Opinion

As mentioned in Note 2 and Note 37 to the financial statements, the Group incurred a net loss of $11,185,680 for the

year ended 31 March 2007 and at 31 March 2007 the Group?s total liabilities exceeded its total assets by $3,340,241

with borrowings from banks and financial institutions in the form of bills payable and loans amounting to $6,760,376.

The Company?s share capital of $18,742,415 has been substantially depleted by accumulated losses of $17,950,716

with total assets exceeding total liabilities by $791,699 at balance sheet date. The Company has issued corporate

guarantees to various financial institutions providing credit or hire purchase facilities to its subsidiary companies.

Subsequent to the balance sheet date, Enzer Electronics Pte Ltd (?EEPL?), a major subsidiary of the Group, has

received letters of demand and writ of summons for claims of outstanding debts of an aggregate sum of $6 million.

Legal proceedings have been commenced against the Company for the sum of $1.2 million which the Company had

acted as a guarantor for EEPL. Due to inadequate working capital, the Group is in the process of ceasing the operations

of the Electronic Components Division. The other business operations of the Group are facing very challenging

circumstances and the Group is now operating on a cash basis and is selling off its existing inventories. The Company

has appointed a corporate advisor to formulate a streaming/restructuring plan to raise new equity to strengthen the

capital base of the Company. Presently the Company and the corporate advisor are in discussions with new investors for

recapitalisation as well as introducing new business into the Company. The Company has also briefed the Group?s

bankers on the Company?s efforts in this regard.

The results and financial position of the Group and the Company raises significant doubt on the Company?s and the

Group?s ability to continue as going concerns. The validity of the going concern assumption on which the consolidated

financial statements of the Group and the balance sheet and statement of changes in equity of the Company are prepared

depends on whether the directors are able to formulate a viable plan to raise new equity and introduce new business and

on the continuing financial support from its bankers and creditors. In the event that adequate additional capital funds are

not available and in the absence of continuing financial support from the Group?s bankers and creditors, the Company

and the Group will no longer be able to continue as going concerns and may not be able to realise its assets and

discharge its liabilities in the normal course of business. The financial statements of the Group and the Company do not

take into account any adjustments to the financial statements that would have to be made to reflect the situation that

assets may need to be realised other than in the normal course of business and at amounts which could differ

significantly from the amounts at which they are currently recorded in the balance sheet. In addition, the Group and

Company may have to provide for any further liabilities which may arise, and to reclassify non-current assets and noncurrent

liabilities as current assets and current liabilities.

Because of the significance of the matter mentioned above, we do not express an opinion as to whether the consolidated

financial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly

drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the ?Act?) and Singapore

Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and the Company as

at 31 March 2007 and the results, changes in equity and cash flows of the Group and changes in equity for the Company

for the financial year ended on that date.

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary

companies incorporated in Singapore of which we are the auditors have been properly kept in accordance with the

provisions of the Act.

Baker Tilly TFWLCL

Certified Public Accountants