KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

Notes In Compliance with FRS 134 (previously known as MASB 26)

A1.	Accounting Policies

The Quarterly Report has been prepared in accordance with FRS 134 (previously known as MASB 26) on ‘Interim Financial Reporting’ and Paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities Berhad (“BMSB”).

The accounting policies and methods of computation used in this interim financial report are consistent with the financial statements for the year ended 31 March 2005.

A2.	Audit report of previous annual financial report

The audit report of the immediate preceding annual financial statements for the year ended 31 March 2005 was not qualified.

A3.	Seasonal or Cyclical Factors

The Group’s operations for the current quarter and the financial year-to-date were not affected significantly by any seasonal or cyclical factors.

A4.	Unusual items

There were no items affecting assets, liabilities, equities, net income or cash flows that are unusual because of their nature, size or incidence during the current quarter and the financial year-to-date.	

A5.	Nature and Amount of Changes in Estimates

There were no changes in estimates of amounts reported in prior interim periods of the current financial year or changes in estimates of amounts reported in previous financial years which have a material effect in the current quarter and the financial year-to-date.

A6.	Issuance and Repayment of Debt and Equity Securities

There is no issuance and repayment of debts and equity securities, share buy-backs, share cancellations, shares held as treasury shares and resale of treasury shares for the current quarter and the financial year-to-date.

A7.	Dividend Paid
	
	There were no dividends paid during the current quarter and the financial year-to-date.

Page 5

KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

A8.	Segmental Information
	
Segmental information is presented in respect of the Group’s business and geographical segments.

Segment revenue and results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 

The main business segments of the Group comprise the following:

a)	Property development	- Property development and construction of properties.
b)	Leisure & tourism			- Resorts, golf club and travel agency services.	    	 
c)	Trading						- Trading of wood products.
d)	Investment holdings		- Investment holding, venture capital and management services.
e)	Others						- Not of a sufficient size to be disclosed separately.

		Segment by activity

Current Financial year to date 30/09/2005	
Property 
development
RM’000	
Leisure &
tourism
RM’000	

Trading
RM’000	Investment
holdings 
and Others
RM’000	

Consolidated
RM’000	
						
Revenue						
External sales	21,355	41,127	15,787	    490	78,759	

Results						
Segment (loss) / profit	 3,638	  9,132	  1,012	(2,943)	       10,839        	
Depreciation	   (372)	(4,964)	     (45)	  (245)	       (5,626)	
Segment result	 3,266	 4,168	     967	(3,188)	         5,213	
Interest expenses				                              	       (19,260)	
Share of associated results					              89	
Taxation					        (1,673)	
Loss after taxation					      (15,631)	
  
Segment by geographical 

Current Financial year to date 30/09/05 	
Malaysia
RM’000	
Singapore
RM’000	
Others
RM’000	
Consolidated
RM’000	
					
Revenue					
External sales	62,972	15,787	     -	78,759	

A9.	Valuations of property, plant and equipment

The valuations of property, plant and equipment have been brought forward without amendment from the previous annual financial statements.

Page 6

KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

A10.	Material subsequent events

There were no material subsequent events from 30 September 2005 to 29 November 2005 (being the latest practicable date which is not earlier than 7 days from the date of issue of this Quarterly Report).

A11.	Changes in the Composition of the Group

There were no material changes in the composition of the Group during the current quarter and the financial year-to-date, except for the following:

On 29 April 2005 the Company subscribed for an additional 1,790,000 ordinary shares of RM1.00 each for a total cash consideration of RM1,790,000 in First Travel and Tours (M) Sdn Bhd (“FTT”), a subsidiary of the Company. The Company’s equity interest in FTT has increased from 70% to 95.69% after the subscription. The increase in the equity interest in FTT has no material impact on the Group’s financial position and results for the current quarter and financial year-to-date.

On 13 June 2005 the Company disposed of 741,000 ordinary share of RM1.00 each representing its entire 30 % shareholding in FSBM Dapannet Sdn Bhd (“FSBM Dapannet”) to FSBM Holdings Berhad for a total cash consideration of RM261,034.21.The disposal of shares has no material impact on the financial position and results of the Group for the current quarter and financial year-to-date. An announcement was made to Bursa Malaysia on 15 June 2005. 

A12.	Changes in contingent liabilities or contingent assets
	
Other than corporate guarantees extended by the Company in support of banking facilities of its subsidiaries, there were no contingent liabilities or contingent assets as at 30 September 2005 (31 March 2005 : nil). 

Notes in compliance with BMSB Listing Requirements 

B1. 	Review of the Performance of the Company and Its Principal Subsidiaries

The Group recorded a revenue of RM 78.7 million for the financial year-to-date ended 30 September 2005 compared to RM 60.8 million for the preceding year’s corresponding period ended 30 September 2004, representing an increase of 29%.

For the financial year-to-date ended 30 September 2005, the Group also achieved a lower pre-tax loss of RM 13.9 million compared to RM 23.3 million in the same period last year.  The improvement was mainly contributed by the Group’s leisure & tourism and property development segments.

In the opinion of the Directors, the results for the current quarter and the financial year-to-date have not been affected by any transaction or event of a material and unusual nature which has arisen between 30 September 2005 and 29 November 2005 (the latest practicable date which is not more than 7 days from the date of this Quarterly Report).

Page 7

KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

B2.	Material Changes in the Quarterly Results Compared to the Results of the Preceding
		Quarter

For the current financial quarter, the Group registered a pre-tax loss of RM 5.8 million as compared to pre-tax loss of RM 8.1 million in the immediate preceding quarter, representing an improvement of RM 2.3 million. This was mainly due to better performance from the hotel, more profit recognition from the on-going residential projects which have reached a higher stage of completion, reduction in finance costs and lower operational costs incurred in this quarter. 

B3.	Current Year Prospects

The Group continues to experience growth in the leisure & tourism and property development segments. Hence, the Group is optimistic that barring any unforeseen circumstances, the Group would continue to benefit from the performance of these two segments. 

B4.	Profit Forecast / Profit Guarantee 
	
Not applicable in this Quarterly Report.

B5.	Taxation

The breakdown of tax charge for the current quarter and financial year-to-date ended 30 September 2005 are as follows:

Tax Charge	Current Quarter
RM’000	Current year-to-date
   RM’000	
Current quarter / year provision	     671	                       1,127	
Under / (Over) provision in previous year	           -	                              -	
Transfer to / (from) deferred taxation	           -	                          546	

Total	-------------
     671	                -------------
                       1,673	
																   ======== 					     ========
The effective tax rate for the periods presented above are higher than the statutory tax rate     principally due to the losses which cannot be set off against taxable profits made by certain subsidiaries.		  

B6.	Profit/ (Loss) on Sale of Unquoted Investments and/or Properties

There was no sale of properties for the current quarter and financial year-to-date, save and except for:-

Disposal of investment in associated companies, FSBM Dapannet Sdn Bhd (Note A11)

	RM’000	
Net book value	318	
Proceed from disposal	261	
Loss on disposal	57	

Page 8

KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

B7.	Quoted Securities
	
There were no purchases or sales of quoted securities for the current quarter and financial year-to-date and there were no investments in quoted securities at the end of the quarter.

B8.	Status of Corporate Proposals Announced But Not Completed as at 29 November 2005 (being the latest practicable date which is not earlier than 7 days from the date of issue of this Quarterly Report)
	
(A)	On 31 March 2005, the Company announced to Bursa Malaysia the following:

1.	Appointment of Affin Merchant Bank Berhad as the principal adviser and lead arranger for the Proposed Asset Securitisation Programme and principal adviser to the Proposed Extension And Restructuring Of the existing RM420 million Nominal Value Zero-Coupon Redeemable Secured Bonds (Bonds 2001/2005).

2.	The Proposed Asset Securitisation Programme would involve an asset-backed securitisation exercise of approximately RM1.04 billion to raise proceeds of about RM200 million from the issuance of approximately RM200 million nominal value of Senior Notes and approximately RM840 million nominal value of Junior Notes repayable over a period of seven (7) years, subject to finality of the terms and conditions acceptable to both parties (“Asset Securitisation Programme”) pursuant to the Proposed Asset Securitisation Programme.

3.	The Company and Abrar Discounts Berhad (“ADB”) had on 31 March 2005 entered into the Heads of Agreement (“HOA”) which outline the principal terms and conditions in relation to the proposed extension and restructuring of the existing RM420 million nominal value zero-coupon redeemable secured bonds (2001/2005) (“2001/2005 Bonds”) of which ADB is the sole holder.

(B)	On 8 April 2005, the Company announced that, an application has been made to the Securities Commission (“SC”) for the proposed extension of the 2001/2005 Bonds pursuant to the HOA. 

(C)	On 10 November 2005, ADB agreed to extend the restructuring of the 2001/2005 Bonds from 30 November 2005 under the HOA to 31 May 2006. An application to SC for the proposed extension of 2001/2005 Bonds was made on 16 November 2005 which outline the revised principal terms and conditions in relation to the proposed extension and restructuring of the 2001/2005 Bonds. An announcement to Bursa Malaysia for the same was made on 21 November 2005. 

		

Page 9

KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

B9.	Borrowings and Debt Securities

 (a)	
Short Term Borrowings	
  RM’000	
			
	Secured		
	Term Loan I (USD5.42Million)	18,133	
	Term Loan II	70,740	
	Revolving Credits	17,000	
	Bank Overdraft	24,034	
			
	Unsecured		
	Hire Purchase Creditors	2,396	
			
	Total	132,303	
			
(b)	Long Term Borrowings	  RM’000	
			
	Secured		
	Term Loan	5,100	
			
	Unsecured		
	Hire Purchase Creditors	1,214	
			
	Total	6,314	

B10.	Off Balance Sheet Financial Instruments

As at 29 November 2005, the Group did not enter into any contract involving financial instruments with off balance sheet risk.

B11.	Material Litigation 

The Group is engaged in the following material litigation as at the date of this report.

	A minority shareholder of First Travel and Tours (M) Sdn. Bhd. (“FTT”), a subsidiary of the Company, has presented a legal petition against FTT, the Company and a director of the Company (“Respondents”) to wind-up FTT pursuant to Section 181 of the Companies Act, 1965, on allegation that the affairs of FTT were conducted in a manner oppressive to him and in disregard of his interests as a shareholder. No provision has been made for possible losses arising from the above legal proceedings as the legal proceedings are still pending.

Page 10

KARAMBUNAI CORP BHD (6461-P)
Unaudited Quarterly Report on the Consolidated Results For the Financial Quarter Ended 30 September 2005

B12.	Dividend

No dividend is recommended for the current quarter and the financial year-to-date.

B13.	Loss Per Share	
		
		Basic loss per share	

 	
Current
Quarter Ended
30/09/2005
    RM’000	
Comparative
Quarter Ended
  30/09/2004 
    RM’000	Current Financial Year-to-date 
Ended  30/09/2005
    RM’000	Preceding Financial
Year-to-date
 Ended
  30/09/2004
    RM’000	
Group’s loss after tax used as numerator in the calculation of basic EPS	
         (6,514)	
     (9,228)	
      (15,644)	
    (23,214)	

Weighted average number of shares used as denominator in the calculation of basic EPS (‘000)	

2,030,060	

2,030,060	

2,030,060	

2,030,060	

Fully diluted (loss)/ earnings per share

The effect on the diluted loss per share for the current quarter and financial year-to-date arising from the assumed conversion of outstanding Warrants is anti-dilutive.

By order of the Board

_______________________
Lim Tiong Jin
Chief Financial Officer
Kota Kinabalu, Sabah           
29 November 2005

Page 11