

ThereportoftheAuditCommitteeforthefinancialyearended31December2006issetoutonpages18to21.

NominationCommittee

The Nomination Committee comprises two Independent Non-Executive Directors and one Non-Independent Non-ExecutiveDirector.MembersoftheNominationCommitteeare:

Dato’SiewMunChuang (Independent, Non-Executive Director )

MaarofbinH.A.Rahman (Independent, Non-Executive Director )

Dato’MohamedFuadbinYon (Non-Independent, Non-Executive Director)

TheCommitteeisresponsibleforproposingnewnomineestotheBoardandtoassessthecontributionofeachindividualDirector and theoverall effectivenessof theBoardonanon-goingbasis. Thefinal decision for any appointmentsremainstheresponsibilityoftheBoardafterconsideringtheCommittee’srecommendations.

RemunerationCommittee

TheRemunerationCommitteecomprisestwoIndependentNon-ExecutiveDirectorsandtheManagingDirector/ChiefExecutiveOfficer.MembersoftheRemunerationCommitteeare:

Dato’SiewMunChuang (Independent, Non-Executive Director)

EncikMaarofbinH.A.Rahman (Independent, Non-Executive Director)

Dato’LimHengSuan (Managing Director/Chief Executive Officer)

The Committee is responsible for making recommendations on the remuneration of executive Directors. ThedeterminationofremunerationpackagesofNon-ExecutiveDirectorsistheresponsibilityoftheBoardasawhole.

ThenumberofDirectorswhoseremunerationfallswithintherespectivebandsduringthefinancialyearisasfollows:

ExecutiveDirectors Non-ExecutiveDirectors (no.ofdirector) (no.ofdirector)

0toRM50,000 - 5

RM350,001toRM400,000 1 -

RM550,001toRM600,000 1 -

RM800,001toRM850,000 2 -

Re-electionofDirectors

TheCompany’sArticlesofAssociationstipulatethatnewlyappointedDirectorsshallholdofficeuntilthenextAnnualGeneralMeetingandshallthenbeeligibleforre-electionbyshareholdersandthatatleastonethirdorthenumbernearesttoonethirdoftheDirectorsarerequiredtoretirebyrotationateveryAnnualGeneralMeetingandbesubjecttore-electionbyshareholders.

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corporate governance statement (cont’d)

SupplyofInformation

TheBoardissuppliedwithallnecessaryinformationbywayofBoardpaperspriortoBoardmeetings.

TheDirectorshaveaccesstotheadviceandservicesoftheCompanySecretarytoassisttheminfurtheranceoftheirduties. The Directors may obtain independent professional advice on special issues at the Company’s expense toenabletheDirectorstodischargetheirdutieswithadequateknowledgeonthemattersbeingdeliberated.

Directors’Training

AlltheDirectorshaveattendedtrainingprogrammesduringthefinancialyearandwillcontinuetoattendfurthertrainingprogrammesfromtimetotimetokeepabreastwiththerelevantchangesanddevelopmentinlawsandregulationsaswellasbusinessdevelopment.

SHAREHOLDERS

RelationshipwithShareholders

TheBoardacknowledgestheneedforshareholderstobeinformedofallmaterialbusinessmattersaffectingtheGroup.InformationoftheGroup’sbusinessactivitiesandperformancearedisseminatedthroughannouncements,quarterlyannouncementsof its result,annual reportsand theAnnualGeneralMeetings. Inaddition, theGroup’swebsiteathttp://www.ipmuda.com.myprovidesabroadrangeofinformationregardingtheGrouptotheshareholders.

En.MaarofbinH.A.RahmanistheSeniorIndependentNon-ExecutiveDirectortowhomminorityshareholders’concernmaybeconveyed.

TheGeneralMeeting

TheAnnualGeneralMeetingsandExtraordinaryGeneralMeetingsprovidemeansofcommunicationwithshareholders.TheBoardaswellastheAuditorsoftheCompanyarepresenttoanswerquestionsraisedatthemeetings.TheBoardtalkstotheshareholdersinformallybeforeandafterthemeetings.

ACCOUNTABILITYANDAUDIT

FinancialReporting

Inpresentingtheannualfinancialstatementsandquarterlyannouncementsofitsresults,theBoardensuredthattheypresentabalancedandunderstandableassessmentoftheGroup’spositionandprospects.

DirectorsResponsibilityStatement

TheBoardisresponsibleforensuringthatthefinancialstatementsgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyasattheendoftheaccountingperiodandoftheirincomestatementsandcashflowsfortheperiodthenended.Inpreparingthefinancialstatements,theDirectorshaveensuredthatapplicableapprovedaccountingstandardsinMalaysiaandtheprovisionsoftheCompaniesAct,1965havebeenapplied.

InternalControl

TheDirectorsacknowledgetheresponsibilityofmaintainingagoodandefficientsystemofinternalcontrol,includingriskmanagementandtheneedtoreviewitseffectivenessregularly.ThesystemisdesignedtomitigateandmanageriskinthepursuitofthebusinessobjectivesaswellassafeguardGroup’sassetsandshareholders’investmentintheGroup.However,suchsystemcanonlyprovidereasonablebutnotabsoluteassuranceagainstmisstatement,fraudorloss.

RelationshipwithAuditors

The internal auditors were present at all the Audit Committee meetings. The Company maintains a transparentrelationshipwiththeexternalauditorsinseekingtheirprofessionaladviceandtowardsensuringcompliancewiththeaccountingstandards.

ThisStatementwasapprovedbytheBoardofDirectorson23May2007.

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audit committee report

TheBoardofDirectorsispleasedtopresentthereportoftheAuditCommitteeforthefinancialyearended31December2006.

COMPOSITION

The present Audit Committee comprises of five (5) members of whom three (3) are Independent Non-ExecutiveDirectorsandtwo(2)areExecutiveDirectors.

MEMBERSHIPANDMEETINGS

Atotaloffive(5)meetingswereheldduringtheyear.DetailsofattendanceofeachAuditCommitteememberisasfollows:

NumberofMeetingsattended

Dato’AhmadBakribinShabdin 5/5(Chairman - Independent Non-Executive Director)

Dato’SiewMunChuang 4/5(Member – Independent Non-Executive Director)

MaarofbinH.A.Rahman 5/5(Member – Independent Non-Executive Director)

Dato’LimHengSuan 4/5(Member – Managing Director/Chief Executive Officer)

LeChingTai@LeeChenChong 5/5(Member – Executive Director)

SUMMARYOFACTIVITIES

Duringthefinancialyearended31December2006,theactivitiesoftheAuditCommitteeincludereviewof:

i) the quarterly and year-end financial statements and recommend the same to the Board for approval andannouncementstotheBursaMalaysiaSecuritiesBerhad(“BursaMalaysia”)andSecuritiesCommission.

ii) the Company’s compliance in particular the quarterly and year end financial statements with the accountingstandardsissuedbyMalaysianAccountingStandardsBoardandtheListingRequirementsofBursaMalaysia.

iii) internalaudittime-tablefortheyear2006.

iv) theinternalauditreportspresentedbytheInternalAuditDepartment(“IAD”)onfindingsandrecommendationswithrespecttosystemandcontrolweaknessesandensureimplementationofcorrectiveactions.

v) mattersrelatingtocorporategovernanceincompliancewiththeListingRequirementsofBursaMalaysiaandtheMalaysianCodeonCorporateGovernance.

vi) relatedpartytransactionsforcompliancewiththeListingRequirementsofBursaMalaysiaandtheappropriatenessofsuchtransactionsbeforerecommendingtotheBoardforapproval.

vii) theGroup’sRecurrentRelatedPartyTransactionsandtheproceduresinrelationthereto.

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INTERNALAUDITFUNCTION

TheIADwasestablishedsincethe1980’s.ThemainroleoftheIADistoprovidetheAuditCommitteewithindependentandobjectivereportsontheeffectivenessofthesystemofinternalcontrolswithintheGroup.

TheIADcarriedoutauditscomprisingheadofficefunctionsandsubsidiaries.Theinternalauditreportsweredeliberatedby the Audit Committee and recommendations were duly acted upon by the management. The audits covered acomprehensivescopeintheareasofoperations,finance/accountsandinvestigation.

TERMSOFREFERENCE

ThetermsofreferenceoftheAuditCommitteeareasfollows:

1. COMPOSITION

TheBoardshallestablishaCommitteeoftheBoardtobeknownastheAuditCommittee.

TheAuditCommitteeshallbeappointedbytheDirectorsfromamongtheirnumber(pursuanttoaresolutionoftheBoardofDirectors)whichfulfillsthefollowingrequirements:

a) theAuditCommitteemustbecomposedofnofewerthan3members;

b) amajorityoftheAuditCommitteemustbeindependentdirectors;and

c) atleastonememberoftheAuditCommittee:

i) mustbeamemberoftheMalaysianInstituteofAccountants;or

ii) ifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthaveatleastthree(3)years’workingexperienceand:

(aa) hemusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountantsAct,1967;or

(bb) hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stScheduleoftheAccountantsAct1967.

NoalternatedirectoristobeappointedamemberoftheAuditCommittee.

IfamemberoftheAuditCommitteeresigns,diesorforanyreasonceasestobeamemberwiththeresultthatthenumberofmembersisreducedtobelowthree,theBoardofDirectorsshall,withinthreemonthsofthatevent,appointsuchnumberofnewmembersasmayberequiredtomakeuptheminimumofthreemembers.

ThemembersoftheAuditCommitteeshallelectaChairmanfromamongtheirnumberwhoshallbeanindependentdirector.

2. OBJECTIVES

TheprimarypurposeoftheAuditCommitteeareto:

a) ProvideassistancetotheBoardinfulfillingitsfiduciaryresponsibilitiesrelatingtothecorporateaccountingpoliciesandinternalcontrolsandfinancialreportingpracticesoftheIpmudaGroup.

b) Maintainthroughregularlyscheduledmeetings,adirectlineofcommunicationbetweentheBoardandtheexternalauditors,internalauditorsandfinancialmanagement.

c) ActupontheBoardofDirectors’requesttoinvestigateandreportonanyactivity,issuesorconcernsinregardtothemanagementoftheGroup.

d) ReviewtheexistingpracticesandmakerecommendationstoManagement.Inthisregard,theAuditCommitteeisauthorisedtoseekanyinformationitrequiresfromanyemployeeandtoobtainoutsidelegalorotherindependentprofessionaladviceandtosecuretheattendanceofoutsiderswithrelevantexperienceandexpertiseifitconsidersnecessary.

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3. FUNCTIONSOFTHEAUDITCOMMITTEE

I) ToreviewthefollowingandreportthesametotheBoardofDirectorsoftheCompany:

a) theauditplan,withtheexternalauditors;

b) itsauditreport,withtheexternalauditors;

c) theassistancegivenbytheemployeesoftheCompanytotheexternalauditors;

d) thequarterlyresultsandyearendfinancialstatements,priortotheapprovalbytheBoardofDirectors,focusingparticularlyon:

i) goingconcernassumption;

ii) changesinorimplementationofmajoraccountingpoliciesandpractices;

iii) significantandunusualevents;and

iv) compliancewithaccountingstandardsandotherlegalrequirements;

e) internalauditfunction:

i) theadequacyof thescope, functionsand resourcesof the internalaudit functionsand that ithas thenecessaryauthoritytocarryoutitswork;

ii) the internal audit programme, processes, the results of the internal audit programme, processes orinvestigationundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;

iii) considerthesignificantfindingsofinternalauditinvestigationsandmanagement’sresponse;

iv) itsevaluationofthesystemofinternalcontrols,withtheexternalauditor;

v) toassessthequalityanddepthofstaffingintheinternalauditfunction;

vi) reviewanyassessmentorappraisaloftheperformanceofthestaffoftheinternalauditfunction;and

vii) toinquireintotheeffectivenessoftheGroup’sinternalauditpoliciesandprocedures;

f) anyrelatedpartytransactionandconflictof interestsituationthatmayarisewithintheCompanyorGroupincludinganytransaction,procedureorcourseofconductthatraisesquestionsofmanagementintegrity;

g) anyletterofresignationfromtheexternalauditorsoftheCompany;

h) whetherthereisreason(supportedbygrounds)tobelievethattheCompany’sexternalauditorsisnotsuitableforre-appointment;and

i) theexternalauditors’managementletterandmanagement’sresponse.

II) Torecommendthenominationofapersonorpersonsasexternalauditors.

III) Todiscussproblemsandreservationsarisingfromtheinterimand/orfinalexternalaudits,andanymatterstheexternalauditorsmaywishtodiscuss(intheabsenceofManagement,wherenecessary)

IV) TocarryoutsuchotherfunctionsasmaybeagreedtobytheAuditCommitteeandtheBoardofDirectors.

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4. REVIEWOFTHEAUDITCOMMITTEE

ThetermofofficeandperformanceoftheAuditCommitteeandeachofitsmembersmustbereviewedbytheBoardofDirectorsatleastonceevery3yearstodeterminewhethertheAuditCommitteeandmembershavecarriedouttheirdutiesinaccordancewiththetermsofreference.

5. MEETINGS

TheAuditCommitteeshallmeetatleast4timesayearandsuchadditionalmeetingsastheChairmanshalldecideinordertofulfillitsduties.Inaddition,theChairmanmaycallameetingoftheauditcommitteeifarequestismadebyanycommitteemember,theCompany’schiefexecutiveorexternalauditors.

TheGroupFinancialControllerwillnormallybeinvitedtoattendallmeetingsoftheAuditCommitteeandtheexternalauditorswillbe invitedtoattendwhereappropriate.Otherboardmembers, thechief internalauditorand/orotheremployees may also be invited to attend any particular meeting of the Audit Committee as determined by theChairman.

6. NOTICE

Threedaysnoticespecifyingtheplace,dateandhourofthemeetingandthebusinesstobediscussedthereatshallbegiventoalltheAuditCommitteemembersandanyotherpersonthatmayberequiredtoattend.

7. QUORUM

ThequorumforeachmeetingoftheAuditCommitteeshallbeamajorityofmemberspresentwhomustbeindependentdirectors.

8. VOTESOFAUDITCOMMITTEEMEMBERS

QuestionsarisingatanymeetingoftheAuditCommitteeshallbedeterminedbyamajorityoftheAuditCommitteememberspresent,andinthecaseofanequalityofvotes,theChairmanshallhaveasecondorcastingvote.

9. SECRETARYANDMINUTES

TheCompanySecretaryshallactasSecretaryoftheAuditCommittee.

TheSecretaryshallalsoberesponsibleforkeepingtheminutesofmeetingsoftheAuditCommitteeandcirculatingthemtotheauditcommitteemembersandtotheothermembersoftheBoardofDirectors.TheChairmanoftheAuditCommitteeshallreportoneachmeetingoftheAuditCommitteetotheBoard.

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statement on internal control

BOARDRESPONSIBILITY

TheBoardacknowledgesthatitisresponsiblefortheGroup’ssystemofinternalcontrolandforreviewingitsadequacyandintegrity.Thesystemisdesignedtomanageratherthantoeliminatetheriskoffailuretoachievebusinessobjectivesandcanonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.

The system includes controls of a financial, operational, organisational and compliance nature as well as riskmanagement. The Board has established an ongoing process to identify, evaluate, document, monitor and reviewsignificantrisksfacedbytheGroupinsafeguardingtheshareholders’investmentandGroup’sassets.

RISKMANAGEMENT

Whist theBoardmaintainsultimatecontrolover riskandcontrol issues, ithasdelegated to theRiskManagementCommittee (RMC) within an established framework on the implementation of risk management with the aim ofstrengtheningtheriskmanagementfunctionsacrosstheGroup.TheRMCreportstotheAuditCommittee.

TheRMCreviewstheeffectivenessandadequacyoftheriskmanagementprocesses inplaceandensurethatriskassessmentexercisewascarriedoutbytherespectiveoperatingunitsanddepartmentsinmonitoringandmitigatingtherisksfacedbytherespectiveunitsanddepartments.Newareasareintroducedforassessmentasthebusinessriskprofilechanges.

INTERNALAUDIT

Theinternalauditfunctionadoptsarisk-basedapproachtoprovidetheAuditCommitteewithindependentandobjectivereportsonthestateofinternalcontrolandtheextentofcompliancewiththeestablishedpoliciesandproceduresaswellasrelevantstatutoryrequirements.

TheinternalauditreportsdirectlytotheAuditCommittee.InternalauditplansitsauditbasedontheauditplanapprovedbytheAuditCommitteeatthebeginningoftheyear.TheAuditCommitteereviewsthereportsfrominternalaudit,beforereportingandmakingrecommendationstotheBoardinstrengtheningtheinternalcontrol.TheAuditCommitteepresentsitsfindingstotheBoardregularly,andatleastonaquarterlybasis,asappropriate.

CONTROLENVIRONMENT

ThekeyelementsoftheGroup’ssystemofinternalcontrolareasfollows:

• There is in place an organisation structure which formally defines lines of responsibility and delegation ofauthority.

• Establishedstrategicplanningandbudgetingprocess requiringalloperatingunits toprepareannualoperatingbudgetincludingcapitalandmanpowerbudgets.TheBoardreviewsandapprovesthebudgets.

• Effective reporting systems are in place for monthly performance and variance reports for review bymanagement.

• Actualperformancecomparedwithbudgetandpreviousyearisreviewedquarterlywithdetailedexplanationofanymaterialvariances.

• Policiesandproceduresofmostoperatingunitsaredocumentedandupdatedregularlytomeetchangingbusinessenvironment.

• ClearlydefinedapprovingauthorityofthemanagersandexecutiveswithintheGroup.

TheGroup’ssystemofinternalcontroldoesnotapplytoassociatedcompaniesbecausetheGroupdoesnothavefullmanagementandcontroloverthem.

TheexternalauditorscontributeanindependentperspectiveoncertainaspectsoftheinternaloperatingandfinancialcontrolsystemarisingfromtheirworktotheAuditCommitteebywayofManagementLetter.

ThisStatementwasapprovedbytheBoardofDirectorson23May2007.

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directors’ report & audited financial statements

Directors’report 24

Statementbydirectors 28

Statutorydeclaration 28

Reportoftheauditors 29

Balancesheets 30

Incomestatements 32

Consolidatedstatementofchangesinequity 33

Companystatementofchangesinequity 34

Cashflowstatements 35

Notestothefinancialstatement 3�

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directors’ report

TheDirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31December2006.

PRINCIPALACTIVITIES

TheprincipalactivityoftheCompanyisthatoftradinganddistributionofbuildingmaterials.

TheprincipalactivitiesofthesubsidiariesaredisclosedinNote6tothefinancialstatements.

Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.

RESULTS

Group Company RM RM

Profitforthefinancialyearaftertaxation 1,822,882 933,043

Attributableto: EquityholdersoftheCompany 1,430,788 933,043

Minorityinterest 392,094 -

1,822,882 933,043

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanasdisclosedinthefinancialstatements.

IntheopinionoftheDirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnatureotherthantheeffectarisingfromchanges inestimateswheretheresidualvaluesofcertainproperty,plantandequipmentswererevisedresultinginanincreaseintheGroup’sandtheCompany’sprofitfortheyearbyRM548,751andRM259,289respectivelyasdisclosedinNote2.4tothefinancialstatements.

DIVIDENDS

NodividendhasbeenrecommendedbytheDirectorsinrespectofthecurrentfinancialyear.

DIRECTORS

ThenamesoftheDirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:

TanSriAbuSahidbinMohamed ExecutiveChairman

Dato’AbuTalibbinMohamed DeputyChairman

Dato’LimHengSuan ManagingDirector/ChiefExecutiveOfficer

LeChingTai@LeeChenChong ExecutiveDirector

Dato’MohamedFuadbinYon

Dato’AhmadBakribinShabdin

Dato’SiewMunChuang

MaarofbinH.A.Rahman

Dato’LimAhLai

Mohd.FauzibinYon (AlternatetoTanSriAbuSahidbinMohamed)

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DIRECTORS’BENEFITS

Neitherattheendofthefinancialyear,noratanytimeduringthatfinancialyear,didtheresubsistanyarrangementtowhichtheCompanywasaparty,wherebytheDirectorsmightacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate,otherthanthosearisingfromtheshareoptionsgrantedundertheExecutiveShareOptionsScheme.

Sincetheendofthepreviousfinancialyear,noDirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebytheDirectorsasshowninNote30ofthefinancialstatementsorthefixedsalaryofafulltimeemployee)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanydirectororwithafirmofwhichheisamember,orwithacompanyinwhichhehasasubstantialfinancialinterest,exceptasdisclosedinNote35tothefinancialstatements.

DIRECTORS’INTERESTS

AccordingtotheregisterofDirectors’shareholdings,theinterestsofDirectorsinofficeattheendofthefinancialyearinsharesintheCompanyanditsrelatedcorporationsduringthefinancialyearwereasfollows:

NumberofOrdinarySharesofRM1each

1January Acquired Sold 31December 2006 2006

The Company

Direct Interest

TanSriAbuSahidbinMohamed 5,388,900 - - 5,388,900

Dato’LimHengSuan 127,000 - - 127,000

Dato’LimAhLai 255,000 - - 255,000

Mohd.FauzibinYon 100,000 - - 100,000

Indirect Interest

TanSriAbuSahidbinMohamed 15,962,000 - - 15,962,000

Dato’LimHengSuan 4,594,000 - - 4,594,000

NoneoftheotherDirectorsinofficeattheendofthefinancialyearhadanyinterestinsharesintheCompanyoritsrelatedcorporationsduringthefinancialyear.

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EXECUTIVESHAREOPTIONSCHEME

TheIpmudaBerhadExecutiveShareOptionsScheme(“ESOS”)implementedin1996wasinforceforaperiodof10yearsfrom28October1996to27October2006.

ThesalientfeaturesandothertermsoftheESOSaredisclosedinNote23(b)tothefinancialstatements.

TheDirectors’shareoptionsintheCompanypursuanttotheESOSareasfollows:

NumberofOptionsoverOrdinarySharesofRM1each

1January 31December 2006 Granted Lapsed 2006

The Company

TanSriAbuSahidbinMohamed 480,000 - 480,000 -

LeChingTai@LeeChenChong 500,000 - 500,000 -

NoneoftheotherDirectorsinofficeattheendofthefinancialyearhadanyinterestinoptionsintheCompanyoritsrelatedcorporationsduringthefinancialyear.

OTHERSTATUTORYINFORMATION

(a) BeforethebalancesheetsandincomestatementsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps:

(i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofprovisionfor doubtful debts and satisfied themselves that all known bad debts had been written off and that adequateprovisionhadbeenmadefordoubtfuldebts;and

(ii) toensurethatanycurrentassetswhichwereunlikelytorealisetheirvaluesasshownintheaccountingrecordsintheordinarycourseofbusinesshadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.

(b) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichwouldrender:

(i) theamountwrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsinadequatetoanysubstantialextent;and

(ii) thevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

(c) Atthedateofthisreport,theDirectorsarenotawareofanycircumstanceswhichhavearisenwhichwouldrenderadherencetotheexistingmethodsofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

(d) Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.

(e) Asatthedateofthisreport,theredoesnotexist:

(i) anychargeontheassetsoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) anycontingentliabilityoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyear.

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(f) IntheopinionoftheDirectors:

(i) nocontingentorother liabilityhasbecomeenforceableor is likely tobecomeenforceablewithin theperiodoftwelvemonthsaftertheendofthefinancialyearwhichwillormayaffecttheabilityoftheGrouporoftheCompanytomeettheirobligationswhentheyfalldue;and

(ii) noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.

SIGNIFICANTEVENTS

DetailsofsignificanteventsaredisclosedinNote40tothefinancialstatements.

SUBSEQUENTEVENTS

DetailsofsubsequenteventsaredisclosedinNote41tothefinancialstatements.

AUDITORS

Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectorsdated25April2007.

TAN SRI ABU SAHID BIN MOHAMED ExecutiveChairman

DATO’ LIM HENG SUAN ManagingDirector/ChiefExecutiveOffice

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statement by directorspursuant to section �69(�5) of the companies act, �965

We,TANSRIABUSAHIDBINMOHAMEDandDATO’LIMHENGSUAN,beingtwooftheDirectorsofIpmudaBerhad,doherebystatethat,intheopinionoftheDirectors,theaccompanyingfinancialstatementssetoutonpages30to95aredrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableMASBApprovedAccountingStandards inMalaysia forEntitiesOtherThanPrivateEntitiesandsoas togivea trueand fairviewof thefinancialpositionoftheGroupandoftheCompanyasat31December2006andoftheresultsandthecashflowsoftheGroupandoftheCompanyforthefinancialyearthenended.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectorsdated25April2007.

TAN SRI ABU SAHID BIN MOHAMED ExecutiveChairman

DATO’ LIM HENG SUAN ManagingDirector/ChiefExecutiveOfficer

statutory declaration pursuant to section �69(�6) of the companies act, �965

I,ONGWANNYI,beingtheOfficerprimarilyresponsibleforthefinancialmanagementofIpmudaBerhad,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementssetoutonpages30to95areinmyopinioncorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,l960.

SubscribedandsolemnlydeclaredbytheabovenamedONGWANNYIatPetalingJaya,SelangorDarulEhsanon25April2007 ONG WANN YI

Beforeme,

G. VIJAYAN @ BASKARAN PPNPesuruhjayaSumpah

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report of the auditorsto the members of ipmuda berhad (22�46-t)

(Incorporated in Malaysia)

Wehaveauditedthefinancialstatementssetoutonpages30to95.ThesefinancialstatementsaretheresponsibilityoftheCompany’sDirectors.

Itisourresponsibilitytoformanindependentopinion,basedonouraudit,onthefinancialstatementsandtoreportouropiniontoyou,asabody,inaccordancewithSection174oftheCompaniesAct,1965andfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

WeconductedourauditinaccordancewithapplicableApprovedStandardsonAuditinginMalaysia.Thosestandardsrequire thatweplanandperformtheaudit toobtain reasonableassuranceaboutwhether thefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.AnauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebytheDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditprovidesareasonablebasisforouropinion.

Withoutqualifyingouropinion,wedrawyourattentiontoNote12ofthefinancialstatementswhichprovidesdisclosuresinrespectoftheamountsduefromcompaniesinwhichcertainDirectorshavesubstantialinterestandtheamountsduefromcompanieswithcertaincommonDirectors.TheDirectorsareoftheopinionthatthedebtswillberecoverableandthusnoprovisionfordoubtfuldebtsisrequiredasat31December2006.Asthedebtsarelongoutstanding,weconsiderthatweshoulddrawyourattentiontothedisclosuremadeinNote12tothefinancialstatements.

Inouropinion:

(a) thefinancialstatementshavebeenproperlydrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableMASBApprovedAccountingStandardsinMalaysiaforEntitiesOtherThanPrivateEntitiessoastogiveatrueandfairviewof:

(i) thefinancialpositionoftheGroupandoftheCompanyasat31December2006andoftheresultsandthecashflowsoftheGroupandoftheCompanyfortheyearthenended;and

(ii) themattersrequiredbySection169oftheCompaniesAct,1965tobedealtwithinthefinancialstatements;and

(b) theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyandbyitssubsidiariesofwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

Wehaveconsideredthefinancialstatementsandtheauditors’reportsthereonofthesubsidiariesofwhichwehavenotactedasauditors,asindicatedinNote6tothefinancialstatements,beingfinancialstatementsthathavebeenincludedintheconsolidatedfinancialstatements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financialstatementsoftheCompanyareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

Theauditors’reportsonthefinancialstatementsofthesubsidiarieswerenotsubjecttoanyqualificationmaterialtotheconsolidatedfinancialstatementsanddidnotincludeanycommentrequiredtobemadeunderSection174(3)oftheAct.

Ernst & Young Mohd Sukarno Bin Tun Sardon No.AF:0039 No.1697/03/09(J)CharteredAccountants Partner

KualaLumpur,Malaysia25April2007

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balance sheetsas at 3� december 2006

Group Company Note 2006 2005 2006 2005 RM RM RM RM (restated) (restated)

NON-CURRENTASSETS

Property,plantandequipment 3 34,857,688 35,838,362 4,569,646 4,982,946

Investmentproperties 4 13,950,000 11,879,370 9,830,000 8,761,839

Prepaidlandleasepayments 5 12,079,120 12,898,764 1,947,940 2,573,574

Investmentsinsubsidiaries 6 - - 16,166,421 16,497,633

Investmentinassociates 7 1,855,500 2,014,999 10,501 49,000

Otherinvestments 8 893,295 888,445 432,440 477,600

Deferredtaxassets 9 1,499,449 1,708,797 687,012 701,393

65,135,052 65,228,737 33,643,960 34,043,985

CURRENTASSETS

Landandpropertydevelopmentexpenditure 10 7,268,739 7,243,947 - -

Inventories 11 23,477,778 23,947,998 2,621,762 3,560,015

Tradereceivables 12 185,862,785 163,204,406 59,177,033 51,277,296

Otherreceivables 13 7,151,771 6,364,686 5,742,337 5,453,512

Taxationrecoverable 1,942,715 1,472,991 1,171,213 871,229

Amountduefromsubsidiaries 6 - - 116,715,496 124,157,136

Shortterminvestment 14 8,297,251 8,297,251 8,297,251 8,297,251

Deposits 15 - 920,000 - -

Cashandbankbalances 16 370,159 1,788,253 27,222 461,379

234,371,198 213,239,532 193,752,314 194,077,818

CURRENTLIABILITIESTradepayables 17 71,169,728 51,510,636 18,536,663 11,386,651

Otherpayables 18 15,165,511 14,748,042 10,774,099 10,908,978

Amountduetosubsidiaries 6 - - 47,643,173 47,875,835

Amountduetoassociate 7 25,201 26,713 25,201 26,713

Hirepurchasepayables 19 87,528 176,532 49,728 138,732

Shorttermbankborrowings 20 80,664,362 70,578,714 53,945,084 48,183,768

Bankoverdrafts 21 7,631,310 5,201,134 3,687,840 3,476,464

Securedbankguaranteed commercialpapers 22 - 15,000,000 - 15,000,000

Taxation 213,615 59,635 - -

174,957,255 157,301,406 134,661,788 136,997,141

NETCURRENTASSETS 59,413,943 55,938,126 59,090,526 57,080,677

124,548,995 121,166,863 92,734,486 91,124,662

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FINANCEDBY:

Sharecapital 23 72,469,500 72,469,500 72,469,500 72,469,500

Sharepremium 24 3,456,500 3,456,500 3,456,500 3,456,500

Reserves 25 35,154,964 31,720,928 16,663,059 14,747,843

111,080,964 107,646,928 92,589,059 90,673,843

Minorityinterests 13,086,829 12,795,826 - -

Totalequity 124,167,793 120,442,754 92,589,059 90,673,843

NON-CURRENTLIABILITIES

Hirepurchasepayables 19 230,477 573,669 145,427 450,819

Deferredtaxliabilities 9 150,725 150,440 - -

381,202 724,109 145,427 450,819

124,548,995 121,166,863 92,734,486 91,124,662

The accompanying notes form an integral part of the financial statements.

balance sheets (cont’d)as at 3� december 2006

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income statementsfor the financial year ended 3� december 2006


Revenue 26 398,142,031 349,103,664 125,281,459 107,472,649

Costofsales 27 (368,742,949) (322,394,216) (117,102,589) (100,088,771)

Grossprofit 29,399,082 26,709,448 8,178,870 7,383,878

Otherincome 28 6,260,578 7,818,341 10,977,966 8,330,933

Administrativeexpenses (16,853,012) (16,252,951) (10,074,620) (9,021,920)

Sellingandmarketingexpenses (10,288,801) (9,211,833) (2,448,232) (2,073,976)

Otheroperatingexpenses (2,128,295) (13,624,987) (2,783,880) (14,457,157)

Profit/(loss)fromoperations 6,389,552 (4,561,982) 3,850,104 (9,838,242)

Financecosts 29 (3,814,580) (3,255,877) (2,638,374) (2,377,934)

Shareofresultsofassociates (159,499) (505,150) - -

Profit/(loss)beforetaxation 30 2,415,473 (8,323,009) 1,211,730 (12,216,176)

Taxation 31 (592,591) (404,455) (278,687) 392,962

Profit/(loss)aftertaxation 1,822,882 (8,727,464) 933,043 (11,823,214)

Attributableto:EquityholdersoftheCompany 1,430,788 (9,248,675) 933,043 (11,823,214)

Minorityinterests 392,094 521,211 - -

1,822,882 (8,727,464) 933,043 (11,823,214)

EarningspershareattributabletoequityholdersoftheCompany(sen)

Basic,forprofitfortheyear 32 1.97 (12.76)

Diluted,forprofitfortheyear 32 1.97 (12.76)


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AttributabletoEquityHoldersoftheCompany Non-distributable Distributable Exchange Share Share Revaluation Fluctuation Retained Minority Total Capital Premium Reserves Reserves Profits Total Interest Equity Note (Note23) (Note24) (Note25) (Note25) (Note25) RM RM RM RM RM RM RM RM

At 1 January 2005 72,469,500 3,456,500 1,173,470 417,953 40,927,938 118,445,361 12,361,015130,806,376

Exchangefluctuationreserve - - - 15,583 - 15,583 - 15,583

Netlossforthefinancialyear - - - - (9,248,675) (9,248,675) 521,211(8,727,464)

Dividends 33 - - - - (1,565,341) (1,565,341) -(1,565,341)

Dividendspaidtominorityinterestofasubsidiary - - - - - - (86,400) (86,400)

At 31 December 2005 72,469,500 3,456,500 1,173,470 433,536 30,113,922107,646,928 12,795,826120,442,754

EffectsofadoptingFRS140 2.3(d) - - (1,173,470) - 3,185,749 2,012,279 9,309 2,021,588

Exchangefluctuationreserve - - - (9,031) - (9,031) - (9,031)

Netprofitforthefinancialyear - - - - 1,430,788 1,430,788 392,094 1,822,882

Dividendspaidtominorityinterestofasubsidiary - - - - - - (110,400) (110,400)

At 31 December 2006 72,469,500 3,456,500 - 424,505 34,730,459111,080,964 13,086,829124,167,793


consolidated statement of changes in equityfor the financial year ended 3� december 2006

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company statement of changes in equityfor the financial year ended 3� december 2006

Non-distributable Distributable

Share Share Revaluation Retained Capital Premium Reserves Profits TotalEquity Note (Note23) (Note24) (Note25) (Note25) RM RM RM RM RM

At 1 January 2005 72,469,500 3,456,500 1,173,470 26,962,928 104,062,398

Netlossforthefinancialyear - - - (11,823,214) (11,823,214)

Dividends 33 - - - (1,565,341) (1,565,341)

At 31 December 2005 72,469,500 3,456,500 1,173,470 13,574,373 90,673,843

EffectsofadoptingFRS140 2.3(d) - - (1,173,470) 2,155,643 982,173

Netprofitforthefinancialyear - - - 933,043 933,043

At 31 December 2006 72,469,500 3,456,500 - 16,663,059 92,589,059


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Group Company 2006 2005 2006 2005 RM RM RM RM

CASHFLOWSFROMOPERATINGACTIVITIES

Profit/(loss)beforetaxation 2,415,473 (8,323,009) 1,211,730 (12,216,176)

Adjustmentsfor: Depreciationofproperty,plant andequipment 1,630,341 2,562,592 407,995 828,625

Depreciationofinvestmentproperty previouslyclassifiedasproperty, plantandequipment - 137,736 - 130,620

Amortisationofprepaidleasepayments 232,970 240,628 38,960 48,125

Allowancefordoubtfuldebts 288,054 4,103,847 1,619,964 7,908,902

Allowanceforimpairmentloss oninvestment (4,850) 6,084,901 414,871 5,169,681

Allowanceforimpairmentloss onland&building - 570,399 - -

Interestexpense 3,814,580 3,255,877 2,638,374 2,377,934

Shareofresultsofassociates 159,499 505,150 - -

Gainondisposalofproperty,plant andequipment (50,752) (140,023) (8,225) (18,098)

Gainondisposalofprepaidleaseassets (1,446,189) - (1,446,189) -

Gainondisposalofinvestmentinassociates (105,000) - - -

Property,plantandequipmentwrittenoff 4,537 76,864 2 4 Writedownofinventories 17,374 440,039 - 149,952

Interestincome (2,375,493) (3,985,865) (1,580,124) (2,852,992)

Dividendincome (1,740) (4,770) (2,836,570) (2,331,710)

Rentalincome (121,500) (136,500) (633,858) (639,648)

Operatingprofit/(loss)before workingcapitalchanges 4,457,304 5,387,866 (173,070) (1,444,781)

Landandpropertydevelopment (24,792) (19,752) - -

Inventories 452,846 15,964,067 938,253 14,780,201

Receivables (23,733,518) 4,183,793 (8,680,647) 1,332,877

Subsidiaries - - 6,081,099 (807,413)

Associates (1,512) 1,290 (1,512) 1,290

Payables 20,076,561 78,867 7,015,133 (1,496,607)

Cashgeneratedfromoperations 1,226,889 25,596,131 5,179,256 12,365,567

Interestpaid (3,142,318) (2,715,710) (1,966,112) (1,837,767)

Taxationpaid (747,744) (1,809,019) (650,278) (874,886)

Netcash(usedin)/generatedfromoperatingactivities (2,663,173) 21,071,402 2,562,866 9,652,914

cash flow statementsfor the financial year ended 3� december 2006

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cash flow statements (cont’d)for the financial year ended 3� december 2006


CASHFLOWSFROMINVESTINGACTIVITIES

Proceedsfromdisposalofproperty, plantandequipment 637,562 158,804 586,552 18,103

Proceedsfromdisposalofprepaid leaseassets 2,032,863 - 2,032,863 -

Proceedsfromdisposalofinvestment inassociates 105,000 - - -

Purchaseofproperty,plant andequipment (1,085,934) (2,625,897) (418,024) (1,723,968)

Rentalincome 121,500 136,500 633,858 639,648

Interestincome 2,375,493 3,985,865 1,580,124 2,852,992

Dividendreceivedfromsubsidiaries - - 2,836,000 2,330,000

Dividendreceivedfromshares quotedinMalaysia 1,740 4,770 570 1,710

Netcashgeneratedfrominvestingactivities 4,188,224 1,660,042 7,251,943 4,118,485

CASHFLOWSUSEDINFINANCINGACTIVITIES

Dividendspaid - (1,565,341) - (1,565,341)

Dividendspaidtominorityshareholders insubsidiarycompanies (110,400) (86,400) - -

Interestoncommercialpaper (381,714) (540,167) (381,714) (540,167)

Interestonbridgingloan (290,548) - (290,548) -

Repaymentofcommercialpaper (15,000,000) (5,000,000) (15,000,000) (5,000,000)

Proceedsfrom/(repaymentof) shorttermbankborrowings 10,085,648 (12,317,690) 5,761,316 (6,724,636)

Debtservicereserveaccount 433,856 (11,364) 433,856 (11,364)

Repaymentofhirepurchase (587,196) (132,399) (549,396) (104,049)

Netcashusedinfinancingactivities (5,850,354) (19,653,361) (10,026,486) (13,945,557)

NET (DECREASE)/ INCREASE IN CASH AND CASH EQUIVALENTS (4,325,303) 3,078,083 (211,677) (174,158)

EXCHANGE DIFFERENCES (9,111) 15,988 - -

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR (2,926,737) (6,020,808) (3,448,941) (3,274,783)

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 34 (7,261,151) (2,926,737) (3,660,618) (3,448,941)


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1.CORPORATEINFORMATION

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheMainBoardofBursaMalaysiaSecuritiesBerhad.TheregisteredofficeoftheCompanyislocatedatBangunanIpmuda,12JalanDatoh,30000Ipoh,PerakDarulRidzuan.

TheprincipalactivityoftheCompanyisthatoftradinganddistributionofbuildingmaterials.Theprincipalactivitiesofthesubsidiariesaretradinginbuildingmaterials,tradinginheavysteelproducts,tradinginfueloilandlubricants,manufactureoffurniture,lettingofpropertiesandpropertydevelopment.Otheractivitiesincludepropertyinvestmentand investmentholding.Therehavebeennosignificantchanges in thenatureof theprincipalactivitiesduringthefinancialyear.

ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionoftheDirectorson25April2007.

2.SIGNIFICANTACCOUNTINGPOLICIES

2.1BasisofPreparation

ThefinancialstatementscomplywiththeprovisionsoftheCompaniesAct,1965andapplicableMASBApprovedAccountingStandardsinMalaysiaforEntitiesOtherThanPrivateEntities.Atthebeginningofthecurrentfinancialyear,theGroupandtheCompanyhadadoptednewandrevisedFinancialReportingStandards(“FRSs”)whicharemandatoryforfinancialperiodsbeginningonorafter1January2006asdescribedfullyinNote2.3.

ThefinancialstatementsoftheGroupandoftheCompanyhavealsobeenpreparedonahistoricalbasis,exceptforbuildingonleaseholdlandincludedwithinproperty,plantandequipmentandinvestmentpropertiesthathavebeenmeasuredattheirrevaluedamountsandfairvaluesrespectively.

ThefinancialstatementsarepresentedinRinggitMalaysia(RM).

2.2SummaryofSignificantAccountingPolicies

(a) SubsidiariesandBasisofConsolidation

(i) Subsidiaries

SubsidiariesareentitiesoverwhichtheGrouphastheabilitytocontrolthefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost lessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.

(ii) Basisofconsolidation

The consolidated financial statements comprise the financial statements of the Company and itssubsidiariesasatthebalancesheetdate.ThefinancialstatementsofthesubsidiariesarepreparedforthesamereportingdateastheCompany.

Subsidiariesareconsolidated from thedateofacquisition,being thedateonwhich theGroupobtainscontrol, and continue to be consolidated until the date that such control ceases. In preparing theconsolidatedfinancialstatements, intragroupbalances, transactionsandunrealisedgainsor lossesareeliminatedinfull.Uniformaccountingpoliciesareadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method ofaccountinginvolvesallocatingthecostoftheacquisitiontothefairvalueoftheassetsacquiredandliabilitiesandcontingentliabilitiesassumedatthedateofacquisition.Thecostofanacquisitionismeasuredastheaggregateofthefairvalues,atthedateofexchange,oftheassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissued,plusanycostsdirectlyattributabletotheacquisition.

notes to the financial statements3� december 2006

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notes to the financial statements (cont’d)3� december 2006

2.SIGNIFICANTACCOUNTINGPOLICIES(cont’d)

2.2SummaryofSignificantAccountingPolicies(cont’d)

(a) SubsidiariesandBasisofConsolidation(cont’d)

(ii) Basisofconsolidation(cont’d)

AnyexcessofthecostoftheacquisitionovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesrepresentsgoodwill.AnyexcessoftheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofacquisitionisrecognisedimmediatelyinprofitorloss.

Minority interests represent theportionofprofitor lossandnetassets insubsidiariesnotheldby theGroup.Itismeasuredattheminorities’shareofthefairvalueofthesubsidiaries’identifiableassetsandliabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity sincethen.

(b)Associates

Associatesareentities inwhich theGrouphassignificant influenceandthat isneitherasubsidiarynoraninterestinajointventure.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutnotincontrolorjointcontroloverthosepolicies.

Investmentsinassociatesareaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodofaccounting.Undertheequitymethod,the investment inassociate iscarried intheconsolidatedbalancesheetatcostadjustedforpost-acquisitionchangesintheGroup’sshareofnetassetsoftheassociate.TheGroup’sshareofthenetprofitorlossoftheassociateisrecognisedintheconsolidatedprofitorloss.Wheretherehasbeenachangerecogniseddirectlyintheequityoftheassociate,theGrouprecognisesitsshareofsuchchanges.

Inapplyingtheequitymethod,unrealisedgainsandlossesontransactionsbetweentheGroupandtheassociateareeliminatedtotheextentoftheGroup’sinterestintheassociate.Afterapplicationoftheequitymethod,theGroupdetermineswhetheritisnecessarytorecogniseanyadditionalimpairmentlosswithrespecttotheGroup’snetinvestmentintheassociate.TheassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificantinfluenceovertheassociate.

Goodwillrelatingtoanassociateisincludedinthecarryingamountoftheinvestmentandisnotamortised.AnyexcessoftheGroup’sshareofthenetfairvalueoftheassociate’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostoftheinvestmentisexcludedfromthecarryingamountoftheinvestmentandisinsteadincludedasincomeinthedeterminationoftheGroup’sshareoftheassociate’sprofitorlossintheperiodinwhichtheinvestmentisacquired.

WhentheGroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganylong-termintereststhat,insubstance,formpartoftheGroup’snetinvestmentintheassociates,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.

ThemostrecentavailableauditedfinancialstatementsoftheassociatesareusedbytheGroupinapplyingtheequitymethod.WherethedatesoftheauditedfinancialstatementsusedarenotcoterminouswiththoseoftheGroup,theshareofresultsisarrivedatfromthelastauditedfinancialstatementsavailableandmanagementfinancial statements to the end of the accounting period. Uniform accounting polices are adopted for liketransactionsandeventsinsimilarcircumstances.

IntheCompany’sseparatefinancialstatements,investmentsinassociatesarestatedatcostlessimpairmentlosses.

Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.

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(c) Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost ofbusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulatedimpairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or morefrequentlyifeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpaired.Gainsandlossesonthedisposalofanentityincludethecarryingamountofgoodwillrelatingtotheentitysold.

(d)Property,PlantandEquipmentandDepreciation

Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance arechargedtotheincomestatementduringthefinancialperiodinwhichtheyareincurred.

Subsequent to recognition,property, plant andequipmentexcept for freehold landare statedat cost lessaccumulateddepreciationandanyaccumulatedimpairmentlosses.

Freehold land is statedat revaluedamount,which is the fair valueat thedateof the revaluation lessanyaccumulated impairment losses. Fair value is determined frommarket-basedevidenceby appraisal that isundertakenbyprofessionallyqualifiedvaluers.Revaluationsareperformedwithsufficientregularitytoensurethatthefairvalueofarevaluedassetdoesnotdiffermateriallyfromthatwhichwouldbedeterminedusingfairvaluesatthebalancesheetdate.Anyrevaluationsurplusiscreditedtotherevaluationreserveincludedwithinequity,excepttotheextentthatitreversesarevaluationdecreaseforthesameassetpreviouslyrecognisedinprofitorloss,inwhichcasetheincreaseisrecognisedinprofitorlosstotheextentofthedecreasepreviouslyrecognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplusin respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal orretirementofanasset,anyrevaluationreserverelatingtotheparticularassetistransferreddirectlytoretainedearnings.

Freeholdlandhasanunlimitedusefullifeandthereforeisnotdepreciated.Buildings-in-progressarealsonotdepreciatedastheseassetsarenotavailableforuse.Depreciationofotherproperty,plantandequipmentisprovidedforonastraight-linebasistowriteoffthecostofeachassettoitsresidualvalueovertheestimatedusefullife,atthefollowingannualrates:

Buildings 2%

Plantandmachinery 10%-35%

Motorvehicles 20%

Officefurniture,renovation,equipmentandair-conditioners 10%-20%

Theresidualvalues,usefullifeanddepreciationmethodarereviewedateachfinancialyear-endtoensurethattheamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Thedifferencebetweenthenetdisposalproceeds,ifanyandthenetcarryingamountisrecognisedinprofitorlossandtheunutilisedportionoftherevaluationsurplusonthatitemistakendirectlytoretainedearnings.


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(e)InvestmentProperties

Investmentpropertiesarepropertieswhichareheldeithertoearnrentalincomeorforcapitalappreciationorforboth.Suchpropertiesaremeasuredinitiallyatcost,includingtransactioncosts.Subsequenttoinitialrecognition, investment properties are stated at fair value. Fair value is arrived at by reference to marketevidenceoftransactionpricesforsimilarpropertiesandisperformedbyregisteredindependentvaluershavinganappropriaterecognisedprofessionalqualificationandrecentexperienceinthelocationandcategoryofthepropertiesbeingvalued.

Gainsorlossesarisingfromchangesinthefairvaluesofinvestmentpropertiesarerecognisedinprofitorlossintheyearinwhichtheyarise.

Apropertyinterestunderanoperatingleaseisclassifiedandaccountedforasaninvestmentpropertyonaproperty-by-propertybasiswhentheGroupholdsittoearnrentalsorforcapitalappreciationorboth.Anysuchpropertyinterestunderanoperatingleaseclassifiedasaninvestmentpropertyiscarriedatfairvalue.

Investment properties are derecognised when either they have been disposed of or when the investmentpropertyispermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromitsdisposal.Anygainsorlossesontheretirementordisposalofaninvestmentpropertyarerecognisedinprofitorlossintheyearinwhichtheyarise.

(f)LandHeldforPropertyDevelopmentandPropertyDevelopmentCosts

(i) Landheldforpropertydevelopment

Landheldforpropertydevelopmentconsistsoflandwherenodevelopmentactivitieshavebeencarriedoutorwheredevelopmentactivitiesarenotexpectedtobecompletedwithinthenormaloperatingcycle.Suchlandisclassifiedwithinnon-currentassetsandisstatedatcostlessanyaccumulatedimpairmentlosses.

Landheldforpropertydevelopmentisreclassifiedasdevelopmentpropertiesatthepointwhendevelopmentactivities have commenced and where it can be demonstrated that the development activities can becompletedwithinthenormaloperatingcycle.

(ii) PropertyDevelopmentCosts

Propertydevelopmentcostscompriseallcoststhataredirectlyattributabletodevelopmentactivitiesorthatcanbeallocatedonareasonablebasistosuchactivities.

Whenthefinancialoutcomeofadevelopmentactivitycanbereliablyestimated,propertydevelopmentrevenueandexpensesarerecognisedintheincomestatementbyusingthestageofcompletionmethod.Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentcostsincurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcosts.

Wherethefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,propertydevelopmentrevenueisrecognisedonlytotheextentofpropertydevelopmentcostsincurredthatisprobablewillberecoverable, and property development costs on properties sold are recognised as an expense in theperiodinwhichtheyareincurred.

Anyexpectedlossonadevelopmentproject,includingcoststobeincurredoverthedefectsliabilityperiod,isrecognisedasanexpenseimmediately.

Propertydevelopmentcostsnotrecognisedasanexpensearerecognisedasanasset,whichismeasuredatthelowerofcostandnetrealisablevalue.

The excess of revenue recognised in the income statement over billings to purchasers is classified asaccruedbillingswithintradereceivablesandtheexcessofbillingstopurchasersoverrevenuerecognisedintheincomestatementisclassifiedasprogressbillingswithintradepayables.

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g) ConstructionContracts

Wheretheoutcomeofaconstructioncontractcanbereliablyestimated,contractrevenueandcontractcostsarerecognisedasrevenueandexpensesrespectivelybyusingthestageofcompletionmethod.Thestageofcompletionismeasuredbyreferencetotheproportionofcontractcostsincurredforworkperformedtodatetotheestimatedtotalcontractcosts.

Wheretheoutcomeofaconstructioncontractcannotbereliablyestimated,contractrevenueisrecognisedtotheextentofcontractcostsincurredthatitisprobablewillberecoverable.Contractcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.

Whenitisprobablethattotalcontractcostswillexceedtotalcontractrevenue,theexpectedlossisrecognisedasanexpenseimmediately.

Whenthetotalofcostsincurredonconstructioncontractsplus,recognisedprofits(lessrecognisedlosses),exceedsprogressbillings,thebalanceisclassifiedasamountduefromcustomersoncontracts.Whenprogressbillingsexceedcosts incurredplus, recognisedprofits (lessrecognised losses), thebalance isclassifiedasamountduetocustomersoncontracts.

h) ImpairmentofNon-FinancialAssets

ThecarryingamountsoftheGroup’sassets,otherthaninvestmentproperties,constructioncontractassets,propertydevelopmentcosts,inventoriesanddeferredtaxassets,arereviewedateachbalancesheetdatetodeterminewhetherthereisanyindicationofimpairment.Ifanysuchindicationexists,theasset’srecoverableamountisestimatedtodeterminetheamountofimpairmentloss.

Forgoodwill,assetsthathaveanindefiniteusefullife,therecoverableamountisestimatedateachbalancesheetdateormorefrequentlywhenindicatorsofimpairmentareidentified.

For thepurposeof impairment testingof theseassets, recoverableamount isdeterminedonan individualassetbasisunlesstheassetdoesnotgeneratecashflowsthatarelargelyindependentofthosefromotherassets.Ifthisisthecase,recoverableamountisdeterminedforthecash-generatingunit(CGU)towhichtheassetbelongsto.Goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtoeachoftheGroup’sCGUs,orgroupsofCGUs,thatareexpectedtobenefitfromthesynergiesofthecombination,irrespectiveofwhetherotherassetsorliabilitiesoftheGroupareassignedtothoseunitsorgroupsofunits.

Anasset’srecoverableamountisthehigherofanasset’sorCGU’sfairvaluelesscoststosellanditsvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscount rate that reflectscurrentmarketassessmentsof the timevalueofmoneyand the risksspecific to theasset.Where thecarryingamountofanassetexceeds its recoverableamount, theasset isconsideredimpairedandiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen,toreducethecarryingamountoftheotherassetsintheunitorgroupsofunitsonapro-ratabasis.

Animpairmentlossisrecognisedinprofitorlossintheperiodinwhichitarises,unlesstheassetiscarriedatarevaluedamount, inwhichcasethe impairment loss isaccountedforasarevaluationdecreasetotheextentthattheimpairmentlossdoesnotexceedtheamountheldintheassetrevaluationreserveforthesameasset.


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2. SIGNIFICANTACCOUNTINGPOLICIES(cont’d)


h) ImpairmentofNon-FinancialAssets(cont’d)

Impairmentlossongoodwillisnotreversedinasubsequentperiod.Animpairmentlossforanassetotherthangoodwill isreversedif,andonlyif,therehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethe last impairment losswasrecognised.Thecarryingamountofanassetotherthangoodwillisincreasedtoitsrevisedrecoverableamount,providedthatthisamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedinprofitorloss,unlesstheassetiscarriedatrevaluedamount,inwhichcase,suchreversalistreatedasarevaluationincrease.

(i) Inventories

Inventoriesarestatedatlowerofcostandnetrealisablevalue.

Cost is determined on a weighted average basis. The cost of raw materials comprises costs of purchase.Thecostsoffinishedgoodsandwork-in-progresscomprisecostsofrawmaterials,directlabour,otherdirectcostsandappropriateproportionsofmanufacturingoverheadsbasedonnormaloperatingcapacity.Thecostof unsold properties comprises cost associated with the acquisition of land, direct costs and appropriateproportionsofcommoncosts.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.

(j) FinancialInstruments

FinancialinstrumentsarerecognisedinthebalancesheetwhentheGrouphasbecomeapartytothecontractualprovisionsoftheinstrument.

Financialinstrumentsareclassifiedasliabilitiesorequityinaccordancewiththesubstanceofthecontractualarrangement. Interest,dividends,gainsand lossesrelating toafinancial instrumentclassifiedasa liability,arereportedasexpenseorincome.Distributionstoholdersoffinancialinstrumentsclassifiedasequityarechargeddirectlytoequity.FinancialinstrumentsareoffsetwhentheGrouphasalegallyenforceablerighttooffsetandintendstosettleeitheronanetbasisortorealisetheassetandsettletheliabilitysimultaneously.

(i) CashandCashEquivalents

For thepurposesof thecashflowstatements,cashandcashequivalents includecashonhandandatbankanddepositsatcallwhichhavean insignificant riskofchanges invalue,netofoutstandingbankoverdrafts.

(ii) OtherNon-CurrentInvestments

Non-currentinvestmentsotherthaninvestmentsinsubsidiaries,associatesandjointlycontrolledentitiesarestatedatcostlessimpairmentlosses.Ondisposalofaninvestment,thedifferencebetweennetdisposalproceedsanditscarryingamountisrecognisedinprofitorloss.


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(j) FinancialInstruments(cont’d)

(iii)MarketableSecurities

Marketablesecuritiesarecarriedatthelowerofcostandmarketvalue,determinedonanaggregatebasis.Costisdeterminedontheweightedaveragebasiswhilemarketvalueisdeterminedbasedonquotedmarketvalues.Increasesordecreasesinthecarryingamountofmarketablesecuritiesarecreditedorchargedtotheincomestatement.Ondisposalofmarketablesecurities,thedifferencebetweennetdisposalproceedsandthecarryingamountischargedorcreditedtotheincomestatement.

(iv)Receivables

Receivables are carried at anticipated realisable values. Bad debts are written off when identified. Anestimateismadefordoubtfuldebtbasedonareviewofalloutstandingamountsasatthebalancesheetdate.

(v) Payables

Payablesarestatedatcostwhichisthefairvalueoftheconsiderationtobepaidinthefutureforgoodsandservicesreceived.

(vi) InterestBearingLoansandBorrowings

All loans and borrowings are initially recognised at the fair value of the consideration received lessdirectlyattributabletransactioncosts.Afterinitialrecognition,interestbearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

(vii)EquityInstruments

Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.

(k) Leases

(i) Classification

AleaseisrecognisedasafinanceleaseifittransferssubstantiallytotheGroupalltherisksandrewardsincidentaltoownership.Leasesoflandandbuildingsareclassifiedasoperatingorfinanceleasesinthesamewayasleasesofotherassetsandthelandandbuildingselementsofaleaseoflandandbuildingsareconsideredseparatelyforthepurposesofleaseclassification.Allleasesthatdonottransfersubstantiallyalltherisksandrewardsareclassifiedasoperatingleases,withthefollowingexceptions:

• Property held under operating leases that would otherwise meet the definition of an investmentpropertyisclassifiedasaninvestmentpropertyonaproperty-by-propertybasisand,ifclassifiedasinvestmentproperty,isaccountedforasifheldunderafinancelease(Note2.2(e));and

• Landheldforownuseunderanoperatinglease,thefairvalueofwhichcannotbemeasuredseparatelyfromthefairvalueofabuildingsituatedthereonattheinceptionofthelease,isaccountedforasbeingheldunderafinancelease,unlessthebuildingisalsoclearlyheldunderanoperatinglease.


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(k) Leases(cont’d)

(ii) Financeleases-theGroupaslessee

Assetsacquiredbywayofhirepurchaseorfinanceleasesarestatedatanamountequaltotheloweroftheirfairvaluesandthepresentvalueoftheminimumleasepaymentsattheinceptionoftheleases,lessaccumulateddepreciationand impairment losses.Thecorresponding liability is included in thebalancesheetasborrowings.Incalculatingthepresentvalueoftheminimumleasepayments,thediscountfactorusedistheinterestrateimplicitinthelease,whenitispracticabletodetermine;otherwise,theCompany’sincrementalborrowingrateisused.Anyinitialdirectcostsarealsoaddedtothecarryingamountofsuchassets.

Leasepaymentsareapportionedbetweenthefinancecostsandthereductionoftheoutstandingliability.Financecosts,whichrepresentthedifferencebetweenthetotalleasingcommitmentsandthefairvalueoftheassetsacquired,arerecognisedintheprofitorlossoverthetermoftherelevantleasesoastoproduceaconstantperiodicrateofchargeontheremainingbalanceoftheobligationsforeachaccountingperiod.

Thedepreciationpolicyfor leasedassets is inaccordancewiththatfordepreciableproperty,plantandequipmentasdescribedinNote2.2(d).

(iii)OperatingLeases-theGroupaslessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of therelevantlease.Theaggregatebenefitofincentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseovertheleasetermonastraight-linebasis.

Inthecaseofaleaseoflandandbuildings,theminimumleasepaymentsortheup-frontpaymentsmadeare allocated, whenever necessary, between the land and the buildings elements in proportion to therelativefairvaluesfor leaseholdinterestsinthelandelementandbuildingselementoftheleaseattheinceptionofthelease.Theup-frontpaymentrepresentsprepaidleasepaymentsandareamortisedonastraight-linebasisovertheleaseterm.

(iv)OperatingLeases-theGroupaslessor

Assetsleasedoutunderoperatingleasesarepresentedonthebalancesheetsaccordingtothenatureoftheassets.Rentalincomefromoperatingleasesisrecognisedonastraight-linebasisoverthetermoftherelevantlease(Note2.2(q)(iv)).Initialdirectcostsincurredinnegotiatingandarranginganoperatingleaseareaddedtothecarryingamountoftheleasedassetandrecognisedonastraight-linebasisovertheleaseterm.

(l) BorrowingCosts

Allborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.


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(m)IncomeTax

Incometaxontheprofitorlossfortheyearcomprisescurrentanddeferredtax.Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthebalancesheetdate.

Deferredtaxisprovidedfor,usingtheliabilitymethod.Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtax isnotrecognised if thetemporarydifferencearisesfromthe initial recognitionofanassetorliability in a transactionwhichat the timeof the transaction, affectsneither accountingprofitnor taxableprofit.

Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxisrecognisedasincomeoranexpenseandincludedintheprofitorlossfortheperiod,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsochargedorcrediteddirectlytoequity.

(n)ProvisionforLiabilities

ProvisionsarerecognisedwhentheGrouphasapresentobligationasaresultofapasteventanditisprobablethat anoutflowof resourcesembodyingeconomicbenefitswill be required to settle theobligation, andareliableestimateoftheamountcanbemade.Provisionsarereviewedateachbalancesheetdateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasfinancecost.

(o)EmployeeBenefits

(i) ShortTermBenefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichtheassociatedservicesarerenderedbyemployeesoftheGroup.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheir entitlement to future compensated absences, and short term non-accumulating compensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.

(ii) DefinedContributionPlans

Defined contribution plans are post-employment benefit plans under which the Group pays fixedcontributionsintoseparateentitiesorfundsandwillhavenolegalorconstructiveobligationtopayfurthercontributions if any of the funds do not hold sufficient assets to pay all employee benefits relating toemployeeservicesinthecurrentandprecedingfinancialyears.Suchcontributionsarerecognisedasanexpenseintheprofitorlossasincurred.Asrequiredbylaw,companiesinMalaysiamakesuchcontributionstotheEmployeesProvidentFund(“EPF”).SomeoftheGroup’sforeignsubsidiariesalsomakecontributionstotheirrespectivecountries’statutorypensionschemes.


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(o)EmployeeBenefits(cont’d)

(iii)ShareBasedCompensation

TheIpmudaBerhadExecutiveShareOptionsScheme(“ESOS”),anequity-settled,share-basedcompensationplan,allowstheGroup’semployeestoacquireordinarysharesoftheCompany.Thetotalfairvalueofshareoptionsgranted toemployees is recognisedasanemployeecostwithacorresponding increase in theshareoption reservewithinequityover the vestingperiodand taking intoaccount theprobability thattheoptionswillvest.Thefairvalueofshareoptionsismeasuredatgrantdate,takingintoaccount,ifany,themarketvestingconditionsuponwhichtheoptionsweregrantedbutexcludingtheimpactofanynon-marketvestingconditions.Non-marketvestingconditionsareincludedinassumptionsaboutthenumberofoptionsthatareexpectedtobecomeexercisableonvestingdate.

(p)ForeignCurrencies

(i) FunctionalandPresentationCurrency

The individualfinancialstatementsofeachentity in theGrouparemeasuredusingthecurrencyof theprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).Theconsolidatedfinancial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functionalcurrency.

(ii) ForeignCurrencyTransactions

In preparing the financial statements of the individual entities, transactions in currencies other thantheentity’s functionalcurrency (foreigncurrencies)are recorded in the functionalcurrenciesusing theexchangeratesprevailingatthedatesofthetransactions.Ateachbalancesheetdate,monetary itemsdenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingonthedatewhenthefairvaluewasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.

Exchangedifferencesarisingonthesettlementofmonetaryitems,andontheretranslationofmonetaryitems,are included inprofitor lossfortheperiodexcept forexchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperation.ExchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperation,wherethatmonetaryitemisdenominatedineitherthefunctionalcurrencyofthereportingentityortheforeignoperation,areinitially takendirectly to the foreigncurrency translation reservewithinequityuntil thedisposalof theforeignoperations,atwhichtimetheyarerecognised inprofitor loss.ExchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperation,wherethatmonetaryitemisdenominatedinacurrencyotherthanthefunctionalcurrencyofeitherthereportingentityortheforeignoperation,arerecognisedinprofitorlossfortheperiod.ExchangedifferencesarisingonmonetaryitemsthatformpartoftheCompany’snetinvestmentinforeignoperation,regardlessofthecurrencyofthemonetaryitem,arerecognisedinprofitorlossintheCompany’sfinancialstatementsortheindividualfinancialstatementsoftheforeignoperation,asappropriate.

Exchangedifferencesarisingontheretranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingontheretranslationofnon-monetaryitemsinrespectofwhichgainsandlossesarerecogniseddirectlyinequity.Exchangedifferencesarisingfromsuchnon-monetaryitemsarealsorecogniseddirectlyinequity.

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(p)ForeignCurrencies(cont’d)

(ii) ForeignCurrencyTransactions(cont’d)

Theprincipalexchangerateforeveryunitofforeigncurrencyrulingatthebalancesheetdateusedisasfollows:

2006 2005 RM RM

SingaporeDollar 2.2962 2.2701

(iii)ForeignOperations

Theresultsandfinancialpositionofforeignoperationsthathaveafunctionalcurrencydifferentfromthepresentationcurrency(RM)oftheconsolidatedfinancialstatementsaretranslatedintoRMasfollows:

• Assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateprevailingatthebalancesheetdate;

• Incomeandexpensesforeachincomestatementaretranslatedataverageexchangeratesfortheyear,whichapproximatestheexchangeratesatthedatesofthetransactions;and

• Allresultingexchangedifferencesaretakentotheforeigncurrencytranslationreservewithinequity.

Goodwillandfairvalueadjustmentsarisingontheacquisitionofforeignoperationsonorafter1January2006 are treated as assets and liabilities of the foreign operations and are recorded in the functionalcurrencyoftheforeignoperationsandtranslatedattheclosingrateatthebalancesheetdate.Goodwillandfairvalueadjustmentswhicharoseontheacquisitionofforeignsubsidiariesbefore1January2006aredeemedtobeassetsandliabilitiesoftheparentcompanyandarerecordedinRMattheratesprevailingatthedateofacquisition.

(q)RevenueRecognition

RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbereliablymeasured.Thefollowingspecificrecognitioncriteriamustalsobemetbeforerevenueisrecognised:

(i) SaleofGoods

Revenueisrecognisednetofsalestaxesanddiscountsupontransferofsignificantrisksandrewardsofownershiptothebuyer.

(ii) ConstructionContracts

RevenuefromconstructioncontractsareaccountedforbythestageofcompletionmethodasdescribedinNote2.2(g).

(iii)SaleofProperties

RevenuefromsaleofpropertiesisaccountedforbythestageofcompletionmethodasdescribedinNote2.2(f)(ii).


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(q)RevenueRecognition(cont’d)

(iv)RentalIncome

Rentalincomefrominvestmentpropertyisrecognisedonastraight-linebasisoverthetermofthelease.Theaggregatecostofincentivesprovidedtolesseesisrecognisedasareductionofrentalincomeovertheleasetermonastraight-linebasis.

(v) Interestincome

Interestincomeisrecognisedonanaccrualbasisusingtheeffectiveinterestmethodexceptforinterestonoverduesalesinvoiceswhichisrecognisedoncashbasis.

(vi)Dividendincome

DividendincomeisrecognisedwhentheGroup’srighttoreceivepaymentisestablished.

(vii)ManagementFees

Managementfeesarerecognisedwhenservicesarerendered.

2.3 ChangesinAccountingPolicies,EffectsandChangesinComparativesArisingfromAdoptionofNewandRevisedFRSs

On1January2006,theGroupandtheCompanyadoptedthefollowingFRSsmandatoryforfinancialperiodsbeginningonorafter1January2006:

FRS2 Share-basedPaymentFRS101 PresentationofFinancialStatementsFRS102 InventoriesFRS108 AccountingPolicies,ChangesinEstimatesandErrorsFRS110 EventsaftertheBalanceSheetDateFRS116 Property,PlantandEquipmentFRS121 TheEffectsofChangesinForeignExchangeRatesFRS127 ConsolidatedandSeparateFinancialStatementsFRS128 InvestmentsinAssociatesFRS132 FinancialInstruments:DisclosureandPresentationFRS133 EarningsPerShareFRS136 ImpairmentofAssetsFRS140 InvestmentProperty

Inadditiontotheabove,theGrouphasalsotakentheoptionofearlyadoptionofFRS117:Leasesforthefinancialperiodbeginning1January2006.

TheadoptionoftheaboveFRSsdoesnotresultinsignificantchangesinaccountingpoliciesoftheGroupexceptthefollowing:

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2.3 ChangesinAccountingPolicies,EffectsandChangesinComparativesArisingfromAdoptionofNewandRevisedFRSs(cont’d)

(a) FRS2:ShareBasedPayments

Priorto1January2006,nocompensationexpensewasrecognisedinprofitorlossforshareoptionsgranted.TheGroupandtheCompanyrecognisedanincreaseinsharecapitalandsharepremiumwhentheoptionswereexercised.UpontheadoptionofFRS2,thetotalfairvalueofshareoptionsgrantedtoemployeesisrecognisedasanemployeecostwithacorrespondingincreaseintheshareoptionreservewithinequityoverthevestingperiod.

InaccordancewiththetransitionalprovisionsinFRS2,thischangeinaccountingpolicyshallbeappliedtoshareoptionsthatweregrantedafter31December2004buthadnotyetvestedon1January2006.TheCompany’sshareoptionsweregrantedprior to31December2004andaccordingly, theCompany isnotrequiredtomeasurethefairvalueoftheshareoptionsgranted.

(b)FRS101:PresentationofFinancialStatements

Priorto1January2006,minority interestsatthebalancesheetdatewerepresented intheconsolidatedbalance sheet separately from liabilities and equity. Upon the adoption of the revised FRS 101, minorityinterestsarenowpresentedwithin totalequity. In theconsolidated incomestatement,minority interestsarepresentedasanallocationofthetotalprofitorlossfortheyear.Asimilarrequirementisalsoapplicableto the statement of changes in equity. The revised FRS101also requires disclosure, on the faceof thestatementofchangesinequity,totalrecognisedincomeandexpensesfortheyear,showingseparatelytheamountsattributabletoequityholdersoftheCompanyandtominorityinterests.

Priorto1January2006,theGroup’sshareoftaxationofassociatesaccountedforusingtheequitymethodwasincludedaspartoftheGroup’sincometaxexpenseintheconsolidatedincomestatement.UpontheadoptionoftherevisedFRS101,theshareoftaxationofassociatesaccountedforusingtheequitymethodarenowincludedintherespectivesharesofprofitorlossreportedintheconsolidatedincomestatementbeforearrivingattheGroup’sprofitorlossbeforetax.

ThesechangesinpresentationhavebeenappliedretrospectivelyandasdisclosedinNote2.3(e)(iii),certaincomparativeshavebeenrestated.Theeffectsontheconsolidatedbalancesheetasat31December2006and consolidated income statement for the year ended 31 December 2006 are set out in Note 2.3(e)(i)andNote2.3(e)(ii)respectively.ThesechangesinpresentationhasnoimpactontheCompany’sfinancialstatements.

(c) FRS117:Leases

Leaseholdlandheldforownuse

Priorto1January2006,leaseholdlandheldforownusewasclassifiedasproperty,plantandequipmentandwasstatedatcostlessaccumulateddepreciationandimpairmentlosses.TheadoptionoftherevisedFRS117hasresultedinachangeintheaccountingpolicyrelatingtotheclassificationofleasesoflandandbuildings.Leasesoflandandbuildingsareclassifiedasoperatingorfinanceleasesinthesamewayasleasesofotherassetsandthelandandbuildingselementsofaleaseoflandandbuildingsareconsideredseparatelyforthepurposesofleaseclassification.Leaseholdlandheldforownuseisnowclassifiedasoperatingleaseandwherenecessary,theminimumleasepaymentsortheup-frontpaymentsmadeareallocatedbetweenthelandandthebuildingselementsinproportiontotherelativefairvaluesforleaseholdinterestsinthelandelementandbuildingselementoftheleaseattheinceptionofthelease.Theup-frontpaymentrepresentsprepaidleasepaymentsandareamortisedonastraight-linebasisovertheleaseterm.


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(c) FRS117:Leases(cont’d)

TheGrouphasappliedthechangeinaccountingpolicyinrespectofleaseholdlandinaccordancewiththetransitionalprovisionsofFRS117.At1January2006,theunamortisedamountofleaseholdlandisretainedasthesurrogatecarryingamountofprepaidleasepaymentsasallowedbythetransitionalprovisions.ThereclassificationofleaseholdlandasprepaidleasepaymentshasbeenaccountedforretrospectivelyandasdisclosedinNote2.3(e)(iii),certaincomparativeshavebeenrestated.Theeffectsontheconsolidatedbalancesheetasat31December2006aresetoutinNote2.3(e)(i).Therewerenoeffectsontheconsolidatedincomestatementfortheyearended31December2006andtheCompany’sfinancialstatements.

(d)FRS140:InvestmentProperty

(i) Prior to 1st January 2006, investment properties were stated at cost/valuation less accumulateddepreciation and impairment losses. Upon the adoption of FRS 140, investment properties are nowstatedatfairvalue,andanygainorlossesarisingfromchangesinthefairvaluesarerecognisedinprofitorlossinthefinancialyearinwhichtheyarise.

TheGrouphasappliedFRS140inaccordancewiththetransitionalprovisions.Thechangesinaccountingpolicyhasnoimpactonamountsreportedfor2005norforpriorperiods.Instead,thechangeshavebeenaccountedforbyrestatingthefollowingopeningbalancesoftheGroupasat1January2006:

Asat1.1.2006 RM Debit/(Credit)

Increaseininvestmentproperties(Note4) 2,070,630Decreaseinrevaluationreserve(Note25) 1,173,470Increaseinminorityinterests (9,309)Increaseinretainedearnings (3,185,749)Increaseindeferredtaxliabilities(Note9) (49,042)

TheeffectsontheconsolidatedandCompany’sbalancesheetasat31December2006aresetoutinNote2.3(e)(i).TherewerenoeffectsontheconsolidatedandCompany’sincomestatementfortheyearended31December2006.

(ii) TheadoptionofFRS140hasresultedinidentificationofpropertiesthatmeetsthedefinitionofinvestmentproperties but were previously classified within property, plant and equipment. Prior to 1st January2006, these investmentpropertieswere statedat cost/valuation less accumulateddepreciationandimpairmentlosses.UpontheadoptionofFRS140,investmentpropertiesarenowstatedatfairvalue,andanygainorlossesarisingfromchangesinthefairvaluesarerecognisedinprofitorlossinthefinancialyearinwhichtheyarise.

TheGrouphasappliedFRS140inaccordancewiththetransitionalprovisions.Thechangesinaccountingpolicy has no impact on the carrying values reported for 2005 nor for prior periods except for thereclassificationfromproperty,plantandequipmentto investmentproperties.ThereclassificationhasbeenaccountedforretrospectivelyandasdisclosedinNote2.3(e)(iii),certaincomparativeshavebeenrestated.

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(e)SummaryofeffectsandchangesarisingfromadoptionofnewandrevisedFRSs

Thefollowingtablesprovideestimatesoftheextenttowhicheachofthelineitemsinthebalancesheetsandincomestatementsfortheyearended31December2006ishigherorlowerthanitwouldhavebeenhadthepreviouspoliciesbeenappliedinthecurrentyear:

(i) Effectsonbalancesheetsasat31December2006

Increase / (Decrease)

FRS 101 FRS 117 FRS140 FRS140Description of change Note Note Note Note 2.3(b) 2.3(c) 2.3(d)(i) 2.3(d)(ii) TotalGroup RM RM RM RM RM

Property,plantandequipment - (12,079,120) - (11,879,370) (23,958,490)

Prepaidleasepayments - 12,079,120 - - 12,079,120

Investmentproperties - - 2,070,630 11,879,370 13,950,000

Deferredtaxliabilities - - 49,042 - 49,042

Revaluationreserve - - (1,173,470) - (1,173,470)

Retainedprofits - - 3,185,749 - 3,185,749

Minorityinterests - - 9,309 - 9,309

Totalequity 13,086,829 - - - 13,086,829

Company

Property,plantandequipment - (1,947,940) - (8,761,839) (10,709,779)

Prepaidleasepayments - 1,947,940 - - 1,947,940

Investmentproperties - - 1,068,161 8,761,839 9,830,000

Deferredtaxliabilities - - 85,988 - 85,988

Revaluationreserve - - (1,173,470) - (1,173,470)

Retainedprofits - - 2,155,643 - 2,155,643


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(e)SummaryofeffectsandchangesarisingfromadoptionofnewandrevisedFRSs(cont’d)

(ii) Effectsonincomestatementsfortheyearended31December2006


FRS 101 FRS 117 FRS140 FRS140Description of change Note Note Note Note 2.3(b) 2.3(c) 2.3(d)(i) 2.3(d)(ii) TotalGroup RM RM RM RM RM

Otherexpenses - - - - -

Operatingprofit - - - - -

Shareofresultsofassociates (7,172) - - - (7,172)

Profitbeforetaxation (7,172) - - - (7,172)

Incometaxexpense 7,172 - - - 7,172

Profitaftertaxation - - - - -

Earningspershare(sen):

-basic,forprofitfortheyear - - - - -

-diluted,forprofitfortheyear - - - - -

Company

Otherexpenses - - - - -

Operatingprofit - - - - -

Profitbeforetaxation - - - - -

Incometaxexpense - - - - -

Profitaftertaxation - - - - -


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(iii)Restatementofcomparatives

ThefollowingcomparativeamountshavebeenrestatedarisingfromtheeffectsofadoptingthenewandrevisedFRSs:


FRS 101 FRS 117 FRS140 FRS140 Previously Note Note Note NoteDescription of change Stated 2.3(b) 2.3(c) 2.3(d)(i) 2.3(d)(ii) Restated RM RM RM RM RM RM

At31December2005

Group

Property,plantandequipment 60,616,496 - (12,898,764) - (11,879,370) 35,838,362

Investmentproperties - - - - 11,879,370 11,879,370

Prepaidleasepayments - - 12,898,764 - - 12,898,764

Totalequity 107,646,92812,795,826 - - -120,442,754

Company

Property,plantand equipment 16,318,359 - (2,573,574) - (8,761,839) 4,982,946

Investmentproperties - - - - 8,761,839 8,761,839

Prepaidleasepayments - - 2,573,574 - - 2,573,574

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FRS 101 FRS 117 FRS140 FRS140 Previously Note Note Note NoteDescription of change Stated 2.3(b) 2.3(c) 2.3(d)(i) 2.3(d)(ii) Restated RM RM RM RM RM RM

Fortheyearended31December2005

Group

Operatingloss (4,561,982) - - - - (4,561,982)

Shareofresultsofassociates (500,738) (4,412) - - - (505,150)

Lossbeforetaxation (8,318,597) (4,412) - - - (8,323,009)

Incometaxexpense (408,867) 4,412 - - - (404,455)

Lossaftertaxation (8,727,464) - - - - (8,727,464)

Earningspershare(sen):

-basic,forprofitfortheyear (12.76) - - - - (12.76)

-diluted,forprofitfortheyear (12.76) - - - - (12.76)

Fortheyearended31December2005

Company

Operatingloss (9,838,242) - - - - (9,838,242)

Lossbeforetaxation (12,216,176) - - - - (12,216,176)

Incometaxbenefit 392,962 - - - - 392,962

Lossaftertaxation (11,823,214) - - - - (11,823,214)

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At the date of authorisation of these financial statements, the following FRS, amendments to FRS andInterpretationswereissuedbutnotyeteffectiveandhavenotbeenappliedbytheGroupandtheCompany.

FinancialreportingStandards EffectiveforfinancialperiodsAmendmentstoFRSandInterpretations beginningonorafter

FRS124-RelatedPartyTransactions 1October2006

FRS6-ExplorationforandEvaluationofMineralResources 1January2007

AmendmentstoFRS1192004-EmployeesBenefits-ActuarialGainsandLosses,GroupPlansandDisclosures 1January2007

AmendmentstoFRS121-TheEffectsofChangesinForeignExchangeRates-NetInvestmentinaForeignOperation 1July2007

ICInterpretation1-ChangesinExistingDecommissioning,RestorationandSimilarLiabilities 1July2007

ICInterpretation2-Members’SharesinCo-operativeEntitiesandSimilarLiabilities 1July2007

ICInterpretation5-RightstoInterestsarisingfromDecommissioning,RestorationandEnvironmentalRehabilitationFunds 1July2007

ICInterpretation6-LiabilitiesarisingfromParticipatinginaSpecificMarket-WasteElectricalandElectronicEquipment 1July2007

ICInterpretation7-ApplyingtheRestatementApproachunderFRS1292004-FinancialReportinginHyperinflationaryEconomies 1July2007

ICInterpretation8-ScopeofFRS2 1July2007

FRS139-FinancialInstruments:RecognitionandMeasurement Deferred

FRS6-ExplorationforandEvaluationofMineralResourcesandtheamendmentstoFRSandInterpretationsarenotrelevanttotheGroup’soperations.


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2.4 ChangesinEstimates

The revisedFRS116:Property,PlantandEquipment requires the reviewof the residualvalueand remaininguseful lifeofan itemofproperty,plantandequipmentat leastateachfinancialyearend.TheGrouprevisedthe residualvaluesofcertainmotorvehicles.The revisionswereaccounted forprospectivelyasachange inaccountingestimatesandasaresult,thedepreciationchargesoftheGroupandoftheCompanyforthecurrentfinancialyearhavebeenreducedbyRM548,751andRM259,289respectively.

2.5 SignificantAccountingEstimatesandJudgements

(a) CriticalJudgementsMadeinApplyingAccountingPolicies

ThefollowingarethejudgementsmadebymanagementintheprocessofapplyingtheGroup’saccountingpoliciesthathavethemostsignificanteffectontheamountsrecognisedinthefinancialstatements.

(i) Classificationbetweeninvestmentpropertiesandproperty,plantandequipment

TheGrouphasdevelopedcertaincriteriabasedonFRS140inmakingjudgementwhetherapropertyqualifiesasaninvestmentproperty.Investmentpropertyisapropertyheldtoearnrentalsorforcapitalappreciationorboth.

Somepropertiescompriseaportionthatisheldtoearnrentalsorforcapitalappreciationandanotherportionthatisheldforuseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.Iftheseportionscouldbesoldseparately(or leasedoutseparatelyunderafinancelease),theGroupwouldaccountfortheportionsseparately.Iftheportionscouldnotbesoldseparately,thepropertyisaninvestmentpropertyonlyifaninsignificantportionisheldforuseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.Judgementismadeonanindividualpropertybasistodeterminewhetherancillaryservicesaresosignificantthatapropertydoesnotqualifyasinvestmentproperty.

(ii) Operatingleasecommitments–theGroupaslessor

TheGrouphasenteredintocommercialpropertyleasesonitsinvestmentpropertyportfolio.TheGrouphasdeterminedthatitretainsallthesignificantrisksandrewardsofownershipofthesepropertieswhichareleasedoutonoperatingleases.

(iii)Allowancesforbadanddoubtfuldebts

ThepolicyforallowanceforbadanddoubtfuldebtsoftheGroupisbasedonmanagement’sjudgementandtheevaluationofcollectibilityandageinganalysisofthereceivablesinclusiveofretentionsum.Aconsiderableamountofjudgementisrequiredinassessingtheultimaterealisationofthesereceivables,includingthecurrentcreditworthinessandthepastcollectionhistoryofeachcustomer.IfthefinancialconditionsoftheGroupweretodeteriorate,allowancemayberequired.

(b) KeySourcesofEstimationUncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthebalancesheetdate,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow:

(i) Depreciationofmotorvehicles

Thecostofmotorvehicleslessresidualvaluearedepreciatedonastraight-linebasisovertheassets’economicusefulliveswhichmanagementhasestimatedtobe5years.Changesintheexpectedlevelofusageandtechnologicaldevelopmentscouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.


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2.5 SignificantAccountingEstimatesandJudgements(cont’d)

(b) KeySourcesofEstimationUncertainty(cont’d)

(ii) Propertydevelopment

TheGrouprecognisespropertydevelopmentrevenueandexpensesintheincomestatementbyusingthestageofcompletionmethod.Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentcostsincurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcosts.

Significant judgement is required in determining the stage of completion, the extent of the propertydevelopmentcostsincurred,theestimatedtotalpropertydevelopmentrevenueandcosts,aswellastherecoverabilityofthedevelopmentprojects.Inmakingthejudgement,theGroupevaluatesbasedonpastexperienceandbyrelyingontheworkofspecialists.

(iii)Deferredtaxassets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances totheextentthat it isprobablethattaxableprofitwillbeavailableagainstwhichthe lossesandcapitalallowancescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.ThetotalcarryingvalueofrecognisedtaxlossesandcapitalallowancesoftheGroupwasRM8,280,870(2005:RM7,052,230)andtheunrecognisedtaxlossesandcapitalallowancesoftheGroupwasRM21,286,784(2005:RM2,100,945).

(iv) Impairmentofinvestments

Themanagementdetermineswhetherthecarryingamountsofitsinvestmentsareimpairedatbalancesheetdate.Thisinvolvesmeasuringtherecoverableamountswhichincludesfairvaluelesscoststosellandvaluationtechniques.Valuationtechniquesincludeamongstothers,discountedcashflowsanalysisandinsomecases,basedonpublishedanalysts’reportsandcurrentmarketindicatorsandestimatesthatprovidereasonableapproximationstothedetailedcomputation.

Basedontheopinionof theDirectors,adequate impairment losshasbeenrecognised in the incomestatementandthemanagement’sassessmentshaveprovidedreasonableassumptionsthatthecarryingamountofinvestmentsatthebalancesheetdatearenotimpaired.


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3.PROPERTY,PLANTANDEQUIPMENT

Office Renovation Office Plant, and Equipment Freehold Building Machinery Motor Furniture and Land Buildings inProgress andTools Vehicles andFittings Computers Total RM RM RM RM RM RM RM RM

Group

At31December2006

Cost or valuation

At1January2006Atcost 2,757,819 21,411,625 11,197,898 10,189,219 8,589,055 7,986,494 6,122,449 68,254,559Atvaluation - 230,000 - - - - - 230,000

2,757,819 21,641,625 11,197,898 10,189,219 8,589,055 7,986,494 6,122,449 68,484,559

Additions - - 219,797 1,100 290,110 511,997 217,930 1,240,934Disposals - - - - (1,075,764) (11,533) (19,098) (1,106,395)Write-off - - - (1,781,189) - (9,450) (132,287) (1,922,926)Reclassification - - - (13,588) - - 13,588 -Exchangedifferences - - - - - 392 2,069 2,461

At31December2006 2,757,819 21,641,625 11,417,695 8,395,542 7,803,401 8,477,900 6,204,651 66,698,633

Representing:Atcost 2,757,819 21,411,625 11,417,695 8,395,542 7,803,401 8,477,900 6,204,651 66,468,633Atvaluation - 230,000 - - - - - 230,000

At31December2006 2,757,819 21,641,625 11,417,695 8,395,542 7,803,401 8,477,900 6,204,651 66,698,633

Accumulated Depreciation and impairment

At1January2006 - 5,353,821 - 9,587,015 6,237,273 5,704,306 5,763,782 32,646,197Depreciationchargefortheyear - 380,068 - 517,831 186,415 381,010 165,017 1,630,341Disposals - - - - (499,098) (5,366) (15,121) (519,585)Write-off - - - (1,778,861) - (8,908) (130,620) (1,918,389)Reclassification - - - (13,332) - - 13,332 -Exchangedifferences - - - - - 326 2,055 2,381

At31December2006 - 5,733,889 - 8,312,653 5,924,590 6,071,368 5,798,445 31,840,945

Net carrying amountAtcost 2,757,819 15,677,736 11,417,695 82,889 1,878,811 2,406,532 406,206 34,627,688Atvaluation - 230,000 - - - - - 230,000

At31December2006 2,757,819 15,907,736 11,417,695 82,889 1,878,811 2,406,532 406,206 34,857,688


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3.PROPERTY,PLANTANDEQUIPMENT(cont’d)

Office Renovation Office Plant, and Equipment Freehold Building Machinery Motor Furniture and Land Buildings inProgress andTools Vehicles andFittings Computers Total RM RM RM RM RM RM RM RM

Group(cont’d)

At31December2005

Cost or valuation

At1January2005Atcost 2,667,81920,509,672 10,965,434 10,189,219 8,215,198 7,363,702 6,106,292 66,017,336Atvaluation - 230,000 - - - - - 230,000

2,667,819 20,739,672 10,965,434 10,189,219 8,215,198 7,363,702 6,106,292 66,247,336

Additions 90,000 901,953 232,464 - 1,301,872 865,235 116,973 3,508,497Disposals - - - - (912,772) (20,760) (2,805) (936,337)Write-off - - - - - (220,851) (93,611) (314,462)Exchangedifferences - - - - (15,243) (832) (4,400) (20,475)

At31December2005 2,757,819 21,641,625 11,197,898 10,189,219 8,589,055 7,986,494 6,122,449 68,484,559

Representing:Atcost 2,757,819 21,411,625 11,197,898 10,189,219 8,589,055 7,986,494 6,122,449 68,254,559Atvaluation - 230,000 - - - - - 230,000

At31December2005 2,757,819 21,641,625 11,197,898 10,189,219 8,589,055 7,986,494 6,122,449 68,484,559

Accumulated Depreciation and impairment

At1January2005 - 4,403,354 - 9,071,615 6,026,912 5,475,591 5,710,958 30,688,430Depreciationchargefortheyear - 380,068 - 515,400 1,130,742 385,216 151,166 2,562,592Disposals - - - - (905,320) (10,003) (2,233) (917,556)Write-off - - - - - (145,837) (91,761) (237,598)Impairmentloss - 570,399 - - - - - 570,399Exchangedifferences - - - - (15,061) (661) (4,348) (20,070)

At31December2005 - 5,353,821 - 9,587,015 6,237,273 5,704,306 5,763,782 32,646,197

Net carrying amountAtcost 2,757,819 16,057,804 11,197,898 602,204 2,351,782 2,282,188 358,667 35,608,362Atvaluation - 230,000 - - - - - 230,000

At31December2005 2,757,819 16,287,804 11,197,898 602,204 2,351,782 2,282,188 358,667 35,838,362


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Office Renovation Office Plant, and Equipment Building Machinery Motor Furniture and Buildings inProgress andTools Vehicles andFittings Computers Total RM RM RM RM RM RM RM

Company

At31December2006

Cost

At1January2006 1,580,958 648,199 12,310 3,653,332 3,426,593 3,503,509 12,824,901Additions - 45,786 - 223,124 203,336 100,778 573,024Disposals - - - (957,998) - (14,158) (972,156)Write-offs - - - - - (11,769) (11,769)

At31December2006 1,580,958 693,985 12,310 2,918,458 3,629,929 3,578,360 12,414,000

Accumulated Depreciation

At1January2006 326,718 - 8,795 2,227,651 1,999,636 3,279,155 7,841,955Depreciationchargefortheyear 23,441 - 390 97,166 205,066 81,932 407,995Disposals - - - (381,334) - (12,495) (393,829)Write-offs - - - - - (11,767) (11,767)

At31December2006 350,159 - 9,185 1,943,483 2,204,702 3,336,825 7,844,354

Net carrying amount

At31December2006 1,230,799 693,985 3,125 974,975 1,425,227 241,535 4,569,646


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Office Renovation Office Plant, and Equipment Building Machinery Motor Furniture and Buildings inProgress andTools Vehicles andFittings Computers Total RM RM RM RM RM RM RM

Company(cont’d)

At31December2005

Cost

At1January2005 679,005 436,883 8,410 2,826,166 3,079,868 3,454,350 10,484,682Additions 901,953 211,316 3,900 880,119 348,923 65,940 2,412,151Transferfromsubsidiaries - - - - - 17,294 17,294Transfertosubsidiaries - - - - (2,198) (6,490) (8,688)Disposals - - - (52,953) - (1,650) (54,603)Write-offs - - - - - (25,935) (25,935)

At31December2005 1,580,958 648,199 12,310 3,653,332 3,426,593 3,503,509 12,824,901

Accumulated Depreciation

At1January2005 303,277 - 8,405 1,732,292 1,816,033 3,230,663 7,090,670Depreciationchargefortheyear 23,441 - 390 548,311 185,799 70,684 828,625Transferfromsubsidiaries - - - - - 11,877 11,877Transfertosubsidiaries - - - - (2,196) (6,489) (8,685)Disposals - - - (52,952) - (1,649) (54,601)Write-offs - - - - - (25,931) (25,931)

At31December2005 326,718 - 8,795 2,227,651 1,999,636 3,279,155 7,841,955

Net carrying amount

At31December2005 1,254,240 648,199 3,515 1,425,681 1,426,957 224,354 4,982,946


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(a) CertainbuildingsonleaseholdlandofasubsidiaryisvaluedbytheDirectorsbasedonthevaluationperformedbyindependentprofessionalvaluers.Fairvalueisdeterminedbyreferencetoopenmarketvaluesonanexistingusebasis.

Yearofvaluation Descriptionofproperty ValuationAmount Basisofvaluation RM

1974 BuildingonlongtermleaseholdlandatIpoh 230,000 Openmarketvalue

Asat31December2006,hadthebuildingsonleaseholdlandbeencarriedatcostlessdepreciation,thecarryingamountofthebuildingsonleaseholdlandwouldhavebeenasfollows:

Group 2006 2005 RM RM

BuildingonlongtermleaseholdlandatIpoh 210,082 210,082

CertainbuildingsonleaseholdlandoftheGroupwererevaluedintheyearsasdisclosedabovebasedonindependentprofessionalvaluationsusingopenmarketvaluesonanexistingusebasis.AspermittedbytheMASB,wheresuchvaluationwasaone-offisolatedeventpriortotheadoptionoftheapplicableApprovedAccountingStandardbytheMASB(FRS116,“Property,PlantandEquipment”),andprovidednofurtherrevaluationshavebeenadoptedinthepreparationofthefinancialstatements,theseassetshavecontinuedtobestatedonthebasisoftheirpreviousrevaluedamounts(subjecttocontinuityindepreciationpolicyandtherequirementtowriteanassetdowntoitsrecoverablevalue).

(b) Duringthefinancialyear,theGroupandtheCompanyacquiredproperty,plantandequipmentataggregatecostsofRM1,240,934 (2005:RM3,508,497)andRM573,024 (2005:RM2,417,568) respectivelyofwhichRM155,000(2005:RM882,600)andRM155,000(2005:RM693,600)respectivelywereacquiredbymeansofhirepurchaseandfinanceleasearrangements.

Netcarryingamountsofproperty,plantandequipmentheldunderhirepurchaseandfinanceleasearrangementsareasfollows:


Motorvehicles 385,320 833,695 234,820 665,695

(c) Thenetcarryingamountsofproperty,plantandequipmentpledgedassecuritiesforborrowings(Note20)areasfollows:


Freeholdland 1,841,923 1,841,923Buildingonfreeholdland 2,575,285 2,639,667Buildingsonlongtermleaseholdland 7,620,841 8,143,688

12,038,049 12,625,278

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4.INVESTMENTPROPERTIES

Group Company RM RM

2006

Carrying amountAt1January2006 11,879,370 8,761,839EffectsofFRS140(Note2.3(d)(ii)) 2,070,630 1,068,161At1January2006(restated)/31December2006 13,950,000 9,830,000

2005

CostAt1January2005/31December2005 13,533,575 10,435,213

Accumulated depreciationAt1January2005 1,516,469 1,542,754Depreciationchargeforthefinancialyear 137,736 130,620At31December2005 1,654,205 1,673,374

Net carrying value 11,879,370 8,761,839

InvestmentpropertieswithanaggregatecarryingvalueofRM7,300,000(2005:RM5,498,503)arepledgedassecuritiesforborrowings(Note20).

5.PREPAIDLANDLEASEPAYMENTS


At1January 12,898,764 13,139,392 2,573,574 2,621,699Disposal (586,674) - (586,674) -Amortisationfortheyear(Note30) (232,970) (240,628) (38,960) (48,125)

At31December 12,079,120 12,898,764 1,947,940 2,573,574

Analysedas:

Longtermleaseholdland 10,750,154 11,539,880 1,947,940 2,573,574Shorttermleaseholdland 1,328,966 1,358,884 - -

12,079,120 12,898,764 1,947,940 2,573,574

LeaseholdlandwithanaggregatecarryingvalueofRM9,011,822(2005:RM9,286,320)arepledgedassecuritiesforborrowings(Note20).


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6.INVESTMENTSINSUBSIDIARIES

Company 2006 2005 RM RM

Unquotedsharesatcost 20,220,462 20,220,462Less:Accumulatedimpairmentlosses (4,054,041) (3,722,829) 16,166,421 16,497,633

Amountsduefromsubsidiaries-tradeaccounts 301,587 462,612-currentaccounts:-interestbearingrangingfrom1%-6%(2005:1%-6%)perannum 41,525,278 40,648,547-non-interestbearing 82,093,283 89,122,750 123,920,148 130,233,909Less:Allowancefordoubtfuldebts (7,204,652) (6,076,773) 116,715,496 124,157,136

Amountsduetosubsidiaries-tradeaccounts (1,042,243) (875,177)-currentaccounts:-interestbearingat3%perannum - (4,969,949)-non-interestbearing (46,600,930) (42,030,709)

(47,643,173) (47,875,835)

The amounts due from and to subsidiary companies under trade accounts are unsecured, non-interest bearing,repayableondemandandaretobesettledincash.

Theamountsduefromandtosubsidiarycompaniesundercurrentaccountsareunsecured,repayableondemandandaretobesettledincash.

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6.INVESTMENTINSUBSIDIARIES(cont’d)

Detailsofthesubsidiariesareasfollows:

ProportionofOwnershipInterest(%) Countryof Principal ByCompany BySubsidiariesNameofSubsidiaries Incorporation Activities 2006 2005 2006 2005

ArmorMasterSdn.Bhd. Malaysia Investmentholding 100.0 100.0 - -

ArtilinSdn.Bhd. Malaysia Dormant 77.8 77.8 - -

BetterLivingGrandSdn.Bhd. Malaysia Tradinginhome 100.0 100.0 - - improvementmaterials

CentrepriseSdn.Bhd. Malaysia Dormant 100.0 100.0 - -

EdaranMaju-MudaSdn.Bhd. Malaysia Tradinginsteelproducts 100.0 100.0 - -

GlobalAlliedSdn.Bhd. Malaysia Tradinginheavysteelproducts 70.0 70.0 - -

GloriousFutureSdn.Bhd. Malaysia Investmentholding 100.0 100.0 - -

HomemartDistribution Malaysia Provisionofwarehousingservices 100.0 100.0 - -CentreSdn.Bhd.

HomemartWarehousing Malaysia Dormant 100.0 100.0 - -Sdn.Bhd.

IpmudaArchitectural Malaysia Tradingagency 80.0 80.0 - -ProductsSdn.Bhd.(formerly known as Tzehong

Architectural Products Sdn. Bhd.)

IpmudaBuildermartSdn.Bhd. Malaysia Tradinginbuildingmaterials 100.0 100.0 - -

IpmudaBuilding Malaysia Dormant 100.0 100.0 - -MaterialsSdn.Bhd.

IpmudaDaganganSdn.Bhd. Malaysia Dormant 100.0 100.0 - -

IpmudaEdarSdn.Bhd. Malaysia Tradinginfueloilandlubricant 100.0 100.0 - - products

IpmudaEngineeringSdn.Bhd. Malaysia Contractorsandtradingin 100.0 100.0 - - constructionmaterials

IpmudaLancoSdn.Bhd. Malaysia Wholesaleandretailofbuilding 51.0 51.0 - - materials(ceasedoperations)

IpmudaSelatanSdn.Bhd. Malaysia Tradinginbuildingmaterials 80.0 80.0 - -

IpmudaTiles& Malaysia Tradingintiles,marble 80.0 80.0 - -SanitarywaresSdn.Bhd. andsanitarywaresproducts

IpmudaTimuranSdn.Bhd. Malaysia Tradinginbuildingmaterials 80.0 80.0 - -

IpmudaTradelinksSdn.Bhd. Malaysia Tradingagencyand 80.0 80.0 - - exporters(ceasedoperations)

IpmudaTradingPte.Ltd. Singapore Tradinginbuildingmaterials 90.0 90.0 - -

IpmudaUtaraSdn.Bhd. Malaysia Tradinginbuildingmaterials 80.0 80.0 - -

ModularEquitySdn.Bhd. Malaysia Investmentholding 100.0 100.0 - -


*

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6.INVESTMENTINSUBSIDIARIES(cont’d)

Detailsofthesubsidiariesareasfollows:

ProportionofOwnershipInterest(%) Countryof Principal ByCompany BySubsidiariesNameofSubsidiaries Incorporation Activities 2006 2005 2006 2005

PerakMetalIndustries Malaysia Manufactureandsale 100.0 100.0 - -SendirianBhd. oflocksandhinges

PerfectFurnitureFittings Malaysia Tradinginfurniturehardware - - 100.0 100.0SystemsSdn.Bhd.

PerniagaanMaju Malaysia Propertydevelopment - - 51.0 51.0RamadhanSdn.Bhd.

Roset-BLGSdn.Bhd. Malaysia Lettingofpropertiesand - - 100.0 100.0 manufactureandsaleoffurniture

RosetInteriorsSdn.Bhd. Malaysia Supplyandinstallationof - - 100.0100.0(formerly known as homefittingsBetter Living Interiors Sdn. Bhd.)

RosetPropertiesSdn.Bhd. Malaysia Dormant - - 100.0 100.0

SitollyCo.Sdn.Bhd. Malaysia Moneylending - - 80.0 80.0

SummitManagement Malaysia Dormant - - 100.0 100.0&ContractsSdn.Bhd.

TorikiMetalEngineering Malaysia Propertyholding - - 100.0 100.0Sdn.Bhd.

VictoryRallySdn.Bhd. Malaysia Propertyholding 100.0 100.0 - -

* Audited by firms other than Ernst & Young


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7.INVESTMENTSINASSOCIATES


Unquotedshares,atcost 3,819,665 3,819,665 49,000 49,000

Shareofpost-acquisitionlosseslessprofitsandretainedreserves (1,942,165) (1,782,666) - -

1,877,500 2,036,999 49,000 49,000

Less:Accumulatedimpairmentloss (22,000) (22,000) (38,499) -

1,855,500 2,014,999 10,501 49,000

Amountsduetoassociatedcompanies

-tradeaccounts - (86) - (86)

-currentaccounts (25,201) (26,627) (25,201) (26,627)

(25,201) (26,713) (25,201) (26,713)

Representedby:

Group’sshareofnettangibleassets 1,855,500 2,000,424

Goodwillarisingonacquisition - 14,575

1,855,500 2,014,999

ProportionofOwnershipInterest(%) Countryof ByCompany BySubsidiaries PrincipalNameofAssociates Incorporation 2006 2005 2006 2005 Activities

BetterLivingInteriors HongKong - - 30.0 30.0 Dormant(HK)Limited

BMGHomeCentreSdn.Bhd. Malaysia - - 20.0 20.0 Dormant

BudimexSdn.Bhd. Malaysia 49.0 49.0 - - Tradingagencyof buildingmaterials

SagaMakmurIndustriSdn.Bhd. Malaysia - - - 28.0 Operationofsteel barservicecentre andtradinginsteel relatedproducts

VintageConsolidatedSdn.Bhd. Malaysia - - 25.0 25.0 Tradinginbuilding materialsand provisionof management services


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7.INVESTMENTSINASSOCIATES(cont’d)

ThefinancialstatementsoftheaboveassociatesarecoterminouswiththoseoftheGroup.

Thesummarisedfinancialinformationoftheassociatesisasfollows:

2006 2005 RM RM

Assets and liabilities

Currentassets 2,827,181 2,106,056Non-currentassets 385,667 1,839,051Totalassets 3,212,848 3,945,107

Currentliabilities 1,362,635 1,413,888Totalliabilities 1,362,635 1,413,888

ResultsRevenue - -(Loss)/profitfortheyear (11,604) 1,305

8.OTHERINVESTMENTS


QuotedsharesinMalaysia,atcost 6,093,580 6,093,580 23,600 23,600Less:Accumulatedimpairmentlosses (5,668,285) (5,707,135) (11,160) -

425,295 386,445 12,440 23,600

Unquotedshares,atcost 260,000 260,000 60,000 60,000Less:Accumulatedimpairmentlosses (260,000) (260,000) (60,000) (60,000)

- - - -

Clubmembership 502,000 502,000 454,000 454,000Less:Accumulatedimpairmentlosses (34,000) - (34,000) -

468,000 502,000 420,000 454,000

893,295 888,445 432,440 477,600

Marketvalueofquotedshares 435,975 398,325 18,340 22,000

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9.DEFERREDTAXATION


At1January 1,558,357 1,010,741 701,393 289,393EffectsofadoptingFRS140 (49,042) - (85,988) -Recognisedinincomestatement (160,591) 547,616 71,607 412,000

At31December 1,348,724 1,558,357 687,012 701,393

Presentedafterappropriateoffsettingasfollows:Deferredtaxassets 1,499,449 1,708,797 687,012 701,393Deferredtaxliabilities (150,725) (150,440) - -

1,348,724 1,558,357 687,012 701,393

Thecomponentsandmovementsofdeferredtaxliabilitiesandassetsduringthefinancialyearpriortooffsettingareasfollows:

DeferredTaxLiabilitiesoftheGroup:

Property, Revaluation Plantand ofFreeholdLand Equipment andBuildings Total RM RM RM

At1January2005 (715,196) (155,249) (870,445)Recognisedintheincomestatement (938,982) 4,862 (934,120)

At31December2005 (1,654,178) (150,387) (1,804,565)

EffectsofadoptingFRS140 - (49,042) (49,042)Recognisedintheincomestatement (284,943) 58,786 (226,157)

At31December2006 (1,939,121) (140,643) (2,079,764)

DeferredTaxAssetsoftheGroup:

UnusedTaxLosses andUnabsorbed Intereston CapitalAllowances OverdueDebts Total RM RM RM

At1January2005 353,841 1,527,345 1,881,186Recognisedintheincomestatement 1,620,803 (139,067) 1,481,736

At31December2005 1,974,644 1,388,278 3,362,922Recognisedintheincomestatement 261,191 (195,625) 65,566

At31December2006 2,235,835 1,192,653 3,428,488


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9.DEFERREDTAXATION(cont’d)

DeferredTaxLiabilitiesoftheCompany:

Property, Revaluation Plantand ofFreeholdLand Equipment andBuildings Total RM RM RM

At1January2005 (101,686) (155,249) (256,935)Recognisedintheincomestatement 67,550 4,862 72,412

At31December2005 (34,136) (150,387) (184,523)EffectsofadoptingFRS140 - (85,988) (85,988)Recognisedintheincomestatement (71,769) 58,786 (12,983)

At31December2006 (105,905) (177,589) (283,494)

DeferredTaxAssetsoftheCompany: UnusedTaxLosses andUnabsorbed Intereston CapitalAllowances OverdueDebts Total RM RM RM

At1January2005 - 546,328 546,328Recognisedintheincomestatement 329,659 9,929 339,588

At31December2005 329,659 556,257 885,916Recognisedintheincomestatement 184,411 (99,821) 84,590

At31December2006 514,070 456,436 970,506

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:


Unusedtaxlosses 23,021,355 21,436,977Unabsorbedcapitalallowances 2,102,733 2,087,709

25,124,088 23,524,686

Potentialdeferredtaxbenefitat27%(2005:28%) 6,783,504 6,586,912

TheavailabilityoftheunusedtaxlossesandunabsorbedcapitalallowancesforoffsettingagainstfuturetaxableprofitsoftherespectivesubsidiariesandoftheCompanyaresubjecttonosubstantialchangesinshareholdingsofthosesubsidiariesandtheCompanyunderSection44(5A)and(5B)ofIncomeTaxAct,1967.

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10.LANDANDPROPERTYDEVELOPMENTEXPENDITURE

Leasehold Development Land Expenditure TotalGroup RM RM RM

At31December2006 At1January2006 1,290,198 5,953,749 7,243,947Additions - 24,792 24,792

At31December2006 1,290,198 5,978,541 7,268,739

At31December2005At1January2005 1,290,198 5,933,997 7,224,195Additions - 19,752 19,752

At31December2005 1,290,198 5,953,749 7,243,947

2006 2005 RM RM

Representedby:Cumulativecostincurredtodate 7,268,739 7,243,947Less:Cumulativecostrecognisedasanexpense - -

7,268,739 7,243,947

11.INVENTORIES


CostTradingandfinishedgoods 20,973,582 21,564,752 2,594,210 3,560,015Propertiesheldforsale 1,253,253 1,253,253 - -Rawmaterials 217,460 91,152 - -Work-in-progress 127,429 111,051 - -

22,571,724 23,020,208 2,594,210 3,560,015

Net realisable valueTradingandfinishedgoods 906,054 904,795 27,552 -Consumablestores - 10 - -Rawmaterials - 22,985 - -

23,477,778 23,947,998 2,621,762 3,560,015


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12.TRADERECEIVABLES


Tradereceivables 207,055,458 186,202,748 66,790,208 58,813,745

Duefromcontractcustomers 22,573 10,912 - -

Retentionsums 816,059 873,066 - -

207,894,090 187,086,726 66,790,208 58,813,745

Less:Allowancefordoubtfuldebts (22,031,305) (23,882,320) (7,613,175) (7,536,449)

185,862,785 163,204,406 59,177,033 51,277,296

Includedintradereceivablesare:

AmountsduefromcompaniesinwhichcertainDirectorshavesubstantialfinancialinterests 34,688,303 26,315,679 19,931,420 19,777,210

AmountsduefromcompanieswithcertaincommonDirectors 27,316,366 26,877,075 1,132,674 490,331

TheGroup’sprimaryexposuretocreditriskarisesthroughitstradereceivables.TheGroup’stradingtermswithitscustomersaremainlyoncredit.Thenormal tradecredit termranges from14to120days.Othercredit termsareassessedandapprovedon a case-by-case basis. Each customer has amaximumcredit limit. TheGroup seeks tomaintainstrictcontroloveritsoutstandingreceivablesandhasacreditcontroldepartmenttominimisecreditrisk.Overduebalanceswhichareinterestbearingarereviewedregularlybyseniormanagement.

InviewoftheaforementionedandthefactthattheGroup’stradereceivablesrelatetoalargenumberofdiversifiedcustomers,thereisnosignificantconcentrationofcreditriskexceptintheformofoutstandingbalancesduefromcompaniesinwhichcertainDirectorshavesubstantialfinancialinterestsandfromcompanieswithcertaincommonDirectors representing 30% and 32% (2005: 28% and 34%) of total trade receivables of the Group and Companyrespectively.

ConcentrationofcreditriskexistswhenthechangesineconomicconditionsaffectthecounterpartieswhoseaggregatecreditexposuresaresignificantinrelationtotheGroup’stotalcreditexposure.

Inassessingtherecoverabilityofthesedebts,theDirectorshavegivendueconsiderationtoallpertinentinformationrelatingtotheabilityofthedebtorstosettlethedebtandexpecttheseamounttobefullyrecoverable.Accordingly,noprovisionhasbeenmadeinrespectofthisamount.

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12.TRADERECEIVABLES(cont’d)

Thefollowingtabulationofconstructioncontractsshowstheelementsincludedinamountduefromandduetocontractcustomers:


Aggregatecostsincurredtodate 2,256,011 1,565,464

Add:Attributableprofit 306,427 191,231

2,562,438 1,756,695

Less:Progressbillings (2,540,667) (1,750,982)

21,771 5,713

Representedby:

Duefromcontractcustomers 22,573 10,912

Duetocontractcustomers(Note17) (802) (5,199)

21,771 5,713

Amountofcontractrevenuerecognisedasrevenueduringthefinancialyear 1,305,617 1,139,175

Amountofcontractcostrecognisedasexpenseduringthefinancialyear 1,227,329 1,072,299

13.OTHERRECEIVABLES


Sundryreceivables 5,012,288 4,661,409 4,806,577 4,466,550

Depositsandprepayments 2,089,388 1,587,714 898,948 950,211

Others 247,143 310,588 36,812 36,751

7,348,819 6,559,711 5,742,337 5,453,512

Less:Allowancefordoubtfuldebts (197,048) (195,025) - -

7,151,771 6,364,686 5,742,337 5,453,512

Asatbalancesheetdate,theGroupandCompanyhasasignificantconcentrationofcreditriskintheformofoutstandingbalances from a debtor and from companies with certain common Directors amounting to RM4,678,996 (2005:RM4,341,778)representingapproximately64%and81%(2005:66%and80%)ofotherreceivablesrespectively.

ConcentrationofcreditriskexistswhenchangesineconomicconditionsaffectingthecounterpartieswhoseaggregatecreditexposureissignificantinrelationtotheGroup’stotalcreditexposure.


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13.OTHERRECEIVABLES(cont’d)

Inassessingtherecoverabilityofthesedebts,theDirectorshavegivendueconsiderationtoallpertinentinformationrelatingtotheabilityofthedebtortosettlethisdebtandexpectthisamounttobefullyrecoverable.Accordingly,noprovisionhasbeenmadeinrespectofthisamount.


Includedinotherreceivablesare:

AmountsduefromcompanieswithcertaincommonDirectors 913,461 577,619 913,461 577,619

14.SHORTTERMINVESTMENT


Amountsduefrom 13,208,251 13,208,251 12,484,306 12,484,306

Less:Accumulatedimpairmentlosses (4,911,000) (4,911,000) (4,187,055) (4,187,055)

8,297,251 8,297,251 8,297,251 8,297,251

Pursuant to theagreementdated20December1995entered intoby theCompany for theacquisitionof the40%shareholdinginJohnsonAdvancedTechnologySdn.Bhd.(“JAT”),thevendoroftheseshareshasgrantedtheCompanyanoptiontorequirethevendortopurchasebackallthesesharesinthecompany.TheputoptionmaybeexercisedbytheCompanyiftheperformanceoftheassociatedcompanydoesnotmeetthestipulatedperformancecriteria.Thisoptionisvalidforaperiodoftwoyearscommencingoneyearafterthecompletionofthepurchase.

TheputoptionwasexercisedbytheDirectorsoftheCompanyrequiringthevendortopurchasebackJATsharesatcosttogetherwithinterestsinFebruary1998.On31March2001,theArbitralTribunalgaveajudgementinfavouroftheCompany.However,thetransactionhasnotbeenfinalisedandcompletedtodateasthevendorcompanywasplacedunderliquidationon14September2001.TheCompanysubsequentlysubmittedaproofofdebton18February2002.

ThelatestStatementofthePositionintheWindingUpfromtheliquidatorsasat13September2006showedthatthevendor’sassetsareabletosatisfycertainportionofthevendor’sdebtsinwhichproofhavebeenadmittedbytheliquidators.

TheDirectorshavegivendueconsiderationtoallavailableinformationinassessingtherecoveryoftheaboveamountandareoftheopinionthatnofurtherprovisionforirrecoverableamountisnecessary.


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15.DEPOSITS Group Company 2006 2005 2006 2005 RM RM RM RM

Withlicensedbanks - 920,000 - -

16.CASHANDBANKBALANCES

Included in cash and bank balances of the Group is an amount of RM617 (2005: RM619) which is maintained indesignatedHousingDevelopmentAccountspursuanttotheHousingDevelopers(ControlandLicensing)Act,1966andHousingRegulations,1991inconnectionwithasubsidiarycompany’spropertydevelopmentproject.

AlsoincludedincashandbankbalancesoftheGroupandCompanyisanamountofRMNil(2005:RM433,856)whichismaintainedinadesignateddebtservicereserveaccountinconnectiontotheissueofSecuredBankGuaranteedCommercialPapers.

17.TRADEPAYABLES Group Company 2006 2005 2006 2005 RM RM RM RM

Tradepayables 70,234,383 50,562,249 18,536,663 11,386,651

Retentionsums 934,543 943,188 - -

Duetocontractcustomers(Note12) 802 5,199 - -

71,169,728 51,510,636 18,536,663 11,386,651

Includedintradepayablesare:

AmountsduetocompaniesinwhichcertainDirectorshavesubstantialfinancialinterests 14,372,232 7,173,240 869,013 439,393

AmountsduetocompanieswithcertaincommonDirectors 841,640 322,694 - -

Tradepayablesarenon-interestbearingandthenormaltradecredittermsgrantedtotheGrouprangefrom14to120days.

18.OTHERPAYABLES Group Company 2006 2005 2006 2005 RM RM RM RM

Sundrypayables 9,967,262 9,701,432 8,416,352 8,650,293

Deposits 543,855 470,382 - -

Accruals 4,224,393 4,163,169 2,152,371 2,046,683

Others 430,001 413,059 205,376 212,002

15,165,511 14,748,042 10,774,099 10,908,978

Includedinotherpayablesare:

AmountsduetocompaniesinwhichcertainDirectorshavesubstantialfinancialinterests 501,650 47,119 495,774 39,617


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19.HIREPURCHASEPAYABLES Group Company 2006 2005 2006 2005 RM RM RM RM

Future minimum lease payments:Notlaterthan1year 101,040 199,536 58,512 157,008Laterthan1yearandnotlaterthan2years 101,040 199,536 58,512 157,008Laterthan2yearsandnotlaterthan5years 165,764 448,881 112,619 353,208

Totalminimumfutureleasepayments 367,844 847,953 229,643 667,224Less:Futurefinancecharges (49,839) (97,752) (34,488) (77,673)

Presentvalueoffinanceleaseliabilities 318,005 750,201 195,155 589,551

Analysis of present value of finance lease liabilities:Notlaterthan1year 87,528 176,532 49,728 138,732Laterthan1yearandnotlaterthan2years 87,528 176,532 49,728 138,732Laterthan2yearsandnotlaterthan5years 142,949 397,137 95,699 312,087

318,005 750,201 195,155 589,551Less:Amountduewithin12months (87,528) (176,532) (49,728) (138,732)

Amountdueafter12months 230,477 573,669 145,427 450,819

OtherinformationonfinancialrisksofhirepurchaseandfinanceleaseliabilitiesaredisclosedinNote38.

20.SHORTTERMBANKBORROWINGS

TheshorttermbankborrowingsoftheGroupandoftheCompanyconsistofthefollowing:


Secured:Bridgingloan 15,000,000 - 15,000,000 -

Unsecured:Bankers’acceptances 65,664,362 70,578,714 38,945,084 48,183,768

80,664,362 70,578,714 53,945,084 48,183,768

ThesecuredbridgingloanoftheGroupandoftheCompanyissecuredbycertainassetsoftheGroupasdisclosedinNotes3,4and5andbearsinterestrateat7.00%perannum.Theloanwasfullyrepaidsubsequentto31December2006.

Theunsecuredbankers’acceptancesoftheGroupandoftheCompanybears interestratesrangingfrom3.09%to6.85%(2005:3.05%to5.80%)perannum.

21.BANKOVERDRAFTS

ThebankoverdraftsoftheGroupandoftheCompanyareunsecuredandbearinterestratesrangingfrom6.75%to9.25%(2005:6.50%to8.75%)perannum.

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22.SECUREDBANKGUARANTEEDCOMMERCIALPAPERS

TheCompanyissuedRM35.0millionsecuredbankguaranteedcommercialpapersin2001.Duringthefinancialyear,theCompanyredeemedthebalanceRM15.0millionofthecommercialpapersmakingatotalredemptionofRM35.0millionsince2001.


Amountduenotlaterthan1year - 15,000,000

TheCompanyhadsetupadebtservicereserveaccountwhereinanequivalentof3months’interestshallbemaintainedatalltimes.Asat31December2005,thebalanceinthisaccountamountstoRM433,856asdisclosedinNote16andwasplacedasfixeddepositswithalicensedbank.

Thebankguaranteedcommercialpapersweresecuredagainstsubsidiarycompanies’propertieswithcarryingvalueofRMNil(2005:RM27,410,101)andbearedinterestratesrangingfrom2.90%to3.95%(2005:2.90%to2.94%)perannumduringthefinancialyear.

23.SHARECAPITAL

Group/Company

NumberofOrdinary SharesofRM1each Amount 2006 2005 2006 2005 RM RM

Authorised:

At1January/31December 500,000,000 500,000,000 500,000,000 500,000,000

Issuedandfullypaid

At1January/31December 72,469,500 72,469,500 72,469,500 72,469,500

TheholdersofordinarysharesareentitledtoreceivedividendsasdeclaredfromtimetotimeandareentitledtoonevotepershareatmeetingsoftheCompany.AllordinarysharesrankequallywithregardtotheCompany’sresidualassets.

(a) Warrants

In1996,35,000,000warrantswereofferedforsaletoshareholdersoftheCompanyatanofferpriceof45senperwarrantonthebasisofone(1)warrantforeverytwo(2)existingordinarysharesheld.Eachwarrantcarriesrighttosubscribeforone(1)newordinaryshareofRM1.00eachatanofferpriceofRM3.80incashanytimecommencingonorafter24September1996andexpiringonanextendedexpirydateof23June2006.Warrantsnotexercisedthereafterwilllapseandceasetobevalid.

Thenumberofwarrantswhichhaveyettobeexercisedof34,995,500(2005:34,995,500)havelapsedon23June2006.


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23.SHARECAPITAL(cont’d)

(b) ESOS

ThemainfeaturesoftheESOSareasfollows:

(i) TheESOSshallbeinforceforaperiodoffiveyearsfromthedateofthereceiptofthelastoftherequisiteapprovals.

(ii) TheeligibilityforparticipationintheESOSshallbeatthediscretionoftheESOSCommitteeappointedbytheBoardofDirectors.

(iii)ThetotalnumberofsharestobeofferedundertheESOSshallnotexceedinaggregate10%oftheissuedsharecapitaloftheCompanyatanypointoftimeduringthetenureoftheESOSwhichshallbeinforcefrom28October1996to27October2006.

(iv)TheoptionpriceforeachshareshallbetheaverageofthemeanmarketquotationofthesharesoftheCompanyinthedailyofficiallistissuedbytheBursaMalaysiaSecuritiesBerhadforthefivetradingdaysprecedingthedateofoffer,orattheparvalueofthesharesoftheCompanyofRM1,whicheverishigher.

(v) Nooptionshallbegrantedforlessthan1,000sharesnormorethan500,000sharestoanyeligibleemployeeanddirector.

Asat31December2006,thedetailsofoptionswhicharenotexercisedandhadlapsedasat27October2006areasfollows:

Exercise NumberofOptionsoverOrdinarySharesofRM1eachDateGranted Price 1January Option Option Option 31December RM 2006 Granted Exercised Lapsed 2006

4November1996 4.84 172,000 - - (172,000) -

19April1999 1.00 826,000 - - (826,000) -

10March2000 1.71 553,000 - - (553,000) -

2July2002 1.13 480,000 - - (480,000) -

5July2003 1.00 500,000 - - (500,000) -

28July2003 1.00 452,000 - - (452,000) -

2,983,000 - - (2,983,000) -

24.SHAREPREMIUM Group/Company

2006 2005 RM RM

At1January/31December 3,456,500 3,456,500

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25.RESERVES

Group Company Note 2006 2005 2006 2005 RM RM RM RM

Non-distributable

Revaluationreserve (a) - 1,173,470 - 1,173,470

Exchangefluctuationreserve (b) 424,505 433,536 - -

424,505 1,607,006 - 1,173,470

Distributable

Retainedprofitat31December (c) 34,730,459 30,113,922 16,663,059 13,574,373

35,154,964 31,720,928 16,663,059 14,747,843

(a) RevaluationReserve

Therevaluationreserveisusedtorecordincreasesinthefairvalueoffreeholdlandandbuildinganddecreasestotheextentthatsuchdecreaserelatestoanincreaseonthesameassetpreviouslyrecognisedinequity.Priorto1January2006,revaluationincreaseofinvestmentpropertyisalsoincludedinthisreservewhichsubsequentlyhasbeenreversedupontheapplicationofFRS140.

(b) ForeignCurrencyTranslationReserve

The foreigncurrency translationreserve isusedto recordexchangedifferencesarising fromthetranslationofthefinancialstatementsofforeignoperationswhosefunctionalcurrenciesaredifferentfromthatoftheGroup’spresentationcurrency.

(c) RetainedProfits

As at 31 December 2006, the Company has tax exempt profits available for distribution of approximatelyRM7,886,643(2005:RM7,886,643),subjecttotheagreementoftheInlandRevenueBoard.

SubjecttotheagreementoftheInlandRevenueBoard,theCompanyhassufficienttaxcreditunderSection108oftheIncomeTaxAct,1967andthebalanceinthetaxexemptincomeaccounttofrankthepaymentofdividendsoutofitsentiredistributablereservewithouthavingtoincuradditionaltaxliability.

26.REVENUE


Salesofgoods 395,369,714 346,549,359 125,281,459 107,472,649

Rentalincomefrominvestmentproperties 1,466,700 1,415,130 - -

Constructioncontracts 1,305,617 1,139,175 - -

398,142,031 349,103,664 125,281,459 107,472,649


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27.COSTOFSALES


Costofinventoriessold 367,515,620 321,321,917 117,102,589 100,088,771

Constructioncontractcosts(Note12) 1,227,329 1,072,299 - -

368,742,949 322,394,216 117,102,589 100,088,771

28.OTHERINCOME


Rentalincome 121,500 136,500 633,858 639,648

Interestondeposits 37,058 42,003 10,372 18,525

Interestfromsubsidiaries - - 543,640 507,015

Interestonoverduetradereceivables 2,338,435 3,943,862 1,026,112 2,327,452

Commissionsreceived - - 732,284 60,660

Cashdiscountreceived 1,385,843 2,060,302 480,656 809,642

Managementfees 72,552 216,032 3,052,552 1,468,032

Gainondisposalofproperty,plantandequipment 50,752 140,023 8,225 18,098

Gainondisposalofprepaidleaseassets 1,446,189 - 1,446,189 -

Gainondisposalofinvestmentinassociates 105,000 - - -

Liabilitieswrittenback 187,650 1,198,519 - -

Reversalofimpairmentinmarketablesecurities 109,080 - - -

Dividendsincome 1,740 4,770 2,836,570 2,331,710

Sundryincome 404,779 76,330 207,508 150,151

6,260,578 7,818,341 10,977,966 8,330,933

29.FINANCECOSTS


Interestontradefinancing 2,943,984 2,572,619 1,838,164 1,627,769

Interestoncommercialpapers 381,714 540,167 381,714 540,167

Interestonbridgingloan 290,548 - 290,548 -

Interestonbankoverdrafts 171,105 130,251 105,447 67,872

Leasingandhirepurchaseinterest 27,229 12,840 22,501 10,239

Interesttosubsidiaries - - - 131,887

3,814,580 3,255,877 2,638,374 2,377,934

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30.PROFIT/(LOSS)BEFORETAXATION

Thefollowingamountshavebeenincludedatarrivingatprofit/(loss)beforetaxation:


Auditors’remuneration-statutory 197,000 189,902 55,000 55,000-underprovisioninprioryear 25,550 9,930 13,000 --otherservices 8,000 8,000 8,000 8,000

Leaserental 925,010 942,249 783,853 702,907

Amortisationofprepaidlandleasepayments(Note5) 232,970 240,628 38,960 48,125

Impairmentofproperty,plantandequipment(Note3)-includedinoperatingexpenses - 570,399 - -

Impairmentofinvestments-shortterminvestment - 4,911,000 - 4,187,055-marketablesecurities 70,230 1,113,900 11,160 --subsidiaries(unquoted) - - 331,212 922,626-associates(unquoted) - - 38,499 --otherinvestments 34,000 60,001 34,000 60,000

Depreciationofproperty,plantandequipment 1,630,341 2,562,592 407,995 828,625

Depreciationofinvestmentpropertiespreviouslyclassifiedasproperty,plantandequipment - 137,736 - 130,620

Writedownofinventories 17,374 440,039 - 149,952

Allowancefordoubtfuldebts 288,054 4,103,847 1,619,964 7,908,902

Property,plantandequipmentwrittenoff 4,537 76,864 2 4

Commissiononbankguarantee 259,932 325,308 259,932 325,308

Netforeignexchangeloss/(gain) 1,846 (10,344) - -

Grossdividendreceived-subsidiaries(unquoted) - - (2,836,000) (2,330,000)-sharesquotedinMalaysia (1,740) (4,770) (570) (1,710)


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30.PROFIT/(LOSS)BEFORETAXATION(cont’d)

Employee Information (Excluding Directors)


Salariesandotheremoluments 12,526,186 11,061,551 5,241,820 4,640,091

Socialsecuritycontributions 155,613 137,352 53,208 48,053

Definedcontributionplan 1,429,661 1,255,837 609,286 501,058

Otherbenefits 651,392 489,262 478,883 187,532

14,762,852 12,944,002 6,383,197 5,376,734

Directors’ Remuneration


Directors of the Company

Executive:

Salariesandotheremoluments 2,237,500 2,525,000 1,912,500 2,200,000

Definedcontributionplan 268,500 281,400 229,500 242,400

Benefits-in-kind 43,862 56,000 15,862 28,000

2,549,862 2,862,400 2,157,862 2,470,400

Non-executive:

Fees 126,000 129,750 126,000 129,750

Other Directors

Executive: Salariesandotheremoluments 1,159,453 1,215,400 - -

Definedcontributionplan 139,398 146,373 - -

Benefits-in-kind 56,800 69,566 - -

1,355,651 1,431,339 - -

Analysisexcludingbenefits-in-kind

TotalexecutiveDirectors’remuneration 3,804,851 4,168,173 2,142,000 2,442,400

Totalnon-executiveDirectors’remuneration 126,000 129,750 126,000 129,750

3,930,851 4,297,923 2,268,000 2,572,150

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30.PROFIT/(LOSS)BEFORETAXATION(cont’d)

Directors’ Remuneration (cont’d)

ThenumberofDirectorsoftheCompanywhosetotalremunerationduringtheyearfellwithinthefollowingbandsisanalysedbelow:

NumberofDirectors 2006 2005 RM RM

ExecutiveDirectors:

RM50,001-RM100,000 - 1

RM350,001-RM400,000 1 1

RM550,001-RM600,000 1 1

RM800,001-RM850,000 2 -

RM850,001-RM900,000 - 1

RM950,001-RM1,000,000 - 1

4 5

Non-executiveDirectors:

RM50,000andbelow 5 6

31.TAXATION


Malaysianincometax:

Forthefinancialyear 414,600 912,720 482,000 -

Under/(over)providedinprioryears 17,400 39,351 (131,706) 19,038

432,000 952,071 350,294 19,038

Deferredtax:

Relatingtooriginationandreversaloftemporarydifferences 223,167 (553,721) (6,708) (412,304)

(Over)/underprovidedinprioryears (62,576) 6,105 (64,899) 304

160,591 (547,616) (71,607) (412,000)

592,591 404,455 278,687 (392,962)

Domesticcurrentincometaxiscalculatedatthestatutorytaxrateof28%(2005:28%)oftheestimatedassessableprofitfortheyear.Thedomesticstatutorytaxratewillbereducedto27%fromthecurrentyear’srateof28%,effectiveyearofassessment2007andto26%effectiveyearofassessment2008.Thecomputationofdeferredtaxasat31December2006hasreflectedthesechanges.


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31.TAXATION(cont’d)

AreconciliationofincometaxexpenseapplicabletoprofitbeforetaxationatthestatutoryincometaxratetoincometaxexpenseattheeffectiveincometaxrateoftheGroupandoftheCompanyisasfollows:

2006 2005 RM RM

Group

Profit/(loss)beforetaxation: 2,415,473 (8,323,009)

TaxationatMalaysianstatutorytaxrateof28%(2005:28%) 676,332 (2,330,443)

Effectoflowertaxratesforsmallandmediumscalecompanies (163,180) (8,503)

Differenttaxratesinothercountries (8,713) 11,852

Effectofchangesintaxrateondeferredtax 24,169 -

Effectofshareofresultsofassociate 44,660 141,442

Allowanceforimpairmentininvestmentnotdeductiblefortaxpurposes 12,645 1,703,772

Allowanceforimpairmentinproperty,plantandequipmentnotdeductiblefortaxpurposes - 159,712

Incomenotsubjecttotax (453,907) (12,409)

Expensesnotdeductiblefortaxpurposes 306,915 636,293

Utilisationofcurrentyeartaxlosses (248,986) (142,338)

Utilisationofpreviouslyunrecognisedtaxlossesandunabsorbedcapitalallowances (170,631) (531,921)

Deferredtaxassetsnotrecognised 618,463 731,542

(Over)/underprovisionofdeferredtaxinprioryears (62,576) 6,105

Underprovisionofincometaxexpenseinprioryears 17,400 39,351

Incometaxexpensefortheyear 592,591 404,455

Company

Profit/(loss)beforetaxation 1,211,730 (12,216,176)

TaxationatMalaysianstatutorytaxrateof28%(2005:28%) 339,284 (3,420,529)

Effectofchangesintaxratesondeferredtax 7,014 -

Allowanceforimpairmentofinvestmentnotdeductiblefortaxpurposes 116,164 1,447,510

Incomenotsubjecttotax (420,773) (468,989)

Expensesnotdeductiblefortaxpurposes 682,589 2,121,642

Utilisationofcurrentyeartaxlosses (248,986) (142,338)

Deferredtaxassetsnotrecognised - 50,400

(Over)/underprovisionofdeferredtaxinprioryears (64,899) 304

(Over)/underprovisionoftaxexpenseinprioryears (131,706) 19,038

Incometaxexpense/(benefit)fortheyear 278,687 (392,962)

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32.EARNINGSPERSHARE

(a) Basic

Basic earningsper share amounts are calculatedbydividingprofit for the year attributable toordinary equityholdersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyearheldbytheCompany.


Profit/(loss)attributabletoordinaryequityholdersoftheCompany 1,430,788 (9,248,675)

Weightedaveragenumberofordinarysharesinissue 72,469,500 72,469,500

Basicearnings/(loss)pershare(sen) 1.97 (12.76)

(b) Diluted

Forthepurposeofcalculatingdilutedearningspershare,theprofitfortheyearattributabletoordinaryequityholdersoftheCompanyandtheweightedaveragenumberofordinarysharesinissueduringthefinancialyearhavebeenadjustedforthedilutiveeffectofallpotentialordinarysharessuchasshareoptionsgrantedtoemployees.


Profit/(loss)attributabletoordinaryequityholdersoftheCompany 1,430,788 (9,248,675)

Weightedaveragenumberofsharesoutstanding 72,469,500 72,469,500-Numberofsharesunderoptions - --Numberofsharesthatwouldhavebeenissuedatfairvalue - -

Numberofsharesusedinthecalculationofdilutedearningspershare 72,469,500 72,469,500

Dilutedearnings/(loss)pershare(sen) 1.97 (12.76)

33.DIVIDEND Dividends Dividends inRespectofYear RecognisedinYear 2006 2005 2004 2006 2005 RM RM RM RM RM

Recognisedduringtheyear:

Firstandfinaldividendfor2004:3%less28%taxation,on72,469,500ordinaryshares(2.16senperordinaryshare)paidon20August2005 - - 1,565,341 - 1,565,341

- - 1,565,341 - 1,565,341

NodividendhasbeenrecommendedbytheDirectorsinrespectofthecurrentfinancialyear.


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34.CASHANDCASHEQUIVALENTS

Cashandcashequivalentsincludedinthecashflowstatementscomprisethefollowingbalancesheetamounts:

Group Company 2006 2005 2006 2005 Note RM RM RM RM

Cashandbankbalances 16 370,159 1,788,253 27,222 461,379

Bankoverdrafts 21 (7,631,310) (5,201,134) (3,687,840) (3,476,464)

(7,261,151) (3,412,881) (3,660,618) (3,015,085)

Less:DebtService

ReserveAccount 16 - (433,856) - (433,856)

(7,261,151) (3,846,737) (3,660,618) (3,448,941)

Deposits 15 - 920,000 - -

(7,261,151) (2,926,737) (3,660,618) (3,448,941)

Included in cash and bank balances of the Group is an amount of RM617 (2005: RM619) which is maintained indesignatedHousingDevelopmentAccountspursuanttotheHousingDevelopers(ControlandLicensing)Act,1966andHousingRegulations,1991inconnectionwithasubsidiarycompany’spropertydevelopmentproject.

35.RELATEDPARTYDISCLOSURES

TheCompanyhasthefollowingrelatedpartiestransactions:


Salestosubsidiaries 8,368,792 8,572,445

Purchasesfromsubsidiaries 12,301,341 13,962,817

Commissionsreceivedfromsubsidiaries 732,284 60,661

Commissionpaidtoasubsidiary 158 8,511

Managementfeereceivedfromsubsidiaries 2,980,000 1,252,000

Loaninterestchargedtosubsidiaries 543,640 507,015

Loaninterestpaidtosubsidiaries - 131,887

Rentalchargedbysubsidiaries 169,644 169,644

Rentalchargedtosubsidiaries 512,358 518,148

Warehousingserviceschargedtosubsidiaries 117,180 148,800

Warehousingservicespaidtoasubsidiary 109,508 73,715

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35.RELATEDPARTYDISCLOSURES(cont’d)

TheGroupandtheCompanytradewithcompaniesinwhichcertainDirectorshavesubstantialfinancialinterestsasfollows:


Revenue

-MajuHoldingsSdn.Bhd. 31,359 264,542 31,359 -

-PerwajaSteelSdn.Bhd. 23,723,065 1,176,474 1,060,218 -

-PerwajaRollingMill&DevelopmentSdn.Bhd. - 1,256,315 - -

-PFCEngineeringSdn.Bhd. - 2,798,247 - -

-PerfectChannelSdn.Bhd. 928,451 - - -

Purchases

-PerwajaSteelSdn.Bhd. 30,060,723 4,402,184 - 4,501

-PerwajaRollingMill&DevelopmentSdn.Bhd. 114 51,984,426 - 7,119,772

-PerwajaNailsSdn.Bhd. - 4,484,876 - 56,604

-PFCEngineeringSdn.Bhd. - 28,800 - -

-KinKeeMarketingSdn.Bhd. 3,963,905 - 429,621 -

-PerfectChannelSdn.Bhd. 7,303,139 - - -

RentalandservicechargespaidtoASMPropertiesSdn.Bhd. 792,297 744,844 728,516 662,680

TheGroupandtheCompanytradewithcompaniesinwhichtherearecertaincommonDirectorsasfollows:


Revenue

-LALEngineeringSdn.Bhd. 1,443,775 3,194,374 1,333,893 2,683,198

-RBTradingSdn.Bhd. 119,053 224,256 18,263 6,160

-ASMPropertiesSdn.Bhd. 527 16,083 - -

-JohnsonFluidEngineeringSdn.Bhd. 105,600 157,872 - 87,472

-JohnsonPacificPte.Ltd. 444,097 47,516 444,512 47,516

Intheordinarycourseofbusiness,theGroupandtheCompanyhavesupplyarrangementstoandfromcompaniesinwhichcertainDirectorshavesubstantialfinancialinterestsorwithcompaniesinwhichtherearecertaincommonDirectors.Thesetransactionsarecarriedoutatpriceswhicharemutuallyagreedtobereflectiveofasupplier/distributorrelationship.


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36.CAPITALCOMMITMENTS


Capitalexpenditure

Approvedandcontractedfor:Property,plantandequipment 601,981 601,981 47,846 47,846

Approvedbutnotcontractedfor:Property,plantandequipment 14,554,683 2,224,885 7,687,280 730,950

37.CONTINGENTLIABILITIES


Unsecured:

Corporateguaranteesgiventobanksforcreditfacilitiesgrantedtosubsidiaries 23,610,000 23,610,000

Corporateguaranteesgiveninfavourofthirdpartiesforsupplyinggoodstosubsidiaries 49,800,000 49,800,000

73,410,000 73,410,000

38.FINANCIALINSTRUMENTS

(a) FinancialRiskManagementObjectivesandPolicies

TheGroup’sfinancialriskmanagementpolicyseekstoensurethatadequatefinancialresourcesareavailableforthedevelopmentoftheGroup’sbusinesseswhilstmanagingitsinterestraterisks(bothfairvalueandcashflow),foreigncurrencyrisk,liquidityriskandcreditrisk.TheBoardreviewsandagreespoliciesformanagingeachoftheserisksandtheyaresummarisedbelow.

(b) LiquidityRisk

TheGroup manages its debt maturity profile, operating cash flows and the availability of funding so as toensurethatrefinancing,repaymentandfundingneedsaremet.Aspartof itsoverall liquiditymanagement,the Group maintains sufficient levels of cash or cash convertible investments to meet its working capitalrequirements. Inaddition, theGroupstrivestomaintainavailablebanking facilitiesatareasonable level toitsoveralldebtposition.As faraspossible, theGroupraisescommittedfundingfrombothcapitalmarketsandfinancialinstitutionsandbalancesitsportfoliowithsomeshorttermfundingsoastoachieveoverallcosteffectiveness.

(c) ForeignCurrencyRisk

TheGroup’sexposuretoforeigncurrencyriskisminimal.

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38.FINANCIALINSTRUMENTS(cont’d)

(d) CreditRisk

TheGroup’screditriskisprimarilyattributabletotradereceivables.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatallcustomerswhowishtotradeoncredittermsaresubjecttocreditverificationprocedures.Collateralsarealsoobtainedfromsomecustomersto furthermitigatethecreditriskexposure.Inaddition,receivablebalancesaremonitoredonanongoingbasisviaGroupmanagementreportingproceduresandtheGroup’sexposuretobaddebtsisnotsignificant.

ThecreditriskoftheGroup’sotherfinancialassets,whichcomprisecashandcashequivalents,marketablesecuritiesandnon-current investments,arises fromdefaultof thecounterparty,withamaximumexposureequaltothecarryingamountofthesefinancialassets.

(e) InterestRateRisk

Cashflowinterestrateriskistheriskthatthefuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinmarketinterestrates.Fairvalueinterestrateriskistheriskthatthevalueofafinancialinstrumentwillfluctuateduetochangesinmarketinterestrates.AstheGrouphasnosignificantinterest-bearingfinancialassets, the Group’s income and operating cash flows are substantially independent of changes in marketinterest rates.TheGroup’s interest-bearingfinancialassetsaremainlyshort term innatureandhavebeenmostlyplacedindeposits.

TheGroup’sinterestrateriskarisesprimarilyfrominterest-bearingborrowings.BorrowingsatfloatingratesexposetheGrouptocashflowinterestraterisk.BorrowingsobtainedatfixedratesexposetheGrouptofairvalueinterestraterisk.TheGroupmanagesitsinterestrateexposurebymaintainingamixoffixedandfloatingrateborrowings.

Thefollowingtablessetoutthecarryingamounts,theweightedaverageeffectiveinterestrates(WAEIR)asatthebalancesheetdateandtheremainingmaturitiesoftheGroup’sandtheCompany’sfinancialinstrumentsthatareexposedtointerestraterisk:

Morethan Note WAEIR Within1 1-2 2-3 3-4 4-5 5 % Year Year Year Year Year Year Total RM RM RM RM RM RM RM

At 31 December 2006

Group

Fixed rate Hirepurchasecreditors 19 5.88 (87,528) (87,528) (87,528) (45,069) (10,352) - (318,005)Bridgingloan 20 7.00 (15,000,000) - - - - - (15,000,000)

Floating rateBankers’acceptance 20 4.47 (65,664,362) - - - - - (65,664,362)Bankoverdrafts 21 7.52 (7,631,310) - - - - - (7,631,310)

Company

Fixed rateHirepurchasecreditors 19 6.59 (49,728) (49,728) (49,728) (35,619) (10,352) - (195,155)Bridgingloan 20 7.00 (15,000,000) - - - - - (15,000,000)

Floating rate Amountsduefromsubsidiaries 6 1.39 41,525,278 - - - - - 41,525,278Bankers’acceptance 20 4.57 (38,945,084) - - - - - (38,945,084)Bankoverdrafts 21 7.28 (3,687,840) - - - - - (3,687,840)


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(e) InterestRateRisk(cont’d)

Morethan Note WAEIR Within1 1-2 2-3 3-4 4-5 5 % Year Year Year Year Year Year Total RM RM RM RM RM RM RM

At 31 December 2005

Group

Fixed rate Hirepurchasecreditors 19 6.21 (176,532) (176,532) (176,532) (176,532) (44,073) - (750,201)

Floating rateDeposits 15 2.10 920,000 - - - - - 920,000Bankers’acceptance 20 3.66 (70,578,714) - - - - - (70,578,714)Bankoverdrafts 21 6.94 (5,201,134) - - - - - (5,201,134)Securedbankguaranteedcommercialpaper 22 2.93 (15,000,000) - - - - - (15,000,000)

Company

Fixed rateHirepurchasecreditors 19 6.61 (138,732) (138,732) (138,732) (138,732) (34,623) - (589,551)

Floating rate Amountsduefromsubsidiaries 6 1.25 40,648,547 - - - - - 40,648,547Amountsduetosubsidiaries 6 3.00 (4,969,949) - - - - - (4,969,949)Bankers’acceptance 20 3.60 (48,183,768) - - - - - (48,183,768)Bankoverdrafts 21 6.79 (3,476,464) - - - - - (3,476,464)Securedbankguaranteedcommercialpaper 22 2.93 (15,000,000) - - - - - (15,000,000)

Interest on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financialinstrumentsoftheGroupandtheCompanythatarenotincludedintheabovetablesarenotsubjecttointerestraterisks.

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(f) FairValues

ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyatthebalancesheetdateapproximatedtheirfairvaluesexceptforthefollowing:

Group Company Carrying Fair Carrying Fair Amount Value Amount Value Note RM RM RM RM

At 31 December 2006

Marketablesecurities 8 425,295 435,975 12,440 18,340

Shortterminvestment 14 8,297,251 * 8,297,251 *

Hirepurchasecreditors 19 318,005 273,937 195,155 162,086

Amountduetosubsidiaries 6 - - 47,643,173 #

Amountduefromsubsidiaries 6 - - 116,715,496 #

Amountduetoassociates 7 25,201 # 25,201 #

At 31 December 2005

Marketablesecurities 8 386,445 398,325 23,600 22,000

Shortterminvestment 14 8,297,251 * 8,297,251 *Hirepurchasecreditors 19 750,201 663,356 589,551 520,141

Amountduetosubsidiaries 6 - - 47,875,835 #

Amountduefromsubsidiaries 6 - - 124,157,136 #

Amountduetoassociates 7 26,713 # 26,713 #

* Itisnotpracticabletoestimatethefairvalueoftheshort-terminvestmentinunquotedsharesbecauseofthelackofquotedmarketpricesandtheinabilitytoestimatethefairvaluewithoutincurringexcessivecosts.

# Itisalsonotpracticabletoestimatethefairvaluesofamountdueto/fromsubsidiariesandassociatesduetolackoffixedrepaymenttermsenteredintobypartiesinvolvedwithoutincurringexcessivecosts.

Themethodsandassumptionsusedbymanagementtodeterminefairvaluesoffinancialinstrumentsotherthanthosewhosecarryingamountsreasonablyapproximatetheirfairvaluesareasfollows:

(i) Marketablesecurities

Thefairvalueofquotedsharesisdeterminedbyreferencetostockexchangequotedmarketbidpricesatthecloseofthebusinessonthebalancesheetdate.

(ii) Borrowings

Fair valuehasbeendeterminedusingdiscountedestimatedcashflows. Thediscount ratesusedare thecurrentmarketincrementallendingratesforsimilartypesoflending,borrowingandleasingarrangements.


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39.SEGMENTINFORMATION

(a) ReportingFormat

TheprimarysegmentreportingformatisdeterminedtobebusinesssegmentsastheGroup’srisksandratesofreturnareaffectedpredominantlybydifferencesintheproductsandservicesproduced.Secondaryinformationis reported geographically. The operating businesses are organised and managed separately according to thenatureoftheproductsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffersdifferentproductsandservesdifferentmarkets.

(b) BusinessSegments

TheGroupcomprisesthefollowingmainbusinesssegments:

(i) Trading - distributor and supplier of construction and finishing building materials, heavy steel products,architectural hardware, home improvement materials, cabinet systems, fuel and lubricants. This segmentoffersproductsandservicesfortheconstruction,infrastructuralandmanufacturingsectorsandendusers.

(ii) Propertyand investmentholding-propertiesare leasedoutforrental incomeorheldfor longtermcapitalappreciation.Investmentinquotedandunquotedsharesareheldfordividendincomeandcapitalgains.

(iii)Contracting-specialistcontractorengagedprincipallyinroofingworks.Theproductcategoriesinthissegmentincludemetalroofing,prefabricatedrooftrussesandceilingworksforfactories,residentialandcommercialbuildings.

(iv)Manufacturing - manufacture and supply of kitchen cabinet and wardrobe systems. This segment offersthe complete cabinet systems and component parts such as doors, furniture components and woodenmouldings.

(v) Propertydevelopment-thedevelopmentofresidentialandcommercialproperties.

(vi)Financing-provisionoffinancestothirdpartiesforinterestincome.

Otheroperationsof theGroupcomprisemainlyprovisionofwarehousingserviceswhichdoesnotconstituteaseparatelyreportablesegment.

(c) GeographicalSegments

TheGroup’sgeographicalsegmentsarebasedonthelocationoftheGroup’sassets.Salestoexternalcustomersdisclosedingeographicalsegmentsarebasedonthegeographicallocationofitscustomers.TheGroup’ssixmainbusinesssegmentsoperateintwogeographicalareas:

(i) Malaysia-theoperationsinthisareaareprincipallytradinganddistributionofbuildingmaterials,propertyandinvestmentholding,specialistcontracting,manufacturingofkitchencabinetsandwardrobesystems,propertydevelopmentandfinancing

(ii) Singapore-theoperationsinthisareaareprincipallytradinganddistributionofbuildingmaterials

(d) AllocationBasisandTransferPricing

Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedonareasonablebasis.

Transferpricesbetweenbusinesssegmentsaresetonanarm’slengthbasisinamannersimilartotransactionswiththirdparties.Segmentrevenue,expensesandresultsincludetransfersbetweenbusinesssegments.Thesetransfersareeliminatedonconsolidation.


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39.SEGMENTINFORMATION(cont’d)

(b) Businesssegments(cont’d)

The following tableprovidesananalysisof theGroup’s revenue, results,assets, liabilitiesandother informationbybusinesssegment:

Propertyand Investment Property Trading Holding Contracting Manufacturing Development Financing Others Elimination Total RM RM RM RM RM RM RM RM RM

At 31 December 2006

RevenueSalestoexternalcustomers 395,295,480 1,466,700 1,305,617 74,234 - - - - 398,142,031Inter-segmentsales 49,713,439 1,438,254 390,383 306,668 - - - (51,848,744) -Totalrevenue 445,008,919 2,904,954 1,696,000 380,902 - - - (51,848,744) 398,142,031

ResultsProfit/(loss)fromoperations 6,753,965 1,151,353 (36,628) (1,453,664) (53,584) (1,497) 29,607 - 6,389,552Financecosts (3,814,580)Shareofresultsofassociates - (159,499) - - - - - - (159,499)Profitbeforetaxation 2,415,473Taxation (592,591)Profitaftertaxation 1,822,882

AssetsSegmentassets 234,566,777 16,294,558 5,024,759 5,739,385 8,550,739 26,895,230 579,302 - 297,650,750Investmentinassociates - 1,855,500 - - - - - - 1,855,500Totalassets 299,506,250

LiabilitiesSegmentliabilities 169,922,154 290,826 2,330,044 264,719 2,504,675 2,275 23,764 - 175,338,457

Other segment informationCapitalexpenditure 1,229,669 - - 11,265 - - - - 1,240,934Depreciation 995,869 - 95 634,377 - - - - 1,630,341Amortisationofprepaidleasepayments 231,461 - - 1,509 - - - - 232,970Impairmentlossesrecognisedinincomestatement 45,160 59,070 - - - - - - 104,230Reversalofimpairmentlosses - (109,080) - - - - - - (109,080)Othersignificantnon-cashcashexpenses (1,045,967) (105,000) (159,581) 28,875 (10,302) - - - (1,291,975)


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39.SEGMENTINFORMATION(cont’d)

(b) Businesssegments(cont’d)

Propertyand Investment Property Trading Holding Contracting Manufacturing Development Financing Others Elimination Total RM RM RM RM RM RM RM RM RM

At 31 December 2005

RevenueSalestoexternalcustomers 346,546,588 1,415,130 1,139,175 2,771 - - - - 349,103,664Inter-segmentsales 47,291,863 1,199,516 221,800 272,617 - - - (48,985,796) -Totalrevenue 393,838,451 2,614,646 1,360,975 275,388 - - - (48,985,796) 349,103,664

ResultsProfit/(loss)fromoperations 1,756,242 (5,879,141) (4,142) 169,662 (29,356) (1,294) (573,953) - (4,561,982)Financecosts (3,255,877)Shareofresultsofassociates - (505,150) - - - - - - (505,150)Lossbeforetaxation (8,323,009)Taxation (404,455)Lossaftertaxation (8,727,464)

AssetsSegmentassets 214,754,337 14,418,191 5,444,439 6,026,620 8,515,507 26,895,250 398,926 - 276,453,270Investmentinassociates - 2,014,999 - - - - - - 2,014,999Totalassets 278,468,269

LiabilitiesSegmentliabilities 152,579,439 264,918 2,665,096 156,450 2,350,191 1,050 8,371 - 158,025,515

Other segment informationCapitalexpenditure 3,442,972 - - 65,525 - - - - 3,508,497Depreciation 1,995,572 8,858 12,722 683,176 - - - - 2,700,328Amortisationofprepaidleasepayments 240,628 - - - - - - - 240,628Impairmentlossesrecognisedinincomestatement 570,399 6,084,901 - - - - - - 6,655,300Reversalofimpairmentlosses - - - - - - - - -Othersignificantnon-cashcashexpenses 4,523,945 - (32,635) (10,583) - - - - 4,480,727

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40.SIGNIFICANTEVENTS

(a) On 1 June 2006, a wholly owned subsidiary, Modular Equity Sdn. Bhd. has entered into agreements with theLiquidators of Johnson Industries Pte. Ltd. (In Compulsory Liquidation) to acquire the entire issued and paidup capital of its three subsidiaries, Johnson Pacific Pte. Ltd., Inliner Technologies Pte. Ltd. and Johnson FluidEngineeringSdn.Bhd.foratotalconsiderationofSGD1,350,000.00,equivalenttoRM3,073,815.

ThetotalpurchaseconsiderationistobesatisfiedbywayofcontradebtsowedbyJohnsonIndustriesPte.Ltd.totheCompany.

(b) On19December2006,theCompanyenteredintoaShareSaleAgreementwithMajuHoldingsSdn.Bhd.fortheacquisitionof520,408ordinary sharesofRM1.00each representing51%of the issuedandpaid-upcapital ofControlInstruments(M)Sdn.Bhd.fromMajuHoldingsSdn.Bhd.foratotalconsiderationofRM5,000,000.ThepurchaseconsiderationfortheacquistionshallbesatisfiedbywayofcontradebtsowedbyMajuHoldingsSdn.Bhd.totheCompany.

41.SUBSEQUENTEVENTS

(a) On19January2007,theCompanyhasannounceditsproposaltoundertakeaBankGuaranteedCommercialPaperProgrammeofuptoanaggregatenominalvalueofRM30million(“CPProgramme”)tobeutilisedasfollows:

(i) tofullyrepaytheBridgingLoanFacilityofuptoRM15millionasdisclosedinNote20,and

(ii) thebalancetofinancetheworkingcapitalrequirementoftheCompanyand/oritssubsidiaries.

TheproposalwasapprovedbytheSecuritiesCommissionon9February2007andtheCompanyhasmadethefirstissuanceoftheCommercialPapersofRM30millionundertheCPProgrammeon21March2007.

(b) On 27 February 2007, the Company announced that the Foreign Investment Committee had approved theCompany’sacquisitionofthe51%oftheissuedandpaidupcapitalofControlInstruments(M)Sdn.Bhd.fromMajuHoldingsSdn.Bhd.foratotalconsiderationofRM5,000,000andthattheacquisitionhasbeendulycompleted.

(c) On12February2007,awhollyownedsubsidiary,ModularEquitySdn.Bhd.completeditsacquisitionofJohnsonPacificPte.Ltd.,InlinerTechnologiesPte.Ltd.andJohnsonFluidEngineeringSdn.Bhd.fromJohnsonIndustriesPte.Ltd.(InCompulsoryLiquidation).


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list of properties heldas at 3� december 2006

Building Tenure LandArea/ CarryingValue Age(approx.) Existing (Expirydate Built-uparea @31/12/2006Location (years) Use oflease) (Sqmetre) RM

1 12JalanDatoh 17* Officeand Freehold 2,297 599,44330000Ipoh showroom PerakDarulRidzuan

2 Lot1240&29462 - Light Freehold 4,663 600,000LahatLane industrial 30200Ipoh lot(vacant) PerakDarulRidzuan

3 1,JalanHalaDatoh2 18 Shophouse Freehold 338 500,00030000IpohPerakDarulRidzuan

4 LotsCG9&10 28 Office Freehold 274 900,000PlazaPekeliling 50400KualaLumpur WilayahPersekutuan

5 6,JalanPenchala 16* Officeand Leasehold 8,094 2,352,17146050PetalingJaya warehouse 18.06.2056 SelangorDarulEhsan

6 Lot1618,JalanDewani 14 Officeand Freehold 3,753/ 1,444,002OffJalanTampoi warehouse 2,092 81100JohorBahru JohorDarulTakzim

7 Lot1619,JalanDewani - Light Freehold 5,025 1,199,467OffJalanTampoi industriallot 81100JohorBahru JohorDarulTakzim

8 36K,JalanBukitKecil 17 Officeand Leasehold 821 398,80721100KualaTerengganu warehouse 02.08.2069 TerengganuDarulIman

9 Units2-1-23,24,26,27,28 13 Office Leasehold 713 1,382,000HarbourTradeCentre (vacant) 11.08.2090 GatLebuhMacCallum 10300PulauPinang

10 Units2-7-16,17,31 13 Office Leasehold 712 893,106HarbourTradeCentre 11.08.2090 GatLebuhMacCallum 10300PulauPinang

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11 84,JalanBertam14 11* Shophouse Freehold 195 350,000TamanDaya 81100JohorBahru JohorDarulTakzim

12 3,JalanSutraJaya 10 Shophouse Leasehold 149 110,0002/1TamanSutraJaya (vacant) 01.12.2092 08000SgPetani KedahDarulAman

13 Plot653,654,662&663 - Industrial Freehold 3,865 436,882MukimPengkalanKundor land DistrictofKotaSetar (vacant) KedahDarulAman

14 Unit4J,AdmiralCove 7 Condominium Freehold 90 227,125Condominium JalanPantai PortDickson NegeriSembilan

15 UnitC-01-08&C-01-09 4 Apartment Leasehold 136 220,000CemaraApartment 23.06.2098 No.2JalanSriPermaisuri3 BandarSriPermaisuri 56000KualaLumpur

16 B-G-1,2,3&B-1-1,2,3& 2 Apartment Freehold 1,111 880,000B-2-1,2&B-3-1,2 TamanPelangiApartment Melaka

17 16JalanPelangi13 2 Singlestorey Freehold 121 100,000TamanPelangi terracehouse Rawang

18 63,PersiaranPortland, 36 Officeand Leasehold 8,653/ 412,945TasekIndustrialEstate, factory 07.12.2071 3,311 31400Ipoh PerakDarulRidzuan

19 21,JalanKualaKangsar 15 Officeand Leasehold 12,141 1,801,218TasekIndustrialEstate warehouse 30.09.2064 31400Ipoh PerakDarulRidzuan

list of properties held (cont’d)as at 3� december 2006

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20 No.1105,BlockA 7 Office Leasehold 47 142,260PusatDagangSetiaJaya 17.07.2091 9JalanPJS8/9 46150PetalingJaya SelangorDarulEhsan

21 3,JalanKilang3 12* Factory Leasehold 2,149/ 290,000JelapangIndustrialEstate andoffice 15.07.2036 282 30100Ipoh PerakDarulRidzuan

22 Block10-18 - Shop-offices Leasehold 7,775 10,528,552Lot11,11A,15,17&19 (under 9.11.2093 JalanUsahawan(1/53) construction) PerusahaanSetapak KualaLumpur

23 1,Jalan13/1 14* Showroom, Leasehold 20,773 13,616,07246200PetalingJaya officeand 06.01.2060 SelangorDarulEhsan warehouse

24 Lot155,LingkaranTaman 11 Factory Freehold 10,063/ 4,417,208IndustriIntegrasiRawang3 5,070 TamanIndustriIntegrasiRawang 48000Rawang SelangorDarulEhsan

25 3645,JalanBaganDalam 14* Officeand Freehold 12,292/ 6,000,00012100Butterworth warehouse 2,339 PulauPinang

26 Lots3213&3214 10 Officeand Leasehold 20,133 4,316,591LorongJelawatSatu, warehouse 03.12.2050 SeberangJayaIndustrialPark PulauPinang

27 Lot758 - Rubber Freehold 14,285 540,000JalanAyerMerah estate Kulim KedahDarulAman

28 1&3,JalanIMJ3 8 Officeand Leasehold 803 521,737TamanIndustriMalimJaya warehouse 18.11.2095 75450Melaka

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29 No.86,Jalan1 9 Officeand Freehold 143 204,836TamanSriKluang warehouse 86000Kluang JohorDarulTakzim

30 No.44,JalanTSJ8/1B 9 Officeand Freehold 164 222,948TamanSerembanJaya warehouse 70450Seremban NegeriSembilan

31 ParcelNo.BC/G/13A&BC/2/13A 6 Apartment Leasehold 227 260,000StoreyNo.GF&2,BlockC (vacant) 20.12.2094 A’FarmosaGardenVilla Malacca

32 PTD129839 - Bungalowlot Freehold 816 95,000MukimPlentong (vacant) JohorBahru

33 TitleNo.03910 - Agricultural Leasehold 1/4shareof 150,000Musi,Bau land 31.12.2034 42,010 Sarawak

*Thebuildingageisfromdateofpurchaseastheactualageofthebuildingscannotbeascertained.


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statement of shareholdings

ClassofStock:RM1.00ordinaryshareVotingRights:1Votepershare

DISTRIBUTIONOFSHAREHOLDINGSASAT15MAY2007

Percentage PercentageRangeof No.of ofShareholders ofIssuedShareholdings Shareholders (%) No.ofShares Capital(%)

Lessthan100 36 0.82 829 0.00

100-1,000 2,072 46.97 2,043,065 2.82

1,001-10,000 2,000 45.34 7,695,667 10.62

10,001-100,000 271 6.14 6,600,787 9.11

100,001tolessthan5%ofissuedshares 26 0.59 11,769,600 16.24

5%andaboveofissuedshares 6 0.14 44,359,552 61.21

TOTAL 4,411 100.00 72,469,500 100.00

THIRTYLARGESTSHAREHOLDERSASAT15MAY2007(asperRecordofDepositors)

Percentageof No.ofShares IssuedCapital(%)

1. MajuHoldingsSdnBhd 15,962,000 22.03

2. IGBCorporationBerhad 7,641,752 10.54

3. MIDFSismaNominees(Tempatan)SdnBhd 6,713,800 9.26PledgedSecuritiesAccountForWongKichin

4. AmanahRayaNominees(Tempatan)SdnBhd 5,740,000 7.92SkimAmanahSahamBumiputera

5. MIDFSismaNominees(Tempatan)SdnBhd 4,594,000 6.34PledgedSecuritiesAccountForPurnamaGigihSdnBhd

6. MIDFSismaNominees(Tempatan)SdnBhd 3,708,000 5.12PledgedSecuritiesAccountForTanSriAbuSahidBinMohamed

7. TehCheongSuan 2,386,000 3.29

8. TecsunSdnBhd 1,500,000 2.07

9. SJSecNominees(Tempatan)SdnBhd 1,380,000 1.90PledgedSecuritiesAccountForTanSriAbuSahidBinMohamed

10.MIDFSismaNominees(Tempatan)SdnBhd 1,191,300 1.64PledgedSecuritiesAccountForSimChooThiam

11. M&ANominee(Tempatan)SdnBhd 1,111,000 1.53FRLAServicesSdnBhdForLimChongSeng

12.OSKNominees(Tempatan)SdnBerhadPledged 439,000 0.61SecuritiesAccountForChewSeeYow

13.TehBoeyWah 291,000 0.40

14.SmoothOperationSdnBhd 288,000 0.40

15.M&ANominee(Tempatan)SdnBhd 264,900 0.37TehCheongKeng

16.LimAhLai 255,000 0.35

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Percentageof No.ofShares IssuedCapital(%)

17. Ambank(M)BerhadPledgedSecuritiesAccount 229,600 0.32ForAhmadZahidBinHamidi

18.ChaiYounNyok 215,100 0.30

19.PublicNominees(Tempatan)SdnBhdPledgedSecurities 210,000 0.29AccountforSurinderSinghA/LWassanSingh

20.LowHingNoi 200,000 0.28

21.RuthleneBintiAbuSahid 200,000 0.28

22.AbuSahidBinMohamed 197,000 0.27

23.HarmoniSdnBhd 192,000 0.26

24.TehPaikChuan 175,000 0.24

25.ChongPakSeang 159,800 0.22

26.CiticorpNominees(Asing)SdnBhd 158,000 0.22UBSAgSingaporeForStarTradersGroupLtd.

27. HSBCNominees(Asing)SdnBhd 155,000 0.21AABSGBRForArcherAssociatesLimited

28.LimHengSuan 127,000 0.18

29.GohJuaiHian 120,000 0.17

30.SimChinSwee 120,000 0.17

TOTAL 55,924,252 77.17

SUBSTANTIALSHAREHOLDERSASAT15MAY2007

Percentageof No.ofShares No.ofShares Issued DirectInterest DeemedInterest Capital(%)

1. MajuHoldingsSdnBhd 15,962,000 - 22.03

2. TanSriAbuSahidbinMohamed 5,388,900 15,962,000 29.46

3. PurnamaGigihSdnBhd 4,594,000 - 6.34

4. Dato’LimHengSuan 127,000 4,594,000 6.51

5. AmanahRayaBerhad/Skim 5,740,000 - 7.92AmanahSahamBumiputera

6. IGBCorporationBerhad 7,641,752 - 10.54

7. GoldISBerhad - 7,641,752 10.54

8. Dato’TanChinNam - 7,929,752 10.94

9. RobertTanChungMeng - 7,929,752 10.94

10.WongKichin 6,723,800 - 9.28

11.TehCheongSuan 2,386,000 1,500,000 5.36

statement of shareholdings (cont’d)

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statement of shareholdings (cont’d)

DIRECTORS’SHAREHOLDINGSASAT15MAY2007

Percentageof No.ofShares No.ofShares IssuedNameofDirectors DirectInterest DeemedInterest Capital(%)

TanSriAbuSahidBinMohamed 5,388,900 15,962,000* 29.46

Dato’LimHengSuan 127,000 4,594,000 6.51

Dato’LimAhLai 255,000 - 0.35

MohdFauziBinYon 100,000 - -

NoneoftheotherDirectorshaveanyinterestsinshares(directorindirect)intheCompany.

Note: *Deemed interested by virtue of his substantial shareholding in Maju Holdings Sdn Bhd. By virtue of Tan Sri Abu Sahid Bin Mohamed interests of more than 15% in the Company, he is deemed to have an interest in the shares of all the subsidiaries to the extent that the Company has an interest.

ipmudaberhad(22146-T)

I/We

of

beingamember(s)ofIPMUDABERHADholding

sharesherebyappoint

of

orfailinghim

of

asmy/ourproxytovoteforme/usonmy/ourbehalfattheThirty-SecondAnnualGeneralMeetingoftheCompanytobeheldonTuesday26June2007at11.00a.m.andatanyadjournmentthereof,inthemannerindicatedbelow:

NO RESOLUTION FOR AGAINST

1 AdoptionofAuditedFinancialStatementsandReports

2 ApprovalofDirectors’Fees

Re-electionofthefollowingDirectors:3 TanSriAbuSahidBinMohamed

4 Dato’AbuTalibBinMohamed

5 Dato’MohamedFuadBinYon

6 AppointmentofAuditorsandauthoriseDirectorstofixtheirremuneration

7 AuthoritytotheDirectorstoissueandallotsharespursuant toSection132DoftheCompaniesAct,1965

Pleaseindicatewith“X”howyouwishyourvotetobecast.Intheabsenceofspecificdirections,yourProxywillvoteorabstainashethinksfit.

Datedthisdayof2007

Signature:

NOTES:

1) AmemberoftheCompanyentitledtoattendandvoteattheabovementionedmeetingisentitledtoappointoneproxybutnotmorethantwoproxiestoattendandvoteinhisstead.SuchproxyneednotbeamemberoftheCompany,andwheretherearetwoproxies,thenumberofsharestoberepresentedbyeachproxymustbestated.

2) Theinstrumentappointingaproxy,inthecaseofanindividual,shallbesignedbytheappointerorbyhisattorneydulyauthorisedinwriting,andinthecaseofacorporation,shallbeeithergivenunderitscommonsealorunderthehandofanofficerorattorneyofthecorporationdulyauthorised.

3) TheinstrumentappointingtheproxymustbedepositedattheRegisteredOfficeoftheCompanyatBangunanIpmuda,12JalanDatuh,30000Ipoh,PerakDarulRidzuan,Malaysia,notlessthanforty-eight(48)hoursbeforethetimesetforholdingthemeetingoranyadjournmentthereof.

form of proxy

TheCompanySecretaryIPMUDA BERHAD BangunanIpmuda,

12,JalanDatuh,30000Ipoh,

PerakDarulRidzuan,Malaysia.

Stamp

2006 annual report (2.3mb).pdfipmuda berhad (22 46-t) annual report 2006 contents notice of annual...

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