TRC SYNERGY BERHAD (413192 D)

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TRC SYNERGY BERHAD (413192 D)

WISMA TRC

217 & 218, JALAN NEGARA 2

TAMAN MELAWATI

53100 ULU KLANG

SELANGOR DARUL EHSAN

TEL 03 4108 0105

03 4108 0106

FAX 03 4108 0104

www.trc.com.my

ANNUAL REPORT 2005

Pedestrian Bridge at Taman Seri Empangan,

Putrajaya

Rail Link to West Port, Pulau Indah

TABLE OF CONTENTS

Corporate Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02

Chairman’s Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04

Board Of Director’s Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Statement On Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . 12

Statement On Internal Control . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

List Of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Analysis Of Shareholdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Notice Of 9th Annual General Meeting . . . . . . . . . . . . . . . . . 66

Statement Accompanying Notice Of Annual General Meeting . . . . . . . . . 68

Proxy Form

TRC Synergy Berhad was initially incorporated as a private limited company in Malaysia under the Companies Act, 1965 on 11 December 1996 under the name TRC Synergy Sdn Bhd. On 8 January 1997, the company changed its status from a private limited company to a public company and assumed the name TRC Synergy Berhad (TRCS).

TRCS was listed on the Main Board of the Bursa Malaysia Securities Berhad on 6 August 2002, where it offered Public Issue and Offer For Sale of 16,000,000 and 3,500,000 ordinary shares respectively. TRCS is principally an investment holding company while the principal activity of its subsidiary companies are construction, manufacturing of construction materials and property development.

The TRCS group of companies employs over 450 personnel of which more than 15% are in the sub-professional and professional group. TRCS not only has the ability to undertake common projects like roads and building construction, but also specialized mega projects like airports, railway trackworks, stadium, hospitals and large property development ventures.

The company’s motto “As one with the nation” sums up the company’s aspiration to progress in tandem with the nation’s vision.

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CORPORATE PROFILE02

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Labuan Airport, Labuan

Control Tower, Kota Bharu Airport

04 CHAIRMAN’S STATEMENTDEAR SHAREHOLDERS,

ON BEHALF OF THE BOARD OF DIRECTORS, I AM PLEASED TO PRESENT THE ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS OF TRC SYNERGY BERHAD FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2005.

REVIEW OF OPERATIONSThe year 2005 has been another challenging year for the Group. It was another year of contraction for the construction industry. The continuous rise in oil prices has invariably resulted in a simultaneous rise in prices of other construction related products like diesel and bitumen. Projects from both government and private sector continue to be scarce. These unfavourable factors have negatively impacted the Group’s performance.

CONSTRUCTIONFor the period under review, construction activity remains the main revenue contributor for the Group. Despite the contraction in the construction industry for 2005, the Group managed to secure the Design and Build Contract to construct the new Prison Complex in Bentong, Pahang. The contract value was RM238 million. With the implementation of the Ninth Malaysia Plan (9MP), we are confident that the prospect for the Group’s construction division would be better in the coming years.

PROPERTY DIVISIONThe Group through its wholly owned subsidiary, TRC Land Sdn Bhd, is currently developing part of a piece of land measuring 163 acres in the Plentong region, next to Permas Jaya, in Johor Bahru. It has, to date, completed Phase A comprising of 352 units of Medium Cost Apartments. Two blocks out of the five blocks of Medium Cost Apartments in Phase B comprising 356 units are currently being developed. So far, the sales for Phase B have been satisfactory despite the soft property market in Johor. We are currently re-strategising the development of the remaining land bank to be more in line with the prevailing market trend and demand of properties in Johor and to tap its potential.

In the Klang Valley, we have recently purchased a piece of land in Ulu Klang measuring 8.68 acres for RM7.5 million for future development.

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Dato’ Sufri Bin Hj Mohd Zin(Executive Chairman)

MANUFACTURING DIVISIONDue to the slowdown in construction activity, the performance of this division was below expectation. However, we expect this division to perform better in the coming years following the revival of the construction industry.

FINANCIAL PERFORMANCEThe Group recorded a turnover of RM140.6 million and a loss of RM5.4 million for the financial year ended 31 December 2005.

The less than satisfactory performance is largely due to the slowdown in the construction industry during the period in question and the rise in construction material prices.

CHANGES IN THE COMPOSITION OF THE GROUPThe Company’s wholly owned subsidiary, Trans Resources Corporation Sdn Bhd (TRC) had, on 19 May 2005, acquired 300,002 shares in its former associated company, Andaman Budi Sdn Bhd (ABSB) for a cash consideration of RM1.00. Through the acquisition, ABSB became a wholly owned subsidiary of TRC. The name of ABSB was subsequently changed to TRC Land Sdn Bhd on 7 May 2005.

The above acquisition will enable the Group to tap on the future potential of the property market in Johor and this is in line with the Group’s vision of strengthening its property division.

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Main Road to Empagan Bakun

Road Package RII at Putrajaya

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ECONOMIC OUTLOOKThe construction sector after a two years contraction will receive a major boost under the Ninth Malaysia Plan (9MP). Over the next five years, the construction sector is expected to grow an average of 3.5% per annum with impetus coming from infrastructure projects and property development. The announcement of the implementation of the Private Finance Initiative (PFI) by the Government will help to increase opportunities for the private sectors to participate in larger infrastructure and utilities developments.

Going forward, we envisage that the Group will benefit from the implementation of the 9MP.

DIVIDENDThe Board of Directors does not recommend the payment of any dividend for the financial year ended 31 December 2005. The Board of Directors, however, have approved to establish a Company’s Dividend Policy commencing from the year 2006 whereby at least 25% of the Company’s Profit After Tax will be reserved for dividend payment. The payment however, will be dependent on, amongst other, the Group’s cashflow position and the availability of tax credit.

ACKNOWLEDGEMENT AND APPRECIATIONOn behalf of the Board of Directors, I would like to extend our sincere appreciation to all our valued clients, bankers and business associates for their undivided support. I would also like to put on record my gratitude to the management and staff of the Group for their effort and hard work in spite of the challenging business environment in the preceding year.

Finally, we acknowledge and appreciate the continuing support of our shareholders and we hope that the prospect for the coming years will be better for the Group.

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BOARD OF DIRECTORS’ PROFILE

Dato’ Sufri Bin Hj Mohd Zin (Executive Chairman)

Dato’ Sufri Bin Hj Mohd Zin, Malaysian, aged 50, was appointed as the Managing Director of TRC Synergy Berhad (“TRC” or “the Company”) on 29 March 2002 and presently he is the Executive Chairman of the Company and the Managing Director of its subsidiary Companies. He graduated from Institute of Teknologi MARA (“ITM”) in 1982 with a Diploma in Business Studies. He started his career as a banker with Bank Bumiputera Malaysia Bhd in 1982. His inherent perseverance and unique business acumen led him into the building and construction industry in 1984. YBhg Dato’ Sufri is a member of the Audit Committee. During the Financial year ended 31 December 2005, he attended all of the four (4) Board Meetings.

Dato’ Abdul Aziz Bin Mohamad(Executive Director)

Dato’ Abdul Aziz Bin Mohamad, Malaysian, aged 47, was appointed as an Executive Director of the Company on 29 March 2002. He joined TRC Group as a Senior Contract Executive in 1994 and was later promoted to Deputy General Manager (Contracts) in 1997. He graduated from Trent Polytechnic in Nottingham, England in 1983. He is a Quantity Surveyor by profession and a member of the Institution of Surveyors, Malaysia. He started his career as an Assistant Quantity Surveyor in England with Rider Hunt and Partners in 1982. He later joined Jabatan Kerja Raya (JKR) Kuala Lumpur in 1983 as a Quantity Surveyor where he administered the contractual aspects of projects. YBhg Dato’ Aziz attended all of the four (4) Board Meetings held during the financial year ended 31 December 2005.

NOTESave as disclosed,

1) none of the Directors have:- i) any family relationship with any director and/or substantial shareholder of the Company; ii) any conflict of interest with the Company; and iii) any conviction for offences (other than traffic offences) within the past ten (10) years.

2) none of the Directors holds directorship in other public companies.

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Encik Noor Zilan Bin Mohamed Noor(Independent, Non–Executive Director)

Encik Noor Zilan Bin Mohamed Noor, Malaysian, aged 46, was appointed as a Director of the Company on 13 May 2002. He graduated from ITM in 1983 with a Diploma in Law. He then joined United Malayan Banking Corporation as a Trainee Executive Officer before pursuing his further studies in the United Kingdom in 1984 and graduated from City of London Polytechnics with LLB (Hons) majoring in Business Law in 1987. Subsequently, he went on to read Law at Lincoln’s Inn and was called to the English Bar in 1988 and upon returning to Malaysia he was then called and admitted to the Malaysian Bar in 1989 as an Advocate & Solicitor. He then worked as a Legal Assistant before starting his own law firm in 1991 and is now a Senior Partner with an established law firm in Kuala Lumpur specializing in the area of Corporate Law, Banking, Building and Construction Law apart from civil & criminal litigation. En. Noor Zilan is the Chairman to the Audit Committee, Nomination Committee and Remuneration Committee. He attended three (3) out of four (4) Board Meeting held during the financial year ended 31 December 2005.

En. Rahman Bin Ali(Independent, Non–Executive Director)

En. Rahman Bin Ali, Malaysian, aged 49, was appointed as a Director of the Company on 13 May 2002. He graduated from University of Malaya in 1982 with a Degree in Accounting. He is currently a Chartered Accountant of the Malaysian Institute of Accountants. He started his career as a credit officer with Bank Bumiputera Malaysia Berhad in 1982. He left the bank in 1986 to set up his own management consultancy company under the name of Advance Management Services in 1986 before becoming a Branch Manager with a public accounting firm, Sahir and Co. in 1990. In 1994, he set up his own accounting firm by the name A. Rahman & Associates and later became a partner of Omar Arif, A.Rahman & Associates in 1996. En. Rahman is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He attended all the four (4) Board Meeting held during the financial year ended 31 December 2005.

General (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin(Non-Independent, Non-Executive Director)

General (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin, aged 59, was appointed as a Director of the Company on 25 March 2004. After his secondary education, he was selected for Officer Cadet training at the Royal Military College, Sungai Besi in 1966 before being commissioned as a Second Lieutenant into the Royal Malay Regiment in 1968 and assigned as a Platoon Commander with the 2nd Battalion, Royal Malay Regiment. General (R) Dato’ Seri Mohd Shahrom has served in various appointments at command, staff, training and the diplomatic services levels and he was the Chief of the Malaysia Army from 1st January 2003 to 15 September 2003. Prior to that appointment he was the Chief of staff at the Armed Forces Headquarters. Currently he is the Senior Vice President Defence of the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also the Chairman of SME Aerospace Sdn Bhd (SMEA) and Director of SME Ordnance Sdn Bhd (SMEO). Both SMEA and SMEO are subsidiary companies of the NADI Group of Companies. General (R) Dato’ Seri Mohd Shahrom attended all Board Meetings held during the financial year ended 31 December 2005.

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CORPORATE INFORMATIONBOARD OF DIRECTORSDato’ Sufri bin Hj Mohd Zin(Executive Chairman)

Dato’ Abdul Aziz bin Mohamad(Executive Director)

Rahman bin Ali(Independent Non-Executive Director)

Noor Zilan bin Mohamed Noor(Independent Non-Executive Director)

General (R) Dato’ Seri Mohd ShahromBin Dato’ Hj Nordin(Non-Independent, Non-Executive Director)

COMPANY SECRETARYAbdul Aziz bin Mohamed(LS 007370)

REGISTERED OFFICE /PRINCIPAL PLACE OF BUSINESSWisma TRC, No. 217 & 218Jalan Negara 2, Taman Melawati53100 Ulu Klang, SelangorTel : 603 4108 0105 / 603 4108 0106Fax. : 603 4108 0104E-mail : trc@tm.net.my

BRANCH OFFICE Lot 3626, Block 16, KCLDTaman Timberland, Lorong Rock 293200 Kuching, SarawakTel : 6082 239 998Fax : 6082 421 998

WEBSITE www.trc.com.my

AUDITORSKumpulan Naga (AF-0024)Suit 1, 1st Floor, Wisma LeopadNo. 5, Jalan Tun Sambanthan50470 Kuala Lumpur

SHARE REGISTRARSymphony Share Registrars Sdn BhdLevel 26, Menara Multi PurposeCapital Square8, Jalan Munshi Abdullah50100 Kuala LumpurTel : 603 2721 2222Fax : 603 2721 2530 / 603 2721 2531

PRINCIPAL BANKERSEON Bank BerhadMalayan Banking BerhadArab-Malaysian Merchant Bank BerhadAffin Bank Berhad

SOLICITORSMessrs Noorzilan & PartnersMessrs C.C. Choo & Co.

STOCK EXCHANGE LISTINGBursa Malaysia Securities Berhad (Main Board)(Stock No. : 5054)

CORPORATE STRUCTURE

TRC SYNERGY BERHAD413192 D

TRANS RESOURCESCORPORATION

SDN BHD (100%)

120265 P

GOMEX SDN BHD (45%)

681546 D

TRC CONSTRUCTIONINDIA PTE LTD

(100%)U45203KL2004PTC017360

TRC INFRASDN BHD

(90%)645178 P

TRCINTERNATIONAL

PTE LTD(100%)

LL04510

TRC DEVELOPMENT SDN BHD(100%)309248 U

TRC CONCRETE INDUSTRIES SDN BHD(100%)151401 V

TRC LAND SDN BHD(formerly known as Andaman Budi Sdn Bhd)(100%)

444162 W

TRC CONSTRUCTION (SARAWAK) SDN BHD(100%)621714 W

TRC-PDI JV SDN BHD(100%)616448 K

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STATEMENT ON CORPORATEGOVERNANCE

The Board of Directors of TRC Synergy Berhad (“the Board”) is committed to ensure that high standards of corporate governance as set out in the Malaysian Code on Corporate Governance (“The Code”) are practiced throughout the Group. These have been recognized by the Board as the Group’s key responsibilities in order to protect and enhance long term shareholder value and to safeguard the Group assets.

The Board will continuously evaluate the Group’s corporate governance practices and procedures, and where appropriate will adopt and implement the best practices as enshrined in the Code. In accordance with paragraph 15.26 of the Bursa Malaysia’s Listing Requirements (“Listing Requirements”), the Board is pleased to provide the following statement detailing the manner the Group has applied the Principles and the extent of compliance with the Best Practices.

Putrajaya Landmark

NAME NO. OF MEETINGS ATTENDED

Dato’ Sufri bin Hj Mohd Zin 4/4

Dato’ Abdul Aziz bin Mohamad 4/4

Noor Zilan Bin Mohamed Noor 3/4

Rahman bin Ali 4/4

Jen (B) Dato’ Seri Mohd Shahrom bin Dato Hj Nordin 4/4

1. DIRECTORS

a) The Board The Group is led and controlled by an effective Board of Directors headed by the Executive Chairman who has detailed knowledge and vast experience in the construction industry. The rest of the Board members possess a wide range of skill and experiences ranging from construction, finance, legal and general management discipline suitable for managing the Group businesses.

The Board of Directors has overall responsibility for the performance of the Group inclusive of corporate governance, strategic planning and maintaining effective control over financial and operational matters.

b) Board Composition and BalanceThe Board consists of five (5) members comprising two Executive Directors, two (2) Independent Non-Executive Directors and one (1) Non Independent Non Executive Director. The Company complies with the criteria of having at least one-third of the Board Members as Independent Non-Executive Directors. The profiles of the Directors are presented in this Annual Report on pages eight (8) and nine (9).

Two (2) of the Board members are Independent Non-Executive Directors who provide broad, unbiased and balanced assessment on proposals initiated by the Executive Directors and the senior management of the Group.

The Non-Executive Directors also include a representative of Lembaga Tabung Angkatan Tentera, one of the substantial shareholders of the Company, who brings independent judgment that safeguards the interest of overall shareholders of the Company.

In view of this composition, the present members of the Board are considered sufficient in addressing the issues affecting the Group and the Board has not considered it necessary to examine its size.

c) Board MeetingDuring the financial year ended 31 December 2005, four (4) board meetings were held. In the meetings, the Board deliberated and considered matters relating to the Group’s financial performance, key business and operational issues and business plans. Details of attendance at the meeting are as follows:-

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The Board has agreed to meet at least four times a year with additional matters addressed by way of circular resolutions and additional meeting to be held as and when the need arises.

d) Supply of Information to the BoardAll Directors have unfettered access to all information within the Group as a full Board or in their individual capacity in carrying out their duties and responsibilities. They also have direct access to the advice and services of the Company Secretary, internal and external auditors and other independent professional at all times.

As for the Board meeting, the agenda and Board papers are distributed to the Board in advance before the meeting to ensure the Directors have sufficient time to appreciate the issues deliberated at the meetings. Senior officers of the Group are invited to clarify and explain the relevant matters tabled to the Board.

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e) Appointment and Re-election of the BoardThe Company has a formal and transparent procedure for the appointment of new Directors and re-election of Directors. These aspects are spelt out clearly in the Company’s Articles of Association. Besides, The Nomination Committee, comprising of two (2) Independent Non-Executive Directors, reviews and recommends any proposed appointments before the appointment are approved by the Board.

All the newly appointed Directors are subject to election by shareholders at the Annual General Meeting subsequent to their appointment.

As for the re-election of Directors, the Articles of Association of the Company provides at least one-third of the Directors are required to retire by rotation at each financial year and are eligible to offer themselves for reelection at the Annual General Meting. All Directors shall retire from office once at least in each three years.

f) Directors’ TrainingAll the Directors have attended and successfully completed the Mandatory Accreditation Program (“MAP”) and the Continuous Education Programme (“CEP”) as prescribed by the Bursa Malaysia Listing Requirements. Commencing from the year 2005 the Board will evaluate the training needs for Directors and they have principally agreed to attend at least one training every year. The Board will identify the relevant training programmes for all Directors to ensure that they are updated with appropriate professional training to enhance their knowledge and professionalism in discharging their duties to the Group.

g) Board CommitteesAs recommended by the Code, the Board has established the following committees to assist the Board in discharging its duties:-

i) Audit Committeeii) Nomination Committeeiii) Remuneration Committeeiv) Employees’ and Directors’ Share Option Scheme (ESOS) Committee

Each of this committee has its own functions and responsibilities and they report to the Board.

2. DIRECTORS’ REMUNERATIONThe Group has adopted the principle recommended by the Code whereby the level or remuneration of the Directors and senior management should reflect the level of responsibility and contributions toward the successful and efficient running of the Group’s activities.

ProcedureTo assist the Board in the discharge of its duties, the Board has established a Remuneration Committee. As at the date of the Annual Report, the composition of the Remuneration Committee is as follows:-

i) Noor Zilan Bin Mohamed Noorii) Rahman bin Ali

The Committee will review and recommend to the Board the remuneration package of the executive directors and senior management of the Group with the main aim of providing level of remuneration sufficient to attract and retain competent executives who can manage the Group effectively.

The Committee did not hold any meeting during the financial year as there were no appointments to the Board as well as the senior management of the Group.

DisclosureThe aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the financial year are as follows:-

CATEGORY FEES (RM) SALARIES (RM) EPF & SOCSO (RM)

Executive Directors 120,000.00 588,000.00 71,109.80

Non-Executive Director 84,000.00 - -

Total 204,000.00 588,000.00 71,109.80

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The remuneration paid to the Directors, analysed into the following bands, is as follows:-

RANGE OF REMUNERATION NUMBER OF EXECUTIVE DIRECTORS NUMBER OF NON-EXECUTIVE DIRECTORS

Less than RM 50,000 - 3

RM50,001 – RM250,000* - -

RM 250,001 – RM 300,000 1 -

RM300,001 – RM500,000* - -

RM 500,001 – RM550,000 1 -

* No Directors within this range of remuneration

3. RELATIONSHIP WITH INVESTORS AND SHAREHOLDER COMMUNICATIONThe Board acknowledges the important of communication and proper dissemination of all important issues and major development concerning the Company. In addition to the various announcements made during the year, the timely release of financial results on a quarterly basis provides shareholders with an overview of the Group’s performance and operations.

During the financial year ended 31 December 2005, there were a number of dialogues and analysts briefings organised by the Company. These sessions were held either at the request of the analysts or initiated by the Company. During the discussions which were attended by the Executive Directors and Senior Management staff, relevant information pertaining to the Group was disseminated to the public.

The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group’s information to the public, shareholders and investors. Press releases are also occasionally organized to clarify on certain matters related to the Company and its operating unit.

Besides, shareholders, investors and members of the public may also obtain updated information on the Group by accessing to the Company’s website at www.trc.com.my.

The company uses the Annual General Meeting as the primary channel of communication with its shareholders. Shareholders who are unable to attend to the meeting can appoint their proxies who can vote on their behalf. Board of directors, senior management as well as the Company’s Auditors are present to answer any relevant questions raised at the meeting

4. ACCOUNTABILITY AND AUDIT

i. Financial ReportingIn presenting the Company’s financial statements and quarterly results to shareholders and other interested parties, the Board aims to present a balanced and understandable assessment of the Group’s financial position and prospects.

The financial statements of the Company and of the Group are prepared in accordance with the requirements of the applicable Approved Accounting Standards in Malaysia and the provisions of the Companies Act, 1965.

The Group’s annual financial statements and quarterly results are reviewed by the Audit Committee and approved by the Board before announcement to Bursa Malaysia for public release.

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The Statement explaining the Directors’ responsibilities for preparing the annual audited financial statements pursuant to paragraph 15.27(a) of the Listing Requirements is set out on page 17 of the Annual Report.

ii. Internal ControlThe Board acknowledges and placed strong emphasis in maintaining a sound system of internal control which is necessary to safeguard the Group’s assets and shareholders’ interest. Details of the Group’s internal control system is presented in the Statement on Internal Control and Audit Committee Report set out on pages 18 to 20 and pages 22 to 24 respectively.

iii. Relationship with External AuditorsThrough the Audit Committee, the Group has established a transparent and appropriate relationship with the Group’s external auditors in seeking their advice and towards ensuring compliance with the applicable Approved Accounting Standards. The external auditors are invited to attend the Audit Committee meeting and to the Board meeting on a need

basis as and when deemed appropriate.

STATEMENT OF COMPLIANCE WITH THE BEST PRACTICE OF THE MALAYSIAN CODE ON CORPORATE GOVERNANCE (THE CODE)Save as disclosed below, the group has substantially complied with the Best Practices in Corporate Governance set out in Part 2 of the Code:-

PROVISION OF THE CODE DETAILS EXPLANATION

Part 2, AA II Chairman and ChiefExecutive

The Company is headed by an Executive Chairman and therefore, the roles of the Chairman and the Chief Executive Officer are not separate. The Board is of the opinion that the check and balance of power is undertaken by the strong presence of Independent Non-Executive Directors in the Board. Furthermore, the Chairman encourages all Directors to participate actively in all deliberation of issues that concern the Group.

Hence, the Board maintains the view that this combined arrangement will not hamper the Board from making fair decisions for the best interest of the Group.

Part 2, AA VII Senior IndependentNon-ExecutiveDirector to whomconcerns may beconveyed

Presently all Board Members are accessible by the shareholders and public investors where they can relay their concerns over company matters. Therefore, the appointment of Senior Independent Non-Executive Director to assume such responsibilities is not timely necessary.

ADDITIONAL CORPORATE INFORMATIONIn compliance with the Listing Requirements, the following information is provided:-

i. Utilization of ProceedsNo proceed were raised by the Company for any corporate exercise during the financial year ended 31 December 2005.

ii. Share BuybacksThe Company has not undertaken any share buyback exercise during the financial year ended 31 December 2005.

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iii. Option, Warrants or Convertible SecuritiesNo options, warrants or convertible securities were exercised by the Company during the financial year ended 31 December 2005.

iv. American Depository Receipt (ADR) / Global Depository Receipt (GDR)The Company has not sponsored any ADR or GDR Programme.

v. Sanctions and / or PenaltiesThere were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2005.

vi. Non-Audit FeesThe non-audit fees paid to external auditors amounting to RM39,000.00 for the financial year ended 31 December 2005.

vii. Variation of ResultsThere was no material variation between the audited results for the financial year ended 31 December 2005 with the unaudited results announced.

viii. Profit GuaranteeThere was no profit guarantee given by the Company during the financial year ended 31 December 2005.

ix. Material ContractsThere was no material contracts between the Company and its subsidiaries involving Directors and major shareholders’ interests during the financial year ended 31 December 2005.

x. Revaluation of Landed PropertiesThe Company does not adopt a policy of regular revaluation of its properties.

xi. Recurrent Related Party TransactionThe Company did not enter into any recurrent related party transaction which requires the shareholders’ mandate during the financial year ended 31 December 2005.

STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATION TO THE FINANCIAL STATEMENTSThe Board is responsible to ensure that the financial statements are prepared in accordance with the provision of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to ensure a true and fair view of the state of affairs of the Group and the Company as at the end of each financial year and of their results and their cash flows for that financial year then ended. The Board is also responsible to maintain accounting records that disclose with reasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities.

The Directors are satisfied that in preparing the financial statements of the Group for the financial year ended 31 December 2005, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also satisfied that reasonable and prudent judgments and estimates were made and all applicable Approved Accounting Standards in Malaysia have been followed accordingly.

18 STATEMENT ON INTERNAL CONTROL

The Board of Directors of TRC Synergy Berhad (“the Board”) is committed to maintaining a sound System of Internal Control in the Group and is pleased to provide the following statement that outlines the nature and scope of internal control of the Group during the financial year ended 31 December 2005 pursuant to paragraph 15.27(b) of the Bursa Malaysia’s Listing Requirements.

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Palm Oil Bulking Facilities, at Bintulu Port

1. BOARD RESPONSIBILITYThe Board acknowledges the importance of sound internal controls and risk management practices within the Group to meet its business objectives. The Board affirms its overall responsibility for the effectiveness of the Group’s systems of internal control and risk management, and for reviewing the adequacy and integrity of these systems. The internal control system involves the core business and its key management, including the Board, and is designed to meet the Group’s particular needs and to manage the risks to which it is exposed. The system of Internal Control aims to:-

safeguard shareholders’ interest and the assets of the Group;ensure that proper accounting records are maintained; andthat the financial information used within the business and the publication to the public is reliable.

The Board is fully aware that this system, by its nature, can only provide reasonable, and not absolute, assurance against material misstatement, loss and fraud. These systems are designed to manage, rather than eliminate, the risk of failure to achieve business objectives of the Group.

2. INTERNAL CONTROLThe key elements of the Group’s internal control system are described below:-

a) Internal Audit DepartmentThe Internal Audit Department which was established on 20 August 2004 is to review the key business processes and controls to assists the Audit Committee in the discharge of its duties and responsibilities. Its role is to provide independent and objective reports on the organization, management, records, accounting policies and internal controls to the Audit Committee and the Board.

b) Quality Policy There is clear and well documented Quality Policy in accordance with ISO 9001 : 2000 by a wholly-owned subsidiary of the Company which is undertaking the core business of the Group. This policy and the related procedures are communicated to the respective staff members. Amongst the salient features of the Quality Policy are as follows:-

Internal Quality Audits are conducted at planned intervals to determine whether the Quality Management System is effectively implemented and maintained and conforms to the established system requirements of Internal Standard, ISO 9001:2000.On an annual basis, an overall Internal Quality Audit Plan is devised encompassing every departments and projects, taking into consideration the status and importance of relevant process, areas to be audited as well as results of previous audits.Qualified Internal Quality Auditors will be assigned with audit works in accordance with the Internal Quality Audit Plan where the reports shall be examined and analyzed and reported to the management during Management Review Board Meeting.As part of the Quality Management System, the management shall meet on monthly basis to discuss and deliberate all issues relating to the business of the Group.The Audit Committee is accessible to the relevant reports produced in relation to the Quality Management and if the need arise, the matter shall be further discussed in the Board Meeting.

c) Line of ReportingClearly defined delegation of responsibilities to committees of the Board and to operating units, including authorisation levels for all aspects of the business. This also includes detailed job description and specification provided to each employee of the Group which is further reiterated through a well defined organizational structure.

d) Dissemination of Information within the GroupRegular and comprehensive information is provided to Management covering financial performance and key business indicators, key operating statistics/ indicators, key business risks, legal, environmental and regulatory matters. Key matters affecting the Group are brought to the attention of the Audit Committee and are reported to the Board on a regular basis.

i)ii)iii)

i)

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e) Detail Budgeting ProcessA detailed budgeting process where operating units prepare budgets for every project for discussion in the Management Meeting. A monthly monitoring of results against budget, with major variances being followed up and management action taken, where necessary.

f) Risk Management FrameworkThe Group has in place an on-going process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives. This is an on-going process, subject to regular review by the Board, and accords with the “Statement on Internal Control: Guidance for Directors of Public Listed Companies”.

The Group adopts a decentralised approach to risk management by encouraging participation of all employees in such a manner that the employees take ownership and responsibility for risks at their respective levels. The process of risk management and treatment is overseen by the senior management and report to the Board through the Audit Committee. The risk management framework is also embodied in the Quality Policy in accordance with ISO 9001 : 2000 practised by a wholly-owned subsidiary of the Company.

g) Audit CommitteeThe Audit Committee, on behalf of the Board, regularly reviews and holds discussions with the management on the matters relating to internal control, the external auditors and the management.

The Report on the Audit Committee set out on pages 22 to 24 of this Annual Report contains further details on the activities undertaken by the Audit Committee in 2005.

h) Board The Board holds regular discussions with the Audit Committee, Management and external auditors and reads their reports on matters relating to internal controls and deliberates their recommendations for implementation.

The Directors have taken the necessary steps, as are reasonably open to them, to ensure that appropriate systems are in place for the assets of the Group to be adequately safeguarded through the prevention and detection of fraud and other irregularities and material misstatements.

The Directors believe that the system of internal control is considered appropriate to business operations, and that the risks taken are at an acceptable level within the context of the business environment of the Group.

During the year, a number of improvements to internal controls were identified and addressed. There has been no significant weakness noted which would result in any material loss.

This statement is made in accordance with a resolution of the Board of Directors dated 27 April 2006.

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Apartments at Bayu Senibong, Johor Bahru

Andaman Ukay, Ulu Klang

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1. COMPOSITION OF THE AUDIT COMMITTEEThe Audit Committee comprises of the following two Independent Non-Executive Directors and one executive director:-

Chairman: En Noor Zilan bin Mohamed Noor (Independent Non-Executive Director)

Member: i) YBhg. Dato’ Sufri Bin Hj Mohd Zin (Executive Chairman)

ii) En Rahman Bin Ali (Independent Non-Executive Director) (Member of the Malaysian Institute of Accountants)

Secretary: En. Abdul Aziz Bin Mohamed (Company Secretary)

2. TERMS OF REFERENCE

i. CompositionThe Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors) comprising not less than three (3) members where the majority of them shall be independent non-executive members of the Board.

The members of the Audit Committee shall elect a Chairman from amongst themselves. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. Should any members of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith.

If the members of the Audit Committee for any reason be reduced to below three (3), the Board of Directors shall within three (3) months of that event, appoint such number of the new members as may be required to make up the minimum number of three (3) members.

ii. ObjectivesThe primary objectives of the Audit Committee are:

To provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to business ethics, policies and practices and financial management and control.To provide greater emphasis on the audit functions by increasing the objectivity and independence of external and internal auditors and providing a forum for discussion that is independent of the management.To maintain through regularly scheduled meetings a direct line of communication between the Board and the external auditors, internal auditors and management.

iii. Duties and responsibilitiesThe duties and responsibilities of the Audit Committee shall be:

To consider the appointment of the external auditors, determination of audit fee and any questions of resignation or dismissal.To discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved.To review the quarterly results and year end financial statements before submission to the board, focusing particularly on:

Any changes in accounting policies and practicesMajor judgmental areasSignificant adjustments resulting from the auditThe going concern assumptionCompliance with accounting standardsCompliance with the stock exchange and legal requirements

a.

b.

c.

a.

b.

c.

i.ii.iii.iv.v.vi.

AUDIT COMMITTEE REPORT

23

To discuss problems and reservations arising from the interim and final audits, and any matters the auditors may wish to discuss (in the absence of management where necessary)To review the internal audit programme, consider the major findings of internal audit investigations and management’s response, and ensure coordination between the internal and external auditors.To keep under review the effectiveness of the internal control system, and in particular review the external auditors’ management letter and management’s response.To review any related party transactions and conflict of interest situations that may arise within the Group including any transactions, procedure or course of conduct that raises questions of management integrity.To carry out such other functions as may be agreed to by the Audit Committee and the Board of Directors.

iv. Authority The Committee is authorized by the Board to investigate any activity within the terms of reference. It is authorized to seek any information it requires from any employees and all employees are directed to co-operate with any request made by the Committee.

The Committee is empowered by the Board to retain persons having special competence as necessary to assist the

Committee in fulfilling its responsibilities.

v) Meeting and MinutesThe Audit Committee shall not hold less than three (3) meetings a year and the quorum for each meeting shall be two (2) members.

Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the other members of the Board. The Committee Chairman shall report on each meeting to the Board.

The Company Secretary shall act as the Secretary to the Audit Committee.

3. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEEDuring the financial year ended 31 December 2005, the Audit Committee met four (4) times. The details of the attendance of the members of the Audit Committee are as follows:-

d.

e.

f.

g.

h.

NO. AUDIT COMMITTEE ATTENDANCE

1 En Noor Zilan bin Mohamed Noor 3/4

2 Dato’ Sufri Bin Hj Mohd Zin 4/4

3 En. Rahman Bin Ali 4/4

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During the financial year, the Audit Committee carried out the following review:-

The quarterly management and annual audited financial statements to ensure compliance with statutory reporting requirements and appropriate resolution of all accounting and audit matters requiring significant judgment and where appropriate, made recommendations to the Board.The external auditor’s audit plan and scope for the Company and the Group, the audit report, significant issues raised and management responses in relation thereto.The external auditors’ fees and to recommend their reappointment to the Board.Measures implemented by management with regard to risk management and internal control.The statement of Corporate Governance and Statement on Internal Controls which are prepared in accordance with the provisions set out under the Malaysian Code on Corporate Governance, the extent of compliance with the said Code and recommend to the Board action plan to address further compliance matters.

4. INTERNAL AUDIT FUNCTIONThe Group has established the Internal Audit Department in 2004 to assist the Audit Committee and the Management in discharging their duties and responsibilities. The principal objective of the Department is to ascertain that adequate internal control is maintained in order to safeguard the assets of the Group and the shareholders interest.

-

-

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24

Throughout the financial year under review, the Internal Audit personnel have actively conducted several independent audits based on the approved Annual Audit Plan of the various operations and systems of control of the Group. Details of the activities performed by the Internal Audit Department during the financial year are as follows:-

Verification of banker acceptance transactions to ensure administration and utilization of fund are proper, efficient and effective;Reviewed on the effectiveness of administration and management of fixed assets;Reviewed on the tendering procedures of sub-contact works for Bentong Prison Project which include the evaluation and appointment of sub-contractors;Reviewed on the procurement procedures to ensure that the construction materials purchased are the most reasonable cost and quality for all projects.To compliment with the Quality Management System in accordance with ISO 9001 : 2000.

From the internal audit findings, the Internal Audit Department will prepare independent opinions and reports accordingly to the Audit Committee on risks areas, weaknesses identified and the relevant recommendations. All recommendations shall be reviewed and discussed accordingly at the Audit Committee Meetings and communicated to the management to rectify the identified weaknesses. The Department also established follow-up audit reviews to monitor and ensure that the recommendations agreed by the Audit Committee have been effectively implemented.

Going forward the Internal Audit Department will strengthen its capacity and efficiency for better contribution to the Group pursuant to the Audit Charter and Internal Audit Plan which have been approved by the Audit Committee.

5. STATEMENT IN RELATION TO THE ALLOCATION OF SHARE OPTION SCHEME The Audit Committee noted that the Company had established Share Option Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which were approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004.

The salient terms of the Scheme are as follows:-

the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company;not more than fifty percent (50%) of the Company’s shares available under the Scheme shall be allocated to Directors and senior management;not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid up capital of the Company;The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria:-

is a confirmed employee or appointed director within the Group;has attained at least age of eighteen (18);is employed full time and on the payroll of the Group;is under such category and of such criteria that the option committee may from time to time decide.

The Scheme shall remain in force for a duration of five (5) years from the effective date of the launch.The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s share traded on the Exchange for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company’s shares.

The option under the Scheme was offered to the eligible employees and Directors at an offer price of RM1.70 per option share.

During the financial year ended 31 December 2005 the Company have not offered any option to its eligible employees, Directors as well as the Non-Executive Directors.

•

••

•

•

i.

ii.

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iv.

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CONTENTS OF THE FINANCIAL STATEMENTS

Directors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Statement by Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Statutory Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Income Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Statement of Changes in Equity - Group . . . . . . . . . . . . . . . . . . . . . 36

Statement of Changes in Equity - Company . . . . . . . . . . . . . . . . . . . 37

Cash Flow Statement - Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Cash Flow Statement - Company . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

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The directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2005.

PRINCIPAL ACTIVITIES

The principal activities of the Company are that of providing corporate, administrative and financial support services to the subsidiaries, investment holding and general contractors supplying labour.

The principal activities of the subsidiaries are construction, manufacturing and trading of construction materials, hiring and servicing of machineries and vehicles and property development.

There have been no significant changes in the nature of these activities during the year.

RESULTS

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GROUP COMPANY

RM RM

Loss after taxation (5,236,435) (2,449,542)

Minority interest (504) -

Net loss for the year (5,236,939) (2,449,542)

There were no material transfers to or from reserves or provisions during the financial year.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

The amount of dividend paid by the Company since 31 December 2004 is as follows :

In respect of the financial year ended 31 December 2004 as reported in the directors’ report of that year :

RM

Final dividend of 1.5% less 28% taxation on 92,400,000 ordinary shares (1.08 net per ordinary share), paid on 22 July 2005. 997,920

DIRECTORS’ REPORTfor the year ended 31 December 2005

DIRECTORS’ REPORT

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DIRECTORS

The names of the directors of the Company since the date of the last report and at the date of this report are:-

Dato’ Sufri Bin Hj Mohd ZinDato’ Abdul Aziz Bin MohamadRahman Bin AliNoor Zilan Bin Mohamed NoorGen. (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin

DIRECTORS’ BENEFITS

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, as required by Section 169 (8) of the Companies Act, 1965.

DIRECTORS’ INTEREST

According to the register of directors’ shareholding required to be kept under Section 134 of the Companies Act, 1965, the interest of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:-

for the year ended 31 December 2005

NUMBER OF ORDINARY SHARES OF RM1 EACH

AT AT

SHARES IN THE COMPANY 1.1.2005 BOUGHT SOLD 31.12.2005

Direct interest:

Dato’ Sufri Bin Hj Mohd ZinDato’ Abdul Aziz Bin Mohamad

12,690,000120,000

--

(71,000)-

12,619,000120,000

Indirect interest:

Dato’ Sufri Bin Hj Mohd Zin # 36,480,000 - - 36,480,000

# Deemed interested by virtue of his substantial shareholdings in TRC Capital Sdn. Bhd. and Kolektif Aman Sdn. Bhd.

By virtue of Dato’ Sufri Bin Hj Mohd Zin and Dato’ Abdul Aziz Bin Mohamad having interests in the Company, they are deemed to be interested in shares of the subsidiaries to the extent the Company has an interest.

DIRECTORS’ REPORT

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for the year ended 31 December 2005

EMPLOYEE SHARE OPTION SCHEME

The Company has established a Share Option Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004.

The option under the Scheme was offered to the eligible employees and Directors on 22 June 2004 and 1 September 2004 at an offer price of RM1.70 per option share. The salient features and other terms of the Scheme are disclosed in Note 3 to the financial statements.

During the financial year ended 31 December 2005 the Company did not offer any option to the Non-Executive Directors.

OTHER STATUTORY INFORMATION

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 proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business 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 amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any substantial extent; and

the values attributed to current assets in the financial statements of the Group and of the Company misleading.

At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

At the date of this report, there does not exist:-

any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

In the opinion of the directors:-

no contingent liability or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due; and

no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is 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.

a)

i)

ii)

b)

i)

ii)

c)

d)

e)

i)

ii)

f)

i)

ii)

DIRECTORS’ REPORT

SIGNIFICANT EVENTS

The following represent the changes in the composition of the Group during the financial year ended 31 December 2005:-

The Company had on 18 February 2005 acquired 45 shares of RM1.00 each in Gomex Sdn. Bhd. for RM45 representing 45% equity interest, resulting in Gomex Sdn. Bhd. becoming a new associated company of the Group.

The Company’s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. (“TRC”), had on 19 May 2005 acquired additional 60% equity interest representing 300,002 ordniary shares of RM1.00 each in its associated company, Andaman Budi Sdn. Bhd. (“ABSB”), resulting in ABSB becoming a wholly owned subsidiary of the Group. ABSB subsequently changed its name to TRC Land Sdn. Bhd. with effect from 5 July 2005.

The Company’s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. (TRC), had on 25 August 2005 acquired 4 ordinary shares of RM1.00 each of TRC-PDI JV Sdn. Bhd. (TRC-PDI) for a total consideration of RM4, resulting in TRC-PDI becoming a wholly owned subsidiary of the Group.

STATUS OF CORPORATE PROPOSAL

On 20 May 2005, Malaysian International Merchant Bankers Berhad (“MIMB”), on behalf of the Board, announced to Bursa Securities that the Company proposed to undertake the following:

proposed renounceable rights issue of:-

up to a maximum of 35,420,000 new Shares in the Company at an issue price to be determined later, and

up to a maximum of RM35,420,000 nominal value of 5% Irredeemable Convertible Unsecured Loan Stocks (“ICULS”) at 100% of the nominal value.

together with up to a maximum of 35,420,000 free detachable warrants, on the basis of 1 Rights Share and RM1.00 nominal value of ICULS together with 1 free Warrant attached for every 3 existing Company’s Shares held by the registered shareholders of the Company whose names appear in the Record of Depositors of the Company as at the Entitlement Date (“Proposed Rights Issue”);

proposed amendments to the Memorandum and Articles of Association of the Company; and

proposed increase in the authorised share capital of the Company.

The proposal are inter-conditional upon one another.

Subsequently on 1 July 2005, MIMB on behalf of the Company announced to Bursa Malaysia on the revisions of the expiry date and the exercise period of the Warrants.

On 14 September 2005, MIMB, on behalf of the Company, announced that the Company has received the approval from the Securities Commission (“SC”) for the Proposed Rights Issue. Subsequently on 29 September 2005, further announcement was made on the revisions of certain terms of the ICULS and Warrants.

Pursuant to Chapter 18 of the SC’s Policies on Issue/Offer of Securities on ‘Implementation of Proposals’, the Proposed Rights Issue is required to be fully implemented within 6 months from the date of the Approval Letter i.e. 1 March 2006. On 9 February 2006, MIMB on behalf of the Company, applied to the SC for a six months extension of time from the deadline up to 1 September 2006 for the Company to implement the Proposed Rights Issue. SC has approved the application via its letter dated 17 February 2006.

i)

ii)

iii)

a)

-

-

b)

c)

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for the year ended 31 December 2005

DIRECTOR’S REPORT

Auditors

The auditors, Kumpulan Naga, have expressed their willingness to continue in office.

On behalf of the Board,

-----------------------------------DATO’ SUFRI BIN HJ MOHD ZINDirector

---------------------------------------DATO’ ABDUL AZIZ BIN MOHAMADDirector

Kuala Lumpur, MalaysiaDate: 27 APRIL 2006

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for the year ended 31 December 2005

STATEMENT BY DIRECTORS

PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, DATO’ SUFRI BIN HJ MOHD ZIN and DATO’ ABDUL AZIZ BIN MOHAMAD, being two of the directors of TRC SYNERGY BERHAD., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 34 to 60 are drawn up in accordance with applicable MASB Approved Accounting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2005 and of the results and the cash flows of the Group and of the Company for the year then ended.

On behalf of the Board,

------------------------------------DATO’ SUFRI BIN HJ MOHD ZIN

---------------------------------------DATO’ ABDUL AZIZ BIN MOHAMAD

Kuala Lumpur, MalaysiaDate: 27 APRIL 2006

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STATUTORY DECLARATION

PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, DATO’ SUFRI BIN HJ MOHD ZIN, being the director primarily responsible for the financial management of TRC SYNERGY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 34 to 60 are, in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed, DATO’ SUFRI BIN HJ MOHD ZIN at Kuala Lumpur in the Federal Territory on 27 APRIL 2006

Before me,

------------------------------------------------Commissioner for Oaths

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}------------------------------------DATO’ SUFRI BIN HJ MOHD ZIN

REPORT OF THE AUDITORS

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TO THE MEMBERS OF TRC SYNERGY BERHAD(Incorporated in Malaysia)

We have audited the financial statements set out on pages 34 to 60.

These financial statements are the responsibility of the Company’s directors.

It is our responsibility to form an independent opinion, based on our audit, on the 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 to any other person for the content of this report.

We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:-

the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting Standards in Malaysia so as to give a true and fair view of:-

the financial position of the Group and of the Company as at 31 December 2005 and of the results and the cash flows of the Group and of the Company for the year then ended; andthe matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and

the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and the auditors’ report of a subsidiary company of which we have not acted as auditors, as indicated in Note 12 to the financial statements, being financial statements that have been included in the consolidated financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company 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 those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the consolidated financial statements and did not include any comment required to be made under Section 174(3) of the Act.

------------------------------------------------ ------------------------------------------------Kumpulan Naga T. Nagarajan C.A.(M), FCCA, FTII, AICMAA.F. No. 0024 No: 824/04/08 (J)Chartered Accountants (M)

Kuala Lumpur, MalaysiaDate: 27 APRIL 2006

a)

i)

ii)

b)

BALANCE SHEETS

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as at 31 December 2005

GROUP COMPANY

NOTES 2005 2004 2005 2004

RM RM RM RM

FINANCED BY:

Share Capital 3 92,400,000 92,400,000 92,400,000 92,400,000

Share Premium 4 6,213,201 6,213,201 6,213,201 6,213,201

Reserve on Consolidation 17,466,866 16,540,657 - -

Exchange Fluctuation Reserve 1,259 (3,828) - -

Retained Profits 5 5,262,638 11,497,497 (852,109) 2,595,353

Shareholders’ Equity 121,343,964 126,647,527 97,761,092 101,208,554

Minority Interest - (500) - -

121,343,964 126,647,027 97,761,092 101,208,554

Deferred Taxation 6 1,960,024 2,767,633 -

Hire Purchase and Lease Payables 7 713,498 941,198 -

Long Term Borrowings 8 41,992,138 40,003,529 40,000,000 40,000,000

166,009,624 170,359,387 137,761,092 141,208,554

NON-CURRENT ASSETS

Property, Plant and Equipment 9 22,158,345 41,709,264 - -

Properties Held for Development 10 11,971,658 - - -

Investments 11 4,249,870 4,255,394 4,000,000 4,000,000

Investment in Subsidiaries 12 - - 133,047,758 136,596,297

Investment in Associate 13 45 513,852 45 -

Expenditure Carried Forward 14 1,041,337 925,333 1,041,337 925,333

CURRENT ASSETS

Property development project costs 15 22,010,447 933,246 - -

Inventories 16 1,593,607 246,255 - -

Trade receivables 17 58,798,747 106,447,693 - -

Other receivables 6,036,459 5,784,989 42,547 66,628

Gross amount due from customers 18 87,636,370 97,961,541 - -

Deposits with licensed banks 19 37,987,711 45,851,022 - -

Cash and bank balances 20 7,860,014 3,295,280 31,631 36,389

221,923,355 260,520,026 74,178 103,017

Assets held for sale 21 9,860,647 - - -

231,784,002 260,520,026 74,178 103,017

CURRENT LIABILITIES

Trade payables 22 27,614,489 46,470,980 - -

Other payables 7,430,780 4,780,295 374,262 395,988

Hire purchase and lease payables 7 602,813 2,484,154 - -

Short term borrowings 23 65,207,012 75,345,541 - -

Taxation 4,172,928 8,332,960 - 9,200

Due to a director 24 147,939 147,886 8,292 8,239

Dividends payable 19,672 2,666 19,672 2,666

105,195,633 137,564,482 402,226 416,093

NET CURRENT ASSETS/(LIABILITIES) 126,588,369 122,955,544 (328,048) (313,076)

166,009,624 170,359,387 137,761,092 141,208,554

The annexed notes form an integral part of these financial statements.

INCOME STATEMENTS

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2005

The annexed notes form an integral part of these financial statements.

GROUP COMPANY

NOTES 2005 2004 2005 2004

RM RM RM RM

Revenue 25 141,768,579 304,438,368 5,405,826 5,268,190

Cost of Sales 25 (132,207,193) (291,112,923) (2,772,400) (4,098,153)

Gross Profit 9,561,386 13,325,445 2,633,426 1,170,037

Other Operating Income 4,896,988 1,679,585 42,507 6,038

Administration Expenses (14,772,118) (11,834,316) (1,452,325) (1,510,923)

Selling Expenses (5,868) (63,271) - -

Operating Profit/(Loss) (319,612) 3,107,443 1,223,608 (334,848)

Finance Cost (7,425,888) (7,247,253) (3,277,863) (1,911,342)

Share of results of an associated company 103,623 (405,182) - -

Profit on disposal of Property, Plant and Equipment 2,832,371 4,923,803 - -

(Loss)/Profit Before Taxation 26 (4,809,506) 378,811 (2,054,255) (2,246,190)

Taxation 27 (426,929) (338,308) (395,287) -

(Loss)/Profit After Taxation (5,236,435) 40,503 (2,449,542) (2,246,190)

Minority interest (504) 501 - -

Net (loss)/profit for the year (5,236,939) 41,004 (2,449,542) (2,246,190)

Earnings per share ( sen )-

Basic 28 (5.67) 0.04 - -

Diluted 28 - - - -

for the year ended 31 December 2005

STATEMENT OF CHANGES IN EQUITY - GROUP

The annexed notes form an integral part of these financial statements.

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for the year ended 31 December 2005

NON-DISTRIBUTABLE DISTRIBUTABLE

EXCHANGE

SHARE SHARE CAPITAL FLUCTUATION RETAINED

NOTES CAPITAL PREMIUM RESERVE RESERVE PROFITS TOTAL

RM RM RM RM RM RM

At 1 January 2004 70,000,000 12,885,471 16,540,657 - 13,766,493 113,192,621

Net profit for the year - - - - 41,004 41,004

Issue of shares 7,000,000 9,100,000 - - - 16,100,000

Share issue costs - (372,270) - - - (372,270)

Bonus issue 15,400,000 (15,400,000) - - - -

Exchange fluctuation reserves - - - (3,828) - (3,828)

Dividend 29 - - - - (2,310,000) (2,310,000)

At 31 December 2004 92,400,000 6,213,201 16,540,657 (3,828) 11,497,497 126,647,527

At 1 January 2005 92,400,000 6,213,201 16,540,657 (3,828) 11,497,497 126,647,527

Capital reserve on acquisition of a subsidiary

- - 926,209 - 926,209

Net loss for the year - - - - (5,236,939) (5,236,939)

Arising during the year - - - 5,087 - 5,087

Dividend 29 - - - - (997,290) (997,290)

At 31 December 2005 92,400,000 6,213,201 17,466,866 1,259 5,262,638 121,343,964

STATEMENT OF CHANGES IN EQUITY - COMPANY

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2005

The annexed notes form an integral part of these financial statements.

for the year ended 31 December 2005

RETAINED PROFIT/

SHARE SHARE (ACCUMULATED

NOTES CAPITAL PREMIUM LOSS) TOTAL

RM RM RM RM

At 1 January 2004 70,000,000 12,885,471 7,151,543 90,037,014

Net loss for the year - - (2,246,190) (2,246,190)

Issue of shares 7,000,000 9,100,000 - 16,100,000

Share issue costs - (372,270) - (372,270)

Bonus issue 15,400,000 (15,400,000) - -

Dividend 29 - - (2,310,000) (2,310,000)

At 31 December 2004 92,400,000 6,213,201 2,595,353 101,208,554

At 1 January 2005 92,400,000 6,213,201 2,595,353 101,208,554

Net loss for the year - - (2,449,542) (2,449,542)

Dividend 29 - - (997,290) (997,290)

At 31 December 2005 92,400,000 6,213,201 (852,109) 97,761,092

CASH FLOW STATEMENTS - GROUP

The annexed notes form an integral part of these financial statements.

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for the year ended 31 December 2005

NOTES 2005 2004

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

(Loss)/Profit before taxation (4,809,506) 378,811

Adjustments for:-

Loss on unexercised warrants 5,524 -

Doubtful debts written off 1,969,446 -

Provision for doubtful debt written back (2,200,000) -

Amortisation of expenditure carried forward 200,000 116,667

Exchange reserve arising due to retranslation of financial statements in foreign currency 5,087 (3,828)

Depreciation 6,241,799 8,369,189

Gain on disposal of property, plant and equipment (2,832,371) (4,923,803)

Share of results of an associated company (103,623) 405,182

Interest expense 7,457,759 4,753,030

Interest income (1,074,373) (1,384,237)

Property, plant and equipment written off 189,889 14,527

Realisation of unrealised profit on development activities (49,783) (49,788)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 4,999,848 7,675,750

Gross amount due from customers 10,325,171 5,063,637

Inventories (1,347,352) 18,286

Receivables 42,444,490 (5,777,050)

Payables (39,909,890) (24,735,487)

Directors’ account 53 (46,761)

Property development project costs (3,121,925) 5,480,606

Cash generated from/(used in) operations 13,390,395 (12,321,019)

Taxation paid (6,128,842) (5,350,468)

Interest paid (7,457,759) (4,753,030)

Interest received 1,074,373 1,384,237

Net cash generated from/(used in) operating activities 878,167 (21,040,280)

CASH FLOWS FROM INVESTING ACTIVITIES

Associate company (45) -

Additional investment in a subsidiary (4) -

Purchase of investment - (4,000,000)

Purchase of property, plant and equipment (2,362,440) (1,856,238)

Proceeds from disposal of property, plant and equipment 8,525,956 8,432,488

Acquisition of subsidiary net of cash acquired 30 1,235,001 1

Net cash generated from investing activities 7,398,468 2,576,251

CASH FLOWS FROM FINANCING ACTIVITIES

Fixed deposits 7,863,311 4,437,701

Repayment of short term borrowings (10,563,411) (28,991,380)

Proceeds from issue of shares - 15,727,730

Proceeds from long term borrowings 7,691,391 39,577,150

Expenditure carried forward (316,004) (980,480)

Repayment of hire purchase creditors (2,128,374) (5,231,742)

Dividend paid (980,914) (2,308,859)

Net cash generated from financing activities 1,565,999 22,230,120

Net increase in cash and cash equivalents 9,842,634 3,766,091

Cash and cash equivalents at the beginning of the year (46,309,990) (50,076,081)

Cash and cash equivalents at the end of the year (36,467,356) (46,309,990)

Cash and cash equivalents at end of year comprise the following:-

Cash and bank balances 7,860,014 3,295,280

Bank overdrafts (44,327,370) (49,605,270)

(36,467,356) (46,309,990)

CASH FLOW STATEMENTS - COMPANY

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The annexed notes form an integral part of these financial statements.

for the year ended 31 December 2005

2005 2004

RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Loss before taxation (2,054,255) (2,246,190)

Adjustments for:-

Amortisation of expenditure carried forward 200,000 116,667

Operating loss before working capital changes (1,854,255) (2,129,523)

Working Capital Changes:-

Receivables 24,081 (64,628)

Payables (21,726) 357,799

Director’s account 53 8,239

Cash used in operating activities (1,851,847) (1,828,113)

Tax paid (404,487) -

Net cash used in operating activities (2,256,334) (1,828,113)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investment - (4,000,000)

Investment in associate (45) -

Acquisition of subsidiary companies - (8,239)

Advances to subsidiary companies 3,548,539 (46,588,230)

Net cash generated from/(used in) investing activities 3,548,494 (50,596,469)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend paid (980,914) (2,308,859)

Proceeds from share issue - 15,727,730

Expenditure carried forward (316,004) (980,480)

Term loans - 40,000,000

Net cash (used in)/generated from financing activities (1,296,918) 52,438,391

Net (decrease)/increase in cash and cash equivalents (4,758) 13,809

Cash and cash equivalents at the beginning of the year 36,389 22,580

Cash and cash equivalents at the end of the year 31,631 36,389

NOTES TO THE FINANCIAL STATEMENTS

1. CORPORATE INFORMATIONThe principal activities of the Company are that of investment holding, general contractors supplying labour and providing corporate, administrative and financial support services to the subsidiaries.

The principal activities of the subsidiaries are disclosed in Note 12 to the financial statements.

The number of employees of the Group as at year end were 411 (2004 : 604).

The number of employees of the Company as at year end was 67 (2004: 90).

The Company is a public limited liability company incorporated and domiciled in Malaysia and listed on the Main Board of Bursa Malaysia.

The registered office and the principal place of business of the Company are located at:-

Wisma TRC217 & 218, Jalan Negara 2,Taman Melawati,53100 Ulu Klang,Selangor Darul Ehsan.

The financial statements of the Company for the year ended 31 December 2005 were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 27 April 2006.

2. PRINCIPAL ACCOUNTING POLICIESThe financial statements of the Group and of the Company have been prepared in accordance with applicable Approved Accounting Standards issued by the Malaysian Accounting Standards Board (MASB) and comply with the provisions of the Companies Act, 1965. The principal accounting policies of the Group are as follows:-

Basis of Preparation of Financial Statements

The financial statements of the Group and of the Company are prepared under the historical cost convention except for revaluation of certain properties included under property, plant and equipment.

During the financial year ended 31 December 2005, the Group adopted Financial Reporting Standard 5: Non-Current Assets Held For Sale and Discontinued Operations (“FRS 5”) for the first time. The adoption has resulted in the assets held for sale are separately presented in the balance sheet and the discontinuation of depreciation of those assets.

Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to 31 December. Subsidiaries are those companies in which the Group has the power to exercise control over the financial and operating policies so as to obtain benefits from their activities. Subsidiaries are consolidated using the acquisition method of accounting under which the results of subsidiaries acquired or disposed of are included in the consolidated financial statements from the date of acquisition or up to the date of disposal. Goodwill or reserve on consolidation represents the difference between the consideration paid for the shares in the subsidiaries and the fair value of attributable net assets acquired, as applicable.

Goodwill arising on consolidation is reflected in the consolidated balance sheet. The carrying amount of such goodwill is assessed in the year it arises, and periodically, including when economic conditions indicate that the carrying amount may be impaired. To the extent deemed impaired, such goodwill is written off by a charge to the income statement. All intercompany transactions, balances and unrealised gains or transactions between the companies within the Group are eliminated. The reserve on consolidation represents the excess of the share of assets of subsidiary companies on acquisition date over the consideration paid for their acquisition.

Subsidiary Companies

Subsidiaries are those companies in which the Group has a long term equity interest and where it has power to exercise control over the financial and operating policies so as to obtain benefits therefrom.

a)

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c)

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31 December 2005

NOTES TO THE FINANCIAL STATEMENTS

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31 December 2005

Investments in subsidiary companies are stated in the financial statements of the Group at cost unless, in the opinion of the directors, there has been a permanent diminution in value, in which case an appropriate provision is made.

Associated CompanyAssociate is a company in which the Group has a long term equity interest and where it exercises significant influence over the financial and operating policies.

Investments in associate are accounted for in the consolidated financial statements by the equity method of accounting based on the audited or management financial statements of the associate. Under the equity method of accounting, the Group’s share of profits less losses of associates during the year is included in the consolidated income statement. The Group’s interest in associates is carried in the consolidated balance sheet at cost plus the Group’s share of post-acquisition retained profits or accumulated losses and other reserves as well as goodwill on acquisition.

Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.

Long Term Investments

Long term investments are stated at cost unless in the opinion of the directors there has been a permanent diminution in value, in which case provision is made for the diminution in value.

Property, Plant and Equipment

Property, plant and equipment are stated at cost modified by the revaluation of certain land and buildings, less accumulated depreciation and amortisation.

Freehold land is not depreciated. Leasehold land is amortised over the period of leases ranging from 55 - 99 years.

Depreciation on other property, plant and equipment is calculated on the original cost or subsequent valuation of the property, plant and equipment and is charged on a straight line basis at varying rates to write off the cost of each asset to its residual value over the estimated useful life. The principal annual depreciation rates applied are as follows:-

Buildings 2%Motor vehicles 20%Plant and machinery 10%Office equipment 20%Furniture and fittings 10%Renovation 10%Telecommunication equipment 20%Computers 20%

Leased and Hired Assets

Assets acquired under finance leases and hire purchase arrangements which in substance transfer substantially all the risks and benefits of ownership of the assets to the Company are capitalised as property, plant and equipment. The property, plant and equipment and corresponding lease obligations are recorded at the lower of the net present value of minimum lease payments or the fair value of the lease assets at the beginning of the respective lease terms. Leases and hire assets which do not meet such criteria are classified as operating lease.

Finance charge of finance leases and hire purchase are charged to the income statement over the period of hire purchase or lease.

Rental payable under operating leases are accounted for in the income statement on a straight line basis over the periods of the respective leases.

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost comprises the cost of purchase plus the cost of bringing the inventories to its present condition.

d)

e)

f)

f)

h)

NOTES TO THE FINANCIAL STATEMENTS

Net realisable value is the estimate of the selling price in the ordinary course of business less the cost of completion and selling expenses.

Land Held For Property Development and Property Development Costs

Land held for property developmentLand held for development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(n).

Land held for development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

Property development costsProperty development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

When the financial outcome of a development activity can be realiably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurrd for work performed to date bear to the estimated total property development costs.

Where the financial outcome of a development activity cannot be reliably estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs properties sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately.

Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value.

Foreign Currency Translation

Foreign Currency TransactionForeign currency assets and liabilities are translated to Ringgit Malaysia at the rates of exchange ruling at the balance sheet date and profit and loss items, where applicable, are converted at rates ruling on the transaction dates. Differences on exchange are taken to the income statement.

Foreign EntitiesFinancial statements of foreign consolidated subsidiaries are translated at year-end exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with respects to the income statement. All resulting translation differences are recognised in equity.

Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deffered tax liabilities are recognised for all taxable temporary differences and deffered tax assets are recognised for all deductable temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deffered tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liabilty in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

i)

i)

ii)

j)

i)

ii)

k)

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31 December 2005

NOTES TO THE FINANCIAL STATEMENTS

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31 December 2005

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition in which case the deferred tax is included in the resulting goodwill or negative goodwill.

Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents include cash on hand and at bank, deposits at call and short term highly liquid investments which have an insignificant risk of changes in value, net of outstanding bank overdrafts.

Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of the revenue can be measured reliably.

Dividend IncomeDividend income from long-term investments and, in respect of the Company, from subsidiaries and associated companies, is recognised in the income statement upon the right to receipt of such dividends being established.

Construction ContractContract revenue is recognised by reference to the stage of physical completion of the contract. Contract revenue and costs are recognised as revenue and expense in the income statement in the accounting period in which the work is performed. The contract revenue is matched with the contract costs incurred in reaching the stage of completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of work completed. Profits expected to be realised on construction contracts are based on estimates of total revenue and costs at completion. These estimates are reviewed and revised periodically throughout the lives of the construction contracts and adjustment to the profits resulting from such revisions are recorded in the accounting period in which the revisions are made. If estimates of costs to complete the construction contract indicate losses, provision is made for the full losses anticipated in the period in which they are identified.

Sale of GoodsRevenue on sales of goods is recognised upon the transfer of risks and rewards.

Interest Income / Rental Income / Management FeeInterest income, rental income and management fee are recognised on an accrual basis.

Impairment

At each balance sheet date, the Group reviews the carrying amounts of its assets (other than inventories, deferred tax assets, assets arising from employee benefits and financial assets which are reviewed pursuant to the relevant accounting policies) to determine whether there are any indications that those assets have suffered an impairment loss. If any such indication exists, impairment is measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable amount is the higher of net selling price and value in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated for individual assets or, if it is possible, for the cash-generating unit to which the asset belongs.

An impairment loss is charged to the income statement immediately, unless the asset is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of any available previously recognised revaluation surplus for the same asset.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is stated at revaluation, in which case it is taken to revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised in the income statement.

l)

m)

i)

ii)

iii)

iv)

n)

NOTES TO THE FINANCIAL STATEMENTS

Financial Instruments

Financial instruments carried in the balance sheet include cash and bank balances, investments, inventories, receivables, payables, leases and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements for the relevant item. The financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the assets and settle the liability simultaneously.

ReceivablesReceivables are carried at their anticipated realisable values.

Bad debts are written off in the year in which they are considered irrecoverable and provision is made for specific doubtful debts, if any.

PayablesPayables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Group.

Interest-Bearing BorrowingsInterest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transaction costs.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate which is the weighted average of the borrowing costs applicable to the Group’s borrowing that are outstanding during the financial year, other than borrowings made specifically for the purpose of acquiring another qualifying asset. For borrowings made specifically for the purpose of acquiring a qualifying asset, the amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of funds drawndown from that borrowing facility.

All other borrowing costs are recognised as an expense in the income statement in the period in which they are incurred.

Construction Contracts

Construction work in progress which is stated at cost plus attributable profits less anticipated losses and progress billings is shown as amount due from customers.

The excess of progress billings over cost plus attributable profits less anticipated loses is shown as amount due to customers.

Costs consist of direct materials, direct labour, direct overhead, sub-contract charge and attributable expenses.

Employee Benefits

Short term benefitsWages, salaries, bonuses and social security contributions 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.

o)

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i)

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31 December 2005

NOTES TO THE FINANCIAL STATEMENTS

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31 December 2005

Defined contribution plansAs required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in the income statement as incurred.

3. SHARE CAPITAL

ii)

GROUP AND COMPANY

2005 2004

RM RM

Authorised:-

Ordinary shares of RM1.00 each

At 1 January 200,000,000 100,000,000

Created during the year - 100,000,000

At 31 December 200,000,000 200,000,000

Issued and fully paid:-

Ordinary shares of RM1.00 each

At 1 January 92,400,000 70,000,000

Issued during the year - 22,400,000

At 31 December 92,400,000 92,400,000

Employee Share Option Scheme

The Company has established a Share Option Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which was approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004.

The salient features and other terms of the Scheme are as follows:

the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company;

not more than fifty percent (50%) of the Company’s shares available under the Scheme shall be allocated to Di-rectors and senior management;

not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid-up capital of the Company.

The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria:-

is a confirmed employee or appointed director within the Group;has attained at least age of eighteen (18);is employed full time and on the payroll of the Group;is under such category and of such criteria that the option committee may from time to time decide.

The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s share traded on the Exchange for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company’s shares.

During the financial year ended 31 December 2005 the Company has not offered any option to the Non-Executive Directors.

i)

ii)

iii)

iv)

1)2)3)4)

v)

NOTES TO THE FINANCIAL STATEMENTS

4. SHARE PREMIUM

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GROUP

2005 2004

RM RM

Deferred tax liabilities (Note a) 2,368,688 2,767,633

Deferred tax assets (Note b) (408,664) -

1,960,024 2,767,633

Note (a)

Deferred Tax Liabilities

Balance as at 1 January 2,767,633 3,469,273

Transfer to income statement (Note 27) (398,945) (701,640)

Balance as at 31 December 2,368,688 2,767,633

Note (b)

Deferred Tax Assets

Balance as at 1 January - -

Prior year underprovision (Note 27) 793 -

Transfer to income statement (Note 27) (409,457) -

Balance as at 31 December (408,664) -

GROUP AND COMPANY

2005 2004

RM RM

Balance as at 1 January 6,213,201 12,885,471

Arising from shares issued:-

- On private placement at a premium of RM1.30 RM 9,100,000

- Share issue costs RM (372,270) - 8,727,730

Capitalisation for bonus issue - (15,400,000)

Balance as at 31 December 6,213,201 6,213,201

5. RETAINED PROFITSThe Company has tax exempt profits available for distribution of approximately RM5,242,666 (2004:RM5,242,666), subject to the agreement of the Inland Revenue Board.

6. DEFERRED TAXATION

NOTES TO THE FINANCIAL STATEMENTS

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7. HIRE PURCHASE AND LEASE PAYABLESGROUP

2005 2004

RM RM

Portion repayable not later than 1 year 602,813 2,484,154

Portion repayable later than 1 year and not later than 5 years 713,498 941,198

1,316,311 3,425,352

8. LONG TERM BORROWINGSGROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

Term loans:i)

Term loans - secureda) - 300,747 - -

Less : Due within 12 months

included in short term

borrowings ( Note 23 ) - (297,218) - -

- 3,529 - -

Term loans - securedb) 40,000,000 40,000,000 40,000,000 40,000,000

Total 40,000,000 40,003,529 40,000,000 40,000,000

Bridging finance facility:ii)

Bridging loans - secureda) 7,992,138 - - -

Less : Due within 12 months

included in short term

borrowings ( Note 23 ) (6,000,000) - - -

1,992,138 - - -

Total borrowings 41,992,138 40,003,529 40,000,000 40,000,000

The term loans bear:-

interest at a rate of approximately 1.5% (2004: 1.5%) above the bank’s base lending rate and is secured by freehold land and building belonging to a subsidiary company and is jointly and severally guaranteed by the directors of the subsidiary company. The term loan is repayable by way of 60 equal monthly instalments of RM29,855 inclusive of interest, with the repayments commenced from November 2000. The term loan was fully settled on 12.7.2005.

interest at the rate of 6.5% (2004:6.5%) per annum on a monthly rest basis as prescribed under the “Tabung In-dustri Kecil dan Serderhana” and is repayable by way of equal monthly instalments, commenced from December 2000. The facility is secured by a fixed deposit placed with a licensed bank as disclosed in Note (19) to the financial statements, a joint and several guarantee by the directors of the subsidiary company, a corporate guarantee by a subsidiary company and a legal charge over leasehold land belonging to a subsidiary company. The term loan was fully settled on 1.12.2005.

interest at a rate of 8.15% per annum and is repayable in one lump sum on the last day of the Tenor of the Facility (ie : Not exceeding five (5) years commencing from date of the Advance of the Facility which is 3 June 2004).

i)

ii)

iii)

NOTES TO THE FINANCIAL STATEMENTS

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Revaluation

Certain freehold and leasehold land and buildings of a subsidiary company were revalued by an independent professional valuer using the open market valuation basis. However in 2001, a proportion of this revaluation was deemed to be in excess of market values and was consequently subject to a downward revaluation during that year. The properties acquired subsequent to the said revaluation are however stated at cost, as the directors are of the opinion that the purchase consideration for the properties approximate their market values. Had the land and building affected been carried at their historical costs less accumulated depreciation, the carrying amounts of the revalued assets that would have been included in the financial statements at the end of the year are as follows:-

a)

LEASEHOLD CAPITAL FURNITURE TELECOM-

FREEHOLD LAND AND WORK-IN- PLANT AND MOTOR OFFICE AND RENOVA- COMPU- MUNICATION

COST/VALUATION LAND BUILDINGS BUILDINGS PROGRESS MACHINERY VEHICLES EQUIPMENT FITTINGS TION TERS EQUIPMENT TOTAL

RM RM RM RM RM RM RM RM RM RM RM RM

At 1 January 2005 4,754,740 1,950,000 3,127,300 3,155,600 60,341,364 16,321,342 4,011,589 701,378 1,463,650 69,944 1,250 95,898,157

Additions - - - 832,000 243,697 1,070,463 119,391 77,632 - 88,184 13,877 2,445,244

Disposals - (415,000) (1,862,500) - (34,801,630) (5,400,225) (1,693,752) (184,593) (47,470) - - (44,405,170)

At 31 December 2005 4,754,740 1,535,000 1,264,800 3,987,600 25,783,431 11,991,580 2,437,228 594,417 1,416,180 158,128 15,127 53,938,231

Accumulated

Depreciation

At 1 January 2005 - 154,243 339,605 - 36,427,991 12,408,635 3,295,228 554,258 942,795 65,450 688 54,188,893

Depreciation charge

for the year - 32,108 43,921 - 3,872,292 1,612,493 321,356 120,288 145,102 90,360 14,122 6,252,042

Disposals - (31,817) (189,354) - (22,070,269) (4,482,890) (1,672,192) (183,528) (30,999) - - (28,661,049)

At 31 December 2005 - 154,534 194,172 - 18,230,014 9,538,238 1,944,392 491,018 1,056,898 155,810 14,810 31,779,886

Net Book Value

At 31 December 2005 4,754,740 1,380,466 1,070,628 3,987,600 25,783,431 2,453,342 492,836 103,399 359,282 2,318 317 22,158,345

At 31 December 2004 4,754,740 1,795,757 2,787,695 3,155,600 23,913,373 3,912,707 716,361 147,120 520,855 4,494 562 41,709,264

Bridging loan:-

The Bridging Loan facility, with a limit of RM9,000,000 bears an interest rate of 2% above the book’s base lending rate, calculated at monthly rest and is repayable by 18 equal monthly instalments of RM500,000 commencing 6 months from date of first drawdown.

The facility is secured by the following:

A fixed legal charge over land belonging to a third party.Assignment of proceeds from the sale of the development units.Corporate guarantee provided by the ultimate holding company.A sinking fund in the form of a fixed deposit amounting to RM3,000,000 to be placed and hold under lien by the bank. This amount is to be placed over a quarterly duration.

9. PROPERTY, PLANT AND EQUIPMENT

i)ii)iii)iv)

NOTES TO THE FINANCIAL STATEMENTS

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2005 2004

RM RM

Freehold land 1,730,490 1,730,490

Freehold buildings 1,341,600 1,372,800

Leasehold land and buildings 1,106,234 1,637,021

4,178,324 4,740,311

Security

Certain land and buildings of a subsidiary company with a net carrying value of RM6,422,669 (2004:RM6,851,465) have been charged to financial institutions as security for various credit facilities granted to the subsidiary company.

Assets acquired under hire purchase and lease arrangementsThe net book value of property, plant and equipment of the subsidiary company acquired under hire purchase and lease arrangements are as follows:-

b)

c)

10. PROPERTIES HELD FOR DEVELOPMENT

2005 2004

RM RM

Plant and machinery 1,412,733 11,568,341

Motor vehicle 1,692,557 3,636,960

3,105,290 15,205,301

2005 2004

RM RM

At cost:

Freehold land 11,720,000 -

Freehold land and building 251,658 -

11,971,658 -

11. INVESTMENTSGROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

At Cost:

- Shares quoted in Malaysia 105,870 111,394 - -

- Corporate membership 144,000 144,000 - -

- Subordinated bonds 4,000,000 4,000,000 4,000,000 4,000,000

4,249,870 4,255,394 4,000,000 4,000,000

Market value

- Shares quoted in Malaysia 12,552 15,337 - -

NOTES TO THE FINANCIAL STATEMENTS

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12. INVESTMENTS IN SUBSIDIARIES COMPANY

2005 2004

RM RM

Unquoted shares, at cost 54,457,030 54,457,020

Amount due from subsidiary companies 84,127,130 84,658,025

Amount due to subsidiary companies (5,536,402) (2,518,748)

133,047,758 136,596,297

Amounts due from/(to) subsidiary companies represents outstanding amounts arising from inter-company trade transactions and advances and payments made on behalf or by subsidiary companies. These amounts which are unsecured, interest free and have no fixed terms of repayment are presented with investment in subsidiary companies as such amounts represent long term inter-company balances.

The details of the subsidiary companies are as follows:-

* The Company’s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. (“TRC”), had acquired additional 60% equity interest in its associated company, TRC Land Sdn. Bhd. (formerly known as Andaman Budi Sdn. Bhd.), resulting in TRC Land Sdn.Bhd. becoming a wholly owned subsidiary of the Group.

** Audited by another firm of auditors.

*** The financial statements of TRC International Pte Ltd have not been consolidated with the financial statements of the Group as the Directors are of the opinion that there will be of no real value in view of the insignificant effect on the financial statements of the Group.

TRC also, had acquired 40% equity interest in TRC-PDI JV Sdn. Bhd. (“TRC-PDI”), resulting in TRC-PDI becoming a wholly owned subsidiary of the Group.

COUNTRY OF EFFECTIVE PRINCIPAL

INCORPORATION INTEREST (%) ACTIVITIES

2005 2004

Trans Resources Corporation Sdn. Bhd. Malaysia 100 100 Construction activities

TRC Development Sdn. Bhd. Malaysia 100 100 Property development

TRC Concrete Industries Sdn. Bhd. Malaysia 100 100 Manufacture of ready mixed concrete

* TRC-Land Sdn. Bhd. (Formerly known as Andaman Budi Sdn. Bhd.)

Malaysia 100 40 Property development

TRC-PDI JV Sdn. Bhd. Malaysia 100 60 Construction

TRC Infra Sdn. Bhd. Malaysia 90 90 Dormant

** TRC Construction (Sarawak) Sdn. Bhd. Malaysia 100 100 Construction

TRC Construction India Pte Ltd India 100 100 Construction

*** TRC International Pte Ltd Malaysia 100 100 Investment Holding

NOTES TO THE FINANCIAL STATEMENTS

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The Company had acquired 45 shares of RM1.00 each in Gomex Sdn. Bhd. (“GSB”) for RM45 representing 45% equity interest, resulting in GSB becoming a new associated company of the Group.

Details of the associated company are as follows:-

GROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

Unquoted shares, at cost 45 200,000 45 -

Share of post - acquisition profit - 313,852 - -

45 513,852 45 4,000,000

13. INVESTMENT IN ASSOCIATE

14. EXPENDITURE CARRIED FORWARDCOMPANY

2005 2004

RM RM

Expenditure carried forward 1,041,337 925,333

Expenditure carried forward represents professional fees incurred in connection with the corporate exercises undertaken by the Company. This will be set off against the share premium account upon completion of the corporate exercises.

Included in the expenditure carried forward was the upfront fee on the subordinated bond which is amortised over five years.

PRINCIPAL COUNTRY OF PERCENTAGE OF EQUITY

NAME ACTIVITY INCORPORATION 2005 2004

% &

Gomex Sdn. Bhd. Dormant Malaysia 45 -

NOTES TO THE FINANCIAL STATEMENTS

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GROUP

2005 2004

RM RM

Brought forward 13,484,793 13,447,499

- Land 30,390,436 21,779,660

- Development costs 43,875,229 35,227,159

Incurred during the year

- Land 5,385,612 37,294

- Development costs 65,868,991 8,610,776

115,129,832 43,875,229

Recognised in income statement

Brought forward (42,941,983) (28,863,095)

Current year (50,177,402) (14,078,888)

(93,119,385) (42,941,983)

22,010,447 933,246

15. PROPERTY DEVELOPMENT PROJECT COSTS

16. INVENTORIESGROUP

2005 2004

RM RM

At Cost:

Construction materials 960,091 196,801

Raw materials 633,516 49,454

1,593,607 246,225

17. TRADE RECEIVABLESIncluded in the trade receivables are retention sums of RM8,705,621 (2004:RM12,616,149) to be receivable upon expiry of the warranty periods.

The Group’s normal trade credit term ranges from 30 to 90 days. Other credit terms are assessed and approved on a case-by-case basis.

NOTES TO THE FINANCIAL STATEMENTS

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Included in progress billings are retention monies totalling RM383,338 (2004: RM696,434).

19. FIXED DEPOSITSThe fixed deposits are placed with licenced financial institutions and have been charged to secure credit facilities granted to the subsidiary companies by the financial institutions.

20. CASH AND BANK BALANCESIncluded in the cash and bank balances of the Group are amounts of RM1,829,469 (2004: RM131,485) held pursuant to Section 7A of the Housing Development ( Control and Licensing ) Act 1966, and therefore restricted from use in other operations.

21. ASSETS HELD FOR SALE

GROUP

2005 2004

RM RM

Costs incurred to date 1,175,586,801 1,059,944,284

Add: Attributable losses (21,374,548) (28,811)

1,154,212,253 1,059,915,473

Less: Progress billings received and receivable (1,066,575,883) (961,953,932)

87,636,370 97,961,541

18. GROSS AMOUNT DUE FROM CUSTOMERS

GROUP

2005 2004

RM RM

Plant and machinery 9,476,325 -

Motor vehicle 384,322 -

9,860,647 -

The above assets were previously classified under property, plant and equipment. However, upon adoption of Financial Reporting Standard 5: Non-Current Assets Held For Sale and Discontinued Operations (“FRS 5”), the assets which are identified by the Group for sale are presented as assets held for sale.

22. TRADE PAYABLESThe normal trade credit terms granted to the Group range from 30 to 90 days.

NOTES TO THE FINANCIAL STATEMENTS

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GROUP

2005 2004

RM RM

Secured:

Bankers acceptance 9,544,000 13,518,000

Bank overdrafts 28,109,498 25,549,694

Revolving credit facility 5,000,000 5,000,000

Medium term credit 336,525 5,854,842

Bridging loan 6,000,000 -

Domestic factoring facilities (883) 52

Overdraft non chequing 16,217,872 24,055,576

Revolving term loan - 1,070,159

65,207,012 75,048,323

Term loan repayable not later than one year - 297,218

65,207,012 75,345,541

Bank Overdrafts

The bank overdrafts of the subsidiary companies are subject to interest at rates ranging from 1.25% to 2.5% (2004: 1.25% to 2.5%) per annum above the banks’ base lending rates and are secured by fixed and floating charges over the subsidiary companies present and future assets, certain fixed deposits, freehold land and assignment of certain contract receipts of the subsidiary companies and a joint and several guarantee by the directors of the subsidiary companies and a corporate guarantee by a subsidiary company.

Revolving Credit Facility

The revolving credit facility is subject to interest at the rate of 1.25% (2004: 1.25%) above the Kuala Lumpur Inter-Bank Offer Rates (KLIBOR) and is secured by assignment of contract by way of Letter of Undertaking from the Awarder to remit all proceeds and personal guarantee of a directors of a subsidiary company.

Bankers Acceptance

The bankers acceptances are subject to commission at rates of approximately 1.0% to 2.0% (2004: 10% to 2.0%) over the B.A. rate and are secured by fixed and floating charges over the subsidiary companies present and future assets, certain fixed deposits, freehold land and leasehold properties belonging to the subsidiary company, a joint and several guarantee by the directors’ of the subsidiary companies and a corporate guarantee by a subsidiary company.

Other Short Term Trade Facilities

The medium term credit is subject to a commission of 0.1% (2004: 0.1%) per month. The domestic factoring facility is subject to charges at a rate of 9.9% (2004: 9.9%) per annum above the bank’s base lending rate. The non chequ-ing overdraft facility bears interest at a rate of 1.5% (2004:1.5%) per annum above the bank’s base lending rate. The facilities are jointly and severally guaranteed by the directors of the subsidiary company.

24. AMOUNT DUE TO A DIRECTORThe amount due to a director is unsecured, interest free and has no fixed terms of repayment.

a)

b)

c)

d)

23. SHORT TERM BORROWINGS

NOTES TO THE FINANCIAL STATEMENTS

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25. REVENUE AND COST OF SALESRevenue of the Group represents recognised contract revenue, sale of construction materials, hiring of machineries and motor vehicles, property development and supply of labour.

Turnover of the Company comprises management fee and supply of labour.

Cost of sales of the Group consists of direct materials, direct labour, direct overhead, sub-contract charges and other directly attributable expenses.

Cost of sales of the Company represents labour charges incurred in relation to the turnover generated.

26. (LOSS)/PROFIT BEFORE TAXATIONGROUP COMPANY

These are stated after charging/(crediting):- 2005 2004 2005 2004

RM RM RM RM

After charging:-

Loss on unexercised warrants 5,524 - - -

Amortisation charges 200,000 116,667 200,000 116,667

Directors’ remuneration 863,110 843,758 84,000 75,000

Auditors’ remuneration 92,000 75,000 12,000 12,000

Bank overdraft interest 992,028 1,514,759 - -

Term loan interest 22,987 29,909 - -

Hire purchase and lease interest 571,239 1,092,452 - -

Bankers acceptance interest 242,347 727,087 - -

Loan interest - others 2,041,296 1,388,823 - -

Depreciation of property, plant and equipment 6,241,799 8,369,189 - -

Property, plant and equipment written off 189,890 14,527 - -

Rental of premises 466,559 700,612 - -

Bad debts written off 1,969,446 - - -

Rental of vehicle and heavy machinery 1,792,913 84,208 - -

Interest on unsecured term loan 3,277,863 1,911,342 3,277,863 1,911,342

Interest on bridging loan 309,999 - - -

Rental of land 10,000 - - -

Interest income (1,074,373) (1,384,237) - -

Gain on disposal of property, plant and equipment (2,832,371) (4,923,803) - -

Dividend income (477) (2,781) - -

Provision for doubtful debt written back (2,200,000) - - -

GROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

Provision for the year (1,317,463) (1,352,603) (395,287) -

Real property gain tax - (35,026) - -

Overprovision in prior years 82,925 350,233 - -

Prior year underprovision of deferred tax (793) - - -

Transferred from deffered taxation (Note 6) 808,402 701,640 - -

Share of associated company’s taxation - (2,552) - -

(426,929) (338,308) (395,287) -

27. TAXATION

NOTES TO THE FINANCIAL STATEMENTS

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28. EARNINGS PER SHAREThe calculation of earnings per share is based on the Group loss after taxation and minority interests, of RM5,236,939 (2004: net profit RM41,004) and the weighted average number of ordinary shares in issue during the year amounting to 92,400,000 (2004: 91,328,962). There are no potential dilutive shares and therefore, the diluted earnings per share is the same as basic earnings per share.

29. DIVIDENDS

GROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

(Loss)/profit before taxation (4,809,506) 378,811 (2,054,255) (2,246,190)

Taxation at Malaysian statutory rate of 28% (2004: 28%) 736,502 (902,665) 575,191 -

Overprovision in prior years 82,925 350,233 - -

Real property gain tax - (35,026) - -

Utilisation of losses 292,037 - - -

Effect of income not subject to tax 796,420 428,956 11,902 -

Under provision of deferred tax (793) - - -

Expenses not deductible for tax purposes (2,374,020) (201,590) (982,380) -

Effect of changes in tax rate 40,000 - - -

Differential tax rate for small and medium scale companies - 21,784 - -

Tax expense for the year (426,929) (338,308) (395,287) -

AMOUNT NET DIVIDENDS PER SHARE

2005 2004 2005 2004

RM RM SEN SEN

First and final tax exempt dividend of 1.08 sen per share 997,920 2,310,000 1.08 2.5

On 22 July 2005, the Company paid a final dividend in respect of the financial year ended 31 December 2004, of 1.5% less 28% taxation on 92,400,000 ordinary shares, amounting to RM997,920 (1.08 sen net per ordinary share).

30. ACQUISITION OF SUBSIDIARY COMPANIESDuring the financial year, the Company’s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. had ac-quired the balance of 60% equity interest in TRC Land Sdn. Bhd., (formerly known as Andaman Budi Sdn. Bhd.) and the balance of 40% equity interest in TRC PDI-JV Sdn. Bhd. The fair value of the assets acquired and liabilities assumed are as follows:-

Subject to the agreement of the Inland Revenue Board, the Company has unabsorbed losses of approximately RM248,780 (2004: RM248,780) as at 31 December 2005 for off setting against future taxable income.

The effective tax rate is significantly higher from the statutory rate due to certain expenses are disallowed for taxation purposes.

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate is as follows:-

NOTES TO THE FINANCIAL STATEMENTS

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31 December 2005

2005 2004

RM RM

Property, plant and equipment 72,561 -

Property development cost 17,905,493 -

Trade and other receivables 11,279,318 -

Cash and bank balances 1,235,001 8,240

Trade and other payables (23,723,217) -

Taxation (725,472) -

Fair value of total net assets 6,043,684 8,240

Less : Share of profit prior to the associate becoming a subsidiary (417,475) -

Net fair value of total net assets 5,626,209 8,240

Less : Minority interests - (1)

Group’s share of net assets 5,626,209 8,239

Share of net assets in excess of purchase consideration (926,209) -

Total purchase consideration 4,700,000 8,239

Purchase consideration was satisfied by:

Cash - 8,239

Conversion of amount due to equity 4,500,000 -

Share of pre-acquisition investment 200,000 -

4,700,000 8,239

Cash inflow/(outflow) arising on acquisition:

Purchase consideration satisfied by cash - (8,239)

Cash and cash equivalents of subsidiary acquired 1,235,001 8,240

Net cash acquired on acquisition 1,235,001 1

31. FINANCIAL INSTRUMENTSFinancial Risk Management Objectives and Policies

The Group’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group’s business whilst managing its credit, interest rate, exchange rate and liquidity risks. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

Credit Risks

Credit risk, or the risk of counter parties defaulting, are controlled by the application of credit approval, limits and monitoring procedures. Trade receivables are monitored on an ongoing basis via Group management reporting procedures.

The Group does not have any significant exposure to any individual customer or counter party nor does it have any major concentration of credit risk related to any financial instrument.

a)

NOTES TO THE FINANCIAL STATEMENTS

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Interest Rate RisksThe Group is exposed to interest rate risk through the impact of rate changes on credit facilities. The Group manages its interest rate risk through the use of both fixed and floating rate debt and derivative financial instruments.

Liquidity RisksThe Group practices prudent liquidity risk management to minimise the mismatch of financial assets and liabilities and to maintain sufficient credit facilities for contingent funding requirement of working capital.

Exchange Rate RisksThe objective of the Group’s foreign exchange policies is to enable the Group to manage exposures that arise from transactional activities within a framework of controls that does not expose the Group to unnecessary foreign exchange risks. The Group’s exposure to foreign exchange risk is minimal.

Fair ValuesThe aggregate value of financial assets and financial liabilities which are not carried at fair value on the balance sheets of the Group and of the Company are represented as follows:-

b)

c)

d)

e)

The carrying amounts of other financial assets and liabilities are approximate their fair values due to the relatively short-term maturity of these financial instruments.

32. SEGMENTAL INFORMATION

GROUP

NOTES CARRYING AMOUNT FAIR VALUE

RM RM

Financial Assets

Marketable securities 11 105,870 12,552

PROFIT/(LOSS) TOTAL ASSETS

REVENUE BEFORE TAXATION EMPLOYED

2005 2004 2005 2004 2005 2004

RM RM RM RM RM RM

Investment holding 2,520,000 1,020,000 (957,619) (434,896) 2,194,961 973,563

Construction activity 111,902,340 245,144,922 (4,267,119)) 558,025 170,114,297 232,102,440

Property development 16,626,295 16,982,769 4,187,698 2,714,766 48,727,552 6,543,696

Hiring of motor vehicle and machinery 4,237,672 4,096,605 (113,230) (30,753) 6,825,477 4,457,038

Manufacturing and retailing in ready mixed concrete 3,702,893 607,447 (515,547) (231,732) 2,038,752 1,105,191

Retailing of construction materials 23,847,207 59,020,977 (637,193) 78,993 38,409,900 58,678,344

Supply of labour 2,885,826 4,248,190 (1,096,636) (1,811,294) 2,513,601 4,054,786

Others 199,411 307,893 (28,835) (108,904) 380,717 8,810

Group’s share of profit of an associated company - - 103,623 (405,182) - -

165,921,644 331,428,803 (3,324,858) 329,023 271,205,257 307,923,868

Consolidated adjustments (24,153,065) (26,990,435) (1,484,648) 49,788 - -

141,768,579 304,438,368 (4,809,506) 378,811 271,205,257 307,923,868

No segmental reporting has been prepared in respect of geographical location as the Group’s activities are predominantly carried out in Malaysia.

NOTES TO THE FINANCIAL STATEMENTS

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31 December 2005

GROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

Secured

Bank guarantees

Performance bond 35,703,503 33,431,770 29,114,554 10,744,944

Advance bond 10,000,000 16,352,204 10,000,000 16,352,204

Tender bond 100,000 2,170,250 100,000 2,170,250

Supplier / Maintenance / Security 2,793,726 4,674,526 2,639,976 3,879,776

48,597,229 56,628,750 41,854,530 33,147,174

The bank guarantees are secured by fixed deposits of a subsidiary company and a corporate guarantee by the Company.

GROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

Unsecured

Corporate guarantee

Corporate guarantees given to banks for credit

facilities granted to trade related subsidiaries - - 50,018,375 36,424,489

34. STAFF COSTSGROUP COMPANY

2005 2004 2005 2004

RM RM RM RM

Staff costs 15,216,504 16,903,929 3,826,026 5,191,958

Staff costs of the Group and the Company include directors’ remuneration, salaries, bonus, contributions to Employees’ Provident Fund and all other staff related expenses.

33. CONTINGENT LIABILITIES

NOTES TO THE FINANCIAL STATEMENTS

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31 December 2005

35. SIGNIFICANT RELATED PARTY TRANSACTIONS

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

36. MATERIAL LITIGATIONThe litigation matters of the Group with regard to Trans Resources Corporation Sdn. Bhd.’s claim against Sanwell Corporation and United Malayan Land Bhd. of RM15,500,000 came to an end via the following settlements:-

cash settlement of RM3,528,342; andsettlement in lieu by way of properties valued at RM11,971,658.

37. SIGNIFICANT EVENTSThe following represent the changes in the composition of the Group during the year 2005:-

The Company had on 18 February 2005 acquired 45 shares of RM1.00 each in Gomex Sdn. Bhd. for RM45 representing 45% equity interest, thus becoming a new associated company of the Group.

The Company’s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. (“TRC”), had on 19 May 2005 acquired additional 60% equity interest representing 300,002 ordniary shares of RM1.00 each in its associated company, Andaman Budi Sdn. Bhd. (“ABSB”), resulting in ABSB becoming a wholly owned subsidiary of the Group.

ABSB subsequently changed its name to TRC Land Sdn. Bhd. with effect from 5 July 2005.

The Company’s wholly owned subsidiary, Trans Resources Corporation Sdn. Bhd. (TRC), had on 25 August 2005 acquired 4 ordinary shares of RM1.00 each of TRC-PDI JV Sdn. Bhd. (TRC-PDI) for a total consideration of RM4, resulting in TRC-PDI becoming a wholly owned subsidiary of the Group.

a)b)

i)

ii)

iii)

2005 2004

RM RM

GROUP

Dividend payable to holding company 1,500,000 -

Management fee charged by holding company 1,020,000 1,020,000

Contract income on a housing development activity from a subsidiary companies 9,188,226 10,233,559

Purchase of construction materials from a subsidiary company 1,735,467 702,101

Rental of motor vehicle charged to subsidiary companies 1,195,292 53,508

Rental of motor vehicle charged by a subsidiary company 14,791 -

Sub-contractors cost charged by a subsidiary company 5,292,862 10,786,585

Contract income on a housing development activity from an associated company - 4,531,000

Management fee receivable from a subsidiary company 372,947 934,645

Contract labour supplied by holding company 2,757,449 4,248,190

COMPANY

Dividend income from a subsidiary company 1,500,000 -

Management fee from a subsidiary company 1,020,000 1,020,000

Supply of labour to a subsidiary company 2,757,449 4,248,190

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LIST OF PROPERTIES

The following are the properties owned by the TRCS Group:-

DESCRIPTION/ APPROX AGE LAND AREA/ NETBOOK VALUE DATE OF

NO LOCATION TENURE EXISTING USE OF BUILDINGS BUILD UP AREA 31 DECEMBER 2005 VALUATION

RM

1 Lot No.3626Section 16Kuching Central Land DistrictSarawak

60-yearleaseholdexpiring

18/4/2059

4-storeyshop/office

7 years 2,412.2 sq ft/8,856.8 sq ft

856,900.70 15/9/2000

2 Lot No.PT 60849 to PT 60860Mukim and District of KlangSelangor

Freehold Industrial land - 154,587.0 sq ft 4,640,000.00 18/9/2000

3 Lot No.PT19447Mukim of AmpanganDistrict of SerembanNegeri Sembilan

99-yearleaseholdexpiring

18/9/2005

Residential land - 9.516 acres 525,813.95 21/9/20000

4 Lot No. PT9259Mukim of SetapakDistrict of GombakSelangor

Freehold 4-storeyshop/office

15 years 1,760.0 sq ft/7,040.0 sq ft

793,667.84 23/9/2000

5 Developer’s Parcel No. 47(218)First and Second Floors of anIntermediate 4-storeyshop/office buildingTaman Melawati Metro 1Phase 4 Town CentreSelangor

Freehold First andSecond Floorsof a 4-storeyshop/office

15 years 1,760.0 sq ft 391,700.00 26/8/2000

6 42 Units of ApartmentsIdaman Senibong ApartmentTaman Bayu SenibongJohor Bahru, Johor(18 units were acquired on1/7/2003 and another 24 unitswere acquired on 8/7/2003

Leaseholdexpiring

21/1/2097

UnderConstruction

- Varying from808.8 sq ft,

815.0 sq ft &868.0 sq ft

3,987,600.00 -

7 HS(D) 346773 PTD 166642Mukim of Plentong, District ofJohor Bahru, State of Johor(together with a double storeyterrace house erected thereon)

Freehold Double storeyterrace

2 years 239.6606 sq metres

251,658.00 -

8 HS(D) 310780 PTD 158256Mukim of Plentong, District ofJohor Bahru, State of Johor

Freehold Agricultureland

- 266.7455 acres 11,720,000.00 -

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LIST OF THIRTY LARGEST SHAREHOLDERSas at 28 April 2006

NO NAME NO OF SHARES %

1 TRC Capital Sdn Bhd 18,240,000 19.74

2 Kolektif Aman Sdn Bhd 18,240,000 19.74

3 Lembaga Tabung Angkatan Tentera 8,400,000 9.09

4 Sufri Bin Mohd Zin 3,630,000 3.93

5 HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Sufri Bin Mohd Zin

3,000,000 3.25

6 Citigroup Nominees (Asing) Sdn BhdMellon Bank NA for State Employees Retirement System

2,517,300 2.72

7 Employees Provident Fund Board 2,375,520 2.57

8 HSBC Nominees (Asing) Sdn BhdExempt AN for JPMorgan Chase Bank, National Association (USA)

2,252,400 2.44

9 AllainceGroup Nominees (Tempatan) Sdn BhdPledged Securities Account for Sufri Bin Mohd Zin

2,040,000 2.21

10 HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Leong Kam Heng

1,954,280 2.12

11 AMSEC Nominees (Tempatan) Sdn BhdPledged Securities Account for Khoo Tew Choon

1,841,500 1.99

12 AMSEC Nominees (Tempatan) Sdn BhdPledged Securities Account for Ooi Cheng Huat @ Ooi Peng Huat

1,710,360 1.85

13 AMSEC Nominees (Tempatan) Sdn BhdEON Finance Berhad for Sufri Bin Mohd Zin

1,560,000 1.69

14 Affin Nominees (Tempatan) Sdn BhdPledged Securities Account for Sufri Bin Mohd Zin

1,440,000 1.56

15 Far Frontier (M) Sdn Bhd 1,381,2001.49

ANALYSIS OF SHAREHOLDINGS

ANALYSIS OF SHAREHOLDINGS

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NO NAME NO OF SHARES %

16 AllainceGroup Nominees (Tempatan) Sdn BhdPledged Securities Account for Khoo Tew Choon

1,174,320 1.27

17 Mohd Raffee Bin Jalil 1,172,580 1.27

18 AMSEC Nominees (Tempatan) Sdn BhdPledged Securities Account for Leong Kam Heng

1,123,260 1.22

19 HSBC Nominees (Tempatan) Sdn BhdHSBC (M) Trustee Bhd for OSK-UOB Shall Cap Opportunity Unit Trust

1,021,480 1.11

20 AllianceGroup Nominees (Tempatan) Sdn BhdPledged Securities Account for Leong Kam Heng

958,120 1.04

21 Citigroup Nominees (Tempatan) Sdn BhdPledged Securities Account for Sufri Bin Mohd Zin

949,000 1.03

22 AMSEC Nominees (Tempatan) Sdn BhdPledged Securities Account for Yap Yon Tai

916,560 0.99

23 Lim Chiang Kheng 876,800 0.95

24 HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Khoo Tew Choon

870,200 0.94

25 Citigroup Nominees (Asing) Sdn BhdCBHK PBCHK for Golden Millennium Worldwide Limited

720,000 0.78

26 HLB Nominees (Tempatan) Sdn BhdPledged Securities Account for Khoo Tew Choon

637,960 0.69

27 AllianceGroup Nominees (Tempatan) Sdn BhdPledged Securities Account for Ooi Cheng Huat @ Ooi Peng Huat

569,040 0.62

28 Citigroup Nominees (Tempatan) Sdn BhdPledged Securities Account for Khoo Teng San

540,000 0.58

29 Citigroup Nominees (Asing) Sdn BhdCD LUX for CB Fund Asian Tiger

438,260 0.47

30 PB Securities Nominees (Tempatan) Sdn BhdPledged Securities Account for Ahmad Fauzi Bin Ghazali

408,000 0.44

ANALYSIS OF SHAREHOLDINGS

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LIST OF DIRECTOR’S SHAREHOLDINGSas at 28 April 2006

NO NAME NO OF SHARES %

1 DATO’ SUFRI BIN HAJI MOHD ZIN (Acc - Alliancegroup Nominees Sdn Bhd) (Acc - HLB Nominees (Tempatan) Sdn Bhd) (Acc - Amsec Nominees (Tempatan) Sdn Bhd) (Acc - Affin Nominees (Tempatan) Sdn Bhd) (Acc - Citicorp Nominees (Tempatan) Sdn Bhd)

3,630,0002,040,0003,000,0001,560,0001,440,000

949,000

12,619,000 13.66

2 DATO’ ABDUL AZIZ BIN MOHAMAD 120,000 0.13

3 RAHMAN BIN ALI 0 0.00

4 NOOR ZILAN BIN MOHAMED NOOR 0 0.00

5 JENERAL (R) DATO’ SERI MOHD SHAHROM BIN DATO’ HJ NORDIN 0 0.00

LIST OF SUBSTANTIAL SHAREHOLDERSas at 28 April 2006

NO NAME NO OF SHARES %

1 Kolektif Aman Sdn Bhd 18,240,000 19.74

2 TRC Capital Sdn Bhd 18,240,000 19.74

3 Dato’ Sufri Bin Haji Mohd Zin 12,690,000 13.73

4 Lembaga Tabung Angkatan Tentera 8,400,000 9.09

57,570,000 62.31

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ANALYSIS OF SHAREHOLDINGS

NAME NO OF HOLDERS % NO OF SHARES %

Less than 100 9 0.91 340 0.00

100 - 1,000 53 5.38 33,740 0.04

1,001 - 10,000 730 74.11 2,182,000 2.36

10,001 - 100,000 146 14.82 3,969,000 4.30

100,001 to less than 5% of issued shares 44 4.47 41,334,920 44.73

5% and above of issued shares 3 0.31 44,880,000 48.57

TOTAL 985 100.00 92,400,000 100.00

LIST OF DIRECTOR’S SHAREHOLDINGSas at 28 April 2006

NOTICE OF 9TH ANNUAL GENERAL MEETING

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NOTICE IS HEREBY GIVEN that the Ninth Annual General Meeting of the Company will be held at Dewan Cempaka, Kelab Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, Ampang Jaya 68000 Selangor on Thursday, 29 June 2006 at 10.30 a.m. for the purpose of transacting the following businesses:-

AGENDA

ORDINARY BUSINESS

To transact any other business of which due notice shall be given in accordance with the Articles of Association of the Company and the Companies Act, 1965.

BY ORDER OF THE BOARDABDUL AZIZ MOHAMED (LS 007370)Secretary

Selangor Darul Ehsan7 June 2006

1 To receive and adopt the Audited Financial Statements, Report of the Directors and Report of the Audi-tors thereon for the year ended 31 December 2005 Resolution 1

2 To approve the payment of Directors’ Fees in respect of the financial year ended 31 December 2005Resolution 2

3 To re-elect Dato’ Sufri bin Hj Mohd Zin who shall retire as Director of the Company pursuant to Articles 84 of the Company’s Articles of Association. Resolution 3

4 To re-appoint Messrs Kumpulan Naga as the Auditors of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration. Resolution 4

SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolution, with or without modification as Ordinary Resolution:-

5 AUTHORITY FOR ALLOTMENT OF SHARES“THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the Bursa Malaysia Securities Berhad and other relevant governmental/regulatory authorities, where such approvals are necessary, the Directors be and are hereby empowered, pursuant to section 132D of the Companies Act, 1965, to issue shares in the Company from time to time at such price, upon such terms and conditions, for such purposes and to such person whomsoever 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 that the Director be also empowered to obtain the approval for the listing and the quotation of the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting.” Resolution 5

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NOTICE OF 9TH ANNUAL GENERAL MEETING

NOTES:A proxy may but need not be a member of the Company and the previous of section 149 (1) (b) of the Act shall not apply to the Company.To be valid the proxy form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meetings.Where a member appoints more than one (1) proxy the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.Where a member is an authorized nominee as defined under the Central Depositories Act, 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 said Securities Account.If the appointer is a corporation, the proxy form must be executed under its Common Seal or under the hand of its attorney.

EXPLANATORY NOTES TO THE SPECIAL BUSINESSOrdinary Resolution No. 5 – Authority for allotment of shares Ordinary Resolution No. 5, if passed, will give power to the Directors of the Company to issue shares up to a maximum 10% of the issued share capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening general meeting to specifically approve such an issue of shares. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

1)

2)

3)4)

5)

6)

STATEMENT ACCOMPANYING

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Directors who are standing for re-election at the 9th Annual General Meeting of TRC Synergy Berhad is Dato’ Sufri bin Hj Mohd Zin.

Details of Board of Directors’ Meeting:–

Four (4) Board Meetings were held during the financial year ended 31 December 2005, details of which are set out in the Statement on Corporate Governance.

Particulars of Directors standing for re-election at the 9th Annual General Meeting of TRC Synergy Berhad:-

1.

2.

3.

Name Dato’ Sufri bin Hj Mohd Zin

Age 50

Nationality Malaysian

Position in the Company Executive Chairman

Working experience / Qualification / OccupationDato’ Sufri is a graduate of Institute Teknologi MARA (“ITM”) with a Diploma in Business Studies. He started started his career as a banker with Bank Bumiputera Malaysia Berhad in 1982 before participating in the building and construction industry in 1984 by incorporating Trans Resources Corporation Sdn Bhd, presently a wholly-owned subsidiary of TRC Synergy Berhad. For details, please refer to his profile on page eight (8) of the Annual Report.

Other directorship of public companies Nil

Securities holdings in the Company and its subsidiaries as at 28 April 2006

12,619,000 (13.66%) (Direct Interest)36,480,000 (39.5%) (Deemed Interest)

Family relationship with any director and/or substantial shareholder of the Company.

Nil

Any conflict of interest with the Company Nil

List of convictions for offences (other than traffic offences) within the past 10 years

Nil

notice of annual general meeting

RESOLUTIONS FOR AGAINST

ORDINARY RESOLUTION 1 Receive and adoption of Audited Financial Statements, Report of Directors and Auditors for the year ended 31 December 2005

ORDINARY RESOLUTION 2 Payment of Directors’ Fees

ORDINARY RESOLUTION 3 Re-election of Dato’ Sufri bin Hj Mohd Zin as Director of the Company

ORDINARY RESOLUTION 4 Re-appointment of Messrs Kumpulan Naga as Auditors of the Company and to authorise the Directors to fix their remuneration.

ORDINARY RESOLUTION 5 Authority to Directors to allot and issue shares pursuant to Section 132D of the Companies Act, 1965

PROXY FORMI/We,

of

Being a member/members of TRC Synergy Berhad, hereby appoint

of

or failing whom,

of

as my/or proxy to vote for me/us on my/our behalf at the Ninth Annual General Meeting of the Company, to be held at Dewan Cempaka, Kelab Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, Ampang Jaya 68000 Selangor on Thursday, 29 June 2006 at 10.30 a.m. or at every adjournment thereof.

I/We direct my/our proxy to vote for or against the resolutions to be tabled at the Ninth Annual General Meeting as hereunder indicated.

TRC Synergy Berhad (413192 D)

(Please indicate with an X in the space provided how you wish your vote to be cast on the resolution specified in the Notice of the Ninth Annual General Meeting. If this form of proxy is returned without any indication as to how the proxy shall vote, the proxy will vote or abstain from voting at his/her discretion.)

Signed ___ day of _____ 2006

Signature(s)/Common Seal of Member(s)

Notes:A proxy may but not need be a member of the Company and the previous of section 149 (1) (b) of the Act shall not apply to the Company.To be valid this form duly completed must be deposited at the registered office of the Company not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meetings.Where the member appoints more than one (1) proxy the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.Where a member is an authorized nominee as defined under the Central Depositories Act, 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 said Securities Account.If the appointer is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

1.

2.

3.4.

5.

6.

No. of ordinary shares held

fold here

fold here

postage

The Company SecretaryTRC Synergy Berhad (413192 D)Wisma TRC217 & 218, Jalan Negara 2Taman Melawati53100 Ulu KelangSelangor Darul Ehsan