Contents :

We refer to Bursa Malaysia Securities Berhad’s letter dated 8th August, 2005 in relation to the news article titled “Grand-Flo set to double profit” appearing in The Star, Starbiz, page 2, on Saturday, 6th August, 2005 and in particular to the following sentence:

“Grand-Flo Solution Bhd is…… to double its 2004 revenue and profit for the year ended Dec 31, 2005….”

The Company wishes to inform that they had wanted to advise the press based on their half year results, particularly for revenue and profits, that was announced on 5 August 2005, they are primarily on track to double the turnover and profit achieved for the financial year ended 31 December 2004 if the half year results were to be extrapolated on a straight line basis.

The statement was made to allow the press to have a view on their current level of operations and not in any way intended to be referred to as estimates, forecasts or projections of the Company and therefore had not been reviewed by the external auditors.

The Company apologizes to Bursa Malaysia Securities Berhad for this matter if it has been inadvertently been interpreted as a forecast of its profitability. In addition, the Board of Directors of Grand-Flo will take note and be more cautious in handling future questions of such nature.

This announcement is dated 9 August, 2005.

Query Letter Contents :

We refer to the above news article appearing in The Star, Starbiz, page 2, on
Saturday, 6 August 2005, a copy of which is enclosed for your reference.
In particular, we would like to draw your attention to the underlined sentence,
which is reproduced as follows:-
"Grand-Flo Solutions Bhd, is ...to double its 2004 revenue and profit for the
year ended Dec 31, 2005..."
In accordance with the Securities Exchange's Corporate Disclosure Policy, you
are requested to furnish the Securities Exchange with an announcement for
public release confirming or denying the above article and in particular the
underlined sentence after due and diligent enquiry with all the directors,
major shareholders and all such persons reasonably familiar with the matter
about which the disclosure is to be made in this respect. In the event you deny
the above sentence or any other part of the above reported article, you are
required to set forth facts sufficient to clarify any misleading aspects of the
same. In the event you confirm the above sentence or any other part of the
above reported article, you are required to set forth facts sufficient to
support the same, including the relevant basis and assumptions in arriving at
the above forecast. In this respect, you are required to confirm whether the
accounting bases, calculations and assumptions have been reviewed by the
external auditors.
Please furnish the Securities Exchange with your reply within one (1) market
day from the date hereof.
Yours faithfully

TAN YEW ENG
Sector Head, Issues & Listing
Group Regulations
TYE/NMA copy to:- Securities Commission (via fax)