AR2006

’06
Company No. 432768-X
annualreport
AHMAD ZAKI RESOURCES BERHAD 432768-X Annual Report 2006
www.azrb.com
2 Notice of Annual General Meeting 6
contents
Statement Accompanying Notice of Annual General Meeting
8 Corporate Information 10 Corporate Structure 11 Financial Highlights
12 Directors’ Profile 16 Statement of Internal Control 18 Corporate Governance Statement
24 Statement of Directors’ Responsibilities 25 Report of the Audit Committee
28 Other Information 30 Environmental Management Activities at Project Sites
33 Quality, Safety and Health Policy 36 Chairman’s Statement / Penyata Pengerusi
41 Review of Operations 45 Calendar of Events 47 Financial Statements
123 Analysis of Shareholdings 125 List of Properties 126 Appendix 1 • Proxy Form
02 ANNUAL REPORT 2006
Notice of
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of the Company
will be held at Dillenia & Eugenia Room, Ground Floor, SIME Darby Convention
Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 21 June 2007 at
10.00 am for the following purposes:-
Agenda
As Ordinary Business:
1. To receive the Audited Financial Statements of the Company for the year ended 31 December 2006 together with the Reports
of the Directors and Auditors thereon. Resolution 1
2. To approve the payment of a first and final dividend of 15% less 27% tax for the year ended 31 December 2006. Resolution 2
3. To approve the payment of Directors’ fees for the year ended 31 December 2006. Resolution 3
4. To re-elect the following Directors retiring under the provisions of the Articles of Association of the Company:-
(i) Dato’ Sri Haji Wan Zaki bin Haji Wan Muda Resolution 4
(ii) Dato’ Haji Mustaffa bin Mohamad Resolution 5
5. To re-appoint Messrs Moore Stephens as Auditors of the Company and to authorise the Directors to fix their remuneration. Resolution 6
As Special Business:
To consider and if thought fit, passing the following Resolutions as Ordinary and Special Resolutions with or without
modifications:-
6. ORDINARY RESOLUTION:
AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES
“THAT subject to the provisions of Section 132D of the Companies Act, 1965 and approvals from Bursa Malaysia and other
relevant governmental/regulatory authorities where such approvals shall be necessary, authority be and is hereby given to the
Directors of the Company to allot and issue shares in the Company from time to time and upon such terms and conditions and
for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this
resolution does not exceed 10% of the issued share capital of the Company for the time being and such authority shall remain
in force until the next Annual General Meeting of the Company.” Resolution 7
AHMAD ZAKI RESOURCES BERHAD 03
Notice of Annual General Meeting (cont’d)
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A

REVENUE OR TRADING IN NATURE WITH ZAKI HOLDINGS (M) SDN BHD AND RESIDENCE INN & MOTELS SDN BHD
“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Company and the
Listing Requirements of Bursa Malaysia (“Listing Requirements”), approval be and is hereby given to the Company and its
subsidiaries (“AZRB Group”) to continue to enter into all arrangements and/or transactions with Zaki Holdings (M) Sdn Bhd
and Residence Inn & Motels Sdn Bhd, involving the interests of Directors, major shareholders or persons connected with
Directors and/or major shareholders of the AZRB Group (“Related Parties”) as disclosed in section 2.2 of the circular to
shareholders dated 31 May 2007 (“Circular”) provided that such arrangements and/or transactions are:
(i) recurrent transactions of a revenue or trading in nature;
(ii) necessary for the day to day operations;
(iii) carried out in the ordinary course of business on normal commercial terms which are not more favourable to the Related
Parties than those generally available to the public; and
(iv) are not to the detriment of the minority shareholders.
(hereinafter known as the “Shareholders’ Mandate 1”);
AND THAT such approval shall continue to be in force until:
(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company (being the 11th AGM of the Company), at
which time the said authority will lapse, unless by a resolution passed at a general meeting whereby the authority of the
Shareholders’ Mandate 1 is renewed;
(ii) the expiration of the period within which the next AGM of the Company (being the 11th AGM of the Company) is required
to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to
Section 143(2) of the Act); or
(iii) revoked or varied by resolution passed by the shareholders in a general meeting,
whichever is earlier;
AND THAT the aggregate value of the transactions of the Shareholders’ Mandate 1 conducted during a financial year will be
disclosed in accordance with the Listing Requirements in the annual report for the said financial year and the disclosure will
include amongst others, the following information:
(i) the types of recurrent related party transactions (“RRPT”); and
(ii) the names of the Related Parties who have interests in each type of the RRPT entered into and their relationship with the
AZRB Group;
AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such
documents as may be required) as they may consider expedient or necessary to give effect to the Shareholders’ Mandate 1.” Resolution 8
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A

REVENUE OR TRADING IN NATURE WITH QMC SDN BHD, CHUAN HUAT INDUSTRIAL MARKETING SDN BHD AND
CHUAN HUAT HARDWARE SDN BHD
“THAT, subject to the Act, the Memorandum and Articles of Association of the Company and the Listing Requirements,
approval be and is hereby given to the AZRB Group to continue to enter into all arrangements and/or transactions with QMC
Sdn Bhd, Chuan Huat Industrial Marketing Sdn Bhd and Chuan Huat Hardware Sdn Bhd, involving the interests of the Related
Parties as disclosed in section 2.2 of the Circular provided that such arrangements and/or transactions are:
(i) recurrent transactions of a revenue or trading in nature;
(ii) necessary for the day to day operations;
(iii) carried out in the ordinary course of business on normal commercial terms which are not more favourable to the Related
Parties than those generally available to the public; and
(iv) are not to the detriment of the minority shareholders.
(hereinafter known as the “Shareholders’ Mandate 2”);
AND THAT such approval shall continue to be in force until:
(i) the conclusion of the next AGM of the Company (being the 11th AGM of the Company), at which time the said authority
will lapse, unless by a resolution passed at a general meeting whereby the authority of Shareholders’ Mandate 2 is
renewed;
(ii) the expiration of the period within which the next AGM of the Company (being the 11th AGM of the Company) is required
to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to
Section 143(2) of the Act); or
(iii) revoked or varied by resolution passed by the shareholders in a general meeting,
whichever is earlier;
AND THAT the aggregate value of the transactions of the Shareholders’ Mandate 2 conducted during a financial year will be
disclosed in accordance with the Listing Requirements in the annual report for the said financial year and the disclosure will
include amongst others, the following information:
(i) the types of RRPT; and
(ii) the names of the Related Parties who have interests in each type of the RRPT entered into and their relationship with the
AZRB Group.
AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such
documents as may be required) as they may consider expedient or necessary to give effect to the Shareholders’ Mandate 2.” Resolution 9
9. SPECIAL RESOLUTION:
PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY
“THAT the proposed amendments to the Articles of Association of the Company as contained in the Appendix I attached to the
Annual Report 2006 be and hereby approved” Resolution 10
10. To transact any other business for which due notice shall have been given in accordance with the Companies Act, 1965.
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS ALSO HEREBY GIVEN that the first and final dividend of 15% less 27% tax for the financial year ended 31 December 2006, if approved,
will be paid on 19 July 2007 to depositors registered in the Record of Depositors at the close of business on 12 July 2007.
A Depositor shall qualify for entitlement to the dividend only in respect of:
a. Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 12 July 2007 in respect of ordinary transfer; and
b. Shares bought on the Bursa Malaysia on a cum entitlement basis according to the Rules of Bursa Malaysia.
By Order of the Board
Bahari Bin Johari (LS 0008773)

Lim Ming Toong (MAICSA 7000281)
Seuhailey binti Shamsudin (MAICSA 7046575)
Secretaries
Kuala Lumpur
31 May 2007
NOTES: EXPLANATORY NOTES ON SPECIAL BUSINESS
1. A member of the Company who is entitled to attend and vote at the meeting is entitled to appoint a proxy 7. Resolution 7
or proxies, (but not exceeding two (2) proxies), to attend and vote in his stead. The proposed ordinary resolution No. 7, if passed, will give the Directors of the Company the power to
2. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of
the proportion of his holdings to be represented by each proxy. the Company for such purposes as the Directors consider would be in the interests of the Company. This
3. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the would avoid any delay and cost involved in convening a general meeting to specifically approve such an
Companies Act, 1965 shall not apply to the Company. issue of shares. This authority, unless revoked or varied at a General Meeting will expire at the next Annual
4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) General Meeting of the Company.
Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary
shares of the Company standing to the credit of the securities account. 8. Resolution 8
5. Where the Form of Proxy is executed by a corporation, it must be executed under its seal or under the hand Please refer to the Circular to Shareholders dated 31 May 2007 which is despatched together with the
of its attorney. Annual Report of the Company for the financial year ended 31 December 2006.
6. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is
signed, or a notarially certified copy of that power or authority, must, to be valid, be deposited at the office 9. Resolution 9
of the Company’s Registrars, Mega Corporate Services Sdn Bhd, Share Registration Department, Level 15- Please refer to the Circular to Shareholders dated 31 May 2007 which is despatched together with the
2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur, not less than forty-eight (48) hours Annual Report of the Company for the financial year ended 31 December 2006.
before the time set for the meeting or at any adjournment thereof.
10. Resolution 10
The proposed special resolution No. 10, if passed, will bring the Articles of Association of the Company in
line with the amendments to the Listing Requirements of Bursa Malaysia Securities Berhad.
Statement Accompanying Notice of

Annual General Meeting
1. Board Meetings held in the financial year ended 31 December 2006
There were four (4) Board Meetings held during the financial year ended 31 December 2006. Details of the attendance of the Directors are as
follows:-
Total Meetings Attended % of Attendance
Executive Directors
Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 4/4 100%
Dato’ Wan Zakariah bin Haji Wan Muda 4/4 100%
Dato’ Haji Mustaffa bin Mohamad 3/4 75%
Dato’ W Zulkifli bin Haji W Muda 4/4 100%
Non-Executive Directors
Raja Dato’ Seri Aman bin Raja Haji Ahmad 4/4 100%
Datuk (Prof) A. Rahman @ Omar bin Abdullah 3/4 75%
Dato’ Ismail @ Mansor bin Said 2/4 50%
2. Place, date and time of Meeting
The Tenth Annual General Meeting of the Company will be held at Dillenia & Eugenia Room, Ground Floor, SIME Darby Convention Centre, 1A,
Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, 21 June 2007 at 10.00 am.
3. Directors who are seeking for re-election or re-appointments at the 10th Annual General Meeting of the Company
The Directors who are offering themselves for re-election at the Annual General Meeting of the Company are as follows:-
(i) Dato’ Sri Haji Wan Zaki bin Haji Wan Muda
(ii) Dato’ Haji Mustaffa bin Mohamad
Details of Directors are set out on pages 12 to 15 of this Annual Report and their securities holdings in the Company are set out in the Analysis of
Shareholdings on page 123.
Excellence in corporate
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Corporate Information
BOARD OF DIRECTORS
Dato’ Sri Haji Wan Zaki Bin Haji Wan Muda
Raja Dato’ Seri Aman Bin Raja Haji Ahmad 1. Raja Dato’ Seri Aman Bin Raja Haji Ahmad (Independent Non-Executive Chairman)
Dato’ Wan Zakariah Bin Haji Wan Muda 2. Dato’ Sri Haji Wan Zaki Bin Haji Wan Muda (Executive Vice Chairman)
From left to right 3. Dato’ Wan Zakariah Bin Haji Wan Muda (Managing Director)
4. Dato’ Haji Mustaffa Bin Mohamad (Executive Director)
5. Dato’ W Zulkifli Bin Haji W Muda (Executive Director)
6. Datuk (Prof.) A Rahman @ Omar Bin Abdullah (Independent, Non-Executive Director)
7. Dato’ Ismail @ Mansor Bin Said (Independent Non-Executive Director)
AUDIT COMMITTEE
1. Raja Dato’ Seri Aman Bin Raja Haji Ahmad (Chairman, Independent Non-Executive Chairman)
2. Dato’ Sri Haji Wan Zaki Bin Haji Wan Muda (Member, Executive Vice Chairman)
3. Dato’ Ismail @ Mansor Bin Said (Member, Independent Non-Executive Director)
COMPANY SECRETARIES
1. Bahari bin Johari (LS 0008773)

2. Seuhailey binti Shamsudin @ Azraain (MAICSA 7046575)
3. Lim Ming Toong (MAICSA 7000281)
REGISTERED OFFICE PRINCIPAL BANKERS
Mezzanine Floor, 8A, Jalan Sri Semantan Satu Affin Bank Berhad
Damansara Heights, 50490 Kuala Lumpur AmInvestment Bank Berhad
Tel: 03-2094 1888 Fax: 03-2094 7673 CIMB Bank Berhad
HSBC Bank Malaysia Berhad
Kuwait Finance House (Malaysia) Berhad
REGISTRAR United Overseas Bank (Malaysia) Bhd
Mega Corporate Services Sdn Bhd

Level 15-2, Faber Imperial Court AUDITORS
Jalan Sultan Ismail, 50250 Kuala Lumpur
Tel: 03-2692 4271 Fax: 03-2732 5388 Moore Stephens
Chartered Accountants
8A, Jalan Sri Semantan Satu
Damansara Heights, 50490 Kuala Lumpur
STOCK EXCHANGE
Main Board of Bursa Malaysia
Dato’ Ismail @ Mansor Bin Said

Dato’ Haji Mustaffa Bin Mohamad
Dato’ W Zulkifli Bin Haji W Muda
Datuk (Prof.) A Rahman @ Omar Bin Abdullah
From left to right

Corporate Structure
Company No. 432768-X
CONSTRUCTION & PROPERTIES OVERSEAS INVESTMENT

Ahmad Zaki Sdn Bhd 100% AZRB Construction (India) Pvt Ltd 100%
Kemaman Technology &
Industrial Park Sdn Bhd 60% AZRB International Ventures Sdn Bhd 100%
Fasatimur Sdn Bhd 50%
Ahmad Zaki Saudi Arabia Co Ltd 100%
BUNKERING SERVICES
Maxi Heritage Sdn Bhd 30%
Trend Vista Development Sdn Bhd 100%
Inter Century Sdn Bhd 100%
Astral Far East Sdn Bhd 100%
AZRB Machineries Sdn Bhd 100%
PLANTATION
PT Ichtiar Gusti Pudi 95%
QUARRY OPERATION
Tadok Granite Manufacturing Sdn Bhd 100%
Financial Highlights
Revenue Profit/(Loss) before
taxation
RM'000 RM'000
500 - 40 -
36,366
442,600
439,030
400 -
30 -
28,118
300 -
306,014
20 -
257,915
19,630
200 -
249,125
18,975
10 -
100 -
0- 0-
02 02
03 03
04 04
05 05
06 06
(4,117)
Shareholders’ Net tangible assets
funds per share
RM'000 Sen
150 - 300 -
136,420
122,177
120 - 240 -
120,960
240
198
111,704
105,434
90 - 180 -
178
176
153
60 - 120 -
30 - 60 -
0- 0-
02 02
03 03
04 04
05 05
06 06
Year Ended 31 December

2002 2003 2004 2005 2006
Group Five Year Summary RM’000 RM’000 RM’000 RM’000 RM’000
Revenue 439,030 306,014 257,915 249,125 442,600

Profit/(Loss) before taxation 19,630 18,975 (4,117) 28,118 36,366
Profit/(Loss) after taxation & minority interest 13,436 12,907 (11,747) 18,899 24,154
Paid up capital 46,301 66,306 66,710 66,710 66,710
Shareholders’ funds 111,704 122,177 105,434 120,960 136,420
Net tangible assets per share (sen) 240 178 153 176 198
Directors’ Profile
Raja Dato’ Seri Aman bin Raja Hj Ahmad

SPMP, DPMP, PJK, AMN
A Malaysian, aged 61, was appointed Chairman and Independent Non-Executive

Director and member of Audit Committee on 26th February 2004 and subsequently
assumed the Chairman of Audit Committee on 8th April 2004. He is also the Chairman
of Risk Management Committee and sits on the Remuneration and Nomination
Committee as an ordinary member.
He is a Certified Public Accountant (CPA), a member of Malaysian Institute of

Accountants (MIA) and a Fellow of the Institute of Chartered Accountant of England and
Wales (ICAEW). He held various positions in Maybank Group from 1974 to 1985 prior to
joining Affin Bank Berhad in 1985 as Executive Director. He left Affin Bank in 1992 to join
Perbadanan Usahawan Nasional Berhad as Chief Executive Officer for 2 years before his
appointment as Chief Executive Officer of Affin Bank Berhad.
He is also a Director of Affin Holdings Berhad and Tomei Consolidated Berhad (a

company listed on the Main Board of Bursa Malaysia) and sits on the board of Affin
Merchant Bank Berhad.
During the financial year ended 31 December 2006, he attended four out of four Board
meetings held.
Notes:
Family Relationship
Except for Dato’ Sri Haji Wan Zaki bin Haji Wan Muda, Dato’ Wan Zakariah bin Haji Wan Muda and Dato’ W Zulkifli
bin Haji W Muda who are brothers, none of the other Directors are related to one another, nor with any substantial
shareholders.
Conflict of Interest
Save as disclosed in the related party transactions on pages 109 to 110 (note 44) of this Annual Report, none of
the other Directors have any conflict of interest with the Company during the financial year.
Convictions for Offences

None of the Directors have been convicted of any offence (excluding traffic offences) within the last 10 years.
Directors’ Profile (cont’d)

Dato’ Sri Haji Wan Zaki bin Haji Wan Muda
SSAP, SIMP, DPMT, PPN, PJK
A Malaysian, aged 58, was appointed the Executive Vice Chairman of AZRB on 24 March
1999. He subsequently held the post of Executive Chairman from 1 March 2000 and was
redesignated as Executive Vice Chairman of AZRB on 26 February 2004. He is presently
the Chairman of Remuneration Committee and an ordinary member of the Audit
Committee and Risk Management Committee.
He is the founding member of AZSB. Dato’ Sri Haji Wan Zaki began his working career in
1971 as a Financial Assistant with Syarikat Permodalan Pahang Bhd, a Pahang state-
owned company. In 1973, he joined Perkayuan Pahang Sdn Bhd as a Financial Assistant
and Marketing Officer and subsequently rose to the position of Marketing Manager. He
left Perkayuan Pahang Sdn Bhd in 1977 to join Pesaka Terengganu Bhd as its Operation
Manager where he served until 1979 prior to joining Pesama Timber Corporation Sdn
Bhd as Managing Director. He left Pesama Timber Corporation Sdn Bhd in 1984 to start
AZSB.
Dato’ Sri Haji Wan Zaki is also a Director of Chuan Huat Resources Bhd (a company listed
on the Second Board of Bursa Malaysia) and also sits on the boards of directors of
several private limited companies.
meetings held.
Dato’ Wan Zakariah bin Haji Wan Muda

DSSA
A Malaysian, aged 47, was appointed an Executive Director of AZRB on 24 March 1999
and subsequently assumed the post of Managing Director of AZRB with effect from 1
January 2003. He is presently the Chairman of the Establishment Committee and sits on
the Remuneration Committee as an ordinary member.
He holds a Bachelor of Science (Quantity Surveying) degree which he obtained in 1986

from the Thames Polytechnic, United Kingdom. He joined AZSB in 1986 as a Quantity
Surveyor and was appointed a Director of AZSB in 1994. In 1996, he was promoted to the
position of Managing Director of AZSB which he held until 6 February 2003.
He does not hold directorship in any other public companies but sits on the boards of
directors of several private limited companies.
meetings held.

Dato’ Haji Mustaffa bin Mohamad
DPMT, PJK
A Malaysian, aged 56, was appointed an Executive Director of AZRB on 24 March 1999
and is an ordinary member of the Establishment Committee.
He obtained his Bachelor of Law (Honours) degree from the University of London,
England in 1976, and was called to the English Bar at Lincolns Inn in 1981. In 1985 he
obtained a Post Graduate Diploma in Port and Shipping Administration from the
University of Wales, Institute of Science and Technology, Cardiff. He is also a member of
the Chartered Institute of Transport (United Kingdom) since 1986. In 1993 he was
awarded a Diploma in Syariah Law and Practice by the International Islamic University,
Malaysia. He was with Terengganu State Economic Development Corporation, serving in
various capacities from 1977-1985 prior to joining ICSB as Managing Director in 1993.
From 1985-1993 he served as the General Manager of Pangkalan Bekalan Kemaman Sdn
Bhd and concurrently as the Executive Director of Jasa Merin (M) Sdn Bhd. These
companies are directly and solely involved in the provision of infrastructure and support
services to the oil and gas industry off the shores of Peninsular Malaysia. He is also a
Director of AZSB and AFE.
During the financial year ended 31 December 2006, he attended three out of four Board
meetings held.
Dato’ W Zulkifli bin Haji W Muda

DIMP
A Malaysian, aged 45, was appointed a Non-Executive Director on 2 January 1999 and
subsequently redesignated as the Executive Director with effect from 1 March 2003. He
sits on the Establishment Committee as an ordinary member.
He holds a Bachelor of Science (Civil Engineering) degree which he obtained in 1985

from the University of Southern Illinois, United States of America. He began his career
with AZSB as a Project Manager in 1985. He was promoted to the position of Executive
Director (Operations) of AZSB in 1996 and subsequently became the Managing Director
of AZSB effective from 7 February 2003.
meetings held.

Datuk (Prof.) A Rahman @ Omar bin Abdullah
PJN, DPMT, JSM, SMT, AMN
A Malaysian, aged 61, was appointed an Independent Non-Executive Director on 1

January 2003. He presently sits on the Remuneration Committee as an ordinary member.
He holds a Diploma in Quantity Surveying from Thames Polytechnic, London, United
Kingdom, and an MSc in Construction Management from the Herriot-Watt University,
Scotland. He also holds fellowships with The Royal Institute of Chartered Surveyors (UK)
and the Institute of Surveyors Malaysia, as well as Professional Membership with The
Chartered Institute of Building of UK.
Datuk A Rahman was the founding CEO of the Construction Industry Development Board
(CIDB) Malaysia, a post which he held from 1995 to the year 2002, after which he held the
post of Chairman of CIDB until December 2006. Prior to CIDB, Datuk A Rahman started his
career in the Public Works Department (PWD) where he served for 25 years. His last post in
the department was the Deputy Director General of PWD. In 1992, he was accorded an
Honorary Professor by the University Teknologi Malaysia. Among other appointments, he
has also been President of the Institute of Surveyors, Malaysia, Chairman of the Technical
Committee on the Development of the Professional Institute for Baitulmal Wilayah
Persekutuan and the President of the Board of Quantity Surveyors, Malaysia.
During the financial year ended 31 December 2006, he attended three out of four Board
meetings held.
Dato’ Ismail @ Mansor bin Said

DPMT, AMN
A Malaysian, aged 58, was appointed a Non-Executive Director on 26 May 1997 and
subsequently assumed the responsibility as an Independent Director. He presently sits on
the Audit Committee, Risk Management Committee and Remuneration Committee as an
ordinary member and is the Chairman of the Nomination Committee.
He holds a Bachelor of Economics degree from the University of Malaya. He was a Member
of Parliament from 1978-1995, Parliamentary Secretary of the Ministry of Youth and Sports
(1990-1995) and the Chairman of MARA from 1987 to 1990. He was also appointed by
Parliament as the Chairman of the Public Accounts Committee where he served from 1985
to 1990. He was also a Director of Sistem Televisyen Malaysia Berhad from 1995 to 2000
and the President of Institut Usahawan Bumiputera from 1988 to 2002.
Dato Ismail is also a director of Lion Diversified Holdings Berhad (a company listed on
the Main Board of the Bursa Malaysia) and also sits on the board of directors of a private
limited company.
During the financial year ended 31 December 2006, he attended two out of four Board
meetings held.
Statement of
Internal Control
The Board of Directors is responsible for the Group’s system of internal control and for reviewing its integrity and adequacy. The system of internal
control covers, inter alia, internal audit, financial, operational, compliance controls including risk management. The system is designed to monitor,
identify and manage risks in the pursuit of the Group’s business objectives, safeguard shareholder’s investments and the Group’s assets.
However, it should be noted that any system can only provide reasonable and not absolute assurance against material misstatement or loss. The concept
of reasonable assurance recognizes that the cost of control procedures is not to exceed the expected benefits.
RISK MANAGEMENT
Pursuant to Best Practices Provision AAI, the Board is expected, in the discharge of its stewardship responsibilities, to identify principal risks and ensure
implementation of appropriate systems to manage these risks. Enterprise Risk Management (ERM) is a structured and disciplined approach aligning
strategy, processes, people, technology and knowledge with the purpose of evaluating and managing the uncertainties the Group faces as it creates
value. This project involves a series of workshops with the staff and management and interviews with the top management. Progressive meetings were
done by the various Risk Management Committees to address the current risk management issues. This risk management exercise is on going and
evolved as the Group’s expand into new projects, domestic and international and new business ventures.
The following are the key principles of the ERM framework:
• To facilitate a systematic and consistent identification of key business risks for AZRB and AZSB
• To facilitate an objective assessment of key controls in managing the relevant business identified
• To enhance the documentation and communication of risks and promote awareness of risk management
• To develop a framework to monitor and report risks and controls, with the assignment of responsibilities within the pilot companies (AZRB and
AZSB) for managing risks; and
• Assist in establishing an appropriate risk management committee/function
The Board acknowledges that considerable effort and commitment is required to implement the risk management framework within the Group. To
monitor and approve the Group Risk Management Strategy, Policy and Guidelines, a Risk Management Committee of the Board (Board Risk Committee)
had been established. This Board Committee, in ensuring an effective risk management framework is adhered to had established another risk committee
at the management level. In relation to that, a risk management committee (RMC) was formed at the management level. The RMC is responsible for
continuously coordinating the implementation of the risk management framework and reporting to the Board Risk Committee on an aggregated view
of principal risks inherent in all operating units and companies within the Group, and their respective risk response plans to manage these risks. In short,
the RMC is primarily responsible for review of the risk management processes.
To ensure an ongoing implementation of risks management and updates of risks registers, the RMC had appointed the risk management unit (RMU) at
business unit level. RMU members are nominated employees from Operations, Finance, Human Resources, Information Technology (IT) and a designated
Risk Officer. The RMU is currently headed by the Operations Director.
Amongst others, the roles and responsibilities of the RMU include:
• Identify and communicate to the RMC the critical risks (present or potential) the business unit faces, their changes and the management action
plans to manage the risks
• Communicate risk management requirements in the business units
• Review risk profiles and performance for the business unit; and
• Review and update the business unit’s risk management methodologies applied, specifically those related to risk identification, measuring,
controlling, monitoring and reporting
Statement of Internal Control (cont’d)
CONTROL ACTIVITIES AND PROCEDURES
Being part of the control tools, the Board reviews and approves annual budget prepared by the management. The budget is then compared to the actual
performance of the Group and any material variances will be addressed in detail by the Board and delivered to management for immediate actions.
Performance appraisals are being carried out annually to gauge the employee’s performance for any confirmation, promotion, transfer and annual
increment exercise. Policies and procedures with regards to employee’s code of conducts and benefits are properly set out in the employee handbook
for employees to adhere. A Committee has also been established by the Board to look after staff’s welfare, grievances and any disciplinary matters.
In line with the newly adopted risk based internal auditing, the Audit Committee had approved a new audit plan for the year 2006 after having carried
out the risk assessment exercise. The new audit plan is derived after evaluating the effectiveness of the Group’s system of internal control and mitigation
of risks including financial, operational and compliance risks. The audit plan is directed to focus in areas of significant risks to the Group. The plan is
formulated in order of priority, areas of high and significant risk critical to the Group’s performance and conducts independent risk based audits to
ensure that the system of internal controls developed to mitigate those risks identified is effective and working satisfactorily. This yearly audit plan will
give the opportunity to structure the audit plan in accordance with the changes in risks the Group may be exposed to given the fact of the objectives,
the industry and the organization itself that are continuously evolving.
INFORMATION AND COMMUNICATION
The Board has received and approved periodic financial and operational progress reports detailing the overview performance of divisions within the
Group including the material related parties’ transactions. The Board also received progressive reports from the investment committee which studies
and makes proposals on any viable business opportunities the Group intends to undertake. Major corporate proposals are tabled and deliberated before
such proposals are being endorsed by the Board for implementation.
MONITORING
The Board places importance on maintaining a sound system of internal control and is responsible for reviewing the effectiveness of the system. The
need for proper risk assessment which is a critical component of a sound internal control system is essential. This is achieved through the reports by the
Audit Committee at periodic Board meetings. The Audit Committee which is chaired by an independent non-executive director reviews the internal
control system findings of the internal auditors and external auditors and accordingly endorses appropriate remedial action. The Audit Committee which
has engaged external party on a co-sourcing basis with the in-house internal auditors to perform the internal audit function based on the approved
audit plan has reviewed and made appropriate recommendations to the Audit Committee in areas like procurement, tendering, project management,
contract management, human resource audit, business development audit and finance audit. In line with the Group’s expansion, new audit areas have
been included in the yearly audit cycle such as Plantation and Bunkering.
Reviews were conducted on these areas and the results of these reviews including comments from the management were reported to the Audit
Committee, who in turn reports to the Board. Follow up reviews are carried out by the Group’s Internal Auditor to ensure implementation on corrective
actions agreed by the management. At present, those internal control weaknesses identified during the financial year under review are being addressed
by the management and has not in any way resulted in any material loss to the Group for the financial year ended 31 December 2006 which require
disclosure in the Group’s financial statement.
The Board remains committed to ensure that appropriate remedial measures are taken to address any control weaknesses that become evident, and
that every effort is put into place to further strengthen the internal control system to protect the interests of its shareholders.
This statement of internal control is made in accordance with the resolution of the Board of Directors dated 24 April 2007.
Corporate Governance
Statement
The Board of Directors of Ahmad Zaki Resources Berhad is committed towards the adoption of principles and best practices as enshrined in the
Malaysian Code of Corporate Governance throughout the Group. It is recognized that the adoption of the highest standards of governance is imperative
for the enhancement of stakeholders value. The Group has complied with the Best Practices set out in Part 2 of the Code throughout the financial year
unless otherwise noted.
The Board is pleased to present the following report on the application of principles and compliance with best practices as set out in the Malaysian Code
of Corporate Governance.
SECTION 1 : DIRECTORS
(a) Composition of the Board
The Board is currently led by an Independent Non Executive Chairman and has seven (7) members comprising four (4) Executive Directors and
three (3) Independent Non-Executive Directors. The Board comprises a balance of members with experience in business and finance required for
an effective and independent decision making at the Board level. The Board considers its current size adequate given the present scope and nature
of the Group’s business operations. A brief description on the background of each Director is presented on pages 12 to 15 of the Annual Report.
The presence of three (3) Independent Directors shall provide unbiased and independent views and judgment in the decision making process at
the Board level and ensure that no significant decisions and policies are made by any individual and that the interest of minority shareholders are
safeguarded.
The positions of the Chairman and the Managing Director are held by two individuals. There is a clear division of responsibilities between the
Chairman and the Managing Director which will ensure a balance of power and authority. Generally, the Chairman is responsible for the orderly
conduct and working of the Board while the Managing Director is responsible for the day to day management of the Group as well as to
implement policies and strategies adopted by the Board. The Board exercises its responsibilities collectively.
All the Directors have given their undertaking to comply with the Bursa Malaysia Exchange Berhad (“BMEB”) Listing Requirements and the
Independent Directors have confirmed their independence in writing.
(b) Board Responsibilities and Supply of Information
The Board recognizes its responsibilities amongst others include six principal responsibilities set out in Best Practice AAI of the Code in discharging
its stewardship role for its shareholders.
The Board has laid down formal schedule of matters specifically reserved to it for decision to ensure that the direction and control of the Group is
firmly in its hands. The Managing Director is responsible to ensure that the management adhered to these guidelines and policies set by the Board.
The Directors have full access to information pertaining to all matters requiring the Board’s decision. Prior to any Board meeting, all Directors shall
be furnished with proper board papers which contained necessary information for each of the meeting agenda in advance to enable the Director
to obtain further explanations, where necessary, in order to be briefed properly before the meeting. Matters to be discussed are not limited to
financial performance of the Group but also to address major investment decisions as well as operational issues and problems encountered by
the Group.
The Board has also set out agreed procedures for the Directors to take independent professional advice at the Company’s expense, if necessary.
All Directors have access to the advice and services of the Company Secretary who ensures compliance with statutory obligations, Listing Rules
of the BMEB or other regulatory requirements. The removal of the Company Secretary shall be a matter for the Board as a whole.
Corporate Governance Statement (cont’d)
Besides the Audit Committee which was set up on 24 March 1999, several Board committees were established subsequently to assist the Board
in discharging its duties and responsibilities. All committees have written terms of reference and procedures duly endorsed by the Board to
examine a particular issue and report back to the Board with a recommendation. Chairman of the committee concerned will report to the Board
on matters dealt by the said committee which will be incorporated as part of the Board minutes.
The additional committees set up are Nomination Committee, Remuneration Committee, Establishment Committee and the Risk Management
Committee having the following primary functions and members:
NOMINATION COMMITTEE
Primary function
The Nomination Committee was established on 16 January 2002. The Nomination Committee is primarily responsible for constantly assessing the
overall effectiveness of the Board and Board committees and make recommendation to the Board for any new candidate as Board member or
Board committee member. In addition, the Nomination Committee also performs introduction briefing for the new Board members with regard to
the overall operations and corporate objectives of the Group and continues to ensure that the Board members undergo the necessary Mandatory
Accreditation Programme (“MAP”) & Continuous Education Programme (“CEP”) prescribed by the BMEB.
The actual decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of the
Nomination Committee.
Member
The present members of the Nomination Committee of the Company are:
(i) Dato’ Ismail @ Mansor bin Said (Independent Non-Executive Director, Chairman)
(ii) Raja Dato Seri Aman bin Raja Haji Ahmad (Independent Non-Executive Chairman, Member)
(iii) Datuk (Prof.) A. Rahman @ Omar bin Abdullah (Independent, Non-Executive, Member)
The Company Secretary is the secretary of the Nomination Committee.
REMUNERATION COMMITTEE
Primary function
The Remuneration Committee was established on 20th August 2001. Its primary function is to set the policy framework and recommend to the
Board on remuneration packages and benefits extended to the Directors, drawing from outside advice as necessary to ensure that the
remuneration is sufficient to attract and retain the Directors needed to run the Company successfully.
The determination of the remuneration package for Non-Executive Directors shall be a matter for the Board as a whole. The Director concerned
shall abstain from deliberations and voting on decisions in respect of his individual remuneration package.
Member
The present members of the Remuneration Committee of the Company are:
(i) Dato’ Sri Haji Wan Zaki bin Haji Wan Muda (Executive Vice Chairman, Chairman)
(ii) Raja Dato Seri Aman bin Raja Haji Ahmad (Independent Non-Executive Chairman, Member)
(iii) Dato’ Wan Zakariah bin Haji Wan Muda (Managing Director, Member)
(iv) Datuk (Prof.) A Rahman @ Omar bin Abdullah (Independent Non-Executive Director, Member)
(v) Dato’ Ismail @ Mansor bin Said (Independent Non-Executive Director, Member)
The Company Secretary is the secretary of the Remuneration Committee.
ESTABLISHMENT COMMITTEE
Primary function
The Establishment Committee was established on 16 January 2002. The main purpose for setting up this committee is to formulate policies and
execution of the whole spectrum of Human Resource Management for the Group on behalf of the Board as well as to formulate and implement
Employee Share Option Scheme (“ESOS”) under the direction of the Board, in accordance with the rules and regulations determined by the
authorities.
Member
The present members of the Establishment Committee of the Company are:
(i) Dato’ Wan Zakariah bin Haji Wan Muda (Managing Director, Chairman)
(ii) Dato’ Haji Mustaffa bin Mohamad (Executive Director, Member)
(iii) Dato’ W Zulkifli bin Haji W Muda (Executive Director, Member)
The Assistant General Manager, Human Resource is the secretary of the Establishment Committee.
The Establishment Committee held two meetings during the financial year ended 31 December 2006.
RISK MANAGEMENT COMMITTEE (BOARD)
Primary Function
The Board Risk Committee (BRC) was established on 18th August 2004 with the primary responsibility of ensuring an effective functioning of the
integrated risk management function within the organization. The BRC oversees and monitor the overall risks impacting the Group. It is being
chaired by the Group Chairman who is also an Independent Director to ensure independence from management as it is the BRC that reviews and
approves risk management policies and risk tolerance limits.
The BRC specifically is to define, sponsor and support all risk management activities within AZRB Group inclusive of its associated companies,
significant joint ventures and where management responsibility is vested to AZRB. Apart from setting and approving the Group’s Risk
Management Strategy, Policy and Guidelines, the BRC also receives and review reports such as Statement on Internal Control on risk management
issues to ensure that critical and significant risks are being addressed and mitigated by proper action plans.
The members of the Committee are as follows:
(i) Raja Dato’ Seri Aman bin Raja Haji Ahmad (Independent Non-Executive Chairman, Chairman)
(ii) Dato’ Ismail bin Said (Independent Non-Executive Director, Member)
(iii) Dato’ Sri Haji Wan Zaki bin Haji Wan Muda (Non-Independent Executive Vice Chairman, Member)
(c) Board Meetings
During the financial year ended 31 December 2006, four (4) meetings were held. The date and details of attendance of each Board meeting held
are as follows:-
Attendance by Directors
Date of meeting Venue Total Board Members (Percentage Attendance)
Independent Non-Independent
25 January 2006 4th Floor, Lot 88, Jalan Gombak 6 2 (67%) 4 (100%)
53100 Kuala Lumpur
28 February 2006 4th Floor, Lot 88, Jalan Gombak 4 1 (33%) 3 (75%)
53100 Kuala Lumpur
25 August 2006 4th Floor, Lot 88, Jalan Gombak 7 3 (100%) 4 (100%)
53100 Kuala Lumpur
21 November 2006 4th Floor, Lot 88, Jalan Gombak 7 3 (100%) 4 (100%)
53100 Kuala Lumpur
The details of attendance of each Board member in the Board meetings held during the financial year ended 31 December 2006 is set out in the
Statement Accompanying Notice of AGM on page 6 of this Annual Report.
(d) Appointment to the Board
In previous years, the process of assessing existing Directors and identifying, recruiting, nominating, appointing and orientating new directors
were performed by the Board. In compliance with the best practices recommended by the Code, these functions have been delegated to
Nomination Committee with effect from 16 January 2002.
(e) Directors’ Remuneration
Prior to the establishment of Remuneration Committee on 20 August 2001, the remuneration of each Director, are determined by the Board, as a
whole. The Directors do not participate in discussion and decision of their own remuneration.
Fees payable to Directors by the Company are approved by the shareholders at the AGM, based on the recommendation of the Board.
Details of the remuneration of the Directors of the Company received from the Group are as follows:-
Salaries* Allowances Fees Bonuses Benefits-in-kind Total

RM RM RM RM RM RM
Executive Directors 1,769,434 21,200 888,145 273,602 658,620 3,611,001

Non-Executive Directors – 14,500 390,000 – 42,250 446,750
* Salaries inclusive of statutory employer contributions to the Employees’ Provident Fund.

The number of Directors whose remuneration falls into the following bands:-
RANGE OF REMUNERATION EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS
Below RM50,000 – 1
RM50,001- RM150,000 – –
RM150,001 - RM200,000 – 1
RM200,001 - RM250,000 – 1
RM250,001 - RM600,000 – –
RM600,001 - RM650,000 1 –
RM650,001 - RM750,000 – –
RM750,001 - RM800,000 1 –
RM800,001 - RM850,000 – –
RM850,001 - RM900,000 1 –
RM900,001 - RM1,300,000 – –
RM1,300,001 - RM1,350,000 1 –
(f) Directors’ Training
Every Director of the Company undergoes continuous training to equip himself to effectively discharge his duties as a Director and for that purpose
he ensures that he attends such training program as prescribed by the BMEB from time to time. The Company also provides briefings for new
recruits to the Board, to ensure they have a comprehensive understanding on the operations of the Group and the Company.
All Directors have attended the MAP prescribed by the BMEB and have been attaining CEP prescribed by the BMEB from time to time.
In addition, during the year under review, several Directors of the company have attended external training programmes to further enhance their
professionalism and knowledge. The Directors are encouraged to attend briefings and seminars to keep abreast with latest developments in the
industry.
(g) Re-election of Directors
In accordance with the Company’s Articles of Association, one-third of the Directors, including Managing Director, shall retire from office by
rotation each year and all Directors are subject to retire at least once in every three years. Retiring Directors may offer themselves for re-election
at the AGM. Director who is appointed by the Board during the year is required to retire and seek re-election by shareholders at the following AGM
held following his appointment. Director over seventy (70) years of age is required to submit himself for re-appointment annually in accordance
with Section 129(6) of the Companies Act, 1965.
SECTION 2 : RELATIONSHIP WITH SHAREHOLDERS
The Board maintained an effective communications policy that enables both the Board and the management to communicate effectively with its
shareholders, stakeholders and the public. The policy effectively interprets the operations of the Group to the shareholders and accommodates feedback
from shareholders, which are factored into the Group’s business decision.
The Senior Independent Non-Executive Director, to whom concerns may be conveyed was held by Dato’ Mohamed bin Awang until 31 December 2003.
Subsequently, the role was assumed by Dato Ismail bin Said with effect from 26 February 2004.
The Board communicates information on the operations, activities and performance of the Group to the shareholders, stakeholders and the public
through the following:-
(i) the Annual Report, which contains the financial and operational review of the Group’s business, corporate information, financial statements, and
information on audit committee and Board of Directors;
(ii) various announcements made to the BMEB, which includes announcement on quarterly results; and
(iii) the Company website at http: //www. azrb.com.
The AGM serves as an important means for shareholders communication. Notice of the AGM and Annual Reports are sent to shareholders twenty one
[21] days prior to the meeting. At each AGM, the Board presents the performance and progress of the Group and provides shareholders with the
opportunity to raise questions pertaining to the Group. The Chairman and the Board will respond to the questions raised by the shareholders during the
AGM.
The Board has ensured each item of special business included in the notice of meeting will be accompanied by an explanatory statement on the effects
of the proposed resolution.
SECTION 3 : ACCOUNTABILITY AND AUDIT
(a) Financial Reporting
The Board which is assisted by Audit Committee aims to present a balanced and understandable assessment of the Group’s position and prospect
through the annual financial statements and quarterly announcements of results to the BMEB.
The Directors are responsible to ensure the annual financial statements are prepared in accordance with the provisions of the Companies Act,
1965 and applicable approved accounting standards in Malaysia.
A statement by the Directors of their responsibilities in preparing the financial statements is set out separately on page 24 of this Annual Report.
(b) Internal Control and Risk Management
The Statement of Internal Control is set out on pages 16 to 17 of this Annual Report.
(c) Relationship with the External Auditors
Through the Audit Committee of the Board, the Board has established formal and transparent arrangements for maintaining an appropriate
relationship with the Group’s external auditors. The role of the Audit Committee in relation to the external auditors is stated in the Audit
Committee Report.
This Statement of Corporate Governance is made in accordance with the resolution of the Board of Directors dated 24 April 2007.
Statement of Directors’ Responsibilities

in Preparing the Financial Statements
The Directors acknowledged their responsibilities as required by the Companies Act, 1965 to prepare the financial statements for each financial year so
as to give a true and fair view of the state of affairs of the Group and the Company as at end of the financial year and of the results and cash flow of
the Group and the Company for the financial year then ended.
In the preparation of the financial statements, the Directors have:
– adopted suitable accounting policies and apply them consistently;

– made judgments and estimates that are reasonable and prudent;
– ensured that applicable approved accounting standards have been complied with; and
– prepared the financial statement on the going concern basis unless it is no longer appropriate to presume that the Company will continue in
business due to unavailable resources.
The Directors are responsible for ensuring that proper accounting and other records are kept which disclose with reasonable accuracy at any time the
financial position of the Group and the Company and to enable them to ensure that the financial statements comply with the Companies Act, 1965. The
Directors are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for prevention and detection of fraud and
other irregularities.
This Statement of Directors’ responsibilities is made in accordance with the resolution of the Board of Directors dated 24 April 2007.
Report of the
Audit Committee
COMPOSITION OF THE AUDIT COMMITTEE / MEMBERSHIP
The present members of the Audit Committee of the Company are:
(i) Raja Dato Seri Aman bin Raja Haji Ahmad (Independent Non-Executive Chairman, Chairman)
(ii) Dato’ Ismail @ Mansor bin Said (Independent Non-Executive Director, Member)
(iii) Dato’ Sri Haji Wan Zaki bin Haji Wan Muda (Non-Independent Executive Vice Chairman, Member)
TERMS OF REFERENCE OF AUDIT COMMITTEE
Terms of Membership
(i) The Committee shall be appointed by the Board of Directors amongst its members and consist of at least three members, of whom majority are
Independent Directors.
(ii) The Committee shall include one member who is a member of the Malaysian Institute of Accountants (“MIA”); or if he is not a member of the
MIA, he must have at least 3 years’ working experience and he must have passed the examinations specified in Part I of the 1st Schedule of the
Accountants Act 1967; or he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants
Act 1967.
(iii) In the event of any vacancy in the Committee resulting in the non-compliance with Paragraph 15.10 of the Listing Requirements of Bursa
Malaysia, the Board shall appoint a new member within three months.
(iv) The Board of Directors shall review the term of office and the performance of the Committee and each of its members at least once in every three years.
(v) No alternate Director shall be appointed as a member of the Committee.
Meetings and Quorum of the Audit Committee
(i) The Committee shall meet at least 4 times a year and the quorum shall be at least two persons with majority being Independent Directors. The details
of the attendance of the meetings are disclosed under the heading ‘Attendance of Audit Committee Meetings’ on page 27 of this Annual Report.
(ii) The Company Secretary shall act as secretary of the Committee.
(iii) The Audit Committee may require the attendance of any management staff from the Finance/Accounts Department or other departments deemed
necessary together with a representative or representatives from the external auditors.
(iv) The Committee shall meet with the external auditors at least once a year without Executive Board members present. Upon the request of the
external auditors, the Chairman of the Audit Committee shall convene a meeting of the committee to consider any matter the external auditors
believe should be brought to the attention of the Directors or shareholders.
Functions of the Audit Committee
The duties and responsibilities of the Audit Committee shall include the following:-
(i) To consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal;
(ii) To discuss with the external auditors before the audit commences, the nature and scope of the audit;
(iii) To discuss with the external auditors on the evolution of the system of internal controls and the assistance given by the employees to the external auditors;
(iv) To review and report to the Board if there is reason (supported by grounds) to believe that the external auditors is not suitable for reappointment;
(v) To review the quarterly and year-end financial statements of the Board, focusing particularly on:
– Any changes in the accounting policies and practices;
– Significant adjustments arising from the audit;
– The going concern assumption; and
– Compliance with accounting standards and other legal requirements.
Report of the Audit Committee (cont’d)
(vi) To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence
of the management where necessary);
(vii) To review the external auditor’s management letter and the management’s response;
(viii) To do the following where there is an internal audit function:
– Review the adequacy of the scope, functions and resources of the internal audit function, and that it has the necessary authority to carry out
its work;
– Review the internal audit program and results of the internal audit process and where necessary ensure that appropriate action is taken on
the recommendations of the internal audit function;
– Review any appraisal or assessment of the performance of members of the internal audit function;
– Approve any appointment or termination of senior staff members of the internal audit function; and
– Inform itself of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons
for resigning.
(ix) To consider any related party transactions that may arise within the Company or the Group;
(x) To consider the major findings of internal investigations and the management’s response;
(xi) To consider other topics as defined by the Board.
Rights of the Audit Committee
The Audit Committee has ensured that, wherever necessary and reasonable for the performance of its duties, in accordance with a procedure
determined by the Board:-
(i) have authority to investigate any matter within its terms of reference;
(ii) have the resources which are required to perform its duties;
(iii) have full and unrestricted access to any information pertaining to the Company;
(iv) have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity (if any);
(v) be able to obtain independent professional or other advice; and
(vi) be able to convene meetings with the external auditors, excluding the attendance of the executive members of the committee, whenever deemed
necessary.
Procedures of Audit Committee
The Audit Committee regulates its own procedures:-
(i) the calling of meetings;

(ii) the notice to be given of such meetings;
(iii) the voting and proceedings of such meetings;
(iv) the keeping of minutes; and
(v) the custody, protection and inspection of such minutes
Review of the Audit Committee
The Board of Directors has ensured that the term of office and performance of the Audit Committee and each of its members are being reviewed at least
once in every three years to determine whether the Audit Committee and members have carried out their duties in accordance with their terms of
reference.
Report of the Audit Committee (cont’d)
Attendance of Audit Committee Meetings
The details of attendance of each Audit Committee meeting held during the financial year ended 31 December 2006 are as follows:-
Date of meeting Total committee members Attendance by committee members

(Percentage attendance)
Independent Non-Independent
24 February 2006 3 2 (100%) 1 (100%)

24 April 2006 3 2 (100%) 1 (100%)
25 May 2006 3 2 (100%) 1 (100%)
10 August 2006 3 2 (100%) 1 (100%)
25 August 2006 3 2 (100%) 1 (100%)
21 November 2006 3 2 (100%) 1 (100%)
The details of attendance of each Audit Committee member in the Audit Committee meetings held during the financial year ended 31 December 2006
are as follows:-
Name of Audit Committee member Total meetings attended by Audit Committee member % of Attendance
Raja Dato Seri Aman bin Raja Haji Ahmad 6/6 100%
Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 6/6 100%
Dato’ Ismail @ Mansor bin Said 6/6 100%
Activities Undertaken By Audit Committee
The activities of the Audit Committee during the financial year ended 31 December 2006 include the following:-
(i) review the Group’s year end audited financial statements presented by the external auditors and recommend the same to the Board for approval;
(ii) review the quarterly financial result announcements;
(iii) review audit plan of external auditors;
(iv) review related party transactions within the Group;
(v) review of internal audit reports on findings and recommendations in relation to weaknesses in the internal control system presented by the
internal auditors and discussed with management on corrective actions to be taken.
Other Information
Required by the Listing Requirements of Bursa Malaysia
SHARE BUY BACK
During the financial year, the Company did not engage in any share buyback arrangement.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
Save for the exercise of options pursuant to the Employees’ Share Option Scheme, the amount of which is disclosed in Note 43 of the Notes to the
Financial Statements, there were no other exercises of options during the financial year ended 31 December 2006.
During the financial year, the Company did not implement any Warrants or Convertible Securities.
AMERICAN DEPOSITORY RECEIPT (“ADR”) / GLOBAL DEPOSITORY RECEIPTS (“GDR”)
During the financial year, the Company did not sponsor any ADR/GDR programme.
SANCTIONS AND PENALTIES
Since the end of the previous financial year, there was no material sanction or penalty imposed by Company and its subsidiaries, directors or
management by the relevant regulatory bodies.
PROFIT GUARANTEE
The Company did not implement any corporate proposals to raise funds for the financial year ended 31 December 2006.
UTILISATION OF PROCEEDS FROM CORPORATE PROPOSALS
The Company did not implement any corporate proposals to raise funds for the financial year ended 31 December 2006.
STATEMENT OF VALUATION POLICY ON LANDED PROPERTIES
Landed properties held for long term investment purpose.
NON AUDIT FEES
There were no non-audit fees paid to the external auditors by the Company and its subsidiaries for the financial year ended 31 December 2006.
VARIATION IN RESULTS
There is no significant difference between the Audited and Unaudited Results released to the Bursa Malaysia in respect of the financial year ended 31
December 2006.
Other Information (cont’d)
MATERIAL CONTRACTS OR LOANS WITH RELATED PARTIES
Save as those disclosed in the following recurrent related parties transactions of a revenue in nature, there were no material contracts or loans entered
by the Company and its subsidiaries involved Directors’ and major shareholders’ interests either subsisting at the end of the financial year ended 31
December 2006 or entered into since the end of previous financial year.
RECURRENT RELATED PARTY TRANSACTIONS
The value of related party transactions entered by the Company and its subsidiaries during the financial year which have acquired the shareholder’s
mandate in the previous AGM are qualified as follows:-
Nature of the transactions with related party Entered by Period covered from Period covered from
1 January to 30 June 1 July to 31 December
of Year 2006 of Year 2006
RM’000 RM’000
a) Purchase of building materials from following

subsidiaries of CHRB:
i. Chuan Huat Industrial Marketing Sdn Bhd AZSB 5,053 9,258
b) Insurance premium paid/payable to ZHSB AZSB, ICSB and AZRB 163 202
c) Administrative charges paid/payable to ZHSB AZSB and ICSB 61 60
d) Rental of premises paid to

Dato’ Sri Haji Wan Zaki bin Haji Wan Muda AZSB 18 18
e) Accomodation charges paid/payable to RIM AZSB 2 7
f) Rental received/receivable from RIM AZSB 18 18
Relationship of the related parties:
i) Chuan Huat Resources Berhad (“CHRB”) Chuan Huat Resources Berhad, a company in which Dato’ Sri Haji Wan Zaki
bin Haji Wan Muda has substantial financial interest and is also a director.
ii) Residence Inn & Motels Sdn. Bhd. (“RIM”) A subsidiary to Zaki Holdings (M) Sdn. Bhd.
iii) Zaki Holdings (M) Sdn. Bhd. (“ZHSB”) Holding company of Ahmad Zaki Resources Berhad.
Environmental Management Activities

at Project Sites
HIGHLIGHTS OF OUR ENVIRONMENTAL PERFORMANCE FOR YEAR 2006
In our effort to further improve our environmental performance and in line with our company vision; to be a trusted industry player in delivering
commitment with excellence and high value of productivity, we have committed ourselves in embarking into achieving our company to be fully certified
with ISO 14001:2004 Environmental Management System (EMS) by end of Year 2007.
With the certification, we will be able to enhance our reputation in undertaking civil construction projects in both locally and internationally. With the
implementation of EMS in our organization, we anticipate that it will reduce the environmental risks in carrying out our business activities, meets our
legal obligation and enhancing our image as a responsible and reputable construction player practicing good corporate citizen.
In 2006, the environmental expenditure of the projects has been substantially allocated to meet the present demand in achieving environmental related
measures for improvements. The budgets which have been set aside for the implementation of environmental management plan in every project were
ranging from 5% to 7% of the total preliminary costs. The following projects are still in progress and are running in full steam in order to meet our
contractual obligations:-
1 Upgrading of Jitra-Kodiang Road Project

2 Upgrading of Kuantan-Pekan Road Project
3 Projek Menyiapkan Mahkamah Petaling Jaya
4 Upgrading of Subang Kelana Link Road Project
5 Projek Menyiapkan Masjid Putrajaya
6 Projek Menyiapkan Indoor Stadium Kuala Terengganu
Environmental management activities during the year are well demonstrated during the construction stages through our continuous improvement of
Environmental Management Plan for each of the project as outlined below:-
The Upgrading of Jitra-Kodiang Project
Once completed, it serves as a second link trunk road between Alor Setar North and Kangar, Perlis. The project is a dual two lane carriageway with total
length of 13 km. Major improvement of road systems is undertaken to cater for the growing demand of traffic generated from rapid development taking
place surrounding the corridor. Due to the fact that the road is located within the existing agricultural areas mainly paddy fields and irrigation networks
serving the needs for paddy farming, the sensitivity of environmental impact created by construction activities are paramount pertinent to avoid any
negative effects to the environment especially deterioration of river water quality which may also affect the existence of commercially river fish rearing
project carried out by Malaysian Agricultural Development Authority (MADA).
The Upgrading of Kuantan-Pekan Road Project
The construction of the project with total length of 37 km, involves large volume of earthworks and ground improvement works such as removal and
replacement of unsuitable materials with sand, earth embankment filling and prefabricated vertical drains for soil consolidation. The construction of
new bridges to replace the existing ones are major part of the contract and extra precaution measures has been identified in order to ensure that the
function of the Sungai Pahang, Sungai Belat, Sungai Jarau and Sungai Soi as important sources of drinking water be taken care of.
The alignment is also located on peat soil which easily catch fire, therefore there was no burning of construction waste been carried out but a systematic
rubbish disposal method has been used by transporting the materials to the approved dump sites. Earth drains were constructed along the sides of the
alignment to cater for the proper discharge of surface run off as well as surrounding streams affected by the construction activities.

at Project Sites (cont’d)
Upgrading of Subang Kelana Link Project
The project which involves the construction of new linkages to improve the connectivity of Subang Jaya road networks with Federal Higheway Route 2
acts as traffic dispersal scheme for congested Jalan Kewajipan road. The project is targeted to be completed in December 2008 and being constructed
along one of the busiest road in Subang Jaya i.e Jalan Kewajipan. Both residential and commercial buildings are abutting Jalan Kewajipan have added
to the complexity and the difficulty in ensuring that the project will not cause major environmental impact during and after the construction works.
During the construction stage, series of dialog session with residents were conducted regularly most importantly to disseminate information pertaining
to the activities that need to be carried out next to their properties that require their utmost cooperation and understanding since generally the
construction is for the benefit of all road users and Subang Jaya residents particularly. Our construction activities were tailored to the request and
suggestion mooted by residents.
Sufficient and effective noise barriers were proposed to be installed along noise sensitive areas after thorough study conducted by the appointed
consultant in order to ensure that there is no increase of noise levels due to the presence of new roads and elevated structures along the alignment.
Projek Mahkamah Petaling Jaya, Projek Masjid Putrajaya and Projek Indoor Stadium Kuala Terengganu
The projects are similar in nature, where involving the building construction works. The impacts to the environment mostly confined to the noise created
by construction activities such as piling works, concreting works and dust caused by the material being transported within the construction work area.
Projek Mahkamah Petaling Jaya is located right in the middle of congested development of other buildings and access road leading to the project site
is busy most of the time. The method of piling by using jack-in spun pile has been adopted to reduce the noise level generated during piling works and
hoarded by plastic sheets to ensure that the dust is only confined within construction site without affecting the adjacent commercial and residential
buildings.
Projek Masjid Putrajaya is being constructed by the side of the famous Putrajaya Lake and will become another tourist attraction once it is completed
in middle of 2008. The most significant environmental impact that needed to be seriously taken care of is the discharge of surface run off during
earthworks stage of the construction. Putrajaya Holding Berhad has imposed a strict rules and regulations pertaining to the protection of water quality
of the lake when there was no discharge of surface run off especially during site clearing and earthworks is allowed into the lake without taking any
proper treatment in controlling the level of suspended solid in the water. Earth bunds with silt traps were constructed and monitored regularly by our
personnel as well as our appointed consultant to ensure that its complied with the rules and regulations set by our client i.e Putrajaya Holding Sdn Bhd.
Projek Indoor Stadium Kuala Terengganu is located in low and muddy area next to the one of the most beautiful beaches in Malaysia that is Pantai Batu
Rakit. The area is popular among local and foreign tourist due to the natural beauty of the beach fronting an open and wide South China Sea. In view
of the significant roles of its location in the tourist map locally as well as internationally, the environmental impact of the project is highly regarded and
looked into by Jabatan Kerja Raya (JKR) by imposing systematic environmental management plan be practiced through out the contract period. Regular
monitoring and audits by Department of Environment (DOE), Department of Safety and Health (DOSH) as well as JKR been carried out and Non
Conformance Reports (NCRs) were issued to ensure the we comply with the rules and regulations set by those agencies. Fast actions have been taken
by us in identifying the root cause of the problems and our for workers and subcontractors that were found responsible for neglecting or ignoring the
implementation of the system, will be penalized, in fact to a certain extent, their contract has been terminated after we found that the recurrence of
non compliance solely caused by their ignorance and blatant disregards to the strict implementation of environmental protection system.
An independent environmental consultant has been appointed for each of our projects to assist us in carrying out detailed monitoring plan according
to the needs of the project which varies based on the geographic factors of the project location. Mitigation measures taken by us in order to minimize
the environmental impact in the projects:-

at Project Sites (cont’d)
1 Construction and Maintenance of Silt Traps

Silt traps are being constructed and maintained complete with the recommended earth drains, sand bags as bunds to intercept and channel the
surface run-off within the construction site that contains sediments to the silt traps. The silt traps and earth bunds are regularly maintained to
ensure the effectiveness of the system.
2 Water Quality Monitoring

The most important aspect during the site clearing and earthwork activities is the total suspended solid. Monthly monitoring are being carried out
during the construction stage to monitor the rate of change compared with the reading taken prior to the commencement of work and the ambient
values at the site and downstream or nearby water ways. In view of the active usage of water generated from rivers for agriculture purposes (not
much for drinking), the level of contaminated chemical contents in the water is given serious attention to minimize the risk to the agricultural
produce.
3 Air Quality Monitoring

The ambient air monitoring was carried out monthly to determine the characteristic at the sensitive receptors to ensure that the total suspended
particles concentration is well below the hazard value. Dust control measures were effectively taken by using water browser sprayed at regular
intervals at sensitive areas usually created by hive of earthworks activities.
4 Noise Quality Monitoring

Noise level readings were taken using a pre calibrated precision integrating noise meter where the equipment was set up at the open space within
the project sites. The monitoring was done during day and night time to record the noise level due to the construction activities.
The most common complaints that we received at sites are in relation to the items listed below. However, we always conduct pro-active remedial
measures so as to minimize or eradicate the issues. The action plans too were tabled to the respective local authorities and clients during progress
monitoring meetings.
a) Erosion and Sedimentation Control

Sand bags, concrete blocks / rocks and proper maintenance of perimeter drains are constantly used to filter and intercept the surface run-off
and also to act as barrier towards landslides. Temporary turf is also adopted to minimize the problem.
b) Solid Waste
Waste bins are provided at designated locations and all the wastes should be disposed at an approved dump site. An area for construction
debris too was designated within the site.
c) Temporary Toiulets
In order to provide a clean sanitary condition within construction area, portable toilets were used beside the standard temporary toilets. For
portable toilets, maintenance was every alternate days and desludging were done regularly.
d) Housekeeping
Housekeeping of site was carried out by ‘gotong-royong’ exercise among our site staff, workers and subcontractors every week. The sense of
togetherness in keeping the site clean and tidy is achieved through the concept.
e) Mosquito and Pest Control
The rodent and pest control services were engaged to carry out the mosquito and pest control activities at sites. The service include the
application of abate spraying and fogging which were carried out periodically to prevent dengue or related diseases.
CONCLUSION
We in AZRB believe that for the successful implementation of an effective environmental programme, a sense of responsibility is to embraced by all
personnel involved in the projects. Because of this, we are constantly raising the level of awareness, knowledge and commitment among our staff so as
to ensure that an environmentally safe working condition not only to benefit our operations but to the general public and the environment as a whole.
Quality, Safety and

Health Policy
The company’s achievements and dedication towards our work, quality, safety and health and environment has been acknowledged by the construction
industry as evident in the numerous awards bestowed to AZRB.
The company has received certification from the International Standards Organization (ISO) and Malaysian Standard (MS):
1 ISO 9001:2000 Quality Management System
The achievement of ISO 9000 certification since the year 2000 testifies the Group commitment towards its mission of being a trusted leader in
delivering commitment with excellence and value in construction industry. The certification under the provision of construction services for civil and
building engineering works is not only for the construction subsidiary company (AZSB) but also the parent company, AZRB.
2 OHSAS 18001:1999
With our diligent efforts towards safety and health in compliance with the legislative requirements, the company has been certified OHSAS 18001:
1999 since 2004.
3 ISO 14000:2004
In October 2006, the management has decided to embark on the certification of ISO 14000 by September 2007. Various sites implementing the
Environmental Management Plan (EMP) are required to improve the system and documented the activities carried out throughout the construction
period.
QUALITY
As we aim for high standards of performance and striving for superior quality in all undertakings, we have focused on the “DO THINGS RIGHT THE FIRST
TIME, EVERY TIME” as our motto for 2006 to be instilled to all our staff, workers, subcontractors and suppliers. This statement is also one of our Quality
objectives.
All new projects local and overseas commencing from 2006 are mandatory to implement strict control on quality and the on going projects are required
to enhance the system that have already been in place. The projects involved are:
1 Indoor Stadium in Kuala Terengganu

2 Putrajaya Mosque in Putrajaya
3 Subang Kelana Link in Subang Jaya
4 Kuantan - Pekan Road Works
5 Jitra - Kodiang Road Works
6 Mahkamah Complex in Petaling Jaya
7 Al Faisal University in Riyadh, Saudi Arabia
8 IT Expressway in Chennai, India
The implementation of the quality control for each project sites is based on the Project Quality Plan. The Inspection Test Plan for the construction
activities have been the mandatory documents used prior to finalization of the works. The workers have been made to aware and been taught the
standard of works to be produced by preparation of mock-up, discussion and clarifying of the detailing shown in the drawings and forming Quality
Committee to carry out walk-about auditing on the on-going works. Performance of the system is constantly being measured, monitored and where
applicable, improvements are made through corrective and preventive actions.
Quality, Safety and

Health Policy (cont’d)
The company has allocated between 0.5% and 2% of the builder works in the implementation of the quality at project sites. To ensure the successful
of the system, external and internal auditors have been scheduled throughout the year to carry out auditing to all the projects. The downward trends of
non compliance reports from the audits were significant where about 9% decreases in the numbers have been achieved. Actions were immediately
taken on the recurrence of repetitive non-compliance by ultimately terminating the workers, suppliers or subcontractors contracts.
By doing the works correctly once, the company not only improves its productivity but also would improve on the profitability of the projects, safe times
and avoid unnecessary abortive works.
Our reputation viewed by clients and public will be upheld if we act in accordance with our Quality Plan and continually improve our system to produce
high quality finishes and products to the clients satisfaction.
The company outstanding performance of delivering the quality works, high turnover and profitability has been recognized by the Malaysian
Construction Industry Excellence Award 2006. AZRB has been awarded Builders of the Year Award for the ultimate achievement in 2006.
We believe that quality enhances the value and reputation towards our continued growth. We strive to provide quality and value added services to our
customer’s satisfaction.
SAFETY AND HEALTH
The management always has a systematic approach to health and safety of workers at all levels in order to achieve continuous performance
improvement. Apart from building a strong safety minded culture among staff, workers, subcontractors and suppliers, the company aims to continually
improve the safety systems at our project sites. The company main objective is to achieve zero occupational injury and illness. We would like to create
safety at site and wants the public, employees and workers to always feel safe at our construction sites.
In 2006, the employee and workers have participated in the in-house training programme on various activities including induction courses, awareness
courses, fire fighting and emergency response, scaffoldings and working at height and First Aid courses. A stick and carrot approach to the workers,
subcontractors and suppliers complying with the safety and health procedure implemented at site has also been practiced. The Safety and Health Plan
for each project was aimed at ensuring that the activities carried out were properly analyzed for the risk (using the HIRAC) and that vigilant monitoring
of unsafe acts been reprimanded. The company also participated in the seminars organized by DOSH and NIOSH throughout the year. Selected
employees and workers have attended the 2006 World Safety and Health Day held in Putrajaya International Convention Center.
The company has allocated the cost for carrying out safety and health and traffic management plan depending on the locations of the project site from
2% to 4% of the contract costs.
To ensure full compliance of the safety and health system, external and internal auditors have been scheduled for auditing. The Department of
Occupational Safety and Health have audited the sites. The year under review saw that the non compliance reports were more on the handling of
chemicals for most of our sites. The awareness on safety requirement among workers and employees and basic requirement in safety has improved
significantly whereas special courses on handling of chemicals have been included in 2007 training needs.
The company has embarked mainly on road projects than buildings projects for 2006. The safety of road users and public has been the utmost important.
Thus, a strict safety plan and traffic management plan are crucial and been systematically implemented.
Quality, Safety and

Health Policy (cont’d)
In 2006, our road projects have touched a total of 1,800,000 man-hours without Lost Time Injury (LTI). Our Subang-Kelana Link project in Subang Jaya
comprising of the construction of elevated structures along the busy Jalan Kewajipan and crossing Federal Highway being the most busiest highway in
Klang Valley have been nominated to participate in the National Safety Awards for 2006 by the Selangor DOSH. The project has successfully won the
gold medal award in construction industry presented by our Prime Minister.
The company will continue to instill the partnering concept to all staff, workers, subcontractors and suppliers in safety and health aspects has ensure
the successful implementation of the safety and health policy in AZRB.
We are committed to pursue our objective of achieving zero accidents in all our projects and ensuring continuous improvement in safety and health
awareness and performance. With the recognition at National level for the above projects as an example, we look forward to working harder to sustain
and improve the system for all our projects local and overseas.
Chairman’s Statement /
Penyata Pengerusi
Dear Shareholders. Pemegang Saham yang dihormati.

The financial year that has just ended on 31 December 2006 saw Tahun kewangan yang baru berakhir pada 31 Disember 2006
continued growth in our overall performance. We delivered on our menyaksikan pertumbuhan yang berkesinambungan dalam
commitment to shareholders by achieving higher profits, prestasi secara keseluruhannya. Kumpulan berjaya memenuhi
maintaining high dividends payout and strengthening our komitmennya kepada para pemegang saham dengan mencapai
position as one of the leading player in the construction industry. tahap keuntungan yang lebih tinggi, sambil mengekalkan
pembayaran dividen yang tinggi serta mengukuhkan
kedudukannya sebagai salah sebuah organisasi teraju dalam
industri pembinaan.
On behalf of the Board of Directors and the Management of Ahmad Zaki Bagi pihak Lembaga Pengarah dan Pengurusan Ahmad Zaki Resources
Resources Berhad (AZRB), it is my pleasure to present the Annual Report Berhad (AZRB), saya dengan sukacitanya membentangkan Laporan Tahunan
and Accounts of AZRB for the year ended 31 December 2006. dan Akaun AZRB untuk tahun kewangan berakhir 31 Disember 2006.
AZRB telah menghasilkan nilai pemegang saham yang diperkukuh

AZRB delivered strenghtened shareholder value through our unwavering menerusi tumpuan yang menjurus semata-mata kepada pertumbuhan
focus on growing our core businesses. In a year which saw the Group perniagaan teras. Meskipun terpaksa menempuhi pelbagai rintangan
faced with many challenges, AZRB remained profitable, with a significant pada tahun kewangan, AZRB telah tetap mengaut keuntungan, iaitu
improvement in pre-tax profit of RM36 million compared with last year’s dengan mencatat peningkatan sebelum cukai sebanyak RM36 juta
RM28 million. Attesting to its resilience, the Group has committed to berbanding RM28 juta pada tahun lepas. Sebagai membuktikan
improving operational efficiency, strengthening internal controls and keutuhannya, Kumpulan bertekad untuk menambahbaik kecekapan
promoting greater consolidation within the Group. operasi, mengukuhkan kawalan dalaman dan menggalakkan
pemantapan yang lebih hebat dalam lingkungan Kumpulan.
While we are constantly proactive in addressing external and internal Sambil Kumpulan terus bersikap proaktif dalam menangani
developments in this fast-paced globalised economy, I am happy to note perkembangan dalaman dan luaran dalam ekonomi global yang pesat
that some of the developments of the Group are a fruition of well berkembang, dengan sukacitanya saya memaklumkan bahawa
thought out initiatives that has a long term bearing on us. sebahagian daripada perkembangan dan kemajuan dalam Kumpulan
adalah berkat inisiatif yang dirancang dan yang memberi manfaat
Our financial results for 2006 reflect the value of our practices and of the jangkapanjang kepada kita.
Group’s investment policy and business strategy.
Keputusan kewangan bagi tahun 2006 mencerminkan nilai amalan-
amalan dan dasar-dasar pelaburan serta strategi perniagaan Kumpulan.
Chairman’s Statement (cont’d) /

Penyata Pengerusi (samb)
FINANCIAL PERFORMANCE PRESTASI KEWANGAN
For the year ended 31 December 2006, AZRB recorded an impressively Bagi tahun berakhir 31 Disember 2006, AZRB mencatat peningkatan
significant increase in revenue of RM443 million which is 78% higher when mendadak dalam hasil pendapatan sebanyak RM443 juta iaitu 78%
compared to RM249 million the previous year. Profit before tax increased lebih tinggi berbanding angka RM249 juta pada tahun sebelumnya.
correspondingly to RM36 million compared to RM28 million for 2005. Keuntungan sebelum cukai telah bertambah ke tahap RM36 juta
berbanding RM28 juta pada tahun 2005.
The better results were achieved against a tough economic environment Keputusan yang lebih memberangsangkan itu telah dicatat meskipun
where the construction industry has been experiencing negative growth menghadapi suasana ekonomi yang menyukarkan yang menyaksikan
for the last three years. Only in the last quarter of 2006, the industry industri pembinaan mengalami pertumbuhan negatif sejak tiga tahun
registered a marginal growth of 0.7%. Against this backdrop, we yang lepas. Hanya di suku tahun terakhir 2006, industri tersebut
succeeded in securing an order book in excess of RM700 million. mencatat pertumbuhan berjidar 0.7%. Namun demikian, Kumpulan
masih berjaya meraih buku pesanan bernilai melebihi RM700 milion.
Construction remains at the forefront of our core business activity. To
replenish our order book, we are actively bidding for jobs locally, as well Sektor pembinaan tetap menjadi kegiatan perniagaan teras. Demi
as overseas. Expanding our expertise globally is a significant strategy menentukan buku pesanan terus diisi, Kumpulan sedang giat
adopted by the Group to further enhance future earnings. mengemukakan bida untuk meraih projek baik di arena tempatan
mahupun di seberang laut. Perluasan kepakaran ke peringkat global
The Group’s oil and gas trading subsidiary remained the other significant merupakan satu strategi tunjang yang diterimapakai oleh Kumpulan
contributor to the Group’s profitability. This division contributed RM52 demi merangsang lagi hasil pendapatan di masa hadapan.
million revenue and RM9.6 million profit. Continuous focus shall be
Syarikat subsidiari Kumpulan yang terlibat dalam operasi minyak dan gas
placed on this subsidiary with the possible intention of taking a larger
telah terus kekal sebagai satu lagi penyumbang utama kepada
position in this business segment.
keberuntungan Kumpulan. Syarikat tersebut menyumbang hasil
pendapatan RM52 juta dan keuntungan RM9.6 juta. Tumpuan yang
berkesinambungan akan diberi kepada operasi syarikat subsidiari ini
OUR PEOPLE - THE KEY TO SUCCESS
dengan kemungkinan memperkembangkan lagi penglibatan dalam
segmen perniagaan ini.
AZRB is fully cognizance of its role as a leader in the sector it operates in.
Being recognized and acknowledged by our peers for its contribution in
the construction industry is just reward and a great honour for the Group. KAKITANGAN - PENENTU PENYERLAHAN UTAMA
AZRB is accorded the ‘Builder of the Year’ Award 2006 by the
Construction Industry Development Board (CIDB) in recognition of its role AZRB menyedari sepenuhnya peranannya sebagai teraju sektor dalam
towards Nation building. We were also placed top in the National mana ianya beroperasi. Sambil mendapat pengiktirafan atas
Occupational Safety and Health excellence award by being the Gold sumbangannya terhadap industri pembinaan, Kumpulan telah
winner in the Construction sector. Capping off a great year, the Asia dianugerahkan penghargaan yang setimpal. AZRB menerima anugerah
Pacific Brands Foundation conferred the ‘Best Brands’ Award in the ‘Jurubina Tahun 2006 daripada Lembaga Kemajuan Industri Pembinaan
Construction Sector to AZRB. (CIDB) sebagai mengiktiraf peranannya dalam usaha membina Negara.
Kumpulan juga menduduki tangga teratas dalam program anugerah
These recognition and honour would not have been possible had its people kecemerlangan Keselamatan dan Kesihatan Pekerjaan Kebangsaan
not been true in delivering commitment with excellence and value. dengan memenangi hadiah Emas dalam sektor pembinaan. Sebagai
Transforming AZRB into a global organization, we recognize the need for kemuncak penyerlahan tahun 2006, AZRB telah berjaya merangkul
human resource development. It is AZRB’s intention to empower every Anugerah “Jenama Terbaik” dalam Sektor Pembinaan iaitu anugerah
employee within the Group with a greater sense of ownership, yang diberi oleh Asia Pacific Brands Foundation.
accountability and responsibility. Its human resource remained an important Pengiktirafan dan penghormatan yang sebegini unggul ini tidak mungkin
cornerstone in its operations and will continue to shape AZRB’s present and menjadi milik AZRB sekiranya pihak daya tenaga tidak bekerja dengan
future success. Kudos to our people for their hard work, honesty, diligence in penuh dedikasi dalam memenuhi komitmen dan nilai dengan cemerlang.
ensuring best practices is commonplace within the Group. Sebagai usaha mengubahbentuk AZRB menjadi sebuah organisasi
global, keperluan pembangunan sumber manusia telah dikenalpasti

CORPORATE RESPONSIBILITY sebagai faktor yang penting. Adalah menjadi hasrat AZRB untuk
menyemaisuburkan semangat kekitaan, akauntabiliti dan
During the year, AZRB continued to play its part in adopting good kebertanggungjawaban yang sejati di sanubari setiap kakitangan dalam
practices in its work ethics in order to minimize negative environmental lingkungan Kumpulan. Sumber manusia telah terus menjadi perjuangan
impact as a result of its business operations. penting dalam operasinya dan akan terus merencanakan kejayaan
semasa dan masa depan AZRB. Syabas kepada segenap tenaga kerja
The Group also continue its obligations to all its stakeholders and believe ARZB di atas kegigihan, keikhlasan dan kebijaksanaan mereka dalam
in playing its part in the development of the community and the progress menentukan amalan terbaik menjadi ciri unggul di seluruh Kumpulan.
of the country with its monetary and non-monetary support to various
charitable, education and cultural programmes.
TANGGUNGJAWAB KORPORAT
Such initiatives include a memorandum of understanding signed Pada tahun kewangan, AZRB telah terus memainkan peranannya dalam
between the Government of Malaysia and AZRB on cooperation in the menerimapakai amalan terbaik dalam etika kerjanya demi
area of Education and Training desiring to promote cooperation on the meminimumkan kesan alam sekitar negatif dari operasi perniagaannya.
basis of reciprocity and mutual benefit for both parties, and our
sponsorship of Adi Putra (child prodigy) maintenance allowance for 2006. Kumpulan telah meneruskan obligasinya kepada semua pemegang
kepentingannya dan bertekad untuk memainkan peranannya dalam
sebahagian daripada pembangunan masyarakat serta kemajuan Negara
OUTLOOK AND PROSPECTS dengan sokongan berbentuk kewangan dan bukan-kewangan kepada
pelbagai program amal kebajikan, pendidikan dan kebudayaan.
Backed by a wealth of experience and upgraded technology, the Group is Ini termasuklah memorandum persefahaman antara Kerajaan Malaysia
always ready to deliver solutions for the local and global construction dengan AZRB berhubung kerjasama dalam bidang Pendidikan dan
needs. Our foray into the international construction market is showing Latihan, sekaligus mempromosi kerjasama atas dasar timbal-balas dan
positive results and have enhanced the Group’s capability and manfaat bersama kepada kedua-dua pihak, dan penajaan Adi Putra
achievements. berbentuk elaun saraan bagi tahun 2006.
Given the close relationship between the construction industry and the
nation’s economic climate, encouraging signs have emerged in 2007. TINJAUAN DAN PROSPEK
These included measures introduced by the Government aimed at
Berbekalkan pengalaman yang begitu meluas dan teknologi yang
improving delivery in both private and public sectors and the rolling out
semakin canggih, Kumpulan sentiasa bersedia untuk menyediakan
of the 9th Malaysia plan projects. AZRB’s major business entities were
penyelesaian mantap untuk keperluan pembinaan tempatan dan global.
able to benefit from the growing confidence in the economy. The forecast
Penceburan dan ketrampilan Kumpulan dalam pasaran pembinaan
for 2007 remains positive.
antarabangsa kini sudah mula menampakkan kesan yang positif dan
telah memberangsang serta menyemarakkan lagi keupayaan dan
The coming year promises to be an eventful year. We are already
prestasi Kumpulan.
aggressively bidding for new orders and will continue to pursue selected
projects in the international market, especially in countries where we are Berdasarkan perkaitan yang begitu rapat antara industri pembinaan dan
now operating. With the improved sentiments in the construction sector, suasana ekonomi negara, tanda-tanda yang memberangsangkan telah
plus the initiatives taken to enhance internal performance, we are disaksikan pada tahun 2007. Ini termasuklah langkah-langkah yang
optimistic of the outlook for 2007. diperkenalkan oleh Kerajaan yang bertujuan untuk menambahbaik
prestasi sektor swasta dan awam serta pelaksanaan projek-projek di
We have actively put in place strategic investment policies that enhance bawah rancangan Malaysia ke-9. Entiti perniagaan utama AZRB telah
shareholders value. Initiatives to diversify our operations into new areas berjaya memanfaatkan keyakinan yang semakin kukuh dalam ekonomi
have taken shape with our investment in oil palm plantation in Indonesia. Negara. Ramalan untuk tahun 2007 tetap bersifat positif.
Our plantation subsidiary PT Icthiar Gusti Pudi, has established our
plantation areas in Kalimantan and field planting has already started. Tahun yang akan datang menjanjikan satu tahun yang cukup hebat.
This new division will create a new source of income for the Group in the Kumpulan sudah mula membida secara agresif untuk projek-projek baru
longer term period. dan akan terus berusaha meraih projek-projek terpilih di pasaran

DIVIDEND PAYOUT antarabangsa, khususnya di negara-negara dalam mana AZRB kini

sedang beroperasi. Dengan bertambah baiknya sentimen dalam sektor
In view of the good performance of the Group in 2006, the Board pembinaan, serta segala inisiatif yang diambil untuk merangsang prestasi
recommended a first and final dividend of 15%. The Board believes that dalaman, kami tetap optimistik tentang tinjauan bagi tahun 2007.
the firm support from its investors and shareholders have largely
contributed to the success of the Group and would like to reward its AZRB telah mengasaskan pelbagai dasar pelaburan yang berupaya
investors and shareholders for their support. merangsang nilai pemegang saham. Usaha untuk mempelbagaikan
operasi kepada bidang-bidang baru telah bermula dengan pelaburan
However, the Board is fully aware of the need to maintain a balance dalam perladangan kelapa sawit di Indonesia. Syarikat subsidiari
between the Group’s funding requirements for future expansion and perladangan iaitu PT Icthiar Gusti Pudi, telah membuka kawasan
growth, and the enhancement of shareholder value. perladangan di Kalimantan dan kerja penanaman sudah pun bermula.
Bahagian perniagaan baru ini akan membentuk sumber pendapatan
baru bagi Kumpulan dalam jangka masa panjang.
ACKNOWLEDGEMENT
PEMBAYARAN DIVIDEN
Throughout 2006, our people have shown exemplary dedication,
commitment and professionalism to meet the challenges of a highly Berdasarkan prestasi Kumpulan yang memberangsangkan pada tahun
competitive environment. Working together in concert and with a sense 2006, Lembaga Pengarah telah mengesyorkan dividen pertama dan
of common enterprise, we accomplished all we set out to do in 2006. I akhir sebanyak 15%. Lembaga Pengarah percaya bahawa sokongan
thank all of you for being such great members of a formidable team. mantap dari para pelabur dan pemegang saham telah banyak
menyumbang kepada kejayaan Kumpulan dan ingin memberi ganjaran
I would also like to express my gratitude and appreciation to various kepada pelabur dan pemegang saham di atas segala sokongan mereka.
government agencies, clients, consultants, contractors, suppliers and Walau bagaimanapun, Lembaga Pengarah sedar akan peri pentingnya
business partners who have contributed to our success. menyenggara suatu keseimbangan antara keperluan pendanaan
Kumpulan untuk perluasan dan pertumbuhan masa depan dengan
Finally, I extend my appreciation to my fellow members of the Board for rangsangan nilai pemegang saham.
their dedication and diligence and the shareholders for your continued
support and confidence in us.
PENGHARGAAN
Sepanjang tahun 2006, barisan tenaga kerja Kumpulan telah
memaparkan dedikasi, komitmen dan tahap profesionalisme yang
disegani demi menangani pelbagai cabaran dalam suasana yang amat
Raja Dato’ Seri Aman Bin Raja Haji Ahmad
bersaing hebat. Sambil berganding bahu dan berusaha sehati sejiwa
Chairman / Pengerusi
untuk kejayaan bersama, segala yang direncanakan untuk tahun 2006
telah berjaya dilaksanakan. Terima kasih kerana menjadi anggota
pasukan yang sungguh cemerlang.
Izinkan saya juga untuk merakamkan ucapan setinggi-tinggi
penghargaan kepada pelbagai agensi kerajaan, kontraktor,
juruperunding, pembekal dan rakan kongsi perniagaan yang telah
menyumbang ke arah kejayaan Kumpulan.
Akhir kata, izinkan saya juga untuk menyatakan penghargaan saya
kepada seluruh anggota Lembaga Pengarah di atas sokongan dan
tunjukajar mereka dan juga kepada seluruh pemegang saham di atas
sokongan yang tidak berbelah bahagi dan keyakinan kepada Kumpulan.
Gold Winner in the CIDB Award The Brand Laureate Award

National Occupational BUILDER OF THE YEAR for Best Brands in
Safety & Health Award AWARD 2006 Construction 2006-2007
Review of Operations
The construction sector in Malaysia registered a growth
of 0.7% in the last quarter of 2006 after experiencing
negative growth for more than two years.
Our construction division remains, by far, the main area

of AZRB’s business operations. As the major contributor
to the Group’s performance both in terms of revenue
and profits, the construction division has an important
role as a catalyst impacting strongly upon the Nation’s
economic growth. We see the current intense
competition for construction contracts as a challenge
to be more efficient and competitive in carrying out our
ongoing projects and bidding for new tenders.
We foresee continued growth in this division especially

since AZRB process good sound technical and financial
strength in specialized areas such as infrastructure and
turnkey projects. In line with the Government
initiatives to promote PFI (Private Funding Initiative),
the Company will diligently pursuit this mode of
procurement for our future contracts.
Review of Operations (cont’d)
ONGOING AND NEW PROJECTS
For the year 2006, the construction division has secured several new projects totaling approximately RM700.0 million. These projects together with our
ongoing works are as follows:-
Approximate Expected Project

Contract Value Completion
No. Project Name (RM Million) Date
1. Construction of Al-Faisal University, Riyadh, Saudi Arabia 397 Dec 2007

(Phase 1 and 2)
2. Improvement and Maintenance of IT Expressway in Chennai, India 117 Dec 2007
3. Proposed Construction and Completion of an Indoor Sports Complex, 116 Jan 2008
Gong Badak, Terengganu
4. Construction of Kiblat Walk, Putrajaya Mosque, Putrajaya 209 May 2008
5. Design and Build for Jitra Road through Kodiang, from Kedah to Arau, Perlis 87 August 2008
6. Design and Build for Subang-Kelana Link (Phase 1 and 2) 316 Dec 2008
7. Upgrading of Federal Road 3 from Kuantan to Pekan 384 May 2009
During the year, the construction division won the following awards:-
• Persatuan Arkitek Malaysia 2006 Awards for excellence in Architecture for the
construction of Universiti Teknologi Petronas, Perak;
• Malaysian Construction Industry Excellence Awards for “Builder of the Year” 2006 by
Construction Industry Development Board (CIDB);
• Gold Winner in the National Occupational Safety and Health Award from the Human
Resources Ministry;
• The BrandLaureate Awards 2006/2007 for Best Brands in the Construction category by
the Asia Pacific Brands Foundation, a not for profit organization promoting branding
standards in the Asia Pacific region.
These awards will further propel the construction division to excel and to achieve the highest
standards in the industry. With such an excellent track record of completing projects of
technical and aesthetical complexity, we believe we are in a strong position to scale greater
heights.
OIL AND GAS DIVISION
Our oil and gas division, Inter Century Sdn Bhd (ICSB)
and Austral Far East Sdn Bhd (AFESB) is expected to
continue to register growth in its revenue as a result of
higher volume of fuel handling to cater for likely
increase in off shore exploration activities. The increase
of demand and consumption of oil and oil related
products such as fuel, diesel, lubricants etc is expected
to continue unabated.
This division will benefit from the increase in the

concentration of oil-related activities such as oil
exploration and oil production activities that will result
in increased demand for fuel, diesel, lubrication for the
offshore vessels. This division is poised for sustainable
growth in 2007.
PLANTATION
The Group has established a presence in the oil palm industry with the acquisition of an
Indonesian company, PT Ichtiar Gusti Pudi (IGP). PT IGP had been granted the permission to
cultivate (Izin Lokasi) oil palm with a total area of 20,500 hectares which is inclusive of the
rights for cultivation (Hak Guna Kuasa) of 8,297 hectares of palm oil in Kalimantan Barat,
Indonesia.
Actual field planting of the oil palm seedings had commenced since December 2006. We
anticipate up to 4,000 hectares of land shall be utilized for actual field planting in 2007.
PROPERTY DEVELOPMENT
As a result of the continued soft market conditions, no major development was undertaken
throughout the year under review for the Group’s only property development project, namely
the Taman Industri Paka at Dungun, Terengganu. Our subsidiary, Kemaman Technology and
Industrial Park Sdn Bhd (“KTIP”) will continue to evaluate its position and study all possible
options available before undertaking further development of the land. The future looks
promising for KTIP’s growth when the much acticipated Eastern Growth Corridor is launched
soon and implemented thereafter.
Calendar of Events
24th JANUARY 2006 (Left)

AZRB participated in the 24th Career Day
UKM at Dewan Canselor Tunku Abdul
Rahman (DECTAR), UKM Bangi.
31st JANUARY 2006 (Right)

Sponsorship of Adi Putra (Child Prodigy)
maintenance allowance for 2006.
3rd to 5th MARCH 2006 (Left)

AZRB Family Day 2006 organised at A-
Famosa Resort Melaka.
8th to 11th MARCH 2006 (Right)

AZRB participated in the Career Carnival
06’ organised by Universiti Teknologi
Malaysia, Skudai.
14th APRIL 2006 (Left)

Our Staff of Al-Faisal University Riyadh
Project camped at Tsumamah Dessert,
Saudi Arabia.
29th APRIL 2006 (Right)

In-house training programme on e-mail
organising conducted by the IT Manager.
8th MAY 2006 (Left)

AZRB staff participated in the training
programme of Scaffolding Fabricated Level
1 and 2, organised by CIDB.
13th MAY 2006 (Right)

AZRB staff participated in the National
Labor Day 2006 at Stadium Putra Bukit
Jalil, Kuala Lumpur, organised by the
Ministry of Human Resource Malaysia.
22nd to 24th MAY 2006 (Right)

Team Building Programme was held at
Outward Bound School (OBS) Lumut Perak.
Calendar of Events (cont’d)
12th JUNE 2006 (Left)

9th Annual General Meeting (AGM) for
AZRB at Sime Darby Convention Centre,
Bukit Kiara Kuala Lumpur.
12th JULY 2006 (Left)

Briefing on Taxation.
22nd JULY 2006 (Right)

Head Office, Fire Prevention Awareness
Programme, briefing given by Fire Brigade
Officer En. Zakaria Muhd (from Head
Quarters Fire Brigade, Wilayah Persekutuan).
7th AUGUST 2006 (Left)

Induction of Management Trainee Program.
19th AUGUST 2006 (Right)

Bowling Tournament 2006 organised by
AZRB Sports and Recreational Club held at
Ampang Superbowl, Ampang Point.
1st to 2nd NOVEMBER 2006 (Left)

In-house training programme on Business
Writing Skills organised by Farooq
Consultant.
12th NOVEMBER 2006 (Right)

AZRB Hari Raya Aidil Fitri Open House at
Sime Darby Convention Centre.
18th to 20th DECEMBER 2006 (Right)

AZRB participated at National Career Fair
organised by International Islamic
University (UIA), Gombak.
Financial
Statements 48
54
Directors’ Report
Statement by Directors
54 Statutory Declaration
55 Report of the Auditors
56 Consolidated Balance Sheet
58 Consolidated Income Statement
59 Consolidated Statement of Changes in Equity
61 Consolidated Cash Flow Statement
63 Balance Sheet
64 Income Statement
65 Statement of Changes in Equity
66 Cash Flow Statement
68 Notes to the Financial Statements

Directors’ Report
The Directors have pleasure in submitting their report and the audited financial
statements of the Group and of the Company for the year ended 31 December 2006.
Principal Activities
The Company is principally engaged in investment holding, providing management services and as contractors of civil and structural construction works.
The principal activities of the subsidiary companies are disclosed in note 6 to the financial statements. There have been no significant changes in the
nature of these activities.
Results
Group Company
RM RM
Profit for the year 24,391,261 10,150,131
Profit attributable to shareholders:-

Equity holders of the Company 24,154,951
Minotiry interest 236,310
24,391,261
Dividend
Since the end of the financial year, the Company paid a first and final dividend of 15% less tax at 28% amounting to RM7,204,723/- in respect of the
financial year ended 31 December 2005.
The Directors recommend a first and final dividend of 15% less tax at 27% amounting to RM7,304,789/- in respect of the current financial year, subject
to the approval of the shareholders at the Annual General Meeting.
Reserves and Provisions

There were no material transfers to or from reserves or provisions during the year other than those disclosed in the financial statements.
Bad and Doubtful Debts

Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps to ascertain
that action had been taken in relation to the writing off of bad debts and the making of provisions for doubtful debts, and have satisfied themselves
that all known bad debts had been written off and that no provision for doubtful debts is required.
At the date of this report, the Directors are not aware of any circumstances which would require provision to be made for doubtful debts or the amount
written off for bad debts in the financial statements of the Group and of the Company inadequate to any substantial extent.
Directors’ Report (cont’d)

Current Assets
Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps to ensure that
any current assets which were unlikely to realise in the ordinary course of business their values as shown in the accounting records of the Group and of
the Company have been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances which would render the values attributed to the current assets in the
financial statements of the Group and of the Company misleading.
Valuation Methods
At the date of this report, the Directors are not aware of any circumstances which have arisen which render adherence to the existing method of
valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
Contingent and Other Liabilities

At the date of this report there does not exist:-
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any
other person, or
(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.
No contingent liability or other liability of the Group or of the Company has become enforceable, or is likely to become enforceable within the period
of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group or of
the Company to meet their obligations as and when they fall due.
Change of Circumstances
At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the
Group and of the Company which would render any amount stated in the financial statements misleading.
Items of an Unusual Nature

In the opinion of the Directors:-
(i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or
event of a material and unusual nature.
(ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material
and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this
report is made.
Issue of Shares
During the year, no new issue of shares was made by the Company.

Employees’ Share Option Scheme (“ESOS”)
The Group’s ESOS was approved by shareholders of the Company at the Annual General Meeting held on 20 June 2002. The ESOS shall continue to be
in force for a duration of ten (10) years commencing from 26 July 2002 and expiring on 25 July 2012.
The salient features of the ESOS are:-
(a) eligible persons are full time employees with confirmed employment within the Group (including executive directors) other than a company which
is dormant. The Date of Offer being the date when an offer in writing is made to eligible employees to participate in ESOS. The eligibility for
participation in the ESOS shall be at the discretion of the Option Committee appointed by the Board of Directors;
(b) the number of ordinary shares of RM1/- each in the Company (“AZRB Shares”) allocated, in the aggregate, to the directors and senior
management of the Group shall not exceed fifty percent (50%) of the total AZRB Shares available under the ESOS;
(c) the aggregate number of shares to be allotted and issued under ESOS shall not exceed ten percent (10%) of the total enlarged issued and paid-
up ordinary share capital of the Company at the time of the offer or at any per centum in accordance with any guidelines, rules and regulations
of the relevant authorities governing the ESOS during the existence of the ESOS;
(d) the exercise price for each share shall be set at a discount of not more than ten percent (10%) from the weighted average market price of the
AZRB shares as shown in the Daily Official List of Bursa Malaysia for the five (5) Market Days immediately preceeding the Date of Offer;
(e) the number of AZRB Shares allocated to any individual director or employee who, either singly or collectively through persons connected holds
twenty percent (20%) or more in the issued and paid-up share capital of the Company shall not exceed ten percent (10%) of the total AZRB shares
available under the ESOS; and
(f) new shares issued under the ESOS shall rank pari passu in all respects with the existing ordinary shares save and except that the new shares shall
not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which precedes the date of allotment of the
new shares.
During the financial year, the number of ESOS options exercised and lapsed are as follows:-
Number of Share Options

2006 2005
At 1 January 2,707,600 2,798,800

Lapsed (39,200) (91,200)
At 31 December 2,668,400 2,707,600
ESOS options lapsed due to resignations of employees.

There were no share options exercised during the financial year.
The terms of share options outstanding as at the end of the financial year are as follows:-
Number of Share Options Outstanding

Expiry Date Exercise Price 2006 2005
RM
25.7.2012 2.05 2,668,400 2,707,600


Directors of the Company
The Directors in office since the date of the last report are:-
RAJA DATO’ SERI AMAN BIN RAJA HAJI AHMAD

DATO’ SRI HAJI WAN ZAKI BIN HAJI WAN MUDA
DATO’ WAN ZAKARIAH BIN HAJI WAN MUDA
DATO’ HAJI MUSTAFFA BIN MOHAMAD
DATO’ W ZULKIFLI BIN HAJI W MUDA
DATUK (PROF.) A RAHMAN @ OMAR BIN ABDULLAH
DATO’ ISMAIL @ MANSOR BIN SAID
In accordance with Article 80 of the Articles of Association, Dato’ Sri Haji Wan Zaki bin Haji Wan Muda and Dato’ Haji Mustaffa bin Mohamad retire,
and being eligible offer themselves for re-election.
Directors’ Interests in Shares and ESOS Options
The interest of those who were directors as at financial year end in the shares and the ESOS options of the Company and related companies are as
follows:-
(a) Shareholdings in the Company and Ultimate Holding Company
Number of Ordinary Shares of RM1/- Each

At At
1.1.06 Bought Sold 31.12.06
The Company
Direct Interest
Dato' Sri Haji Wan Zaki bin Haji Wan Muda 498,690 – – 498,690
Dato' Wan Zakariah bin Haji Wan Muda 149,674 – – 149,674
Dato' Haji Mustaffa bin Mohamad 1,350,912 – – 1,350,912
Dato' W Zulkifli bin Haji W Muda 225,874 38,800 – 264,674
Dato' (Prof.) A Rahman @ Omar bin Abdullah 300,000 – – 300,000
Dato' Ismail @ Mansor bin Said 1 – – 1
Indirect Interest
Being shares held through Zaki Holdings (M) Sdn. Bhd.
Dato' Sri Haji Wan Zaki bin Haji Wan Muda 40,262,410 502,874 – 40,765,284
Ultimate Holding Company
- Zaki Holdings (M) Sdn. Bhd.
Direct Interest
Dato' W Zulkifli bin Haji W Muda 10,000 – – 10,000

Directors’ Interests in Shares and ESOS Options (cont’d)
(b) Share Options Pursuant to ESOS
Number of Options Over Ordinary Shares of RM1/- Each

At At
1.1.06 Exercised Lapsed 31.12.06
Dato' Haji Mustaffa bin Mohamad 324,000 – – 324,000
By virtue of Dato’ Sri Haji Wan Zaki bin Haji Wan Muda having an interest of more than fifteen percent (15%) of the shares in the Company, he is deemed
interested in the shares of its subsidiary companies to the extent the Company has an interest.
Other than as disclosed above, none of the other directors held any shares or have any interest in the Company and its related companies during the
financial year.
Directors’ Benefits
Since the end of the previous financial year no director’s of the Company has received or become entitled to receive any benefit (other than those
disclosed as directors fees, other emoluments and benefits-in-kind disclosed in note 25(c) to the financial statements) by reason of a contract made by
the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has
a substantial financial interest except for any benefits that may have arisen out of ordinary course of business as disclosed in notes 44(a) and 44(b) to
the financial statements.
Neither during nor at the end of the financial year, was the Company a party to any arrangements whose object is to enable the Directors to acquire
benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate other than the ESOS disclosed in the
financial statements.
Significant Events During the Year
Significant events arising subsequent to the financial year are disclosed in note 48 to the financial statements.
Subsequent Events
Significant events arising subsequent to the financial year are disclosed in note 49 to the financial statements.

The Directors regard Zaki Holdings (M) Sdn. Bhd., a company incorporated in Malaysia, as the ultimate holding company of the Company.
Auditors
The auditors, Messrs. Moore Stephens, have expressed their willingness to continue in office.
On Behalf of the Board
RAJA DATO’ SERI AMAN BIN RAJA HAJI AHMAD DATO’ WAN ZAKARIAH BIN HAJI WAN MUDA
KUALA LUMPUR
24 April 2007
Statement by Directors
We, the undersigned, being two of the Directors of the Company, state that in the opinion of the Directors, the accompanying financial statements as
set out on pages 56 to 122, are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting
Standards for Entities Other Than Private Entities in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company
as at 31 December 2006 and of the results of the operations, changes in equity and cash flows of the Group and of the Company for the year ended on
that date.
On Behalf of the Board
RAJA DATO’ SERI AMAN BIN RAJA HAJI AHMAD DATO’ WAN ZAKARIAH BIN HAJI WAN MUDA
KUALA LUMPUR
24 April 2007
Statutory Declaration
I, Gan Meng Yong, NRIC No.:651127-05-5084, being the officer primarily responsible for the financial management of the Company, do solemnly and
sincerely declare that the financial statements as set out on pages 56 to 122 are to the best of my knowledge and belief, correct and I make this solemn
declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared at

Kuala Lumpur in the Federal Territory
on 24 April 2007
GAN MENG YONG
Before me
M. NAMASIVAYAM
PPN
No. W299
Pesuruhjaya Sumpah
Report of the Auditors

to the Members of Ahmad Zaki Resources Berhad (Incorporated in Malaysia)
We have audited the financial statements set out on pages 56 to 122.
The preparation of the financial statements are the responsibility of the Company’s directors.
It is our responsibility to form an independent opinion, based on our audit, on those financial statements and to report our opinion to you, as a body, in
accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility towards any other person for the
content of this report.
We conducted our audit in accordance with the approved standards on auditing in Malaysia. These standards require that we plan and perform the
audit to obtain all the information and explanations, which we considered necessary to provide us with sufficient evidence to give reasonable assurance
that the financial statements are free of material misstatement. Our audit includes examining, on a test basis, evidence relevant to the amounts and
disclosures in the financial statements. Our audit includes an assessment of the accounting principles used and significant estimates made by the
Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our audit provides a
reasonable basis for our opinion.
In our opinion:-
(a) the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved
Accounting Standards for Entities Other Than Private Entities in Malaysia for entities other that private entities so as to give a true and fair view
of:-
(i) the matters required by Section 169 of the Companies Act, 1965, to be dealt with in the financial statements of the Group and of the
Company; and
(ii) the state of affairs of the Group and of the Company as at 31 December 2006 and of the results of the operations, changes in equity and
cash flows of the Group and of the Company for the year on that date;
and
(b) the accounting and other records and the registers required by the Companies Act, 1965, to be kept by the Company and its subsidiary companies
of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.
The names of the subsidiary companies of which we have not acted as auditors are disclosed in note 6 to the financial statements. We have considered
the financial statements of these subsidiary companies and the auditors’ reports thereon.
We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial statements are in
form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory
information and explanations required by us for these purposes.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any qualification and in respect of subsidiary
companies incorporated in Malaysia, did not include any comment made under Section 174(3) of the Companies Act, 1965.
MOORE STEPHENS AU TAI WEE

Chartered Accountants 1551/01/09 (J)
(AF.0282) Partner
KUALA LUMPUR
24 April 2007
Consolidated Balance Sheet

As at 31 December 2006
2006 2005
Note RM RM
ASSETS
Non-current assets
Property, plant and equipment 4 47,766,177 35,418,056
Investment properties 5 24,550,000 24,200,000
Investments in subsidiary companies 6 – –
Interest in associated companies 7 59,875 63,120
Interest in joint ventures 8 (28,601,943) (28,407,817)
New planting expenditure 9 12,862,724 2,293,598
Other Investments 10 4,615,500 4,615,500
Deferred tax assets 11 – 30,827
Goodwill 12 3,744,605 3,744,605
64,996,938 41,957,889
Current assets
Inventories 13 10,521,722 15,513,481
Property development costs 14 1,784,567 1,642,492
Receivables 15 246,063,818 156,200,474
Tax assets 16 737,035 2,850,925
Cash and cash deposits 17 145,004,720 154,096,042
404,111,862 330,303,414
TOTAL ASSETS 469,108,800 372,261,303

Consolidated Balance Sheet (cont’d)

2006 2005
Note RM RM
EQUITY AND LIABILITIES

Equity
Share Capital 18 66,710,400 66,710,400
Reserves 19 69,710,468 54,249,887
Total equity attributable to shareholders of the Company 136,420,868 120,960,287

Minority interest 2,760,664 2,524,354
Total equity 139,181,532 123,484,641
Liabilities
Non-current liabilities
Other borrowings 20 51,350,526 50,582,645
Deferred tax liabilities 11 5,039,510 3,981,991
56,390,036 54,564,636
Current liabilities
Payables 21 254,826,555 185,382,323
Bank overdrafts - secured 22 3,687,933 5,361,355
Tax liabilities 2,382,075 552,322
273,537,232 194,212,026
Total liabilities 329,927,268 248,776,662
TOTAL EQUITY AND LIABILITIES 469,108,800 372,261,303
The annexed notes form an integral part of, and should be read in conjunction with, these financial statements.
Consolidated Income Statement

For the year ended 31 December 2006
2006 2005
Note RM RM
Operating revenue 23 442,600,300 249,124,615

Direct operating costs 24 (378,671,527) (199,522,413)
Gross profit 63,928,773 49,602,202

Other operating revenue 5,018,843 4,012,515
Administrative costs (22,609,156) (19,391,174)

Other operating costs (5,022,555) (2,471,975)
(27,631,711) (21,863,149)
Profit from operations 41,315,905 31,751,568

Finance costs (4,751,830) (3,067,938)
Share of results of joint ventures (194,126) (561,846)
Share of result of associated companies (3,245) (3,899)
Profit before taxation 25 36,366,704 28,117,885

Taxation 26 (11,975,443) (9,249,362)
Attributable to :
Equity holders of the Company 24,154,951 18,898,874
Minority interest 236,310 (30,351)
24,391,261 18,868,523
Earning per share attributable to equity holder of the Company (sen)

Basic, earnings per ordinary shares (Sen) 27 36.21 28.33
Fully diluted earnings per ordinary shares (Sen) 27 – –
Proposed net dividend per ordinary shares (Sen) 10.95 10.80
Consolidated Statement of Changes in Equity

Attributable to Equity Holders of the Company

Non Distributable Distributable
Foreign
Exchange
Share Share Translation Revaluation Retained Minority Total
Capital Premium Reserve Reserve Profits Sub Total Interest Equity
RM RM RM RM RM RM RM RM
At 1.1.05 66,710,400 2,180,250 (121) 7,002,890 29,540,538 105,433,957 1,585,330 107,019,287
Net profit for the year – – – – 18,898,874 18,898,874 (30,351) 18,868,523

Foreign exchange
translation difference
from foreign branches
and subsidiary
companies* – – (10,340) – – (10,340) – (10,340)
Total income and
expenses recognised
for the year – – (10,340) – 18,898,874 18,888,534 (30,351) 18,858,183
Acquisition of
subsidiary company – – – – – – 340,681 340,681
Allotment of shares
by subsidiary company
to minority interest – – – – – – 628,694 628,694
First and final dividend
paid for year 2004
(7% per share less
28% income tax) – – – – (3,362,204) (3,362,204) – (3,362,204)
At 31.12.05
(As previously
reported) 66,710,400 2,180,250 (10,461) 7,002,890 45,077,208 120,960,287 2,524,354 123,484,641
Effect of adopting
FRS 140 – – – (5,454,890) 5,454,890 – – –
Deferred tax relating
to adoption of
FRS 140 – – – (1,548,000) – (1,548,000) – (1,548,000)
At 1.1.06
(As restated) 66,710,400 2,180,250 (10,461) – 50,532,098 119,412,287 2,524,354 121,936,641
Consolidated Statement of Changes in Equity (cont’d)

Attributable to Equity Holders of the Company
Non Distributable Distributable
Foreign
Exchange
Share Share Translation Revaluation Retained Minority Total
Capital Premium Reserve Reserve Profits Sub Total Interest Equity
RM RM RM RM RM RM RM RM
Balance brought down 66,710,400 2,180,250 (10,461) – 50,532,098 119,412,287 2,524,354 121,936,641
Net profit for the year – – – – 24,154,951 24,154,951 236,310 24,391,261

Foreign exchange
translation difference
from foreign branches
and subsidiary
companies* – – 58,353 – – 58,353 – 58,353
Total income
and expenses
recognised
for the year – – 58,353 – 24,154,951 24,213,304 236,310 24,449,614
First and final
dividend paid
for year 2005
(15% per share less
28% income tax) – – – – (7,204,723) (7,204,723) – (7,204,723)
At 31.12.06 66,710,400 2,180,250 47,892 – 67,482,326 136,420,868 2,760,664 139,181,532
* Income and expenses recognised directly in equity.
Consolidated Cash Flow Statement

2006 2005
Note RM RM
Cash Flows From Operating Activities
Profit before taxation 36,366,704 28,117,885
Adjustments for:-
Amortisation of leasehold land 22,376 22,376
Amortisation of goodwill – 513,825
Bad debts written off – 13,163
Depreciation of property, plant and equipment 5,459,571 3,743,632
Dividend revenue (2,609) (7,800)
Gain on disposal of property, plant and equipment (356,019) (201,505)
Changes in fair value of investment properties (350,000) –
Impairment loss on investment in associated company – 400
Interest expenses 4,481,301 1,936,363
Interest revenue (3,190,472) (2,709,463)
Loss on foreign exchange - unrealised 794,444 18,426
Property, plant and equipment written off 277,102 –
Share of results of associated companies 3,245 3,899
Share of results in joint ventures 194,126 561,846
Operating profit before working capital changes 43,699,769 32,013,047
Decrease/(Increase) in inventories 4,991,759 (5,225,443)

Increase in amount due from customers for contract works (82,175,440) (12,061,952)
Increase in property development costs (142,075) (73,384)
Decrease in amount due to customers for contract works (178,695) (11,542,971)
Increase in trade and other receivables (8,484,132) (27,776,625)
Increase in trade and other payables 69,530,344 56,084,343
Cash generated from operations 27,241,530 31,417,015
Interest paid (4,481,301) (2,155,954)

Tax paid (8,398,343) (8,027,002)
Net Cash Generated From Operating Activities Carried Down 14,361,886 21,234,059
Consolidated Cash Flow Statement (cont’d)

2006 2005
Note RM RM
Net Cash Generated From Operating Activities Brought Down 14,361,886 21,234,059
Cash Flows From Investing Activities
Distribution received from joint ventures – 15,199

Dividend received 2,609 7,800
Effect of acquisition of subsidiary companies, net of cash acquired 28 – (7,096,899)
Interest received 3,190,472 2,648,636
New planting expenditure incurred (9,935,163) (2,099,344)
Acquisition of other investments – (4,500,000)
Proceeds from disposal of property, plant and equipment 725,598 521,484
Purchase of property, plant and equipment 29 (14,430,436) (3,120,900)
Repayments from joint ventures – 1,656,686
Repayments from related companies – 4,765
Repayment of associated companies – 9,300
Net cash used in investing activities (20,446,920) (11,953,273)
Cash Flows From Financing Activities
Advances from ultimate holding company (528) –

Advances from related companies 1,784 46,186
Advances from associated companies – –
Dividend paid (7,204,723) (3,362,204)
Payments to hire purchase payables (2,586,970) (2,204,250)
Proceeds from trust receipts/Mudarabah facility 10,260,378 2,425,517
Repayments of term loans (818,441) (781,102)
Repayments of trust receipts (1,062,372) (3,509,630)
Drawdown of term loan – 45,000,000
Net cash (used in)/generated from financing activities (1,410,872) 37,614,517
(7,495,906) 46,895,303
Effects of exchange rate changes 8,860,623 (11,009)
Net increase in cash and cash equivalents 1,364,717 46,884,294
Cash and cash equivalents at beginning of the year
As previously reported 148,734,687 101,850,393

Effects of exchange rate changes on cash and cash equivalents (8,782,617) –
139,952,070 101,850,393
Cash and cash equivalents at end of the year 30 141,316,787 148,734,687
Balance Sheet
2006 2005
Note RM RM
ASSETS
Non-current assets
Property, plant and equipment 4 1,518,487 2,784,254
Investments in subsidiary companies 6 43,711,997 43,220,553
Other investments 10 4,568,000 4,568,000
49,798,484 50,572,807
Current assets
Receivables 15 118,834,418 95,163,861
Tax assets 16 1,653,851 409,722
Cash and cash deposits 17 20,756,821 52,910,271
141,245,090 148,483,854
TOTAL ASSETS 191,043,574 199,056,661
EQUITY AND LIABILITIES

Equity
Share capital 18 66,710,400 66,710,400
Reserves 19 23,636,210 20,684,859
Total equity 90,346,610 87,395,259
Non-current liabilities
Deferred tax liabilities 11 4,459,052 1,581,389
50,052,827 47,462,052
Current liabilities
Payables 21 47,506,804 63,836,959
Other borrowings 20 3,137,333 347,703
Tax liabilities – 14,688
50,644,137 64,199,350
Total liabilities 100,696,964 111,661,402
TOTAL EQUITY AND LIABILITIES 191,043,574 199,056,661
Income Statement
2006 2005
Note RM RM
Operating revenue 23 189,611,794 164,386,352

Direct operating costs 24 (165,318,808) (143,107,511)
Gross profit 24,292,986 21,278,841

Other operating revenue 1,634,449 751,826
Administrative costs 5,344,557 4,219,412

Other operating costs 578,248 121,881
(5,922,805) (4,341,293)
Profit from operations 20,004,630 17,689,374

Finance costs (3,372,131) (1,774,063)
Profit before taxation 25 16,632,499 15,915,311

Taxation 26 (6,482,368) (5,355,355)
Statement of Changes in Equity

Foreign
Exchange
Share Share Translation Retained Total
Capital Premium Reserve Profits Equity
RM RM RM RM RM
At 1.1.05 66,710,400 2,180,250 – 11,313,332 80,203,982
Foreign exchange translation difference* – – (6,475) – (6,475)

Net profit for the year – – – 10,559,956 10,559,956
Total income and expenses recognised for the year – – (6,475) 10,559,956 10,553,481
First and final dividend paid for year 2004
(7% per share less 28% income tax) – – – (3,362,204) (3,362,204)
At 31.12.05 66,710,400 2,180,250 (6,475) 18,511,084 87,395,259
First and final dividend paid for year 2005

(15% per share less 28% income tax) – – – (7,204,723) (7,204,723)
Foreign exchange translation difference* – – 5,943 – 5,943

Net profit for the year – – – 10,150,131 10,150,131
Total income recognised for the year – – 5,943 10,150,131 10,156,074
At 31.12.06 66,710,400 2,180,250 (532) 21,456,492 90,346,610
* Income and expenses recognised directly in equity.
Cash Flow Statement

2006 2005
Note RM RM
Cash Flows From Operating Activities
Profit Before Taxation 16,632,499 15,915,311
Adjustments for:-
Depreciation of property, plant and equipment 911,967 434,834

Dividend revenue (10,000,040) (10,000,040)
Interest expenses 3,351,028 922,454
Interest revenue (1,634,449) (751,826)
Loss on foreign exchange - unrealised 294,415 18,426
Property, plant and equipment written off 5,519 –
Operating Profit Before Working Capital Changes 9,560,939 6,539,159
Decrease in amount due from customers for contract works (21,338,382) (10,234,610)
(Decrease)/Increase in amount due to customers for contract works (347,510) 347,510
Decrease/(Increase) in trade and other receivables 26,276,418 (43,619,273)
(Decrease)/Increase in trade and other payables (16,277,059) 44,484,039
Cash used in operations (2,125,594) (2,483,175)
Interest paid (3,351,028) (52,203)

Tax paid (1,260,581) (959,369)
Net cash used in operating activities carried down (6,737,203) (3,494,747)

Cash Flow Statement (cont’d)

2006 2005
Note RM RM
Net cash used in operating activities brought down (6,737,203) (3,494,747)
Cash Flows From Investing Activities
Acquisition of investment in subsidiary companies (491,444) (19,042,713)

Dividend received 7,300,030 7,200,030
Interest received 1,634,449 749,822
Acquisition of other investment – (4,500,000)
Purchase of property, plant and equipment 29 (534,845) (1,472,701)
Repayments from related companies (28,629,266) 11,734,012
Repayment from associated companies – 7,002
Net cash used in investing activities (20,721,076) (5,324,548)
Cash Flows From Financing Activities
Dividend paid (7,204,723) (3,362,204)

Payments to hire purchase payables (347,703) (240,199)
Drawndown of Mudarabah facility 1,770,000 –
Drawdown of trust receipts 1,080,444 –
Drawdown of term loan – 45,000,000
Net cash (used in)/generated from financing activities (4,701,982) 41,397,597
(32,160,261) 32,578,302
Effects of exchange rate changes 4,896,153 (7,143)
Net (decrease)/increase in cash and cash equivalents (27,264,108) 32,571,159
Cash and cash equivalents at beginning of the year
As previously reported 52,910,271 20,339,112

Effects of exchange rate changes on cash and cash equivalents (4,889,342) –
48,020,929 20,339,112
Cash and cash equivalents at end of the year 30 20,756,821 52,910,271
Notes to the Financial Statements

31 December 2006
1. Corporate Information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, with its shares listed on the Main Board of Bursa
Malaysia.
The Company is principally engaged in investment holding, providing management services and as contractors of civil and structural construction
works. The principal activities of the subsidiary companies are disclosed in note 6 to the financial statement. There have been no significant
changes in the nature of those activities.
The registered office and principal place of business are located at Mezzanine Floor, 8A, Jalan Sri Semantan Satu, Damansara Height, 50490 Kuala
Lumpur and No. 88, Jalan Gombak, Setapak, 53000 Kuala Lumpur respectively.
The ultimate holding company of the Company is Zaki Holdings (M) Sdn. Bhd., a company incorporated in Malaysia.
The financial statements were authorised for issue in accordance with a Board of Directors’ resolution dated 24 April 2007.
2. Basis of Preparation
The financial statements of the Group and of the Company comply with the provisions of the Companies Act, 1965 and applicable MASB Approved
Accounting Standards for Entities Other Than Private Entities issued by the Malaysian Accounting Standards Board (‘MASB’).
The measurement bases applied in the presentation of the financial statement of the Group and of the Company included cost, recoverable
amount, fair value and realisable value. Estimates are used in measuring these values.
The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which
the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the
Company’s functional currency. All financial information presented in RM has been rendered to nearest RM, unless otherwise stated.
The preparation of financial statements of the Group and of the Company requires management to make assumptions, estimates and judgements
that effect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Assumptions and estimates
are reviewed on an ongoing basis and are recognized in the period in which the assumption or estimate is revised.
Significant areas of estimation, uncertainty and critical judgements used in applying accounting principles that have significant effect on the
amount recognised in the financial statements are as follows:-
i. Fair value of investment properties (note 5) - the measurement of the fair value for investment properties performed by management is
determined with reference to current prices in an active market for similar properties in the same location and condition and subject to
similar lease and other contracts.
ii. Annual testing for impairment of goodwill (note 12) and property, plant and equipment (note 4) - the measurement of the recoverable
amount of cash-generating units are determined based on the value-in-use method, which requires the use of cash flow projections based
on financial budgets approved by management.
iii. Construction contracts (note 31) - significant judgement is used in determining the stage of completion, the extent of the contract costs
incurred, the estimated total contract revenue (for contracts other than fixed price contracts) and contract costs, as well as the recoverability
of the contracts. Total contract revenue also includes an estimation of the recoverable variation works that are recoverable from the
customers. In making judgments, the Group evaluates based on past experience and work of specialists.
iv. Property development costs (note 14) - significant judgement is required in determining the stage of completion, the extent of the property
development costs incurred, the estimated total property development revenue and cost, as well as the recoverability of the development
projects. In making judgements, the Group evaluates based on past experience and work of specialists.
Notes to the Financial Statements (cont’d)

3. Significant Accounting Policies
On 1 January 2006, the Group and the Company adopted the following Financial Reporting Standards (“FRS”) issued by MASB mandatory for
accounting periods beginning on or after 1 January 2006.
FRS 2 Share-based Payment

FRS 3 Business Combination
FRS 5 Non-current Assets Held for Sale and Discontinued Operations
FRS 101 Presentation of Financial Statements
FRS 102 Inventories
FRS 104 Depreciation Accounting
FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors
FRS 110 Events After the Balance Sheet Date
FRS 116 Property, Plant and Equipment
FRS 120 Accounting for Government Grants and Disclosure of Government Assistance
FRS 121 The Effects of Changes in Foreign Exchange Rates
FRS 127 Consolidated and Separate Financial Statements
FRS 128 Investments in Associates
FRS 129 Financial Reporting in Hyperinflationary Economics
FRS 131 Interests in Joint Ventures
FRS 132 Financial Instruments : Disclosures and Presentation
FRS 133 Earnings per Share
FRS 136 Impairment of Assets
FRS 138 Intangible Assets
FRS 140 Investment Property
The adoption of these FRS standards does not have any material financial impact on the Group and on the Company, or any significant changes
in accounting policies of the Group and of the Company except as disclosed in note 51 to the financial statements.
The Group and the Company have not early adopted the FRS as follows:-
- FRS117 - Leases, which is effective for financial periods on or after 1 October 2006
- FRS124 - Related Party Disclosures, which is effective for financial periods on or after 1 October 2006
- FRS139 - Financial Instruments: Recognition and Measurement, for which MASB has yet to announce the effective date.
The impact of applying these standards on this financial statements upon first adoption of these standards as required by paragraph 30(b) of FRS
108 Accounting Policies, Changes in Accounting Estimates and Errors are not required to be disclosed by virtue of exemptions provided under
paragraph 67B of FRS117, paragraph 22A of FRS124 and paragraph 103AB of FRS139.
(a) Basis of Consolidation
The consolidated financial statements incorporate the audited financial statements of the Company and all of its subsidiary companies
which are disclosed in note 6 to the financial statements made up to the end of the financial year.
Intra-group balances, transactions and resulting unrealised profits and losses are eliminated on consolidation and the consolidated financial
statements reflect external transactions only.
The results of the subsidiary companies acquired or disposed during the financial year are included in the consolidated financial statements
based on the purchase method from the effective date of acquisition or up to the effective date of disposal respectively. The assets, liabilities
and contingent liabilities assumed of a subsidiary company are measured at their fair values at the date of acquisition and these values are
reflected in the consolidated balance sheet.

3. Significant Accounting Policies (cont’d)
(a) Basis of Consolidation (cont’d)
Goodwill or negative goodwill acquired in a business combination represents the difference between purchase consideration and the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities in the subsidiary companies at the date of
acquisition.
Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities over the cost of acquisition is recognised as
negative goodwill in the income statement.
Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minority
interests’ share of the fair value of net assets at the acquisition date and the minorities’ share of changes in the equity since then.
The consolidated financial statements are prepared on the basis that exceeds of losses attributable to minority shareholders over their
equity interest will be absorbed by the Group. All profits subsequently reported by the subsidiary companies will be allocated to the Group
until the minority shareholders’ share of losses previously absorbed by the Group has been recovered.
(b) Goodwill
Goodwill is allocated to cash generating units and is stated at cost less accumulated impairment losses, if any. Impairment test is performed
annually. Goodwill is also tested for impairment when indication of impairment exists. Impairment losses recognised are not reversed in
subsequent periods.
Upon the disposal of interest in the subsidiary company, the related goodwill will be included in the computation of gain or loss on disposal
of interest in the subsidiary company in the consolidated income statement.
(c) Subsidiary Company
A subsidiary company is defined as a company in which the Group has a long term equity interest, directly or indirectly, and has control over
its financial and operating policies so as to obtain benefits therefrom.
Investment in subsidiary company, which are eliminated on consolidation, are stated at cost less accumulated impairment losses, if any, in
the Company’s financial statements. Impairment loss is determined on individual basis.
On disposal of such investments, difference between the net disposal proceeds and their carrying amount is included in the income
statement.
(d) Associated Company
Associated companies are entities in which the Group has significant influence and that is neither a subsidiary company nor an interest in
a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not in
control or joint control over those policies.
Investment in associated companies are accounted for in the Group’s consolidated financial statements using the equity method. The
Group’s investment in associated companies is recognised in the consolidated balance sheet at cost plus the Group’s share of post-
acquisition net results of the associated company less impairment loss, if any, determined on an individual basis. The Group’s share of results
of the associated company is recognised in the consolidated income statement from the date that significant influence commences until the
date that significant influence ceases. Unrealised gains and losses on transactions between the Group and the associated companies are
eliminated to the extent of the Group’s interest in the associated company.

(d) Associated Company (cont’d)
When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company. Consistent accounting
policies are applied for transactions and events in similar circumstances.
Goodwill relating to an associated company is included in the carrying amount of the investment and is not amortised. Any excess of the
Group’s share of the fair value of the associated company’s net identifiable assets and contingent liabilities over the cost of the investment
is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the
results of the associated company in the period in which the investment is acquired.
Investments in associated companies are stated at cost, less accumulated impairment losses, if any, in the Company’s financial statements.
(e) Joint Venture
Joint venture is defined as a contractual arrangement entered into by two or more parties to undertake a jointly controlled economic activity
in which no single venturer has unilateral control in the financial and operating decisions of the joint venture.
Interest in joint venture which does not involve any establishment of a separate entity is accounted for in the financial statements based on
the agreed share of the results, assets and liabilities of the joint venture.
Investment in joint venture which involves an establishment of a separate entity is stated at cost less accumulated impairment losses, if any,
in the financial statements. Where consolidated financial statements are prepared, the interest in the joint venture entity is accounted for
using the equity method based on the audited financial statements of the entity. When audited financial statements of the entities are not
co-terminous with those of the Group, the share of results is based on the unaudited management financial statements made up to the
financial year end of the Group. The consolidated income statement includes the Group’s share of the entity’s results of the operation. In
the consolidated balance sheet, the Group’s interest is stated at cost and adjusted for the Group’s share of changes in the net assets of the
entity.
(f) Property, Plant and Equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes
expenditure that are directly attributable to the acquisition of the asset. Subsequent costs are included in the assets’ carrying amount or
recognised as separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably.
Depreciation on property, plant and equipment is calculated on the straight line method to write off the cost of the property, plant and
equipment over their estimated useful lives.
The principal annual rates used for this purpose are:-
Leasehold land Over the remaining lease period of 23 and 77 years

Buildings 2%
Furniture, fittings and equipment 10% - 20%
Plant and machinery 10% - 20%
Motor vehicles 20%
Renovation 20%

(f) Property, Plant and Equipment and Depreciation (cont’d)
The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and
period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the items of property and equipment.
An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in the income statement.
Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use and no further charge
for depreciation is made in respect of these property, plant and equipment.
(g) Impairment of Assets
The carrying amounts of assets other than investment property that is measured at fair value, construction contract assets, property
development costs, inventories, deferred tax assets and financial assets are reviewed at each balance sheet date to determine whether there
is any indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated. The recoverable amount is the
higher of net selling price and the value in use, which is measured by reference to discounted future cash flows. An impairment loss is
recognised whenever the carrying amount of an item of asset or its cash generating unit exceeds its recoverable amount. A cash generating
unit is the smallest identifiable asset group that generates cash flows that largely independent from other assets and group.
An impairment loss is recognised as an expense in the income statement. Impairment losses recognised in respect of cash generating units
are allocated first to reduce the carrying amount of any goodwill and then to reduce the carrying amount of other assets. Reversal of
impairment loss of an asset, other than goodwill, due to a subsequent increase in recoverable amount is restricted to the carrying amount
that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior
years. The reversal of impairment loss is recognised as revenue in the income statement.
(h) Investment Properties
Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are
measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Fair
values of investment properties are determined either by independent professional valuers or by management based on their judgement
and estimates. Management’s estimates have been made with reference to current prices in an active market for similar properties in the
same location and condition and subject to similar lease and other contracts.
Gains or losses arising from changes of fair values of investment properties are recognised in income statement in the year in which they
arise.
Investment properties are derecognised when either there have been disposed of or when the investment property is permanently withdraw
from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment
property are recognised in income statement in the year in which they arise.
(i) New Planting Expenditure
New planting expenditure incurred on land clearing and upkeep of trees to maturity is capitalised as costs and is amortised upon maturity
over the remaining lease period of the leasehold land.

(j) Inventories
Inventories are stated at the lower of cost and net realisable value and are costed on the first-in- first-out basis. Cost includes the actual cost
of purchases and incidentals in bringing the inventories into store. Cost of completed development properties is determined on specific
identification basis and includes land, construction and appropriate development overheads.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale.
(k) Construction Contracts
Contract work-in-progress consists of cost incurred to date plus a proportion of estimated profit attributable to contract work performed to
date less progress billings received and receivable. Contract costs include direct materials, labour, sub-contract costs and attributable
construction overheads. Where foreseeable losses on contract are anticipated, full provision of these losses is made in the financial
statements.
The aggregate of the costs incurred plus the profit/loss recognised on each contract is compared against the respective progress billings up
to the end of the financial year. The excess of costs incurred plus recognised profit (less recognised losses) over progress billings, is shown
as ‘Amount due from customers for contract work’ under current assets. Conversely, the excess of progress billings over costs incurred and
recognised profit (less recognised losses), is shown as ‘Amount due to customers for contract work’ under current liabilities.
(l) Property Development Costs
Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a
reasonable basis to such activities. Costs consist of land and construction costs and other development costs including related overheads
and capitalised borrowing costs.
When the financial outcome of a development activity can be reliably estimated, development revenue and costs are recognised in the
income statement by reference to the stage of completion of development activities at the balance sheet date.
When the financial outcome of a development activity cannot be reliably estimated, development revenue is recognised only to the extent
of development costs incurred that is probable will be recoverable, and development costs on properties sold are recognised as an expense
in the period in which they are incurred.
Any expected loss on a development project is recognised as an expense immediately.
Property development costs not recognised as an expense is recognised as an asset, which is measured at the lower of cost and net
realisable value.
Accrued billings as current assets represent the excess of revenue recognised in the income statement over billings to purchasers. Progress
billings as current liabilities represent the excess of billings to purchases over revenue recognised in the income statement.

(m) Capitalisation of Borrowing Costs
Borrowing costs incurred on borrowings related to property, plant and equipment, development properties and investment properties are
capitalised during the period when activities to plan, develop and construct these assets are undertaken. Capitalisation of borrowing costs
ceases when these assets are ready for their intended use or sale.
All other borrowings are recognised in income statement in the period in which they are incurred.
(n) Finance Lease
Property, plant and equipment acquired by way of hire purchase or finance lease are capitalised at the inception of the lease or hire purchase
at the lower of the fair values of the asset and the present value of the minimum lease payments. Each lease payment is allocated between
the liability and finance charges so as to achieve a periodic constant rate of interest on the remaining balance. The corresponding rental
obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
(o) Foreign Currencies
i. Transactions in foreign currencies

Transactions in foreign currencies are converted into Ringgit Malaysia at the rate of exchange ruling at the time of the transaction and
where settlement had not taken place at year end, at the approximate rates ruling as at that date. All gains and losses on exchange
are included in the income statement.
ii. Translation of foreign currency financial statements

Assets, liabilities and reserves of foreign subsidiary company are translated into Ringgit Malaysia at the rates of exchange
approximating those ruling as at the financial year end. Income and expense items are translated at the average rate of exchange for
the financial year. The translation differences arising therefrom are recorded as movements in translation reserve. Upon disposal of a
foreign subsidiary company, the accumulative amount of translation differences at the date of disposal of the subsidiary company is
taken to the income statement.
(p) Taxation
Taxation in the income statement represents the aggregate amount of current and deferred tax. Current tax is the expected amount payable
in respect of taxable income for the year and any adjustments recognised for prior years’ tax.
Deferred tax is recognised, using the liability method, on all temporary differences between the tax base of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax is not recognised if the temporary differences arise from goodwill or negative
goodwill or from the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the
transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the
period in which the assets are realised or the liabilities are settled.
Deferred tax is recognised in equity when it relates to items recognised directly in equity. When deferred tax arises from business
combination that is an acquisition, the deferred tax is included in the resulting goodwill or negative goodwill.
Deferred tax assets are recognised only to the extent that there are sufficient taxable temporary differences relating to the same taxation
authority to offset or when it is probable that future taxable income will be available against which the assets can be utilised.

(q) Revenue Recognition
Revenue from construction contracts is recognised on the percentage of completion method in the proportion of which the contract costs
incurred to date bear to the total estimated contract costs, when the outcome of the contracts can be reliably estimated.
Revenue from development properties sold is recognised on the percentage of completion method in the proportion of which the
development costs incurred to date bear to the total estimated development costs, when the outcome of development can be reliably
estimated.
Sales of goods are recognised when goods are delivered.
Rental and management fees revenue are recognised on due and receivable basis.
Interest revenue is recognised on a time proportion basis that reflects the effective yield of the assets.
Dividend revenue from investment in subsidiary companies, associated companies and other investments is recognised when the right to
receive the dividend is established.
(r) Employee Benefits
i. Short Term Employee Benefits

Wages, salaries, social security contributions, bonuses are recognised as an expense in the year in which the associated services are
rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating
compensated absences such as sick leave are recognised when the absences occur.
ii. Defined Contribution Plans

As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund. Some of
the Group’s foreign subsidiary companies make contributions to their respective countries’ statutory pension schemes. Such
contributions are recognised as an expense in the income statement as incurred.
iii. Share-Based Compensation

The Employees’ Share Option Scheme (“ESOS”) allows the Group’s employees to acquire shares of the Company. The fair value of
share options granted to employees is recognised as an expense in the income statement over the vesting periods of the grants, with
a corresponding increase in equity. The total amount to be recognised as compensation expense is determined by reference to the fair
value of the share option at the date of the grant and the number of share options to be vested by the vesting date taking into
account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market
vesting conditions. At the balance sheet date, the Group revises its estimate of the number of share options that are expected to vest
by the vesting date. Any revision of this estimates is included in the income statement and a corresponding adjustment to equity over
the remaining vesting period.
(s) Murabahah Facility
Construction materials acquired under the Murabahah facility are capitalised as construction costs and the corresponding obligations
included in other borrowings. The related financial charges are allocated to the income statement on a systematic basis over the period of
the financing.

(t) Financial Instruments
Financial instruments are classified as assets, liabilities or equity in accordance with the substance of the contractual arrangement. Interest,
dividends, losses and gains relating to financial instruments classified as assets or liabilities are reported as expense or revenue. Distributions
to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Company has
a legally enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The recognised financial instruments comprise cash and cash equivalents, trade and other receivables, trade and other payables, other non-
current investments, bank borrowings and ordinary shares. These instruments are recognised in the financial statements when a contract or
contractual arrangement has been entered into with the counter-parties.
The unrecognised financial instruments comprise financial guarantees given to financial institutions for banking and credit facilities granted
to subsidiary companies and legal claims by suppliers. The financial guarantees and legal claims would be recognised as liabilities when
obligations to pay the counter-parties are assessed as being probable.
i. Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances and deposits, bank overdrafts and short term, highly liquid
investments that are readily convertible to known amount of cash and are subject to insignificant risk of changes in value.
ii. Receivables
Receivables are stated at cost less allowance for doubtful debts, if any, which are the anticipated realisable values. Known bad debts
are written off and specific allowance is made for those debts considered to be doubtful of collection.
iii. Payables
Payables are stated at cost which are the fair values of considerations to be paid in the future for goods and services received.
iv. Other Non-Current Investments

Non-current investments other than investments in subsidiary companies, associated companies, jointly controlled entities and
investment properties are stated at cost less allowance for diminution in value, if any.
On disposal of investment, the difference between net disposal proceeds and its carrying amount is charged or credited to the income
statement.
v. Interest Bearing Bank Borrowings

The interest bearing bank borrowings include bank overdrafts, trade financing and loans and are stated at the amount of proceeds
received, net of transaction costs.
vi. Equity Instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.
The transaction costs of an equity transaction, other than in the context of a business combination, are accounted for as a deduction
from equity, net of tax. Equity transaction costs comprise only those external costs directly attributable to the equity transaction which
would otherwise have been avoided. Cost of issuing equity securities in connection with a business combination are included in the
cost of acquisition.

4. Property, Plant and Equipment
Furniture,
Leasehold Freehold Building & Plant & Motor Fittings &
Land Land Renovation Machinery Vehicles Equipment Total
RM RM RM RM RM RM RM
GROUP
COST
At 1.1.06 10,672,129 5,531,840 8,119,715 14,099,049 16,419,206 3,236,386 58,078,325

Additions – – 29,496 13,814,838 4,266,266 1,019,766 19,130,366
Disposals – – (16,434) (300,600) (1,154,840) (14,100) (1,485,974)
Translation difference – – – (28,783) (18,001) (17,211) (63,995)
Written off – – (307,770) – – (7,358) (315,128)
At 31.12.06 10,672,129 5,531,840 7,825,007 27,584,504 19,512,631 4,217,483 75,343,594
ACCUMULATED
DEPRECIATION
At 1.1.06 299,189 – 866,975 9,620,970 9,743,228 2,129,907 22,660,269

Charge for the year 355,383 – 155,897 2,443,414 2,765,765 395,452 6,115,911
Disposals – – (4,657) (300,592) (797,049) (14,097) (1,116,395)
Translation difference – – – (35,596) (6,056) (2,690) (44,342)
Written off – – (36,187) – – (1,839) (38,026)
At 31.12.06 654,572 – 982,028 11,728,196 11,705,888 2,506,733 27,577,417
NET BOOK VALUE
At 31.12.06 10,017,557 5,531,840 6,842,979 15,856,308 7,806,743 1,710,750 47,766,177


4. Property, Plant and Equipment (cont’d)
Furniture,
Leasehold Freehold Building & Plant & Motor Fittings &
Land Land Renovation Machinery Vehicles Equipment Total
RM RM RM RM RM RM RM
GROUP
COST
At 1.1.05 1,347,925 5,369,840 7,471,715 13,652,355 14,348,910 2,613,238 44,803,983

In respect of subsidiary
company acquired 9,324,204 – – – – 3,965 9,328,169
Additions – 162,000 648,000 603,194 3,088,520 688,086 5,189,800
Disposals – – – (156,500) (1,018,224) (68,903) (1,243,627)
At 31.12.05 10,672,129 5,531,840 8,119,715 14,099,049 16,419,206 3,236,386 58,078,325
ACCUMULATED
DEPRECIATION
At 1.1.05 82,559 – 718,590 8,745,567 8,192,501 1,884,597 19,623,814

Charge for the year 216,630 – 148,385 1,031,944 2,249,496 313,807 3,960,262
Disposals – – – (156,494) (698,739) (68,415) (923,648)
Translation difference – – – (47) (30) (82) (159)
At 31.12.05 299,189 – 866,975 9,620,970 9,743,228 2,129,907 22,660,269
NET BOOK VALUE
At 31.12.05 10,372,940 5,531,840 7,252,740 4,478,079 6,675,978 1,106,479 35,418,056


Furniture,
Motor Fittings & Plant &
Vehicles Equipment Machinery Total
RM RM RM RM
COMPANY
COST
At 1.1.06 2,809,144 381,199 594,994 3,785,337
Additions 112,416 359,262 63,167 534,845
Written off – (7,358) – (7,358)
Disposals (372,056) (325,763) (593,475) (1,291,294)
Translation difference – (1,449) (68) (1,517)
At 31.12.06 2,549,504 405,891 64,618 3,020,013
ACCUMULATED DEPRECIATION
At 01.01.06 953,917 22,337 24,829 1,001,083
Charge for the year 548,640 54,857 308,470 911,967
Written off – (1,839) – (1,839)
Disposals (57,598) (27,302) (324,136) (409,036)
Translation difference (221) (322) (106) (649)
At 31.12.06 1,444,738 47,731 9,057 1,501,526
NET BOOK VALUE

At 31.12.06 1,104,766 358,160 55,561 1,518,487
COST
At 1.1.05 1,562,008 4,728 – 1,566,736
Additions 1,247,136 376,471 594,994 2,218,601
At 31.12.05 2,809,144 381,199 594,994 3,785,337
ACCUMULATED DEPRECIATION
At 1.1.05 561,680 4,728 – 566,408
Charge for the year 392,267 17,691 24,876 434,834
Translation difference (30) (82) (47) (159)
At 31.12.05 953,917 22,337 24,829 1,001,083
NET BOOK VALUE

At 31.12.05 1,855,227 358,862 570,165 2,784,254

Included in property, plant and equipment of the Group are:-
(i) analysis of leasehold land as follows:-
Long Term Short Term

Leasehold Leasehold
Land Land Total
RM RM RM
2006
Cost 1,188,180 9,483,949 10,672,129
Net book value 1,095,596 8,921,961 10,017,557
2005
Cost 1,188,180 9,483,949 10,672,129
Net book value 1,111,027 9,261,913 10,372,940
Long term lease refers to lease periods with unexpired periods of fifty years or more.
Short term lease refers to lease periods with unexpired periods of less than fifty years.
(ii) property, plant and equipment under hire purchase instalments plans as follows:-
Motor Plant &

Vehicles Machinery Total
RM RM RM
GROUP
2006
Cost 13,356,122 2,969,337 16,325,459
Net Book Value 6,878,021 2,323,567 9,201,588
2005
Cost 11,121,398 1,604,937 12,726,335
Net Book Value 5,969,316 1,155,960 7,125,276


(ii) property, plant and equipment under hire purchase instalments plans as follows:- (cont’d)
Motor Plant &

Vehicles Machinery Total
RM RM RM
COMPANY
2006
Cost 2,237,088 – 2,237,088
Net Book Value 962,161 – 962,161
2005
Cost 2,237,088 – 2,237,088
Net Book Value 1,409,571 – 1,409,571
(iii) freehold and leasehold land and buildings with a total net book value of RM11,418,082/- (2005 : RM11,815,253/-) charged to financial
institutions as securities for banking facilities of a subsidiary company, Ahmad Zaki Sdn. Bhd. (“AZSB”) as disclosed in notes 22 and 42 to
the financial statements.
5. Investment Properties
GROUP
2006 2005
RM RM
At fair value/At valuation

At beginning of the year 24,200,000 24,200,000
Changes in fair value (Note 25) 350,000 –
At end of the year 24,550,000 24,200,000
Included in above are:

Freehold land 5,300,000 4,950,000
Hotel properties
- freehold land 543,912 543,912
- hotel buildings 18,706,088 18,706,088
19,250,000 19,250,000
24,550,000 24,200,000

5. Investment Properties (cont’d)
The hotel properties are charged to financial institutions as security for facilities of a subsidiary company, AZSB, as disclosed in note 22 to the
financial statements.
6. Investments in Subsidiary Companies
COMPANY
2006 2005
RM RM
Unquoted shares,at cost

Additions 491,444 19,042,713
At end of the year 43,711,997 43,220,553
The subsidiary companies are as follows:-
Effective Equity
Country of Interest
Name of Company Incorporation 2006 2005 Principal Activities
Held by the Company
# Ahmad Zaki Sdn. Bhd. Malaysia 100% 100% Contractors of civil and structural contract
works
# Inter-Century Sdn. Bhd. Malaysia 100% 100% Dealer of marine fuels and lubricants
# Tadok Granite Manufacturing Sdn. Bhd. Malaysia 100% 100% Dormant
# AZRB International Ventures Sdn. Bhd. Malaysia 100% 100% Dormant
Held by the Company
# AZRB Machineries Sdn. Bhd. Malaysia 100% 100% Dormant

# Trend Vista Development Sdn. Bhd. Malaysia 100% 100% Dormant
* P.T. Ichtiar Gusti Pudi Republic of Indonesia 95% 95% Oil palm cultivation
@* Ahmad Zaki Saudi Arabia Co. Ltd Kingdom of 95% – Contractors of civil and structural contract
Saudi Arabia works
Held through Ahmad Zaki Sdn. Bhd.
* Kemaman Technology & Industrial Park Malaysia 60% 60% Property development
Sdn. Bhd. (“KTIP”)

6. Investments in Subsidiary Companies (cont’d)
The subsidiary companies are as follows:- (cont’d)
Effective Equity
Country of Interest
Name of Company Incorporation 2006 2005 Principal Activities
Held through Inter-Century Sdn. Bhd.

# Astral Far East Sdn. Bhd. Malaysia 100% 100% Dealer of lubricants and petroleum-based
products
Held through AZRB
International Ventures Sdn. Bhd.
* AZRB Construction (India) Pvt. Ltd. India 100% 100% Dormant
@* Ahmad Zaki Saudi Arabia Co. Ltd Kingdom of 5% – Contractors of civil and structural contract
Saudi Arabia works
# Audited by an associated firm of the auditors of the Company.
* Audited by another professional firm of accountants.
@ Wholly owned subsidiary company of the Group.
7. Interest in Associated Companies
GROUP
2006 2005
RM RM
Unquoted shares, at cost

At beginning of the year 110,400 110,400
Impairment loss (400) (400)
At end of the year 110,000 110,000

Share of losses of associated companies (50,125) (46,880)
59,875 63,120
Represented by:-
Group's share of net tangible assets 51,819 55,064
Goodwill on acquisition 40,288 40,288

Less: Accumulated amortisation (32,232) (32,232)
8,056 8,056
59,875 63,120

7. Interest in Associated Companies (cont’d)
Post acquisition losses of an associated company not recognised in the financial statements are as follows:-
GROUP
2006 2005
RM RM
Loss for the year – 8

Accumulated losses 3,381 3,381
The associated companies, all incorporated in Malaysia, are as follows:-
Effective Equity
Interest
Name of Company 2006 2005 Principal Activities
Held through Ahmad Zaki Sdn. Bhd.

# Fasatimur Sdn. Bhd. 50% 50% Project management
# Maxi Heritage Sdn. Bhd. 20% 20% General contractor
# Hidro Fokus Sdn. Bhd. 40% 40% Dormant
# Audited by another professional firm of accountants.
The summarised financial information of the associated companies are as follows:-
2006 2005
RM RM
Total assets 705,966 713,742
Total liabilities 578,409 578,959
Operating revenue – –
Net loss (6,726) (7,772)


8. Interest in Joint Ventures
GROUP
2006 2005
RM RM
Shares of post acquisition results in joint ventures

At beginning of the year (28,407,817) (27,830,772)
Add: Share of results for the year (194,126) (561,846)
Less: Distribution from joint ventures – (15,199)
At end of the year (28,601,943) (28,407,817)
The Group has a 50% and 7.70% interest in the jointly controlled entities as mentioned in (i) and (ii) respectively:-
(i) BumiHiway-Ahmad Zaki Joint Venture which undertakes the contract for realignment of the route from Putrajaya to Cyberjaya, Selangor, and
(ii) Malaysia-China Hidro Joint Venture which undertakes the contract for design and execution of works for Bakun Hydroelectric Project
Package CW2 - Main Civil Works at Sarawak.
(a) The Group’s share of assets, liabilities, revenue and expenses of the joint ventures are as follows:-
(i) Share of the assets and liabilities
GROUP
2006 2005
RM RM
Property, plant and equipment 415 415

CURRENT ASSETS
Trade receivables 12,787,411 8,889,060
Other receivables, deposits and prepayments 240,331 341,714
Cash and cash deposits 1,294,646 4,804,808
14,322,388 14,035,582
LESS: CURRENT LIABILITIES
Amount due to customers for contract works – 6,739,588
Trade payables 30,887,334 16,840,452
Other payables and accruals 12,037,412 18,863,774
(42,924,746) (42,443,814)
Share of net assets of the joint ventures (28,601,943) (28,407,817)


8. Interest in Joint Ventures (cont’d)
(a) The Group’s share of assets, liabilities, revenue and expenses of the joint ventures are as follows:- (cont’d)
(ii) Share of the revenue and expenses
GROUP
2006 2005
RM RM
Attributable contract revenue 48,889,765 15,561,320

Attributable contract costs (48,889,765) (15,595,896)
Gross loss – (34,576)

Other operating revenue 762 56,798
762 22,222
Finance costs (194,888) (584,068)
Share of losses for the year (194,126) (561,846)
9. New Planting Expenditure
GROUP
2006 2005
RM RM
At cost:
At beginning of the year 2,293,598 –
Additions 10,569,126 2,293,598
At end of the year 12,862,724 2,293,598
This is in respect of expenditure incurred on new planting of oil palm in a plantation in the Republic of Indonesia.
Included in new planting expenditure is amortisation and depreciation of leasehold land and property, plant and equipment amounting to
RM633,964/- (2005 : 194,254/-).

10. Other Investments
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
At cost:
Unquoted shares in Malaysia
At beginning of the year 4,547,500 47,500 4,500,000 –

Additions – 4,500,000 – 4,500,000
At end of the year 4,547,500 4,547,500 4,500,000 4,500,000

Club membership 68,000 68,000 68,000 68,000
4,615,500 4,615,500 4,568,000 4,568,000
The club membership is in respect of transferable golf club membership.
11. Deferred Tax Assets/(Liabilities)
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
At beginning of the year (3,951,164) (637,132) (1,581,389) (18,000)

Transfer to income statement (note 26) 474,551 (703,283) (3,550,443) (1,563,417)
In respect of subsidiary company acquired (note 28) – (2,610,777) – –
Adjustment relating to the adoption of FRS 140 (1,548,000) – – –
Transfer to subsidiary company in respect of disposal of
foreign operations – – 672,700 –
Translation differences (14,897) 28 80 28
At end of the year (5,039,510) (3,951,164) (4,459,052) (1,581,389)
Presented after appropriate offsetting as follows:-

Deferred tax assets – 30,827 – –
Deferred tax liabilities (5,039,510) (3,981,991) (4,459,052) (1,581,389)
(5,039,510) (3,951,164) (4,459,052) (1,581,389)


11. Deferred Tax Assets/(Liabilities) (cont’d)
This is in respect of estimated deferred tax assets/(liabilities) arising from temporary differences as follows:-
GROUP
2006 2005
RM RM
Deferred tax assets

Differences between the carrying amount of property, plant and equipment and its tax base – 1,305
Unrelieved tax losses – 29,522
– 30,827
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Deferred tax liabilities

Differences between the carrying amount of property,
plant and equipment and its tax base (351,593) (169,374) (57,382) (61,674)
Taxable temporary differences in respect of foreign branch's revenue – (672,700) – (672,700)
Surplus arising from revaluation of investment property (2,077,140) (529,140) – –
Deductible temporary differences in respect of expenses – – (4,401,670) (847,015)
Fair value adjustment in respect of acquisition of subsidiary company (2,610,777) (2,610,777) – –
(5,039,510) (3,981,991) (4,459,052) (1,581,389)
In previous year, the estimated temporary differences for which no deferred tax assets had been recognised were in respect of share of joint
venture’s allowance for foreseeable losses amounting to RM6,341,000/-.
12. Goodwill
GROUP
2006 2005
RM RM
At cost:
In respect of subsidiary company acquired (note 28) – 624,554
5,358,197 5,358,197
Less: Accumulated amortisation (1,613,592) (1,613,592)
At end of the year 3,744,605 3,744,605


13. Inventories
GROUP
2006 2005
RM RM
At cost:
Completed development properties 1,787,498 2,896,627
Marine fuels and lubricants 8,657,485 12,540,115
Granite blocks and slabs 76,739 76,739
10,521,722 15,513,481
14. Property Development Costs
2006 2005
RM RM
Development costs
Costs incurred during the year 142,075 73,384
At end of the year 1,820,106 2,831,304

Transfer to inventories – (1,153,273)
1,820,106 1,678,031
Cost recognised in income statement (35,539) (35,539)
1,784,567 1,642,492
15. Receivables
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Trade receivables
External parties 59,447,141 61,022,723 – 30,007,683
Amount due from customers for contract works (note 31) 158,011,660 75,836,210 31,823,484 10,485,102
Amount owing by related companies (note 33) 109,882 111,670 69,508,327 40,899,733
Balance carried down 217,568,683 136,970,603 101,331,811 81,392,518


15. Receivables (cont’d)
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Balance brought down 217,568,683 136,970,603 101,331,811 81,392,518
Other receivables
Amount owing by
- associated companies (note 34) 20,000 20,000 – –
- joint ventures (note 35) 49,773 49,773 – –
69,773 69,773 – –
Other receivables, deposits and prepayments (note 32) 28,425,362 19,160,098 17,502,607 13,771,343
28,495,135 19,229,871 17,502,607 13,771,343
246,063,818 156,200,474 118,834,418 95,163,861
The Group’s and the Company’s normal trade credit term ranges from 60 to 90 days.
The foreign currency exposure profile of trade receivables is as follows:-
GROUP/COMPANY
2006 2005
RM RM
Saudi Riyal 28,885,152 20,029,868
16. Tax Assets
This is in respect of tax paid in advance to the relevant tax authorities.


17. Cash and Cash Deposits
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Cash and bank balances 36,025,977 31,185,173 2,306,293 23,744,149

Cash deposits with licensed banks 108,978,743 122,910,869 18,450,528 29,166,122
145,004,720 154,096,042 20,756,821 52,910,271
Included in cash deposits with licensed banks of the Group are deposits of RM61,715,785/- (2005 : RM57,146,267/-) which have been pledged to
financial institutions as security for bank guarantee and credit facilities of the Group.
Included in cash deposits with licensed banks of the Company are deposits of RM2,421,626/- (2005 : RM2,352,599/-) which have been pledged
to financial institutions as security for bank guarantee and credit facilities of its subsidiary company, AZSB.
The cash deposits with licensed banks of the Group and of the Company bear effective interest at rates ranging from 2.50% to 3.75% (2005 :
2.50% to 3.70%) and 2.50% to 3.75% (2005 : 2.50% to 3.65%) respectively per annum.
The foreign currency exposure profile is as follows:-
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Indonesia Rupiah 1,955,627 163,268 – –

India Rupee 350,584 778,365 350,584 776,706
United States Dollar – 29,635,526 – 16,549,064
Saudi Riyal 6,423,224 1,914,474 – 1,914,474
8,729,435 32,491,633 350,584 19,240,244
18. Share Capital
GROUP/COMPANY
2006 2005
RM RM
Authorised:
100,000,000 ordinary shares of RM1/- each 100,000,000 100,000,000
Issued and fully paid:

66,710,400 ordinary shares of RM1/- each 66,710,400 66,710,400

19. Reserves
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
NON-DISTRIBUTABLE
Share premium 2,180,250 2,180,250 2,180,250 2,180,250
Revaluation Reserve – 7,002,890 – –
Foreign exchange translation reserve 47,892 (10,461) (532) (6,475)
2,228,142 9,172,679 2,179,718 2,173,775
DISTRIBUTABLE
Retained profits 67,482,326 45,077,208 21,456,492 18,511,084
69,710,468 54,249,887 23,636,210 20,684,859
The Directors proposed a first and final dividend of 15% (2005 : 15%) per ordinary share in respect of the current financial year. The retained
profits appropriated for this proposed dividend less tax at 27% (2005 : 28%) amounted to RM7,304,789/- (2005 : RM7,204,723/-).
20. Other Borrowings
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Current Liabilities
Hire purchase payables (note 41) 2,549,456 2,096,146 286,889 347,703
Trust receipts - secured 7,428,006 – 1,080,444 –
Murabahah facility - secured 1,770,000 – 1,770,000 –
Term loans (note 42) 893,207 819,880 – –
12,640,669 2,916,026 3,137,333 347,703
Non-Current Liabilities
Hire purchase payables (note 41) 5,764,945 4,105,295 593,775 880,663
Term loans (note 42) 45,585,581 46,477,350 45,000,000 45,000,000
51,350,526 50,582,645 45,593,775 45,880,663


20. Other Borrowings (cont’d)
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Total Borrowings
Hire purchase payables (note 41) 8,314,401 6,201,441 880,664 1,228,366
Trust receipts - secured 7,428,006 – 1,080,444 –
Murabahah facility - secured 1,770,000 – 1,770,000 –
Term loans (note 42) 46,478,788 47,297,230 45,000,000 45,000,000
63,991,195 53,498,671 48,731,108 46,228,366
The trust receipt facilities bear interest at rates ranging from 7.75% to 8.25% (2005 : Nil) per annum. These facilities are secured and supported by:-
(i) cash deposits of a subsidiary company, AZSB; and
(ii) corporate guarantee from the Company.
The Murabahah facility bears a financial charge at a rate of 5.97% (2005 : Nil) per annum and is secured by assignments of contract proceeds,
guarantees and insurance proceeds from a specific construction contract.
21. Payables
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Trade payables
Amount due to customers for contract works (note 31) 8,513,471 8,692,166 – 347,510
External parties (note 36) 167,284,086 117,248,352 26,453,936 10,747,267
175,797,557 125,940,518 26,453,936 11,094,777

Other payables
Amounts owing to
- holding company (note 38) 246,776 247,304 – –
- associate company (note 39) 53,089 53,089 – –
Advance payments received (note 40) 74,531,085 55,977,621 19,687,145 50,977,621
74,830,950 56,278,014 19,687,145 50,977,621

Other payables and accruals (note 37) 4,198,048 3,163,791 1,365,723 1,764,561
79,028,998 59,441,805 21,052,868 52,742,182
254,826,555 185,382,323 47,506,804 63,836,959


22. Bank Overdrafts - Secured
The bank overdraft facilities are payable on demand and bear interest at rates ranging from 7.25% to 8.25% (2005 : 7.00% to 7.50%) per annum.
These facilities are secured and supported by:-
(i) cash deposits and freehold and leasehold land and buildings of a subsidiary company, AZSB, as disclosed in notes 4 and 5 to the financial
statements;
(ii) cash deposits of the Company; and
(iii) corporate guarantee from the Company.
23. Operating Revenue
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Management fees – – 2,113,000 1,570,000

Dividend revenue – – 10,000,040 10,000,040
Sale of goods 54,613,505 36,663,528 – –
Attributable contract revenue 387,986,795 212,461,087 177,498,754 152,816,312
442,600,300 249,124,615 189,611,794 164,386,352
24. Direct Operating Costs
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Cost of goods sold 40,385,700 23,148,131 – –

Attributable contract costs 338,285,827 176,374,282 165,318,808 143,107,511
378,671,527 199,522,413 165,318,808 143,107,511


25. Profit Before Taxation
Profit before taxation is arrived at after charging/(crediting):-
(a) Others
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Amortisation of goodwill – 513,825 – –

Amortisation of leasehold land 22,376 22,376 – –
Auditors'remuneration
- statutory audit 149,078 98,152 34,341 37,016
- under provision in prior year – 2,100 – –
Bad debts written off – 13,163 – –
Depreciation of property, plant and equipment 5,459,571 3,743,632 911,967 434,834
Impairment loss on investment in associated company – 400 – –
Interest expense 4,481,301 1,936,363 3,351,028 922,454
Loss on foreign exchange
- realised 244,760 40,578 244,760 39,913
- unrealised 794,444 18,426 294,415 18,426
Property, plant and equipment written off 277,102 – 5,519 –
Rental and running cost of machinery and equipment 6,628,761 1,428,319 – –
Rental of motor vehicles 36,639 85,195 – 83,182
Rental of premises 1,871,124 1,848,125 180,000 187,866
Dividend revenue - unquoted shares (2,609) (7,800) – –
Gain on disposal of property, plant and equipment (356,019) (201,505) – –
Changes in fair value of investment properties (350,000) – – –
Interest revenue (3,190,472) (2,709,463) (1,634,449) (751,826)
Rental revenue from investment properties (109,600) (147,950) – –
(b) Employees Information
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Staff costs 29,040,175 16,450,131 5,590,323 3,436,056
Included in staff cost are as follows:

EPF and SOCSO 2,738,380 1,878,491 433,228 331,201
The staff costs of the Group and of the Company consist of aggregate remuneration of salaried directors, other staff’s salaries, allowances,
bonus, EPF, SOCSO, medical expenses, staff welfare and other expenses directly related to employment of staff.

25. Profit Before Taxation (cont’d)
(c) The remuneration paid or payable to the Directors and the estimated monetary value of benefits provided to the Directors during the
financial year by the Group and by the Company are as follows:-
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Executive Directors
Fees 888,145 265,000 – –
Other emoluments 2,064,236 1,559,923 1,155,708 892,946
Benefits-in-kind 658,620 635,800 228,550 251,100
3,611,001 2,460,723 1,384,258 1,144,046
Non-Executive Directors
Fees 390,000 390,000 372,000 372,000
Other emoluments 14,500 20,700 10,300 18,900
Benefits-in-kind 42,250 25,900 31,150 14,200
446,750 436,600 413,450 405,100
The estimated monetary value of benefits provided to the Directors are not recognised in the income statement.
Share options granted to directors are disclosed in note 43 to the financial statements.
The Executive directors are as follows:-
2006
2005

25. Profit Before Taxation (cont’d)
(c) The remuneration paid or payable to the Directors and the estimated monetary value of benefits provided to the Directors during the
financial year by the Group and by the Company are as follows:- (cont’d)
The Non-Executive directors are as follows:-
2006
Raja Dato’ Seri Aman bin Raja Haji Ahmad
2005
Raja Dato’ Seri Aman bin Raja Haji Ahmad
26. Taxation
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Based on results for the year 11,809,323 8,585,128 4,507,020 3,791,938

Origination and reversal of temporary differences (note 11) (474,551) 703,283 3,550,443 1,563,417
11,334,772 9,288,411 8,057,463 5,355,355

Under/(Over) provision in prior years 640,671 (39,049) (1,575,095) –
Tax expense 11,975,443 9,249,362 6,482,368 5,355,355


26. Taxation (cont’d)
The provision for taxation differs from the amount of taxation determined by applying the applicable statutory tax rate to the profit before
taxation as a result of the following differences:-
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Accounting profit before taxation 36,366,704 28,117,885 16,632,499 15,915,311
Tax at the statutory income tax rate of 28% 10,182,700 7,873,008 4,657,100 4,456,287
Effect of lower tax rate for Malaysian subsidiary companies
with issued and paid-up share capital of RM2.5 million and below – (5,900) – –
Effect of lower tax rate for foreign branches/subsidiary companies (294,761) (269,000) (73,690) (269,000)
Tax effect of non-deductible expenses 1,446,833 1,702,503 689,439 499,053
Under/(Over) provision of taxation in prior years
- income tax 640,671 (39,049) (1,575,095) –
- deferred tax – (12,200) 2,784,614 669,015
Tax expense 11,975,443 9,249,362 6,482,368 5,355,355
Subject to agreement by the Inland Revenue Board:-

(i) the Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967, to frank payment of dividends out of its entire retained
profits as at 31 December 2006, without incurring additional tax liability; and
(ii) the Company has tax exempt income account available for distribution by way of tax exempt dividends amounted to RM297,002/- (2005 :
RM297,002/-). This is in respect of chargeable income of which the income tax has been waived.
27. Basic Earnings Per Ordinary Share
The basic earnings per ordinary share of the Group is calculated based on the profit attributable to shareholders of RM24,154,951/- (2005 : of
RM18,898,874/-) divided by the number of ordinary shares of RM1/- each in issue of 66,710,400 (2005 : 66,710,400).
The fully diluted earnings per ordinary share is not presented in the financial statements as the effect of the assumed subscriptions for new
ordinary shares by ESOS option holders is anti-dilutive.
28. Acquisition of Subsidiary Companies
During the year, the Company completed the incorporation of a foreign subsidiary company know as Ahmad Zaki Saudi Arabia Company
Ltd.(“AZSA”) in Riyadh, the Kingdom of Saudi Arabia. AZSA was incorporated with a paid-up share of SR500,000/- divided into 1,000 cash shares
of equal value of SR500/-.
In the previous year, the Group completed the acquisition of 95% equity shareholdings in P.T. Ichtiar Gusti Pudi (“IGP”) for a cash consideration
of Rp17,000,000,000/- or RM7,097,500/-.

28. Acquisition of Subsidiary Companies (cont’d)
(i) Effect of acquisition of subsidiary companies, net of cash acquired.
The fair values of the assets acquired and the liabilities assumed at the effective date of acquisition are as follows:-
GROUP
AZSA IGP
2006 2005
RM RM
Property, plant and equipment – 9,328,169

Cash at bank 491,444 601
Other receivables – 95,634
Deferred taxation – (2,610,777)
Goodwill on consolidation – 624,554
Minority interest – (340,681)
Total purchase consideration 491,444 7,097,500

Cash at bank (491,444) (601)
Effect of acquisition of subsidiary companies, net of cash acquired – 7,096,899
(ii) Effect on Consolidated Income Statement
The effect on the consolidated results of the Group from their effective date of acquisition are as follows:-
GROUP
AZSA IGP
2006 2005
RM RM
Operating revenue 84,031,539 –

Direct operating costs (77,824,653) –
Gross profit 6,206,886 –

Other operating revenue
Administrative costs 1,068,962 –

Other operating costs 1,684,766 –
(2,753,728) –
3,453,158 –
Finance costs (689,763) –
Net profit for the year 2,763,395 –


28. Acquisition of Subsidiary Companies (cont’d)
(iii) Effect of Consolidated Financial Position
The effect on the consolidated balance sheet as at financial year end are as follows:-
GROUP
AZSA IGP
2006 2005
RM RM
Property, plant and equipment 10,475,403 9,484,251

Planting development expenditure – 2,293,598
Cash at bank 6,423,224 13,249,730
Trade receivables 63,444,254 –
Other receivables and deposits 3,956,973 119,399
Trade payables (19,221,760) (7,540)
Other payables and accruals (27,047,082) (24,143)
Amount owing to related companies (34,158,425) (2,976,945)
Tax liabilities (1,533,522) –
Minority interest – (969,166)
Deferred taxation – (2,610,777)
Revaluation reserve – (6,713,427)
Translation reserve 225,081 (4,216)
2,564,146 11,840,764
29. Purchase of Property, Plant and Equipment
During the financial year, the Group acquired property, plant and equipment with aggregate cost of RM19,130,366/- (2005 : RM5,189,800/-) of
which RM4,699,930/- (2005 : RM2,068,900/-) was financed by means of hire purchase. Cash payments of RM14,430,436/- (2005 : RM3,120,900/-)
were made to purchase property, plant and equipment.
During the financial year, the Company acquired property, plant and equipment with aggregate cost of RM534,845/- (2005 : RM2,218,601/-) of
which RM Nil (2005 : RM745,900/-) was financed by means of hire purchase. Cash payments of RM534,845/- (2005 : RM1,472,701/-) were made
to purchase property, plant and equipment.

30. Cash and Cash Equivalents
Cash and cash equivalents included in the cash flow statements comprise the following amounts:-
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Cash and bank balances 36,025,977 31,185,173 2,306,293 23,744,149

Cash deposits with licensed banks 108,978,743 122,910,869 18,450,528 29,166,122
Bank overdrafts (3,687,933) (5,361,355) – –
141,316,787 148,734,687 20,756,821 52,910,271
Included in cash deposits with licensed banks of the Group are deposits of RM61,715,785/- (2005: RM57,146,267/-) which have been pledged to
financial institutions as security for bank guarantee and credit facilities of the Group and are only available to be utilised for repayment of the said
facilities.
Included in cash deposits with licensed banks of the Company are deposits of RM2,421,626/- (2005 : RM2,352,599/-) which have been pledged
to financial institutions as security for bank guarantee and credit facilities of its subsidiary company, AZSB, and are only available to be utilised for
repayment of the said facilities.
31. Amount Due From/(To) Customers for Contract Works
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Aggregate costs incurred to date 1,527,743,035 1,183,708,034 307,031,029 200,064,649

Attributable profits 167,033,376 117,559,687 19,313,299 12,813,191
1,694,776,411 1,301,267,721 326,344,328 212,877,840

Progress billings (1,545,278,222) (1,234,123,677) (294,520,844) (202,740,248)
149,498,189 67,144,044 31,823,484 10,137,592
Represented By:-
Amount due from customers for contract works (note 15) 158,011,660 75,836,210 31,823,484 10,485,102
Amount due to customers for contract works (note 21) (8,513,471) (8,692,166) – (347,510)
Included in the above progress billings of the Group are retention sums of RM20,162,977/- (2005 : RM17,304,945/-).

32. Other Receivables, Deposits and Prepayments
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Other receivables 23,209,059 17,161,436 17,289,612 12,902,668

Sundry deposits 4,789,887 999,618 50,128 71,756
Prepayments 426,416 999,044 162,867 796,919
28,425,362 19,160,098 17,502,607 13,771,343
Included in other receivables of the Group and of the Company are advances to sub-contractors of RM18,771,006/- (2005 : RM12,905,661/-) and
RM16,212,251/- (2005 : RM9,905,661/-) respectively.
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM

India Rupee 14,912,480 9,126,924 14,912,480 9,125,663
Saudi Riyal 3,956,973 1,720,018 – 1,720,018
22,768,382 10,966,341 14,912,480 10,845,681
33. Amount Owing by Related Companies
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Holding Company
- Zaki Holdings (M) Sdn. Bhd. – – 106,232 96,650
Subsidiary Companies
- AZRB Construction (India) Pvt. Ltd. – – 10,568 9,490
- Ahmad Zaki Sdn. Bhd. – – 23,683,006 33,236,027
- Ahmad Zaki Saudi Arabia Co. Ltd – – 34,451,164 –
- Inter-Century Sdn. Bhd. – – 5,074,868 4,424,485
- Tadok Granite Manufacturing Sdn. Bhd. – – 339,503 289,360
- AZRB International Ventures Sdn. Bhd. – – 46,884 41,734
- Kemaman Technology & Industrial Park Sdn. Bhd. – – 2,274 1,460
- AZRB Machineries Sdn. Bhd. – – 23,684 17,673

33. Amount Owing by Related Companies (cont’d)
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Subsidiary Companies (cont’d)

- Trend Vista Development Sdn. Bhd. – – 23,734 17,673
- P.T. Ichtiar Gusti Pudi – – 5,746,410 2,765,181
Related Company
- Residence Inn & Motels Sdn. Bhd. 109,882 111,670 – –
109,882 111,670 69,508,327 40,899,733
These amounts are non-trade in nature, unsecured, interest free and with no fixed term of repayment.
COMPANY
2006 2005
RM RM
India Rupee 10,568 9,490

Indonesia Rupiah 5,746,410 2,765,181
Saudi Riyal 34,451,164 –
40,208,142 2,774,671
34. Amount Owing by Associated Company
The amount owing by Maxi Heritage Sdn .Bhd is non-trade in nature, unsecured, interest free and with no fixed term of repayment.

35. Amount Owing by Joint Ventures
GROUP
2006 2005
RM RM
Trade
Bumi Hiway - Ahmad Zaki Joint Venture 2,856 2,856
Non-Trade
Bumi Hiway - Ahmad Zaki Joint Venture 46,917 46,917
49,773 49,773
The non-trade amount is unsecured, interest free and with no fixed term of repayment.
36. Trade Payables
Included in trade payables of the Group are amounts owing to:-
GROUP
2006 2005
RM RM
Chuan Huat Industrial Marketing Sdn. Bhd., a subsidiary company of Chuan Huat Resources Berhad,
a company in which Dato' Sri Haji Wan Zaki bin Haji Wan Muda has substantial financial interest
and is also a director 923,581 573,193
The Group’s and the Company’s normal trade credit term ranges from 60 to 90 days.
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
India Rupee 89,262 – 89,262 –

Saudi Riyal 19,221,760 10,747,267 – 10,747,267
20,907,122 10,754,807 89,262 10,747,267


37. Other Payables and Accruals
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Other payables 2,295,639 1,196,645 347,475 90,377

Deposits received – 680 – –
Accruals 1,902,409 1,966,466 1,018,248 1,674,184
4,198,048 3,163,791 1,365,723 1,764,561
In previous year, accruals of the Group and of the Company included the balance of consideration owing for acquisition of PT Ichtiar Gusti Pudi
amounting to RM695,300/-.
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Indonesia Rupiah 39,766 24,143 – –

India Rupee 343,595 75,647 341,162 71,972
Saudi Riyal 797,548 91,843 – 91,843
1,180,909 191,633 341,162 163,815
38. Amount Owing to Holding Company
This amount owing to Zaki Holdings (M) Sdn. Bhd. is non-trade in nature, unsecured, interest free and with no fixed term repayment.
39. Amount Owing to an Associated Company
This amount owing to Fasatimur Sdn. Bhd. is non-trade in nature, unsecured, interest free and with no fixed term of repayment.
40. Advance Payments Received
This amount is in respect of interest free advances received for performance of the Group’s and of the Company’s construction contracts. These
advances are to be set off against the Group’s and the Company’s progress billings on the related contracts.

40. Advance Payments Received (cont’d)
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
India Rupee 12,471,925 9,966,252 12,471,925 9,966,252

Saudi Riyal 26,249,534 31,011,368 – 31,011,368
38,721,459 40,977,620 12,471,925 40,977,620
41. Hire Purchase Payables
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Total instalment payments 9,203,740 6,841,724 949,495 1,352,347

Less: Future finance charges (889,339) (640,283) (68,831) (123,981)
Present value of hire purchase payables 8,314,401 6,201,441 880,664 1,228,366
Payable within one year
Total instalment payments 2,958,067 2,397,391 322,496 402,852

Present value of hire purchase payables (note 20) 2,549,456 2,096,146 286,889 347,703
Payable after one year but not later than five years
Total instalment payments 6,245,673 4,444,333 626,999 949,495

Present value of hire purchase payables (note 20) 5,764,945 4,105,295 593,775 880,663
8,314,401 6,201,441 880,664 1,228,366
The hire purchase payables of the Group and of the Company bear effective interest at rates ranging from 7.30% to 7.67% (2005 : 4.46% to
7.60%) per annum.

42. Term Loans
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
CURRENT LIABILITIES
Secured
Repayable within one year (note 20) 893,207 819,880 – –
NON-CURRENT LIABILITIES
Secured
Repayable after one year but not later than five years 585,581 1,305,387 – –
Repayable after five years – 171,963 – –
585,581 1,477,350 – –
Unsecured
Repayable after one year but not later than 5 years 45,000,000 45,000,000 45,000,000 45,000,000
45,585,581 46,477,350 45,000,000 45,000,000
46,478,788 47,297,230 45,000,000 45,000,000
SECURED
The term loans bear effective interest at rates ranging from 6.85% to 8.75% (2005 : 6.60% to 8.00%) per annum.
The term loans are repayable in monthly instalments over 5 and 10 years commencing in April, 2003 and April, 2001 respectively.
The term loans are secured and supported as follows:-
(i) legal charges over freehold and leasehold land and buildings of a subsidiary company, AZSB, as disclosed in note 4 to the financial
statements; and
(ii) a corporate guarantee from the Company.
UNSECURED
The unsecured term loan bears interest at a fixed rate of 7.13% (2005 : 7.13%) per annum and is repayable in one lump sum on the last day of
the tenor of the facility which should not exceed five years.

43. Equity Compensation Benefits
(i) The Group’s ESOS was approved by shareholders of the Company at the Annual General Meeting held on 20 June 2002. The ESOS shall
continue to be in force for a duration of ten (10) years commencing from 26 July 2002 and expiring on 25 July 2012.
The salient features of the ESOS are:-

(a) eligible persons are full time employees with confirmed employment within the Group (including executive directors) other than a
company which is dormant. The Date of Offer being the date when an offer in writing is made to eligible employees to participate in
ESOS. The eligibility for participation in the ESOS shall be at the discretion of the Option Committee appointed by the Board of
Directors;
(b) the number of ordinary shares of RM1/- each in the Company (“AZRB Shares”) allocated, in the aggregate, to the directors and senior
management of the Group shall not exceed fifty percent (50%) of the total AZRB Shares available under the ESOS;
(c) the aggregate number of shares to be allotted and issued under ESOS shall not exceed ten percent (10%) of the total enlarged issued
and paid-up ordinary share capital of the Company at the time of the offer or at any per centum in accordance with any guidelines,
rules and regulations of the relevant authorities governing the ESOS during the existence of the ESOS;
(d) the exercise price for each share shall be set at a discount of not more than ten percent (10%) from the weighted average market price
of the AZRB shares as shown in the Daily Official List of Bursa Malaysia for the five (5) Market Days immediately preceeding the Date
of Offer;
(e) the number of AZRB Shares allocated to any individual director or employee who, either singly or collectively through persons
connected holds twenty percent (20%) or more in the issued and paid-up share capital of the Company shall not exceed ten percent
(10%) of the total AZRB Shares available under the ESOS; and
(f) new shares issued under the ESOS shall rank pari passu in all respects with the existing ordinary shares save and except that the new
shares shall not be entitled to any dividend, rights, allotments and/or other distributions, the entitlement date of which precedes the
date of allotment of the new shares.
(ii) During the financial year, the number of ESOS options exercised and lapsed are as follows:-
Number of Share Options

2006 2005
At 1 January 2,707,600 2,798,800

Lapsed (39,200) (91,200)
At 31 December 2,668,400 2,707,600
ESOS options lapsed due to resignations of employees.
There were no share options exercised during the financial year.


43. Equity Compensation Benefits (cont’d)
(ii) The terms of share options outstanding as at the end of the financial year are as follows:-
Number of Share Options Outstanding

Expiry Date Exercise Price 2006 2005
RM
25.7.2012 2.05 2,668,400 2,707,600
(iii) The Directors’ interest in ESOS options are as follows:-
Number of Options Over Ordinary Shares of RM1/- Each

At At
1.1.06 Exercised Lapsed 31.12.06
Interest in share options pursuant to the ESOS

Dato' Haji Mustaffa bin Mohamad 324,000 – – 324,000
44. Significant Related Party Transactions
(a) The significant transactions with related companies are as follows:-
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Accommodation charged by:-

- Residence Inn & Motels Sdn. Bhd. 8,393 4,103 – –
Management fees charged to:-

- Ahmad Zaki Sdn. Bhd. – – (1,200,000) (1,200,000)
- Inter-Century Sdn. Bhd. – – (600,000) (300,000)
- Tadok Granite Manufacturing Sdn. Bhd. – – (10,000) (5,000)
- AZRB International Ventures Sdn. Bhd. – – (5,000) (5,000)
- Trend Vista Development Sdn. Bhd. – – (5,000) (5,000)
- Technipolitan Sdn. Bhd. – – (5,000) (5,000)
- PT Ichtiar Gusti Pudi – – (288,000) (50,000)
- Ahmad Zaki Saudi Arabia Co. Ltd. – – – –

44. Significant Related Party Transactions (cont’d)
(a) The significant transactions with related companies are as follows:- (cont’d)
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Dividend revenue from:-

- Ahmad Zaki Sdn. Bhd. – – (5,000,030) (5,000,030)
- Inter-Century Sdn. Bhd. – – (5,000,010) (5,000,010)
Interest received and receivable from:-

- Ahmad Zaki Saudi Arabia Co. Ltd. – – (892,738) –
- PT Ichtiar Gusti Pudi – – (288,748) –
Administrative service charged by:-
- Zaki Holdings (M) Sdn. Bhd. 121,200 122,400 – –
Rental paid and payable to:-
- Zaki Holdings (M) Sdn. Bhd. 420,000 420,000 180,000 180,000
Insurance premium paid and payable to:-
- Zaki Holdings (M) Sdn. Bhd. 365,640 327,792 47,267 59,090
(b) The significant transactions with the Directors, parties connected to the Directors and companies in which the Directors have substantial
financial interest are as follows:-
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
Purchases from subsidiary companies of Chuan Huat Resources Berhad,

a company in which Dato' Sri Haji Wan Zaki bin Haji Wan Muda
has substantial financial interest and is also a director:-
- Chuan Huat Industrial Marketing Sdn. Bhd. 14,311,923 5,764,393 – –
- Chuan Huat Hardware Sdn. Bhd. – 8,300 – –
Rental of premises paid to

Dato' Sri Haji Wan Zaki bin Haji Wan Muda 36,000 36,000 – –
The Directors are of the opinion that the above transactions are entered into in the normal course of business and have been established under
terms mutually agreed upon between the parties involved.

45. Contingent Liabilities
GROUP COMPANY
2006 2005 2006 2005
RM RM RM RM
(1) UNSECURED
(a) Legal claims by suppliers of joint ventures of AZSB 18,453,756 18,453,756 – –
(b) Corporate guarantees given to financial institutions and
suppliers in respect of credit facilities granted to AZSB – – 66,766,503 96,962,740
(2) PARTIALLY SECURED

Corporate guarantee given together with a pledge
of cash deposits of the Company amounting to
RM2,421,026/- (2005 : RM2,352,599/-) to a
financial institutions in respect of credit facilities
granted to AZSB – – 62,588,205 34,830,149
18,453,756 18,453,756 129,354,708 131,792,889
No provision has been made for the contingent liabilities mentioned in 1(a) above as the outcome of the legal proceedings are still pending and
that AZSB has supplementary agreements with joint venture partners to indemnify AZSB against any liabilities which may arise therefrom.
46. Capital Commitment
COMPANY
2006 2005
RM RM
Approved and contracted for 704,000 –
47. Segment Analysis - By Activity
Segment information is presented in respect of the Group’s business and geographical segments. Segment results, assets and liabilities include
items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate
assets, liabilities and expenses.
Segment assets and liabilities do not include income tax assets and tax liabilities respectively. Segment capital expenditure is the total costs
incurred during the year to acquire segment assets that are expected to be used for more than one accounting period.
Inter-segment transactions are entered in the ordinary course of business based on terms mutually agreed upon by the parties concerned.

47. Segment Analysis - By Activity (cont’d)
Business Segments
The Group comprises the following three major business segments:-
(i) Construction - civil and structural construction works.

(ii) Trading in oil and gas and other related services - dealing in marine fuels, lubricants and petroleum based products.
(iii) Cultivation - oil palm.
(iv) Other operations - property development, investment holding, provision of management services and
dormant companies.
Geographical Segments
The Group operates in four principal geographical areas of the world:-
(i) Malaysia - civil and structural construction works, dealing in marine fuels, lubricants and
petroleum based products, property development, investment holding, provision of
management services and dormant companies.
(ii) Republic of Indonesia - oil palm cultivation.
(iii) India - civil and structural construction works and dormant company.
(iv) Kingdom of Saudi Arabia - civil and structural construction works.
MAJOR SEGMENT BY ACTIVITY
Trading In
Oil & Gas
& Other
Related Other
Construction Services Cultivation Operations Eliminations Consolidated
RM RM RM RM RM RM
2006
Revenue
External revenue 387,986,792 52,105,877 – 2,507,631 – 442,600,300
Inter-segment revenue – 1,511,410 – 2,088,000 (3,599,410) –
Total revenue 387,986,792 53,617,287 – 4,595,631 (3,599,410) 442,600,300


MAJOR SEGMENT BY ACTIVITY (cont’d)
Trading In
Oil & Gas
& Other
Related Other
RM RM RM RM RM RM
2006 (cont’d)
Results
Segment result 30,714,604 9,485,471 – (2,345,171) – 37,854,904
Interest revenue 3,190,472
Interest expenses (4,481,301)
Share of results in
joint ventures (194,126) – – – – (194,126)
Share of results of
associated companies (3,245) – – – – (3,245)
Income taxes (11,975,443)
Minority interest (236,310)
Profits attributable to
shareholders 24,154,951
Other Information
Segment assets 295,068,528 20,557,121 27,865,959 11,533,377 – 355,024,985
Investment properties 24,550,000
Interest in joint ventures (28,601,943) – – – – (28,601,943)
Goodwill 3,744,605
Tax assets 737,035
Deferred tax assets –
Cash deposits with licensed
banks 108,978,743
Other investments 4,615,500
Interest in associated
companies 59,875 – – – – 59,875
Consolidated total assets 469,108,800


Trading In
Oil & Gas
& Other
Related Other
RM RM RM RM RM RM
2006 (cont’d)
Segment liabilities 250,310,003 982,012 1,635,865 1,898,675 – 254,826,555
Interest bearing borrowings 67,679,128
Tax liabilities 2,382,075
Deferred tax liabilities 5,039,510
Consolidated total liabilities 329,927,268
Capital expenditure 16,215,576 1,081,328 1,653,282 180,180 – 19,130,366

Depreciation 4,239,130 729,651 – 553,166 (40,000) 5,481,947
2005
Revenue
External revenue 212,461,087 36,663,528 – – – 249,124,615
Inter-segment revenue – 959,584 – 1,570,000 (2,529,584) –
Total revenue 212,461,087 37,623,112 – 1,570,000 (2,529,584) 249,124,615
Results
Segment result 22,379,788 9,644,591 – (4,113,849) – 27,910,530
Interest revenue 2,709,463
Interest expenses (1,936,363)
Share of results in joint ventures (561,846) – – – – (561,846)
Share of results of
associated companies (3,899) – – – – (3,899)
Income taxes (9,249,362)
Minority interest 30,351
Profits attributable
to shareholders 18,898,874

Trading In
Oil & Gas
& Other
Related Other
RM RM RM RM RM RM
2005 (cont’d)
Other Information
Segment assets 179,343,547 20,197,137 11,866,261 30,846,329 – 242,253,274
Investment properties 24,200,000
Interest in joint ventures (28,407,817) – – – – (28,407,817)
Goodwill on consolidation 3,744,605
Tax assets 2,850,925
Deferred tax assets 30,827
Cash deposits with licensed banks 122,910,869
Other investments 4,615,500
Interest in associated companies 63,120 – – – – 63,120
Consolidated total assets 372,261,303
Segment liabilities 179,123,409 3,939,856 31,683 2,287,375 – 185,382,323

Interest bearing borrowings 58,860,026
Tax liabilities 552,322
Deferred tax liabilities 3,981,991
Consolidated total liabilities 248,776,662
Capital expenditure 3,338,172 799,642 156,082 895,904 – 5,189,800

Depreciation 2,702,839 696,873 – 406,296 (40,000) 3,766,008

MAJOR SEGMENT BY GEOGRAPHICAL LOCATION
Kingdom
Republic of Of Saudi
Malaysia Indonesia India Arabia Consolidated
2006
Total revenue from external customers 308,963,014 – 21,595,235 112,042,051 442,600,300
Segment assets 221,086,809 27,865,959 21,479,624 84,592,593 355,024,985

Investments in associate companies 59,875 – – – 59,875
Interest in joint ventures (28,601,943) – – – (28,601,943)
Goodwill 3,744,605 – – – 3,744,605
Tax assets 737,035 – – – 737,035
Cash deposits with licensed banks 107,908,108 1,070,635 – – 108,978,743
Investment properties 24,550,000 – – – 24,550,000
Other investments 4,615,500 – – – 4,615,500
Consolidated total assets 334,099,989 28,936,594 21,479,624 84,592,593 469,108,800
Capital expenditure 6,570,170 1,653,282 225,689 10,681,225 19,130,366
2005
Total revenue from external customers 210,213,767 – 3,202,339 35,708,509 249,124,615
Segment assets 185,063,491 11,866,261 10,571,548 34,751,974 242,253,274

Investments in associate companies 63,120 – – – 63,120
Interest in joint venture (28,407,817) – – – (28,407,817)
Goodwill on consolidation 3,744,605 – – – 3,744,605
Tax assets 2,850,925 – – – 2,850,925
Deferred tax assets 30,827 – – – 30,827
Fixed deposits with licensed banks 109,824,407 13,086,462 – – 122,910,869
Investment properties 24,200,000 – – – 24,200,000
Other investments 4,615,500 – – – 4,615,500
Consolidated total assets 301,985,058 24,952,723 10,571,548 34,751,974 372,261,303
Capital expenditure 3,708,533 156,082 33,891 1,291,294 5,189,800


48. Significant Events
(i) On 2 March 2006, the Company signed a Supplemental agreement with the Government of Malaysia for additional works to be undertaken
for the Subang-Kelana Link Project in Selangor Darul Ehsan,Malaysia for RM133.113 million.
(ii) On 26 March 2006, the Company completed the incorporation of a foreign subsidiary company know as Ahmad Zaki Saudi Arabia Company
Ltd.(“AZSA”) in Riyadh, the Kingdom of Saudi Arabia. AZSA was incorporated with an paid-up share of SR500,000/- divided into 1,000 cash
shares of equal value of SR500/- each.
(iii) On 31 March 2006, the wholly owned sudsidiary company, Technipolitan Sdn.Bhd. changed its name to AZRB Machineries Sdn. Bhd..
(iv) On 24 April 2006, the Company signed an agreement with the State Government of Terengganu of Malaysia to complete a stadium in Gong
Badak, Mukim Kuala Nerus, Dearah Kuala Terengganu, Tengganu for RM115.989 million.
(v) On 10 May 2006, the Company signed an agreement with the Government of Malaysia for improvement the Federal Highway 3 from
Kuantan (KM3) to Pekan (KM46), Pahang Darul Makmur for RM383.909 million.
49. Subsequent Events
(i) On 8 January 2007, the Company signed a Facility Agreement with RHB Investment Bank Berhad (formerly known as RHB Sakura Merchant
Bankers Berhad) (“the Lender”) and Prima Uno Berhad (“the Issuer”) for an unsecured fixed loan facility under Primary Collateralised Loan
Obligation Programme up to the maximum principal amount of RM40.0 Million (“the Facility”).
(ii) Subsequent to the financial year end and up to the date of this report, the Company had increased its paid-up share capital from
RM66,710,400/- to RM66,757,800/- by the allotment of 47,400 ordinary shares of RM1/- each, pursuant to its ESOS. All allotted shares rank
pari passu with the existing shares of the Company and were granted listing by Bursa Malaysia Securities Berhad (“Bursa Securities”).
50. Financial Instruments
(a) Financial Risk Management Policies
The Group is exposed to a variety of risks in the formal course of business. The Company’s risk management seeks to minimize the potential
adverse effects from these exposures. The management reviews and agrees policies for managing each of these risks as follows:-
i. Foreign Exchange Risk

The Group is exposed to foreign currency risk as a result of its normal trade activities when the currency denomination differs from its
functional currency. Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities
are kept to an acceptable level.

50. Financial Instruments (cont’d)
(a) Financial Risk Management Policies (cont’d)
ii. Interest Rate Risk

The Group’s exposure to interest rate risk relates to interest bearing financial assets and liabilities:-
- Interest bearing financial assets

Cash deposits are short term in nature and are not held for speculative purposes but are placed to satisfy conditions for bank
guarantee and borrowing facilities granted to the Group and for better yield returns than cash at banks.
The Group manages its interest rate yield by prudently balancing the placement of deposits with varying maturity periods.
- Interest bearing financial liabilities

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group
actively reviews its debt portfolio, taking into account the investment holding period and the nature of its assets. This strategy
allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against
rate hikes.
iii. Credit Risk

The Group’s exposure to credit risk arises from its receivables and the maximum risk associated with recognised financial assets is the
carrying amounts as presented in the balance sheet.
The Group has a credit policy in place and the exposure to credit risk is managed through the tendering assessment and evaluation
process, application of credit approvals, credit limits and monitoring procedures.
The Group does not have any significant credit risk exposure to any individual customer.
iv. Liquidity and Cash Flow Risks

The Group actively manages its operating cash flows and the availability of funding so as to ensure that all repayment and funding
needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash to meet its working
capital requirements.
(b) Fair Values
The methods and assumptions used to estimate the fair value of each class of financial assets and liabilities are as follows:-
i. Cash and Bank Balances, Cash Deposits, Trade and Other Receivables and Payables
The carrying amounts approximate fair values due to the relatively short term maturities of these financial assets and liabilities.
ii. Other Investments

The fair values of transferable golf club memberships are estimated based on the current market price of the memberships determined
on an individual basis.

(b) Fair Values (cont’d)
iii. Borrowings
The carrying amounts of bank overdrafts approximate fair values due to the relatively short term maturities of these financial
liabilities.
The carrying amounts of floating rate term loans and financing facilities approximate their fair values.
The fair values of hire purchase payables and fixed rate term loans are estimated using discounted cash flow analysis, based on current
lending rates for similar types of borrowing arrangements.
The carrying amounts of financial assets and liabilities recognised in the balance sheets approximate their fair values except for the
following:-
GROUP COMPANY
Carrying Carrying
Amount Fair Value Amount Fair Value
Note RM RM RM RM
2006
Financial Assets
Club memberships 10 68,000 100,000 68,000 100,000
Unquoted shares 10 4,547,500 –* 4,500,000 –
Financial Liability
Hire purchase payables 41 8,314,401 8,004,903 880,663 860,355
Borrowings 42 46,478,788 35,936,024 45,000,000 34,330,284
2005
Financial Assets
Club memberships 10 68,000 100,000 68,000 100,000
Unquoted shares 10 4,547,500 –* 4,500,000 –
Financial Liability
Hire purchase payables 41 8,314,401 8,004,903 880,663 860,355
Borrowings 42 45,000,000 44,766,839 45,000,000 44,766,839
* It is not practical to estimate the fair values of other investments because of the lack of quoted market prices and inability to
estimate fair value without incurring excessive costs.

(b) Fair Values (cont’d)
The nominal/notional amounts and fair values of financial liabilities not recognised in the balance sheets of the Group and of the Company
are as follows:-
GROUP COMPANY
Nominal Nominal
Amount Fair Value Amount Fair Value
Note RM RM RM RM
2006
Contingent liabilities in respect of:-
Legal claims by suppliers of joint ventures of AZSB 45(1a) 18,453,756 –* – –
Corporate guarantees given to financial institutions
and suppliers of AZSB 45(1b) – – 66,766,503 66,766,503
Corporate guarantees given 45(a)
to a financial institution of AZSB (partially
secured) – – 62,588,205 62,588,205
18,453,756 – 129,354,708 129,354,708
2005
Contingent liabilities in respect of:-
Legal claims by suppliers of joint ventures of AZSB 45(1a) 18,453,756 –* – –
Corporate guarantees given to financial institutions
and suppliers of AZSB 45(1b) – – 96,962,740 96,962,740
Corporate guarantees given to a financial 45(a)
institution of AZSB (partially
secured) – – 34,830,149 35,423,648
18,453,756 – 131,792,889 132,386,388
* It is not practical to estimate the fair value of the contingent liabilities reliable due to uncertainties of timing, costs and eventual
outcome.

51. Changes in Accounting Policies
The adoption of the FRS standards as set out in note 3 to the financial statements does not have any material financial impact on the Group and
on the Company, or any significant changes in accounting policies of the Group and of the Company except as follows:-
(a) FRS 3: Business Combination, FRS136: Impairment of Assets and FRS 138: Intangible Assets
Prior to 1 January 2006, goodwill was amortised over a period of ten years or the expected useful life, whichever is shorter, commencing in
the year of acquisition of subsidiary company or associated company. Goodwill is written down when there is an impairment in their
carrying value. Negative goodwill (formerly known as reserve on consolidation) was amortised over a period of three years or the expected
useful life, whichever is shorter, commencing one year after the year of acquisition of subsidiary company or associated company.
With the adoption of FRS, goodwill is carried at cost less accumulated impairment losses, if any, and is tested for impairment annually or
when indication of impairment exists. Negative goodwill is written off to the income statement in the year of acquisition.
In accordance with the transitional provisions of FRS 3, the Group has applied the standard prospectively from 1 January 2006. The Group
has eliminated the accumulated amortisation at 1 January 2006 amounting to RM1,613,592/- against the goodwill of RM5,358,197/-. The
carrying amount of goodwill as at 1 January 2006 of RM3,744,605/- ceased to be amortised thereafter. Accordingly, the annual amortisation
has not been recognised resulting in an increase to profits of RM513,825/-.
The Group has ceased to include annual amortisation of goodwill included in the carrying amount of investments in associates in the
determination of the Group’s share of profits or losses of associates. The net carrying amount of goodwill included in investment in
associated company as at 1 January 2006 is RM8,056/-. Accordingly, the annual amortisation has not been recognised resulting in an
increase to profits of RM4,029/-.
(b) FRS 140: Investment Property
Prior to January 2006, investment properties were stated at valuation less accumulated impairment losses, if any. Revaluations were carried
out at least once every five years and any increase is taken to equity as a revaluation surplus. Any deficit arising is offset against the
revaluation reserve to the extent of a previous increase for the same property. In all other cases, a decrease in a carrying amount is charged
to the income statement. The investment properties were last revalued in 2002. Upon the adoption of FRS 140, investment properties are
now stated at fair value and gains and losses arising from charges in fair values are recognised in income statement in the year in which
they arise.
The Group has applied FRS 140 is accordance with the transitional provision and the change in accounting policy has no impact on amounts
reported for 2005 or prior periods. The changes have been accounted for by adjusting the opening balance of revaluation reserve of
RM5,454,890/- to Retained earnings and the balance of RM1,548,000/- to deferred tax.
(c) FRS 2: Share Based Payment
Prior to 1 January 2006, no compensation expense was recognised in income statement for share options granted. The Group and the
Company recognised an increase in the share capital and share premium when the options were exercised. With the adoption of FRS 2, the
total fair value of share options granted to employees is recognised as an expense in the income statement over the vesting periods of the
grants, with a corresponding increase in equity.
Under the Transitional Provisions of FRS 2, this FRS will apply to share options which were granted after 31 December 2004 and which had
not yet vested on 1 January 2006. The adoption of this FRS has not resulted in any financial impact to the Group and to the Company as
there were no new share options granted after 31 December 2004 which remain unvested on 1 January 2006.

51. Changes in Accounting Policies (cont’d)
(d) FRS 101: Presentation of Financial Statements
Prior to 1 January 2006, minority interest at the balance sheet date were presented in the consolidated balance sheet separately from
liabilities and equity. Upon the adoption of the revised FRS 101, minority interest are now presented within total equity. In the consolidated
income statement, minority interest are presented as an allocation of the total profit or loss for the year. A similar requirement is also
applicable to the statement of changes in equity. The revised FRS 101 also requires disclosures, on the face of the statement of changes in
equity, total recognised income and expense for the year, showing separately the amounts attributable to equity holders of the Company
and to minority interests.
The changes in presentation are applied retrospectively and the comparative amounts have been restated.
Analysis of Shareholdings
As at 30 April 2007
Authorised Share Capital : RM 100,000,000.00

Class of Shares : Ordinary Share of RM1.00 each
Issued and Fully Paid-up Share Capital : RM 66,761,800
Voting Rights : One vote per RM1.00 per share
Statement of Director’s Shareholdings
Number of Ordinary Shares of RM1.00 Each

Direct Deemed
Interest % Interest %
The Company
Ahmad Zaki Resources Berhad
Raja Dato’ Seri Aman bin Raja Haji Ahmad – – – –
Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 498,690 0.75 40,765,284 61.06*
Dato’ Wan Zakariah bin Haji Wan Muda 149,674 0.22 – –
Dato’ Haji Mustaffa bin Mohamad 1,280,912 1.91 – –
Dato’ W Zulkifli bin Haji W Muda 264,674 0.40 – –
Datuk (Prof) A Rahman @ Omar bin Abdullah 300,000 0.45 – –
Dato’ Ismail @ Mansor bin Said 1 – – –

Dato’ Sri Haji Wan Zaki bin Haji Wan Muda 50,001 50.00 – –
Dato’ Wan Zakariah bin Haji Wan Muda 10,000 10.00 – –
Dato’ W Zulkifli bin Haji W Muda 10,000 10.00 – –
* Shares held through Zaki Holdings (M) Sdn Bhd.
By virtue of Dato’ Sri Haji Wan Zaki bin Haji Wan Muda having an interest of more than 15% of the shares in Ahmad Zaki Resources Berhad, he is
deemed interested in the shares of its subsidiaries to the extent the Company has an interest.
Other than as disclosed above, none of the Directors held any shares or have any interest in the Company and its related companies as as 30 April 2007.
Distribution of Shareholders
No. of Shareholders No. of Shares % of Shareholdings

Category Malaysian Foreign Malaysian Foreign Malaysian Foreign
Less than 100 138 – 7,015 – – –

100 to 1,000 400 1 335,850 1,000 0.50 –
1,001 to 10,000 1,317 6 4,840,660 126,760 7.25 0.19
10,001 to 100,000 222 26 6,756,634 141,000 10.12 0.21
100,001 to less than 5% of Issued Shares 31 – 13,787,597 – 20.65 –
5% and above of Issued Shares 2 – 40,765,284 – 61.06 –
Total 2,110 33 66,493,040 268,760 99.5859 0.4026

Analysis of Shareholdings (cont’d)

List of Substantial Shareholders (5% and Above Excluding Bare Trustees)
Number of Ordinary Shares of RM1.00 Each

Direct Deemed
Interest % Interest %
1 Zaki Holdings (M) Sdn Bhd 40,765,284 61.06 – –

2 Dato’ Sri Haji Wan Zaki Bin Haji Wan Muda 498,690 0.75 40,765,284 61.06*
* Shares held through Zaki Holdings (M) Sdn Bhd
List of 30 Largest Shareholders as at 30 April 2007
No. Name Shares Held %
1 Zaki Holdings Sdn Bhd 32,919,768 49.31

2 Zaki Holdings Sdn Bhd 7,845,516 11.75
3 Geosakti Sdn Bhd 1,588,400 2.38
4 Employees Provident Fund Board 1,530,440 2.29
5 HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee BHD for OSK-UOB Small CAP Oppurtunity Unit Trust 1,340,700 2.00
6 OSK Nominees (Tempatan) Sdn Bhd Idris bin Mohammad 1,000,000 1.49
7 Al-Wakalah Nominees (Tempatan) Sdn Bhd Pledged Securities account for Dato Mustaffa bin Mohamad (CKT) 784,000 1.17
8 Nik Mahani binti Nik Mohd Rashid 727,727 1.09
9 Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees Berhad for MAAKL Value Fund 517,000 0.77
10 Fong Ting Wong 500,000 0.75
11 Dato Sri Haji Wan Zaki bin Haji Wan Muda 498,690 0.75
12 Dato’ Haji Mustaffa bin Mohamad 496,912 0.74
13 Betanaz Corporation Sdn Bhd 492,500 0.74
14 M&A Securities Sdn Bhd 486,600 0.73
15 AXA Affin General Insurance Berhad 439,200 0.66
16 Valuecap Sdn Bhd 328,200 0.49
17 Datuk (Prof) A Rahman @ Omar bin Abdullah 300,000 0.45
18 HSBC Nominees (Tempatan) Sdn Bhd 275,900 0.41
19 Dato’ W Zulkifli bin Haji W Muda 264,674 0.40
20 CitiGroup Nominees (Tempatan) Sdn Bhd 231,900 0.35
21 Maybank Securities Nominees (Tempatan) Sdn Bhd Pledged Securities account for Lee Keng Hong 216,860 0.32
22 Rosmini Azah binti Abdul Rahman 200,300 0.30
23 Hoo Hock San 194,500 0.29
24 Tengku Ab Malek bin Tengku Mohamed 178,360 0.27
25 HSBC Nominees (Tempatan) Sdn Bhd HSBC (M) Trustee BHD for MAAKL Al-Fauzan (5170) 165,000 0.25
26 Goonchen Investment Trust Sdn Berhad 161,000 0.24
27 Dato’ Wan Zakariah bin Haji Wan Muda 149,674 0.22
28 Kurnia Insurans (Malaysia) Berhad 136,500 0.20
29 Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees Berhad for PHEIM Asia Ex-Japan Islamic Fund 132,400 0.20
30 Alliance Group Nominees (Tempatan) Sdn Bhd PHEIM Asset Management Sdn Bhd for Employees Provident Fund 118,600 0.18
Total 54,221,321 81.21

List of Properties
Date of Description of property Tenure Total land area/ NBV

Title & location of property acquisition (existing use) (age of building) (built up area) RM’000
GM372, Lot 981 and 20.01.1994 Vacant land Freehold 54,967 sq.ft. 5,300
GM 4708, Lot 985, Mukim Setapak &
Daerah Kuala Lumpur and 16.02.1994
Negeri Wilayah Persekutuan
(“Lot 981 and Lot 985”)
EMR 873,Lot 826 30.10.1993 Land and 1-storey and Freehold 202,815/ 19,250
Mukim Sungai Karang 3-storey buildings held (13 years) (64,670) sq.ft.
Kuantan, Pahang (“Lot 826”) for rental
HS (M) 1038, Lot PT4782 05.05.1997 Adjoining 5-storey Freehold 3,498/ 3,963
and HS (M) 1039, Lot PT4783 buildings for own use (11 years) (20,728) sq.ft.
Mukim Setapak, Daerah Kuala Lumpur
and Negeri Wilayah Persekutuan
(“Lot PT4782 and Lot PT4783”)
Daerah Kuala HS (M) 994, Lot PT16360 28.09.2000 5-storey building for Freehold 1,581/ 1,294
Mukim Setapak own use (21 years) (10,364) sq.ft.
Daerah Kuala Lumpur and
Negeri Wilayah Persekutuan
(“Lot PT16360”)
HS (D)15563, Lot 4910 21.01.2000 Double storey bungalow Leasehold expiring 10,332/ 1,282
PT1921, Mukim Hulu Klang for rental 17.06.2078/ (2,457) sq.ft.
District of Gombak (22 years)
Negeri Selangor (“Lot PT4970”)
GM 1821, Lot No. 5413 26.11.2002 Double storey bungalow Freehold 42,738/ 6,173
Mukim Kuala Lumpur for own use (29 years) (9,640) sq.ft.
District of Negeri Wilayah Persekutuan
(“Lot PT5419”)
Lot PT2100, HSD 722 15.07.2003 Vacant land Leasehold expiring 20 hectares 125
Mukim Kuala Telemong 18.10.2025
District of Hulu Terengganu
Kuala Terengganu, Terengganu
(“Lot PT2100”)
HS (M) 929, Lot PT 16343 24.11.2005 4-storey building Freehold 1,604/ 795
Mukim Setapak, Daerah Kuala Lumpur for own use (11 years) (8,291) sq.ft.
and Negeri Wilayah Persekutuan
(“Lot PT 16343”)
HGU No. 5 Desa Amboyo Selatan 31.05.2005 Land for cultivation Leasehold expiring 7,740 hectares 8,797
Kecamatan Ngabang 27.09.2033
Kabupaten Pontianak
Kalimantan Barat, Republic of Indonesia
Appendix 1
The Articles of Association of Ahmad Zaki Resources Berhad are proposed to be amended in the following manner, to reflect current
practice and be in compliance with the amendments to the Listing Requirement of Bursa Malaysia Securities Berhad:
AMENDED PROVISIONS
ARTICLE EXISTING PROVISIONS (HIGHLIGHTED IN BOLD)
To amend Article 2 Interpretation Interpretation
“the Exchange” “the Exchange”

– Kuala Lumpur Stock Exchange. – Bursa Malaysia Securities Berhad (635998-W)
including any further change to its name and such
other stock exchange, if any, upon which the
shares or other securities of the Company may be
listed and quoted.
“Member” “Member”
– any person/persons for the time being holding – Any person for the time being holding shares in
shares in the Company and whose names appear the Company and whose name appear in the
in the Register of Members (except the Malaysian Register of Members including a Depositor who
Central Depository nominees Sdn. Bhd.) including shall be treated as if he were a Member pursuant
depositors whose names appear on the Record of to Section 35 of the Central Depositories Act but
Depositors. excludes the Depository in its capacity as a bare
trustee.
“Central Depository” “Depository”

– Malaysian Central Depository Sdn Bhd. – Bursa Malaysia Depository Sdn Bhd
(165570-W) including any further change to its
name.
“Depositor” “Depositor”
– a holder of a securities account. – A holder of a securities account established by the
Depository.
“Deposited Security” “Deposited Security”

– a security standing to the credit of a securities – Shall have the meaning given in section 2 of the
account and includes securities in a securities Central Depositories Act.
account that is in suspense.
“Record of Depositors” “Record of Depositors

– a record provided by the Central Depository to the – A record provided by the Depository to the
Company under Chapter 24.0 of the Rules. Company under Chapter 24.0 of the Rules.
“Rules” “Rules”
– the Rules of the Central Depository. – the Rules of the Depository.
This is the Appendix 1 referred to the Special Resolution of the Notice of Tenth Annual General Meeting of Ahmad Zaki Resources Berhad.
Appendix 1 (cont’d)
AMENDED PROVISIONS
To amend Article 2 “Securities Account” “Securities Account”

– an account established by the Central Depository – An account established by the Depository for a
for a Depositor for the recording of deposit or Depositor for the recording of deposit of securities
withdrawal of securities and for dealing in such and for dealing in such securities by the Depositor.
securities by the Depositor.
To amend Article 6 Rights of Preference Shareholders Rights of Preference Shareholders
Subject to the Act, any preference shares may with Subject to the Act, any preference shares may with
the sanction of an Ordinary Resolution, be issued on the sanction of an Ordinary Resolution, be issued on
the terms that they are, or at the option of the the terms that they are, or at the option of the
Company are liable, to be redeemed but the total Company are liable, to be redeemed and the
nominal value of the issued preference shares shall Company shall not issue preference shares ranking in
not exceed the total nominal value of the issued priority over preference shares already issued, but
ordinary shares at any time and the Company shall may issue preference shares ranking equally
not issue preference shares ranking in priority over therewith. Preference shareholders shall have the
preference shares already issued, but may issue same rights as ordinary shareholders as regards
preference shares ranking equally therewith. receiving notices, reports and Balance Sheets, and
Preference shareholders shall have the same rights as attending general meetings of the Company.
ordinary shareholders as regards receiving notices, Preference shareholders shall also have the right to
reports and Balance Sheets, and attending general vote at any meeting convened for the purpose of
meetings of the Company. Preference shareholders reducing the capital, or winding up, or sanctioning
shall also have the right to vote at any meeting the disposal of the whole of the Company’s property,
convened for the purpose of reducing the capital, or business and undertakings, or where any proposition
winding up, or sanctioning the disposal of the whole to be submitted to the meeting directly affects their
of the Company’s property, business and rights and privileges, or when the dividend on the
undertakings, or where any proposition to be preference shares is in arrears for more than six (6)
submitted to the meeting directly affects their rights months, or during the winding up of the Company.
and privileges, or when the dividend on the
preference shares is in arrears for more than six (6)
months, or during the winding up of the Company.
To amend Article 6A Rights of Preference Shareholders Rights of Preference Shareholders
Preference Shareholders shall be entitled to a return (Deleted)

of capital in preference to ordinary shareholders
when the Company is wound up.
AMENDED PROVISIONS
To amend Article 27A Transfer in writing Transfer in writing
The transfer of any Deposited Security or class of The transfer of any Deposited Security or class of
Deposited Security of the Company, shall be by way Deposited Security of the Company, shall be by way
of book entry by the Central Depository in accordance of book entry by the Depository in accordance with
with rules of the Central Depository and rules of the Depository and notwithstanding section
notwithstanding section 103 and 104 of the 103 and 104 of the Companies Act 1965, and
Companies Act 1965, and provisions herein but provisions herein but subject to subsection 107C(2) of
subject to subsection 107C(2) of the Companies Act the Companies Act 1965 and any exemption that may
1965 and any exemption that may be made from be made from compliance with subsection 107C(1) of
compliance with subsection 107C(1) of the the Companies Act 1965, the Company shall be
Companies Act 1965, the Company shall be precluded precluded from registering and effecting any transfer
from registering and effecting any transfer of the of the Deposited Securities.
Deposited Securities.
To amend Article 29(3) No liability No liability
With the exception of transfer in favour of the Central With the exception of transfer in favour of the
Depository the Directors may decline to register the Depository the Directors may decline to register the
transfer of any shares if in their opinion, such transfer transfer of any shares if in their opinion, such transfer
is made to an individual who or to a corporation or is made to an individual who or to a corporation or
any other legal entity which will hold the shares as a any other legal entity which will hold the shares as a
nominee unless such transfer shall be accompanied nominee unless such transfer shall be accompanied
by a declaration by the transferee as to the persons by a declaration by the transferee as to the persons
entitled to the beneficial interest thereof. entitled to the beneficial interest thereof.
To amend Article 31 Suspension of registration Suspension of registration

The registration of transfers may be suspended at
The registration of transfers may be suspended at
such times and for such periods as the Directors may
such times and for such periods as the Directors may
from time to time determine not exceeding in the
from time to time determine not exceeding in the
whole thirty (30) Market Days in any year. Ten (10)
whole thirty (30) Market Days in any year. Eighteen
Market Days’ notice of intention to suspense the said
(18) Market Days’ notice of intention to suspense the
register of members shall be published in a daily
said register of members shall be published in a daily
newspaper circulating in Malaysia and shall also be
newspaper circulating in Malaysia and shall also be
given to the Exchange. The said notice shall state the
given to the Exchange. The said notice shall state the
purpose or purposes for which the register of
purpose or purposes for which the register of
members is being closed. The Company shall give
members is being closed. The Company shall give
notice in accordance with the Rules to enable the
notice in accordance with Rules of MCD to the
Depository to prepare the appropriate Record of
Central Depository to enable the Central Depository
Depositors.
to prepare the appropriate Record of Depositors.
AMENDED PROVISIONS
To amend Article 35 Notice of election Notice of election
If the person so becoming entitled elects to be If the person so becoming entitled elects to be
registered himself, he shall deliver or send to the registered himself, he shall deliver or send to the
Company a notice in writing signed by him stating Company a notice in writing signed by him stating
that he so elects provided that where the share is a that he so elects provided that where the share is a
Deposited Security and the person becoming entitled, Deposited Security and the person becoming entitled,
elects to have the share transferred to him, the elects to have the share transferred to him, the
aforesaid notice must be served by him on the Central aforesaid notice must be served by him on the
Depository. If he elects to have another person Depository. If he elects to have another person
registered he shall testify his election by executing to registered he shall testify his election by executing to
that person a transfer of the shares. All the that person a transfer of the shares. All the
limitations, restrictions and provisions of these limitations, restrictions and provisions of these
Articles relating to the rights to transfer and the Articles relating to the rights to transfer and the
registration of transfers of shares shall be applicable registration of transfers of shares shall be applicable
to any such notice or transfer as aforesaid as if the to any such notice or transfer as aforesaid as ‘if the
death or bankruptcy of the member had not occurred death or bankruptcy of the member had not occurred
and the notice or transfer were a transfer signed by and the notice or transfer were a transfer signed by
that member. that member.
To insert new Article 36A – Transmission of Securities
Where:-
(i) The securities of the Company are listed on

another stock exchange; and
(ii) The Company is exempted from compliance

with Section 14 of the Central Depository Act
or Section 29 of the Securities Industry
(Central Depositories) (Amendment) Act,
1998, as the case may be, under the Rules in
respect of such securities;
the Company shall upon request of a securities

holder, permit a transmission of securities held
by such securities holders from the register of
holders maintained by the registrar of the
Company in the jurisdiction of the other stock
exchange to the register of holders maintained
by the registrar of the Company in Malaysia
(“Malaysian Register”) and vice versa provided
that there shall be no change in the ownership
of such securities.
AMENDED PROVISIONS
To amend Article 57(a) Notice of meeting Notice of meeting
The notice convening meetings shall specify the place, The notice convening meetings shall specify the place,
day and hour of the meeting, and shall be given in a day and hour of the meeting, and shall be given in a
manner hereinafter mentioned to persons who are manner hereinafter mentioned to persons who are
under the provisions of these Articles entitled to under the provisions of these Articles entitled to
receive notices of general meetings from the receive notices of general meetings from the
Company at least 14 days before the meeting or least Company at least 14 days before the meeting or least
21 days before the meeting where any special 21 days before the meeting where any special
resolution is to be proposed or where it is an annual resolution is to be proposed or where it is an annual
general meeting. Any notice of a meeting called to general meeting. Any notice of a meeting called to
consider special business shall be accompanied by a consider special business shall be accompanied by a
statement regarding the effect of any proposed statement regarding the effect of any proposed
resolution in respect of such special business. At least resolution in respect of such special business. At least
14 days’ notice or 21 days’ notice in the case where 14 days’ notice or 21 days’ notice in the case where
any special resolution is proposed or where it is the any special resolution is proposed or where it is the
annual general meeting of every such meeting shall annual general meeting of every such meeting shall
be given by advertisement in the daily press and in be given by advertisement in at least one
writing to the Exchange and other stock exchange, if nationally circulated Bahasa Melayu or English
any, on which the shares of the Company is listed. daily newspaper and in writing to the Exchange and
other stock exchange, if any, on which the shares of
the Company is listed.
To amend Article 57(b) Notice of meeting Notice of meeting
Subject to the Central Depositories Act and the Rules, Subject to the Central Depositories Act and the Rules,
the Company shall by written request made in the Company shall by written request made in
duplicate in the prescribed form, request the Central duplicate in the prescribed form, request the
Depository in accordance with the Rules, to prepare Depository in accordance with the Rules, to prepare
the Record of Depositors to whom notices of general the Record of Depositors to whom notices of general
meetings shall be given by the Company. meetings shall be given by the Company.
AMENDED PROVISIONS
To amend Article 57(c) Notice of meeting Notice of meeting
The Company shall inform the Central Depository of The Company shall inform the Depository of the
the dates of general meetings and shall in written dates of general meetings and shall in written request
request made in duplicate in the prescribed form, made in duplicate in the prescribed form, request the
request the Central Depository in accordance with the Depository in accordance with the Rules, to prepare
Rules, to prepare the Record of Depositors, as at a the Record of Depositors, as at the latest date
date not earlier than 3 market days from the date of which is reasonably practicable which shall in
the general meeting. The General Meeting Record of any event be not less than three (3) market days
Depositors shall be the final record of all depositors before the general meeting. The General Meeting
who shall be deemed to be the registered holders of Record of Depositors shall be the final record of all
ordinary shares of the Company eligible to be present depositors who shall be deemed to be the registered
and vote at such meeting. holders of ordinary shares of the Company eligible to
be present and vote at such meeting.
To amend Article 68 Voting Voting
Subject to any rights or restrictions for the time being Subject to any rights or restrictions for the time being
attached to any classes of shares, at meetings of attached to any classes of shares, at meetings of
members or classes of members each member members or classes of members each member
entitled to vote may vote in person or by proxy who entitled to vote may vote in person or by proxy who
may but need not be a member of the Company or by may but need not be a member of the Company or by
attorney upon which all calls due to the Company attorney upon which all calls due to the Company
have been paid and on a show of hands every person have been paid and on a show of hands, a
who is a member or representative or proxy of a member of ordinary shares or preference share
member shall have one (1) vote, and on a poll every who is personally present and entitled to vote
member present in person or by proxy or by attorney shall be entitled to one (1) vote, and on a poll
or other duly authorised representative shall have one every member present in person or by proxy or by
(1) vote for each share he holds. A proxy or attorney attorney or other duly authorised representative shall
shall be entitled to vote both on a show of hands or have one (1) vote for each share he holds. A proxy or
on a poll. attorney shall be entitled to vote both on a show of
hands or on a poll.
AMENDED PROVISIONS
To amend Article 79 Number of Directors Number of Directors
All the Directors of the Company shall be natural Until otherwise determined by general meeting the
persons and until otherwise determined by general number of Directors shall not be less than three (3)
meeting the number of Directors shall not be less nor more than eleven (11) but in the event of any
than three (3) nor more than eleven (11) but in the casual vacancy occurring and reducing the number of
event of any casual vacancy occurring and reducing Directors below the aforesaid minimum the
the number of Directors below the aforesaid continuing Director or Directors may except in an
minimum the continuing Director or Directors may emergency, act only for the purpose of increasing the
except in an emergency, act only for the purpose of number of Directors to such minimum number or to
increasing the number of Directors to such minimum summon a general meeting of the Company. The first
number or to summon a general meeting of the directors are Dato’ Ismail @ Mansor Bin Said and
Company. The first directors are Dato’ Ismail @ Dato’ Haji Hamzah Bin Mamat @ Muhamad.
Mansor Bin Said and Dato’ Haji Hamzah Bin Mamat
@ Muhamad.
To amend Article 91 When offices of Director deemed vacant When offices of Director deemed vacant
The office of director shall become vacant if the The office of director shall become vacant if the
director:- Director:-
(a) has a Receiving Order in Bankruptcy made against (a) becomes of unsound mind or bankrupt during
him or makes any arrangement or composition his term of office;
with his creditors generally;
(b) becomes prohibited from being a director by (b) becomes prohibited from being a director by
reason of any order made under the Act or reason of any order made under the Act or
contravenes Section 130 of the Act; contravenes Section 130 of the Act;
(c) ceases to be or is prohibited from being a Director (c) ceases to be or is prohibited from being a Director
by virtue of the Act; by virtue of the Act;
(d) becomes of unsound mind or a person whose (d) resigns his office by notice in writing to the
person or estate is liable to be dealt with in any Company and deposited at the registered address
way under the law relating to mental disorder; of the Company;
(e) resigns his office by notice in writing to the (e) is removed from his office of Director by resolution
Company and deposited at the registered address of the Company in general meeting of which
of the Company; special notice has been given;
(f) is removed from his office of Director by resolution (f) becomes prohibited from being a director by
of the Company in general meeting of which reason of Section 129(1) of the Act unless
special notice has been given; otherwise reappointed pursuant to the provision
of the Act;
(g) becomes prohibited from being a director by
reason of Section 129(1) of the Act unless
otherwise reappointed pursuant to the provision
of the Act;
AMENDED PROVISIONS
To amend Article 91 (h) is absent from more than 50% of the total board
(Cont’d) of directors’ meeting held during a financial year.
To amend Article 131 To whom copies of profit and loss accounts etc may To whom copies of profit and loss accounts etc may
be sent be sent
The Directors shall from time to time in accordance The Directors shall from time to time in accordance
with Section 169 of the Act cause to be prepared and with Section 169 of the Act cause to be prepared and
laid before the Company in general meeting such laid before the Company in general meeting such
profit and loss accounts, balance sheets and report as profit and loss accounts, balance sheets and report as
are referred to in the Section. The interval between are referred to in the Section. The interval between
the close of a financial year of the Company and the the close of a financial year of the Company and the
issue of accounts relating to it shall not exceed four issue of accounts relating to it shall not exceed four
(4) months. A copy of each such documents shall not (4) months. A copy of each such documents (whether
less than twenty-one (21) days before the date of the in hard or soft copy) shall not less than twenty-one
meeting be sent to every member of, and to every (21) days before the date of the meeting be sent to
holder of debentures of the Company under the every member of, and to every holder of debentures
provisions of the Act or of these presents. The of the Company under the provisions of the Act or of
requisite number of copies of each such documents as these presents. The requisite number of copies of each
may be required by the Exchange and/or other stock such documents as may be required by the Exchange
exchange(s), if any, upon which the Company’s shares and/or other stock exchange(s), if any, upon which
may be listed shall at the same time be likewise sent the Company’s shares may be listed shall at the same
to the Exchange and/or such other stock exchange(s). time be likewise sent to the Exchange and/or such
Provided that this Article shall not require a copy of other stock exchange(s). Provided that this Article
these documents to be sent to any person of whose shall not require a copy of these documents to be
address the Company is not aware or to more than sent to any person of whose address the Company is
one of joint holders but any member to whom a copy not aware or to more than one of joint holders but
of these documents has not been sent shall be any member to whom a copy of these documents has
entitled to receive a copy free of charge on not been shall be entitled to receive a copy free of
application at the Company’s registered office. charge on application at the Company’s registered
office.
To amend Article 150(c) Who may receive notice Who may receive notice
All notices served for and on behalf of the Company All notices served for and on behalf of the Company
or the Directors shall only be effectual if it bears the or the Directors shall be deemed effectual if it
signature of a Director of the Company Secretary or a purports to bear the signature of a Director or
duly authorised officer of the Company. the Company Secretary or a duly authorised officer of
the Company.
AMENDED PROVISIONS
To amend Article 157(g) Effects of the Listing Requirements Effects of the Listing Requirements
For the purpose of this Article, unless the context For the purpose of this Article, unless the context
otherwise require, “Listing Requirements” means the otherwise require, “Listing Requirements” means the
Listing Requirements of Kuala Lumpur Stock Listing Requirements of Bursa Malaysia Securities
Exchange including any amendment to the Listing Berhad (635998-W) including any amendment to
Requirements that may be made from time to time. the Listing Requirements that may be made from time
to time.
Number of Shares Held
Co. No. 432768-X (Incorporated in Malaysia)
Form of Proxy
*I/We, ________________________________________________________ NRIC/Company No. ___________________________________
of _______________________________________________________________________________________________________________
being a *member/members of AHMAD ZAKI RESOURCES BERHAD, hereby appoint
______________________________________________________________ NRIC No. ___________________________________________
of _______________________________________________________________________________________________________________
*and/or failing him/her ____________________________________________ NRIC No. ____________________________________________
of _______________________________________________________________________________________________________________
or failing *him/her/both, the Chairman of the Meeting as *my/our proxy to vote for *me/us on *my/our behalf at the Tenth Annual General Meeting of
the Company to be held at Dillenia & Eugenia Room, Ground Floor, Sime Darby Convention Centre, 1A, Jalan Bukit Kiara 1, 60000 Kuala Lumpur on
Thursday, 21 June 2007 at 10.00am and, at every adjournment thereof for/against* the resolution(s) to be proposed thereat.
The proportion of *my/our holding to be represented by *my/our proxies are as follows:-
(The next paragraph should be completed only when two proxies are appointed)
*First Proxy (1) _______________ % *Second Proxy (2) _______________ %
*My/Our proxy is to vote as indicated below:-

NOTES:
NO. RESOLUTIONS FOR AGAINST 1. A member of the Company who is entitled to attend and vote at the meeting is entitled to
appoint a proxy or proxies, (but not exceeding two (2) proxies), to attend and vote in his
1. RESOLUTION 1 stead.
2. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless
2. RESOLUTION 2 he specifies the proportion of his holdings to be represented by each proxy.
3. A proxy may but need not be a member of the Company and the provision of Section
3. RESOLUTION 3 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
4. Where a member is an authorised nominee as defined under the Securities Industry (Central
4. RESOLUTION 4 Depositories) Act 1991, it may appoint at least one proxy in respect of each securities
account it holds with ordinary shares of the Company standing to the credit of the securities
5. RESOLUTION 5 account.
6. RESOLUTION 6 5. Where the Form of Proxy is executed by a corporation, it must be executed under its seal or
under the hand of its attorney.
7. RESOLUTION 7 6. The instrument appointing a proxy and the power of attorney or other authority (if any)
under which it is signed, or a notarially certified copy of that power or authority, must, to be
8. RESOLUTION 8 valid, be deposited at the office of the Company’s Registrars, Mega Corporate Services Sdn
Bhd, Share Registration Department, Level 15-2, Faber Imperial Court, Jalan Sultan Ismail,
9. RESOLUTION 9 50250 Kuala Lumpur, not less than forty-eight (48) hours before the time set for the meeting
or at any adjournment thereof.
10. RESOLUTION 10
EXPLANATORY NOTES ON SPECIAL BUSINESS
(Please indicate with an “X” in the appropriate spaces provided above as Resolution 7
to how you wish your votes to be cast. If you do not do so, the proxy will The proposed ordinary resolution No. 7, if passed, will give the Directors of the Company the
power to issue shares in the Company up to an amount not exceeding in total 10% of the issued
vote or abstain from voting at *his/her discretion). share capital of the Company for such purposes as the Directors consider would be in the interests
of the Company. This would avoid any delay and cost involved in convening a general meeting to
specifically approve such an issue of shares. This authority, unless revoked or varied at a General
As Witness my hand this _____________ day of _____________ 2007 Meeting will expire at the next Annual General Meeting of the Company.
Resolution 8
Please refer to the Circular to Shareholders dated 31 May 2007 which is despatched together with
the Annual Report of the Company for the financial year ended 31 December 2006.
Resolution 9
______________________________________________________ Please refer to the Circular to Shareholders dated 31 May 2007 which is despatched together with
the Annual Report of the Company for the financial year ended 31 December 2006.
Signature of member(s)/Seal
Resolution 10
The proposed special resolution No. 10, if passed, will bring the Articles of Association of the
(*Delete where inapplicable) Company in line with the amendments to the Listing Requirements of Bursa Malaysia Securities
Berhad.

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’06

Company No. 432768-X

AHMAD ZAKI RESOURCES BERHAD 432768-X Annual Report 2006

8 Corporate Information 10 Corporate Structure 11 Financial Highlights

12 Directors’ Profile 16 Statement of Internal Control 18 Corporate Governance Statement

24 Statement of Directors’ Responsibilities 25 Report of the Audit Committee

28 Other Information 30 Environmental Management Activities at Project Sites

33 Quality, Safety and Health Policy 36 Chairman’s Statement / Penyata Pengerusi

41 Review of Operations 45 Calendar of Events 47 Financial Statements

AUTHORITY TO DIRECTORS TO ALLOT AND ISSUE SHARES

Notice of Annual General Meeting (cont’d)

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A

(i) recurrent transactions of a revenue or trading in nature;

(ii) necessary for the day to day operations;

(iv) are not to the detriment of the minority shareholders.

(hereinafter known as the “Shareholders’ Mandate 1”);

AND THAT such approval shall continue to be in force until:

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

(i) the types of recurrent related party transactions (“RRPT”); and

Notice of Annual General Meeting (cont’d)

PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A

(i) recurrent transactions of a revenue or trading in nature;

(ii) necessary for the day to day operations;

(iv) are not to the detriment of the minority shareholders.

(hereinafter known as the “Shareholders’ Mandate 2”);

AND THAT such approval shall continue to be in force until:

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

(i) the types of RRPT; and

Notice of Annual General Meeting (cont’d)

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF THE COMPANY

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

By Order of the Board

Bahari Bin Johari (LS 0008773)

NOTES: EXPLANATORY NOTES ON SPECIAL BUSINESS

Statement Accompanying Notice of

Total Meetings Attended % of Attendance

2. Place, date and time of Meeting

1. Bahari bin Johari (LS 0008773)

REGISTERED OFFICE PRINCIPAL BANKERS

Mega Corporate Services Sdn Bhd

Main Board of Bursa Malaysia

Dato’ Ismail @ Mansor Bin Said

From left to right

Company No. 432768-X

CONSTRUCTION & PROPERTIES OVERSEAS INVESTMENT

Year Ended 31 December

Revenue 439,030 306,014 257,915 249,125 442,600

Raja Dato’ Seri Aman bin Raja Hj Ahmad

A Malaysian, aged 61, was appointed Chairman and Independent Non-Executive

He is a Certified Public Accountant (CPA), a member of Malaysian Institute of

He is also a Director of Affin Holdings Berhad and Tomei Consolidated Berhad (a

Convictions for Offences

Directors’ Profile (cont’d)

Dato’ Wan Zakariah bin Haji Wan Muda

He holds a Bachelor of Science (Quantity Surveying) degree which he obtained in 1986

Directors’ Profile (cont’d)

Dato’ W Zulkifli bin Haji W Muda

He holds a Bachelor of Science (Civil Engineering) degree which he obtained in 1985

Directors’ Profile (cont’d)