connecting strengths, - national university of...

LeedenThe Integration Specialist for Welding, Gas and Safety

Connecting Strengths, Catalysing Growth

Annual Report 2008Leeden Limited

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To be accepted as Asia’s foremost integration

specialist in welding, gas and safety

Achieve market leadership in Asia’s marine, oil & gas industries

Ensure customer value by providing integrated services & solutions for welding, gas and safety

Build a company of repute to attract and nurture people of high performance

Our Vision

Our Mission

About Us

Chairman & CEO’s Message

Operations Review

Financial Highlights

Financial Overview

Board of Directors

Management Team

Corporate Governance Report

Directors’ Report

Statement by Directors

Independent Auditors’ Report

Consolidated Income Statement

Balance Sheets

Consolidated Statements of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Financial Statements

Shareholding Statistics

Substantial Shareholders

Warrantholding Statistics

Notice of Annual General Meeting

Proxy Form

Contents

01Annual Report 2008

Since our incorporation in 1964, we have progressed from a reputable distributor of welding and safety products as well as

downstream industrial gas manufacturer and distributor to become a value added integration specialist for our customers in the

marine, oil & gas industries.

Our customers include major oil and gas companies and contractors, shipbuilding and ship repair yards, oil rig, platform, jacket

and floating production storage offloading (FPSO) systems as well as steel and pipeline fabricators from across Asia.

Our customers’ success is fundamental to the way we conduct our business. In fulfilling and anticipating the dynamic business

needs of our customers, we expertly strategise to ensure success in our partnerships. We believe that through proximity to our

customers, premium quality service can be delivered at all times.

Our achievements attest to our consistent delivery of product quality, value and service excellence. We’ve received the Spring

Singapore National Model Company award and accreditations like ISO9001:2000. We’ve also garnered recognition from the

brands we represent, including:

• Evac International Pte Ltd (Licensed Distributor 2006 – 2009)

• Red Wing International (Exclusive Distributor)

• DBI SALA By Capital Safety Group Asia (Top Asia Distributor Award 2008)

• Weiler (Sales Excellence Award 2008)

• Hobart (Outstanding Sales Achievement 2008)

• Miller (Outstanding Sales Achievement 2008)

• OTC Daihen (Sales Achievement Award for OTC XD-500 Welding Machine and OTC Arc Welding Robot 2007 and

First Half 2008)

• Bortech Corporation (Top Performance Award – Number One Distributor in the Asia Pacific Region)

We continue to be a strong and progressive Welding, Gas and Safety integration company; one that cares for the success of its

customers, business partners, staff and shareholders.

About Us

Dear Shareholders

In spite of the global slow down as foreshadowed in my previous

Annual Peport, Leeden Limited achieved its fourth consecutive year of

unprecedented earnings growth in 2008 on the back of strong marine

and offshore, oil and gas activities. The Group’s turnover jumped 53%

to a record of S$157.2 million in FY2008 while the net profit after tax

more than doubled to S$13.6 million in FY2008.

I would like to emphasize that, FY2008 was a challenging year to

operate in as the sub-prime crisis escalated into a full blown global

recession and news of order book cancellations and delays plagued

the marine and offshore industries. Nevertheless, I am very happy to

report that through careful planning and strategic M&A activities, the

Group has successfully navigated through the storm and emerged to

achieve all time high sales and profits.

Our success to date would not have been possible without human

capital, an extremely important element in our business model. I would

like to take the opportunity to applaud our management, marketing

communications, technical product and sales teams who have done

a fantastic job in their consistent efforts to build the ‘Leeden’ brand by

delivering quality customized integrated solutions in our core business

of welding, gas and safety.

...through careful planning and strategic M&A activities, the

Group has successfully navigated through the storm and

emerged to achieve all time high sales and profits. Our success

to date would not have been possible without human capital,

an extremely important element in our business model.

“ “

02

Chairman and CEO’sMessage

03

The Group also made some strategic acquisitions during

the year to enhance its presence in the region and further

complement its industrial operations. Leeden acquired a 55%

stake in Eversafe Extinguisher Sdn Bhd, a well established

Malaysian company which specializes in fire protection

products. The Group also acquired a 75% stake in Power

Weld Sdn Bhd, which is in the business of manufacturing

and distributing quality welding electrodes and welding wires.

By leveraging on Leeden’s established distribution network,

Leeden and its subsidiaries can benefit from mutual synergies

to effectively increase the Group’s presence in Asia.

During the year, the Group also increased its stake in strategic

associate companies, making them subsidiaries, notably

National Industrial Gases Pte Ltd and NIG Industrial Gases Sdn

Bhd.

Moving ForwardAs the global recession deepens, market conditions have

never been more uncertain and trying. However, we still see

opportunities amidst the crisis and have formulated plans and

strategies to face the new challenging environment.

With worries of dwindling global demand, flow of work for new

builds in the offshore and marine segment may see a slow

down. On the other hand, we anticipate yards to do more

conversion and repair jobs and we will tailor our product range

accordingly to service this segment while adding mid-range

products to help customers save costs. Riding on this, we will

continue to penetrate new and existing markets, while growing

our geographical reach in Thailand, Vietnam and Indonesia.

With the recent spate of announcements on fiscal stimulus

plans, the budget for infrastructure spending by governments

across the region has increased tremendously. Hence, we will

expand our revenue streams by broadening our sales channels

to penetrate the infrastructure industry as well. Currently, 40%

of our revenue is derived from our safety and gas products, out

of which, 50% is servicing industries outside the marine and

offshore.

As mentioned, our rich human capital has helped the Group to

grow over the years. Consequently, we will continue to build

the team at Leeden and intend to increase the current team

of management, sales and technical product executives in

line with our expansion plans. On top of this, the Group will

set up new training facilities to upgrade skills of staff to ensure

the provision of world class customer service pertinent to our

success.

Besides working on organic growth, we will also be on the

lookout for more M&A opportunities which may arise amidst

the economic turmoil. Leeden will continue to focus on its core

competencies to be Asia’s leading integration specialist for

welding, gas and safety. At the same time, creating value for

its customers through more comprehensive ‘one-stop’ solution

for welding, gas and safety product needs.

As part of our efforts to focus on what we do best, the property

business will be discontinued subsequent to the completion of

the Paterson Linc project by early 2010.

In AppreciationIn appreciation of the support shown by shareholders, an

interim dividend of net 1 cent per share was declared and

paid on 10 September 2008, doubling the dividend amount

declared and paid in FY2007. The Board does not recommend

a final dividend to be declared for the year ended 31 December

2008.

I would like to thank our longstanding stakeholders, namely

our shareholders, our business associates, loyal customers,

my colleagues on the Board, the management and staff, for

their dedication and support. I sincerely look forward to your

continuous support as we march into the Leeden era with

renewed focus and zeal in the industrial business.

Steven ThamChairman & Chief Executive Officer

7 April 2009

Annual Report 2008

Connecting Expertise and Experience At Leeden, our wealth of expertise and experience gives us the competitive edge as we continue to provide our clients with excellent one-stop services and solutions. The delivery of integrated solutions, together with our commitment towards client satisfaction, has contributed not only to the growth of Leeden, but also to the progress of our customers.

With the winning synergy of expertise and experience, we are able to strengthen Leeden’s foothold in the marine, oil and gas industries.

Welding DivisionOver the years, Leeden has established itself as a leading

integrated solutions provider and consultant in the welding,

gas and safety arena. The Group’s competitive position is

maintained through its provision of value-added welding

products and services, making the business more resilient

through economic downturn.

In spite of the negative business sentiments, the Group

has recognized the crisis as an opportunity to expand its

presence in the region. During the year, Leeden acquired

Power Weld, a leading electrode manufacturer in Malaysia

to further expand its filler metal product range, providing the

Group with an assured source of supply for quality welding

electrodes and welding wires.

The Group has also been awarded a number of new agencies,

one of which is from the FSH Welding Group, specifically

for its welding electrodes under the SelectArc Industries

brand. Other new agencies obtained during the year include

CompAir, a leading manufacturer of compressors in the UK,

Procut, a supplier of high quality carbide burrs and ATA

Tools for it’s range of air and pneumatic tools.

The sale of welding equipments and consumables will

continue to play a major role in the Group’s core business.

Notwithstanding the challenges ahead, the Group will

continue to leverage on its strengths and develop synergies

from its acquisitions in order to better serve our customers.

05

Operations Review

Gas DivisionThe right mix of gases ensures effective welding solutions.

That is why Leeden’s Gas Division is a vital component to

Leeden’s integrated welding solutions. The Group’s gas

business in Singapore, Malaysia and Batam is operated

through the National Industrial Gases Group (NIG Group), a

joint venture with National Oxygen Pte Ltd, which is a wholly

owned subsidiary of Taiyo Nippon Sanso Corporation.

In FY2008, Leeden increased its stake in NIG resulting in the

group of companies operating the gas business, becoming

indirect subsidiaries of the Leeden Group.

As one of the largest downstream industrial gas

manufacturers and distributors in Singapore, Malaysia and

Batam, NIG Group provides the most comprehensive range

of gas and gas-related products and services, including

specialized industrial gases, gas cylinders, gas control

apparatus and gas systems & engineering consultancy

services.

The NIG Group has the largest dissolved acetylene

production capabilities in Singapore, Malaysia and Batam

region. In Malaysia, the NIG Group has an extensive

distribution network with branches spanning from Penang

to Johor Bahru, offering NIG operations in Malaysia

the business agility and efficiency as a key competitive

advantage over other competitors.

Annual Report 2008

06

Safety DivisionAs part of the Group’s vision of providing integrated services,

Leeden also provides comprehensive safety solutions to

meet clients’ needs. The range of products is classified into

Personal Safety, Fall Protection, Environmental Protection

and Emergency Response equipments. The provision

of safety solutions are supported by expert consultancy

services that cover on-site assessment, system installation,

pre and post installation assessment, maintenance and

recertification.

The Safety Division’s growth during the year was fuelled

by increased awareness and continued emphasis on

workplace safety. The buoyant marine, oil & gas industries

continued to drive demand for the Group’s safety products

and services, helping Leeden’s Personal Safety and Fall

Protection products achieve record sales. Market leading

brands such as DBI SALA (Fall Protection) and Red Wing

Shoes (Personal Safety) continued to post strong growth

this year.

Finally, as part of the Group’s expansion efforts, the

strategic acquisition of Eversafe added a new dimension to

the Group’s existing range of safety products and solutions,

Eversafe’s firefighting products enabled the Group to gain

exposure to the growing market of fire fighting systems.

Technological improvements made in 2008 have played a

big part in keeping NIG Group competitive. For the past

year, NIG Group has invested resources into developing

relevant technologies to further improve the quality of

our services and product offerings. Technologies such as

Cylinder Maintenance System (CMS) and Vehicle Monitoring

System (VMS) have allowed NIG Group to operate more

effectively and efficiently, as well as to offer better services

to its customers. Looking forward, NIG Group anticipates a

challenging yet exciting year ahead.

During these difficult times, NIG Group will seek to focus on

its fundamental capabilities to provide reliable and quality

gas-related products and services to new and existing

customers. In addition to maintain the existing distribution

network, NIG Group will also continue with its strategy

of developing the Group’s infrastructure through capital

expenditure projects in 2009. Having recently acquired

plots of land in Bintan, Shah Alam, Kuantan and Penang,

NIG Group will allocate resources to expand and strengthen

its manufacturing and distribution bases in these locations.

Operations Review

During the year, Leeden participated in international trade

events such as the OS+H Asia 6th Occupational Safety

& Health Exhibition (held at Suntec Convention Centre

in September 2008) and Offshore South East Asia Oil &

Gas Show (“OSEA” held at Suntec Convention Centre in

December 2008) to help market welding and safety brands

under the Group. Such events served as a platform to

showcase the latest products & offerings of the Industrial

Business, gaining visibility and market share for the Group.

Catalysing Growth and ExcellenceAt Leeden, we constantly seize opportunities to enhance our business segments and deepen our regional network, thus maintaining our position as one of the leading solutions provider in Asia. Alongside growth opportunities, synergistic acquisitions made in FY2008 will continue to boost growth and excellence for Leeden, as well as accelerate progress for our customers.

By making the most of every opportunity, Leeden is able to catalyse growth and excellence.

FinancialHighlights

Profit Before and After Tax (S$’000)Sales Turnover (S$’000)

Earnings Per Share and Dividends Per Share (Cents)

8.0

6.0

4.0

2.0

-2005 2006 2007 2008

0.41.3

4.5

6.1

EPS DPS (net)

0.36 0.5 1.0

Net Asset Value Per Share (Cents)

40.0

35.0

30.0

25.0

26.227.1

31.1

35.3

NAV per share

2005 2006 2007 2008

PBTPAT

1,58

8

621

3,15

2

1,88

8

8,73

6

6,60

3

16,800

13,582

200720062005 2008

08

Property & others Industrial

47,524

25,783

69,277

16,789

140,54

9

16,690

96,706

6,18

6

200720062005 20080

30,000

60,000

90,000

120,000

150,000

0

4,000

8,000

12,000

16,000

20,000

In 2008, the Leeden Group continued its growth momentum

to register another year of excellent performance. The Group

achieved a record turnover of S$157.2 million in FY2008, which

is a 53% jump from FY2007 turnover of S$102.9 million.

The Group’s Industrial Business (made up of the welding,

gas, and safety divisions) registered a significant increase in

turnover of 45% from S$96.7 million in FY2007 to S$140.5

million in FY2008 on the back of strong marine and offshore

activities and contribution of S$45.1 million from newly

acquired subsidiaries. Turnover from other businesses, mainly

property development, grew from S$6.2 million in FY2007 to

S$16.7 million in FY2008.

In spite of the challenging economic conditions, overall gross

profit margin remained strong at 28%, with overall gross profit

increasing 49% to S$44.1 million in FY2008.

In line with increased sales revenue, distribution costs grew

38% from S$12.5 million in FY2007 to S$17.2 million. However,

distribution costs as a percentage of sales decreased from 12%

to 11% as a result of economies of scale. While administrative

costs grew 55% from S$5.8 million in FY2007 to S$9.0 million

in FY2008, administrative costs remained constant at 6% of

sales over both years.

Other costs increased by S$1.0 million to S$4.5 million in

FY2008 as the Group adopted a conservative stance on

its profitability and provided a higher allowance for doubtful

debts and stock obsolescence of S$1.8 million in FY2008

as compared to S$0.3 million in FY2007. In addition, there

was an unrealized derivative loss of S$0.7 million recorded in

FY2008, out of which S$0.5 million relates to a USD option

contract that has expired in January 2009 and the unrealized

losses have since been reversed. Other costs as a percentage

of sales remained constant at 3% in both years.

A negative goodwill of S$0.8 million was recognized due to

the acquisition of Eversafe Extinguisher Sdn Bhd (“Eversafe”)

and Power Weld Sdn Bhd (“Power Weld”). Share of profits

from associated companies was 225% higher in FY2008 at

S$1.3 million.

Leeden achieved another year of record earnings with a 106%

jump in profit after taxation to S$13.6 million in FY2008. Profit

attributable to equity holders of the Company grew 59% to

S$10.4 million.

Balance SheetWith the acquisition of new subsidiaries Eversafe, Power

Weld, National Industrial Gas Ptd Ltd (“NIG”), and NIG

Industrial Gases Sdn Bhd (“NIB”), there was a consolidation

of the Group’s balance sheet items as of 31 December 2008,

whereas revenue from these new subsidiaries were recognized

only for the remaining period of the financial year after the

acquisitions.

The Group’s non-current assets grew from S$19.1 million as

at 31 December 2007 to S$60.0 million as at 31 December

2008 mainly due to the acquisition of new subsidiaries which

resulted in higher property, plant and equipment, intangible

assets and goodwill.

Current assets also increased from S$63.5 million as at

31 December 2007 to S$120.8 million as at 31 December

2008 due to a higher stock level which grew from S$17.7

million as at 31 December 2007 to S$46.2 million as at 31

December 2008. The increase in stocks was due to S$12.2

million of stocks held by newly acquired subsidiaries and higher

stock holding was also necessary to provide better services

and prompt deliveries to customers. As such, stock turnover

increased from 93 days in FY2007 to 123 days in FY2008.

Trade debtors also increased from S$28.8 million as at

31 December 2007 to S$48.5 million as at 31 December 2008

due to the acquisition of new subsidiaries which accounted for

S$20.7 million of the trade debts. Trade debtors’ turnover days

improved from 102 days in FY2007 to 86 days in FY2008.

The Group’s current liabilities grew from S$33.3 million as

at 31 December 2007 to S$81.0 million as at 31 December

2008, while non-current liabilities increased from S$3.5 million

as at 31 December 2007 to S$16.5 million as at 31 December

2008. The increase in total liabilities was mainly due to the

consolidation of newly acquired subsidiaries which resulted in

higher amount due to bankers and long-term loans by S$40.8

million to S$51.9 million as at 31 December 2008.

Leeden’s total equity improved from S$45.8 million as at

31 December 2007 to S$83.3 million as at 31 December 2008.

Cash FlowAs at 31 December 2008, the Group had cash and cash

equivalents of S$15.6 million, a 3% improvement from 31

December 2007. As the Group stocked up during the year

to ensure better service and prompt delivery to customers,

net cash provided by operating activities declined from S$14.3

million in FY2007 to S$0.8 million in FY2008.

Due to the Group’s acquisition activities, net cash provided by

financing activities rose to S$20.0 million, while net cash used

in investing activities was S$20.4 million.

FinancialReview


Board of Directors

Mr Steven Tham appointed on the

Board on 30 June 2000, has been the

Group’s Executive Chairman and Chief

Executive Officer since 27 March 2001.

He was last re-elected on 27 April 2007.

Mr Tham has over 30 years of working

experience in the industrial, banking,

trading, retail and property industries.

He holds a BBA (Hons) and M. Sc

(Real Estate) Degree from the University

of Singapore. He is also a member of

the Chartered Institute of Management

Accountants and the Singapore Institute

of Directors (MSID).

Mr Kelvin Lee was appointed

as Executive Director on 12 August

2004 and has been promoted to the

position of Managing Director & Chief

Operating Officer on 1 October 2007.


Mr Lee has over 33 years of experience

in the chemical, metallurgy, welding

and industrial gases industries. He is

currently appointed as a council member

of the board of Singapore Welding

Society and a committee member of

the Asian Industrial Gases Association

and the Industrial Gases Association of

Singapore. He is also a member of the

Singapore Institute of Directors (MSID).

Mr Lee holds a Bachelor of Science

Degree from the University of London.

Mr Lim How Boon is our Executive

Director and has joined the Board since 1

February 1999. He was last re-elected on

25 April 2008. Mr Lim is an accountant

by profession and is a Fellow (FCPA)

of the Institute of Certified Public

Accountants of Singapore (ICPAS). He

has accumulated more than 40 years

of working experience covering the

insurance, hotel, leisure, retail, property,

building and construction industries.

Mr Lim is also an active community

leader and has been commended twice

by the Singapore Government, having

being awarded the Public Service Medal

(PBM) and Public Service Star (BBM)

in 1980 and 1990 respectively. He is

currently a member of the Singapore

Institute of Directors (MSID).

Mr Leslie Struys has served on

the Board as a Non-Executive and

Independent Director since 30 June

1993. Mr Struys was appointed as the

Lead Independent Director on 1 January

2006. He was last re-elected onto the

Board on 25 April 2008. He is currently

the Chairman of both the Remuneration

Committee and Nominating Committee

and a member of the Audit Committee.

Mr Struys graduated from the University

of Malaya in 1960 with a Bachelor of

Arts Degree in Economics. He also

sits on the Board of Fraser & Neave

Holdings Bhd, a Malaysian Company

listed on the Bursa Malaysia Securities

Berhad, as the Senior Independent and

Non-Executive Director.

10

Mr Tony Chan Wing Khei was

appointed as a Non-Executive and

Independent Director since 1 March

1997. He was last re-elected on 28 April

2006. He serves as the Chairman of

the Audit Committee and is a member

of the Remuneration Committee and

Nominating Committee. Mr Chan has

over 30 years of experience in the

construction and property industries

both in Singapore and Malaysia. Mr Chan

is a civil engineer having graduated

from the Royal Melbourne Institute of

Technology.

Mr Loh Weng Whye was appointed

as an Independent Director on 7

February 2005 and last re-elected on 27

April 2007. He is a member of both the

Audit and Remuneration Committees.

Mr Loh is a veteran in infrastructure

development and energy business in

Singapore and the region, with over

35 years of experience in senior and

corporate-level appointments with

the civil service, government-linked

companies and the private sector.

Under the Public Utilities Board, he

headed Generation Projects responsible

for the management and commissioning

of power station projects worth more

than S$3 billion. He was also the

founding General Manager (Projects) of

Tuas Power Ltd. Mr Loh was formerly

President of ST Energy Pte Ltd and

SembCorp Energy Pte Ltd. He was

appointed Advisor to Green Dot Capital,

an investment and holding company

under Temasek Holdings. Currently,

Mr Loh sits on the boards of four SGX

mainboard-listed companies. He was

appointed Senior Adivisor by YTL Power

International for the bidding for the three

Singapore gencos and the S$3.8 billion

acquisition of PowerSeraya Ltd. He also

holds advisory appointments in external

councils and institutions of tertiary

education. Holding MSc. (Industrial Eng.)

and B Eng. (Mechanical) Degree, he is

a Professional Engineer (Singapore), a

Member of the Singapore Institute of

Directors, and was elected a Fellow of

the Institution of Engineers Singapore in

1995.

Mr Hendra Harjadi was appointed as

Non-Executive Director on 3 May 2004.


Mr Harjadi is the Managing Director of

various companies in Indonesia and has

over 30 years of experience managing

companies in the oil and gas and retail

industries. Mr Harjadi holds a Bachelor

of Arts Degree from the Universitas

Methodist Indonesia.


From Left

Mr Steven Tham

Mr Kelvin Lee

Mr Lim How Boon

Mr Leslie Struys

Mr Tony Chan

Mr Loh Weng Whye

Mr Hendra Harjadi

12

Management Team

Mr Edwin Chow joined American

Dynamics Pte Ltd in January 2008 as

General Manager in charge of Welding

Business in the Singapore, Malaysia

and Batam. Mr Chow holds a Diploma

in Marketing and also a Diploma in

Marine Engineering. He has over

20 years of experience in marketing

welding equipment and consumables

in the shipbuilding and oil & gas related

industries.

Mr Robert Goh has been with the

Group since 1978 and is currently the

General Manager of National Industrial

Gases Pte Ltd, heading the Gas

Business in Singapore and Batam. Mr

Goh has over 30 years of operations

and sales experience in the oil and gas

related industries.

Mr Philip Chan is the Assistant

General Manager in charge of the Safety

Business in Singapore as well as in the

Asia region. He has been with the Group

since 1990. Mr Chan holds a Master

of Business Administration Degree from

the University of Birmingham. He is

responsible for increasing sales and

profitability of the Safety Business in the

region.

Mr Alex Ong joined the Company

in February 2008 as Head of Welding

Consumables, Market Development

Division. Mr Ong holds a Bachelor of

Science in Business Administration from

TUE, Philippines with extensive regional

sales and marketing exposure over the

past 25 years. He is responsible for

developing the Asia market for welding

consumables.

Mr Tan Kean Hooi has been the

General Manager of NIG Gases Sdn

Bhd since 1993 and is responsible

for the Gas Business in the central

region of Malaysia. He holds a Bachelor

Degree in Architecture from University

of Strathclyde, and a Housing, Building

Planning Degree from University Science

Malaysia (USM).

Mr Cheang Fook Sam is the

General Manager of Hercules Machinery

Gases Sdn Bhd and NIG Utara Sdn Bhd.

With more than 30 years of industrial

sales experience, he is responsible for

the gas and equipment sales activities in

the northern region of Malaysia.

Mr Tan Lian Khar is the Managing

Director and one of the co-founders

of Eversafe Extinguisher Sdn Bhd

(“Eversafe”). He is responsible for the

overall growth and profitability of

Eversafe.

Mr Dennis Teo is the Operations

Director of Power Weld Sdn Bhd and

has more than 20 years of experience

in the manufacturing and marketing of

welding electrodes and consumables in

Malaysia.

Ms Fang Lee Wei is the Group

Financial Controller. She joined the

Group in 2006 and has more than

10 years of experience in financial

management and accounting. Ms

Fang holds a Master of Commerce in

International Business Degree from the

University of New South Wales and is a

member of the Institute of Certified Public

Accountants of Singapore (ICPAS).

She is responsible for all aspects of

financial and accounting management

of the Group, including treasury, internal

control and tax matters.

Ms Iris Yap is the Senior Manager

of Corporate Services and the Group’s

Company Secretary. She has been

with the Group for over 20 years and

oversees the corporate secretarial,

legal and general administration of

the Group. Ms Yap holds a Bachelor in

Business Administration Degree from La

Trobe University, Australia. She is Fellow

(FCIS) of the Institute of Chartered

Secretaries and Administrators (ICSA)

and the Singapore Associations of the

Institute of Chartered Secretaries and

Administrators (SAICSA).



Leeden Limited (the “Company” or “Leeden” or “Group”) continues to be committed to observing high standards

of corporate governance by complying with the Singapore Code of Corporate Governance (the “Code”).

For effective corporate governance, the Company has put in place various self-regulatory and monitoring

mechanisms. This Report outlines the Company’s corporate governance practices and structures that were in

place for the fi nancial year 2008.

BOARD OF DIRECTORS

Principle 1 : Board’s Conduct of its Affairs

The Board of Directors (the “Board”) holds at least two scheduled meetings a year with ad-hoc meetings being

convened as and when necessary. During the year, the Board met four times.

The principal roles of our Board are as follows:-

Formulating and approving the Group’s policies, strategies and fi nancial objectives;

Approving annual budgets, major funding proposals, investment and divestment proposals;

Overseeing the processes for evaluating the adequacy of risk management, internal controls, fi nancial

reporting and compliance;

Reviewing and approving any interested person transactions;

Approving the nomination of board members and the appointment of key executives;

Reviewing and endorsing the recommended framework of remuneration for the Board and key executives;

Setting values and standards of the Company and ensuring that obligations to shareholders are understood;

and

Assuming responsibilities for compliance with Corporate Governance.

The Board of Directors is obliged to act in good faith and will consider at all times, the interest of the Company.

The Company has adopted a set of Approving Authority & Limit, setting out the level of authorization required for

specifi ed transactions, including those that require Board approval.

To assist the Board in executing its responsibilities, the Board is supported by the Audit Committee, Nominating

Committee and Remuneration Committee. These Committees function within clear defi ned terms of reference,

which are reviewed on a regular basis, to ensure effectiveness of each Committee.

Upon appointment of a director, orientation program is organized for the newly appointed director to ensure that

incoming director is familiar with the Company’s business activities and directions of the Group. The Company will

consider relevant training for the directors, from time to time. Relevant courses include seminars conducted by the

Singapore Institute of Director or other training institute. During the year under review, the Directors visited one of

the overseas plants to understand the operations and provide strategic guidance.

A formal letter is provided to each newly-appointed Director, explaining their statutory and other duties and

responsibilities as a director.


14

The attendances of the Directors at the meetings of the Board and the Board Committees, as well as the

frequency of such meetings for FY2008 are as follows:

Name of Directors BoardAudit

CommitteeNominating Committee

Remuneration Committee

Number of Meetings held 4 2 1 4

Number of Meetings attended

Steven Tham 4 – 1 –

Kelvin Lee 4 – – –

Lim How Boon 4 – – –

Tony Chan 4 2 1 4

Leslie Struys 3 1 1 4

Loh Weng Whye 4 2 – 3

Hendra Harjadi 4 – – –

Principle 2 : Board Composition and Balance

Presently, the Board comprises seven directors, three of whom are independent directors. The Board is of the

view that the current board size is appropriate, taking into account the nature and scope of the Company’s

operations. The Board is able to exercise objective judgment on corporate affairs independently, in particular, from

the Management of the Company.

The Board members as at the date of this Report are:

Steven Tham Weng Cheong (Chairman & CEO)

Kelvin Lee Chee Fatt (Managing Director & COO)

Lim How Boon (Executive Director)

Leslie Struys (Lead Independent Non-Executive Director)

Tony Chan Wing Khei (Independent Non-Executive Director)

Loh Weng Whye (Independent Non-Executive Director)

Hendra Harjadi (Non-Independent Non-Executive Director)

Non-Executive Directors (“NED”) constructively challenge and develop proposals on strategy. The NED also reviews

performance of the Management in ensuring that set goals and objectives are met.

The Nominating Committee has reviewed the independence of the Directors for the fi nancial year ended

31 December 2008 in accordance with the Code’s defi nition of independence and is of the view that three of the

Directors are independent directors within the meaning of the Code.

The Nominating Committee is also of the view that the current Board comprises of directors with a wide range

of skills, experience and expertise in operational, management, fi nancial, banking, engineering, economics and

real estate, whose collective and vast experience ensure that the Board is equipped to deal with a wide range of

issues to meet the Company’s objectives. Also no individual or a group of individuals dominate the Board.



Principle 3 : Role of Chairman and Chief Executive Offi cer (“CEO”)

The Board is of the view that it is in the best interest of the Group to adopt a single leadership structure,

whereby the CEO and Chairman of the Board is the same person, so as to ensure that the decision-making

process of the Group would be unnecessarily hindered. Mr Steven Tham continues to be the Chairman and CEO

of the Group. The Board is of the opinion that suffi cient checks and safeguards are in place to ensure that the

process of decision making is independent and based on collective decisions without any individual exercising

any considerable power or infl uence. As the Chairman, Mr Tham is responsible for the workings of the Board

and ensuring compliance with the Group’s guidelines on corporate governance. He exercises control over the

accuracy and timeliness of the information that the Directors receive. He facilitates effective contributions of the

NEDs in particular and encourages constructive relationships between Executive Directors and NEDs. As the CEO,

Mr Tham plays a pivotal role in the development and execution of policies and strategies and the day-to-day

management of the Group.

With the appointment of Mr Leslie Struys as the Company’s lead independent director, shareholders will have an

alternative avenue to raise their concerns, especially when contacts through the normal channels of the Chairman/

CEO have failed or when such contact is inappropriate.

BOARD COMMITTEES

Principle 4 : Board Membership

Nominating Committee (NC)

The NC comprises of three Directors, majority of whom are independent and non-executive. In addition, the

Chairman of the NC is not, and not directly associated with, a substantial shareholder.

The members of the NC as at the date of this report are:-

Mr Leslie Struys Chairman (Independent Non-Executive)

Mr Tony Chan (Independent Non-Executive)

Mr Steven Tham

The NC met once during the fi nancial year to evaluate Board’s performance as guided by the Terms of Reference

adopted by the NC on 11 August 2006.

The principal duties and responsibilities include:

Making recommendations to the Board on the appointment of new executive and non-executive Directors;

Determining annually whether or not a Director is independent as well as put in place plans for succession,

in particular for the Chairman and Chief Executive Offi cer;

Recommending Directors who are retiring by rotation to be put forward for re-election;

Deciding whether or not a Director is able to and has been adequately carrying out his duties as a Director

of the Company; and

Evaluating the performance and effectiveness of the Board as a whole.


16

In accordance with the Company’s Articles of Association, one-third of the Board is subject to re-election annually.

For this forthcoming Annual General Meeting, Mr Steven Tham Weng Cheong and Mr Hendra Harjadi will retire by

rotation. Mr Leslie Struys and Mr Tony Chan Wing Khei will retire pursuant to S153(6) of the Companies Act, Cap.

50. The NC had recommended Mr Steven Tham Weng Cheong, Mr Hendra Harjadi, Mr Leslie Struys and Mr Tony

Chan Wing Khei for re-election at the forthcoming Annual General Meeting.

Having considered their performance and contributions, the Board accepted the NC’s recommendation and

accordingly, Mr Steven Tham Weng Cheong, Mr Hendra Harjadi, Mr Leslie Struys and Mr Tony Chan Wing Khei

will be offering themselves for re-election at the forthcoming Annual General Meeting.

When the need for a new director arises, Nominating Committee will review the expertise, skills and attributes on

the Board, identify its needs and shortlist candidates with appropriate profi le for nomination and re-nomination.

The search will be through search companies, contacts and recommendation.

Principle 5 : Board Performance

The NC, in considering the re-appointment of any Director, evaluates the performance of the Director. Subsequent

to fi nancial year-end, the Board initiated an evaluation to assess the effectiveness of the Board as a whole in

FY2008 which requires the completion of a questionnaire. The assessment parameters include attendance record

at meetings of the Board and Board Committees, participation at meetings and contributions. Board performance

criteria will not change from year to year unless circumstances deem it necessary. The Board would continue the

evaluation into this fi nancial year and address the fi ndings accordingly. While the NC has continued monitoring the

contribution of individual Directors (such as meeting attendance, performance during meetings and how much

effort and time devoted etc), a more formal and appropriate/acceptable process of doing so would take some time

to evolve.

Principle 6 : Access to Information

Board members are provided with quarterly fi nancial reports and are furnished with relevant information from

time to time on material transactions to enable them to make informed decision. Board papers are circulated for

meetings of the Board and Committees in advance, to enable the Directors to review the information and obtain

further explanations, where necessary.

Directors have the discretion, whether as a group or individually, to obtain independent professional advice on any

matter in the furtherance of their duties as directors, at the Company’s expenses.

The Directors have separate and independent access to the Company Secretary and senior management of the

Company at all times. The Company Secretary attends the board meetings and assists the Board in ensuring

that established Board procedures are followed and all relevant statutes and regulations that are applicable to the

Company are complied with.

The Board is accountable to the shareholders and oversees the management of the business and affairs of the

Group.



Principle 7 : Procedures for Developing Remuneration PoliciesPrinciple 8 : Level of Mix of RemunerationPrinciple 9 : Disclosure on Remuneration


The Remuneration Committee (RC) comprises of three independent non-executive members. Mr Leslie Struys is

the Chairman for the RC. The members of the RC as at the date of this Report are as follows:

Mr Leslie Struys Chairman (Independent Non-Executive)

Mr Tony Chan (Independent Non-Executive)

Mr Loh Weng Whye (Independent Non-Executive)

The primary role of RC, guided by the Terms of Reference adopted on 11 August 2006, is to review and approve

recommendations on remuneration including but not limited to directors’ fees, salaries, allowances, bonuses, share

options and benefi ts-in-kind. The RC met 4 times last year. The RC has access to professional advice both from

the internal human resource personnel and external remuneration professionals. The RC does not participate in

any decisions concerning their own remuneration package.

RC has adopted a framework for reviewing the remuneration of non-executive directors. It consists of a base fee,

membership fee for Board Committee as well as fees for being the Chairman of Board Committee. Amount of

time and level of responsibilities are taken into account when reviewing the remuneration. Fees for non-executive

Directors are subject to shareholders’ approval at the Company’s Annual General Meeting. Executive Directors are

not entitled to base fees or fees for membership of Board Committee. The remuneration packages for Executive

Chairman and Executive Directors consist of a performance bonus based on the Group’s profi tability. The RC

also ensures that the remuneration of the Executive Chairman and Executive Directors is on par with the industrial

standards and comparable companies.

The RC’s principle functions are to:

1. Review and recommend to the Board in consultation with the Chairman and CEO a remuneration framework

so as to determine a specifi c remuneration package and employment terms for each of the executive

directors and key management executives of the Group;

2. Recommend to the Board in consultation with the Chairman and CEO a share option scheme or long term

incentive schemes from time to time;

3. Ensure that all aspects of remunerations are covered which include directors’ fee, salaries, allowances,

bonuses, share options and benefi ts-in-kind; and

4. Compare the remuneration packages of directors within the industry and comparable companies so as

to fi nd a meaningful way of assessing the performance of individual executive directors. The remuneration

packages shall include a performance-related element.

The RC administers the Ace Dynamics Share Option Scheme and Leeden Share Option Scheme 2007, which

were approved by shareholders on 19 February 2000 and 8 August 2007, respectively.


18

Level and Mix of Remuneration of Directors for the year ended 31 December 2008

Name of Directors Salary Bonus Benefi ts Fees Total

% % % % %

$750,001 to $1,000,000

Steven Tham 35 64 1 – 100

$500,001 to $750,000

Kelvin Lee 27 73 – – 100

Below $250,0000

Lim How Boon 71 25 4 – 100

Leslie Struys – – – 100 100

Tony Chan – – – 100 100

Loh Weng Whye – – – 100 100

Hendra Harjadi – – – 100 100

The range of gross remuneration received by the top fi ve executives of the Company for the year ended 31

December 2008 is as follows:

Remuneration Bands No. Of Executives

More than $250,000 Nil

Less than $250,000 5

For the fi nancial year ended 31 December 2008, there were no employees in the Group who are immediate family

members of a Director whose remuneration exceeds S$150,000.

Principal 10 : Accountability and AuditPrinciple 11 : Audit CommitteePrinciple 12 : Internal Controls

Audit Committee (AC)

The Audit Committee (AC) comprises three board members:

Mr Tony Chan Chairman (Independent Non-Executive)

Mr Leslie Struys (Independent Non-Executive)

Mr Loh Weng Whye (Independent Non-Executive)

The AC members have had many years of experience in senior management positions in both the fi nancial

and industrial sectors. All members are fi nancially literate and have accounting or related fi nancial management

expertise or experience. The AC members are all Non-Executive and Independent Directors.

The role of the AC is regulated in its Terms of Reference which has been approved by the Board. The Terms of

Reference defi nes the purpose, authority and responsibilities of the AC. The AC is authorized to investigate any

matters specifi ed in the Terms of Reference.



During the fi nancial year, the AC met twice and performed the following key functions:

Reviews with the internal auditors, the scope and the results of internal audit procedures and their evaluation

of the overall internal control systems and any signifi cant fi ndings;

Reviews with the external auditors, their audit plan, risk assessment, fi ndings for the external audit process

and any other relevant matters;

Reviews signifi cant fi nancial reporting issues and judgments to ensure the integrity of the fi nancial

statements and any formal announcements in relation to fi nancial performance;

Reviews the interim and annual fi nancial statements before submission to the Board for release to SGX-ST;

Reviews and makes recommendations to the Board on the appointment of external auditors;

Reviews interested person transactions, if any, as set out in the Listing Rules of SGX-ST; and

Reviews all non-audit services provided by the fi rm of external auditors, if any, to determine if the provision

of such services would affect the independence of the external auditors.

The AC has the express power to conduct or authorize investigations into any matters within its terms of reference,

has full access to and co-operation by the Management and full discretion to invite any Director or executive

offi cer to attend its meetings. All major fi ndings and recommendations are brought to the attention of the Board of

Directors.

In performing its functions, the AC also meets with external auditors without the presence of the Company’s

management at least once annually. Such meetings allow for a more open discussion on any issues of concerns.

During the year, AC has reviewed the effectiveness of the Group’s material internal controls, including fi nancial and

operational compliance controls, and risk management. The processes used by the AC to review the effectiveness

of the system of internal control and risk management include discussions with management and auditors on the

risks identifi ed and the review of signifi cant issues arising there from.

The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfi ed that the

nature and extent of such services would not affect the independence of the external auditors.

The Directors are of the opinion that, in the absence of any evidence to the contrary, the system of internal controls

provides reasonable, but not absolute, assurance that the Group will not be adversely affected by any event that

could reasonably be foreseen as it strives to achieve its business objectives.

Whistle Blowing Policy

The Company has adopted a Policy and Procedure on Whistle Blowing. The Company has provided employees

with well-defi ned and accessible channels within the Group to raise concerns about possible improprieties in

matters of fi nancial reporting such as fraud, corruption or other matters. Upon receipt of such complaint, the AC

would exercise discretion on how to proceed with the investigation, thereafter recommend necessary actions to be

taken.

The AC has received no complaints as at the date of this report.


20

Principle 13 : Internal Audit

The Company has outsourced its internal audit function to a certifi ed public accounting fi rm. The internal auditors

plan its internal audit schedules in consultation with, but independent of the Management. The audit plan is

submitted to the AC for approval prior to the commencement of the internal audit. With the assistance of the

AC, the Board reviews the effectiveness of the Company’s internal control on an on-going basis, provides its

perspective on management control and ensures appropriate actions when required.

The internal auditors comply with the Standards for the Professional Practice of Internal Auditing developed by the

Institute of Internal Auditors.

COMMUNICATION WITH SHAREHOLDERS

Principle 14 : Communication with ShareholdersPrinciple 15 : Promoting Greater Participation by Shareholders

In complying with the Code:-

All information as required under the Singapore Exchange’s disclosure policy is disseminated to shareholders

through the SGXNET on a timely basis and the Company does not practice selective disclosure;

Price sensitive announcement including interim and full-year results are released through SGXNET within the

mandatory period;

The Annual Report is sent to all shareholders of the Company at least 14 days before the meeting and the

Notice of Annual General Meeting (“AGM”) is made available on SGX-ST’s website;

Members of the Board and various Board committees together with the External Auditor are present and

available to address questions at the AGM;.

Members of the Company are encouraged to attend the AGM and in the event that the member cannot

attend the AGM, the Articles of Association of the Company allow a member to appoint one or two proxies

to attend and vote on behalf of the member. At the AGM, shareholders are given the opportunity to voice

their constructive views and direct questions regarding the Group to the Management or the Directors,

including the Chairmen of the Audit Committee, Remuneration Committee and Nominating Committee; and

All the resolutions at the AGM are single item resolutions.

DEALINGS WITH SECURITIES[SGX-ST Listing Rule 1207 (18)]

The Company has adopted an internal code to provide guidance with regards to dealings in the Company’s

securities by Directors and senior offi cers of the Group.

The guideline sets out window periods where trading in the Company’s securities are not allowed. Directors and

senior offi cers are also expected to observe insiders trading laws at all times even when dealing in securities

outside the window periods. They are also discouraged from dealing in the Company’s share on short-term

considerations. Directors and senior offi cers are required to report to the Company Secretary whenever they deal

in the Company’s shares.



RISK MANAGEMENT

Although the Board does not have a risk management committee, the management reviews the Company’s

business and operational activities on a regular basis to identify areas of business risks as well as appropriate

control measures to mitigate these risks. Any signifi cant matters detected by the management are reported to the

Directors. The Group continues to review on an on-going basis, succession plans and other employees-related

issues in an effort to recruit and retain skilled and experienced workforce necessary for its operation The Group’s

fi nancial risk management is discussed under Note 39 to the Notes to the Financial Statements on pages 92 to

97.

MATERIAL CONTRACTS[SGX-ST Listing Rule 1207 (8)]

No material contracts were entered into between the Company or any of its subsidiaries involving the interest of

the CEO or any director or controlling shareholder of the Company or their associates, either still subsisting by end

of the fi nancial year or if not then subsisting, entered into since the end of the previous fi nancial year.

INTERESTED PERSON TRANSACTIONS

The Company has adopted an internal policy governing procedures for the identifi cation, approval and monitoring

of transactions with interested persons. All interested person transaction is subject to review by the AC.

During the fi nancial year, there was no interested person transactions entered into by the Group.

Directors’ Report

22

The Directors are pleased to present their report to the members together with the audited consolidated fi nancial

statements of Leeden Limited (the “Company”) and its subsidiary companies (collectively, the “Group”) and the

balance sheet and statement of changes in equity of the Company for the fi nancial year ended 31 December

2008.

Directors

The Directors of the Company in offi ce at the date of this report are :

Steven Tham Weng Cheong

Kelvin Lee Chee Fatt

Lim How Boon

Leslie Struys

Tony Chan Wing Khei

Loh Weng Whye

Hendra Harjadi

Arrangements to enable Directors to acquire shares and debentures

Other than Leeden Share Option Scheme 2007 and Ace Dynamics Share Option Scheme, neither at the end of

nor at any time during the fi nancial year, was the Company a party to any arrangement whose objects are, or one

of whose object is, to enable the Directors of the Company to acquire benefi ts by means of the acquisition of

shares or debentures of the Company or any other body corporate.

Directors’ interests in shares and debentures

The following Directors, who held offi ce at the end of the fi nancial year, had, according to the register of directors’

shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in

shares, share options and bonus warrants of the Company and related corporations (other than wholly-owned

subsidiary companies) as stated below :

Direct interest Deemed interest

Name of DirectorAt

1.1.2008At

31.12.2008At

21.1.2009At

1.1.2008At

31.12.2008At

21.1.2009

The CompanyNumber of ordinary shares

Steven Tham Weng Cheong 1,000,000 9,053,000 9,053,000 26,050,000 28,000,000 28,000,000

Kelvin Lee Chee Fatt 560,000 – – 14,885,000 20,847,000 20,847,000

Lim How Boon 400,000 489,000 489,000 16,669,000 20,163,000 20,163,000

Leslie Struys – – – 2,000,000 2,842,000 2,842,000

Tony Chan Wing Khei 420,000 420,000 420,000 – – –

Loh Weng Whye 337,000 470,400 470,400 – – –

Hendra Harjadi – – – 8,862,000 10,598,000 10,598,000


Directors’ Report

Direct interest Deemed interest

Name of DirectorAt

1.1.2008At

31.12.2008At

21.1.2009At

1.1.2008At

31.12.2008At

21.1.2009

Option to subscribe for ordinary shares

Steven Tham Weng Cheong 3,390,000 3,390,000 3,390,000 – – –

Kelvin Lee Chee Fatt 2,500,000 2,500,000 2,500,000 – – –

Lim How Boon 920,000 920,000 920,000 – – –

Leslie Struys 220,000 220,000 220,000 – – –

Tony Chan Wing Khei 200,000 200,000 200,000 – – –

Loh Weng Whye 200,000 200,000 200,000 – – –

Hendra Harjadi 200,000 200,000 200,000 – – –

Bonus Warrants

Steven Tham Weng Cheong 5,241,000 – – – – –

Kelvin Lee Chee Fatt 112,000 – – 2,897,000 – –

Lim How Boon 89,000 – – 3,201,000 – –

Leslie Struys – – – 642,000 – –

Loh Weng Whye 57,400 – – – – –

Hendra Harjadi – – – 1,736,000 – –

Except for the changes set out above, there was no other change in any of the above-mentioned interests

between the end of the fi nancial year and 21 January 2009.

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in

shares, share options, warrants or debentures of the Company, or of related corporations, either at the beginning

of the fi nancial year, or date of appointment if later, or at the end of the fi nancial year.

Share options

(a) At the Extraordinary General Meeting held on 19 February 2000 and 8 August 2007, shareholders approved

the adoption of the Ace Dynamics Share Option Scheme (“Scheme I”) and Leeden Share Option Scheme

2007 (“Scheme II”) respectively.

Scheme I

Options may be granted to selected employees of the Group including employees of its associated

companies, executive and non-executive directors. Controlling shareholders and their associates are not

eligible to participate in the scheme. Further details are set out in the circular to shareholders dated 28

January 2000 (“Circular I”).

Under the rules of the scheme as set out in Circular I, the duration of the scheme is subject to a maximum

of 5 fi nancial years commencing with the fi nancial year in which the fi rst option was granted under the

scheme. As the fi rst option was granted during the fi nancial year 2000, the scheme has ceased operation

in the fi nancial year ended 31 December 2004 (the “Period of the Scheme”). However, all outstanding

options under the scheme shall continue to be valid subject to the rules of the scheme. The share options

granted in 2000 in connection with the scheme were issued at a discount of $0.05 per share.

Directors’ Report

24

Scheme II

At an Extraordinary General Meeting held on 8 August 2007, shareholders approved the Leeden Share

Option Scheme 2007 for the granting of options to eligible confi rmed Group employees, including

employees of associated companies, executive and non-executive directors and controlling shareholder.

Further details are set out in the circular to shareholders dated 17 July 2007.

Three tranches of options were granted pursuant to the scheme. Tranch 1 and 3 have vesting period of

2 years while Tranch 2 has vesting periods between 2 to 4 years. Details of the options granted are as

follows :

TranchDate ofgrant

Duration(years)

Expirydate

Discount per share

($)

Exerciseprice

($)Number of

options

1 28 September 2007 10 27 September 2017 0.09 0.40 2,000,000

2 28 September 2007 10 27 September 2017 0.07 0.42 2,190,000

3A 23 October 2007 10 22 October 2017 0.11 0.48 4,360,000

3B 23 October 2007 5 22 October 2012 0.11 0.48 820,000

The Committee administering the schemes comprises of three directors: Leslie Struys, Tony Chan Wing

Khei and Loh Weng Whye.

(b) Details of share options to Directors to subscribe for ordinary shares under the schemes are as follows :

Scheme I

Name of Director

Optionsgranted

during the fi nancial year

Aggregateoptions

granted since commencement of the Scheme to the end of fi nancial year

Aggregate options lapsed/ exercised since commencement of the Scheme to the end of fi nancial year

Aggregateoptions

outstandingas at end of

fi nancial year

Steven Tham Weng Cheong – 4,326,000 3,126,000 1,200,000

Kelvin Lee Chee Fatt – 1,589,000 1,089,000 500,000

Lim How Boon – 2,377,000 1,777,000 600,000

Leslie Struys – 920,000 920,000 –

Tony Chan Wing Khei – 950,000 950,000 –

Hendra Harjadi – 250,000 250,000 –


Directors’ Report

Scheme II

Name of Director

Optionsgranted


Aggregateoptions



Aggregateoptions


fi nancial year

Steven Tham Weng Cheong – 2,190,000 – 2,190,000

Kelvin Lee Chee Fatt – 2,000,000 – 2,000,000

Lim How Boon – 320,000 – 320,000

Leslie Struys – 220,000 – 220,000

Tony Chan Wing Khei – 200,000 – 200,000

Loh Weng Whye – 200,000 – 200,000

Hendra Harjadi – 200,000 – 200,000

(c) Details of share options to employees to subscribe for ordinary shares under the schemes are as follows :

Scheme I

Name of Participant

Optionsgranted


Aggregateoptions



Aggregateoptions


fi nancial year

Granted 5% or more of the total options under the plan

John Lee Sok Khian – 1,708,000 1,708,000 –

Others below 5% individually – 11,512,000 10,707,000 805,000

Scheme II

Name of Participant

Optionsgranted


Aggregateoptions



Aggregateoptions


fi nancial year

Granted 5% or more of the total options under the plan

Steven Tham Weng Cheong – 2,190,000 – 2,190,000

Kelvin Lee Chee Fatt – 2,000,000 – 2,000,000

Others below 5% individually – 5,180,000 1,325,000 3,855,000

Steven Tham Weng Cheong is a controlling shareholder of the Company.

Directors’ Report

26

(d) During the fi nancial year, options that lapsed are as follows :

Options granted in

Scheme I Number of options lapsed

2001 5,000

2004 30,000

Scheme II

2007 1,325,000

(e) At the end of the fi nancial year, unissued shares under option comprise the following :

Scheme I

Options granted in Price per share payablein full upon application Exercise period

Number ofordinary shares

2004 $0.20 24.08.2005 to 23.08.2011 3,105,000

Scheme II

Options granted in Price per share payablein full upon application Exercise period

Number ofordinary shares

2007 $0.42 28.09.2009 to 27.09.2017 730,000

2007 $0.42 28.09.2010 to 27.09.2017 730,000

2007 $0.42 28.09.2011 to 27.09.2017 730,000

2007 $0.40 28.09.2009 to 27.09.2017 2,000,000

2007 $0.48 23.10.2009 to 22.10.2017 3,035,000

2007 $0.48 23.10.2009 to 22.10.2012 820,000

No other options were granted during the fi nancial year.

Bonus Warrants

On 16 February 2007 and 6 March 2007, the Company announced a bonus issue of warrants (the “Bonus

Warrants”) to its shareholders on the basis of one Bonus Warrant for every fi ve existing ordinary shares in the

capital of the Company held by the entitled shareholders as at the books closure date. Each Bonus Warrant shall

confer on the holder the right to subscribe, in cash, for one new ordinary share (the “New Share”) at an exercise

price of $0.25 for each New Share and expiring on the date falling twenty-four months after the date of listing of

the Bonus Warrants.

The date of listing of the Bonus Warrants is 17 April 2007. During the year, 22,552,705 (2007 : 25,600) Bonus

Warrants were exercised and a total of 6,571,850 (2007 : 29,124,555) Bonus Warrants were outstanding as at 31

December 2008.


Directors’ Report

Directors’ contractual benefi ts

Except as disclosed in the fi nancial statements, since the end of the previous fi nancial year, no Director of the

Company has received or become entitled to receive a benefi t by reason of a contract made by the Company or a

related corporation with the Director, or with a fi rm of which the Director is a member, or with a company in which

the Director has a substantial fi nancial interest.

Audit Committee

The Audit Committee at the date of this report comprises of the following three members who, are independent

Directors :

Tony Chan Wing Khei (Chairman)

Leslie Struys

Loh Weng Whye

The Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Singapore

Companies Act, Cap. 50, including the following:

Reviews the audit plans of the internal and external auditors of the Company and reviews the internal

auditors’ evaluation of the adequacy of the Company’s system of internal accounting controls and the

assistance given by the Company’s management to the external and internal auditors;

Reviews the interim and annual fi nancial statements and the auditors’ report on the annual fi nancial

statements of the Company before their submission to the Board of Directors;

Reviews effectiveness of the Company’s material internal controls, including fi nancial, operational and

compliance controls and risk management via reviews carried out by the internal auditors;

Meets with the external auditors, other committees, and management in separate executive sessions to

discuss any matters that these groups believe should be discussed privately with the AC;

Reviews legal and regulatory matters that may have a material impact on the fi nancial statements, related

compliance policies and programmes and any reports received from regulators;

Reviews the cost effectiveness and the independence and objectivity of the external auditors;

Reviews the nature and extent of non-audit services provided by the external auditors;

Recommends to the board of directors the external auditors to be nominated, approves the compensation

of the external auditors, and reviews the scope and results of the audit;

Reports actions and minutes of the AC to the board of directors with such recommendations as the AC

considers appropriate; and

Reviews interested person transactions in accordance with the requirements of the Singapore Exchange

Securities Trading Limited (“SGX-ST”)’s Listing Manual.

Directors’ Report

28

The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfi ed that the

nature and extent of such services would not affect the independence of the external auditors. The AC has also

conducted a review of interested person transactions.

The AC convened two meetings during the year. The AC has also met with internal and external auditors, without

the presence of the Company’s management, at least once a year.

Further details regarding the AC are disclosed in the Report on Corporate Governance.

Auditors

Ernst & Young LLP have expressed their willingness to accept reappointment as auditors.

On behalf of the Board of Directors,

Steven Tham Weng CheongDirector

Kelvin Lee Chee FattDirector

Singapore

30 March 2009


Statement by Directors

We, Steven Tham Weng Cheong and Kelvin Lee Chee Fatt, being two of the Directors of Leeden Limited, do

hereby state that, in the opinion of the Directors :

(i) the accompanying balance sheets, consolidated income statement, statements of changes in equity, and

consolidated cash fl ow statement together with notes thereto are drawn up so as to give a true and fair

view of the state of affairs of the Group and of the Company as at 31 December 2008 and the results of the

business, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the

year ended on that date, and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay

its debts as and when they fall due.

On behalf of the Board of Directors,

Steven Tham Weng CheongDirector

Kelvin Lee Chee FattDirector

Singapore

30 March 2009

Independent Auditors’ ReportTo the Members of Leeden Limited

30

We have audited the accompanying fi nancial statements of Leeden Limited (the “Company”) and its subsidiary

companies (collectively, the “Group”) set out on pages 31 to 100, which comprise the balance sheets of the Group

and the Company as at 31 December 2008, the statements of changes in equity of the Group and the Company,

and the income statement and cash fl ow statement of the Group for the year then ended, and a summary of

signifi cant accounting policies and other explanatory notes.

Management’s responsibility for the fi nancial statements

Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance

with the provisions of the Singapore Companies Act, Cap. 50 (the Act) and Singapore Financial Reporting

Standards. This responsibility includes devising and maintaining a system of internal accounting controls suffi cient

to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition;

and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true

and fair profi t and loss account and balance sheet and to maintain accountability of assets; selecting and applying

appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our

audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are

free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of

the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the

fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for

the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made

by management, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit

opinion.

Opinion

In our opinion,

(i) the consolidated fi nancial 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 Act and Singapore

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

the Company as at 31 December 2008 and the results, changes in equity and cash fl ows of the Group and

the changes in equity of the Company for the year ended on that date; and

(ii) 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.

Ernst & Young LLP

Public Accountants and Certifi ed Public Accountants

Singapore

30 March 2009


Consolidated Income Statementfor the fi nancial year ended 31 December 2008

GroupNote 2008 2007

$’000 $’000

Turnover 4 157,239 102,892

Cost of sales (113,095) (73,203)

Gross profi t 44,144 29,689

Other income 5 2,378 1,318

Distribution costs (17,233) (12,487)

Administrative costs (8,961) (5,796)

Other costs 5 (4,548) (3,532)

Negative goodwill arising from consolidation 11 810 –

Profi t from operating activities 6 16,590 9,192

Finance costs 7 (1,138) (937)

Share of profi t in associated companies 1,349 415

Share of (loss)/profi t in joint venture companies (1) 66

Profi t before taxation 16,800 8,736

Taxation 8 (3,218) (2,133)

Profi t after taxation 13,582 6,603

Attributable to :

Equity holders of the Company 10,385 6,549

Minority interest 3,197 54

13,582 6,603

Basic earnings per share (in cents) 9 6.05 4.51

Diluted earnings per share (in cents) 9 5.89 4.01

The accompanying accounting policies and explanatory notes form an integral part of the fi nancial statements.

Balance Sheetsas at 31 December 2008

32

Group Company

Note2008$’000

2007$’000

2008$’000

2007$’000

Non-current assets

Property, plant and equipment 10 48,010 9,492 441 16

Subsidiary companies 11 – – 53,994 39,408

Associated companies 12 4,811 9,233 – –

Joint venture companies 13 – 97 – –

Other investments 14 338 150 – –

Intangible assets 15 5,355 90 – –

Goodwill 16 1,487 – – –

Investment property 17 – – – –

60,001 19,062 54,435 39,424

Current assets

Assets held for sale 18 – 960 – –

Development property 19 4,628 – – –

Amount due from subsidiary companies 20 – – 3,371 –

Amount due from related parties 21 901 – 141 –

Stocks 22 46,216 17,688 4,202 208

Trade debtors 23 48,479 28,807 3,463 267

Other debtors and prepayments 24 3,999 869 301 153

Derivatives 25 4 – – –

Fixed deposits 26 1,669 7,176 – –

Cash and bank balances 26 14,893 8,034 3,681 452

120,789 63,534 15,159 1,080

Current liabilities

Amounts due to bankers 27 44,426 9,206 9,678 348

Gross amount due to customers for

contract work in progress 19 – 1,241 – –

Trade creditors 20,223 14,785 2,953 321

Other creditors and accruals 28 9,351 5,290 2,311 307

Hire purchase creditors 29 811 86 57 –

Amount due to related parties 21 3,232 – – –

Provision for taxation 2,230 2,683 130 –

Derivatives 25 747 – – –

81,020 33,291 15,129 976

Net current assets 39,769 30,243 30 104


Balance Sheetsas at 31 December 2008

Group Company

Note2008$’000

2007$’000

2008$’000

2007$’000

Non-current liabilities

Long-term loans 31 7,503 1,957 2,930 121

Hire purchase creditors 29 2,395 199 185 –

Amounts due to a related party 30 887 908 – –

Deferred tax liabilities 32 5,731 404 5 –

(16,516) (3,468) (3,120) (121)

Net assets 83,254 45,837 51,345 39,407

Equity attributable to equity holders of the Company

Share capital 33 52,900 45,237 52,900 45,237

Treasury shares 33 (1,217) – (1,217) –

Asset revaluation reserve 34 2,070 2,070 – –

Capital reserve 34 763 689 170 96

Employee share option reserve 34 1,091 374 1,091 374

Accumulated profi t/(losses) 6,985 (1,653) (1,599) (6,300)

Foreign currency translation reserve 34 (1,561) (1,248) – –

61,031 45,469 51,345 39,407

Minority interests 22,223 368 – –

Total equity 83,254 45,837 51,345 39,407


Consolidated Statement of Changes in Equityfor the fi nancial year ended 31 December 2008

34

Att

ribut

able

to e

quity

hol

ders

of t

he C

ompa

ny

Shar

e ca

pita

l

Trea

sury

sh

ares

re

serv

e

Ass

et

reva

luat

ion

rese

rve

Cap

ital

rese

rve

Fore

ign

curr

ency

tr

ansl

atio

n re

serv

e

Empl

oyee

sh

are

optio

n re

serv

eA

ccum

ulat

ed

loss

esTo

tal

rese

rves

Min

ority

in

tere

sts

Tota

leq

uity

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

Gro

up

Bala

nce a

t 1 J

anuary

2007

43,8

01

–

2,0

70

614

(1,2

23)

274

(7,4

72)

(5,7

37)

298

38,3

62

Tra

nsla

tion a

dju

stm

ent

for

the y

ear

–

–

–

–

(2

5)

–

–

(2

5)

–

(2

5)

Tota

l lo

sses r

ecognis

ed

directly

in

eq

uity

–

–

–

–

(2

5)

–

–

(2

5)

–

(2

5)

Net

pro

fi t f

or

the y

ear

–

–

–

–

–

–

6,5

49

6,5

49

54

6,6

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Tota

l re

cognis

ed

gain

s a

nd

losses

fo

r th

e y

ear

–

–

–

–

(2

5)

–

6,5

49

6,5

24

54

6,5

78

Div

idend

s–

–

–

–

–

–

(7

30)

(730)

–

(7

30)

Exerc

ise o

f em

plo

yee s

hare

op

tions

1,4

31

–

–

–

–

(1

13

)–

(1

13)

–

1,3

18

Exp

iry

of

em

plo

yee s

hare

op

tions

–

–

–

1

–

(1

)–

–

–

–

Exerc

ise o

f b

onus w

arr

ants

5–

–

–

–

–

–

–

–

5

Exp

enses o

f share

-based

p

aym

ents

–

–

–

–

–

214

–

214

–

214

Purc

hase o

f tr

easury

share

s–

(87)

–

–

–

–

–

(8

7)

–

(8

7)

Dis

posal of

treasury

share

s–

87

–

74

–

–

–

161

–

161

Acq

uis

itio

n o

f a s

ub

sid

iary

–

–

–

–

–

–

–

–

16

16

Bala

nce a

t 31

Decem

ber

2007

45,2

37

–

2,0

70

689

(1,2

48)

374

(1,6

53)

232

368

45,8

37



Att

ribut

able

to e

quity

hol

ders

of t

he C

ompa

ny

Shar

e ca

pita

l

Trea

sury

sh

ares

re

serv

e

Ass

et

reva

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ion

rese

rve

Cap

ital

rese

rve

Fore

ign

curr

ency

tr

ansl

atio

n re

serv

e

Empl

oyee

sh

are

optio

n re

serv

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ccum

ulat

ed

profi

t/(lo

sses

)To

tal

rese

rves

Min

ority

in

tere

sts

Tota

leq

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$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0$’

000

Gro

up

Bala

nce a

t 1 J

anuary

2008

45,2

37

–

2,0

70

689

(1,2

48)

37

4(1

,653)

232

368

45,8

37

Tra

nsla

tion a

dju

stm

ent

for

the y

ear

–

–

–

–

(3

13)

–

–

(3

13)

–

(313)

Tota

l lo

sses r

ecognis

ed

directly

in

eq

uity

–

–

–

–

(3

13)

–

–

(3

13)

–

(313)

Net

pro

fi t f

or

the y

ear

––

––

––

10,3

85

10,3

85

3,1

97

13,5

82

Tota

l re

cognis

ed

gain

s a

nd

lo

sses f

or

the y

ear

–

–

–

–

(3

13)

–

10,3

85

10,0

72

3,1

97

13,2

69

Div

idend

s–

–

–

–

–

–

(1

,747)

(1,7

47)

–

(1,7

47)

Exerc

ise o

f em

plo

yee s

hare

op

tions

200

–

–

–

–

(3

2)

–

(3

2)

–

168

Exp

iry

of

em

plo

yee s

hare

op

tions

–

–

–

74

–

(7

4)

–

–

–

–

Exerc

ise o

f b

onus w

arr

ants

4,5

65

–

–

–

–

–

–

–

–

4,5

65

Exp

enses o

f share

-based

p

aym

ents

–

–

–

–

–

82

3–

823

–

823

Purc

hase o

f tr

easury

share

s–

(1,2

17)

–

–

–

–

–

(1

,217)

–

(1,2

17)

Acq

uis

itio

n o

f a s

ub

sid

iary

2,8

98

–

–

–

–

–

–

–

18,6

58

21,5

56

Bala

nce a

t 31

Decem

ber

2008

52,9

00

(1,2

17)

2,0

70

763

(1,5

61)

1,0

91

6,9

85

8,1

31

22,2

23

83,2

54


36

Att

rib

utab

le t

o e

qui

ty h

old

ers

of

the

Co

mp

any

Sha

re c

apita

lTr

easu

ry

shar

es

Cap

ital

rese

rve

Em

plo

yee

shar

e o

ptio

n re

serv

eA

ccum

ulat

ed

loss

esTo

tal

equi

ty$’

000

$’00

0$’

000

$’00

0$’

000

$’00

0

Co

mp

any

Bala

nce a

t 1 J

anuary

2007

43,8

01

–

2

1274

(9,6

84)

34,4

12

Net

pro

fi t f

or

the y

ear

–

–

–

–

4,1

14

4,1

14

Tota

l re

cognis

ed

gain

s f

or

the y

ear

–

–

–

–

4,1

14

4,1

14

Div

idend

s–

–

–

–

(7

30)

(730)

Exerc

ise o

f em

plo

yee s

hare

op

tions

1,4

31

–

–

(1

13)

–

1,3

18

Exp

iry

of

em

plo

yee s

hare

op

tions

–

–

1

(1)

–

–

Exerc

ise o

f b

onus w

arr

ants

5–

–

–

–

5

Exp

enses o

f share

-based

paym

ents

–

–

–

214

–

214

Purc

hase o

f tr

easury

share

s–

(8

7)

–

–

–

(8

7)

Dis

posal of

treasury

share

s–

87

74

–

–

161

Bala

nce a

t 31

Decem

ber

2007 a

nd

1 J

anuary

2008

45,2

37

–

96

374

(6,3

00)

39,4

07

Net

pro

fi t f

or

the y

ear

–

–

–

–

6,4

48

6,4

48

Tota

l re

cognis

ed

gain

s f

or

the y

ear

–

–

–

–

6,4

48

6,4

48

Div

idend

s–

–

–

–

(1

,747)

(1,7

47)

Exerc

ise o

f em

plo

yee s

hare

op

tions

200

–

–

(3

2)

–

168

Exp

iry

of

em

plo

yee s

hare

op

tions

–

–

7

4(7

4)

–

–

Exerc

ise o

f b

onus w

arr

ants

4,5

65

–

–

–

–

4,5

65

Exp

enses o

f share

-based

paym

ents

–

–

–

823

–

823

Purc

hase o

f tr

easury

share

s–

(1

,217)

–

–

–

(1

,217)

Acq

uis

itio

n o

f a s

ub

sid

iary

com

pany

2,8

98

–

–

–

–

2,8

98

Bala

nce a

t 31

Decem

ber

2008

52,9

00

(1,2

17)

17

01,0

91

(1,5

99)

51,3

45

The a

ccom

panyi

ng a

ccounting p

olic

ies a

nd

exp

lanato

ry n

ote

s f

orm

an inte

gra

l p

art

of

the fi n

ancia

l sta

tem

ents

.


Consolidated Cash Flow Statementfor the fi nancial year ended 31 December 2008

2008 2007$’000 $’000

Cash fl ow from operating activities :


Adjustments for :

Share of profi t in associated companies (1,349) (415)

Share of (loss)/profi t in joint venture companies 1 (66)

Depreciation of property, plant and equipment 2,849 1,491

Impairment of goodwill arising on consolidation – 5

Impairment loss in intangible assets – 13

Impairment loss in property, plant and equipment – 705

Impairment loss in investment in associated company – 418

Impairment loss in assets held for sale – 12

(Gain)/loss on disposal of property, plant and equipment (158) 147

Gain on disposal of assets held for sale (453) –

Write-off of property, plant and equipment 12 3

Gain on disposal of a subsidiary company (7) –

Interest income (340) (117)

Interest expense 1,138 937

Loss/(gain) on fair value changes of assets held at fair value through profi t and loss 83 (83)

Allowance for stocks obsolescence 512 253

Allowance for doubtful debts 2,906 1,951

Stocks written off 216 19

Bad debts written (back)/off (7) 163

Amortisation of intangible assets 102 –

Gain on disposal of other investment – (88)

Loss on disposal of intangible assets 4 22

Negative goodwill arising from consolidation (810) –

Expenses on share-based payment 823 214

Net fair value loss on derivatives – unrealised 743 –

Translation adjustments arising on consolidation (548) (25)

Operating profi t before working capital changes 22,517 14,295

Changes in working capital:

Decrease/(increase) in debtors 7,913 (5,056)

Decrease in development property completed for sale – 3,395

(Increase)/decrease in stocks (17,680) 864

(Decrease)/increase in creditors (5,145) 4,500

Increase in amounts due from associated companies, net (3,536) (2,472)

Increase in amount due to related parties, net 1,351 635

Cash generated from operations 5,420 16,161

Interest received 340 117

Interest paid (1,138) (937)

Income tax paid (3,805) (1,001)

Net cash provided by operating activities 817 14,340

Consolidated Cash Flow Statementfor the fi nancial year ended 31 December 2008

38

2008$’000

2007$’000

Cash fl ow from investing activities :

Proceeds from striking off joint ventures company 56 –

Progress billings received from development property 560 9,275

Purchase of property, plant and equipment (4,726) (404)

Proceeds from sale of property, plant and equipment and assets held for sale 2,139 963

Net cash outfl ow from acquisition of a subsidiary company (Note 11) (581) (29)

Net cash outfl ow from disposal of a subsidiary company (Note 11) (41) –

Proceeds from sale of other investments 4 142

Proceeds from sale of intangible assets – 30

Investment in associated companies – (46)

Increase in costs of development property (6,429) (5,019)

Dividend received from associated companies – 210

Dividend received from joint venture companies 40 –

Decrease in amount due to related parties (10,577) –

Fixed deposits held as collateral (832) (30)

Net cash (used in)/provided by investing activities (20,387) 5,092

Cash fl ow from fi nancing activities :

Proceeds from issuance of ordinary shares 4,733 1,323

Proceeds from loan and borrowing 54,850 37,599

Payments of loans and amounts due to bankers (excluding bank overdrafts) (36,427) (45,226)

Purchase of treasury shares (1,217) (87)

Sale of treasury shares – 161

Dividends paid (1,747) (730)

Decrease in hire purchase creditors (227) (370)

Net cash provided by/(used in) fi nancing activities 19,965 (7,330)

Net increase in cash and cash equivalents 395 12,102

Cash and cash equivalents at beginning of year 15,180 3,078

Cash and cash equivalents at end of year (Note 26) 15,575 15,180



Notes to the Financial Statements31 December 2008

1. Corporate information

Leeden Limited (the “Company”) is a limited liability company, which is domiciled and incorporated in the

Republic of Singapore and is listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). The

registered offi ce and principal place of business of the Company is located at 1 Shipyard Road, Singapore

628128.

The principal activities of the Company are those of an investment holding company, the provision of

management and administrative services to the Group and distribution of safety products.

The subsidiary companies, associated companies and joint venture company as at 31 December 2008 are :

Name of company(Country of

incorporation)Principal activities(place of business) Cost

Percentageof equity held by

the Group2008 2007 2008 2007$’000 $’000 % %

Subsidiary companies :Held by the Company

a Leeden Investment

Pte Ltd (Singapore)

Investment holding and

leasing of property

(Singapore)

9,400 9,400 100 100

a Leeden International

Pte Ltd (Singapore)

Provision of management

services (Singapore)

6,290 6,290 100 100

o Leeden International Limited

(Hong Kong)

Investment holding (Hong

Kong)

2 2 100 100

15,962 15,692

Name of company (Country ofincorporation)

Principal activities(place of business)

Percentage of equity held by

the Group2008 2007

% %

Held through subsidiary companiesby Leeden International Limited

m Leeden China Co., Ltd

(People’s Republic of China)

Distribution of industrial equipment

and hardware (People’s Republic

of China)

100(1) –

by Leeden International Pte Ltd

a American Dynamics Pte Ltd

(Singapore)

Distribution of industrial equipment

and hardware (Singapore)

100 100

a AD Safety Pte Ltd

(Singapore)

Distribution of safety products

(Singapore)

100 100

a Blue Power Corporation Pte Ltd

(Singapore)

Distribution of industrial products

(Singapore)

100 100


40

1. Corporate information (cont’d)



Percentage of equity held by the

Group2008 2007

% %

by Leeden International Pte Ltda Powercut Machines Pte Ltd

(Singapore)Rental of welding machines and equipment (Singapore)

70 80

b Auweld Sdn Bhd (formerly known as Uniweld Malaysia Sdn Bhd)(Malaysia)

Distribution of industrial safety products (Malaysia)

100 100

c Leeden Sdn Bhd (Malaysia) Distribution of safety products (Malaysia)

100 100

c Dynamic AD IndustriesSdn Bhd (Malaysia)

Distribution of industrial products (Malaysia)

100 100

b Eversafe Extinguisher Sdn Bhd(Malaysia)

Manufacturing and trading of fi re extinguishers, fi re fi ghting appliances and accessories (Malaysia)

55(2) –

d Power Weld Sdn Bhd(Malaysia)

Manufacturing and trading ofwelding consumables (Malaysia)

75(2) –

n Jiangyan Eversafe FireEquipment Co., Ltd(People’s Republic of China)

Manufacturing and trading of fi refi ghting equipments (People’sRepublic of China)

100(2) –

f NIG Industrial Gases Sdn Bhd(Malaysia)

Sale of gases and related products (Malaysia)

51(3) 50

a National Industrial Gases Pte Ltd(Singapore)

Sale of gases and related products(Singapore)

35(3) 35

l Auweld Product, Inc. (formerly known asBlue Power Products, Inc.)(United States of America)

Dormant(United States of America)

100 100

g PT Leeden Indonesia (formerly known as PT Mako Jaya) (Indonesia)

Dormant(Indonesia)

100 100

by Leeden Investment Pte Ltd

a Latene International Pte Ltd (Singapore)

Distribution of industrial products(Singapore)

100 100

a Green Aces Development Pte Ltd(Singapore)

Investment holding and property development (Singapore)

100 100

a AceD Development Pte Ltd(Singapore)

Provision of management services(Singapore)

100 100

a Omnidisc Manufacturing Pte Ltd(Singapore)

Manufacturer of compact discs(Singapore)

– (4) 100






Percentage of equity held by the

Group2008 2007

% %

Held through subsidiary companies by NIG Industrial Gases Sdn Bhd

f NIG Gases Sdn Bhd

(Malaysia)

Manufacturer, distributor of industrial

gases and related products

(Malaysia)

57 (5) –

by National Industrial GasesPte Ltd

g PT National Industrial Gases

(Indonesia)

Manufacture and sale of gases and

related products

(Indonesia)

100 (5) –

h Myanmar National Industrial

Gases Ltd (Myanmar)

Sale of gases and related products

(Myanmar)

100 (5) –

by Green Aces DevelopmentPte Ltd

a Leeden Distribution Pte. Ltd.

(Singapore)

Property investment and development

(Singapore)

100 100

a Green Aces Paterson Pte Ltd

(Singapore)

Property investment and development

(Singapore)

70 70


42


Name of company(Country of

incorporation)Principal activities(place of business) Cost

Percentageof equity held by

the Group2008 2007 2008 2007$’000 $’000 % %

Joint venture company:Held by Leeden International Pte Ltd

e Ion Exchange Dynamics

Pte Ltd (Singapore)

Distribution of waste water

treatment systems and

equipment (Singapore)

– (6) 50 – 50

– 50

Associated companies:

Held by Leeden International Pte Ltd

a National Industrial Gases

Pte Ltd (Singapore)

Sale of gases and related

products (Singapore)

– (3) 1,401 – 35

f NIG Industrial Gases Sdn

Bhd (Malaysia)

Sale of gases and related

products (Malaysia)

– (3) 666 – 50

e Bondfl ex Private Limited

(Singapore)

Trading in grinding discs

(Singapore)

1,865 1,865 50 50

e Henglong Water Pte Ltd

(Singapore)

Investment holding and

distribution of waste water

treatment equipment

(Singapore)

1,600 1,600 50 50

i Leeden Thailand Co. Ltd

(Thailand)

Distribution of industrial and

safety products (Thailand)

46 46 48 48

Held by Eversafe Extinguisher Sdn Bhd

j Eversafe Extinguisher

Australia Pty Ltd

(Australia)

Trading of fi re extinguisher

and maintenance services

(Australia)

84 (7) – 30 –

Held by NIG Industrial Gases Sdn Bhd

k Mega Mount Industrial

Gases Sdn Bhd

(Malaysia)

Manufacturing & distribution

of industrial gases

(Malaysia)

731 (7) – 28 –

4,326 5,578




a Audited by Ernst & Young LLP, Singapore.

b Audited by Ernst & Young, Chartered Accountants, Malaysia.

c Audited by Christopher Chooi & Co., Chartered Accountants, Malaysia.

d Audited by Horwath, Melaka, Chartered Accountants, Malaysia.

e Audited by Singapore Assurance PAC (formerly known as B L Ong & Co., Certifi ed Public Accountants), Singapore.

f Audited by Ong & Wong, Chartered Accountants, Malaysia.

g Audited by Riyanto, SE, AK., Indonesia.

h Audited by U Tin Win Group, Certifi ed Public Accountants, Myanmar.

i Audited by N&S Audit Partner, Thailand.

j Audited by Hacketts, DFK, Australia.

k Audited by Huang Yan Teo & Co, Chartered Accountants, Malaysia.

l Not required to be audited under the law of country of incorporation.

m Audited by Shanghai Hui Hong, Certifi ed Public Accountants, Co., Ltd.

n Audited by Taizhou Xingrui, Certifi ed Accountants Co., Ltd.

o Audited by World Link CPA Limited, Hong Kong

(1) Subsidiary company incorporated during the year.

(2) Subsidiary company acquired during the year.

(3) Associated company became subsidiary company during the year.

(4) Disposed off during the year.

(5) Subsidiary company of associated company which became subsidiary company during the year.

(6) Joint venture company in the process to be struck off during the year.

(7) Associated company of new subsidiary company acquired during the year.

2. Summary of signifi cant accounting policies

2.1 Basis of preparation

The consolidated fi nancial statements of the Group and the balance sheet and statement of changes in

equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards

(“FRS”).

The fi nancial statements have been prepared on a historical cost basis except as disclosed in the

accounting policies below.

The fi nancial statements are presented in Singapore Dollars (SGD or $) and all values in the tables are

rounded to the nearest thousand ($’000) as indicated.

The accounting policies have been consistently applied by the Group and the Company and are consistent

with those used in the previous fi nancial year except as disclosed below.

2.2 Changes in accounting policies

The following INT FRSs are effective for annual period beginning 1 January 2008:

– INT FRS 111 FRS 102 – Group and Treasury Share Transactions

– INT FRS 112 Service Concession Arrangements

– INT FRS 114 FRS 19 – The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and

Their Interaction

– FRS 39 and FRS 107 – FRS 39: Financial Instruments: Recognition and Measurement and FRS 107

Financial Instruments: Disclosures – Amendments relating to Reclassifi cation of Financial Assets


44

2. Summary of signifi cant accounting policies (cont’d)

2.2 Changes in accounting policies (cont’d)

The adoption of these new and revised INT FRS has no material impact to the fi nancial statements in the

period of initial application.

2.3 Future changes in accounting policies

The Group and the Company have not adopted the following FRS and INT FRS that have been issued but

not yet effective:

Reference Description

Effective for annual periods beginning

on or after

FRS 1 Presentation of Financial Statements

– Revised Presentation

– Amendments regarding Puttable Financial Instruments and

Obligations Arising on Liquidation

1 January 2009

1 January 2009

FRS 23 Borrowing Costs 1 January 2009

FRS 27 Consolidated and Separate Financial Statements –

Amendments relating to Cost of an Investment in a Subsidiary,

Jointly Controlled Entity or Associate

1 January 2009

FRS 32 Financial Instruments: Presentation – Amendments relating

to Puttable Financial Instruments and Obligations Arising on

Liquidation

1 January 2009

FRS 39 Financial Instruments: Recognition and Measurement

– Amendments relating to Eligible Hedged Items

1 July 2009

FRS 101 First-time Adoption of Financial Reporting Standards –



1 January 2009

FRS 102 Share-based Payments – Amendments relating to vesting

conditions and cancellations

1 January 2009

FRS 108 Operating Segments 1 January 2009

INT FRS 101 First-time Adoption of Financial Reporting Standards –



1 January 2009

INT FRS 112 Service Concession Arrangements 1 January 2009

INT FRS 113 Customer Loyalty Programmes 1 July 2008

INT FRS 116 Hedges of a Net Investment in a Foreign Operation 1 October 2008

INT FRS 117 Distributions of Non-cash Assets to Owners 1 July 2009

FRS 39 Financial Instruments: Recognition and Measurement –

Amendments relating to Eligible Hedged Items

1 July 2009




2.3 Changes in accounting policies (cont’d)

The directors expect that the adoption of the above pronouncements will have no material impact to the

fi nancial statements in the period of initial application, except for FRS 1, FRS 102 and FRS 108 as indicated

below.

FRS 1 Presentation of Financial Statements – Revised presentation

The revised FRS 1 requires owner and non-owner changes in equity to be presented separately. The

statement of changes in equity will include only details of transactions with owners, with all non-owner

changes in equity presented as a single line item. In addition, the revised standard introduces the statement

of comprehensive income: it presents all items of income and expense recognised in profi t or loss, together

with all other items of recognised income and expense, either in one single statement, or in two linked

statements. The Group is currently evaluating the format to adopt.

FRS 102 Share-based payment – Vesting conditions and cancellations

FRS 102 has been amended to restrict the defi nition of “vesting condition”’ to a condition that includes an

explicit or implicit requirement to provide services. Any other conditions are non-vesting conditions which

have to be taken into account when estimating the fair value of the equity instrument granted. In the case

that an award does not vest as a result of failure to meet a non-vesting condition that is within the control of

either the entity or the counterparty, this must be accounted for as a cancellation. The change in accounting

policy is to be applied retrospectively. The Group is currently assessing the possible impact of the adoption

of these amendments on its fi nancial statements.

FRS 108 Operating Segments

FRS 108 requires entities to disclose segment information based on the information reviewed by the entity’s

chief operating decision maker. The impact of this standard on the other segment disclosures is still to be

determined. As this is a disclosure standard, it will have no impact on the fi nancial position and results of

the Group when implemented in 2009.

2.4 Basis of consolidation

The consolidation fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries

as at the balance sheet date. The fi nancial statements of the subsidiaries used in the preparation of the

consolidated fi nancial statements are prepared for the same reporting date as the Company. Consistent

accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group

transactions are eliminated in full.

Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifi able assets acquired

and liabilities and contingent liabilities assumed in a business combination are measured initially at their

fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are

treated as a revaluation and recognised in equity. Any excess of the cost of business combination over the

Group’s share in the net fair value of the acquired subsidiary’s identifi able assets, liabilities and contingent

liabilities is recorded as goodwill on the balance sheet. The accounting policy for goodwill is set out in Note

2.8(a). Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifi able assets,

liabilities and contingent liabilities over the cost of business combination is recognised as income in the

income statement on the date of acquisition.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains

control, and continue to be consolidated until the date that such control ceases.


46


2.5 Transactions with minority interest

Minority interests represent the portion of profi t and loss and net assets in subsidiaries not held by the

Group and are presented separately in the consolidated income statement and within equity in the

consolidated balance sheet, separately from parent shareholders’ equity. Transactions with minority interests

are accounted for using the entity concept method, whereby, transactions with minority interests are

accounted for as transactions with equity holders. On the acquisition of minority interests, the difference

between the consideration and book value of the share of the net assets acquired is refl ected as being a

transaction between owners and recognised directly in equity. Gain or loss on disposal to minority interests

is recognised directly in equity.

2.6 Foreign currency

Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates

approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign

currencies are translated at the rate of exchange ruling at the balance sheet date. Non-monetary items that

are measured in terms of historical cost in a foreign currency are translated using the exchange rates as

at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are

translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the

balance sheet date are recognised in the income statement except for exchange differences arising on

monetary items that form part of the Group’s net investment in foreign operations, which are recognised

initially in equity as foreign currency translation reserve in the consolidated balance sheet and recognised in

the consolidated income statement on disposal of the foreign operation.

The assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the

balance sheet date and their income statements are translated at the weighted average exchange rates for

the year. The exchange differences arising on the translation are taken directly to a separate component of

equity as foreign currency translation reverse. On disposal of a foreign operation, the cumulative amount

recognised in equity in foreign currency translation reserve relating to that particular foreign operation is

recognised in the income statement.

2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,

plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefi ts

associated with the item will fl ow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, property, plant and equipment and furniture and fi ttings are measured at cost or

valuation less accumulated depreciation and accumulated impairment losses. A one-off revaluation of the

property was conducted in 1989 and the fair value is determined from market-based evidence by appraisal

that is undertaken by professionally qualifi ed valuers.

Any revaluation surplus is credited directly to the asset revaluation reserve in equity, except to the extent

that it reverses a revaluation decrease of the same asset previously recognised in the income statement,

in which case the decrease is recognised in the income statement. A revaluation defi cit is recognised in

income statement, except to the extent that it offsets an existing surplus on the same asset carried in the

asset revaluation reserve.




2.7 Property, plant and equipment (cont’d)

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of

the asset and the net amount is restated to the revalued amount of the asset. The whole of the revaluation

surplus included in the asset revaluation reserve in respect of an asset is transferred directly to retained

earnings on retirement or disposal of the asset.

Freehold land has an unlimited useful life and therefore is not depreciated.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows :

Leasehold properties – over the term of the lease of 30 to 73½ years

Plant and machinery – 6 months to 10 years

Offi ce equipment, furniture and fi ttings – 3 to 10 years

Motor vehicles – 5 to 8 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes

in circumstances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each fi nancial year-end to ensure

that the amount, method and period of depreciation are consistent with previous estimates and the

expected pattern of consumption of the future economic benefi ts embodied in the items of property, plant

and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic

benefi ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is

included in the income statement in the year the asset is derecognised.

2.8 Intangible assets

(a) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less

accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if

events and circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired is allocated to each of the Group’s cash-

generating units that are expected to benefi t from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and

whenever there is an indication that the cash-generating unit may be impaired, by comparing the

carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable

amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is

less than the carrying amount, an impairment loss is recognised in the income statement. Impairment

losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-

generating unit is disposed of, the goodwill associated with the operation disposed of is included in

the carrying amount of the operation when determining the gain or loss on disposal of the operation.

Goodwill disposed of in this circumstance is measured based on the relative fair values of the

operations disposed of and the portion of the cash-generating unit retained.


48


2.8 Intangible assets (cont’d)

(a) Goodwill (cont’d)

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as

assets and liabilities of the foreign operations and are recorded in the functional currency of the

foreign operations and translated in accordance with the accounting policy set out in Note 2.6.

(b) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets

acquired in a business combination is their fair values as at the date of acquisition. Following

initial acquisition, intangible assets are measured at cost less any accumulated amortisation and

accumulated impairment losses.

Intangible assets with fi nite useful lives are amortised over the estimated useful lives and assessed

for impairment whenever there is an indication that the intangible assets may be impaired. The

amortisation period and the amortisation method are reviewed at least at each fi nancial year-end.

Intangible assets with indefi nite useful lives or not yet available for use are tested for impairment

annually, or more frequently if the events and circumstances indicate that the carrying value may be

impaired either individually or at the cash-generating unit level. Such intangibles are not amortised.

The useful life of an intangible asset with an indefi nite useful life is reviewed annually to determine

whether the useful life assessment continues to be supportable.

(i) Club membership

Club membership was acquired separately and is amortised on a straight line basis over its

fi nite useful life of 90 years.

(ii) Distribution rights

Distribution rights were acquired separately and are amortised on a straight line basis over its

fi nite useful life of 3 years.

(iii) Customer relationships

Customer relationships were acquired in business combinations. The useful lives of these

intangible assets are assessed to be 7 to 10 years based on average number of years the

customers have been with the acquired companies and are amortised on a straight-line basis.

(iv) Trade name

The trade names were acquired in business combinations. The useful lives of the trade names

are estimated to be indefi nite because based on the current market share of the brands,

management believes there is no foreseeable limit to the period over which the brands are

expected to generate net cash infl ows for the Group.




2.9 Impairment of non-fi nancial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired.

If any such indication exists, or when annual impairment assessment for an asset is required, the Group

makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to

sell and its value in use and is determined for an individual asset, unless the asset does not generate cash

infl ows that are largely independent of those from other assets. In assessing value in use, the estimated

future cash fl ows expected to be generated by the asset are discounted to their present value. Where the

carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable

amount.

Impairment losses are recognised in the income statement except for assets that are previously revalued

where the revaluation was taken to equity. In this case the impairment is also recognised in equity up to the

amount of any previous revaluation.

An assessment is made at each reporting date as whether there is any indication that previously recognised

impairment losses may no longer exist or may have decreased. A previously recognised impairment loss

is reversed only if there has been a change in the estimates used to determine the asset’s recoverable

amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset

is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have

been determined, net of depreciation, had no impairment loss be recognised previously. Such reversal is

recognised in the income statement unless the asset is measured at revalued amount, in which case the

reversal is treated as a revaluation increase.

2.10 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the fi nancial and operating policies

so as to obtain benefi ts from its activities.

In the Company’s separate fi nancial statements, investments in subsidiaries are accounted for at cost less

any impairment losses.

2.11 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has signifi cant

infl uence. The associate is equity accounted for from the date the Group obtains signifi cant infl uence until

the date the Group ceases to have signifi cant infl uence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity

method, the investment in associate is measured in the balance sheet at cost plus post-acquisition changes

in the Group’s share of net assets of the associate. Goodwill relating to an associate is included in the

carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s

identifi able asset, liabilities and contingent liabilities over the cost of the investment is deducted from the

carrying amount of the investment and is recognised as income as part of the Group’s share of results of

the associate in the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group

does not recognise further losses, unless it has incurred obligations or made payments on behalf of the

associate.

The fi nancial statements of the associate are prepared as of the same reporting date as the Company.

Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.


50


2.12 Joint venture

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity

that is subject to joint control, where the strategic fi nancial and operating decisions relating to the activity

require the unanimous consent of the parties sharing control. The Group recognised its interest in joint

venture using the equity method. Under the equity method, the investment in joint venture is measured

in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the joint

venture. The Group’s share of the profi t or loss of the joint venture is recognised in the consolidated income

statement. Where there has been a change recognised directly in the equity of the joint venture, the Group

recognises its share of such changes. After application of the equity method, the Group determines whether

it is necessary to recognise any impairment loss with respect to the Group’s net investment in the joint

venture. The joint venture is equity accounted for from the date the Group obtains joint control until the date

the Group cease to have joint control over the joint venture.

The fi nancial statements of the joint venture are prepared as of the same reporting date as the Company.

Where necessary, adjustments are made to bring the accounting policies into line with those of the Group.

2.13 Financial assets

Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to

the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial

assets not at fair value through profi t or loss, directly attributable transaction costs.

A fi nancial asset is derecognised where the contractual right to receive cash fl ows from the assets has

expired. On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and

the sum of the consideration received and any cumulative gain or loss that has been recognised directly in

equity is recognised in the income statement.

All regular way purchases and sales of fi nancial assets are recognised or derecognised on the trade date

i.e. the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are

purchases or sales of fi nancial assets that require delivery of assets within the period generally established

by regulation or convention in the marketplace concerned.

(a) Financial assets at fair value through profi t or loss

Financial assets held for trading are classifi ed as fi nancial assets at fair value through profi t or loss.

Financial assets held for trading are derivatives (including separated embedded derivatives) or fi nancial

assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, fi nancial assets at fair value through profi t or loss are measured at

fair value. Any gains or losses arising from changes in fair value of the fi nancial assets are recognised

in the income statement. Net gains or net losses on fi nancial assets at fair value through profi t or loss

include exchange differences, interest and dividend income.




2.13 Financial assets (cont’d)

(b) Loans and receivables

Financial assets with fi xed or determinable payments that are not quoted in an active market are

classifi ed as loans and receivables. Subsequent to initial recognition, loans and receivables are

measured at amortised cost using the effective interest method. Gains and losses are recognised in

the income statement when the loans and receivables are derecognised or impaired, and through the

amortisation process.

The Group classifi es the following fi nancial assets as loans and receivables:

• cash and short term deposits;

• trade and other debtors, including amounts due from subsidiary companies and associated

companies.

(c) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are fi nancial assets that are not classifi ed in any of the other

categories. After initial recognition, available-for-sale fi nancial assets are measured at fair value. Any

gains or losses from changes in fair value of the fi nancial asset are recognised directly in the fair value

adjustment reserve in equity, except that impairment losses, foreign exchange gains and losses on

monetary instruments and interest calculated using the effective interest method are recognised in the

income statement. The cumulative gain or loss previously recognised in equity is recognised in the

income statement when the fi nancial asset is derecognised.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost

less impairment loss.

The Group does not have any held-to-maturity fi nancial assets.

2.14 Impairment of fi nancial assets

The Group assesses at each reporting date whether there is any objective evidence that a fi nancial asset is

impaired.

(a) Assets carried at amortised cost

If there is objective evidence that an impairment loss on fi nancial assets carried at amortised cost

has been incurred, the amount of the loss is measured as the difference between the asset’s carrying

amount and the present value of estimated future cash fl ows discounted at the fi nancial asset’s

original effective interest rate. The carrying amount of the asset is reduced through the use of an

allowance account. The impairment loss is recognised in the income statement.

When the assets become uncollectible, the carrying amount of impaired fi nancial assets is reduced

directly or if an amount was charged to the allowance account, the amounts charged to the

allowance account are written off against the carrying value of the fi nancial asset.

To determine whether there is objective evidence that an impairment loss on fi nancial assets has

been incurred, the Group considers factors such as the probability of insolvency or signifi cant fi nancial

diffi culties of the debtor and default or signifi cant delay in payments.


52


2.14 Impairment of fi nancial assets (cont’d)

(a) Assets carried at amortised cost (cont’d)

If in a subsequent period, the amount of the impairment loss decreases and the decrease can

be related objectively to an event occurring after the impairment was recognised, the previously

recognised impairment loss is reversed to the extent that the carrying amount of the asset does not

exceed its amortised cost at the reversal date. The amount of reversal is recognised in the income

statement.

(b) Assets carried at cost

If there is objective evidence (such as signifi cant adverse changes in the business environment where

the issuer operates, probability of insolvency or signifi cant fi nancial diffi culties of the issuer) that an

impairment loss is measured as the difference between the asset’s carrying amount and the present

value of estimated future cash fl ows discounted at the current market rate of return for a similar

fi nancial asset. Such impairment losses are not reversed in subsequent periods.

(c) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are fi nancial assets that are not classifi ed in any of the other

categories. After initial recognition, available-for-sale fi nancial assets are measured at fair value. Any

gains or losses from changes in fair value of the fi nancial asset are recognised directly in the fair value

adjustment reserve in equity, except that impairment losses, foreign exchange gains and losses on

monetary instruments and interest calculated using the effective interest method are recognised in the

income statement. The cumulative gain or loss previously recognised in equity is recognised in the

income statement when the fi nancial asset is derecognised.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost

less impairment loss.

2.15 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits, and short-term, highly liquid

investments that are readily convertible to known amounts of cash and which are subject to an insignifi cant

risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash

management.

2.16 Assets held for sale

Assets are classifi ed as held for sale if their carrying amount will be recovered primarily through sale

transactions rather than through continuing use. Upon classifi cation as held for sale, these assets are

not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any

differences are recognised in the income statement.




2.17 Development property

Development properties are properties held and developed for sale in the ordinary course of business.

Development properties are stated at the lower of cost and net realisable value. The costs are assigned

by using specifi c identifi cation. Net realisable value represents the estimated selling price less costs to be

incurred in selling the property.

Costs of properties under development include land acquisition costs, development expenditure, borrowing

costs and other related expenditure. Borrowing costs payable on loans funding a development property are

capitalised as cost of the development property until the date of its practical completion, which is taken to

be the date of issue of the Temporary Occupation Permit (“TOP”).

Revenue and costs associated with the development property are recognised as revenue and expenses

respectively, by reference to the stage of completion of the development property at the balance sheet

date, when the outcome of the construction contract can be estimated reliably. The stage of completion is

determined by reference to the proportion that contract costs incurred for work performed to date bear to

the total estimated contract costs, costs in both cases exclude land and interest costs. When the outcome

of a construction contract cannot be estimated reliably, revenue is recognised to the extent of costs incurred

that are likely to be recoverable and development costs are recognised as expense in the period which they

are incurred.

When it is probable that total development costs will exceed total revenue of the construction contract,

provision for expected loss is recognised as an expense immediately. Revenue of the construction contract

comprise the amount of revenue agreed in the contract.

The development property will be transferred to development property completed for sale when it has been

completed, the TOP has been obtained and it is available for sale.

2.18 Stocks

Stocks are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling

price in the ordinary course of business less estimated costs necessary to make the sale.

Costs incurred in bringing the inventories to their present location and condition are accounted for as

follows:

- Raw materials : purchase costs on a fi rst-in-fi rst-out basis

- Finished goods and work-in-progress for manufactured products : costs of direct materials and

labour and a proportion of manufacturing overheads based on normal operating capacity. These

costs are assigned on a fi rst-in fi rst-out basis

- Finished goods for trading products : Purchase costs on a weighted average basis


54


2.19 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable

that an outfl ow of economic resources will be required to settle the obligation and the amount of the

obligation can be estimated reliably.

Provisions are reviewed at each balance sheet date and adjusted to refl ect the current best estimate. If it

is no longer probable that an outfl ow of economic resources will be required to settle the obligation, the

provision is reversed. If the effect of the time value of money is material, provisions are discounted using

a current pre tax rate that refl ects, where appropriate, the risks specifi c to the liability. When discounting is

used, the increase in the provision due to the passage of time is recognised as a fi nance cost.

2.20 Financial liabilities

Financial liabilities include trade creditors which are normally settled on 30-90 day terms, other creditors,

amounts due to related parties and interest-bearing loans and borrowings. Financial liabilities are recognised

on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the

fi nancial instrument.

Financial liabilities are recognised initially at fair value plus, in the case of fi nancial liabilities other than

derivatives, directly attributable transaction costs.

Subsequent to initial recognition, all fi nancial liabilities are measured at amortised cost using the effective

interest method, except for derivatives, which are measured at fair value.

A fi nancial liability is derecognised when the obligation under the liability is extinguished. For fi nancial

liabilities other than derivatives, gains and losses are recognised in the income statement when the liabilities

are derecognised, and through the amortisation process. Any gains or losses arising from changes in fair

value of derivatives are recognised in the income statement. Net gains or losses on derivatives include

exchange differences.

2.21 Financial guarantee

A fi nancial guarantee contract is a contract that requires the issuer to make specifi ed payments to reimburse

the holder for a loss it incurs because a specifi ed debtor fails to make payment when due.

Financial guarantees are recognised initially at fair value. Subsequent to initial recognition, fi nancial

guarantees are recognised as income in the income statement over the period of the guarantee. If it is

probable that the liability will be higher than the amount initially recognised less amortisation, the liability is

recorded at the higher amount with the difference charged to the income statement.

2.22 Borrowing costs

Borrowing costs are recognised in the income statement as incurred except to the extent that they are

capitalised. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction

or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to

prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are

incurred. Borrowing costs are capitalised until the assets are ready for their intended use or sale.




2.23 Employee benefi ts

(a) Defi ned contribution plans

The Group participates in the national pension schemes as defi ned by the laws of the countries in

which it has operations. In particular, the Singapore companies in the Group make contributions

to the Central Provident Fund scheme in Singapore, a defi ned contribution pension scheme.

Contributions to defi ned contribution pension schemes are recognised as an expense in the period in

which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to the

employees. The estimated liability for leave is recognised for services rendered by employees up to

balance sheet date.

(c) Employee share option plans

Employees of the Group receive remuneration in the form of share options as consideration for

services rendered. The cost of these equity-settled transactions with employees is measured by

reference to the fair value of the options at the date on which the share options are granted. This cost

is recognised in the income statement, with a corresponding increase in the employee share option

reserve, over the vesting period. The cumulative expense recognised at each reporting date until the

vesting date refl ects the extent to which the vesting period has expired and the Group’s best estimate

of the number of options that will ultimately vest. The charge or credit to the income statement for a

period represents the movement in cumulative expense recognised as at the beginning and end of

that period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is

conditional upon a market condition, which are treated as irrespective of whether or not the market

condition is satisfi ed, provided that all other performance conditions are satisfi ed. The employee share

option reserve is transferred to capital reserve upon expiry of the options. When the options are

exercised, the employee share option reserve is transferred to share capital if new shares are issued.

2.24 Leases

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of

the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower,

at the present value of the minimum lease payments. Any initial direct costs are also added to the amount

capitalised. Lease payments are apportioned between the fi nance charges and reduction of the lease liability

so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are

charged to the income statement.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the

lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease

term.

Operating lease payments are recognised as an expense in the income statement on a straight-line basis

over the lease term. The aggregate benefi t of incentives provided by the lessor is recognised as a reduction

of rental expense over the lease term on a straight-line basis.


56


2.25 Revenue

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Group and

the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or

receivable. The following specifi c recognition criteria must also be met before revenue is recognised :

Revenue from the sale of manufactured products and equipment is recognised upon the transfer of

signifi cant risk and rewards of ownership of the goods to the customer which generally coincides with

their delivery and acceptance.

Revenue from the provision of management services is recognised when the services are rendered

(unless is in doubt).

Dividend income is recognised when the Group’s right to receive the payment is established.

Interest income is recognised using the effective interest method.

For development properties, it is recognised by reference to the stage of completion at the balance

sheet date as stated in Note 2.17.

Rental income arising on welding machines and equipment is accounted for on a straight-line basis

over the lease terms.

2.26 Income taxes

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid

to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are

enacted or substantively enacted by the balance sheet date.

Current taxes are recognised in the income statement except that the tax relating to items recognised

directly in equity is recognised directly in equity.

(b) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance

sheet date between the tax bases of assets and liabilities and their carrying amounts for fi nancial

reporting purposes.

Deferred tax assets and liabilities are recognised for all taxable temporary differences, except:

Where the deferred tax arises from the initial recognition of an asset or liability in a transaction

that is not a business combination and, at the time of the transaction, affects neither the

accounting profi t nor taxable profi t or loss;

In respect of taxable temporary differences associated with investments in subsidiary

companies, associates and interests in joint venture, where the timing of the reversal of the

temporary differences can be controlled by the Group and it is probable that the temporary

differences will not reverse in the foreseeable future; and




2.26 Income taxes (cont’d)

(b) Deferred tax (cont’d)

In respect of deductible temporary differences and carry forward of unused tax credits and

unused tax losses, if it is not probable that taxable profi t will be available against which the

deductible temporary differences and carry-forward of unused tax credits and unused tax

losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to

the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part

of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each

balance sheet date and are recognised to the extent that it has become probable that future taxable

profi t will allow the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year

when the asset is realised or the liability is settled, based on tax rates and tax laws that have been

enacted or substantively enacted at the balance sheet date.

Deferred taxes are recognised in the income statement except that deferred tax relating to items

recognised directly in equity is recognised directly in equity and deferred tax arising from a business

combination is adjusted against goodwill on acquisition.

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

Where the sales tax incurred in a purchase of assets or services is not recoverable from the

taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of

the asset or as part of the expense item as applicable; and

Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part

of receivables or payables in the balance sheet.

2.27 Segment reporting

A business segment is a distinguishable component of the Group that is engaged in providing products or

services that are subject to risks and returns that are different from those of other business segments. A

geographical segment is a distinguishable component of the Group that is engaged in providing products

within a particular economic environment and that is subject to risks and returns that are different from

those of components operating in other economic environments.

2.28 Share capital and share issue expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs

directly attributable to the issuance of ordinary shares are deducted against share capital.


58


2.29 Treasury shares

When shares recognised as equity are reacquired, the amount of consideration paid is recognised directly

in equity. Reacquired shares are classifi ed as treasury shares and presented as a deduction from total

equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation of

treasury shares.

2.30 Contingencies

A contingent liability or asset is a possible obligation that arises from past events and whose existence

will be confi rmed only by the occurrence or non-occurrence of uncertain future event not wholly within the

control of the Group.

Contingent liabilities and assets are not recognised on the balance sheet of the Group.

3. Signifi cant accounting judgements and estimates

The preparation of the Group’s fi nancial statement requires management to make judgements, estimates

and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the

disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and

estimates could result in outcomes that could require a material adjustment to the carrying amount of the

asset or liability affected in the future.

3.1 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance

sheet date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next fi nancial year are discussed below.

(i) Useful lives of property, plant and equipment

The cost of property, plant and equipment for welding and other industrial applications, as well as

for property development and investment, is depreciated on a straight-line basis over the assets’

useful lives. Management estimates the useful lives of these property, plant and equipment to

be within 6 months to 73½ years. These are common life expectancies applied in the relevant

industry. The carrying amount of the Group’s property, plant and equipment at 31 December 2008

was $48,010,000 (2007: $9,492,000). Changes in the expected level of usage and technological

developments could impact the economic useful lives and the residual values of these assets,

therefore future depreciation charges could be revised.

(ii) Provision for foreseeable losses of development property

In estimating the foreseeable losses, management makes reference to information such as (i) current

quotes from sub-contractors and suppliers, (ii) recent quotes agreed with sub-contractors and

suppliers, and (iii) estimates of construction and material costs and (iv) stages of completion of the

contracts. No provision for foreseeable losses of development property were made as at year end.



3. Signifi cant accounting judgements and estimates (cont’d)

3.1 Key sources of estimation uncertainty (cont’d)

(iii) Impairment of non-fi nancial assets

The Group assesses whether there are any indicators of impairment for all non-fi nancial assets at

each reporting date. Goodwill and other indefi nite life intangibles are tested for impairment annually

and at other times when such indicators exist. Other than intangibles, stocks are valued at the lower

of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary

course of business less estimated costs necessary to make the sale. Other non-fi nancial assets are

tested for impairment when there are indicators that the carrying amounts may not be recoverable.

When value in use calculations are undertaken, management must estimate the expected future

cash fl ows from the asset or cash-generating unit and choose a suitable discount rate in order to

calculate the present value of those cash fl ows. Further details of the key assumptions are given in

the respective notes to the fi nancial statements.

(iv) Impairment of loans and receivables

The Group assesses at each balance sheet date whether there is any objective evidence that a

fi nancial asset is impaired. To determine whether there is objective evidence of impairment, the Group

considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor

and default or signifi cant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash fl ows are

estimated based on historical loss experience for assets with similar credit risk characteristics.

The carrying amount of the Group’s loans and receivables at the balance sheet date is disclosed in

Note 40 to the fi nancial statements.

(v) Employee share options

The Group measures the cost of equity-settled transactions with employees by reference to the fair

value of the employee share options at the date at which they are granted. Judgement is required in

determining the most appropriate valuation model for the share options granted, depending on the

terms and conditions of the grant. Management are also required to use judgement in determining

the most appropriate inputs to the valuation model including expected life of the option, volatility and

dividend yield. The assumptions and model used are disclosed in Note 35.


60

3. Signifi cant accounting judgements and estimates (cont’d)

3.2 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following

judgements, apart from those involving estimations, which has the most signifi cant effect on the amounts

recognised in the fi nancial statements:

(i) Revenue recognition

The stage of completion of its development property is measured by reference to the proportion

that contract costs incurred for work performed to date bear to the estimated total contract costs.

Signifi cant assumptions are required to estimate the total contract costs and the recoverable variation

works that will affect the stage of completion. The estimates are made based on past experience

and knowledge of the project engineers. Where the fi nal cost incurred by the Group is different from

the amounts that were initially estimated, such differences will impact the revenue recognised in the

period in which such determination is made. The carrying amounts of assets and liabilities arising

from development property are disclosed in Note 19 to the fi nancial statements.

(ii) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Signifi cant judgement is

involved in determining the Group-wide provision for income taxes. There are certain transactions

and computations for which the ultimate tax determination is uncertain during the ordinary course

of business. The Group recognises liabilities for expected tax issues based on estimates of whether

additional taxes will be due. Where the fi nal tax outcome of these matters is different from the

amounts that were initially recognised, such differences will impact the income tax and deferred tax

provisions in the period in which such determination is made. The carrying amount of the Group’s

tax payables and deferred taxation at 31 December 2008 was $2,230,000 (2007: $2,683,000) and

$5,731,000 (2007: $404,000) respectively.

4. Turnover

Group2008 2007$’000 $’000

Sale of goods 139,707 99,237

Revenue recognised from development property 15,795 –

Revenue from development property completed for sale – 3,445

Others 1,737 210

157,239 102,892



5. Other income/costs

Group2008 2007$’000 $’000

Other income included the following :

Interest income 340 117

Administrative fees charged to an associated company 197 –

Gain on disposal of assets held for sale 453 –

Gain on disposal of property, plant and equipment 158 –

Gain on disposal of a subsidiary company 7 –

Rental of machineries 250 659

Repair and servicing 149 131

Sale of water treatment products – 205

Sales rebates 446 –

Commission income – 25

Group2008 2007$’000 $’000

Other costs included the following :

Amortisation of intangible assets 102 –

Allowance for stocks obsolescence 512 253

Stocks written off 216 19

Write off of property, plant and equipment 12 3

Allowance for doubtful debts (trade) 1,249 25

(Write back)/allowance for doubtful debts (other) (2) 107

Allowance for doubtful debts (associated company) 1,659 1,819

Bad debts written (back)/off (7) 163

Loss on disposal of property, plant and equipment – 147

Gain on disposal of other investment – (88)

Loss on disposal of intangible assets 4 22

Loss/(gain) on fair value change of assets held at fair value through

profi t and loss 83 (83)

Fair value losses on derivatives – unrealised 747 –

Fair value gains on derivatives – unrealised (4) –

Fair value gains on derivatives – realised (55) –

Fair value losses on derivatives – realised 9 –

Impairment loss in investment in associated company – 418

Impairment loss in intangible assets – 13

Impairment loss in property, plant and equipment – 705

Impairment loss in assets held for sale – 12


62

6. Profi t from operating activities

Group2008 2007$’000 $’000

Profi t from operating activities is stated after

charging/(crediting) the following:

Depreciation of property, plant and equipment 2,849 1,491

Salaries and related costs 15,147 10,047

Defi ned contributions schemes 1,494 691

Foreign currency exchange (gains)/losses

- realised (57) (803)

- unrealised 463 502

Expenses on share-based payment 823 214

Rental expense 836 553

Non-audit fees paid to auditors of the Company 30 –

7. Finance costs

Group2008 2007$’000 $’000

Interest expense :

- bank overdrafts 24 62

- hire purchase interest 121 32

- trust receipts 460 513

- term loans 518 330

- others 15 –

1,138 937



8. Taxation

Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2008 and 2007 are:

Group2008 2007$’000 $’000

Income statement:

- current taxation 2,297 2,539

- deferred taxation 1,152 (451)

3,449 2,088

(Over)/under provision of prior years’

- current taxation (217) 45

- deferred taxation (14) –

(231) 45

Income tax expense recognised in the income statement 3,218 2,133

Relationship between tax expense and accounting profi t

The reconciliation between the tax expense and the product of accounting profi t multiplied by the applicable

corporate tax rate for years ended 31 December are as follows :

Group2008 2007$’000 $’000


Tax at domestic rates applicable to profi ts in the countries where the Group

operates 3,689 1,591

Adjustments:

Non-deductible expenses 206 583

Income not subject to taxation (14) (63)

Utilisation of tax losses and capital allowances brought

forward (185) (44)

Tax rebate (257) (145)

Deferred tax asset not recognised 78 142

Reinvestment allowance (42) –

Others (26) 24

3,449 2,088

(Over)/under provision in respect of previous year (231) 45

Income tax expense recognised in the income statement 3,218 2,133


64

8. Taxation (cont’d)

At 31 December 2008, the Group has unutilised tax losses and unabsorbed capital allowances of

approximately $5,788,000 and $418,000, respectively (2007 : $7,106,000 and $6,000 respectively), which

are available for set off against future taxable income subject to the respective local tax provisions and

regulations. No deferred tax asset is recognised in the fi nancial statement for these unutilised tax losses

due to uncertainty of its recoverability.

The corporate income tax rate applicable to Singapore companies of the Group was reduced to 18% for the

year of assessment 2008 from 20% for year of assessment 2007. Subsequent to year-end, the corporate

income tax rate was further reduced to 17% for the year of assessment 2009 onwards. The corporate

income tax rate applicable to Malaysian companies of the Group was reduced from 28% to 27% and 26%

for the year of assessment 2007 and the year of assessment 2008 respectively. This was further reduced

to 25% for the year of assessment 2009 onwards.

The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.

9. Basic and diluted earnings per share

Basic earnings per share amounts are calculated by dividing profi t for the year attributable to ordinary equity

holders of the parent by the weighted average number of ordinary shares outstanding during the fi nancial

year.

Diluted earnings per share amounts are calculated by dividing profi t for the year attributable to ordinary

equity holders of the parent by the weighted average number of ordinary shares outstanding during the year

plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive

potential ordinary shares into ordinary shares.

The following tables refl ect the profi t and loss and share data used in the computation of basic and diluted

earnings per share for the years ended 31 December:

Group

2008 2007

$’000 $’000

Profi t net of tax attributable to ordinary equity holders for

basic and diluted earnings per share 10,385 6,549

2008 2007

’000 ’000

Weighted average number of ordinary shares on issue

applicable to basic earnings per share 171,724 145,337

Effects of dilution :

- Share options 1,787 2,388

- Bonus warrants 2,706 15,734

Adjusted weighted average number of ordinary shares

applicable to diluted earnings per share 176,217 163,459



9. Basic and diluted earnings per share (cont’d)

3,855,000 (2007: 5,180,000) of share options granted to employees under the existing employee share

option plans have not been included in the calculation of diluted earnings per share because they are anti-

dilutive for the current and previous fi nancial years presented.

Since the end of the fi nancial year, employees have exercised the options to acquire 843,000 (2007:

6,062,000) ordinary shares. There have been no other transactions involving ordinary shares or potential

ordinary shares since the reporting date and before the completion of these fi nancial statements.

10. Property, plant and equipment

Freehold land

Freehold property

Leasehold properties

Plant and machinery

Other assets Total

$’000 $’000 $’000 $’000 $’000 $’000

Group

Cost or valuation

Balance at 1 January 2007 -

Valuation – – 4,500 – – 4,500

Cost – – 10,508 6,264 2,298 19,070

– – 15,008 6,264 2,298 23,570

Additions – – – 135 269 404

Impairment loss – – – (705) – (705)

Disposals – – – (2,644) (117) (2,761)

Transferred to assets held

for sale (Note 18) – – – (1,659) (481) (2,140)

Balance at 31 December

2007 – – 15,008 1,391 1,969 18,368

Balance at 1 January 2008 -

Valuation – – 4,500 – – 4,500

Cost – – 10,508 1,391 1,969 13,868

– – 15,008 1,391 1,969 18,368

Additions – – 912 1,770 2,841 5,523

Disposals – (14) – (515) (1,339) (1,868)

Write off – – – (26) (32) (58)

Acquisition of subsidiaries 1,928 2,309 5,136 33,117 20,130 62,620

Exchange differences (18) (22) (181) (454) (130) (805)


2008 1,910 2,273 20,875 35,283 23,439 83,780


66

10. Property, plant and equipment (cont’d)

Freehold land

Freehold property

Leasehold properties

Plant and machinery

Other assets Total

$’000 $’000 $’000 $’000 $’000 $’000

Group

Accumulated depreciation

Balance at 1 January 2007 – – 5,952 3,702 1,427 11,081

Charge for the year – – 635 548 308 1,491

Disposals – – – (1,653) (75) (1,728)

Transferred to assets held

for sale (Note 18) – – – (1,509) (459) (1,968)


2007 and 1 January 2008 – – 6,587 1,088 1,201 8,876

Charge for the year – 34 676 1,044 1,095 2,849

Disposals – – – (470) (853) (1,323)

Write off – – – (9) – (9)

Acquisition of subsidiaries – 204 645 16,048 8,828 25,725

Exchange differences – (11) (38) (248) (51) (348)


2008 – 227 7,870 17,453 10,220 35,770

Net carrying amount:

At 31 December 2008 1,910 2,046 13,005 17,830 13,219 48,010

At 31 December 2007 – – 8,421 303 768 9,492




Plant and machinery

Other assets Total

$’000 $’000 $’000

Company

Cost

Balance at 1 January 2007 – – –

Additions – 18 18

Balance at 31 December 2007 – 18 18

Additions 19 603 622

Impairment – (43) (43)

Disposals – (56) (56)

Balance at 31 December 2008 19 522 541

Accumulated depreciation and impairment

Balance at 1 January 2007 – – –

Charge for the year – 2 2

Balance at 31 December 2007 – 2 2

Charge for the year 4 106 110

Disposals – (12) (12)

Balance at 31 December 2008 4 96 100

Net book value

At 31 December 2008 15 426 441

At 31 December 2007 – 16 16

The carrying amount of plant and machinery which is intended to be disposed of has been transferred to

“assets held for sale” (Note 18).

(a) The details of the Group’s revalued leasehold property are as follows :

LocationSite area

(sq. metres) TenureYear of

ValuationDescription and usage

1 Shipyard Road

Singapore 628128

24,712 Leasehold, 30

years

commencing

1 November

1991

1989 Offi ce and

manufacture

of gases

168, Kawasan Perindustrian

Air Keroh, 75450 Melaka,

Malaysia


months

commencing

1 July 2008

2008 Offi ce and

manufacture

of welding

consumables

131-C, Jalan Usaha 5,

Kawasan Perindustrian Air

Keroh, 75450 Melaka,

Malaysia


months

commencing

1 July 2008

2008 Offi ce and

manufacture

of welding

consumables


68


(b) The revaluation of the Group’s leasehold properties in Singapore and Malaysia was made by the

Directors in 1989 and 2008 respectively based on professional appraisal by independent valuers.

If the leasehold property, that had been revalued, were measured using the cost model, the carrying

amount at the end of the fi nancial year would be $577,000 (2007 : $634,000).

(c) Other assets of the Group include offi ce equipment, furniture and fi ttings and motor vehicles. During

the year, the Group acquired motor vehicles and plant and machinery with an aggregate cost of

approximately $965,000 (2007 : $Nil) by means of fi nance leases. The net book value of other

assets and plant and machinery as at 31 December 2008 include assets under hire purchase

contracts amounted to approximately $1,207,000 (2007 : $267,000) and $1,115,000 (2007: $nil)

respectively for the Group.

(d) In addition to assets held under fi nance leases, the Group’s leasehold property and freehold land and

property with a carrying amount of $1,315,000 (2007 : $8,421,000) and $3,956,000 (2007 : $Nil)

respectively are pledged to secure the Group’s amounts due to bankers (Notes 27 and 31).

(e) Impairment of assets

During the fi nancial year, a subsidiary of the Group within the others segment, carried out a review of

the recoverable amount of its production equipment because the entity had been consistently making

losses. An impairment of approximately $nil (2007 : $705,000), representing the write down of

these equipment to the recoverable amount was recognised in other costs in the income statement.

Recoverable amount was based on fair value less costs to sell determined by the contracted amount

with the buyer.

11. Subsidiary companies

Company2008 2007$’000 $’000

Investments in unquoted shares, at cost 15,692 15,692

Amounts due from subsidiary companies - non-trade 38,302 23,638

Amounts due from subsidiary companies - trade – 78

38,302 23,716

53,994 39,408

All amounts due from and to subsidiary companies are unsecured, interest free and are not expected to be

repaid within the next twelve months.



11. Subsidiary companies (cont’d)

Acquisition of subsidiary companies

On 8 January 2008 and 20 June 2008, the Group’s subsidiary company, Leeden International Pte

Ltd (“Leeden International”) acquired 55% and 75% equity interests in Eversafe Extinguisher Sdn Bhd

(“Eversafe”) and Power Weld Sdn Bhd (“Power Weld”) respectively. Upon the acquisition, Eversafe and

Power Weld became subsidiary companies of the Group.

On 1 September 2008, Leeden International acquired an additional 1% equity interest in its 50%-owned

associated company, NIG Industrial Gases Sdn Bhd (“NIG Industrial Gases”). Upon the acquisition, NIG

Industrial Gases and National Industrial Gases Pte Ltd (“National Industrial Gases”) became subsidiaries of

the Group.

The fair values of the identifi able assets and liabilities of Eversafe, Power Weld, NIG Industrial Gases, and

National Industrial Gases as at the date of acquisition were:

Recognised on date of acquisition

Carrying amount before combination

$’000 $’000

Property, plant and equipment 36,895 35,911

Investment in associates (6,709) (6,709)

Other investment 323 323

Intangible assets 5,490 161

Amount due from related party 3,214 3,214

Stocks 11,865 11,400

Trade and other debtors 32,549 32,549

Fixed deposit 218 218

Cash and bank balances 5,339 5,339

89,184 82,406

Trade and other creditors (14,888) (14,888)

Amount due to associates (887) (887)

Amount due to related parties (15,243) (15,243)

Amount due to bankers (6,843) (6,843)

Term loan (15,472) (15,472)

Hire purchase creditors (2,408) (2,408)

Provision for taxation (1,283) (1,283)

Deferred tax liabilities (4,222) (2,577)

(61,246) (59,601)

Net identifi able assets 27,938 22,805


70


Total cost of business combination

The total cost of the business combination is as follows:

$’000

Consideration for acquisition of additional 1% equity interest :

- Cash paid 64

Consideration for new acquisition of subsidiaries :

- 6,300,000 ordinary shares issued at $0.46 each 2,898

- Cash paid 5,865

- Directly attributable professional fees 209

9,036

The effect of acquisition on cash fl ows is as follows:

Total consideration for 1% equity interest acquired 64

Total consideration for new subsidiaries acquired 8,972

Less: Non-cash consideration (2,898)

6,138

Less: Cash and cash equivalents of subsidiary companies acquired (5,557)

Net cash outfl ow on acquisition 581

The total consideration for the 1% equity interest in NIG Industrial Gases was paid by Leeden International

in September 2008 and it represented the fair value of the share of net identifi able assets acquired on that

date. The full consideration is settled by cash.

In connection with new acquisition of 55% equity interest in Eversafe, the Company issued 6,300,000

ordinary shares with a fair value of $0.46 each, being the published price of the shares at the date of

exchange to the vendor.

The total consideration for the new acquisition of 75% equity interest in Power Weld was paid by Leeden

International in June 2008 and it represented the fair value of the share of net identifi able assets acquired on

that date. The full consideration is settled by cash.




On 7 June 2007, the fair values of net assets assumed of a subsidiary company which was previously a

joint venture company, arising from the control over the board of directors and management control, and

the cash fl ow effect was as follows :

2007$’000

Stocks 6

Debtors 93

Cash and bank balances 1

Creditors (18)

Amount accounted as joint venture company (41)

Minority interest (16)

Share of net assets acquired 25

Goodwill 5

Total purchase consideration 30

Cash and bank balances acquired (1)

Net cash outfl ow on acquisition 29

Impact of acquisition on income statement

From the date of acquisition, Eversafe, Power Weld, NIG Industrial Gases and National Industrial Gases have

contributed $2,549,000 to the Group’s profi t net of tax. If the combination had taken place at the beginning

of the fi nancial year, the Group’s profi t from continuing operations, net of tax would have been $17,098,000

and revenue from continuing operations would have been $199,352,000.

Goodwill arising on acquisition

Negative goodwill of $810,000 arose from the acquisition of 55% equity interest in Power Weld. The amount

was fully recognised in the income statement during the fi nancial year.

Provisional accounting of acquisition

As at 31 December 2008, the fair value of the identifi able assets and liabilities of NIG Industrial Gases

and National Industrial Gases has been determined on a provisional basis. Goodwill arising from these

acquisitions will be adjusted accordingly on a retrospective basis when the purchase price allocation

exercise is fi nalised.


72


Disposal of a subsidiary company

On 15 August 2008, the Group disposed its 100% interest in Omnidisc Manufacturing Pte Ltd (“Omnidisc”)

to an individual for a cash consideration of S$1. As at 31 December 2008, Omnidisc ceased to be a

subsidiary of the Group. The cash fl ow effect arising from the disposal was as follows:

2008$’000

Fixed deposits 30

Cash and bank balances 41

Trade creditors (29)

Other creditors (7)

Provision for taxation (42)

Share of net liabilities disposed (7)

Gain on disposal 7

Cash proceeds from disposal –

Cash and bank balances disposed (41)

Net cash outfl ow on disposal (41)

12. Associated companies

Group2008 2007$’000 $’000

Cost of investment 4,326 5,578

Share of post-acquisition reserves (1,300) 2,852

Amounts due from associated companies (non-trade) 5,681 3,040

8,707 11,470

Less :

Impairment loss in investment (418) (418)

Allowance for doubtful debts (3,478) (1,819)

4,811 9,233

Receivables that are impaired

Individually impaired2008 2007$’000 $’000

Movements in allowance accounts:

At 1 January 1,819 –

Charge for the year 1,659 1,819

At 31 December 3,478 1,819



12. Associated companies (cont’d)

The amounts due from associated companies are unsecured, interest-free and are not expected to be

repaid within the next twelve months.

During the fi nancial year, the Group carried out a review of the discounted cashfl ows of an associated

company that had been making losses. An impairment loss of $nil (2007 : $418,000), representing the

write-down of this investment to the recoverable amount was recognised in other costs of the income

statement.

On 1 September 2008, the Group’s subsidiary company, Leeden International acquired an additional 1%

equity interest in its 50%-owned associated company, NIG Industrial Gases Sdn Bhd (“NIG Industrial

Gases”). Upon the acquisition, NIG Industrial Gases and National Industrial Gases Pte Ltd (“National

Industrial Gases”) became subsidiaries of the Group.

The Group has not recognised losses relating to Bondfl ex Private Limited where its share of losses exceeds

the Group’s interest in this associate. The Group’s cumulative share of unrecognised losses at the balance

sheet date was approximately $323,000 (2007 : $Nil). The Group has no obligation in respect of these

losses.

The summarised fi nancial information of the associated companies, not adjusted for the proportion of

ownership interest held by the Group is as follows:

Group2008 2007$’000 $’000

Assets and liabilities :

Current assets 15,807 33,118

Non-current assets 24,355 47,852

Total assets 40,162 80,970

Non-current liabilities (4,642) (18,996)

Current liabilities (24,192) (37,851)

Total liabilities (28,834) (56,847)

Results :

Revenue 19,205 51,757

(Loss)/profi t for the year (1,076) 1,597


74

13. Joint venture companies

Group2008 2007$’000 $’000

Cost of investment – 50

Share of post-acquisition reserves – 47

– 97

The aggregate amounts of each of current assets, non-current assets, current liabilities, non-current

liabilities, income and expenses related to the Group’s interests in the jointly-controlled entities are as

follows:

Assets and liabilities :

Current assets – 119

Non-current assets – –

Total assets – 119

Current liabilities – (22)

Non-current liabilities – –

Total liabilities – (22)

Results :

Revenue 4 189

Expenses (2) (123)

(Loss)/profi t for the year (2) 66

In August 2008, the joint venture company, Ion Exchange Pte Ltd has commenced strike off procedures

and ceased to be a joint venture of the Group.

14. Other investments

Group2008 2007$’000 $’000

Quoted investments comprise of :

Shares in corporations 68 150

Unquoted investments comprise of:

Shares in corporations 270 –

338 150

Quoted investments are stated at fair value by reference to published market prices at the balance sheet

date.



15. Intangible assets

Tradenames

Customer relationships

Club membership

Distribution rights Total

$’000 $’000 $’000 $’000 $’000

Cost

Balance at 1 January 2007 – – 103 52 155

Disposal – – – (52) (52)

Impairment loss (13) – (13)

Balance at 31 December 2007

and 1 January 2008 – – 90 – 90

Acquisition of subsidiary 3,663 1,666 46 – 5,375

Disposal – – (8) – (8)

Amortisation – (102) – – (102)

Balance at 31 December 2008 3,663 1,564 128 – 5,355

Trade names and customer relationships

Trade names and customer relationship relates to the “Eversafe” and “Power Weld” trade names that were

acquired in business combinations. Customer relationship relates to value of customer base with reference

to recurring business dealings. As mentioned in note 2.8, the useful life of these trade names and customer

relationship are estimated to be indefi nite and 7 to 10 years respectively.

Amortisation expense

The amortisation of customer relationship is included in the “Other Costs” in the income statement.

There is no amortisation of club membership during the fi nancial year as they are not signifi cant.

Impairment testing of trade name

Trade name has been allocated to industrial segment products cash generating unit (CGU) for impairment

testing.

The recoverable amounts of the CGU has been determined based on value in use calculations using cash

fl ow projections from fi nancial budgets approved by management covering a fi ve year period. The pre-tax

discount rate applied to the cash fl ow projections and the forecasted growth rates used to extrapolate cash

fl ows beyond the fi ve year period are as follow:

Industrial segment2008 2007

Growth rates 1% - 2% –

Pre-tax discount rates 13.0% - 14.7% –


76

15. Intangible assets (cont’d)

The calculations of value in use for the CGU are most sensitive to the following assumptions:

Royalty rates – Royalty rates adopted are based on the analysis of market transactions in the relevant

industry from Royalty Source.

Growth rates – The forecasted terminal growth rates are based on expectations that the industry will mature

in the long run.

Pre-tax discount rates – Discount rates refl ect management’s estimate of the risks specifi c to each CGU.

This is benchmark used by management to assess operating performance and to evaluate future investment

proposals. In determining appropriate discount rate for each CGU, regards has been given to the risk

associated with the trademark to apply to the forecast royalty cashfl ow stream.

Market share assumptions – These assumptions are important because, as well as using industry data for

growth rates (as noted above), management assess how the CGU’s position, relative to its competitors,

might change over the budgeted period. Management expects the Group’s share of the industrial market to

be stable over the budget period.

Impairment loss recognised

In 2008, the carrying amount of club membership approximates published market price at the balance

sheet date.

In 2007, an impairment loss of $13,000 was recognised under other costs to write-down the carrying

amount of club membership by reference to published market prices at the balance sheet date.

16. Goodwill

Goodwill of $1,487,000 arose from the acquisition of additional 1% equity interest in NIG Industrial Gases

and represents a preliminary premium to fair value of the net assets acquired compared to the purchase

consideration of the acquisition. The goodwill amount has been included in the industrial segment.

17. Investment property

Group2008 2007$’000 $’000

At beginning of the year – 800

Transfer to assets held for sale (Note 18) – (800)

Impairment loss – –

At end of the year – –

The investment property comprise :

Location DescriptionSite area

(sq metres) Tenure Usage

No. 458 Siglap Road

#03-03, Flamingo Valley,

Singapore 455938

Condominium 187 Freehold Residential



17. Investment property (cont’d)

The investment property is charged to fi nancial institution for credit facilities as mentioned in Notes 27 and 31.

Investment property is stated at fair value which has been determined based on valuation as at 31 December 2005 performed by a registered independent appraiser having an appropriate recognised professional qualifi cation.

Transfer to assets held for sale

In 2007, the investment property was reclassifi ed as asset held for sale in view of the conclusion of a collective sales agreement. The asset was measured at lower of its carrying amount and fair value less costs to sell (Note 18). During the year, the investment property was sold off.

18. Assets held for sale

In 2007, in connection with the intention to dispose certain machineries not in use, the assets were written down to their recoverable amounts based on a valuation carried out by a recognised independent appraiser having an appropriate recognised professional qualifi cation.

Group2008 2007$’000 $’000

Transferred from property, plant and equipment (Note 10):

Plant and machinery:

Carrying value – 2,140

Accumulated depreciation – (1,968)

Impairment loss in asset held for sale – (12)

– 160

Investment property (Note 17) – 800

– 960

Assets held-for-sale were recognised under the property and others segment in segment information. The disposal of assets held for sale were completed during the year.

19. Development property/Gross amount due to customers for contract work-in-progress

In accordance with a Collaboration Agreement between the 20 existing owners of Paterson Lodge and a subsidiary company, the owners permitted the subsidiary company, at its own costs, to demolish the existing building on the land located at 20 Paterson Road, Singapore 238509, and to develop it into a new residential development comprising a new residential building with 35 new units with certain communal facilities. The subsidiary company also undertook to deliver vacant possession of 20 new units out of the 35 new units and the respective subsidiary Strata Certifi cates of Titles to the respective 20 existing owners. The remaining 15 new units are transferred to the subsidiary company in consideration of the role and undertaking by the subsidiary company as stated above. All 15 units were sold in 2007. Based on the selling price of these 15 units, the 20 units to be delivered to the 20 existing owners are estimated to be valued at approximately $50 million.


78

19. Development property/Gross amount due to customers for contract work-in-progress (cont’d)

A subsidiary company has provided corporate guarantees to banks for pre-existing loans obtained by certain existing owners of the development property (Note 37). These pre-existing loans are secured by the respective owners’ units.

Group2008 2007$’000 $’000

Development costs 18,540 8,034

Less : Progress billings (13,912) (9,275)

4,628 (1,241)

Borrowing costs capitalised during the year 345 538

The details of the development property are as follows:

Site areaLocation (sq metres) Tenure of land

20 Paterson Road

Singapore 238509

1,077 Freehold

As at balance sheet date, the expected year of obtaining TOP is 2010.

Development costs include an amount of subsidiary company’s directors’ remuneration of $145,000

(2007 : $79,000).

The development property is charged to a fi nancial institution for credit facilities as mentioned in Note 27.

20. Amounts due from subsidiary companies

Amounts due from subsidiary companies were unsecured, interest free and repayable on demand.

21. Amounts due from/(to) related parties

Amounts due from/(to) related parties are unsecured, interest free and repayable on demand.



22. Stocks

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Balance sheetFinished goods 35,429 14,938 3,289 –

Goods-in-transit 3,927 2,713 913 208

Raw materials 3,283 37 – –

Parts and accessories 2,629 – – –

Work-in-progress 948 – – –

Total inventories at lower of cost and net

realisable value 46,216 17,688 4,202 208

Income statementStocks recognised as an expense in cost of sales 103,028 68,393 10,605 477

Stocks recognised as an expense in other costs :

Stocks written off 216 19 – –

Allowance for stocks obsolescence 512 253 210 –

23. Trade debtors

Trade debtors are non-interest bearing and are generally on 30 days’ terms. They are recognised at their

original invoice amounts which represent their fair values on initial recognition.

Receivables that are past due but not impaired

The Group has trade receivables amounting to $23,865,000 (2007 : $13,886,000) that are past due at the

balance sheet date but not impaired. These receivables are unsecured and the analysis of their aging at the

balance sheet date is as follow:

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Trade debtors past due:

Lesser than 30 days 13,241 8,065 765 24

30 to 60 days 4,790 3,293 433 –

61 to 90 days 2,990 2,394 356 –

More than 90 days 2,844 134 429 –

23,865 13,886 1,983 24


80

23. Trade debtors (cont’d)


The Group’s trade debtors that are impaired at the balance sheet date and the movement of the allowance

accounts used to record the impairment are as follows:

GroupCollectively impaired Individually impaired

2008 2007 2008 2007$’000 $’000 $’000 $’000

Trade debtors 9,320 2,096 1,240 96

Less : Allowance for impairment (1,255) (410) (1,240) (92)

8,065 1,686 – 4

Movement in allowance accounts:

At 1 January 410 459 92 160

At date of acquisition 1,160 – 5 –

Exchange adjustment (26) – (13) –

Charge/(write-back) for the year 1 (4) 1,248 29

Write off against allowance account (290) (45) (92) (97)

At 31 December 1,255 410 1,240 92

CompanyIndividually impaired2008 2007$’000 $’000

Trade debtors 35 –

Less: Allowance for impairment (35) –

– –


At 1 January – –

Charge for the year 35 –

At 31 December 35 –

Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors

that are in signifi cant fi nancial diffi culties and have defaulted on payments. These receivables are not

secured by any collateral or credit enhancements.



24. Other debtors and prepayments

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Sundry deposits 1,147 202 84 –

Other debtors + 1,169 311 9 134

Prepayment 1,449 283 208 19

Tax recoverable 234 73 – –

3,999 869 301 153

+ Other debtors are non-trade in nature, unsecured, interest-free and are repayable on demand.

24. Other debtors and prepayments (cont’d)


The Group’s other debtors that are impaired at the balance sheet date and the movement of the allowance

accounts used to record the impairment are as follows:

GroupIndividually impaired

CompanyIndividually impaired

2008 2007 2008 2007$’000 $’000 $’000 $’000

Other debtors – nominal amounts 1,036 1,038 – –

Less: Allowance for impairment (1,036) (1,038) – –

– – – –


At 1 January 1,038 931 – 6,078

(Write-back)/charge for the year (2) 107 – –

Write off against allowance account – – – (6,078)

At 31 December 1,036 1,038 – –

Other debtors that are individually determined to be impaired at the balance sheet date relate to debtors that

are in signifi cant fi nancial diffi culties and have defaulted on payments. These receivables are not secured by

any collateral or credit enhancements.


82

25. Derivatives

2008 2007$’000 $’000

Contract/Notional Amount Assets Liabilities

Contract/Notional Amount Assets Liabilities

Forward currency contracts

- USD 8,800 – (548) – – –

- AUD 660 4 – – – –

Interest rate swap

- SGD 3,000 – (199) – – –

4 (747) – – –

Forward currency contracts are used to hedge the Group’s purchases denominated in USD and AUD.

The interest rate swap is used to hedge cash fl ow interest rate risk arising from fl oating rate SGD bank

loans. This interest rate swap receives fl oating interest equal to 3 month SGD Swap Offer Rate (“SOR”) and

pays a fi xed rate of interest of 3.45% per annum.

26. Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and at bank, unpledged fi xed deposits and bank

overdrafts. Fixed deposits held as collaterals are excluded from cash and cash equivalents.

For the purpose of consolidated cash fl ow statement, cash and cash equivalents comprise the following at

the balance sheet date :

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Fixed deposits 1,669 7,176 – –

Cash and bank balances 14,893 8,034 3,681 452

Bank overdrafts (Note 27) (155) – – –

16,407 15,210 3,681 452

Less : Fixed deposits held as collaterals (832) (30) – –

15,575 15,180 3,681 452

Fixed deposits held as collaterals is pledged as a security for term loan and payment to or part payment of

any other damages, loss, interests or costs which the owners of the development property may suffer or

incur in the event of any default of the Group.

The fi xed deposits earned interest from 0.63% to 3.75% (2007 : 0.83% to 3.25%) per annum.

Included in cash and cash equivalents of the Group is an amount of approximately $4,730,000 (2007 :

$2,881,000) denominated in United States Dollars.

Bank overdrafts are included in the determination of cash and cash equivalents because they form an

integral part of the Group’s cash management.



27. Amounts due to bankers

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Secured -

Term loan 1,118 – – –

Property loan 1,300 45 – –

Bank overdrafts (Note 26) 155 – – –

Bills payables, trust receipts and banker

acceptance 730 – – –

Unsecured -

Money market facilities 15,805 2,000 6,200 –

Bills payables, trust receipts and

banker acceptance 14,241 6,813 1,701 –

Term loan 11,077 348 1,777 348

44,426 9,206 9,678 348

(i) The secured term loan bears interest from 3.25% to 8.53% (2007 : 4.29% to 5.75%) per annum and is secured by the following :

(a) fi rst legal charge over the freehold land and property;

(b) corporate guarantee by a subsidiary company; and

(c) fi xed and fl oating charges over all present and future assets of the subsidiary company.

(ii) In 2007, the property loan bore interest from 4.50% to 5.25% per annum and was secured by a fi rst legal mortgage over the investment property (Note 17). The property loan was also secured by corporate guarantee from the Company. As at 31 December 2007, the mortgage on the investment property had been discharged.

In the current year, the property loan bears interest of 5.25% (2007 : nil) per annum and is secured by the following:

(a) a fi rst legal mortgage over 15 apartment units of the development property;

(b) corporate guarantee from a subsidiary company and a related party; and

(c) a performance bond from an insurance company.

(iii) The bank overdrafts bear interest from 8.25% to 8.75% (2007 : 6.50% to 7.07%) per annum and are secured by the following :

(a) legal charge over the freehold land and property;

(b) legal charge over certain leasehold properties;

(c) corporate guarantees by certain subsidiary companies;

(d) jointly and severally guarantee by a director of a subsidiary company and two third parties; and

(e) fi xed and fl oating charge over all present and future assets of the subsidiary company.


84

27. Amounts due to bankers (cont’d)

(iv) The secured bills payables, trust receipts and bankers acceptance bear interest from 4.94 % to 5.85% (2007 : Nil%) per annum and are secured by :

(a) legal charge over certain leasehold properties;

(b) corporate guarantees by certain subsidiary companies; and

(c) fi xed and fl oating charges over all the present and future assets of the subsidiary company.

(v) The money market facilities bear interest from 2.15% to 7.13% (2007 : 3.95% to 5.50%) per annum and are secured by a corporate guarantee issued by a subsidiary company.

(vi) The bills payable, trust receipts and banker acceptance bear interest from 2.75% to 9.00% (2007: 3.03% to 9.50%) per annum and are secured by corporate guarantees issued by certain subsidiary companies. Bills payable, trust receipts and banker acceptance denominated in foreign currencies as at 31 December are as follows:

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

US dollar 10,984 – – –

Euro 1,084 – – –

28. Other creditors and accruals

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Accruals 6,110 4,532 1,570 270

Sundry creditors 1,929 626 402 30

Downpayment from customers 1,312 132 339 7

9,351 5,290 2,311 307

Sundry creditors are unsecured, non-interest bearing and are normally settled on 30 to 60 days terms.



29. Hire purchase creditors

The Group acquired certain plant and machinery under hire purchase arrangements over the next 1 to 7

years. The discount rates implicit in the leases are between 2.35% to 4.74% (2007 : 3.00% to 6.27%) per

annum. There are no restrictions placed upon the Group by entering into these leases. The future minimum

lease payments together with the present value of the net minimum lease payments are as follows :

Minimum payments

Present value of payments

Minimum payments

Present value of payments

2008 2008 2007 2007$’000 $’000 $’000 $’000

Group

Within 1 year 1,188 811 97 86

After 1 year but not more than 5 years 2,370 2,317 209 199

After 5 years 80 78 – –

2,450 2,395 209 199

Total minimum lease payments 3,638 3,206 306 285

Less : amounts representing

fi nance charges (432) – (21) –

Present value of lease payments 3,206 3,206 285 285

Company

Within 1 year 66 57 – –

After 1 year but not more than 5 years 199 185 – –

Total minimum lease payments 265 242 – –

Less : amounts representing

fi nance charges (23) – – –

Present value of lease payments 242 242 – –

30. Amounts due to a related party

Amounts due to a related party are unsecured, bear an interest rate of 10% (2007 : 10%) per annum and

are not expected to be repaid in the next 12 months.

31. Long-term loans

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Secured :

(a) Property loans – 1,836 – –

(b) Term loan 4,573 – – –

Unsecured :

(a) Term loan 2,930 121 2,930 121

7,503 1,957 2,930 121


86

31. Long-term loans (cont’d)

(i) In 2007, one of the property loans of $536,000 bore interest at 4.5% per annum and was secured by

a fi rst legal mortgage over the investment property and corporate guarantee from the Company. The

loan has been fully repaid and the mortgage was fully discharged during the year.

The remaining property loan of $1,300,000 bears interest at 5.25%, was secured by the development

property, corporate guarantee from a subsidiary company and a related party. The loan has been

reclassifi ed to amounts due to bankers (Note 27) during the year.

(ii) The secured term loan bears interest from 3.25% to 8.53% per annum and is secured by a legal

mortgage over certain leasehold properties.

32. Deferred tax liabilities

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Balance at beginning of year 404 855 – –

Fair value adjustments on acquisition of subsidiary 4,222 – – –

Exchange adjustment (47) – – –

Provision/(write-back) for the year 1,152 (451) 5 –

Balance at end of year 5,731 404 5 –

Deferred taxes as at 31 December relate to the following:

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

Differences in carrying values of property, plant

and equipment for accounting and tax purposes 3,321 193 5 –

Difference in carrying value of the revaluation

reserve for accounting and tax purposes 1,461 211 – –

Differences in carrying values of the development

property for accounting and tax purposes 949 – – –

Net deferred tax liabilities 5,731 404 5 –



33. Share capital and treasury shares

(a) Share capital

Group and Company2008 2007

No. of

shares

’000 $000

No. of

shares

’000 $’000

Issued and fully paid ordinary shares :

At 1 January 146,354 45,237 140,266 43,801

Issued for acquisition of a subsidiary

(Note 11) 6,300 2,898 – –

Exercise of employee share options 843 200 6,062 1,431

Exercise of bonus warrants 22,553 4,565 26 5

At 31 December 176,050 52,900 146,354 45,237

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when

declared by the Company. All ordinary shares carry one vote per share without restrictions.

Details of outstanding share options of the Company are set out in Note 35.

Proceeds from the exercise of the bonus warrants are used as working capital in the Company.

(b) Treasury shares

Treasury shares relate to ordinary shares of the Company that is held by the Company.

The Company acquired 3,127,000 (2007 : 272,000) shares in the Company through purchases on

the Singapore Exchange during the fi nancial year. The total amount paid to acquire the shares was

$1,217,000 (2007 : $87,000). In 2007, the gain of $161,000 from the sale was recognised under

capital reserve. As at 31 December 2008, the Company held 3,127,000 (2007: Nil) treasury shares.

34. Asset revaluation reserve, capital reserve, employee share option reserve and foreign currency translation reserve

Asset revaluation reserve

The asset revaluation reserve arose from the revaluation of the leasehold property in 1989 as mentioned in

Note 10.

Capital reserve

The capital reserve is not available for distribution as dividends and the Company’s assets.


88

34. Asset revaluation reserve, capital reserve, employee share option reserve and foreign currency translation reserve (cont’d)

Employee share option reserve

Employee share option reserve represents the equity settled share options granted to employees.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation

of the fi nancial statements of foreign operations whose functional currencies are different from that of the

Group’s presentation currency.

35. Equity compensation benefi ts

Share Option Schemes

(a) Ace Dynamics Share Option Scheme (“Scheme I”)

At the Extraordinary meeting held on 19 February 2000, shareholders approved the adoption of

Scheme I. Under Scheme I, options may be granted to selected employees of the Group including

employees of its associated companies, executive and non-executive Directors. Controlling

shareholders and their associates are not eligible to participate in Scheme I. Further details of

Scheme I are set out in the circular to shareholders dated 28 January 2000. Details of the various

exercise prices per share are set out in paragraph (c) below.

(b) Leeden Share Option Scheme 2007 (“Scheme II”)

At the Extraordinary meeting held on 8 August 2007, shareholders approved the adoption of the

Scheme. Under Scheme II, options may be granted to confi rmed Group employees, including

employees of associated companies, executive and non-executive directors and controlling

shareholders. Further details are set out in the circular to shareholders dated 17 July 2007. Details

of the various exercise prices per share are set out in paragraph (c) below.



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90

35. Equity compensation benefi ts (cont’d)

(d) The fair value of share options as at the date of grant, is estimated by an external valuer using a

binomial model, taking into account the terms and conditions upon which the options were granted.

The inputs to the model used for the years ended 31 December 2008 and 31 December 2007 are

shown below.

Scheme I

2008 2007

Dividend yield (%) 1 1

Expected volatility (%) 46.71 46.71

Historical volatility (%) 46.71 46.71

Risk-free interest rate (%) 2.25 to 2.81 2.25 to 2.81

Expected life of option (years) 2.5 2.5

Weighted average share price ($) 0.19 0.19

Scheme II

2008 2007

Dividend yield (%) 1.5 1.5

Expected volatility (%) 41.46 - 41.56 41.46 - 41.56

Historical volatility (%) 41.46 - 41.56 41.46 - 41.56

Risk-free interest rate (%) 2.54 to 2.81 2.54 to 2.81

Weighted average share price ($) 0.49 - 0.59 0.49 - 0.59

The expected life of the options is based on historical data and is not necessarily indicative of

exercise patterns that may occur. The expected volatility refl ects the assumption that the historical

volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other

features of the option grant were incorporated into the measurement of fair value.

36. Commitments

The Group has entered into leases on its leasehold property and retail shops. These non-cancellable leases

have remaining lease terms of 1 to 15 years. The lease on the Group’s leasehold property includes a clause

to enable upward revision of the rental charge on an annual basis. The lease terms do not contain any

restriction on the Group’s activities concerning dividends, additional debt or further leasing. Future minimum

lease payments under non-cancellable operating leases are as follows as of 31 December:

Group2008 2007$’000 $’000

Due within one year 2,009 450

Due within two to fi ve years 2,543 1,470

Due after fi ve years 2,861 3,762

7,413 5,682



37. Contingent liabilities

Contingent liabilities not provided for in the fi nancial statements for year ended 31 December comprised :

Group Company2008 2007 2008 2007$’000 $’000 $’000 $’000

(a) unsecured

(i) Guarantees to provide fi nancial support to

certain subsidiary companies – – 29,815 9,459

(ii) Guarantees issued for bank facilities of

associated companies 5,254 2,573 – –

(b) secured

(i) Guarantees issued for bank facilities of

subsidiary companies – – – 581

(ii) Guarantees issued for bank facilities of

certain existing unit owners of

development property 2,518 2,518 – –

The Company has undertaken to provide fi nancial support to certain subsidiary companies and corporate guarantees to banks for loans and borrowings as mentioned in Notes 27 and 31.

A subsidiary company has provided corporate guarantees to banks for pre-existing loans obtained by

certain existing owners of the development property as mentioned in Note 19.

38. Signifi cant related party disclosures

An entity or individual is considered a related party of the Group for the purposes of the fi nancial statements if i) it possesses the ability (directly or indirectly) to control or exercise signifi cant infl uence over the operating and fi nancial decisions of the Group or vice versa or ii) it is subject to common control or common signifi cant infl uence.

The following signifi cant transactions between the Group and related parties who are not members of the Group took place during the year at terms agreed between the parties:

Group2008 2007$’000 $’000

Rental income and service fee from an associated company 554 819

Rental expense and service fee to associated companies 85 129

Administrative fees charged to an associated company 197 –

Purchases from associated companies 393 558

Sales to associated companies 1,745 31

Interest paid to a related companies 83 83

Interest received from an associated company 266 56

Purchase from a related party 624 –


92

38. Signifi cant related party disclosures (cont’d)

Directors’ and key executives’ remuneration

Directors’ remuneration and fees amount to approximately $1,692,000 (2007 : $1,321,000) and $175,000

(2007 : $175,000) respectively. Share based payments and central provident fund contributions to directors

amount to approximately $468,000 (2007 : $106,000) and $25,000 (2007 : $41,000) respectively.

Key executive offi cers’ remuneration and share based payment amount to approximately $882,000

(2007 : $850,000) and $15,000 (2007 : Nil) respectively. Central provident fund contributions to key

executive offi cers amount to $55,000 (2007 : $42,000).

39. Financial risk management objectives and policies

The Group and the Company is exposed to fi nancial risks arising from its operation and the use of fi nancial

instruments. The key fi nancial risks include interest rate risk, foreign currency risk, credit risk, liquidity

risk and market price risk. The board of directors reviews and agrees policies and procedures for the

management of these risks and they are summarised below:

The following sections provide details regarding the Group’s and Company’s exposure to the above-

mentioned fi nancial risks and the objectives, policies and processes for the management of these risks.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash fl ows of the Group’s and the Company’s

fi nancial instruments will fl uctuate because of changes in market interest rates. The Group’s and the

Company’s exposure to interest rate risk arises primarily from their loans and borrowings.

The Group’s exposure to changes in interest rates relates primarily to the Group’s bank borrowings

and hire purchase creditor. The Group’s policy is to obtain the most favourable interest rates available

without increasing its foreign currency exposure.

To manage this risk, the Group also enters into interest rate swap to minimise the fl uctuation of

interest costs due to fl oating rate debts. The Group manages interest costs in alignment with the

market expectation of future rates movement. The Group does not enter into interest rate swap in a

decreasing rate environment.

Sensitivity analysis for interest rate risk

At the balance sheet date, if SGD and MYR interest rates had been 161 (2007: 75) and 6 (2007 : Nil)

basis points respectively lower/higher with all other variables held constant, the Group’s profi t net of

tax would have been $386,000 (2007: $96,000) and $4,000 (2007 : $Nil) respectively higher/lower,

arising mainly as a result of lower/higher interest expense on fl oating rate loans and borrowings.

Surplus funds are placed with major fi nancial institutions.



39. Financial risk management objectives and policies (cont’d)

(b) Foreign currency risk

The Group has transactional currency exposures arising from sales or purchases that are

denominated in a currency other than the respective functional currencies of Group entities,

primarily SGD and Malaysian Ringgit (MYR). The foreign currencies in which these transactions are

denominated are mainly United States Dollars (USD). Approximately 23% (2007 : 28%) of the Group’s

sales are denominated in foreign currencies, whilst approximately 46% (2007 : 47%) of costs are

denominated in the respective functional currencies of the Group entities. The Group enters into

forward currency contracts to minimise the currency exposures.

The Group seeks to maintain a natural hedge through the matching of liabilities against assets in the

same currency. Where appropriate, the Group enters into short term forward contracts and foreign

exchange derivative instruments to hedge against expected currency exposure.

The Group is also exposed to currency translation risk arising from its net investments in foreign

operations, including Malaysia, People’s Republic of China (“PRC”) and Thailand. The Group’s net

investments in Malaysia, PRC and Thailand are not hedged as currency positions in MYR, RMB and

Thai Baht are considered to be long-term in nature.

Included in trade debtors of the Group are amounts of approximately $5,775,000 (2007 : $6,198,000)

and $2,231,000 (2007 : $3,524,000) denominated in USD and EUR respectively.

Included in trade creditors of the Group are amounts of approximately $7,291,000 (2007 :

$8,398,000), $3,244,000 (2007 : $5,173,000) and $218,000 (2007 : $445,000) denominated in USD,

EUR and AUD respectively.

The Group also holds cash and cash equivalent denominated in foreign currencies for working capital

purposes. At the balance sheet date, such foreign currency balances (mainly in USD) amount to

$4,730,000 (2007: $2,881,000) for the Group.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity to a reasonably possible change in the USD, EUR,

AUD and MYR exchange rates (against SGD), with all other variables held constant, of the Group’s

profi t net of tax and equity.

2008 2007Profi t net

of taxProfi t net

of tax$’000 $’000

USD - strengthened 6% (2007: 3%) 175 (19)

- weakened 6% (2007: 3%) (165) 19

EUR - strengthened 1% (2007: 3%) (7) (49)

- weakened 1% (2007: 3%) 7 49

AUD - strengthened 6% (2007: 3%) (11) (11)

- weakened 6% (2007: 3%) 10 10


94


c) Credit risk

The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all

customers who wish to trade on credit terms are subject to credit verifi cation procedures. In addition,

receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to

bad debts is not signifi cant.

With respect to credit risk arising from the other fi nancial assets of the Group, which comprise trade

and other receivables and cash and cash equivalents, the Group’s exposure to credit risk arises from

the default of the counter party, with a maximum exposure equal to the carrying amount of these

instruments.

Since the Group trades only with recognised and creditworthy third parties, there is no requirement

for collateral. There are no signifi cant concentrations of credit risk within the Group.

Exposure to credit risk

At the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk is

represented by:

- the carrying amount of each class of fi nancial assets recognised in the balance sheets,

including derivatives with positive fair values; and

- a nominal amount of $Nil (2007: $581,000) relating to corporate guarantees provided by the

Company to banks on a subsidiaries’ bank loans.

Information regarding credit enhancements for trade and other receivables is disclosed in Notes 23

and 24.

Credit risk concentration profi le

The Group determines concentrations of credit risk by monitoring the country and industry sector

profi le of its trade receivables on an on-going basis. The credit risk concentration profi le of the

Group’s trade receivables at the balance sheet date is as follows:

2008 2007$’000 % of total $’000 % of total

Group

By country:

Malaysia 17,244 36 6,580 23

Singapore 14,050 29 11,690 41

Indonesia 7,818 16 4,502 16

Hong Kong 2,312 5 3,524 12

Other countries 7,055 14 2,511 8

48,479 100 28,807 100




c) Credit risk (cont’d)

Credit risk concentration profi le (cont’d)

2008 2007$’000 % of total $’000 % of total

Group

By industry sectors:

Reseller, dealer and trader 9,659 20 2,873 10

Shipyard 7,731 16 5,901 21

Engineering 7,043 15 2,646 9

Oil and gas 6,218 13 4,448 15

Property 4,111 8 – –

Water treatment 2,224 5 3,524 12

Offshore 1,523 3 2,880 10

Others 9,970 20 6,535 23

48,479 100 28,807 100

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good

payment record with the Group. Cash and cash equivalents and investment securities are placed

with or entered into with reputable fi nancial institutions or companies with high credit ratings and no

history of default.

Financial assets that are either past due or impaired

Information regarding fi nancial assets that are either past due or impaired is disclosed in Note 23

(Trade debtors), Note 24 (Other debtors) and Note 12 (Associated companies).

(d) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter diffi culty in meeting fi nancial

obligations due to shortage of funds. The Group’s and Company’s exposure to liquidity risk arises

primarily from mismatches of the maturities of fi nancial assets and liabilities. The Group’s and the

Company’s objective is to maintain a balance between continuity of funding and fl exibility through the

use of stand-by credit facilities.

The Group’s and the Company’s liquidity risk management policy is to maintain a minimun current

ratio of 1.0 at all times and to maintain suffi cient liquid fi nancial assets and stand-by credit facilities.


96


(d) Liquidity risk (cont’d)

The table below summarises the maturity profi le of the Group’s and the Company’s fi nancial liabilities

at the balance sheet date based on contractual undiscounted payments.

The table below summarises the maturity profi le of the Group’s and the Company’s fi nancial liabilities

at the balance sheet date based on contractual undiscounted payments.

Less than 1 year

1 to 5 years

Over 5 years Total

$’000 $’000 $’000 $’000

Group

2008

Trade creditors 20,223 – – 20,223

Other creditors and accruals 9,351 – – 9,351

Loan and borrowings 44,628 6,365 1,413 52,406

Amount due to related parties 3,232 887 – 4,119

Hire purchase creditors 1,188 2,370 80 3,638

78,622 9,622 1,493 89,737

2007



Loan and borrowings 9,206 1,587 370 11,163

Amount due to a related party – 908 – 908

Hire purchase creditors 86 199 – 285

29,367 2,694 370 32,431

Company

2008



Amount due to bankers 9,797 3,012 – 12,809

Hire purchase creditors 97 209 – 306

15,158 3,221 – 18,379

2007

Trade creditors 321 – – 321

Other creditors and accruals 307 – – 307

Amount due to bankers 348 121 – 469

976 121 – 1,097




(e) Market price risk

Market price risk is the risk that the fair value or future cash fl ows of the Group’s fi nancial instruments

will fl uctuate because of changes in market prices (other than interest or exchange rates). The

Group is exposed to equity price risk arising from its investment in quoted equity instruments. These

instruments are quoted on the SGX-ST in Singapore and are classifi ed as other investments. The

Group does not have exposure to commodity price risk.

Sensitivity analysis for equity price risk

At the balance sheet date, if the STI had been 54% (2007: 2%) higher/lower with all other variables

held constant, the Group’s profi t net of tax would have been $32,000 (2007: $3,000) higher/lower,

arising as a result of higher/lower fair value gains on quoted equity instruments, and the Group’s other

investments would have been $32,000 (2007: $3,000) higher/lower, arising as a result of an increase/

decrease in the fair value of equity instruments classifi ed as other investments.

40. Fair value of fi nancial instruments

Management has determined that the carrying amounts of trade and other receivables, cash, trade and

other creditors, amount due to a related party and amounts due to bankers based on their notional

amounts, reasonably approximate their fair values because these are mostly short-term in nature or are

repriced frequently.

The amounts due from associated companies and subsidiary companies have no fi xed terms of repayment

and are repayable only when the cash fl ow permits. Accordingly, the fair values are not determinable as the

timing of the future cash fl ow arising from them cannot be estimated reliably. These amounts were carried

at cost.

The fi nancial instruments classifi ed in accordance to the classes are as tabled below :

Fair value through

profi t and loss

Carried at amortised

costCarried at

cost Total$’000 $’000 $’000 $’000

Group

2008

Amounts due from associated companies – – 2,203 2,203

Other investments 68 – 270 338

Trade debtors – 48,479 – 48,479

Other debtors – 2,550 – 2,550

Fixed deposits – 1,669 – 1,669

Cash and bank balances – 14,893 – 14,893

Amount due to bankers – (51,929) – (51,929)

Trade creditors – (20,223) – (20,223)

Other creditors and accruals – (9,351) – (9,351)

Amounts due to related parties – (4,119) – (4,119)

Derivatives (743) – – (743)


98

40. Fair value of fi nancial instruments (cont’d)

Fair value through

profi t and loss

Carried at amortised

costCarried at

cost Total$’000 $’000 $’000 $’000

2007

Amounts due from associated companies – – 1,221 1,221

Other investments 150 – – 150

Trade debtors – 28,807 – 28,807

Other debtors – 586 – 586

Fixed deposits – 7,176 – 7,176

Cash and bank balances – 8,034 – 8,034

Amount due to bankers – (11,163) – (11,163)

Trade creditors – (14,785) – (14,785)

Other creditors – (5,290) – (5,290)

Amounts due to a related party – (908) – (908)

41. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating

and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic

conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payments to

shareholders, return capital to shareholders or issue new shares.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt.

The Group includes within net debt, loans and borrowings, trade and other creditors, less cash and cash

equivalents. Capital includes equity attributable to the equity holders of the parent.

Group2008 2007$’000 $’000

Loans and borrowings 55,135 11,448

Trade and other creditors 29,574 21,316

Amounts due to related parties 4,119 908

Less: Cash and bank balances (14,893) (8,034)

Less: Fixed deposits (1,669) (7,176)

Net debt 72,266 18,462

Equity attributable to the equity holders of the parent 61,031 45,469

Capital and net debt 133,297 63,931

Gearing ratio 54% 29%



42. Segment information

Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and

rates of return are affected predominantly by differences in the products and services produced. Secondary

information is reported geographically. The operating businesses are organised and managed separately

according to the nature of the products and services provided, with each segment representing a strategic

business unit that offers different products and serves different markets.

The Group is organised into 2 main operating segments, namely :

(a) distribution of industrial equipment, hardware and safety products; and

(b) property investment/development and other operations, including the Group’s compact disc

manufacturing operations.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that

can be allocated on a reasonable basis.

By industry

Distribution of welding, gas and safety products Property and others Consolidated2008 2007 2008 2007 2008 2007$’000 $’000 $’000 $’000 $’000 $’000

Segment revenue

Sales to external customers 140,549 96,706 16,690 6,186 157,239 102,892

Segment results 11,441 12,321 4,339 (3,129) 15,780 9,192

Interest expenses (1,138) (937)

Negative goodwill arising from

consolidation 810 – – – 810 –

Share of profi t in associated and

joint venture companies 1,348 481


Tax expense (3,218) (2,133)

Net profi t after taxation 13,582 6,603

Segment assets 165,099 71,945 15,691 10,651 180,790 82,596

Segment liabilities 93,352 31,196 4,184 5,563 97,536 36,759

Other segment information

Capital expenditure 5,501 263 9 141 5,510 404

Depreciation 2,159 462 690 1,029 2,849 1,491

Impairment in value of investment – 431 83 (71) 83 360

Amortisation of intangible assets 102 – – – 102 –

Other non-cash expenses 4,379 2,170 – 34 4,379 2,204


100

42. Segment information (cont’d)

By geographical

Geographical segments

The Group’s geographical segments are based on the location of the Group’s assets. Sales to external

customers disclosed in geographical segments are based on the geographical location of the Group’s

operations.

Singapore Malaysia Others Consolidated2008 2007 2008 2007 2008 2007 2008 2007$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Segment revenue

Sales to external

customers 106,128 89,684 51,111 13,208 – – 157,239 102,892

Other geographical information

Segment assets 121,792 78,095 57,777 4,350 1,221 151 180,790 82,596

Capital expenditure 3,013 396 2,439 8 58 – 5,510 404

43. Dividends

The Company declared and paid an interim dividend of 1.00 cents per ordinary share with one tier tax

exempt (2007 : 0.50 cents per ordinary share net tax of 18%) amounting to $1,747,000 (2007 : $730,000)

for the fi nancial year ended 31 December 2008.

44. Subsequent events

Injection of capital in Lianyungang Henglong Water Co., Ltd

On 14 January 2009, the Company’s 50% owned associated company, Henglong Water Pte Ltd injected an

additional USD 100,000 into its wholly owned subsidiary Lianyungang Henglong Water Co., Ltd.

Subsequently on 9 March 2009, Henglong Water Pte Ltd has further injected USD417,000 into Lianyungang

Henglong Water Co., Ltd. With the above capital injections, the paid up capital of Lianyungang Henglong

Water Co., Ltd currently stands at USD6,517,000.

45. Authorisation of fi nancial statements for issue

The fi nancial statements of Leeden Limited for the year ended 31 December 2008 were authorised for issue

in accordance with a resolution of the Directors on 30 March 2009.


Shareholding Statisticsas at 18 March 2009

Number of Issued Shares (excluding Treasury Shares) : 172,305,983

Number/Percentage of Treasury Shares : 3,931,000 (2.28%)

Class of Shares : Ordinary Share

Voting Rights (excluding Treasury Shares) : One Vote Per Share

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholding No. of Shareholders % No. of Shares %

1 - 999 149 4.32 51,924 0.03

1,000 - 10,000 2,764 80.19 10,487,847 6.09

10,001 - 1,000,000 513 14.88 30,346,333 17.61

1,000,001 and above 21 0.61 131,419,879 76.27

3,447 100.00 172,305,983 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name Of Shareholders No. of Shares %

1. United Overseas Bank Nominees Pte Ltd 19,749,200 11.46

2. Hong Leong Finance Nominees Pte Ltd 15,334,500 8.90

3. Mayban Nominees (S) Pte Ltd 12,272,000 7.12

4. Tham Weng Cheong Steven 9,053,000 5.25

5. Phillip Securities Pte Ltd 8,478,103 4.92

6. CIMB Bank Nominees (S) Sdn Bhd 8,179,000 4.75

7. DBS Vickers Securities (Singapore) Pte Ltd 7,726,000 4.48

8. UOB Kay Hian Pte Ltd 7,598,600 4.41

9. Amfraser Securities Pte. Ltd. 7,416,000 4.30

10. HSBC (Singapore) Nominees Pte Ltd 7,339,000 4.26

11. HL Bank Nominees (S) Pte Ltd 6,192,000 3.59

12. Kim Eng Securities Pte. Ltd. 4,738,200 2.75

13. Eber Geb Linden Marianne Doris 3,241,892 1.88

14. OCBC Securities Private Ltd 2,842,000 1.65

15. Esser Heinz Johann 2,337,289 1.36

16. Lee Lai Ying 2,100,000 1.22

17. Chai Chee Keng 1,709,800 0.99

18. DBS Nominees Pte Ltd 1,530,000 0.89

19. Tan Lian Khar 1,289,000 0.75

20. Sam Yoke Tatt 1,257,295 0.73

Total : 130,382,879 75.66

PUBLIC FLOAT

Based on information available to the Company as at 18 March 2009, approximately 46.49% of the Company’s

shares are held in the hands of the public. Accordingly, the Company has complied with Rule 723 of the Listing

Manual of SGX-ST which requires that at least 10% of the equity securities (excluding preference shares and

convertible equity securities) in a class that is listed to be in the hands of the public.

Shareholding Statisticsas at 18 March 2009

102

SUBSTANTIAL SHAREHOLDERS As At 18 March 2009 (As recorded in the Register of Substantial Shareholders)

Substantial Shareholders

Direct Interest Deemed Interest

No. of Shares

%In Nominees’ Name Others

No. of Shares % Note

No. of Shares % Note

Steven Tham Weng Cheong 9,053,000 5.26 27,500,000 15.97 (1) 500,000 0.29 (2)

Kelvin Lee Chee Fatt – – 20,847,000 12.11 (3) – – –

Lim How Boon 489,000 0.28 18,075,000 10.50 (4) 2,100,000 1.22 (5)

Hendra Harjadi – – 10,598,000 6.15 (6) – – –

Ong Nai Pew 15,000 0.01 12,760,800 7.41 (7) – – –

Greenline Holdings Pte Ltd 361,000 0.21 17,714,000 10.29 (8) – – –

Notes:

(1) Mr Steven Tham Weng Cheong is deemed to be interested in the shares held by the following nominees:

a. Hong Leong Finance Nominees Pte. Ltd.: 7,000,000 shares

b. United Overseas Bank Nominees Pte. Ltd.: 7,000,000 shares

c. CIMB Nominees (S) Sdn Bhd: 5,000,000 shares

d. HL Bank Nominees (S) Pte. Ltd.: 3,000,000 shares

e. Philip Securities Pte. Ltd.: 2,000,000 shares

f. Malayan Banking Berhad: 3,500,000 shares

(2) Held by spouse: Madam Tan Kee Tiang.

(3) By virtue of Mr Kelvin Lee Chee Fatt holding not less than 20% of the voting rights in Greenline Holdings Pte Ltd (“Greenline”), he

is deemed to be interested in 361,000 shares held by Greenline and 17,714,000 shares held by UOB Kay Hian Pte. Ltd., Kim Eng

Securities Pte Ltd, Philip Securities Pte Ltd, OCBC Securities Private Ltd and Mayban Nominees (Sinagpore) Pte Ltd as nominees for

Greenline. Mr Lee is also deemed to be interested in 2,772,000 shares held by Mayban Nominees (Singapore) Pte Ltd.

(4) By virtue of Mr Lim How Boon holding not less than 20% of the voting rights in Greenline Holdings Pte Ltd (“Greenline”), he is deemed to

be interested in the 361,000 shares held by Greenline and 17,714,000 shares held by UOB Kay Hian Pte. Ltd., Kim Eng Securities Pte

Ltd, Philip Securities Pte Ltd, Mayban Nominees (Singapore) Pte Ltd and OCBC Securities Private Ltd as nominees for Greenline.

(5) Held by spouse: Madam Lee Lai Ying.

(6) Dr Hendra Harjadi is deemed to be interested in the shares held by the following nominees:

a. Hong Leong Finance Nominees Pte Ltd: 6,000,000 shares

b. UOB Kay Hian Private Limited: 4,598,000 shares

(7) Dr Ong Nai Pew is deemed to be interested in the shares held by the following nominees:

a. DBS Vickers Securities (S) Pte Ltd: 1,198,000 shares

b. CIMB Bank Nominees (S) Sdn Bhd: 3,179,000 shares

c. United Overseas Bank Nominees Pte Ltd: 7,832,800 shares

d. OCBC Securities Private Ltd: 201,000 shares

e. Hong Leong Nominees Pte Ltd: 350,000 shares

(8) Greenline Holdings Pte Ltd is deemed to be interested in the shares held by the following nominees:

a. UOB Kay Hian Pte Ltd: 1,200,000 shares

b. Kim Eng Securities Pte Ltd: 3,450,000 shares

c. Philip Securities Pte Ltd: 5,204,000 shares

d. OCBC Securities Private Ltd: 1,860,000 shares

e. Mayban Nominees (Singapore) Pte Ltd: 6,000,000 shares


Warrantholding Statisticsas at 18 March 2009

DISTRIBUTION OF WARRANTHOLDINGS

No. of Size of Warrantholdings Warrantholders % No. of Warrants %

1 - 999 1,971 60.63 741,296 11.61

1,000 - 10,000 1,205 37.06 2,706,307 42.39

10,001 - 1,000,000 75 2.31 2,936,447 46.00

1,000,001 and above 0 0.00 0 0.00

3,251 100.00 6,384,050 100.00

TWENTY LARGEST WARRANTHOLDERS

No. Name of Warrantholders No. of Warrants %

1. United Overseas Bank Nominees Pte Ltd 355,400 5.57

2. Amfraser Securities Pte. Ltd. 336,000 5.26

3. DBS Nominees Pte Ltd 266,600 4.18

4. OCBC Nominees Singapore Pte Ltd 157,600 2.47

5. Koh Seok Hoon 137,000 2.15

6. Sam Yoke Tatt 100,459 1.57

7. Ong Nai Pew 96,000 1.50

8. Thern Ching Aik 90,000 1.41

9. Gan Yok Lian 80,000 1.25

10. HSBC (Singapore) Nominees Pte Ltd 70,600 1.11

11. Tseng Daniel 65,200 1.02

12. SBS Nominees Pte Ltd 53,200 0.83

13. Ang Chian Poh 43,284 0.68

14. Khong Kin Thong @ Tai Kin 40,000 0.63

15. Toh Chwee Ti 37,800 0.59

16. Ng Siew San Susan 36,000 0.56

17. Soo Bon Han 33,000 0.52

18. Hong Leong Finance Nominees Pte Ltd 31,400 0.49

19. UOB Kay Hian Pte Ltd 29,320 0.46

20. Baek Tae Joo 28,600 0.45

Total : 2,087,463 32.70


104

LEEDEN LIMITED(Company Registration No. 196400172G)

(Incorporated in the Republic of Singapore)

NOTICE IS HEREBY GIVEN that the 45th Annual General Meeting of LEEDEN LIMITED will be held at 1 Shipyard

Road, Singapore 628128 on Thursday, 23 April 2009 at 10.30 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended

31 December 2008. (Resolution 1)

2. To re-elect the following Directors retiring pursuant to Article 93 of the Company’s Articles of Association:-

i) Mr Steven Tham Weng Cheong (Resolution 2) ii) Mr Hendra Harjadi (Resolution 3)

Mr Steven Tham Weng Cheong will, upon re-election as a Director of the Company, remain as a member of

the Nominating Committee and will be considered non-independent.

3. To re-appoint the following Directors retiring under Section 153(6) of the Companies Act, Cap. 50, to hold

offi ce from the date of this Annual General Meeting until the next Annual General Meeting of the Company.

[See Explanatory Note (i)]

i) Mr Leslie Struys (Resolution 4) ii) Mr Tony Chan Wing Khei (Resolution 5)

Mr Leslie Struys will, upon re-appointment as a Director of the Company, remain as Chairman of the

Nominating Committee and Remuneration Committee and as a member of the Audit Committee and will be

considered independent.

Mr Tony Chan Wing Khei will, upon re-appointment as a Director of the Company, remain as Chairman of

the Audit Committee and as a member of the Remuneration Committee and Nominating Committee and will

be considered independent.

4. To approve Directors’ Fees of S$175,000 for the year ended 31 December 2008. (2007: S$175,000)

(Resolution 6)

5. To re-appoint Ernst & Young LLP as auditors and to authorise the directors to fi x their remuneration.

(Resolution 7)

6. To transact any other business which may properly be transacted at an Annual General Meeting.



AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without any

modifi cations:

7. Authority to issue shares up to fi fty per centum (50%) of the issued shares in the capital of the Company

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of

the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and

empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would

require shares to be issued, including but not limited to the creation and issue of (as well as

adjustments to) options, warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the

Directors of the Company may in their absolute discretion deem fi t; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue

shares in pursuance of any Instrument made or granted by the Directors of the Company while this

Resolution was in force,

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments,

made or granted pursuant to this Resolution) to be issued pursuant to this Resolution shall not

exceed fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the

capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the

aggregate number of shares and Instruments to be issued other than on a pro-rata basis to existing

shareholders of the Company shall not exceed twenty per centum (20%) of the total number of

issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance

with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading

Limited) for the purpose of determining the aggregate number of shares that may be issued under

sub-paragraph (1) above, the total number of issued shares shall be based on the total number of

issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of

this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards which are

outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions

of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force

(unless such compliance has been waived by the Singapore Exchange Securities Trading Limited)

and the Articles of Association of the Company; and


106

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force

until the conclusion of the next Annual General Meeting of the Company or the date by which the

next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (ii)] (Resolution 8)

8. Authority to issue shares other than on a pro-rata basis pursuant to the aforesaid share issue mandate at discounts not exceeding twenty per centum (20%) of the weighted average price for trades done on the SGX-ST.

That subject to and pursuant to the share issue mandate in the aforesaid resolution being obtained, the

Directors of the Company be hereby authorised and empowered to issue shares other than on a pro-rata

basis at a discount not exceeding twenty per centum (20%) to the weighted average price for trades done

on the SGX-ST for the full market day on which the placement or subscription agreement in relation to such

shares is executed (or if not available for a full market day, the weighted average price must be based on

the trades done on the preceding market day up to the time the placement or subscription agreement is

executed), provided that :-

(a) in exercising the authority conferred by this Resolution, the Company complies with the provisions

of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been

waived by the SGX-ST); and

(b) unless revoked or varied by the Company in general meeting, such authority shall continue in force

until the conclusion of the next Annual General Meeting of the Company or the date by which the

next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (iii)] (Resolution 9)

9. Authority to issue shares under the Ace Dynamics Share Option Scheme

That approval be and is hereby given to the Directors to allot and issue from time to time such number of

shares in the capital of the Company as may be required to be issued pursuant to the exercise of options

under the Ace Dynamics Share Option Scheme.

[See Explanatory Note (iv)] (Resolution 10)

By Order of the Board

Yap Yin Yin IrisCompany Secretary

Singapore, 7 April 2009



Explanatory Notes:

(i) The effect of the Ordinary Resolutions 4 and 5 proposed in item 3 above, are to re-appoint directors of the Company who are over 70

years of age.

(ii) The Ordinary Resolution 8 in item 7 above, if passed, will empower the Directors of the Company to issue shares, make or grant

instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of

the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other

than on a pro-rata basis to shareholders.

For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will

be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this

Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of any convertible securities, or

share options or the vesting of share awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed

and any subsequent bonus issue, consolidation or subdivision of shares.

(iii) The Ordinary Resolution 9 in item 8 above is pursuant to measures implemented by the SGX-ST as stated in a press release entitled

“SGX introduces further measures to facilitate fund raising” dated 19 February 2009 and which became effective on 20 February 2009.

Under the measures implemented by the SGX-ST, issuers will be allowed to undertake non pro-rata placements of new shares priced at

discounts of up to 20% to the weighted average price for trades done on the SGX-ST for a full market day on which the placement or

subscription agreement in relation to such shares is executed, subject to the conditions that (a) shareholders’ approval be obtained in a

separate resolution (the “Resolution”) at a general meeting to issue new shares on a non pro-rata basis at discount exceeding 10% but

not more than 20%; and (b) that the resolution seeking a general mandate from shareholders for issuance of new shares on a non pro-

rata basis is not conditional upon the Resolution.

It should be noted that under the Listing Manual of the SGX-ST, shareholders’ approval is not required for placements of new shares, on

a non pro-rata basis pursuant to a general mandate, at a discount of up to 10% to the weighted average price for trades done on the

SGX-ST for a full market day on which the placement or subscription agreement in relation to such shares is executed.

(iv) The Ordinary Resolution 10 in item 9 above, if passed, will empower the Directors of the Company, from the date of this Meeting until

the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held or such authority

is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the

exercise of options granted under the Ace Dynamics Share Option Scheme (the “Scheme”). Although the Scheme has ceased operation

during the fi nancial year ended 31 December 2004, the outstanding options previously granted under the Scheme will remain valid until

the expiry, cancellation or exercise of the options.

Notes:

1. A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not

be a Member of the Company.

2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised offi cer or attorney.

3. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at 1 Shipyard Road, Singapore 628128

not less than forty-eight (48) hours before the time for holding the meeting.

LEEDEN LIMITED[Company Registration No. 196400172G]

(Incorporated In The Republic of Singapore)

PROXY FORM 45th Annual General Meeting (Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of LEEDEN LIMITED (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing, the person, or either or both of the persons, referred to above, the Chairman of the Meeting as

my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the

Company to be held on Thursday, 23 April 2009 at 10.30 a.m. and at any adjournment thereof. I/We direct

my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If

no specifi c direction as to voting is given or in the event of any other matter arising at the Meeting and at any

adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein

includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [√] within the box provided.)

No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 31 December 2008

2 Re-election of Mr Steven Tham Weng Cheong as a Director

3 Re-election of Mr Hendra Harjadi as a Director

4 Re-appointment of Mr Leslie Struys as a Director

5 Re-appointment of Mr Tony Chan Wing Khei as a Director

6 Approval of Directors’ fees amounting to S$175,000

7 Re-appointment of Ernst & Young LLP as Auditors

8 Authority to issue new shares

9 Authority to issue new shares up to discount of 20%

10 Authority to issue shares under the Ace Dynamics Share Option Scheme

Dated this day of 2009

Signature of Shareholder(s)

or, Common Seal of Corporate Shareholder

*Delete where inapplicable

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

IMPORTANT:

1. For investors who have used their CPF monies to buy shares in the capital

of Leeden Limited, this Report is forwarded to them at the request of the

CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be

ineffective for all intents and purposes if used or purported to be used by

them.

3. CPF investors who wish to attend the Meeting as an observer must

submit their requests through their CPF Approved Nominees within the

time frame specifi ed. If they also wish to vote, they must submit their

voting instructions to the CPF Approved Nominees within the time frame

specifi ed to enable them to vote on their behalf.

Notes :

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as

defi ned in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have

Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered

against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the

aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of

Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by

you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to

attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, he/she shall specify the proportion of his/her shareholding (expressed as a percentage of

the whole) to be represented by each proxy. If no such proportion is specifi ed, the fi rst named proxy shall be treated as representing

100% of the shareholding and any second named proxy as an alternate to the fi rst named proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting.

Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such

event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the

Meeting.

The Company Secretary

LEEDEN LIMITED1 Shipyard Road

Singapore 628128

Affi x

Postage

Stamp

1st Fold

2nd Fold

5. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 1 Shipyard Road

Singapore 628128 not less than 48 hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing.

Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under

the hand of an offi cer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on

behalf of the appointor, the letter or power of attorney or a duly certifi ed copy thereof must be lodged with the instrument.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to

act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore..

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or

where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing

a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument

appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the

Depository Register as at 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited

to the Company.

CorporateInformation

Registered Office1 Shipyard Road

Singapore 628128

Telephone : (65) 6266 4868

Facsimile : (65) 6266 2026

Email : [email protected]

Website : www.leedenlimited.com

AuditorsErnst & Young

Certified Public Accountants

Partner-in-charge : Tan Wee Khim

(Appointed since financial year 2007)

Share RegistrarBoardroom Corporate & Advisory

Services Pte Ltd

3 Church Street, #08-01

Samsung Hub

Singapore 049483

Principal BankersABN Amro Bank N.V.

Bangkok Bank Public Company Limited

CIMB Bank Berhad

Citibank, NA

DBS Bank Limited

KBC Bank N.V.

Malayan Banking Berhad

Mizuho Corporate Bank, Ltd

Oversea-Chinese Banking Corporation Limited

RHB Bank Berhad

Standard Chartered Bank

Board of Directors


Chairman & CEO

Kelvin Lee Chee Fatt

Managing Director & COO

Lim How Boon

Executive Director

Leslie Struys

Lead Independent Director

Tony Chan Wing Khei

Independent Director

Loh Weng Whye

Independent Director

Hendra Harjadi

Non-Executive Director

Audit Committee

Tony Chan Wing Khei (Chairman)

Leslie Struys

Loh Weng Whye


Leslie Struys (Chairman)

Tony Chan Wing Khei

Loh Weng Whye

Nominating Committee

Leslie Struys (Chairman)


Tony Chan Wing Khei

Company Secretary

Yap Yin Yin Iris

Leeden LimitedCompany Registration No. 196400172G

1 Shipyard Road, Singapore 628128Tel : (65) 6266 4868 Fax : (65) 6266 [email protected]

LeedenThe Integration Specialist for Welding, Gas and Safety

Leeden Lim

itedA

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