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HO HUP CONSTRUCTION COMPANY BERHAD(14034-W)

2006laporan tahunanannual report

www.hohup.netHO HUP CONSTRUCTION COMPANY BERHAD (14034-W)No. 2 Medan Imbi55100 Kuala LumpurTel No. 03-2148 7711Fax No.03-2142 4988

Notis Mesyuarat Agung Tahunan

Penyata Mengiringi Notis bagi MesyuaratAgung Tahunan

Maklumat Korporat

Struktur Korporat

Profil Lembaga Pengarah

Penyata Urus Tadbir Korporat

Lain-lain Maklumat Yang Diperlukan OlehSyarat-Syarat Penyenaraian Bursa MalaysiaSecurities Berhad

Penyata Kawalan Dalaman

Laporan Jawatankuasa Audit

Penyata Tanggungjawab Para Pengarah

Penyata Pengerusi

Maklumat Penting Kewangan 5 Tahun

Keterangan Pemegang-pemegang Saham

Senarai Hartanah

Penyata Kewangan

Borang Proksi

2-3

3

6

7

8-11

12-15

16

22-23

26-28

32

34-41

42-43

44-45

46

47-110

Notice Of Annual General Meeting

Statement Accompanying Notice OfAnnual General Meeting

Corporate Information

Corporate Structure

Board Of Directors’ Profile

Corporate Governance Statement

Other Information Required By TheListing Requirements Of BursaMalaysia Securities Berhad

Statement On Internal Control

Audit Committee Report

Statement Of Directors’ Responsibility

Chairman’s Statement

5 Years’ Financial Highlights

Shareholders’ Information

List Of Properties

Financial Statements

Form Of Proxy

4-5

5

6

7

8-11

17-20

21

24-25

29-31

33

34-41

42-43

44-45

46

111-174

laporan tahunan2006 annual report

HO HUPCONSTRUCTIONCOMPANY BERHAD

kandungan contents

HO HUP CONSTRUCTION COMPANY BERHAD (14034-W)

laporan tahunan2006 annual report2

notis mesyuarat agung tahunan

Resolusi 1

Resolusi 4

Resolusi 3

Resolusi 5

Resolusi 2

NOTIS ADALAH DENGAN INI DIBERI BAHAWA MESYUARAT AGUNG TAHUNAN KE TIGA PULUH TIGASYARIKAT AKAN DIADAKAN DI BALLROOM, HOTEL EQUATORIAL, JALAN SULTAN ISMAIL, 50250 KUALALUMPUR, PADA HARI JUMAAT, 28 SEPTEMBER 2007 JAM 11.30 PAGI UNTUK MENGURUSKAN PERKARA-PERKARA BERIKUT:

AGENDA

1. Untuk menerima Penyata Kewangan Teraudit bagi tahun berakhir 31 Disember 2006, dan Laporan Pengarahserta Juruaudit yang berkenaan.

2. Untuk melantik semula Pengarah berikut yang bersara di bawah peruntukan Artikel 90 Tataurusan PertubuhanSyarikat:-

i) YBhg. Datuk Sulaiman Bin Daudii) En. Faris Najhan Bin Hashim

3. Untuk meluluskan bayaran yuran para Pengarah berjumlah RM213,000.00 bagi tahun berakhir 31 Disember2006.

4. Untuk melantik semula Tetuan Ernst & Young sebagai Juruaudit Syarikat dan membenarkan para Pengarahuntuk menetapkan imbuhan mereka.

5. SEBAGAI URUSAN KHAS

Untuk menimbang, dan sekiranya difikirkan sesuai, meluluskan yang berikut sebagai Resolusi-Resolusi Biasa:

Resolusi Biasa 1

CADANGAN AUTORITI MEMPERUNTUKKAN SAHAM-SAHAM SELARAS DENGAN SEKSYEN 132DAKTA SYARIKAT, 1965

"Bahawa selaras dengan Seksyen 132D Akta Syarikat, 1965 para Pengarah adalah dan dengan ini diberi kuasamemperuntukkan dan menerbitkan saham-saham dalam Syarikat pada bila-bila masa dan atas terma-termadan syarat-syarat tertentu dan untuk tujuan tertentu sebagaimana para Pengarah mungkin, mengikut budibicara mutlak mereka, anggap sesuai dengan syarat bahawa bilangan agregat saham yang diterbitkan selarasdengan resolusi tidak melebihi 10% daripada modal saham Syarikat yang diterbitkan pada tarikh MesyuaratAgung Tahunan ini dan bahawa para Pengarah adalah dan dengan ini juga diberi kuasa untuk mendapatkelulusan bagi penyenaraian dan sebut harga bagi saham-saham tambahan yang diterbitkan itu pada BursaMalaysia Securities Berhad dan bahawa autoriti sedemikian akan berkuatkuasa sehingga penutup MesyuaratAgung Tahunan Syarikat yang akan datang."

Resolusi Biasa 2

CADANGAN PEMBAHARUAN MANDAT PEMEGANG-PEMEGANG SAHAM BAGI URUSNIAGA PIHAKBERKAITAN BERULANG SEDIA ADA DAN MANDAT BAGI URUSNIAGA PIHAK BERKAITAN BERULANGTAMBAHAN BERSIFAT HASIL ATAU PERDAGANGAN DALAM PENGLIBATAN BIASA PERNIAGAANYANG ADALAH PERLU BAGI OPERASI HARIAN HO HUP CONSTRUCTION COMPANY BERHAD (“HOHUP ATAU SYARIKAT”) DAN SUBSIDIARI-SUBSIDIARINYA (“KUMPULAN HO HUP ATAU KUMPULAN”)("CADANGAN")

“BAHAWA, selaras dengan Perenggan 10.09 Syarat-Syarat Penyenaraian Bursa Malaysia Securities Berhad("Syarat-Syarat Penyenaraian Bursa Securities"), mandat am bagi urusniaga pihak berkaitan berulang sifat hasilatau perdagangan Kumpulan yang diberi dalamMesyuarat Agung Tahunan Syarikat yang diadakan pada 30 Jun2006 adalah dengan ini diperbaharui DAN BAHAWA mandat dengan ini diberikan oleh pemegang-pemegangsaham Syarikat untuk memohon urusniaga pihak berkaitan berulang tambahan dan kebenaran diberi kepadaKumpulan Ho Hup untuk memasuki dan memberi kuatkuasa berterusan kepada urusniaga pihak berkaitanberulang tertentu yang bersifat hasil atau perdagangan Kumpulan Pihak Berkaitan (sebagaimana ditakrifkandalam Syarat-syarat Penyenaraian Bursa Securities dan sebagaimana dinyatakan dalam Seksyen 2.4 Pekelilingkepada pemegang-pemegang saham bertarikh 6 September 2007), yang adalah perlu bagi operasi harian dalampenglibatan biasa perniagaan Kumpulan Ho Hup atas terma-terma yang tidak lebih menguntungkan kepadaPihak-pihak Berkaitan daripada yang biasanya tersedia kepada orang awam dan tidak merugikan pemegang-pemegang saham minoriti Syarikat.

Resolusi 7

Resolusi 6


laporan tahunan2006 annual report 3

DAN BAHAWA, Kumpulan Ho Hup dengan ini diberi kuasa untuk memasukiurusniaga pihak berkaitan berulang dengan Pihak-pihak Berkaitan yang dinyatakan didalamnya dengan syarat bahawa:

(a) Urusniaga adalah dalam perjalanan biasa perniagaan dan adalah atas terma-terma yang tidak lebih menguntungkan kepada pihak-pihak berkaitan lebihdaripada yang biasanya tersedia kepada orang awam dan tidak merugikanpemegang-pemegang saham minoriti Syarikat; dan

(b) Pendedahan akan dibuat dalam laporan tahunan dengan pecahan nilai agregaturusniaga pihak berkaitan berulang selaras dengan Cadangan dalam tahunkewangan berdasarkan jenis Urusniaga Pihak Berkaitan berulang dibuat, namapihak-pihak berkaitan yang terlibat dalam setiap jenis urusniaga pihak berkaitanberulang dan hubungan mereka dengan Syarikat.

DAN BAHAWA, kelulusan tersebut akan berkuatkuasa sehingga:

(i) penutup Mesyuarat Agung Tahunan Syarikat berikutan mesyuarat agung padamana Cadangan tersebut telah diluluskan, pada masa mana, akan tamat,melainkan melalui resolusi yang diluluskan pada mesyuarat, autoriti adalahdiperbaharui; atau

(ii) penamatan tempoh dalammana Mesyuarat Agung Tahunan berikutnya selepastarikh ia diperlukan untuk diadakan selaras dengan Seksyen 143(1) AktaSyarikat, 1965 (tetapi tidak akan dilanjutkan sehingga lanjutan tertentusebagaimana mungkin dibenarkan selaras dengan Seksyen 143(2) Akta Syarikat,1965); atau

(iii) dibatalkan atau diubah melalui resolusi yang diluluskan oleh pemegang-pemegang saham dalam mesyuarat,

yang mana lebih awal,

DAN BAHAWA autoriti adalah dengan ini diberi kepada para Pengarah Syarikat untukmenyelesaikan dan melakukan perbuatan dan perkara tertentu (termasukmenandatangani semua dokumen tertentu sebagaimana mungkin diperlukan) untukmemberi kesan kepada urusniaga yang dipertimbangkan dan/atau yang dibenarkanoleh Resolusi Biasa ini.”

6. Untuk menguruskan lain-lain perkara biasa perniagaan yang boleh diuruskansewajarnya pada Mesyuarat Agung Tahunan.

Menurut Perintah Lembaga,

KANG SHEW MENG (MAICSA 0778565)SEOW FEI SAN (MAICSA 7009732)Setiausaha-setiausaha

Kuala Lumpur6 September 2007

Nota-Nota:a) Seorang ahli yang berhak menghadiri dan

mengundi di mesyuarat adalah berhakuntuk melantik proksi/proksi-proksi bagimenghadiri dan mengundi sebagai wakildirinya. Seseorang proksi tidak semestinyaahli Syarikat.

Bagaimanapun, selaras dengan Seksyen149(1)(b) Akta Syarikat, 1965, seorang ahlitidak boleh melantik sesiapa yang bukanahli syarikat sebagai proksinya kecualiorang tersebut adalah pengamal guamanbertauliah, juruaudit syarikat yangdiluluskan atau seorang yang diluluskanoleh Pendaftar Syarikat dalam kes-kestertentu.

Di mana Ahli Syarikat adalah nomini yangdibenarkan sebagaimana ditakrifkan dibawah Akta Depositori Pusat, ia bolehmelantik sekurang-kurangnya seorangproksi berhubung dengan setiap akaunsekuriti yang ia pegang dengan saham-saham biasa Syarikat berada pada kreditakaun-akaun sekuriti tersebut.

b) Borang Proksi hendaklah diserahkan kePejabat Pendaftar Syarikat di No. 2, MedanImbi, 55100 Kuala Lumpur, tidak kurangdaripada 48 jam sebelum waktu yang telahditetapkan untuk memulakan Mesyuarat.

c) Suratcara melantik proksi bagi individuhendaklah ditandatangani oleh pelantikatau peguam yang diberi kuasa dansekiranya pelantik adalah sebuah syarikathendaklah dimeteraikan atauditandatangani oleh pegawai yangdibenarkan atau peguam yang diberikuasa. Tandatangan mana-manapemegang bersama adalah memadai.

Notis Penjelasan untuk Resolusi Khas:

Resolusi 6Cadangan Resolusi 6, sekiranya diluluskan,akan membolehkan para Pengarah untukmenerbitkan sehingga maksimum 10% modalsaham Syarikat pada tarikh Mesyuarat AgungTahunan ini untuk tujuan tertentu sebagaimanapara Pengarah anggap demi kepentinganterbaik Syarikat. Autoriti ini akan tamat diMesyuarat Agung Tahunan berikutnyamelainkan dibatalkan atau diubah oleh Syarikatdi Mesyuarat Agung Syarikat.

Resolusi 7Maklumat lanjut mengenai Urusniaga PihakBerkaitan Berulang dinyatakan dalam Seksyen 2Pekeliling bertarikh 6 September 2007 yangdihantar bersama dengan Laporan TahunanSyarikat 2006.

Para Pengarah yang menawarkan diri untuk pelantikan semula pada Mesyuarat Agung Tahunan ke Tiga Puluh Tiga.

Artikel No. 90 Tataurusan Pertubuhan:-


Profil para Pengarah yang menawarkan diri untuk pelantikan semula terdapat pada muka surat 9 dan 11. Butir-butir kepentingandalam sekuriti Syarikat terdapat pada muka surat 44 Laporan Tahunan.

penyata mengiringi notis mesyuarat agung tahunan



notice of annual general meeting

Resolution 1

Resolution 3Resolution 2

Resolution 4

Resolution 5

NOTICE IS HEREBY GIVEN THAT THE THIRTY-THIRD ANNUAL GENERAL MEETING OF THE COMPANYWILL BE HELD AT THE BALLROOM, HOTEL EQUATORIAL, JALAN SULTAN ISMAIL, 50250 KUALALUMPUR, ON FRIDAY, 28 SEPTEMBER 2007 AT 11.30 A.M. TO CONSIDER THE FOLLOWING BUSINESS:

AGENDA

1. To receive the Audited Financial Statements for the year ended 31 December 2006 and the Reports ofthe Directors and Auditors thereon.

2. To re-elect the following Directors who retire under the provision of Article 90 of the Company’s Articlesof Association:-


3. To approve the payment of Directors’ Fees amounting to RM213,000.00 for the year ended31 December 2006.

4. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fixtheir remuneration.

5. AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following Ordinary Resolutions:

Ordinary Resolution 1

PROPOSED AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THECOMPANIES ACT, 1965.

“THAT pursuant to Section 132D of the Companies Act, 1965 the Directors be and are herebyauthorised to allot and issue shares in the Company at any time and upon such terms and conditionsand for such purposes as the Directors may, in their absolute discretion, deem fit provided that theaggregate number of shares issued pursuant to this resolution does not exceed 10% of the issuedshare capital of the Company as at the date of this Annual General Meeting and that the Directors beand are also empowered to obtain the approval for the listing of and quotation for the additional sharesso issued on the Bursa Malaysia Securities Berhad and that such authority shall continue to be in forceuntil the conclusion of the next Annual General Meeting of the Company.”

Ordinary Resolution 2

PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR EXISTING RECURRENT RELATEDPARTY TRANSACTIONS AND MANDATE FOR ADDITIONAL RECURRENT RELATED PARTYTRANSACTIONS OF A REVENUE OR TRADING NATURE IN THE ORDINARY COURSE OFBUSINESS WHICH ARE NECESSARY FOR THE DAY-TO-DAY OPERATIONS OF HO HUPCONSTRUCTION COMPANY BERHAD (“HO HUP” OR “COMPANY”) AND ITS SUBSIDIARYCOMPANIES (“HO HUP GROUP” OR “GROUP”) (“PROPOSALS”)

“THAT, pursuant to Paragraph 10.09 of the Bursa Malaysia Securities Berhad Listing Requirements(“Bursa Securities Listing Requirements”), the general mandate for recurrent related party transactionsof a revenue or trading nature of the Group given at the Annual General Meeting of the Company heldon 30 June 2006 is hereby renewed AND THAT mandate be and is hereby granted by shareholders ofthe Company to apply to the additional recurrent related party transactions and approval be and ishereby given to the Ho Hup Group to continue to enter into and give effect to specified recurrent relatedparty transactions of a revenue or trading nature of the Group with the Related Parties (as defined inthe Bursa Securities Listing Requirements and as specified in Section 2.4 of the Circular to Shareholdersdated 6 September 2007) which are necessary for the day to day operations in the ordinary course ofbusiness of the Ho Hup Group on terms not more favourable to the Related Parties than those generallyavailable to the public and not detrimental to minority shareholders of the Company.

Resolution 7

Resolution 6



AND THAT, the Ho Hup Group is hereby authorised to enter into the recurrent relatedparty transactions with the Related Parties mentioned therein provided that:

(a) the transactions are in the ordinary course of business and are on terms whichare not more favourable to the Related Parties than those generally available tothe public and are not to the detriment of the minority shareholders of theCompany; and

(b) the disclosure will be made in the annual report of the breakdown of theaggregate value of recurrent related party transactions conducted pursuant tothe Proposals during the financial year based on the type of recurrent relatedparty transactions made, the names of the related parties involved in each typeof recurrent related party transactions and their relationship with the Company.

AND THAT, such approval shall be in force until:

(i) the conclusion of the next Annual General Meeting of the Company followingthe general meeting at which such Proposals was passed, at which time it willlapse, unless by a resolution passed at the meeting, the authority is renewed;or

(ii) the expiration of the period within which the next Annual General Meeting afterthe date it is required to be held pursuant to Section 143(1) of the CompaniesAct, 1965 (but shall not extend to such extension as may be allowed pursuantto Section 143(2) of the Companies Act, 1965); or

(iii) revoked or varied by resolution passed by shareholders in general meeting,

whichever is earlier,

AND THAT authority be and is hereby given to the Directors of the Company tocomplete and do such acts and things (including executing all such documents asmay be required) to give effect to the transactions contemplated and/or authorisedby this Ordinary Resolution.”

6. To transact any other ordinary business which may properly be transacted at anAnnual General Meeting.

By Order of the Board,

KANG SHEW MENG (MAICSA 0778565)SEOW FEI SAN (MAICSA 7009732)Secretaries

Kuala Lumpur6 September 2007

Directors who are standing for re-election at the Thirty-Third Annual General Meeting:

Article 90 of the Articles of Association:


The profile of the Directors who are standing for re-election at the Annual General Meeting are further set out on pages 9 and 11of the Annual Report. The details of their interest in the securities in the company is set out on page 44 of the Annual Report.

Notes:a) A member entitled to attend and vote at

the meeting is entitled to appoint aproxy/proxies to attend and vote in hisstead. A proxy need not be a member ofthe Company.

However, in accordance with Section149(1)(b) of the Companies Act, 1965, amember shall not be entitled to appoint aperson who is not a member of theCompany as his proxy unless that personis a qualified legal practitioner, an approvedcompany auditor or a person approved bythe Registrar of Companies in a particularcase.

Where a Member of the Company is anauthorised nominee as defined under theCentral Depositories Act, it may appoint atleast one proxy in respect of eachsecurities account it holds with ordinaryshares of the Company standing to thecredit of the said securities account.

b) The Form of Proxy must be deposited atthe Registered Office of the Company, atNo.2 Medan Imbi, 55100 Kuala Lumpur,not less than 48 hours before the timeappointed for holding the meeting.

c) The instrument appointing a proxy in thecase of an individual shall be signed by theappointer or his attorney and in the caseof a corporation must be executed underits common seal or under the hand of itsduly authorised officer or attorney. Thesignature of any joint holder is sufficient.

Explanatory Notes on Special Business:

Resolution 6The proposed Resolution 6, if passed, wouldenable the Directors to issue up to a maximumof 10% of the issued share capital of theCompany as at the date of this Annual GeneralMeeting for such purposes as the Directorsconsider would be in the best interest of theCompany. This authority unless revoked orvaried by the Company in a general meeting willexpire at the next Annual General Meeting.

Resolution 7Further information on the Recurrent RelatedParty Transactions is set out in Section 2 of theCircular to Shareholders dated 6 September2007 which is despatched together with theCompany’s Annual Report 2006.

statement accompanyingnotice of annual general meeting



maklumat korporatcorporate information

LEMBAGA PENGARAH/BOARD OF DIRECTORS

En. Abdul Kadir Bin Md Kassim Pengerusi/Pengarah Bukan Eksekutif Bukan BebasChairman/Non-Independent Non-Executive Director

YBhg. Dato’ Low Tuck Choy Pengarah Urusan/Managing Director

Mr. Low Teik Kien Pengarah Eksekutif/Executive Director

En. Faris Najhan Bin Hashim Pengarah Eksekutif/Executive Director

Mr. Lai Moo Chan Pengarah Bebas Bukan Eksekutif/Independent Non-Executive Director

YBhg. Datuk Sulaiman Bin Daud Pengarah Bebas Bukan Eksekutif/Independent Non-Executive Director

YBhg. Dato’ Mohd Ghazali @ Pengarah Bebas Bukan Eksekutif/Independent Non-Executive DirectorFauzi Bin Yacub

JAWATANKUASA AUDITAUDIT COMMITTEE

YBhg. Datuk Sulaiman Bin DaudPengerusi/Chairman

En. Faris Najhan Bin HashimYBhg. Dato’ Mohd Ghazali @Fauzi Bin YacubAhli/Member

JAWATANKUASA GANJARANREMUNERATION COMMITTEE

YBhg. Dato’ Mohd Ghazali @Fauzi Bin YacubPengerusi/Chairman

En. Abdul Kadir Bin Md KassimYBhg. Datuk Sulaiman Bin DaudAhli/Member

JAWATANKUASA PELANTIKANNOMINATION COMMITTEE

En. Abdul Kadir Bin Md KassimPengerusi/Chairman

YBhg. Dato’ Mohd Ghazali @Fauzi Bin YacubMr. Lai Moo ChanAhli/Member

JAWATANKUASA URUSAN RISIKORISK MANAGEMENT COMMITTEE

Mr. Lai Moo ChanPengerusi/Chairman

En. Abdul Kadir Bin Md KassimEn. Faris Najhan Bin HashimAhli/Member

SETIAUSAHA-SETIAUSAHA SYARIKATCOMPANY SECRETARIES

Kang Shew Meng (MAICSA 0778565)Seow Fei San (MAICSA 7009732)

PEJABAT BERDAFTARREGISTERED OFFICE

No. 2 Medan Imbi55100 Kuala LumpurTel No. 03-2148 7711Fax No. 03-2142 4988

PENDAFTAR SAHAMSHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 26 Menara Multi-PurposeCapital SquareNo 8, Jalan Munshi Abdullah50100 Kuala LumpurTel No. 03-2721 2222Fax No. 03-2721 2530

BANK-BANK UTAMAPRINCIPAL BANKERS

CIMB Bank BerhadUnited Overseas Bank (Malaysia) BerhadRHB Bank Berhad

JURUAUDITAUDITORS

Ernst & YoungLevel 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala LumpurTel No. 03-7495 8000Fax No. 03-2095 9076

PEGUAM-PEGUAMSOLICITORS

Dorairaj, Low & TehJasbeer, Nur & Lee

PENYENARAIAN BURSA MALAYSIASTOCK EXCHANGE LISTING

Bursa Malaysia Securities Berhad(Papan Utama/Main Board)

DOMISIL & NEGARADIPERBADANKANDOMICILE & COUNTRY OFINCORPORATION

Malaysia

JENIS SYARIKATLEGAL FORM

Syarikat Awam Terhad olehsaham-sahamPublic Company Limited by shares

LAMAN WEBWEB SITE

www.hohup.net



struktur korporatcorporate structure


* Diperbadankan di India/Incorporated in India** Diperbadankan di Republic China/

Incorporated in the People’s Republic of China*** Diperbadankan di Madagascar/Incorporated in Madagascar**** Diperbadankan di Mauritius/Incorporated in Mauritius# Diperbadankan di Thailand/Incorporated in Thailand## Diperbadankan di South Africa/Incorporated in South Africa### Diperbadankan di Indonesia/Incorporated in Indonesia

100% Ho Hup Construction Company (India) Private Limited *

100% Ho Hup Construction Company Berhad (Madagascar Branch)

49.9% Ho Hup Construction (Madagascar) SARL ***

100% Ho Hup Corporation (Mauritius) Ltd ****

100% Ho Hup Corporation (South Africa) Pty Ltd ##

49% Ho Hup Ubunye Construction Pty Ltd ##

50% Hupcon Antarabangsa Sdn Bhd

45% Shanghai San Ho Hup Pile Co. Ltd **

48% Ho Hup Corporation (Thailand) Limited #

70% Bukit Jalil Development Sdn Bhd

100% Ho Hup Equipment Rental Sdn Bhd

100% Ho Hup Geotechnics Sdn Bhd

100% Ho Hup Jaya Sdn Bhd

100% Mekarani Heights Sdn Bhd

100% Intermax Resources Sdn Bhd

51% Homeg Sdn Bhd

49% Semenyih Brickmakers Sdn Bhd

100% Timeless Element Sdn Bhd

90% Tru-Mix Concrete Sdn Bhd

80% PT Halford Citra ###



profil lembaga pengarahboard of directors5 profile

En. Abdul Kadir Bin Md Kassim

Pengerusi/Chairman

YBhg. Dato’ Low Tuck Choy

Pengarah Urusan/Managing Director

En. Abdul Kadir Bin Md Kassim, seorang warganegara Malaysia, berusia 66 tahun, telah dilantik ke Lembaga Pengarah Ho HupConstruction Company Berhad pada 15 November 2001 dan beliau adalah Pengerusi (Bukan Eksekutif Bukan Bebas) Syarikat. Beliauadalah juga Pengerusi Jawatankuasa Pelantikan dan ahli Imbuhan dan Jawatankuasa Pengurusan Risiko.

En. Kadir memegang ijazah Sarjana Muda Undang-undang daripada University of Singapore. Beliau berkhidmat dalam PerkhidmatanPentadbiran dan Diplomatik Malaysia dan dalam Perkhidmatan Kehakiman dan Undang-undang di antara 1966 dan 1973, memegangbeberapa jawatan. Beliau pada masa ini adalah rakan pengurusan Tetuan Kadir, Andri & Partners. Beliau juga adalah pengarah UEMGroup Berhad (dahulunya dikenali sebagai United Engineers (Malaysia) Berhad), Proton Holdings Berhad, UEM World Berhad, SuriaCapital Holdings Berhad, TIME dotCom Berhad, Sino Hua-An International Berhad dan beberapa syarikat sendirian, termasuk menjadiPengerusi Jawatankuasa Labuan International Financial Exchange.

En. Kadir tidak mempunyai pegangan sekuriti dalam Syarikat dan subsidiarinya dan tiada hubungan kekeluargaan dengan mana-manapengarah dan/atau pemegang saham utama Syarikat, dan tidak mempunyai percanggahan kepentingan dengan Syarikat. Beliau tidakpernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.

En. Abdul Kadir Bin Md Kassim, a Malaysian, aged 66, was appointed to the Board of Ho Hup Construction Company Berhad on15 November 2001 and he is the Chairman (Non-Independent Non-Executive) of the Company. He is also the Chairman of theNomination Committee and a member of the Remuneration and Risk Management Committee.

En. Kadir holds a Bachelor of Laws degree from University of Singapore. He served in the Malaysian Administrative and DiplomaticService and in the Judicial and Legal Service between 1966 and 1973, holding various positions. He is currently the Managing Partnerof Messrs. Kadir, Andri & Partners. He is also a director of UEM Group Berhad (formerly known as United Engineers (Malaysia)Berhad), Proton Holdings Berhad, UEM World Berhad, Suria Capital Holdings Berhad, TIME dotCom Berhad, Sino Hua-AnInternational Berhad and a few private companies, including being Chairman of the Committee of Labuan International FinancialExchange.

En. Kadir has no securities holdings in the Company and its subsidiaries and no family relationship with any director and/or majorshareholder of the Company, and has no conflict of interest with the Company. He has not been convicted of any offence in the past10 years.

YBhg. Dato’ Low Tuck Choy, seorang warganegara Malaysia, berusia 49 tahun, adalah Pengarah Urusan Ho Hup ConstructionCompany Berhad. Beliau memegang ijazah Sarjana Muda Sains (Kepujian) Kejuruteraan Awam daripada University of Wales,Swansea, United Kingdom. Beliau menyertai Ho Hup Construction Company Berhad sebagai Jurutera Tapak dan telah dilantik keLembaga Pengarah sebagai Pengarah Eksekutif pada 30 November 1984. Dalam tahun 1994, beliau telah dilantik sebagai PengarahUrusan selepas kematian bapa beliau, mendiang En. Low Chee. YBhg. Dato’ Low mempunyai lebih daripada 23 tahun pengalamandalam industri pembinaan dan pembangunan.

YBhg. Dato’ Low juga pengarah Ho Hup Corporation (Mauritius) Limited, Bukit Jalil Development Sdn Bhd, Tru-Mix Concrete SdnBhd, Ho Hup Jaya Sdn Bhd, Homeg Sdn Bhd, Timeless Element Sdn Bhd, Ho Hup Construction Company (India) Pte Ltd, Ho HupCorporation (South Africa) Pty Ltd, Ho Hup Corporation (Thailand) Limited, Shanghai San Ho Hup Pile Co. Ltd dan beberapa syarikatpersendirian.

Pada 7 Ogos 2007, YBhg. Dato’ Low mempunyai kepentingan langsung 1,319,000 saham biasa dan kepentingan tidak langsung25,162,629 saham biasa dalam Syarikat. YBhg. Dato’ Low adalah abang kepada En. Low Teik Kien yang berkhidmat sebagai PengarahEksekutif Ho Hup Construction Company Berhad. Kecuali dan melainkan bagi urusan-urusan pihak berkaitan yang dinyatakan dalamNota 37 kepada Penyata Kewangan di mukasurat 101 hingga 102, beliau tidak ada percanggahan kepentingan dengan Syarikat.YBhg. Dato’ Low tidak pernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.



YBhg. Dato’ Low Tuck Choy, a Malaysian, aged 49, is the Managing Director of Ho Hup Construction Company Berhad. He holds aBachelor of Science (Hons) degree in Civil Engineering from University of Wales, Swansea, United Kingdom. He joined Ho HupConstruction Company Berhad as a Site Engineer and on 30 November 1984 was appointed to the Board as an Executive Director. In1994 he was appointed as Managing Director upon the demise of his father, the late Mr. Low Chee. YBhg. Dato’ Low has over 23 yearsof hands-on experience in the construction and building industry.

YBhg. Dato’ Low is also a director of Ho Hup Corporation (Mauritius) Limited, Bukit Jalil Development Sdn Bhd, Tru-Mix Concrete SdnBhd, Ho Hup Jaya Sdn Bhd, Homeg Sdn Bhd, Timeless Element Sdn Bhd, Ho Hup Construction Company (India) Pte Ltd, Ho HupCorporation (South Africa) Pty Ltd, Ho Hup Corporation (Thailand) Limited, Shanghai San Ho Hup Pile Co. Ltd together with several otherprivate companies.

As at 7 August 2007, YBhg. Dato’ Low has a direct interest of 1,319,000 ordinary shares and an indirect interest of 25,162,629 ordinaryshares in the Company. YBhg. Dato’ Low is the brother of Mr Low Teik Kien who serves as an Executive Director of Ho Hup ConstructionCompany Berhad. Save and except for the related party transactions disclosed in Note 37 to the Financial Statements on page 165 to166 of the Annual Report, he has no conflict of interest with the Company. YBhg. Dato’ Low has not been convicted of any offences inthe past 10 years.

YBhg. Datuk Sulaiman Bin Daud, seorang warganegara Malaysia, berusia 60 tahun, dilantik ke Lembaga Pengarah Ho HupConstruction Company Berhad pada 19 November 2001 dan beliau adalah Pengarah Bukan-Eksekutif Bebas Kanan. Beliau adalahPengerusi Jawantankuasa Audit dan ahli Jawatankuasa Imbuhan. Beliau memegang Ijazah Sarjana Pengurusan Perniagaan dariIMC Buckingham, United Kingdom dan telah menyertai Program Pengurusan Lanjutan Stanford-Insead di Fontainbleau, Perancis.Beliau mempunyai pengalaman bekerja lebih daripada 32 tahun dalam pelbagai bidang dan kini beliau adalah Pengerusi BankPertanian Malaysia. Beliau juga adalah pengarah Park May Berhad, Pharmaniaga Berhad, Malaysia Packaging Industry Berhad danSilverlake Axis Limited, disenaraikan di Singapura. Beliau juga adalah Pengerusi dan pengarah beberapa syarikat persendirian diMalaysia, Thailand dan India. Beliau juga adalah Pengerusi Majlis Perniagaan Malaysia/Syria.

Beliau tidak mempunyai pegangan sekuriti dalam Syarikat dan subsidiarinya dan tidak mempunyai hubungan kekeluargaan denganmana-mana pengarah dan/atau pemegang saham utama Syarikat, dan tiada percanggahan kepentingan dengan Syarikat. Beliautidak pernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.

YBhg. Datuk Sulaiman Bin Daud, a Malaysian, aged 60, was appointed to the Board of Ho Hup Construction Company Berhad on19 November 2001 and he is the Senior Independent Non-Executive Director. He is the Chairman of the Audit Committee and amember of the Remuneration Committee. He has a Master in Business Administration from IMC Buckingham, United Kingdomand attended the Stanford-Insead Advanced Management Programme at Fontainbleau, France. He has over 32 years of workingexperience in various fields and is currently the Chairman of Bank Pertanian Malaysia. He is also a director of Park May Bhd,Pharmaniaga Berhad and Malaysia Packaging Industry Berhad and Silverlake Axis Limited, listed in Singapore. He is also Chairmanand director of other private companies with businesses in Malaysia, Thailand and India. He is also the Chairman of the Malaysia/Syria Business Council.

He has no securities holdings in the Company and its subsidiaries and no family relationship with any director and/or majorshareholder of the Company, and has no conflict of interest with the Company. He has not been convicted of any offences in thepast 10 years.

YBhg. Datuk Sulaiman Bin Daud

Pengarah/Director



Mr. Lai Moo Chan

Pengarah/Director

Mr. Low Teik Kien

Pengarah Eksekutif/Executive Director

En. Lai Moo Chan, seorang warganegara Malaysia, berusia 62 tahun, menyertai Syarikat pada 1964 dan telah dilantik ke LembagaPengarah pada 8 Mei 1980. Pada 21 Februari 2006, beliau telah ditukar jawatan dari Pengarah Bukan Eksekutif Bukan Bebas kePengarah Bebas Bukan Eksekutif Ho Hup Construction Company Berhad. Beliau adalah Pengerusi Jawatankuasa PengurusanRisiko dan ahli Jawatankuasa Pelantikan. Beliau mempunyai lebih daripada 41 tahun pengalaman bekerja dalam industri pembinaandan bekas presiden Master Builders Association Malaysia. Beliau juga adalah ahli Majlis Perunding Ekonomi Negara II dan pengarahTalam Corporation Berhad.

Pada 7 Ogos 2007, beliau memegang 1,453,522 saham biasa dalam Syarikat. Beliau tidak mempunyai hubungan kekeluargaandengan mana-mana pengarah dan/atau pemegang saham utama Syarikat, dan tiada percanggahan kepentingan dengan Syarikat.Beliau tidak pernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.

Mr. Lai Moo Chan, a Malaysian, aged 62, joined the Company in 1964 and was appointed to the Board of Directors on 8 May 1980.On 21 February 2006, he was redesignated from a Non-Independent Non-Executive Director to an Independent Non-ExecutiveDirector of Ho Hup Construction Company Berhad. He is a Chairman of the Risk Management Committee and a member of theNomination Committee. He has more than 41 years of experience in the construction industry and was the past President ofMaster Builders Association Malaysia. He is also a member of the National Economic Consultative Council II and a director ofTalam Corporation Berhad.

As at 7 August 2007, he holds 1,453,522 ordinary shares in the Company. He has no family relationship with any director and/ormajor shareholder of the Company and no conflict of interest with the Company. He has not been convicted of any offences inthe past 10 years.

En. Low Teik Kien, seorang warganegara Malaysia, berusia 42 tahun, pertama kalinya dilantik ke Lembaga Ho Hup ConstructionCompany Berhad pada 1 Jun 1995 dan sejak itu telah berkhidmat sebagai Pengarah Eksekutif. Beliau mempunyai lebih 20 tahunpengalaman dalam industri pembinaan dan pembangunan. Beliau juga adalah pengarah Tru-Mix Concrete Sdn Bhd dan beberapasyarikat sendirian lain.

Sebagai seorang ahli penting Pengurusan Syarikat Kumpulan, En. Low bertanggungjawab bagi menyelia penyelenggaraanrangkaian komprehensif peralatan pembinaan Kumpulan dan penyediaan sokongan logistik untuk projek-projek pembinaanKumpulan di Malaysia.

En. Low, adik kepada Pengarah Urusan, mempunyai kepentingan langsung dan tidak langsung dalam saham biasa Syarikat sebanyak698,700 dan 25,162,529masing-masing pada 7Ogos 2007. Kecuali bagi urusniaga pihak berkaitan sebagaimana dinyatakan dalamNota37 kepada Penyata Kewangan padamuka surat 101 hingga 102 Laporan Tahunan, beliau tidakmempunyai percanggahan kepentingandengan Syarikat. Beliau tidak pernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.

Mr. Low Teik Kien, a Malaysian, aged 42, was first appointed to the Board of Ho Hup Construction Company Berhad on 1 June1995 and has since served as an Executive Director. He has over 20 years of experience in the construction and building industry.He is also a director of Tru-Mix Concrete Sdn Bhd and several other private companies.

As a key member of the Company’s Management Group, Mr. Low is responsible for overseeing the maintenance of the Company’scomprehensive fleet of construction equipment and the provision of logistics support for the Group’s construction projects inMalaysia.

Mr. Low, the younger brother of the Managing Director, has a direct and indirect interest in 698,700 and 25,162,629 ordinaryshares of the Company respectively as at 7 August 2007. Save for the related party transactions as disclosed in Note 37 to theFinancial Statements on page165 to 166 of the Annual Report, he has no conflict of interest with the Company. He has not beenconvicted of any offences over the past 10 years.



En. Faris Najhan Bin Hashim, seorang warganegara Malaysia berusia 40 tahun, telah dilantik ke Lembaga Ho Hup Construction CompanyBerhad pada 12 Mei 2004. Pada 24 September 2004, beliau telah dilantik sebagai Pengarah Eksekutif Syarikat. Beliau adalah ahliJawatankuasa Audit dan Jawatankuasa Pengurusan Risiko. Beliau memegang ijazah Sarjana Muda Ekonomi (khusus dalam Perakaunan)daripada The University of Sydney, Australia. Beliau mempunyai banyak tahun pengalaman semasa kerja dalam pengurusan korporatdan pembangunan projek, projek penswastaan, IT, telekomunikasi, pendidikan, sector awam dan sector pembangunan teknologi.Beliau berkhidmat sebagai Pengarah Eksekutif dan kemudiannya Pengarah Urusan Mun Loong Berhad di antara 1995 and 1999.

Beliau tidak mempunyai pegangan sekuriti dalam Syarikat dan subsidiarinya dan tidak ada hubungan kekeluargaan dengan mana-manapengarah dan/atau pemegang-pemegang saham utama Syarikat, dan tidak mempunyai percanggahan kepentingan dengan Syarikat.Beliau tidak pernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.

En. Faris Najhan Bin Hashim, a Malaysian aged 40, was appointed to the Board of Ho Hup Construction Company Berhad on12 May 2004. On 24 September 2004, he was redesignated as an Executive Director of the Company. He is a member of the AuditCommittee and Risk Management Committee. He holds a Bachelor of Economics (Major in Accounting) degree from TheUniversity of Sydney, Australia. He has many years of hands-on experience in corporate management and project development,privatisation projects, IT, telecommunication, education, public sector and technology development sectors. He served as theExecutive Director and subsequently Managing Director of Mun Loong Berhad between 1995 and 1999.

He has no securities holdings in the Company and its subsidiaries and no family relationship with any director and/or majorshareholders of the Company, and has no conflict of interest with the Company. He has not been convicted of any offences inthe past 10 years.

En. Faris Najhan Bin Hashim

Pengarah Eksekutif/Executive Director

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub, seorang warganegara Malaysia, berusia 62 tahun, telah dilantik ke LembagaPengarah Ho Hup Construction Company Berhad pada 2 Januari 2002 dan beliau adalah Pengarah Bukan-Eksekutif Bebas. Beliauadalah Pengerusi Jawatankuasa Imbuhan, ahli Jawatankuasa Audit dan Jawatankuasa Pelantikan. Beliau memegang Ijazah SarjanaMuda Kesusasteraan dari Universiti Malaya, Kuala Lumpur dan pernah bertugas di Polis DiRaja Malaysia di antara 1969 dan 1999,memegang jawatan sebagai Ketua Pegawai Polis Kedah, Pengarah Anti-Narkotik Kuala Lumpur, Pesuruhjaya Polis Sarawak danPengarah Sekuriti Dalaman dan Perintah Awam Bukit Aman, Kuala Lumpur.

Beliau tidak mempunyai pegangan sekuriti dalam Syarikat dan subsidiarinya serta tidak mempunyai hubungan kekeluargaan denganmana-mana pengarah dan/atau pemegang saham utama Syarikat, dan tiada percanggahan kepentingan dengan Syarikat. Beliautidak pernah disabit dengan apa-apa kesalahan dalam tempoh 10 tahun yang lepas.

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub, a Malaysian aged 62, was appointed to the Board of Ho Hup Construction CompanyBerhad on 2 January 2002 and he is an Independent Non-Executive Director. He is the Chairman of the Remuneration Committee,a member of the Audit Committee and Nomination Committee. He holds a Bachelor of Arts from University Malaya, Kuala Lumpur,and served in the Polis DiRaja Malaysia between 1969 and 1999, holding the positions of Chief Police Officer Kedah, Director ofAnti-Narcotics Kuala Lumpur, Polis Commissioner Sarawak and Director of Internal Security and Public Order, Bukit Aman, KualaLumpur.

He has no securities holdings in the Company and its subsidiaries and no family relationship with any director and/or majorshareholder of the Company, and has no conflict of interest with the Company. He has not been convicted of any offences in thepast 10 years.

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub

Pengarah/Director



penyata urus tadbir korporat

LEMBAGA MENGIKTIRAF PENTINGNYA MENGAMALKAN URUS TAKBIR KORPORAT YANG BAIK UNTUK MELINDUNGI DANMENINGKATKAN NILAI PEMEGANG SAHAM DAN BERTERUSAN MELAKSANAKAN PENGESYORAN KOD URUS TADBIRKORPORAT MALAYSIA ("KOD"), UNTUK MEMASTIKAN BAHAWA PIAWAIAN TERTINGGI URUS TADBIR KORPORATDIAMALKAN SECARA KESELURUHAN OLEH KUMPULAN SEBAGAI BAHAGIAN PENTING DALAM MELAKSANAKANTANGGUNGJAWAB MEREKA.

DINYATAKAN DI BAWAH ADALAH PENERANGAN TENTANG BAGAIMANA KUMPULAN TELAH MENGGUNAKAN PRINSIP-PRINSIP DAN TAHAP PEMATUHAN DENGAN AMALAN TERBAIK, SEBAGAIMANA DINYATAKAN DALAM KOD, SEPANJANG12 BULAN BERAKHIR 31 DISEMBER 2006 DAN SEHINGGA TARIKH LAPORAN INI.

A. PENGARAH

Lembaga bertanggungjawab bagi hala tuju strategikKumpulan secara keseluruhan dan mengekalkan kawalanyang berkesan dan tanggungjawab penuh bagi kegiatan-kegiatan Kumpulan. Dalam memenuhi kewajipan-kewajipan fidusiarinya, Lembaga memastikan bahawaterdapat sistem dan proses sewajarnya untuk mengurusrisiko-risiko penting Kumpulan. Selain daripada itu,Lembaga juga mempunyai pasukan pengurusan yangberupaya dan berpengalaman untuk menyelia operasiharian Kumpulan.

1. Komposisi Lembaga

Pada tarikh laporan ini, Lembaga terdiri daripada7 ahli termasuk 3 Pengarah Bukan Eksekutif Bebas,1 Pengarah Bukan Eksekutif Bukan Bebas dan3 Pengarah Eksekutif. Lembaga mematuhiPerenggan 15.02 Syarat-syarat Penyenaraian yangmemerlukan sekurang-kurangnya dua atau satupertiga, yang mana lebih tinggi, terdiri daripadaPengarah-pengarah Bebas.

Syarikat diketuai oleh Lembaga yang berkesan yangmempunyai rangkaian pengalaman perniagaan dankewangan meluas kepada hala tuju Kumpulan.Bersama-sama mereka menyelia dan menguruskanperniagaan Kumpulan yang adalah amat penting bagikejayaan Kumpulan dan peningkatan nilai pemegang-pemegang saham jangka panjang dengan rangkaianmeluas pengalaman, kemahiran dan pengetahuanmereka. Penerangan ringkas mengenai latarbelakang setiap Pengarah dikemukakan pada mukasurat 8 hingga 11.

Dalam tempoh 12 bulan berakhir 31 Disember 2006,Lembaga bermesyuarat tujuh (7) kali. Butir-butirkehadiran setiap Pengarah adalah seperti berikut:

Para Pengarah Kehadiran

En. Abdul Kadir Bin Md Kassim 6/7(Pengerusi)

YBhg. Dato’ Low Tuck Choy 7/7(Pengarah Urusan)

YBhg. Datuk Sulaiman Bin Daud 7/7

En. Faris Najhan Bin Hashim 7/7(Pengarah Eksekutif)

En. Lai Moo Chan 7/7

En. Low Teik Kien 7/7(Pengarah Eksekutif)

YBhg. Dato’ Mohd Ghazali 7/7@ Fauzi Bin Yacub

Pada mesyuarat Lembaga, para Pengarahmembincang dan merumuskan perkara-perkarastrategik, operasi dan kewangan penting, perkarakorporat dan peraturan yang melibatkan Kumpulan.Hubungan Lembaga dengan pengurusan dijelaskanmelalui Pengarah Urusan yang memaklumkanjangkaan Lembaga kepada pengurusan Kumpulandan memberi taklimat kepada Lembaga mengenaistatus dan perkembangan operasi Kumpulan.Pengarah Urusan mengawasi perjalanan Kumpulandan pelaksanaan keputusan dan polisi-polisiLembaga.



2. Keseimbangan Lembaga

Terdapat pembahagian tanggungjawab yang jelas diantara Pengerusi dan Pengarah Urusan untukmemastikan bahawa terdapat keseimbangan kuasadan autoriti. Pengerusi bertanggungjawab bagipengendalian mesyuarat dengan betul dan teraturmanakala Pengarah Urusan bertanggungjawabterutamanya bagi operasi keseluruhan Kumpulan danpelaksanaan strategi dan polisi.

Keseimbangan dalam Lembaga dipertingkatselanjutnya melalui kehadiran Pengarah BukanEksekutif Bebas. Peranan Pengarah Bukan EksekutifBebas khususnya penting dalam memastikanbahawa kepentingan jangka panjang pemegangsaham, kakitangan, pelanggan, pembekal danbeberapa komuniti dalam mana Kumpulan jalankanperniagaan dijaga.

Lembaga telah mengenal pasti YBhg. DatukSulaiman Bin Daud sebagai Pengarah Kanan BukanEksekutif Bebas kepada siapa kebimbanganmengenai Kumpulan boleh disampaikan.

Semua pemegang saham diwakili secara saksamapada Lembaga. Pelaburan minoriti pemegang sahamdiwakili secara saksama oleh 3 Pengarah BukanEksekutif Bebas yang membentuk 1/3 bahagianLembaga.

3. Jawatankuasa Lembaga

Lembaga telah menubuhkan jawatankuasa-jawatankuasa berikut untuk membantunya dalammenjalankan kewajipan-kewajipan fidusiarinya.Semua jawatankuasa ini mempunyai bidang tugasbertulis yang jelas menggariskan objektif, kewajipandan kuasa mereka.

Jawatankuasa Audit

Objektif Jawatankuasa Audit adalah untukmembantu Lembaga mengkaji kesesuaian danintegriti sistem kawalan dalaman dan sistemmaklumat pengurusan Syarikat dan Kumpulan.Komposisi, ringkasan kegiatan dan bidang tugasJawatankuasa Audit boleh didapati dalam LaporanJawatankuasa Audit pada muka surat 26 hingga 28.

Jawatankuasa Pengurusan Risiko

Jawatankuasa Pengurusan Risiko bertanggungjawabbagi mengkaji proses pengurusan risiko Kumpulandan menyediakan maklum balas kepada Lembagadari masa ke masa. Ahli Jawatankuasa pada masa iniadalah seperti yang berikut:

En. Lai Moo Chan (Pengerusi)

En. Abdul Kadir Bin Md KassimEn. Faris Najhan Bin Hashim

Dalam tahun kewangan dan sehingga tarikh laporantahunan ini, jawatankuasa telah bermesyuarat empat(4) kali.

Jawatankuasa Pelantikan

Peranan Jawatankuasa Pelantikan dijelaskan dibawah 5) Pelantikan ke Lembaga.

Jawatankuasa Ganjaran

Peranan Jawatankuasa ganjaran dijelaskan di bawahbahagian B) Ganjaran Pengarah.

4. Mesyarat Lembaga dan Bekalan Maklumat

Lembaga bermesyuarat sekurang-kurangnya empat(4) kali setahun yang dijadualkan pada setiap sukutahunan, dengan mesyuarat tambahan diadakanapabila perlu.

Tujuh (7) Mesyuarat Pengarah-pengarah telahdiadakan dalam tahun kewangan berakhir31 Disember 2006. Butir-butir kehadiran Pengarah-pengarah dikemukakan pada muka surat 12.

Semua Pengarah mempunyai akses kepada AkaunPengurusan Bulanan Kumpulan dan dimaklumkanoleh Pengarah Eksekutif dan Pengurus Besar –Korporat & Kewangan semasa Mesyuarat Lembaga.

Kertas-kertas Lembaga disediakan kepada semuaPengarah dari masa ke masa untuk membolehkanmereka mengawasi prestasi kewangan dan operasiKumpulan. Kertas-kertas Lembaga termasukmaklumat seperti Analisis Prestasi Syarikat danKumpulan, Analisis Jumlah Dagangan mengikutProjek, Buku Pesanan, Pengusiaan PenghutangDagangan, Kawalan Kredit, Pengusiaan Pemiutangdan subkontraktor, Ramalan Aliran Tunai, Ringkasanbagi Kemudahan Perbankan, Kerja DalamPelaksanaan dan Kerja-kerja Tender/Dicadangkan,Pelan Strategik Tahunan dan Kemudahan KewanganKumpulan. Semua perkara yang memerlukankelulusan Lembaga juga diedarkan sebelumMesyuarat Lembaga dan semasa MesyuaratLembaga perkara-perkara ini dipertimbangkansebelum keputusan dibuat. Kakitangan PengurusanKanan mungkin dijemput untuk menghadiriMesyuarat Lembaga untuk menyediakan Lembagadengan maklumat yang diperlukan dan penjelasanmengenai isu-isu yang telah dibincangkan dalammesyuarat.

Selepas setiap mesyuarat Lembaga diadakan, drafminit-minit diedarkan kepada semua Pengarah bagiulasan mereka.



Pengarah Urusan akan bersara daripada jawatansekurang-kurangnya sekali dalam setiap tiga tahuntetapi adalah layak untuk pemilihan semula.Pengarah-pengarah yang bersara pada setiap tahunadalah Pengarah-pengarah yang memegang jawatanpaling lama sejak tarikh pemilihan terakhir dibuat.

7. Latihan Pengarah

Semua Pengarah Syarikat telah menghadiri ProgramAkreditasi Mandatori (“MAP”) Bursa MalaysiaSecurities Berhad (“Bursa Securities”) danmengumpul mata-mata diperlukan di bawah syarat-syarat Program Pendidikan Berterusan.Jawatankuasa Pelantikan juga ditugaskan dengankewajipan mengesyor program-program orientasi,pendidikan dan latihan yang bersesuaian secaraberterusan untuk melatih dan melengkapkan paraPengarah sedia ada dan baru.

Dalam tahun kewangan, Lembaga telah menghadirilatihan dalam syarikat yang dikendalikan oleh Syarikatuntuk mengikuti perkembangan isu-isu semasa,peraturan terkini dan pembangunan baru dalampersekitaran perniagaan.

Lembaga mengakui betapa pentingnya latihanberterusan untuk meningkatkan lagi kemahiran danpengetahuan dan akan terus mengenal pastipersidangan dan seminar yang akan memberimanfaat kepada para Pengarah.

B. GANJARAN PENGARAH

1. Jawatankuasa Ganjaran

Objektif Jawatankuasa Ganjaran adalah untukmenubuhkan dasar perlaksanaan polisi dan untukmembuat pengesyoran kepada Lembaga mengenaisemua elemen ganjaran, terma-terma pekerjaan,struktur ganjaran, dan faedah-faedah sampingan bagiPengarah Eksekutif, Pengarah Urusan dan lain-lainjawatan pengurusan atasan dengan sasaran untukmenarik, mengekal, dan memberi motivasi individu-individu yang paling kaliber.

Ganjaran Pengarah Eksekutif adalah berdasarkanprestasi mereka. Yuran perlu dibayar kepadaPengarah Bukan Eksekutif ditentukan denganmerujuk kepada pertubuhan yang setanding.Pengarah Bukan Eksekutif dibayar elaun mesyuaratberdasarkan kehadiran.

Jawatankuasa Ganjaran pada masa ini terdiri daripadaPengarah Bukan Eksekutif berikut:

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub(Pengerusi)

En. Abdul Kadir Bin Md Kassim

YBhg. Datuk Sulaiman Bin Daud

Dalam tahun kewangan dan sehingga tarikh LaporanTahunan ini, jawatankuasa bermesyuarat sekali.

Lembaga telah meluluskan satu prosedur bagiPengarah, sama ada sebagai Lembaga secarakeseluruhan atau dalam keupayaan perseoranganmereka untuk mengambil nasihat bebas, di manaperlu, dalam melaksanakan kewajipan-kewajipanmereka dan atas perbelanjaan Kumpulan.

Semua Pengarah juga mempunyai akses kepadanasihat dan perkhidmatan Setiausaha Syarikat danmereka boleh meminta nasihat profesional bebas,sekiranya perlu.

5. Pelantikan ke Lembaga

Dalam tahun kewangan 2002, Lembaga telahmenubuhkan Jawatankuasa Pelantikan. ObjektifJawatankuasa Pelantikan adalah untuk memastikanbahawa Pengarah membawa kepada Lembaga,campuran kemahiran dan kepakaran yang diperlukanuntuk memenuhi keperluan pengemudian korporat.Jawatankuasa Pelantikan juga akan membantuLembaga dalam mengkaji atas dasar tahunankeseimbangan dan saiz sewajarnya penyertaanPengarah Bukan Eksekutif dan mewujudkanprosedur dan proses ke arah penilaian tahunankeberkesanan Lembaga secara menyeluruh dansumbangan setiap ahli individu Lembaga danJawatankuasa Lembaga.

Jawatankuasa Pelantikan, menerusi bidangtugasnya, ditugaskan dengan kewajipan membuatpengesyoran-pengesyoran bersesuaian untukmengisi kekosongan pada Lembaga danjawatankuasa-jawatankuasanya. Namun demikian,kelulusan bagi pelantikan Ahli-ahli Lembaga baru atauAhli-ahli Jawatankuasa terletak pada Lembaga secarakeseluruhan.

Jawatankuasa Pelantikan pada masa ini terdiridaripada Pengarah Bukan Eksekutif, majoriti yangmana adalah Pengarah-pengarah Bebas seperti yangberikut:

En. Abdul Kadir Bin Md Kassim (Pengerusi)

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin YacubEn. Lai Moo Chan

Dalam tahun kewangan dan sehingga tarikh LaporanTahunan ini, jawatankuasa telah bermesyuarat sekali.

6. Pemilihan Semula kepada Lembaga

Selaras dengan Tataurusan Pertubuhan Syarikat,semua Pengarah yang dilantik oleh Lembaga adalahtertakluk kepada pemilihan semula oleh pemegang-pemegang saham pada Mesyuarat Agung Tahunanpertama yang diadakan selepas pelantikan mereka.Tataurusan juga memperuntukkan bahawa sekurang-kurang satu pertiga Pengarah yang selebihnyatertakluk kepada pemilihan semula mengikut giliranpada setiap Mesyuarat Agung Tahunan, dengansyarat sentiasa bahawa semua Pengarah termasuk



Jawatankuasa Ganjaran akan membuatpengesyoran-pengesyoran mengenai Ganjaran bagiPengarah Eksekutif. Ganjaran dan keberhakanPengarah Bukan Eksekutif termasuk PengerusiBukan Eksekutif hendaklah menjadi perkara yangakan diputuskan oleh Lembaga Pengarah secarakeseluruhan. Kelulusan bagi Ganjaran Pengarahterletak pada Lembaga secara keseluruhan denganPengarah-pengarah terlibat berkecuali daripadamengundi dan perbincangan mengenai keputusanberhubung dengan pakej Ganjaran mereka sendiri.

Ganjaran Pengarah diagregatkan dan dikategorikanke dalam komponen-komponen sewajarnya, bilanganPengarah yang ganjaran termasuk dalam golonganganjaran berturutan sebanyak RM50,000.00,membezakan di antara Pengarah Eksekutif danBukan Eksekutif, ditunjukkan pada muka surat 76.

C. PEMEGANG SAHAM

1. Hubungan Pemegang Saham dan Pelabur

Lembaga adalah komited untuk mengekalkanhubungan berkesan dengan pemegang sahamSyarikat, pemegang pelbagai kepentingan dan orangawam secara amnya. Selaras dengan perenggan9.02 Syarat-syarat Penyenaraian Bursa Securities,Lembaga mendedahkan kepada orang awam semuamaklumat keperluan bagi pelaburan yang termaklumdan mengambil langkah-langkah munasabah untukmemastikan bahawa semua pemegang sahammenikmati akses yang sama rata kepada maklumatsedemikian.

Pemegang-pemegang saham boleh juga mendapatakses kepada Laporan Tahunan, Pekeliling kepadaPemegang-pemegang Saham, Prospektus Syarikatdan maklumat korporat dan kewangan Kumpulandaripada laman web Bursa Securities.

2. Mesyuarat Agung Tahunan

Notis Mesyuarat Agung Tahunan dan kertas-kertasberkaitan dihantar kepada pemegang sahamsekurang-kurangnya 21 hari sebelum tarikhmesyuarat.

Pada setiap Mesyuarat Agung Tahunan, Lembagamengemukakan kemajuan dan prestasi perniagaandan menggalakkan pemegang saham untukmenyertai sesi soal jawab berhubung denganprestasi kewangan Syarikat. Pengarah Eksekutif dan,di mana wajar, Pengerusi Jawatankuasa Auditbersedia untuk menjawab soalan-soalan pemegangsaham dalam mesyuarat.

Pemegang pelbagai kepentingan dan juruanalisispasaran dijemput untuk bertemu dengan paraPengarah selepas setiap Mesyuarat Agung Tahunan.

D. TANGGUNGJAWAB SOSIAL KORPORAT

Syarikat menyedari Tanggungjawab Sosial Korporatnyadan sebagai warganegara korporat yangbertanggungjawab, Kumpulan telah menyumbang kepada

beberapa yayasan melalui derma dan menyediakanbiasiswa pendidikan kepada pelajar-pelajar kurangbernasib baik yang terpilih untuk menerimanya bagimembolehkan mereka meneruskan pendidikan tinggidalam kursus-kursus berkaitan kejuruteraan.

E. KEBERTANGGUNGJAWAPAN DAN AUDIT

1. Pelaporan Kewangan

Dalam membentangkan penyata kewangan tahunandan pengumuman suku tahunan kepada pemegangsaham, para Pengarah berhasrat untukmengemukakan penilaian yang seimbang dansenang difahami mengenai kedudukan dan prospek-prospek Kumpulan. Penyata Pengarah selarasdengan Seksyen 169 Akta Syarikat, 1965dibentangkan pada muka surat 51 manakala PenyataTanggungjawab Pengarah selaras dengan perenggan15.27(a) Syarat-syarat Penyenaraian Bursa Securitiesterdapat pada muka surat 32.

2. Kawalan Dalaman

Para Pengarah mengiktiraf tanggungjawabnya bagisistem kawalan dalaman Kumpulan meliputi bukansahaja kawalan kewangan tetapi juga kawalanoperasi dan pematuhan serta pengurusan risiko.Sistem kawalan dalaman melibatkan setiapperniagaan dan pengurusan penting daripada setiapperniagaan, termasuk Lembaga, direka untukmemenuhi keperluan tertentu dan untukmenguruskan risiko-risiko kepada mana ia terdedah.Sistem, melalui sifatnya, hanya boleh memberikanjaminan munasabah tetapi bukan mutlak terhadapsalahnyataan atau kerugian.

Kumpulan mempunyai Jabatan Audit Dalaman, yangmelaporkan kepada Jawatankuasa Audit danmembantu Lembaga Pengarah dalammengawal danmengurus risiko dan kawalan dalaman.

Lembaga telah mengkaji kesesuaian dan integritisistem kawalan dalaman Kumpulan dan Penyatamengenai Kawalan Dalaman Lembaga dibentangkanpada muka surat 22 hingga 23.

3. Hubungan dengan Juruaudit

Syarikat mengekalkan hubungan yang telus denganjuruaudit luar dalammendapatkan nasihat profesionalmereka dalam memastikan pematuhan denganpiawaian-piawaian perakaunan.

Peranan Jawatankuasa Audit berhubung denganjuruaudit dinyatakan dalam bidang tugasJawatankuasa Audit pada muka surat 26 hingga 28.

PENYATA PEMATUHAN DENGAN AMALAN-AMALANTERBAIK URUS TADBIR KORPORAT

Syarikat telah mematuhi hampir semua amalan terbaiksebagaimana terkandung dalam Bahagian 2 Kod kecuali bagiimbuhan dibayar kepada Pengarah-pengarah ditunjukkan dalamagregat dan dianalisis dalam rangkaian RM50,000.00 yangmematuhi Syarat Penyenaraian Bursa Securities.



1. Sanksi dan/atau PenaltiPada 31 Julai 2006, Bursa Malaysia Securities Berhad(“Bursa Securities”) teguran awam dan mengenakandenda sebanyak RM21,000 ke atas Syarikat bagipemungkiran perenggan 9.23(b) Syarat-syaratPenyenaraian Bursa Securities (“LR Bursa Securities”).

Syarikat telah memungkiri perenggan 9.23(b) LR BursaSecurities kerana gagal untuk menyerahkan akaun teraudittahunan bagi tahun kewangan berakhir 31 Disember 2005(“AAA 2005”) pada tarikh akhir 30 April 2006. Syarikathanya menyerahkan AAA 2005 kepada Bursa Securitiesbagi pengumuman awam pada 31 Mei 2006.

Teguran awam dan denda dikenakan selaras denganperenggan 16.17 LR Bursa Securities selepas mengambilpertimbangan semua faktor berkaitan.

2. Kontrak MaterialTidak ada Pengarah dan pemegang saham utamamempunyai sebarang kontrak material dengan Syarikatdan/atau anak subsidiarinya kecuali dan melainkan bagiyang berikut:

1. Urusniaga penting pihak berkaitan sebagaimanadinyatakan dalam Nota 37 penyata kewangan padamuka surat 101 hingga102.

2. Syarikat akan meneruskan timbangtara denganRevolutionary Technology Holdings Sdn Bhd, SeriSiantan Sdn Bhd dan Syarikat Pembinaan Al-JoffrieSdn Bhd (RTHSSAJ-JV) bagi jumlah dalam lebihansebanyak RM7.16 juta terhutang kepada Syarikatbagi nilai kerja yang dilaksanakan diperakui dan nilaikerja yang dilaksanakan. Mahkamah semenjak itutelah melantik hanya seorang perantara.

3. Yuran bukan AuditDalam tahun kewangan berakhir 31 Disember 2006, tidakada yuran bukan audit ditanggung untuk perkhidmatanyang diberikan kepada Syarikat dan/atau subsidiari-subsidiarinya oleh juruaudit luar, Tetuan Ernst & Young ataufirma atau syarikat gabungan kepada Tetuan Ernst & Young.

4. Polisi Penilaian Semula ke atas HartanahSyarikat dan subsidiari-subsidiarinya tidak menerima pakaipolisi penilaian semula tetap ke atas hartanah.

5. Pembelian Balik SahamTidak terdapat pembelian balik saham dalam tahunkewangan 2006.

6. Opsyen, Waran atau Sekuriti Boleh TukarSyarikat tidak menerbitkan apa-apa opsyen, waran atausekuriti boleh tukar.

7. American Depository Receipt (“ADR”)/GlobalDepository Receipt (“GDR”)Syarikat tidak menaja sebarang program ADR atau GDRdalam tahun kewangan 2006.

8. Jaminan KeuntunganTidak ada jaminan keuntungan diterima oleh Syarikatdalam tahun kewangan 2006.

9. Status Penggunaan Perolehan

Tiada perolehan telah dihasil daripada sebarang cadangankorporat.

LAIN-LAIN MAKLUMAT YANG DIPERLUKAN OLEH SYARAT-SYARAT PENYENARAIAN BURSA MALAYSIA SECURITIESBERHAD

10. Variasi dalam KeputusanDengan mematuhi Perenggan 9.19(34) KeperluanPenyenaraian Bursa Malaysia Securities Berhad, terdapatpemesongan dalam kerugian selepas cukai Kumpulan didalam Keputusan Suku Keempat belum diaudit berakhir31 Disember 2006 yang diumumkan pada 28 Februari2007 dan penyata kewangan beraudit bagi tahunkewangan berakhir 31 Disember 2006 yang telahdiselaraskan dan diterangkan di bawah:

Tidak Diaudit Teraudit VariasiRM’000 RM’000 RM’000

Kerugian sebelum cukai (17,305) (33,824) (16,519)Cukai (4,837) (1,324) 3,513Kerugian bagitahun kewangan (22,142) (35,148) (13,006)

Sebagaimana digambarkan di atas, keputusan terauditKumpulan bagi tahun kewangan berakhir 31 Disember2006 merekodkan kerugian bersih selepas cukai sebanyakRM35.1 juta berbanding dengan keputusan tidak diauditKumpulan merupakan kerugian bersih selepas cukaisebanyak RM22.1 juta yang diumumkan pada 28 Februari2007.

Perbezaan di antara keputusan laporan daripada laporanakaun tidak diaudit suku tahunan dan akaun terauditterakhir adalah peningkatan dalam kerugian bagi tahunkewangan sebanyak RM13 juta terutamanya akibatdaripada alasan-alasan berikut:-

RM'000

Kerugian tidak diaudit bagi tahun kewangan (22,142)Pendapatan kontrak cawangan asingterkurang iktiraf 4,563

Kos penjualan berhubung dengan pendapatankontrak cawangan asing terkurang diiktiraf (4,276)

Perbelanjaan bersih cawangan asingterkurang diiktiraf (302)

Terkurang nyataan pendapatan berhubung denganprojek-projek pembinaan dan pembangunan 4,201

Terkurang nyataan kos berhubung denganprojek-projek pembinaan dan pembangunan (6,554)

Peruntukan tambahan bagi hutang ragu danhutang lapuk yang dihapuskira (9,551)

Terlebih peruntukan perbelanjaan cukaitahun semasa 3,513

Cukai tanah dan taksiran dicajkan kepadapenyata pendapatan (1,932)

Penjimatan dalam susutnilai yang timbuldaripada perubahan dalam anggaran hayatberguna dan nilai sisa hartanah, loji dan peralatan1,731

Terkurang akruan pemiutang (3,637)Peruntukan tambahan bagi ganti rugijumlah tertentu dipastikan (983)

Terlebih nyataan kos kewangan 1,090Bahagian kerugian tambahan syarikat bersekutu (216)Terlebih nyataan lain-lain pendapatan/Lain-lain (653)Kerugian teraudit bagi tahun kewangan (35,148)



corporate governance statement

THE BOARD RECOGNISES THE IMPORTANCE OF PRACTISING GOOD CORPORATE GOVERNANCE TO PROTECT ANDENHANCE SHAREHOLDER VALUE AND CONTINUES TO IMPLEMENT THE RECOMMENDATIONS OF THEMALAYSIAN CODEOF CORPORATE GOVERNANCE (“THE CODE”), TO ENSURE THAT HIGHEST STANDARDS OF CORPORATE GOVERNANCEARE PRACTISED THROUGHOUT THE GROUP AS A FUNDAMENTAL PART OF DISCHARGING THEIR RESPONSIBILITY.

SET OUT BELOW IS A DESCRIPTION OF HOW THE GROUP HAS APPLIED THE PRINCIPLES AND THE EXTENT OFCOMPLIANCE WITH BEST PRACTICES, AS SET OUT IN THE CODE, THROUGHOUT THE 12 MONTHS ENDED 31 DECEMBER2006 AND UP TO THE DATE OF THIS REPORT.

During the 12 months ended 31 December 2006, theBoard met seven (7) times. Details of the attendanceof the Directors are as follows:

Directors Attendance

En. Abdul Kadir Bin Md Kassim 6/7(Chairman)

YBhg. Dato’ Low Tuck Choy 7/7(Managing Director)

YBhg. Datuk Sulaiman Bin Daud 7/7

En. Faris Najhan Bin Hashim 7/7(Executive Director)

Mr. Lai Moo Chan 7/7

Mr. Low Teik Kien 7/7(Executive Director)

YBhg. Dato’ Mohd Ghazali 7/7@ Fauzi Bin Yacub

At the Board meetings, the Directors deliberate andresolve significant strategic, operational, financial,corporate and regulatory matters affecting theGroup. The Board’s relationship with management isdefined through the Managing Director whocommunicates the Board’s expectations tomanagement of the Group and briefs the Board onthe status and progress of the Group’s operations.The Managing Director oversees the running of theGroup and the implementation of the Board’sdecision and policies.

A. DIRECTORS

The Board is responsible for the overall strategic directionof the Group and retains full and effective control of andresponsibility for the Group’s activities. In fulfilling itsfiduciary duties, the Board ensures that there areappropriate systems and processes in place to managethe Group’s significant risks. In addition, the Board alsohas in place a capable and experienced managementteam to oversee the day-to-day operations of the Group.

1. Composition of the Board

At the date of this report, the Board consists of7 members including 3 Independent Non-ExecutiveDirectors, 1 Non-Independent Non-ExecutiveDirector and 3 Executive Directors. The Boardcomplied with Paragraph 15.02 of the ListingRequirements which requires at least two or one-third, whichever is higher, to be independentDirectors.

The Company is led by an effective Board who has awide range of business and financial experiencerelevant to the direction of the Group. Together theysupervise and manage the Group’s businesseswhich are vital to the success of the Group andenhancement of long term shareholders’ value withtheir broad range of experience, skills andknowledge. A brief description of the background ofeach Director is presented on pages 8 to 11.



2. Board Balance

There is a clear division of responsibility between theChairman and the Managing Director to ensure thatthere is a balance of power and authority. TheChairman is responsible for the proper and smoothconduct of the meetings whilst the ManagingDirector is primarily responsible for the overalloperations of the Group and implementation of thestrategies and policies.

Balance in the Board is further enhanced by thepresence of Independent Non-Executive Directors.The role of Independent Non-Executive Directors isparticularly important in ensuring that the long terminterest of shareholders, employees, customers,suppliers and the many communities in which theGroup conducts business are being looked after.

The Board has identified YBhg. Datuk Sulaiman BinDaud as the Senior Independent Non-ExecutiveDirector to whom concerns regarding the Group maybe conveyed.

All shareholders are fairly represented on the Board.The investment of minority shareholders is fairlyrepresented by the 3 Independent Non-ExecutiveDirectors who make up 1/3rd of the Board.

3. Board Committees

The Board has put in place the following committeesto assist in carrying out its fiduciary duties. All ofthese committees have written terms of referenceclearly outlining their objectives, duties and powers.

Audit Committee

The objective of the Audit Committee is to assist theBoard to review the adequacy and integrity of theCompany’s and Group’s internal control systems andmanagement information systems. The composition,summary of activities and terms of reference of theAudit Committee can be found in the AuditCommittee Report on pages 29 to 31.

Risk Management Committee

The Risk Management Committee is responsible forreviewing the Group’s risk management process andproviding feedback to the Board on a regular basis.The members of the committee are as follows:

Mr. Lai Moo Chan (Chairman)

En. Abdul Kadir Bin Md KassimEn. Faris Najhan Bin Hashim

During the financial year and up to the date of thisannual report, the Committee had four (4) meetings.

Nomination Committee

The role of the Nomination Committee is describedbelow under 5) Appointments to the Board.

Remuneration CommitteeThe role of the Remuneration Committee isdescribed below under B) Directors’ Remuneration.

4. Board Meetings and Supply of Information

The Board meets at least four (4) times a year whichis scheduled at quarterly intervals, with additionalmeetings convened when necessary.

Seven (7) Directors’ Meetings were held during thefinancial year ended 31 December 2006. Details ofattendance of the Directors are disclosed onpage 17.

All Directors have access to monthly ManagementAccounts of the Group and are briefed by theExecutive Directors and General Manager –Corporate & Finance during Board Meetings.

Board papers are provided to all Directors on aregular basis to enable them to monitor the financialand operational performance of the Group. TheBoard papers include information such as Analysis ofPerformance of the Company and of the Group,Turnover Analysis by Project, Order Book, TradeDebtors Ageing, Credit Control, Creditors’ andsubcontractors’ Ageing, Cash Flow Forecast,Summary of Banking Facilities, Work-In Progress andTendered/Proposed Jobs, Annual Strategic Plan andGroup Financial Facilities. All matters requiringBoard’s approval are also circulated prior to the BoardMeeting and during Board Meetings these mattersare deliberated before decisions are made. SeniorManagement staff may be invited to attend BoardMeetings to provide the Board with the necessaryinformation and clarification on issues that aredeliberated during the meetings.

After each Board meeting, draft minutes arecirculated to all Directors for their comments.

The Board has approved a procedure for Directors,whether as a full Board or in their individual capacityto take independent advice, where necessary, infurtherance of their duties and at the Group’sexpense.

All Directors also have access to the advice andservices of the Company Secretary and they mayseek independent professionals advice, if required.



duty of recommending suitable orientation,educational, and training programmes tocontinuously train and equip existing and newDirectors.

During the financial year, the Board has attended anin house training conducted by the Company in orderto keep abreast with the current issues, regulatoryupdates and new developments in the businessenvironment.

The Board acknowledges the importance ofcontinuous training to further enhance their skills andknowledge and will continuously identifiesconferences and seminars which are beneficial tothe Directors.

B. DIRECTORS’ REMUNERATION

1. Remuneration Committee

The objective of the Remuneration Committee is toset the policy framework and to makerecommendations to the Board on all elements ofthe remuneration, terms of employment, rewardstructure, and fringe benefits for Executive Directors,the Managing Director and other selected topmanagement positions with the aim to attract, retain,and motivate individuals of the highest caliber.

The remuneration of the Executive Directors is basedon their performance. Fees payable to Non-ExecutiveDirectors are determined by way of benchmarking tocomparable organisations. Non-Executive Directorsare paid meeting allowances based on attendance.

The Remuneration Committee currently consists ofthe following Non-Executive Directors:

YBhg. Dato Mohd Ghazali @ Fauzi Bin Yacub (Chairman)

En. Abdul Kadir Bin Kassim

YBhg. Dato Sulaiman Bin Daud

During the financial year and up to the date of thisannual report, the Committee had met once.

The Remuneration Committee will makerecommendations on the remuneration for ExecutiveDirectors. The remuneration and entitlements of theNon-Executive Directors including the Non-ExecutiveChairman shall be a matter to be decided by theBoard of Directors as a whole. The approval forDirectors’ remuneration rests with the Board as awhole with the Directors abstaining from voting anddeliberating on decisions in respect of their ownremuneration package.

5. Appointments to the Board

During the 2002 financial year, the Board had set upa Nomination Committee. The objective of theNomination Committee is to ensure that theappointed Directors bring to the Board, a mix of skillsand expertise necessary to meet the requirementsof corporate stewardship. The NominationCommittee will also assist the Board in reviewing,on an annual basis, the appropriate balance and sizeof Non-Executive Directors’ participation and inestablishing procedures and processes towards anannual assessment of the effectiveness of the Boardas a whole and contribution of each individualDirector and Board Committee member.

The Nomination Committee, in its terms ofreference, is tasked with the duty of making suitablerecommendations to fill vacancies on the Board andits committees. Nonetheless, the approval forappointment of new Board or Committee Membersrests with the Board as a whole.

The Nomination Committee currently consists of thefollowing Non-Executive Directors, a majority ofwhom are Independent Directors:

En. Abdul Kadir bin Kassim (Chairman)

YBhg. Dato Mohd Ghazali @ Fauzi Bin Yacub

Mr. Lai Moo Chan

During the financial year and up to the date of thisannual report, the Committee had met once.

6. Re-election to the Board

In accordance with the Company’s Articles ofAssociation, all Directors who are appointed by theBoard are subject to re-election by the shareholdersat the first Annual General Meeting held after theirappointment. The Articles also provide that at leastone third of the remaining Directors be subject to re-election by rotation at each Annual General Meeting,provided always that all Directors including ManagingDirector shall retire from office at least once in everythree years but shall be eligible for re-election. TheDirectors who retire in each year are the Directorswho have been longest in office since their lastelection.

7. Directors’ Training

All Directors of the Company have attended BursaMalaysia Securities Berhad’s (“Bursa Securities”)Mandatory Accreditation Programme (“MAP”) andaccumulated the requisite points under therequirements of Continuing Education Programme.The Nomination Committee is also tasked with the



Directors’ remuneration aggregated and categorisedinto appropriate components, number of Directorswhose remuneration falls into successive band ofRM50,000.00, distinguishing between Executive andNon-Executive Directors, are shown on page 140.

C. SHAREHOLDERS

1. Shareholders and Investor Relations

The Board is committed to maintaining effectivecommunications with the Company’s shareholders,stakeholders and the public generally. In accordancewith para 9.02 of Bursa Securities listingrequirements, the Board discloses to the public allmaterial information necessary for informedinvestment and takes reasonable steps to ensurethat all shareholders enjoy equal access to suchinformation.

Shareholders are also able to access the Company’sAnnual Reports, Circulars to Shareholders,Prospectuses and Group’s corporate and financialinformation from the Bursa Securities website.

2. The Annual General Meeting

Notice of the Annual General Meeting and relatedpapers are sent out to shareholders at least 21 daysbefore the date of the meeting.

At each Annual General Meeting, the Board presentsthe progress and performance of the business andencourages shareholders to participate in thequestion and answer session. Executive Directorsand, where appropriate, the Chairman of the AuditCommittee are available to respond to shareholders’questions during the meeting.

Stakeholders and market analysts are invited to meetwith Directors after each Annual General Meeting.

D. CORPORATE SOCIAL RESPONSIBILITY

The Company is aware of its Corporate SocialResponsibility and as a responsible corporate citizen, theGroup has contributed to various foundations throughdonations and provided educational scholarships toselected deserving underprivileged students to enablethem to pursue tertiary education in engineering relatedcourses.

E. ACCOUNTABILITY AND AUDIT

1. Financial Reporting

In presenting the annual financial statements andquarterly announcements to shareholders, theDirectors aim to present a balanced andunderstandable assessment of the Group’s positionand prospects. The statement of Directors pursuantto Section 169 of the Companies Act 1965 is set outon page 115 whereas the Directors’ ResponsibilityStatement pursuant to para 15.27(a) of the BursaSecurities Listing requirements is on page 33.

2. Internal Control

The Directors acknowledge their responsibility forthe Group’s system of internal controls covering notonly financial controls but also operational andcompliance controls as well as risk management.The internal control system involves each businessand key management from each business, includingthe Board, and designed to meet the Group’sparticular needs and to manage the risks to which itis exposed. The system, by its nature, can onlyprovide reasonable but not absolute assuranceagainst misstatement or loss.

The Group has an Internal Audit Department, whichreports to the Audit Committee and assists theBoard of Directors in monitoring and managing risksand internal controls.

The Board has reviewed the adequacy and integrityof the Group’s system of internal controls and theBoard’s Statement on Internal Control is set out onpages 24 to 25.

3. Relationship with the Auditors

The Company maintains a transparent relationshipwith the external auditors in seeking theirprofessional advice towards ensuring compliancewith the accounting standards.

The role of the Audit Committee in relation to theauditors is stated in the Audit Committee’s terms ofreference on pages 29 to 31.

STATEMENT ON COMPLIANCE WITH BEST PRACTICES OFCORPORATE GOVERNANCE

The Company has complied substantially with all the bestpractices as contained in Part 2 of the Code except for theremuneration paid to Directors are shown in aggregate andanalysed into bands of RM50,000.00 which is in compliancewith Bursa Securities Listing Requirement.



1. Sanctions and/or PenaltiesOn 31 July 2006, Bursa Malaysia Securities Berhad("Bursa Securities") publicly reprimanded and imposed afine of RM21,000 on the Company for breach ofparagraph 9.23(b) of the Listing Requirements of BursaSecurities ("Bursa Securities LR").

The Company has breached paragraph 9.23(b) of theBursa Securities LR for failing to submit the annualaudited accounts for the financial year ended 31December 2005 ("AAA 2005") by the due date of 30 April2006. The Company only submitted the AAA 2005 toBursa Securities for public release on 31 May 2006.

The public reprimand and fine are imposed pursuant toparagraph 16.17 of the Bursa Securities LR after takinginto consideration all relevant factors.

2. Material ContractsNone of the Directors and substantial shareholders haveany material contract with the Company and/or itssubsidiaries save and except for the following:

a. significant related-party transactions as disclosed inNotes 37 of the financial statements on page 165 to166.

b. The Company is proceeding with an arbitration withRevolutionary Technology Holdings Sdn Bhd, SeriSiantan Sdn Bhd and Syarikat Pembinaan Al-JoffrieSdn Bhd (RTHSSAJ-JV) for an amount in excess ofRM7.16m due to the Company for certified value ofwork done and value of work done. The Court hadsince appointed a sole Arbitrator.

3. Non-audit FeesDuring the financial year ended 31 December 2006, therewere no non-audit fees incurred for services rendered tothe Company and/or its subsidiaries by the externalauditors, Messrs Ernst & Young or a firm or companyaffiliated to Messrs Ernst & Young

4. Revaluation Policy on Landed PropertiesThe Company and its subsidiaries’ have not adopted aregular revaluation policy on landed properties.

5. Share Buy BacksThere were no share buy-backs during the financial year2006.

6. Options, Warrants or Convertible SecuritiesThere were no options, warrants or convertible securitiesexercised during the financial year 2006.

7. American Depository Receipt (“ADR”)/GlobalDepository Receipt (“GDR”)The company did not sponsor any ADR or GDR programduring the financial year 2006.

8. Profit GuaranteeThere were no profit guarantees received by the Companyduring the financial year 2006.

9. Utilisation of proceedsThere were no proceeds raised by the Group from anycorporate proposal.

OTHER INFORMATION REQUIRED BY THE LISTING REQUIREMENTS OF THE BURSA MALAYSIA SECURITIES BERHAD

10. Variation in resultsIn compliance with Rule 9.19(34) of the ListingRequirements of Bursa Securities, there was a deviationbetween the Loss After Tax stated in the Unaudited 4thQuarter Results ended 31 December 2006 announced on28 February 2007 and the Audited Financial Statement forthe financial year ended 31 December 2006 which havebeen reconciled and are explained below:-

Unaudited Audited VarianceRM’000 RM’000 RM’000

Loss before taxation (17,305) (33,824) (16,519)Taxation (4,837) (1,324) 3,513Loss for thefinancial year (22,142) (35,148) (13,006)

As depicted above, the Group's audited results for thefinancial year ended 31 December 2006 recorded a netloss after taxation of RM35.1 million as compared to theGroup's unaudited results of a net loss after taxation ofRM22.1 million announced on 28 February 2007.

The difference between the results of the unauditedquarterly report and the final audited accounts is anincrease in the loss for the financial year of RM13 millionwhich was mainly due to the following reasons:-

RM'000

Unaudited loss for the financial year (22,142)Contract revenue of foreign branch underrecognised 4,563

Cost of sales relating to foreign branchcontract revenue under recognised (4,276)

Net expenses of foreign branchunder recognised (302)

Understatement of revenue relatingto construction and development projects 4,201

Understatement of cost relatingto construction and development projects (6,554)

Additional provision for doubtful debtsand bad debts written off (9,551)

Overprovision of current year tax expense 3,513Quit rent and assessment chargedto income statement (1,932)

Savings in depreciation arising from changein estimates of useful lives and residualvalues of property, plant and equipment 1,731

Underaccrual of creditors (3,637)

Additional provision for liquidatedascertained damages (983)

Overstatement of finance cost 1,090

Additional share of loss of associates (216)

Overstatement of other income/ Others (653)

Audited loss for the financial year (35,148)



penyata kawalan dalaman

PENGENALAN

Kod mengenai Urus Tadbir Korporat Malaysia, menetapkanbahawa Lembaga Pengarah syarikat-syarikat tersenarai harusmengekalkan sistem kawalan dalaman yang kukuh untukmelindungi pelaburan pemegang saham dan aset Kumpulan.Dinyatakan di bawah adalah Penyata Kawalan Dalaman(“Penyata”) Ho Hup Construction Company Berhad dansubsidiari-subsidiarinya, dibuat oleh Lembaga Pengarah Ho HupConstruction Company Berhad (“Lembaga”), untuk mematuhiSyarat-syarat Penyenaraian Bursa Malaysia Securities Berhaddan Penyata Kawalan Dalaman: Panduan bagi PengarahSyarikat Awam yang Tersenarai.

TANGGUNGJAWAB

Lembaga Pengarah mengakui bahawa ia secara kolektifbertanggungjawab bagi sistem kawalan dalaman Kumpulan danuntuk mengkaji kesesuaian dan integritinya. Sistem kawalandalaman Kumpulan termasuk kawalan bersifat operasi danpematuhan, serta kawalan kewangan dalaman. Sistem kawalandalaman direka untuk mengenal pasti dan mengurus risiko-risiko penting dalammeneruskan objektif perniagaan Kumpulanserta untuk melindungi pelaburan pemegang-pemegang sahamdan aset Kumpulan.

Sistem bertindak untuk memberikan jaminan munasabah tetapibukan jaminan mutlak terhadap risiko kerugian material.Konsep jaminan munasabah mengiktiraf bahawa kos prosedurkawalan tidak boleh melebihi faedah dijangkakan.

SISTEM KAWALAN DALAMAN KUMPULAN

Gaya Pengendalian dan Mekanisme Pengawasan

Kegiatan harian perniagaan Kumpulan diamanahkan kepadaPengarah Urusan. Pengarah Urusan mempunyai pasukankakitangan pengurusan kanan yang berupaya untuk membantubeliau dalam penyeliaan perniagaan Kumpulan. Lembagamembincang mengenai hala tuju strategik Kumpulan dalamMesyuarat Lembaganya. Pengarah Urusan menyampaikanharapan Lembaga kepada Pengurusan Kanan dan RancanganPerniagaan 3 tahun boleh pinda disediakan atas dasar tahunan.

Atas dasar suku tahunan, mesyuarat pengurusan seluruhkumpulan dipengerusikan oleh Penolong Pengurus Besardiadakan untuk membincangkan semua aspek operasi danprestasi Kumpulan. Selain daripada mesyuarat di atas, lain-lainmesyuarat seperti mesyuarat tapak projek dan mesyuaratbahagian juga diadakan atas dasar berkala untuk mengawasioperasi Kumpulan. Pelbagai laporan seperti Akaun PengurusanBulanan dan Laporan Status Projek juga disediakan dandisampaikan kepada pengurusan berkaitan secara tepat padamasa. Mesyuarat-mesyuarat dan laporan-laporan ini menjadiplatform di mana kegiatan Kumpulan diawasi serta memastikanisu-isu kritikal dikenalpasti dan diselesaikan secara tepat padamasa.

Lembaga mengawasi prestasi Kumpulan pada mesyuaratnyadi mana ia dikemukakan dengan maklumat mengenai operasidan prestasi Kumpulan melalui kertas-kertas Lembaga. Selaindaripada itu, Pengarah Urusan akan memaklumkan Lembagamengenai aktiviti Kumpulan dan membawa perkara-perkarapenting kepada perhatiannya.

Dasar Perlaksanaan Pengurusan Risiko

Terdapat proses berterusan bagi mengenal pasti, menilai dan mengurus risiko-risiko penting dihadapi oleh Kumpulan dan prosesini telah beroperasi dalam tahun di bawah kajian dan sehingga tarikh kelulusan laporan tahunan. Proses ini, mempunyai padaterasnya, dasar perlaksanaan pengurusan risiko Kumpulan sebagaimana ditunjukkan di bawah.

JAWATANKUASA KERJAPENGURUSAN RISIKO

• Terdiri daripadapengurusan kananKumpulan (iaitu ketuabahagian dan subsidiari-subsidiarinya)

• Mesyuarat suku tahunanuntuk mengemaskini profilrisiko Kumpulan danmengawasi status PelanTindakan Pengurusandirumuskan untukmengatasi apa-apakelemahan

JAWATANKUASAPENGURUSAN RISIKO

• Jawatankuasa terdiridaripada ahli-ahliLembaga yang dilantikdengan Bidang Tugasbertulis yang menyatakantugas, kuasa danautoritinya

• Mesyuarat suku tahunandi mana PengerusiJawatankuasa KerjaPengurusan Risikomengemaskinijawatankuasa mengenaikegiatan-kegiatannya

LEMBAGA PENGARAH

• Mengkaji minit-minitmesyuarat JawatankuasaPengurusan Risiko

• Mengkaji risiko-risikopenting melibatkanKumpulan dan PelanTindakan Pengurusanuntuk menguruskanrisiko-risiko tersebut



Lembaga juga telah melabur dalam perisian pakar pengurusanrisiko yang membolehkan pengawasan dan pengesananberkesan dan cekap terhadap risiko Kumpulan dan kawalanberkaitan, serta rancangan tindakan untuk menguruskan risiko-risiko tersebut.

Lain-lain Ciri Penting Sistem Kawalan Dalaman Kumpulan

Ciri-ciri penting sistem kawalan dalaman Kumpulan adalahseperti berikut:

• Struktur pengurusan dengan garis tanggungjawab dantahap wajar penugasan dinyatakan dengan jelas;

• Polisi dan prosedur didokumenkan pada keseluruhanKumpulan di mana operasinya hendaklah dipatuhi;

• Pentauliahan ISO 9001:2000 membawa peningkatankepada kualiti dan proses dengan berterusan;

• Komunikasi bertulis sepanjang masa tentang nilai-nilaisyarikat, jangkaan kod perilaku dan disiplin kepadakakitangan;

• Program-program latihan dan pembangunan sepadandengan keperluan kakitangan;

• Sistem pelaporan di mana maklumat mengenai prestasikewangan dan petunjuk perniagaan penting disediakan darimasa ke masa kepada pengurusan;

• Lawatan dari masa ke masa ke unit-unit pengendalian olehahli pengurusan kanan dan pengarah eksekutif; dan

• Fungsi audit dalaman yang bebas untuk menilai kawalandalaman dan integriti maklumat kewangan yang disediakandan untuk mengawasi pematuhan dengan prosedur-prosedur.

Mekanisme Jaminan

Lembaga mengkaji secara berterusan kesesuaian dan integritisistem kawalan dalaman Kumpulan. Proses yang Lembagatelah pakai untuk mengkaji kesesuaian dan integriti sistemkawalan dalaman diringkaskan seperti berikut:

• Jawatankuasa Audit, bagi pihak Lembaga, memeriksakeberkesanan sistem kawalan dalaman Kumpulan danmelapor balik penemuan-penemuan mereka kepadaLembaga atas dasar suku tahunan;

• Jawatankuasa Audit dibantu oleh juruaudit dalaman yangmenjalankan kerja mereka selaras dengan rancangan audityang diluluskan oleh Jawatankuasa Audit; dan

• Laporan audit dalaman dibentangkan dalam mesyuaratJawatankuasa Audit, yang diadakan setiap suku tahunanbagi tahun kewangan. Kelemahan kawalan dan isu-isuditonjolkan ditangani atau diperbaiki oleh Pengurusan danprosedur kawalan dalaman dan langkah-langkahkeselamatan diperkenalkan jika perlu.

Selain daripada audit statutori mengenai penyata kewangan,juruaudit luar mengadakan ujian ke atas kawalan-kawalankewangan tertentu. Apa-apa kelemahan yang ditemuiditunjukkan kepada Jawatankuasa Audit melalui surat-suratpengurusan atau dinyatakan ketika mesyuarat JawatankuasaAudit.

Laporan Jawatankuasa Audit dinyatakan pada muka surat 26hingga 28 mengandungi maklumat selanjutnya mengenaiaktiviti Jawatankuasa serta juruaudit dalaman.

Fungsi Kualiti dan Kesihatan & Keselamatan Kumpulan, yangbebas daripada operasi, juga memberikan jaminan tambahanbahawa proses-proses dijalankan selaras dengan polisi danprosedur diluluskan. Jaminan ini diperolehi melalui kajian rutinberkala dijadualkan yang dijalankan oleh kedua-dua fungsiKualiti dan Kesihatan & Keselamatan dengan laporan-laporanmereka disampaikan kepada tahap pengurusan berkaitan.

Sistem kawalan dalaman Kumpulan terutamanya dipakai olehunit-unit pengendalian dan tidak meliputi syarikat-syarikatbersekutu dan syarikat dorman.

Perkara di atas selaras dengan garis panduan yang dipaparkandalam Penyata Garis Panduan Kawalan Dalaman bagiPengarah-pengarah Syarikat Awam Tersenarai.

KOMITMEN LEMBAGA

Lembaga memahami bahawa Kumpulan beroperasi dalampersekitaran perniagaan yang dinamik di mana struktur kawalandan operasi hendaklah berkembang secara berterusan untukmemastikan ianya kekal mencukupi dan sesuai dengankeadaan Syarikat dan Kumpulan. Lembaga kekal komited untukmengekalkan sistem kawalan dalaman yang kukuh danmenyediakan tindakan-tindakan untuk membaiki danmeningkatkan sistem kawalan dalaman Kumpulan secaraberterusan jika perlu.



statement on internal control

INTRODUCTION

The Malaysian Code on Corporate Governance stipulates thatthe Board of Directors of listed companies should maintain asound system of internal control to safeguard shareholders’investment and Group’s assets. Set out below is the Statementon Internal Control (“Statement”) of Ho Hup ConstructionCompany Berhad and its subsidiaries, made by the Board ofDirectors of Ho Hup Construction Company Berhad incompliance with the Bursa Malaysia Securities Bhd’s ListingRequirements and the Statement on Internal Control: Guidancefor Directors of Public Listed Companies.

RESPONSIBILITY

The Board of Directors acknowledges that it is collectivelyresponsible for the Group’s system of internal control and forreviewing its adequacy and integrity. The Group’s system ofinternal control includes controls of an operational andcompliance nature, as well as internal financial controls. Theinternal control system is designed to identify and managesignificant risks in pursuit of the Group’s business objectivesas well as to safeguard shareholders’ investments and theGroup’s assets.

The system serves to provide reasonable but not absoluteassurance against the risk of material loss. The concept ofreasonable assurance recognises that the cost of controlprocedures shall not exceed the expected benefits.

Risk Management Framework

There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group and this process hasoperated during the year under review and up to the date of approval of the annual report. This process has at its core, the Group’srisk management framework as depicted below.

THE GROUP’S SYSTEM OF INTERNAL CONTROL

Operating Style and Monitoring Mechanisms

The day to day running of the Group’s business is entrusted tothe Managing Director. The Managing Director has a team ofcapable senior management who assists him in overseeing theGroup’s business. The Board deliberates on the strategicdirection of the Group at its Board meetings. The ManagingDirector communicates the Board’s expectations to SeniorManagement and a rolling 3 year Business Plan is drawn up ona yearly basis.

On a quarterly basis, a group wide management meetingchaired by the Assistant General Manager is held to discuss allaspects of the Group’s operations and performance. Other thanthe above meeting, other meetings such as project-sitemeetings and departmental meetings are also held on aperiodic basis to monitor the Group’s operations. Variousmanagement reports such as the Monthly ManagementAccounts and Project Status Report are also prepared andescalated to relevant management on a timely basis. Thesemeetings and reports represent the platform by which theGroup’s activities are monitored as well as ensure timelyidentification and resolution of any critical issues.

The Board monitors the Group’s performance at its meetingswhere it is presented with information on the Group’soperations and performance through the Board papers. Inaddition, the Managing Director will brief the Board on theGroup’s activities and bring significant matters to its attention.

RISK MANAGEMENTWORKING COMMITTEE

• Consists of seniormanagement of the Group(i.e. heads of departmentsand subsidiaries)

• Quarterly meetings toupdate the risk profile ofthe Group and monitor thestatus of ManagementActions Plans formulatedto overcome anyweaknesses

RISK MANAGEMENTCOMMITTEE

• A committee comprisingof appointed members ofthe Board with writtenTerms of Referenceoutlining its duties,powers and authorities.

• Quarterly meetingswhere the Chairman ofthe Risk ManagementWorking Committeeupdates the committeeon its activities.

BOARD OF DIRECTORS

• Reviews the minutes ofthe Risk ManagementCommittee meetings.

• Reviews the significantrisks affecting the Groupand Management ActionPlans to manage thoserisks.



The Board has also invested in a specialist risk managementsoftware which enables effective and efficient monitoring andtracking of the Group’s risks and related controls, as well asaction plans to manage those risks.

Other Key features of the Group’s Internal Control System

The salient features of the Group’s system of internal controlare as follows:

• A management structure with clearly defined lines ofresponsibility and the appropriate levels of delegation;

• Documented policies and procedures throughout theGroup to which its operations must comply;

• ISO 9001:2000 accreditation leading to continuous qualityand process improvements;

• Regular written communication of company values,expected code of conduct and discipline to employees;

• Training and development programmes corresponding tothe needs of employees;

• A reporting system where information on financialperformance and key business indicators are regularlyprovided to management;

• Regular visits to operating units by the seniormanagement and executive directors; and

• An independent internal audit function to assess theinternal controls and integrity of financial informationprovided and to monitor compliance with procedures

Assurance Mechanisms

The Board continuously reviews the adequacy and integrity ofthe Group’s system of internal control. The process that theBoard has applied in reviewing the adequacy and the integrityof the system of internal control is summarised as follows:

• The Audit Committee, on behalf of the Board, examinesthe effectiveness of the Group’s system of internal controland reports their findings back to the Board on a quarterlybasis;

• The Audit Committee is assisted by the internal auditorswho carry out their work in accordance with audit plansapproved by the Audit Committee; and

• Internal audit reports are tabled in Audit Committeemeetings, which are held every quarter of the financialyear. Control deficiencies and issues highlighted areaddressed or rectified by Management and internalcontrol procedures and security measures are introducedwhen necessary.

In addition, as part of the statutory audit of the financialstatement, the external auditors perform tests over certainfinancial controls. Any weaknesses detected are highlighted tothe Audit Committee through management letters orarticulated at Audit Committee meetings.

The Audit Committee Report set out on pages 29 to 31contains further information on the committee’s activities aswell as that of the internal auditors.

The Group’s Quality and Health & Safety functions, which areindependent of operations, also provide added assurance thatprocesses are carried out in accordance with approved policiesand procedures. This assurance is gained through the routinescheduled periodic reviews carried out by both the Quality andHealth & Safety functions with their reports escalated torelevant management levels.

The Group’s system of internal control mainly applies to itsoperating units and does not cover associated companies anddormant companies.

The above accords with the guidance as outlined in Statementof Internal Control Guidance for Directors of Public ListedCompanies.

BOARD’S COMMITMENT

The Board understands that the Group operates in a dynamicbusiness environment and that the structure of controls andoperations must continually evolve to ensure they remainadequate and appropriate to the Company’s and Group’ssituation. The Board remains committed to maintaining asound system of internal control and will, when necessary, putin place actions to continuously improve and enhance theGroup’s system of internal control.



laporan jawatankuasa audit

1. PENUBUHAN

Jawatankuasa Audit (“Jawatankuasa”) Ho HupConstruction Company Berhad telah ditubuhkan olehLembaga Pengarah pada 1993. Bidang TugasJawatankuasa dinyatakan pada muka surat 26 hingga 28Laporan Tahunan.

2. KOMPOSISI

Jawatankuasa Audit semasa terdiri daripada tiga (3) ahliLembaga, majoriti yang mana adalah Pengarah BukanEksekutif Bebas.

3. AHLI-AHLI

Ahli-ahli Lembaga yang berkhidmat dalam JawatankuasaAudit di antara 1 Januari 2006 dan tarikh Laporan Tahunanadalah YBhg. Datuk Sulaiman Bin Daud (Pengerusi), YBhg.Dato’ Mohd Ghazali @ Fauzi Bin Yacub dan En. FarisNajhan Bin Hashim.

4. KEKERAPAN MESYUARAT

Bagi tahun kewangan di bawah kajian, Jawatankuasabermesyuarat 4 kali. Kehadiran oleh setiap ahliJawatankuasa dalam mesyuarat sepanjang tahunkewangan adalah seperti berikut:

Jawatankuasa hendak mengadakan sekurang-kurangnyaempat (4) mesyuarat dalam tahun kewangan. Bilanganmesyuarat jawatankuasa yang diadakan dalam tahunkewangan dan butir-butir kehadiran setiap ahli individuberhubung dengan mesyuarat yang diadakan akandidedahkan secara tahunan.

Ahli-ahli Pengurusan Kanan termasuk Pengarah Urusan,pengurus audit dalaman sebagai ketua fungsi auditdalaman dan wakil daripada juruaudit luar telah menghadirimesyuarat Jawatankuasa Audit melalui jemputan yangdiadakan dalam tahun kewangan di bawah kajian.

5. BIDANG TUGAS

1.0 Komposisi Jawatankuasa Audit

Jawatankuasa Audit akan dilantik oleh LembagaPengarah dari kalangan ahli-ahlinya:

a. Jawatankuasa Audit hendaklah terdiri tidakkurang daripada tiga (3) ahli.

b. Majoriti ahli Jawatankuasa Audit hendaklahPengarah Bebas.

c. Sekurang-kurangnya seorang ahli JawatankuasaAudit hendaklah seorang ahli Institut AkauntanMalaysia (“MIA”) atau mana-mana kelayakanlain yang diiktiraf oleh MIA.

d. Tiada pengarah silih ganti akan dilantik sebagaiahli Jawatankuasa Audit.

Bil. Mesyuarat Dihadiri/Tarikh Pelantikan/ Diadakan Semasa

Kehadiran Perletakan Jawatan Memegang Jawatan

YBhg. Datuk Sulaiman Bin Daud Dilantik mulai 4/4(Pengarah Bukan Eksekutif Bebas) 19 November 2001

En. Faris Najhan Bin Hashim * Dilantik mulai 4/4(Pengarah Eksekutif) 23 September 2005

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub Dilantik mulai 4/4(Pengarah Bukan Eksekutif Bebas) 2 Januari 2002

* En. Faris Najhan Bin Hashim memegang ijazah Sarjana Muda Ekonomi (khusus dalam Perakaunan) daripada The University of Sydney, Australia danmempunyai sekurang-kurangnya 3 tahun pengalaman selepas tamat pengajian dalam bidang perakaunan dan kewangan. Kelayakan ini memenuhiPerenggan 9.27 (c), 15.10 (1) (c) (iii) dan Nota Amalan No.13/2002 Syarat-syarat Penyenaraian Bursa Malaysia Securities Berhad (“Bursa Securities”).



Ahli-ahli Jawatankuasa Audit hendaklah kemudiannyamemilih seorang Pengerusi daripada kalanganmereka yang hendaklah merupakan Pengarah Bebas.Kesemua ahli Jawatankuasa Audit termasukPengerusi, akan memegang jawatan hanya selagimereka berkhidmat sebagai Pengarah Ho HupConstruction Company Berhad. Lembaga Pengarahhendaklah mengkaji tempoh jawatan dan prestasiJawatankuasa Audit dan setiap daripada ahli-ahlinyasekurang-kurangnya setiap tiga (3) tahun untukmenentukan sama ada Jawatankuasa Audit telahmenjalankan kewajipannya selaras dengan bidangtugasnya.

Korum mesyuarat hendaklah terdiri daripada dua (2)ahli, majoriti yang mana hendaklah Pengarah Bebas.

2.0 Setiausaha Jawatankuasa Audit (“SetiausahaJawatankuasa”)

Setiausaha Syarikat Ho Hup Construction CompanyBerhad atau wakil beliau menjadi SetiausahaJawatankuasa.

3.0 Autoriti Jawatankuasa Audit

Dalam menjalankan kewajipan dantanggungjawabnya, Lembaga Pengarah telahmemberi kuasa kepada Jawatankuasa Audit denganyang berikut:

a. Autoriti eksplisit untuk menyiasat apa-apaperkara dalam bidang tugasnya;

b. Untuk mempunyai, atau mendapat sumber-sumber yang diperlukan untuk menjalankankewajipannya;

c. Akses penuh dan tidak terbatas kepada apa-apamaklumat, rekod, hartanah dan kakitanganSyarikat dan mana-mana syarikat lain dalamKumpulan;

d. Saluran komunikasi langsung dengan juruauditluar dan pengurus audit dalaman yangmenjalankan fungsi atau aktiviti audit dalaman;

e. Untuk mendapatkan nasihat profesional bebasatau lain-lain nasihat dan menjemput pihak luardengan pengalaman dan kepakaran yangberkenaan untuk menghadiri mesyuaratJawatankuasa (sekiranya diperlukan) danmemberi taklimat kepada Jawatankuasa;

f. Boleh mengadakan mesyuarat dengan juruauditluar tanpa kehadiran ahli lembaga eksekutif,sekurang-kurangnya satu kali setahun; dan

g. Di mana Jawatankuasa berpendapat bahawaapa-apa perkara yang dilaporkan olehnya kepadaLembaga Pengarah tidak diselesaikan denganmemuaskan dan mengakibatkan pelanggaranSyarat-syarat Penyenaraian Bursa Securities,Jawatankuasa hendaklah dengan segeramelaporkan perkara tersebut kepada BursaSecurities.

4.0 Objektif Jawatankuasa Audit

Objektif Jawatankuasa Audit adalah untukmembantu Lembaga dalam menjalankantanggungjawabnya dengan mengkaji kesesuaian danintegriti sistem kawalan dalaman dan sistemmaklumat pengurusan Kumpulan dan Syarikat,termasuk sistem-sistem bagi pematuhan denganakta-akta, undang-undang, peraturan, arahan dangaris panduan yang berkuatkuasa.

5.0 Fungsi Jawatankuasa Audit

Berikut adalah kewajipan dan tanggungjawab utamaJawatankuasa secara kolektif:

5.01 Mengesyorkan kepada Lembaga mengenaipelantikan dan pelantikan semula tahunanjuruaudit luar dan yuran audit mereka, selepasmengambil kira kebebasan dan objektivitijuruaudit luar dan keberkesanan audit mereka.

5.02 Berbincang dengan juruaudit luar sebelumaudit dimulakan, mengenai sifat dan skopaudit, rancangan audit dan memastikanpenyelarasan di mana lebih daripada satufirma audit terlibat.

5.03 Mengkaji keputusan interim suku tahunan danpenyata kewangan tahunan Syarikat danKumpulan sebelum diluluskan oleh Lembagamanakala memastikan bahawa ia disediakandalam cara yang tepat pada masa dan betul,mematuhi semua keperluan perakaunan danperaturan dan diterbitkan tepat pada masa.

5.04 Membincangkan masalah dan reservasi yangtimbul daripada audit interim dan akhir danapa-apa perkara juruaudit mungkin inginbincangkan dalam ketidakhadiran pengurusanjika perlu.

5.05 Mengkaji surat pengurusan juruaudit luar dantindakan diambil oleh pengurusan.

5.06 Mengkaji bantuan dan kerjasama yang diberioleh pegawai Syarikat dan Kumpulannyakepada juruaudit luar dan dalaman.



5.07 Mengkaji dan memastikan Bahagian AuditDalaman mendapat sumber maklumat yangmencukupi, mempunyai kedudukan yangsewajarnya dalam Ho Hup ConstructionCompany Berhad dan menilai piawaiankawalan dalaman dan laporan kewanganKumpulan.

5.08 Menilai prestasi Pengurus Audit Dalamanyang merupakan ketua bahagian auditdalaman dan fungsi audit dalaman.

5.09 Meluluskan apa-apa pelantikan, pertukaranatau penamatan Pengurus Audit Dalamanyang merupakan ketua fungsi audit dalaman.Untuk mengkaji sebab perletakan jawatanketua bahagian audit dalaman dan untukmemberikan ahli kakitangan yang meletakjawatan peluang untuk memberi alasanperletakan jawatan, jika perlu.

5.10 Untuk mengkaji program audit dalaman,menimbangkan penemuan utama siasatandalaman dan tindakan diambil olehpengurusan.

5.11 Mengkaji apa-apa urusniaga pihak berkaitandan keadaan percanggahan kepentingan yangmungkin timbul dalam Kumpulan, termasukapa-apa urusniaga, prosedur atau tindakanyang menimbulkan persoalan integritipengurusan.

5.12 Menimbangkan isu-isu yang ditimbulkan olehJawatankuasa Urusan Risiko dan lain-lain isusebagaimana ditakrifkan oleh Lembaga.

AKTIVITI JAWATANKUASA

Dalam tahun di bawah kajian, aktiviti utama yangdilaksanakan oleh Jawatankuasa adalah seperti berikut:

• Mengkaji skop kerja juruaudit luar dan rancanganaudit sepanjang tahun. Rancangan auditdikemukakan oleh wakil-wakil daripada juruaudit luar.

• Mengkaji laporan juruaudit luar dan suratpengurusannya serta tindakan di ambil olehpengurusan.

• Bermesyuarat dengan juruaudit luar sekali sebelumpemuktamadan Penyata Kewangan Teraudit bagitahun kewangan berakhir 31 Disember 2006 tanpakehadiran mana-mana ahli Lembaga Eksekutif atauPengurusan.

• Mengkaji pengumuman keputusan kewangan tidakdiaudit suku tahunan sebelummengesyorkan kepadaLembaga untuk kelulusan. Kajian dan perbincangantelah diadakan dengan Pengarah Eksekutif, PengurusBesar – Korporat & Kewangan dan juruaudit luar.

• Mengkaji penyata kewangan teraudit Syarikatsebelum pengemukaan kepada Lembaga bagipertimbangan dan kelulusan mereka.

• Mengkaji laporan audit dalaman yang menunjukkanisu-isu audit, cadangan dan tindakan diambil olehpengurusan. Membincangkan tindakan yang diambiluntuk memperbaiki sistem kawalan dalamanberdasarkan peluang-peluang peningkatan yangdikenalpasti dalam laporan audit dalaman.

• Mengkaji kebebasan dan objektiviti JuruauditDalaman dan keperluan sumber-sumber bahagianaudit dalaman dan rancangan audit bagi tahunkewangan 2006.

• Mengkaji pematuhan Syarikat khususnya penyatakewangan suku tahunan dan akhir tahun denganSyarat-syarat Penyenaraian Bursa Securities,Lembaga Piawaian Perakaunan Malaysia dan lain-lainkeperluan undang-undang dan peraturan.

• Mengkaji isu-isu penting Kumpulan yang mempunyaikesan penting ke atas keputusan Kumpulantermasuk peningkatan dan pelaburan selanjutnyadalam produk dan perkhidmatan sedia ada yangditawarkan, langkah penrasionalan kos, penyusunansemula unit-unit perniagaan dan pembangunansumber manusia.

FUNGSI AUDIT DALAMAN

Bahagian Audit Dalaman ditubuhkan untuk menjalankankajian operasi, prosedur dan kawalan dalaman Syarikatdan anak-anak syarikatnya dan melapor penemuan dancadangan kepada Pengurusan dan Jawatankuasa Audit.

Audit dalaman dijalankan berdasarkan rancangan auditdalaman yang dikaji dan diluluskan oleh JawatankuasaAudit. Ketika menyediakan rancangan tersebut,keutamaan Kumpulan dan penilaian risiko telahdipertimbangkan. Kajian audit dalaman termasuk:

• Kekukuhan, kesesuaian dan penggunaan kawalanpentadbiran, kewangan dan kendalian.

• Pematuhan dengan polisi prosedur dan rancanganyang mantap.

• Pematuhan dengan undang-undang dan peraturan.

• Kebertanggungjawapan dan perlindungan aset.

• Ketepatan data pengurusan yang dihasilkan.



audit committee report

1. Constitution

The Audit Committee (“the Committee”) of Ho HupConstruction Company Berhad was established by theBoard of Directors in 1993. The Terms of Reference of theCommittee are set out in pages 29 to 31 of this AnnualReport.

2. Composition

The present Audit Committee comprises of three (3)members of the Board, majority of whom areIndependent Non-Executive Directors.

3. Members

Members of the Board who served on the AuditCommittee between 1 January 2006 and the date of theAnnual Report are YBhg. Datuk Sulaiman Bin Daud(Chairman), YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacuband En. Faris Najhan Bin Hashim.

4. Frequency of Meetings

For the financial year under review, the Committee met4 times. The attendance by each Committee member atmeetings during the financial year were as follows:

The Committee shall hold a minimum of at least four (4)meetings in a financial year. The number of committeemeetings held in a financial year and the details ofattendance of each individual member in respect ofmeetings held shall be disclosed annually.

The members of Senior Management including theManaging Director, the internal audit manager as head ofinternal audit function and representative from theexternal auditors have, by invitation, attended the AuditCommittee meetings conducted during the financial yearunder review.

5. Terms of Reference

1.0 Composition of the Audit Committee

The Audit Committee shall be appointed by theBoard of Directors from amongst its members:

a. The Audit Committee must be composed of nofewer than three (3) members.

b. A majority of the Audit Committee membersmust be Independent Directors.

c. At least one member of the Audit Committeemust be a member of the Malaysian Institute ofAccountants (“MIA”) or any other equivalentqualifications recognised by the MIA.

d. No alternate director shall be appointed as amember of the Audit Committee.

No. of MeetingsAttended/Held

Attendance Date of Appointment/Resignation whilst in Office

YBhg. Datuk Sulaiman Bin Daud Appointed w.e.f 19 November 2001 4/4(Independent Non-Executive Director)

En. Faris Najhan Bin Hashim * Appointed w.e.f 23 September 2005 4/4(Executive Director)

YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub Appointed w.e.f 2 January 2002 4/4(Independent Non Executive Director)

* En. Faris Najhan Bin Hashim holds a Bachelor of Economics (Major in Accounting) degree from The University of Sydney, Australia and has at least 3 years’post qualification experience in accounting and finance. These qualifications satisfy the requirements of Paragraph 9.27 (c), 15.10 (1) (c) (iii) and PracticeNote No. 13/2002 of Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Listing Requirements.



The members of the Audit Committee shall thenelect a Chairman from among themselves who shallbe an Independent Director. All members of theAudit Committee, including the Chairman, will holdoffice only so long as they serve as Directors of HoHup Construction Company Berhad. The Board ofDirectors must review the term of office andperformance of the Audit Committee and each of itsmembers at least once every three (3) years todetermine whether the Audit Committee has carriedout its duties in accordance with its terms ofreference.

The quorum of the meeting shall consist of two (2)members, the majority of whom shall beindependent Directors.

2.0 Secretary of the Audit Committee (“CommitteeSecretary”)

The Company Secretary of Ho Hup ConstructionCompany Berhad or his/her representative shall bethe Committee Secretary.

3.0 Authority of the Audit Committee

In carrying out its duties and responsibilities, theBoard of Directors has empowered the AuditCommittee with the following:

a. Explicit authority to investigate any matterwithin its terms of reference;

b. To have, or obtain the resources required toperform its duties;

c. Full and unrestricted access to any information,records, properties and personnel of theCompany and of any other companies withinthe Group;

d. Direct communication channels with theexternal auditors and internal audit managercarrying out the internal audit function oractivity;

e. To be able to obtain independent professionalor other advice and to invite outsiders withrelevant experience and expertise to attend theCommittee’s meetings (if required) and to briefthe Committee;

f. Be able to convene meetings with externalauditors without the presence of the executiveboard members, at least once a year; and

g. Where the Committee is of the view that anymatter reported by it to the Board of Directorshas not been satisfactorily resolved resulting ina breach of Bursa Securities ListingRequirements the Committee must promptlyreport such matter to Bursa Securities.

4.0 Objectives of the Audit Committee

The objective of the Audit Committee is to assist theBoard in discharging its responsibilities by reviewingthe adequacy and integrity of the Company’s and ofthe Group’s internal control systems andmanagement information systems, includingsystems for compliance with applicable laws,regulations, rules, directives and guidelines.

5.0 Functions of the Audit Committee

The following are the main duties and responsibilitiesof the Committee collectively:

5.01 Recommend to the Board on the appointmentand annual reappointment of the externalauditors and their audit fee, after taking intoconsideration the independence andobjectivity of the external auditors and thecost effectiveness of their audit.

5.02 Discuss with the external auditor before theaudit commence, the nature and scope of theaudit, the audit plan and ensure co-ordinationwhere more than one audit firm is involved.

5.03 Review the quarterly interim results andannual financial statements of the Companyand the Group prior to approval by the Boardwhilst ensuring that they are prepared in atimely and accurate manner, complying withall accounting and regulatory requirementsand are promptly published.

5.04 Discuss problems and reservations arisingfrom the interim and final audits and anymatter the auditor may wish to discuss in theabsence of the management wherenecessary.

5.05 Review the external auditor’s managementletter and management’s response.

5.06 Review the assistance and co-operation givenby the Company and its Group’s officers tothe external and internal auditors.



5.07 Review and ensure the Internal AuditDepartment is adequately resourced, hasappropriate standing within Ho HupConstruction Company Berhad and evaluatethe standards of internal controls and financialreports of the Group.

5.08 Appraise the performance of the InternalAudit Manager who is the head of internalaudit department and internal audit function.

5.09 Approve any appointment, transfer ortermination of the Internal Audit Managerwho is the head of the internal audit function.To review any resignation of the head ofinternal audit department and to provide theresigning staff member an opportunity tosubmit reasons for resigning, wherenecessary.

5.10 To review the internal audit programme,consider the major findings of internalinvestigations and management’s response.

5.11 Review any related party transactions andconflict of interest situation that may arisewithin the Group, including any transaction,procedure or course of conduct that raisesquestions of management integrity.

5.12 Consider issues raise by the RiskManagement Committee and other issues asdefined by the Board.

ACTIVITIES OF THE COMMITTEE

During the year under review, the main activities undertakenby the Committee were as follows:

• Reviewed the external auditors’ scope of work and auditplan for the year. The audit plan was presented by therepresentatives from the external auditors.

• Reviewed the external auditors’ report and themanagement letter, including the management’sresponse.

• Met with the external auditors once before the finalisationof the Audited financial statements for the financial yearended 31 December 2006 without the presence of anyother executive Board member or Management.

• Reviewed the quarterly unaudited financial resultsannouncement before recommending to the Board forapproval. The review and discussions were conductedwith Executive Director, General Manager – Corporate &Finance and external auditors.

• Reviewed the audited financial statements of theCompany prior to submission to the Board for theirconsideration and approval.

• Reviewed the internal audit reports which highlighted theaudit issues, recommendations and management’sresponse. Discussed the actions taken to improve thesystem of internal control based on improvementopportunities identified in the internal audit reports.

• Reviewed the independence and objectivity of the InternalAuditors and the internal audit department’s resourcesrequirements and audit plan for financial year 2006.

• Reviewed the Company’s compliance in particular thequarterly and year end financial statements with theListing Requirements of Bursa Securities, MalaysianAccounting Standards Board and other relevant legal andregulatory requirements.

• Reviewed pertinent issues of the Group which had asignificant impact on the results of the Group whichincluded enhancement and further investment in existingproducts and services offered, cost rationalisationmeasures, reorganisation of business units and humanresource development.

INTERNAL AUDIT FUNCTION

The Internal Audit Department is established to conductreviews of the operation, procedures and internal control of theCompany and its subsidiaries and to report findings andrecommendation to the management and Audit Committee.

The internal audit is carried out based on the internal audit planreviewed and approved by the Audit Committee. In preparingthe plan, the Group’s priority and risk assessment is taken intoconsideration. The internal audit reviews include:

• Soundness, adequacy and application of administrative,financial and operating controls.

• Compliance with established policies procedures andplans.

• Compliance with laws and regulation.

• Accountability and safeguard of assets.

• Reliability of the management data developed.



penyata tanggungjawab para pengarah berhubungdengan penyata kewangan yang telah diaudit

Pengarah-pengarah dikehendaki untuk menyediakan penyata kewangan bagi setiap tahun kewangan yang memberikan gambaran

sebenar dan saksama mengenai kedudukan kewangan Kumpulan dan Syarikat pada akhir tahun kewangan dan keputusan-

keputusan dan aliran tunai Kumpulan dan Syarikat bagi tahun kewangan berakhir pada ketika itu.

Pengarah-pengarah mempertimbangkan, dalam menyediakan penyata kewangan ini, Kumpulan dan Syarikat telah menggunakan

polisi-polisi perakaunan yang sesuai dan menggunakannya secara konsisten dan membuat keputusan dan anggaran-anggaran

yang munasabah dan berhemah. Pengarah-pengarah juga mempertimbangkan semua Piawaian Perakaunan Diluluskan berkenaan

telah diikuti dan memastikan bahawa penyata kewangan telah disediakan berdasarkan prinsip daya usaha berterusan.

Pengarah-pengarah bertanggungjawab bagi memastikan agar Kumpulan dan Syarikat menyimpan rekod-rekod perakaunan yang

teratur yang membolehkan mereka untuk memastikan bahawa penyata kewangan mematuhi peruntukan-peruntukan Akta Syarikat,

1965 dan Piawaian-piawaian Perakaunan Diluluskan di Malaysia.



directors5 responsibility statement in relation tothe audited financial statements

The Directors are required to prepare financial statements for each financial year which give a true and fair view of the financial

position of the Group and of the Company as at the end of the financial year and of the results and cash flow of that Group and

of the Company for the financial year then ended.

The Directors consider that, in preparing these financial statements, the Group and the Company have used appropriate accounting

policies and applied them consistently and made judgements and estimates that are reasonable and prudent. The Directors also

consider that all applicable Approved Accounting Standards have been followed and confirmed that the financial statements have

been prepared on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep proper accounting records which enable them

to ensure that the financial statements comply with the provisions of the Companies Act, 1965 and the applicable Approved

Accounting Standards in Malaysia.



penyata pengerusichairman5s statement

PENGENALAN/INTRODUCTION

BAGI PIHAK LEMBAGA PENGARAH HO HUP CONSTRUCTIONCOMPANY BERHAD, SAYA MEMBENTANGKAN KEPADA ANDALAPORAN TAHUNAN DAN PENYATA KEWANGAN KUMPULAN DANSYARIKAT BAGI TAHUN KEWANGAN BERAKHIR 31 DISEMBER2006.

ON BEHALF OF THE BOARD OF DIRECTORS OF HO HUPCONSTRUCTION COMPANY BERHAD, I PRESENT TO YOU THEANNUAL REPORT AND THE FINANCIAL STATEMENTS OF THEGROUP AND OF THE COMPANY FOR THE FINANCIAL YEARENDED 31 DECEMBER 2006.

TRANS EASTERN KEDAH INTERLANDHIGHWAY PROJECT



PERSEKITARAN OPERASI

Kegiatan pembinaan mencatatpengecutan kecil sebanyak 0.5% padatahun 2006 disebabkan terutamanyaoleh kegiatan kejuruteraan awam yanglebih rendah dalam segmen bukankediaman. Berikutan penyiapanbeberapa projek infrastruktur besardalam beberapa tahun kebelakangan,persaingan dalam industri kekal sengitdan mencabar dengan margin yanglebih rendah apabila semakin ramaikontraktor membuat bidaan bagibilangan projek-projek infrastruktur yangsemakin sedikit tersedia dalam pasaran.

Walau bagaimanapun, dalam tahun2006, Kerajaan mengumumkanbeberapa keputusan polisi penting yangakan melonjak kegiatan pembinaanmaju ke hadapan. Ini termasukpengumuman peruntukan KerajaanPersekutuan yang lebih tinggi bagiprojek-projek infrastruktur di bawahRancangan Malaysia ke Sembilan(RM9). Peningkatan sebanyak 17.6%dalam peruntukan adalah terutamanyabagi pembinaan lebuh raya, jambatan,sekolah dan projek-projek berkaitan air.

PRESTASI KEWANGAN

Bagi tahun kewangan berakhir31 Disember 2006, Kumpulan mencatatkerugian bersih selepas cukai sebanyakRM35.1 juta (2005 : keuntungan bersihselepas cukai sebanyak RM2.6 juta)berdasarkan Pendapatan Kumpulanyang ketara lebih rendah sebanyakRM86.9 juta (2005 : RM174.1 juta).Dana pemegang-pemegang sahamKumpulan berada pada RM121.7 juta(2005 : RM156.7 juta) pada akhir tahunkewangan.

OPERATING ENVIRONMENT

Construction activity registered a mildcontraction of 0.5% in 2006 due mainlyto lower civil engineering activity in thenon-residential segment. Following thecompletion of several largeinfrastructure projects in recent years,competition in the industry remainedintense and challenging with lowermargins as an increasing number ofcontractors bid for fewer infrastructureprojects available in the market.

However, during the year, theGovernment announced several keypolicy decisions that would spurconstruction activity going forward. Thisincluded the announcement of higherFederal Government spending oninfrastructure projects under the NinthMalaysia Plan (9MP). The 17.6%increase in spending is mainly for theconstruction of highways, bridges,schools and water-related projects.

FINANCIAL PERFORMANCE

For the financial year ended31 December 2006, the Groupregistered a net loss after tax ofRM35.1 million (2005 : net profit aftertax of RM2.6 million) on the back of asignificantly lower Group Revenue ofRM86.9 million (2005 : RM174.1million). The Group’s shareholders’funds stood at RM121.7 million (2005 :RM156.7 million) as at the financialyear-end.



TINJAUAN OPERASI KUMPULAN

Pembinaan

Kegiatan dalam bahagian pembinaankami semakin perlahan kepada kadarsederhana pada tahun 2006.Pendapatan berkurangan daripadaRM66.9 juta pada tahun 2005 kepadaRM33.7 juta pada tahun 2006 manakalakerugian sebelum cukai merosot keRM13.9 juta daripada kerugian sebelumcukai sebanyak RM0.1 juta dicatatkanpada tahun sebelumnya. Keputusanmenunjukkan keadaan mencabar dalampersekitaran perniagaan yang Kumpulanterlibat di dalamnya, denganpeningkatan dalam kos material dansemakin berkurangan kontrak yangmenawarkan margin keuntungan yangmenarik.

Dalam tahun di bawah kajian, Kumpulantelah berjaya menyiapkan Projek MajlisLink di Zon Perdagangan Bebas BandarPusat Bandar Seaport bersebelahandengan Lebuh Raya Persekutuan, kerja-kerja membuat lapisan baru ke ataslaluan bas dikenal pasti di Jakarta,Indonesia dan penyerahan 60 unit kedaipejabat 2-tingkat di Bandar Bukit Jalil.

Kerja-kerja dalam tangan semasaKumpulan dijangkakan akan disiapkanmengikut jadual projek masing-masing.Kumpulan aktif menjalankan beberapaprojek dalam pelbagai peringkatpenyiapan. Ini termasuk Lebuh RayaTrans Eastern Kedah Interland dariDurian Burung ke Kupang di Kedahbernilai RM230 juta, Projek TebatanBanjir di Bertam-Kepala Batas,Seberang Perai, Pulau Pinang, kerja-

OVERVIEW OF GROUP OPERATIONS

Construction

Activity in our construction divisionslowed to a moderate pace in 2006.Revenue declined from RM66.9 millionin 2005 to RM33.7 million in 2006 whilethe loss before taxation slid to RM13.9million from a loss before tax of RM0.1million recorded from the previous year.The results reflected the challengingbusiness environment the Group isoperating in, with escalation in materialcosts and fewer contracts offeringlucrative margins.

During the year under review, the Grouphas successfully completed the MajlisLink Project in the Pusat Bandar SeaportFree Trade Zone adjacent to the FederalHighway, resurfacing works ondedicated buslanes in Jakarta,Indonesia and handed over 60 units of2-storey shop office at Bandar BukitJalil.

The Group’s current jobs on hand areexpected to be completed according tothe respective project schedules. TheGroup is actively undertaking severalprojects in various stages ofcompletion. These include the TransEastern Kedah Interland Highway fromDurian Burung to Kupang in Kedahvalued at RM230 million, the ProjekTebatan Banjir at Bertam-Kepala Batas,Seberang Perai, Penang, bored pilingand associated foundation works for theconstruction of a sewage treatment



BERTAM-KEPALA BATAS FLOODMITIGATION PROJECT

kerja cerucuk tergerek dan kerja-kerjaasas berkaitan bagi pembinaan lojirawatan kumbahan di Seremban,Negeri Sembilan dan pembinaan 113unit rumah teres berangkai dan 12 unitrumah berkembar dua di Fasa 3 hingga6 bagi subsidiari pembangunanhartanahnya di Bandar Bukit Jalil, KualaLumpur.

Kumpulan giat mendapatkan tenderbagi kerja-kerja infrastruktur lain diAfrika, India dan di negara-negara jiranAsia Tenggara.

plant in Seremban, Negeri Sembilan andthe construction of 113 units ofsuperlink terrace houses and 12 units ofsemi-detached houses at Phases 3 to 6for its property development subsidiaryat Bandar Bukit Jalil, Kuala Lumpur.

The Group is actively tendering for otherinfrastructure works in Africa, India andin the neighbouring countries of SouthEast Asia.



PROPERTY DEVELOPMENT

Pembangunan Hartanah

Bagi tahun di bawah kajian, bahagianpembangunan hartanah mencatatkankejatuhan dalam pendapatan kepadaRM11.2 juta daripada RM63.9 jutadicapai pada tahun 2005. Kejatuhandalam prestasi berpunca daripada kadarjualan yang lebih rendah dalam pasaranyang bersaingan dan ketiadaanpelancaran baru sepanjang tahunkewangan.

Tanpa mengambil kira keadaan pasaransederhana, cabang pembangunanhartanah Kumpulan bersedia bagi

Property Development

For the year under review, the propertydevelopment division registered adecline in revenue to RM11.2 millionfrom RM63.9 million achieved in 2005.The decline in performance wasattributed to a slower take up rate in acompetitive market and the absence ofnew launches during the financial year.

Notwithstanding the moderate marketconditions, the Group’s propertydevelopment arm is poised for furtherlaunches in the fourth quarter of 2007.These include the much awaited



pelancaran seterusnya pada suku tahunkeempat 2007. Ini termasuk pelancaranyang ditunggu-tunggu iaitu 50 unit kedaipejabat komersial 4-tingkat, 76 unitrumah bandar 4-tingkat, 133 unit lagirumah teres berangkai dan 20 unitrumah berkembar dua.

Konkrit Siap Bancuh

Bahagian konkrit siap bancuh terusmenunjukkan keputusan boleh diterimadi tengah-tengah persaingan sengit.Bahagian mencatatkan keuntunganbersih yang lebih rendah sebanyakRM0.2 juta berbanding RM1.92 jutadicatatkan pada tahun lepas.

Subsidiari dan Sekutu

Subsidiari dan Sekutu Kumpulan terusmenunjukkan keputusan-keputusanmenggalakkan. Syarikat bersekutu45%-dimiliki Kumpulan di Shanghai,China, yang terlibat dalam pengilangandan perdagangan cerucuk putarankonkrit, mencatat peningkatan hasilsebanyak RM14.6 juta berbandingRM9.2 juta dicatatkan pada tahun lepas.Walau bagaimanapun, disebabkanpeningkatan kos-kos bahan, Syarikatmengalami peningkatan bahagiankerugian bersih sebanyak RM1.55 juta(2005 : bahagian kerugian bersihsebanyak RM1.43 juta).

PERKEMBANGAN KORPORAT

Pada 5 Disember 2006, Syarikatmemperbadankan subsidiari milik 80%di Indonesia, iaitu P.T. Halford Citra. Bakikepentingan ekuiti sebanyak 20%

launching of 50 units of 4-storey

commercial shop-office, 76 units of 4-

storey townhouses, another 133 units

of superlink terrace houses and 20 units

of semi-detached houses.

Ready-Mixed Concrete

The ready-mixed concrete division

continued to show acceptable results in

the face of intense competition. The

division recorded a lower net profit of

RM0.2 million against RM1.92 million

recorded last year.

Subsidiaries and Associates

The other subsidiaries and associates of

the Group continue to show

encouraging results. The Group’s 45%-

owned associate company in Shanghai,

China, which is involved in the

manufacturing and trading of concrete

spun piles, registered improved

revenue of RM14.6 million compared

with RM9.2 million recorded last year.

However, due to increased material

costs, the Company experienced an

increased share of net loss of RM1.55

million (2005 : share of net loss of

RM1.43 million).

CORPORATE DEVELOPMENT

On 5 December 2006, the Company

incorporated a 80%-owned subsidiary in

Indonesia, namely P.T. Halford Citra. The

balance 20% equity interest is held by



dipegang oleh pihak Indonesia. Sebuahsyarikat pemegangan pelaburan, P.T.Halford Citra akan menerajui perniagaanKumpulan di Indonesia terutamanyadalam bidang kerja-kerja infrastrukturdan dalam usaha niaga-usaha niagaminyak dan gas.

HARAPAN PERNIAGAAN

Ekonomi Malaysia dijangka akantumbuh pada kira-kira 6% pada tahun2007. Selepas tempoh pengecutan,sektor pembinaan dijangkakan akanmenjadi penyumbang utama bagipertumbuhan yang diunjurkan ini.Tumpuan Kerajaan baru-baru ini ke atasprojek-projek infrastruktur utamatermasuk Jambatan Kedua PulauPinang, Jalan Lingkaran Luar PulauPinang, dan penubuhan PembangunanIskandar dan Wilayah Koridor Utaradijangka akan melonjakkan semulakegiatan pembinaan maju ke hadapan.

Sebagai pengusaha utama dalam sektorpembinaan, Lembaga tuan adalahoptimistik menikmati satu lagi tahunaktif di sebalik keadaan perniagaan kekalmencabar dan bersaingan.

PENGHARGAAN

Bagi pihak Lembaga, saya mengucapterima kasih kepada pengurusan dankakitangan atas usaha tidak kenal penatlelah dan komitmen padu mereka kearah mencapai objektif Kumpulan. Sayajuga ingin mengucapkan terima kasihkepada pelanggan-pelanggan yang

an Indonesian party. An investment

holding company, P.T. Halford Citra will

spearhead the Group’s business in

Indonesia particularly in the areas of

infrastructure works and in oil and gas

ventures.

BUSINESS OUTLOOK

The Malaysian economy is envisaged to

grow at approximately 6% in year 2007.

After a period of contraction, the

construction sector is expected to be a

key contributor of this projected growth.

The Government’s recent focus on

major infrastructural projects including

the Second Penang Bridge, the Penang

Outer Ring Road, and the establishment

of the Iskandar Development and

Northern Corridor Regions are expected

to reenergize construction activity going

forward.

As a major player in the construction

sector, your Board is optimistic of

another active year despite business

conditions remaining challenging and

competitive.

ACKNOWLEDGEMENT

On behalf of the Board, I thank the

management and staff for their untiring

efforts and strong commitment towards

achieving the Group’s objectives.

I would also like to thank our valued



dihargai, perunding, pembiaya, rakanperniagaan, pihak berkuasa dan agensikerajaan, sub-kontraktor, pembekal dantidak lupa juga, pemegang-pemegangsaham atas sokongan berterusan dankeyakinan mereka dalam Kumpulan.

customers, consultants, financiers,

business associates, government

authorities and agencies, sub-

contractors, suppliers and last but not

least, shareholders for their continuing

support and confidence in the Group.

INTERCHANGE PROJECTPUSAT BANDAR SEAPORT

PETALING JAYA

ABDUL KADIR BIN MD KASSIMPengerusi/Chairman



maklumat penting kewangan 5 tahun5 years5 financial highlights

KUNCI KIRA-KIRABALANCE SHEETS

RM’000 2002 2003 2004 2005 2006

Modal SahamShare Capital 60,000 60,000 102,000 102,000 102,000

RizabReserves 102,720 96,096 50,973 54,720 19,728

Ekuiti Pemegang SahamShareholders’ Equity 162,720 156,096 152,973 156,720 121,728

Jangka Panjang dan Liabiliti TertundaLong Term and Deferred Liabilities 60,129 21,699 23,676 32,186 15,128

Hartanah, Loji dan PeralatanProperty, Plant and Equipment 40,571 27,672 35,090 42,178 41,145

Lain-lain Aset Bukan SemasaOther Non-Current Assets 228,817 131,554 135,720 141,112 135,235

Aset SemasaCurrent Assets 207,498 241,227 208,522 234,256 185,822

Liabiliti SemasaCurrent Liabilities 249,707 216,774 199,458 226,679 223,432

Aset Bersih Sesaham Boleh Diagihkankepada Pemegang Saham (sen)

Net Assets Attributable to ShareholdersPer Share (sen) 271 260 150 154 119

PENYATA PENDAPATANINCOME STATEMENTS

RM’000 2002 2003 2004 2005 2006

PendapatanRevenue 171,860 212,711 159,321 174,108 86,982

(Kerugian)/Keuntungan Sebelum Cukai(Loss)/Profit Before Taxation (61,554) (252) (34,766) 6,091 (33,824)

CukaiTaxation 3,697 (4,880) (1,044) (3,476) (1,324)

(Kerugian)/Keuntungan Boleh Diagihkankepada Pemegang Ekuiti

(Loss)/Profit Attributable toEquity Holders (58,601) (6,686) (33,151) 3,879 (35,101)

(Kerugian)/Pendapatan Sesaham (sen)(Loss)/Earnings Per Share (sen) (98) (8) (34) 4 (34)



HARTANAH, LOJI DAN PERALATAN

PROPERTY, PLANT AND EQUIPMENT

40,5

71

27,6

72 35,0

90 42,1

78

41,1

45

60 -

40 -

20 -

0 -

RM’000

ASET BERSIH SESAHAM BOLEH DIAGIHKANKEPADA PEMEGANG SAHAM

NET ASSETS ATTRIBUTABLE TOSHAREHOLDERS PER SHARE

271

260

150 15

4

119

300 -

250 -

200 -

150 -

100 -

50 -

0 -

sen

PENDAPATAN

REVENUE

171,

860 21

2,71

1

159,

321

174,

108

86,9

82

250 -

200 -

150 -

100 -

50 -

0 -

RM’000

JANGKA PANJANG DAN LIABILTI TERTUNDA

LONG TERM AND DEFERRED LIABILTIES

(KERUGIAN)/KEUNTUNGAN SEBELUM CUKAI

(LOSS)/PROFIT BEFORE TAXATION

(61,

554)

(252

)

(34,

766)

6,09

1

(33,

824)

4(34)

(8)

(98)

(34)

20 -

0 -

(20) -

(40) -

(60) -

(80) -

RM’000

(KERUGIAN)/PENDAPATAN SESAHAM

(LOSS)/EARNINGS PER SHARE

20 -

0 -

(20) -

(40) -

(60) -

(80) -

(100) -

sen

EKUITI PEMEGANG SAHAM

SHAREHOLDERS’ EQUITY

162,

720

156,

096

152,

973

156,

720

121,

728

200 -

150 -

100 -

50 -

0 -

RM’000

2002 2003 2004 2005 2006

60,1

29

21,6

99

23,6

76 32,1

86

15,1

28

80 -

60 -

40 -

20 -

0 -

RM’000

2002 2003 2004 2005 2006

2002 2003 2004 2005 2006 2002 2003 2004 2005 2006

2002 2003 2004 2005 2006

2002 2003 2004 2005 2006

2002 2003 2004 2005 2006



keterangan pemegang-pemegang sahamshareholders5 informationPADA 7 OGOS 2007/AS AT 7 AUGUST 2007

ANALISA PEGANGAN SAHAMANALYSIS OF SHAREHOLDINGS

Modal Saham Dibenarkan : RM200,000,000.00Authorised Share CapitalDiterbit dan dibayar sepenuhnya : RM102,000,408.00Issued and fully paid-upKelas Saham : Saham biasa Satu Ringgit sesahamClass of Shares : Ordinary shares of One Ringgit eachJumlah Pemegang Saham : 3,842No. of ShareholdersHak mengundi : Satu undi bagi setiap saham biasaVoting-right : One vote per ordinary share

Saiz Pegangan Bilangan Pemegang Saham Jumlah Saham BiasaSize of Holding No. of Shareholders % No. of Ordinary Shares %

1 – 99 112 2.92 2,400 0.00100 – 1,000 601 15.64 377,109 0.371,001 – 10,000 2,459 64.00 10,125,295 9.9310,001 – 100,000 591 15.38 18,900,700 18.53100,001 – 5,100,019 * 77 2.01 32,687,549 32.055,100,020 dan ke atas/and above ** 2 0.05 39,907,355 39.12

JUMLAH/TOTAL 3,842 100.00 102,000,408 100.00

Nota/Notes:

* Kurang daripada 5% pegangan diterbitkan/Less than 5% of issued holdings** 5% dan ke atas pegangan diterbitkan/5% and above of issued holdings

HARGA SAHAM 2006SHARE PRICE 2006

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Tinggi/High 0.46 0.59 0.725 0.745 0.865 0.595 0.66 0.615 0.55 0.56 0.705 0.68Rendah/Low 0.44 0.445 0.465 0.61 0.605 0.51 0.56 0.52 0.50 0.50 0.535 0.54

KEPENTINGAN PARA PENGARAH DALAM SAHAMDIRECTORS’ INTEREST IN SHARES

Langsung Tidak LangsungNama Pengarah Pemegangan Saham Pemegangan SahamName of Directors Direct Shareholdings % Indirect Shareholdings %

YBhg. Dato’ Low Tuck Choy 1,319,000 1.29 25,162,629 * 24.67Low Teik Kien 698,700 0.68 25,162,629 * 24.67Lai Moo Chan 1,453,522 1.43 – –Abdul Kadir Bin Md Kassim – – – –YBhg. Datuk Sulaiman Bin Daud – – – –Faris Najhan Bin Hashim – – – –YBhg. Dato’ Mohd Ghazali @ Fauzi Bin Yacub – – – –

* Dipegang melalui badan korporat/Held through a body corporate



SENARAI TIGA PULUH PEMEGANG SAHAM TERBESARLIST OF THIRTY LARGEST SHAREHOLDERS

Nama Bilangan SahamName No. of Shares %

1. Low Chee & Sons Sdn Bhd 22,363,029 21.922. UEM Group Berhad 17,544,326 17.203. Central Effective Sdn Bhd 4,000,000 3.924. HSBC Nominees (Asing) Sdn Bhd

Exempt An For HSBC Private Bank (Suisse) S.A (S’pore TST AC CL) 3,409,800 3.345. Leu Leang @ Liew Yong Choy 2,664,000 2.616. Low Tuck Choy 2,050,000 2.017. AmBank (M) Berhad

Akaun Sekuriti disandar untuk/Pledged Securities Account for Lai Moo Chan (Smart) 1,297,014 1.278. Mrs Yung Emily Yeuk – May Nee Poon 1,000,000 0.989. HSBC Nominees (Tempatan) Sdn Bhd

HPBS SG untuk/for Chua Suya Hong Alias Chua Lee Hoon 850,001 0.8310. Low Chee & Sons Sdn Bhd 749,600 0.7311. United Overseas Nominees (Tempatan) Sdn Bhd

Akaun Sekuriti disandar untuk/Pledged Securities Account for Low Teik Kien (MKL) 698,700 0.6812. Low Tuck Choy 688,500 0.6713. Oh Seong Oon 671,503 0.6614. Lim Kew @ Lim Kon Foong 564,527 0.5515. Citigroup Nominees (Tempatan) Sdn Bhd

Akaun Sekuriti disandar untuk/Pledged Securities Account for Low Tuck Choy (471941) 564,500 0.5516. Esteem Evergreen Sdn Bhd 557,000 0.5517. Ho Yoon Shin @ Michael Ho 525,000 0.5118. Kew Hoi Lam @ Hew Hoi Lam 510,400 0.5019. CIMSEC Nominees (Tempatan) Sdn Bhd

CIMB Bank untuk/for Chan Yoke Meng (MY 0291) 500,000 0.4920. Edmond Hoyt Yung 500,000 0.4921. Eng Shi Lin @ Ng Cheu Ling 435,000 0.4322. Choh Pam Kok @ Choo Pun Kok 430,000 0.4223. Gan Swee Lea 382,000 0.3724. Apt Avenue Sdn Bhd 365,500 0.3625. Chow Chee Onn 359,900 0.3526. CIMSEC Nominees (Tempatan) Sdn Bhd

CIMB Bank for Chuah Ah Bee (PB–Retail Banking) 343,300 0.3427. Lee Chenk Guan 343,000 0.3428. Ho Kai Ming 340,000 0.3329. Low Lai Yoong 282,600 0.2830. Tan Lim Kiaw 276,200 0.27

65,265,400 63.95

PEMEGANG SAHAM UTAMA (5% DAN KE ATAS)SUBSTANTIAL SHAREHOLDERS (5% AND ABOVE)

Nama Bilangan SahamName No. of Shares %

UEM Group Berhad 17,544,326 17.20Low Chee & Sons Sdn Bhd 23,112,629 22.66



senarai hartanahlist of properties

Usia Tarikh Tempoh Saiz/ KegunaanAlamat/Lokasi Bangunan Pembelian Pegangan Kawasan Semasa Huraian Nilai Buku

Net BookAge of Date of Value

Address/Location Building Acquisition Tenure Size/Area Existing Use Description RM’000

Lot 4150 30/1/1985 Milik Bebas 5.5 Kosong Tanah 1,712Mukim of Cheras Freehold ekar/acres Vacant LandDistrict of Ulu LangatSelangor Darul Ehsan

2B 1st Floor 31 1/7/1986 Milik Bebas 900 Ruang Pejabat Rumah Kedai 66Medan Imbi tahun/years Freehold ka. persegi/ Office Premise ShophouseKuala Lumpur sq. ft.

Lot A4-01 22 2/12/1985 Tamat tahun/ 2,412 Sewa Kilang Bertingkat 2414th Floor, Kuala Lumpur tahun/years Expires year ka.persegi/ Rented Flatted FactoryIndustrial Park 2063 sq. ft.8 km Jalan Klang LamaKuala Lumpur

Lot 584, 585 & 599 9/11/1983 Milik Bebas 14.7 Kosong Tanah 1,919Mukim of Ulu Klang Freehold ekar/acres Vacant PembangunanDistrict of Gombak DevelopmentSelangor Darul Ehsan Land

Lot 36099, 36100 & 36101 12/9/1995 Milik Bebas 153 Pembangunan Tanah 146,444Mukim of Petaling Freehold ekar/acres Hartanah PembangunanWilayah Persekutuan Property Development

Development Land

Laporan Pengarah

Penyata Para Pengarah

Akuan Berkanun

Laporan Juruaudit

Penyata Pendapatan

Kunci Kira-Kira

Penyata Perubahan Dalam Ekuiti

Penyata Aliran Tunai Disatukan

Penyata Aliran Tunai

Nota-Nota Kepada Penyata Kewangan

48-50

51

51

52-53

54

55-56

57

58

59

60-110


penyata kewangan



Para Pengarah menyampaikan laporan mereka bersama dengan penyata kewangan Kumpulan dan Syarikat yang telahdiaudit bagi tahun kewangan berakhir 31 December 2006.

KEGIATAN UTAMA

Kegiatan utama Syarikat terdiri daripada kejuruteraan asas, kejuruteraan awam, kerja-kerja kontrak bangunan danpenyewaan loji dan jentera.

Kegiatan utama subsidiari-subsidiari dan syarikat-syarikat bersekutu masing-masing telah dinyatakan dalam Nota 20 danNota 21 kepada penyata kewangan.

Tiada perubahan ketara dalam kegiatan-kegiatan utama bagi tahun kewangan ini.

KEPUTUSAN

Kumpulan SyarikatRM'000 RM'000

Kerugian bersih bagi tahun 35,148 14,956

Boleh diagihkan kepada:Pemegang ekuiti Syarikat 35,101 14,956Kepentingan minoriti 47 –

35,148 14,956

Tiada pemindahan ketara dibuat kepada atau daripada rizab atau peruntukan dalam tahun kewangan ini kecuali yangdinyatakan dalam Penyata Perubahan Dalam Ekuiti.

Pada pendapat para Pengarah, keputusan operasi Kumpulan dan Syarikat dalam tahun kewangan ini tidak banyak terjejasoleh mana-mana perkara, urusniaga atau peristiwa yang penting dan luar biasa.

DIVIDEN

Dividen tidak dibayar atau diisytiharkan oleh Syarikat sejak akhir tahun kewangan yang lepas.

Para Pengarah tidak mencadangkan sebarang pembayaran dividen bagi tahun kewangan ini.

PARA PENGARAH

Para Pengarah yang berkhidmat sejak tarikh laporan yang lepas dan pada tarikh laporan ini adalah:

Abdul Kadir Bin Md KassimY.Bhg. Dato' Low Tuck ChoyLow Teik KienLai Moo ChanY.Bhg. Datuk Sulaiman Bin DaudY.Bhg. Dato' Mohd Ghazali @ Fauzi Bin YacubFaris Najhan Bin Hashim

laporan pengarah



MANFAAT PARA PENGARAH

Pada akhir dan disepanjang tahun kewangan ini, tiada sebarang perjanjian yang melibatkan Syarikat sebagai salah satupihak yang membolehkan para Pengarah mendapat manfaat melalui pembelian saham dalam Syarikat atau lain-lain badankorporat.

Semenjak akhir tahun kewangan yang lepas, tiada Pengarah yang menerima atau berhak menerima sebarang faedah (selaindaripada faedah yang dimasukkan dalam agregat jumlah emolumen yang telah diterima atau akan diterima oleh paraPengarah seperti ditunjukkan dalam Nota 12 kepada penyata kewangan atau gaji tetap kakitangan sepenuh masa Syarikat)atas alasan kontrak yang dibuat oleh Syarikat atau perbadanan yang berhubung kait, dengan Pengarah atau dengan firma dimana Pengarah adalah ahli, atau dengan syarikat di mana Pengarah mempunyai kepentingan besar, selain yang dinyatakandalam Nota 37 kepada penyata kewangan.

KEPENTINGAN PARA PENGARAH

Menurut daftar pemegangan saham para Pengarah, kepentingan para Pengarah yang berkhidmat pada akhir tahunkewangan dalam saham-saham Syarikat dan perbadanan berkaitan bagi tahun kewangan ini adalah seperti berikut:

<-------- Bilangan Saham Biasa Bernilai RM1 Sesaham -------->Pada Pada

1 Januari 31 Disember2006 Pembelian Penjualan 2006

Syarikat

Kepentingan secara langsungY.Bhg. Dato' Low Tuck Choy 1,270,000 49,000 – 1,319,000Low Teik Kien 698,700 – – 698,700Lai Moo Chan 1,981,422 – (3,000) 1,978,422

Kepentingan secara tidak langsungY.Bhg. Dato' Low Tuck Choy 25,162,629 – – 25,162,629Low Teik Kien 25,162,629 – – 25,162,629

Selaras dengan kepentingan Y.Bhg. Dato' Low Tuck Choy dan Low Teik Kien dalam saham-saham Syarikat, mereka jugadianggap berkepentingan dalam saham-saham semua subsidiari-subsidiari berasaskan Syarikat mempunyai kepentingandalamnya.

Tidak ada Pengarah lain di pejabat pada akhir tahun kewangan mempunyai apa-apa kepentingan dalam saham-saham dalamSyarikat atau perbadanan berkaitan dalam tahun kewangan ini.

LAIN-LAIN MAKLUMAT BERKANUN

(a) Sebelum penyata pendapatan dan kunci kira-kira Kumpulan dan Syarikat disediakan, para Pengarah telah mengambillangkah-langkah yang munasabah:

(i) untuk memastikan bahawa tindakan sewajarnya telah diambil berhubung dengan pelupusan hutang lapuk danperuntukan untuk hutang ragu dan telah berpuas hati bahawa semua hutang lapuk yang diketahui telahdihapuskira dan peruntukan secukupnya telah dibuat untuk hutang ragu; dan

(ii) untuk memastikan bahawa mana-mana aset semasa yang tidak mungkin dapat diperolehi nilainya sebagaimanaditunjukkan dalam rekod perakaunan dalam urusniaga biasa telah dikurangkan kepada jumlah jangkaan yang dapatdiperolehi.

LAIN-LAIN MAKLUMAT BERKANUN (SAMB.)

(b) Pada tarikh laporan ini, para Pengarah tidak menyedari kewujudan sebarang keadaan yang akan menjadikan:

(i) jumlah dihapuskira bagi hutang lapuk atau jumlah yang diperuntukan bagi hutang ragu dalam penyata kewanganKumpulan dan Syarikat tidak memadai pada tahap material; dan

(ii) kekeliruan pada nilai yang diberi kepada aset semasa dalam penyata kewangan Kumpulan dan Syarikat.

(c) Pada tarikh laporan ini, para Pengarah tidak menyedari apa-apa keadaan yang telah timbul yang akan menjadikanpematuhan kepada kaedah-kaedah penilaian aset atau liabiliti sedia ada Kumpulan dan Syarikat mengelirukan atau tidaksesuai.

(d) Pada tarikh laporan ini, para Pengarah tidak menyedari apa-apa keadaan yang tidak sebaliknya diuruskan dalam laporanini atau penyata kewangan Kumpulan dan Syarikat yang akan menjadikan mana-mana jumlah yang dinyatakan dalampenyata kewangan mengelirukan.

(e) Pada tarikh laporan ini, tidak wujud:

(i) sebarang cagaran atas aset-aset Kumpulan atau Syarikat yang telah timbul sejak akhir tahun kewangan yangmenjamin liabiliti pihak lain; atau

(ii) sebarang tanggungan luarjangka berhubung dengan Kumpulan atau Syarikat yang telah timbul sejak akhir tahunkewangan.

(f) Pada pendapat para Pengarah:

(i) tiada tanggungan luarjangka atau tanggungan yang lain dikuatkuasa atau mungkin berkuatkuasa dalam tempohdua belas bulan selepas akhir tahun kewangan yang akan atau mungkin menjejaskan keupayaan Kumpulan atauSyarikat untuk memenuhi segala kewajipan apabila tiba tempohnya; dan

(ii) tiada perkara, urusniaga atau peristiwa bersifat ketara dan luar biasa telah berlaku sepanjang tempoh antara akhirtahun kewangan dengan tarikh laporan ini yang mungkin akan menjejaskan secara ketara keputusan operasiKumpulan atau Syarikat bagi tahun kewangan ini semasa laporan ini disediakan.

PERISTIWA PENTING DALAM TAHUN KEWANGAN

Peristiwa penting dalam tahun kewangan dihuraikan dalam Nota 38 kepada penyata kewangan.

PERISTIWA PENTING SELEPAS TARIKH KUNCI KIRA-KIRA

Peristiwa penting selepas tarikh kunci kira-kira dihuraikan dalam Nota 39 kepada penyata kewangan.

JURUAUDIT

Juruaudit, Ernst & Young telah menyatakan kesanggupan mereka untuk menerima pelantikan semula.

Ditandatangani bagi pihak Lembaga selaras dengan resolusi para Pengarah bertarikh 31 Julai 2007.

Y.BHG. DATO' LOW TUCK CHOY FARIS NAJHAN BIN HASHIM



Kami, Y.BHG DATO’ LOW TUCK CHOY dan FARIS NAJHAN BIN HASHIM, dua orang Pengarah bagi HO HUPCONSTRUCTION COMPANY BERHAD, dengan ini menyatakan bahawa, pada pendapat para Pengarah, penyata kewanganyang mengiringi pada muka surat 54 hingga 110 telah disediakan selaras dengan Piawaian Pelaporan Kewangan diMalaysia dan peruntukan Akta Syarikat, 1965 untuk memberi gambaran yang benar dan saksama mengenai kedudukankewangan Kumpulan dan Syarikat pada 31 Disember 2006 dan mengenai keputusan-keputusan perniagaan Kumpulan danSyarikat dan aliran tunai Kumpulan dan Syarikat bagi tahun berakhir pada tarikh tersebut.

Ditandatangani bagi pihak Lembaga selaras dengan resolusi para Pengarah bertarikh 31 Julai 2007.


akuan berkanunSELARAS DENGAN SEKSYEN 169(16) AKTA SYARIKAT, 1965

Saya, FARIS NAJHAN BIN HASHIM, merupakan Pengarah yang bertanggungjawab terutamanya bagi pengurusankewangan HO HUP CONSTRUCTION COMPANY BERHAD, dengan ini sesungguhnya dan seikhlasnya mengaku bahawapenyata kewangan yang dibentangkan pada mukasurat 54 hingga 110, mengikut pengetahuan dan kepercayaan saya,adalah betul dan saya membuat perakuan ini dengan penuh kepercayaan bahawa perkara yang sama adalah benar, danselaras kepada peruntukan Akta Akuan Berkanun, 1960.

Diakui dan diisytiharkan dengan sesungguhnya )oleh FARIS NAJHAN BIN HASHIM tersebut di atas )di Kuala Lumpur dalam Wilayah Persekutuan )pada 31 Julai 2007. ) FARIS NAJHAN BIN HASHIM

Di hadapan saya,

N. NAGENDRAM (W 468)Pesuruhjaya Sumpah



penyata para pengarahSELARAS DENGAN SEKSYEN 169(15) AKTA SYARIKAT, 1965

Kami telah mengaudit penyata kewangan dibentangkan pada muka surat 54 hingga 110. Penyata kewangan ini adalahtanggungjawab para Pengarah Syarikat.

Ia adalah tanggungjawab kami untuk membentuk pendapat bebas, berdasarkan audit kami, mengenai penyata kewangandan untuk melapor pendapat kami kepada tuan, sebagai sebuah badan, selaras dengan Seksyen 174 Akta Syarikat, 1965dan bukan untuk tujuan lain. Kami tidak akan bertanggungjawab kepada mana-mana orang lain bagi kandungan laporan ini.

Kami telah melaksanakan audit kami mengikut piawaian pengauditan yang diluluskan di Malaysia. Piawaian-piawaiantersebut memerlukan kami untuk merancang dan menjalankan audit untuk mendapat asas yang munasabah mengenaisama ada penyata kewangan tersebut adalah bebas daripada salah nyata yang ketara. Sesebuah audit meliputi pemeriksaanberdasarkan ujian, bukti yang menyokong jumlah dan pembentangan dalam penyata kewangan. Sesebuah audit jugameliputi penilaian secara prinsip-prinsip perakaunan yang digunakan dan anggaran penting yang dibuat oleh para pengarahserta juga penilaian secara keseluruhan pembentangan maklumat dalam penyata kewangan. Kami yakin bahawa audit kamimemberi asas yang wajar bagi pendapat kami.

Pada pendapat kami:

(a) penyata kewangan ini telah disediakan dengan sempurna menurut peruntukan Akta Syarikat, 1965 dan PiawaianPelaporan Kewangan diterima pakai di Malaysia untuk memberi gambaran yang benar dan saksama tentang:

i) kedudukan kewangan Kumpulan dan Syarikat pada 31 December 2006 dan keputusan dan aliran tunai Kumpulandan Syarikat bagi tahun berakhir pada tarikh tersebut; dan

ii) perkara-perkara yang dikehendaki oleh Seksyen 169 Akta Syarikat, 1965 yang akan dinyatakan dalam penyatakewangan; dan

(b) rekod-rekod perakaunan dan rekod-rekod lain serta daftar-daftar yang dikehendaki oleh Akta untuk disimpan olehSyarikat dan subsidiari-subsidiari yang kami telah bertindak sebagai juruaudit telah disimpan menurut peruntukan Aktatersebut.

Kami telah mempertimbangkan penyata kewangan dan laporan juruaudit mengiringi subsidiari-subsidiari yang mana kamitidak bertindak sebagai juruaudit, sebagaimana ditunjukkan dalam Nota 20 penyata kewangan, yang merupakan penyatakewangan yang telah dimasukkan dalam penyata kewangan disatukan.

Kami berpuas hati bahawa penyata kewangan subsidiari-subsidiari yang telah disatukan dengan penyata kewangan Syarikatdalam bentuk dan kandungan yang bersesuaian dan wajar bagi tujuan penyediaan penyata kewangan disatukan dan kamitelah menerima maklumat dan penjelasan yang memuaskan sepertimana diperlukan oleh kami bagi tujuan-tujuan tersebut.

Laporan juruaudit tentang penyata kewangan subsidiari-subsidiari tidak tertakluk kepada sebarang pengecualian materialkepada penyata kewangan penyatuan dan tidak termasuk sebarang teguran yang dibuat di bawah Seksyen 174(3) Aktatersebut.

Tanpa melayakkan pendapat kami, kami ingin menarik perhatian kepada perkara berikut:

Nota 25 dan Nota 40 kepada penyata kewangan mendedahkan butir-butir mengenai litigasi material berkaitan denganKumpulan dan Syarikat. Sekiranya keputusan mengenai perkara-perkara yang dirujuk dalam Nota 25 dan Nota 40 tidakmemihak kepada Kumpulan dan Syarikat, ia mungkin membawa kepada ketakpastian ketara atas keupayaan Kumpulan danSyarikat untuk meneruskan atas dasar usaha berterusan memandangkan pelarasan-pelarasan penting mungkin diperlukanbagi peruntukan tambahan bagi hutang ragu dan/atau liabiliti selanjutnya dalam penyata kewangan Kumpulan dan Syarikat.Sebagaimana didedahkan dalam Nota 2 kepada penyata kewangan, para Pengarah Syarikat, selepas berunding sewajarnyadengan penasihat undang-undang mereka mengenai kemungkinan keputusan ketakpastian yang dirujuk dalam Nota 25 danNota 40, menganggapnya wajar untuk menyediakan penyata kewangan Kumpulan dan Syarikat atas dasar usahaberterusan.



laporan juruauditKEPADA AHLI-AHLI HO HUP CONSTRUCTION COMPANY BERHAD (Diperbadankan di Malaysia)

Penyata kewangan menunjukkan bahawa Kumpulan dan Syarikat menanggung kerugian bersih masing-masing sebanyakRM35.1 juta dan RM14.9 juta dalam tahun berakhir 31 Disember 2006 dan, pada tarikh tersebut, liabiliti semasa Kumpulanmelebihi aset semasanya sebanyak RM37.6 juta. Penyata kewangan selanjutnya menunjukkan bahawa Kumpulan danSyarikat mempunyai aliran tunai kendalian negatif masing-masing sebanyak RM20.2 juta dan RM26.5 juta. Selain daripadaitu, sebagaimana didedahkan dalam Nota 31 dan Nota 32 kepada penyata kewangan, Syarikat tidak memenuhi beberapadaripada obligasi bayaran baliknya berkaitan dengan kemudahan kredit pusingan dan sewa beli dengan AmBank (M)Berhad. Syarat-syarat ini, bersama dengan perkara sebagaimana dikemukakan dalam perenggan sebelumnya, menunjukkankewujudan ketidakpastian material yang menimbulkan keraguan ketara mengenai keupayaan Kumpulan dan Syarikat untukditeruskan atas dasar usaha berterusan. Keupayaan Kumpulan dan Syarikat untuk diteruskan atas dasar berterusanbergantung atas pemerolehan kontrak berdaya maju dan sokongan berterusan jurubank, pemiutang dan pemegang-pemegang saham.

Penyata kewangan Kumpulan dan Syarikat telah disediakan atas dasar usaha berterusan yang mengandaikan bahawaKumpulan dan Syarikat akan meneruskan kewujudan operasi sedia ada bagi masa hadapan boleh diramal dan mempunyaidana yang mencukupi untuk memenuhi obligasi-obligasi mereka bila dan apabila tiba masanya. Kesahan andaian ini adalahbergantung ke atas faktor-faktor sebagaimana digariskan dalam dua perenggan sebelum ini.

Penyata kewangan Kumpulan dan Syarikat tidak termasuk sebarang pelarasan berkaitan dengan kebolehan dikutip danpengkelasan semula jumlah aset yang direkodkan atau jumlah dan pengkelasan liabiliti yang mungkin diperlukan sekiranyaSyarikat dan Kumpulan tidak dapat diteruskan atas dasar usaha berterusan.

Memandangkan keketaraan ketidakpastian-ketidakpastian ini, kami menganggap bahawa pendedahan-pendedahan ini harusdibawa kepada perhatian tuan.

ERNST & YOUNG TAN SOO YANAF: 0039 No.1307/03/08(J/PH)Akauntan Bertauliah Rakan Kongsi

Kuala Lumpur, Malaysia31 Julai 2007



Kumpulan Syarikat2006 2005 2006 2005

Nota RM'000 RM'000 RM'000 RM'000(Dinyatakan (Dinyatakan

semula) Semula)

Pendapatan 8 86,982 174,108 46,431 105,740Kos penjualan 9 (81,947) (125,127) (46,530) (87,037)

Keuntungan kasar 5,035 48,981 (99) 18,703Lain-lain pendapatan 10(a) 27,749 13,152 40,409 23,774Perbelanjaan pentadbiran 10(b) (12,702) (12,504) (9,433) (8,860)Perbelanjaan operasi 10(b) (45,305) (36,465) (38,689) (18,152)

(Kerugian)/keuntungan daripada operasi 10 (25,223) 13,164 (7,812) 15,465Pembiayaan kos 14 (6,550) (5,867) (6,057) (5,598)Bahagian keputusan syarikat-syarikat bersekutu (2,051) (1,206) – –

(Kerugian)/keuntungan sebelum cukai (33,824) 6,091 (13,869) 9,867Cukai 15 (1,324) (3,476) (1,087) (2,500)

(Kerugian)/keuntungan bagi tahun kewangan (35,148) 2,615 (14,956) 7,367

Boleh diagihkan kepada:Pemegang ekuiti Syarikat (35,101) 3,879 (14,956) 7,367Kepentingan minoriti (47) (1,264) – –

(35,148) 2,615 (14,956) 7,367

(Kerugian)/perolehan sesaham bolehdiagihkan kepada pemegang ekuiti Syarikat

(Kerugian)/perolehan asas/dicairkan sesaham (sen) 16 (34.4) 3.8

Nota-nota yang dilampirkan membentuk sebahagian penting dalam penyata kewangan ini.



penyata pendapatanBAGI TAHUN BERAKHIR 31 DISEMBER 2006



semula) Semula)

ASET BUKAN SEMASA

Hartanah, loji dan peralatan 17 41,145 42,178 39,374 39,570Hartanah pelaburan 18 1,712 5,580 1,712 5,281Tanah dipegang untuk pembangunan hartanah 19(a) 122,183 122,183 – –Pelaburan dalam subisidiari-subsidiari 20 – – 21,002 20,990Pelaburan dalam syarikat-syarikat bersekutu 21 11,284 13,314 10,566 10,566Pelaburan dalam entiti kawalan bersama 22 – – – –Lain-lain pelaburan 23 35 35 – –Aset cukai tertunda 33 21 – – –

176,380 183,290 72,654 76,407

ASET SEMASA

Kos pembangunan hartanah 19(b) 26,180 28,753 – –Inventori 24 159 175 – –Dagangan boleh diterima 25 117,739 137,462 59,309 65,304Lain-lain jumlah boleh diterima 26 11,320 14,679 210,132 212,594Tunai dan baki bank 28 30,424 53,187 28,120 49,785

185,822 234,256 297,561 327,683

JUMLAH ASET 362,202 417,546 370,215 404,090




kunci kira-kiraPADA 31 DISEMBER 2006



semula) Semula)

EKUITI DAN LIABILITIEkuiti boleh diagihkan kepada pemegangekuiti Syarikat

Modal saham 29 102,000 102,000 102,000 102,000Rizab 30 19,728 54,720 72,613 87,569

Ekuiti pemegang saham 121,728 156,720 174,613 189,569Kepentingan minoriti 1,914 1,961 – –

Jumlah ekuiti 123,642 158,681 174,613 189,569

LIABILITI BUKAN SEMASA

Pinjaman jangka panjang 31 15,128 32,115 10,558 17,534Liabiliti cukai tertunda 33 – 71 – –

15,128 32,186 10,558 17,534

LIABILITI SEMASA

Pinjaman jangka pendek 31 73,158 82,848 52,205 64,133Dagangan perlu dibayar 34 104,096 112,602 86,625 96,261Lain-lain jumlah perlu dibayar 35 38,135 23,918 40,357 31,718Cukai perlu dibayar 8,043 7,311 5,857 4,875

223,432 226,679 185,044 196,987

Jumlah liabiliti 238,560 258,865 195,602 214,521

JUMLAH EKUITI DAN LIABILITI 362,202 417,546 370,215 404,090




<----- Boleh diagihkan kepada Pemegang Ekuiti Syarikat ----->Rizab

pertukaranmatawang Rizab tidak Keuntungan

asing boleh diagihkan tertahanModal tidak boleh daripada boleh Kepentingansaham diagihkan penyatuan diagihkan minoriti Jumlah

Nota RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

KUMPULAN

Pada 1 Januari 2005 102,000 5,410 236 45,327 3,225 156,198

Keuntungan/(kerugian) bersih bagi tahun – – – 3,879 (1,264) 2,615

Perbezaan peruntukan atas penjemahanaset bersih subsidiari asing dansyarikat bersekutu – (132) – – – (132)

Pada 31 Disember 2005 102,000 5,278 236 49,206 1,961 158,681

Pada 1 Januari 2006Seperti dinyatakan semula 102,000 5,278 236 49,206 1,961 158,681Kesan penerimaan pada FRS 3 3(c) – – (236) 236 – –

102,000 5,278 – 49,442 1,961 158,681

Kerugian bersih bagi tahun – – – (35,101) (47) (35,148)

Perbezaan peruntukan atas penjemahanaset bersih subsidiari asing dansyarikat bersekutu – 109 – – – 109

Pada 31 Disember 2006 102,000 5,387 – 14,341 1,914 123,642

KeuntunganModal tertahansaham boleh diagihkan JumlahRM'000 RM'000 RM'000

SYARIKAT

Pada 1 Januari 2005 102,000 80,202 182,202

Keuntungan bersih bagi tahun – 7,367 7,367

Pada 31 Disember 2005 102,000 87,569 189,569

Pada 1 Januari 2006 102,000 87,569 189,569

Kerugian bersih bagi tahun – (14,956) (14,956)

Pada 31 Disember 2006 102,000 72,613 174,613




penyata perubahan dalam ekuitiBAGI TAHUN BERAKHIR 31 DISEMBER 2006

2006 2005RM'000 RM'000

(Dinyatakansemula)

ALIRAN TUNAI DARIPADA AKTIVITI OPERASI

(Kerugian)/keuntungan sebelum cukai (33,824) 6,091Pelarasan bagi:

Hutang lapuk dihapuskira 1,409 1,595Peruntukan hutang ragu 10,487 145Kemasukan semula peruntukan hutang ragu (41) (444)Susutnilai hartanah, loji dan peralatan 6,599 9,652Keuntungan atas penjualan hartanah, loji dan peralatan (10,583) (9,712)Susutnilai atas pelaburan hartanah 18 29Keuntungan atas pelaburan hartanah (13,876) –Keuntungan pertukaran asing tidak direalisasi (419) –Peruntukan pampasan lewat penyerahan 6,793 5,925Faedah pendapatan (1,336) (1,344)Faedah perbelanjaan 6,550 5,867Bahagian keputusan syarikat-syarikat bersekutu 2,051 1,206

(Kerugian)/keuntungan operasi sebelum perubahan modal kerja (26,172) 19,010

Kos pembangunan hartanah 5,573 14,354Inventori 16 14Jumlah boleh diterima 11,646 (49,610)Jumlah perlu dibayar (1,082) 9,538

Tunai bersih digunakan dalam operasi (10,019) (6,694)Cukai dibayar (684) (524)Faedah dibayar (9,550) (8,867)

Tunai bersih digunakan dalam aktiviti operaasi (20,253) (16,085)

ALIRAN TUNAI DARIPADA AKTIVITI PELABURAN

Pembelian hartanah, loji dan peralatan (7,130) (2,917)Pelaburan atas syarikat-syarikat bersekutu – (257)Kutipan daripada penjualan hartanah, loji dan peralatan 13,172 11,088Kutipan daripada penjualan hartanah pelaburan 17,726 –Faedah diterima 1,336 1,344

Tunai bersih diperolehi daripada aktiviti pelaburan 25,104 9,258

ALIRAN TUNAI DARIPADA AKTIVITI PEMBIAYAAN

Bayaran balik pembiayaan sewa beli (21,282) (4,519)Pinjaman bank (8,154) 3,307

Tunai bersih digunakan dalam aktiviti pembiayaan (29,436) (1,212)

PENGURANGAN BERSIH DALAM TUNAI DAN TUNAI PERSAMAAN (24,585) (8,039)

KESAN PERUBAHAN KADAR PERTUKARAN MATAWANG ASING 88 (236)

TUNAI DAN TUNAI PERSAMAAN BAGI AWAL TAHUN KEWANGAN 34,388 42,663

TUNAI DAN TUNAI PERSAMAAN BAGI AKHIR TAHUN KEWANGAN (NOTA 28) 9,891 34,388




penyata aliran tunai disatukanBAGI TAHUN BERAKHIR 31 DISEMBER 2006

2006 2005RM'000 RM'000

(Dinyatakansemula)

ALIRAN TUNAI DARIPADA AKTIVITI OPERASI

(Kerugian)/keuntungan sebelum cukai (13,869) 9,867Pelarasan bagi:

Hutang lapuk dihapuskira 1,409 1,595Peruntukan hutang ragu– Jumlah boleh diterima 10,487 254– Subsidiari 13,714 –Peruntukan pengurangan nilai pelaburan – 200Susutnilai hartanah, loji dan peralatan 5,656 8,370Keuntungan atas penjualan hartanah, loji dan peralatan (10,547) (9,672)Susutnilai hartanah pelaburan 11 22Keuntungan atas penjualan hartanah pelaburan (13,898) –Kerugian pertukaran asing tidak direalisasi (419) –Faedah pendapatan (14,311) (12,902)Faedah perbelanjaan 6,057 5,598

(Kerugian)/keuntungan operasi sebelum perubahan modal kerja (15,710) 3,332

Jumlah boleh diterima (3,636) (38,461)Jumlah perlu dibayar (997) 31,060

Tunai digunakan dalam daripada operasi (20,343) (4,069)

Cukai dibayar (105) –Faedah dibayar (6,057) (5,598)

Tunai bersih digunakan dalam aktiviti operasi (26,505) (9,667)

ALIRAN TUNAI DARIPADA AKTIVITI PELABURAN

Pembelian hartanah, loji dan peralatan (7,021) (2,416)Pelaburan atas syarikat-syarikat besekutu – (257)Pelaburan atas subsidiari-subsidiari (12) (94)Kutipan daripada penjualan hartanah, loji dan peralatan 13,133 10,614Kutipan daripada penjualan hartanah pelaburan 17,456 –Faedah diterima 1,213 1,081

Tunai bersih diperolehi daripada aktiviti pelaburan 24,769 8,928

ALIRAN TUNAI DARIPADA AKTIVITI PEMBIAYAAN

Bayaran balik pembiayaan sewa beli (11,586) (3,835)Pinjaman bank (9,631) 981

Tunai bersih digunakan dalam aktiviti pembiayaan (21,217) (2,854)

PENGURANGAN BERSIH DALAM TUNAI DAN TUNAI PERSAMAAN (22,953) (3,593)

TUNAI DAN TUNAI PERSAMAAN BAGI AWAL TAHUN KEWANGAN 33,995 37,588

TUNAI DAN TUNAI PERSAMAAN BAGI AKHIR TAHUN KEWANGAN (NOTA 28) 11,042 33,995




penyata aliran tunaiBAGI TAHUN BERAKHIR 31 DISEMBER 2006

1. MAKLUMAT KORPORAT

Kegiatan utama Syarikat terdiri daripada kejuruteraan asas, kejuruteraan awam, kerja-kerja kontrak bangunan danpenyewaan loji dan jentera.

Kegiatan utama subsidiari-subsidiari dan syarikat-syarikat bersekutu dinyatakan dalam Nota 20 dan Nota 21.

Tidak ada perubahan ketara dalam jenis kegiatan utama dalam tahun kewangan ini.

Syarikat adalah sebuah syarikat liabiliti awam berhad, diperbadankan dan berdomisil di Malaysia dan tersenarai padaPapan Utama Bursa Malaysia Securities Berhad. Pejabat berdaftar Syarikat terletak di No. 2, Medan Imbi, 55100Kuala Lumpur.

Penyata kewangan telah dibenarkan untuk dikeluarkan oleh Lembaga Pengarah selaras dengan resolusi para Pengarahbertarikh 31 Julai 2007.

2. ASAS-ASAS PENYEDIAAN

Penyata kewangan Kumpulan dan Syarikat telah disediakan di bawah konvensyen kos sejarah melainkan dinyatakansebaliknya. Penyata kewangan ini dibentangkan dalam Ringgit Malaysia (“RM”) dan semua nilai dinyatakan dalam ribuyang paling hampir kecuali dinyatakan sebaliknya.

Nota 25 dan Nota 40 mendedahkan butir-butir mengenai litigasi material berkaitan dengan Kumpulan dan Syarikat.Kalau hasil perkara-perkara yang dinyatakan di Nota 25 dan Nota 40 menunjukkan keputusan yang tidak diingini, makaia akan menimbulkan ketidakupayaan bagi Kumpulan dan Syarikat untuk terus beroperasi kerana pengubahan yangketara mungkin diperlukan untuk menambah peruntukan hutang ragu dan/atau liabiliti selanjutnya dalam penyatakewangan Kumpulan dan Syarikat. Setelah para Pengarah mendapat pandangan daripada pihak peguam tentangkeputusan yang mungkin berlaku mengenai perkara-perkara yang dinyatakan di Nota 25 dan Nota 40, para Pengarahberpendapat ia adalah sesuai supaya penyata kewangan Kumpulan dan Syarikat dibuat berasaskan terus beroperasi.

Penyata kewangan menunjukkan bahawa Kumpulan dan Syarikat menanggung kerugian bersih masing-masingsebanyak RM35.1 juta dan RM14.9 juta dalam tahun berakhir 31 Disember 2006 dan, pada tarikh tersebut, liabilitisemasa Kumpulan melebihi aset semasanya sebanyak RM37.6 juta. Penyata kewangan selanjutnya menunjukkanbahawa Kumpulan dan Syarikat mempunyai aliran tunai kendalian negatif masing-masing sebanyak RM20.2 juta danRM26.5 juta. Selain daripada itu, sebagaimana dinyatakan dalam Nota 31 dan Nota 32 penyata kewangan, Syarikattidak memenuhi beberapa daripada obligasi bayaran baliknya berkaitan dengan kemudahan kredit pusingan dan sewabeli dengan AmBank (M) Berhad. Sebagaimana dinyatakan selanjutnya dalam Nota 31 dan Nota 32 Syarikat telahpada 3 Julai 2007 menandatangani Perjanjian Jual Beli untuk melupuskan 3 bidang tanah yang pada masa inidigadaikan kepada AmBank (M) Berhad. Perolehan pelupusan sebanyak lebih kurang RM23 juta akan diguna, antaralainnya, bagi penyelesaian kemudahan kredit pusingan dan sewa beli. Syarat-syarat ini, bersama dengan perkarasebagaimana dikemukakan dalam perenggan sebelum itu, menunjukkan kewujudan ketakpastian material yangmenimbulkan keraguan ketara mengenai keupayaan Kumpulan dan Syarikat untuk meneruskan atas dasar usahaberterusan. Keupayaan Kumpulan dan Syarikat untuk diteruskan atas dasar usaha berterusan bergantung ke ataspemerolehan kontrak berdaya maju dan sokongan bersama jurubank, pemiutang dan pemegang-pemegang saham.

Penyata kewangan Kumpulan dan Syarikat telah disediakan atas dasar usaha berterusan yang mengandaikan bahawaKumpulan dan Syarikat akan meneruskan kewujudan operasi bagi masa hadapan boleh diramal dan mempunyai danayang mencukupi untuk memenuhi obligasi-obligasinya bila dan apabila tiba masanya. Keesahan andaian ini bergantungatas faktor-faktor sebagaimana digariskan dalam dua perenggan sebelum ini.

Penyata kewangan Kumpulan dan Syarikat tidak termasuk pelarasan berkaitan dengan kebolehan dikutip danpengkelasan semua jumlah aset yang direkodkan atau jumlah dan pengkelasan liabiliti yang mungkin diperlukansekiranya Syarikat dan Kumpulan tidak dapat diteruskan atas dasar usaha berterusan.



nota-nota kepada penyata kewangan31 DISEMBER 2006

2. ASAS-ASAS PENYEDIAAN (SAMB.)

(a) Penyata pematuhan

Penyata kewangan mematuhi peruntukan-peruntukan Akta Syarikat 1965 dan Piawaian-piawaian PelaporanKewangan terpakai (“FRS”) di Malaysia. Pada permulaan tahun kewangan, Kumpulan dan Syarikat telahmenerima pakai FRS baru dan disemak yang adalah mandatori bagi tempoh-tempoh kewangan bermula pada atauselepas 1 Januari 2006 sebagaimana dinyatakan dalam Nota 3.

(b) Asas-asas Penyatuan

(i) Subsidiari-subsidiari

Penyata kewangan disatukan termasuk penyata kewangan Syarikat dan semua subsidiarinya. Subsidiari-subsidiari adalah entiti dalam mana Kumpulan mempunyai kuasa untuk menggunakan kawalan ke atas dasarpolisi kewangan dan kendalian untuk mendapat faedah daripada kegiatan-kegiatan mereka. Kewujudan dankesan potensi hak mengundi yang pada masa ini boleh dilaksanakan atau boleh ditukar dipertimbangkanapabila menilai sama ada Kumpulan mempunyai kuasa sedemikian ke atas entiti yang lain.

Penyata kewangan subsidiari-subsidiari disatukan dengan menggunakan kaedah pengambilalihan.

Di bawah kaedah pengambilalihan perakaunan, keputusan subsidiari-subsidiari disatukan dari tarikhpengambilalihan, merupakan tarikh bila mana Kumpulan mendapat kawalan, dan berterusan untuk disatukansehingga tarikh yang kawalan sedemikian berhenti. Kos pengambilalihan diukur sebagai agregat nilaisaksama, pada tarikh pertukaran, aset-aset diberikan, liabiliti ditanggung atau diandaikan, dan instrumen-instrumen ekuiti diterbitkan, campur sebarang kos boleh diagihkan secara langsung kepada pengambilalihan.Kaedah pengambilalihan perakaunan melibatkan peruntukan kos pengambilalihan kepada nilai saksama asetdan liabiliti yang diambil alih dan liabiliti kontigen yang diambil alih pada tarikh pengambilalihan. Sebaranglebihan daripada kos pengambilalihan ke atas kepentingan Kumpulan dalam nilai saksama bersih aset, liabilitidan liabiliti kontigen boleh dikenal pasti mewakili muhibah. Sebarang lebihan daripada kepentinganKumpulan dalam nilai saksama bersih aset, liabiliti dan liabiliti kontigen yang boleh dikenal pasti ke atas kospengambilalihan diiktiraf dengan serta-merta dalam penyata pendapatan.

Urusniaga antara ahli kumpulan, baki dan keuntungan tidak direalisasi dihapus kira atas penyatuan danpenyata kewangan disatukan menunjukkan urusniaga dengan pihak luar sahaja. Kerugian tidak direalisasidihapus kira atas penyatuan melainkan kos tidak boleh diperolehi semula. Polisi-polisi perakaunan seragamditerima pakai dalam penyata kewangan disatukan bagi urus niaga yang serupa dan peristiwa-peristiwadalam keadaan-keadaan yang serupa.

Kepentingan minoriti mewakili bahagian keuntungan atau kerugian dan aset bersih dalam subsidiari-subsidiaritidak dipegang oleh Kumpulan dan dibentangkan secara berasingan dalam penyata pendapatan dan dalamekuiti dalam kunci kira-kira disatukan, berasingan daripada ekuiti pemegang-pemegang saham syarikat induk.Ia diukur pada bahagian minoriti daripada nilai saksama aset dan liabiliti boleh dikenal pasti subsidiari-subsidiari pada tarikh pengambilalihan dan bahagian minoriti daripada perubahan dalam ekuiti subsidiari-subsidiari sejak daripada itu.

(ii) Syarikat-syarikat Bersekutu

Syarikat-syarikat bersekutu adalah entiti dalam mana Kumpulan melaksanakan pengaruh penting tetapi bukankawalan. Pengaruh penting adalah kuasa untuk mengambil bahagian dalam keputusan-keputusan polisikewangan dan kendalian syarikat menerima pelaburan tetapi bukan mengawal atau mengawal secarabersama polisi-polisi tersebut.

Pelaburan dalam syarikat-syarikat bersekutu diakaunkan dalam penyata kewangan disatukan denganmenggunakan kaedah ekuiti perakaunan. Di bawah kaedah ekuiti perakaunan, pelaburan dalam syarikatbersekutu dinyatakan dalam kunci kira-kira disatukan pada kos diselaraskan bagi perubahan selepaspengambilalihan dalam bahagian Kumpulan daripada aset-aset bersih syarikat bersekutu. Bahagiankeuntungan atau kerugian Kumpulan daripada syarikat bersekutu dalam tahun kewangan dimasukkan dalampenyata pendapatan disatukan. Di mana terdapat perubahan yang diiktiraf secara langsung dalam ekuitisyarikat bersekutu, Kumpulan mengiktiraf bahagiannya dalam perubahan sedemikian.



2. ASAS-ASAS PENYEDIAAN (SAMB.)

(b) Asas-asas Penyatuan (samb.)

(ii) Syarikat-syarikat Bersekutu (samb.)

Keuntungan tidak direalisasikan ke atas urusniaga di antara Kumpulan dan syarikat-syarikat bersekutudihapuskira setakat kepentingan Kumpulan dalam syarikat-syarikat bersekutu. Kerugian tidak direalisasidihapuskira melainkan kos tidak dapat diperolehi.

Selepas penggunaan kaedah ekuiti, Kumpulan menentukan sama ada ia adalah wajar untuk mengiktirafmana-mana kerugian kemerosotan tambahan berhubung dengan pelaburan bersih Kumpulan dalam syarikatbersekutu. Syarikat bersekutu diekuiti akaunkan dari tarikh Kumpulan mendapat pengaruh penting sehinggatarikh Kumpulan berhenti daripada mempunyai pengaruh penting ke atas syarikat bersekutu, atau apabila iadikelaskan sebagai dipegang untuk jualan.

Muhibah berkaitan dengan syarikat bersekutu dimasukkan dalam amaun dibawa pelaburan dan tidakdilunaskan. Sebarang lebihan dalam bahagian Kumpulan daripada nilai saksama bersih aset, liabiliti danliabiliti kontigen boleh dikenal pasti syarikat bersekutu ke atas kos pelaburan dikecualikan daripada amaundibawa pelaburan dan sebaliknya dimasukkan dalam penentuan bahagian Kumpulan daripada keuntunganatau kerugian syarikat bersekutu dalam tempoh dalam mana pelaburan diperolehi.

Apabila bahagian kerugian Kumpulan dalam syarikat bersekutu menyamai atau melebihi kepentingannyadalam syarikat bersekutu, termasuk sebarang faedah jangka panjang yang, pada dasarnya, membentuksebahagian daripada pelaburan bersih Kumpulan dalam syarikat bersekutu, Kumpulan tidak mengiktirafkerugian selanjutnya, melainkan ia telah menanggung obligasi-obligasi atau membuat bayaran bagi pihaksyarikat bersekutu.

Penyata kewangan teraudit atau penyata kewangan pengurusan yang paling terkini syarikat bersekutudigunakan oleh Kumpulan dalam menggunakan kaedah ekuiti. Polisi-polisi perakaunan seragam diterimapakai bagi urus niaga dan peristiwa serupa dalam keadaan-keadaan yang sama.

(iii) Entiti Kawalan Bersama

Entiti kawalan bersama adalah entiti dalam mana Kumpulan mempunyai kawalan bersama ke atas kegiatanekonomi yang diwujudkan di bawah pengaturan perjanjian.

Kepentingan dalam entiti kawalan bersama diakaun ekuitikan dalam penyata kewangan disatukan denganmenggunakan kaedah ekuiti perakaunan dinyatakan dalam Nota 2(b)(ii).

3. PERUBAHAN-PERUBAHAN DALAM POLISI-POLISI PERAKAUNAN

MASB telah mengeluarkan beberapa daripada FRS baru dan disemak dan Tafsiran-tafsiran yang berkuat kuasa bagitempoh-tempoh kewangan bermula pada atau selepas 1 Januari 2006. Kecuali bagi perubahan-perubahan dalampolisi-polisi perakaunan dan kesan-kesannya sebagaimana dibincangkan di bawah, FRS baru dan disemak dan Tafsiran-tafsiran tidak mempunyai sebarang kesan ketara yang lain ke atas penyata kewangan Kumpulan dan Syarikat.

(a) FRS 101: Pembentangan Penyata Kewangan

Penerimaan pakai FRS 101 disemak melibatkan pembentangan kepentingan minoriti, bahagian selepas ditolakkeputusan cukai syarikat-syarikat bersekutu dan lain-lain pendedahan. Dalam kunci kira-kira disatukan,kepentingan minoriti dibentangkan sekarang dalam jumlah ekuiti. Dalam penyata pendapatan disatukan,kepentingan minoriti dibentangkan sebagai peruntukan daripada jumlah keuntungan atau kerugian bersih bagitahun. Keperluan yang sama juga terpakai kepada penyata perubahan dalam ekuiti. FRS 101 juga memerlukanpendedahan, pada muka penyata perubahan dalam ekuiti, jumlah pendapatan dan perbelanjaan diiktiraf bagitahun, menunjukkan secara berasingan jumlah yang boleh dikaitkan kepada pemegang-pemegang ekuiti syarikatinduk dan kepada kepentingan minoriti.

Pembentangan tahun kewangan semasa bagi penyata kewangan Kumpulan adalah berdasarkan syarat-syaratdisemak FRS 101, dengan angka-angka bandingan dinyatakan semula untuk menyamai dengan pembentangantahun semasa.



3. PERUBAHAN-PERUBAHAN DALAM POLISI-POLISI PERAKAUNAN (SAMB.)

(b) FRS 140: Hartanah Pelaburan

Sebelum 1 Januari 2006, hartanah pelaburan dikelaskan sebagai hartanah, loji dan peralatan dan dinyatakan padakos tolak susutnilai terkumpul dan kerugian kemerosotan. Penerimaan pakai FRS 140 Hartanah Pelaburan telahmenyebabkan perubahan dalam polisi perakaunan berkaitan dengan pengkelasan hartanah pelaburan. Hartanah-hartanah pelaburan dinyatakan pada kos tolak susutnilai terkumpul dan kerugian kemerosotan.

Pengkelasan semula hartanah pelaburan telah diakaunkan secara retrospektif dan angka-angka bandingan tertentutelah dinyatakan semula. Tidak ada kesan ke atas penyata pendapatan disatukan dan penyata pendapatanSyarikat bagi tahun berakhir 31 Disember 2006.

(c) FRS 3: Kombinasi Perniagaan

Sebelum 1 Januari 2006, muhibah negatif akan dinyatakan pada kos. Di bawah FRS 3, sebarang lebihan faedahKumpulan dalam nilai saksama bersih aset, liabiliti dan liabiliti boleh dikenal pasti syarikat diambilalih ke atas kospengambilalihan, selepas penilaian semula, lani diiktiraf dengan serta-merta dalam keuntungan atau kerugian.Selaras dengan peruntukan-peruntukan transisi FRS 3, muhibah negatif pada 1 Januari 2006 sebanyakRM236,000 tidak lagi diiktiraf dengan peningkatan sepadan kepada baki pembukaan daripada perolehan tertahan.

Disebabkan oleh polisi perakaunan disemak telah digunakan secara prospektif, perubahan tidak mempunyai kesanke atas jumlah yang dilaporkan bagi 2005 atau tempoh-tempoh sebelumnya. Tidak ada kesan ke atas penyatapendapatan disatukan bagi tahun berakhir 31 Disember 2006 dan penyata kewangan Syarikat.

4. PERUBAHAN-PERUBAHAN DALAM ANGGARAN-ANGGARAN

FRS 116 disemak: Hartanah, Loji dan Peralatan memerlukan semakan nilai baki dan hayat berguna selebihnya perkaraatau hartanah, loji dan peralatan sekurang-kurangnya pada setiap tahun kewangan. Semakan telah diakaunkan secaraprospektif sebagai perubahan dalam anggaran-anggaran perakaunan dan akibat daripada itu, caj susutnilai Kumpulandan Syarikat bagi tahun kewangan semasa telah dikurangkan sebanyak RM1,730,700.

5. PENGHAKIMAN DAN ANGGARAN PERAKAUNAN PENTING

Para Pengarah diperlukan untuk membuat anggaran, penghakiman dan andaian tertentu yang mereka percaya adalahmunasabah berdasarkan maklumat yang tersedia. Anggaran dan andaian ini yang melibatkan jumlah aset dan liabilitidilaporkan pada tarikh penyata kewangan dan jumlah pendapatan dan perbelanjaan yang dilaporkan dalam tempoh-tempoh dibentangkan. Atas dasar berterusan, Kumpulan menilai anggaran-anggarannya dengan menggunakan sejarahpengalaman, perundingan dengan pakar-pakar dan lain-lain kaedah yang dianggap munasabah dalam keadaan-keadaankhusus. Keputusan-keputusan sebenar mungkin berbeza dengan ketaranya daripada anggaran-anggaran, kesan yangmana diiktiraf dalam tempoh dalam mana fakta-fakta yang membawa kepada semakan menjadi diketahui.

Andaian-andaian penting berhubung dengan sumber-sumber penting masa hadapan dan sumber-sumber penting yanglain pada tarikh kunci kira-kira, yang mempunyai risiko ketara menyebabkan pelarasan material kepada amaun dibawaaset dan liabiliti dalam tahun kewangan berikutnya dibincangkan seperti berikut:

(a) Jumlah Dagangan dan Lain-lain Jumlah Boleh Diterima

Kumpulan dan Syarikat menilai kebolehan dikutip jumlah dagangan dan lain-lain jumlah boleh diterima danmerekodkan peruntukan-peruntukan bagi hutang ragu berdasarkan sejarah corak kutipan. Peruntukan-peruntukanini adalah berdasarkan, antara lainnya, perbandingan usia relatif akaun dan pertimbangan sejarah penghapusan kirasebenar. Tahap penghutang sebenar yang dikutip mungkin berbeza daripada tahap perolehan semula yangdianggarkan, yang mungkin memberi kesan ke atas keputusan-keputusan kendalian secara positif atau negatif.Pada 31 Disember 2006, jumlah dagangan dan lain-lain jumlah boleh diterima Kumpulan dan Syarikat masing-masing adalah RM148,976,000 (2005: RM162,251,000) dan RM347,472,000 (2005: RM331,728,000), danperuntukan bagi hutang ragu yang dibuat berhubung dengan jumlah dagangan dan lain-lain jumlah boleh diterimamasing-masing adalah RM19,917,000 (2005: RM10,110,000) dan RM78,031,000 (2005: RM53,830,000).



5. PENGHAKIMAN DAN ANGGARAN PERAKAUNAN PENTING (SAMB.)

(b) Pengkelasan antara hartanah pelaburan dan hartanah, loji dan peralatan

Kumpulan dan Syarikat telah mewujudkan kriteria tertentu berdasarkan FRS 140 dalam membuat penghakimansama ada hartanah layak sebagai hartanah pelaburan. Hartanah pelaburan adalah hartanah yang dipegang untukmendapat sewa atau bagi peningkatan modal atau kedua-dua.

(c) Susutnilai loji dan jentera

Kos loji dan jentera disusutnilaikan atas dasar garisan lurus ke atas hayat berguna aset. Pengurusanmenganggarkan hayat berguna loji dan jentera ini sebagai 10 hingga 20 tahun.

Perubahan dalam tahap penggunaan dijangka mungkin memberi kesan ke atas hayat ekonomi berguna dan nilaibaki aset-aset ini, dengan yang demikian caj susutnilai masa hadapan boleh disemak.

Perbezaan sebanyak 20% dalam purata hayat berguna aset-aset ini daripada anggaran pengurusan akanmengakibatkan varians sebanyak lebih kurang 3% dalam kerugian Kumpulan bagi tahun.

(d) Pembangunan hartanah

Kumpulan mengiktiraf pendapatan dan perbelanjaan pembangunan hartanah dalam penyata pendapatan denganmenggunakan kaedah peringkat siap. Peringkat siap ditentukan melalui perkadaran yang kos pembangunanhartanah tersebut ditanggung kerja dilaksanakan sehingga kini tanggung berbanding kos pembangunan hartanahdianggarkan.

Penghakiman penting diperlukan untuk menentukan peringkat siap, tahap kos pembangunan hartanah yangditanggung, anggaran jumlah pendapatan dan kos pembangunan hartanah, serta kebolehan dikutip bagi projek-projek pembangunan. Dalam membuat penghakiman, Kumpulan menilai berdasarkan pengalaman yang lepas dandengan bergantung pada kerja pakar-pakar.

Peruntukan bagi ganti rugi jumlah tertentu disediakan sehingga tarikh siap projek pembangunan dianggarkan.Kelewatan dalam tarikh siap projek-projek pembangunan akan menyebabkan kerugian jumlah tertentu selanjutnyasebanyak lebih kurang RM600,000 setiap bulan.

(e) Kontrak pembinaan

Kumpulan mengiktiraf pendapatan dan perbelanjaan dalam penyata pendapatan dengan menggunakan kaedahperingkat siap. Peringkat siap ditentukan melalui perkadaran kos kontrak yang ditanggung bagi kerja dilaksanakansehingga kini berbanding anggaran kos kontrak secara keseluruhan.

Penghakiman penting diperlukan untuk menentukan peringkat siap, tahap kos pembinaan ditanggung, anggaranjumlah pendapatan dan kos pembinaan, serta juga kebolehan dikutip projek-projek pembinaan. Dalam membuatpenghakiman, Kumpulan menilai berdasarkan pengalaman yang lepas dan dengan bergantung pada kerja pakar-pakar.

(f) Litigasi material

Kumpulan dan Syarikat menentukan sama ada obligasi semasa berhubung dengan litigasi material wujud padatarikh kunci kira-kira dengan mengambil kira semua bukti yang ada, termasuk, pendapat peguam cara. Buktiyang dipertimbangkan termasuk sebarang bukti tambahan yang boleh diperolehi melalui peristiwa-peristiwaselepas tarikh kunci kira-kira. Berdasarkan bukti sedemikian, Kumpulan dan Syarikat menilai sekiranya peruntukanperlu untuk diiktiraf dalam penyata kewangan. Butir-butir selanjutnya mengenai litigasi material melibatkanKumpulan dan Syarikat diberikan dalam Nota 40.



5. PENGHAKIMAN DAN ANGGARAN PERAKAUNAN PENTING (SAMB.)

(g) Kemerosotan Aset

Kumpulan menilai pada setiap tarikh laporan sama ada terdapat petunjuk bahawa aset mungkin merosot.Sekiranya mana-mana petunjuk sedemikian wujud, atau apabila pengujian kemerosotan tahunan bagi asetdiperlukan, Kumpulan membuat anggaran jumlah boleh diperolehi semula aset. Jumlah boleh diperolehi semulaaset adalah unit penghasilan tunai aset tolak kos untuk menjual dan nilai dalam penggunaannya yang mana lebihtinggi ditentukan bagi aset individu, melainkan aset tidak menghasilkan aliran tunai masuk yang sebahagianbesarnya bebas daripada lain-lain aset atau kumpulan aset. Di mana jumlah aset dibawa melebihi jumlah bolehdiperolehi semulanya, aset dianggap dirosotkan dan dikurangkan nilai kepada jumlah boleh diperolehi semulanya.

6. POLISI-POLISI PERAKAUNAN PENTING

(a) Hartanah, Loji dan Peralatan dan Susutnilai

Hartanah, loji dan peralatan pada asalnya direkod pada kos. Kos berikutnya dimasukkan dalam jumlah asetdibawa atau diiktiraf sebagai aset berasingan, sebagaimana sesuai, hanya apabila ia berkemungkinan bahawamanfaat ekonomi masa hadapan berkaitan dengan perkara akan mengalir kepada Kumpulan dan kos perkaraboleh diukur dengan betul. Amaun dibawa bahagian digantikan tidak lagi diiktiraf. Semua pembaikian danpenyelenggaraan yang lain dicaj kepada penyata pendapatan dalam tempoh kewangan dalam mana ia ditanggung.

Selepas pengiktirafan, hartanah, loji dan peralatan dinyatakan pada kos tolak susutnilai terkumpul dan kerugiankemerosotan.

Tanah pegangan kekal tidak disusutnilaikan. Tanah pegangan pajak disusutnilaikan sepanjang tempoh 50 tahun.

Susutnilai lain-lain hartanah, loji dan peralatan diperuntukkan atas dasar garisan lurus untuk menghapuskira kossetiap aset kepada nilai bakinya sepanjang anggaran hayat berguna, pada kadar tahunan berikut:

Bangunan 2%Kenderaan bermotor 20%Loji dan jentera 5% – 10%Lain-lain 10% – 20%

Kaedah susutnilai, nilai baki, hayat berguna dan susutnilai hartanah, loji & peralatan disemak, dan diselaraskansekiranya sesuai, pada setiap akhir tahun kewangan.

Perkara hartanah, loji dan peralatan tidak lagi diiktiraf selepas pelupusan atau apabila tidak ada manfaat ekonomimasa hadapan dijangka daripada penggunaan atau pelupusannya. Sebarang keuntungan atau kerugian timbul ataspenyahiktirafan aset (dikira sebagai perbezaan di antara perolehan pelupusan bersih dan jumlah aset dibawadimasukkan dalam penyata pendapatan dalam tahun aset tidak lagi diiktiraf.

(b) Hartanah Pelaburan

Hartanah pelaburan adalah hartanah-hartanah yang dipegang sama ada untuk memperolehi pendapatan sewa ataubagi peningkatan modal atau kedua-duanya. Hartanah-hartanah sedemikian dikira pada asalnya pada kos,termasuk kos urus niaga. Selepas pengiktirafan, hartanah pelaburan dinyatakan pada kos tolak susutnilaiterkumpul dan kerugian kemerosotan.

Susutnilai bangunan dikelaskan sebagai hartanah pelaburan diperuntukkan atas dasar garisan lurus untuk menghapuskira kos setiap aset kepada nilai bakinya sepanjang anggaran hayat berguna, pada kadar tahunan sebanyak 2%.

Kaedah nilai baki, hayat berguna dan susutnilai hartanah pelaburan disemak, dan diselaraskan sekiranya sesuai,pada setiap akhir tahun kewangan.



6. POLISI PERAKAUNAN PENTING (SAMB.)

(b) Hartanah Pelaburan (samb.)

Hartanah pelaburan tidak lagi diiktiraf apabila sama ada ia telah dilupuskan atau apabila hartanah pelaburan tidaklagi digunakan secara kekal dan tidak ada manfaat ekonomi masa hadapan dijangka daripada pelupusannya.Sebarang keuntungan atau kerugian timbul atas persaraan atau pelupusan hartanah pelaburan diiktiraf dalampenyata pendapatan dalam tahun persaraan atau pelupusan.

(c) Pelaburan dalam Subsidiari-subsidiari, Syarikat-syarikat Bersekutu, Entiti Kawalan Bersama

Pelaburan Syarikat dalam subsidiari-subsidiari, syarikat-syarikat bersekutu dan entiti kawalan bersama telahdinyatakan pada kos tolak kerugian kemerosotan.

Apabila pelaburan sedemikian dijual, perbezaan di antara perolehan penjualan bersih dan jumlah penyimpananakan diiktiraf dalam penyata pendapatan.

(d) Kemerosotan Aset

Kumpulan menilai pada setiap tarikh dilaporkan sama ada terdapat petunjuk bahawa aset mungkin merosot.Sekiranya sebarang petunjuk sedemikian wujud, atau apabila pengujian kemerosotan tahunan bagi asetdiperlukan, Kumpulan membuat anggaran jumlah boleh diperolehi semula aset. Jumlah boleh diperolehi semulaaset adalah unit penghasilan tunai aset tolak kos untuk menjual dan nilai dalam penggunaannya yang mana lebihtinggi ditentukan bagi aset individu, melainkan aset tidak menghasilkan aliran tunai masuk yang sebahagianbesarnya bebas daripada lain-lain aset atau kumpulan aset. Di mana jumlah aset dibawa melebihi jumlah bolehdiperolehi semulanya, aset dianggap dirosotkan dan dikurangkan nilai kepada jumlah boleh diperolehi semulanya.Dalam menilai nilai dalam penggunaan, anggaran aliran tunai masa hadapan didiskaunkan kepada nilai semasanyadengan menggunakan kadar diskaun yang sesuai yang menunjukkan penilaian pasaran semasa daripada nilaimasa wang dan risiko-risiko khusus kepada aset. Dalam menentukan nilai saksama tolak kos untuk menjual,model penilaian sewajarnya digunakan. Pengiraan ini akan dibenarkan melalui penilaian pengganda atau lain-lainpetunjuk nilai saksama yang ada.

Kerugian kemerosotan diiktiraf dalam penyata pendapatan dalam kategori-kategori perbelanjaan tersebut yangseimbang dengan fungsi aset dirosotkan.

Penilaian dibuat pada setiap tarikh dilaporkan mengenai sama ada terdapat sebarang petunjuk bahawa kerugiankemerosotan diiktiraf sebelum ini mungkin tidak lagi wujud atau mungkin telah merosot. Sekiranya petunjuksedemikian wujud, Kumpulan membuat anggaran jumlah boleh diperolehi semula. Kerugian kemerosotan sebelumini diterbalikkan hanya sekiranya terdapat perubahan dalam anggaran-anggaran digunakan untuk menentukanjumlah boleh diperolehi semula aset sejak kerugian kemerosotan terakhir diiktiraf. Sekiranya demikian jumlahaset dibawa ditambah kepada jumlah boleh diperolehi semulanya. Jumlah yang ditambah tersebut tidak bolehmelebihi jumlah dibawa yang mungkin telah ditentukan, tolak susutnilai, sekiranya tidak ada kerugiankemerosotan diiktiraf bagi aset dalam tahun-tahun terdahulu. Keterbalikan sedemikian diiktiraf dalam penyatapendapatan.

(e) Tanah dipegang untuk Pembangunan Hartanah dan Kos Pembangunan Hartanah

(i) Tanah dipegang untuk pembangunan hartanah

Tanah dipegang untuk pembangunan hartanah terdiri daripada tanah di mana tidak ada kegiatanpembangunan telah dijalankan atau di mana kegiatan pembangunan tidak dijangka akan disiapkan dalammasa kitaran kendalian biasa. Tanah tersebut dikelaskan dalam aset bukan semasa dan dinyatakan pada kostolak mana-mana kerugian kemerosotan terkumpul.

Tanah dipegang untuk pembangunan hartanah dikelaskan semula sebagai kos pembangunan hartanah padaperingkat apabila kegiatan-kegiatan pembangunan telah bermula dan di mana boleh ditunjukkan bahawakegiatan-kegiatan pembangunan boleh disiapkan dalam kitaran kendalian biasa.




(e) Tanah dipegang untuk Pembangunan Hartanah dan Kos Pembangunan Hartanah (samb.)

(ii) Kos pembangunan hartanah

Kos pembangunan hartanah terdiri daripada semua kos yang boleh dikaitkan secara langsung dengankegiatan-kegiatan pembangunan atau yang boleh diperuntukkan atas dasar yang munasabah kepada kegiatan-kegiatan tersebut.

Apabila keputusan kewangan kegiatan pembangunan boleh dianggarkan secara boleh dipercayai, pendapatandan perbelanjaan pembangunan hartanah diiktiraf dalam penyata pendapatan dengan menggunakan kaedahperingkat penyiapan. Peringkat penyiapan ditentukan mengikut perkadaran kos pembangunan hartanahditanggung untuk kerja yang dilaksanakan setakat semasa berbanding anggaran jumlah kos pembangunanhartanah.

Apabila keputusan kewangan bagi kegiatan pembangunan tidak boleh dianggarkan secara yang bolehdipercayai, pendapatan pembangunan hartanah diiktiraf hanya setakat kos pembangunan hartanah ditanggungyang berkemungkinan boleh diperolehi semula, dan kos pembangunan hartanah ke atas hartanah yang dijualdiiktiraf sebagai perbelanjaan dalam tempoh di mana ia ditanggung.

Sebarang kerugian dijangka ke atas projek pembangunan diiktiraf sebagai perbelanjaan dengan serta merta.

Kos pembangunan hartanah yang tidak diiktiraf sebagai perbelanjaan akan diiktiraf sebagai aset, dan dinilaikanpada kos dan nilai boleh perolehi bersih yang mana lebih rendah .

Lebihan pendapatan diiktiraf dalam penyata pendapatan berbanding pengebilan kepada pembeli dikelaskansebagai pengebilan terakru dalam dagangan boleh diterima dan lebihan pengebilan kepada pembeliberbanding pendapatan yang diiktiraf dalam penyata pendapatan diiktiraf sebagai pengebilan berperingkatdalam pembayaran perdagangan.

(f) Kontrak Pembinaan

Di mana pendapatan daripada kontrak pembinaan boleh dianggarkan dengan pasti, pendapatan kontrak dan koskontrak diiktiraf masing-masing sebagai pendapatan dan perbelanjaan merujuk kepada peringkat penyiapankegiatan kontrak. Peringkat penyiapan diukur dengan merujuk kepada perkadaran kos kontrak yang ditanggunguntuk kerja yang dilaksanakan setakat semasa berbanding dengan jumlah kos kontrak yang dianggarkan.

Di mana pendapatan daripada kontrak pembinaan tidak boleh dianggarkan dengan pasti, pendapatan kontrakdiiktiraf sehingga ke tahap kos kontrak yang ditanggung dan boleh diperolehi semula. Kos kontrak akan diiktirafsebagai perbelanjaan dalam tempoh di mana ia telah ditanggung.

Apabila jumlah kos kontrak berkemungkinan akan melebihi jumlah pendapatan kontrak, anggaran kerugian akandiiktiraf sebagai perbelanjaan dengan serta merta.

Apabila jumlah kos yang ditanggung atas kontrak pembinaan campur keuntungan diiktiraf (tolak kerugian diiktiraf)melebihi bil-bil progres, bakinya akan ditunjukkan sebagai jumlah terhutang daripada pelanggan ke atas kontrak.Apabila bil-bil progres melebihi kos ditanggung campur keuntungan diiktiraf (tolak kerugian diiktiraf), bakiditunjukkan sebagai jumlah kena dibayar kepada pelanggan atas kontrak.

(g) Lain-lain Pelaburan

Lain-lain pelaburan dinyatakan pada kos tolak kerugian kemerosotan. Atas pelupusan pelaburan, perbezaan antaraperolehan pelupusan bersih dan jumlah dibawanya diiktiraf dalam penyata pendapatan.




(h) Inventori

Inventori yang mewakili bahan pembinaan dinyatakan pada kos (ditentukan atas dasar masuk dahulu, keluardahulu) dan nilai bersih yang boleh direalisasikan yang mana lebih rendah. Nilai bersih yang boleh direalisasikanmewakili anggaran harga jualan dalam pengurusan biasa tolak kos anggaran penyiapan dan kos yang perlu untukpenjualan.

(i) Jumlah Dagangan dan Lain-lain Jumlah Boleh Diterima

Jumlah dagangan dan lain-lain jumlah boleh diterima dinyata pada jangkaan nilai boleh direalisasi. Hutang lapukdihapuskira apabila dikenal pasti. Anggaran dibuat bagi hutang ragu atas kajian semula semua jumlah belumdijelaskan pada tarikh kunci kira-kira.

(j) Tunai dan Tunai Persamaan

Bagi tujuan penyata aliran tunai, tunai dan tunai persamaan termasuk tunai dalam tangan dan di bank dan depositpanggilan yang mempunyai risiko perubahan nilai yang tidak ketara, bersih daripada overdraf bank yang belumdijelaskan.

(k) Ekuiti dan Liabiliti Kewangan

Liabiliti kewangan dan ekuiti instrumen dan dikelaskan menurut bentuk perjanjian yang telah dimeterai. Instrumenekuiti adalah mana-mana kontrak yang menunjukkan faedah sisa dalam aset Kumpulan selepas pengurangansemua liabilitinya.

Faedah, dividen dan keuntungan serta kerugian berhubung dengan liabiliti kewangan dilaporkan sebagaiperbelanjaan atau pendapatan. Pengagihan kepada pemegang instrumen ekuiti diiktiraf secara langsung dalamekuiti.

(i) Instrumen Ekuiti

Saham-saham biasa dikelaskan sebagai ekuiti. Dividen ke atas saham-saham biasa diiktiraf dalam ekuitidalam tempoh di mana ia diisytiharkan.

Kos urusniaga bagi urusniaga ekuiti dinyatakan sebagai penolakan daripada ekuiti, bersih daripada cukai. Kosurusniaga ekuiti hanya terdiri daripada kos luaran yang meningkat dan dikaitkan secara langsung kepadaurusniaga ekuiti manakala boleh dielakkan disebaliknya.

(ii) Pinjaman Menanggung Faedah dan Kos Pinjaman

Pinjaman menanggung faedah pada asalnya diiktiraf pada nilai saksama balasan diterima tolak kos urus niagaboleh dikaitkan secara langsung.

Selepas pengiktirafan awal, pinjaman menanggung faedah kemudiannya diukur pada kos dilunaskan denganmenggunakan kaedah faedah berkesan

Kos pembiayaan, termasuk premium perlu dibayar berhubung penyelesaian atau penebusan dan kos terbitanlangsung, diambilkira berasaskan akruan kepada penyata pendapatan menggunakan kaedah faedah berkesandan ditambah kepada jumlah bawa instrumen berkenaan ke tahap ia tidak dijelaskan dalam tempoh iatimbul.

Kos pinjaman secara langsung boleh dikaitkan kepada pengambilalihan, pembinaan atau pengeluaran aset-aset yang layak, yang memerlukan tempoh masa yang lama untuk kegunaan atau jualan yang dihasratkan,dipermodalkan sebagai sebahagian daripada kos aset tersebut, sehingga masa tertentu apabila sebahagianbesar aset sedia untuk kegunaan dan jualan seperti yang dirancangkan. Jumlah kos pinjaman yang layakbagi permodalan ditentukan dengan menggunakan kadar permodalan yang merupakan purata wajaran kospembiayaan terpakai kepada pinjaman Kumpulan yang belum dijelas dalam tahun, selain daripada pinjamanyang dibuat secara khusus untuk tujuan mendapatkan aset layak. Bagi pinjaman yang dibuat khusus untuktujuan mendapatkan aset yang layak, jumlah kos pembiayaan yang layak bagi permodalan adalah kospembiayaan sebenar yang ditanggung tolak sebarang pendapatan daripada pelaburan sementara ataspinjaman tersebut dalam tempoh yang sama.




(k) Ekuiti dan Liabiliti Kewangan (samb.)

(iii) Jumlah Dagangan dan Lain-lain Jumlah Perlu Dibayar

Jumlah dagangan dan lain-lain jumlah perlu dibayar dinyatakan pada kos iaitu nilai saksama balasan yangakan dibayar pada masa hadapan bagi barangan dan perkhidmatan diterima.

(l) Cukai Pendapatan

Cukai pendapatan ke atas keuntungan atau kerugian bagi tahun terdiri daripada cukai semasa dan cukai tertunda.Cukai semasa adalah jumlah dijangka daripada jumlah cukai pendapatan perlu dibayar berhubung dengankeuntungan boleh dicukai bagi tahun dan dikira dengan menggunakan kadar cukai yang telah digubal pada tarikhkunci kira-kira.

Cukai tertunda diperuntukkan, dengan menggunakan kaedah liabiliti, atas perbezaan semasa pada tarikh kuncikira-kira di antara asas cukai aset dan liabiliti dan jumlah penyimpanan aset dan liabiliti dalam penyata kewangan.Pada dasarnya, liabiliti cukai tertunda diiktiraf bagi semua perbezaan sementara boleh dicukai dan aset cukaitertunda akan diiktiraf bagi semua perbezaan sementara boleh ditolak, kerugian cukai tidak diguna dan kreditcukai tidak diguna sehingga tahap yang ia berkemungkinan bahawa keuntungan boleh dicukai akan tersediaterhadap yang mana perbezaan sementara boleh ditolak, kerugian cukai tidak diguna dan kredit cukai tidak digunaboleh digunakan. Cukai tertunda tidak diiktiraf sekiranya perbezaan sementara timbul daripada muhibah ataumuhibah negatif atau daripada pengitkrafan awal aset atau liabiliti dalam urusniaga yang bukan merupakankombinasi perniagaan dan pada masa urusniaga, tidak menjejaskan keuntungan perakaunan mahupun keuntunganboleh dicukai.

Cukai tertunda dikira pada kadar cukai yang dijangka akan terpakai dalam tempoh di mana aset direalisasikan atauliabiliti diselesaikan, berdasarkan kadar cukai yang telah digubal atau digubal sebahagian besarnya pada tarikhkunci kira-kira. Cukai tertunda diiktiraf dalam penyata pendapatan. Cukai tertunda diiktiraf dalam penyatapendapatan, kecuali apabila ia timbul daripada urusniaga yang diiktiraf secara langsung dalam ekuiti, dalam halmana cukai tertunda juga diiktiraf secara langsung dalam ekuiti, atau apabila ia timbul daripada kombinasiperniagaan yang merupakan pengambilalihan, dalam hal mana cukai tertunda dimasukkan dalam muhibah terhasilatau jumlah daripada mana-mana lebihan kepentingan syarikat pengambil alih dalam nilai saksama bersih asetboleh dikenal pasti, liabiliti dan liabiliti kontigen yang diperolehi syarikat diambil alih berbanding kos kombinasi.

(m) Peruntukan bagi Liabiliti

Peruntukan bagi liabiliti diiktirafkan apabila Kumpulan mempunyai tanggungan semasa akibat daripada peristiwalepas dan berkemungkinan bahawa sumber Kumpulan merangkumi faedah-faedah ekonomi yang akan mengalirkeluar untuk menunaikan tanggungan dan anggaran jumlahnya dapat ditentukan. Peruntukan-peruntukan dikajipada setiap tarikh kunci kira-kira dan diselaraskan untuk menggambarkan anggaran terbaik semasa. Di manakesan nilai masa wang adalah material, peruntukan didiskaunkan mengguna kadar pra-cukai semasa yangmenggambarkan, di mana sesuai, risiko khusus kepada liabiliti. Di mana pendiskaunan diguna, peningkatandalam peruntukan disebabkan peredaran masa diiktiraf sebagai kos kewangan.

(n) Pajakan

Pajakan diiktiraf sebagai pajakan pembiayaan sekiranya ia memindahkan semua insiden risiko dan ganjaranpemilikan kepada Kumpulan. Semua pajakan lain dikenali sebagai pajakan pengendalian.

(i) Pajakan Pembiayaan

Aset dibeli melalui cara sewa beli atau pajakan pembiayaan dinyatakan pada jumlah bersamaan dengan nilaisaksama dan nilai semasa bayaran pajakan minimum pada permulaan pajakan yang mana lebih rendah, tolaksusutnilai dan kerugian kemerosotan terkumpul. Liabiliti sepadan dimasukkan dalam kunci kira-kira sebagaipinjaman. Dalam mengira nilai semasa bayaran pajakan minimum, faktor diskaun digunakan adalah kadarfaedah tersirat dalam pajakan, apabila ia adalah munasabah untuk ditentukan; jikalau tidak, kadar pinjamanmeningkat Syarikat akan digunakan.




(n) Pajakan (samb.)

(i) Pajakan Pembiayaan (samb.)

Bayaran pajakan diagihkan di antara kos pembiayaan dan pengurangan liabiliti yang belum dijelaskan. Kospembiayaan, yang mewakili perbezaan di antara jumlah komitmen pajakan dan nilai saksama aset dibeli,diiktiraf sebagai perbelanjaan dalam penyata pendapatan atas tempoh pajakan berkaitan untuk menghasilkankadar berkala tetap caj ke atas baki selebihnya obligasi-obligasi bagi setiap tempoh perakaunan.

Polisi susutnilai bagi aset pajakan adalah selaras dengan polisi susutnilai bagi hartanah, loji dan peralatanyang boleh disusutnilai sebagaimana dijelaskan dalam Nota 6(a).

(ii) Pajakan Kendalian

Bayaran pajakan kendalian diiktiraf sebagai perbelanjaan dalam penyata pendapatan atas dasar garisan lurussepanjang tempoh pajakan berkaitan.

(o) Faedah Kakitangan

(i) Faedah jangka pendek

Upah, gaji, bonus dan caruman keselamatan sosial diiktiraf sebagai perbelanjaan dalam tahun di manaperkhidmatan berkaitan diberikan oleh kakitangan Kumpulan. Ketidakhadiran diberi pampasan jangka pendekseperti cuti tahunan berbayar diiktiraf apabila perkhidmatan diberikan oleh kakitangan yang meningkatkan hakmereka kepada ketidakhadiran diberi pampasan masa hadapan, dan ketidakhadiran diberi pampasan. Jangkapendek tidak terkumpul seperti cuti sakit diiktiraf apabila ketidakhadiran berlaku.

(ii) Pelan Caruman Dinyatakan

Pelan caruman dinyatakan adalah pelan manfaat selepas pekerjaan di bawah mana Kumpulan membayarcaruman tetap kepada entiti berasingan atau dana-dana dan tidak akan mempunyai obligasi undang-undangatau konstruktif untuk membayar caruman selanjutnya sekiranya mana-mana dana tidak memegang aset-asetyang mencukupi untuk membayar semua manfaat kakitangan berkaitan dengan perkhidmatan kakitangandalam tahun kewangan semasa dan sebelumnya.

Sebagaimana dikehendaki oleh undang-undang, syarikat-syarikat di Malaysia membuat caruman kepadaKWSP. Caruman tersebut diiktiraf sebagai perbelanjaan dalam penyata pendapatan sebagaimana yangditanggung.

(p) Pengiktirafan Pendapatan

Pendapatan diiktiraf apabila ia berkemungkinan bahawa faedah ekonomi dikaitkan dengan urusniaga akan mengalirkepada perusahaan dan jumlah pendapatan boleh dinilai dengan agak pasti.

(i) Kontrak Pembinaan

Pendapatan daripada kontrak pembinaan dinyatakan mengikut kaedah peringkat penyiapan sebagaimanaditerangkan dalam Nota 6(f).

(ii) Jualan Hartanah

Pendapatan daripada jualan hartanah dinyatakan mengikut kaedah peratusan penyiapan sebagaimanadijelaskan dalam Nota 6(e)(ii).




(p) Pengiktirafan Pendapatan (samb.)

(iii) Jualan Barang Siap

Pendapatan berkaitan dengan jualan barangan siap diiktiraf bersih daripada cukai jualan dan diskaun bilapemindahan risiko dan ganjarannya berlaku.

(iv) Sewa Loji dan Jentera

Pendapatan daripada sewa loji dan jentera diiktiraf atas dasar akruan.

(q) Mata Wang Asing

(i) Mata Wang Kefungsian dan Pembentangan

Penyata kewangan individu bagi setiap entiti dalam Kumpulan diukur mengguna mata wang persekitaranekonomi utama semasa dalam mana entiti beroperasi (“mata wang kefungsian”). Penyata kewangandisatukan dikemukakan dalam RM, yang juga merupakan mata wang kefungsian Syarikat.

(ii) Urusniaga Mata Wang Asing

Dalam menyediakan penyata kewangan entiti individu, urusniaga dalam mata wang selain daripada matawang kefungsian entiti (mata wang asing) direkod dalam mata wang kefungsian mengguna kadar pertukaranlazim pada tarikh urusniaga. Pada setiap tarikh kunci kira-kira, perkara-perkara monetari didenominasikandalam mata wang asing diterjemahkan pada kadar lazim pada tarikh kunci kira-kira. Perkara-perkara bukanmonetari yang dicatat pada nilai saksama didenominasikan dalam mata wang asing diterjemahkan pada kadarlazim pada tarikh apabila nilai saksama ditentukan. Perkara-perkara bukan monetari yang diukur mengikut kossejarah dalam mata wang asing tidak diterjemahkan.

Perbezaan pertukaran timbul atas penyelesaian perkara-perkara monetari, dan atas terjemahan perkara-perkara monetari, dimasukkan dalam untung rugi bagi tempoh kecuali bagi perbezaan pertukaran yang timbulke atas perkara-perkara monetari yang membentuk sebahagian daripada pelaburan bersih Kumpulan dalamoperasi asing. Perbezaan pertukaran timbul atas perkara-perkara monetari yang membentuk sebahagiandaripada pelaburan bersih Kumpulan dalam operasi asing, di mana perkara monetari didenominasikan samaada dalam mata wang kefungsian entiti yang melapor atau operasi asing, pada awalnya dibawa secaralangsung kepada rizab terjemahan mata wang asing dalam ekuiti sehingga pelupusan operasi asing, padamasa mana ianya diiktiraf dalam untung rugi.

Perbezaan pertukaran timbul ke atas perkara-perkara monetari yang membentuk sebahagian daripadapelaburan bersih kumpulan dalam operasi asing, di mana perkara monetari didenominasikan dalam matawang selain daripada mata wang kefungsian sama ada entiti melapor atau operasi asing, diiktiraf dalamuntung rugi bagi tempoh. Perbezaan pertukaran timbul ke atas perkara-perkara monetari yang membentuksebahagian daripada pelaburan bersih Syarikat dalam operasi asing, tanpa mengambil kira mata wang perkaramonetari, diiktiraf dalam untung rugi dalam penyata kewangan Syarikat atau penyata kewangan individuoperasi asing, sebagaimana sesuai.

Perbezaan pertukaran timbul atas terjemahan perkara-perkara bukan monetari dinyatakan pada nilai saksamadimasukkan dalam untung atau rugi bagi tempoh kecuali bagi perbezaan yang timbul atas terjemahanperkara-perkara bukan monetari berhubung dengan yang mana keuntungan dan kerugian diiktiraf secaralangsung dalam ekuiti. Perbezaan pertukaran timbul daripada perkara-perkara bukan monetari sedemikianjuga diiktiraf secara langsung dalam ekuiti.




(q) Mata Wang Asing (samb.)

(ii) Urusniaga Mata Wang Asing (samb.)

Kadar pertukaran utama diguna bagi setiap unit mata wang asing yang berkuat kuasa pada tarikh kunci kira-kira adalah seperti berikut:

2006 2005RM RM

100 Rupee Indian 7.84 8.201 Renminbi China 0.45 0.471 USD 3.53 3.77100 Baht Thai 9.81 –100 Rand Afrika Selatan 50.10 –1000 Ariary Madagascar 1.82 1.77

(iii) Operasi Asing

Keputusan dan kedudukan kewangan operasi asing yang mempunyai mata wang kefungsian berbezadaripada mata wang pembentangan (RM) penyata kewangan disatukan diterjemahkan kepada RM sepertiberikut:

(a) Aset dan liabiliti bagi setiap kunci kira-kira dikemukakan telah diterjemahkan pada kadar penutupan lazimpada tarikh kunci kira-kira;

(b) Pendapatan dan perbelanjaan bagi setiap penyata pendapatan diterjemahkan pada purata kadarpertukaran bagi tahun, yang lebih kurang menyamai kadar pertukaran pada tarikh urusniaga; dan

(c) Kesemua perbezaan pertukaran terhasil dimasukkan kepada rizab terjemahan mata wang asing dalamekuiti.

Muhibah dan pelarasan nilai saksama timbul atas pengambilalihan operasi asing pada atau selepas 1 Januari2006 dianggap sebagai aset dan liabiliti operasi asing dan dicatatkan dalam mata wang kefungsian daripadaoperasi asing dan diterjemahkan pada kadar penutupan pada tarikh kunci kira-kira. Muhibah dan pelarasannilai saksama yang timbul atas pengambilalihan subsidiari-subsidiari asing sebelum 1 Januari 2006 dianggapsebagai aset dan liabiliti syarikat induk dan dicatatkan dalam RM pada kadar lazim pada tarikhpengambilalihan.

(r) Anggaran nilai saksama untuk tujuan pendedahan

Dalam menilai nilai saksama instrumen kewangan, Kumpulan dan Syarikat menggunakan pelbagai kaedah danmembuat andaian yang adalah berdasarkan keadaan pasaran yang wujud pada setiap tarikh kunci kira-kira.

Nilai saksama sekuriti diniagakan secara awam adalah berdasarkan harga pasaran disebut harga pada tarikh kuncikira-kira. Di mana tidak ada pasaran aktif, nilai saksama dibuktikan dengan menggunakan teknik penilaian. Teknikpenilaian termasuk mengguna urusniaga pasaran terbaru atas terma-tema biasa di antara pihak-pihakberpengetahuan, bersedia, sekiranya tersedia, rujukan kepada nilai saksama semasa daripada satu lagi instrumenyang sebahagian besarnya adalah sama, analisis aliran tunai didiskaunkan dan model opsyen penetapan harga.

Nilai muka bagi aset kewangan dan liabiliti kewangan dengan tempoh kematangan lebih daripada satu (1) tahundiandaikan menyamai nilai saksamanya.



7. PERUBAHAN MASA HADAPAN DALAM POLISI-POLISI PERAKAUNAN

Pada tarikh penyata kewangan ini dibenarkan, FRS berikut, pindaan kepada FRS dan tafsiran telah dikeluarkan tetapibelum lagi berkuatkuasa dan telah tidak dipakai oleh Kumpulan dan Syarikat:

Berkuatkuasabagi tempoh

kewanganbermula padaatau selepas

(i) FRS 117 – Pajakan 1 Oktober 2006

(ii) FRS 124 – Pendedahan Pihak Berkaitan 1 Oktober 2006

(iii) FRS 139 – Instrumen Kewangan: Pengiktirafan dan Pengukuran Tertunda

(iv) FRS 6 – Carigali untuk dan Penilaian Sumber Galian 1 Januari 2007

(v) Pindaan kepada FRS 1192004 – Manfaat Kakitangan– Keuntungan dan Kerugian Aktuari, Pelan Kumpulan dan Pendedahan 1 Januari 2007

(vi) Pindaan kepada FRS 121 – Kesan Perubahan dalam Kadar Pertukaran Asing– Pelaburan Bersih dalam Operasi Asing 1 Januari 2007

(vii) Tafsiran IC 1: Perubahan dalam Penyahgunaan, Pemulihan dan Liabiliti Serupa Sedia Ada 1 Julai 2007

(viii) Tafsiran IC 2: Saham-saham Ahli dalam Entiti Koperasi dan Instrumen Serupa 1 Julai 2007

(ix) Tafsiran IC 5: Hak kepada Kepentingan timbul daripada Penyahgunaan, Pemulihandan Dana Pemulihan Alam Sekitar 1 Julai 2007

(x) Tafsiran IC 6: Liabiliti timbul daripada Penyertaan dalam Pasaran Khusus– Sisa Peralatan Elektrik dan Elektronik 1 Julai 2007

(xi) Tafsiran IC 7 : Mengguna Pendekatan Pernyataan Semula di bawah FRS 1292004– Pelaporan Kewangan dalam Ekonomi Hiperinflasi 1 Julai 2007

(xii) Tafsiran IC 8 : Skop FRS 2 1 Julai 2007

(xiii) FRS 107 – Penyata Aliran Tunai 1 Julai 2007

(xiv) FRS 111 – Kontrak Pembinaan 1 Julai 2007

(xv) FRS 112 – Cukai Pendapatan 1 Julai 2007

(xvi) FRS 118 – Pendapatan 1 Julai 2007

(xvii) FRS 119 – Manfaat Kakitangan 1 Julai 2007

(xviii) FRS 120 – Perakaunan bagi Pendedahan Geran Kerajaan dan Pendedahan Bantuan Kerajaan 1 Julai 2007

(xix) FRS 126 – Perakaunan dan Pelaporan melalui Pelan Manfaat Persaraan 1 Julai 2007

(xx) FRS 129 – Pelaporan Kewangan dalam Ekonomi Hiperinflasi 1 Julai 2007

(xxi) FRS 134 – Pelaporan kewangan Interim 1 Julai 2007

(xxii) FRS 137 – Peruntukan, Liabiliti Kontigen dan Aset Kontigen 1 Julai 2007



7. PERUBAHAN MASA HADAPAN DALAM POLISI-POLISI PERAKAUNAN (SAMB.)

Kumpulan dan Syarikat telah dikecualikan daripada mendedahkan kemungkinan kesan, sekiranya ada, kepada penyatakewangan atas penggunaan awal FRS 117, 124 dan FRS 139.

FRS 6 tidak berkaitan kepada operasi Kumpulan dan Syarikat dan penerimaan pakai pindaan dan Tafsiran di atas tidakakan mempunyai kesan ke atas penyata kewangan Kumpulan dan Syarikat.

8. PENDAPATAN


RM'000 RM'000 RM'000 RM'000

Kontrak pembinaan 33,693 66,966 45,888 104,485Jualan pembangunan hartanah 11,233 63,967 – –Jualan barangan 41,522 42,034 – –Sewa loji dan jentera 534 1,141 543 1,255

86,982 174,108 46,431 105,740

9. KOS PENJUALAN


RM'000 RM'000 RM'000 RM'000

Kos kontrak pembinaan 36,879 43,286 46,530 87,037Kos pembangunan hartanah 13,363 49,853 – –Kos barangan dijual 31,705 31,988 – –

81,947 125,127 46,530 87,037

Termasuk dalam kos kontrak pembinaan Kumpulan dan Syarikat adalah kos kakitangan berikut (Nota 11):


RM'000 RM'000 RM'000 RM'000

Upah dan gaji 3,774 4,077 3,774 4,077Kos keselamatan sosial 86 58 86 58Kos pencen – pelan caruman dinyatakan 405 444 405 444Lain-lain perbelanjaan kakitangan yang berkaitan 442 638 442 638

4,707 5,217 4,707 5,217



10. (KERUGIAN)/KEUNTUNGAN DARIPADA OPERASI

(Kerugian)/keuntungan daripada operasi dinyatakan selepas dicaj/(dikredit) berikut:

(a) Lain-lain pendapatan

Termasuk dalam lain-lain pendapatan Kumpulan dan Syarikat adalah seperti berikut:


RM'000 RM'000 RM'000 RM'000

Faedah pendapatan– daripada subsidiari-subsidiari – – (13,098) (11,821)– deposit dengan institusi kewangan (1,336) (1,344) (1,213) (1,081)

Kemasukan semula peruntukan hutang ragu (41) (444) – –Keuntungan atas penjualan hartanah, loji

dan peralatan (10,583) (9,712) (10,547) (9,672)Keuntungan atas penjualan hartanah pelaburan (13,876) – (13,898) –Pendapatan sewa (356) (725) (147) (306)Keuntungan pertukaran asing tidak direalisasi (419) – (419) –

(b) Perbelanjaan pentadbiran dan operasi

Termasuk dalam perbelanjaan pentadbiran dan operasi Kumpulan dan Syarikat adalah seperti berikut:


RM'000 RM'000 RM'000 RM'000(Dinyatakan (Dinyatakansemula) semula)

Kos kakitangan (Nota 11) 11,989 14,228 6,634 8,285Imbuhan Pengarah Bukan-eksekutif (Nota 12) 213 263 213 263Imbuhan juruaudit (Nota 13)– Audit berkanun 268 110 98 45– Lain-lain perkhidmatan 10 8 – –Hutang lapuk dihapuskira 1,409 1,595 1,409 1,595Peruntukan hutang ragu– Jumlah boleh diterima 10,487 145 10,487 254– Subsidiari – – 13,714 –Susutnilai hartanah, loji dan peralatan (Nota 17) 6,599 9,652 5,656 8,370Susutnilai hartanah pelaburan (Nota 18) 18 29 11 22Sewa pejabat dan stor 1,631 1,561 965 876Sewa loji dan jentera 26 97 – –Peruntukan pengurangan nilai pelaburan – – – 200Peruntukan pampasan lewat penyerahan (Nota 35) 6,793 5,925 – –Sewa peralatan 28 30 – –



11. KOS KAKITANGAN


RM'000 RM'000 RM'000 RM'000

Upah dan gaji 12,314 14,337 8,909 10,440Kos keselamatan sosial 391 387 148 126Kos pencen – pelan caruman dinyatakan 1,117 1,330 970 1,159Lain-lain perbelanjaan kakitangan yang berkaitan 2,874 3,391 1,314 1,777

16,696 19,445 11,341 13,502

Termasuk dalam kos kakitangan Kumpulan dan Syarikat adalah imbuhan Pengarah-pengarah eksekutif masing-masingberjumlah sebanyak RM1,014,000 (2005: RM1,093,000) dan RM984,000 (2005: RM1,063,000) sebagaimana dinyatakandalam Nota 12.

12. IMBUHAN PENGARAH-PENGARAH


RM'000 RM'000 RM'000 RM'000

Pengarah-pengarah SyarikatEksekutif:

Gaji dan lain-lain emolumen 984 1,063 984 1,063Faedah bukan dalam bentuk wang 37 37 37 37Yuran 30 30 – –

Bukan Eksekutif:Yuran 213 263 213 263

1,264 1,393 1,234 1,363

Analisis tidak termasuk faedah bukan dalam bentuk wang:Jumlah imbuhan Pengarah-pengarah eksekutif tidak

termasuk faedah bukan bentuk wang (Nota 11) 1,014 1,093 984 1,063Jumlah imbuhan Pengarah-pengarah bukan eksekutif

tidak termasuk faedah bukan bentuk wang (Nota 10(b)) 213 263 213 263

Jumlah imbuhan Pengarah-pengarah tidak termasukfaedah bukan bentuk wang 1,227 1,356 1,197 1,326

Bilangan pengarah-pengarah Syarikat yang jumlah imbuhan termasuk dalam rangkaian imbuhan berikut adalah dianalisasepertimana di bawah:

Bilangan Pengarah2006 2005

Pengarah Eksekutif:RM250,001 – RM300,000 2 2RM400,001 – RM450,000 1 1

Bukan Pengarah Eksekutif:Bawah RM50,000 1 2RM50,001 – RM100,000 3 3



13. IMBUHAN JURUAUDIT


RM'000 RM'000 RM'000 RM'000

Juruaudit SyarikatAudit berkanun 243 80 98 45

Lain-lain JuruauditAudit berkanun 25 30 – –Yuran bagi lain-lain perkhidmatan:– Penasihat cukai 6 6 – –– Lain-lain 4 2 – –

278 118 98 45

14. KOS PEMBIAYAAN


RM'000 RM'000 RM'000 RM'000

Faedah perbelanjaan atas:– Penerimaan bank 814 722 674 597– Overdraf bank 1,731 1,336 1,451 1,231– Kredit pusingan 2,183 2,026 2,183 2,026– Sewa beli 1,536 1,783 1,463 1,744– Pinjaman berjangka 286 – 286 –

6,550 5,867 6,057 5,598

15. CUKAI


RM'000 RM'000 RM'000 RM'000

Pendapatan cukai semasa:Cukai pendapatan Malaysian 259 3,068 – 2,500Cukai keuntungan hartanah 675 – 675 –Cukai pendapatan asing 52 549 1 –Terkurang peruntukan dalam tahun 430 – 411 –

1,416 3,617 1,087 2,500

Cukai tertunda (Nota 33):Berhubung dengan pengasalan dan kebalikan

perbezaan sementara (92) 89 – –Terlebih peruntukan dalam tahun-tahun terdahulu – (230) – –

(92) (141) – –

1,324 3,476 1,087 2,500

Cukai pendapatan domestik dikira pada kadar cukai berkanun Malaysia sebanyak 28% (2005: 28%) daripada anggarankeuntungan boleh dinilai bagi tahun. Kadar cukai berkanun domestik akan dikurangkan kepada 27% daripada kadartahun semasa sebanyak 28%, tahun taksiran berkesan 2007 dan kepada 26% tahun taksiran berkesan 2008.Pengiraan cukai tertunda pada 31 Disember 2006 telah menggambarkan perubahan ini.



15. CUKAI (SAMB.)

Penyelarasan perbelanjaan cukai pendapatan kepada keuntungan/(kerugian) sebelum cukai pada kadar cukaipendapatan berkanun kepada perbelanjaan cukai pendapatan pada kadar cukai pendapatan berkesan Kumpulan danSyarikat adalah seperti berikut:


RM'000 RM'000 RM'000 RM'000

(Kerugian)/keuntungan sebelum cukai (33,824) 6,091 (13,869) 9,867

Cukai pada kadar cukai berkanun Malaysiasebanyak 28% (2005: 28%) (9,471) 1,705 (3,883) 2,763

Kesan perbezaan kadar cukai bagi syarikatberskala kecil dan sederhana sebanyak 20%bagi pendapatan boleh dikenakan cukai pertamasebanyak RM500,000 (33) – – –

Kesan perbezaan kadar cukai di luar negara (24) 127 – –Pendapatan tidak tertakluk kepada cukai (3,891) (467) (3,891) (467)Perbelanjaan tidak boleh ditolak untuk tujuan cukai 1,603 1,195 4,459 262Cukai tertunda tidak diiktiraf dalam tahun 12,035 1,204 3,316 –Penggunaan aset cukai tertunda tidak diiktiraf dalam

tahun terdahulu – (58) – (58)Cukai terkurang peruntukan dalam tahun-tahun terdahulu 430 – 411 –Cukai tertunda terlebih peruntukan dalam tahun – (230) – –Cukai keuntungan hartanah 675 – 675 –

Perbelanjaan cukai bagi tahun 1,324 3,476 1,087 2,500

Analisis kerugian cukai seperti berikut:

Penjimatan cukai diiktiraf dalam tahun timbul daripada:Penggunaan kerugian cukai tahun semasa 3,099 80 3,099 80

16. (KERUGIAN)/PEROLEHAN/ASAS/DICAIRKAN SETIAP SAHAM (SEN)

(Kerugian)/perolehan/asas/dicairkan setiap saham dikira dengan membahagikan (kerugian)/keuntungan bersih bagi tahundengan purata wajaran bilangan saham biasa dalam terbitan dalam tahun kewangan.

2006 2005

(Kerugian)/keuntungan bersih bagi tahun (RM'000) (35,101) 3,879Purata wajaran bilangan saham biasa dalam terbitan ('000) 102,000 102,000(Kerugian)/perolehan asas/dicairkan setiap saham (sen) (34.4) 3.8



17. HARTANAH, LOJI DAN PERALATAN

Tanahdan

Tanah bangunan Perabot,dan pegangan lengkapan Alat-alat

Tanah bangunan pajak dan Loji danpegangan pegangan jangka kelengkapan Kenderaan dan Pengubah- peralatankekal kekal panjang pejabat bermotor jentera suaian teknikal JumlahRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Kumpulan2006

Kos

Pada 1 JanuariSeperti dinyatakan

sebelumnya 4,493 1,535 354 5,250 29,318 131,955 360 2,961 176,226Kesan penerimaan pakai FRS 140 (4,493) (1,435) – – – – – – (5,928)

Seperti dinyatakan semula – 100 354 5,250 29,318 131,955 360 2,961 170,298

Tambahan – – – 33 1,079 6,850 4 189 8,155

Penjualan – – – (28) (5,815) (18,303) – – (24,146)

Pada 31 Disember – 100 354 5,255 24,582 120,502 364 3,150 154,307

Susutnial TerkumpulPada 1 Januari

Seperti dinyatakansebelumnya – 380 106 3,965 25,352 96,230 313 2,122 128,468

Kesan penerimaan pakai FRS 140 – (348) – – – – – – (348)


Dicaj bagi tahun – 2 7 415 744 5,263 28 140 6,599

Penjualan – – – (7) (4,472) (17,081) – – (21,560)

Perbezaan pertukaran – – – 3 – – – – 3

Pada 31 Disember – 34 113 4,376 21,624 84,412 341 2,262 113,162

Nilai Buku BersihPada 31 Disember – 66 241 879 2,958 36,090 23 888 41,145



17. HARTANAH, LOJI DAN PERALATAN (SAMB.)

Tanahdan


Tanah bangunan pajak dan Loji danpegangan pegangan jangka kelengkapan Kenderaan dan Pengubah- peralatankekal kekal panjang pejabat bermotor jentera suaian teknikal JumlahRM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM’000

(Dinyatakansemula)

Kumpulan2005

KosPada 1 Januari

Seperti dinyatakansebelumnya 4,493 1,535 354 4,845 29,996 146,347 360 2,509 190,439

Kesan penerimaan pakai FRS 140 (4,493) (1,435) – – – – – – (5,928)


Tambahan – – – 410 1,246 16,013 – 452 18,121

Penjualan – – – – (1,878) (30,280) – – (32,158)

Dihapuskira – – – – (46) (125) – – (171)

Perbezaan pertukaran – – – (5) – – – – (5)

Pada 31 Disember – 100 354 5,250 29,318 131,955 360 2,961 170,298

Susutnilai TerkumpulPada 1 Januari




Dicaj bagi tahunSeperti dinyatakan

sebelumnya – 31 7 471 1,459 7,568 36 109 9,681Kesan penerimaan pakai FRS 140 – (29) – – – – – – (29)

Seperti dinyatakan semula – 2 7 471 1,459 7,568 36 109 9,652

Penjualan – – – – (1,494) (29,288) – – (30,782)

Dihapuskira – – – – (46) (125) – – (171)

Perbezaan pertukaran – – – (2) – – – – (2)

Pada 31 Disember – 32 106 3,965 25,352 96,230 313 2,122 128,120

Nilai Buku BersihPada 31 Disember – 68 248 1,285 3,966 35,725 47 839 42,178




Tanahdan



Syarikat2006

Pada 1 JanuariSeperti dinyatakan

sebelumnya 4,493 1,195 354 3,563 17,191 123,116 133 2,770 152,815Kesan penerimaan pakai FRS 140 (4,493) (1,095) – – – – – – (5,588)


Tambahan – – – 11 1,063 6,783 – 189 8,046

Penjualan – – – (28) (5,688) (18,303) – – (24,019)

Pada 31 Disember – 100 354 3,546 12,566 111,596 133 2,959 131,254





Dicaj bagi tahun – 2 7 255 382 4,868 7 135 5,656

Penjualan – – – (7) (4,345) (17,081) – – (21,433)

Pada 31 Disember – 34 113 2,878 10,572 76,072 128 2,083 91,880





Tanahdan



(Dinyatakansemula)

Syarikat2005

KosPada 1 Januari

Seperti dinyatakansebelumnya 4,493 1,195 354 3,262 18,244 137,559 133 2,318 167,558

Kesan penerimaan pakai FRS 140 (4,493) (1,095) – – – – – – (5,588)


Tambahan – – – 301 409 15,912 – 452 17,074

Penjualan – – – – (1,416) (30,230) – – (31,646)

Dihapuskira – – – – (46) (125) – – (171)

Pada 31 Disember – 100 354 3,563 17,191 123,116 133 2,770 147,227





Dicaj bagi tahunSeperti dinyatakan

sebelumnya – 24 7 291 1,100 6,853 13 104 8,392Kesan penerimaan pakai FRS 140 – (22) – – – – – – (22)

Seperti dinyatakan semula – 2 7 291 1,100 6,853 13 104 8,370

Penjualan – – – – (1,416) (29,288) – – (30,704)

Dihapuskira – – – – (46) (125) – – (171)

Pada 31 Disember – 32 106 2,630 14,535 88,285 121 1,948 107,657





(a) Nilai buku bersih hartanah, loji dan peralatan Kumpulan dan Syarikat yang diperolehi di bawah pengaturan sewabeli adalah seperti berikut:


RM'000 RM'000 RM'000 RM'000

Kenderaan bermotor 2,047 24,672 1,502 24,064Loji dan jentera 2,310 1,909 2,310 1,909

4,357 26,581 3,812 25,973

(b) Pembelian hartanah, loji dan peralatan

Kos aggregat pembelian 8,155 18,121 8,046 17,074Tolak: Pembelian secara sewa beli (1,025) (15,204) (1,025) (14,658)

7,130 2,917 7,021 2,416

(c) Loji dan jentera dengan agregat nilai dibawa sebanyak RM2,831,525 (2005: RM Tiada) telah disandarkan sebagaicagaran bagi pinjaman (Nota 31).

18. HARTANAH PELABURAN


RM'000 RM'000 RM'000 RM'000(dinyatakan dinyatakansemula) semula)

KosPada 1 Januari 5,928 5,928 5,588 5,588Penjualan (4,216) – (3,876) –

Pada 31 Disember 1,712 5,928 1,712 5,588

Susutnilai TerkumpulPada 1 Januari 348 319 307 285Caj bagi tahun 18 29 11 22Penjualan (366) – (318) –

Pada 31 Disember – 348 – 307

Nilai Buku Bersih 1,712 5,580 1,712 5,281

Hartanah pelaburan dengan agregat nilai dibawa sebanyak RM1,712,000 (2005: RM Tiada) telah disandarkan sebagaicagaran bagi pinjaman (Nota 31).



18. HARTANAH PELABURAN (SAMB.)

Nilai saksama hartanah pelaburan adalah seperti berikut:


RM'000 RM'000 RM'000 RM'000(dinyatakan dinyatakansemula) semula)

Tanah pegangan kekal 9,646 28,536 9,646 28,186

Nilai saksama hartanah pelaburan pada 31 Disember 2005 berdasarkan penilaian dilaksanakan oleh Hakimi &Associates Sdn. Bhd., jurunilai bebas berdaftar. Nilai saksama hartanah pelaburan pada 31 Disember 2006 adalahberdasarkan penaksiran dalaman lebih daripada penilaian oleh jurunilai bebas yang memegang kelayakan profesionaldiiktiraf dan berkaitan dan mempunyai pengalaman terbaru dalam lokasi dan kategori hartanah pelaburan yangdinilaikan. Nilai saksama mewakili amaun pada mana aset-aset boleh ditukar di antara pembeli berpengetahuan,bersedia dan penjual berpengetahuan, bersedia atas terma-terma urusniaga biasa.

19. TANAH DIPEGANG UNTUK PEMBANGUNAN DAN KOS PEMBANGUNAN HARTANAH

(a) Tanah Dipegang untuk Pembangunan Hartanah

Kumpulan2006 2005

RM'000 RM'000

Tanah Pegangan KekalKosPada 1 Januari 122,183 115,815Tambahan – 6,368

Pada 31 Disember 122,183 122,183

(b) Kos Pembangunan Hartanah

Kos pembangunan hartanah pada 1 Januari:Tanah pegangan kekal 34,710 34,710Kos pembangunan 236,425 199,404

271,135 234,114Kos ditanggung dalam tahun:Kos pembangunan 10,790 37,021

Keterbalikan projek siap (133,557) –

Kos diiktiraf dalam penyata pendapatan:Pada 1 Januari (242,382) (192,446)Diiktiraf dalam tahun (13,363) (49,936)Keterbalikan projek siap 133,557 –

Pada 31 Disember (122,188) (242,382)

Kos pembangunan hartanah pada 31 Disember 26,180 28,753



19. TANAH DIPEGANG UNTUK PEMBANGUNAN DAN KOS PEMBANGUNAN HARTANAH (SAMB.)

(b) Kos Pembangunan Hartanah (samb.)

Termasuk dalam kos pembangunan hartanah ditanggung dalam tahun kewangan adalah:

Kumpulan2006 2005

RM'000 RM'000

Perbelanjaan faedah 215 30

Tanah dipegang untuk pembangunan dan pembangunan hartanah telah dicagar kepada institusi-institusi kewangansebagai cagaran bagi pinjaman tertentu yang diberikan kepada Kumpulan dan Syarikat sebagaimana dirujuk dalamNota 31.

20. PELABURAN DALAM SUBSIDIARI-SUBSIDIARI

Syarikat2006 2005

RM'000 RM'000

Saham-saham tidak disebutharga, pada kos 21,002 20,990

Butir-butir subsidiari-subsidiari adalah seperti berikut:

Kepentingan EkuitiDipegang (%)

Nama Subsidiari-subsidiari 2006 2005 Kegiatan Utama

Diperbadankan di Malaysia

Homeg Sdn. Bhd.* 51 51 Kejuruteraan, pemerolehan, pembinaan danpenyelenggaraan sistem saluran paip

Tru-Mix Concrete Sdn. Bhd. 90 90 Pengilangan dan pengedaran konkrit campur siap

Bukit Jalil Development Sdn. Bhd. 70 70 Pembangunan hartanah

Ho Hup Jaya Sdn. Bhd. # 100 100 Tidak aktif

Ho Hup Equipment Rental Sdn. Bhd.* 100 100 Sewa peralatan

Mekarani Heights Sdn. Bhd.* 100 100 Tidak aktif

Intermax Resources Sdn. Bhd.* 100 100 Tidak aktif

Ho Hup Geotechnic Sdn. Bhd.* 100 100 Tidak aktif

Timeless Element Sdn. Bhd.* 100 100 Tidak aktif



20. PELABURAN DALAM SUBSIDIARI-SUBSIDIARI (SAMB.)


Nama Subsidiari-subsidiari 2006 2005 Kegiatan Utama

Diperbadankan di India

Ho Hup Construction Company (India) Pte. Ltd.* 100 100 Pembinaan

Diperbadankan di Mauritius

Ho Hup Construction (Mauritius) Limited * 100 100 Tidak aktif

Diperbadankan di South Africa

Ho Hup Construction (South Africa) Pty Ltd *100 – Pegangan pelaburan

Diperbadankan di Indonesia

PT Halford Citra * 80 – Tidak aktif

* Subsidiari-subsidiari yang juruauditnya bukan Ernst & Young.

# Laporan Juruaudit ke atas penyata kewangan subsidiari ini mengandungi satu perenggan yang menitikberatkanperkara berikut:

Pada 17 April 2003, Ho Hup Jaya Sdn Bhd (“HH Jaya”), sebuah subsidiari milik penuh Syarikat, telah memeteraiperjanjian jual beli bersyarat dengan Khoo Soon Lee Realty Sdn Bhd (“KSL”) bagi penjualan dua bidang tanahpembangunan masing-masing seluas 52.668 hektar dan 39.504 hektar yang dipegang di bawah hakmilik indukH.S.(D) 257249 No. PTD 71047 dan H.S.(D) 258295 No. PTD 71065, yang terletak di Mukim Pulai, Daerah JohorBahru, dengan bayaran tunai berjumlah RM97 juta (“Harga Belian”). Selain daripada RM4,476,919 yang dipegangoleh pemegang kepentingan (“Wang Pemegang Kepentingan”), baki Harga Belian telah diselesaikan kepada HHJaya. Pertikaian timbul antara HH Jaya dan KSL tentang siapakah yang layak menerima Wang PemegangKepentingan (“Pertikaian”). Pada 28 April 2004, Pertikaian tersebut telah dirujuk ke Mahkamah melalui satusaman interpleader bagi menentukan siapakah yang layak untuk menerima Wang Pemegang Kepentingantersebut. Kes kini ditetapkan untuk pengurusan kes pada 7 Ogos 2007.

Ketidakpastian timbul tentang kutipan baki yang boleh diterima sebanyak RM4,476,919.

Setelah mendapat nasihat daripada pihak peguam, para pengarah Syarikat berpendapat bahawa jumlah yangterhutang oleh KSL boleh dikutipkan.

(a) Pemerbadanan subsidiari-subsidiari dalam tahun kewangan berakhir 31 Disember 2006

Pada 20 Januari 2006, Syarikat memperbadankan subsidiari milik penuhnya, Ho Hup Corporation (South Africa)Pty Ltd di Afrika Selatan dengan modal saham dinyatakan sebanyak Rand 1,000 terdiri daripada 1,000 sahambiasa bernilai 1 Rand sesaham.

Pada 5 Disember 2006, Syarikat memperbadankan subsidiari milik 80% di Indonesia, PT Halford Citra, yangmempunyai modal saham dibenarkan sebanyak Rp.4,577,500,000 terdiri daripada 500,000 saham biasa bernilaiRp.9,155 sesaham.



20. PELABURAN DALAM SUBSIDIARI-SUBSIDIARI (SAMB.)

(a) Pemerbadanan subsidiari-subsidiari dalam tahun kewangan berakhir 31 Disember 2006 (samb.)

Pemerbadanan subsidiari-subsidiari ini mempunyai kesan berikut ke atas keputusan kewangan Kumpulan bagitahun ini:

2006RM'000

Pendapatan –Kerugian bersih dalam tahun –

Pemerbadanan subsidiari-subsidiari ini mempunyai kesan berikut ke atas keputusan kewangan Kumpulan pada akhirtahun kewangan:

2006RM'000

Lain-lain jumlah boleh diterima 250Lain-lain jumlah perlu dibayar (250)

Bahagian bersih saham Kumpulan –

(b) Pemerbadanan subsidiari dalam tahun kewangan berakhir 31 Disember 2005

Pada 22 April 2005, Syarikat telah memperbadankan sebuah subsidiari milik penuh, Ho Hup Corporation(Mauritius) Limited in Mauritius dengan modal saham yang dinyatakan sebanyak USD25,000 yang meliputi 500saham biasa bernilai USD50 sesaham.

Pemerbadanan subsidiari ini mempunyai kesan berikut ke atas keputusan kewangan Kumpulan bagi tahun ini:

2005RM'000

Pendapatan –Kerugian bersih dalam tahun 5

Pemerbadanan subsidiari ini mempunyai kesan berikut ke atas keputusan kewangan Kumpulan pada akhir tahunkewangan:

2005RM'000

Lain-lain jumlah boleh diterima 176Tunai dan baki bank 2Lain-lain jumlah perlu dibayar (89)

Bahagian bersih saham Kumpulan 89



21. PELABURAN DALAM SYARIKAT-SYARIKAT BERSEKUTU


RM'000 RM'000 RM'000 RM'000

Saham-saham tidak disebutharga, pada kos 12,917 12,917 12,917 12,917Bahagian dalam rizab selepas pengambilalihan 421 2,451 – –

13,338 15,368 12,917 12,917Tolak: Kerugian kemerosotan terkumpul (2,054) (2,054) (2,351) (2,351)

11,284 13,314 10,566 10,566

Diwakili oleh:Bahagian aset bersih 11,284 13,314

Butir-butir syarikat-syarikat bersekutu adalah seperti berikut:


Nama Syarikat-syarikat bersekutu 2006 2005 Kegiatan Utama

Diperbadankan di Malaysia

Semenyih Brickmakers Sdn. Bhd.* 49 49 Tidak aktif

Hupcon Antarabangsa Sdn. Bhd.* 50 50 Tidak aktif

Diperbadankan di Republik Rakyat Cina

Shanghai San Ho Hup Pile Co. Ltd.* 45 45 Pembinaan dan perdagangan cerucuk terpintal

Diperbadankan di Thailand

Ho Hup Corporation (Thailand) Limited * 48 48 Tidak aktif

Diperbadankan di Madagascar

Ho Hup Construction (Madagascar) Sarl * 49.9 49.9 Tidak aktif

Diperbadankan di South Africa

Ho Hup Ubunye Construction Pty Ltd * 49 – Pembinaan

Pada tahun kewangan berakhir 31 Disember 2006, Kumpulan telah mengambilalih 49% kepentingan ekuiti dalam HoHup Ubunye Construction Pty Ltd dengan bayaran tunai berjumlah RM50.

Pada tahun kewangan yang lepas, Kumpulan telah mengambilalih 48% dan 49.9% kepentingan ekuiti dalam Ho HupCorporation (Thailand) Limited dan Ho Hup Construction (Madagascar) Sarl, dengan bayaran tunai masing-masingberjumlah RM240,000 dan RM17,148.

* Syarikat-syarikat bersekutu yang juruauditnya bukan Ernst & Young.



21. PELABURAN DALAM SYARIKAT-SYARIKAT BERSEKUTU (SAMB.)

Ringkasan maklumat kewangan syarikat-syarikat bersekutu adalah berikut:

2006 2005RM'000 RM'000

Aset dan liabilitiAset semasa 8,079 7,817Aset bukan semasa 7,353 7,971

Jumlah aset 15,432 15,788

Liabiliti semasa (4,148) (2,474)

Aset bersih 11,284 13,314

KeputusanPendapatan 6,616 4,145Kerugian bagi tahun (2,051) (1,206)

22. PELABURAN DALAM ENTITI KAWALAN BERSAMA


RM'000 RM'000 RM'000 RM'000

Pelaburan tidak disebutharga, pada kos 250 250 250 250Bahagian dalam rizab selepas pengambilalihan (250) (250) – –

– – 250 250Tolak: Kerugian kemerosotan terkumpul – – (250) (250)

– – – –

Butir-butir entiti-entiti kawalan bersama adalah seperti berikut:

Kepentingan Ekuitidipegang (%)

Nama Entiti-entiti Kawalan Bersama 2006 2005 Kegiatan Utama

Ho Hup-Ballast Nedam Joint Venture 50 50 Kerja pembinaan

Ho Hup-Star-Zaks Joint Venture 50 50 Kerja pembinaan

Ho Hup-Simplex Joint Venture 50 50 Kerja pembinaan



23. LAIN-LAIN PELABURAN


RM'000 RM'000 RM'000 RM'000

Sekuriti Hutang Boleh Tebus Boleh TukarDisebutharga, pada kos 35 35 – –

35 35 – –

Nilai pasaran daripada pelaburan disebutharga 56 62 – –

24. INVENTORI


RM'000 RM'000 RM'000 RM'000

Pada kos:Bahan pembinaan 159 175 – –

25. DAGANGAN BOLEH DITERIMA


RM'000 RM'000 RM'000 RM'000

Dagangan boleh diterima 105,567 109,362 70,610 71,209Bil-bil terakru berhubung dengan kos

pembangunan hartanah 24,128 35,340 – –Jumlah terhutang daripada pelanggan-pelanggan

ke atas kontrak (Nota 27) – – – –Jumlah tertahan bagi kerja kontrak (Nota 27) 1,357 1,295 1,357 1,295

131,052 145,997 71,967 72,504

Tolak: Peruntukan hutang ragu (13,313) (8,535) (12,658) (7,200)

117,739 137,462 59,309 65,304

Dagangan boleh diterima Kumpulan dan Syarikat merangkumi jumlah agregat boleh diterima sebanyak RM1,528,000(2005: RM1,528,000) daripada subsidiari kepada pelabur bersekutu berhubung dengan bil-bil progres kerja-kerjapembinaan.

Tempoh kredit dagangan biasa Kumpulan adalah di antara 14 hingga 90 hari (2005: 14 hingga 90 hari). Lain tempohkredit telah diases dan diluluskan secara individu.

Pendedahan kredit Kumpulan dan Syarikat tertumpu terutamanya masing-masing kepada sepuluh (2005: dua belas)dan sembilan (2005: sebelas) dagangan boleh diterima, yang masing-masing merupakan 69% (2005: 66%) dan 95%(2005: 93%) daripada dagangan boleh diterima pada akhir tahun.



25. DAGANGAN BOLEH DITERIMA (SAMB.)

(a) Dagangan boleh diterima Kumpulan dan Syarikat pada 31 Disember 2006 meliputi jumlah RM15,385,808 (2005:RM15,385,808) yang dihutang oleh dua pelanggan daripada kontrak yang dipertikaikan. Peruntukan bagi hutangragu berjumlah RM3,030,463 (2005: RM3,030,463) telah dibuat di dalam penyata kewangan berhubung denganjumlah yang akan diterima daripada kedua-dua pelanggan ini.

Syarikat telah mengambil tindakan undang-undang untuk memperolehi semula jumlah yang terhutang. Statustindakan undang-undang dinyatakan dalam Nota 40(e).

Setelah mendapat nasihat daripada pihak peguam, para Pengarah Syarikat berpendapat bahawa jumlah daganganbersih pada 31 Disember 2006 setelah menolak peruntukan hutang ragu dapat dikutipkan.

(b) Pada tahun kewangan berakhir 31 Disember 2004, Syarikat telah diberi kontrak pembinaan tertentu oleh KerajaanMadagascar. Kontrak pembinaan ini telah ditamatkan oleh dua pihak pada tahun kewangan berakhir 31 Disember2005.

Dagangan boleh diterima Kumpulan dan Syarikat pada 31 Disember 2006 meliputi jumlah RM27.8 juta (2005:RM25.0 juta) yang merupakan jumlah yang dihutang oleh Kerajaan Madagascar berhubung dengan kontrakpembinaan yang dinyatakan di atas.

Pada 15 September 2006, Syarikat memulakan tuntutan timbangtara bagi jumlah sebanyak USD19,746,595.53(bersamaan dengan RM69.74 juta) merupakan nilai kerja yang dilakukan dan ganti rugi selaras dengan penamatankontrak yang menyalahi undang-undang berhubung dengan kerja-kerja pembinaan jalan di Republik Madagascaryang telah ditandatangani oleh Kerajaan Republik Madagascar dan Syarikat. Tuntutan telah dirujuk kepadaMahkamah Antarabangsa Timbangtara di bawah Peraturan International Chamber of Commerce (“ICC”), Paris.

Penimbangtara ketiga telah dilantik oleh ICC. Kerajaan Madagascar telah memfail Pembelaan dan Tuntutan Balasdan Syarikat telah mengemukakan Jawapan kepada Tuntutan Balas. Kerajaan Madagascar telah mengemukakantuntutan balas sebanyak USD27,000,000. Tarikh bagi perbicaraan telah ditetapkan pada 28 Januari 2008 hingga1 Februari 2008 dan 31 Mac 2008 hingga 4 April 2008.

Para Pengarah Syarikat selepas rundingan dengan penasihat guaman mereka, berpendapat bahawa Syarikatmempunyai peluang kejayaan yang saksama dan bahawa jumlah yang terhutang daripada Kerajaan Madagascarakan dapat diperolehinya.

(c) Pada 17 April 2003, Ho Hup Jaya Sdn Bhd ("HH Jaya"), sebuah subsidiari milik penuh Syarikat, menandatanganiperjanjian jual beli bersyarat dengan Khoo Soon Lee Realty Sdn Bhd ("KSL") untuk melupuskan dua bidang tanahpembangunan seluas 52.668 hektar dan 39.504 hektar dipegang masing-masing di bawah hak milik induk H.S.(D)257249 No. PTD 71047 dan H.S.(D) 258295 No. PTD 71065, kedua-duanya terletak di Mukim Pulai, Daerah JohorBahru, bagi balasan tunai sebanyak RM97 juta ("Harga Pembelian"). Kecuali bagi jumlah sebanyak RM4,476,919dipegang oleh pemegang amanah ("Pemegang Amanah Wang"), baki Harga Pembelian telah dilepaskan kepadaHH Jaya. Pertikaian timbul di antara HH Jaya dan KSL berhubung dengan siapa yang berhak kepada WangPemegang Amanah Harta ("Pertikaian"). Pada 28 April 2004, Pertikaian telah dirujuk kepada Mahkamah melaluisaman interplider untuk menetapkan siapa yang berhak kepada Wang Pemegang Amanah Harta. Kes kiniditetapkan untuk pengurusan kes pada 7 Ogos 2007.

Para Pengarah Syarikat selepas meminta nasihat dengan penasihat undang-undang mereka, berpendapat bahawajumlah terhutang daripada KSL boleh diperolehi semula.



26. LAIN-LAIN JUMLAH BOLEH DITERIMA


RM'000 RM'000 RM'000 RM'000

Jumlah terhutang daripada subsidiari-subsidiari (Nota a) – – 261,720 246,020Deposit 3,942 4,413 3,563 4,029Pra-bayaran 275 1,885 32 1,589Jumlah runcit boleh diterima 13,707 9,956 10,190 7,586

17,924 16,254 275,505 259,224Tolak: Peruntukan hutang ragu (6,604) (1,575) (65,373) (46,630)

11,320 14,679 210,132 212,594

(a) Jumlah terhutang daripada subsidiari-subsidiari adalah tidak bercagar, tidak ada tempoh tetap bayaran balik dantertakluk kepada faedah pada kadar di antara 8.0% (2005 : 8.0%) setahun.

(b) Penerimaan lain bagi Kumpulan dan Syarikat pada 31 Disember 2006 meliputi jumlah deposit RM1.5 juta (2005:RM1.5 juta) yang dibayar berhubung dengan cadangan pengambilalihan 51% daripada jumlah modal sahamberbayar dan terbitan Urban Shift. Peruntukan bagi hutang ragu telah dibuat berhubung dengan keseluruhandeposit dalam tahun kewangan berakhir 31 Disember 2006.

27. JUMLAH TERHUTANG DARIPADA PELANGGAN-PELANGGAN KE ATAS KONTRAK


RM'000 RM'000 RM'000 RM'000

Kos kontrak pembinaan ditanggung sehingga kini 44,152 234,120 44,152 234,120Keuntungan boleh diagih 13,295 29,020 13,295 29,020

57,447 263,140 57,447 263,140Tolak: Bil-bil progres (57,447) (263,140) (57,447) (263,140

Jumlah terhutang daripada pelanggan-pelangganke atas kontrak (Nota 25) – – – –

Jumlah tahanan ke atas kontrak, termasuk dalamdagangan boleh diterima (Nota 25) 1,357 1,295 1,357 1,295



27. JUMLAH TERHUTANG DARIPADA PELANGGAN-PELANGGAN KE ATAS KONTRAK (SAMB.)

Kos telah ditanggung sehingga kini ke atas kontrak pembinaan termasuk kos yang telah ditanggung berikut yangdibuat sepanjang tahun:


RM'000 RM'000 RM'000 RM'000

Sewa loji dan jentera 1,693 425 1,693 425Kos kakitangan (Nota a) 4,707 5,217 4,707 5,217Sewa bangunan 112 112 112 112

(a) Upah dan gaji 3,774 4,077 3,774 4,077Kos keselamatan sosial 86 58 86 58Kos pencen – pelan caruman dinyatakan 405 444 405 444Lain-lain perbelanjaan kakitangan yang berkaitan 442 638 442 638

4,707 5,217 4,707 5,217

28. TUNAI DAN TUNAI PERSAMAAN


RM'000 RM'000 RM'000 RM'000

Tunai dalam tangan dan di bank 3,709 5,130 1,405 2,118Deposit dengan bank berlesen 26,715 48,057 26,715 47,667

Tunai dan baki bank 30,424 53,187 28,120 49,785Tolak: Overdraf bank (Nota 31) (20,533) (18,799) (17,078) (15,790)

Tunai dan tunai persamaan 9,891 34,388 11,042 33,995

Termasuk dalam tunai di bank Kumpulan adalah jumlah RM1,140,000 (2005: RM976,000) dipegang selaras denganSeksyen 7A Akta Pemaju Perumahan (Kawalan dan Pelesenan) 1966.

Deposit dengan bank berlesen Kumpulan dan Syarikat berjumlah sebanyak RM26,715,000 (2005: RM47,667,000) telahdicagar kepada bank sebagai jaminan bagi kemudahan kredit yang diberikan kepada Kumpulan dan Syarikatsebagaimana dirujukkan dalam Nota 31 dan Nota 36

Purata wajaran kadar faedah dalam tahun kewangan dan purata kematangan deposit dengan bank berlesen pada31 Disember 2006 masing-masing adalah 3.28% (2005: 2.75%) setahun dan 49 hari (2005: 93 hari).



29. MODAL SAHAM

Bilangan Saham Biasabernilai RM1 sesaham Jumlah2006 2005 2006 2005'000 '000 RM'000 RM'000

Dibenarkan:Pada 1 Januari/31 Disember 200,000 200,000 200,000 200,000

Diterbitkan dan dibayar penuh:Pada 1 Januari/31 Disember 102,000 102,000 102,000 102,000

30. KEUNTUNGAN TERTAHAN

Pada 31 Disember 2006, Syarikat mempunyai keuntungan dikecuali tersedia untuk diagihkan sebanyak lebih kurangRM26,000,000 (2005: RM26,000,000), tertakluk kepada persetujuan Lembaga Hasil Dalam Negeri.

Syarikat mempunyai kredit cukai yang mencukupi di bawah Seksyen 108 Akta Cukai Pendapatan 1967 yangmencukupi untuk membayar dividen daripada keseluruhan keuntungan tertahannya pada 31 Disember 2006.

31. PINJAMAN


RM'000 RM'000 RM'000 RM'000

Pinjaman Jangka PendekBercagar:Overdraf bank 11,855 11,711 11,855 11,711Kredit pusingan 20,840 29,500 20,840 29,500Penerimaan bank 14,295 16,806 11,333 13,847Pinjaman berjangka 15,893 12,571 1,543 –Sewa beli perlu dibayar (Nota 32) 1,597 5,172 1,411 4,996

64,480 75,760 46,982 60,054

Tidak bercagar:Overdraf bank 8,678 7,088 5,223 4,079

73,158 82,848 52,205 64,133

Pinjaman Jangka Panjang

Dicagar:Pinjaman berjangka 13,835 14,140 9,535 –Sewa beli perlu dibayar (Nota 32) 1,293 17,975 1,023 17,534

15,128 32,115 10,558 17,534



31. PINJAMAN (SAMB.)


RM'000 RM'000 RM'000 RM'000

Jumlah Pinjaman

Overdraf bank (Nota 28) 20,533 18,799 17,078 15,790Kredit pusingan 20,840 29,500 20,840 29,500Penerimaan bank 14,295 16,806 11,333 13,847Pinjaman berjangka 29,728 26,711 11,078 –Sewa beli perlu dibayar (Nota 32) 2,890 23,147 2,434 22,530

88,286 114,963 62,763 81,667

Kematangan pinjaman(tidak termasuk sewa beli perlu dibayar)

Dalam tempoh satu tahun 71,561 77,676 50,794 59,137Lebih daripada 1 tahun dan kurang daripada 2 tahun 6,530 9,840 2,230 –Lebih daripada 2 tahun dan kurang daripada 5 tahun 7,305 4,300 7,305 –

85,396 91,816 60,329 59,137

Dalam tahun kewangan, Syarikat tidak memenuhi obligasi bayaran baliknya berhubung dengan kemudahan kreditpusingan dengan AmBank (M) Berhad.

Pada 3 Julai 2007, Ho Hup Jaya Sdn Bhd (“HHJ”), sebuah subsidiari milik penuh Syarikat, menandatangani PerjanjianJual Beli dengan Tenterajaya (M) Sdn Bhd untuk melupuskan tiga bidang tanah pembangunan pegangan kekal(“Tanah”) dipegang di bawah Geran Mukim No. 3, Lot No. 584, Geran Mukim No. 4 Lot No. 585 dan Geran MukimNo. 5 Lot No. 599 kesemuanya dalam Mukim Ulu Klang, Daerah Gombak dan Negeri Selangor keluasan masing-masing lebih kurang 5.62 ekar, 4.47 ekar dan 4.62 ekar bagi jumlah balasan tunai sebanyak RM23,081,494.00 sahaja.

Syarikat berhasrat untuk membayar balik kemudahan kredit pusingan sebanyak RM5,086,585 mengguna perolehandaripada pelupusan tersebut.

Purata wajaran kadar faedah berkesan bagi tahun kewangan untuk pinjaman adalah seperti berikut:

Kumpulan Syarikat2006 2005 2006 2005% % % %

Overdraf bank 8.33 7.65 8.30 7.62Kredit pusingan 8.03 6.62 8.03 6.62Penerimaan bank 4.50 4.11 4.57 4.09Pinjaman berjangka 8.62 7.50 9.25 –



31. PINJAMAN (SAMB.)

Overdraf bank bercagar, kredit pusingan dan penerimaan bank Kumpulan dan Syarikat dicagar oleh aset-aset tertentuKumpulan dan Syarikat sebagaimana dinyatakan dalam Nota 17, Nota 19 dan Nota 28.

Berkuat kuasa dari 21 September 2006, 52 Akaun Sewa Beli Syarikat telah di struktur semula kepada kemudahanpinjaman berjangka sebanyak RM11,077,525.

Pinjaman bercagar Kumpulan dicagar melalui:

(a) Gadaian undang-undang pertama ke atas tanah dipegang untuk pembangunan dan hartanah pembangunansubisidiari-subsidiari sebagaimana dinyatakan dalam Nota 19;

(b) Gadaian undang-undang pertama pihak pertama ke atas tanah dipegang di bawah H.S (D) 812 Lot No. PT 4150,Mukim Cheras, Daerah Hulu Langat, Selangor Darul Ehsan sebagaimana dinyatakan dalam Nota 18;

(c) Gadaian tetap melalui debentur ke atas jentera/peralatan yang dibebankan didaftarkan atas nama Syarikat yangterdiri daripada mesin pengorek, kren, jentolak, traktor caterpillar, penggelek penggetar, traktor dan trak kargo,jentera rangkak, jentera angkat roda dan peralatan pembinaan seumpamanya, yang boleh diterima oleh Bank danmempunyai nilai pasaran tidak kurang daripada RM10 juta (“Jentera”) dan senarai Jentera hendaklah dipersetujuioleh semua pihak;

(d) Pengendorsan tuntutan pemilikan di Jabatan Pengangkutan Jalan ke atas jentera/peralatan berdaftar melaluipendaftaran e-Hakmilik; dan

(e) Jaminan korporat oleh Syarikat.

32. SEWA BELI PERLU DIBAYAR


RM'000 RM'000 RM'000 RM'000Bayaran minima:Tidak melebihi 1 tahun 1,788 7,238 1,585 7,034Lebih daripada 1 tahun dan tidak melebihi 2 tahun 657 7,176 509 6,973Lebih daripada 2 tahun dan tidak melebihi 5 tahun 678 13,549 544 13,268

3,123 27,963 2,638 27,275Tolak: Caj pembiayaan masa hadapan (233) (4,816) (204) (4,745)

Nilai semasa sewa beli perlu dibayar 2,890 23,147 2,434 22,530

Nilai semasa sewa beli perlu dibayarTidak melebihi 1 tahun 1,597 5,172 1,411 4,996Lebih daripada 1 tahun dan tidak melebihi 2 tahun 627 5,732 488 5,546Lebih daripada 2 tahun dan tidak melebihi 5 tahun 666 12,243 535 11,988

2,890 23,147 2,434 22,530

Dianalisis sebagai:Perlu dibayar dalam tempoh 12 bulan (Nota 31) 1,597 5,172 1,411 4,996Perlu dibayar selepas 12 bulan (Nota 31) 1,293 17,975 1,023 17,534

2,890 23,147 2,434 22,530



32. SEWA BELI PERLU DIBAYAR (SAMB.)

Pemiutang sewa beli menanggung faedah dalam tahun di antara 2.32% dan 4.73% (2005: 1.26% dan 10.72%)setahun.

Dalam tahun kewangan, Syarikat memungkirkan bayaran ansuran kemudahan sewa belinya dengan AmBank (M)Berhad. Selaras dengan itu, semua ansuran sewa beli di bawah kemudahan sewa beli ini sebanyak RM53,000, yangpada asalnya dijadualkan bagi bayaran balik selepas 31 Disember 2007, diklasifikasikan semula sebagai liabiliti semasa.

Pada 3 Julai 2007, Ho Hup Jaya Sdn Bhd (“HHJ”), sebuah subsidiari milik penuh Syarikat, menandatangani PerjanjianJual dan Beli dengan Tenterajaya (M) Sdn Bhd untuk melupuskan tiga bidang tanah pembangunan pegangan kekal(“Tanah”) dipegang di bawah Geran Mukim No. 3 Lot No. 584, Geran Mukim No. 4 Lot No. 585 dan Geran MukimNo. 5 Lot No. 599 semua di Mukim Ulu Klang, Daerah Gombak dan Negeri Selangor masing-masing berukuran kira-kira 5.62 ekar, 4.47 ekar dan 4.62 ekar bagi jumlah balasan tunai sebanyak RM23,081,494.00 sahaja.

Syarikat berhasrat untuk membayar semula kemudahan sewa beli sebanyak RM1,425,620 menggunakan perolehandaripada pelupusan di atas.

33. CUKAI TERTUNDA


RM'000 RM'000 RM'000 RM'000

Pada 1 Januari 71 212 – –Diiktiraf dalam penyata pendapatan (Nota 15) (92) (141) – –

Pada 31 Disember (21) 71 – –

Dikemukakan selepas penolakan sewajar seperti berikut:Aset cukai tertunda (5,564) (6,051) (5,139) (5,626)Liabiliti cukai tertunda 5,543 6,122 5,139 5,626

(21) 71 – –



33. CUKAI TERTUNDA (SAMB.)

Komponen dan pergerakan liabiliti dan aset cukai tertunda dalam tahun kewangan sebelum pengimbangan adalahseperti berikut:

Liabiliti cukai tertunda Kumpulan:Elaun JumlahModal Boleh

Dipertingkatkan Diterima JumlahRM'000 RM'000 RM'000

Pada 1 Januari 2006 5,998 124 6,122Diiktiraf dalam penyata pendapatan (579) – (579)

Pada 31 Disember 2006 5,419 124 5,543

Pada 1 Januari 2005 6,139 124 6,263Diiktiraf dalam penyata pendapatan (141) – (141)

Pada 31 Disember 2005 5,998 124 6,122

Aset cukai tertunda Kumpulan:Kerugian CukaiTidak Digunakan

dan Elaun JumlahModal Tidak Boleh

Diserap Diterima JumlahRM'000 RM'000 RM'000

Pada 1 Januari 2006 (5,911) (140) (6,051)Diiktiraf dalam penyata pendapatan 487 – 487

Pada 31 Disember 2006 (5,424) (140) (5,564)

Pada 1 Januari/31 Disember 2005 (5,911) (140) (6,051)

Liabiliti cukai tertunda Syarikat:ElaunModal

DipertingkatkanRM'000

Pada 1 Januari 2006 5,626Diiktiraf dalam penyata pendapatan (487)

Pada 31 Disember 2006 5,139

Pada 1 Januari/31 Disember 2005 5,626



33. CUKAI TERTUNDA (SAMB.)

Aset cukai tertunda Syarikat:

KerugianCukai TidakDigunakandan ElaunModal Tidak

DiserapRM'000

Pada 1 Januari 2006 (5,626)Diiktiraf dalam penyata pendapatan 487

Pada 31 Disember 2006 (5,139)

Pada 1 Januari/31 Disember 2005 (5,626)

Aset cukai tertunda tidak diiktiraf berhubung dengan berikutnya seperti berikut:


RM'000 RM'000 RM'000 RM'000

Kerugian cukai tidak digunakan 139,839 107,164 35,934 29,548Elaun modal tidak diserap 719 658 – –Perbezaan sementara lain 25,232 14,985 14,233 8,775

165,790 122,807 50,167 38,323

Ketersediaan kerugian cukai tidak digunakan dan elaun modal tidak diserap bagi pengimbangan terhadap keuntunganboleh dicukai masa hadapan kumpulan adalah tertakluk kepada perubahan-perubahan besar dalam pemegangan sahamsubsidiari-subsidiari tersebut di bawah Seksyen 44(5A) dan (5B) Akta Cukai Pendapatan, 1967.

Aset-aset cukai tertunda tidak diiktiraf berhubung dengan kerugian cukai tidak digunakan dan elaun modal tidakdiserap memandangkan adalah tidak mungkin bahawa keuntungan boleh dicukai masa hadapan akan tersedia terhadapyang mana ia boleh digunakan berdasarkan rancangan semasa syarikat masing-masing.

34. DAGANGAN PERLU DIBAYARKumpulan Syarikat

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

Dagangan perlu dibayar 56,866 64,657 42,540 51,354Jumlah dagang terakru 5,110 4,965 2,089 1,927Pendahuluan diterima ke atas kontrak (Nota a) 31,578 30,250 31,578 30,250Jumlah tahanan ke atas kontrak 10,542 12,730 10,418 12,730

104,096 112,602 86,625 96,261



34. DAGANGAN PERLU DIBAYAR (SAMB.)

Tempoh kredit dagangan biasa yang diberi kepada Kumpulan adalah di antara 30 hingga 120 hari (2005: 30 hingga 120hari).

Nota a

Jumlah ini mewakili pendahuluan yang diterima daripada Kerajaan Madagascar berhubung dengan kontrak pembinaanyang telah ditamatkan. Butir-butir mengenai prosiding timbangtara dengan Kerajaan Madagascar dinyatakan dalam Nota25(b).

35. LAIN-LAIN JUMLAH PERLU DIBAYAR


RM'000 RM'000 RM'000 RM'000

Jumlah terhutang kepada subsidiari-subsidiari – – 20,812 19,507Jumlah terhutang kepada pelabur bersekutu 1,211 1,211 – –Jumlah terhutang kepada syarikat/estet dalam mana para

Pengarah tertentu mempunyai kepentingan benefisal 4,499 3,543 4,037 3,155Akruan 8,556 8,013 6,448 5,509Jumlah runcit perlu dibayar 10,869 4,940 9,060 3,547Peruntukan pampasan lewat penyerahan (Nota a) 13,000 6,211 – –

38,135 23,918 40,357 31,718

Nota aPada 1 Januari 6,211 3,488 – –Peruntukan tambahan dalam tahun (Nota 10(b)) 6,793 5,925 – –Bayaran dibuat dalam tahun (4) (3,202) – –

Pada 31 Disember 13,000 6,211 – –

Jumlah hutang kepada subsidiari-subsidiari dan pelabur bersekutu adalah tidak bercagar, tanpa faedah dan tidakmempunyai tempoh tetap bagi bayaran balik.

Termasuk dalam akruan dibayar oleh Kumpulan adalah jumlah sebanyak RM2,542 (2005: RM2,542) terhutang kepadaSri Rakyat Management Sdn Bhd ("Sri Rakyat"), Bukit Jalil Development Sdn Bhd ("BJD"), subsidiari kepada Syarikat,memperbadankan Sri Rakyat sebagai jentera untuk melaksanakan obligasi dan tanggungjawab BJD di bawah Akta HakMilik Strata 1985 (Akta 318) & Peraturan Hak Milik Strata 1988 ("Akta"), sebagai pemilik asal. Sri Rakyat akanmenyediakan perkhidmatan pengurusan dan penyelenggaraan bagi apartmen kos rendah dan akan dipindahkan kepadapemilik-pemilik parsel apartmen kos rendah apabila selesai pemindahan hak milik strata berhubung dengan semuaparsel oleh BJD atau selepas membuat perintah di bawah subseksyen (2) Seksyen 64A Akta.



36. LIABILITI LUARJANGKA


RM'000 RM'000 RM'000 RM'000

Jaminan diberi kepada institusi kewangan berhubungdengan kemudahan kredit yang diberi kepadasubsidiari-subsidiari– Tidak bercagar – – 27,650 35,711

Jaminan diberi kepada institusi kewangan berhubungdengan bon pelaksanaan, deposit jaminan dan tenderyang dikeluarkan oleh institusi kewangan memihakkepada pihak-pihak ketiga untuk projek pembinaan– Bercagar 60,503 65,832 60,503 65,832– Tidak bercagar – 15,794 – 15,794

60,503 81,626 60,503 81,626

Jaminan bercagar Kumpulan dan Syarikat adalah dicagar terhadap deposit tetap Kumpulan dan Syarikat masing-masingsebagaimana dinyatakan dalam Nota 28.

37. URUSNIAGA PIHAK BERKAITAN YANG PENTING


RM'000 RM'000 RM'000 RM'000

Dengan subsidiari-subsidiariPembelian bahan daripada Tru-Mix Concrete Sdn. Bhd. – – 1,122 3,377

Bil-bil progress bagi kerja-kerja pembinaan yangdiadakan untuk Bukit Jalil Development Sdn. Bhd. – – 12,671 40,032

Bil-bil progress bagi kerja-kerja pembinaan yangdiadakan oleh Homeg Sdn. Bhd. – – – 90

Faedah pendapatan daripada:– Bukit Jalil Development Sdn. Bhd. – – 11,269 10,195– Homeg Sdn. Bhd. – – 1,829 1,626

Pendapatan sewa daripada:– Bukit Jalil Development Sdn. Bhd. – – 9 –– Tru-Mix Concrete Sdn. Bhd. – – – 107



37. URUSNIAGA PIHAK BERKAITAN YANG PENTING (SAMB.)


RM'000 RM'000 RM'000 RM'000

Dengan syarikat/estet/individu dalam manapara Pengarah tertentu dianggap mempunyaikepentingan benefisal/yang berkaitan dengan

Bayaran sewa pejabat dan stor perlu dibayar– Low Chee & Sons Sdn. Bhd. 678 627 678 627– Estet Low Chee 88 88 54 54– Concrete Paver Industries Sdn. Bhd. 130 130 – –– Tang Sau Kuan 96 96 – –

Pendapatan sewa daripada:– Tepat Concrete Industries Sdn. Bhd. 60 120 60 120

Pembelian bahan daripada:– Tara Technic Sdn. Bhd. 82 217 82 217– Tepat Concrete Industries Sdn. Bhd. 171 – 171 –

Para Pengarah berpendapat bahawa semua urusniaga di atas telah diuruskan dalam perjalanan biasa perniagaan dantelah diwujudkan atas terma-terma dan syarat-syarat yang tidak jauh berbeza daripada yang diperolehi dalam urusniagadengan pihak bukan berkaitan.

38. PERISTIWA PENTING DALAM TAHUN KEWANGAN

(a) Pada 20 Januari 2006, Syarikat memperbadankan sebuah subsidiari milik penuh, Ho Hup Corporation (SouthAfrica) Pty Ltd di Afrika Selatan dengan modal saham yang dibenarkan sebanyak South African Rand (“Rand”)10,000 dan modal saham yang diterbitkan dan berbayar sebanyak Rand 1,000 terdiri daripada 1,000 saham biasabernilai Rand 1.00 sesaham.

(b) Pada 8 Februari 2006, subsidiari Syarikat, Ho Hup Corporation (South Africa) Pty Ltd (“HHCSA”) melanggan bagi49 saham biasa bernilai Rand 1.00 sesaham mewakili 49% daripada modal saham yang diterbitkan dan berbayarHo Hup Ubunye Construction Pty Ltd (“Ho Hup Ubunye”) bagi jumlah balasan tunai sebanyak Rand 49bersamaan dengan RM30.57.

(c) Pada 31 Julai 2006, Bursa Malaysia Securities Berhad (“Bursa Securities”) teguran awam dan mengenakandenda sebanyak RM21,000 ke atas Syarikat bagi pemungkiran perenggan 9.23(b) Syarat-syarat PenyenaraianBursa Securities (“LR Bursa Securities”).

Syarikat telah memungkiri perenggan 9.23(b) LR Bursa Securities kerana gagal untuk menyerahkan akaun teraudittahunan bagi tahun kewangan berakhir 31 Disember 2005 (“AAA 2005”) pada tarikh akhir 30 April 2006. Syarikathanya menyerahkan AAA 2005 kepada Bursa Securities bagi pengumuman awam pada 31 Mei 2006.

Teguran awam dan denda dikenakan selaras dengan perenggan 16.17 LR Bursa Securities selepas mengambilpertimbangan semua faktor berkaitan.

(d) Pada 3 Ogos 2006, Syarikat menandatangani Perjanjian Jual dan Beli (“S&P”) dengan Bina Plastic Industries SdnBhd (“BPI”) untuk melupuskan dua (2) bidang Tanah Perindustrian dipegang di bawah Geran No. 23482, Lot No.4151 dan Geran No. 23375, Lot No. 4152, kedua-dua Mukim Cheras, Daerah Ulu Langat, Negeri Selangorberukuran kira-kira 201,123.66 dan 152,987.45 kaki per segi bagi jumlah balasan tunai sebanyak RM14,341,499.96sahaja.

2 bidang tanah dibeli pada tahun 1985 pada kos sebanyak RM2.78 juta. Keuntungan ke atas pelupusan tanah-tanah ini berjumlah RM11.6 juta ditunjukkan dalam Nota 10(a).



39. PERISTIWA PENTING SELEPAS TARIKH KUNCI KIRA-KIRA

(a) Pada 10 Januari 2007, Syarikat telah disampaikan dengan Writ Saman dan Penyata Tuntutan oleh AmBank (M)Berhad (“AmBank”) bagi jumlah sebanyak RM5,086,584.95 bagi Kemudahan Kredit Pusingan dan faedahberterusan.

Pada 16 Mac 2007, Penyata Pembelaan telah difailkan oleh Syarikat. Perkara ini ditetapkan bagi Siasatan Tanah diPejabat Tanah Gombak pada 27 Mac 2007 berhubung dengan permohonan oleh AmBank untuk merampas tanahdi Lot 584, 585 dan 599 di Mukim Ulu Klang, Daerah Gombak (“Harta”). Pada tarikh tersebut, peguam caraAmBank telah mengambil tarikh lain untuk membolehkan Syarikat meneruskan dengan Perjanjian Jual & Beli(menjual harta kepada pihak ke3).

Syarikat telah pada 3 Julai 2007 menandatangani Perjanjian Jual & Beli untuk melupuskan 3 bidang tanah yangpada masa ini digadai kepada AmBank. Perolehan pelupusan kira-kira RM23 juta akan digunakan, antara lainnya,bagi penebusan Kemudahan Kredit Pusingan. Selepas Perjanjian Jual dan Beli ditandatangani, AmBank telahbersetuju untuk menahan tindakan undang-undang menunggu penyelesaian. Siasatan tanah yang dimulakan olehAmBank telah ditangguhkan sehingga 21 Ogos 2007 disebabkan pelupusan 3 bidang tanah.

(b) Pada 14 Mac 2007, Syarikat mengeluarkan jaminan korporat sebanyak RM40 juta memihak kepada UOB Bank(Malaysia) Berhad berhubung dengan RM40 juta kemudahan kewangan kontrak kepada Bayu Melati Sdn Bhd. Iniadalah untuk memudahkan pembiayaan projek Lebuh Raya Trans Eastern Kedah Interland yang mana Syarikatadalah subkontraktor utama.

(c) Pada 18 April 2007, sekutu Syarikat, Ho Hup Ubunye Construction Pty Ltd (“HH Ubunye”) menyampaikan NotisUsul di bawah kes no. 2007/8363 di Mahkamah Tinggi Afrika Selatan (Bahagian Tempatan Witwatersrand) ke atasSyarikat dan Ho Hup Corporation (South Africa) Pty Ltd (“HHCSA”), subsidiari Syarikat, masing-masingmerupakan Defendant Pertama dan Kedua bagi bayaran berjumlah sekurang-kurangnya Rand 29,680,000(bersamaan dengan RM14.65 juta) mewakili modal boleh diguna, kos permulaan dan operasi, dan kos ditanggungdalam menyewa loji dan peralatan kena dibayar oleh Syarikat dan HHCSA kepada HH Ubunye.

Syarikat telah melantik STRB Smith Tabatha Buchanan Boyes untuk mewakili Syarikat di Johannesburg dan untukmemfailkan jawapan sewajarnya di Mahkamah dan peguam cara berpendapat bahawa kes ini adalah remeh.Syarikat telah mengarahkan peguam cara untuk membuat permohonan bagi membubarkan HH Ubunyedisebabkan keretakan dalam perhubungan di antara pemegang-pemegang saham HH Ubunye.

(d) Pada 3 Julai 2007, Ho Hup Jaya Sdn Bhd, subsidiari milik penuh Syarikat, menandatangani Perjanjian Jual danBeli dengan Tenterajaya (M) Sdn Bhd untuk melupuskan tiga bidang tanah pembangunan pegangan kekal(“Tanah”) dipegang di bawah Geran Mukim No. 3 Lot No. 584, Geran Mukim No. 4 Lot No. 585 dan GeranMukim No. 5 Lot No. 599 semua dalam Mukim Ulu Klang, Daerah Gombak dan Negeri Selangor masing-masingberukuran kira-kira 5.62 ekar, 4.47 ekar dan 4.62 ekar bagi jumlah balasan tunai sebanyak RM23,081,494.00sahaja.



40. LITIGASI UTAMA

(a) Yip Chee Seng & Sons Sdn Bhd, subkontraktor Syarikat telah mengemukakan satu tuntutan dengan MahkamahTinggi, Kuala Lumpur pada 17 Februari 2003. Tuntutan tersebut adalah untuk kerja-kerja tanah yang telahdilakukan untuk projek Sistem Transit Aliran Ringan Dua bagi Kuala Lumpur. Kuantum yang dituntut adalah untukjumlah RM1,023,585 berserta dengan faedah pada kadar 8% setahun dari 26 Julai 2002 sehingga realisasi(“Tuntutan”). Syarikat menafikan bahawa ia bertanggungjawab dan telah mengemukakan tuntutan balas berjumlahRM1,413,522 berserta dengan faedah 8% setahun dari 18 April 2003 (tarikh memfailkan tuntutan balas) sehinggarealisasi.

Pada 1 Mac 2004, Mahkamah telah mengeluarkan Perintah Interim (“Perintah”) bahawa jumlah RM1,023,585yang ditempatkan di dalam satu deposit tetap berasingan dalam bank dengan Yip Chee Seng & Sons Sdn Bhddan Syarikat merupakan penandatangan bersama. Syarikat telah merayu kepada Mahkamah Rayuan berhubungkeputusan tersebut. Mahkamah menetapkan 10 September 2007 sebagai pengurusan kes. Perkara telahditetapkan untuk perbicaraan pada 11 Mac 2008, 12 Mac 2008 dan 13 Mac 2008.

Para peguam Syarikat berpendapat bahawa Syarikat akan berusaha untuk mengenepikan Perintah tersebut danmembuat pembelaan terhadap Tuntutan. Tidak ada halangan yang diramalkan pada peringkat ini bagi Syarikatdalam membuktikan tuntutan balasnya semasa perbicaraan.

(b) Pada 17 April 2003, Ho Hup Jaya Sdn Bhd (“HH Jaya”), sebuah subsidiari milik penuh Syarikat, telahmenandatangani perjanjian jual beli bersyarat dengan Khoo Soon Lee Realty Sdn Bhd (“KSL”) bagi pelupusan duabidang tanah pembangunan seluas 52.668 hektar dan 39.504 hektar yang dipegang di bawah hak milik indukH.S.(D) 257249 PTD No 71047 dan H.S.(D) 258295 PTD No 71065, kedua-duanya terletak dalam Mukim Pulai,Daerah Johor Bahru, bagi balasan tunai sebanyak RM97 juta (“Harga Pembelian”). Kecuali bagi jumlah sebanyakRM4,476,919 yang dipegang oleh pemegang-pemegang dalam Amanah (“Wang Pemegang Dalam Amanah”),baki Harga Belian telah dilepaskan kepada HH Jaya.

Pertikaian timbul di antara HH Jaya dan KSL berhubung dengan siapa yang berhak kepada Wang PemegangDalam Amanah (“Pertikaian"). Pada 28 April 2004, Pertikaian telah dirujuk kepada Mahkamah melalui SamanInterplider untuk menentukan siapa yang berhak kepada Wang Pemegang Dalam Amanah. Pada 16 Julai 2004pertikaian Mahkamah telah mengarahkan agar HH Jaya dirujukkan sebagai plaintif dan KSL sebagai Defendan.Pada 17 November 2005, Timbalan Pendaftar selanjutnya mengarahkan agar no. saman interplider ditukar kepadano. writ saman dan Mahkamah akan selaras dengan itu memaklumkan kedua-dua pihak mengenai no. guamandan tarikh sebutan. Pada tarikh yang sama, Peguamcara Syarikat juga telah memfailkan Notis untuk MenghadiriPengurusan Kes Pra Perbicaraan agar arahan boleh diberi mengenai pengendalian perbicaraan dan yang samamasih lagi belum diekstrak sehingga kini Kes sekarang ini telah ditetapkan untuk pengurusan kes pada 7 Ogos2007.

Peguam Syarikat berpendapat bahawa tuntutan KSL sama ada untuk mendapatkan jumlah penuh WangPemegang Dalam Amanah atau sebahagian daripadanya tidak dapat dipastikan kerana HH Jaya telah memenuhisemua syarat bagi pelepasan Wang Dalam Amanah.



40. LITIGASI UTAMA (SAMB.)

(c) Europlus Corporation Sdn Bhd (“Europlus”) membuat tuntutan di Mahkamah Tinggi, Kuala Lumpur melaluiGuaman Sivil No S1-22-241-2004 pada 26 Februari 2004. Tuntutan tersebut adalah bagi dakwaan lebih bayaran dibawah satu projek dikenali sebagai “Cadangan Persimpangan Bertingkat Bukit Beruntung” meliputi laluan atas diCH. 7501.575 di Lebuh Raya Rawang-Tanjung Malim, Pembangunan Bukit Beruntung, Mukim Serendah, DaerahUlu Selangor, Selangor Darul Ehsan. Tuntutan tersebut berjumlah RM4,387,462.92.

Saman dan Penyataan Tuntutan telah difailkan pada 26 Februari 2004 dan diserahkan pada 1 April 2004.Seterusnya Ho Hup memfailkan permohonan untuk butir-butir lebih lanjut dan lebih terperinci pada 30 Julai 2004dan perkara tersebut ditetapkan untuk pembicaraan pada 19 Ogos 2004 tetapi telah ditangguhkan ke 26 Oktober2004. Ho Hup mendapat perintah berhubung permohonan tersebut pada 26 Oktober 2004 dan selepas ituEuroplus menyerahkan butir-butir yang diminta oleh Ho Hup pada 25 November 2004. Ho Hup memfailkanpembelaannya pada 10 Disember 2004. Sehingga kini, Europlus tidak mengambil sebarang tindakan lanjut dalamdakwaan tuntutannya. Europlus telah melantik peguamcara baru, iaitu Tetuan Alvin, John & Partners. Belum adaprosiding selanjutnya dimulakan lagi.

Peguam Syarikat berpendapat bahawa tuntutan Europlus akan ditolak dengan kos.

(d) KM Quarry Sdn Bhd (“KM Quarry”) telah mengemukakan tuntutan di Mahkamah Tinggi, Melaka, melalui SamanSivil No 22-3-2005 pada 10 Januari 2005. Tuntutan berkenaan adalah terhadap jumlah RM3,233,474.37 bagibekalan dan kerja penurapan di bawah projek yang dikenali sebagai “Cadangan Membina Jalanraya DurianTunggal-Paya Rumput-Sungai Udang, Melaka”.

KM Quarry telah memfailkan permohonan untuk mendapatkan ringkasan penghakiman pada 22 Julai 2005.Selepas itu, Syarikat memfailkan notis rayuan dan penangguhan hukuman dan keputusan kini dijadualkan pada19 April 2006. Rayuan Syarikat ditolak dengan kos dan satu rayuan kepada mahkamah rayuan telah dibuat pada20 April 2006. Permohonan bagi penggantungan pelaksanaan dalam Mahkamah Tinggi Melaka telah ditetapkanuntuk keputusan pada 19 Julai 2007. Bil Kos telah ditetapkan untuk perbicaraan pada 14 Ogos 2007.

Selain itu, Syarikat telah memfailkan tuntutan bersilang terhadap KM Quarry bagi jumlah RM3,433,335.75 ataspengukuran bersama tidak mencukupi dan RM2,439,294.47 atas tuntutan berlebihan. KM Quarry sejak itu telahmenfailkan permohonan untuk membubarkan tuntutan Syarikat. Pada 26 Januari 2007, Mahkamah membenarkanpermohonan KM Quarry untuk memotong beberapa perenggan dan prayer dalam pernyataan tuntutan Syarikat.Syarikat telah memfailkan permohonan untuk mengenepikan Perintah tersebut dan yang sama sekarang ini telahditetapkan untuk perbicaraan pada 7 Jun 2007. Sementara itu, KM Quarry juga telah memfailkan permohonanuntuk meminda Pernyataan Pembelaan terpinda mereka yang telah dibenarkan oleh Mahkamah pada 14 Mac2007. Perkara ini sekarang ditetapkan untuk perbicaraan pada 16 Ogos 2007.

Peguam Syarikat berpendapat bahawa sekiranya mahkamah rayuan boleh dipujuk untuk menimbang tuntutanbersilang Syarikat terhadap KM Quarry di Mahkamah Kuala Lumpur, peluang menang dalam rayuan adalah baik.




(e) Pada 19 Oktober 2004, Syarikat telah mengeluarkan satu notis menurut Seksyen 218 Akta Syarikat, 1965terhadap Revolutionary Technology Holdings Sdn Bhd (“RTH”) bagi jumlah sebanyak RM7,169,810 berkaitanjumlah yang perlu dibayar di bawah projek pembinaan yang dijalankan oleh Syarikat. Pada 10 November 2004,RTH telah memfail satu permohonan arahan bagi menghalang Syarikat daripada memfail dan menghebahkanpenutupan tersebut dan satu arahan interim telah diberi buat ke atas Syarikat pada 12 April 2005.

Pada 16 Mei 2006 melalui perintah mahkamah, penimbang tara tunggal telah dilantik. Syarikat meneruskanperkara melalui timbang tara bagi jumlah sebanyak RM23,438,498. Pada 19 Mac 2007, Syarikat telahmemfailkan Sijil Kesegeraan bagi tarikh perbicaraan awal. Permohonan bagi perintah berikut telah dibuat:

– RTH menyediakan jaminan ke atas kos timbang tara sebanyak RM69,200;– Tuntutan balas RTH dalam timbang tara hendaklah digantung sehingga masa tertentu bila RM69,200 dibayar;– Injunksi untuk menghalang RTH daripada menerima wang daripada Kerajaan bagi projek Melaka sementara

menunggu keputusan penimbang tara ke atas tuntutan sebanyak RM23,438,498.

Mesyuarat timbang tara yang berikutnya bagi penjelasan dijadualkan untuk 9 Ogos 2007 dan 10 Ogos 2007.

Peguamcara Syarikat berpendapat bahawa Syarikat mempunyai peluang kejayaan yang baik dalam menuntutjumlah belum dijelaskan tersebut dalam prosiding timbang tara.

(f) Pada 9 Mac 2005, subsidiari Syarikat, Ho Hup Construction Company (India) Pte Ltd (“Ho Hup India”) telahmenandatangani Perjanjian Pembangunan Bersama dengan Andhra Pradesh Housing Board (“APHB”) untukmembangunkan sebidang tanah yang terletak di Kancha Imarath, Maheshwaran Mandal, Ranga Reddy District,Andhra Pradesh, India. Ho Hup India telah dipilih untuk melaksanakan pembangunan tanah tersebut untukdijadikan perbandaran bersepadu dengan nilai pembangunan lebih kurang Rupee India ("Rs") 3.6 bilion (bersamaandengan RM320,760,000) di Shamshabad berhampiran Hyderabad. Ho Hup India hendaklah membayar yuranpembangunan APHB sebanyak Rs101,175,000 (bersamaan dengan RM9,014,693) sepanjang tempoh lima (5)tahun.

Perjanjian Pembangunan Bersama ini kemudiannya telah ditamatkan oleh APHB. Syarikat mempertikaikanpenamatan atas alasan bahawa APHB belum lagi mematuhi obligasinya berhubung dengan syarat duluan dibawah perjanjian, Penamatan yang dikatakan tidak mempunyai kesan buruk ke atas penyata kewangan Kumpulandan Syarikat.

Pada 2 Mei 2005, Syarikat telah memulakan tuntutan timbang tara bagi ganti rugi berjumlah Rs2,544,512,230(bersamaan dengan RM221.88 juta) merupakan penamatan tidak sah kontrak tersebut di atas. Syarikat telahmengemukakan Pernyataan Tuntutannya kepada Tribunal Timbang Tara dan Tribunal menunggu pembelaan dantuntutan balas (sekiranya ada) daripada Andhra Pradesh Housing Board. Pengambilan semua keterangan lisantelah diselesaikan dan Penimbang Tara telah menetapkan dua hari pada Ogos 2007 dan dua hari pada September2007 untuk penghujahan selepas mana Penimbang Tara akan memberikan keputusan mereka.

Para Pengarah, dengan nasihat peguamcara mereka berpendapat bahawa Syarikat mempunyai peluang kejayaanyang baik dalam menuntut jumlah tersebut dalam prosiding timbang tara.




(g) Syarikat telah memfailkan Saman Pemula dan Saman Dalam Kamar untuk injunksi bagi menghalang ataumenyekat pembayaran wang oleh CIMB Bank Berhad (“CIMB”) (dahulunya dikenali sebagai Bumiputera-Commerce Bank Berhad) kepada Kementerian Pengangkutan, Kerja Awam & Pembangunan Tanah Madagascar keatas Jaminan Bank berjumlah USD14,269,003 (bersamaan dengan RM50.4 juta).

Pada 31 Mac 2006, Mahkamah telah memberikan injunksi interim sehingga tarikh perbicaraan yang berikutnyaatas permohonan Syarikat untuk mengekalkan status quo di antara pihak-pihak sehingga penyelesaian prosestimbang tara di Paris. Sementara itu, Kerajaan Madagascar telah memohon untuk mencelah dalam guamantersebut dan telah memfailkan dan menyampaikan Saman Dalam Kamar tidak dimeterai dan afidavit sokongannyamelalui cara permohonan kepada Mahkamah dan Syarikat kemudiannya telah memfailkan Afidavit Jawapan untukmembantah permohonan untuk mencelah tersebut. Pada 22 September 2006, Mahkamah telah membenarkanpermohonan Kerajaan Madagascar untuk mencelah dan dinamakan sebagai Defendan Kedua, dan kemudiannyapada 6 Oktober 2006, rayuan kepada Mahkamah Rayuan telah dibuat ke atas keputusan tersebut. Pada 13 April2007, permohonan Syarikat bagi injunksi untuk menyekat CIMB daripada membuat bayaran ke atas Jaminan Bankkepada Defendan Kedua telah dibuang dan bahawa injunksi ad interim yang telah diberikan kepada Syarikat pada31 Mac 2006 juga telah dibatalkan. Syarikat telah memfailkan rayuan terhadap keputusan Mahkamah Rayuanpada 16 April 2007.

Pada 17 April 2007, Mahkamah telah membenarkan permohonan Syarikat bagi Injunksi Erinford untukmenghalang atau menyekat Defendan-defendan daripada membuat apa-apa tuntutan untuk bayaran ke atasJaminan-jaminan Bank tersebut sementara menunggu pelupusan rayuan Syarikat kepada Mahkamah Rayuan.Tidak ada tarikh telah ditetapkan untuk perbicaraan sehingga hari ini.

Peguamcara Syarikat berpendapat bahawa sekiranya Syarikat boleh memujuk Mahkamah Rayuan untuk menerimapenghujahan Syarikat bahawa Jaminan-jaminan dan Bon-bon Pelaksanaan bukanlah tidak bersyarat tetapi adalahJaminan-jaminan bersyarat, peluang kejayaan dalam Mahkamah Rayuan adalah baik.

(h) Syarikat telah disampaikan dengan Writ Saman dan Pernyataan Tuntutan dimeterai bertarikh 14 Jun 2006, olehAmBank (M) Berhad (“AmBank”) bagi jumlah sebanyak RM1,425,620 bagi jumlah terhutang oleh Syarikat kepadaAmBank selaras dengan perjanjian Sewa Beli yang ditandatangani bertarikh 29 Januari 2005.

Pada 28 Jun 2007, Mahkamah telah membenarkan permohonan AmBank bagi penghakiman terus. Syarikat telahmemfailkan Notis Rayuan kepada Hakim dalam Kamar dan juga permohonan bagi penggantungan pelaksanaan.Kedua-dua permohonan sekarang ditetapkan untuk perbicaraan pada 6 September 2007.

Pada 3 Julai 2007, Ho Hup Jaya Sdn Bhd (“HHJ”), sebuah subsidiari milik penuh Syarikat menandatanganiPerjanjian Jual Beli dengan Tenterajaya (M) Sdn Bhd untuk melupuskan tiga bidang tanah pembangunanpegangan kekal (“Tanah”) dipegang di bawah Geran Mukim No. 3 Lot No. 584, Geran Mukim No. 4 Lot No. 585dan Geran Mukim No. 5 Lot No. 599 kesemuanya dalam Mukim Ulu Klang, Daerah Gombak dan Negeri Selangormasing-masing berukuran lebih kurang 5.62 ekar, 4.47 ekar dan 4.62 ekar bagi jumlah balasan tunai sebanyakRM23,081,494.00 sahaja.

Syarikat berhasrat untuk membayar balik kemudahan sewa beli sebanyak RM1,425,620 menggunakan perolehandaripada pelupusan di atas.




(i) Pada 10 Julai 2006, Syarikat menyampaikan notis selaras dengan Seksyen 218 Akta Syarikat 1965 terhadapUrban Shift Sdn Bhd (“Urban Shift”) bagi tuntutan untuk kerja yang dilakukan berjumlah RM7,440,016 di bawahprojek dikenali sebagai “Cadangan Pembangunan Bercampur Yang Mengandungi 3 Blok Pangsapur Servis Dengan5 Tingkat Podium Beli-belah dan Aras Basemen Letak Kereta Termasuk Rumah Kelab Di Atas Lot 1282, 1283Seksyen 67 Kuala Lumpur” yang kemudiannya telah digantung pada tahun 2005. Urban Shift telah melantikpeguam cara untuk bertindak bagi pihak mereka dan mereka telah menjawab kepada notis Seksyen 218.Syarikat telah memfailkan petisyen penggulungan terhadap Urban Shift yang belum lagi disampaikan, diiklankandan diwartakan. Petisyen ini kemudiannya telah ditarik balik. Petisyen penggulungan yang baru telah difailkanpada 26 Julai 2007 dan Syarikat sedang menunggu bagi petisyen dimeterai untuk diekstrakkan daripadaMahkamah.

Peguamcara Syarikat berpendapat bahawa peluang kejayaan penggulungan Urban Shift adalah baik

(j) Butir-butir prosiding timbang tara dengan Kerajaan Madagascar dinyatakan dalam Nota 25(b).

41. INSTRUMEN KEWANGAN

(a) Objektif dan Polisi Pengurusan Risiko Kewangan

Polisi pengurusan risiko kewangan Kumpulan ditubuhkan untuk menjamin bahawa Kumpulan menambah nilaiuntuk pemegang-pemegang sahamnya manakala mengurus kadar faedahnya, pertukaran matawang asing,kecairan dan risiko kredit. Kumpulan beroperasi mengikut garis panduan dan polisi yang jelas iaitu ia tidak akanterlibat dalam urusniaga spekulatif.

(b) Risiko Kadar Faedah

Kumpulan membiayai operasinya melalui aliran tunai kendalian dan pinjaman yang didominasikan terutamanyadalam Ringgit Malaysia.

Risiko kadar faedah utama Kumpulan berkait dengan hutang yang menanggung faedah, memandangkanKumpulan tidak mempunyai aset menanggung faedah jangka panjang utama pada 31 Disember 2006. Pelaburandalam aset kewangan kebanyakannya adalah bersifat jangka pendek dan ia tidak dipegang untuk tujuan spekulasitetapi kebanyakannya telah disimpan dalam deposit tetap.

(c) Risiko Pertukaran Matawang Asing

Kumpulan tidak terdedah kepada risiko pertukaran matawang asing akibat daripada kebarangkalian pembelian danpenjual. Kumpulan, walau bagaimanapun, tertakluk kepada naik turun kadar pertukaran matawang asing apabilamenukar penyata kewangan entiti asing sebagaimana dirujuk dalam Nota 6(q)(iii).

(d) Risiko Kecairan

Kumpulan secara aktif menguruskan profil kematangan hutang, aliran tunai kendalian dan ketersediaanpembiayaan untuk memastikan bahawa semua keperluan pembiayaan semula, pembayaran balik dan keperluanpembiayaan dipenuhi. Kumpulan berusaha untuk mengekalkan tahap tunai yang mencukupi melalui penjualanaset bukan teras Kumpulan dan untuk mengekalkan kemudahan perbankan mencukupi pada tahap yangmunasabah.



41. INSTRUMEN KEWANGAN (SAMB.)

(e) Risiko Kredit

Risiko kredit, atau risiko pemungkiran pihak-pihak satu lagi, dikawal melalui perlaksanaan kelulusan kredit, had danprosidur pengawasan. Risiko kredit telah diminimumkan dan diawasi melalui perkaitan dengan rakan perniagaandengan status kredit yang tinggi. Jumlah dagangan boleh diterima telah diawasi berterusan melalui prosidorpelaporan pengurusan Kumpulan.

Kumpulan tidak mempunyai apa-apa pendedahan ketara kepada mana-mana pelanggan individu atau pihak satulagi atau apa-apa penumpuan utama risiko kredit berhubung dengan mana-mana instrumen kewangan.

(f) Nilai Saksama

Nilai saksama aset kewangan dan liabiliti kewangan hampir sama dengan nilai bawanya pada tarikh kunci kira-kiraKumpulan dan Syarikat.

Adalah tidak munasabah untuk menganggarkan nilai saksama liabiliti kontigen sebagaimana dirujuk dalam Nota 36akibat daripada ketidakpastian pemasaan, kos dan keputusan akhir.

Kaedah-kaedah dan andaian-andaian berikut telah diguna untuk menganggarkan nilai saksama kelas instrumenkewangan berikut:

(i) Tunai dan Tunai Persamaan, Jumlah Dagangan dan Lain-lain Jumlah Boleh Diterima/Perlu Dibayardan Pinjaman Jangka Pendek

Jumlah penyimpanan lebih kurang menyamai nilai saksama akibat daripada tempoh kematangan instrumenkewangan ini yang agak pendek.

(ii) Pinjaman – Pinjaman Berjangka

Nilai saksama pinjaman berjangka lebih kurang menyamai jumlah penyimpanan memandangkan kadar faedahterdapat pada pinjaman ini lebih kurang menyamai kadar faedah semasa bagi liabiliti dengan profil risiko yangserupa.

42. MAKLUMAT MENGIKUT SEGMEN

Kumpulan disusun ke dalam tiga segmen utama:

i) Pembinaan – kejuruteraan asas dan awam, kerja-kerja kontrak bangunan dan kejuruteraan, pemerolehan,pembinaan dan penyelenggaraan sistem saluran paip.

ii) Pembangunan hartanah – pembangunan hartanah kediaman dan komersil.

iii) Perkilangan – perkilangan dan pengedaran konkrit siap campur dan cerucuk terpintal konkrit.

Lain-lain segmen perniagaan mewakili sewa loji dan jentera yang tidak begitu ketara untuk dilaporkan secaraberasingan.

Para Pengarah berpendapat bahawa semua urusniaga antara segmen telah diurus dalam perjalanan biasa perniagaandan telah diwujudkan atas terma-terma dan syarat-syarat yang tidak jauh berbeza daripada yang diperolehi dalamurusniaga-urusniaga dengan pihak tidak berkaitan.

Tiada analisis bagi segmen geografi dibentangkan memandangkan Kumpulan beroperasi secara utamanya di Malaysiadan operasi luar negera Kumpulan dianggap tidak penting.



42. MAKLUMAT MENGIKUT SEGMEN (SAMB.)

Pembangunan PenghapusanPembinaan Hartanah Perkilangan Lain-lain Kira Disatukan

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

PENDAPATAN DAN PERBELANJAAN

PendapatanJualan luar 33,693 66,966 11,233 63,967 41,522 42,034 534 1,141 – – 86,982 174,108Jualan antara segmen 12,671 40,139 – – 1,122 3,377 9 7 (13,802) (43,523) – –

Jumlah pendapatan 46,364 107,105 11,233 63,967 42,644 45,411 543 1,148 86,982 174,108

KeputusanKeputusan segmen(Kerugian)/keuntungan

daripada operasi (7,865) 5,402 (17,785) 5,282 804 2,589 (377) (109) – – (25,223) 13,164Pembiayaan kos (6,058) (5,516) (72) (22) (390) (245) (30) (84) – – (6,550) (5,867)Bahagian keputusan

syarikat bersekutu – – – – (2,051) (1,206) – – – – (2,051) (1,206)Cukai (1,138) (3,049) – – (186) (427) – – – – (1,324) (3,476)

(Kerugian)/keuntunganselepas cukai (35,148) 2,615

Kepentingan minoriti 47 1,264

(Kerugian)/keuntunganbersih bagi tahun (35,101) 3,879

ASET DAN LIABILITI

Aset segmen 149,567 184,990 184,969 201,994 16,353 17,248 29 – – – 350,918 404,232Pelaburan dalam cara

ekuiti syarikat bersekutu – – – – 11,506 13,057 (222) 257 – – 11,284 13,314

Jumlah aset disatukan 362,202 417,546

Liabiliti segmen 179,609 199,994 43,481 43,183 15,462 15,622 8 66 – – 238,560 258,865

MAKLUMAT LAIN

Susutnilai 5,696 8,446 205 193 716 1,042 – – – – 6,617 9,681Perbelanjaan modal 8,046 17,074 4 301 105 746 – – – – 8,155 18,121Perbelanjaan bukan tunai

selain daripada susutnilaidan pelunasan 11,896 1,704 6,793 5,924 – 37 – – – – 18,689 7,665



Directors’ Report

Statement by Directors

Statutory Declaration

Report of the Auditors

Income Statements

Balance Sheets

Statements of Changes in Equity

Consolidated Cash Flow Statement

Cash Flow Statement

Notes to the Financial Statements

112-114

115

115

116-117

118

119-120

121

122

123

124-174


financial statements



The Directors present their report together with the audited financial statements of the Group and of the Company for thefinancial year ended 31 December 2006.

PRINCIPAL ACTIVITIES

The principal activities of the Company consist of foundation engineering, civil engineering, building contracting works andhire of plant and machinery.

The principal activities of the subsidiaries and associates are disclosed in Note 20 and Note 21 to the financial statementsrespectively.

There have been no significant changes in the nature of the principal activities during the financial year.

RESULTS

Group CompanyRM'000 RM'000

Net loss for the financial year 35,148 14,956

Attributable to:Equity holders of the Company 35,101 14,956Minority interests 47 –

35,148 14,956

There were no material transfers to or from reserves or provisions during the financial year, except as disclosed in theStatements of Changes in Equity.

In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial yearwere not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year.

The Directors do not recommend the payment of any dividend for the current financial year.

DIRECTORS

The names of the Directors of the Company in office since the date of the last report and at the date of this report are:

Abdul Kadir Bin Md KassimY.Bhg. Dato' Low Tuck ChoyLow Teik KienLai Moo ChanY.Bhg. Datuk Sulaiman Bin DaudY.Bhg. Dato' Mohd Ghazali @ Fauzi Bin YacubFaris Najhan Bin Hashim

directors� report



DIRECTORS' BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which theCompany was a party, whereby the Directors might acquire benefits by means of the acquisition of shares in theCompany or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other thanbenefits included in the aggregate amount of emoluments received or due and receivable by the Directors as shown inNote 12 to the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contractmade by the Company or a related corporation with any Director or with a firm of which the Director is a member orwith a company in which the Director has a substantial financial interest, except as disclosed in Note 37 to the financialstatements.

DIRECTORS' INTERESTS

According to the register of Directors' shareholdings, the interests of Directors in office at the end of the financial year inshares in the Company and its related corporations during the financial year were as follows:

<----------- Number of Ordinary Shares of RM1 Each ----------->At 1 At 31

January December2006 Bought Sold 2006

The Company

Direct interestY.Bhg. Dato' Low Tuck Choy 1,270,000 49,000 – 1,319,000Low Teik Kien 698,700 – – 698,700Lai Moo Chan 1,981,422 – (3,000) 1,978,422

Indirect interestY.Bhg. Dato' Low Tuck Choy 25,162,629 – – 25,162,629Low Teik Kien 25,162,629 – – 25,162,629

Y.Bhg. Dato' Low Tuck Choy and Low Teik Kien by virtue of their interest in shares of the Company are also deemedinterested in shares of all the Company's subsidiaries to the extent the Company has an interest.

None of the other Directors in office at the end of the financial year had any interest in shares in the Company or itsrelated corporations during the financial year.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the Directorstook reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making ofprovision for doubtful debts and satisfied themselves that all known bad debts had been written off and thatadequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting recordsin the ordinary course of business had been written down to an amount which they might be expected so torealise.

OTHER STATUTORY INFORMATION (CONT’D)

(b) At the date of this report, the Directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the provision for doubtful debts in the financialstatements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Companymisleading.

(c) At the date of this report, the Directors are not aware of any circumstances which have arisen which would renderadherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading orinappropriate.

(d) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report orfinancial statements of the Group and of the Company which would render any amount stated in the financialstatements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial yearwhich secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the Directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period oftwelve months after the end of the financial year which will or may affect the ability of the Group or of theCompany to meet their obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of thefinancial year and the date of this report which is likely to affect substantially the results of the operations of theGroup or of the Company for the financial year in which this report is made.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are as disclosed in Note 38 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE

Significant events subsequent to the balance sheet date are as disclosed in Note 39 to the financial statements.

AUDITORS

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 31 July 2007.




We, Y.BHG. DATO' LOW TUCK CHOY and FARIS NAJHAN BIN HASHIM, being two of the Directors of HO HUPCONSTRUCTION COMPANY BERHAD, do hereby state that, in the opinion of the Directors, the accompanying financialstatements set out on pages 118 to 174 are drawn up in accordance with applicable Financial Reporting Standards inMalaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the financial position of theGroup and of the Company as at 31 December 2006 and of the results and the cash flows of the Group and of theCompany for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 31 July 2007.


statutory declarationPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, FARIS NAJHAN BIN HASHIM, being the Director primarily responsible for the financial management of HO HUPCONSTRUCTION COMPANY BERHAD, do solemnly and sincerely declare that the accompanying financial statements setout on pages 118 to 174 are in my opinion correct, and I make this solemn declaration conscientiously believing the sameto be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared )by the abovenamed FARIS NAJHAN BIN HASHIM )at Kuala Lumpur in the Federal Territory )on 31 July 2007. ) FARIS NAJHAN BIN HASHIM

Before me,

N. NAGENDRAM (W 468)Commissioner for Oaths



statement by directorsPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We have audited the financial statements set out on pages 118 to 174. These financial statements are the responsibilityof the Company’s Directors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report ouropinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We donot assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believethat our audit provides a reasonable basis for our opinion.

In our opinion:

(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of:

(i) the financial position of the Group and of the Company as at 31 December 2006 and of the results and thecash flows of the Group and of the Company for the year then ended; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements;and

(b) the accounting and other records and the registers required by the Act to be kept by the Company and by itssubsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of theAct.

We have considered the financial statements and the auditors’ reports thereon of the subsidiaries of which we have notacted as auditors, as indicated in Note 20 to the financial statements, being financial statements that have been includedin the consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financialstatements of the Company are in form and content appropriate and proper for the purposes of the preparation of theconsolidated financial statements and we have received satisfactory information and explanations required by us for thosepurposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to theconsolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.

Without qualifying our opinion, we draw attention to the following:

Note 25 and Note 40 to the financial statements disclose details of material litigation relating to the Group and theCompany. Should the outcome of the matters referred to in Note 25 and Note 40 be unfavourable to the Group and theCompany, it may give rise to significant uncertainty on the abilities of the Group and the Company to continue as goingconcerns as significant adjustments may be required for additional provision for doubtful debts and/or further liabilities inthe financial statements of the Group and the Company. As disclosed in Note 2 to the financial statements, the Directorsof the Company, after due consultation with their legal advisers as to the possible outcome of the uncertainties referredto in Note 25 and Note 40, considered it appropriate to prepare the financial statements of the Group and the Companyon a going-concern basis.



report of the auditorsTO THE MEMBERS OF HO HUP CONSTRUCTION COMPANY BERHAD (Incorporated in Malaysia)

The financial statements indicates that the Group and the Company incurred a net loss of RM35.1 million and RM14.9million respectively during the year ended 31 December 2006 and, as of that date, the Group's current liabilities exceededits current assets by RM37.6 million. The financial statements further show that the Group and the Company havenegative operating cash flows of RM20.2 million and RM26.5 million respectively. In addition, as disclosed in Note 31 andNote 32 to the financial statements, the Company has not met certain of its repayment obligations relating to revolvingcredit and hire purchase facilities with AmBank (M) Berhad. These conditions, along with the matter as set forth in thepreceding paragraph, indicate the existence of material uncertainties which may cast significant doubt about the Group'sand the Company's ability to continue as a going concern. The ability of the Group and the Company to continue as goingconcerns depends upon the securing of viable contracts and continued support of bankers, creditors and shareholders.

The financial statements of the Group and the Company have been prepared on a going concern basis which assumesthat the Group and the Company will continue in operational existence for the foreseeable future and having adequatefunds to meet their obligations as and when they fall due. The validity of this assumption is dependent upon the factorsas outlined in the two preceding paragraphs.

The financial statements of the Group and the Company do not include any adjustments relating to the recoverability andreclassification of recorded assets amounts or to amounts and classification of liabilities that may be necessary if theCompany and the Group are unable to continue as going concerns.

In view of the significance of these uncertainties, we consider that these disclosures should be brought to your attention.

ERNST & YOUNG TAN SOO YANAF: 0039 No.1307/03/08(J/PH)Chartered Accountants Partner

Kuala Lumpur, Malaysia31 July 2007



Group Company2006 2005 2006 2005

Note RM'000 RM'000 RM'000 RM'000(restated) (restated)

Revenue 8 86,982 174,108 46,431 105,740Cost of sales 9 (81,947) (125,127) (46,530) (87,037)

Gross profit 5,035 48,981 (99) 18,703Other income 10(a) 27,749 13,152 40,409 23,774Administrative expenses 10(b) (12,702) (12,504) (9,433) (8,860)Operating expenses 10(b) (45,305) (36,465) (38,689) (18,152)

(Loss)/profit from operations 10 (25,223) 13,164 (7,812) 15,465Finance costs 14 (6,550) (5,867) (6,057) (5,598)Share of result of associates (2,051) (1,206) – –

(Loss)/profit before taxation (33,824) 6,091 (13,869) 9,867Taxation 15 (1,324) (3,476) (1,087) (2,500)

(Loss)/profit for the financial year (35,148) 2,615 (14,956) 7,367

Attributable to:Equity holders of the Company (35,101) 3,879 (14,956) 7,367Minority interest (47) (1,264) – –

(35,148) 2,615 (14,956) 7,367

(Loss)/earnings per share attributable toequity holders of the Company

Basic/diluted (loss)/earning per share (sen) 16 (34.4) 3.8

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



income statementsFOR THE YEAR ENDED 31 DECEMBER 2006

Group Company2006 2005 2006 2005


NON-CURRENT ASSETS

Property, plant and equipment 17 41,145 42,178 39,374 39,570Investment properties 18 1,712 5,580 1,712 5,281Land held for property development 19(a) 122,183 122,183 – –Investment in subsidiaries 20 – – 21,002 20,990Investment in associates 21 11,284 13,314 10,566 10,566Investment in jointly controlled entities 22 – – – –Other investments 23 35 35 – –Deferred tax assets 33 21 – – –

176,380 183,290 72,654 76,407

CURRENT ASSETS

Property development costs 19(b) 26,180 28,753 – –Inventories 24 159 175 – –Trade receivables 25 117,739 137,462 59,309 65,304Other receivables 26 11,320 14,679 210,132 212,594Cash and bank balances 28 30,424 53,187 28,120 49,785

185,822 234,256 297,561 327,683

TOTAL ASSETS 362,202 417,546 370,215 404,090




balance sheetsAS AT 31 DECEMBER 2006

Group Company2006 2005 2006 2005


EQUITY AND LIABILITIESEquity attributable to equityholders of the Company

Share capital 29 102,000 102,000 102,000 102,000Reserves 30 19,728 54,720 72,613 87,569

Shareholders' equity 121,728 156,720 174,613 189,569Minority interests 1,914 1,961 – –

Total equity 123,642 158,681 174,613 189,569

NON-CURRENT LIABILITIES

Long term borrowings 31 15,128 32,115 10,558 17,534Deferred tax liabilities 33 – 71 – –

15,128 32,186 10,558 17,534

CURRENT LIABILITIES

Short term borrowings 31 73,158 82,848 52,205 64,133Trade payables 34 104,096 112,602 86,625 96,261Other payables 35 38,135 23,918 40,357 31,718Tax payable 8,043 7,311 5,857 4,875

223,432 226,679 185,044 196,987

Total liabilities 238,560 258,865 195,602 214,521

TOTAL EQUITY AND LIABILITIES 362,202 417,546 370,215 404,090




<----- Attributable to Equity Holders of the Company ----->Non-

Distributable Non-Foreign Distributable Distributable

Share exchange Reserve on retained Minoritycapital reserve consolidation profits interest Total

Note RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

GROUP

At 1 January 2005 102,000 5,410 236 45,327 3,225 156,198

Net profit/(loss) for the year – – – 3,879 (1,264) 2,615

Exchange difference on translationof net assets of a foreign subsidiaryand an associate – (132) – – – (132)

At 31 December 2005 102,000 5,278 236 49,206 1,961 158,681

At 1 January 2006As previously stated 102,000 5,278 236 49,206 1,961 158,681Effects of adopting FRS 3 3(c) – – (236) 236 – –

102,000 5,278 – 49,442 1,961 158,681

Net loss for the year – – – (35,101) (47) (35,148)

Exchange difference on translationof net assets of a foreign subsidiaryand an associate – 109 – – – 109

At 31 December 2006 102,000 5,387 – 14,341 1,914 123,642

DistributableShare retainedcapital profits TotalRM'000 RM'000 RM'000

COMPANY

At 1 January 2005 102,000 80,202 182,202

Net profit for the year – 7,367 7,367

At 31 December 2005 102,000 87,569 189,569

At 1 January 2006 102,000 87,569 189,569

Net loss for the year – (14,956) (14,956)

At 31 December 2006 102,000 72,613 174,613




statements of changes in equityFOR THE YEAR ENDED 31 DECEMBER 2006

2006 2005RM'000 RM'000

(restated)

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit before taxation (33,824) 6,091Adjustments for:

Bad debts written off 1,409 1,595Provision for doubtful debts 10,487 145Write back of provision for doubtful debts (41) (444)Depreciation of property, plant and equipment 6,599 9,652Gain on disposal of property, plant and equipment (10,583) (9,712)Depreciation of investment properties 18 29Gain on disposal of investment properties (13,876) –Unrealised foreign exchange gain (419) –Provision for liquidated ascertained damages 6,793 5,925Interest income (1,336) (1,344)Interest expense 6,550 5,867Share of results of associates 2,051 1,206

Operating (loss)/profit before working capital changes (26,172) 19,010

Property development costs 5,573 14,354Inventories 16 14Receivables 11,646 (49,610)Payables (1,082) 9,538

Cash used in operations (10,019) (6,694)Tax paid (684) (524)Interest paid (9,550) (8,867)

Net cash used in operating activities (20,253) (16,085)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (7,130) (2,917)Investments in associates – (257)Proceeds from disposal of property, plant and equipment 13,172 11,088Proceeds from disposal of investment properties 17,726 –Interest received 1,336 1,344

Net cash generated from investing activities 25,104 9,258

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of hire purchase financing (21,282) (4,519)Bank borrowings (8,154) 3,307

Net cash used in financing activities (29,436) (1,212)

NET DECREASE IN CASH AND CASH EQUIVALENTS (24,585) (8,039)

EFFECTS OF EXCHANGE RATE CHANGES 88 (236)

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 34,388 42,663

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 28) 9,891 34,388




consolidated cash flow statementFOR THE YEAR ENDED 31 DECEMBER 2006

2006 2005RM'000 RM'000

(restated)

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/profit before taxation (13,869) 9,867Adjustments for:

Bad debts written off 1,409 1,595Provision for doubtful debts– Receivables 10,487 254– Subsidiary 13,714 –Provision for diminution in value of investment – 200Depreciation of property, plant and equipment 5,656 8,370Gain on disposal of property, plant and equipment (10,547) (9,672)Depreciation of investment properties 11 22Gain on disposal of investment properties (13,898) –Unrealised foreign exchange gain (419) –Interest income (14,311) (12,902)Interest expense 6,057 5,598

Operating (loss)/profit before working capital changes (15,710) 3,332

Receivables (3,636) (38,461)Payables (997) 31,060

Cash used in operations (20,343) (4,069)

Tax paid (105) –Interest paid (6,057) (5,598)

Net cash used in operating activities (26,505) (9,667)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (7,021) (2,416)Investments in associates – (257)Investments in subsidiaries (12) (94)Proceeds from disposal of property, plant and equipment 13,133 10,614Proceeds from disposal of investment properties 17,456 –Interest received 1,213 1,081

Net cash generated from investing activities 24,769 8,928

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of hire purchase financing (11,586) (3,835)Bank borrowings (9,631) 981

Net cash used in financing activities (21,217) (2,854)

NET DECREASE IN CASH AND CASH EQUIVALENTS (22,953) (3,593)

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 33,995 37,588

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR (NOTE 28) 11,042 33,995




cash flow statementFOR THE YEAR ENDED 31 DECEMBER 2006



notes to the financial statements31 DECEMBER 2006

1. CORPORATE INFORMATION

The principal activities of the Company consist of foundation engineering, civil engineering, building contracting worksand hire of plant and machinery.

The principal activities of the subsidiaries and associates are disclosed in Note 20 and Note 21.

There have been no significant changes in the nature of the principal activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the MainBoard of the Bursa Malaysia Securities Berhad. The registered office of the Company is located at No.2, Medan Imbi,55100 Kuala Lumpur.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of theDirectors on 31 July 2007.

2. BASIS OF PREPARATION

The financial statements of the Group and of the Company have been prepared under the historical cost conventionunless otherwise indicated. The financial statements are presented in Ringgit Malaysia ("RM") and all values arerounded to the nearest thousand except when otherwise stated.

Note 25 and Note 40 disclose details of material litigation relating to the Group and the Company. Should theoutcome of the matters referred to in Note 25 and Note 40 be unfavourable to the Group and the Company, it maygive rise to significant uncertainty on the abilities of the Group and the Company to continue as going concerns assignificant adjustments may be required for additional provision for doubtful debts and/or further liabilities in thefinancial statements of the Group and the Company. The Directors of the Company, after due consultation with theirlegal advisers as to the possible outcome of the uncertainties referred to in Note 25 and Note 40, considered itappropriate to prepare the financial statements of the Group and the Company on a going-concern basis.

The financial statements indicates that the Group and the Company incurred a net loss of RM35.1 million andRM14.9 million respectively during the year ended 31 December 2006 and, as of that date, the Group’s currentliabilities exceeded its current assets by RM37.6 million. The financial statements further show that the Group andthe Company have negative operating cash flows of RM20.2 million and RM26.5 million respectively. In addition, asdisclosed in Note 31 and Note 32, the Company has not met certain of its repayment obligations relating to revolvingcredit and hire purchase facilities with AmBank (M) Berhad. As further disclosed in Note 31 and Note 32, theCompany had on 3 July 2007 entered into a Sale and Purchase Agreement to dispose of the 3 pieces of land whichis currently charged to AmBank (M) Berhad. The disposal proceeds of approximately RM23 million would be applied,inter alia, for settlement of the revolving credit and hire purchase facilities. These conditions, along with the matteras set forth in the preceding paragraph, indicate the existence of material uncertainties which may cast significantdoubt about the Group's and the Company's ability to continue as a going concern. The ability of the Group and theCompany to continue as going concerns depends upon the securing of viable contracts and continued support ofbankers, creditors and shareholders.

The financial statements of the Group and the Company have been prepared on a going concern basis whichassumes that the Group and the Company will continue in operational existence for the foreseeable future andhaving adequate funds to meet their obligations as and when they fall due. The validity of this assumption isdependent upon the factors as outlined in the two preceding paragraphs.

The financial statements of the Group and the Company do not include any adjustments relating to the recoverabilityand reclassification of recorded assets amounts or to amounts and classification of liabilities that may be necessary ifthe Company and the Group are unable to continue as going concerns.

2. BASIS OF PREPARATION (CONT’D)

(a) Statement of compliance

The financial statements comply with the provisions of the Companies Act, 1965 and applicable FinancialReporting Standards ("FRSs") in Malaysia. At the beginning of the current financial year, the Group and theCompany had adopted new and revised FRSs which are mandatory for financial periods beginning on or after1 January 2006 as described in Note 3.

(b) Basis of Consolidation

(i) Subsidiaries

The consolidated financial statements include the financial statements of the Company and all itssubsidiaries. Subsidiaries are those entities in which the Group has power to exercise control over thefinancial and operating policies so as to obtain benefits from their activities. The existence and effect ofpotential voting rights that are currently exercisable or convertible are considered when assessing whetherthe Group has such power over another entity.

Financial statements of the subsidiaries are consolidated using the acquisition method of accounting.

Under the acquisition method of accounting, the results of subsidiaries are consolidated from the date ofacquisition, being the date on which the Group obtains control, and continue to be consolidated until thedate that such control ceases. The cost of an acquisition is measured as the aggregate of the fair values, atthe date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued,plus any costs directly attributable to the acquisition. The acquisition method of accounting involvesallocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingentliabilities assumed at the date of acquisition. Any excess of the cost of acquisition over the Group's interestin the net fair value of the identifiable assets, liabilities and contingent liabilities represent goodwill. Anyexcess of the Group's interest in the net fair value of the identifiable assets, liabilities and contingentliabilities over the cost of acquisition is recognised immediately in income statements.

Intra-group trasactions, balances and resulting unrealised gains are eliminated on consolidation and theconsolidated financial statements reflect external transactions only. Unrealised losses are eliminated onconsolidation unless costs cannot be recovered. Uniform accounting policies are adopted in the consolidatedfinancial statements for like transactions and events in similar circumstances.

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by theGroup and are presented separately in the income statement and within equity in the consolidated balancesheet, separately from parent shareholders' equity. It is measured at the minorities' share of the fair valueof the subsidiaries' identifiable assets and liabilities at the acquisition date and the minorities' share ofchanges in the subsidiaries' equity since then.

(ii) Associates

Associates are entities in which the Group exercises significant influence but not control. Significantinfluence is the power to participate in the financial and operating policy decisions of the investee but notin control or joint control over those policies.

Investments in associates are accounted for in the consolidated financial statements using the equitymethod of accounting. Under the equity method of accounting, the investment in associate is carried in theconsolidated balance sheet at cost adjusted for post-acquisition changes in the Group's share of net assetsof the associate. The Group’s share of profits or losses of associate during the financial year is included inthe consolidated income statement. Where there has been a change recognised directly in equity of theassociate, the Group recognises its share of such changes.



2. BASIS OF PREPARATION (CONT’D)

(ii) Associates (Cont’d)

Unrealised gains on transactions between the Group and the associates are eliminated to the extent of theGroup’s interests in the associates. Unrealised losses are eliminated unless cost cannot be recovered.

After application of the equity method, the Group determines whether it is necessary to recognise anyadditional impairment loss with respect to the Group's net investment in the associate. The associate isequity accounted for from the date the Group obtains significant influence until the date the Group ceasesto have significant influence over the associate, or when it is classified as held for sale.

Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised.Any excess of the Group's share of the net fair value of the associate's identifiable assets, liabilities andcontingent liabilities over the cost of investment is excluded from the carrying amount of the investmentand is instead included in the determination of the Group's share of the associate's profit or loss in theperiod in which the investment is acquired.

When the Group's share of losses in an associate equals or exceeds its interest in associate, including anylong-term interest that, in substance, form part of the Group's net investment in the associate, the Groupdoes not recognise further losses, unless it has incurred obligations or made payments on behalf of theassociate.

The most recent available audited or management financial statements of the associate are used by theGroup in applying the equity method. Uniform accounting policies are adopted for like transactions andevents in similar circumstances.

(iii) Jointly Controlled Entities

A jointly controlled entity is an entity in which the Group has joint control over its economic activityestablished under a contractual arrangement.

Interest in jointly controlled entity is accounted for in the consolidated financial statements using the equitymethod of accounting as described in Note 2(b)(ii).

3. CHANGES IN ACCOUNTING POLICIES

The MASB has issued a number of new and revised FRS and Interpretations that are effective for financial periodsbeginning on or after 1 January 2006. Except of the changes in accounting policies and their effects as discussedbelow, the new and revised FRS and Interpretations do not have any other significant impact on the financialstatements of the Group and the Company.

(a) FRS 101: Presentation of Financial Statements

The adoption of the revised FRS 101 has affected the presentation of minority interest, share of net-after taxresults of associates and other disclosures. In the consolidated balance sheet, minority interests are nowpresented within total equity. In the consolidated income statement, minority interests are represented as anallocation of the total net profit or loss for the year. A similar requirement is also applicable to the statement ofchanges in equity. FRS 101 also requires disclosures, on the face of the statement of changes in equity, totalrecognised income and expenses for the year, showing separately the amounts attributable to equity holders ofthe parent and to minority interest.

The current financial year's presentation of the Group's financial statements is based on the revisedrequirements of FRS 101, with the comparatives restated to conform with the current year's presentation.



3. CHANGES IN ACCOUNTING POLICIES (CONT’D)

(b) FRS 140: Investment Property

Prior to 1 January 2006, investment properties were classified as property, plant and equipment and were statedat cost less accumulated depreciation and impairment losses. The adoption of FRS 140 Investment Property hasresulted in a change in the accounting policy relating to the classification of investment properties. Investmentproperties are stated at cost less accumulated depreciation and impairment losses.

The reclassification of investment properties have been accounted for restrospectively and certain comparativeshave been restated. There were no effects on the consolidated income statement and the Company's incomestatement for the year ended 31 December 2006.

(c) FRS 3: Business Combinations

Prior to 1 January 2006, negative goodwill was stated at cost. Under FRS 3, any excess of the Group’s interestin the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost of acquisitions,after reassessment, is now recognised immediately in profit or loss. In accordance with transitional provisions ofFRS 3, the negative goodwill as at 1 January 2006 of RM236,000 was derecognised with a correspondingincrease to the opening balance of retained earnings.

Because the revised accounting policy has been applied prospectively, the change has had no impact onamounts reported for 2005 or prior periods. There were no effects on the consolidated income statement for theyear ended 31 December 2006 and the Company's financial statements.

4. CHANGES IN ESTIMATES

The revised FRS 116: Property, Plant and Equipment requires the review of the residual value and remaining usefullife of an item or property, plant and equipment at least at each financial year. The revisions were accounted forprospectively as a change in accounting estimates and as a result, the depreciation charges of the Group and of theCompany for the current financial year have been reduced by RM1,730,700.

5. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

The Directors are required to make certain estimates, judgements and assumptions that they believe are reasonablebased upon the information available. These estimates and assumptions affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts of revenue and expenses during theperiods presented. On an ongoing basis, the Group evaluates its estimates using historical experience, consultationwith experts and other methods considered reasonable in the particular circumstances. Actual results may differsignificantly from the estimates, the effect of which is recognised in the period in which the facts that give rise tothe revision become known.

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheetdate, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilitieswithin the next financial year are discussed as follows:

(a) Trade and Other Receivables

The Group and the Company evaluate the collectibility of trade and other receivables and record provisions fordoubtful debts based on historical collection pattern. These provisions are based, amongst other things,comparisons of the relative age of accounts and consideration of actual write-off history. The actual level ofreceivables collected may differ from the estimated levels of recovery, which could impact the operating resultspositively or negatively. As at 31 December 2006, the Group's and the Company's gross trade and otherreceivables were RM148,976,000 (2005: RM162,251,000) and RM347,472,000 (2005: RM331,728,000)respectively, and the provision for doubtful debts made in respect of trade and other receivables wereRM19,917,000 (2005: RM10,110,000) and RM78,031,000 (2005: RM53,830,000) respectively.



5. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT’D)

(b) Classification between investment properties and property, plant and equipment

The Group and the Company have developed certain criteria based on FRS 140 in making judgement whether aproperty qualifies as an investment property. Investment property is a property held to earn rentals or for capitalappreciation or both.

(c) Depreciation of plant and machinery

The cost of plant and machinery is depreciated on a straight-line basis over the assets' useful lives.Management estimates the useful lives of these plant and machinery to be between 10 and 20 years.

Changes in the expected level of usage could impact the economic useful lives and the residual values of theseassets, therefore future depreciation charges could be revised.

A 20% difference in the average useful lives of these assets from management's estimates would result inapproximately 3% variance in the Group's loss for the year.

(d) Property development

The Group recognises property development revenue and expenses in the income statement using the stage ofcompletion method. The stage of completion is determined by the proportion that property development costsincurred for work performed to date bear to the estimated property development costs.

Significant judgement is required in determining the stage of completion, the extent of property developmentcosts incurred, the estimated total property development revenue and costs, as well as the recoverability of thedevelopment projects. In making the judgement, the Group evaluates based on past experience and by relyingon the work of specialists.

Provision for liquidated damages is provided up to the estimated completion date of development projects. Adelay in the completion date of development projects will result in further liquidated damages of approximatelyRM600,000 per month.

(e) Construction contracts

The Group recognises construction revenue and expenses in the income statement using the stage ofcompletion method. The stage of completion is determined by the proportion of contract costs incurred for workperformed to date to the estimated total contract costs.

Significant judgement is required in determining the stage of completion, the extent of construction costsincurred, the estimated total construction revenue and costs, as well as the recoverability of the constructionprojects. In making the judgement, the Group evaluates based on past experience and by relying on the work ofspecialists.

(f) Material litigations

The Group and the Company determine whether a present obligation in relation to a material litigation exists atthe balance sheet date by taking into account all available evidence, including, the opinion of the solicitors. Theevidence considered includes any additional evidence provided by events after the balance sheet date. On thebasis of such evidence, the Group and the Company evaluate if a provision needs to be recognised in thefinancial statements. Further details of the material litigations involving the Group and the Company are given inNote 40.



5. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES (CONT’D)

(g) Impairment of Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If anysuch indication exists, or when annual impairment testing for an asset is required, the Group makes an estimateof the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generatingunit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the assetdoes not generate cash inflows that are largely independent of those from other assets or groups of assets.Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and iswritten down to its recoverable amount.

6. SIGNIFICANT ACCOUNTING POLICIES

(a) Property, Plant and Equipment and Depreciation

Property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset's carryingamount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefitsassociated with the item will flow to the Group and the cost of the item can be measured reliably. The carryingamount of the replaced part is derecognised. All other repairs and maintenance are charged to the incomestatement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation andimpairment losses.

Freehold land is not depreciated. Leasehold land is depreciated over 50 years.

Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the costof each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings 2%Motor vehicles 20%Plant and machinery 5% – 10%Others 10% – 20%

The residual values, useful lives and methods of depreciation of property, plant & equipment are reviewed, andadjusted if appropriate, at each financial year end.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefitsare expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as thedifference between the net disposal proceeds and the carrying amount of the asset) is included in the incomestatement in the year the asset is derecognised.

(b) Investment Properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or forboth. Such properties are measured initially at cost, including transaction costs. Subsequent to recognition,investment properties are stated at cost less accumulated depreciation and impairment losses.

Depreciation of buildings classified as investment properties is provided for on a straight-line basis to write offthe cost of each asset to its residual value over the estimated useful life, at an annual rate of 2%.

The residual values, useful lives and methods of depreciation of investment properties are reviewed, andadjusted if appropriate, at each financial year end.



6. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(b) Investment Properties (Cont’d)

Investment properties are derecognised when either they have been disposed of or when the investmentproperty is permanently withdrawn from use and no future economic benefit is expected from its disposal. Anygain or loss arising on the retirement or disposal of an investment property are recognised in the incomestatement in the year of retirement or disposal.

(c) Investments in Subsidiaries, Associates and Jointly Controlled Entities

The Company’s investments in subsidiaries, associates and jointly controlled entities are stated at cost lessimpairment losses.

On disposal of such investments, the difference between net disposal proceeds and their carrying amounts isrecognised in the income statement.

(d) Impairment of Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If anysuch indication exists, or when annual impairment testing for an asset is required, the Group makes an estimateof the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generatingunit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the assetdoes not generate cash inflows that are largely independent of those from other assets or groups of assets.Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and iswritten down to its recoverable amount. In assessing value in use, the estimated future cash flows arediscounted to their present value using a suitable discount rate that reflects current market assessments of thetime value of money and the risks specific to the asset. In determining fair value less costs to sell, anappropriate valuation model is used. These calculations are corroborated by valuation multiples or other availablefair value indicators.

Impairment losses are recognised in the income statement in those expense categories consistent with thefunction of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognisedimpairment losses may no longer exist or may have decreased. If such indication exists, the Group makes anestimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been achange in the estimates used to determine the asset's recoverable amount since the last impairment loss wasrecognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. Thatincreased amount cannot exceed the carrying amount that would have been determined, net of depreciation, hadno impairment loss been recognised for the asset in prior years. Such reversal is recognised in the incomestatement.

(e) Land held for Property Development and Property Development Costs

(i) Land held for property development

Land held for property development consists of land where no development activities have been carried outor where development activities are not expected to be completed within the normal operating cycle. Suchland is classified within non-current assets and is stated at cost less any accumulated impairment losses.

Land held for property development is reclassified as property development costs at the point whendevelopment activities have commenced and where it can be demonstrated that the development activitiescan be completed within the normal operating cycle.




(e) Land held for Property Development and Property Development Costs (Cont’d)

(ii) Property development costs

Property development costs comprise all costs that are directly attributable to development activities or thatcan be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be reliably estimated, property developmentrevenue and expenses are recognised in the income statement by using the stage of completion method.The stage of completion is determined by the proportion that property development costs incurred for workperformed to date bear to the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property developmentrevenue is recognised only to the extent of property development costs incurred that is probable will berecoverable, and property development costs on properties sold are recognised as an expense in the periodin which they are incurred.

Any expected loss on a development project is recognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is measuredat the lower of cost and net realisable value.

The excess of revenue recognised in the income statement over billings to purchasers is classified asaccrued billings within trade receivables and the excess of billings to purchasers over revenue recognised inthe income statement is classified as progress billings within trade payables.

(f) Construction Contracts

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs arerecognised as revenue and expenses respectively by using the stage of completion method. The stage ofcompletion is measured by reference to the proportion of contract costs incurred for work performed to date tothe estimated total contract costs.

Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised tothe extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised asexpenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognisedas an expense immediately.

When the total of costs incurred on construction contracts plus recognised profits (less recognised losses)exceeds progress billings, the balance is classified as amount due from customers on contracts. When progressbillings exceed costs incurred plus recognised profits (less recognised losses), the balance is classified asamount due to customers on contracts.

(g) Other Investments

Other investments are stated at cost less impairment losses. On disposal of an investment, the differencebetween net disposal proceeds and its carrying amount is recognised in the income statement.




(h) Inventories

Inventories which represent construction materials are stated at the lower of cost (determined on the first-in,first-out basis) and net realisable value. Net realisable value represents the estimated selling price in the ordinarycourse of business less the estimated costs of completion and the costs necessary to make the sale.

(i) Trade and Other Receivables

Trade and other receivables are carried at anticipated realisable values. Bad debts are written off when identified.An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheetdate.

(j) Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at banksand deposits at call which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

(k) Equity and Financial Liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractualarrangements entered into. An equity instrument is any contract that evidences a residual interest in the assetsof the Group after deducting all of its liabilities.

Interest, dividends and gains and losses relating to a financial liability are reported as expenses or income.Distributions to holders of equity instruments are recognised directly in equity.

(i) Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the periodin which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax.Equity transaction costs comprise only those incremental external costs directly attributable to the equitytransaction which would otherwise have been avoided.

(ii) Interest-Bearing Borrowings and Borrowing Costs

Interest-bearing borrowings are initially recognised at the fair value of the consideration received lessdirectly attributable transaction costs.

After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using theeffective interest method.

Finance costs, including premiums payable on settlement or redemption and direct issue costs, areaccounted for on an accrual basis to the income statement using the effective interest method and areadded to the carrying amount of the instrument to the extent they are not settled in the period in whichthey arise.

Finance cost directly attributable to the acquisition, construction or production of qualifying assets, whichare assets that necessarily take a substantial period of time to get ready for their intended use or sale, arecapitalised as part of the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale. The amount of finance cost eligible for capitalisation is determined by applying acapitalisation rate which is the weighted average of the finance cost applicable to the Group’s borrowingsthat are outstanding during the financial year, other than borrowings made specifically for the purpose ofacquiring another qualifying asset. For borrowings made specifically for the purpose of acquiring a qualifyingasset, the amount of finance cost eligible for capitalisation is the actual finance cost incurred on thatborrowing during the period less any investment income on the temporary investment of funds drawn downfrom that borrowing facility.




(k) Equity and Financial Liabilities (Cont’d)

(iii) Trade and Other Payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in thefuture for goods and services received.

(l) Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expectedamount of income taxes payable in respect of the taxable profit for the year and is measured using the tax ratesthat have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. Inprinciple, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets arerecognised for all deductible temporary differences, unutilised tax losses and unutilised tax credits to the extentthat it is probable that taxable profit will be available against which the deductible temporary differences,unutilised tax losses and unutilised tax credits can be utilised. Deferred tax is not recognised if the temporarydifference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in atransaction which is not a business combination and at the time of the transaction, affects neither accountingprofit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised orthe liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheetdate. Deferred tax is recognised in the income statement, except when it arises from a transaction which isrecognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when itarises from a business combination that is an acquisition, in which case the deferred tax is included in theresulting goodwill or the amount of any excess of the acquirer's interest in the net fair value of the acquiree'sidentifiable assets, liabilities and contingent liabilities over the cost of the combination.

(m) Provisions for Liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event andit is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date andadjusted to reflect the current best estimate. Where the effect of the time value of money is material,provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risk specific to theliability. Where discounting is used, the increase in the provision due to the passage of time is recognised asfinance cost.

(n) Leases

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewardsincidental to ownership. All other leases are classified as operating leases.

(i) Finance Leases

Assets acquired by way of hire-purchase or finance leases are stated at an amount equal to the lower oftheir fair values and the present value of the minimum lease payments at the inception of the leases, lessaccumulated depreciation and impairment losses. The corresponding liability is included in the balance sheetas borrowings. In calculating the present value of the minimum lease payments, the discount factor used isthe interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’sincremental borrowing rate is used.




(n) Leases (Cont’d)

(i) Finance Leases (Cont’d)

Lease payments are apportioned between the finance cost and the reduction of the outstanding liability.Finance cost, which represent the difference between the total leasing commitments and the fair value ofthe assets acquired, are recognised as an expense in the income statement over the term of the relevantlease so as to produce a constant periodic rate of charge on the remaining balance of the obligations foreach accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant andequipment as described in Note 6(a).

(ii) Operating Leases

Operating lease payments are recognised as an expense in the income statement on a straight-line basisover the term of the relevant lease.

(o) Employee Benefits

(i) Short-Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year inwhich the associated services are rendered by employees of the Group. Short-term accumulatingcompensated absences such as paid annual leave are recognised when services are rendered by employeesthat increase their entitlement to future compensated absences. Short-term non-accumulating compensatedabsences such as sick leave are recognised when the absences occur.

(ii) Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributioninto separate entities or funds and will have no legal or constructive obligation to pay further contributions ifany of the funds do not hold sufficient assets to pay all employee benefits relating to employee services inthe current and preceding financial years.

As required by law, companies in Malaysia make contributions to the EPF. Such contributions arerecognised as an expense in the income statement as incurred.

(p) Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flowto the enterprise and the amount of the revenue can be measured reliably.

(i) Construction Contracts

Revenue from construction contracts is accounted for by the stage of completion method as described inNote 6(f).

(ii) Sale of Properties

Revenue from sale of properties is accounted for by the percentage of completion method as described inNote 6(e)(ii).




(p) Revenue Recognition (Cont’d)

(iii) Sale of Goods

Revenue relating to sale of goods is recognised net of sales taxes and discounts upon the transfer of risksand rewards.

(iv) Hire of Plant and Machinery

Revenue from hire of plant and machinery is recognised on an accrual basis.

(q) Foreign Currencies

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are measured using the currency of theprimary economic environment in which the entity operates ("the functional currency"). The consolidatedfinancial statements are presented in RM, which is also the Company's functional currency.

(ii) Foreign Currency Transactions

In preparing the financial statements of the individual entities, transactions in currencies other than theentity's functional currency (foreign currency) are recorded in the functional currencies using the exchangerates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominatedin foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary itemscarried at fair value that are denominated in foreign currencies are translated at the rates prevailing on thedate when the fair value was determined. Non-monetary items that are measured in terms of historical costin a foreign currency are not translated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetaryitems, are included in the profit or loss for the period except for exchange differences arising on monetaryitems that form part of the Group's net investment in foreign operation. Exchange differences arising onmonetary items that form part of the Group's net investment in foreign operation, where that monetaryitem is denominated in either the functional currency of the reporting entity or the foreign operation, areinitially taken directly to the foreign currency translation reserve within equity until the disposal of theforeign operation, at which time they are recognised in profit or loss.

Exchange differences arising on monetary item that form part of the Group's net investment in foreignoperation, where that monetary item is denominated in a currency other than the functional currency ofeither the reporting entity or the foreign operation, are recognised in the profit or loss for the period.Exchange differences arising on monetary items that form part of the Company's net investment in foreignoperation, regardless of the currency of the monetary item, are recognised in the profit or loss in theCompany's financial statements or the individual financial statements of the foreign operation, asappropriate.

Exchange differences arising on the translation of non-monetary items carried at fair value are included inprofit or loss for the period except for the differences arising on the translation of non-monetary items inrespect of which gains and losses are recognised directly in equity. Exchange differences arising from suchnon-monetary items are also recognised directly in equity.




(q) Foreign Currencies (Cont’d)

(ii) Foreign Currency Transactions (Cont’d)

The principal exchange rate used for every unit of foreign currency ruling at the balance sheet date is asfollows:

2006 2005RM RM

100 Indian Rupee 7.84 8.201 Chinese Renminbi 0.45 0.471 USD 3.53 3.77100 Thai Baht 9.81 –100 South African Rand 50.10 –1000 Madagascar Ariary 1.82 1.77

(iii) Foreign Operations

The results and financial position of foreign operations that have a functional currency different from thepresentation currency (RM) of the consolidated financial statements are translated into RM as follows:

(a) Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing atthe balance sheet date;

(b) Income and expenses for each income statement are translated at average exchange rates for theyear, which approximates the exchange rates at the dates of the transactions; and

(c) All resulting exchange differences are taken to the foreign currency translation reserve within equity.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January2006 are treated as assets and liabilities of the foreign operations and are recorded in the functionalcurrency of the foreign operations and translated at the closing rate at the balance sheet date. Goodwill andfair value adjustments which arose on acquisition of foreign subsidiaries before 1 January 2006 are deemedto be assets and liabilities of the parent company and are recorded in RM at the rates prevailing at the dateof acquisition.

(r) Fair Value Estimation for Disclosure Purposes

In assessing the fair value of financial instruments, the Group and the Company use a variety of methods andmake assumptions that are based on market conditions existing at each balance sheet date.

The fair value of publicly traded securities is based on quoted market prices at the balance sheet date. Wherethere is no active market, fair value is established using a valuation technique. Valuation techniques include usingrecent arm's length market transactions between knowledgeable, willing parties, if available, reference to thecurrent fair value of another instrument that is substantially the same, discounted cash flow analysis and optionpricing models.

The face values for financial assets and financial liabilities with maturity of less than one (1) year are assumed toapproximate their fair values.



7. FUTURE CHANGES IN ACCOUNTING POLICIES

At the date of authorisation of these financial statements, the following FRS, amendments to FRS and Interpretationswere issued but not yet effective and have not been applied by the Group and the Company:

Effective forfinancial periods

beginningon or after

(i) FRS 117 – Leases 1 October 2006

(ii) FRS 124 – Related Party Disclosures 1 October 2006

(iii) FRS 139 – Financial Instruments: Recognition and Measurement Deferred

(iv) FRS 6 – Exploration for an Evaluation of Mineral Resources 1 January 2007

(v) Amendment to FRS 1192004 – Employee Benefits – Actuarial Gains and Losses,Group Plans and Disclosures 1 January 2007

(vi) Amendments to FRS 121 – The Effects of Changes in ForeignExchange Rates – Net Investment in a Foreign Operation 1 July 2007

(vii) IC Interpretation 1: Changes in Existing Decommissioning, Restorationand Similar Liabilities 1 July 2007

(viii) IC Interpretation 2: Members' Shares in Co-operative Entities and Similar Instruments 1 July 2007

(ix) IC Interpretation 5: Rights to Interest arising from Decommissioning, Restoration andEnvironmental Rehabilitation Funds 1 July 2007

(x) IC Interpretation 6: Liabilities arising from Participating in a Specific Market– Waste Electrical and Electronic Equipment 1 July 2007

(xi) IC Interpretation 7: Applying the Restatement Approach under FRS 1292004

– Financial Reporting in Hyperinflationary Economies 1 July 2007

(xii) IC Interpretation 8: Scope of FRS 2 1 July 2007

(xiii) FRS 107 – Cash Flow Statements 1 July 2007

(xiv) FRS 111 – Construction Contracts 1 July 2007

(xv) FRS 112 – Income Taxes 1 July 2007

(xvi) FRS 118 – Revenue 1 July 2007

(xvii) FRS 119 – Employee Benefits 1 July 2007

(xviii) FRS 120 – Accounting for Government Grants and Disclosure of Government Assistance 1 July 2007

(xix) FRS 126 – Accounting and Reporting by Retirement Benefit Plans 1 July 2007

(xx) FRS 129 – Financial Reporting in Hyperinflationary Economies 1 July 2007

(xxi) FRS 134 – Interim Financial Reporting 1 July 2007

(xxii) FRS 137 – Provision, Contingent Liabilities and Contingent Assets 1 July 2007



7. FUTURE CHANGES IN ACCOUNTING POLICIES (CONT’D)

The Group and the Company are exempted from disclosing the possible impact, if any, to the financial statementsupon the initial application of FRS 117, 124 and FRS 139.

FRS 6 is not relevant to the Group's and the Company's operations and the adoption of the above amendments andInterpretations will have no impact on the financial statements of the Group and of the Company.

8. REVENUE

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Construction contracts 33,693 66,966 45,888 104,485Sale of development properties 11,233 63,967 – –Sale of goods 41,522 42,034 – –Hire of plant and machinery 534 1,141 543 1,255

86,982 174,108 46,431 105,740

9. COST OF SALES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Construction contract costs 36,879 43,286 46,530 87,037Property development costs 13,363 49,853 – –Cost of goods sold 31,705 31,988 – –

81,947 125,127 46,530 87,037

Included in the construction contract costs of the Group and of the Company are the following staff costs (Note 11):

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Wages and salaries 3,774 4,077 3,774 4,077Social security costs 86 58 86 58Pension cost – defined contribution plans 405 444 405 444Other staff related expenses 442 638 442 638

4,707 5,217 4,707 5,217



10. (LOSS)/PROFIT FROM OPERATIONS

(Loss)/profit from operations is stated after (crediting)/charging to the following:

(a) Other income

Included in other income of the Group and of the Company are the following:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000Interest income

– from subsidiaries – – (13,098) (11,821)– deposits with financial institutions (1,336) (1,344) (1,213) (1,081)

Write back of provision for doubtful debts (41) (444) – –Gain on disposal of property, plant and equipment (10,583) (9,712) (10,547) (9,672)Gain on disposal of investment properties (13,876) – (13,898) –Rental income (356) (725) (147) (306)Unrealised foreign exchange gain (419) – (419) –

(b) Administrative and operating expenses

Included in administrative and operating expenses of the Group and of the Company are the following:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000(Restated) (Restated)

Staff costs (Note 11) 11,989 14,228 6,634 8,285Non-executive Directors’ remuneration (Note 12) 213 263 213 263Auditors' remuneration (Note 13)– Statutory audits 268 110 98 45– Other services 10 8 – –Bad debts written off 1,409 1,595 1,409 1,595Provision for doubtful debts– Receivables 10,487 145 10,487 254– Subsidiary – – 13,714 –Depreciation of property, plant and

equipment (Note 17) 6,599 9,652 5,656 8,370Depreciation of investment properties (Note 18) 18 29 11 22Office and store rental 1,631 1,561 965 876Hire of plant and machineries 26 97 – –Provision for diminution in value of investment – – – 200Provision for liquidated ascertained

damages (Note 35) 6,793 5,925 – –Rental of equipment 28 30 – –



11. STAFF COSTS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Wages and salaries 12,314 14,337 8,909 10,440Social security costs 391 387 148 126Pension cost – defined contribution plans 1,117 1,330 970 1,159Other staff related expenses 2,874 3,391 1,314 1,777

16,696 19,445 11,341 13,502

Included in staff costs of the Group and of the Company are executive Directors’ remuneration amounting toRM1,014,000 (2005: RM1,093,000) and RM984,000 (2005: RM1,063,000) respectively as further disclosed in Note 12.

12. DIRECTORS’ REMUNERATION

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Directors of the CompanyExecutive:

Salaries and other emoluments 984 1,063 984 1,063Benefits-in-kind 37 37 37 37Fees 30 30 – –

Non-executive:Fees 213 263 213 263

1,264 1,393 1,234 1,363

Analysis excluding benefits-in-kind:Total executive Directors’ remuneration excluding

benefits-in-kind (Note 11) 1,014 1,093 984 1,063Total non-executive Directors’ remuneration excluding

benefits-in-kind (Note 10(b)) 213 263 213 263Total Directors’ remuneration excluding

benefits-in-kind 1,227 1,356 1,197 1,326

The number of Directors of the Company whose total remuneration during the year fell within the following bands isanalysed below:

Number of Directors2006 2005

Executive Directors:RM250,001 to RM300,000 2 2RM400,001 to RM450,000 1 1

Non-executive Directors:Below RM50,000 1 2RM50,001 to RM100,000 3 3



13. AUDITORS' REMUNERATION

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Auditors of the CompanyStatutory audit 243 80 98 45

Other auditorsStatutory audit 25 30 – –Fees for other services:

– Tax advisory 6 6 – –– Others 4 2 – –

278 118 98 45

14. FINANCE COSTS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Interest expense on:– Bankers’ acceptances 814 722 674 597– Bank overdrafts 1,731 1,336 1,451 1,231– Revolving credits 2,183 2,026 2,183 2,026– Hire purchase 1,536 1,783 1,463 1,744– Term loan 286 – 286 –

6,550 5,867 6,057 5,598

15. TAXATION

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Current income tax:Malaysian income tax 259 3,068 – 2,500Real property gains tax 675 – 675 –Foreign income tax 52 549 1 –Underprovision in prior years 430 – 411 –

1,416 3,617 1,087 2,500

Deferred tax (Note 33):Relating to origination and reversal

of temporary differences (92) 89 – –

Overprovision in prior years – (230) – –

(92) (141) – –

1,324 3,476 1,087 2,500

Domestic income tax is calculated at the Malaysian statutory tax rate of 28% (2005: 28%) of the estimatedassessable profit for the year. The domestic statutory tax rate will be reduced to 27% from the current year's rate of28%, effective year of assessment 2007 and to 26% effective year of assessment 2008. The computation ofdeferred tax as at 31 December 2006 has reflected these changes.



15. TAXATION (CONT’D)

A reconciliation of income tax expense applicable to (loss)/profit before taxation at the statutory income tax rate toincome tax expense at the effective income tax rate of the Group and of the Company is as follows:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

(Loss)/profit before taxation (33,824) 6,091 (13,869) 9,867

Taxation at Malaysian statutory tax rate of 28%(2005: 28%) (9,471) 1,705 (3,883) 2,763

Effect of different tax rate for small and mediumscale companies of 20% for the first chargeableincome of RM500,000 (33) – – –

Effects of different tax rate in other country (24) 127 – –Income not subject to income tax (3,891) (467) (3,891) (467)Expenses not deductible for tax purposes 1,603 1,195 4,459 262Deferred tax not recognised during the year 12,035 1,204 3,316 –Utilisation of previously

unrecognised deferred tax assets – (58) – (58)Under-provision of income tax in prior years 430 – 411 –Over-provision of deferred tax in prior years – (230) – –Real property gains tax 675 – 675 –

Tax expense for the year 1,324 3,476 1,087 2,500

Tax losses are analysed as follows:

Tax savings recognised during the year arising from:Utilisation of current year tax losses 3,099 80 3,099 80

16. BASIC/DILUTED (LOSS)/EARNINGS PER SHARE (SEN)

The basic/diluted (loss)/earnings per share is calculated by dividing the net (loss)/profit for the year by the weightedaverage number of ordinary shares in issue during the financial year.

2006 2005

Net (loss)/profit for the year (RM'000) (35,101) 3,879Weighted average number of ordinary shares in issue ('000) 102,000 102,000Basic/diluted (loss)/earnings per share (sen) (34.4) 3.8



17. PROPERTY, PLANT AND EQUIPMENT

Long term Furniture,Freehold leasehold fittings Tools and

Freehold land and land and and office Motor Plant and technicalland building building equipment vehicles machinery Renovation equipment Total

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group2006

Cost

At 1 JanuaryAs previously stated 4,493 1,535 354 5,250 29,318 131,955 360 2,961 176,226Effects of adopting

FRS 140 (4,493) (1,435) – – – – – – (5,928)

As restated – 100 354 5,250 29,318 131,955 360 2,961 170,298

Additions – – – 33 1,079 6,850 4 189 8,155

Disposals – – – (28) (5,815) (18,303) – – (24,146)

At 31 December – 100 354 5,255 24,582 120,502 364 3,150 154,307

Accumulated DepreciationAt 1 January

As previously stated – 380 106 3,965 25,352 96,230 313 2,122 128,468Effects of adopting

FRS 140 – (348) – – – – – – (348)

As restated – 32 106 3,965 25,352 96,230 313 2,122 128,120

Charge for the year – 2 7 415 744 5,263 28 140 6,599

Disposals – – – (7) (4,472) (17,081) – – (21,560)

Exchange differences – – – 3 – – – – 3

At 31 December – 34 113 4,376 21,624 84,412 341 2,262 113,162

Net Book ValueAt 31 December – 66 241 879 2,958 36,090 23 888 41,145



17. PROPERTY, PLANT AND EQUIPMENT (CONT’D)



RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000(Restated)

Group2005

CostAt 1 January

As previously stated 4,493 1,535 354 4,845 29,996 146,347 360 2,509 190,439Effects of adopting

FRS 140 (4,493) (1,435) – – – – – – (5,928)

As restated – 100 354 4,845 29,996 146,347 360 2,509 184,511

Additions – – – 410 1,246 16,013 – 452 18,121

Disposals – – – – (1,878) (30,280) – – (32,158)

Write off – – – – (46) (125) – – (171)

Exchange differences – – – (5) – – – – (5)

At 31 December – 100 354 5,250 29,318 131,955 360 2,961 170,298



FRS 140 – (319) – – – – – – (319)

As restated – 30 99 3,496 25,433 118,075 277 2,013 149,423

Charge for the yearAs previously stated – 31 7 471 1,459 7,568 36 109 9,681Effects of adopting

FRS 140 – (29) – – – – – – (29)

As restated – 2 7 471 1,459 7,568 36 109 9,652

Disposals – – – – (1,494) (29,288) – – (30,782)

Write off – – – – (46) (125) – – (171)

Exchange differences – – – (2) – – – – (2)

At 31 December – 32 106 3,965 25,352 96,230 313 2,122 128,120

Net Book ValueAt 31 December – 68 248 1,285 3,966 35,725 47 839 42,178






RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Company2006

At 1 JanuaryAs previously stated 4,493 1,195 354 3,563 17,191 123,116 133 2,770 152,815Effects of adopting

FRS 140 (4,493) (1,095) – – – – – – (5,588)

As restated – 100 354 3,563 17,191 123,116 133 2,770 147,227

Additions – – – 11 1,063 6,783 – 189 8,046

Disposals – – – (28) (5,688) (18,303) – – (24,019)

At 31 December – 100 354 3,546 12,566 111,596 133 2,959 131,254



FRS 140 – (307) – – – – – – (307)

As restated – 32 106 2,630 14,535 88,285 121 1,948 107,657

Charge for the year – 2 7 255 382 4,868 7 135 5,656

Disposals – – – (7) (4,345) (17,081) – – (21,433)

At 31 December – 34 113 2,878 10,572 76,072 128 2,083 91,880







RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000(Restated)

Company2005

CostAt 1 January

As previously stated 4,493 1,195 354 3,262 18,244 137,559 133 2,318 167,558Effects of adopting

FRS 140 (4,493) (1,095) – – – – – – (5,588)

As restated – 100 354 3,262 18,244 137,559 133 2,318 161,970

Additions – – – 301 409 15,912 – 452 17,074

Disposals – – – – (1,416) (30,230) – – (31,646)

Write off – – – – (46) (125) – – (171)

At 31 December – 100 354 3,563 17,191 123,116 133 2,770 147,227



FRS 140 – (285) – – – – – – (285)

As restated – 30 99 2,339 14,897 110,845 108 1,844 130,162

Charge for the yearAs previously stated – 24 7 291 1,100 6,853 13 104 8,392Effects of adopting

FRS 140 – (22) – – – – – – (22)

As restated – 2 7 291 1,100 6,853 13 104 8,370

Disposals – – – – (1,416) (29,288) – – (30,704)

Write off – – – – (46) (125) – – (171)

At 31 December – 32 106 2,630 14,535 88,285 121 1,948 107,657





(a) Net book values of property, plant and equipment of the Group and of the Company held under hire purchasearrangement are as follows:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Motor vehicles 2,047 24,672 1,502 24,064Plant and machinery 2,310 1,909 2,310 1,909

4,357 26,581 3,812 25,973

(b) Purchase of property, plant and equipment

Aggregate cost of purchase 8,155 18,121 8,046 17,074Less: Purchased under hire purchase (1,025) (15,204) (1,025) (14,658)

7,130 2,917 7,021 2,416

(c) Plant and machinery with an aggregate carrying value of RM2,831,525 (2005: RM Nil) are pledged as securitiesfor borrowings (Note 31).

18. INVESTMENT PROPERTIESGroup Company

2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000

(restated) (restated)

CostAt 1 January 5,928 5,928 5,588 5,588Disposals (4,216) – (3,876) –

At 31 December 1,712 5,928 1,712 5,588

Accumulated depreciationAt 1 January 348 319 307 285Charge for the year 18 29 11 22Disposals (366) – (318) –

At 31 December – 348 – 307

Net Book Value 1,712 5,580 1,712 5,281

Investment properties with an aggregate carrying value of RM1,712,000 (2005: RM Nil) are pledged as securities forborrowings (Note 31).



18. INVESTMENT PROPERTIES (CONT’D)

The fair value of investment properties are as follows:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000(restated) (restated)

Freehold land 9,646 28,536 9,646 28,186

The fair value of investment properties as at 31 December 2005 is based on valuations performed by Hakimi &Associates Sdn. Bhd., a registered independent valuer. The fair value of investment properties as at 31 December2006 is based on internal appraisals rather than on a valuation by an independent valuer who holds a recognised andrelevant professional qualification and has recent experience in the location and category of the investment propertybeing valued. Fair value represents the amount at which the assets could be exchanged between a knowledgeable,willing buyer and a knowledgeable, willing seller in an arm's length transaction.

19. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS

(a) Land Held for Property Development

Group2006 2005

RM'000 RM'000

Freehold LandCostAt 1 January 122,183 115,815Additions – 6,368

At 31 December 122,183 122,183

(b) Property Development Costs

Property development costs at 1 January:Freehold land 34,710 34,710Development costs 236,425 199,404

271,135 234,114

Costs incurred during the year:Development costs 10,790 37,021

Reversal of completed projects (133,557) –

Costs recognised in income statement:At 1 January (242,382) (192,446)Recognised during the year (13,363) (49,936)Reversal of completed projects 133,557 –

At 31 December (122,188) (242,382)

Property development costs at 31 December 26,180 28,753



19. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS (CONT’D)

(b) Property Development Costs (Cont’d)

Included in property development costs incurred during the financial year are:

Group2006 2005

RM'000 RM'000

Interest expense 215 30

The land held for development and development properties are pledged to financial institutions as security forcertain borrowings granted to the Group and the Company as referred to in Note 31.

20. INVESTMENT IN SUBSIDIARIES

Company2006 2005

RM'000 RM'000

Unquoted shares, at cost 21,002 20,990

Details of the subsidiaries are as follows:

Equity Interest Held (%)Name of Subsidiaries 2006 2005 Principal activities

Incorporated in Malaysia

Homeg Sdn. Bhd.* 51 51 Engineering, procurement, construction, andcommissioning of pipeline system

Tru-Mix Concrete Sdn. Bhd. 90 90 Manufacturing and distribution of ready-mixedconcrete

Bukit Jalil Development Sdn. Bhd. 70 70 Property development

Ho Hup Jaya Sdn. Bhd. # 100 100 Inactive

Ho Hup Equipment Rental Sdn. Bhd.* 100 100 Rental of equipment

Mekarani Heights Sdn. Bhd.* 100 100 Dormant

Intermax Resources Sdn. Bhd.* 100 100 Dormant

Ho Hup Geotechnic Sdn. Bhd.* 100 100 Dormant

Timeless Element Sdn. Bhd.* 100 100 Dormant



20. INVESTMENT IN SUBSIDIARIES (CONT’D)

Equity Interest Held (%)Name of Subsidiaries 2006 2005 Principal activities

Incorporated in India

Ho Hup Construction Company (India) Pte. Ltd.* 100 100 Construction

Incorporated in Mauritius

Ho Hup Construction (Mauritius) Limited * 100 100 Dormant

Incorporated in South Africa

Ho Hup Construction (South Africa) Pty Ltd * 100 – Investment holding

Incorporated in Indonesia

PT Halford Citra * 80 – Dormant

* Subsidiaries not audited by Ernst & Young.

# The auditors’ reports on the financial statements of this subsidiary include an emphasis of matter paragraph asfollows:

On 17 April 2003, Ho Hup Jaya Sdn Bhd ("HH Jaya"), a wholly-owned subsidiary of the Company, entered into aconditional sale and purchase agreement with Khoo Soon Lee Realty Sdn Bhd (“KSL”) for the disposal of twoparcels of development land measuring 52.668 hectares and 39.504 hectares held under master titles H.S.(D)257249 PTD No 71047 and H.S.(D)258295 PTD No 71065, respectively, both located in the Mukim of Pulai,District of Johor Bahru, for a cash consideration of RM97 million ("Purchase Price"). Save for the sum ofRM4,476,919 held by the stakeholders ("Stakeholder Monies"), the balance Purchase Price has been released toHH Jaya. A dispute arose between HH Jaya and KSL as to who is entitled to the Stakeholder Monies("Dispute"). On 28 April 2004, the Dispute was referred to the Court by way of an interpleader summons todetermine who is entitled to the Stakeholder Monies. The case is now fixed for case management on 7 August2007.

Uncertainties exist regarding the recoverability of the balance of the receivable of RM4,476,919.

The Directors of the Company after consultation with their legal advisers, are of the opinion that the amount duefrom KSL is recoverable.

(a) Incorporation of subsidiaries during financial year ended 31 December 2006

On 20 January 2006, the Company incorporated a wholly owned subsidiary, Ho Hup Corporation (South Africa)Pty Ltd in South Africa with a stated share capital of Rand 1,000 comprising 1,000 ordinary shares of Rand 1each.

On 5 December 2006, the Company incorporated a 80%-owned subsidiary in Indonesia, PT Halford Citra, whichhas an authorised share capital of Rp.4,577,500,000 comprising 500,000 ordinary shares of Rp.9,155 each.



20. INVESTMENT IN SUBSIDIARIES (CONT’D)

(a) Incorporation of subsidiaries during financial year ended 31 December 2006 (Cont’d)

The incorporation of these subsidiaries had the following effect on the Group's financial results for the year:

2006RM'000

Revenue –Net loss for the year –

The incorporation of these subsidiaries had the following effect on the financial position of the Group as at theend of the financial year:

2006RM'000

Other receivables 250Other payables (250)

Group's share of net assets –

(b) Incorporation of subsidiary during financial year ended 31 December 2005

On 22 April 2005, the Company incorporated a wholly owned subsidiary, Ho Hup Corporation (Mauritius) Limitedin Mauritius with a stated share capital of USD25,000 comprising 500 ordinary shares of USD50 each.

The incorporation of this subsidiary had the following effect on the Group's financial results for the year:

2005RM'000

Revenue –Net loss for the year 5

The incorporation of this subsidiary had the following effect on the financial position of the Group as at the endof the financial year:

2005RM'000

Other receivables 176Cash and bank balances 2Other payables (89)

Group's share of net assets 89



21. INVESTMENT IN ASSOCIATES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Unquoted shares, at cost 12,917 12,917 12,917 12,917Share of post acquisition reserves 421 2,451 – –

13,338 15,368 12,917 12,917Less: Accumulated impairment losses (2,054) (2,054) (2,351) (2,351)

11,284 13,314 10,566 10,566

Represented by:Share of net assets 11,284 13,314

Details of the associates are as follows:

Equity Interest Held (%)Name of Associates 2006 2005 Principal Activities

Incorporated in Malaysia

Semenyih Brickmakers Sdn. Bhd.* 49 49 Dormant

Hupcon Antarabangsa Sdn. Bhd.* 50 50 Dormant

Incorporated in The People's Republic of China

Shanghai San Ho Hup Pile Co. Ltd.* 45 45 Manufacturing and tradingof concrete spun piles

Incorporated in Thailand

Ho Hup Corporation (Thailand) Limited * 48 48 Dormant

Incorporated in Madagascar

Ho Hup Construction (Madagascar) Sarl * 49.9 49.9 Dormant

Incorporated in South Africa

Ho Hup Ubunye Construction Pty Ltd * 49 – Construction

During the financial year ended 31 December 2006, the Group acquired 49% equity interest in Ho Hup UbunyeConstruction Pty Ltd for a total cash consideration of RM50.

During the previous financial year, the Group acquired 48% and 49.9% equity interests in Ho Hup Corporation(Thailand) Limited and Ho Hup Construction (Madagascar) Sarl respectively, for cash consideration of RM240,000 andRM17,148 respectively.

* Associates not audited by Ernst & Young.



21. INVESTMENT IN ASSOCIATES (CONT’D)

The summarised financial information of the associates are as follows:

2006 2005RM'000 RM'000

Assets and liabilitiesCurrent assets 8,079 7,817Non-current assets 7,353 7,971

Total assets 15,432 15,788

Current liabilities (4,148) (2,474)

Net assets 11,284 13,314

ResultsRevenue 6,616 4,145Loss for the year (2,051) (1,206)

22. INVESTMENT IN JOINTLY CONTROLLED ENTITIES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Unquoted investment, at cost 250 250 250 250Share of post-acquisition reserves (250) (250) – –

– – 250 250Less: Accumulated impairment losses – – (250) (250)

– – – –

Details of the jointly controlled entities are as follows:

Equity Interest Held (%)Name of Jointly Controlled Entities 2006 2005 Principal activities

Ho Hup-Ballast Nedam Joint Venture 50 50 Dormant

Ho Hup-Star-Zaks Joint Venture 50 50 Dormant

Ho Hup-Simplex Joint Venture 50 50 Dormant



23. OTHER INVESTMENTS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Quoted Convertible RedeemableDebt Securities, at cost 35 35 – –

35 35 – –

Market value of quoted investment 56 62 – –

24. INVENTORIES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

At cost:Construction materials 159 175 – –

25. TRADE RECEIVABLES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Trade receivables 105,567 109,362 70,610 71,209Accrued billings in respect of property

development costs 24,128 35,340 – –Due from customers on contracts (Note 27) – – – –Retention sums on contracts (Note 27) 1,357 1,295 1,357 1,295

131,052 145,997 71,967 72,504

Less: Allowance for doubtful debts (13,313) (8,535) (12,658) (7,200)

117,739 137,462 59,309 65,304

Trade receivables of the Group and the Company include an aggregate amount of RM1,528,000 (2005: RM1,528,000)receivable from subsidiary of an associated investor in connection with progress billings on construction works.

The Group's normal trade credit term ranges from 14 to 90 days (2005: 14 to 90 days). Other credit terms areassessed and approved on a case-by-case basis.

The Group and the Company credit exposures are concentrated mainly on ten (2005: twelve) and nine (2005: eleven)trade receivables respectively, which accounted for 69% (2005: 66%) and 95% (2005: 93%) respectively of the totaltrade receivables as at the year then ended.



25. TRADE RECEIVABLES (CONT’D)

(a) Included in the trade receivables of the Group and of the Company as at 31 December 2006 is an amount ofRM15,385,808 (2005: RM15,385,808) owing from two customers for contracts under dispute, of which provisionfor doubtful debts of RM3,030,463 (2005: RM3,030,463) was made in the financial statements.

The Company is taking legal action to recover the disputed amounts owing. The status of the legal action isdisclosed in Note 40(e).

The Directors of the Company after consultation with their legal advisers, are of the opinion that the remainingamounts of receivables not provided for as at 31 December 2006 are recoverable.

(b) During financial year ended 31 December 2004, the Company was awarded certain construction contracts by theGovernment of Madagascar. These construction contracts were mutually terminated during the financial yearended 31 December 2005.

Included in the trade receivables of the Group and of the Company as at 31 December 2006, is an amount ofRM27.8 million (2005: RM25.0 million), being the amounts due from the Government of Madagascar in relationto the aforementioned construction contracts.

On 15 September 2006, the Company commenced an arbitration claim for the sum of USD19,746,595.53(equivalent to RM69.74 million) being the value of work done and damages pursuant to the unlawful terminationof the contracts in relation to the construction of road works at the Republic of Madagascar which was enteredinto by the Government of the Republic of Madagascar and the Company. The claim has been referred to theInternational Court of Arbitration under the Rules of the International Chamber of Commerc ("ICC"), Paris.

The third arbitrator has been appointed by the ICC. The Government of Madagascar has filed the Defence andCounter-Claim and the Company has submitted the Reply to the Counter-Claim. The Government of Madagascarhas submitted a counter-claim for USD27,000,000. The dates for hearings have been fixed for 28 January 2008to 1 February 2008 and 31 March 2008 to 4 April 2008.

The Directors of the Company after consultation with their legal advisers, are of the opinion that the Companyhas a fair chance of success and that the amounts due from the Government of Madagascar will berecoverable.

(c) On 17 April 2003, Ho Hup Jaya Sdn Bhd ("HH Jaya"), a wholly-owned subsidiary of the Company, entered into aconditional sale and purchase agreement with Khoo Soon Lee Realty Sdn Bhd (“KSL”) for the disposal of twoparcels of development land measuring 52.668 hectares and 39.504 hectares held under master titles H.S.(D)257249 PTD No 71047 and H.S.(D)258295 PTD No 71065, respectively, both located in the Mukim of Pulai,District of Johor Bahru, for a cash consideration of RM97 million ("Purchase Price"). Save for the sum ofRM4,476,919 held by the stakeholders ("Stakeholder Monies"), the balance Purchase Price has been released toHH Jaya. A dispute arose between HH Jaya and KSL as to who is entitled to the Stakeholder Monies("Dispute"). On 28 April 2004, the Dispute was referred to the Court by way of an interpleader summons todetermine who is entitled to the Stakeholder Monies. The case is now fixed for case management on 7 August2007.

The Directors of the Company after consultation with their legal advisers, are of the opinion that the amount duefrom KSL is recoverable.



26. OTHER RECEIVABLES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Due from subsidiaries (Note a) – – 261,720 246,020Deposits 3,942 4,413 3,563 4,029Prepayments 275 1,885 32 1,589Sundry receivables 13,707 9,956 10,190 7,586

17,924 16,254 275,505 259,224Less: Provision for doubtful debts

(6,604) (1,575) (65,373) (46,630)

11,320 14,679 210,132 212,594

(a) The amounts owing from certain subsidiaries are unsecured, with no fixed terms of repayment and are subjectto interest at 8.0% (2005 : 8.0%) per annum.

(b) Included in the other receivables of the Group and of the Company as at 31 December 2006 is an amount ofdeposit of RM1.5 million (2005: RM1.5 million) paid in relation to the proposed acquisition of 51% of the totalissued and paid-up share capital of Urban Shift. Provision for doubtful debts has been made in respect of theentire deposit in the financial year ended 31 December 2006.

27. DUE FROM CUSTOMERS ON CONTRACTS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Construction contract costs incurred to date 44,152 234,120 44,152 234,120Attributable profits 13,295 29,020 13,295 29,020

57,447 263,140 57,447 263,140

Less: Progress billings (57,447) (263,140) (57,447) (263,140)

Due from customers on contracts (Note 25) – – – –

Retention sums on contract, included withintrade receivables (Note 25) 1,357 1,295 1,357 1,295



27. DUE FROM CUSTOMERS ON CONTRACTS (CONT’D)

The costs incurred to date on construction contracts include the following costs incurred during the year:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Hire of plant and machinery 1,693 425 1,693 425Staff costs (Note a) 4,707 5,217 4,707 5,217Rental of premises 112 112 112 112

(a) Wages and salaries 3,774 4,077 3,774 4,077Social security costs 86 58 86 58Pension cost – defined contribution plans 405 444 405 444Other staff related expenses 442 638 442 638

4,707 5,217 4,707 5,217

28. CASH AND CASH EQUIVALENTS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Cash on hand and at banks 3,709 5,130 1,405 2,118Deposits with licensed banks 26,715 48,057 26,715 47,667

Cash and bank balances 30,424 53,187 28,120 49,785Less: Bank overdrafts (Note 31) (20,533) (18,799) (17,078) (15,790)

Cash and cash equivalents 9,891 34,388 11,042 33,995

Included in cash at banks of the Group are amounts of RM1,140,000 (2005: RM976,000) held pursuant to Section 7Aof the Housing Developers (Control and Licensing) Act 1966.

Deposits with licensed banks of the Group and the Company amounting to RM26,715,000 (2005: RM47,667,000) arepledged to banks as security for credit facilities granted to the Group and Company as referred to in Note 31 andNote 36.

The weighted average interest rates during the financial year and the average maturities of deposits with licensedbanks as at 31 December 2006 were 3.28% (2005: 2.75%) per annum and 49 days (2005: 93 days) respectively.



29. SHARE CAPITAL

Number of OrdinaryShares of RM1 each Amount2006 2005 2006 2005'000 '000 RM'000 RM'000

Authorised:At 1 January/31 December 200,000 200,000 200,000 200,000

Issued and fully paid:At 1 January/31 December 102,000 102,000 102,000 102,000

30. RETAINED PROFITS

As at 31 December 2006, the Company has tax exempt profit available for distribution of approximatelyRM26,000,000 (2005: RM26,000,000), subject to agreement with Inland Revenue Board.

The Company has sufficient tax credit under Section 108 of the Income Tax Act 1967 to frank the payment ofdividends out of its entire retained profits as at 31 December 2006.

31. BORROWINGS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Short Term BorrowingsSecured:Bank overdrafts 11,855 11,711 11,855 11,711Revolving credits 20,840 29,500 20,840 29,500Bankers' acceptances 14,295 16,806 11,333 13,847Term loans 15,893 12,571 1,543 –Hire purchase payables (Note 32) 1,597 5,172 1,411 4,996

64,480 75,760 46,982 60,054

Unsecured:Bank overdrafts 8,678 7,088 5,223 4,079

73,158 82,848 52,205 64,133

Long Term Borrowings

Secured:Term loans 13,835 14,140 9,535 –Hire purchase payables (Note 32) 1,293 17,975 1,023 17,534

15,128 32,115 10,558 17,534



31. BORROWINGS (CONT’D)

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Total Borrowings

Bank overdrafts (Note 28) 20,533 18,799 17,078 15,790Revolving credits 20,840 29,500 20,840 29,500Bankers' acceptances 14,295 16,806 11,333 13,847Term loans 29,728 26,711 11,078 –Hire purchase payables (Note 32) 2,890 23,147 2,434 22,530

88,286 114,963 62,763 81,667

Maturity of borrowings(excluding hire purchase payables)

Within one year 71,561 77,676 50,794 59,137More than 1 year and less than 2 years 6,530 9,840 2,230 –More than 2 years and less than 5 years 7,305 4,300 7,305 –

85,396 91,816 60,329 59,137

During the financial year, the Company has not met its repayment obligations relating to a revolving credit facilitywith AmBank (M) Berhad.

On 3 July 2007, Ho Hup Jaya Sdn Bhd ("HHJ"), a wholly-owned subsidiary of the Company, entered into a Sale andPurchase Agreement with Tenterajaya (M) Sdn Bhd to dispose three pieces of freehold development land ("Land")held under Geran Mukim No.3 Lot No.584, Geran Mukim No.4 Lot No. 585 and Geran Mukim No.5 Lot No.599 all inthe Mukim of Ulu Klang, District of Gombak and State of Selangor measuring approximately 5.62 acres, 4.47 acresand 4.62 acres respectively for a total cash consideration of RM23,081,494.00 only.

The Company intends to repay the revolving credit facility of RM5,086,585 using the proceeds from the abovedisposal.

The weighted average effective interest rates during the financial year for borrowings were as follows:

Group Company2006 2005 2006 2005% % % %

Bank overdrafts 8.33 7.65 8.30 7.62Revolving credits 8.03 6.62 8.03 6.62Bankers' acceptances 4.50 4.11 4.57 4.09Term loans 8.62 7.50 9.25 –



31. BORROWINGS (CONT’D)

The secured bank overdrafts, revolving credits and bankers' acceptances of the Group and of the Company aresecured by certain assets of the Group and of the Company as disclosed in Note 17, Note 19 and Note 28.

With effect from 21 September 2006, 52 Hire Purchase Accounts of the Company have been restructured to a termloan facility of RM11,077,525.

The term loans of the Group are secured by:

(a) First legal charge over the land held for development and development properties of the subsidiaries as stated inNote 19;

(b) First party first legal charge over land held under H.S (D) 812 Lot No. PT 4150, Mukim of Cheras, District ofHulu Langat, Selangor Darul Ehsan as stated in Note 18;

(c) A fixed charge by way of debenture on the encumbered machinery/equipment registered in the name of theCompany which comprise of excavator, cranes, bulldozer, caterpillar compactors, vibratory roller, tractors andcargo truck, crawler, wheel loader and construction equipment of the like, acceptable to the Bank and having themarket value of not less than RM10 million ("Machinery") and the list of Machinery shall be agreed by theparties;

(d) Endorsement of ownership claim at Road Transport Department on the registrable machinery/equipment viae-Hakmilik registration; and

(e) Corporate guarantee by the Company.

32. HIRE PURCHASE PAYABLES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Minimum payments:Not later than 1 year 1,788 7,238 1,585 7,034Later than 1 year and not later than 2 years 657 7,176 509 6,973Later than 2 years and not later than 5 years 678 13,549 544 13,268

3,123 27,963 2,638 27,275Less: Future finance charges (233) (4,816) (204) (4,745)

Present value of hire purchase payables 2,890 23,147 2,434 22,530

Present value of hire purchase payablesNot later than 1 year 1,597 5,172 1,411 4,996Later than 1 year and not later than 2 years 627 5,732 488 5,546Later than 2 years and not later than 5 years 666 12,243 535 11,988

2,890 23,147 2,434 22,530



32. HIRE PURCHASE PAYABLES (CONT’D)

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Analysed as:Due within 12 months (Note 31) 1,597 5,172 1,411 4,996Due after 12 months (Note 31) 1,293 17,975 1,023 17,534

2,890 23,147 2,434 22,530

The hire purchase payables bear interest during the year of between 2.32% and 4.73% (2005: 1.26% and 10.72%)per annum.

During the financial year, the Company defaulted in payments of its instalments of a hire purchase facility withAmBank (M) Berhad. Accordingly, all hire purchase instalments under this hire purchase facility of RM53,000, whichwas originally scheduled for repayment after 31 December 2007, is reclassified as current liabilities.

On 3 July 2007, Ho Hup Jaya Sdn Bhd ("HHJ"), a wholly-owned subsidiary of the Company, entered into a Sale andPurchase Agreement with Tenterajaya (M) Sdn Bhd to dispose three pieces of freehold development land ("Land")held under Geran Mukim No.3 Lot No.584, Geran Mukim No.4 Lot No. 585 and Geran Mukim No.5 Lot No.599 all inthe Mukim of Ulu Klang, District of Gombak and State of Selangor measuring approximately 5.62 acres, 4.47 acresand 4.62 acres respectively for a total cash consideration of RM23,081,494.00 only.

The Company intends to repay the hire purchase facility of RM1,425,620 using the proceeds from the abovedisposal.

33. DEFERRED TAX

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

At 1 January 71 212 – –Recognised in income statement (Note 15) (92) (141) – –

At 31 December (21) 71 – –

Presented after appropriate offsetting as follows:

Deferred tax assets (5,564) (6,051) (5,139) (5,626)Deferred tax liabilities 5,543 6,122 5,139 5,626

(21) 71 – –



33. DEFERRED TAX (CONT’D)

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting areas follows:

Deferred tax liabilities of the Group:AcceleratedCapital

Allowance Receivables TotalRM'000 RM'000 RM'000

At 1 January 2006 5,998 124 6,122Recognised in income statement (579) – (579)

At 31 December 2006 5,419 124 5,543

At 1 January 2005 6,139 124 6,263Recognised in income statement (141) – (141)

At 31 December 2005 5,998 124 6,122

Deferred tax assets of the Group:Unused TaxLosses andUnabsorbed

CapitalAllowance Receivables TotalRM'000 RM'000 RM'000

At 1 January 2006 (5,911) (140) (6,051)Recognised in income statement 487 – 487

At 31 December 2006 (5,424) (140) (5,564)

At 1 January/31 December 2005 (5,911) (140) (6,051)

Deferred tax liabilities of the Company:AcceleratedCapital

AllowanceRM'000

At 1 January 2006 5,626Recognised in income statement (487)

At 31 December 2006 5,139

At 1 January/31 December 2005 5,626



33. DEFERRED TAX (CONT’D)

Deferred tax assets of the Company:Unused TaxLosses andUnabsorbed

CapitalAllowanceRM'000

At 1 January 2006 (5,626)Recognised in income statement 487

At 31 December 2006 (5,139)

At 1 January/31 December 2005 (5,626)

Deferred tax assets have not been recognised in respect of the following as follows:

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Unused tax losses 139,839 107,164 35,934 29,548Unabsorbed capital allowances 719 658 – –Other temporary differences 25,232 14,985 14,233 8,775

165,790 122,807 50,167 38,323

The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profitsof the group are subject to no substantial changes in shareholdings of those subsidiaries under Section 44(5A) and(5B) of Income Tax Act, 1967.

Deferred tax assets have not been recognised in respect of unused tax losses and unabsorbed capital allowances asit is not probable that future taxable profits will be available against which they can be utilised based on current planof the respective companies.

34. TRADE PAYABLES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Trade payables 56,866 64,657 42,540 51,354Trade accruals 5,110 4,965 2,089 1,927Advances received on contracts (Note a) 31,578 30,250 31,578 30,250Retention sums on contracts 10,542 12,730 10,418 12,730

104,096 112,602 86,625 96,261



34. TRADE PAYABLES (CONT’D)

The normal trade credit term granted to the Group ranges from 30 to 120 days (2005: 30 to 120 days).

Note aThis amount represents advances received from the Government of Madagascar in relation to construction contractswhich have been terminated. Details of the arbitration proceedings with the Government of Madagascar are disclosedin Note 25(b).

35. OTHER PAYABLES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Due to subsidiaries – – 20,812 19,507Due to an associated investor 1,211 1,211 – –Due to companies/estates in which certain

Directors have beneficial interests 4,499 3,543 4,037 3,155Accruals 8,556 8,013 6,448 5,509Sundry payables 10,869 4,940 9,060 3,547Provision for liquidated ascertained damages (Note a) 13,000 6,211 – –

38,135 23,918 40,357 31,718

Note aAt 1 January 6,211 3,488 – –Additional provision made during the year (Note 10(b)) 6,793 5,925 – –Payments made during the year (4) (3,202) – –

At 31 December 13,000 6,211 – –

The amounts due to subsidiaries and to an associated investor are unsecured, interest-free and have no fixed termsof repayment.

Included in accruals of the Group is an amount of RM2,542 (2005: RM2,542) owing to Sri Rakyat Management SdnBhd (“Sri Rakyat”). Bukit Jalil Development Sdn Bhd (“BJD”), a subsidiary of the Company, incorporated Sri Rakyatas a vehicle to undertake the obligations and responsibilities of BJD under the Strata Title Act 1985 (Act 318) &Strata Titles Rules 1988 ("the Act"), as the original proprietor. Sri Rakyat will provide management and maintenanceservices for the low cost apartments and will be transferred to the parcel proprietors of the low cost apartmentsupon completion of the transfer of strata title in respect of all parcels by BJD or upon the making of an order undersubsection (2) of the Section 64A of the Act.



36. CONTINGENT LIABILITIES

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

Guarantees given to financial institutions in respectof credit facilities granted to subsidiaries– Unsecured – – 27,650 35,711

Guarantees given to financial institutionsin connection with performancebonds, security and tender depositsissued by the financial institution in favourof third parties for construction projects– Secured 60,503 65,832 60,503 65,832– Unsecured – 15,794 – 15,794

60,503 81,626 60,503 81,626

The secured guarantees of the Group and the Company are secured against certain fixed deposits of the Group andthe Company respectively as disclosed in Note 28.

37. SIGNIFICANT RELATED PARTY TRANSACTIONS

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

With subsidiary companiesPurchases of materials from

Tru-Mix Concrete Sdn. Bhd. – – 1,122 3,377

Progress billings for construction works performedfor Bukit Jalil Development Sdn. Bhd. – – 12,671 40,032

Progress billings for construction works performed byHomeg Sdn. Bhd. – – – 90

Interest income from:– Bukit Jalil Development Sdn Bhd – – 11,269 10,195– Homeg Sdn. Bhd. – – 1,829 1,626

Rental income from– Bukit Jalil Development Sdn Bhd – – 9 –– Tru-Mix Concrete Sdn. Bhd. – – – 107



37. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

Group Company2006 2005 2006 2005

RM'000 RM'000 RM'000 RM'000

With companies/estates/individual inwhich certain Directors are deemed tohave beneficial interests/related toOffice and store rental payable

– Low Chee & Sons Sdn. Bhd. 678 627 678 627– Estate of Low Chee 88 88 54 54– Concrete Paver Industries Sdn. Bhd. 130 130 – –– Tang Sau Kuan 96 96 – –

Rental income from:– Tepat Concrete Industries Sdn. Bhd. 60 120 60 120

Purchases of materials from:– Tara Technic Sdn. Bhd. 82 217 82 217– Tepat Concrete Industries Sdn. Bhd. 171 – 171 –

The Directors are of the opinion that all the transactions above have been entered into in the normal course ofbusiness and have been established on terms and conditions that are not materially different from those obtainable intransactions with unrelated parties.

38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 20 January 2006, the Company incorporated a wholly owned subsidiary, Ho Hup Corporation (South Africa)Pty Ltd in South Africa with an authorised share capital of South African Rand ("Rand") 10,000 and an issued andpaid-up share capital of Rand 1,000 comprising 1,000 ordinary shares of Rand1.00 each.

(b) On 8 February 2006, a subsidiary of the Company, Ho Hup Corporation (South Africa) Pty Ltd ("HHCSA")subscribed for 49 ordinary shares of Rand 1.00 each representing 49% of the issued and paid-up share capital ofHo Hup Ubunye Construction Pty Ltd ("Ho Hup Ubunye") for a total cash consideration of Rand 49 equivalent toRM30.57.

(c) On 31 July 2006, Bursa Malaysia Securities Berhad ("Bursa Securities") publicly reprimanded and imposed a fineof RM21,000 on the Company for breach of paragraph 9.23(b) of the Listing Requirements of Bursa Securities("Bursa Securities LR").

The Company has breached paragraph 9.23(b) of the Bursa Securities LR for failing to submit the annual auditedaccounts for the financial year ended 31 December 2005 ("AAA 2005") by the due date of 30 April 2006. TheCompany only submitted the AAA 2005 to Bursa Securities for public release on 31 May 2006.

The public reprimand and fine are imposed pursuant to paragraph 16.17 of the Bursa Securities LR after takinginto consideration all relevant factors.

(d) On 3 August 2006, the Company entered into Sale and Purchase Agreements ("S&P") with Bina Plastic IndustriesSdn Bhd ("BPI") to dispose two (2) pieces of Industrial Land held under Geran No. 23482, Lot No. 4151 andGeran No. 23375, Lot No. 4152, both of Mukim Cheras, Daerah Ulu Langat, Negeri Selangor measuringapproximately 201,123.66 and 152,987.45 square feet for a total cash consideration of RM14,341,499.96 only.

The 2 pieces of land were acquired in year 1985 at a cost of RM2.78 million. The gain on disposal of thesepieces of land amounting to RM11.6 million is reflected in Note 10(a).



39. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

(a) On 10 January 2007, the Company was served with a sealed Writ of Summons and Statement of Claims byAmBank (M) Berhad ("AmBank") for the sum of RM5,086,584.95 for a Revolving Credit Facility and continuinginterest.

On 16 March 2007, a Statement of Defence has been filed by the Company. This matter was fixed for LandInquiry at the Gombak Land Office on 27 March 2007 in respect of an application by AmBank to foreclose theland at Lot 584, 585 and 599 in Mukim of Ulu Klang, District of Gombak ("Property"). On the said date,AmBank's solicitors took another date to enable the Company to proceed with the Sales & Purchase Agreement(selling the Property to a 3rd party).

The Company had on 3 July 2007 entered into a Sale and Purchase Agreement to dispose of the 3 pieces ofland which is currently charged to AmBank. The disposal proceeds of approximately RM23 million would beapplied, inter alia, for redemption of the Revolving Credit Facility. Subsequent to the signing of the Sale andPurchase Agreement, AmBank has agreed to withold the legal action pending settlement. The land enquiryinitiated by AmBank has been postponed to 21 August 2007 due to the disposal of the 3 pieces of land.

(b) On 14 March 2007, the Company issued a corporate guarantee of RM40 million in favour of UOB Bank(Malaysia) Berhad in connection with a RM40 million contract financing facility to Bayu Melati Sdn Bhd. This isto facilitate the funding of the Trans Eastern Kedah Interland Highway project which the Company is the mainsubcontractor.

(c) On 18 April 2007, an associate of the Company, Ho Hup Ubunye Construction Pty Ltd ("HH Ubunye") served aNotice of Motion under case no. 2007/8363 in the High Court of South Africa (Witwatersrand Local Division) onthe Company and Ho Hup Corporation (South Africa) Pty Ltd ("HHCSA"), a subsidiary of the Company, being the1st and 2nd Defendant respectively for the payment of the amount of at least Rand 29,680,000 (equivalent toRM14.65 million) representing the employable capital, start-up and operational costs, and costs incurred in hiringplant and equipment due by the Company and HHCSA to HH Ubunye.

The Company has appointed STRB Smith Tabatha Buchanan Boyes to represent the Company in Johannesburgand to file the appropriate responses in Court and the solicitors are of the opinion that this case is frivolous. TheCompany has instructed the solicitors to make an application to liquidate HH Ubunye due to the breakdown inthe relationship between the shareholders of HH Ubunye.

(d) On 3 July 2007, Ho Hup Jaya Sdn Bhd, a wholly-owned subsidiary of the Company, entered into a Sale andPurchase Agreement with Tenterajaya (M) Sdn Bhd to dispose three pieces of freehold development land("Land") held under Geran Mukim No.3 Lot No.584, Geran Mukim No.4 Lot No. 585 and Geran Mukim No.5 LotNo.599 all in the Mukim of Ulu Klang, District of Gombak and State of Selangor measuring approximately 5.62acres, 4.47 acres and 4.62 acres respectively for a total cash consideration of RM23,081,494.00 only.



40. MATERIAL LITIGATIONS

(a) Yip Chee Seng & Sons Sdn Bhd, a sub-contractor of the Company, has lodged a claim with the High Court,Kuala Lumpur on 17 February 2003. The claim is for earthworks done for the Light Rail Transit System Two forKuala Lumpur. The quantum claimed is for an amount of RM1,023,585 together with interest at 8% per annumfrom 26 July 2002 until realisation ("the Claim"). The Company denies that it is liable and has lodged a counterclaim for an amount of RM1,413,522 together with interest at 8% per annum from 18 April 2003 (date of filingof the counter claim) until realisation.

On 1 March 2004, the High Court made an Interim Order ("Order") that an amount of RM1,023,585 be placed ina separate fixed deposit account in a bank with Yip Chee Seng & Sons Sdn Bhd and the Company being thejoint signatories. The Company has appealed to the Court of Appeal against the decision and the Court has fixed10 September 2007 for case management. The matter is set down for trial on 11 March 2008, 12 March 2008and 13 March 2008.

The solicitors of the Company are of the opinion that the Company will succeed in setting aside the Order andin its defence against the Claim. There are no foreseen obstacles at this stage for the Company in establishingits counter-claim at the trial.

(b) On 17 April 2003, Ho Hup Jaya Sdn Bhd (“HH Jaya”), a wholly-owned subsidiary of the Company, entered intoa conditional sale and purchase agreement with Khoo Soon Lee Realty Sdn Bhd (“KSL”) for the disposal of twoparcels of development land measuring 52.668 hectares and 39.504 hectares held under master titles H.S.(D)257249 PTD No 71047 and H.S.(D)258295 PTD No 71065, respectively, both located in the Mukim of Pulai,District of Johor Bahru, for a cash consideration of RM97 million (“Purchase Price”). Save for the sum ofRM4,476,919 held by the stakeholders (“Stakeholder Monies”), the balance Purchase Price has been released toHH Jaya.

A dispute arose between HH Jaya and KSL as to who was entitled to the Stakeholder Monies ("Dispute"). On28 April 2004, the Dispute was referred to the Court by way of an interpleader summons to determine whowas entitled to the Stakeholder Monies. On 16 July 2004, the Court has directed that HH Jaya be referred to asthe plaintiff and KSL as the defendant. On 17 November 2005, the Deputy Registrar further directed that theinterpleader summons no. to be changed to writ summons no. and the Court will accordingly inform both partiesof the suit no. and the next mention date. On the same date, the solicitors of the Company have also filed theNotice to Attend Pre-Trial Case Management so that directions can be given on the conduct of the trial and thesame is still pending extraction as at to date. The case is now fixed for case management on 7 August 2007.

The Company’s solicitors are of the opinion that KSL’s claim to either the full sum of the Stakeholder Monies orpart thereof is unsustainable as HH Jaya has fulfilled all the conditions for the release of the StakeholderMonies.



40. MATERIAL LITIGATIONS (CONT’D)

(c) Europlus Corporation Sdn Bhd (“Europlus”) lodged a claim in the High Court, Kuala Lumpur, vide Civil SuitNo S1-22-241-2004 on 26 February 2004. The claim is for an alleged overpayment under a project known as“Proposed Bukit Beruntung Interchange” including overpass at CH. 7501.575 of Rawang-Tanjung MalimExpressway, Bukit Beruntung Development, Mukim Serendah, Daerah Ulu Selangor, Selangor Darul Ehsan for asum of RM4,387,462.92.

The Summons and Statement of Claim has been filed on 26 February 2004 and served on 1 April 2004. Ho Hupsubsequently filed an application for further and better particulars on 30 July 2004 and the matter was fixed forhearing on 19 August 2004 but was adjourned to 26 October 2004. Ho Hup obtained order in terms of the saidapplication on 26 October 2004 and Europlus has subsequently served Ho Hup the particulars as requested on25 November 2004. Ho Hup then filed its defence on 10 December 2004. As at to date, Europlus has not takenany further action in pursuing its claim. Europlus has appointed a new solicitor, namely Messrs. Alvin, John &Partners. No further proceeding is initiated yet.

The solicitors of the Company are of the opinion that Europlus’s claim will be dismissed with cost.

(d) KM Quarry Sdn Bhd (“KM Quarry”) lodged a claim in the High Court, Melaka, vide Civil Suit No 22-3-2005 on10 January 2005. The claim is for a sum of RM3,233,474.37 for the supply and laying of pavement works undera project known as “Cadangan Membina Jalanraya Durian Tunggal-Paya Rumput-Sungai Udang, Melaka”.

KM Quarry's application for summary judgement was allowed on 22 July 2005. Thereafter, the Company filed anotice of appeal and application for stay of execution. On 19 April 2006, the Company's appeal was dismissedwith costs and an appeal to the Court of Appeal was made on 20 April 2006. The application for stay ofexecution in Melaka High Court is fixed for decision on 19 July 2007. The Bill of Costs is fixed for hearing on14 August 2007.

On the other hand, the Company also filed a cross claim against KM Quarry for an amount of RM3,433,335.75for incomplete joint measurement and RM2,439,294.47 for overlapping claims. KM Quarry has since filed anapplication to strike out the Company's claim. On 26 January 2007, the Court allowed KM Quarry's application tostrike out some paragraphs and prayers in the Company's statement of claim. The Company has then filed anapplication to set aside the said Order and the same is now fixed for hearing on 7 June 2007. In the meantime,KM Quarry had also filed an application to amend their amended Statement of Defence which was allowed bythe Court on 14 March 2007. This matter is now fixed for hearing on 16 August 2007.

The solicitors of the Company are of the opinion that if the Court of Appeal can be persuaded to take intoaccount of the Company's cross claim against KM Quarry in the Kuala Lumpur High Court, the chances ofsuccess of the Appeal are good.




(e) On 19 October 2004, the Company issued a notice pursuant to Section 218 of the Companies Act, 1965 againstRevolutionary Technology Holdings Sdn Bhd ("RTH") for the sum of RM7,169,810 in respect of the amounts dueunder construction project undertaken by the Company. RTH had on 10 November 2004 filed an injunctionapplication restraining the Company from filing and advertising the winding-up and an ad interim injunction wasgranted against the Company on 12 April 2005.

On 16 May 2006, by way of court order, a sole arbitrator was appointed. The Company is pursuing the matterby way of arbitration for the amount of RM23,438,498. On 19 March 2007, the Company filed a Certificate ofUrgency for an early hearing date. An application for the following order was made:

– RTH to provide a guarantee on arbitration cost of RM69,200;– RTH's counter claim in arbitration is to be stayed until such time the RM69,200 is paid;– Injunction to prevent RTH from accepting monies from the Government for the Melaka project pending the

decision of the arbitrator on the claim of RM23,438,498.

The next arbitration meeting for clarification is scheduled for 9 August 2007 and 10 August 2007.

The solicitors of the Company are of the opinion that the Company has a good chance of success in claimingthe said outstanding sum in the arbitration proceeding.

(f) On 9 March 2005, a subsidiary of the Company, Ho Hup Construction Company (India) Pte Ltd ("Ho Hup India")entered into a Joint Development Agreement with the Andhra Pradesh Housing Board ("APHB") to develop apiece of land situated at Kancha Imarath, Maheshwaran Mandal, Ranga Reddy District, Andhra Pradesh, India. HoHup India has been selected to implement the development of the said land into an integrated township with anapproximate development value of Indian Rupee ("Rs") 3.6 billion (equivalent to RM320,760,000) at Shamshabadnear Hyderabad. Ho Hup India shall pay APHB development fees of Rs101,175,000 (equivalent to RM9,014,693)over a period of five (5) years.

This Joint Development Agreement was subsequently terminated by APHB. The Company is disputing thetermination on the ground that APHB had yet to comply with its obligations in respect of condition precedentunder the agreement. The purported termination does not have material adverse impact on the financialstatements of the Group and of the Company.

On 2 May 2005, the Company commenced an arbitration claim for damages amounting to Rs2,544,512,230(equivalent to RM221.88 million) being the unlawful termination of the abovementioned contract. The Companyhas submitted its Statement of Claim to the Arbitration Tribunal and the Tribunal is awaiting the defence andcounterclaim (if any) of Andhra Pradesh Housing Board. All taking of oral evidence have been completed and theArbitrators have fixed two days in August 2007 and two days in September 2007 for submissions after whichthe Arbitrators will deliver their decision.

The Directors, in consultation with their solicitors, are of the opinion that the Company has a good chance ofsuccess in claiming the said sum in the arbitration proceeding.




(g) The Company has filed an Originating Summons and Summons in Chambers for Injunction to prohibit or restrainthe paying out of monies by CIMB Bank Berhad ("CIMB") (formerly known as Bumiputra-Commerce BankBerhad) to Ministry of Transport, Public Works & Land Development of Madagascar on Bank Guaranteesamounting to USD14,269,003 (equivalent to RM50.4 million).

On 31 March 2006, the Court has granted an interim injunction until the next hearing date on the Company'sapplication to maintain status quo between the parties until the conclusion of the arbitration process in Paris. Inthe interim, the Government of Madagascar had applied to intervene in the said suit and has filed and served anunsealed Summons in Chambers and affidavit in support thereof by way of application to the Court and theCompany had then filed the Affidavit of Reply to object the said application to intervene. On 22 September2006, the Court allowed the Government of Madagascar's application to intervene and be named as 2ndDefendant, and subsequently on 6 October 2006, an appeal to the Court of Appeal was made on the saiddecision. On 13 April 2007, the Company's application for an injunction to restrain CIMB from making paymenton Bank Guarantees to the 2nd Defendant was dismissed and that the ad interim injunction that was granted tothe Company on 31 March 2006 was also dissolved. The Company has filed an appeal against the decision tothe Court of Appeal on 16 April 2007.

On 17 April 2007, the Court has allowed the Company's application for an Erinford injunction to prevent orrestrain Defendants from making any demand for payment on the said Bank Guarantees pending the disposal ofthe Company's appeal to the Court of Appeal. No date has been fixed for hearing as of todate.

The solicitors of the Company are of the opinion that if the Company is able to persuade the Court of Appeal toaccept the Company's arguments that the Guarantees and Performance Bonds are not unconditional but ratherare conditional Guarantees, the chances of success in the Court of Appeal is good.

(h) The Company was served with a sealed Writ of Summons and Statement of Claims dated 14 June 2006, byAmBank (M) Berhad ("AmBank") for the sum of RM1,425,620 for an alleged amount owing by the Company toAmBank pursuant to the Hire Purchase Agreement entered into dated 29 January 2005.

On 28 June 2007, the Court has granted AmBank's application for summary judgement. The Company has fileda Notice of Appeal to the Judge in Chambers and also an application for stay of execution. Both applications arenow fixed for hearing on 6 September 2007.

On 3 July 2007, Ho Hup Jaya Sdn Bhd ("HHJ"), a wholly-owned subsidiary of the Company, entered into a Saleand Purchase Agreement with Tenterajaya (M) Sdn Bhd to dispose three pieces of freehold development land("Land") held under Geran Mukim No.3 Lot No.584, Geran Mukim No.4 Lot No. 585 and Geran Mukim No.5 LotNo.599 all in the Mukim of Ulu Klang, District of Gombak and State of Selangor measuring approximately 5.62acres, 4.47 acres and 4.62 acres respectively for a total cash consideration of RM23,081,494.00 only.

The Company intends to repay the hire purchase facility of RM1,425,620 using the proceeds from the abovedisposal.




(i) On 10 July 2006, the Company served a notice pursuant to Section 218 of the Companies Act, 1965 againstUrban Shift Sdn Bhd ("Urban Shift") for claims for workdone in the amount of RM7,440,016 under the projectknown as "Cadangan Pembangunan Bercampur Yang Mengandungi 3 Blok Pangsapuri Servis Dengan 5 TingkatPodium Beli Belah dan Aras Basemen Letak Kereta Termasuk Rumah Kelab Di Atas Lot 1282, 1283 Seksyen 67Kuala Lumpur" which was then suspended in year 2005. Urban Shift has appointed a solicitor to act on theirbehalf and they have replied to the Section 218 notice. The Company has filed a winding up petition againstUrban Shift which is yet to be served, advertised and gazetted. This petition has subsequently been withdrawn.A new winding-up petition has been filed on 26 July 2007 and the Company is awaiting for the sealed petitionto be extracted from the Court.

The solicitors of the Company are of the opinion that the chances of successfully winding up Urban Shift aregood.

(j) Details of the arbitration proceedings with the Government of Madagascar is disclosed in Note 25(b).

41. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies

The Group’s financial risk management policy seeks to ensure that the Group creates value for its shareholderswhilst managing its interest rate, foreign exchange, liquidity and credit risks. The Group operates within clearlydefined guidelines and policy that is not to engage in speculative transactions.

(b) Interest Rate Risk

The Group finances its operations through operating cash flows and borrowings which are principallydenominated in Malaysian Ringgit.

The Group’s primary interest rate risk relates to interest-bearing debt, as the Group had no substantial long-terminterest-bearing assets as at 31 December 2006. The investment in financial assets are mainly short term innature and they are not held for speculative purposes but have been mostly placed in fixed deposits.

(c) Foreign Exchange Risk

The Group is not exposed to foreign exchange risk derived from highly probable purchases and sales. TheGroup, however, is subject to foreign exchange rates fluctuation when translating the foreign entities’ financialstatements as referred to in Note 6(q)(iii).

(d) Liquidity Risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so asto ensure that all refinancing, repayment and funding needs are met. The Group strives to maintain sufficientlevels of cash through disposal of non-core assets of the Group and to maintain sufficient banking facilities of areasonable level.



41. FINANCIAL INSTRUMENTS (CONT’D)

(e) Credit Risk

Credit risks, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits andmonitoring procedures. Credit risks are minimised and monitored by associating with business partners with highcreditworthiness. Trade receivables are monitored on an ongoing basis via Group management reportingprocedures.

The Group does not have any significant exposure to any individual customer or counterparty nor does it haveany major concentration of credit risk related to any financial instruments.

(f) Fair Values

The fair values of financial assets and financial liabilities of the Group and of the Company approximate theircarrying values as at the balance sheet date.

It is not practicable to estimate the fair value of contingent liabilities as referred to in Note 36 due to theuncertainties of timing, costs and eventual outcome.

The following methods and assumptions are used to estimate the fair values of the following classes of financialinstruments:

(i) Cash and Cash Equivalents, Trade and Other Receivables/Payables and Short Term Borrowings

The carrying amounts approximate fair values due to the relatively short term maturity of these financialinstruments.

(ii) Borrowings – term loans

The fair value of the term loans approximate the carrying amounts as the interest rates attached to theseborrowings approximate the current interest rates for liabilities with similar risk profiles.

42. SEGMENT INFORMATION

The Group is organised into three major segments:

(i) Construction – foundation and civil engineering, building contracting works and engineering, procurement,construction and commissioning of pipeline system.

(ii) Property development – the development of residential and commercial properties.

(iii) Manufacturing – manufacturing and distribution of ready-mixed concrete and concrete spun piles.

Other business segment represents hire of plant and machinery which is not of sufficient size to be reportedseparately.

The Directors are of the opinion that all inter-segment transactions have been entered into in the normal course ofbusiness and have been established on terms and conditions that are not materially different from those obtainable intransactions with unrelated parties.

No analysis of geographical segments is presented as the Group operates principally in Malaysia and the Group'sforeign operations are considered to be insignificant.



42. SEGMENT INFORMATION (CONT’D)

PropertyConstruction Development Manufacturing Others Eliminations Consolidated

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

REVENUE AND EXPENSES

RevenueExternal sales 33,693 66,966 11,233 63,967 41,522 42,034 534 1,141 – – 86,982 174,108Inter-segment sales 12,671 40,139 – – 1,122 3,377 9 7 (13,802) (43,523) – –

Total revenue 46,364 107,105 11,233 63,967 42,644 45,411 543 1,148 86,982 174,108

ResultSegment results(Loss)/profit

from operations (7,865) 5,402 (17,785) 5,282 804 2,589 (377) (109) – – (25,223) 13,164Finance costs (6,058) (5,516) (72) (22) (390) (245) (30) (84) – – (6,550) (5,867)Share of results of

associates – – – – (2,051) (1,206) – – – – (2,051) (1,206)Taxation (1,138) (3,049) – – (186) (427) – – – – (1,324) (3,476)

(Loss)/profit after taxation (35,148) 2,615

Minority interests 47 1,264

Net (loss)/profit for the year (35,101) 3,879

ASSETS AND LIABILITIESSegment assets 149,567 184,990 184,969 201,994 16,353 17,248 29 – – – 350,918 404,232Investment in equity

method of associates – – – – 11,506 13,057 (222) 257 – – 11,284 13,314

Consolidated total assets 362,202 417,546

Segment liabilities 179,609 199,994 43,481 43,183 15,462 15,622 8 66 – – 238,560 258,865

OTHER INFORMATION

Depreciation 5,696 8,446 205 193 716 1,042 – – – – 6,617 9,681Capital expenditure 8,046 17,074 4 301 105 746 – – – – 8,155 18,121Non-cash expenses

other than depreciationand amortisation 11,896 1,704 6,793 5,924 – 37 – – – – 18,689 7,665



borang proksi Bilangan Saham Dipegang

Saya/Kami

sebagai ahli/ahli-ahli HO HUP CONSTRUCTION COMPANY BERHAD, dengan ini melantik

dari

atau jika beliau tidak dapat hadir, Pengerusi Mesyuarat sebagai proksi saya/kami untuk mengundi bagi pihak saya/kami di MesyuaratAgung Tahunan Syarikat yang akan diadakan pada hari Jumaat, 28 September 2007 di Ballroom, Hotel Equatorial, Kuala Lumpurpada 11.30 pagi dan di sebarang penangguhan mengikut resolusi-resolusi berikut yang merujuk kepada notis Mesyuarat AgungTahunan:-

No Resolusi Menyokong Menentang

1. Penerimaan Penyata Kewangan Teraudit bagi tahun berakhir 31 Disember 2006serta Laporan Pengarah dan Juruaudit berkenaan

2. Perlantikan semula YBhg. Datuk Sulaiman Bin Daud

3. Perlantikan semula En. Faris Najhan Bin Hashim

4. Untuk meluluskan bayaran Yuran Pengarah sebanyak RM213,000.00

5. Perlantikan semula Juruaudit, Tetuan Ernst & Young

6. Untuk memberi kuasa kepada Para Pengarah untuk menerbit dan memperuntuksaham-saham selaras dengan Seksyen 132D Akta Syarikat, 1965

7. Cadangan Pembaharuan Mandat Pemegang-pemegang Saham bagi Urusniaga PihakBerkaitan Berulang dan Mandat bagi Urusniaga Pihak Berkaitan Berulang Tambahan

Tarikh:

Tandatangan

Nota:

a) Seorang ahli yang berhak menghadiri dan mengundi di mesyuarat adalah berhak untuk melantik proksi/proksi-proksi bagi menghadiri danmengundi sebagai wakil dirinya. Seseorang proksi tidak semestinya ahli Syarikat.

Bagaimanapun, selaras dengan Seksyen 149(1)(b) Akta Syarikat, 1965, seorang ahli tidak boleh melantik sesiapa yang bukan ahli syarikatsebagai proksinya kecuali orang tersebut adalah pengamal guaman bertauliah, juruaudit syarikat yang diluluskan atau seorang yang diluluskanoleh Pendaftar Syarikat dalam kes-kes tertentu.

Di mana Ahli Syarikat adalah nomini yang dibenarkan sebagaimana ditakrifkan di bawah Akta Depositori Pusat, ia boleh melantik sekurang-kurangnya seorang proksi berhubung dengan setiap akaun sekuriti yang ia pegang dengan saham-saham biasa Syarikat berada pada kreditakaun-akaun sekuriti tersebut.

b) Borang Proksi hendaklah diserahkan ke Pejabat Pendaftar Syarikat di Ho Hup Construction Company Berhad, No. 2, Medan Imbi, 55100 KualaLumpur, tidak kurang daripada 48 jam sebelum waktu yang telah ditetapkan untuk memulakan Mesyuarat.

c) Suratcara melantik proksi bagi individu hendaklah ditandatangani oleh pelantik atau peguam yang diberi kuasa dan sekiranya pelantik adalahsebuah syarikat hendaklah dimeteraikan atau ditandatangani oleh pegawai yang dibenarkan atau peguam yang diberi kuasa. Tandatangan mana-mana pemegang bersama adalah memadai.

d) Sila tanda “X” di kotak yang bersesuaian sebagaimana anda ingin proksi anda mengundi. Jika Borang Proksi ini dikembalikan tanpa sebarangpetunjuk bagaimana proksi harus mengundi, proksi tersebut akan mengundi atau tidak mengundi mengikut pertimbangannya sendiri.

Sebarang perubahan yang dilakukan di atas Borang Proksi ini hendaklah ditandakan oleh sesiapa yang menandatanganinya.


proxy form Number of Shares Held

I/We

being a member of HO HUP CONSTRUCTION COMPANY BERHAD , hereby appoint

of

or failing him, The Chairman of Meeting as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meetingof the Company to be held on Friday, 28 September 2007 at the Ballroom, Hotel Equatorial , Jalan Sultan Ismail, 50250 KualaLumpur at 11.30 a.m. and at any adjournment thereof on the following resolutions referred to in notice of the Annual GeneralMeeting.

No Resolutions For Against

1. To receive the Audited Financial Statements for the financial year ended 31 December2006 and the Reports of the Directors and Auditors thereon

2. To re-elect YBhg. Datuk Sulaiman Bin Daud

3. To re-elect En. Faris Najhan Bin Hashim

4. To approve the payment of Directors’ fees of RM213,000.00

5. To re-appoint Auditors, Messrs Ernst & Young

6. To authorise the Directors to issue and allot shares pursuant to Section 132D of theCompanies Act, 1965

7. Proposed Renewal of Shareholders’ Mandate for Existing Recurrent Related PartyTransactions and Additional Recurrent Related Party Transactions

Dated:

Signature

Notes:

a) A member entitled to attend and vote at the meeting is entitled to appoint a proxy/proxies to attend and vote in his stead. A proxy need notbe a member of the Company.

However, in accordance with Section 149(1)(b) of the Companies Act, 1965, a member shall not be entitled to appoint a person who is nota member of the Company as his proxy unless that person is a qualified legal practitioner, an approved company auditor or a person approvedby the Registrar of Companies in a particular case.

Where a Member of the Company is an authorised nominee as defined under the Central Depositories Act, it may appoint at least one proxyin respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

b) The Form of Proxy must be deposited at the Registered Office of the Company, at Ho Hup Construction Company Berhad, No.2 Medan Imbi,55100 Kuala Lumpur, not less than 48 hours before the time appointed for holding the Meeting.

c) The instrument appointing a proxy in the case of an individual shall be signed by the appointer or his attorney and in the case of a corporationmust be executed under its common seal or under the hand of its duly authorised officer or attorney. The signature of any joint holder issufficient.

d) Please indicate with a “X“ in the appropriate box how you wish your proxy to vote. If the Form of Proxy is returned without any indicationas to how the proxy shall vote, the proxy shall vote or abstain at his discretion.

Any alteration made in the Form of Proxy must be initialled by the person who signs it.


HO HUP CONSTRUCTION CO. (INDIA)PRIVATE LIMITED8-2-617/A/5, Road No. 11Banjara Hills, Hyderabad-500 034Andhra Pradesh, IndiaTel: + 91 40 5562 8278/5575 8278Fax: + 91 40 5562 8278

HO HUP CORPORATION (THAILAND) LIMITEDSuite 304, 3/F Tonson Building50 Soi Ton Son, Ploenchit RoadPathumwan, Bangkok 10330Tel: + 662 652 2169 71Fax: + 662 652 2172

HO HUP CORPORATION (MAURITIUS) LIMITEDc/o Moore Stephens6th Floor, Nirmal House, 22, Sir William Newton StreetPort Louis, MauritiusTel: + 230 2116 535/6716/7484Fax: + 230 2116 964/6712

HO HUP CORPORATION (SOUTH AFRICA)PTY LTDc/o Drysdale & PereiraChartered AccountantsGround Floor, Block BHurlingham Office ParkWoodlands AvenueHurlingham, 2070Johannesburg, South AfricaTel: + 2711 787 4923/4931Fax: + 2711 787 3832

HO HUP UBUNYE CONSTRUCTION PTY LTD23 Mangold StreetNewton Park 6045Port ElizabethTel: + 2741 363 1525Fax: + 2741 363 1425

HO HUP CONSTRUCTION COMPANY BERHADHO HUP JAYA SDN BHDHOMEG SDN BHDTIMELESS ELEMENT SDN BHDHead Office:No. 2, Medan Imbi, 55100 Kuala LumpurTel: + 603 2148 7711Fax: + 603 2142 4988

Branch Office:Logt 289 Cité AmpefilohaAntananarivo, MadagascarTel: + 261 20 226 5996Fax: + 261 20 226 8631

BUKIT JALIL DEVELOPMENT SDN BHDMain Office:61, Jalan 109E, Desa Business Park, Taman Desa58100 Kuala LumpurTel: + 603 7982 7711Fax: + 603 7982 2712

Site/Sales Office:Bandar Bukit Jalil, Lebuh Raya Sungai Besi-Puchong57000 Kuala LumpurTel: + 603 8994 7711Fax: + 603 8994 2988

TRU-MIX CONCRETE SDN BHDNo. 27A, Jalan Pandan 3/3, Taman Pandan Jaya55100 Kuala LumpurTel: + 603 9282 4628Fax: + 603 9285 7211

SHANGHAI SAN HO HUP PILE CO. LTD.5885, Longdong Road, Heqing Industry Development AreaPudong New Avenue, ShanghaiThe People’s Republic of ChinaTel: + 86 3897 0009Fax: + 86 5897 4384

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