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Malaysia Building Society Berhad Economic Profit And Loss Statement For The Financial Year Ended 31 December 2006

BackJun 29, 2007

The Company would like to announce the economic profit and loss statement for the financial year ended 31 December 2006.

Economic profit or loss is amount earned for a period by a business after deducting the operating expenses and a charge for the opportunity cost of capital employed. The economic profit and loss statement set out below is disclosed on a voluntary basis.

ECONOMIC PROFIT AND LOSS STATEMENT

For the financial year ended 31 December 2006
RM'000
For the financial year ended 31 December 2005
RM'000
Profit after taxation of the Group 40,182 38,786
Less: Cost of capital employed (41,983) (38,526)
Economic profit/(loss) (1,801) 260
We wish to inform Bursa Malaysia that the economic profit/loss for the financial year ended 31 December 2006 should be negative RM1.801 million instead of RM10.5 million, which was announced on 14 June 2007. The difference was mainly due to an erroneous input of data into the formulas computing the cost of capital employed.

The assumptions used in the computing the above economic loss is as follows:

1. The cost of equity is calculated based on the following formula:
Cost of Equity = (Beta x Market Risk Premium) + Risk Free Rate

2. The Beta used in the computation is the 5-year adjusted Bloomberg Beta as follows:

For the financial year ended 31 December 2006
For the financial year ended 31 December 2005
Beta
1.33
1.2

3. The risk free rate is the rate of return of a 10-year Malaysian Government Securities ("MGS") at the closing of the reporting period as follows:

For the financial year ended 31 December 2006
For the financial year ended 31 December 2005
Risk free rate
3.77
4.5

4. The market risk premium is assumed at 5.2%, which represents the market return in excess of the return earned on risk free asset.

5. Total equity is based on the average as at the beginning and end of the reporting period as follows:

For the financial year ended 31 December 2006
RM'000
For the financial year ended 31 December 2005
RM'000
Average equity
392,875
358,712


This announcement is dated 29 June 2007.