KEIN HING INTERNATIONAL BERHAD 
(Company No. 616056-T)

CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS AND YEAR-TO-DATE ENDED 31 OCTOBER 2008

			3 Months Ended		6 Months Ended		
			31-Oct-08		31-Oct-07		31-Oct-08		31-Oct-07		
			(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)		
		Note	RM'000		RM'000		RM'000		RM'000		

Revenue			       44,462 		      40,146 		      84,691 		      72,418 		
											
Operating profit		         2,732 		        2,932 		        5,080 		        4,717 		
											
Interest income		             35 		             92 		            62 		           144 		
Finance costs		          (609)		          (694)		       (1,143)		       (1,329)		
Share of net results in associates	           239 		             36 		           388 		           329 		
			 		 		 		 		
Profit before tax		         2,397 		        2,366 		        4,387 		        3,861 		
											
Tax expense	B5	            (92)		           218 		          (320)		            (30)		
			 		 		 		 		
Profit for the period		         2,305 		        2,584 		        4,067 		        3,831 		

Attributable to:										
											
  Shareholders of the Company		         2,217 		        2,632 		        3,972 		        4,126 		
  Minority interests		             88 		            (48)		            95 		          (295)		
											
			         2,305 		        2,584 		        4,067 		        3,831 		
											
Earnings per share										
 attributable to Shareholders 										
 of the Company (sen):										
   Basic / Diluted	B13	          2.24 		          2.66 		          4.01 		          4.17 		
											
The Condensed Consolidated Income Statements should be read in conjunction with the audited financial statements for the financial year ended 30 April 2008 and the accompanying explanatory notes attached to the interim financial statements.	

KEIN HING INTERNATIONAL BERHAD 
(Company No. 616056-T)

CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2008
(The figures have not been audited)
					Restated	
			As at		As at	
			31-Oct-08		30-Apr-08	
	Note		RM'000		RM'000	
ASSETS						
Non-current assets						
 Property, plant and equipment 			                83,359 		              83,712 	
 Prepaid lease payments 			                  5,343 		                5,518 	
 Investment in associates 			                  3,686 		                3,298 	
 Other investments 	 B7 		                     802 		                   802 	
			                93,190 		              93,330 	
Current assets						
 Receivables, deposits and prepayments 			                31,680 		              25,739 	
 Inventories 			                17,550 		              12,284 	
 Cash and cash equivalents 			                  6,355 		                6,217 	
			                55,585 		              44,240 	
						
TOTAL ASSETS			              148,775 		            137,570 	
						
EQUITY AND LIABILITIES						
Equity attributable to Shareholders of the Company						
 Share capital 			                49,500 		              49,500 	
 Reserves 	 A2 		                23,869 		              19,925 	
			                73,369 		              69,425 	
Minority interests			                  2,856 		                2,766 	
Total equity			                76,225 		              72,191 	
						
Non-current liabilities						
 Loans and borrowings 	B9		                16,230 		              16,589 	
 Amount due to Directors 			                  3,636 		                3,671 	
 Deferred tax liabilities 	 A2 		                  5,044 		                5,166 	
			                24,910 		              25,426 	
Current liabilities						
 Payables and accruals 			                23,070 		              19,238 	
 Current tax liabilities 			                       82 		                     48 	
 Loans and borrowings 	B9		                24,488 		              20,667 	
			                47,640 		              39,953 	
			 		 	
Total liabilities			                72,550 		              65,379 	
						
TOTAL EQUITY AND LIABILITIES			              148,775 		            137,570 	
						
Net assets per share attributable to 						
  Shareholders of the Company (RM)			                     0.74 		                   0.70 	

The audited Balance Sheet as at 30 April 2004 was prepared at company level. No consolidated financial statements were prepared as the company has yet to commence operations. 

The Condensed Consolidated Balance Sheet as at 31 July 2004 has been prepared on a proforma basis on the assumption that the acquisition of subsidiaries and associated companies, an integral part of the restructuring exercise in conjunction with its listing on the Second Board of Bursa Securities, were completed on 31 July 2004. 

The audited Balance Sheet as at 30 April 2004 was prepared at company level. No consolidated financial statements were prepared as the company has yet to commence operations. 

The Condensed Consolidated Balance Sheet as at 31 July 2004 has been prepared on a proforma basis on the assumption that the acquisition of subsidiaries and associated companies, an integral part of the restructuring exercise in conjunction with its listing on the Second Board of Bursa Securities, were completed on 31 July 2004. 

The Condensed Consolidated Balance Sheet should be read in conjunction with the audited financial statements for the financial year ended 30 April 2008 and the accompanying explanatory notes attached to the interim financial statements.	

KEIN HING INTERNATIONAL BERHAD 
(Company No. 616056-T)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 OCTOBER 2008

		 Attributable to Shareholders of the Company 			
			 Non-distributable 	 Distributable 				
		 Share 	 Share 	 Translation 	 Retained 		Minority	Total	
		 Capital 	 Premium 	 reserve 	 Profits 	 Total 	Interests	Equity	
		 RM'000 	 RM'000 	 RM'000 	 RM'000 	 RM'000 	 RM'000 	 RM'000 	
Unaudited									
At 1 May 2008		    49,500 	          2,669 	               (562)	              17,306 	      68,913 	        2,766 	    71,679 	
Effect of adopting FRS 112	 A2 	             -   	                 -   	                    -   	                   512 	           512 	               -   	         512 	
At 1 May 2008 (Restated)		    49,500 	          2,669 	               (562)	              17,818 	      69,425 	        2,766 	    72,191 	
									
Foreign exchange translation		 	 	 	 	 	 	 	
  differences		             -   	                 -   	                 (28)	                       -   	             (28)	              (5)	          (33)	
Net loss recognised		 	 	 	 	 	 	 	
  directly in equity		             -   	                 -   	                 (28)	                       -   	             (28)	              (5)	          (33)	
Profit for the period		             -   	                 -   	                    -   	                3,972 	         3,972 	              95 	      4,067 	
Total recognised income									
  and expense for the period		             -   	                 -   	                 (28)	                3,972 	         3,944 	              90 	      4,034 	
									
At 31 October 2008 		    49,500 	          2,669 	               (590)	              21,790 	      73,369 	        2,856 	    76,225 	
Unaudited									
At 1 May 2007		    49,500 	          2,669 	               (316)	              12,849 	      64,702 	        3,043 	    67,745 	
Effect of adopting FRS 112	 A2 	             -   	                 -   	                    -   	                1,053 	         1,053 	               -   	      1,053 	
At 1 May 2007 (Restated)		    49,500 	          2,669 	               (316)	              13,902 	      65,755 	        3,043 	    68,798 	
									
Foreign exchange translation		 	 	 	 	 	 	 	
  differences		             -   	                 -   	                 (21)	                       -   	             (21)	               -   	          (21)	
Net loss recognised		 	 	 	 	 	 	 	
  directly in equity		             -   	                 -   	                 (21)	                       -   	             (21)	               -   	          (21)	
Profit / (Loss) for the period		             -   	                 -   	                    -   	                4,126 	         4,126 	          (295)	      3,831 	
Total recognised income									
  and expense for the period		             -   	                 -   	                 (21)	                4,126 	         4,105 	          (295)	      3,810 	
									
At 31 October 2007		    49,500 	          2,669 	               (337)	              18,028 	      69,860 	        2,748 	    72,608 	

The Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the audited financial statements for the financial year ended 30 April 2008 and the accompanying explanatory notes attached to the interim financial statements. 	

KEIN HING INTERNATIONAL BERHAD 
(Company No. 616056-T)

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2008

			6 Months Ended	
			31-Oct-08		31-Oct-07	
			(Unaudited)		(Unaudited)	
			RM'000		RM'000	
Cash flows from operating activities				
	Profit before tax	            4,387 		           3,861 	
	Adjustments for:				
		Non-cash items	            5,515 		           5,260 	
		Non-operating items	            1,081 		           1,172 	
	Operating profit before working capital changes	          10,983 		         10,293 	
	Changes in working capital:				
		Inventories	          (5,558)		              (48)	
		Receivables, deposits and prepayments	          (6,101)		          (4,806)	
		Payables and accruals	            4,119 		           3,524 	
	Cash generated from operations	            3,443 		           8,963 	
		Tax paid	              (408)		             (143)	
	Net cash generated from operating activities	            3,035 		           8,820 	
						
Cash flows from investing activities				
	Acquisition of other investments	                   -   		             (111)	
	Proceeds from disposal of  an associate	                   -   		               370 	
	Proceeds from disposal of  property, plant and equipment	               697 		               153 	
	Purchase of property, plant and equipment	          (3,281)		          (3,079)	
	Interest received	                 62 		               117 	
	Net cash used in investing activities	          (2,522)		          (2,550)	
						
Cash flows from financing activities				
	Proceeds from term loans	            2,519 		           3,133 	
	Repayment of advances to a Director	               (35)		             (451)	
	Repayment of term loans	          (2,594)		          (1,742)	
	Drawdown of other borrowings	            1,121 		               312 	
	Repayment of hire purchase liabilities	          (3,089)		          (2,648)	
	Interest paid	          (1,143)		          (1,289)	
	Net cash used in financing activities	          (3,221)		          (2,685)	
Exchange differences on translation of the				
	financial statements of foreign operations	               (84)		                  -   	
Net (decrease)/increase in cash and cash equivalents	          (2,792)		           3,585 	
Cash and cash equivalents at beginning of financial year	             (447)		           1,162 	
Foreign exchange differences on opening balance	                 (4)		                  -   	
Cash and cash equivalents at end of financial period	          (3,243)		           4,747 	
						
Cash and cash equivalents at end of financial period comprise:				
	Cash & bank balances	            4,071 		           9,448 	
	Deposits with licensed banks (excluding deposits pledged)	            2,172 		           1,063 	
	Bank overdrafts	          (9,486)		          (5,764)	
			          (3,243)		           4,747 	

The Condensed Consolidated Cash Flow Statement should be read in conjunction with the audited financial statements for the financial year ended 30 April 2008 and the accompanying explanatory notes attached to the interim financial statements.	

KEIN HING INTERNATIONAL BERHAD 
(Company No. 616056-T)
                                             
PART A: EXPLANATORY NOTES PURSUANT TO FRS 134

A1.	Basis of preparation 

The interim financial statements are unaudited and have been prepared in accordance with the requirements of Financial Reporting Standard (“FRS”) 134: Interim Financial Reporting and Paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities Berhad. 

The interim financial statements should be read in conjunction with the audited financial statements of the Group for the financial year ended 30 April 2008. These explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the last financial year ended 30 April 2008.

A2.	Changes in accounting policies

The accounting policies and method of computation adopted for interim financial statements are consistent with those of the audited financial statements for the financial year ended 30 April 2008 except for the adoption of the following FRSs and Interpretations, where applicable, that are effective for financial periods beginning on or after 1 July 2007:

FRS 107			 Cash Flow Statements
FRS 111			 Construction Contracts
FRS 112			 Income Taxes
FRS 118			 Revenue
FRS 120	Accounting for Government Grants and Disclosure of Government Assistance
Amendment to FRS 121	The Effects of Changes in Foreign Exchange Rates – Net Investment in a Foreign Operation
FRS 134		Interim Financial Reporting 
FRS 137		Provisions, Contingent Liabilities and Contingent Assets
FRS 139		Financial Instruments: Recognition and Measurement 
IC Interpretation 1	Changes in Existing Decommissioning, Restoration and Similar Liabilities
IC Interpretation 2	Members’ Shares in Co-operative Entities and Similar Instruments
IC Interpretation 5	Rights to Interest arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IC Interpretation 6	Liabilities arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment
IC Interpretation 7	Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economics 
IC Interpretation 8	Scope of FRS 2

The Group has not opted for early adoption of the FRS 139: Financial Instruments – Recognition and Measurement that will only be effective for financial periods beginning on or after 1 January 2010.

The initial application of these FRSs and Interpretations, where applicable, are not expected to have any material impact on the financial statements of the Group other than the change discussed below:

FRS 112: Income Taxes

FRS 112 addresses the accounting treatment for income taxes. However, FRS 112 does not prescribe the accounting treatment for reinvestment allowance and investment tax allowance (tax incentives). In the current accounting policy for income taxes, reinvestment allowance or investment tax allowance is treated as the tax base of an asset. On adoption of FRS 112, the Group intends to account for these tax incentives by applying the analogy of the accounting treatment for unused tax losses in FRS 112. The change in accounting policy is applied retrospectively and as disclosed below, certain comparative amounts as at 30 April 2008 have been restated:-

	As previously reported
RM’000	Prior year adjustment
RM’000	As restated 

RM’000	
Consolidated Balance Sheet
  As at 30 April 2008				
  Retained profits	17,306	512	17,818	
  Deferred tax liabilities	5,678	(512)	5,166	
				
Consolidated Income Statement
  For the year ended 30 April 2008				
  Profit for the year 	5,818	512	6,330	

A3.	Seasonal and cyclical factors

The Group’s business operation results were not materially affected by any major seasonal or cyclical factors.
	
A4.	Unusual nature and amounts of items affecting assets, liabilities, equity, net income or cash flows

There were no unusual nature and amounts of items affecting assets, liabilities, equity, net income or cash flows during the current quarter and financial year-to-date.

A5.	Material changes in estimates

There were no changes in estimates that have had material effect in the current quarter and financial year-to-date. 

A6.	Issuances and repayment of debt and equity securities	

There were no issuance, repayment of debt and equity securities, share buy-backs, share cancellations, shares held as treasury shares or resale of treasury shares during the current quarter and financial year-to-date.

A7.	Dividend Paid

The first and final tax exempt dividend of 1.5 sen per share or 3% totaling RM1,485,000 in respect of the financial year ended 30 April 2008 was paid by the Company to the entitled shareholders of the Company on 21 November 2008.

A8.	Segmental information

	Segmental information is presented in respect of the Group’s business segments:-

Results for 6 months ended 31 October 2008			
					Investment			
			Manufacturing	Trading	Holding	Adjustment	Consolidated	
			RM'000	RM'000	RM'000	RM'000	RM'000	
Revenue from external customers 	82,141	2,550	-	                  -   	84,691	
Inter-segment revenue		1,997	112	-	(2,109)	                -   	
Total revenue		84,138	2,662	-	(2,109)	84,691	
							 	
Segment results		5,124	80	(117)	(7)	5,080	
								
Interest income						62	
Finance costs						(1,143)	
Share of net results in associates					388	
Profit before tax					4,387	
Tax expense						(320)	
Profit for the period					4,067	

A9.	Material events subsequent to the end of the interim period

There were no material events subsequent to the end of the current quarter ended 31 October 2008.

A10.	Changes in the composition of the Group

There were no material changes in the composition of the Group for the current quarter and financial year-to-date save as disclosed below:-

The Company had on 5 September 2008 acquired 2 ordinary shares of RM1.00 each in the share capital of Zenne Appliances Sdn. Bhd. (“ZASB”) at a total purchase consideration of RM2.00 only. Upon the transfer of shares, ZASB has become a wholly-owned subsidiary of the Company.

A11.	Changes in contingent liabilities

There were no changes in contingent liabilities or contingent assets of a material nature since the last audited financial statements for the financial year ended 30 April 2008.

A12.	Capital commitments

There were no capital commitments as at the latest practicable date prior to issue of this report.

PART B: 	EXPLANATORY NOTES PURSUANT TO APPENDIX 9B OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

B1.	Review of performance 
	
The Group registered revenue of RM44.5 million and RM84.7 million for the current 2nd quarter and financial year-to-date ended 31 October 2008 compared with RM40.1 million and RM72.4 million reported in the preceding year corresponding quarter and period, representing an increase of RM4.4 million or 11% and RM12.3 million or 17% respectively. 

The growth in revenue was mainly attributed to stronger customers’ demand, particularly the sales of a subsidiary in Vietnam increased significantly compared with last year, and the increase in selling prices following the increase in material costs.

Against the above backdrop, the Group reported profit before tax (“PBT”) of RM2.4 million and RM4.4 million for the current 2nd quarter and financial year-to-date as compared to PBT of RM2.37 million and RM3.9 million recorded in the corresponding quarter and period last year, representing an increase of approximately RM30,000 or 1% and RM0.5 million or 13% respectively.

B2.	Variation of results against preceding quarter 

The Group registered PBT of RM2.4 million for the current 2nd quarter compared to PBT of RM2.0 million reported in the immediate preceding quarter, representing an increase of RM0.4 million or 20%. The rise in PBT was mainly attributed to the increase in revenue.

B3.	Prospects 

Barring any unforeseen circumstances, the Board expects the Group to achieve a satisfactory performance for the current financial year ending 30 April 2009.

B4.	Variance of actual and forecast profit 

The Group has not provided any profit forecast or profit guarantee for the current financial year ending 30 April 2009.

B5.	Tax expense 
		3 Months		6 Months	
		Ended		Ended	
		31.10.2008		31.10.2008	
Current tax expense					
 - Malaysian income tax	153		503	
 - Overprovision in prior year	(61)		(61)	
	92		442	
Deferred tax expense 	-		(122)	
Total 	92		320	
			
The effective tax rate of the Group for the current quarter and financial year-to-date was lower than the statutory income tax rate of 25% mainly due to utilization of reinvestment allowance available to a wholly-owned subsidiary of the Company.

B6.	Unquoted investments and/or properties 

The Group has not disposed of any unquoted investments and/or properties in the current quarter and financial year-to-date.

B7.	Quoted and marketable investments 

The details of quoted investments as at 31 October 2008 are as follows:

	As at
31.10.2008
RM’000	

At cost	
528	
At book value	528	
At market value	443	

B8.	Status of corporate proposal announced 

There were no corporate proposals announced but not completed as at the date of this report.

B9.	Group loans and borrowings 

The Group loans and borrowings as at 31 October 2008 are as follows:

	Short Term
RM’000		Long Term
RM’000	
Unsecured				
Bills payable	2,074		-	
Bankers’ acceptance	2,377		-	
	4,451		-	
Secured				
Bank overdrafts	9,486		-	
Bills payable	1,043		-	
Term loans	5,320		11,780	
Hire purchase liabilities	4,188		4,450	
	20,037		16,230	
				
Total borrowings	24,488		16,230	

The loans and borrowings are denominated in Ringgit Malaysia except for certain term loans and the bills payable amounting to RM15.2 million which are denominated in US Dollar.

B10.	Off balance sheet financial instrument 

There are no financial instruments with off balance sheet risk as at the date of this report.

B11.	Changes in material litigation 

Neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration, either as plaintiff or defendant, which has a material effect on the financial position of the Company or any of its subsidiaries and the Board is not aware of any proceedings pending or threatened, or of any fact likely to give rise to any proceedings, which might materially and adversely affect the position or business of the Company or any of its subsidiaries. 

B12.	Dividend payable

No interim dividend has been proposed or declared in respect of the current financial year during the current quarter and financial year-to-date under review (1.5.2007 to 31.10.2007 : NIL).

B13.	Basic earnings per share 

	The basic earnings per share are calculated by dividing profit for the period attributable to Shareholders of the Company by the weighted average number of ordinary shares in issue during the current 2nd quarter under review as follows:-

	3 Months
Ended
31.10.2008
RM’000		3 Months
Ended
31.10.2007
RM’000	
Earnings
  Profit attributable to Shareholders of the Company	
2,217		
2,632	

Weighted average number of ordinary shares in issue (‘000)	
99,000		
99,000	

Basic earnings per share (sen)	
2.24		
2.66	
  
B14.	Auditors’ report on preceding annual financial statements

	The independent auditors’ report on the financial statements of the Group and of the Company for the financial year ended 30 April 2008 was unqualified.

B15.	Authorisation for issue

	The interim financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 15 December 2008.

	By Order of the Board

	------------------------------
	Yap Toon Choy
	Group Managing Director
	15 December 2008