MIRA INFORM REPORT

Report Date :

31.01.2008

IDENTIFICATION DETAILS

Name :	LEONG HUAT TIEN GUAN TRADING SDN BHD
Registered Office :	11-k, Jalan Tun Perak, Mezzanine Floor, 75300 Melaka
Country :	Malaysia
Financials (as on) :	30.06.2007
Date of Incorporation :	01.09.1992
Com. Reg. No.:	247990-H
Legal Form :	Private Limited Company
Line of Business :	Trader of sundry goods.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

EXECUTIVE SUMMARY

REGISTRATION NO. : 247990-H

COMPANY NAME : LEONG HUAT TIEN GUAN TRADING SDN BHD

FORMER NAME : N/A

INCORPORATION DATE : 01/09/1992

COMPANY STATUS : EXIST

LEGAL STATUS : PRIVATE LIMITED

LISTED STATUS : NO

REGISTERED ADDRESS : 11-K, JALAN TUN PERAK, MEZZANINE FLOOR, 75300 MELAKA, MELAKA,

MALAYSIA.

BUSINESS ADDRESS : LOT 79, JALAN IKS MJ 4, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA,

MALAYSIA.

TEL.NO. : 06-3340684/3340690

FAX.NO. : 06-3340696

CONTACT PERSON : NG LONG CHONG ( DIRECTOR )

INDUSTRY CODE : 51239

PRINCIPAL ACTIVITY : TRADING IN SUNDRY GOODS

AUTHORISED CAPITAL : MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL: MYR 1,200,000.00 DIVIDED INTO
ORDINARY SHARES 1,200,000 CASH OF MYR 1.00 EACH.

SALES : MYR 33,393,220 [2007]

NET WORTH : MYR 2,684,478 [2007]

STAFF STRENGTH : 25 [2008]

BANKER (S) : MALAYAN BANKING BHD

LITIGATION : CLEAR

FINANCIAL CONDITION : LIMITED

PAYMENT : AVERAGE

MANAGEMENT CAPABILITY : AVERAGE

COMMERCIAL RISK : MODERATE

CURRENCY EXPOSURE : MODERATE

GENERAL REPUTATION : SATISFACTORY

INDUSTRY OUTLOOK : STRONG GROWTH

HISTORY / BACKGROUND

The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies

The SC is principally engaged in the (as a / as an) trading in sundry goods.

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

The SC is not qualified to be one of the Top Corporate Performers in the Malaysia 1000 (M1000) publication, a directory jointly published by Companies Commission of Malaysia (The Registrar Office), Minister of Domestic Trade and Consumer Affairs and our publication arm, BASIS Publications House Sdn Bhd.

The major shareholder(s) of the SC are shown as follows :

Name	Address	IC/PP/Loc No	Shareholding
MR. NG CHEE HENG +	2, JALAN MURNI 1, TAMAN MALIM JAYA, 75000 MELAKA, MELAKA, MALAYSIA.	810417-04-5031	300,000.00
MR. NG LONG CHONG +	24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75000 MELAKA, MELAKA, MALAYSIA.	480610-04-5333 0665926	300,000.00
MS. TEO AH CHIEW +	24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75000 MELAKA, MELAKA, MALAYSIA.	560515-04-5562 4974503	300,000.00
MR. NG CHEE KIONG +	24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75000 MELAKA, MELAKA, MALAYSIA.	741209-04-5495 A2968614	300,000.00
			---------------
			1,200,000.00
			============

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject : MR. NG CHEE HENG

Address : 2, JALAN MURNI 1, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA, MALAYSIA.

New IC No : 810417-04-5031

Date of Birth : 17/04/1981

Nationality : MALAYSIAN CHINESE

Date of Appointment : 19/11/2004

DIRECTOR 2

Name Of Subject : MR. NG LONG CHONG

Address : 24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

IC / PP No : 0665926

New IC No : 480610-04-5333

Date of Birth : 10/06/1948

Nationality : MALAYSIAN CHINESE

Date of Appointment : 01/09/1992

DIRECTOR 3

Name Of Subject : MS. TEO AH CHIEW

Address : 24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

IC / PP No : 4974503

New IC No : 560515-04-5562

Date of Birth : 15/05/1956

Nationality : MALAYSIAN CHINESE

Date of Appointment : 01/09/1992

DIRECTOR 4

Name Of Subject : MR. NG CHEE KIONG

Address : 24/1, JALAN NANGKA 2, TAMAN RUMPUN BAHAGIA, 75300 MELAKA, MELAKA, MALAYSIA.

IC / PP No : A2968614

New IC No : 741209-04-5495

Date of Birth : 09/12/1974

Nationality : MALAYSIAN CHINESE

Date of Appointment : 04/05/1993

MANAGEMENT

1) Name of Subject : NG LONG CHONG

Position : DIRECTOR

AUDITOR

Auditor : H L LIM & CO

Auditor' Address : 11-K, JALAN TUN PERAK, 1ST FLOOR, 75300 MELAKA, MELAKA, MALAYSIA.

COMPANY SECRETARIES

1) Company Secretary : MS. TAN AH MOI

IC / PP No : 6092774

New IC No : 610126-04-5334

Address : 36, JALAN POKOK MANGGA 22, TAMAN POKOK MANGGA, 75250 MELAKA,

MELAKA, MALAYSIA.

Date of Appointment : 01/09/1992

BANKING

Banking relations are maintained principally with :

1) Name : MALAYAN BANKING BHD

The SC enjoys normal banking routine with above mentioned banker(s). The SC has bank charges with above mentioned banker(s).

ENCUMBRANCE (S)

ENCUMBRANCE 1

Date of Creation : 08/05/2002

Description Of Charge : N/A

Amount Secured : RM320,000.00

Description Of Property Affected : N/A

Name & Address Of Chargee : MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 3 In The Register of Charges

ENCUMBRANCE 2

Date of Creation : 21/05/2002

Description Of Charge : N/A

Amount Secured : RM579,000.00

Description Of Property Affected : N/A

Name & Address Of Chargee : MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 4 In The Register of Charges

ENCUMBRANCE 3

Date of Creation : 08/05/2002

Description Of Charge : N/A

Amount Secured : RM320,000.00

Description Of Property Affected : N/A

Name & Address Of Chargee : MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 5 In The Register of Charges

ENCUMBRANCE 4

Date of Creation : 12/06/2003

Description Of Charge : N/A

Amount Secured : RM800,000.00

Description Of Property Affected : N/A

Name & Address Of Chargee : MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 6 In The Register of Charges

ENCUMBRANCE 5

Date of Creation : 12/06/2003

Description Of Charge : N/A

Amount Secured : RM1,600,000.00

Description Of Property Affected : N/A

Name & Address Of Chargee : MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 7 In The Register of Charges

ENCUMBRANCE 6

Date of Creation : 07/09/2004

Description Of Charge : N/A

Amount Secured : RM150,000,000.00

Description Of Property Affected : N/A

Name & Address Of Chargee : MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 8 In The Register of Charges

LEGAL CHECK AGAINST SC

* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia back dated since 1900.

No legal action was found in our databank.

No winding up petition was found in our databank.

PAYMENT RECORD

SOURCES OF RAW MATERIALS:

Local : YES

Overseas : YES

The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt [ ] Good [ ] Average [ X ]

Fair [ ] Poor [ ]

CLIENTELE

Local : YES Percentage : 100%

Domestic Markets : MALAYSIA

Overseas : NO Percentage : 0%

Credit Term : AS AGREED

Payment Mode : CASH

Type of Customer : END USERS,DEALERS,WALK IN CUSTOMERS

OPERATIONS

Goods Traded : SUNDRY GOODS

Competitor(s) : A CLOUET & COMPANY (KUALA LUMPUR) SDN BHD

HARPERS TRADING (MALAYSIA) SDN BHD

LUN HENG SDN BHD

MAGRI FOODS SDN BHD

SUSHI KIN SDN BHD

Ownership of premises : OWNED

Total Number of Employees:

YEAR 2008 2007 2006 2005 2004

---

GROUP N/A N/A N/A N/A N/A

COMPANY 25 30 30 44 43

Branch : NO

Other Information:

The SC is principally engaged in the (as a / as an) trading in sundry goods.

The SC sells a wide range of provision goods and fast moving goods such as onions, garlic, sugar, rice, flour, dryfood and others.

Besides that the SC also sells canned foods including canned fruits, luncheon meat, luncheon pork, canned soup, mushroom soup and etc.

The SC has its own transport to send goods to its customers' premises.

The SC has a warehouse at the ground floor and its office is based in first floor of the same building.

We were informed that the SC normally imports goods every week but during the peak seasons, the SC imports more often.

The SC also undertakes packing of certain products according to its customers' requirements.

RECENT DEVELOPMENT

We have checked with the Malaysian National News Agency's (BERNAMA) database, but no latest development was noted in our investigation.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client : 006063340684

Current Telephone Number : 06-3340684/3340690

Match : YES

Address Provided by Client : LOT 29 JALAN IKS KJ4 TAMAN MALIM JAYA 75350 MELAKA

Current Address : LOT 79, JALAN IKS MJ 4, TAMAN MALIM JAYA, 75250 MELAKA, MELAKA, MALAYSIA.

Match : NO

Latest Financial Accounts : YES

Other Investigations

We conducted an interview with one of the SC's staff from Admin & Accounts Division. She revealed some relevant information on the SC.

FINANCIAL COMMENTS

Profitability:

Turnover : Increased [ 2005 - 2007 ]

Profit/(Loss) Before Tax : Decreased [ 2005 - 2007 ]

Return on Shareholder Funds : Acceptable [ 16.80% ]

Return on Net Assets : Acceptable [ 19.19% ]

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years. The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The SC's management had generated acceptable return for its shareholders using its assets.

Working Capital Control:

Stock Ratio : Favourable [ 22 Days ]

Debtors Ratio : Favourable [ 34 Days ]

Creditors Ratio : Favourable [ 10 Days ]

The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the SC. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity:

Liquid Ratio : Unfavourable [ 0.61 Times ]

Current Ratio : Unfavourable [ 0.90 Times ]

A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

Solvency

Interest Cover : Unfavourable [ 2.80 Times ]

Gearing Ratio : Acceptable [ 0.96 Times ]

The SC's interest cover was low. If its profits fall or when interest rate rises, it may not be able to meet all its interest payment. The SC's gearing was slightly high. The SC is utilising the leverage concept to fund its expansion. However, the high gearing has added financial risks to the SC. It will be more vulnerable in times of economy downturn.

Overall Accessment:

Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC's gearing was slightly high and its financial risk was also high. If no plans are made to reduce its gearing, the SC's performance may deteriorate in the coming year.

Overall financial condition of the SC : LIMITED

ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators: 2004 2005 2006 2007* 2008**

Population ( Million) 25.58 26.13 26.64 27.17 27.73

Gross Domestic Products ( % ) 7.1 5.3 5.8 6.0 6.5

Domestic Demand ( % ) 7.5 7.3 7.0 9.0 6.8

Private Expenditure ( % ) 13.1 9.5 7.0 8.6 8.2

Consumption ( % ) 10.5 9.2 7.1 9.0 7.9

Investment ( % ) 25.8 8.5 7.0 7.1 9.5

Public Expenditure ( % ) <2.1> 3.6 6.8 10.1 3.2

Consumption ( % ) 6.0 5.4 5.0 10.8 5.5

Investment ( % ) <8.7> 1.9 8.9 9.3 0.5

Balance of Trade ( MYR Million ) 80,663 99,760 108,192 99,965 99,599

Government Finance ( MYR Million ) <19,419> <18,684> <19,109> <19,948> <20,933>

Government Finance to GDP / Fiscal Deficit ( % ) <4.3> <3.8> <3.3> <3.2> <3.1>

Inflation ( % Change in Composite CPI) 1.4 3.1 3.9 4.0 4.0

Unemployment Rate 3.5 3.5 3.4 3.5 3.3

Net International Reserves ( MYR Billion ) 254 266 290 - -

Average Risk-Weighted Capital Adequacy Ratio ( % ) 13.84 13.63 12.91 - -

Average 3 Months of Non-performing Loans ( % ) 8.46 6.74 5.41 - -

Average Base Lending Rate ( % ) 5.99 6.00 6.61 - -

Business Loans Disbursed( % ) 10.5 8.7 <2.5> - -

Foreign Investment ( MYR Million ) 13,143.9 17,882.9 20,228.0 - -

Consumer Loans ( % ) - - - - -

Registration of New Companies ( No. ) 38,580 37,474 38,293 - -

Registration of New Companies ( % ) 6.8 <2.9> 2.2 - -

Liquidation of Companies ( No. ) 3,334 3,069 8,647 - -

Liquidation of Companies ( % ) <15.8> <7.9> 181.8 - -

Registration of New Business ( No. ) 189,206 193,095 216,147 - -

Registration of New Business ( % ) 4.6 2.1 11.9 - -

Business Dissolved ( No. ) 51,301 73,355 52,879 - -

Business Dissolved ( % ) 7.0 43.0 <27.9> - -

Sales of New Passenger Cars (' 000 Unit ) 380.6 400.8 374.1 - -

Cellular Phone Subscribers ( Million ) 14.6 18.5 19.5 21.3 -

Tourist Arrival ( Million Persons ) 15.7 16.7 17.5 20.1 -

Hotel Occupancy Rate ( % ) 60.8 63.6 64.8 - -

Credit Cards Spending ( % ) 19.3 13.9 15.4 - -

Bad Cheque Offenders (No.) 70,465 57,316 36,555 - -

Individual Bankruptcy ( No.) 16,251 15,868 13,596 - -

Individual Bankruptcy ( % ) 31.6 <2.4> <14.3> - -

INDUSTRIES ( % of Growth ): 2004 2005 2006 2007* 2008**

Agriculture 5.0 2.5 5.3 3.1 3.5

Palm Oil 3.9 7.1 5.8 <0.6> -

Rubber 16.5 <2.9> 12.6 1.0 -

Forestry & Logging 4.3 2.0 <0.4> 2.8 -

Fishing 5.5 <0.4> 9.3 5.2 -

Other Agriculture 2.4 3.2 5.3 7.0 -

Industry Non-Performing Loans ( MYR Million ) 620.3 563.7 516.5 487.3 0

% of Industry Non-Performing Loans 1.38 1.19 1.06 1.08 0

Mining 3.9 0.8 <0.4> 3.3 4.0

Oil & Gas 4.5 1.6 4.6 - -

Other Mining <8.0> <1.0> 5.1 - -

Industry Non-performing Loans ( MYR Million ) 62.6 68.8 55.4 42.2 -

% of Industry Non-performing Loans 0.1 0.1 0.1 0.1 -

Manufacturing # 9.8 5.1 7.3 3.1 3.8

Exported-oriented Industries 15.5 3.0 11.1 <1.9> -

Electrical & Electronics 17.8 3.6 13.4 3.0 -

Rubber Products 14.8 2.4 0.4 8.0 -

Wood Products 12.7 0.9 0.7 3.3 -

Textiles & Apparel <11.7> <4.4> 12.6 <10.1> -

Domestic-oriented Industries 9.7 6.9 5.0 5.3 -

Food, Beverages & Tobacco 3.8 7.7 4.8 5.6 -

Chemical & Chemical Products 14.6 6.9 1.7 9.2 -

Plastic Products 13.5 18.6 21.3 <3.6> -

Iron & Steel 2.7 <6.7> <6.9> 17.5 -

Fabricated Metal Products 29.2 <7.5> 20.0 26.2 -

Non-metallic Mineral <4.8> <6.0> <1.9> 6.6 -

Transport Equipment 8.6 10.4 5.3 <19.0> -

Paper & Paper Products 2.3 4.6 4.1 14.9 -

Crude Oil Refineries <2.4> 8.2 12.1 8.6 -

Industry Non-Performing Loans ( MYR Million ) 7,765.4 6,035.6 6,181.3 6,366.2 -

% of Industry Non-Performing Loans 17.3 12.7 12.7 14.1 -

Construction <1.5> <1.6> <0.5> 5.2 6.3

Industry Non-Performing Loans ( MYR Million ) 5,547.7 5,172.7 5,527.3 5,116.7 -

% of Industry Non-Performing Loans 12.4 10.9 11.4 11.3 -

Services 6.8 6.6 7.2 9.0 8.6

Electric, Gas & Water 8.1 5.5 5.2 4.6 5.0

Transport, Storage & Communication 8.5 6.3 5.2 7.6 7.8

Wholesale, Retail, Hotel & Restaurant 7.1 8.0 7.1 11.6 10.0

Finance, Insurance & Real Estate 6.3 7.0 7.7 10.7 9.2

Government Services 6.5 7.6 9.8 4.6 8.6

Other Services 4.9 5.0 4.7 5.0 5.9

Industry Non-Performing Loans ( MYR Million ) 8,913.7 8,716.8 11,593.2 10,207.8 -

% of Industry Non-Performing Loans 19.9 18.4 23.9 22.6 -

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index
(Source : Department of Statistics / Economic Report / Bank Negara Report)

INDUSTRY COMMENTS

MSIC CODE

51239 : Wholesale of other foodstuffs e.g mee,kueh teow, wantan skin and related products,cooking oil, tinned food, etc

INDUSTRY : FOOD & BEVERAGES

Food production is seen to expand further with the Government's policy to reduce the food import bill and promote self-sufficiency by 2010 through expansion of idle lands and mechanization of farming methods as well as promotion of good farming practices. Areas of activity that will boost this sector include aquaculture, deep-sea fishing, floriculture as well as herbs cultivation.

Output of the food products industry grew significantly by 12.7% (January-June 2006: 1.1%). This was driven by higher output in processing and preserving of fish and fish products, which grew by 27.1% in tandem with increased marine fish landings. In addition, the robust growth of food products was also supported by increased output of dairy (16.0%) and grain mill products (7.0%), in particular, rice milling which increased 17.7%, benefiting from higher production of paddy. Meanwhile, other food products, particularly, sugar refinery and biscuit products also registered double-digit growth ranging between 23.0% and 25.0%.

Export receipts of food products increased by 15.9% (RM5,268 million) while beverages 106.5% (RM580 million) as a result of continuous efforts by manufacturers to attain quality assurance and accreditation for Malaysia's food and beverages products.

The Government has identified the processed food industry as one of the major growth sectors of the economy under the Ninth Malaysia Plan (9MP). Under the 9MP, the food commodities subsector is expected to grow at an average rate of 7.6% per annum through improvements in efficiency and productivity as well as expansion in hectarage. Exports of food commodities will be increased to achieve a positive food trade balance. The production of 'padi' will be increased to meet the target of self-sufficiency level of 90%. The production of fruits will be undertaken on a large-scale in the fruit production zones using the cluster development approach and concentrating on nine fruit species which have export potential. The production of vegetables will focus on high value varieties for local consumption and selected export markets. The Green Book Programme to promote cultivation of food crops at the community level will be reactivated.

The Government has approved an allocation of RM11.4 billion representing an increase of 70% compared with the Eighth Plan allocation for the sector. Among the objectives of the plan are large-scale commercial farming and greater application of modern technology and ICT to produce higher value-added processed food and food products.

Production of 'halal' food will be further promoted to take advantage of the vast potential of the 'halal' export market. This will include processing and packaging of meat, fisheries and other food-based products. In addition, Malaysia will be developed as the centre for the certification of 'halal' products and the Jabatan Kemajuan Islam Malaysia (JAKIM) 'halal' certification will be promoted worldwide. Concerted efforts to develop Malaysia as world halal hub to capture new markets worldwide would provide impetus for further growth of the local food industry.

The market for convenience and functional foods is expected to grow rapidly in view of the changing consumption patterns and greater awareness of healthy lifestyles. In this regard, the production and supply of ready-to-use seafood, livestock products and vegetable-based convenience food will be promoted as new areas of investment. Palm oil and cocoa-based food ingredients will be further developed in terms of products range and quality. The better performance in the food products industry was also due to greater efforts undertaken by the industry to keep pace with advancement in technology.

Note : The Ninth Malaysia Plan (9MP) was tabled in Parliament on March 31, 2006, is the five-year blueprints within the new National Mission policy and implementation framework from now until 2010. Malaysia is expected to see some structural changes and improved performance in the economy.

OVERALL INDUSTRY OUTLOOK : Strong Growth

COMMENTS

Formed in 1992, as a private limited company, the SC is principally engaged in the trading in sundry goods such as onions, garlic, rice, canned foods and others. With its long track record in the industry, the SC should have gained certain market share and acquired a satisfactory reputation in the market. Having a paid up capital of RM1.2 million, the SC has the abilities to expand its business comfortably.

Although the SC solely focuses on the local market, it does not face significant risk as its products are treated as necessity items for public. Besides that, being supported by some traditional customers, the SC's business risk is regarded as moderate. Today, the management of the SC is assisted by 25 employees in the operations. It is managed by its director, Ng Long Chong.

During the financial year 2007, the SC's turnover and pre-tax profit stood at RM33,393,220 and RM586,577 respectively. Return on shareholders' funds is at an acceptable level, indicating that the SC's management was efficient in utilising its funds to generate return. However, the SC is in a weak liquidity position. It may face working capital deficiency in meeting its short term obligations. A low gearing ratio has minimised its financial risk. The overall financial performance of the SC is limited. Given a networth of RM2.68 million, we believe that the SC has the abilities to maintain its business in the near term.

Investigation revealed that the SC sources its products from both the local and overseas market. Thus the SC is subjected to the foreign currency exposure risk.

Based on its financial historical data, the SC's payment record is average and there are no legal suit against the SC.

The industry continues to grow and the growth prospect is bright. This has created ample business opportunities for the SC to expand and stabilise its business.

In view of the above, we recommend credit be granted to the SC normally.

PROFIT AND LOSS ACCOUNT

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.

LEONG HUAT TIEN GUAN TRADING SDN BHD

For The Year Ended 30-June-2007

	2007	2006	2005
	MYR	MYR	MYR
TURNOVER	33,393,220	27,774,743	26,846,958
	==========	==========	==========
PROFIT/(LOSS) FROM OPERATIONS	586,577	605,726	426,208
	------------	------------	------------
PROFIT/(LOSS) BEFORE TAXATION	586,577	605,726	426,208
Taxation	<135,704>	<145,255>	<117,973>
PROFIT/(LOSS) AFTER TAXATION	------------ 450,873	------------ 460,471	------------ 308,235
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	------------ 450,873	------------ 460,471	------------ 308,235
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT FORWARD	------------ 450,873	------------ 460,471	------------ 308,235
As previous reported	1,233,605	773,134	464,899
As restated	------------ 1,233,605	------------ 773,134	------------ 464,899
	------------	------------	------------
PROFIT AVAILABLE FOR APPROPRIATIONS	1,684,478	1,233,605	773,134
RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED FORWAD	------------ 1,684,478 ==========	------------ 1,233,605 ==========	------------ 773,134 ==========
RETAINED BY: The Company	1,684,478	1,233,605	773,134
	------------ 1,684,478 ==========	------------ 1,233,605 ==========	------------ 773,134 ==========
INTEREST EXPENSE (as per notes to PL)
Term loan	77,753	36,575	40,469
Hire purchase	8,283	16,437	11,882
bank interest	22,190	11,019	135,846
bankers acceptance	217,542	154,759	27,375
overdue interest	-	144	-

BALANCE SHEET

LEONG HUAT TIEN GUAN TRADING SDN BHD

As At 30-June-2007

	2007	2006	2005
	MYR	MYR	MYR
ASSET EMPLOYED:
FIXED ASSETS	5,459,199	3,047,909	2,904,918
TOTAL LONG TERM ASSETS	------------ 5,459,199	------------ 3,047,909	------------ 2,904,918
CURRENT ASSETS
Development Properties/expenditure	-	484,353	227,399
Stocks	1,972,400	1,446,693	1,853,213
Trade debtors	3,131,450	2,170,185	2,318,191
Other debtors, deposits & prepayments	343,934	19,055	47,732
Cash & bank balances	746,904	102,450	224,509
TOTAL CURRENT ASSETS	------------ 6,194,688	------------ 4,222,736	------------ 4,671,044
CURRENT LIABILITIES
Trade creditors	892,170	657,371	682,087
Other creditors & accruals	168,737	110,615	78,898
Hire purchase & lease creditors	119,382	85,587	120,820
Bank overdraft	-	310,134	166,966
Short term borrowings/Term loans	447,176	187,313	195,276
Bill & acceptances payable	4,266,000	2,063,000	2,870,000
Amounts owing to director	852,862	810,744	830,884
Provision for taxation	32,602	81,829	55,966
provision for directors' fee	120,000	120,000	155,000
TOTAL CURRENT LIABILITIES	------------ 6,898,929	------------ 4,426,593	------------ 5,155,897
NET CURRENT ASSETS/(LIABILITIES)	------------ <704,241>	------------ <203,857>	------------ <484,853>
TOTAL NET ASSETS	------------ 4,754,958 ==========	------------ 2,844,052 ==========	------------ 2,420,065 ==========
FINANCED BY:
SHARE CAPITAL
Ordinary share capital	1,000,000	1,000,000	1,000,000
TOTAL SHARE CAPITAL	------------ 1,000,000	------------ 1,000,000	------------ 1,000,000
RESERVES
Retain profit/(Accumulated loss) carried forward	1,684,478	1,233,605	773,134
TOTAL RESERVES	------------ 1,684,478	------------ 1,233,605	------------ 773,134
SHAREHOLDERS' FUNDS/EQUITY	------------ 2,684,478	------------ 2,233,605	------------ 1,773,134
LONG TERM & DEFERRED LIABILITIES & PROVISIONS
Long term loans	1,960,515	453,892	604,228
Hire purchase creditors	45,454	114,414	5,625
Deferred taxation	64,511	42,141	37,078
TOTAL LONG TERM & DEFERRED LIABILITIES & PROVISIONS	------------ 2,070,480	------------ 610,447	------------ 646,931
	------------	------------	------------
	4,754,958	2,844,052	2,420,065
	==========	==========	==========

FINANCIAL RATIOS

LEONG HUAT TIEN GUAN TRADING SDN BHD

As At 30-June-2007

2007 2006 2005

MYR MYR MYR

TYPES OF FUNDS

      Cash 746,904 102,450 224,509

      Net Liquid Funds 299,728 <394,997> <137,733>

      Net Liquid Assets <2,676,641> <1,650,550> <2,338,066>

      Net Current Assets/(Liabilities) <704,241> <203,857> <484,853>

      Net Tangible Assets 4,754,958 2,844,052 2,420,065

      Net Monetary Assets <4,747,121> <2,260,997> <2,984,997>

BALANCE SHEET ITEMS

      Total Borrowings 2,572,527 1,151,340 1,092,915

      Total Liabilities 8,969,409 5,037,040 5,802,828

      Total Assets 11,653,887 7,270,645 7,575,962

      Net Assets 4,754,958 2,844,052 2,420,065

      Net Assets Backing 2,684,478 2,233,605 1,773,134

      Shareholders" Funds 2,684,478 2,233,605 1,773,134

      Total Share Capital 1,000,000 1,000,000 1,000,000

      Total Reserves 1,684,478 1,233,605 773,134

LIQUIDITY(Times)

      Cash Ratio 0.11 0.02 0.04

      Liquid Ratio 0.61 0.63 0.55

      Current Ratio 0.90 0.95 0.91

WORKING CAPITAL CONTROL (Days)

      Stock Ratio 22 25 28

      Debtors Ratio 34 29 32

      Creditors Ratio 10 9 9

SOLVENCY RATIOS (Times)

      Gearing Ratio 0.96 0.52 0.62

      Liabilities Ratio 3.34 2.26 3.27

      Times Interest Earned Ratio 2.80 3.77 2.98

PERFORMANCE RATIO (%)

      Operating Profit Margin 1.76 2.18 1.59

      Net Profit Margin 1.35 1.66 1.15

      Return On Net Assets 19.19 29.00 26.52

      Return On Capital Employed 17.14 24.06 22.11

      Return On Shareholders' Funds/Equity 16.80 20.62 17.38

      Dividend Pay Out Ratio (Times) 0 0 0

NOTES TO ACCOUNTS

      Contingent Liabilities 0.00 0.00 0.00

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions