On behalf of the Board of Directors, I am pleased to present the Annual Report and Financial Statements for the year ended 30 June 2009 of Lion Teck Chiang Limited. Turnover for the steel business remained strong due to the higher construction activity and steel prices. The property market has improved with renewed interest in the second quarter of 2009.

Financial Highlights

The Group recorded a higher turnover of $207m in FY09, compared to $172m in FY08, an increase of 20.4% with higher sales for both Steel and Property Development. Net operating profit (before fair value loss on investment properties) improved by $1.8m from $7.1m to $8.9m. Group net profit declined by $10.0m from $12.5m for FY08 to $2.5m for FY09 due to fair value loss on investment properties and provision for foreseeable loss on properties under development. A fair value loss of $2.0m was incurred on investment properties in Singapore compared to a gain of S$8.1m in FY08. In addition a provision for foreseeable loss of $3.6m was also incurred on properties under development. If not for the aggregate impact of $13.7m of these items, net profit for FY09 would have been higher than that for FY08.

Prospects

Steel Trading

After both international and domestic steel prices had reached the peak in August 2008, the steel prices had made a sharp turn by dropping as much as 60%, like most of the other commodities which had been badly affected by the global economic crisis. Though relatively stable condition now, the pricing of international steel rebar will continue to hinge on supply and demand as well as the raw material prices. The demand for steel in Singapore may improve based on the current resurgent sales in private residential property. The local construction sector may also be bolstered by the release of few major infrastructure projects such as Marina Coastal Expressway and the MRT Down-town Line. Steel prices in Singapore are expected to be more stable but remain competitive. Nevertheless, global economic prospects, international steel price stability and foreign exchange rate fluctuations are the factors affecting our results.

Property Development

Singapore

Based on URA statistics, the residential property index declined by 4.7% quarter-on-quarter in the second quarter of 2009, following the 14.1% decline in the first quarter of 2009. The index for landed homes indicated price decrease of 4.7% in the second quarter of 2009 compared to 9.2% in the first quarter. However, the residential property market in Singapore has turned slightly bullish since the second quarter of 2009 but it is not certain if buying interest is sustainable. For FY10, the Group will focus on and launch its housing projects at Wareham Road and Crescent Road comprising of bungalows and cluster bungalows, respectively and expects firm buying interest.

Malaysia

In FY09, the projects under Che Kiang Realty performed moderately for the year. The softening of the property market was experienced with the economic downturn. Buyers were very cautious and selective with their purchase and properties which were packaged with attractive incentives fared better. The residential project at Bandar Mahkota Banting, has completed its earlier launched phases. For the year, it recorded higher revenue mainly contributed from the sales of existing phase of 47 units of Double Storey Terrace Houses. In Malacca, higher revenue contributions were also achieved from the sales of the Mahkota Marina Apartments, Plaza Mahkota Shops and Strata Offices. For FY10, we will focus in strategizing to clear the completed stocks. We will continue several incentive schemes introduced earlier which has been specifically packaged to tailor to the needs of purchasers such as the Zero Cost Plan and Easy Payment Scheme.

Property Rental

Sustaining the occupancy and rental rates of the Group’s investment properties in Singapore remains challenging due to the global economic crisis and uncertain economic outlook. In Malaysia, the Group will continue to benefit from the contribution of rental income from its hypermarket building at Skudai, Johor Bahru.

Acknowledgement

On behalf of the Board, I wish to thank all our management and staff for their achievements and contributions to our performance. I would also like to express my sincere appreciation to our customers, suppliers, shareholders and business associates for their continuing support. I am grateful to members of the Audit Committee and my fellow Directors for their counsel and commitment.

CHENG THENG KEE Chairman