We have received some queries about Formis Resources Berhad (FRB) financial performance for FY2006/07, which reported a loss of RM4.4million. We hope the following explanation provide you with a better perspective of the situation:

• For the FY06/07, FRB’s Profit from Operations was RM6.95milliion.
  
• In compliance with the new Financial Reporting Standards (FRS), FRB took write-off of RM17.67million for impairment of goodwill and provisions for bad debts. In addition, there was a book gain of RM6.35million from the sale of Applied Information Management Services Sdn Bhd and asset write-backs. Therefore, the net effect is RM11.32million in write-off.
  
• The difference between Profit from Operations and net write-off is the reported Net Loss of RM4.4million.
  
• To comply with the Financial Reporting Standard (FRS) requirements, FRB will continue to assess its goodwill (now valued at RM 140 million) to ensure that it is always positive.
  
• Financially the Group is still sound and strong.

Please note that this should be the standard clarification in response to queries from our business partners and customers.