Notes to the Accounts

1.	 Basis of Preparation
	The interim financial report  is unaudited and has been prepared in accordance with FRS 134:  Interim Financial  Reporting and Chapter 9 part K of the Listing Requirements of the Bursa Malaysia Securities Berhad (Bursa Securities).

	The interim financial report should be read in conjunction with the audited financial statements of the Group for the year ended 31 December, 2005.

	The explanatory notes attached to the interim financial statements provide explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the financial year ended 31 December 2005.

2. 	Changes in Accounting Policies
The significant accounting policies adopted are consistent with those of the audited financial statements for the year ended 31 December 2005 except for the adoption of the following new  or revised Financial Reporting Standards (“FRS”) effective for financial period beginning 1 January 2006:
FRS 1		First-time Adoption of Financial Reporting Standards	
FRS 2 		Share-based Payment
FRS 3 		Business Combinations
FRS 101 	Presentation of Financial Statements
FRS 102 	Inventories
FRS 108 	Accounting Policies, Changes in Estimates and Errors
FRS 110 	Events after the Balance Sheet Date
FRS 116 	Property, Plant and Equipment
FRS 127 	Consolidated and Separate Financial Statements
FRS 128 	Investment in Associates
FRS 131 	Interest in Joint Ventures
FRS 132 	Financial Instruments: Disclosure and Presentation
FRS 133 	Earnings Per Share
FRS 136 	Impairment of Assets
FRS 138 	Intangible Assets
FRS 139		Financial Instruments : Recognition & Measurement
FRS 140 	Investment Property
FRS 201 	Property Development Activities
 
The adoption of all FRS mentioned above does not have significant financial impact on the Group. 

3.	Audit report for the preceding annual financial statements
The audit report on the audited financial statements for the year ended 31 December, 2005 was an unqualified opinion. 
			
4.	Seasonal or Cyclical Factors
The Group’s business operations were not significantly affected by any seasonal and cyclical factors.

5.	Unusual Items because of nature, size or incidence
There were no unusual items during the period under review.
 
6.	Changes in estimates
There were no changes in the nature or amount of estimates reported in prior interim period that have a material effect in the current quarter. 

7.	Issuances and Repayment of Debt and Equity Securities
There were no debt and equity securities issued, cancelled, repurchased, resold or repaid during the period under review.

8.	Dividends 
	No dividend has been paid, proposed or declared during the period under review.

9.	Segmental Reporting

	Quarter ended	
	Revenue	Profit/(Loss) before tax	
	2006
RM’000	2005
RM’000	2006
RM’000	2005
RM’000	
Property Development   (*)
Project Management & Investment holding
Others	2,163
21
200	9,136
15
410	(3,593)
(1,105)
(202)	(2,552)
(1,092)
(264)	

Inter-segment elimination	2,384
(5)	9,561
(4)	(4,900)
0	(3,908)
0	
	2,379	9,557	(4,900)	(3,908)	

	6 months ended	
	Revenue	Profit/(Loss) before tax	
	2006
RM’000	2005
RM’000	2006
RM’000	2005
RM’000	
Property Development   (*)
Project Management & Investment holding
Others	6,233
9,603
349	12,546
13,782
715	3,175
(1,380)
(467)	(3,206)
(2,173)
(504)	

Inter-segment elimination	16,185
(9,565)	27,043
(13,729)	1,328
0	(5,883)
0	
	6,620	13,314	1,328	(5,883)	
 
*   Includes contribution from our associate company whose primary business is property development. The investment in associate was disposed during the  period under review.
    
10.	       Property,  plant and equipment
The valuation of land and buildings have been brought forward without amendment from the previous annual report.

11.	Material Events Subsequent To The End Of The Period Reported
There are no material events subsequent to the end of the period reported on that have not been reflected in the financial statement for the said period. 

12.	Changes in the Composition of the Group
There were no changes in the composition of the Group for the period under review. 

13.	Changes In Contingent Liabilities 
There were no material changes in contingent liabilities since the end of the previous financial year.

ADDITIONAL INFORMATION REQUIRED BY THE  BURSA SECURITIES LISTING REQUIREMENTS

1.	Review of Performance 
For  the 6  months, the Group recorded a turnover of RM6.620 million (2005: RM13.314 million) and a profit before taxation of RM1.328 million (2005:  a loss before taxation of RM5.883 million). The decrease in turnover in the period under review was due to decrease in sales of development properties. Increase in profit before taxation was mainly due to higher contribution from our associate company.

2.	Variation of Results of the Preceding Quarter

	Current quarter
RM’000	Preceding quarter
RM’000	Change
%	
Profit /(Loss) before taxation	1,328	6,228	-79%	
   
The change in the current quarter results compared to that of the preceding quarter was mainly due to higher contribution generated from our associate company  in the preceding quarter.

3.	Current Year Prospects
The Group expects the year 2006 to be challenging.

4.	Profit forecast or profit guarantee
Not applicable as no profit forecast or profit guarantee was published or provided. 

5.	Tax Expense

	Quarter Ended
30 June, 2006
RM’000	6 months Ended
30 June, 2006
RM’000	
Current Year Provision
Deferred Tax Liability	16
-	2,556
-	
Total	16	2,556	
The provision for tax payable for the period under review was mainly due the share of profit of an associate. 

6.	Unquoted Investments and Properties
The Board of Directors of Menang Corporation had on  1 June 2006 entered into Sales and Purchase Agreement with Hicom Properties Sdn Bhd to dispose its entire equity investment for  a total cash consideration of RM7,595,000.00.  The disposal has no effect on the share capital, the net assets per share and the earnings per share of the Group. 

7.	Quoted Securities
There were no dealings in quoted securities during the period under review.

Investments in quoted securities as at 30 June, 2006:
	RM’000	
Total Investments at Cost
Total Investments at Carrying Value
Total Investments at Market Value	2
2
4	

8.	Status of Corporate Proposals
There were no corporate proposals announced at the date of this report.

9.	Borrowings and debt securities 
	As at 30 June, 2006
	Short Term Borrowings
RM’000	Long Term Borrowings
RM’000	
Secured
Unsecured	48,072
-	42,651	

	Out of the total long term borrowings of RM42.651 million,  an amount of RM11.625 million is a 5 years 8% Redeemable Convertible Secured Loan Stocks (RCLS) expiring on 13 March, 2007.
									
10. 	Balance Sheet  Financial Instruments
No off balance sheet financial instruments contracts were entered at the date of this report.

11.	Changes in Material Litigation
As at the date of this report, there are no significant changes in the status of the material litigation (reported in the audited financial statements for the year ended 31 December, 2005) since the last annual balance sheet date.

12.	Dividends 
	No dividend has been proposed or declared during the current quarter under review.

13.	Earnings Per Share
a.	Basic Earnings

	Quarter Ended
30 June, 2006	6 months Ended
30 June, 2006	
Loss attributable to shareholders (RM’000)	(4,916)	(1,228)	
Number of ordinary shares issued (‘000)	267,107	267,107	
Basic Loss per ordinary share (sen)	(1.84)	(0.46)	

b.	Diluted Earnings
Under the FRS 133 on Earnings Per Share, the assumed conversion from the Employee Share Option Scheme (ESOS), Redeemable Convertible Secured Loan Stocks and Warrants would have no dilutive effect to the loss per share  as the exercise price of RM1.00 per new ordinary share is above the average market price of the Company’s shares for the year ended 30 June, 2006.

By Order of the Board
MENANG CORPORATION (M) BERHAD

Ng Ah Wah  (MIA  No.  10366)
Secretary

Kuala Lumpur
30 August, 2006