A N N U A L R E P O R T 2 0 0 7

(Company No. 5383-K)

2 CORPORATEINFORMATION

3 NOTICEOFANNUALGENERALMEETING

5 STATEMENTACCOMPANYING NOTICEOFANNUALGENERALMEETING

6 DIRECTORS’PROFILE

9 CHAIRMAN’SSTATEMENT10 AUDITCOMMITTEEREPORT

15 CORPORATEGOVERNANCESTATEMENT

20 STATEMENTONINTERNALCONTROL 23 OTHERCOMPLIANCESTATEMENTS

25 STATEMENTOFDIRECTORS’RESPONSIBILITIES INRESPECTOFTHEAUDITEDFINANCIALSTATEMENTS

26 FINANCIALSTATEMENTS

90 LISTOFPROPERTIESHELD

92 SHAREHOLDERS’INFORMATION

95 WARRANTHOLDERS’INFORMATION

PROXYFORM

Contents

�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Corporate Information

BOARD OF DIRECTORS

Group Executive ChairmanYBHGDATO’ABDULMOkHTARAHMAD

Group Managing Director/Group Chief Executive OfficerYBHGDATO’SHUNLEONGkWONG

Non-Executive Group Deputy ChairmanYBHGDATINMARIAMEUSOFF

Non-Independent Non-Executive DirectorDR.CHRISTOPHERSHUNkONGLENG,CFP®,RFP™

Independent Non-Executive DirectorsMRCHIAMTAUMENGMRTOOkOkLENG

SECRETARY

MRNGAHWAH(MIANo.10366)

REGISTERED OFFICE

8thStoreySouthBlockWismaSelangorDredging142-AJalanAmpang50450kualaLumpurTel:(603)21613366Fax:(603)21613393

REGISTRAR

Tenaga Koperat Sdn Bhd20thFloorPlazaPermataJalankamparOffJalanTunRazak50400kualaLumpurTel:(603)40473883Fax:(603)40426352

AUDITORS

BDO BinderCharteredAccountants12thFloor,MenaraUni.Asia1008,JalanSultanIsmail50250kualaLumpur

PRINCIPAL BANKERS

AmBank(M)BerhadBankIslamMalaysiaBerhadMalayanBankingBerhadRHBBankBerhadUnitedOverseasBank(Malaysia)Bhd

SOLICITORS

Cheah Teh & Su17thFloorWismaDenmark86JalanAmpang50450kualaLumpur

Rahman Too & Co5,JalanWolff70000SerembanNegeriSembilanDarulkhusus

STOCK EXCHANGE LISTING

Main Board of theBursa Malaysia Securities Berhad

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�

An

nu

al

Re

po

rt 2

00

7

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THATtheFortyFourth(44th)AnnualGeneralMeeting(“AGM”)oftheCompanywillbeheldattheMeetingRoom,kelabSultanSulaiman,JalanDewanSultanSulaiman,50300kualaLumpuronMonday,30June2008at10.00a.m.forthetransactionofthefollowingbusinesses:

Ordinary Business

1. ToreceiveandadopttheDirectors’Report,AuditedFinancialStatementsandtheAuditors’Reportforthefinancialyearended31December2007.

2. ToapprovethepaymentofDirectors’feesofRM30,000.00forthefinancialyearended31December2007.

3. Tore-electthefollowingDirectorswhoretirebyrotationinaccordancewithArticle112oftheArticlesofAssociationoftheCompanyandbeingeligible,offerthemselvesforre-election:

(a) Dato’ShunLeongkwong(b) TookokLeng

4. Tore-appointMessrsBDOBinderasAuditorsoftheCompanyfortheensuingyearandtoauthorisetheBoardofDirectorstofixtheirremuneration.

Special Business

Toconsider,ifthoughtfit,topassthefollowingOrdinaryResolutions:

5. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

“THATpursuanttoSection132DoftheCompaniesAct,1965andsubjecttotheapprovalsoftherelevantgovernmentaland/orregulatoryauthorities,theDirectorsbeandareherebyauthorisedtoissuesharesintheCompanyatanytimeuntiltheconclusionofthenextAGManduponsuchtermsandconditionsand for suchpurposesas theDirectorsmay in theirabsolutediscretiondeemfit,provided that theaggregatenumberofshares tobeissueddoesnotexceed10%of the issuedsharecapitalof theCompanyforthetimebeing,ANDTHATtheDirectorsbeandarealsoempoweredtoobtaintheapprovalforthelistingandquotationoftheadditionalsharessoissuedontheBursaMalaysiaSecuritiesBerhad.”

6. Proposed Renewal of General Mandate for Substantial Property Transactions Involving Directors pursuant to Section 132E of the Companies Act, 1965

“THATpursuanttoSection132EoftheCompaniesAct,1965,authoritybeandisherebygiventotheCompanyoritsrelatedcorporationstoenterintoarrangements or transactions with the Directors of the Company or anypersonconnectedwithsuchDirectors(withinthemeaningofSection122A,CompaniesAct,1965)wherebytheCompanyoritsrelatedcorporationsmayacquirefromordisposetosuchDirectorsorconnectedpersonsnon-cashassetsincludingbutnotlimitedtoservices,land,developmentproperties,capitalequipmentandmachineriesand/oranyotherassetsorproductsoftheCompanyoritsrelatedcorporationsprovidedthatsuchacquisitionsordisposalsareoncommercialtermsandintheordinarycourseofbusiness,suchauthoritywillcontinuetobeinforceuntilconclusionofthenextAnnualGeneralMeeting.”

7. TotransactanyotherbusinessofwhichduenoticeshallhavebeengiveninaccordancewiththeCompaniesAct,1965andtheArticlesofAssociationoftheCompany.

(Ordinary Resolution 1)

(Ordinary Resolution 2)

(Ordinary Resolution 3)(Ordinary Resolution 4)

(Ordinary Resolution 5)

(Ordinary Resolution 6)

(Ordinary Resolution 7)

�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

NOTICE IS ALSO HEREBY GIVEN THATaDepositorshallbeeligibletoattendthismeetingonlyinrespectof:

(a) SharesdepositedintotheDepositor’sSecuritiesAccountbefore12.30p.m.on23June2008(inrespectofshareswhichareexemptedfrommandatorydeposit);

(b) SharestransferredintotheDepositor’sSecuritiesAccountbefore4.00p.m.on23June2008(inrespectofordinarytransfers);

(c) SharesboughtontheBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesoftheBursaMalaysiaSecuritiesBerhad.

ByOrderoftheBoard

NG AH WAH(MIANo.10366)CompanySecretary

kualaLumpur6June2008

NOTES:

1. A member of the Company entitled to attend and vote at the abovementioned meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company.

2. The Proxy form must be signed by the appointer or his/her attorney duly authorised in writing or in the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of a duly authorised officer or attorney.

3. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

4. Any alteration to the instrument appointing a proxy must be initialed. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 8th Storey, South Block, Wisma Selangor Dredging, 142-A Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the time fixed for the meeting or any adjournment thereof.

5. Explanatory Notes on Special Business:

(i) Ordinary Resolution 6 – Authority to Allot and Issue Shares

The proposed Ordinary Resolution 6, if passed, will empower the Directors to issue shares in the capital of the Company up to an aggregate amount not exceeding 10% of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the best interest of the Company. This authority unless revoked or varied by the Company at a general meeting will expire at the next Annual General Meeting.

(ii) Ordinary Resolution 7 – Proposed Renewal of General Mandate for Substantial Property Transactions involving Directors pursuant to Section 132E of the Companies Act, 1965

Section 132E of the Companies Act, 1965 prohibits a company or its subsidiaries from entering into any arrangement or transaction with its directors or persons connected with such directors in respect of the acquisition from or disposal to such directors or connected persons any non-cash assets of the “requisite value” without prior approval of the Company in general meeting. According to the Act, a non-cash asset is considered to be of the “requisite value” if, at the time of the arrangement or transaction for the acquisition or disposal of the asset, its value is greater than Ringgit Malaysia Two Hundred and Fifty Thousand (RM250,000.00) or ten per centum (10%) of the net assets of the Company, subject to minimum of Ringgit Malaysia Ten Thousand (RM10,000.00).

The proposed Ordinary Resolution 7, if passed, will authorise the Company or its related corporations to acquire from or dispose to such Directors or connected persons non-cash assets including but not limited to services, land, development properties, capital equipment and machineries and/or any other assets or products of the Company or its related corporations which may fall within the definition of “requisite value”, provided that such acquisitions or disposals are on commercial terms and in the ordinary course of business.

Notice of Annual General Meeting (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�

An

nu

al

Re

po

rt 2

00

7

Statement AccompanyingNotice of Annual General Meeting

(Pursuant to Paragraph 8.28 (2) of the Bursa Malaysia Securities Berhad Listing Requirements)

1. Names of Directors who are standing for re-election

Directorswhoarestandingforre-electionpursuanttotheArticle112oftheArticlesofAssociationattheFortyFourthAnnualGeneralMeetingoftheCompanyareasfollows:

(a) Dato’ShunLeongkwong;and

(b) TookokLeng

ThedetailsoftheDirectorsstandingforre-electionattheforthcomingFortyFourthAnnualGeneralMeetingaresetoutintheDirectors’Profileonpages6to8oftheAnnualReport.

2. Attendance of Directors at Board Meetings held during the financial year ended 31 December 2007

Atotaloffive(5)BoardofDirectors’Meetingswereheldduringthefinancialyearended31December2007andthedetailsaresetoutintheStatementofCorporateGovernanceonpage16oftheAnnualReport.

3. Venue, Date and Time of the Meeting

TheFortyFourthAnnualGeneralMeetingofMenangCorporation(M)BerhadwillbeheldattheMeetingRoom,kelabSultanSulaiman,JalanDewanSultanSulaiman,50300kualaLumpuronMonday,30June2008at10.00a.m.

�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Directors’ Profile

DATO’ ABDuL MOKHTAR AHMADGroup Executive Chairman

DATO’ABDULMOkHTARAHMAD,aMalaysian,aged68,wasappointed to theBoardofMenangon23May1989.HebeganhisearlycareerintheCivilService.In1972,heleftfortheprivatesectorwhenhewasappointedasGeneralManager inSyarikatPembenaanRayaSdnBhd (popularly knownasRaya)whichwastheoneoftheleadingBumiputracontractorsinthecountry.Withinthree(3)yearshewasappointedastheManagingDirectorofRayaandacquirednotableachievementswhichincludeconstructionoficonson thekualaLumpurskylineduring thatera, suchasMenaraBankBumiputra,BangunanBankRakyat,WismaAngkasaRayaandBangunanSeriMARA(nowknownasMedanMARA).RayaalsoactedasthelocalconsultanttotheSouthkoreanmaincontractorofMalayanBankingBerhad’s58-storeyHeadOfficebuildingknownasMenaraMaybank.

HeispresentlytheDeputyPresidentofFootballAssociationofSelangor(FAS).In1998to2003heassumedtheresponsibilityastheSelangorfootballteammanager.Heappliedhispassionandtenacitytothistaskwhichboughthisteamtoitsgloryyearswinningseveralcupsalongtheway.

Currently, Dato’Abdul MokhtarAhmad is the Group Executive Chairman of Menang (Non-IndependentDirector).

DATO’ SHuN LEONG KWONGGroup Managing Director/Group Chief Executive Officer

DATO’SHUNLEONGkWONG,aMalaysian,aged69,wasappointedtotheBoardofMenangon29June1989.Aftergraduationhejoinedthebankingindustry.HewasfirstwithCitibankMalaysiawherehedistinguishedhimselfbeingthefirstlocalexecutivetobemadeVice-PresidentoftheBank.HethenjoinedOverseasChineseBankingCorporationMalaysia.HeservedinseniorpositionsandleftasDeputyChiefExecutiveOfficerofOverseasChineseBankingCorporationMalaysiain1982tojoinprivateenterprise.Combiningtheskillsandexposureswhichheacquiredfromthebankingexperience,heexpandedrapidlyinhisprivateenterprise,concentratingonrealestate.HeholdsaB.A.Econs.(Hons)fromtheUniversityofMalaya.

Currently,Dato’ShunistheGroupManagingDirector/GroupChiefExecutiveOfficerofMenangGroupofCompanies (Non-IndependentDirector).He isactively involved inmonitoring the implementationof thestrategyandoverseeingtheoperationsoftheGroup.

Dato’ShunisthefatherofNon-ExecutiveDirector,Dr.ChristopherShunkongLeng,CFP®,RFP™.

DATIN MARIAM EuSOffNon-Executive Group Deputy Chairman

DATINMARIAMEUSOFF,aMalaysian,aged62,startedhercareerasalecturerattheInstitutTeknologiMarain1969beforeshejoinedCitibankNA,Malaysiain1973whereshewasManagerinthePublicSectorLendingDivision.In1977,shewasrecruitedbyBankBumiputraMalaysiaBerhadtoheadtheInternationalBankingDepartmentcoveringforeigncurrencylending,overseasbranchoperationsaswellascorrespondentbanking.Shewasappointedon1July1989asManagingDirectorofMaztriPaduSdnBhd,theprivatiseddeveloperforkelanaJayaUrbanCentre.SheholdsaB.A.(Hons)fromtheUniversityofMalayaandaMasterdegreeinCommunicationsfromtheUniversityofWashington,U.S.A.

DatinMariamwasappointedtotheBoardofMenangon25February1991andwassubsequentlyappointedasGroupExecutiveDirectorofMenangon1January1992(Non-IndependentDirector)andlaterbecametheNon-ExecutiveGroupDeputyChairmanon1July2005.ShewasthealternatechairpersonoftheGroupManagementCommitteeintheabsenceoftheGroupExecutiveChairman.AsNon-ExecutiveGroupDeputyChairman,shesuperviseslegal,corporateandpubliccommunicationsoftheGroup.Oneofherprincipalresponsibilities is in strategic planning and implementation of new property projects besides providinggeneraladministrationofGroupoperations.SheisalsoamemberoftheAuditCommitteeoftheCompany.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�

An

nu

al

Re

po

rt 2

00

7

DR. CHRISTOPHER SHuN KONG LENG, CfP®, RfP™Non-Independent Non-Executive Director

DR.CHRISTOPHERSHUNkONGLENG,CFP®,RFP™,aMalaysian,aged42,graduatedfromBostonUniversitywithaBachelorofScience inBusinessAdministrationwithSummaCumLaudeandBachelorofArts inEconomicswithMagnaCumLaudeinMay1987.HepursuedaMerchantBankingcareerwithHillSamuelBank,Londonfrom1987to1989.In1991,heobtainedhisMasterofScienceinManagementfromtheMITSloanSchoolofManagement,U.S.A.HesubsequentlyjoinedBankersTrustLondonasaMergerandAcquisitionAssociate.HewasawardedtheAdvancedPostgraduateDiplomainManagementConsultancy(Adv.Dip.C)fromHenleyManagementCollege,UnitedkingdominApril2000.HesecuredtheCertifiedFinancialPlanner(CFP®)qualificationbyexaminationinFebruary2003.HewasawardedthedesignationRegisteredFinancialPlanner(RFP™)on18July2006.

He completed his Doctor of BusinessAdministration (D.B.A) from Henley Management College, BrunelUniversity,Unitedkingdomin2004whereinhisDoctoralDissertationsecuredtheprestigious7thplacingintheEuropeanDoctoralAssociationforManagementandBusinessAdministration(EDAMBA)whosemembershipincludesthetop60UniversitiesinEurope.Subsequently,Dr.ChristopherShunhasbeeninvitedtoundertakepractitionerresearchattheWhartonSchoolofFinanceattheUniversityofPennsylvania,U.S.A.

Dr.ChristopherShunistheonlyMalaysianPublicCompanyDirectortohaveobtainedanapprovalfromtheSecuritiesCommissionasaqualifiedlicensedFinancialPlanneron16August2005.

Dr.ChristopherShunwasappointedin2007ontotheNationalPropertyResearchEconomicCouncil(NAPREC)think tankunder theoversightof theMinistryofFinance (MOF).Togetherwitheight (8)other illustriouspersonalities,theyadvisetheGovernmentofMalaysia(GOM)onallmatterspertainingtoRealEstatepoliciesandMacroeconomicimpactsontheMalaysianeconomy.

Dr.ChristopherShunwasappointedtotheBoardofMenangon25February1991andwasmadeExecutiveDirectoron1April1991(Non-IndependentDirector).Subsequently,hewasappointedasGroupExecutiveDirectoron1January1992andhewaspromotedtoDeputyGroupManagingDirectoron1July2005.On31December2007,Dr.ChristopherShunwasre-designatedasNon-ExecutiveDirector.HeisalsoamemberoftheRemunerationCommitteeoftheCompany.

Dr.ChristopherShunisthesonofDato’ShunLeongkwong.

MR CHIAM TAu MENGIndependent Non-Executive Director

MRCHIAMTAUMENG,aMalaysian,aged55,graduatedwithaBachelorofCommerceDegreemajoringinAccountancyfromUniversityofOtago,Dunedin,NewZealandin1976.HewasadmittedasanAssociateCharteredAccountantoftheInstituteofCharteredAccountantsofNewZealandin1980.HeisalsoaCharteredAccountantoftheMalaysianInstituteofAccountants.

Hestartedhiscareerin1976asaFinanceManagerofTolleyIndustriesLtd(NewZealand)andin1979,hejoinedMalaysianContainers(1974)BerhadasaFinanceManagercumCompanySecretary.In1984,hejoinedMenangCorporation(M)BerhadasaGeneralManagerofCorporateServices.

In 1989, he joined Bee Hin Holdings Sdn Bhd as General Manager-Corporate Finance in charge of thereconstructionschemeunderSection176oftheCompaniesAct,1965onkualaLumpurIndustriesBerhad.

In1992,hejoinedthemanagementconsultancypracticeofaninternationalaccountingorganisationandin1994,hesetuphisownconsultingpracticenamelyCTMConsulting.

Hewasappointedasan IndependentNon-ExecutiveDirectorofMenangon21October2005.He is theChairman of theAudit Committee and the Nominating Committee and a Member of the RemunerationCommitteeofMenang.HealsositsontheBoardofthefollowingcompanieslistedontheBursaMalaysiaSecuritiesBerhad:-

MedaInc.Berhad (Independent&Non-Executive)ComintelCorporationBerhad (Independent&Non-Executive)YikonCorporationBerhad (Independent&Non-Executive)LCLCorporationBerhad (Non-Independent&Non-Executive)

Directors’ Profile (Cont’d)

�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

MR TOO KOK LENGIndependent Non-Executive Director

MRTOOkOkLENG,aMalaysian,aged49,holdsaB.A(Hons)inLawandwasadmittedtotheMalaysianBarin1983.Hestartedhisownpracticein1988andwaspractisingunderthenameandstyleofRahman,Too&Co.inSerembanandkualaLumpur.Hespecialisedinthecorporateandbankingfieldsrenderinglegaladvicetoseveralbanksandpubliclistedcompanies.Hehassinceventuredintohisownprivatebusinessinpropertyandotherrelatedactivities.

MrToowasappointedasanIndependentNon-ExecutiveDirectorofMenangon1August1995.HeisalsotheChairmanoftheRemunerationCommitteeandmemberoftheAuditCommitteeandNominatingCommitteeoftheCompany.

HealsositsontheBoardofRamuniaHoldingsBerhadlistedontheBursaMalaysiaSecuritiesBerhadasanIndependentNon-ExecutiveDirector.

Notes:

1. FamilyrelationshipwithDirectorand/ormajorshareholder

Save as hereinabove disclosed, none of the Directors has any family relationship with the other directors and/or major shareholders of Menang Corporation (M) Berhad.

2. ConflictofInterest

None of the Directors has any conflict of interest in the Company except for those transactions disclosed in Note 36 to the financial statements.

3. ConvictionforOffence

None of the Directors has been convicted of any offence within the past ten (10) years.

4. OtherDirectorshipofPublicCompanies

None of the Directors hold any directorship in any public listed company except for Mr Chiam Tau Meng and Mr Too Kok Leng.

Mr Chiam Tau Meng was appointed as Directors of Meda Inc. Berhad, LCL Corporation Berhad, Comintel Corporation Berhad and Yikon Corporation Berhad on 28 December 2001, 5 December 2003, 28 December 2006 and 16 May 2008, respectively while Mr Too Kok Leng was appointed as Director of Ramunia Holdings Berhad on 28 January 2008.

5. SecuritiesHoldingsintheCompany

Details of the Directors’ securities holdings in the Company, and its subsidiaries are set out on pages 92 to 96 of the Annual Report.

Directors’ Profile (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�

An

nu

al

Re

po

rt 2

00

7

Chairman’s Statement

OnbehalfoftheBoardofDirectors,IampleasedtopresenttheAnnualReportandAuditedFinancialStatementsoftheCompanyandtheGroupforthefinancialyearended31December2007.

fINANCIAL REVIEW

Fiscalyear2007wasanothertoughyearforus.TheSerembanmarketinwhichourprincipalactivitywaslocatedcontinuedtobeslow.Salesandpricingofhousesremainunattractive.Risingfuelprices,materialscostandlaborcostaddedtothecostprofile.Marginswerefurthersqueezed.Our50/50jointventurewithOSkPropertiesSdnBhdremainedactivethroughout2007.Itsoldoffalldoublestoreyresidentialunitsandmorethan95%ofthesinglestoreyresidentialunits.Thesemi-Dhouseshadalsosoldmorethan75%oftheunitslaunched.Ofthe36unitsofdoubleandsinglestoreyshop-offices,salesaremovingatasluggishpace.Weexpectthe36unitstobefullycompletedbytheendofthisyearandexpectmostofthemtobetakenup.ThejointventurecontinuedtobeacontributortotheGroup’sresults.ComparedtotheprecedingyeartheGroupsufferedaslightlyhigherloss(aftertax)ofRM10.5millioncomparedtothepreviousyear’sRM9.5million.

CORPORATE DEVELOPMENTS

1. On12March2007,weenteredintoastrategicCollaborationAgreementwiththeSinohydroCorporationGroupofChinawithmuchexcitementandexpectation.WeregrettosaythatbyyearenditbecameclearthatnothingmuchwasbeingachievedjointlywiththisGroup.WedonotexpectnewexcitingdevelopmentswithSinohydroCorporationGroupintheforeseeablefuture.

2. Throughout2007theGroupfacestightliquiditypressurealthoughtheGroup’sassetsmorethancoverourbankandtradeliabilitiesbyatleast2.4times.Wehaddifficulty obtaining bank facilities for ouroperations.Wethereforeembarkedonanaggressiverationalizationprogramtowardsthelastquarteroftheyear.Thisrationalizationprogramcallsforaggressivedisposalofsomeofournon-coreassetstomeetGroup’sobligations.Wealsoimplementedacostrationalization program by cutting salaryexpensesbymorethan30%.Weexpectthisrationalizationtohaveitspositiveeffectforfiscal2008andfiscal2009.TheGroupiscurrentlyaggressivelybiddingforbigticketitemswiththePublicSector.Weareoptimisticsomethinggoodwouldcomeoutofoureffortswithin2008andthefirsthalfof2009.

APPRECIATION

IwouldliketoextendmysincerelygratitudetomyfellowmembersoftheBoard,managementandstaffoftheGroupfortheirdedicationinthisyetanotherdifficultyear.

DATO’ ABDuL MOKHTAR AHMADExecutiveChairman

21May2008kualaLumpur

10

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Audit Committee Report

CHAIRMAN : Mr. Chiam Tau Meng (Independent Non-Executive Director)

MEMBERS : Mr Too Kok Leng (Independent Non-Executive Director)

Dr. Christopher Shun Kong Leng, CfP®, RfP™ (Deputy Group Managing Director, redesignated as Non-Independent Non-

Executive Director on 31 December 2007) (resigned on 15 November 2007)

Y Bhg Datin Mariam Eusoff (Non-Executive Group Deputy Chairman) (appointed on 15 November 2007)

TERMS Of REfERENCE

Constitution

TheAudit Committee of the Company comprising all non-executive directors, a majority of whom areindependent,hasbeenestablishedsince22March1994.

Objective

TheprimaryobjectivesoftheAuditCommitteeare:

1. toassistinthefiduciarydutiesoftheBoardinmatterspertainingtobusinessethics,policies,financialmanagement, internalcontrols,accountingpoliciesandfinancialreportingof theCompanyanditssubsidiaries;

2. tomaintainandenhancealineofcommunicationandindependencebetweentheGroupandtheexternalauditors;

3. toensureasystemofinternalcontrolswhichwillmitigatethelikelihoodoffraudorerror.

TheappointmentofaproperlyconstitutedAuditCommitteeisanimportantsteptoassisttheBoardofDirectorsinraisingthestandardofCorporateGovernanceandobservanceofgoodCorporateGovernancepractices.

Composition

1. TheAuditCommitteeshallbeappointedbythedirectorsfromamongstthemselvesandthisfulfilsthefollowingrequirements:

(a) theAuditCommitteeshallcompriseofnofewerthanthree(3)members;

(b) alltheAuditCommitteemustbenon-executivedirectors,withamajorityofthembeingindependentdirectors;

(c) theChairmanoftheAuditCommitteeshallbeanindependentdirector;and

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

11

An

nu

al

Re

po

rt 2

00

7

Audit Committee Report (Cont’d)

(d) atleastone(1)memberoftheAuditCommittee:

(i) mustbeamemberoftheMalaysianInstituteofAccountants(“MIA”);or

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

(aa) hemusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountantsAct1967;or

(bb) hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stScheduleoftheAccountantsAct1967.

(iii) fulfilssuchotherrequirementsasprescribedorapprovedbytheExchange.

2. NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.

3. IntheeventofanyvacancyintheAuditCommitteeresultinginthenon-complianceofsubparagraph15.10(1)oftheBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)ListingRequirements,theCompanymustfillthevacancywithinthree(3)months.

4. TheBoardofDirectorsoftheCompanymustreviewthetermofofficeandperformanceofanAuditCommitteeandeachofitsmembersatleastonceeverythree(3)yearstodeterminewhethersuchauditcommitteeandmembershavecarriedouttheirdutiesinaccordancewiththeirtermsofreference.

Secretary to the Audit Committee

TheCompanySecretaryshallbetheSecretarytotheAuditCommittee.

Meetings

1. TheAuditCommitteeshallmeetat leastfour(4)timesayearormorefrequentlyascircumstancesrequirewithduenoticeofissuestobediscussedandshallrecorditsconclusionsindischargingitsdutiesandresponsibilities.

2. Themajorityofmemberspresentmustbeindependentdirectorstoformaquorum.

3. TheGroupAccountantortheFinanceDirectorandrepresentativeofexternalauditorsshallnormallyattendthemeeting.

4. TheCommitteemayaskmembersofmanagementorotherstoattendthemeetingsandprovidepertinentinformationasnecessary.

5. TheCompanymustensurethatotherdirectorsandemployeesattendanyparticularAuditCommitteemeetingonlyattheauditcommittee’sinvitation,specifictotherelevantmeeting.

6. TheCommittee shallmeetwith theexternal auditorswithout theexecutiveBoardat least twiceayear.

7. TheCommitteeactionsshallbereportedtotheBoardofDirectorswithsuchrecommendationsastheCommitteedeemedappropriate.

1�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Procedure of Audit Committee

TheAuditCommitteemayregulateitsownprocedure,inparticular:(a) thecallingofmeetings;

(b) thenoticetobegivenofsuchmeetings;

(c) thevotingandproceedingsofsuchmeetings;

(d) thekeepingofminutes;and

(e) thecustody,productionandinspectionofsuchminutes.

Authority

TheAudit Committee was appointed under Chapter 15, Part C, paragraph 15.10 of the Bursa SecuritiesListingRequirements.TheCommitteeisgiventheauthoritytoinvestigateanymatteroftheCompanyanditssubsidiarieswithinitstermsofreference,theresourceswhicharerequiredtoperformitsduties,theauthoritytohavefullandunrestrictedaccesstoany informationof theCompanyandtheauthoritytohavedirectcommunicationchannelswiththeexternalauditorsandperson(s)carryingouttheinternalauditfunction.TheCommitteeshallobtainindependent/externalprofessionaladviceandtobeabletoconvenemeetingswiththeexternalauditors,internalauditorsorbothexcludingtheattendanceofotherdirectorsandemployeesoftheCompany,wheneverdeemednecessary.

functions and Duties

ThefunctionoftheAuditCommitteeareasfollows:

1. Toconsidertheappointmentoftheexternalauditors,theauditfeeandanyquestionsofresignationordismissalandonwhetherthereisreason(supportedbygrounds)tobelievethattheCompany’sexternalauditorsarenotsuitableforre-appointment;

2. Todiscusswiththeexternalauditorsbeforetheauditcommences,thenatureandscopeoftheauditandensureco-ordinationwheremorethanoneauditfirmisinvolved;

3. Toreview:

(a) withtheexternalauditors,theirauditplan;

(b) withtheexternalauditors,theoverallscopeoftheexternalauditanddiscusstheresultsoftheirexaminationandtheirevaluationoftheinternalcontrolsystem;

(c) withtheexternalauditors,theauditreport;

(d) theassistancegivenbytheemployeesoftheCompanytotheexternalauditors;

(e) thequarterlyresultsandyearendfinancialstatementsoftheCompany,priortotheapprovalbytheboardofdirectors,focusingparticularlyon:

(i) anychangesinorimplementationofmajoraccountingpoliciesandpractices;

(ii) significantadjustmentsarisingfromtheauditandunusualevents;

(iii) thegoingconcernassumption;

(iv) compliancewithaccountingstandards,otherstatutoryandlegalrequirements;

Audit Committee Report (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

1�

An

nu

al

Re

po

rt 2

00

7

(f) anyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompanyor Group including any transaction, procedure or course of control that raises questions ofmanagementintegrity;

(g) theexternalandinternalauditor’smanagementletterandmanagement’sresponse;

(h) anyletterofresignationfromtheexternalauditorsoftheCompany.

4. Torecommendthenominationofapersonorpersonsasexternalauditors.

5. Todiscussproblemsandreservationsarisingfromtheinterimandfinalauditsandanyothermatterstheauditorsmaywishtodiscuss;

6. Todothefollowingwhereaninternalauditfunctionexists:

(a) toreviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsandthatithasthenecessaryauthoritytocarryonitswork;

(b) toreviewtheinternalauditprogramme,processes,theresultsoftheinternalauditprogramme,processesor investigationundertakenandwhetherornotappropriateaction is takenon therecommendationsoftheinternalauditfunction;

(c) toreviewanyappraisalorassessmentsof theperformanceofmembersof the internalauditfunction;

(d) to approve any appointments or terminations of senior staff members of the internal auditfunction;

(e) toinformitselfofresignationsofinternalauditstaffmembersandprovidetheresigningstaffmemberanopportunitytosubmithis/herreasonsforresignation;

7. Toconsiderthemajorfindingsofinternalinvestigationsandmanagement’sresponse;

8. ToreportpromptlysuchmattertotheBursaSecuritieswheretheauditcommitteeisoftheviewthatamatterreportedbyittotheBoardofDirectorsoftheCompanyhasnotbeensatisfactorilyresolvedresultinginabreachoftheListingRequirements;and

9. ToconsiderothertopicsasdefinedbytheBoard.

NuMBER Of MEETINGS AND DETAILS Of ATTENDANCE

Six(6)AuditCommitteemeetingswereheldon6February2007,28February2007,23April2007,28May2007,23August2007and2November2007duringthefinancialyearended31December2007.Theattendancerecordofeachmemberduringthefinancialyearisasfollows:

Audit DateofMeetingsHeld/Attended Total Committee Meetings Members 06.02.2007 28.02.2007 23.04.2007 28.05.2007 23.08.2007 02.11.2007 Attended

MrChiamTauMeng √ √ √ √ √ √ 6/6

MrTookokLeng √ √ √ √ √ √ 6/6

Dr.ChristopherShun √ √ √ √ √ r 5/6 kongLeng,CFP®,RFPTM

Duringtheyear,theexternalauditorshaveattendedtwo(2)meetings,i.e.on28February2007and23April2007.

Audit Committee Report (Cont’d)

1�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

ACTIVITIES

AsummaryoftheactivitiesundertakenbytheAuditCommitteeindischargingtheirdutiesandresponsibilitiesduringthefinancialyearwereasfollows:

(i) Reviewedtheexternalauditors’scopeofworkandtheirauditplanfortheyear;

(ii) Reviewed with the external auditors the results of their audit, the audit report, the managementletter,includingmanagement’sresponseandinternalcontrolrecommendationsinrespectofcontrolweaknessesnotedinthecourseoftheiraudit;

(iii) ReviewedtheauditedfinancialstatementsbeforerecommendingitforBoard’sapproval;

(iv) ReviewedandrecommendedtheauditfeespayabletotheexternalauditorsfortheBoard’sapproval;

(v) ReviewedtheCompany’scompliancewiththeListingRequirementsoftheBursaSecurities,applicableapprovedaccountingstandardsissuedbytheMalaysianAccountingStandardsBoard(“MASB”)andotherrelevantlegalandregulatoryrequirements;

(vi) Reviewedthequarterlyunauditedfinancialresults,announcementsandauditedfinancialstatementsoftheCompanypriortosubmissionfortheBoard’sconsiderationandapprovaltoensurethattheauditedfinancialstatementsaredrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andtheapplicableapprovedaccountingstandardsapprovedbytheMASB;

(vii) Reviewed the internal audit function and risk management needs, programme and plan for thefinancialyearunderreviewandannualassessmentoftheinternalauditfunctionandriskmanagementperformance;

(viii) Reviewedtheauditreportspresentedbyinternalauditfunctionandriskmanagementonfindingsandrecommendationswithregardtosystemandcontrolsweaknessesnotedinthecourseoftheirauditandmanagement’s responses theretoandensuringmaterialfindingsareadequatelyaddressedbymanagement;

(ix) ReviewedtheCompany’sstatusofcompliancewiththeprovisionssetoutundertheMalaysianCodeonCorporateGovernanceforthepurposeofpreparingtheCorporateGovernanceStatementpursuantto the requirement of paragraph 15.26 of theBursa Malaysia Securities Berhad Revamped ListingRequirementsbefore recommending them to theBoardactionplansand theprescribedcorporategovernanceprinciplesandbestpracticesundertheCode;and

(x) ReviewedandverifiedtheallocationofEmployeesShareOptionScheme(“ESOS”)madeinthefinancialyearended31December2007andconfirmedthattheallocationcompliedwiththeallocationcriteriadeterminedbytheESOSCommitteeandinaccordancewiththeESOSBye-Laws.

INTERNAL AuDIT fuNCTION

TheCompanyhadoutsourcedtheinternalauditfunctiontoCGRMInfocommSdnBhd(“CGRM”).TheprincipalroleofCGRMistoundertakeindependentregularandsystematicreviewsofthesystemofinternalcontrolssoastoprovidereasonableassurancethatsuchsystemscontinuedtooperatesatisfactorilyandeffectively.ItistheresponsibilityofCGRMtoprovidetheAuditCommitteewithindependentandobjectivereportsontheextentofcomplianceofthevariousoperatingunitswithintheGroup’sestablishedpoliciesandproceduresaswellasrelevantstatutoryrequirements.

FurtherdetailsoftheactivitiesofInternalAuditFunctionaresetoutintheStatementonInternalControlonpage21oftheAnnualReport.

STATEMENT BY THE AuDIT COMMITTEE IN RELATION TO ESOS ALLOCATION

TheAuditCommitteeconfirmsthatthecriteriaofallocationofESOShasbeenmadeinaccordancewiththeCompany’sESOSBye-Laws.

Audit Committee Report (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

1�

An

nu

al

Re

po

rt 2

00

7

Corporate Governance Statement

INTRODuCTION

TheBoardofDirectors(“theBoard”)ofMenangCorporation(M)Berhad(“Menang”or“theCompany”)fullysubscribestotheprinciplesandrecommendationsembodiedintheMalaysianCodeonCorporateGovernance(“theCode”)andappreciatestheimportanceofadoptinghighstandardsofcorporategovernancewithintheGroup.Assuch,theBoardstrivestoadoptthesubstancebehindcorporategovernanceprescriptionsandnotmerelytheform.TheBoardisthusfullycommittedtothemaintenanceofhighstandardsofcorporategovernancebyensuringfullapplicationofalltheprinciplesandbestpracticessetoutinParts1and2oftheCode.

TheBoardispleasedtoprovidethefollowingstatement,whichoutlineshowtheGrouphasappliedtheprincipleslaiddownintheCode.Exceptofmattersspecificallyidentified,theBoardhascompliedwiththebestpracticessetoutintheCodethroughoutthefinancialyearended31December2007.

A. DIRECTORS

A1. The Board

Board Responsibilities / Principle Duties

TheBoardtakesfullresponsibilityfortheoverallperformanceoftheCompanyandtheMenangGroupbysettingthevisionandobjectives,establishinggoalsformanagementandmonitoringitsachievement,directingthepolicies,strategicactionplansandultimatelytheenhancementoflongtermshareholdersvalue.TheBoardfocusesmainlyonthefollowingspecificareas:

• ThestrategicactionplansfortheGroup• EvaluationofCompany’sbusinessperformance• Identifyingandmanagementofprincipalrisks• Successionplanningforseniormanagement• Developing and implementing an investor relations programme and shareholder

communicationspolicy• ReviewingadequacyandintegrityofCompany’sinternalcontrolsystemsandmanagement

informationsystems

Composition of the Board

TheBoardismadeupofsix(6)members,comprisingtheGroupExecutiveChairman,theGroupManagingDirector/GroupChiefExecutiveOfficer,Non-ExecutiveGroupDeputyChairman,Non-IndependentNon-ExecutiveDirectorandtwo(2)IndependentNon-ExecutiveDirectors.

Board Committee

TheBoardofDirectorsdelegatescertainresponsibilitiestotheBoardCommittees inordertoenhancebusinessandoperationalefficiency.Currently,theCompanyhasthree(3)committeesnamelyAudit,NominationandRemunerationCommitteestoassisttheBoardintheexecutionofitsduties.Thesethree(3)committeesconsistofmembersfromtheBoard.Allthecommitteeshavetheirownwrittentermsofreferenceandoperatingprocedures.TheyreportdirectlytotheBoard,theoutcomeoftheCommitteemeetingsaswellastheirrecommendations.

Meeting

TheBoardmeetsatleastfour(4)timesayearatquarterlyintervalswithadditionalmeetingsforparticularmatterconvenedasandwhennecessary.Five(5)BoardmeetingswereheldduringthefinancialyeartodeliberateuponandconsideredavarietyofmattersincludingGroup’sfinancialresults, issuesofstrategy,performanceandresources,strategicdecisions,businessplananddirectionoftheGroup.

1�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Corporate Governance Statement (Cont’d)

TheattendancerecordofeachDirectorisasfollows:

No. of Meetings Attended/Held

Executive DirectorsDato’AbdulMokhtarAhmad 3/5Dato’ShunLeongkwong 5/5Dr.ChristopherShunkongLeng,CFP®,RFP™ 5/5(redesignated as Non IndependentNon-Executive Director on 31 December 2007)

Non-Executive Directors:DatinMariamEusoff 5/5MrChiamTauMeng 5/5MrTookokLeng 4/5

A2. Board Balance

The current Board composition of two(2) Executive Directors, two(2) Non-Independent Non-ExecutiveDirectorsandtwo(2)IndependentNon-ExecutiveDirectorscomplieswithPara15.02oftheBursaMalaysiaSecuritiesBerhadListingRequirementswhichrequiresatleasttwo(2)Directorsorone-third(1/3)oftheBoard,whicheverishigher,areindependentdirectors.

TheDirectors,withtheirdifferentbackgroundsandspecializations,equippedwithawiderangeofknowledgeandexperienceandwith thesupportof themanagement teamresponsible forimplementingthepoliciesanddecisionsoftheBoard,overseeingtheoperationsandmanagingtheGroup’sbusinessandresources.

ThereisabalanceintheBoardmembershipwiththepresenceoftheIndependentNon-ExecutiveDirectorswhoarecalibreand individualsof credibilitywithvastvariedexperience.Both theIndependentNon-ExecutiveDirectorsareindependentofmanagementandfreeofanyrelationshipwhichcouldinterferewiththeexerciseofindependentjudgementortheabilitytoactinthebestinterestoftheCompany.

The IndependentNon-ExecutiveDirectorsareactively involved invariousBoardcommittees.TheybringtobearobjectiveandindependentassessmentandopiniontothedecisionmakingoftheBoardandprovideacapablecheckandbalancefortheExecutiveDirectors.TogetherwiththeExecutiveDirectorswhohaveintimateknowledgeofthebusiness,theyprovideaneffectiveblendofentrepreneurship,businessandprofessionalexpertiseingeneralmanagementandareasoftheindustriestheGroupisinvolvedin.

TheroleoftheGroupExecutiveChairmanandtheGroupManagingDirector/GroupChiefExecutiveOfficerareseparateandeachhasaclearlyaccepteddivisionofresponsibilitiestoensurethatthereisabalanceofpowerandauthority.TheBoardhasidentifiedMrChiamTauMengastheSeniorIndependentNon-ExecutiveDirectoroftheBoardtowhomconcernsmaybeconveyed.ThespecificareasofresponsibilitiesofeachdirectorisshownintheDirectors’profileonpages6to8oftheAnnualReport.

TheBoardisrepresentedbyasignificantshareholder.

The Board is satisfied that the current composition fairly reflects the investment of minorityshareholdersintheCompanythroughtherepresentationofthetwo(2)IndependentNon-ExecutiveDirectors.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

1�

An

nu

al

Re

po

rt 2

00

7

A3. Supply of Information

AlltheBoardmembershavefullandtimelyaccesstoallinformationwithintheGroup.Boardpapers are distributed prior to the Board Meeting to enable the Directors to obtain relevantinformationandhavesufficienttimetodeliberateontheissuestoberaisedatthemeetingsoastodischargetheirdutiesdiligently.

TheBoardpaperswhichincludetheagendaandreportscoveringamongstothers,areasofstrategic,financial,operational,regulatorycompliancemattersthatrequiretheBoard’sapproval.

Detailedperiodicbriefingson industryoutlook,companyperformanceandpreviewsarealsoconductedfortheDirectorstoensurethattheBoardiswellinformedonthelatestmarketandindustrytrendsanddevelopment.

TheBoardortheindividualdirectorhasunfetteredaccesstotheadviceandservicesoftheCompanySecretarywhoensureeffectivefunctioningoftheBoardandcomplianceofapplicablerulesandregulations.IntheeventthattheCompanySecretaryfailstofulfillhis/herdutieseffectively,thetermsofappointmentpermitshis/herremovalandappointmentofasuccessorbytheBoardasawhole.

TheBoardofDirectors,whetherasafullboardorintheirindividualcapacities,isentitledtoobtainindependentprofessionaladviceoropinionwherenecessaryandinappropriatecircumstances,infurtheranceoftheirdutiesattheGroup’sexpense.

A4. Appointment to the Board

TheNominationCommitteeoftheCompanycomprisesexclusivelyofIndependentNon-ExecutiveDirectorswiththeresponsibilityofrecommendingasuitablecandidatewiththenecessaryskills,experienceandcompetencestobefilledintheBoardandBoardCommittees.Anynewnominationreceived is put to the full Board for assessment and endorsementon an ongoing basis.TheCompanySecretarywillensurethatallappointmentsareproperlymadeandthatallnecessaryinformationisobtained,aswellaslegalandregulatoryobligationsaremet.

Duringtheyear,theNominationCommitteehadimplementedaprocesstoassesstheperformanceandcontributionofeachDirectorandeffectivenessof theBoardasawholeandat thesametimehadreviewedtherequiredmixofskillsandexperienceoftheBoard.TheCommitteealsokeepsunderreviewtheBoardstructure,sizeandcompositionaswellasconsideringtheBoard’ssuccessionplanning.

ThereisaformaltrainingprogrammefornewdirectorsasitistheCompany’spolicytoappointtotheBoardindividualsofsufficientcalibreandexperiencetocarryoutthenecessarydutiesofadirector.TheBoardismindfulofthecodeofbestpracticeinthisregardandwillreviewthenecessityforformaltrainingfromtimetotime.

AlltheDirectorshavesuccessfullycompletedtheMandatoryAccreditationProgrammeprescribed

by the Bursa Malaysia Securities Berhad (“Bursa Securities”).The Directors will continue toundergo relevantcoursesandseminarsaccreditedbyBursaSecuritiesunder theContinuingEducationProgrammefordirectorsofpublic listedcompanies tokeepabreastwith industry,regulatoryandcomplianceissues,trendsandbestpractices.

TrainingsandseminarsattendedbyDirectorsin2007comprisedthefollowing:-

• CorporateGovernanceandMedia• InsiderTrading:IssuesandChallenges• CodeofCorporateComplianceandEthicalConduct• StrategicMarketingPlanandBrandManagementStrategies

Corporate Governance Statement (Cont’d)

1�

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

A5. Re-election

InaccordancewiththeCompany’sArticlesofAssociation,alltheDirectorswhoareappointedbytheBoardaresubjecttoretirementandareeligibleforre-electionbytheshareholdersatthenextAnnualGeneralMeeting (“AGM”)held following theirappointments.Therewasnonewappointmentmadeduringthefinancialyear.

Thearticlesalsoprovidethatatleastone-third(1/3)oftheDirectorsshallretirefromtheofficeateachAGMandshallbeeligibletooffer themselvesforre-electionprovidedalwaysthatallDirectorsincludingtheManagingDirectorshallretirefromofficeandstandforre-electionatleastonceeverythree(3)years.

B. DIRECTORS’ REMuNERATION

TheRemunerationCommitteeoftheCompanycomprisesthefollowingDirectors:

MrTookokLeng - IndependentNon-ExecutiveDirector (Chairman)

MrChiamTauMeng - IndependentNon-ExecutiveDirector

Dr.ChristopherShunkongLeng,CFP®,RFP™ - DeputyGroupManagingDirector(redesignated as Non-IndependentNon-Executive Director on 31 December 2007)

The Remuneration Committee responsible for recommending the remuneration packages of theExecutiveDirectorsinaccordancewiththeCompany’spolicyandwithreferencetoexternalbenchmarkreportstothefullBoardforconsiderationandapproval.InthecaseofNon-ExecutiveDirectors,thelevelofremunerationreflectstheexperienceandlevelofresponsibilitiesundertakenbythem.TheBoardasawholedeterminestheremunerationoftheNon-ExecutiveDirectorswiththeindividualdirectoraffectedabstainingfromdiscussionanddeterminationofhis/herownremunerationpackage.

Theremunerationpackageisnecessarytoattract,retainandmotivateDirectorsofthequalityrequiredtomanagethebusinessoftheCompanyandtoaligntheinterestoftheDirectorswiththoseoftheshareholders.

ThedetailsoftheremunerationforDirectorsreceived/receivablefromtheCompanyduringthefinancialyearareasfollows:

(a) aggregateremunerationofDirectorscategorisedintoappropriatecomponents:

Bonus & Benefits fees Salaries Incentives -in-Kind Others Total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

ExecutiveDirectors 15.000 36.000 9.000 114.617 2.850 177.467Non-ExecutiveDirectors 15.000132.000 – 10.892 0.600 158.492

(b) ThenumberofDirectorswhosetotalremunerationfallswithinthefollowingbands:

Number of DirectorsRange of remuneration (RM) Executive Non-Executive

Notmorethan50,000 2 150,001to100,000 1 2

Corporate Governance Statement (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

1�

An

nu

al

Re

po

rt 2

00

7

C. SHAREHOLDERS

TheCompanyrecognisestheimportanceofaccountabilitytoitsshareholdersthroughaneffectiveandconstructivecommunicationpolicy thatenablesboth theboardandmanagement tocommunicateeffectivelywithitsshareholders,stakeholdersandthepublicgenerallyaboutperformance,corporategovernance and other matters affecting shareholders’ interest.The Company reaches out to itsshareholdersthroughitsdistributionoftheannualreportsandotherexplanatorycirculars.Eachyear,theCompanystrivestoproduceacomprehensiveannualreportwhichisnotonlyinformativewithfactsandfiguresbutalsoreader-friendly.TimelyannouncementaremadetothepublicwithregardstotheCompany’scorporateproposal,financialresultsandotherrequiredannouncements.

AllshareholdersareencouragedtoattendtheCompany’sAnnualGeneralMeetingandtoparticipateintheproceedings.Shareholders’suggestionsreceivedduringtheAnnualGeneralMeetingsarereviewedandconsideredforimplementationwhereverpossible.Theshareholdersaregiveneveryopportunitytoenquire,raisequestionsandseekclarificationonthebusinessandperformanceoftheGroup.Thesewouldgive investorsabetterappreciationoftheCompany’sobjectives, itspotentialproblems,thequalityofitsmanagement,enhancebetterunderstandingofcorporatestrategieswhilealsomakingtheCompanyawareoftheexpectationsandconcernsoftheshareholders.Thisprocesshelpstocreateamorestableshareholdersbase.

D. ACCOuNTABILITY AND AuDIT

D1. financial Reporting

TheBoardaimstopresentabalanced,clearandmeaningfulassessmentoftheGroup’sfinancialpositionsandprospectsinalltheirreportstotheshareholders,investorsandregulatoryauthorities.ThisassessmentisprimarilyprovidedintheAnnualReportthroughtheChairman’sStatementandtheStatementbyDirectorstoenhanceshareholders’understandingofthebusinessoperationsoftheGroup.

ThequarterlyresultsannouncementsontheseresultsalsoreflecttheBoard’scommitmenttogiveregularupdatedassessmentsontheGroup’sperformances.

D2. Internal Control

TheinformationontheGroup’sinternalcontrolispresentedintheStatementonInternalControlonpages20to22oftheAnnualReport.

D3. Relationship with the Auditors

TheBoardthroughitsAuditCommitteemaintainsaformalandtransparentarrangementwiththeCompany’sexternalauditors.AsummaryofactivitiesoftheAuditCommitteeduringthefinancialyearareincludedintheAuditCommitteeReportasdetailedonpage14oftheAnnualReport.

Corporate Governance Statement (Cont’d)

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Statement on Internal Control

1. INTRODuCTION

TheMalaysianCodeonCorporateGovernancestipulatesthattheBoardofDirectorsoflistedcompaniestomaintainasoundsystemofinternalcontrolstosafeguardshareholder’sinvestmentsandtheGroup’sassets.TheBoardofDirectorsofMenangCorporation(M)Berhad(“theBoard”)istakingappropriateinitiatives tomaintainand furtherstrengthen the transparency,accountabilityandefficiencyof theGroupoperations.

TheStatementof InternalControl ispreparedunder therequirementofPara15.27(b)of theBursaMalaysia Securities Berhad (“Bursa Securities”) Listing Requirements and in accordance with the“StatementonInternalControl:GuidanceforDirectorsofPublicListedCompanies”issuedjointlybytheInstituteofInternalAuditorsandBursaSecurities.TheBoardispleasedtoreporttotheshareholdersonthestateofinternalcontroloftheGroupduringtheyearunderreview.

2. RESPONSIBILITY fOR RISK AND INTERNAL CONTROLS

TheBoardandtheseniormanagementrecognizesitsoverallresponsibilityformaintainingtheGroup’ssystemofinternalcontrolandhadestablishedprocessesforidentifying,evaluatingandmanagingthesignificantrisksfacedbytheGroup.

Hence, theBoardendeavors tomaintainanadequate systemof internal controls that isdesignedtomanage,ratherthantoeliminaterisk,toachievebusinessobjectivesandtoimprovegovernanceprocess.However,itisrecognizedthatevaluationandimplementationofthesystemcanonlyprovidereasonableassuranceoftheGroupinachievingitsobjectives.Thesystemwillnotprovideabsoluteassuranceagainstanymateriallossoccurrence.

TheBoardconfirmsthatthesystemofinternalcontrolswiththekeyelementshighlightedinParts5and6ofthisstatementwereinplaceduringthefinancialyear.ThesystemissubjecttoregularreviewsbytheBoard.However,materialjointventureandassociatedcompanyhavenotbeendealtwithaspartoftheGroupforpurposesofapplyingtheaboveguidanceasthejointventureandassociatedcompanyhavetheirownsystemsofinternalcontrolsinplace.Nevertheless,theBoardconvenesregularBoardandoperationsmeetingswiththejointventureandassociatedcompanytomonitortheseinvestments.

3. RISK MANAGEMENT fRAMEWORK

TheGroupisstillmaintainingitsriskmanagementpolicyandframeworktocontinuallyupdateandidentifythevariousfactorsthatcouldhaveapotentiallysignificantimpactontheGroup’smidtolongtermbusinessobjectives.

Theriskmanagementpolicyandframeworkincorporatesthefollowingactivities:

• Identifythevariousriskfactors(financialandnon-financial)thatcanpotentiallyhaveasignificantimpactonMenangCorporation(M)Berhad(“Menang”)’ssuccessandcontinuity.

• Establishariskcoveragepolicyandrankoftheserisksaccordingtoitsrelativeweight.• Assesseachoftheserisks(usingtheriskfactorsandrelativeweight)onMenang’smainbusiness

linei.e.,propertydevelopment.• Establishanoverallriskprofileinorderofpriority.• Establishanoverallauditplanthatcoversallrisksareas.• Conductreviewsofcontrolactivitiesonhigh-riskareas.• Evaluatethecontrolactivitiesandgiveanopiniononthesystemsofinternalcontrols.• Monitorchangesinbusinessconditionsandoperatingstyle.• Evaluatechangesagainstrisksidentifiedearlierandinternalcontrolsystems.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

Statement on Internal Control (Cont’d)

4. INTERNAL AuDIT fuNCTION

TheGrouphasoutsourceditsinternalauditfunctiontoCGRMInfocommSdnBhd(528644-W)(“CGRM”).CGRM,anindependentinternalauditservicesprovider,wasappointedtosupporttheAuditCommittee,andbyextension,theBoard,byprovidinganindependentassuranceontheeffectivenessoftheGroup’ssystemofinternalcontrol.

Inparticular,CGRMappraisesandcontributestowardsimprovingtheGroup’sriskassessmentandcontrolsystemsandreportstotheAuditCommitteeonaperiodicbasis.Todate,two(2)reviewshavebeenconductedduringthefinancialyear.

Theinternalauditworkplanisrisk-basedandreflectstheGroup’smajorbusinessactivitiesidentifiedbytheriskmanagementframework.ThisplanisreviewedandapprovedbytheAuditCommittee.ThescopeofCGRM’sfunctioncoveredtheauditofallbusinessunitsandoperationsexceptthoseofthejointventureandassociatecompanies.

The internal audit reviews were conducted in accordance to the Guidelines on the InternalAuditFunctionissuedbyTheInstituteofInternalAuditorsMalaysiainJuly2002aswellastheStandardsfortheProfessionalPracticeofInternalAuditing(SPPIA)issuedbyTheInstituteofInternalAuditorsandtheprinciplesoftheCOSO(CommitteeoftheSponsoringOrganizationsoftheTreadwayCommission)framework,agloballyacceptedinternalcontrolandgovernancemodel.

5. INTERNAL CONTROL SYSTEM

AnembeddedcontrolsystemisdesignedtofacilitateachievementoftheGroup’sbusinessobjectives.Itcomprisestheunderlyingcontrolenvironment,riskassessment,controlactivities,informationandcommunicationaswellasmonitoringsystems.

The organizational structure has a positive tone and good leadership as well as defined lines ofresponsibility,delegationofauthorityandsegregationofduties.

TheGrouphasinplaceacomprehensivebudgetingprocessforalloperatingunits.

Pertinentinformationisidentified,capturedandutilisedatalllevelsoftheGroup.Thesearedistributedinaformandtimeframethatsupportstheachievementoffinancialreportingobjectives.

CloseindependentappraisalsbytheManagement,AuditCommittee,InternalandExternalAuditorsensure ongoing compliance with policies, procedures, standards and legislations whilst assessingtheeffectivenessoftheGroup’ssystemoffinancial,complianceandoperationalcontrols.FrequentmonitoringofperformanceisundertakentoidentifymajorvariancesandManagementactionthathasbeentakenortobetaken.

BesidesprimaryownershipovertheeffectivenessoftheGroup’sinternalcontrolsystems,theBoardrecognizesitsresponsibilityovertheprincipalrisksofvariousaspectsoftheGroup’sbusiness.Forlong-termviabilityoftheGroup,itiscrucialtoachieveacriticalbalancebetweenrisksincurredandpotentialreturns.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

6. OTHER KEY ELEMENTS Of INTERNAL CONTROL

ThefollowingareotherkeyelementsoftheGroup’sinternalcontrolsystems:

• TheAuditCommitteemeetsatleastfour(4)timesayearandreviewstheeffectivenessoftheGroup’ssystemofinternalcontrols.

• Thehands-oninvolvementoftheExecutiveDirectorsintheoperationsandfinancialoftheGroupenablemostissuestobeeffectivelyresolvedonatimelybasis.

• Annualbudgetsarepreparedbyeachoperatingunitandconsolidatedby theGroupFinancefunction.ThesearethoroughlyreviewedbeforetheyaretabledtotheManagementCommittee,AuditCommitteeandtheBoardforapproval.

• ATender Committee is established and meets at least once a year to evaluate and appointcontractorstosupplytheirgoodsand/orservices.Thecentralizedprocurementfunctionalsoensuresapprovalproceduresareadhered toaswellas to leverageonaconsolidatedGrouppurchasingpower.

• Management constantly monitors the progress of highlighted issues and had showed itscommitmentandprovidestheleadershipinrectifyingthem.

• ManagementmonitorsthequarterlyresultsoftheGroupagainstaBoard-approvedbudgetandintheeventofmajorvariances,Managementwilltakeappropriateaction.

• TheGroup’sperformanceismonitoredbytheGroupFinancefunctionwhopreparesmonthlymanagementaccountswithcomparisonsagainsttheapprovedbudget.ThemonthlymanagementaccountsarereviewedanddeliberatedbyManagementinitsMonthlyManagementMeeting.

• TheBoardmonitorstheGroup’sperformancebyreviewingitsquarterlyresultsandoperationsandapprovestheannouncementstotheBursaSecurities.ThesearereviewedbytheAuditCommitteebeforetheyaretabledtotheBoard.

Allthesefunctionsprovidetheirrespectivedegreeofassurancetotheoperationsandexistenceofthesystemoftheinternalcontrol.

7. CONCLuSION

Internalcontrolweaknesseswereidentifiedduringthefinancialyearended31December2007.Thecontrolweaknessesidentifiedhavebeen,orarebeing,addressedtoensuretheintegrityofinternalcontrols.Noneoftheweaknesseshaveresultedinanymateriallosses,contingenciesoruncertaintiesthatwouldrequirementionintheGroup’sannualreport.

TheManagementoftheGroupcontinuestotakemeasurestostrengthentheinternalcontrolenvironment.ThedevelopmentofthesystemofinternalcontrolisanongoingprocessandtheBoardmaintainsanongoingcommitmenttostrengthentheGroup’sinternalcontrolenvironmentandprocesses.

This statement was made in accordance with the Minutes of the Board of Directors’ Meeting held on 26 February 2008.

Statement on Internal Control (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Other Compliance Statements

1. uTILISATION Of PROCEEDS

Therewerenoproceedsraisedfromanyproposalduringthefinancialyear.

2. SHARE BuY-BACKS

TherewerenoShareBuy-Backsduringthefinancialyear.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECuRITIES

TherewerenoWarrants,RedeemableConvertibleSecuredLoanStocksorEmployeeShareOptionSchemeexercisedduringthefinancialyear.

4. AMERICAN DEPOSITORY RECEIPT(“ADR”)/GLOBAL DEPOSITORY RECEIPT (“GDR”)

TherewerenoADR/GDRprogrammesponsoredbytheCompanyduringthefinancialyear.

5. SANCTIONS AND/OR PENALTIES

TherewerenosanctionsormaterialpenaltiesimposedbyanyoftheregulatorybodiesontheCompanyanditssubsidiaries,directorsormanagement.

6. NON-AuDIT fEES

Therewerenonon-auditfeespaidtoexternalauditorsduringthefinancialyear.

7. VARIATION IN RESuLTS

Therewerenovariancebetweentheresultsofthefinancialyearandtheunauditedresultspreviouslyannounced.

8. PROfIT GuARANTEE

TherewerenoprofitguaranteegivenbytheCompanyduringthefinancialyear.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Other Compliance Statements (Cont’d)

9. MATERIAL CONTRACTS

ThematerialcontractsenteredintobytheCompanyanditssubsidiariesinvolvingdirectorsandmajorshareholders’interest:-

a) whichwerestillsubsistingasat31December2007.

Relation between the director or major shareholder Parties General Cash and contracting Date involved Nature Consideration parties

02.06.2005 TancoLand Tonovatethe RM9,000,000.00 Maymerge(M) SdnBhd Saleand plusaccrued SdnBhd (“TLSB”) Purchase interest (“Maymerge”)is Agreement thesubstantial PelangiCitapadu betweenTLSB shareholderor (M)SdnBhd andPCSBto ultimatesubstantial (“PCSB”) MDSBto shareholderof purchasesix Menang and (6)piecesof Corporation(M) landfromTLSB Berhad(“MCB”), Menang MDSBandPCSB. Development (M)SdnBhd Dato’Abdul (“MDSB”) Mokhtar Ahmad,Dato’ ShunLeongkwong andDatinMariam Eusoffarethe directorsof Maymerge,MCB, MDSBandPCSB.

b) whichwereenteredintosincetheendofthepreviousfinancialyear

Nil.

10. REVALuATION POLICY ON LANDED PROPERTIES

TheCompanyrevaluesitslandedpropertieseveryfive(5)yearsandashorterintervalswheneverthefairvalueoftherevaluedassetsisexpectedtodiffermateriallyfromtheircarryingvalue.

11. RECuRRENT RELATED PARTY TRANSACTIONS Of A REVENuE NATuRE

Therewerenorecurrentrelatedpartytransactionsofarevenuenatureduringthefinancialyear.

12. CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

TheGroupdidnotundertakeanycorporatesocialresponsibilityactivitiesduringthefinancialyearended31December2007.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Statement of Directors’ ResponsibilitiesIN RESPECT OF THE AUDITED FINANCIAL STATEMENTS

TheDirectorsarerequiredtoensurethatfinancialstatementsforeachfinancialyearareproperlydrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapprovedaccountingstandardsinMalaysiasoastogiveatrueandfairviewofthestateofaffairsandresultsoftheGroupandtheCompanyforthefinancialyearthenended.

Inpreparingthefinancialstatements,theDirectorshave:

• adoptedsuitableaccountingpoliciesandthenapplythemconsistently;

• madejudgementsandestimatesthatareprudentandreasonable;and

• ensuredallapplicableaccountingstandardshavebeenfollowed.

TheDirectorsareresponsibleforensuringproperaccountingrecordsarekeptwhichdisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandoftheCompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct,1965.

The Directors have a general responsibility for taking such reasonable steps as are reasonably open tothem:-

(a) tosafeguardtheassetsoftheGroupandtheCompany;and

(b) topreventanddetectfraudandotherirregularities.

This statement is made in accordance with a resolution of the Board of Directors dated 28 April 2008.

27 DIRECTORS’REPORT

34 STATEMENTBYDIRECTORS

34 STATUTORYDECLARATION

35 REPORTOFTHEAUDITORS

36 BALANCESHEETS

38 INCOMESTATEMENTS

39 STATEMENTOFCHANGESINEqUITY

40 CASHFLOWSTATEMENTS

42 NOTESTOTHEFINANCIALSTATEMENTS

StatementsFinancial

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Directors’ Report

TheDirectorsherebysubmittheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31December2007.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding, letting out of properties and the provisionofmanagementservices.TheprincipalactivitiesofthesubsidiariesarestatedinNote10tothefinancialstatements. Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringthefinancialyear.

RESuLTS

Group Company RM’000 RM’000

Net(loss)/profitforthefinancialyear,attributable toequityholdersoftheCompany (10,497) 499

DIVIDENDS

NodividendhasbeenpaidordeclaredbytheCompanysincetheendofthepreviousfinancialyear.TheDirectorsalsodonotrecommendanydividendpaymentinrespectofthecurrentfinancialyear.

RESERVES AND PROVISIONS

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanthosedisclosedinthefinancialstatements.

ISSuE Of SHARES AND DEBENTuRES

TheCompanyhasnotissuedanynewsharesordebenturesduringthefinancialyear.

OPTIONS GRANTED OVER uNISSuED SHARES

NooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringtheyearapartfromtheissueofwarrantsandoptionspursuanttotheEmployees’ShareOptionScheme.

Warrants2006/2011

TheWarrantsare in registered formandconstitutedbyaDeedPoll andentitle the registeredholder tosubscribeforone(1)newordinaryshareofRM1.00eachintheCompanyatapriceofRM1.00perordinaryshareforeverywarrantheld.TheconversionratioissubjecttotheaforesaidDeedPollandcanbeexercisedatanytimeduringtheinitialfive-yearsubscriptionperiodwhichexpiredon15October2006.On30June2006,pursuanttotheExtraordinaryGeneralMeetingandtheMeetingoftheWarrantholdersinrelationtotheWarrantsExtension,theWarrantshavebeenextendedbyanadditionalfive(5)years,from16October2006uptoandincluding15October2011.Theothertermsandconditionsoftheoriginaldeedpolldated17May2001shallremainunchanged.AsatthedateoftheReport,noneofthewarrantshasbeenexercised.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

OPTIONS GRANTED OVER uNISSuED SHARES (Continued)

Employees’ShareOptionScheme(“ESOS”)

AtanExtraordinaryGeneralMeetingheldon15January2002,theCompany’sshareholdersapprovedtheestablishmentofanEmployees’ShareOptionSchemetoeligibleExecutiveDirectorsandemployeesoftheGroupwhereby;

(i) notmorethanfiftypercent(50%)oftheordinarysharesavailableundertheESOSshouldbeallocated,inaggregate,toExecutiveDirectorsandseniormanagement;and

(ii) notmorethantenpercent(10%)oftheordinarysharesavailableundertheESOSshouldbeallocatedtoanyindividualExecutiveDirectororEligibleEmployee,whoeithersinglyorcollectivelythroughhis/herassociatesholdtwentypercent(20%)ormoreoftheissuedandpaid-upsharecapitaloftheCompany.

TheoptionsofferedunderESOStotakeupunissuedordinarysharesofRM1.00eachandthesubscriptionpricesareasfollows:

- Number of options over ordinary shares of RM1.00 each - Subscription Balance Offered Lapsed BalanceExercise period price as at and due to as at RM 1.1.2007 accepted resignation 31.12.2007

25.1.2002 - 23.1.2012 1.00 12,473,000 – (3,402,000) 9,071,0002.5.2002 - 23.1.2012 1.00 10,000 – – 10,0007.11.2002 - 23.1.2012 1.00 312,000 – (312,000) –10.1.2003 - 23.1.2012 1.00 146,000 – – 146,00025.2.2004 - 23.1.2012 1.00 621,000 – (55,000) 566,0007.1.2005 - 23.1.2012 1.00 1,753,000 – (1,043,000) 710,00021.2.2005 - 23.1.2012 1.00 172,000 – (32,000) 140,000

15,487,000 – (4,844,000) 10,643,000

TheCompanyhasbeengrantedexemptionby theCompaniesCommissionofMalaysia fromhaving todisclose the listofemployeesandtheiroptionholdingswhich is less than1,000,000ordinarysharesofRM1.00each.

ThesalientfeaturesoftheESOSareasfollows:

(i) themaximumnumberofordinarysharestobeissuedandallottedbytheCompanyundertheESOSasapprovedbytheSecuritiesCommissionshallnotexceedtenpercent(10%)ofthetotalissuedandpaid-upsharecapitaloftheCompanyatanypointintimeduringthedurationoftheESOS;

(ii) ExecutiveDirectorsandeligibleemployeesarethosewhohavebeenconfirmedinwritingasemployeesoftheGrouponorpriortothedateoftheoffer;

(iii) theoptionispersonaltothegranteeandshallnotbetransferred,assignedordisposedofbythegranteesaveandexceptintheeventofthedeathofthegranteeasprovidedunderBye-Law14.6;

(iv) nooffershallbemadetoanyExecutiveDirectoroftheCompanyunlesssuchofferandtherelatedallotmentofshareshavepreviouslybeenapprovedbytheshareholdersoftheCompanyingeneralmeeting;

Directors’ Report (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

OPTIONS GRANTED OVER uNISSuED SHARES (Continued)

Employees’ShareOptionScheme(“ESOS”)(Continued)

(v) thesubscriptionpriceatwhichtheemployeesareofferedtotakeupsharesundertheESOSiseitheratadiscountofnotmorethantenpercent(10%)fromtheweightedaveragemarketpriceofthesharesasshowninthedailyofficiallistissuedbyBursaMalaysiaSecuritiesBerhadforfive(5)marketdaysimmediately preceding the date of offer or at par value of the shares of the Company of RM1.00,whicheverishigher;

(vi) theoptionsgrantedmaybeexercisedatanytimewithintheoptionperiodandtheoptionmaybefullyexercisedaftertheacceptanceunderBye-Law10.1;and

(vii) theoptionsgrantedmaybeexercisedinfullorinlessernumberofordinarysharesprovidedthatthenumbershallbeinmultiplesof1,000shares.

ThepersonstowhomtheoptionshavebeengrantedhavenorighttoparticipatebyvirtueoftheoptionsinanyshareissueofanyothercompanywithintheGroup.

On26December2006,theCompanyhasextendeditsexistingESOSwhichisexpiringon23January2007foranotherfive(5)yearseffectivefrom24January2007uptoandincluding23January2012inaccordancewiththeprovisionoftheCompany’sESOSBye-Law.

DIRECTORS

TheDirectorswhoheldofficesincethedateofthelastreportare:

Y.Bhg.Dato’AbdulMokhtarAhmadY.Bhg.Dato’ShunLeongkwongY.Bhg.DatinMariamEusoffDr.ChristopherShunkongLeng,CFP®,RFPTM

TookokLengChiamTauMeng

InaccordancewithArticle112oftheCompany’sArticlesofAssociation,Y.Bhg.Dato’ShunLeongkwongandTookokLengretirefromtheBoardbyrotationattheforthcomingAnnualGeneralMeetingand,beingeligible,offerthemselvesforre-election.

DIRECTORS’ INTERESTS

TheDirectorsholdingofficeattheendofthefinancialyearandtheirbeneficialinterestintheordinarysharesoftheCompanyanditsrelatedcorporationsduringthefinancialyearended31December2007asrecordedintheRegisterofDirectors’ShareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965wereasfollows:

- Number of ordinary shares of RM1.00 each - Balance Balance as at as atShares in the Company 1.1.2007 Bought Sold 31.12.2007

Directinterests:-Y.Bhg.Dato’ShunLeongkwong 9,400 – – 9,400-Y.Bhg.DatinMariamEusoff 4,200 – – 4,200-Dr.ChristopherShunkongLeng,CFP®,RFPTM 5,070,500 3,732,500 8,800,000 3,000

Directors’ Report (Cont’d)

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

DIRECTORS’ INTERESTS (Continued)

- Number of ordinary shares of RM1.00 each - Balance Balance as at as atShares in the Company 1.1.2007 Bought Sold 31.12.2007

Indirectinterests:-Y.Bhg.Dato’AbdulMokhtarAhmad 118,557,830 – 22,612,700 95,945,130-Y.Bhg.Dato’ShunLeongkwong 118,564,130 – 22,619,000 95,945,130-Y.Bhg.DatinMariamEusoff 118,557,830 – 22,612,700 95,945,130

- Number of options over ordinary shares of RM1.00 each - Balance Offered Balance as at and as atESOS in the Company 1.1.2007 accepted Exercised 31.12.2007

Y.Bhg.Dato’AbdulMokhtarAhmad 1,000,000 – – 1,000,000Y.Bhg.Dato’ShunLeongkwong 1,000,000 – – 1,000,000Y.Bhg.DatinMariamEusoff 1,000,000 – – 1,000,000Dr.ChristopherShunkongLeng,CFP®,RFPTM 1,000,000 – – 1,000,000

Y.Bhg.Dato’AbdulMokhtarAhmad,Y.Bhg.Dato’ShunLeongkwong,Y.Bhg.DatinMariamEusoffandDr.ChristopherShunkongLeng,CFP®,RFPTMaredeemedtohaveinterestinthesharesofthesubsidiariesoftheGroupbyvirtueoftheirinterestintheCompanyasdisclosedabove.

NoneoftheotherDirectorsholdingofficeat31December2007hadanyinterestintheordinarysharesoftheCompanyandofitsrelatedcorporationsduringthefinancialyear.DIRECTORS’ BENEfITS

Sincetheendofthepreviousfinancialyear,noneoftheDirectorsoftheCompanyhavereceivedorbecomeentitledtoreceiveabenefit(otherthanabenefitincludedintheaggregateamountofemolumentsreceivedordueandreceivablebytheDirectorsasshowninthefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththeDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichhehasasubstantialfinancialinterest,otherthancertainDirectorswhoaredeemedtoderiveabenefitbyvirtueoftheirinterestsincompanieswhichprovidedservicestocertaincompaniesintheGroupintheordinarycourseofbusinessasdisclosedinNote36tothefinancialstatements.

Therewerenoarrangementsduringandattheendofthefinancialyear,towhichtheCompanyisaparty,whichhadtheobjectofenablingDirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporateapartfromtheissuanceofRedeemableConvertibleSecuredLoanStocksasdisclosedinNote25tothefinancialstatementsandDirectors’entitlementtosubscribefornewordinarysharesintheCompanyunderESOSoftheCompany.

Directors’ Report (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

OTHER STATuTORY INfORMATION REGARDING THE GROuP AND THE COMPANY

(I) AS AT THE END Of THE fINANCIAL YEAR

(a) BeforethefinancialstatementsoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablesteps:

(i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofprovisionfordoubtfuldebtsandhavesatisfiedthemselvesthatallknownbaddebtshavebeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts;and

(ii) toensurethatanycurrentassetswhichwereunlikelytorealisetheirbookvaluesintheordinarycourseofbusinesshadbeenwrittendowntotheirestimatedrealisablevalues.

(b) IntheopinionoftheDirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearhavenotbeensubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

(II) fROM THE END Of THE fINANCIAL YEAR TO THE DATE Of THIS REPORT

(c) TheDirectorsarenotawareofanycircumstances:

(i) whichwouldrendertheamountwrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsinthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanymaterialextent;or

(ii) whichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading;and

(iii) whichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

(d) IntheopinionoftheDirectors:

(i) therehasnotarisenanyitem,transactionoreventofamaterialandunusualnaturelikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade;and

(ii) nocontingentorotherliabilityhasbecomeenforceable,orislikelytobecomeenforceable,withintheperiodoftwelvemonthsaftertheendofthefinancialyearwhichwillormayaffecttheabilityoftheGrouporoftheCompanytomeettheirobligationsasandwhentheyfalldue.

(III) AS AT THE DATE Of THIS REPORT

(e) TherearenochargesontheassetsoftheGroupandoftheCompanywhichhavearisensincetheendofthefinancialyeartosecuretheliabilitiesofanyotherperson.

(f) TherearenocontingentliabilitiesoftheGroupandoftheCompanywhichhavearisensincetheendofthefinancialyear.

(g) TheDirectorsarenotawareofanycircumstancesnototherwisedealtwithinthereportorfinancialstatementswhichwouldrenderanyamountstatedinthefinancialstatementsoftheGroupandoftheCompanymisleading.

Directors’ Report (Cont’d)

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

SIGNIfICANT EVENTS DuRING THE fINANCIAL YEAR

(i) On9October2002,MenangDevelopment(M)Sdn.Bhd.(“MDSB”)enteredintoaSaleandPurchaseAgreementwithTancoLandSdn.Bhd.(“TLSB”)todispose18parcelsofshoplotsinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhususforatotalcashconsiderationofRM6.84million.AsumofRM50,000wasreceivedontheexecutionofagreement.

On9October2002,MDSBenteredintoaSaleandPurchaseAgreementwithTLSBtoacquirethreepiecesof landinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhususmeasuringapproximately28.68acresforatotalcashconsiderationofRM6.84million.AsumofRM50,000waspaidontheexecutionofagreement.

On9October2002,PelangiCitapadu(M)Sdn.Bhd.(“PCSB”)enteredintoaSaleandPurchaseAgreementwithTLSBtoacquiresixpiecesoflandinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhususmeasuringapproximately40.10acresforatotalcashconsiderationofRM9.00millionincludingaccruedinterest.

TheaboveSaleandPurchaseAgreementsareinter-conditionalandtobecompletedsimultaneously.

However,on2June2005,MDSBenteredintoaNovationAgreement(“thesaidNovationAgreement”)withTLSBandPCSBtonovatetheSalesandPurchaseAgreementdated9October2002fromPCSBtoMDSB.

On 30 December 2005, MDSB entered into a SupplementalAgreement (“the said SupplementalAgreement”)withTLSBandPCSBtoextendthecompletiondateofthesaidNovationAgreementforthree(3)monthscommencingfrom:

(a) thevalidationorderbeingobtainedfromtheHighCourtundersection176(10C)oftheCompaniesAct,1965forthesaidNovationAgreementandthesaidSupplementalAgreement;or

(b) therestrainingordergrantedbyHighCourtundersection176(10)oftheCompaniesAct,1965toTLSBlapses;

whichevershallbeearlierprovidedalwaysthattheperiodinwhichitem(a)or(b)occursshallbewithinsix(6)monthsfrom30December2005thatisthedateofthesaidSupplementalAgreement.

On30June2006,therestrainingorderhaslapsedandpursuanttothesaidSupplementalAgreement,thecompletiondatewas30September2006.However,on9April2007,MDSBenteredintoaSecondSupplementalAgreementtoextenditscompletiondatefrom1October2006to31March2008.

On18April2008,TLSBagreedtoextenditscompletiondatefrom31March2008to30September2008pendingcompletionofconditionsprecedent.

(ii) On27February2007,theCompanydisposedofitsequityinterestof490,000ordinarysharesofRM1.00eachinMenangConstruction(M)Sdn.Bhd.,representing49%oftheissuedandpaid-upcapitalfora total cash consideration of RM392,861. Subsequently, on 12 November 2007, the Company hadreacquiredthe49%oftheissuedandpaid-upcapitalofMenangConstruction(M)Sdn.Bhd.foracashconsiderationofRM392,861.

Directors’ Report (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

AuDITORS

Theauditors,BDOBinder,haveexpressedtheirwillingnesstocontinueinoffice.

SignedonbehalfoftheBoardinaccordancewitharesolutionoftheDirectors.

Y. Bhg. Dato’ Abdul Mokhtar Ahmad Y. Bhg. Dato’ Shun Leong Kwong Director Director

kualaLumpur23April2008

Directors’ Report (Cont’d)

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Statement by Directors(Pursuant to Section 169 (15) of the Companies Act, 1965)

IntheopinionoftheDirectors,thefinancialstatementssetoutonpages36to89havebeendrawnupinaccordancewiththeapplicableapprovedFinancialReportingStandardsinMalaysiaandtheprovisionsoftheCompaniesAct,1965soastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat31December2007andoftheresultsoftheoperationsoftheCompanyandoftheGroupandofthecashflowsoftheCompanyandoftheGroupforthefinancialyearthenended.

OnbehalfoftheBoard,

Y. Bhg. Dato’ Abdul Mokhtar Ahmad Y. Bhg. Dato’ Shun Leong Kwong Director Director

kualaLumpur23April2008

I,NgkimFong,beingtheofficerprimarilyresponsibleforthefinancialmanagementofMenang Corporation (M) Berhad,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages36to89are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

Subscribedandsolemnly ) Ng Kim fongdeclaredbytheabovenamedat )kualaLumpurthis )23April2008

Beforeme:

ROBERT LIM HOCK KEE(No.W092)CommissionerforOathsLot2.10,Tingkat2,BangunanAngkasaRayaJalanAmpang50450kualaLumpur

Statutory Declaration(Pursuant to Section 169 (16) of the Companies Act, 1965)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Report of the AuditorsTO THE MEMBERS OF MENANG CORPORATION (M) BERHAD

Wehaveaudited thefinancial statements setoutonpages36 to89.Thesefinancial statementsare theresponsibilityoftheCompany’sDirectors.

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

WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thesestandardsrequire thatweplanandperform theaudit toobtain reasonableassuranceaboutwhether thefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.AnauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebytheDirectors,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.

Inouropinion:

(a) thefinancialstatementshavebeenproperlydrawnupinaccordancewithapplicableapprovedFinancialReportingStandardsinMalaysiaandtheprovisionsoftheCompaniesAct,1965soastogiveatrueandfairviewof:

(i) themattersrequiredbySection169oftheCompaniesAct,1965tobedealtwithinthefinancialstatementsoftheGroupandoftheCompany;and

(ii) thestateofaffairsoftheGroupandoftheCompanyasat31December2007andoftheresultsoftheoperationsoftheGroupandoftheCompanyandofthecashflowsoftheGroupandoftheCompanyforthefinancialyearthenended;

and

(b) theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyandbythesubsidiariesofwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsofthesaidAct.

Wehaveconsideredthefinancialstatementsandauditors’reportsofthesubsidiariesofwhichwehavenotactedasauditors,asindicatedinNote10tothefinancialstatements,beingfinancialstatementsthatareincludedintheconsolidatedfinancialstatements.

WearesatisfiedthatthefinancialstatementsofthesubsidiariesthatareconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

Theauditors’reportsonthefinancialstatementsofthesubsidiarieswerenotsubjecttoanyqualificationanddidnotincludeanycommentmadeunderSection174(3)oftheAct.

Withoutqualifyingouropinion,wedrawyourattentiontoNote4.1tothefinancialstatementswherereferencehas been made on matter concerning the uncertainty of the appropriateness of preparing the financialstatementsoftheGrouponagoingconcernbasisanditseffectonthefinancialstatements.

BDO Binder Ng Chee HoongAF:0206 2278/10/08(J)CharteredAccountants Partner

kualaLumpur23April2008

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Balance SheetsAs at 31 December 2007

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assets

Property,plantandequipment 7 935 1,301 197 342 Investmentproperties 8 52,500 54,698 12,439 12,439 Landheldforpropertydevelopment 9 155,765 165,751 – – Investmentsinsubsidiaries 10 – – 85,331 85,525 Investmentinassociate 11 – – – – Otherinvestment 12 2 2 – –

209,202 221,752 97,967 98,306

Current assets

Propertydevelopmentcosts 13 61,464 64,373 – – Inventories 14 6,190 6,190 – – Tradereceivables 15 287 250 – – Otherreceivables,depositsand prepayments 16 7,547 3,290 274 326 Amountowingbysubsidiaries 17 – – 140,238 150,604 Taxrecoverable 2,676 – 2,676 896 Cashandbankbalances 670 883 49 7

78,834 74,986 143,237 151,833

TOTAL ASSETS 288,036 296,738 241,204 250,139

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

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000

EQuITY AND LIABILITIES

Equity attributable to equity holders of the Company

Sharecapital 18 267,107 267,107 267,107 267,107 Reserves 19 (96,866) (86,369) (42,604) (43,103)

TOTAL EQuITY 170,241 180,738 224,503 224,004

LIABILITIES

Non-current liabilities

Borrowings 20 60 115 2 10 Deferredtaxliabilities 21 2,732 2,732 – –

2,792 2,847 2 10

Current liabilities

Tradepayables 22 873 612 – – Otherpayablesandaccruals 23 21,523 18,750 2,415 2,427 Amountowingtosubsidiaries 24 – – 8,078 8,129 Borrowings 20 89,166 82,166 2,765 3,944 RedeemableConvertibleSecured LoanStocks 25 3,441 11,625 3,441 11,625

115,003 113,153 16,699 26,125

TOTAL LIABILITIES 117,795 116,000 16,701 26,135

TOTAL EQuITY AND LIABILITIES 288,036 296,738 241,204 250,139

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

Balance Sheets (Cont’d)As at 31 December 2007

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Income StatementsFor the Financial Year ended 31 December 2007

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000

Revenue 27 27,912 18,643 18 9,573

Costofsales 28 (23,565) (15,447) – –

Grossprofit 4,347 3,196 18 9,573

Otherincome 512 1,055 1,375 4,545

Administrativeexpenses (9,284) (11,220) (2,011) (1,938)

Otherexpenses (658) (1,077) (1,080) (1,353)

(Loss)/Profitbeforeoperations (5,083) (8,046) (1,698) 10,827

Financecosts (9,245) (8,853) (739) (1,309)

Shareofresultsofassociate – 7,350 – –

(Loss)/Profitbeforetax 29 (14,328) (9,549) (2,437) 9,518

Taxincome/(expense) 30 3,831 – 2,936 (2,492)

Net(loss)/profitforthefinancialyear (10,497) (9,549) 499 7,026

Attributable to:EquityholdersoftheCompany (10,497) (9,549) 499 7,026

Earnings per share attributable to equity holders of the CompanyLosspershare(sen) 31 (3.93) (3.57)

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

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Statement of Changes in EquityFor the Financial Year ended 31 December 2007

Share Capital Accumulated capital reserve losses TotalGroup RM’000 RM’000 RM’000 RM’000

Balanceasat31December2005 267,107 960 (77,780) 190,287

Netlossforthefinancialyear, representingtotalrecognisedincome andexpenseforthefinancialyear – – (9,549) (9,549)

Balanceasat31December2006 267,107 960 (87,329) 180,738

Netlossforthefinancialyear, representingtotalrecognisedincome andexpenseforthefinancialyear – – (10,497) (10,497)

Balanceasat31December2007 267,107 960 (97,826) 170,241

Company

Balanceasat31December2005 267,107 960 (51,089) 216,978

Netlossforthefinancialyear, representingtotalrecognisedincome andexpenseforthefinancialyear – – 7,026 7,026

Balanceasat31December2006 267,107 960 (44,063) 224,004

Netlossforthefinancialyear, representingtotalrecognisedincome andexpenseforthefinancialyear – – 499 499

Balanceasat31December2007 267,107 960 (43,564) 224,503

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

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Cash Flow StatementsFor the Financial Year ended 31 December 2007

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000

CASH fLOWS fROM OPERATING ACTIVITIES

(Loss)/Profitbeforetax (14,328) (9,549) (2,437) 9,518

Adjustmentsfor:

Allowancefordoubtfuldebts 3 – 781 1,094 Baddebtswrittenoff 9 – – – Deferredliabilitycharges 2,485 2,485 – – Depreciationofproperty,plantand equipment:- -theGroupandoftheCompany 7 347 424 104 145 -jointventure 12 7 – – Dividendincome – – – (9,555) Impairmentofinvestmentin subsidiaries – – 194 113 Interestexpenses 6,760 6,368 739 1,308 Interestincome (68) (137) (885) (1,267) Loss/(Gain)ondisposalof investmentproperties 252 (677) – (677) Loss/(Gain)ondisposalof property,plantandequipment 21 (61) 21 (61) Gainondisposaloflandheldfor propertydevelopment (415) – – – Gainondisposalofproperty development (303) – – – Loss/(Gain)ondisposalofinvestment inanassociate – 400 – (2,541) Shareofresultsofassociate – (7,350) – – Property,plantandequipment writtenoff 8 12 – –

Operatinglossbeforeworking capitalchanges (5,217) (8,078) (1,483) (1,923) Decreaseininventories – 1,749 – – Increaseintradereceivables (37) (40) – – (Increase)/Decreaseinother receivables,depositsand prepayments (4,218) (82) 52 (29) Increase/(Decrease)intradepayables 261 (646) – – Increase/(Decrease)inother payablesandaccruals 1,086 45 (962) (361) Decreaseinamountsowingto corporateshareholders (35) (1,821) – – (Decrease)/Increaseinamounts owingtodirectors (111) (1,182) 548 (202)

Cashusedinoperations (8,271) (10,055) (1,845) (2,515)

Taxrefunded 1,155 – 1,155 – Interestreceived 3 137 – –

Netcashusedinoperatingactivities (7,113) (9,918) (690) (2,515)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

Group Company 2007 2006 2007 2006 Note RM’000 RM’000 RM’000 RM’000

CASH fLOWS fROM INVESTING ACTIVITIES

Additionsindevelopmentproperty (418) (1,836) – – Proceedsfromdisposaloflandheld forpropertydevelopment 10,401 1,708 – – Proceedsfromdisposalof developmentproperty 3,630 646 – – Purchaseofinvestmentproperties – (41) – – Dividendreceivedfromassociate – 6,880 – 6,880 Proceedsfromdisposalofproperty, plantandequipment 27 61 27 61 Purchaseofproperty,plantand equipment (37) (206) (7) (139) Proceedsfromdisposalofan associate – 7,278 – 7,278 Proceedsfromdisposalof investmentproperties 1,946 1,840 – 22 Advancesto/(Repaymentfrom) subsidiaries – – 2,288 (10,556)

Netcashfrominvestingactivities 15,549 16,330 2,308 3,546

CASH fLOWS fROM fINANCING ACTIVITIES

Deferredliabilitychargespaid (388) (100) – – Drawdownoftermloan 1,554 1,936 – – Interestpaid (100) (394) (89) (234) Paymentofhire-purchaseliabilities (67) (181) (8) (15) Repaymentoftermloans (1,178) (6,979) (1,141) (100) RedemptionofRedeemable ConvertibleSecuredLoanStocks (8,184) – – – Repaymenttosubsidiaries – – (52) (21)

Netcashusedinfinancingactivities (8,363) (5,718) (1,290) (370)

Netincreaseincashandcash equivalents 73 694 328 661

Cashandcashequivalentsat beginningoffinancialyear 354 (340) (522) (1,183)

Cashandcashequivalentsatendof financialyear 32 427 354 (194) (522)

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

Cash Flow Statements (Cont’d)For the Financial Year ended 31 December 2007

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements31 December 2007

1. CORPORATE INfORMATION

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandlistedontheMainBoardoftheBursaMalaysiaSecuritiesBerhad.

TheregisteredofficeandprincipalplaceofbusinessoftheCompanyarelocatedat8thStorey,SouthBlock,WismaSelangorDredging,142-A,JalanAmpang,50450kualaLumpur.

ThefinancialstatementsarepresentedinRinggitMalaysia(RM),whichisalsothefunctionalcurrencyoftheGroupandoftheCompany.

ThefinancialstatementswereauthorisedforissueinaccordancewitharesolutionbytheBoardofDirectorson23April2008.

2. PRINCIPAL ACTIVITIES

TheCompanyisprincipallyengagedininvestmentholding,lettingoutofpropertiesandtheprovisionofmanagementservices.TheprincipalactivitiesofthesubsidiarycompaniesarestatedinNote10tothefinancialstatements.Therehavebeennosignificantchangesinthenatureoftheseactivitiesduringthefinancialyear.

3. BASIS Of PREPARATION

ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewithapplicableapprovedFinancialReportingStandards(“FRS”)andtheprovisionsoftheCompaniesAct,1965.

4. SIGNIfICANT ACCOuNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under thehistoricalcostconventionexceptasotherwisestatedinthefinancialstatementsandonthebasisofaccountingprinciplesapplicabletoagoingconcern.

Asat31December2007,theGrouphasnetcurrentliabilitiesofRM36,169,000(2006:RM38,167,000)whichindicatethattheGroupmaybeunabletomeetitsliabilitiesasandwhentheyfalldue.Currently,theGroupisembarkingonarationalisationprogrammeofassetsdisposal.

ThecontinuationoftheGroupasagoingconcernisdependentuponthesuccessfuldisposaloftheassets.TheDirectorsareoftheopinionthat,barringanyunforeseencircumstances,theGroupwillbeabletoimplementtherationalisationprogrammeandthereforethepreparationoffinancialstatementsoftheGrouponagoingconcernbasisisappropriate.

ShouldthegoingconcernbasisofpreparingthefinancialstatementsoftheGroupbeinappropriate,adjustmentswillhavetobemadetoreclassifynon-currentassetandnon-currentliabilitiesascurrentassetsandcurrentliabilitiesrespectively,torestatethecarryingvalueoftheassetstotheirrecoverableamountsandtoprovideforfurtherliabilitieswhichmayarise.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Companyandallitssubsidiariesmadeuptotheendofthefinancialyearusingthepurchasemethodofaccounting.

Underthepurchasemethodofaccounting,thecostofbusinesscombinationismeasuredattheaggregateoffairvaluesatthedateofexchange,ofassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissuedplusanycostsdirectlyattributabletothebusinesscombination.

At the acquisition date, the cost of business combination is allocated to identifiable assets,liabilitiesandcontingentliabilitiesinthebusinesscombinationwhicharemeasuredinitiallyattheirfairvaluesattheacquisitiondate.TheexcessofthecostofbusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesisrecognisedasgoodwill.Ifthecostofbusinesscombinationislessthantheinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilities,theGroupwill:

(a) reassesstheidentificationandmeasurementoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesandthemeasurementofthecostofthecombination;and

(b) recogniseimmediatelyinprofitorlossanyexcessremainingafterthatreassessment.

Whenabusinesscombinationincludesmorethanoneexchangetransaction,anyadjustmenttothefairvaluesofthesubsidiary’sidentifiableassets,liabilitiesandcontingentliabilitiesrelatingtopreviouslyheldinterestsoftheGroupisaccountedforasarevaluation.

Subsidiariesareconsolidatedfromtheacquisitiondate,whichisthedateonwhichtheGroupeffectivelyobtainscontrol,untilthedateonwhichtheGroupceasestocontrolthesubsidiaries.ControlexistswhentheGrouphasthepowertogovernthefinancialandoperatingpoliciesofanentitysoastoobtainbenefitsfromitsactivities.Inassessingcontrol,potentialvotingrightsthatareexercisablearetakenintoaccount.

Intragroupbalances, transactionsandunrealisedgainsand losseson intragrouptransactionsareeliminatedinfull.Intragrouplossesmayindicateanimpairmentthatrequiresrecognitionin the consolidated financial statements. If a subsidiary uses accounting policies other thanthoseadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances,appropriateadjustmentsaremadeto itsfinancialstatements inpreparingtheconsolidatedfinancialstatements.

Thegainorlossondisposalofasubsidiary,whichisthedifferencebetweenthenetdisposalproceedsandtheGroup’sshareofitsnetassetsasofthedateofdisposalincludingthecarryingamountofgoodwillandthecumulativeamountofanyexchangedifferencesthatrelatetothesubsidiary,isrecognisedintheconsolidatedincomestatement.

Minorityinterestisthatportionoftheprofitorlossandnetassetsofasubsidiaryattributabletoequityintereststhatarenotowned,directlyorindirectlythroughsubsidiaries,bytheGroup.Itismeasuredattheminority’sshareofthefairvalueofthesubsidiaries’identifiableassetsandliabilitiesattheacquisitiondateandtheminority’sshareofchangesinthesubsidiaries’equitysincethatdate.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.2 Basis of consolidation (Continued)

Wherelossesapplicabletotheminorityinasubsidiaryexceedtheminority’sinterestintheequityofthatsubsidiary,theexcessandanyfurtherlossesapplicabletotheminorityareallocatedagainsttheGroup’sinterestexcepttotheextentthattheminorityhasabindingobligationandisabletomakeadditionalinvestmenttocoverthelosses.Ifthesubsidiarysubsequentlyreportsprofits,suchprofitsareallocatedtotheGroup’sinterestuntiltheminority’sshareoflossespreviouslyabsorbedbytheGrouphasbeenrecovered.

MinorityinterestispresentedintheconsolidatedbalancesheetwithinequityandispresentedintheconsolidatedstatementofchangesinequityseparatelyfromequityattributabletoequityholdersoftheCompany.

MinorityinterestintheresultsoftheGroupispresentedintheconsolidatedincomestatementasanallocationofthetotalprofitorlossforthefinancialyearbetweenminorityinterestandequityholdersoftheCompany.

4.3 Property, plant and equipment and depreciation

Allitemsofproperty,plantandequipmentareinitiallymeasuredatcost.Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheasset.

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenthecostisincurredanditisprobablethatthefutureeconomicbenefitsassociatedwiththeassetwillflowtotheGroupandthecostoftheassetcanbemeasuredreliably.Thecarryingamountofparts thatare replaced isderecognised. Thecostsof theday-to-dayservicingofproperty,plantandequipmentarerecognisedintheincomestatementasincurred.CostalsocomprisestheinitialestimateofdismantlingandremovingtheassetandrestoringthesiteonwhichitislocatedforwhichtheGroupisobligatedtoincurwhentheassetisacquired,ifapplicable.

Eachpartofanitemofproperty,plantandequipmentwithacostthatissignificantinrelationtothetotalcostoftheassetandwhichhavedifferentusefullife,isdepreciatedseparately.

Afterinitialrecognitionproperty,plantandequipmentarestatedatcostlessanyaccumulateddepreciationandanyaccumulatedimpairmentlosses.

Depreciationiscalculatedtowriteoffthecostoftheassetstotheirresidualvaluesonastraightlinebasisovertheirestimatedusefullives.Theprincipaldepreciationratesareasfollows:

Buildingandofficelots 2%Plantandmachinery 10%-25%Motorvehicles 20%Furniture,fittingsandequipment 10%-25%Siteoffice,renovationsandsignboards 10%-20%

Freeholdlandisnotdepreciated.

Ateachbalancesheetdate,thecarryingamountofanitemofproperty,plantandequipmentisassessedforimpairmentwheneventsorchangesincircumstancesindicatethatitscarryingamountmaynotberecoverable.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.3 Property, plant and equipment and depreciation (Continued)

The residual values, useful life and depreciation method are reviewed at each financial yearendtoensurethattheamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.

Thecarryingamountofanitemofproperty,plantandequipmentisderecognisedondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Thedifferencebetweenthenetdisposalproceeds,ifany,andthecarryingamountisincludedinprofitorlossandtherevaluationsurplusrelatedtothoseassets,ifany,istransferreddirectlytoretainedearnings.

4.4 Leases

(a) Financeleases

AssetsacquiredunderfinanceleaseswhichtransfersubstantiallyalltherisksandrewardsofownershiptotheGrouparerecognisedinitiallyatamountsequaltothefairvalueofthe leasedassetsor, if lower, thepresentvalueof theminimum leasepayments,eachdeterminedattheinceptionofthelease.Thediscountrateusedincalculatingthepresentvalueoftheminimumleasepaymentsistheinterestrateimplicitintheleases,ifthisispracticaltodetermine;ifnot,theGroup’sincrementalborrowingrateisused.AnyinitialdirectcostsincurredbytheGroupareaddedtotheamountrecognisedasanasset.Theassetsarecapitalisedasproperty,plantandequipmentandthecorrespondingobligationsaretreatedasliabilities.Theproperty,plantandequipmentcapitalisedaredepreciatedonthesamebasisasownedassets.

The minimum lease payments are apportioned between the finance charges and the

reductionoftheoutstandingliability.Thefinancechargesarerecognisedinprofitandlossovertheperiodoftheleasetermsoastoproduceaconstantperiodicrateofinterestontheremainingleaseliabilities.

(b) Operatingleases

Leasepaymentunderoperatingleasesarerecognisedasanexpenseonastraight-linebasisovertheleaseterm.

(c) Leaseoflandandbuilding

Forleaseoflandandbuilding,thelandandbuildingelementsareconsideredseparatelyforthepurposeofleaseclassificationandtheseleasesareclassifiedasoperatingorfinanceleasesinthesamewayasleasesofotherassets.

Theminimumleasepaymentsincludinganylump-sumupfrontpaymentsmadetoacquirethe interest in the landandbuildingsareallocatedbetweenthe landandthebuildingselementsoftheleaseinproportiontotherelativefairvaluesforleaseholdinterestinthelandelementandthebuildingelementattheinceptionofthelease.

Leasehold landthatnormallyhasan indefiniteeconomic lifeandwherethe leasedoesnottransfersubstantiallyalltheriskandrewardsincidentaltoownershipistreatedasanoperatinglease.Thelump-sumupfrontleasepaymentsmadeonenteringintooracquiringleaseholdlandisaccountedforasprepaidleasepaymentsandisamortisedovertheleasetermonastraight-linebasisexceptforleaseholdlandthatisclassifiedasaninvestmentpropertyoranassetheldunderpropertydevelopment.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.4 Leases (Continued)

(c) Leaseoflandandbuilding(Continued)

Iftheleasepaymentscannotbeallocatedreliablybetweenlandandbuilding,theentireleaseisclassifiedasafinancelease,unless it isclearthatbothelementsareoperatingleases,inwhichcasetheentireleaseisclassifiedasanoperatinglease.

Foraleaseoflandandbuildinginwhichtheamountthatwouldinitiallyberecognisedforthelandelementisimmaterial,thelandandbuildingaretreatedasasingleunitforthepurposeofleaseclassificationandisaccordinglyclassifiedasafinanceoroperatinglease.Insuchcase,theeconomiclifeofthebuildingsisrecognisedaretheeconomiclifeoftheentireleaseasset.

4.5 Investment properties

Investmentpropertiesarepropertieswhichareheldtoearnrentalsorforcapitalappreciationor forboth. Investmentpropertiesare initiallymeasuredat cost,which includes transactionscosts.Investmentpropertiesarestatedatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.Freeholdlandisnotdepreciated.

Apropertyinterestunderanoperatingleaseisclassifiedandaccountedforasaninvestmentpropertyonaproperty-by-propertybasiswhentheGroupholdsittoearnrentalsorforcapitalappreciationorboth.

Investmentpropertiesarederecognisedwheneithertheyhavebeendisposedoforwhentheyarepermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromtheirdisposal.Thegainsorlossesarisingfromtheretirementordisposalofinvestmentpropertyisdeterminedasdifferencebetweenthenetdisposalproceeds,ifany,andthecarryingamountoftheassetandisrecognisedinprofitorlossintheperiodoftheretirementordisposal.

4.6 Property development activities

(a) Landheldforpropertydevelopment

Landheldforpropertydevelopmentisstatedatcostlessimpairmentlosses,ifany.Suchlandisclassifiedasnon-currentassetwhennodevelopmentworkhasbeencarriedoutorwheredevelopmentactivitiesarenotexpectedtobecompletedwithinthenormaloperatingcycle.

(b) Propertydevelopmentcosts

Propertydevelopmentcostscompriseallcostthataredirectlyattributabletothedevelopmentactivitiesorthatcanbeallocatedonareasonablebasistosuchactivities.Theycomprisethecostof landunderdevelopment,constructioncostsandother relateddevelopmentcostscommontothewholeprojectincludingprofessionalfees,stampduties,commissions,conversionfeesandotherrelevantleviesaswellasborrowingcosts.

Property development costs not recognised as an expense are recognised as an assetmeasuredatthelowerofcostandnetrealisablevalue.

Whenrevenuerecognisedintheincomestatementexceedsprogressbillingstopurchasers,thebalanceisclassifiedasaccruedbillingsundercurrentassets.Whenprogressbillingsexceedrevenuerecognisedintheincomestatement,thebalanceisclassifiedasprogressbillingsundercurrentliabilities.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.7 Investments

(a) Subsidiaries

AsubsidiaryisanentityinwhichtheGroupandtheCompanyhaspowertocontrolthefinancialandoperatingpoliciessoastoobtainbenefitsfromitsactivities.TheexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGrouphassuchpoweroveranotherentity.

Aninvestmentinsubsidiary,whichiseliminatedonconsolidation,isstatedintheCompany’sseparatefinancialstatementsatcostlessimpairmentlosses,ifany.Ondisposalofsuchaninvestment,thedifferencebetweenthenetdisposalproceedsanditscarryingamountisincludedinprofitorloss.

(b) Associates

AnassociateisanentityoverwhichtheGroupandtheCompanyhassignificantinfluenceandthatisneitherasubsidiarynoraninterestinajointventure.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthosepolicies.

IntheCompany’sseparatefinancialstatements,aninvestmentinassociateisstatedatcostlessimpairmentlosses,ifany.

Aninvestmentinassociateisaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodofaccounting.TheinvestmentinassociateintheconsolidatedbalancesheetisinitiallyrecognisedatcostandadjustedthereafterforthepostacquisitionchangeintheGroup’sshareofnetassetsoftheinvestment.

Theinterestintheassociateisthecarryingamountoftheinvestmentintheassociateundertheequitymethodtogetherwithanylong-terminterestthat,insubstance,formpartoftheGroup’snetinterestintheassociate.

TheGroup’sshareoftheprofitorlossoftheassociateduringthefinancialyearisincludedintheconsolidatedfinancialstatements,afteradjustmentstoaligntheaccountingpolicieswith those of the Group, from the date that significant influence commences until thedatethatsignificant influenceceases. Distributionsreceivedfromtheassociatereducethecarryingamountoftheinvestment.AdjustmentstothecarryingamountmayalsobenecessaryforchangesintheGroup’sproportionateinterestintheassociatearisingfromchangesintheassociate’sequitythathavenotbeenrecognisedintheassociate’sprofitorloss.Suchchangesincludethosearisingfromtherevaluationofproperty,plantandequipmentandfromforeignexchangetranslationdifferences.TheGroup’sshareofthosechangesisrecogniseddirectlyinequityoftheGroup.

When theGroup’sshareof losses in theassociateequalsorexceeds its interest in the

associate,thecarryingamountingofthatinterestisreducedtonilandtheGroupdoesnotrecognisefurtherlossesunlessithasincurredlegalorconstructiveobligationsormadepaymentsonitsbehalf.

ThemostrecentavailablefinancialstatementsoftheassociateareusedbytheGroupinapplyingtheequitymethod.Wherethereportingdatesofthefinancialstatementsarenotcoterminous,theshareofresultsisarrivedatusingthelatestauditedfinancialstatementsforwhich thedifference in reportingdates isnomore than threemonths.Adjustmentsaremadefortheeffectsofanysignificanttransactionsoreventsthatoccurbetweentheinterveningperiod.

Upon disposal of an investment in associate, the difference between the net disposalproceedsanditscarryingamountisincludedinprofitorloss.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.7 Investments (Continued)

(c) Jointventure

AjointventureisacontractedagreementwherebytheGroupandotherpartieshavecontroloveraneconomicactivity.

Inrespectoftheirinterestinjointlycontrolledassets,theGroupandtheCompanyrecogniseintheirfinancialstatementstheirshareofthejointlycontrolledassets,classifiedaccordingtothenatureoftheassets,anyliabilitieswhichtheyhaveincurred,theirshareofanyliabilitiesincurredjointlywiththeotherventurersinrelationtothejointventure,anyincomefromthesaleoruseoftheirshareoftheoutputofthejointventuretogetherwiththeirshareofanyexpensesincurredbythejointventure,andanyexpenseswhichtheyhaveincurredinrespectoftheirinterestinthejointventure.

Unrealised profits or losses arising from transactions between the Group and its jointventurersare recognisedonly to theextentof thatportionof thegainor losswhich isattributabletotheinterestsoftheotherventurers.Unrealisedlossesarerecognisedinfullwhenthetransactionprovidesevidenceofareductioninthenetrealisablevalueofcurrentassetsoranimpairmentloss.

TheGroup’sinterestinjointlycontrolledassetsandliabilitiesarisingfromitsjointventurearrangement has been accounted for in the financial statements using the line-by-linereportingformatforproportionateconsolidation.

(d) Otherinvestments

Non-current investments, other than investments in subsidiaries, associate and jointlycontrolledentitiesandinvestmentproperties,arestatedatcostlessallowancefordiminutioninvalue,ifany.

Allcurrentinvestmentsarecarriedatthelowerofcostandmarketvalue,determinedonanaggregateportfoliobasisbycategoryofinvestments.

Upondisposalofsuchinvestment,thedifferencebetweennetdisposalproceedsanditscarryingamountisrecognisedinprofitorloss.

4.8 Inventories

(a) Completedproperty

Completed properties held for sale are stated at the lower of cost and net realisablevalue.

Thecostofcompletedpropertiesheldforsalecomprisescostassociatedwiththeacquisitionofland,directcostsandappropriateproportionsofcommoncosts.

(b) Otherinventories

Costofotherinventoriesisstatedatthelowerofcostandnetrealisablevalue.Costisdeterminedonweightedaveragecostbasis.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness, lesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.9 Impairment of non-financial assets

ThecarryingamountsoftheGroup’sandtheCompany’sassets,exceptforinventories,deferredtaxassetsandfinancialassets(excludinginvestmentinsubsidiaries,investmentinanassociateandotherinvestment),arereviewedateachbalancesheetdate,todeterminewhetherthereisanyindicationofimpairment. Ifanysuchindicationexists,theasset’srecoverableamountisestimated.

Goodwillandintangibleassetsthathaveanindefiniteusefullifearetestedannuallyforimpairmentormorefrequentlyifeventsorchangesincircumstancesindicatethatthegoodwillorintangibleassetmightbeimpaired.

Therecoverableamountofanassetisestimatedforanindividualasset.Whereitisnotprobabletoestimatetherecoverableamountoftheindividualasset,theimpairmenttestiscarriedoutonthecashgeneratingunit(“CGU”)towhichtheassetbelongs.Goodwillacquiredinabusinesscombination is from theacquisitiondate,allocated toeachof theGroup’sCGUorgroupsofCGUthatareexpectedtobenefitfromsynergiesofthecombinationgivingrisetothegoodwillirrespectiveofwhetherotherassetsorliabilitiesoftheacquireareassignedtothoseunitsorgroupsofunits.

TherecoverableamountofanassetorCGUisthehigherofitsfairvaluelesscosttosellanditsvalueinuse.

Inestimatingthevalueinuse,theestimatedfuturecashinflowsandoutflowstobederivedfromcontinuinguseoftheassetandfromitsultimatedisposalarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassetforwhichthefuturecashflowestimateshavenotbeenadjusted.AnimpairmentlossisrecognisedintheincomestatementwhenthecarryingamountoftheassetortheCGU,exceedstherecoverableamountoftheassetortheCGU.

Theimpairmentlossisrecognisedintheincomestatementimmediatelyexceptfortheimpairmentona revaluedassetwhere the impairment loss is recogniseddirectlyagainst therevaluationreservetotheextentofthesurpluscreditedfromthepreviousrevaluationforthesameassetwiththeexcessoftheimpairmentlosschargedtotheincomestatement.

Animpairmentlossongoodwillisnotreversedinsubsequentperiods.Animpairmentlossforotherassetsisreversedif,andonlyif,therehasbeenachangeintheestimatesusedtodeterminetheassets’recoverableamountsincethelastimpairmentlosswasrecognised.

Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeenrecognised.

Suchreversalsarerecognisedasincomeimmediatelyintheincomestatementexceptforthereversalofanimpairmentlossonarevaluedassetwherethereversaloftheimpairmentlossistreatedasarevaluationincreaseandcreditedtotherevaluationreserveaccountofthesameasset.However,totheextentthatanimpairmentlossonthesamerevaluedassetwaspreviouslyrecognised inprofitor loss,a reversalof that impairment loss isalso recognised inprofitorloss.

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.10 financial instruments

4.10.1 financial instruments recognised on the balance sheets

FinancialinstrumentsarerecognisedonthebalancesheetwhentheGrouphasbecomeapartytothecontractualprovisionsoftheinstrument.

Financial instruments are classified as liabilities or equity in accordance with thesubstanceofthecontractualarrangement.Interest,dividendsandlossesandgainsrelating to a financial instrument or a component that is a financial liability shallbe recognised as income or expense in profit or loss. Distributions to holders ofan equity instrument are debited directly to equity, net of any related tax effect.Financial instrumentsareoffsetwhen theGrouphasa legallyenforceable right tooffsetandintendstosettleonanetbasisortorealisetheassetandsettletheliabilitysimultaneously.

(a) Receivables

Tradereceivablesandotherreceivables,includingamountsowingbysubsidiariesandrelatedpartiesarecarriedatanticipatedrealisablevalue.knownbaddebtsarewrittenoffandspecificallowanceismadefordebtsconsideredtobedoubtfulofcollection.

Receivablesarenotheldfortradingpurposes.

(b) Cashandcashequivalents

Cashandcashequivalentsincludecashandbankbalances,bankoverdraft,andothershortterm,highlyliquidinvestmentswhicharereadilyconvertibletocashandwhicharesubjecttoinsignificantriskofchangesinvalue.

(c) Payables

Payables including amounts owing to subsidiaries and related parties arerecognised when there is a contractual obligation to deliver cash or anotherfinancialassettoanotherentity.Payablesareinitiallyandsubsequentlymeasuredatcost.

(d) Loanstock

8%RedeemableConvertibleSecuredLoanStocks2002/2007(“RCLS”)

TheCompanyisrequiredtoredeemtheloanstocksatthematuritydateunlessconvertedbytheholders.Assuch,theseloanstocksareclassifiedasfinancialliability.

(e) Interestbearingloansandborrowings

All loans and borrowings are initially recognised at the fair value of theconsiderationreceivedlessdirectlyattributabletransactioncosts. After initialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.10 financial instruments (Continued)

4.10.1 financial instruments recognised on the balance sheets (Continued)

(f) Equityinstruments

Ordinarysharesarerecordedatthenominalvalueandproceedsinexcessofthenominalvalueofsharesissued,ifany,areaccountedforassharepremium.Bothordinarysharesandsharepremiumareclassifiedasequity.Transactioncostsofanequitytransactionareaccountedforasadeductionfromequity,netofanyrelatedincometaxbenefit.Otherwise,theyarechargedtotheincomestatement.

Dividendstoshareholdersarerecognisedinequityintheperiodinwhichtheyaredeclared.

IftheCompanyreacquiresitsownequityinstruments,theconsiderationpaid,includinganyattributabletransactioncostsisdeductedfromequityastreasurysharesuntiltheyarecancelled.Nogainorlossisrecognisedinprofitorlossonthepurchase,sale,issueorcancellationiftheCompany’sownequityinstruments.Where such shares are issued by resale, the difference between the salesconsiderationandthecarryingamountisshownasamovementinequity.

4.10.2 financial instruments not recognised on the balance sheets

Therearenofinancialinstrumentsnotrecognisedonthebalancesheets

4.11 Borrowing costs

Borrowingcostthataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetiscapitalisedaspartofthecostoftheassetuntilwhensubstantiallyalltheactivitiesnecessarytopreparetheassetforitsintendeduseorsalearecomplete,afterwhichsuchexpenseischargedtotheincomestatement.Aqualifyingassetisanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduseorsale.Capitalisationofborrowingcostissuspendedduringextendedperiodsinwhichactivedevelopmentisinterrupted.

Theamountofborrowingcostseligibleforcapitalisationistheactualborrowingcostsincurred

ontheborrowingduringtheperiodlessanyinvestmentincomeonthetemporaryinvestmentoftheborrowing.

All other borrowings cost are recognised in profit or loss in the period in which they areincurred.

4.12 Provisions

Provisionsarerecognisedwhenthereisapresentobligation,legalorconstructive,asaresultofapastevent,whenitisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.

Where theeffectof the timevalueofmoney ismaterial, theamountofaprovisionwillbediscountedtoitspresentvalueatapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.13 Employee benefits

4.13.1 Short term employee benefits

Wages,salariesandsocialsecuritycontributionsarerecognisedasanexpenseinthefinancialyearwhenemployeeshave rendered their services to theGroupand theCompany.

Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedasanexpensewhenemployeesrenderservicesthatincreasetheirentitlementtofuturecompensatedabsences.Shorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.

Bonusesarerecognisedasanexpensewhenthereisapresent,legalorconstructiveobligation tomake suchpayments, asa resultofpast eventsandwhena reliableestimatecanbemadeoftheamountoftheobligation.

4.13.2 Defined contribution plan

TheGroupmakescontributionstoastatutoryprovidentfund.Thecontributionsarerecognisedasaliabilityafterdeductingcontributionalreadyandasanexpenseintheperiodinwhichtheemployeesrendertheirservices.

4.13.3 Share-based payments

TheGroupoperatesanequity-settledshare-basedcompensationplan,allowingtheemployeesoftheGrouptoacquireordinarysharesoftheCompanyatpredeterminedprices.Thetotalfairvalueofshareoptionsgrantedtoemployeesisrecognisedasanexpensewithacorrespondingincreaseintheshareoptionsreservewithinequityoverthevestingperiodandtakingintoaccounttheprobabilitythattheoptionswillvest.

Thefairvalueofshareoptionsismeasuredatgrantdate,takingintoaccount,ifany,themarketvestingconditionsuponwhich theoptionsweregrantedbutexcludingtheimpactofanynon-marketvestingconditions.Non-marketvestingconditionsareincludedinassumptionsaboutthenumberofoptionsthatareexpectedtobecomeexercisableonvestingdate.

Ateachbalancesheetdate,theGrouprevisesitsestimatesofthenumberofoptionsthatareexpectedtobecomeexercisableonvestingdate.Itrecognisestheimpactoftherevisionoforiginalestimates,ifany,inprofitorloss,andacorrespondingadjustmenttoequityovertheremainingvestingperiod.Theequityamountisrecognisedintheshareoptionsreserveuntiltheoptionsareexercised,uponwhichitwillbetransferredtosharepremium,oruntiltheoptionsexpires,uponwhichitwillbetransferreddirectlytoretainedearnings.

Theproceedsreceivednetofanydirectlyattributabletransactioncostsarecreditedtoequitywhentheoptionsareexercised.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.13 Employee benefits (Continued)

4.13.3 Share-based payments (Continued)

Foroptionsgrantedpriorto31December2004,nocompensationcostorobligationisrecognisedintheincomestatementwhentheshareoptionsaregranted.

Whentheoptionsareexercised,equityisincreasedbytheamountoftheproceedsreceived.ThisisinaccordancewiththetransitionalprovisionofFRS2Share-basedpayment.

TheCompanyhasneitheroptionsgrantedafter31December2004andhadnotyet

vestedasat1January2007,noroptionsgrantedafter1January2007.

FRS2willapplytotheCompany’snewgrantsofoptionsinthefuture.

4.14 Income taxes

Incometaxesincludealldomestictaxesontaxableprofitforthefinancialyear.Incometaxesalsoincludeothertaxes,suchasassociateorjointlycontrolledentityondistributionstotheGroupandCompany,andrealpropertygainstaxespayableondisposalofproperties,priorto1April2007,ifany.

Taxesintheincomestatementcomprisecurrenttaxanddeferredtax.

(a) Currenttax

Currenttaxistheamountofincometaxespayableorreceivableinrespectofthetaxableprofitorlossforaperiod.

Currenttaxforthecurrentandpriorperiodsaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

(b) Deferredtax

Deferredtaxisrecognisedinfullusingtheliabilitymethodontemporarydifferencesarisingbetweenthecarryingamountofanassetorliabilityinthebalancesheetanditstaxbase.

Deferredtaxisrecognisedforalltemporarydifferences,unlessthedeferredtaxarisesfromgoodwillortheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeoftransaction,affectsneitheraccountingprofitnortaxableprofit.

Adeferredtaxassetisrecognisedonlytotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Thecarryingamountofadeferredtaxassetisreviewedateachbalancesheetdate.Ifitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowthebenefitofpartorallofthatdeferredtaxasset tobeutilised, thecarryingamountof thedeferred taxassetwillbe reducedaccordingly.Whenitbecomesprobablethatsufficienttaxableprofitwillbeavailable,suchreductionswillbereversedtotheextentofthetaxableprofit.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.14 Income taxes (Continued)

(b) Deferredtax(Continued)

Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhenthedeferredincometaxesrelatetothesametaxationauthority.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbythebalancesheetdate.

4.15 Revenue recognition

Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivablenetofdiscountsandrebates.

RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheGroup,andtheamountofrevenueandthecostincurredortobeincurredinrespectofthetransactioncanbereliablymeasuredandspecificrecognitioncriteriahavebeenmetforeachoftheGroup’sactivitiesasfollows:

(i) Propertydevelopment

Propertydevelopmentrevenueisrecognisedinrespectofalldevelopmentunitsthathavebeensold.Revenuerecognitioncommenceswhenthesaleofthedevelopmentunitiseffected,uponthecommencementofdevelopmentandconstructionactivitiesandwhenthefinancialoutcomecanbereliablyestimated.Theattributableportionofpropertydevelopmentcostisrecognisedasanexpenseintheperiodinwhichtherelatedrevenueisrecognised.Theamountofsuchrevenueandexpensesrecognisedisdeterminedbyreferencetothestageofcompletionofdevelopmentactivityatthebalancesheetdate.Thestageofcompletionismeasuredbyreferencetotheproportionthat property development costs incurred for work performed to date bear to theestimatedtotalpropertydevelopmentcost.

Whenthefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,thepropertydevelopmentrevenueisrecognisedonlytotheextentofpropertydevelopmentcostsincurredthatisprobabletoberecoverableandthepropertydevelopmentcostsonthedevelopmentunitssoldarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

Anyexpectedlossonadevelopmentprojectisrecognisedasanexpenseimmediately,includingcoststobeincurredoverthedefectsliabilityperiod.

(ii) Constructioncontracts

Where the outcome of a construction contract can be reliably estimated, contractrevenueandcontractcostsassociatedwiththeconstructioncontractarerecognisedasrevenueandexpensesrespectivelybyreferencetothestageofcompletionofthecontractactivityatthebalancesheetdate.Thestageofcompletionismeasuredbyreferencetotheproportionofcontractcostsincurredforworkperformedtodatetotheestimatedtotalcontractcosts.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

4. SIGNIfICANT ACCOuNTING POLICIES (Continued)

4.15 Revenue recognition (Continued)

(ii) Constructioncontracts(Continued)

Wheretheoutcomeofaconstructioncontractcannotbereliablyestimated,contractrevenueisrecognisedonlytotheextentofcontractcostsincurredthatitisprobablewillberecoverableandcontractcostsarerecognisedasanexpenseintheperiodinwhichtheyareincurred.

Whenit isprobablethattotalcontractcostswillexceedtotalcontractrevenue,theexpectedlossisrecognisedasanexpenseimmediately.

(iii) Saleofproperties

Revenuefromsaleofpropertiesisrecogniseduponsigningofthesaleandpurchaseagreement.

(iv) Recreationalfacilities

Revenuefromrecreationalfacilitiesconsistsofthefollowing:

(a) Registration fees and card sales

Revenuefromregistrationfeesandcardsalesarerecogniseduponsigningofthemembershipagreement.

(b) food and beverages and tournament fees

Revenuefromfoodandbeveragesandtournamentfeesreceivedarerecogniseduponthesaleofgoodsandservicesrendered.

(v) Dividendincome

Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.

(vi) Managementfees

Managementfeeisrecognisedonanaccrualbasis.

(vii) Rentalincome

Revenue from property investment is recognised based on rental received andreceivablefromlettingofproperties.

(viii) Interestincome

Interestincomeisrecognisedasitaccrues,usingtheeffectiveinterestmethod.

(ix) Otherincome

Incomefromhire-purchase,factoringandloanfacilitiesisrecognisedbasedonthesumofdigitsmethod.

4.16 Rounding of amounts

Unlessotherwiseindicated,theamountsshowninthesefinancialstatementshavebeenroundedtothenearestthousand.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

5. ADOPTION Of NEW fRS AND AMENDMENT TO fRS

5.1 New fRS and amendment to fRS adopted

(a) FRS6ExplorationforandEvaluationofMineralResourcesismandatoryforannualperiodsbeginningonorafter1January2007.FRS6isnotrelevanttotheGroup’soperations.

(b) FRS117LeasesandFRS124RelatedPartyDisclosuresaremandatoryforannualperiodsbeginningonorafter1October2006.TheadoptionofthesestandardsdoesnothaveanysignificantimpactonthefinancialstatementsoftheGroupandCompany.

(c) FRS1192004AmendmenttoFRS1192004EmployeeBenefits–ActuarialGainsandLosses,GroupPlansandDisclosuresismandatoryforannualperiodsbeginningonorafter1January2007.

Thisamendmentpermitsanysystematicmethodthatresultsinrecognitionofactuarialgainsandlossesintheperiodinwhichtheyoccurprovidedthatthesamebasis isappliedtoboth,gainsandlossesandthebasisisappliedconsistentlyfromperiodtoperiod.

AstheGroupdoesnotintendtochangetheaccountingpolicyadoptedfortherecognitionofactuarialgainsandlossesanddoesnotparticipateinanymulti-employerplans,theadoptionof thisamendmentwillonly impact the formatandextentofdisclosurespresentedinthefinancialstatements.

5.2 New fRS and amendments to fRS not adopted

TheGrouphasnotadoptedFRS139FinancialInstruments:RecognitionandMeasurementandtheconsequentialamendmentsresultingfromFRS139whicheffectivedate isdeferredtoadatetobeannouncedbytheMASB.FRS139establishestheprinciplesfortherecognitionandmeasurementoffinancialassetsandfinancialliabilitiesincludingcircumstancesunderwhichhedgeaccountingispermitted.Byvirtueoftheexemptionprovidedunderparagraph103ABofFRS139,theimpactofapplyingFRS139onitsfinancialstatementsuponfirstadoptionofthestandardasrequiredbyparagraph30(b)ofFRS108isnotdisclosed.

TheGrouphasalsonotadoptedthefollowingFRSandamendmentsthathavebeenissuedasatthedateofauthorisationofthesefinancialstatementsbutarenotyeteffectivefortheGroup.TheDirectorsdonotanticipatethattheapplicationofthesestandardswhentheyareeffectivewillhaveamaterialimpactontheresultsandthefinancialpositionoftheGroup:

(a) FRSwhichareeffectiveforannualperiodsbeginningonorafter1July2007

FRS107 CashFlowStatementsFRS111 ConstructionContractsFRS112 IncomeTaxesFRS118 RevenueFRS120 AccountingforGovernmentGrantsandDisclosureofGovernment AssistanceFRS134 InterimFinancialReportingFRS137 Provisions,ContingentLiabilitiesandContingentAssets

ThesestandardsaligntheMASB’sFRSwiththeequivalentInternationalAccountingStandards,bothintermsofformandcontent.Theadoptionofthesestandardswillonlyimpacttheformandcontentofdisclosurespresentedinthefinancialstatements.TheGroupwillapplythesestandardsforitsannualperiodbeginning1January2008.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

5. ADOPTION Of NEW fRS AND AMENDMENT TO fRS (Continued)

5.2 New fRS and amendments to fRS not adopted (Continued)

(b) FrameworkforthePreparationandPresentationofFinancialStatements(“Framework”)whichiseffectiveforannualperiodsbeginningonorafter1July2007

TheFrameworksetsouttheconceptsthatunderliethepreparationandpresentationoffinancialstatementsforexternalusers.ItisnotaMASBapprovedaccountingstandardandhencedoesnotdefinestandardsforanyparticularmeasurementordisclosureissue.TheGroupwillapplythisFrameworkforitsannualperiodbeginning1January2008.

(c) AmendmentsandICInterpretationswhichareeffectiveforannualperiodsbeginningonorafter1July2007

AmendmenttoFRS121 TheEffectsofChangesinForeignExchangeRates-NetInvestmentinaForeignOperation

ICInterpretation1 ChangesinExistingDecommissioning,Restorationand

EnvironmentalRehabilitationFunds ICInterpretation2 Members’Shares inCo-operativeEntitiesandSimilar

Instruments ICInterpretation5 Rights to Interests arising from Decommissioning,

RestorationandEnvironmentalRehabilitationFunds ICInterpretation6 LiabilitiesarisingfromParticipatinginaSpecificMarket

-WasteElectricalandElectronicEquipment ICInterpretation7 ApplyingtheRestatementApproachunderFRS1292004

FinancialReportinginHyperinflationaryEconomies ICInterpretation8 ScopeofFRS2

TheseICInterpretationarenotrelevanttotheGroup’soperations.

6. SIGNIfICANT ACCOuNTING ESTIMATES AND JuDGEMENTS

6.1 Critical judgements made in applying accounting policies

ThejudgementsmadebymanagementintheprocessofapplyingtheGroup’saccountingpoliciesthathavethemostsignificanteffectontheamountrecognisedinthefinancialstatementsistheclassificationbetweeninvestmentpropertiesandproperty,plantandequipment.

TheGrouphasdevelopedcertaincriteriabasedonFRS140 InvestmentProperty inmakingjudgementwhetherapropertyqualifiesasaninvestmentproperty.Investmentpropertyisapropertyheldtoearnrentalsorforcapitalappreciationorboth.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

6. SIGNIfICANT ACCOuNTING ESTIMATES AND JuDGEMENTS (Continued)

6.1 Critical judgements made in applying accounting policies (Continued)

Somepropertiescompriseaportionthatisheldtoearnrentalsorforcapitalappreciationandanotherportion that isheld foruse in theproductionorsupplyofgoodsorservicesor foradministrativepurposes.Iftheseportionscouldbesoldseparately(orleasedoutseparatelyunderafinancelease),theGroupwouldaccountfortheportionsseparately.Iftheportionscouldnotbesoldseparately,thepropertyisaninvestmentpropertyonlyifaninsignificantportionisheldforuseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.Judgementismadeonanindividualpropertybasistodeterminewhetherancillaryservicesaresosignificantthatapropertydoesnotqualifyasinvestmentproperty.

TheGrouphasaclubhouseandrecreationalfacilitiesknownasParadiseValleyGolfResortClubhouse(“PVGRC”).PVGRCisnottreatedasproperty,plantandequipmentbecauseitistheGroup’sintentiontoholdforcapitalappreciationorforrental,andnotforuseasowneroccupiedproperties.TheGroupisinthemidstofsourcingforexternalpartiestomanagePVGRC.Assuch,theGrouphasclassifieditasaninvestmentproperty.

6.2 Key sources of estimation uncertainty

Thefollowingarekeysassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthebalancesheetdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyear.

(a) Deferredtaxassets

Deferredtaxassetsarerecognisedforallunusedtaxlossesandunabsorbedcapitalallowancestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhich the losses and capital allowances can be utilised. Significant managementjudgement is required todetermine theamountofdeferred taxassets thatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.

(b) FairvalueofInvestmentProperties

Investmentpropertieswhichcomprisefreeholdlandarestatedatcostlessaccumulatedimpairmentlosses, ifany. Fordisclosurepurposes,theinvestmentpropertyoftheCompanywasappraisedbytheDirectorbasedonavaluationbyanindependentfirmofprofessionalvaluersbasedonopenmarketvaluein2004.

(c) Depreciationusefullivesofproperty,plantandequipment

Thecostofproperty,plantandmachineryisdepreciatedonastraight-linebasisovertheassets’useful lives. Managementestimates theuseful livesof theseproperty,plantandequipmenttobewithintheperiodasdisclosedinNote4.3tothefinancialstatements.ThesearecommonlifeexpectanciesappliedintheindustrytheGroupoperates.Changesintheexpectedlevelofusageandtechnologicaldevelopmentscouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,thereforefuturedepreciationchargescouldberevised.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

7. PROPERTY, PLANT AND EQuIPMENT

Balance BalanceGroup as at Written as at 1.1.2007 Additions Disposals off 31.12.20072007 RM’000 RM’000 RM’000 RM’000 RM’000

At cost Freeholdland 10 – – – 10Buildings 689 – – – 689Plantandmachinery 1,063 2 – (1) 1,064Plantandmachinery acquiredunder hire-purchase 46 – – – 46Motorvehicles 1,517 – (399) (4) 1,114Motorvehiclesacquired underhire-purchase 393 – – – 393Furniture,fittingsand equipment 2,507 25 – (28) 2,504Siteofficeandsignboards 306 10 – – 316Renovations 201 – – – 201 6,732 37 (399) (33) 6,337

Charge Balance for the Balance as at financial Written as at 1.1.2007 year Disposals off 31.12.20072007 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Buildings 317 14 – – 331Plantandmachinery 870 74 – (1) 943Plantandmachinery acquiredunder hire-purchase 25 2 – – 27Motorvehicles 1,382 23 (351) (4) 1,050Motorvehiclesacquired underhire-purchase 327 66 – – 393Furniture,fittingsand equipment 2,022 147 – (20) 2,149Siteofficeandsignboards 287 21 – – 308Renovations 201 – – – 201 5,431 347 (351) (25) 5,402

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

7. PROPERTY, PLANT AND EQuIPMENT (Continued)

Balance BalanceGroup as at Written Reclassi- as at 1.1.2006 Additions Disposals off fication 31.12.20062006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At cost

Freeholdland 10 – – – – 10Buildings 689 – – – – 689Plantandmachinery 695 – – (12) 380 1,063Plantandmachinery acquiredunder hire-purchase 426 – – – (380) 46Motorvehicles 1,271 169 – – 77 1,517Motorvehiclesacquiredunderhire-purchase 611 – (141) – (77) 393Furniture,fittingsand equipment 2,488 35 (8) (8) – 2,507Siteofficeandsignboards 304 2 – – – 306Renovations 201 – – – – 201

6,695 206 (149) (20) – 6,732

Charge Balance for the Balance as at financial Written Reclassi- as at 1.1.2006 year Disposals off fication 31.12.20062006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Buildings 303 14 – – – 317Plantandmachinery 643 14 – (4) 217 870Plantandmachinery acquiredunder hire-purchase 178 64 – – (217) 25Motorvehicles 1,244 61 – – 77 1,382Motorvehiclesacquired underhire-purchase 451 94 (141) – (77) 327Furniture,fittingsand equipment 1,879 155 (8) (4) – 2,022Siteofficeandsignboards 265 22 – – – 287Renovations 201 – – – – 201

5,164 424 (149) (8) – 5,431

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

7. PROPERTY, PLANT AND EQuIPMENT (Continued)

Balance BalanceCompany as at as at 1.1.2007 Additions Disposal 31.12.20072007 RM’000 RM’000 RM’000 RM’000

At cost

Motorvehicles 535 – (395) 140Motorvehiclesacquiredunder hire-purchase 63 – – 63Furniture,fittingsandequipment 1,018 7 – 1,025Renovations 27 – – 27 1,643 7 (395) 1,255

Charge Balance for the Balance as at financial as at 1.1.2007 year Disposal 31.12.2007 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Motorvehicles 431 14 (347) 98Motorvehiclesacquiredunder hire-purchase 63 – – 63Furniture,fittingsandequipment 780 90 – 870Renovations 27 – – 27

1,301 104 (347) 1,058

Balance BalanceCompany as at as at 1.1.2006 Additions Disposal 31.12.20062006 RM’000 RM’000 RM’000 RM’000

At costMotorvehicles 405 130 – 535Motorvehiclesacquiredunder hire-purchase 204 – (141) 63Furniture,fittingsandequipment 1,017 9 (8) 1,018Renovations 27 – – 27 1,653 139 (149) 1,643

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

7. PROPERTY, PLANT AND EQuIPMENT (Continued)

Charge Balance for the Balance as at financial as at 1.1.2006 year Disposal 31.12.2006 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation

Motorvehicles 391 40 – 431Motorvehiclesacquiredunder hire-purchase 192 12 (141) 63Furniture,fittingsandequipment 695 93 (8) 780Renovations 27 – – 27 1,305 145 (149) 1,301

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Net book value Freeholdland 10 10 – –Buildings 358 372 – –Plantandmachinery 121 193 – –Plantandmachineryacquired underhire-purchase 19 21 – –Motorvehicles 64 135 42 104Motorvehiclesacquiredunder hire-purchase – 66 – –Furniture,fittingsandequipment 355 485 155 238Siteofficeandsignboards 8 19 – –Renovations – – – – 935 1,301 197 342

FreeholdlandandbuildingsoftheGroupwithnetbookvalueamountingtoRM367,875(2006:RM381,665)arepledgedtosecuretermloanfacilitiesgrantedtotheGroup.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

8. INVESTMENT PROPERTIES

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

freehold land, at cost

Balanceasat1January 60,203 117,238 4,325 90,757Less:Disposals (261) (57,035) – (86,432)

Balanceasat31December 59,942 60,203 4,325 4,325

Development expenditure

Balanceasat1January 18,411 22,098 8,114 15,952Additions – 41 – 9Less:Disposals (3,567) (3,728) – (7,847) Balanceasat31December 14,844 18,411 8,114 8,114

74,786 78,614 12,439 12,439Less: Accumulated impairment losses

Balanceasat1January 23,916 24,516 – –Reversalarisingfromdisposal (1,630) (600) – –

Balanceasat31December (22,286) (23,916) – –

52,500 54,698 12,439 12,439

Certain freehold land amounting to approximately RM12,948,800 (2006: RM15,146,000) have beenchargedtosecuretermloansandbankoverdraftfacilitiesgrantedtotheGroupasdisclosedinNote20.

TheinvestmentpropertiesoftheGroupandoftheCompanywereappraisedbyindependentfirmsofprofessionalvaluersbasedonopenmarketvaluein2004.Thesepropertiesareclassifiedasinvestmentproperties so as to reflect the management’s intention of holding these properties for investmentpurposesandforcapitalappreciation.Basedontheprevailingmarket informationthat iscurrentlyavailableandthepropertysurveyreportcompiledbyindependentprofessionalvaluers,theDirectorsareoftheviewthatthefairvaluesoftheinvestmentpropertiesheldatthebalancesheetdatearenotsignificantlydifferentfromthecarryingamountshowninthefinancialstatementsatthebalancesheetdate.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

9. LAND HELD fOR PROPERTY DEVELOPMENT

Group 2007 2006 RM’000 RM’000

freehold land, at cost

Balanceasat1January 173,956 120,962Additionsduringthefinancialyear – 56,504Less:Transfertodevelopmentproperties(Note13) – (2,146) Disposalsduringthefinancialyear (9,150) (1,364) Balanceasat31December 164,806 173,956 Leasehold land, at cost

Balanceasat1January/31December 9,765 9,765

Development expenditure

Balanceasat1January 12,067 10,510Additionsduringthefinancialyear – 2,496Less:Transfertodevelopmentproperties(Note13) – (595) Disposalsduringthefinancialyear (836) (344) Balanceasat31December 11,231 12,067

185,802 195,788Less: Accumulated impairment losses

Balanceasat1January/31December (30,037) (30,037) 155,765 165,751

CertainfreeholdlandamountingtoapproximatelyRM76,906,600(2006:RM76,970,000)arepledgedtofinancialinstitutionstosecuretermloansandbankoverdraftfacilitiesgrantedtotheCompanyandtheGroup.

Thelongtermleaseholdlandconsistofparcelsoflandinklang,Selangor,Malaysiawhichareheldforlongtermpropertydevelopment.CertainleaseholdlandamountingtoapproximatelyRM6,242,000(2006:RM6,242,000)arepledgedtosecuretermloanfacilitiesgrantedtotheGroup.

10. INVESTMENT IN SuBSIDIARIES

Company 2007 2006 RM’000 RM’000

Unquotedshares,atcost 222,034 222,034Less:Accumulatedimpairmentlosses (136,703) (136,509) 85,331 85,525

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

10. INVESTMENT IN SuBSIDIARIES (Continued)

Thedetailsofthesubsidiariesareasfollows:

Interest in equity held by Company Subsidiaries Country of 2007 2006 2007 2006Name of company incorporation % % % % Principal activities

Subsidiaries

MenangDevelopment Malaysia 100 100 – – Propertydevelopment (M)Sdn.Bhd.^

MenangLeasing Malaysia 100 100 – – Leasingandhire-purchase andCredit(M) Sdn.Bhd.^

MenangManagement Malaysia 100 100 – – Managementservices Services(M) Sdn.Bhd.^

MenangProperties Malaysia 100 100 – – Propertyinvestment (M)Sdn.Bhd.^

MenangAquatics Malaysia 100 100 – – Investmentholding Sdn.Bhd.^ andunder-takingof landscapingprojects

MenangConstruction Malaysia 100 100 – – Propertyconstruction (M)Sdn.Bhd.^

EquitiplusSdn.Bhd.^ Malaysia 100 100 – – Investmentholding

HitungPanjang Malaysia 100 100 – – Investmentholding Sdn.Bhd.*

TemerisHoldings Malaysia 100 100 – – Propertyinvestment Sdn.Bhd.^

MenangIndustries Malaysia 100 100 – – Dormant (M)Sdn.Bhd.^

MenangPlantations Malaysia 100 100 – – Dormant (M)Sdn.Bhd.^

Seremban3Paradise Malaysia 100 100 – – Operatingrecreational ValleyGolfResort facilities Sdn.Bhd.*

Subsidiary of Hitung Panjang Sdn. Bhd.

MaztriPaduSdn.Bhd.* Malaysia 50 50 50 50 Propertydevelopment

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

10. INVESTMENT IN SuBSIDIARIES (Continued)

Interest in equity held by Company Subsidiaries Country of 2007 2006 2007 2006Name of company incorporation % % % % Principal activities

Subsidiary of Menang Leasing and Credit (M) Sdn. Bhd.

MenangFinservices(M) Malaysia – – 100 100 Licensedmoney-lender Sdn.Bhd.^

Subsidiary of Menang Land (M) Sdn. Bhd.

MenangSaujana Malaysia 49.50 49.50 50.50 50.50 Propertydevelopment Sdn.Bhd.^

Subsidiary of Menang Aquatics Sdn. Bhd.

MenangGreens Malaysia – – 100 100 Landscapingandturf Sdn.Bhd.^ farming

Subsidiaries of Equitiplus Sdn. Bhd.

HarapanAkuarium(M) Malaysia – – 100 100 Investmentholdingand Sdn.Bhd.^ investmenttrading

MenangEquities(M) Malaysia – – 100 100 Investmentholdingand Sdn.Bhd.^ investmenttrading

Subsidiary of Temeris Holdings Sdn. Bhd.

TemerisResorts Malaysia – – 100 100 Propertydevelopment Development Sdn.Bhd.^

Subsidiaries of Menang Development (M) Sdn. Bhd.

MenangLand(M) Malaysia 0.02 0.02 99.98 99.98 Investmentholding Sdn.Bhd.^

TwinVersionSdn.Bhd.* Malaysia – – 100 100 Investmentholding

CharismaCheer Malaysia – – 100 100 Investmentholding Sdn.Bhd.*

^ Subsidiaries audited by BDO Binder* Subsidiaries not audited by BDO Binder.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

11. INVESTMENT IN AN ASSOCIATE

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Unquotedshares,atcost – 5,023 – 5,023Shareofpost-acquisitionprofits (netofdividendreceived) – 4,413 – –Disposalduringtheyear – (9,436) – (5,023)

– – – –

Thesummarisedfinancialinformationoftheassociateareasfollows:

31.5.2006* RM’000

Assets and liabilities

Non-currentassets 176Currentassets 25,488 Totalassets 25,664

Non-currentliabilities –Currentliabilities 6,659

Totalliabilities 6,659

1.1.2006 to 31.5.2006* RM’000

Results

Revenue 35,500Profitaftertax 14,999

* Date of disposal

12. OTHER INVESTMENT

Group 2007 2006 RM’000 RM’000

SharesquotedinMalaysia,atcost 2 2

Marketvalueofquotedshares 7 6

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

13. PROPERTY DEVELOPMENT COSTS

Group 2007 2006 RM’000 RM’000

freehold land, at cost

Balanceasat1January 57,894 56,217Transferfromlandheldforpropertydevelopment(Note9) – 2,146Less: Disposalduringthefinancialyear (2,745) (469)

Balanceasat31December 55,149 57,894

Development costs

Balanceasat1January 6,479 6,035Additionduringthefinancialyear 418 2,909Transferfromlandheldforpropertydevelopment(Note9) – 595Less: Disposalduringthefinancialyear (582) (177) Overaccruedofpremiumonlandconversion – (2,883)

Balanceasat31December 6,315 6,479

61,464 64,373

14. INVENTORIES

Group 2007 2006 RM’000 RM’000

At cost

Completedproperties 6,024 6,024Plantsandshrubs 156 156Foodandbeverages 10 10

6,190 6,190

CertaincompletedpropertiesamountingtoapproximatelyRM1,499,000(2006: RM1,499,000)havebeenchargedtosecuretermloanfacilitygrantedtotheGroup.

15. TRADE RECEIVABLES

Thecredittermsoftradereceivablesrangefrom30to60daysfromdateofinvoice.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

16. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Otherreceivables 6,794 2,746 244 272Deposits 605 390 19 19Prepayments 148 154 11 35

7,547 3,290 274 326

IncludedinotherreceivablesoftheGroupatbalancesheetdatearetheamountowingbythirdpartyofRM1,318,000(2006:RM1,513,000)inrespectofthedisposaloftheentireequityinterestinanassociateandtheamountowingbyajointventureprojectofRM5,151,200(2006:RM779,700)whichrepresentsshareofprofit for the jointventureprojectwhichareunsecured, interest-freeand repayableuponcompletionofthejointventureproject.

IncludedinthedepositsoftheGroupisRM400,000(2006:RM200,000)depositpaidtoTancoLandSdn.Bhd.inacquiringsixpiecesoflandinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhusus.

17. AMOuNTS OWING BY SuBSIDIARIES

Company 2007 2006 RM’000 RM’000

Amountsowingbysubsidiaries 186,369 195,954Less:Allowancefordoubtfuldebts (46,131) (45,350) 140,238 150,604

The amounts owing by subsidiaries represent advances and payments made on behalf which areunsecured,interest-freeandhavenofixedtermsofrepaymentexceptforamountsofapproximatelyRM174million(2006:RM184million)whichbearinterestrangingfrom0.2%to0.6%(2006:0.5%to0.9%)perannum.

18. SHARE CAPITAL

Group and Company 2007 2006 Number Number of shares of shares ’000 RM’000 ’000 RM’000

OrdinarysharesofRM1.00each:

Authorised 1,000,000 1,000,000 1,000,000 1,000,000

Issuedandfullypaid 267,107 267,107 267,107 267,107

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

18. SHARE CAPITAL (Continued)

18.1 TherewasnoexercisebytheregisteredholdersofthewarrantstosubscribefornewordinarysharesintheCompanyduringthefinancialyear.

18.2 UponissuanceoftheRedeemableConvertibleSecuredLoanStocks(“RCLS”),asdisclosedinNote25tothefinancialstatements,thetwoSchemeCreditorshavetherightstoconvertasat31December2006,11,625,449RCLSataconversionratioofone(1)newordinaryshareofRM1.00each in theCompanyforeveryRM1.00nominalvalueofRCLSasper termsandconditionsstipulatedundertheloanstockagreementdated13March2002.

18.3 TheEmployees’ShareOptionScheme(“ESOS”)oftheCompanywasapprovedbytheSecuritiesCommission(“SC”)on1November2001andsubsequentlyapprovedbyshareholdersatanExtraordinaryGeneralMeetingon15January2002.TheESOSshallbeinforceforaperiodof5yearseffectivefrom24January2002to23January2007.

On26December2006,theCompanyhasdecidedtoextenditsexistingESOSwhichisexpiringon23January2007foranotherfive(5)yearseffectivefrom24January2007uptoandincluding23January2012.

Thedetailsofoptionsgrantedtosubscribeforshareswhichwereoutstandingasat31December2007areasfollows:

- Number of options over ordinary shares of RM1.00 each - Subscription Balance Offered Lapsed Balance Exercise period price as at and due to as at RM 1.1.2007 accepted resignation 31.12.2007

25.1.2002 - 23.1.2012 1.00 12,473,000 – (3,402,000) 9,071,0002.5.2002 - 23.1.2012 1.00 10,000 – – 10,0007.11.2002 - 23.1.2012 1.00 312,000 – (312,000) –10.1.2003 - 23.1.2012 1.00 146,000 – – 146,00025.2.2004 - 23.1.2012 1.00 621,000 – (55,000) 566,0007.1.2005 - 23.1.2012 1.00 1,753,000 – (1,043,000) 710,00021.2.2005 - 23.1.2012 1.00 172,000 – (32,000) 140,000

15,487,000 – (4,844,000) 10,643,000

Theconsiderationispayableinfullonapplication.

ThesalientfeaturesoftheESOSareasfollows:

(i) themaximumnumberofordinarysharestobeissuedandallottedbytheCompanyundertheESOSasapprovedbytheSCshallnotexceedtenpercent(10%)ofthetotalissuedandpaid-upsharecapitaloftheCompanyatanypointintimeduringthedurationoftheESOS;

(ii) ExecutiveDirectorsandeligibleemployeesarethosewhohavebeenconfirmedinwritingasemployeesoftheGrouponorpriortothedateoftheoffer;

(iii) theoptionispersonaltothegranteeandshallnotbetransferred,assignedordisposedofbythegranteesaveandexceptintheeventofthedeathofthegranteeasprovidedunderBye-Law14.6;

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

18. SHARE CAPITAL (Continued)

(iv) nooffershallbemadetoanyexecutivedirectoroftheCompanyunlesssuchofferandtherelatedallotmentofshareshavepreviouslybeenapprovedbytheshareholdersoftheCompanyingeneralmeeting;

(v) thesubscriptionpriceatwhichtheemployeesareofferedtotakeupsharesundertheESOSiseitheratadiscountofnotmorethantenpercent(10%)fromtheweightedaveragemarketpriceofthesharesasshowninthedailyofficiallistissuedbyBursaMalaysiaSecuritiesBerhadforfive(5)marketdaysimmediatelyprecedingthedateofofferoratparvalueofthesharesoftheCompanyofRM1.00,whicheverishigher;

(vi) theoptionsgrantedmaybeexercisedatanytimewithintheoptionperiodandtheoptionmaybefullyexercisedaftertheacceptanceunderBye-Law10.1;and

(vii) theoptionsgrantedmaybeexercisedinfullorinlessernumberofordinarysharesprovidedthatthenumbershallbeinmultiplesof1,000shares.

19. RESERVES Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Non-distributable: Capitalreservearising fromwarrantsissue 960 960 960 960

Distributable: Accumulatedlosses (97,826) (87,329) (43,564) (44,063)

(96,866) (86,369) (42,604) (43,103)

TheWarrantsissuerelatestothebalanceoftheamountfromtheissuanceof40,070,400newwarrants2006/2011atanissuepriceofRM0.10perwarrantundertheRestructuringSchemeinpreviousyears.

20. BORROWINGS (INTEREST BEARING)

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Current liabilities

Termloans-secured-Al-BaiBithamanAjilloan 42,802 39,151 – –-Othertermloans 46,066 42,419 2,514 3,407

88,868 81,570 2,514 3,407

Bankoverdraft-secured 243 529 243 529Hire-purchasecreditors 55 67 8 8 89,166 82,166 2,765 3,944

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

20. BORROWINGS (INTEREST BEARING) (Continued)

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Non-current liabilities Hire-purchasecreditors 60 115 2 10

60 115 2 10

89,226 82,281 2,767 3,954

Total borrowings Al-BaiBithamanAjilloan(Note20.1) 42,802 39,151 – –Othertermloans(Note20.2) 46,066 42,419 2,514 3,407Bankoverdraft-secured(Note20.3) 243 529 243 529Hire-purchasecreditors(Note26) 115 182 10 18

89,226 82,281 2,767 3,954

ThematurityprofileandtheexposureofborrowingsoftheGroupandoftheCompanyasatbalancesheetdate(excludinghire-purchaseliabilities)areasfollows:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Repayableasfollows:

Currentliabilities:-notlaterthanoneyear 89,111 82,099 2,757 3,936

Terms and debt repayment schedule

20.1 TheAl-BaiBithamanAjilfacilityisrepayablewithin7yearsfromdrawdowndateandwasdueinfullin2003.Negotiationtorestructurethefacilityhasbeenongoingandofferletterswerereceivedfromthefinancial institutiondated30August2000,6June2001and29December2004respectively.Thefacilityisnowcurrentlyundernegotiationwiththefinancialinstitutionsforsettlementarrangementspendingdisposalofthedevelopmentpropertieschargedtothefacility.

The total profit of the loan for the whole duration is RM11,759,634 (2006: RM11,759,634).Subsequentto2003,theGrouphasaccruedprofitontheAl-BaiBithamanAjilfacilityofwhichduringthefinancialyear,anamountofapproximatelyRM2.485million(2006:RM2.485million)waschargedtotheincomestatement.

TheAl-BaiBithamanAjilfacilityissecuredbywayoflegalchargesovercertainlandheldforpropertydevelopmentofasubsidiaryandcorporateguaranteebytheCompany.Thetermloanissubjecttoaprofitequivalenttoyieldrateof9.13%(2006:9.13%)perannum.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

20. BORROWINGS (INTEREST BEARING) (Continued)

20.2 Theothertermloanscomprisethefollowing:-

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

TermloanI 11,360 10,300 – –TermloanII 32,192 28,712 – –TermloanIII – 1,141 – 1,141TermloanIV 2,514 2,266 2,514 2,266

46,066 42,419 2,514 3,407

TermloansIandIIwerepayableinfullby28April2006.TermloansIandIIarenowcurrentlyundernegotiationwiththefinancialinstitutionsforsettlementarrangementspendingdisposaloflandheldforpropertydevelopmentandinvestmentpropertieschargedtothetermloanIandII.

Term loan III was fully settled as at 31 December 2007. The properties charged have beendischarged.

TermloanIVwaspayableinfullasat31December2006.TermloanIVisnowcurrentlyundernegotiationwiththebankforsettlementarrangementpendingdisposalofcertainpropertieschargedtotermloanIV.

On15March2007,thebankthroughitssolicitorhasservedawritofsummonandstatementofclaimsagainsttheCompanytorecovertermloanIVwhichhasbeenindefault.

NoexpectedlossonmajoroperationalimpactareanticipatedfromthisclaimastheCompany’sunderlyingsecuritiesfortermloanIVisfarinexcessoftheindebtednessamount.

ThesetermloanswithfinancialinstitutionsaresecuredbywayofchargesoncertainpropertiesoftheCompanyandasubsidiary.Theinterestratechargedrangesfrom9.15%to10.66%(2006:8.75%to9.70%)perannum.

20.3 Thebank overdrafts of the Groupandof theCompanyare securedbywayof legal chargeovercertainpropertiesofsubsidiaries.Theinterestratechargedis10.25%(2006:10.25%)perannum.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

21. DEfERRED TAX

(a) Thedeferredtaxliabilitiesaremadeupofthefollowing:

Group 2007 2006 RM’000 RM’000

Balanceasat31January/31December 2,732 2,732

(b) Themovementofdeferredtaxliabilitiesduringthefinancialyearareasfollows:

Group 2007 2006 RM’000 RM’000

Balanceasat1January/31December 2,732 2,732

(c) Thecomponentsofdeferredtaxliabilitiesasattheendofthefinancialyearcomprisetaxeffectof:

Group 2007 2006 RM’000 RM’000

Fairvalueadjustmentsonrevaluationofland 2,732 2,732

(d) Theamountoftemporarydifferencesforwhichnodeferredtaxassetshavebeenrecognisedinthebalancesheetisasfollows:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Unutilisedtaxlosses 125,869 114,454 24,149 24,149Unabsorbedcapitalallowances 1,727 1,692 416 416Impairmentlossesonlandheld forpropertydevelopment 39,527 39,527 – –Others 711 641 – –

167,834 156,314 24,565 24,565

Deferredtaxassetshavenotbeenrecognisedinrespectoftheseitemsasitisnotprobablethatfuturetaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencescanbeutilised.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

22. TRADE PAYABLES

Group 2007 2006 RM’000 RM’000

Tradepayables 669 408Retentionsum 204 204 873 612

Thecredittermsoftradepayablesrangefrom30to60daysfromdateofinvoice.

23. OTHER PAYABLES AND ACCRuALS

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Otherpayables 6,130 2,932 314 36Accruals 13,242 13,519 1,261 2,099Deposits 58 60 – –Amountsowingtocorporate shareholders 614 649 – –Amountsowingtodirectors 1,479 1,590 840 292

21,523 18,750 2,415 2,427

IncludedinotherpayablesoftheGroupisthirdpartyloanwhichamountedtoRM5,559,000(2006:RM2,640,000)whicharesecuredagainsttheGroup’slandedproperties,bearinterestattherangeof0.9%to2.6%(2006:2%)permonthandisrepayableannuallyofeachsubsequentdrawdownofeachtranche.

Includedinaccrualsareasfollows:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Conversionpremiumtoconvert Seremban3landfromagriculture landtoresidentialandcommercialland 7,253 7,253 – –InterestpayableonRedeemable ConvertibleSecuredLoanStocks 273 1,261 273 1,261

Theamountsowingtocorporateshareholdersrepresentadvancesandpaymentsmadeonbehalfwhichareunsecured,bearinterestat9.65%(2006:9.65%)perannumandrepayableupondemand.

Theamountsowingtodirectorsrepresentsalariespayableandadvancesfromdirectorswhichareunsecured,interest-freeandrepayableupondemand.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

24. AMOuNTS OWING TO SuBSIDIARIES

The amounts owing to subsidiaries represent advances and payments made on behalf which areunsecured,interest-freeandrepayableupondemand.

25. REDEEMABLE CONVERTIBLE SECuRED LOAN STOCKS

Group and Company 2007 2006 RM’000 RM’000

Balanceasat1January 11,625 11,625Repaymentsduringthefinancialyear (8,184) –

Balanceasat31December 3,441 11,625

TheRedeemableConvertibleSecuredLoanStocks(“RCLS”)havebeenissuedtotheSchemeCreditorson13March2002pursuanttotheSchemesofArrangementoftheRestructuringSchemein2002.

TheSchemesofArrangementcomprise,interalia,thefollowingmainfeatures:

(a) Theissuanceof36,935,8608%5-yearRCLSbytheCompanytotwooftheSchemeCreditorsonthebasisofRM1.00ofdebtforRM1.00innominalvalueofRCLS.TheRCLSissuedisconditionaluponaPutandCallOptionsAgreementbetweenasubstantialshareholder,Maymerge(M)Sdn.Bhd.(“Maymerge”)withthetwoSchemeCreditors;and

(b) ReschedulingthetermsofrepaymentofthedebtoutstandingwiththethirdSchemeCreditorwhichisnotparticipatingintheRCLSIssue.

MaymergeenteredintothePutandCallOptionsAgreementwiththeseSchemeCreditorson13December2001.Y.Bhg.Dato’AbdulMokhtarAhmad,Y.Bhg.Dato’ShunLeongkwongandY.Bhg.DatinMariamEusoff,whoarealsoDirectorsandsubstantialshareholdersofMaymergearedeemedtohaveinterestsintheRCLSissuedbyvirtueofthePutandCallOptions.

ThetwoSchemeCreditorsenteredintoaLoanStocksAgreementwiththeCompanyon13December2001fortheRCLSLoanCovenant.TheLoanStocksAgreementhasimposed,interalia,thefollowingcovenantstotheCompany:

(a) TheCompanyshouldprocurethat,exceptwiththewrittenconsentoftheSchemeCreditorsandsolongasanyoftheRCLSremainsoutstanding,neithertheCompanynoritssubsidiarieswillborrowanysumorsumsiftheborrowingsthereofwouldhavetheeffectthatthetotalborrowingsexceedorwouldexceedonepointtwofive(1.25)timestheamountofShareholders’FundsoftheGroupasdisclosedbythelatestGroupbalancesheet.

(b) TheCompanymaydeclaredividendsprovidedsuchdividendsdeclaredshallnotexceed30%oftheprofitaftertaxoftheGroupforthatfinancialyearonanon-cumulativebasisasreflectedinitslatestauditedfinancialstatements,andtherearenolossesreportedforthatfinancialyearandnooverdueinterestwhichisunpaidonanyoftheRCLSpursuanttotheAgreement.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

25. REDEEMABLE CONVERTIBLE SECuRED LOAN STOCKS (Continued)

TheRCLShavethefollowingsalientfeatures:

(a) PriortoconversionoftheRCLStoordinarysharesortheirredemption,theholdersoftheRCLSwillbeentitledparipassutointerestat8.0%perannumpayablesemi-annually.

(b) Conversionrights

EachregisteredholderoftheRCLSshallhavearighttoconvertattheConversionRatiosuchamountofRCLSintofullypaid-upordinarysharesintheCompanyonthebasisofRM1.00innominalvalueofRCLSforone(1)newordinaryshareofRM1.00eachintheCompanyatanytimeduringtheconversionperiod.

ThenewordinarysharestobeissuedfromtheconversionoftheRCLSshallrankparipassuwithallexistingordinarysharesoftheCompany.

Unlessconverted,theRCLSwillberedeemableinaccordancewiththetermssetoutbelow.

(c) RedemptionofRCLS

TheRCLSwillberedeemableinpartorinfullattheoptionoftheCompanyfromthedateofissue.Inanyevent,anyRCLSnotredeemedorconvertedwithintwo(2)yearsfromthedateofissuewillberedeemablebytheCompanyonthefollowingbasis:

End of year Redemption Ratio of RCLS Issued 3 20% 4 30% 5 50%

IndeterminingthenumberofRCLStoberedeemedattheendoftherespectiveanniversary,theCompanyshalltakeintoaccountthenumberofRCLSexercisedunderthePutandCallOptions,convertedorredeemeduptotheendoftheperiod.

(d) WheretheCompanyredeemsonlypartoftheRCLSoutstandingwhetheratitsoptionatanytimeduringtheredemptionperiodoronthebasissetoutaboveafterthelapseoftwo(2)yearsfromthedateofissue,thenumberofRCLSredeemedfromeachholdershallapplyinproportiontotheholdingofeachRCLSholder.

Asat31December2007,noneofthe11,625,449RCLSofRM1.00eachhavebeenconvertedintoordinarysharesoftheCompany.

On13March2007,theCompanyhasdefaultedonitsprincipalandinterestobligationtoitsRCLSholderamountingtoRM3,713,487.TheRCLSarecurrentlyundernegotiationwiththeholderforsettlementarrangement and on 11April 2007 settlement has been agreed for revised repayment schedule tobemadein3tranchesofRM1.2millioneachon30June2007,30September2007and31December2007.

On28January2008,theCompanywrotetoRCLSholderforfurtherextensionoftimeastheCompanyisinnegotiationtosellallthesecuritiespledgedtoRCLSholderwhichthemarketvalueofthesecuritiesareinexcessofthetotaloutstandingduetoRCLSholder.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

26. HIRE-PuRCHASE CREDITORS

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Minimumhire-purchasepayments:-notlaterthanoneyear 70 82 11 11-laterthanoneyearandnotlater thanfiveyears 75 145 2 13

145 227 13 24Less:Futureinterestcharges (30) (45) (3) (6)

Presentvalueofhire-purchase andliabilities 115 182 10 18

Repayableasfollows:

Currentliabilities-notlaterthanoneyear 55 67 8 8

Non-currentliabilities:-laterthanoneyearand notlaterthanfiveyears 60 115 2 10

115 182 10 18

27. REVENuE

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Saleofproperties 27,092 17,827 – –Dividendincome – – – 9,555Managementfees 86 89 18 18Incomefromrecreationalfacilities 734 727 – –

27,912 18,643 18 9,573

28. COST Of SALES

Group 2007 2006 RM’000 RM’000

Costofpropertiessold 22,650 14,435Costofservices 915 1,012

23,565 15,447

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

29. (LOSS)/PROfIT BEfORE TAX

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

(Loss)/Profitbeforetaxis arrivedataftercharging:

Allowancefordoubtfuldebts 3 – 781 1,094 Auditors’remuneration -currentyear 68 60 18 18 -underprovisioninprioryear – 1 – – Baddebtswrittenoff 9 – – – Directors’remuneration -fees 30 30 30 30 -emolumentsotherthanfees 2,025 2,039 180 181 Depreciationofproperty,plant andequipment:- -theGroup/Company 347 424 104 145 -jointventure 12 7 – – Deferredliabilitycharges(Note20.1) 2,485 2,485 – – Interestexpenseson: -RedeemableConvertible SecuredLoanStocks 404 930 404 930 -termloans 4,825 4,384 285 273 -bankoverdrafts 47 90 47 90 -hire-purchase 15 25 3 5 -otherloans 1,469 939 – 10 Property,plantandequipmentwrittenoff 8 12 – – Rentalexpensepayableto: -certaindirectors 25 26 – – -others 292 264 – – Rentalofequipment 5 5 – – Impairmentofinvestmentinsubsidiaries – – 194 113 Lossondisposalofinvestmentproperties 252 – – – Lossondisposalofanassociate – 400 – – Lossondisposalofproperty, plantandequipment 21 – 21 –

Andcrediting:

Debtsrecoveredfromassociate – – 195 – Dividendincomereceived fromanassociate – – – 9,555 Interestincome: -fromsubsidiaries – – 885 1,267 -others 68 137 – – Managementfeereceivable fromsubsidiaries – – 18 18 Rentalincomeonbuildings 101 158 – – Gainondisposalofinvestmentproperties – 677 – 677 Gainondisposalofproperty,plantand equipment – 61 – 61 Gainondisposalofanassociate – – – 2,541

Theestimatedmonetaryvalueofbenefit-in-kindreceivedbytheDirectorsotherwisethanincashfromtheGroupandtheCompanyamountedtoRM125,509andRM125,509(2006:RM140,765andRM140,765)respectively.

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

30. TAX (INCOME)/EXPENSE

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Currentyeartaxexpense – – – 2,936Overprovisioninprioryears (3,831) – (2,936) (444)

(3,831) – (2,936) 2,492

Incometaxiscalculatedatthestatutorytaxrateof27%(2006:28%)oftheestimatedtaxableprofitforthefiscalyear.Thestatutorytaxratewillbereducedto26%fromthecurrentyear’srateof27%forthefiscalyearofassessment2008andto25%forthefiscalyearofassessment2009onwards.Thecomputationofdeferredtaxasat31December2007hasreflectedthesechanges.

ThenumericalreconciliationbetweentheaverageeffectivetaxrateandtheapplicabletaxrateoftheGroupandoftheCompanyareasfollows:

Group Company 2007 2006 2007 2006 % % % %

Applicabletaxrate (27) (28) (27) 28Non-allowableexpenses 7 6 37 8Movementofdeferredtaxassets notrecognised 22 34 – –Utilisationofpreviouslyunrecognised deferredtaxassets – (5) – (5)Non-taxableincome (2) (7) (10) –Overprovisioninprioryears (27) – (120) (5)

(27) – (120) 26

TaxsavingsoftheGroupandoftheCompanyareasfollows:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Arisingfrom-utilisationoftaxlossesbroughtforward 1 2,286 – 2,285-utilisationofcapitalallowance – 18 – 18

Subject to agreement of the Inland Revenue Board, the Company has unutilised tax losses andunabsorbedcapitalallowancesofapproximatelyRM24,149,000andRM416,000(2006:RM24,149,000andRM416,000)respectivelywhichareavailableforsetoffagainstfuturetaxableincome.

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

31. LOSS PER SHARE

(a) Loss per ordinary share

LossperordinaryshareoftheGroupiscalculatedbydividingthenetlossforthefinancialyearofapproximatelyRM10,497,000(2006:RM9,549,000)bythenumberofordinarysharesinissueduringthefinancialyearofapproximately267,107,000(2006:267,107,000).

Group 2007 2006

Netlossforthefinancialyear(RM’000) 10,497 9,549

Numberofordinaryshares(‘000) 267,107 267,107

Lossperordinaryshare(sen) 3.93 3.57

(b) Diluted loss per share

UndertheFRS133onEarningsPerShare,thewarrantsof40,070,400issue(Note18.1),exerciseoroptionsoversharesunderEmployees’ShareOptionScheme(Note18.3)andtheassumedconversionfromtheRedeemableConvertibleSecuredLoanStock(Note25)wouldbeantidilutive,andthedilutedlosspersharefiguresarethereforenotshown.

32. CASH AND CASH EQuIVALENTS

Cashandcashequivalentsincludedinthecashflowstatementscomprisethefollowingbalancesheetamount:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Cashandbankbalances 670 883 49 7Bankoverdrafts (243) (529) (243) (529)

427 354 (194) (522)

33. SEGMENT INfORMATION

Business segments

TheGroup’soperationscomprisethefollowingbusinesssegments:

Propertydevelopment : Developmentofresidentialandcommercialproperties.

Projectmanagementand : Investmentholding,lettingoutofpropertiesand investmentholding provisionformanagementservices.

Credit,leasingandtrading : Licensedmoneylenderandinsuranceagent,undertakingof landscapingprojectsandturffarming,andoperating recreationalfacilities.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

33. SEGMENT INfORMATION (Continued)

Project management and Property Credit, leasing investment holding development and trading Eliminations Consolidation 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Business segmentsRevenuefrom externalcustomers 86 89 27,092 17,827 734 727 – – 27,912 18,643Inter-segmentrevenue 18 9,573 – – 1 2 (19) (9,575) – –

Totalrevenue 104 9,662 27,092 17,827 735 729 (19) (9,575) 27,912 18,643

Segmentresults (2,832) (2,910) (1,515) (4,472) (804) (801) – – (5,151) (8,183)

Interestexpense (9,245) (8,853)Interestincome 68 137Shareofprofitofassociate – – – 7,350 – – – – – 7,350

Lossbeforetax (14,328) (9,549)Taxincome 3,831 –

Netlossforthefinancialyear (10,497) (9,549)

Segment assets 21,979 19,640 265,290 276,082 767 1,016 – – 288,036 296,738

Total assets 288,036 296,738

Segment liabilities 9,232 18,601 108,289 97,240 274 159 – – 117,795 116,000

Capitalexpenditure 6 139 18 54 13 13 – – 37 206Depreciation 104 146 113 143 142 142 – – 359 431Property,plantand equipmentwrittenoff – – – – 8 12 – – 8 12

34. CONTINGENT LIABILITIES - SECuRED

Company 2007 2006 RM’000 RM’000

Guaranteeandcontingenciesrelatingtoborrowingsofsubsidiaries 85,940 77,748

35. CAPITAL COMMITMENTS

Group 2007 2006 RM’000 RM’000

Capitalexpenditureinrespectofpurchaseoflandheldfor propertydevelopment Contractedbutnotprovidedfor 15,590 15,590

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

36. RELATED PARTIES DISCLOSuRE

(a) Identities of related parties

PartiesareconsideredtoberelatedtotheGroupiftheGrouphastheability,directlyorindirectly,tocontrolthepartyorexercisesignificantinfluenceoverthepartyinmakingfinancialandoperatingdecisions,orviceversa,orwheretheGroupandthepartyaresubjecttocommoncontrolorcommonsignificantinfluence.Relatedpartiesmaybeindividualsorotherentities.

TheCompanyhascontrollingrelatedpartyrelationshipwithitsdirectandindirectsubsidiaries.

(b) Significant related party transactions and balances Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Transaction value

Advancesto Maymerge(M)Sdn.Bhd. 35 1,821 – –

Interestpayableto Maymerge(M)Sdn.Bhd. 38 182 – –

InterestonRedeemableConvertible SecuredLoanStockpayableto Maymerge(M)Sdn.Bhd. 129 655 129 655 Purchaseofproperty,plantand equipmentfromcompaniesin whichcertainDirectors’have financialinterest -PakatanLaksana(M)Sdn.Bhd. – 50 – 50 -PelangiCitapadu(M)Sdn.Bhd. – 60 – 60 -TanjungAlamSdn.Bhd. – 20 – 20 -CapitalSanctuarySdn.Bhd. – 35 – –

Subsidiaries

Managementfeesreceivablefrom Seremban3ParadiseValley GolfResortSdn.Bhd. – – 18 18

Interestincomefrom:--TemerisHoldingsSdn.Bhd. – – 62 154-TemerisResortsDevelopment Sdn.Bhd. – – 36 90-MenangDevelopment(M)Sdn.Bhd. – – 787 1,023

Disposalofinvestmentpropertiesto:--MenangDevelopment(M)Sdn.Bhd. – – – 93,805

Associate

DividendincomefromHicom MenangPropertiesSdn.Bhd. – – – 9,555

Therelatedpartytransactionsdescribedabovewerecarriedoutontermsandconditionsnotmateriallydifferentfromthoseobtainablefromtransactionswithunrelatedparties.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

36. RELATED PARTIES DISCLOSuRE (Continued)

(b) Significant related party transactions and balances (Continued)

TherelationshipbetweentheGroupandtherelatedparties,otherthanthosedisclosedelsewhereinthefinancialstatementsareasfollows:

(i) Substantial shareholder of the Company,Titian Hartanah (M) Sdn. Bhd. (affiliatedcompany)

(ii) Holdingcompanyofthesubstantialshareholder,Maymerge(M)Sdn.Bhd.

TheshareholdersoftheCompanyhadapprovedtherenewalofgeneralmandateatAnnualGeneral Meeting held on 30 June 2007 for substantial property transactions involvingDirectorsunderSection132EoftheCompaniesAct,1965.

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Balance outstanding Advancesowingto Maymerge(M)Sdn.Bhd. 613 649 – –

Subsidiarycompanies-Advancesowingto – – 8,078 8,129-Advancesowingby – – 186,369 195,954

Directors-remuneration,feesandadvances 1,479 1,590 840 292

(c) Compensation of key management personnel

Theremunerationofkeymanagementpersonnelduringthefinancialyearwasasfollows:

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Directors’remuneration otherthanfees 2,025 2,039 180 181

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

37. fINANCIAL INSTRuMENTS

(a) financial risk management objectives and policies

TheBoardofDirectorsrecognisestheimportanceoffinancialriskmanagementintheoverallmanagement of the Group’s businesses.A sound risk management system will not onlymitigatefinancialriskbutwillalsobeabletocreateopportunitiesifriskelementsareproperlymanaged.

The Group’s overall financial risk management objective is to ensure that the Group createsvalueforitsshareholderswhileminimisingpotentialadverseeffectsontheperformanceoftheGroup.Financialriskmanagementiscarriedoutthroughriskreviews,internalcontrolsystemsandadherencetotheGroup’sfinancialriskmanagementpolicies,whicharesetoutasfollows:

(i) Liquidityrisk

TheGroupisactivelymanagingitsoperatingcashflowtosuitthedebtmaturityprofilesoastoensureallcommitmentsandfundingneedsaremet.Aspartoftheoverallliquiditymanagement,itistheGroup’spolicytoensurecontinuityinservicingitscashobligationsinthefuturebywayofmeasuresandforecastsitscashcommitmentsandtomaintainsufficientlevelsofcashorcashequivalentstomeetitsworkingcapitalrequirements.Inaddition,theGroupalsomaintainscreditfacilitiessufficienttomeetitsoperationalneeds.

(ii) Creditrisk

Therewerenosignificantconcentrationsofcreditrisk.ThemaximumexposuretocreditriskfortheGroupandtheCompanywasrepresentedbythecarryingamountofeachfinancialasset.

Inrespectofthedeposits,cashandbankbalancesplacedwithmajorfinancialinstitutionsinMalaysia,theDirectorsbelievethatthepossibilityofnon-performancebythesefinancialinstitutionsisremoteonthebasisoftheirfinancialstrength.

(iii) Interestraterisk

TheGroupand theCompanyhasno interestbearingfinancial liabilities,except for thesecured term loans and Redeemable Convertible Secured Loan Stocks, bank overdraftfacilities and amount owing to corporate shareholders and subsidiary companies asdisclosedinthefinancialstatements.

InterestratesonRedeemableConvertibleSecuredLoanStocksandamountduetocorporateshareholders is fixed.Those for term loans and bank overdraft, interest rate vary withreferencetothebaselendingrateofthefinancialinstitutions.

InterestearningfinancialassetsoftheCompanyismainlyamountsduebysubsidiariesthatattractinterestincome.However,thefluctuationininterestrate,ifany,isnotexpectedtohaveamaterialimpactontheresultsoftheCompany.

The following tables are set out the carrying amounts, the weighted average effectiveinterestrateasatthebalancesheetdateandtheremainingmaturitiesoftheGroup’sandtheCompany’sinstrumentsthatareexposedtointerestraterisk.

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

37. fINANCIAL INSTRuMENTS (Continued)

(a) financial risk management objectives and policies (Continued)

(iii) Interestraterisk(Continued)

Weighted average annual effectiveGroup interest Within 1 - 2 2- 3 3 - 4 At 31 December 2007 rate 1 year years years years Total Note % RM’000 RM’000 RM’000 RM’000 RM’000

fixed ratesHire-purchaseand leasecreditors 26 7.74 55 47 13 – 115

floating ratesAl-BaiBithamanAjilloan 20 9.13 42,802 – – – 42,802Securedtermloans 20 9.15-10.65 46,066 – – – 46,066Advancesfrom corporateshareholder 23 9.65 614 – – – 614Securedoverdraft 20 10.25 243 – – – 243RedeemableConvertible SecuredLoanStocks 25 8.00 3,441 – – – 3,441

At 31 December 2006

fixed ratesHire-purchaseand leasecreditors 26 7.88 67 55 47 13 182

floating ratesAl-BaiBithamanAjilloan 20 9.13 39,151 – – – 39,151Securedtermloans 20 8.75-9.70 42,419 – – – 42,419Advancesfrom corporateshareholder 23 9.65 649 – – – 649Securedoverdraft 20 10.25 529 – – – 529RedeemableConvertible SecuredLoanStocks 25 8.00 11,625 – – – 11,625

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

37. fINANCIAL INSTRuMENTS (Continued)

(a) financial risk management objectives and policies (Continued)

(iii) Interestraterisk(Continued)

Weighted average annual effectiveCompany interest Within 1 - 2 2- 3 3 - 4 At 31 December 2007 rate 1 year years years years Total Note % RM’000 RM’000 RM’000 RM’000 RM’000

fixed ratesHire-purchaseand leasecreditors 26 8.55 8 2 – – 10

floating ratesAdvancetosubsidiary companies 17 0.20-0.60 174,000 – – – 174,000Securedtermloans 20 9.25-9.40 2,514 – – – 2,514Securedoverdraft 20 10.25 243 – – – 243RedeemableConvertible SecuredLoanStocks 25 8.00 3,441 – – – 3,441

At 31 December 2006

fixed ratesHire-purchaseand leasecreditors 26 8.40 8 8 2 – 18

floating ratesAdvancetosubsidiary companies 17 0.50-0.90 184,000 – – – 184,000Securedtermloans 20 8.75-9.7 3,407 – – – 3,407Securedoverdraft 20 10.25 529 – – – 529RedeemableConvertible SecuredLoanStocks 25 8.00 11,625 – – – 11,625

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Notes to the Financial Statements (Cont’d)31 December 2007

37. fINANCIAL INSTRuMENTS (Continued)

(b) fair values

ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyasatbalancesheetdateapproximatetheirfairvaluesduetotherelativelyshorttermmaturityofthefinancialinstruments.

The following methods and assumptions are used to determine the fair value of financialinstruments:

(i) The carrying amounts of financial assets and liabilities maturing within 12 monthsapproximatetheirfairvaluesduetotherelativelyshorttermmaturityofthesefinancialinstruments.

(ii) Thefairvaluesofquotedinvestmentisbasedonquotedmarketpricesatthebalancesheetdate.

(iii) ThefairvaluesofthefinancialliabilitiesareestimatedbydiscountingfuturecontractualcashflowsatthecurrentmarketinterestrateavailabletotheGroupforsimilarfinancialinstruments.

38. MATERIAL LITIGATION

On25July2006,theGroupreceivedawritofsummonsdated11January2006.ThePlaintiff,PasarParitBerhadhasinstitutedthelegalactionagainsttheCompany’ssubsidiary,MaztriPaduSdn.Bhd.(“Defendant”)forthelossessustainedduetofailureofthePlaintiffinobtainingindividualstratatitleastodate.

ThecasewastransferredtotheHighCourtatShahAlamandthematterisstillpendingforhearingtobefixedonalaterdate.

NoprovisionhasbeenmadefortheabovematterastheDirectorsareoftheopinionthattheGroup’schanceforsuccessinrespectofthecaseisgood.

MeanwhiletheGroupisintheprogressofapplicationforsub-divisionandtheissueofstratatitles.

39. EMPLOYEE BENEfITS

Group Company 2007 2006 2007 2006 RM’000 RM’000 RM’000 RM’000

Directors’remunerationotherthanfees 2,025 2,039 180 181Salariesandwages 2,523 2,882 652 663Definedcontributionplan 257 331 75 83Otheremployeebenefits 258 430 72 100 5,063 5,682 979 1,027

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Notes to the Financial Statements (Cont’d)31 December 2007

40. SIGNIfICANT EVENTS DuRING THE fINANCIAL YEAR

(i) On9October2002,MenangDevelopment(M)Sdn.Bhd.(“MDSB”)enteredintoaSaleandPurchaseAgreementwithTancoLandSdn.Bhd.(“TLSB”)todispose18parcelsofshoplotsinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhusus fora totalcashconsiderationofRM6.84million.AsumofRM50,000wasreceivedontheexecutionofagreement.

On9October2002,MDSBenteredintoaSaleandPurchaseAgreementwithTLSBtoacquirethreepiecesoflandinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhususmeasuringapproximately28.68acresforatotalcashconsiderationofRM6.84million.AsumofRM50,000waspaidontheexecutionofagreement.

On9October2002,PelangiCitapadu(M)Sdn.Bhd.(“PCSB”)enteredintoaSaleandPurchaseAgreementwithTLSBtoacquiresixpiecesoflandinMukimofRasah,DistrictofSeremban,NegeriSembilanDarulkhususmeasuringapproximately40.10acresforatotalcashconsiderationofRM9.00millionincludingaccruedinterest.

The above Sale and PurchaseAgreements are inter-conditional and to be completedsimultaneously.

However, on 2 June 2005, MDSB entered into a NovationAgreement (“the said NovationAgreement”)withTLSBandPCSBtonovatetheSalesandPurchaseAgreementdated9October2002fromPCSBtoMDSB.

On30December2005,MDSBenteredintoaSupplementalAgreement(“thesaidSupplementalAgreement”)withTLSBandPCSBtoextendthecompletiondateofthesaidNovationAgreementforthree(3)monthscommencingfrom:

(a) the validation order being obtained from the High Court under section 176(10C) of theCompaniesAct,1965forthesaidNovationAgreementandthesaidSupplementalAgreement;or

(b) therestrainingordergrantedbyHighCourtundersection176(10)oftheCompaniesAct,1965toTLSBlapses;

whichevershallbeearlierprovidedalwaysthattheperiodinwhichitem(a)or(b)occursshallbe within six (6) months from 30 December 2005 that is the date of the said SupplementalAgreement.

On 30 June 2006, the restraining order has lapsed and pursuant to the said SupplementalAgreement,thecompletiondatewas30September2006.However,on9April2007,MDSBenteredintoaSecondSupplementalAgreementtoextenditscompletiondatefrom1October2006to31March2008.

On18April2008,TLSBagreedtoextenditscompletiondatefrom31March2008to30September2008pendingcompletionofconditionsprecedent.

(ii) On27February2007,theCompanydisposedofitsequityinterestof490,000ordinarysharesofRM1.00eachinMenangConstruction(M)Sdn.Bhd.,representing49%oftheissuedandpaid-upcapitalforatotalcashconsiderationofRM392,861.Subsequently,on12November2007,theCompanyhadreacquiredthe49%oftheissuedandpaid-upcapitalofMenangConstruction(M)Sdn.Bhd.foracashconsiderationofRM392,861.

�0

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

List of Properties HeldAs at 31 December 2007

Net Year of Area Existing usage/ Age of Book Acquisition/ Location Tenure (Approximately) Description Buildings Value Revaluation RM’000GeranNo.27973 FreeholdLand 53,413sf VacantIndustrial N/A 461 1998LotNo.2596 LandforFutureMukimofBukitRaja DevelopmentDaerahklangSelangorDarulEhsan

GeranNo.27974 FreeholdLand 55,347sf VacantIndustrial N/A 481 1998LotNo.2597 LandforFutureMukimofBukitRaja DevelopmentDaerahklangSelangorDarulEhsan

GeranNo.27975 FreeholdLand 72,473sf VacantIndustrial N/A 541 1998LotNo.2615 LandforFutureMukimofBukitRaja DevelopmentDaerahklangSelangorDarulEhsan

GeranNo.27976 FreeholdLand 63,516sf VacantIndustrial N/A 521 1998LotNo.2616 LandforFutureMukimofBukitRaja DevelopmentDaerahklangSelangorDarulEhsan

GeranNo.27917 FreeholdLand 82.90acres VacantIndustrial N/A 17,515 1998LotNo.48 LandforFutureMukimofBukitRaja DevelopmentDaerahklangSelangorDarulEhsan

HSD97332 Leasehold 27.86acres VacantIndustrial N/A 2,516 1998PT25008 99Years LandforFutureMukimofklang Expirydate- DevelopmentDaerahklang 2103SelangorDarulEhsan

HSD97333 Leasehold 41.25acres VacantIndustrial N/A 3,726 1998PT50718 99Years LandforFutureMukimofklang Expirydate- DevelopmentDaerahklang 2103SelangorDarulEhsan

GeranNo.21944 FreeholdLand 46.50acres VacantIndustrial N/A 4,856 1998LotNo.20 LandforFutureMukimofUluBernam DevelopmentDaerahUluSelangorSelangorDarulEhsan

LotNo.663,GM3689 FreeholdLand 10.38acres VacantIndustrial N/A 1,086 1998MukimofUluBernam LandforFutureDaerahUluSelangor DevelopmentSelangorDarulEhsan

LotNo.889,GM3690 FreeholdLand 10.13acres VacantIndustrial N/A 1,058 1998MukimofUluBernam LandforFutureDaerahUluSelangor DevelopmentSelangorDarulEhsan

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

�1

An

nu

al

Re

po

rt 2

00

7

List of Properties Held (Cont’d)As at 31 December 2007

Net Year of Area Existing usage/ Age of Book Acquisition/ Location Tenure (Approximately) Description Buildings Value Revaluation RM’000

Lot237,GM583 FreeholdLand 4.20acres VacantService N/A 5,000 1998MukimofSiRusa Apartments DaerahPortDickson LandforFutureNegeriSembilanDarulkhusus Development

Lot1279,CT6441 FreeholdLand 3.93acres VacantHotelResort N/A 4,673 1998MukimofSiRusa LandforFutureDaerahPortDickson DevelopmentNegeriSembilanDarulkhusus

665&666JalanRJ1/15 FreeholdLand 3,600sf 31/2Storey 25years 368 1998RasahJaya70300Seremban OfficeLotsNegeriSembilanDarulkhusus

92unitsofMarketStalls FreeholdLand 12,511sf VacantMarket 21years 250 1998MukimofRasah,Seremban Stalls

24unitsof3StoreyOffice FreeholdLand 43,758sf OfficeLotsFor 10years 5,774 1998MukimofRasah,Seremban Rental

RasahJaya FreeholdLand 6.29acres OnGoingMixed N/A 13,297 1998MukimofRasah,Seremban DevelopmentLandNegeriSembilanDarulkhusus

Seremban3 FreeholdLand 563acres OnGoingMixed N/A 192,563 2001Varioussubdividedlots DevelopmentLandNegeriSembilanDarulkhusus

Lot868,Geran17863 FreeholdLand 2.51acres Residential N/A 753 2002MukimofRasah,Seremban DevelopmentLandNegeriSembilanDarulkhusus

Lot1570,Geran3890 FreeholdLand 64.84acres AgriculturalLand N/A 5,101 2004MukimofRantau,SerembanNegeriSembilanDarulkhusus

Lot776,GM33 FreeholdLand 11.75acres VacantCommercial N/A 7,601 2004MukimofRasah,Seremban LandNegeriSembilanDarulkhusus

Lot9555&9556, FreeholdLand 9.93acres AgriculturalLand N/A 1,729 2005HS(D)125699&125700MukimofRasah,SerembanNegeriSembilanDarulkhusus

Lot661,GeranNo587 FreeholdLand 44,100sf AgriculturalLand N/A 1,129 2004MukimofSiRusaDaerahPortDicksonNegeriSembilanDarulkhusus

Lot996,GeranNo591 FreeholdLand 87,121sf AgriculturalLand N/A 2,230 2004MukimofSiRusaDaerahPortDicksonNegeriSembilanDarulkhusus

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Shareholders’ Information

ANALYSIS Of SHAREHOLDINGS AS AT 5 MAY 2008

SHARE CAPITAL

Authorised Share Capital : RM1,000,000,000.00

Issued and Paid-up Capital : RM267,107,000.00

Class of Shares : OrdinarySharesofRM1.00each

Voting Rights : Onevotepershare

DISTRIBuTION Of SHAREHOLDERS

Size of No. of No. of SharesShareholdings Holders % of RM1.00 each %

Lessthan100 159 0.81 2,088 0.00100to1,000 10,102 51.44 5,205,851 1.951,001to10,000 7,712 39.27 28,385,831 10.6310,001to100,000 1,484 7.55 45,447,100 17.01100,001to13,355,349 182 0.93 92,144,200 34.5013,355,350*andabove 1 0.00 95,921,930 35.91

19,640 100.00 267,107,000 100.00

*5%ofissuedshares=13,355,350

SuBSTANTIAL SHAREHOLDERS (Excluding bare trustee)(As per Register of Substantial Shareholders)

Direct No. of Indirect No. ofName Shares Held % Shares Held %

Dato’AbdulMokhtarAhmad – – 95,945,130 * 35.92Dato’ShunLeongkwong 9,400 0.00 95,945,130 * 35.92DatinMariamEusoff 4,200 0.00 95,945,130 * 35.92Maymerge(M)SdnBhd 1,200 0.00 95,943,930 + 35.92TitianHartanah(M)SdnBhd 95,943,930 @ 35.92 – –

* Indirect interest through Maymerge (M) Sdn Bhd (257143-M) andTitian Hartanah (M) Sdn Bhd(271634-U)byvirtueofSection6A(4)(c)oftheCompaniesAct,1965

+ IndirectinterestthroughTitianHartanah(M)SdnBhd(271634-U)byvirtueofSection6A(4)(c)oftheCompaniesAct,1965

@ Includedinthisfigure,95,921,930sharesheldbybaretrustee,AMSECNominees(Tempatan)SdnBhd(102918-T)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Shareholders’ Information (Cont’d)

DIRECTORS’ SHAREHOLDINGS(As per Register of Directors’ Shareholdings)

Direct No. of Indirect No. ofName Shares Held % Shares Held %

Dato’AbdulMokhtarAhmadin TheCompany – – 95,945,130 * 35.92 Maymerge(M)SdnBhd 118,977,400 20.00 – – TitianHartanah(M)SdnBhd – – 1,000,000 100.00

Dato’ShunLeongkwongin TheCompany 9,400 0.00 95,945,130 * 35.92 Maymerge(M)SdnBhd 267,699,150 45.00 – – TitianHartanah(M)SdnBhd – – 1,000,000 100.00

DatinMariamEusoffin TheCompany 4,200 0.00 95,945,130 * 35.92 Maymerge(M)SdnBhd 208,210,450 35.00 – – TitianHartanah(M)SdnBhd – – 1,000,000 100.00

Dr.ChristopherShunkongLeng, CFP®,RFPTMinTheCompany 3,000 0.00 – –

TookokLeng – – – –

ChiamTauMeng – – – –

* Indirect interest through Maymerge (M) Sdn Bhd (257143-M) andTitian Hartanah (M) Sdn Bhd(271634-U)byvirtueofSection6A(4)(c)oftheCompaniesAct,1965

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

THIRTY LARGEST SHAREHOLDERS AS AT 5 MAY 2008

Name No. of Shares %

1. AMSECNominees(Tempatan)SdnBhd 95,921,930 35.91 AmBank (M) Berhad for Titian Hartanah (M) Sdn Bhd2. OSkNominees(Tempatan)SdnBerhad 9,242,800 3.46 Pledged Securities Account for Foremillion (M) Sdn Bhd3. RHBNominees(Tempatan)SdnBhd 7,150,000 2.68 Pledged Securities Account for Goh Kheng Peow4. TanShooLi 3,063,800 1.155. LimSengChee 3,022,900 1.136. AMSECNominees(Tempatan)SdnBhd 2,792,900 1.05 Pledged Securities Account for Azam Nusa Sdn Bhd7. RHBCapitalNominees(Tempatan)SdnBhd 2,367,000 0.89 Pledged Securities Account for Goh Kheng Peow (CEB)8. MaybanNominees(Tempatan)SdnBhd 2,177,700 0.82 Pledged Securities Account for Kek Lian Lye 9. BHLBTrusteeBerhad 2,023,600 0.76 Exempted - Trust Acount for EPF Investment for Member Savings Scheme10. ContinuumSanctuaryCommercialSdnBhd 2,000,000 0.7511. kenangaNominees(Tempatan)SdnBhd 1,874,000 0.70 Pledged Securities Account for Dorothy Ng Siew May12. TohMayFook 1,800,000 0.6713. TANominees(Tempatan)SdnBhd 1,300,000 0.49 Pledged Securities Account for Toh May Fook 14. CitigroupNominees(Asing)SdnBhd 1,130,000 0.42 UBS AG Hong Kong for Yellow Gold Enterprise Inc 15. M.I.TNominees(Tempatan)SdnBhd 1,100,000 0.41 Pledged Securities Account for Lau Hock Lee (MG0035-222)16. CIMSECNominees(Tempatan)SdnBhd 1,009,000 0.38 CIMB Bank for Liew Choon Guan @ Liew Soon Guan (MQ0026)17. AMSECNominees(Tempatan)SdnBhd 1,000,000 0.37 Pledged Securities Account for Goh Kheng Peow18. ChanMayYoong 1,000,000 0.3719. HarasaAbadiSdnBhd 1,000,000 0.3720. MalaccaEquityNominees(Tempatan)SdnBhd 1,000,000 0.37 Pledged Securities Account for See Thoo Chan21. ChuakhinEng 955,100 0.3622. CIMSECNominees(Asing)SdnBhd 904,000 0.34 Exempt An For CIMB-GK Securities Pte Ltd (Retail Clients)23. AIBBNominees(Tempatan)SdnBhd 900,000 0.34 Pledged Securities Account for Wong Kie Yik24. HoTauTai 795,400 0.3025. PakatanLaksanaCommercialSdnBhd 793,500 0.3026. OSkNominees(Tempatan)SdnBerhad 760,000 0.28 Pledged Securities Account for Yap Kwok Ming27. AIBBNominees(Tempatan)SdnBhd 730,700 0.27 Pledged Securities Account for Lim Choo Tad28. HLGNominee(Asing)SdnBhd 712,200 0.27 Exempt An for UOB Kay Hian Pte Ltd (A/C Clients)29. AIBBNominees(Tempatan)SdnBhd 700,000 0.26 Pledged Securities Account for Low Kong Teck30. AMSECNominees(Tempatan)SdnBhd 680,000 0.25 Pledged Securities Account for Joseph Thong Sing Choy

149,906,530 56.12

Shareholders’ Information (Cont’d)

Me

na

ng

Co

rpo

rati

on

(M

) B

erh

ad

(5

38

3-K

) (I

nc

orp

ora

ted

in

Ma

lays

ia)

��

An

nu

al

Re

po

rt 2

00

7

Warrant Holders’ Information

ANALYSIS Of WARRANT HOLDINGS AS AT 5 MAY 2008

No. of Warrrants : 40,070,400

Exercise Rights : EachWarrantentitlestheholdertosubscribeforone(1)newordinaryshareofRM1.00eachintheCompany

Exercise Period : 16October2001to15October2011

Exercise Price : TheExercisePriceofeachWarrantisRM1.00forone(1)newordinaryshareofRM1.00eachintheCompany

DISTRIBuTION Of WARRANT HOLDERS

Size of No. of No. ofWarrant holdings Holders % Warrants %

Lessthan100 1 0.08 69 0.00100to1,000 437 32.88 377,032 0.941,001to10,000 583 43.87 3,070,899 7.6610,001to100,000 282 21.22 9,287,500 23.18100,001to2,003,519 25 1.88 5,939,900 14.822,003,520*andabove 1 0.07 21,395,000 53.40

1,329 100.00 40,070,400 100.00

*5%ofWarrants=2,003,520

DIRECTORS’ INTEREST IN WARRANT

Direct No. Indirect No. of Warrants of Warrants Name Held % Held %

Dato’AbdulMokhtarAhmad – – – –Dato’ShunLeongkwong – – – –DatinMariamEusoff – – – –Dr.ChristopherShunkongLeng,CFP®,RFPTM – – – –TookokLeng – – – –ChiamTauMeng – – – –

��

An

nu

al

Re

po

rt 2

00

7M

en

an

g C

orp

ora

tio

n (

M)

Be

rha

d (

53

83

-K)

(In

co

rpo

rate

d i

n M

ala

ysia

)

Warrant Holders’ Information (Cont’d)

THIRTY LARGEST WARRANT HOLDERS AS AT 5 MAY 2008 Name No. of Warrants %

1. OSkNominees(Tempatan)SdnBerhad 21,395,000 53.39 Pledged Securities Account for Foremillion (M) Sdn Bhd2. TangkeeHiong 1,200,200 3.003. DavinderkaurA/PGurcharanSingh 575,500 1.444. AIBBNominees(Tempatan)SdnBhd 394,500 0.98 Pledged Securities Account for Kek Lian Lye 5. BokTaiSang 311,800 0.786. PakatanLaksanaCommercialSdnBhd 233,300 0.587. LimBoonLeong 230,000 0.578. LeeChinLing 200,000 0.509. LeeSeeSin@LimSeeSin 199,000 0.5010. PerbadanankemajuanNegeriSelangor 199,000 0.5011. TanShooLi 198,400 0.5012. TanSawEan 179,800 0.4513. ChaiChunLeong 165,000 0.4114. HLGNominee(Tempatan)SdnBhd 164,000 0.41 Pledged Securities Account for Yap Soon Nam15. WongCheeHoong 161,200 0.4016. kwekMengHuat 156,000 0.3917. PerbadanankemajuanNegeriSelangor 154,000 0.3818. PublicNominees(Tempatan)SdnBhd 150,000 0.37 Pledged Securities Account for Tan Chia Hong @ Gan Chia Hong19. PerbadanankemajuanNegeriSelangor 147,000 0.3720. OoiChiengSim 140,000 0.3521. TanSuLam 140,000 0.3522. TangHuatWong 138,000 0.3423. AbdulAzizBinMohdHassan 133,200 0.3324. ChaiChunLeong 130,000 0.3225. MokBiWan 130,000 0.3226. SJSECNominees(Tempatan)SdnBhd 110,000 0.27 Pledged Securities Account for Sim Ming Joo (SMT)27. ChanMoonThiam 100,000 0.2528. FooSai 100,000 0.2529. GohkhengPeow 100,000 0.2530. khooGheeHian 100,000 0.25

Total 27,734,900 69.22

✄

(5383-k)IncorporatedinMalaysia

PROXY fORM

I/We............................................................................................................................................................................. (Full Name in Capital Letters)

of................................................................................................................................................................................. (Full Address)

beingamember(s)ofMENANG CORPORATION (M) BERHADherebyappoint.................................................

................................................................................................. NRICNo.................................................................. (Full Name in Capital Letters)

of................................................................................................................................................................................. (Full Address)

orfailinghimtheChairmanoftheMeetingas*my/ourproxytovotefor*me/usandon*my/ourbehalfattheFortyFourthAnnualGeneralMeetingoftheCompanytobeheldatMeetingRoom,kelabSultanSulaiman,JalanDewanSultanSulaiman,50300kualaLumpuronMonday,30June2008at10.00a.m.andatanyadjournmentthereof.

*My/Ourproxy(ies)is/aretovoteasindicatedbelow:

Resolutions Ordinary Business for Against

OrdinaryResolution1 Adoption ofAudited Financial Statements andReports

OrdinaryResolution2 ApprovalofDirectors’Fees

OrdinaryResolution3 Re-electionofDato’ShunLeongkwongasDirectorpursuanttoArticle112

OrdinaryResolution4 Re-electionofTookokLengasDirectorpursuanttoArticle112

OrdinaryResolution5 Re-appointment of Messrs BDO Binder as theCompany’sAuditors

Special Business

OrdinaryResolution6 Authorisation to issue shares pursuant to Section132DoftheCompaniesAct,1965

OrdinaryResolution7 ProposedrenewalofGeneralMandateforSubstantialPropertyTransactionsinvolvingDirectorspursuanttoSection132EoftheCompaniesAct,1965

Please indicate with (X) how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his/her discretion.

Datedthis.........................dayof........................................... 2008

............................................................................[Signature/CommonSealofShareholder(s)]

(*Deleteifnotapplicable)

NOTES:

(1) A member of the Company entitled to attend and vote at the abovementioned meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company.

(2) The Proxy form must be signed by the appointer or his/her attorney duly authorised in writing or in the case of a corporate member, the instrument appointing a proxy shall be under its Common Seal or under the hand of a duly authorised officer or attorney.

(3) Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy.

(4) Any alteration to the instrument appointing a proxy must be initialed. The instrument appointing a proxy must be deposited at the Company’s Registered Office at 8th Storey, South Block, Wisma Selangor Dredging, 142-A Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the time fixed for the meeting or any adjournment thereof.

NumberofSharesHeld

TheCompanySecretaryMenang Corporation (M) Berhad (5383-k)Box#2,WismaSelangorDredging8thStorey,SouthBlock142-AJalanAmpang50450kualaLumpur

Stamp

Please fold here

Please fold here

(Thispagehasbeenintentionallyleftblank)

(Thispagehasbeenintentionallyleftblank)