shining corporation ltd - finanznachrichten.de filehardware business, the sale of the shop unit, the...

CIRCULAR DATED 26 FEBRUARY 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor,accountant or other professional adviser immediately.

If you have sold or transferred all your shares in the capital of Shining Corporation Ltd (the “Company”), you shouldimmediately forward this Circular, the Notice of Extraordinary General Meeting and the accompanying Proxy Form to thepurchaser or transferee or to the stockbroker, bank or agent through whom the sale or transfer was effected for onwardtransmission to the purchaser or transferee.

The Singapore Exchange Securities Trading Limited (“SGX-ST”) assumes no responsibility for the correctness of any of thestatements made, reports contained or opinions expressed in this Circular. Approval in-principle granted by the SGX-ST tothe Company for the listing and quotation of the Strategic Shares (as defined in this Circular) and the New Shares (asdefined in this Circular) on the official list of Catalist is not to be taken as an indication of the merits of the ProposedPlacement, the Strategic Shares, the New Shares, the Company, its subsidiaries and its securities.

SHINING CORPORATION LTD(Company Registration Number 199904729G)

(Incorporated in the Republic of Singapore)

CIRCULAR TO SHAREHOLDERS

in relation to

(1) THE PROPOSED ISSUE OF (A) 167,307,692 STRATEGIC SHARES IN THE CAPITAL OF THE COMPANY ATAN ISSUE PRICE OF S$0.13 FOR EACH STRATEGIC SHARE TOGETHER WITH THE ISSUE OF UP TO155,653,846 FREE WARRANTS EXERCISABLE AT S$0.13 PER WARRANT, ALL BY WAY OF PRIVATEPLACEMENT TO CITIPOINT ASIA REAL ESTATE CAPITAL LTD AND/OR ITS NOMINEE AND (B) THE NEWSHARES ARISING FROM THE EXERCISE OF THE WARRANTS PURSUANT TO THE STRATEGICPLACEMENT AGREEMENT.

(2) THE PROPOSED WHITEWASH RESOLUTION FOR THE WAIVER BY THE INDEPENDENT SHAREHOLDERSOF THEIR RIGHT TO RECEIVE A MANDATORY GENERAL OFFER FROM CITIPOINT ASIA REAL ESTATECAPITAL LTD (AND PARTIES ACTING IN CONCERT WITH IT) FOR ALL THE ISSUED AND PAID-UP SHARESOF THE COMPANY FOLLOWING COMPLETION OF THE PLACEMENT.

(3) THE PROPOSED CONDITIONAL SHINING IPT TRANSACTIONS RELATING TO THE SALE OF THEHARDWARE BUSINESS, THE SALE OF THE SHOP UNIT, THE USE OF THE NAME “SHINING” AND THENOVATION OR SUB-CONTRACT OF THE RETRO-FITTING CONTRACT.

(4) A MANDATE FOR THE COMPANY TO ENGAGE IN PROPERTY DEVELOPMENT IN SINGAPORE FOLLOWINGCOMPLETION OF THE PROPOSED TRANSACTIONS.

Financial Advisor to Shining Corporation Ltd

DMG & PARTNERS SECURITIES PTE. LTD.(Incorporated in the Republic of Singapore)

(Company Registration Number 198701140E)

Independent Financial Adviser to the Independent Directors of Shining Corporation Ltd

IMPORTANT DATES AND TIMES:

Last date and time for lodgement of Proxy Form : 16 March 2008 at 10.00 a.m.

Date and time of Extraordinary General Meeting : 18 March 2008 at 10.00 a.m.

Place of Extraordinary General Meeting : 11 Changi South Street 3, #04-01Singapore 486122

DMG & Partners

(Incorporated in the Republic of Singapore)(Company Registration Number 196100003D)

TABLE OF CONTENTS

Page

DEFINITIONS ...................................................................................................................................... 3

LETTER TO SHAREHOLDERS .......................................................................................................... 8

1. INTRODUCTION........................................................................................................................ 8

2. DETAILS OF THE PROPOSED PLACEMENT .......................................................................... 9

3. PROPOSED WHITEWASH RESOLUTION .............................................................................. 15

4. THE PROPOSED SHINING IPT TRANSACTIONS .................................................................. 18

5. MANDATE FOR THE COMPANY TO ENGAGE IN PROPERTY DEVELOPMENTIN SINGAPORE ........................................................................................................................ 23

6. APPOINTMENT OF PROPOSED NEW DIRECTORS .............................................................. 24

7. RATIONALE FOR THE PROPOSED TRANSACTIONS ............................................................ 25

8. FINANCIAL EFFECTS .............................................................................................................. 26

9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS .................................. 27

10. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE COMPANY ...... 28

11. ADVICE OF HLF TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE PROPOSED PLACEMENT AND THE PROPOSED WHITEWASH RESOLUTION.......... 28

12. ADVICE OF HLF TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE PROPOSED SHINING IPT TRANSACTIONS .................................................................. 28

13. STATEMENT OF THE AUDIT COMMITTEE.............................................................................. 29

14. INDEPENDENT DIRECTORS’ RECOMMENDATIONS ............................................................ 29

15. EXTRAORDINARY GENERAL MEETING ................................................................................ 30

16. ABSTENTION FROM VOTING .................................................................................................. 30

17. ACTION TO BE TAKEN BY SHAREHOLDERS ........................................................................ 30

18. DIRECTORS’ RESPONSIBILITY STATEMENT ........................................................................ 31

19. CONSENTS .............................................................................................................................. 31

20. DOCUMENTS AVAILABLE FOR INSPECTION ........................................................................ 31

APPENDIX 1 ........................................................................................................................................ 32

APPENDIX 2 ........................................................................................................................................ 59

NOTICE OF EXTRAORDINARY GENERAL MEETING...................................................................... 60

PROXY FORM – EXTRAORDINARY GENERAL MEETING

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DEFINITIONS

Except where the context otherwise requires, the following definitions apply throughout this Circular:-

Board : The board of Directors of the Company.

Builders Shop : Builders Shop Pte Ltd, a wholly-owned subsidiary of theCompany.

Business Transfer Agreement : A conditional agreement dated 10 September 2007 betweenBuilders Shop and Shining Holdings for the transfer of theHardware Business by Builders Shop to Shining Holdings on theterms and subject to the conditions therein.

Catalist : Formerly known as SGX-SESDAQ.

CDP : The Central Depository (Pte) Limited.

Circular : This circular dated 26 February 2008.

Completion : The completion of the Proposed Placement in accordance withthe terms and subject to the conditions of the Strategic PlacementAgreement.

Completion Date : The date notified in writing by the Company to the Subscriber asthe date for Completion, being a date no later than five (5) MarketDays after the satisfaction of the conditions precedents set out inthe Strategic Placement Agreement or such other date as theparties to the Strategic Placement Agreement may agree and allother conditions of the Strategic Placement Agreement beingsatisfied.

Code : The Singapore Code on Take-overs and Mergers.

Company : Shining Corporation Ltd.

Companies Act : The Companies Act, Chapter 50, of Singapore, as amended fromtime to time, and any enactment thereof.

Deed of Covenant : A conditional deed dated 10 September 2007 between theCompany, Shining Construction, Shining Holdings and Tan KayKiang.

Deed of Mutual Covenants : A conditional deed dated 10 September 2007 between theCompany, Shining Construction, Shining Holdings and ShiningDevelopment for the continued use of the name “Shining” by eachof the Shining Entities.

Deed Poll : The deed poll to be executed by the Company for the purpose ofconstituting the Warrants and containing, inter alia, provisions forthe protection of the rights and interests of the Warrantholders.

Director : A director of the Company as at the date of this Circular.

Effective Date : 1 January 2008

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EGM : The extraordinary general meeting of the Company, notice ofwhich is set out on pages 60 to 62 of this Circular.

Executive Directors : Tan Kay Kiang, Tan Chin Hoon, Tan Kay Tho and Tan Kay Sing.

Exercise Period : The period during which Warrants may be exercised commencingon and including the date of issue of the Warrants and expiring at5.00 p.m. on the date immediately preceding the fifth anniversaryof the date of issue of the Warrants, subject to the conditions ofthe Deed Poll.

Exercise Price : $0.13, being the sum payable in respect of each New Share towhich the Warrantholder will be entitled to subscribe uponexercise of a Warrant, or such adjusted price subject to theconditions of the Deed Poll.

Existing Controlling : Tan Kay Kiang, Tan Chin Hoon, Tan Kay Tho, Tan Kay Sing Shareholders who are the Company’s Directors, their respective spouses, Alex

Tan Nan Choon, a Director of the Company, and Shining Holdingswho collectively are deemed interested in 29.72% of theCompany’s total issued shares.

FA : DMG & Partners Securities Pte. Ltd., being the financial adviser tothe Company.

Group or Group Companies : The Company and its subsidiaries and Group Company meansany one of them.

HLF or IFA : Hong Leong Finance Limited, being the independent financialadviser to the Independent Directors in respect of the ProposedPlacement, the Proposed Whitewash Resolution and theProposed Shining IPT Transactions.

IFA Letter : The letter dated 26 February 2008 from HLF to the IndependentDirectors in respect of the Proposed Placement, the ProposedWhitewash Resolution and the Proposed Shining IPTTransactions, a copy of which is set out in Appendix 1 of thisCircular.

Hardware Business : The entirety of the business and goodwill carried on by BuildersShop as a going concern in hardware distribution and retailingand certain assets owned by or under the control or in thepossession of Builders Shop and used in the conduct of thisbusiness.

Independent Directors : The independent Directors as at the date of this Circular, namely,Lee Eng Kian and Gurdaib Singh s/o Pala Singh.

Independent Shareholders : Shareholders other than (i) the Subscriber and (ii) persons actingin concert with the Subscriber; and (iii) persons not independentof the persons mentioned in (i) and (ii) of this definition.

Issue Price : S$0.13 per Strategic Share.

Knight Frank : Knight Frank Pte Ltd.

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Latest Practicable Date : 22 February 2008, being the latest practicable date prior to theprinting of this Circular.

Listing Manual : The listing manual of the SGX-ST, as amended from time to time.

Market Day : A day on which the SGX-ST is open for trading of securities inSingapore.

New Shares : New Shares in the capital of the Company to be issued from timeto time upon the exercise of the Warrants.

Nico Po : Nico Po Purnomo, an Indonesian citizen.

Open Market Value : The open market value of the Shop Unit.

Proposed Placement : The proposed placement of the Strategic Shares and theWarrants to the Subscriber under the Strategic PlacementAgreement.

Proposed Shining IPT : The respective transactions set out in the Business Transfer Transactions Agreement, the Deed of Covenant, the Deed of Mutual Covenants

and the Shop Unit Option Agreement.

Proposed Transactions : The Proposed Placement and the Proposed Shining IPTTransactions.

Proposed Whitewash : The resolution proposed as Ordinary Resolution Number 2 in the Resolution Notice of EGM appended to this Circular, for a waiver by the

Independent Shareholders of their rights to receive a mandatorytakeover offer from the Subscriber and its concert parties for theShares not already owned or controlled by the Subscriber and itsconcert parties.

Record Date : The date as at the close of business in relation to any dividend,right, allotment or other distributions on which members of theCompany must be registered in order to participate in suchdividend, right, allotment or other distributions.

Register of Members : The Register of Members of the Company.

Retro-Fitting Contract : The tender for retro-fitting addition and alteration work forapproximately $30 million submitted by Shining Construction toAFP Warehouse Pte Ltd.

Rights Issue : The renounceable non-underwritten rights issue of 48,000,000new Shares in the capital of the Company undertaken by theCompany pursuant to the offer information statement dated 16August 2007.

Securities Account : Securities account maintained by a Depositor with CDP but doesnot include a securities sub-account.

SFA : The Securities and Futures Act (Chapter 289) of Singapore andany statutory modification or re-enactment thereof.

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Shareholder : Registered holders of Shares in the Register of Members of theCompany except that where the registered holder is CDP, theterm Shareholders shall, in relation to such Shares, mean thepersons to whose Securities Accounts maintained with CDP arecredited with the Shares.

Shares : Ordinary shares in the share capital of the Company.

Shining Entities : The Company, Shining Construction, Shining Holdings andShining Development.

SGX-ST or Exchange : Singapore Exchange Securities Trading Limited.

SGX-SESDAQ : SGX-ST Dealing and Automated Quotation System.

SIC : Securities Industry Council.

Shining Construction : Shining Construction Pte Ltd, a wholly-owned subsidiary of theCompany.

Shining Development : Shining Development Pte Ltd, a wholly-owned subsidiary ofShining Holdings.

Shining Holdings : Shining Holdings Pte Ltd, a company whose share capital iswholly held by the Executive Directors, Tan Siok Hwee and TanSeok Luan.

Shop IPT Sale : The proposed sale of the Shop Unit by Shining Construction toShining Holdings in accordance with the Shop Unit OptionAgreement.

Shop Unit : The shop unit at 29 Lorong 13 Geylang, Singapore 388672 ownedby Shining Construction.

Shop Unit Book Value : The book value of the Shop Unit as recorded in the books ofShining Construction as at 31 December 2006.

Shop Unit Option Agreement : The conditional option agreement dated 10 September 2007between Shining Construction and Shining Holdings for the sale,through an option, of the Shop Unit to Shining Holdings.

Strategic Placement : A conditional agreement dated 10 September 2007 between Agreement the Company and the Subscriber pursuant to which the

Subscriber will inter alia invest $21,750,000.00 in the Company bysubscribing for the Strategic Shares and the Warrants.

Strategic Shares : 167,307,692 new Shares in the capital of the Company with eachsuch new Share to be issued at $0.13 to the Subscriber.

Subscriber : Citipoint Asia Real Estate Capital Ltd, a corporation incorporatedin the British Virgin Islands and having its registered address atNerine Chambers, P.O. Box 905, Road Town, Tortola, British VirginIslands.

Substantial Shareholder : A substantial Shareholder as defined under Section 81 of theCompanies Act.

“S$”, “$” or “cents” : Singapore dollars and cents, respectively.

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Valuation Certificate : The valuation certificate dated 12 December 2007 from KnightFrank in respect of the valuation of the Shop Unit.

Warrant Agent : The warrant agent to be appointed by the Company in connectionwith the Deed Poll.

Warrantholders : Registered holders of the Warrants, except where CDP is theregistered holder, the term Warrantholders shall, where thecontext so admits, mean the persons named as Depositors in theDepository Register into whose Securities Accounts are creditedwith such Warrants.

Warrants : Up to 155,653,846 warrants to be constituted under the Deed Poll,each warrant entitling the holder thereof to subscribe for one (1)new Share upon its exercise in accordance with the terms andsubject to the conditions of the Deed Poll.

“%” or “per cent” : Percentage or per centum.

The terms Depositor, Depository Agent and Depository Register shall have the meanings ascribed tothem, respectively, in Section 130A of the Companies Act.

The term subsidiary shall have the meaning ascribed to it by Section 5 of the Companies Act.

The term acting in concert shall have the meaning ascribed to it in the Code.

Words importing the singular shall, where applicable, include the plural and vice versa, and wordsimporting the masculine gender shall, where applicable, include the feminine and neuter genders andvice versa. References to persons shall include corporations.

Any reference in this Circular to any enactment is a reference to that enactment as for the time beingamended or re-enacted. Any word defined under the SFA, the Companies Act, the Listing Manual or theCode or any statutory modification thereof and used in this Circular shall, where applicable, have themeaning ascribed to it under the SFA, the Companies Act, the Listing Manual or the Code or anystatutory modification thereof, as the case may be.

Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwisestated.

All discrepancies in the tables included herein between the listed amounts and totals thereof are due torounding. Accordingly, figures shown as totals in certain tables may be an arithmetic aggregation of thefigures that precede them.

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SHINING CORPORATION LTD (Company Registration Number 199904729G)


LETTER TO SHAREHOLDERS

Directors Registered Office

Tan Kay Kiang (Executive Chairman) 11 Changi South Street 3 #04-01Tan Chin Hoon (Group Managing Director) Singapore 486122Tan Kay Tho (Executive Director)Tan Kay Sing (Executive Director)Alex Tan Nan Choon (Non-Executive Director)Lee Eng Kian (Independent Director)Gurdaib Singh s/o Pala Singh (Independent Director)

26 February 2008

To: The Shareholders of Shining Corporation Ltd

Dear Sir / Madam

1. INTRODUCTION

On 10 September 2007, the Company announced that the Company had entered into theStrategic Placement Agreement for the proposed placement of new ordinary shares and certainfree warrants to the Subscriber.

The Subscriber is a special purpose corporation incorporated in the British Virgin Islands. Theentire share capital of the Subscriber is held by Nico Po.

Under the Strategic Placement Agreement, the Subscriber will invest S$21,750,000 in theCompany by subscribing for the Strategic Shares and the Warrants. Each Strategic Share will besubscribed for at the Issue Price. Each Warrant will be issued free to the Subscriber, on the termsand subject to the conditions of the Strategic Placement Agreement and the Deed Poll.

Nico Po has additionally undertaken that he shall ensure the performance by the Subscriber of itsobligations to subscribe for the Strategic Shares on the terms and subject to the conditions of theStrategic Placement Agreement. On 18 September 2007, the Company received writtenconfirmation from a bank in Singapore that Nico Po has sufficient financial resources to fulfil theobligations to subscribe for the Strategic Shares. The Company has accepted such writtenconfirmation of financial resources.

The Strategic Placement Agreement stipulates that as a condition to the placement of theStrategic Shares, the Group is to enter into the Proposed Shining IPT Transactions. Under theStrategic Placement Agreement, the performance of each of the placement of the Strategic Sharesand the Proposed Shining IPT Transactions by the respective parties thereto are inter-conditionalupon the performance of each of these transactions.

It is further the intention of Nico Po, who will be a controlling shareholder of the Company onCompletion, for the Group to enter into the new business of property development following thecompletion of the Proposed Placement. In line with the proposed new business, the ProposedShining IPT Transactions will allow the Company to divest itself of its current businesses that willno longer form its core business if the Proposed Transactions are approved.

A copy of the Company’s announcements made on 10 September 2007 and 18 September 2007are available on SGX-ST’s website at www.sgx.com.

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The Directors are convening an EGM to seek Shareholders’ approval, by way of respectiveordinary resolutions, for (i) the issue of the Strategic Shares, (ii) the issue of the Warrants, (iii) theissue of New Shares upon the exercise of the Warrants, all of which are pursuant to the StrategicPlacement Agreement (and in the case of the issue of the Warrants and the New Shares,additionally pursuant to and on the terms of the Deed Poll), (iv) the Proposed Shining IPTTransactions and (v) the Group to be permitted to engage in property development in Singaporefollowing Completion, as set out in the notice of EGM on pages 60 to 62 of this Circular. Thepurpose of this Circular is to provide Shareholders with the relevant information relating to thesematters.

2. DETAILS OF THE PROPOSED PLACEMENT

2.1 The Strategic Placement Agreement

Pursuant to the Strategic Placement Agreement, the Company agreed to:-

(a) allot and issue the Strategic Shares to the Subscriber or its nominees at an issue price ofS$0.13 per Strategic Share; and

(b) issue up to 155,653,846 free Warrants to the Subscriber, each Warrant carrying the right tosubscribe for one (1) New Share at an exercise price of S$0.13 for each New Share,

upon the terms and subject to the conditions in the Strategic Placement Agreement.

The Strategic Shares and the New Shares when issued and fully paid will rank pari passu in allrespects with and carry all rights similar to the existing issued Shares except that they will not rankfor any dividend, right, allotment or other distributions, the Record Date for which falls on or beforethe Completion Date or the date of exercise of the relevant Warrants (as the case may be).

The Strategic Shares will represent approximately 53.7% of the enlarged issued share capital ofthe Company upon completion of the Proposed Placement. Accordingly, the Proposed Placementis subject to the prior approval of Shareholders pursuant to Rule 803 of the Listing Manual whichprovides that a company shall not issue securities to transfer a controlling interest without priorapproval of shareholders in general meeting.

The Issue Price of S$0.13 for each of the Strategic Shares and the exercise price of S$0.13 foreach of the Warrants represents a discount of:-

(i) 24.3% to the weighted average price for trades done on the SGX-SESDAQ on 7 September2007, being the full market day prior to the signing of the Strategic Placement Agreement;and

(ii) 30.3% to the prevailing market price of the Shares on 7 September 2007 prior to the signingof the Strategic Placement Agreement.

The Issue Price was agreed based on arms’ length negotiations taking into account, inter alia, theexisting financial position of the Company, historical and prevailing Share prices and marketsentiments.

2.2 Principal Terms of the Warrants

The information contained in this section is a summary of the proposed terms of the Warrants tobe constituted under the Deed Poll.

Number of Warrants : Up to 155,653,846 free Warrants to be issued

Status of New Shares : The New Shares arising from the exercise of the Warrants will,upon, allotment and issue, rank pari passu in all respects with thethen existing Shares save for any dividend, right, allotment or otherdistribution that may be declared or paid, the Record Date forwhich falls before the relevant date of issue of the New Shares

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Trading of the Warrants : Not applicable. Under Rule 826 of the Listing Manual, if anapplication is made for the listing of company warrants, the SGX-ST expects at least 100 warrantholders for a class of companywarrants in order to ensure a sufficient spread of holdings toprovide for an orderly market in the securities. As the Warrantsare proposed to be placed out only to the Subscriber, theWarrants will not be listed and traded on Catalist.

Form and subscription : The Warrants will be issued in registered form and will be rights constituted by the Deed Poll. Subject to the terms and conditions

of the Warrants to be set out in the Deed Poll, each Warrant shallentitle the Warrantholder, at any time during the Exercise Period,to subscribe for one (1) New Share at the Exercise Price.

Exercise Period : The Warrants may be exercised at any time from and including thedate of issue of the Warrants up to 5.00 p.m. (Singapore time) onthe date immediately preceding the fifth anniversary of the date ofissue of the Warrants unless such date is a date on which theRegister of Members is closed or is not a Market Day, in whichevent the Exercise Period shall expire on the date prior to theclosure of the Register of Members or the immediately precedingMarket Day, as the case may be, but excluding such period(s)during which the Register of Members may be closed, subject tothe terms and conditions of the Warrants to be set out in the DeedPoll. Warrants remaining unexercised at the expiry of the ExercisePeriod shall lapse and cease to be valid for any purpose.

Notice of expiry of the Warrants shall be given to allWarrantholders at least thirty (30) days before the expiry date, andthe Company shall announce the same on the SGX-ST.

Adjustments : The Exercise Price and the number of Warrants will, after theirissue, be subject to adjustments under certain circumstances asset out in the Deed Poll. Such circumstances include capitalisationissues, rights issues and certain capital distributions which will bemore particularly described in the Deed Poll.

Modification to terms of : The Company may, without the consent of the Warrantholders but Warrants and Deed Poll in accordance with the terms of the Deed Poll, effect any

modification to the terms of the Warrants or the Deed Poll which, inthe opinion of the Company, is not materially prejudicial to theinterests of the Warrantholders or which, in its opinion, is either (i)of a formal, technical or minor nature or to correct a manifest errorto comply with mandatory provisions of Singapore law or (ii) tovary or replace provisions relating to the transfer or exercise of theWarrants or meetings of the Warrantholders (in order to facilitatetrading in or the exercise of the Warrants or in connection with theimplementation and operation of the book-entry (scripless)settlement system in respect of the trades of the Company’ssecurities on Catalist). Any such modification shall be binding onall Warrantholders and all persons having an interest in theWarrants and shall be notified to them in accordance with theterms of the Deed Poll.

Any alteration in the terms of the Warrants to the advantage of theWarrantholders is subject to the approval of the Shareholdersexcept where the alterations are made pursuant to the terms of theDeed Poll.

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Transfer and transmission : A Warrant may only be transferred in the manner prescribed in theterms and conditions of the Warrants to be set out in the Deed Pollincluding, inter alia, the following:-

(i) a Warrantholder (“Transferor”) shall lodge, during normalbusiness hours on any Business Day (as defined in theDeed Poll) at the specified office of the Warrant Agent, theTransferor’s warrant certificate(s) together with a transferform as prescribed by the Company from time to time (the“Transfer Form”) duly completed and signed by or on behalfof the Transferor and the transferee and duly stamped inaccordance with any law for the time being in force relatingto stamp duty, provided that the Warrant Agent maydispense with requiring CDP to sign as transferee anyTransfer Form for the transfer of Warrants to CDP. ATransferor shall be deemed to remain a Warrantholder of theWarrants until the name of the transferee is entered in theRegister of Warrantholders by the Warrant Agent.

(ii) Deceased Warrantholder - the executors and administratorsof a deceased Warrantholder (not being one of several jointholders) and, in the case of one or more of several jointWarrantholders, the survivor or survivors of such jointWarrantholders, shall be the only persons recognised ashaving any title to Warrants registered in the name of adeceased Warrantholder. Such person(s) shall be entitled tobe registered as Warrantholders and/or to make suchtransfer(s) as the deceased Warrantholder is entitled tomake, upon the production by such persons to the Companyand the Warrant Agent of such evidence as may bereasonably required by the Company and the Warrant Agentto prove their title and on payment of the fees and expensesset out in the Deed Poll.

Winding-up : If a resolution is passed for a members’ voluntary winding-up ofthe Company then if such winding-up is for the purpose ofreconstruction or amalgamation pursuant to a scheme ofarrangement to which the Warrantholders, or some persondesignated by them for such purpose by a resolution, shall be aparty and shall have approved or assented to by way of such aresolution, the terms of such scheme of arrangement shall bebinding on all the Warrantholders and all persons having aninterest in the Warrants; and in any other case every Warrantholdershall be entitled upon and subject to the terms and conditions ofthe Deed Poll at any time within six (6) weeks after the passing ofsuch resolution for a members’ voluntary winding-up of theCompany, to elect to be treated as if he had immediately prior tothe commencement of such winding-up exercised the Warrants tothe extent specified in a notice to the Company and had on suchdate been the holder of the Shares to which he would havebecome entitled pursuant to such exercise and the liquidator of theCompany shall give effect to such election accordingly. TheCompany shall give notice to the Warrantholders in accordancewith the terms and conditions set out in the Deed Poll of thepassing of any such resolution within seven (7) Business Days (asdefined in the Deed Poll) after the passing thereof.

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Subject to the foregoing, if the Company is wound up for any otherreason, all Warrants which have not been exercised at the date ofthe passing of such resolution for the winding-up of the Companyshall lapse and the Warrants shall cease to be valid for anypurpose.

Further issue of securities : Subject to the terms and conditions of the Warrants set out in theDeed Poll, the Company shall be at liberty to issue Shares toShareholders either for cash or as a bonus distribution and toissue further subscription rights, upon such terms and conditionsas the Company sees fit but the Warrantholders shall not have anyparticipating rights in such further issue(s) of Shares orsubscription rights unless otherwise resolved by the Company ingeneral meeting.

Governing Laws : Laws of the Republic of Singapore.

The 155,653,846 Warrants will be issued on the Completion Date.

2.3 Conditions Precedent for the Proposed Placement

The obligations of the Subscriber under the Strategic Placement Agreement to subscribe for theStrategic Shares and the Warrants, and the Company’s obligations to issue the Strategic Sharesand the Warrants, is conditional upon the performance by the Company and the Subscriber of theirrespective obligations under the Strategic Placement Agreement and also upon fulfilment of thefollowing:

(i) the Subscriber obtaining a whitewash waiver by the SIC of the requirement for theSubscriber and its concert parties to make a mandatory general offer for the Shares of theCompany not already owned by the Subscriber or its concert parties, and if granted subjectto conditions, such conditions being acceptable to the Subscriber (the “Whitewash WaiverRuling”);

(ii) the Company having obtained a whitewash waiver from the Company’s Shareholdersindependent of the Subscriber and its concert parties and fulfilment of other relevant termsand conditions (if any) of the Whitewash Waiver Ruling of the SIC;

(iii) approval in-principle for the listing and quotation of the Strategic Shares, the Warrants andthe New Shares to be issued upon the exercise of the Warrants on the SGX-ST (onconditions, if any, acceptable to the Company and the Subscriber) having been obtained andremaining in full force and effect and where such approval is given subject to conditionswhich must be fulfilled on or before the Completion Date, they are so fulfilled;

(iv) all corporate and Shareholders’ approvals having been obtained by the Company on termssatisfactory to the Company and the Subscriber in respect of the allotment, issue andsubscription of the Strategic Shares, the issue of the Warrants and all the transactionsancillary to or contemplated thereto and such approvals remaining in full force and effect onCompletion and, if such approvals are subject to any conditions which are required to befulfilled on or prior to Completion, such conditions are fulfilled;

(v) the allotment, issue and subscription of the Strategic Shares and the allotment and issue ofthe Warrants and the New Shares arising from the exercise of the Warrants not beingprohibited by any statute, order, rule, regulation or directive promulgated or issued after thedate of the Strategic Placement Agreement by any legislative, executive or regulatory bodyor authority of Singapore which is applicable to the Company or the Subscriber;

(vi) on the Completion Date, the representations and warranties of the Company and theSubscriber under the Strategic Placement Agreement being true, accurate and correct in allmaterial respects as if made on the Completion Date, with reference to the then existingcircumstances and the Company and the Subscriber having performed in all materialrespects all of their obligations under the Strategic Placement Agreement to be performedon or before the Completion Date;

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(vii) all approvals and Shareholders’ approvals for the Proposed Shining IPT Transactions havingbeen obtained by the Company on terms satisfactory to the Company and the ExistingControlling Shareholders;

(viii) the Subscriber being satisfied that the audited consolidated net tangible assets of theCompany and its subsidiaries as a group not being less than S$12 million for the financialyear ended 31 December 2007, based on the same accounting policies and standardsadopted in the Company’s financial audited statements (“NTA”), however, in the eventCompletion occurs at any time before 31 December 2007, the NTA, as reviewed by theSubscriber’s appointed auditors in consultation with the auditors of the Company, in respectof the financial period ending as at the end of the month immediately prior to the month inwhich Completion occurs shall not be less than S$12,000,000 (for avoidance of doubt, allprofessional costs and related expenses up to an amount no more than S$550,000 inconnection with securing the requisite approvals for the Proposed Transactions andbrokerage fees payable shall not be computed as reducing the NTA);

(ix) the Shares of the Company have not been suspended for more than three (3) market days;and

(x) the Shares of the Company have not been delisted.

The Company and the Subscriber further agreed that they shall respectively use their bestendeavours to secure the satisfaction of the conditions precedent above on or before 31 March2008 or such other date as they may agree in writing (the “Cut-Off Date”).

The Subscriber may, upon such terms as it thinks fit, waive compliance with any of the conditionsprecedent above (other than the conditions contained in (i), (ii), (iii), (iv), (v), (vii) and (x)) and anycondition so waived shall be deemed to have been satisfied.

If any of the conditions precedent are not satisfied or waived, in accordance with the terms of theStrategic Placement Agreement, on or before the Cut-Off Date or such other date as the Companyand the Subscriber may agree, the Strategic Placement Agreement shall ipso facto cease anddetermine thereafter and neither the Company nor the Subscriber shall have any claim against theother for costs, expenses, damages, losses, compensation or otherwise.

2.4 Moratorium in respect of the Strategic Shares

The Subscriber has undertaken, that during the period of six (6) months commencing from thedate of issue of the Strategic Shares and ending on the date falling six (6) months from the date ofthe issue of the Strategic Shares, it shall not directly or indirectly dispose of any interest, direct orindirect, in the said Strategic Shares.

2.5 In-principle Approval from the SGX-ST

In-principle approval was obtained from the SGX-ST on 22 February 2008 for the dealing in, listingof and quotation for the Strategic Shares and the New Shares on Catalist, subject to:-

(a) compliance with the SGX-ST’s listing requirements;

(b) Shareholders’ approval for the Proposed Placement at the EGM;

(c) submission of an undertaking from the Company to:-

(i) provide a status report on the use of the proceeds from the Proposed Placement in itsannual report; and

(ii) announce any adjustment to the Warrants made pursuant to Rule 829(1) of the SGX-ST Listing Manual.

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The SGX-ST has highlighted that in the event the Company acquires any asset from theSubscriber, Nico Po and/or their related parties, the SGX-ST reserves the right to aggregatethe acquisitions and the Proposed Placement, and deem the subsequent asset injections asa very substantial acquisition or reverse takeover under Rule 1015 of the Listing Manual.

The in-principle approval granted by the SGX-ST is not to be taken as an indication of the meritsof the Proposed Placement, the Company, its subsidiaries, the Shares, the Strategic Shares, theWarrants and the New Shares.

The Warrants will not be listed and traded on Catalist as the Warrants are proposed to be placedout only to the Subscriber.

2.6 Approval from the SGX-ST for Waiver of Rule 825 of the Listing Manual

Rule 825 of the Listing Manual provides that the number of new shares arising from theexercise/conversion of outstanding company warrants or other convertible securities must inaggregate not exceed 50% of the issued share capital.

The number of New Shares arising from the full exercise of the Warrants would exceed 50% of theCompany’s existing issued share capital (which comprises 144,000,000 Shares). In thisconnection, the SGX-ST has indicated on 22 February 2008 that it has no objections to the waiverof Rule 825 of the Listing Manual, subject to:-

(a) the Company making an announcement of the waiver granted via SGXNET pursuant to Rule107 of the Listing Manual;

(b) the Proposed Placement is approved by Shareholders at the EGM;

(c) an unqualified opinion from a financial adviser that the Proposed Placement is notprejudicial to the interests of the Company and its minority shareholders;

(d) an unanimous approval from all the Company’s non-executive independent directors for theProposed Placement after having satisfied themselves that the Proposed Placement is notprejudicial to the interests of the Company and its minority shareholders.

In fulfilment of condition (a) above, the Company has made an announcement of the waiver ofRule 825 of the Listing Manual on 25 February 2008.

In fulfilment of condition (c) above, the Company has appointed HLF as its financial adviser.In the IFA Letter dated 26 February 2008 addressed to the Independent Directors, the IFAhas stated that given the factors and circumstances considered, as set out in the IFA Letter,the Proposed Placement is not prejudicial to the interests of the Company and itsShareholders. Hence, the IFA recommends that the Directors advise Shareholders to vote infavour of the Proposed Placement. The IFA Letter is set out in Appendix 1 of this Circular.

In fulfilment of condition (d) above, all the independent non-executive directors of the Companyhave also confirmed that having considered the IFA Letter dated 26 February 2008, they are of theview that the Proposed Placement is not prejudicial to the interests of the Company and itsminority Shareholders.

2.7 Proposed Use of Proceeds from the Proposed Placement and the Exercise of the Warrants

The Company intends to use the net proceeds from the Proposed Placement and the exercise ofthe Warrants as follows:-

(a) to undertake activities relating to high-end residential development of properties inSingapore; and

(b) for general working capital purposes.

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3. PROPOSED WHITEWASH RESOLUTION

3.1 As at the Latest Practicable Date, the Subscriber and its concert parties do not hold any Shares orinstruments convertible into the rights to subscribe for and options in respect of Shares. Oncompletion of the Proposed Placement, the Subscriber and/or its nominees will hold 167,307,692Shares, representing approximately 53.7% of the enlarged Share capital of the Company. Pursuantto Rule 14.1(a) of the Code and Section 139 of the SFA, the Subscriber and parties acting inconcert with it would be required to make a general offer for the remaining Shares not owned oragreed to be acquired by the Subscriber and parties acting in concert with it at the highest pricepaid or agreed to be paid by the Subscriber and parties acting in concert with it for the Shares inthe past 6 months. The Subscriber has sought a waiver from the SIC of its obligation to make ageneral offer under Rule 14.1(a) of the Code and for SIC to permit it to propose the ProposedWhitewash Resolution. The SIC had on 12 November 2007 granted the Subscriber a waiver of therequirements to make a general offer following the completion of the Proposed Placement subjectto, inter alia, the following conditions:-

(a) a majority of holders of voting rights of the Company present and voting at a generalmeeting, held before the issue of the Strategic Shares to the Subscriber, approve by way ofa poll, a resolution (the “Whitewash Resolution”) to waive their rights to receive a generaloffer from the Subscriber and parties acting in concert with it;

(b) the Whitewash Resolution is separate from other resolutions;

(c) the Subscriber, parties acting in concert with it and parties not independent of it, abstainfrom voting on the Whitewash Resolution;

(d) the Subscriber and its concert parties did not acquire or are not to acquire any shares orinstruments convertible into and options in respect of shares of the Company (other thansubscriptions for, rights to subscribe for, instruments convertible into or options in respect ofnew shares which have been disclosed in the circular):-

(i) during the period between the announcement of the Proposed Placement and thedate shareholders’ approval is obtained for the Whitewash Resolution; and

(ii) in the 6 months prior to the announcement of the Proposed Placement, butsubsequent to negotiations, discussions or the reaching of understandings oragreements with the directors of the Company in relation to the issue of the StrategicShares;

(e) the Company appoints an independent financial adviser to advise its independentshareholders on the Whitewash Resolution;

(f) the Company sets out clearly in the circular to shareholders:-

(i) details of the Proposed Placement;

(ii) the dilution effect of the Proposed Placement, or upon the exercise or conversion ofthe Warrants to be issued, to existing holders of voting rights;

(iii) the number and percentage of voting rights in the Company as well as the number ofinstruments convertible into, rights to subscribe for and options in respect of shares inthe Company held by the Subscriber and its concert parties as at the latestpracticable date;

(iv) the number and percentage of voting rights to be issued to the Subscriber, or to beacquired by the Subscriber upon the exercise of the Warrants to be issued;

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(v) specific and prominent reference to the fact that the Proposed Placement would resultin the Subscriber holding shares carrying over 49% of the voting rights of theCompany based on its enlarged issued share capital, and the fact that the Subscriberwill be free to acquire further shares without incurring any obligation under Rule 14 tomake a general offer;

(iv) the shareholders, by voting for the Whitewash Resolution, are waiving their rights to ageneral offer from the Subscriber at the highest price paid by the Subscriber andparties acting in concert with it for the Company’s shares in the past 6 monthspreceding the commencement of the Proposed Placement;

(g) the circular by the Company to its shareholders states that the waiver granted by the SIC tothe Subscriber and parties acting in concert with it from the requirement to make a generaloffer under Rule 14 is subject to the conditions stated at 3.1(a) to (f) above;

(h) the Subscriber obtains SIC’s approval in advance for those parts of the circular that refer tothe Whitewash Resolution; and

(i) to rely on the Whitewash Resolution, the acquisition of the Strategic Shares by theSubscriber pursuant to the Proposed Placement must be completed within 3 months of theapproval of the Whitewash Resolution.

3.2 The Independent Shareholders are therefore asked to vote on a poll on the Proposed WhitewashResolution set out as an ordinary resolution in the Notice of EGM on page 61 of this Circular.

3.3 Shareholders should note that the passing of the ordinary resolution relating to the ProposedPlacement is conditional upon the Proposed Whitewash Resolution being approved byIndependent Shareholders as the Proposed Whitewash Resolution is a condition precedent in theStrategic Placement Agreement.

If Independent Shareholders do not vote in favour of the Proposed Whitewash Resolution, theProposed Placement will not take place. As completion of the Proposed Shining IPT Transactionsis also conditional upon the completion of the Proposed Placement taking place simultaneously,the Proposed Shining IPT Transactions will also not take place.

3.4 Independent Shareholders should note that the Proposed Placement would result in theSubscriber holding Shares carrying over 49% of the voting rights of the Company based onits enlarged issued share capital.

3.5 Independent Shareholders should also note that by voting for the Proposed WhitewashResolution:-

(a) the Subscriber will be free to acquire further Shares without incurring any obligationunder Rule 14 of the Code to make a general offer; and

(b) the Independent Shareholders will be waiving their rights to a general offer from theSubscriber at the highest price paid by the Subscriber and parties acting in concertwith it for the Company’s Shares in the past 6 months preceding the commencementof the Proposed Placement.

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3.6 Shareholding Effects

Assuming that the Proposed Whitewash Resolution is approved by Shareholders, the illustrativeeffects of the allotment and issue of the Strategic Shares and the New Shares on the shareholdingstructure of the Company (based on the shareholding information available to the Company as atthe Latest Practicable Date) are set out below:-

After the Allotment Before the Allotment After the Allotment and Issue of the

and Issue of the and Issue of the Strategic Shares and Strategic Shares(7) Strategic Shares(8) the New Shares(9)

Total Interest Total Interest Total InterestDirectors No. of Shares % No. of Shares % No. of Shares %

Tan Kay Kiang(1) 20,500,320 14.24 20,500,320 6.59 20,500,320 4.39Tan Chin Hoon(2) 16,265,310 11.30 16,265,310 5.22 16,265,310 3.48Tan Kay Tho(3) 19,925,310 13.83 19,925,310 6.40 19,925,310 4.27Tan Kay Sing(4) 25,525,420 17.73 25,525,420 8.20 25,525,420 5.47Tan Nan Choon 2,425,020 1.68 2,425,020 0.78 2,425,020 0.52Lee Eng Kian – – – – – –Gurdaib Singh s/o Pala Singh – – – – – –

Substantial Shareholders

Shining Holdings 13,950,420 9.69 13,950,420 4.48 13,950,420 2.99Citipoint Asia Real Estate Capital Ltd(5) – – 167,307,692 53.74 322,961,538(6) 69.16(6)

Other Shareholders(10) 101,209,880 70.28 101,209,880 32.51 101,209,880 21.67

Public Shareholders(11) 84,544,380 58.71 84,544,380 27.16 84,544,380 18.11

Notes:-

(1) As at the Latest Practicable Date, Tan Kay Kiang has a direct interest in 1,549,920 Shares. He is deemed to beinterested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 4,999,980 Shares held by his wife, TaySwee Leng, by virtue of section 7 of the Companies Act.

(2) As at the Latest Practicable Date, Tan Chin Hoon has a direct interest in 314,910 Shares. He is deemed to beinterested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 1,999,980 Shares held by his wife,Tjioe A Lan, by virtue of section 7 of the Companies Act.

(3) As at the Latest Practicable Date, Tan Kay Tho has a direct interest in 1,474,890 Shares. He is deemed to beinterested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 4,500,000 Shares held by his wife,Yeong Yoon Ying, by virtue of section 7 of the Companies Act.

(4) As at the Latest Practicable Date, Tan Kay Sing has a direct interest in 11,025,000 Shares. He is deemed to beinterested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 550,000 Shares held by his wife, SimMong Lan, by virtue of section 7 of the Companies Act.

(5) Citipoint Asia Real Estate Capital Ltd, which is the Subscriber under the Strategic Placement Agreement, is wholly-owned by Mr Nico Po Purnomo. Mr Nico Po Purnomo is therefore deemed to be interested in such number ofStrategic Shares and New Shares as may be held by the Subscriber by virtue of section 7 of the Companies Act.

(6) All the Warrants will be placed out to the Subscriber (or its nominee) on the terms and conditions of the Deed Pollafter Shareholders’ approval has been obtained at the EGM.

(7) The issued share capital of the Company before the allotment and issue of the Strategic Shares comprises144,000,000 Shares.

(8) Assuming that 167,307,692 Strategic Shares are allotted and issued, the issued share capital of the Company willcomprise 311,307,692 Shares.

(9) Assuming that 167,307,692 Strategic Shares and 155,653,846 New Shares are allotted and issued, the issued sharecapital of the Company will comprise 466,961,538 Shares.

(10) Refers to persons other than Directors, their respective spouses and Substantial Shareholders.

(11) Refers to persons other than Directors, Substantial Shareholders and their respective associates.

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3.7 HLF has been appointed the IFA to the Independent Directors in relation to the ProposedWhitewash Resolution. The letter from HLF to the Independent Directors containing their advice isset out in Appendix 1 of this Circular.

4. THE PROPOSED SHINING IPT TRANSACTIONS

4.1 Details of the Proposed Shining IPT Transactions

(a) The Proposed Shining IPT Transactions are set out in the following agreements:

(i) the Business Transfer Agreement;

(ii) the Shop Unit Option Agreement;

(iii) the Deed of Mutual Covenants; and

(iv) the Deed of Covenant.

Under Chapter 9 of the Listing Manual, where a listed company proposes to enter into atransaction with its director, CEO or Controlling Shareholder (or any of their “associates”, asthat term is defined in the Listing Manual), Shareholders’ approval and/or an immediateannouncement is required in respect of that transaction if its value is equal to or exceedscertain financial thresholds. In particular, Shareholders’ approval is required where the valueof such transaction with any such persons is equal to or more than:

(A) 5% of the listed company’s latest audited NTA; or

(B) 5% of the listed company’s latest audited NTA, when aggregated with the value of allother transactions entered into with the same Interested Person during the samefinancial year.

As at the Latest Practicable Date, Shining Holdings and Shining Development areassociates of the Executive Directors. The shareholders of Shining Holdings are theExecutive Directors (each of whom owns approximately 21.8% of the issued share capital ofShining Holdings), Ms Tan Seok Luan and Ms Tan Siok Hwee (each of whom ownsapproximately 6.4% of the issued share capital of Shining Holdings).

Accordingly, the Proposed Shining IPT Transactions constitute interested persontransactions within the meaning of Chapter 9 of the Listing Manual.

Pursuant to Chapter 9 of the Listing Manual, HLF has been appointed as independentfinancial adviser to the Independent Directors to advise them on whether the ProposedShining IPT Transactions are on normal terms and whether the transactions are prejudicialto the interests of the Company and the minority Shareholders. The letter from HLF to theIndependent Directors in relation to the Proposed Shining IPT Transactions is set out inAppendix 1 of this Circular.

(b) The proposed divestment of the Hardware Business – Business Transfer Agreement:

The Company’s wholly-owned subsidiary, Builders Shop, carries on the Hardware Businessat six shop units in Singapore including at the Shop Unit.

Builders Shop has entered into the Business Transfer Agreement to sell the HardwareBusiness to Shining Holdings. Shining Holdings is controlled by the Executive Directors.

Accordingly, the proposed divestment of the Hardware Business is an interested persontransaction within the scope of Chapter 9 of the SGX-ST Listing Manual.

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The Hardware Business comprises the distribution and retailing of hardware by the Groupas carried out by Builders Shop. After the divestment of the Hardware Business, it is theintention of the Subscriber that Builders Shop will continue to be involved in the import andagency for stones, tiles and marbles.

As the Subscriber does not presently intend to modify the scope of the other ongoingbusinesses carried on by the Group, the Group will also continue to engage in the followingactivities after the divestment of the Hardware Business:-

(a) construction;

(b) retailing and trading of furniture and home lifestyle products and design; and

(c) manufacture of furniture.

Major Transaction – Chapter 10 Of The Listing Manual

Pursuant to Chapter 10 of the Listing Manual (“Chapter 10”), if a listed company proposesto enter into a transaction where any of the relative figures computed on the bases set out inRule 1006 of Chapter 10 exceeds 20%, the transaction is classified as a major transactionthat requires approval by the shareholders of the listed company in general meeting. Thebases set out in the said Rule 1006 are as follows:-

(a) The net asset value of the assets to be disposed of, compared with the group’s netasset value. This basis is not applicable to an acquisition of assets.

(b) The net profits attributable to the assets acquired or disposed of, compared with thegroup’s net profits.

(c) The aggregate value of the consideration given or received, compared with theissuer’s market capitalisation.

(d) The number of equity securities issued by the issuer as consideration for anacquisition, compared with the number of equity securities previously in issue.

Applying the abovementioned bases of computation, the disposal of the Hardware Businessconstitutes a major transaction within the meaning of Chapter 10, thereby requiring theapproval of the Shareholders at the EGM. The computations are set forth below:-

Rule Bases Relative Figure

1006(a) The attributable net tangible assets of the Hardware Business 4.2 %is approximately $0.52 million as at 30 June 2007. The Group’s consolidated net tangible assets for the same period is approximately $12.4 million (taking into account the recently completed Rights Issue)

1006(b) For the half year ended 30 June 2007, the net profits attributable 48.7 %to the Hardware Business is $52,147. The Group’s net profits forthe same period is $107,000.

1006(c) The Consideration payable for the Hardware Business is the 1.9 %underlying net book value of approximately $0.52 million as at 30 June 2007. The Company’s market capitalisation as at 7 September 2007, being the market day prior to the signing ofthe Business Transfer Agreement is $28.1 million.

1006(d) The Consideration is payable in cash. Not Applicable

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(c) Divestment details

Pursuant to the Business Transfer Agreement, Builders Shop shall sell, transfer and assignthe Hardware Business to Shining Holdings all rights, title and interests of Builders Shop inthe Hardware Business as a going concern and the assets owned by or under the control orin the possession of Builders Shop and used in the conduct of the Hardware Business.

All liabilities of Builders Shop in respect of the Hardware Business (including but not limitedto trade payables, other payables, finance leases and the obligations in respect of certainpremises leases) whether current, long term or contingent of Builders Shop as at 1 January2008 together with (but subject to completion) all such liabilities of Builders Shop from 1January 2008 down to the completion date shall be assumed by Shining Holdings.

Subject to completion of the Business Transfer Agreement, property in and title to theHardware Business and its assets to be transferred under the Business Transfer Agreementshall pass to Shining Holdings on 1 January 2008.

(d) Consideration payable for the Hardware Business

The consideration (“Consideration”) payable by Shining Holdings for the sale and transferof the Hardware Business and its assets is effectively the net tangible assets of the saidHardware Business as at 1 January 2008. Such net tangible assets shall be the sum that isequal to the net book values of the assets as recorded in the audited books of BuildersShop less the liabilities at their net book values being assumed by Shining Holdings.

The Consideration shall be satisfied by Shining Holdings paying at completion in cash toBuilders Shop according to the following schedule:-

(i) 20% of the Consideration on completion;

(ii) four equal payments of 20% of the Consideration at the end of each consecutivemonth in the four-month period following completion,

provided that the Consideration shall be based on the net book value set out in thecompletion accounts and in the event of dispute, the determination of the auditors of theCompany as expert shall be binding. In preparing the completion accounts, the auditors ofthe Company shall apply the same accounting policies and principles as that of prior years.

(e) Conditions Precedent

The completion of the proposed divestment of the Hardware Business is conditional upon:-

(i) all resolutions as may be necessary or incidental in relation to Builders Shop’s saleand transfer of the Hardware Business, having been passed at the general meeting ofshareholders of the Company or any adjournment thereof;

(ii) all necessary approvals being given and not having been withdrawn by the SGX-STfor the admission to the official list of the SGX-ST and the dealing and quotation ofthe Strategic Shares being issued pursuant to the Strategic Placement Agreement;

(iii) the simultaneous completion of the Strategic Placement Agreement, the proposeddivestment of the Hardware Business and the exercise of the purchase of the ShopUnit; and

(iv) all necessary consents or approvals of third parties, bankers, financial institutions orgovernmental or regulatory authorities having jurisdiction over the sale and transfer ofthe Hardware Business having been obtained.

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If any one of the conditions precedent to the Business Transfer Agreement described aboveis not fulfilled or waived on or before the Cut-Off Date (or such later date as the Companyand the Subscriber may agree in writing), the Business Transfer Agreement shall de factocease and determine provided that any extension of time under the Strategic PlacementAgreement shall be deemed an extension made to the timeline under the Business TransferAgreement.

(f) Other salient terms

(i) Indemnity: Shining Holdings has agreed and undertaken to Builders Shop that it willindemnify Builders Shop against, and save it harmless from, all costs, proceedings,claims, demands and expenses (including legal fees on an indemnity basis) whichmay be incurred, made or threatened against Builders Shop and/or any loss ordamage suffered by Builders Shop as a result of or in connection with any act,neglect, default or omission on the part of Shining Holdings in respect of any of theassets or the business or the liabilities which Shining Holdings shall assume underthe Business Transfer Agreement or any breach by Shining Holdings of any of itsundertakings in the Business Transfer Agreement.

(ii) Premises Transfer: As part of the sale of the Hardware Business to ShiningHoldings, Shining Construction will by way of the Shop Unit Option Agreement selland convey the Shop Unit to Shining Holdings. With respect to the other premisesbeing leased by Builders Shop to carry on the Hardware Business, Builders Shop willeither procure for the novation, assignment or a sub-tenancy of these leasedpremises on the same terms and conditions to Shining Holdings for the remainingtenancy periods.

(iii) Employees: Upon completion of the Business Transfer Agreement, with effect fromthe Effective Date, Shining Holdings shall assume and be responsible for all debts,obligations and liabilities of Builders Shop pertaining to the employment of theemployees of the Hardware Business whether or not the employees shall haveaccepted employment with Shining Holdings including, without limitation, payment ofsalaries and wages, any taxes, accrued holiday pay, accrued bonus, Central ProvidentFund payments, contributions to retirement benefit schemes and all other costs andexpenses related to their employment as from and after the close of business on theEffective Date.

4.2 Divestment of Shop Unit and other tenancy arrangements – Shop Unit Option Agreement

(a) In connection with the sale of the Hardware Business, another integral transaction is thesale of the Shop Unit by Shining Construction (which is a sister subsidiary of Builders Shop)to Shining Holdings at the book value of the Shop Unit as recorded in the books of ShiningConstruction as at 31 December 2006.

(b) In respect of the lease over the Shop Unit, Shining Construction will by way of an optionexercisable by Shining Holdings (“Shop Unit Call Option”) within 3 months from theCompletion Date sell and convey the Shop Unit at its book value to Shining Holdings or asShining Holdings may nominate. Upon such conveyance and completion of the sale of theShop Unit, the lease over the Shop Unit with Builders Shop shall end.

(c) The consideration, which is the underlying net book value of the Shop Unit of $213,887 asat 31 December 2006, is 0.76% of the Company’s market capitalisation of $28.1 million asat 7 September 2007. The net book value of the Shop Unit is S$212,827 as at 30 June2007.

(d) In respect of the other tenancy arrangements which are between Builders Shop and othermembers of the Group for the Hardware Business, Builders Shop shall procure the novationand/or assignment of such other tenancy arrangements on the same terms and conditionsto Shining Holdings for the balance of the tenancy period.

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(e) In addition, the Hardware Business requires the tenancy over 11 Changi South Street 3,#01-01, Singapore 486122 (the “Required Unit”) (in respect of which Builders Shop is themaster tenant). Builders Shop shall procure a sub-tenancy agreement over the RequiredUnit to be entered into in favour of Shining Holdings for a period of 3 years from completionof the Shop Unit Option Agreement and at the same rent.

(f) In respect of third party tenancy agreements, which are between Builders Shop and thirdparties, Builders Shop shall procure for the novation and/or assignment of the other tenancyagreements on the same terms and conditions to Shining Holdings for the remainder of thetenancy period.

(g) The Company has obtained a valuation on the Shop Unit from Knight Frank, who has valuedthe Shop Unit at S$800,000. A copy of the Valuation Certificate is attached as Appendix 2 tothis Circular.

4.3 Continued use of the name “Shining” by the Shining Entities – Deed of Mutual Covenants

(a) The Company and its subsidiary, Shining Construction (the ““A” Covenantors”) and ShiningHoldings and Shining Development which is also controlled by the Executive Directors (the““B” Covenantors”) have each been using the name “Shining” as part of its respectivename and/or for its respective business for a number of years and such use was in their ownrespective business and not confusing to the public or their customers.

(b) In contemplation of the Completion of the Strategic Placement Agreement whereupon thefuture businesses of the Company and the Group may change and as a result, possibleconfusion may happen, each of the covenantors has acknowledged that each can continueto use the name “Shining” in the same manner as they have done so previously except thatin the case of:

(i) the Company, the use shall be for a period of at most one (1) year after theCompletion of the Strategic Placement Agreement after which the Company shallchange its name and not use the name “Shining”;

(ii) Shining Construction, for an indefinite period after the completion of the StrategicPlacement Agreement provided that the name “Shining” is used in conjunction withanother name.

(c) In the event that the Company sells its present subsidiaries (the “Transfer”) or the Companydecides that the present subsidiaries shall cease, sells and liquidate their currentbusinesses and return their capital to the Company and thereby become dormant shells (the“Cessation”) then the Company shall do the following:

(i) in the case of the Transfer, the Company shall procure and offer for assignment by thesubsidiaries for a sum of S$10,000 in aggregate the names “Cream Homestore” and“Builders Shop” (as corporate names or other usages) to Shining Holdings or itsnominees;

(ii) in the case of the Cessation, the Company shall procure and offer for sale for a sumof S$10,000 in aggregate the subsidiaries Cream Homestore Pte Ltd and BuildersShop to Shining Holdings or its nominees on the basis that such subsidiaries areclean shells with no assets or liabilities save for their ownership of such names andtheir uses.

The Deed of Mutual Covenants is inter-conditional upon the performance of each of theProposed Transactions.

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4.4 Novation or sub-contract of the Retro-Fitting Contract to Shining Holdings – Deed ofCovenant

(a) The Company through its subsidiary, Shining Construction, has submitted a tender for acontract value of approximately $30 million for the refurbishment of an industrial warehouse.The tender is currently pending award by the owner, AFP Warehouse Pte Ltd.

(b) In the event that the Proposed Transactions are completed, the Deed of Covenant providesthat the Retro-Fitting Contract shall be novated or sub-contracted in its entirety to ShiningHoldings or its nominees on the basis as if Shining Construction has not entered into theRetro-Fitting Contract. Both the economic benefit and losses in respect of the Contract shallbe transferred and belong to Shining Holdings.

4.5 Rationale for the Proposed Shining IPT Transactions

The Proposed Shining IPT Transactions are proposed to be entered into by Builders Shop andShining Construction in connection with the completion of the Strategic Placement Agreement.

As the Hardware Business would not be in line with the proposed future business direction of theCompany (which is to engage in property development in Singapore), the Company is proposing todispose of the Hardware Business through the Proposed Shining IPT Transactions.

5. MANDATE FOR THE COMPANY TO ENGAGE IN PROPERTY DEVELOPMENT IN SINGAPORE

5.1 The Company has been engaged in the supply of building materials to the construction relatedsector for a long time. The Company has a relatively small market capitalisation and a modestbalance sheet compared to larger construction-related companies.

5.2 It is the intention of Nico Po, who will be a controlling shareholder of the Company on Completion,for the Group to enter into the new business of high-end residential property development followingthe completion of the Proposed Placement.

It is believed that despite current uncertainties arising from the sub-prime concerns in the UnitedStates of America, prospects for high-end residential properties still remain attractive.GoldenFlowerGroup Real Estate had recently completed the en-bloc acquisition of residential landat 55 Devonshire Road. In order to position the Group with entry into the business of developmentof high-end residential apartments, injection of its residential land at 55 Devonshire Road into theCompany in future may be considered. Any asset injection will be subject to approval of theCompany’s Board and will be carried out in compliance with the applicable provisions of the ListingManual, including the requirements relating to interested person transactions.

5.3 In support of this future business direction, Nico Po intends to transfer experienced real-estateprofessionals based in Singapore from his private operations in Singapore to become seniormanagement of the Company. In addition, Po Sun Kok, who is the father of Nico Po and thechairman of GoldenFlowerGroup, the general name for a group of privately and separately ownedcorporations in Indonesia with over 10,000 employees, is proposed to be appointed as a non-executive chairman of the Company whilst Nico Po will be appointed as the managing director ofthe Company.

5.4 GoldenFlowerGroup Real Estate is currently developing an integrated development, Paragon City,in Semarang, Central Java, which would have a 1,000,000 square feet retail mall, a 250-room four-star hotel and convention facilities. The hotel and convention facilities will be managed by the Inter-Continental Hotel Group. The group also has land banks in Jakarta for offices, apartments and asix-star hotel. In Singapore, the group’s investment holdings includes MacDonald House, an officebuilding along Orchard Road, 51 apartment units at Suite@Central in the Orchard Road area. Onerecent successful project was the purchase, refurbishing and divestment of 135 Cecil Street(previously known as the LKN Building). A recent en-bloc acquisition of residential land at 55Devonshire Road positions the group with an entry into development of high-end residentialapartments.

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5.5 In line with the future business direction, the Company is now seeking Shareholders’ approval toengage in property development in Singapore. For the further reasons discussed in Section 7below, it is anticipated that the Company’s participation in the property development sector withcash injection from the Subscriber will enhance the market capitalisation of the Company. TheCompany and the Group is not intending to engage in property investment holding.

5.6 GoldenFlowerGroup, with the benefit of its experience in real estate, will continue to seekopportunities for property development, both in Singapore and elsewhere, to raise the profile ofthe Group and enhance the intrinsic value of the Group. Upon the Shareholders’ mandate forproperty development being approved, Nico Po intends to engage primarily in residential propertydevelopment in Singapore exclusively through the Group.

6. APPOINTMENT OF PROPOSED NEW DIRECTORS

6.1 Pursuant to the terms of the Strategic Placement Agreement, the Subscriber proposes to nominateadditional directors to form a majority of the Board whose appointment is intended to take effectupon Completion. Nominees of the Subscriber will be appointed by the Board pursuant to theArticles of Association of the Company upon Completion of the Strategic Placement Agreement.

6.2 The current members of the Board (save for one Director who is representing the ExistingControlling Shareholders) will resign on Completion of the Strategic Placement Agreement. TheSubscriber and the current Board members will take the necessary steps to ensure that thecomposition of the Board meets the relevant best practices of corporate governance uponCompletion of the Strategic Placement Agreement.

6.3 The particulars of the new directors proposed to be nominated by the Subscriber as members ofthe Board are set out below.

Name Age Address Proposed Position

Nico Po Purnomo 26 9 Ardmore Park #11-01 Managing DirectorSingapore 259955

Po Sun Kok 59 Dr. Cipto 182 Semaran ChairmanCentral Java Indonesia

6.4 The Subscriber is a special purpose corporation incorporated in the British Virgin Islands on 1December 2006 which is wholly owned by Nico Po. Since the incorporation of the Subscriber todate, it has not entered into any transactions and thus has no substantial assets or liabilities todate.

Nico Po, aged 26, has been the Chief Executive Officer of GoldenFlowerGroup Real Estate sinceJanuary 2003 and has been involved in the property development projects undertaken andacquisition of investment properties by GoldenFlowerGroup Real Estate during the last 4 years.Nico Po holds a Bachelor’s Degree in Computing from the National University of Singapore.

6.5 Since founding the GoldenFlowerGroup in August 1981, Mr Po Sun Kok has helmed theGoldenFlowerGroup as Chairman and Chief Executive Officer. As GoldenFlowerGroup’s Chairman,he sets the GoldenFlowerGroup’s strategic direction and determines its financial and investmentdecisions. Mr Po Sun Kok has led the GoldenFlowerGroup through several pivotal chapters of itshistory including the GoldenFlowerGroup’s diversification into 3 main industries (apparelmanufacturing, banking and finance and real estate) and the international expansion of its realestate business.

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7. RATIONALE FOR THE PROPOSED TRANSACTIONS

The Company has made an announcement on 30 July 2007 with regards to its future corporatedirection. Certain relevant extracts of the announcement are set out below:-

“Future Corporate Direction

The Directors further wish to make the following announcement regarding the future corporatedirection of the Company.

The Directors noted that although the Company has been in the building materials andconstruction related sector for a long time, the Company has a relatively small marketcapitalisation and a modest balance sheet when compared to larger construction-relatedcompanies. This would remain the case even after the proposed rights issue which is for a grossamount of S$2.88 million. Increasingly, with the bullish property market and the growing scale ofbuilding projects in Singapore, competitors with larger market capitalization and financial resourceswould have relative comparative advantages.

The Directors have reviewed and considered strategic ways to grow the market capitalization andthe balance sheet and resources of the Company. The Directors wish to announce that for theforeseeable future, the Company intends to pursue the following corporate possibilities:-

(i) to explore acquisition opportunities of substantial and viable property, construction orbuilding materials related businesses (such acquisitions would complement or leverage onthe existing business of the Group);

(ii) in the event that acquisition opportunities in such related areas are not possible or notavailable, to explore acquisition opportunities in other viable businesses; and

(iii) in connection with (i) or (ii) above, to issue as payment for such acquisition new shares ofthe Company.

…………………..It must be noted that a pursuit of such acquisition opportunities may result in avery major transaction or a reverse takeover under Chapter 10 of the Listing Manual.”

The Directors had prioritized, amongst others, property business in its 30th July 2007announcement because the Group’s current building material and construction businesses arecomplementary and supportive to property development activities. The Directors believe that theGroup has expertise in the construction of high-end or luxury apartment projects for third-partydevelopers. For example, it was reported in The Straits Times on 5 September 2007 that one ofthe condominiums built by the Group, namely One Moulmein Rise, was among the 9 winners ofthe 2007 Aga Khan Award for Architecture. In addition, the Group has an established andextensive capability in the sourcing of natural stones and tiles that are of quality and appealingdesigns that has recently seen growing demand from the high-end developers. For example, theGroup has supplied products to high-end residential projects such as St Regis Residences (by CityDevelopments Limited), the BLVD and The Marq (both by SC Global Developments Ltd).

The Directors believe that the resources and experience of Nico Po and of GoldenFlowerGroup,taking into account their experiences in real-estate in Indonesia, and their growing participation inthe Singapore real-estate market would benefit the Group in its future direction of residentialproperty development.

The overall outcome of the Proposed Placement and the proposed shareholders’ mandate forresidential property development would enable the Company to transform itself beyond merely asupporting and facilitating supplier and contractor to the property market to becoming a real estatedeveloper in its own right. The entry of Nico Po as a new controlling shareholder through theProposed Placement would increase the market capitalisation of the Company, and with thepotential of further increases in its financial resources in the future through possible exercise of theWarrants will enable the Company to better compete in the property development industry.

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8. FINANCIAL EFFECTS

8.1 Purely for illustrative purposes and based on the latest unaudited consolidated financialstatements of the Group for the financial half-year ended 30 June 2007, the financial effects of theissue of Strategic Shares, the Warrants, the Business Transfer Agreement and the Shop UnitOption Agreement are set out below, assuming that the aforesaid transactions are completed on30 June 2007 and further assuming as if the September 2007 rights issue was completed on 30June 2007. The objective of the financial effects analysis is to illustrate what the historicalinformation of the Company might have been had such transactions been completed at an earlierdate. However, such information is not necessarily indicative of or a projection of the financialperformance or financial position of the Company after the following transactions:

(a) Rights Issue;

(b) Issue of Strategic Shares;

(c) Exercise of Warrants; and

(d) Completion of the Business Transfer Agreement and exercise of the Shop Unit OptionAgreement.

8.2 The effect of the aforesaid transactions on the share capital and total equity of the Company areas follows:-

Assuming thecompletion ofthe Business

TransferAgreement

After Rights Assuming Assuming and theAs at Issue in the issue of the exercise exercise of

30 June September the Strategic of the the Shop Unit2007 2007 Shares Warrants Call Option

No. of Shares Issued 96,000,000 144,000,000 311,307,692 466,961,538 466,961,538

Share Capital (S$’000) 15,046 17,926 39,676 59,911 59,911

Total Equity (’000) 10,423 13,303 35,053 55,288 55,288

8.3 The effect of the aforesaid transactions on the NTA per Share of the Group based on theunaudited consolidated balance sheet of the Group as at 30 June 2007 are as follows:-


TransferAgreement



NTA (S$’000) 9,574 12,454 34,204 54,439 54,440


NTA per Share (Singapore cents) 9.97 8.65 10.99 11.66 11.66

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8.4 The effect of the aforesaid transactions on the gearing of the Group based on the unauditedconsolidated balance sheet of the Group as at 30 June 2007 are as follows:-


TransferAgreement



Net Borrowings (S$’000) 1,221 1,221 1,221 1,221 1,221

Total Equity (S$’000) 10,576 13,456 35,206 55,441 55,441

Gearing 0.12 0.09 0.03 0.02 0.02

Note:-For the purposes of the above calculation:-

Net Borrowings means the total borrowings of the Group minus fixed deposits pledged with banks;

Total Equity means the aggregate amount of share capital, revenue reserves, other reserves and minority interests of theGroup; and

Gearing means the ratio of the Net Borrowings to the shareholders’ funds.

Assuming the proceeds from the aforesaid transactions is used to repay the borrowings, therewould be no borrowings.

8.5 The effect of the aforesaid transactions on the loss per Share of the Group based on the auditedprofit and loss statement of the Group for FY2006 and assuming the Rights Issue and theaforesaid transactions are completed on 1 January 2006 are as follows:-


TransferAgreement

After Rights Assuming Assuming and theIssue in the issue of the exercise exercise of

September the Strategic of the the Shop UnitFY2006 2007 Shares Warrants Call Option

Loss after tax (S$’000) (796) (796) (796) (796) (728)


Loss per Share (Singapore cents) (0.83) (0.55) (0.26) (0.17) (0.16)

9. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

9.1 None of the Strategic Shares and the Warrants will be issued to any person who is a Director or aSubstantial Shareholder of the Company, or any of the following persons:

(a) the immediate family members of the Directors and Substantial Shareholders of theCompany;

(b) Substantial Shareholders, related companies (as defined in the Companies Act), associatedcompanies and sister companies of the Substantial Shareholders; and

(c) corporations in whose shares the Directors and Substantial Shareholders have anaggregate interest of at least 10%.

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9.2 None of the Directors or Substantial Shareholders of the Company or their associates has anyinterest, direct or indirect, in the Proposed Placement (other than arising from their shareholdingsin the Company, if any). Nico Po has confirmed that neither himself, the Subscriber nor its nomineehas any connections (including business relationship) with the Company, its Directors and itsSubstantial Shareholders and that they do not fall within the categories of persons or entities listedin Rule 812(1) of the Listing Manual.

10. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE COMPANY

10.1 The direct and deemed interest of the Directors and Substantial Shareholders in the Shares asrecorded in the Register of Directors’ Shareholdings and the Register of Substantial Shareholdersrespectively as at the Latest Practicable Date are set out below:

Direct interest Deemed InterestDirectors No. of Shares % No. of Shares %

Tan Kay Kiang(1) 1,549,920 1.08 18,950,400 13.16Tan Chin Hoon(2) 314,910 0.22 15,950,400 11.08Tan Kay Tho(3) 1,474,890 1.02 18,450,420 12.81Tan Kay Sing(4) 11,025,000 7.66 14,500,420 10.07Tan Nan Choon 2,425,020 1.68 – –Lee Eng Kian – – – –Gurdaib Singh s/o Pala Singh – – – –

Substantial Shareholders

Shining Holdings 13,950,420 9.69 – –

Notes:-

(1) Tan Kay Kiang is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the4,999,980 Shares held by his wife, Tay Swee Leng, by virtue of section 7 of the Companies Act.

(2) Tan Chin Hoon is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the1,999,980 Shares held by his wife, Tjioe A Lan, by virtue of section 7 of the Companies Act.

(3) Tan Kay Tho is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the4,500,000 Shares held by his wife, Yeong Yoon Ying, by virtue of section 7 of the Companies Act.

(4) Tan Kay Sing is deemed to be interested in the 13,950,420 Shares held by Shining Holdings Pte Ltd and the 550,000Shares held by his wife, Sim Mong Lan, by virtue of section 7 of the Companies Act.

11. ADVICE OF HLF TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE PROPOSEDPLACEMENT AND THE PROPOSED WHITEWASH RESOLUTION

11.1 The Independent Directors have appointed HLF as the Independent Financial Adviser to advisethem in respect of the Proposed Placement and the Proposed Whitewash Resolution. A copy ofthe letter from HLF to the Independent Directors, containing their advice in full, is set out inAppendix 1 of this Circular, and Shareholders’ attention is drawn to it.

11.2 Having regard to the considerations set forth in their letter to the Independent Directors, HLF is ofthe opinion that the Proposed Placement and the Proposed Whitewash Resolution are notprejudicial to the interests of the Company and its Independent Shareholders.

12. ADVICE OF HLF TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE PROPOSEDSHINING IPT TRANSACTIONS

12.1 Pursuant to Chapter 9 of the Listing Manual, HLF has been appointed as the IndependentFinancial Adviser to the Independent Directors to advise them on whether the Proposed ShiningIPT Transactions are on normal commercial terms and whether it is prejudicial to the interests ofthe Company and the minority Shareholders. A copy of their letter to the Independent Directors isset out in Appendix 1 of this Circular. Shareholders are advised to read HLF’s letter of advicecarefully.

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12.2 HLF is of the opinion that, based on the information available as at the Latest Practicable Date, theProposed Shining IPT Transactions, if evaluated on a stand alone basis, do not seem to be onnormal commercial terms as there is a material difference between the Open Market Value and theShop Unit Book Value. Although the Shop IPT Sale is not at a compelling price for the Company,one should also consider it in the context that the Hardware Business is a relatively small businesswhen compared to the total proceeds raised from the Proposed Placement. Furthermore, HLF tookinto account that the Proposed Shining IPT Transactions and the Proposed Placement are inter-linked and interdependent on each other. Hence, even though the Proposed Shining IPTTransactions may not be on normal commercial terms and may be prejudicial to the Company andits Independent Shareholders, HLF has advised the Independent Directors to recommend that theIndependent Shareholders vote in favour of the Proposed Placement, the Proposed WhitewashResolution and the Proposed Shining IPT Transactions.

HLF has highlighted in the IFA Letter that Shareholders should note that voting for one resolutionbut not the other, would not enable the Company to proceed with the Proposed Placement. Byvoting in favour of the Proposed Whitewash Resolution, which is a condition for the completion ofthe Proposed Placement and the Proposed Shining IPT Transactions, the Company wouldtransform itself beyond merely a supporting and facilitating supplier and contractor to the propertymarket to becoming a real estate developer in its own right. The entry of Nico Po as a newcontrolling shareholder through the Proposed Placement would increase the market capitalizationof the Company, and with the potential of further increases in its financial resources in the futurethrough possible exercise of the Warrants will enable the Company to better compete in theproperty development industry.

13. STATEMENT OF THE AUDIT COMMITTEE

The Audit Committee, save for Mr Alex Tan Nan Choon (who is the son of Mr Tan Chin Hoon) whohas abstained from making any recommendation on the Proposed Shining IPT Transactions, hasreviewed, inter alia, the rationale for and the terms of the Proposed Shining IPT Transactions, andtaking into consideration the opinion of the IFA, the Audit Committee is of the view that theProposed Shining IPT Transactions are on normal commercial terms and are not prejudicial to theinterests of the Company and the minority Shareholders.

14. INDEPENDENT DIRECTORS’ RECOMMENDATIONS

14.1 The Proposed Transactions

The Executive Directors and Mr Alex Tan Nan Choon (who is the son of Mr Tan Chin Hoon) haverefrained from making any recommendations to Shareholders in respect of the ProposedTransactions as they are interested in the Proposed Shining IPT Transactions.

Having considered and reviewed, amongst others, the terms of the Strategic PlacementAgreement, the Business Transfer Agreement, the Shop Unit Option Agreement, the Deed ofMutual Covenants, and the Deed of Covenant, the rationale for and the financial effects of theProposed Transactions, and all other relevant facts set out in this Circular, the IndependentDirectors concur with the advice of HLF in relation to the Proposed Placement and the ProposedShining IPT Transactions. Accordingly, they recommend that eligible Shareholders vote in favour ofOrdinary Resolutions Numbers 1, 3, 4, 5, 6 and 7 set out in the Notice of the EGM contained inthis Circular.

In rendering their advice, the Independent Directors have not had regard to the specific investmentobjectives, financial situation, tax position, tax status, risk profiles or particular needs andconstraints and circumstances of any individual Shareholder. As each Shareholder would havedifferent investment objectives and profiles, the Independent Directors would recommendthat any individual Shareholder who may require specific advice in relation to his specificinvestment objectives or portfolio should consult his stockbroker, bank manager, solicitor,accountant, tax adviser or other professional adviser immediately.

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14.2 The Proposed Whitewash Resolution

The Independent Directors have considered and concur with the advice of HLF in relation to theProposed Whitewash Resolution. They believe that the Proposed Whitewash Resolution is notprejudicial to the Company and its Independent Shareholders. Accordingly, they recommend thatIndependent Shareholders vote in favour of Ordinary Resolution Number 2 relating to theProposed Whitewash Resolution as stated in the Notice of the EGM contained in this Circular.

In rendering their advice, the Independent Directors have not had regard to the specific investmentobjectives, financial situation, tax position, tax status, risk profiles or particular needs andconstraints and circumstances of any individual Shareholder. As each Shareholder would havedifferent investment objectives and profiles, the Independent Directors would recommendthat any individual Shareholder who may require specific advice in relation to his specificinvestment objectives or portfolio should consult his stockbroker, bank manager, solicitor,accountant, tax adviser or other professional adviser immediately.

14.3 Inter-conditionality of the Proposed Transactions

The approval of ordinary resolutions numbers 1, 2, 3, 4, 5, 6 and 7 in respect of the ProposedPlacement, the Proposed Whitewash Resolution, each of the Proposed Shining IPT Transactionsand the proposed mandate for the Company to engage in property development in Singapore, areinter-conditional. This means that if any one of these resolutions in the Notice of EGM is notapproved, these other resolutions would be taken to have been not approved.

15. EXTRAORDINARY GENERAL MEETING

The EGM, notice of which is set out on pages 60 to 62 of this Circular, is to be held at 11 ChangiSouth Street 3, #04-01, Singapore 486122 on 18 March 2008 at 10.00 a.m. for the purpose ofconsidering and, if thought fit, passing with or without any amendment, the resolutions set out inthe Notice of the EGM.

16. ABSTENTION FROM VOTING

16.1 Mr Tan Kay Kiang, Mr Tan Chin Hoon, Mr Tan Kay Tho, Mr Tan Kay Sing, Mr Alex Tan Nan Choonand their respective associates (as defined in the Listing Manual) will abstain from voting inrespect of all the Ordinary Resolutions which are proposed to be passed at the forthcoming EGM.

16.2 As at the Latest Practicable Date, none of the Subscriber and parties acting in concert with it holdsany Shares. In the event that the Subscriber and/or parties acting in concert with it subsequentlyacquires any interest in the Shares, the Subscriber and parties acting in concert with it will abstainfrom voting on Ordinary Resolution Number 2, being the proposed resolution relating to theProposed Whitewash Waiver.

16.3 Further, each of the persons mentioned in this paragraph 16 undertakes to decline to acceptappointment to act as proxies for other Shareholders of the Company at the EGM unless theShareholder concerned shall have given specific instructions as to the manner in which his votesare to be cast.

17. ACTION TO BE TAKEN BY SHAREHOLDERS

Shareholders who are unable to attend the EGM and who wish to appoint a proxy to attend andvote on their behalf should complete, sign and return the attached proxy form in accordance withthe instructions printed thereon as soon as possible and, in any event, so as to reach theregistered office of the Company at 11 Changi South Street 3, #04-01, Singapore 486122 by notlater than 10.00 a.m. on 16 March 2008. The completion and return of a proxy form by aShareholder will not preclude he/she from attending and voting in person at the EGM in place ofhis/her proxy if he/she so wishes.

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18. DIRECTORS’ RESPONSIBILITY STATEMENT

This Circular has been reviewed and approved by the Directors and they (including those whohave delegated detailed supervision of this Circular) collectively and individually, accept fullresponsibility for the accuracy of the information given in this Circular. They also confirm, aftermaking all reasonable enquiries and to the best of their knowledge and belief, that this Circularconstitute full and true disclosure of all material facts above in connection with the ProposedTransactions and that there are no material facts the omission of which would make any statementin this Circular misleading in any material respect.

19. CONSENTS

19.1 DMG & Partners Securities Pte. Ltd. has given and has not withdrawn its written consent to theissue of this Circular with the inclusion of its name and all references thereto in the form andcontext in which they appear in this Circular and to act in such capacity in relation to this Circular.

19.2 HLF has given and has not withdrawn its written consent to the issue of this Circular with theinclusion of its name and the IFA Letter and all references thereto in the form and context in whichthey appear in this Circular and to act in such capacity in relation to this Circular.

19.3 Knight Frank has given and has not withdrawn its written consent to the issue of this Circular withthe inclusion of its name and the Valuation Certificate and all references thereto in the form andcontext in which they appear in this Circular.

20. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the registered office of theCompany at 11 Changi South Street 3, #04-01, Singapore 486122 during normal business hoursfrom the date of this Circular up to and including the date of the EGM:

(a) the Memorandum and Articles of Association of the Company;

(b) the Strategic Placement Agreement;

(c) the Business Transfer Agreement;

(d) the Shop Unit Option Agreement,

(e) the Deed of Mutual Covenants;

(f) the Deed of Covenant;

(g) the Deed Poll;

(h) the Valuation Report dated 12 December 2007 from Knight Frank in respect of the ShopUnit;

(i) the Valuation Certificate;

(j) the IFA Letter; and

(k) the letters of consent referred to in paragraph 19 above.

Yours faithfully

For and on behalf of SHINING CORPORATION LTD

Tan Kay KiangChairman

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APPENDIX I

LETTER FROM HONG LEONG FINANCE LIMITED TO THE INDEPENDENT DIRECTORS OF SHINING CORPORATION LTD

IN RELATION TO PROPOSED PLACEMENT, THE PROPOSED WHITEWASHRESOLUTION AND THE PROPOSED SHINING IPT TRANSACTIONS

Hong Leong Finance Limited16 Raffles Quay #01-05

Hong Leong BuildingSingapore 048581

26 February 2008

To: The Independent DirectorsShining Corporation Ltd 11 Changi South Street 3#04-01 Builders CenterSingapore 486122

Dear Sirs,

(A) THE PROPOSED PLACEMENT OF THE STRATEGIC SHARES AND THE WARRANTS TOCITIPOINT ASIA REAL ESTATE CAPITAL LTD UNDER THE STRATEGIC PLACEMENTAGREEMENT

(B) THE PROPOSED WHITEWASH RESOLUTION FOR THE WAIVER BY THE INDEPENDENTSHAREHOLDERS OF THEIR RIGHT TO RECEIVE A MANDATORY GENERAL OFFER FROMCITIPOINT ASIA REAL ESTATE CAPITAL LTD (AND PARTIES ACTING IN CONCERT WITH IT)FOR ALL THE ISSUED AND PAID-UP SHARES OF THE COMPANY FOLLOWINGCOMPLETION OF THE PLACEMENT; AND

(C) THE PROPOSED CONDITIONAL PROPOSED SHINING IPT TRANSACTIONS RELATING TOTHE SALE OF THE HARDWARE BUSINESS, THE SALE OF THE SHOP UNIT, THE USE OFTHE NAME “SHINING” AND THE NOVATION OR SUB-CONTRACT OF THE RETRO-FITTINGCONTRACT.

Except where the context otherwise requires or where otherwise stated, the definitions used in theCircular shall apply throughout the “Letter from Hong Leong Finance Limited to the IndependentDirectors of Shining Corporation Ltd in relation to the Proposed Placement, the Proposed WhitewashResolution and the Proposed Shining IPT Transactions” (this “IFA Letter”).

1. INTRODUCTION

This IFA Letter has been prepared for inclusion in the circular to Shareholders of the Companydated 26 February 2008 (the “Circular”) in connection with, inter alia, the Placement and theProposed Shining IPT Transactions. This IFA Letter sets out our views on the Proposed Placement,the Proposed Whitewash Resolution and the Proposed Shining IPT Transactions and ourrecommendations to the Independent Directors accordingly. This Letter will set forth such factorsconsidered by Hong Leong Finance Limited (“HLF”) in arriving at our views. The Circular willprovide, inter alia, details of the Proposed Placement and the Proposed Shining IPT Transactions,and the recommendation(s) of the Independent Directors in relation to the Proposed Placement,the Proposed Whitewash Resolution and the Proposed Shining IPT Transactions, havingconsidered HLF’s advice in this IFA Letter.

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On 10 September 2007, the Company announced that the Company had entered into theStrategic Placement Agreement for the proposed placement of new ordinary shares and certainfree warrants to the Subscriber.

The Subscriber is a special purpose corporation incorporated in the British Virgin Islands. Theentire share capital of the Subscriber is held by Nico Po.

Under the Strategic Placement Agreement, the Subscriber will invest S$21,750,000 in theCompany by subscribing for the Strategic Shares and the Warrants. Each Strategic Share will besubscribed for at the Issue Price. Each Warrant will be issued free to the Subscriber, on the termsand subject to the conditions of the Strategic Placement Agreement and the Deed Poll.

Nico Po has additionally undertaken that he shall ensure the performance by the Subscriber of itsobligations to subscribe for the Strategic Shares on the terms and subject to the conditions of theStrategic Placement Agreement. On 18 September 2007, the Company received writtenconfirmation from a bank in Singapore that Nico Po has sufficient financial resources to fulfil theobligations to subscribe for the Strategic Shares. The Company has accepted such writtenconfirmation of financial resources.

The Strategic Placement Agreement stipulates that as a condition to the placement of theStrategic Shares, the Group is to enter into the Proposed Shining IPT Transactions. Under theStrategic Placement Agreement, the performance of each of the placement of the Strategic Sharesand the Proposed Shining IPT Transactions by the respective parties thereto are inter-conditionalupon the performance of each of these transactions.

It is further the intention of Nico Po, who will be a controlling shareholder of the Company onCompletion, for the Group to enter into the new business of property development following thecompletion of the Proposed Placement. In line with the proposed new business, the ProposedShining IPT Transactions will allow the Company to divest itself of its current businesses that willno longer form its core business if the Proposed Transactions are approved.

A copy of the Company’s announcements made on 10 September 2007 and 18 September 2007are available on SGX-ST’s website at www.sgx.com.

The Directors are convening an EGM to seek Shareholders’ approval, by way of respectiveordinary resolutions, for (i) the issue of the Strategic Shares, (ii) the issue of the Warrants, (iii) theissue of New Shares upon the exercise of the Warrants, all of which are pursuant to the StrategicPlacement Agreement (and in the case of the issue of the Warrants and the New Shares,additionally pursuant to and on the terms of the Deed Poll), (iv) the Proposed Shining IPTTransactions and (v) the Group to be permitted to engage in property development in Singaporefollowing Completion, as set out in the notice of EGM on pages 60 to 62 of this Circular. Thepurpose of this Circular is to provide Shareholders with the relevant information relating to thesematters.

2. PROPOSED WHITEWASH RESOLUTION

2.1 As at the Latest Practicable Date, the Subscriber and its concert parties do not hold any Shares orinstruments convertible into the rights to subscribe for and options in respect of Shares. Oncompletion of the Proposed Placement, the Subscriber and/or its nominees will hold 167,307,692Shares, representing approximately 53.7% of the enlarged Share capital of the Company. Pursuantto Rule 14.1(a) of the Code and Section 139 of the SFA, the Subscriber and parties acting inconcert with it would be required to make a general offer for the remaining Shares not owned oragreed to be acquired by the Subscriber and parties acting in concert with it at the highest pricepaid or agreed to be paid by the Subscriber and parties acting in concert with it for the Shares inthe past 6 months. The Subscriber has sought a waiver from the SIC of its obligation to make ageneral offer under Rule 14.1(a) of the Code and for SIC to permit it to propose the Proposed

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Whitewash Resolution. The SIC had on 12 November 2007 granted the Subscriber and partiesacting in concert with it a waiver of the requirements to make a general offer following thecompletion of the Proposed Placement subject to, inter alia, the following conditions:-

(a) a majority of holders of voting rights of the Company present and voting at a generalmeeting, held before the issue of the Strategic Shares to the Subscriber, approve by way ofa poll, a resolution (the “Whitewash Resolution”) waive their rights to receive a generaloffer from the Subscriber and parties acting in concert with it;

(b) the Whitewash Resolution is separate from other resolutions;

(c) the Subscriber, parties acting in concert with it and parties not independent of it, abstainfrom voting on the Whitewash Resolution;

(d) the Subscriber and its concert parties did not acquire or are not to acquire any shares orinstruments convertible into and options in respect of shares of the Company (other thansubscriptions for, rights to subscribe for, instruments convertible into or options in respect ofnew shares which have been disclosed in the circular):-

(i) during the period between the announcement of the Proposed Placement and thedate shareholders’ approval is obtained for the Proposed Whitewash Resolution; and

(ii) in the 6 months prior to the announcement of the Proposed Placement, butsubsequent to negotiations, discussions or the reaching of understandings oragreements with the directors of the Company in relation to the issue of the StrategicShares;

(e) the Company appoints an independent financial adviser to advise its independentshareholders on the Whitewash Resolution;

(f) the Company sets out clearly in the circular to shareholders:-

(i) details of the Proposed Placement;

(ii) the dilution effect of the Proposed Placement, or upon the exercise or conversion ofthe Warrants to be issued, to existing holders of voting rights;

(iii) the number and percentage of voting rights in the Company as well as the number ofinstruments convertible into, rights to subscribe for and options in respect of shares inthe Company held by the Subscriber and its concert parties as at the latestpracticable date;

(iv) the number and percentage of voting rights to be issued to the Subscriber, or to beacquired by the Subscriber upon the exercise of the Warrants to be issued;

(v) specific and prominent reference to the fact that the Proposed Placement would resultin the Subscriber holding shares carrying over 49% of the voting rights of theCompany based on its enlarged issued share capital, and the fact that the Subscriberwill be free to acquire further shares without incurring any obligation under Rule 14 tomake a general offer;

(vi) the shareholders, by voting for the Whitewash Resolution, are waiving their rights to ageneral offer from the Subscriber at the highest price paid by the Subscriber andparties acting in concert with it for the Company’s shares in the past 6 monthspreceding the commencement of the Proposed Placement;

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(g) the circular by the Company to its shareholders states that the waiver granted by the SIC tothe Subscriber and parties acting in concert with it from the requirement to make a generaloffer under Rule 14 is subject to the conditions stated at 3.1(a) to (f) above;

(h) the Subscriber obtains SIC’s approval in advance for those parts of the circular that refer tothe Whitewash Resolution; and

(i) to rely on the Whitewash Resolution, the acquisition of the Strategic Shares by theSubscriber pursuant to the Proposed Placement must be completed within 3 months of theapproval of the Whitewash Resolution.

2.2 The Independent Shareholders are therefore asked to vote on a poll on the Proposed WhitewashResolution set out as an ordinary resolution in the Notice of EGM on pages 60 to 62 of thisCircular.

2.3 Shareholders should note that the passing of the ordinary resolution relating to the ProposedPlacement is conditional upon the Proposed Whitewash Resolution being approved byIndependent Shareholders as the Proposed Whitewash Resolution is a condition precedent in theStrategic Placement Agreement.

If Independent Shareholders do not vote in favour of the Proposed Whitewash Resolution, theProposed Placement will not take place. As completion of the Proposed Shining IPT Transactionsis also conditional upon the completion of the Proposed Placement taking place simultaneously,the Proposed Shining IPT Transactions will also not take place.

2.4 Independent Shareholders should note that the Proposed Placement would result in theSubscriber holding Shares carrying over 49% of the voting rights of the Company based onits enlarged issued share capital.

2.5 Independent Shareholders should also note that by voting for the Proposed WhitewashResolution:-

(a) the Subscriber will be free to acquire further Shares without incurring any obligationunder Rule 14 of the Code to make a general offer; and

(b) the Independent Shareholders will be waiving their rights to a general offer from theSubscriber at the highest price paid by the Subscriber and parties acting in concertwith it for the Company’s Shares in the past 6 months preceding the commencementof the Proposed Placement.

3. TERMS OF REFERENCE

HLF has been appointed by the Company to advise the Independent Directors in respect of theProposed Placement and the Proposed Whitewash Resolution and whether they are prejudicial tothe interests of the Company and the minority Shareholders. HLF has also been appointed by theCompany to advise the Independent Directors on whether the Proposed Shining IPT Transactionsare on normal commercial terms and whether it is prejudicial to the interests of the Company andthe minority Shareholders. We are not and were not involved in any aspect of the negotiation inrelation to the Proposed Placement and the Proposed Shining IPT Transactions, nor were weinvolved in the deliberations leading up to the decision on the part of the Subscriber to propose theProposed Placement and the Proposed Shining IPT Transactions and we do not, by this letter,warrant the merits of the Proposed Placement and the Proposed Shining IPT Transactions otherthan to express a view on whether the Proposed Placement and the Proposed WhitewashResolution are prejudicial to the interests of the Company and the minority Shareholders andwhether the Proposed Shining IPT Transactions are on normal commercial terms and whether it isprejudicial to the interests of the Company and the minority Shareholders.

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We have limited our evaluation to the Proposed Placement, the Proposed Whitewash Resolutionand the Proposed Shining IPT Transactions and in relation to our evaluation we have consideredthe financial terms of the Proposed Placement and the Proposed Shining IPT Transactions. Ourterms of reference do not require us to evaluate or comment on the strategic merits, long term orotherwise, and/or on the commercial/financial merits and/or risks (if any) of the ProposedPlacement, the Proposed Shining IPT Transactions and the Proposed Whitewash Resolution.Such evaluations or comments where necessary on the Proposed Placement, the ProposedShining IPT Transactions and the Proposed Whitewash Resolution remain the sole responsibility ofthe board of Directors and management of the Company although we may draw upon their viewsor make such comments in respect thereof (to the extent deemed necessary or appropriate by us)in arriving at our opinion.

In the course of our evaluation, we have held discussions with certain members of the board ofDirectors and management of the Company and have examined publicly available informationcollated by us and information provided by the Directors, management and professional advisersof the Company and their representatives. We have relied upon and assumed the accuracy of,without having independently verified, such information, whether written or verbal, provided to usby the aforesaid parties and accordingly cannot and do not expressly or impliedly warrant, and wedo not accept any responsibility for, the accuracy, completeness or adequacy of such information.

We have relied upon the assurances of the Directors who have accepted full responsibility for theaccuracy and completeness of the information provided to us and who have confirmed to us that tothe best of their knowledge, information and belief, having made due and careful enquiries, allmaterial information available to them in connection with the Proposed Placement, the ProposedShining IPT Transactions and the Proposed Whitewash Resolution have been disclosed to HLFand that such information constitute full and true disclosure of all material information relating tothe Proposed Placement, the Proposed Shining IPT Transactions and the Proposed WhitewashResolution, and is true, complete and accurate in all material respects and there is no otherinformation or fact including the expected future performance or future growth prospects of theCompany or the Group after the Proposed Placement, the Proposed Shining IPT Transactions andthe Proposed Whitewash Resolution, the omission of which would cause any of the informationdisclosed to us or relied by us in making our recommendation or giving our advice or informationdisclosed or opinion expressed in the Circular to be inaccurate, incomplete, untrue or misleading inany material respect. We have assumed that all statements of fact, belief, opinion and intentionmade by the board of Directors and management of the Company in the Circular have beenreasonably made after due and careful enquiry. Accordingly, no representation or warranty, expressor implied, is made and no responsibility is accepted by us concerning the accuracy, completenessor adequacy of such information.

In addition, we have not made any independent evaluation or appraisal of the assets and liabilities(including without limitation, real property) of the Company or the Group and we have not beenfurnished with any such evaluation or appraisal.

The scope of our appointment does not require us to express, and we do not express, a view onthe future growth prospects, value and earnings potential of the Company or the Group. We aretherefore not expressing any view herein as to the price at which the Shares may trade uponcompletion of the Proposed Placement, the Proposed Shining IPT Transactions and the ProposedWhitewash Resolution or on the future value, financial performance or condition of the Companyafter the Proposed Placement, the Proposed Shining IPT Transactions and the ProposedWhitewash Resolution.

Our views are based on market, economic, industry, monetary and other conditions (whereapplicable) prevailing on, and our analysis of the information made available to us as of the LatestPracticable Date. We assume no responsibility to update, revise or reaffirm our opinion, factors orassumptions in light of any subsequent development after the Latest Practicable Date that mayaffect our opinion or factors or assumptions contained herein.

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We have not had regard to the general or specific investment objectives, financial situation, taxposition, risk profiles or unique needs and constraints of any individual Shareholder. As differentShareholders would have different investment portfolios and objectives, we would advise theIndependent Directors to recommend that any individual Shareholder who may require specificadvice in relation to his or her investment portfolio should consult his or her stockbroker, bankmanager, solicitor, accountant, tax adviser or other professional advisers.

Our conclusion and recommendation in relation to the Proposed Placement, the WhitewashResolution and the Shining IPT Transactions are set out under section 13 of this Letter. Ourrecommendations should be considered in the context of the entirety of our advice as setout in this Letter.

The Company has been separately advised by its own adviser in the preparation of the Circular(other than this Letter). We have had no role or involvement and have not provided any advice(legal, financial or otherwise) whatsoever in the preparation, review and verification of the Circular(other than this Letter) and our responsibility is as set out above in relation to this Letter,Accordingly, we take no responsibility for, and express no views, whether expressed or implied, onthe contents of the Circular (except for this Letter).

4. THE PROPOSED PLACEMENT

The terms of the Proposed Placement are set out in section 2 of the Letter to Shareholdersincluded in the Circular and parts of it have been extracted and reproduced here. We recommendthat the Independent Directors advise the Independent Shareholders to read section 2 of the Letterto Shareholders included in the Circular carefully.

4.1 Overview

Pursuant to the Strategic Placement Agreement, the Company agreed to:-

(a) allot and issue the Strategic Shares to the Subscriber or its nominees at an issue price ofS$0.13 per Strategic Share; and

(b) issue up to 155,653,846 free Warrants to the Subscriber, each Warrant carrying the right tosubscribe for one (1) New Share at an exercise price of S$0.13 for each New Share,

upon the terms and subject to the conditions in the Strategic Placement Agreement.

The Strategic Shares and the New Shares when issued and fully paid will rank pari passu in allrespects with and carry all rights similar to the existing issued Shares except that they will not rankfor any dividend, right, allotment or other distributions, the Record Date for which falls on or beforethe Completion Date or the date of exercise of the relevant Warrants (as the case may be).

The Strategic Shares will represent approximately 53.7% of the enlarged issued share capital ofthe Company upon completion of the Proposed Placement. Accordingly, the Proposed Placementis subject to the prior approval of Shareholders pursuant to Rule 803 of the Listing Manual whichprovides that a company shall not issue securities to transfer a controlling interest without priorapproval of shareholders in general meeting.

The Issue Price of S$0.13 for each of the Strategic Shares and the exercise price of S$0.13 foreach of the Warrants represents a discount of:-

(i) 24.3% to the weighted average price for trades done on the SGX-SESDAQ on 7 September2007, being the full market day prior to the signing of the Strategic Placement Agreement;and

(ii) 30.3% to the prevailing market price of the Shares on 7 September 2007 prior to the signingof the Strategic Placement Agreement.

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The Issue Price was agreed based on arms’ length negotiations taking into account, inter alia, theexisting financial position of the Company, historical and prevailing Share prices and marketsentiments.

4.2 Conditions Precedent for the Proposed Placement

The obligations of the Subscriber under the Strategic Placement Agreement to subscribe for theStrategic Shares and the Warrants, and the Company’s obligations to issue the Strategic Sharesand the Warrants, is conditional upon the performance by the Company and the Subscriber of theirrespective obligations under the Strategic Placement Agreement and also upon fulfilment of thefollowing:

(i) the Subscriber obtaining a whitewash waiver by the SIC of the requirement for theSubscriber and its concert parties to make a mandatory general offer for the Shares of theCompany not already owned by the Subscriber or its concert parties, and if granted subjectto conditions, such conditions being acceptable to the Subscriber (the “Whitewash WaiverRuling”);

(ii) the Company having obtained a whitewash waiver from the Company’s Shareholdersindependent of the Subscriber and its concert parties and fulfilment of other relevant termsand conditions (if any) of the Whitewash Waiver Ruling of the SIC;

(iii) approval in-principle for the listing and quotation of the Strategic Shares, the Warrants andthe New Shares to be issued upon the exercise of the Warrants on the SGX-ST (onconditions, if any, acceptable to the Company and the Subscriber) having been obtained andremaining in full force and effect and where such approval is given subject to conditionswhich must be fulfilled on or before the Completion Date, they are so fulfilled;

(iv) all corporate and Shareholders’ approvals having been obtained by the Company on termssatisfactory to the Company and the Subscriber in respect of the allotment, issue andsubscription of the Strategic Shares, the issue of the Warrants and all the transactionsancillary to or contemplated thereto and such approvals remaining in full force and effect onCompletion and, if such approvals are subject to any conditions which are required to befulfilled on or prior to Completion, such conditions are fulfilled;

(v) the allotment, issue and subscription of the Strategic Shares and the allotment and issue ofthe Warrants and the New Shares arising from the exercise of the Warrants not beingprohibited by any statute, order, rule, regulation or directive promulgated or issued after thedate of the Strategic Placement Agreement by any legislative, executive or regulatory bodyor authority of Singapore which is applicable to the Company or the Subscriber;

(vi) on the Completion Date, the representations and warranties of the Company and theSubscriber under the Strategic Placement Agreement being true, accurate and correct in allmaterial respects as if made on the Completion Date, with reference to the then existingcircumstances and the Company and the Subscriber having performed in all materialrespects all of their obligations under the Strategic Placement Agreement to be performedon or before the Completion Date;

(vi) all approvals and Shareholders’ approvals for the Proposed Shining IPT Transactions havingbeen obtained by the Company on terms satisfactory to the Company and the ExistingControlling Shareholders;

(viii) the Subscriber being satisfied that the audited consolidated net tangible assets of theCompany and its subsidiaries as a group not being less than S$12 million for the financialyear ended 31 December 2007, based on the same accounting policies and standardsadopted in the Company’s financial audited statements (“NTA”), however, in the eventCompletion occurs at any time before 31 December 2007, the NTA, as reviewed by theSubscriber’s appointed auditors in consultation with the auditors of the Company, in respect

38

of the financial period ending as at the end of the month immediately prior to the month inwhich Completion occurs shall not be less than S$12,000,000 (for avoidance of doubt, allprofessional costs and related expenses up to an amount no more than S$550,000 inconnection with securing the requisite approvals for the Proposed Transactions andbrokerage fees payable shall not be computed as reducing the NTA);

(ix) the Shares of the Company have not been suspended for more than three (3) market days;and

(x) the Shares of the Company have not been delisted.

The Company and the Subscriber further agreed that they shall respectively use their bestendeavours to secure the satisfaction of the conditions precedent above on or before 31 March2008 or such other date as they may agree in writing (the “Cut-Off Date”).

The Subscriber may, upon such terms as it thinks fit, waive compliance with any of the conditionsprecedent above (other than the conditions contained in (i), (ii), (iii), (iv), (v), (vii) and (x)) and anycondition so waived shall be deemed to have been satisfied.

If any of the conditions precedent are not satisfied or waived, in accordance with the terms of theStrategic Placement Agreement, on or before the Cut-Off Date or such other date as the Companyand the Subscriber may agree, the Strategic Placement Agreement shall ipso facto cease anddetermine thereafter and neither the Company nor the Subscriber shall have any claim against theother for costs, expenses, damages, losses, compensation or otherwise.

5. EVALUATION OF THE PROPOSED PLACEMENT AND THE PROPOSED WHITEWASHRESOLUTION

In the course of our evaluation of the Proposed Placement and the Proposed WhitewashResolution, we have given due consideration to, inter alia, the following factors:

(a) The rationale for the Proposed Transactions;

(b) The financial assessment of the Issue Price vis-à-vis:

(i) Market quotation of the Shares;

(ii) Salient valuation parameters of companies listed on the SGX-ST whose businessactivities are broadly comparable to those of the Company and the Group; and

(iii) Comparable transactions.

(c) The financial condition and performance of the Company and the Group, including thefinancial effects of the Strategic Shares and Warrants; and

(d) Other relevant considerations.

6. RATIONALE FOR THE PROPOSED TRANSACTIONS

The Company has made an announcement on 30 July 2007. Certain relevant extracts of theannouncement are set out below:-

“Future Corporate Direction

The Directors further wish to make the following announcement regarding the future corporatedirection of the Company.

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The Directors noted that although the Company has been in the building materials andconstruction related sector for a long time, the Company has a relatively small marketcapitalization and a modest balance sheet when compared to larger construction-relatedcompanies. This would remain the case even after the proposed rights issue which is for a grossamount of S$2.88 million. Increasingly, with the bullish property market and the growing scale ofbuilding projects in Singapore, competitors with larger market capitalization and financial resourceswould have relative comparative advantages.

The Directors have reviewed and considered strategic ways to grow the market capitalization andthe balance sheet and resources of the Company. The Directors wish to announce that for theforeseeable future, the Company intends to pursue the following corporate possibilities:-

(i) to explore acquisition opportunities of substantial and viable property, construction orproperty materials related businesses (such acquisitions would complement or leverage onthe existing business of the Group);

(ii) in the event that acquisition opportunities in such related areas are not possible or notavailable, to explore acquisition opportunities in other viable businesses; and

(iii) in connection with (i) or (ii) above, to issue as payment for such acquisition new shares ofthe Company.

The Company would be engaging with professional intermediaries and professional advisers in themarket place to assist the Company to seek and explore such acquisition opportunities. It must benoted that a pursuit of such acquisition opportunities may result in a very major transaction or areverse takeover under Chapter 10 of the Listing Manual.”

The Directors had prioritized, amongst others, property business in its 30th July 2007announcement because the Group’s current building material and construction businesses arecomplementary and supportive to property development activities. The Directors believe that theGroup has expertise in the construction of high-end or luxury apartment projects for third-partydevelopers. For example, it was reported in The Straits Times on 5 September 2007 that one ofthe condominiums built by the Group, namely One Moulmein Rise, was among the 9 winners ofthe 2007 Aga Khan Award for Architecture. In addition, the Group has an established andextensive capability in the sourcing of natural stones and tiles that are of quality and appealingdesigns that has recently seen growing demand from the high-end developers. For example, theGroup has supplied products to high-end residential projects such as St Regis Residences (by CityDevelopment), the BLVD and The Marq (both by SC Global Development).

The Directors believe that the resources and experience of Nico Po and of GoldenFlowerGroup,taking into account their experiences in real-estate in Indonesia, and their growing participation inthe Singapore real-estate market would benefit the Group in its future direction of residentialproperty development.

The overall outcome of the Proposed Placement and the proposed shareholders’ mandate forresidential property development would enable the Company to transform itself beyond merely asupporting and facilitating supplier and contractor to the property market to becoming a real estatedeveloper in its own right. The entry of Nico Po as a new controlling shareholder through theProposed Placement would increase the market capitalisation of the Company, and with thepotential of further increases in its financial resources in the future through possible exercise of theWarrants will enable the Company to better compete in the property development industry.

7. FINANCIAL ASSESSMENT OF THE ISSUE PRICE

In our financial assessment of whether or not if the Proposed Placement and the ProposedWhitewash Resolution are prejudicial to the interests of the Company and its minorityShareholders, we have considered the following factors: –

(a) Market quotations of the Shares;

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(b) Comparative analyses by reference to Price to Earnings Ratio (“PER”) and Price to BookRatio (“PBR”) of companies listed on the SGX-ST whose business activities are broadlycomparable to those of the Company and the Group;

(c) Comparable transactions;

(d) Evaluation of the Warrants;

(e) Financial condition and performance of the Group; and

(f) Other relevant considerations.

We wish to highlight that the figures used in our financial assessment has been extracted,where available and/or applicable, from Bloomberg and/or the Circular. We make norepresentations or warranties, express or implied, as to the accuracy or completeness ofsuch information.

7.1 Market Quotations of the Shares

The Issue Price can be evaluated against the traded prices of the Shares on the premise that themarket can be considered to provide an efficient mechanism by which the intrinsic value of theShares is expressed. The valuation of the Shares based on its traded price may be affected by,inter alia, general market sentiments, trading liquidity, size of free float, extent of researchcoverage and investor following.

The following charts show the daily trading volume and closing price for the Shares and the StraitsTimes Index for the 12 month period prior to 10 September 2007 (the “Announcement Date”)and for the period from the Announcement Date up to the Latest Practicable Date.

Source: Bloomberg

Shining Share Price Movement vs STI Index

0

0.05

0.1

0.15

0.2

0.25

Jan-

00

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Jan-

08

Feb

-08

Sha

re P

rice

(S$)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Inde

x

Strategic Share Issue Price S$0.13

STI Closing Index Line

Shining secures St. Regis contract

1 Feb 2007

Shining Closing Price Line

FY2006 results announcement15 Feb 2007

Settlement of suit with China Enersave Limited

16 July 2007

Strategic Placement Announcement; Rights

listing and quotation10 September 2007

HY2007 Results announcement13 August 2007

41

42

Source: Bloomberg

The trading statistics of the Shares during the 12 months prior to the Announcement Date are setout below:

(a) the highest VWAP for the Shares was S$0.1864, which occurred on 7 September 2007 andwhich had a trading volume of 2,470,000 Shares; and

(b) the lowest VWAP for the Shares was S$0.0234, which occurred on 11, 14 and 21September 2006 and which had trading volumes of approximately 26,000, 5,000 and 4,000Shares respectively.

We set out a summary of the trading statistics of the Shares for the periods preceding 7September 2007 (being the last trading day prior to the Announcement Date) and the tradingstatistics as at the Latest Practicable Date:

7 September2007 (Last

As at the trading dayLatest prior to the

Practicable Announcement 1 6 12Date Date) Month months Months

Volume-weighted averageprice (“VWAP”) (S$) (1) 0.1184 0.1864 0.1665 0.1286 0.1117

Premium / (Discount) of IssuePrice as % to the VWAP 9.80 (43.38)% (28.05)% 1.09% 16.38%

Source: Bloomberg

Notes:

1 Based on the volume-weighted average prices for the latest practicable date and the last trading day prior to theAnnouncement Date and for the periods, 1 month, 6 months and 12 months preceding the last trading day prior tothe Announcement Date.

Daily Trading Volume of Shining

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

Sep

-06

Oct

-06

Nov

-06

Dec

-06

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb

-08

Vol

ume

(Sha

res)

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Price Performance Analysis

Based on the above, we noted that the Issue Price is:

(a) within the high/low closing price range for the 12 months period to the last trading daybefore the Announcement Date;

(b) at a discount of 28.05% over the 1 month VWAP preceding the last trading day prior to theAnnouncement Date;

(c) at a slight premium of 1.09% over the 6 months VWAP preceding the last trading day priorto the Announcement Date;

(d) at a premium of 16.38% over the 12 months VWAP preceding the last trading day prior tothe Announcement Date;

(e) at a discount of 43.38% over the VWAP for the last trading day prior to the AnnouncementDate of S$0.1864 on 7 September 2007; and

(f) at a premium of 9.80% to the VWAP of S$0.1184 on the Latest Practicable Date.

From the chart, we wish to point out that a large part of the price increase in the Shares wasconcentrated during the period just before the Announcement Date. We further note from theShare Price Movement Graph that the price has stayed above the Issue Price Line for the periodcommencing from the Announcement Date up to 17 January 2008, after which the Share price hasconsistently traded below the Issue Price.

Liquidity Analysis

In recent months, trading in the Shares were active and trading activity seemed to have peakedaround the middle of April 2007, July 2007 and again in middle of September 2007. But whenaverage trading volume is calculated for the full year, we noted that the relative trading activity ofthe Shares was significantly lower. The average daily volume of Shares traded for the 12 monthsperiod to the last trading day before the Announcement Date was approximately 486,000 duringthe 12-month period prior to the Announcement date.

7.2 Comparative Analyses by reference to PER and PBR of companies listed on the SGX-STwhose Business Activities are broadly comparable to those of the Company and the Group

In our financial assessment of the Issue Price, we have also assessed the reasonableness of theIssue Price by comparing the valuation statistics implied by the Issue Price as compared to thoseof selected companies listed on the SGX-ST (“Comparable Companies”) whose businessactivities are broadly similar or comparable to those of the Company and the Group, as set out inthe table below. The Comparable Companies have been selected on the basis of the perceivedcomparability and similarity of their businesses to the core businesses of the Company and theGroup. It should be noted that there may not be any company listed on the SGX-ST that isdirectly comparable to the Company and the Group in terms of business activities, size ofoperations, asset base, geographical spread of activities, geographical markets, trackrecord, future prospects and other relevant criteria. Any comparison made with respect tothe Comparable Companies is therefore intended to serve as an illustrative guide only.

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Any conclusions drawn from the comparison may not necessarily reflect the perceived or impliedmarket valuation of the Company as of the Latest Practicable Date.

Comparable StockCompanies Description of Business Activities Exchange

Eagle Brand SingaporeHoldings Ltd

Showy International SingaporeLimited

Sim Siang Choon Ltd Singapore

Source: Bloomberg

PER Analysis

Historical PER comparison and comparison of earnings of companies may be significantly affectedby, inter alia, their financing, accounting policies, growth rate, dividend payout policies, operatingand financing leverage, taxation and assets investment decisions as well as relative demand forthe shares in the market for which they trade. As such, the review outlined here is meant forillustrative purposes only as the comparability of historical PERs between the Company and theComparable Companies is necessarily limited.

As the Group incurred a net loss after taxation attributable to equity holders of the Company ofapproximately $722,000 in respect of the financial year FY2006, we are unable to compute thePER for the Company implied by the Issue Price vis-à-vis the corresponding PERs of theComparable Companies. It is therefore not meaningful to use the historical PER as a basis inassessing the Issue Price; hence, we have not done so.

Price-to-Book Ratio (“PBR”) Analysis

The NTA reflects only the net tangible assets of a company in accounting terms and is meaningfulinsofar as it shows the extent to which the value of each shares is backed by tangible assets. Itdoes not necessarily reflect the value of the company as a going concern. The NTA basis (orcomparison thereof) in valuing a company or providing an indication of the relative value of acompany, may provide an estimate of the value of a company assuming the hypothetical sale ofthe assets used in the computation of the NTA, the proceeds of which are used to repay theliabilities of the company. As such, the review outlined here is only meant for illustrative purposesas the comparability of historical PBRs between the Company and the Comparable Companies isnecessarily limited.

In assessing the Issue Price using the NTA approach, we have not independently verified whetherany tangible assets such as property, plant and equipment and other assets should be valued at amaterially different amount than that which is recorded in the audited balance sheet of the Groupas at 31 December 2006.

Designs, manufactures, distributes and sells ceramic tilesand ceramic sanitary-wares in China. The Company alsoprovides auxiliary and administrative services.

Designs, manufactures, trades, and distributes sanitaryfittings, bathroom products and accessories, and kitchenproducts and accessories under the SHOWY brand name.

Retails and distributes all kinds of sanitary hardware,applicances, accessories and fixtures used in bathrooms,toilets and kitchens. The Company also retails DIYequipment and toolings.

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We list below the PBRs of the Comparable Companies based on their share prices and historicalbook NTA per share as at the Latest Practicable Date.

Stock Market HistoricalComparable Companies Exchange Capitalisation PBR

(S$’ millions) (times)

Eagle Brand Holdings Ltd Singapore 63.7 0.56

Showy International Limited Singapore 63.5 3.18

Sim Siang Choon Ltd Singapore 37.9 2.37

High 3.18

Low 0.56

Simple Average 2.04

Company (Implied) Singapore 18.72 1.50 (1)

Source: Bloomberg

1 For the purpose of the analysis of the implied PBR, PBR is assumed to be a ratio of: (1) the number of outstandingshares as at the Latest Practicable Date multiplied by the Issue Price; over (2) the Group’s latest consolidated nettangible assets amounting to S$12.4 million .

In summary, based on our above observations, it appears that: -

(a) the PBR of 1.50 times implied by the Issue Price is between the range of PBRs of theComparable Companies; and

(b) the PBR of 1.50 times implied by the Issue Price is lower than the simple average PBRs ofthe Comparable Companies.

7.3 Comparable Transactions

In our financial assessment of the Issue Price, we have also assessed the reasonableness of theIssue Price by comparing the valuation statistics implied by the Issue Price as compared to thoseof selected comparable transactions. The comparable transactions have been selected on thebasis of the perceived comparability and similarity of the nature of their transactions. It should benoted that there may not be any transactions that is directly comparable. Any comparisonmade with respect to the comparable transactions is therefore intended to serve as anillustrative guide only. Any conclusions drawn from the comparison may not necessarily reflectthe perceived or implied market valuation (as the case may be) of the Company as of the LatestPracticable Date.

Comparison with other corporate exercises of companies listed on the SGX-ST involvingplacement and option and whitewash resolution.

In assessing the reasonableness of the premium / discount to last traded price prior toannouncement as implied by the Issue Price and the dilution impact to the IndependentShareholders, we have considered the details of placement and option as described in thecirculars of companies on completed placement and option transactions that involved the issue ofnew placement shares and option shares to provide an illustration of, inter alia, the premium /discount to last traded price prior to announcement as implied by the prices of the new sharesissued pursuant to the placement and option. In addition, the placement and option transactionsselected for our analysis involved the shareholders of the companies having to approve whitewashresolutions in relation to the issuance of new shares pursuant to the placement and option.

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We have tabulated below the announced transactions involving placement and option transactions(“Other Placement and Option Transactions”) by SGX-ST listed companies, to illustrate thetypical premium / discount represented by the issue price to the weighted average price for the lasttrading day immediately prior to the release of the announcement of the transactions:

PremiumBrief Weighted / (Discount)

Description of average price to lastPlacement Issue immediately traded price Dilution

Placement and and Option Price Per Announcement prior to the prior to impact toOption Companies (‘000,000) Share (1) Date announcement announcement shareholders

Rotol Singapore 110 placement shares S$0.10 7 Apr 2005 S$0.06 66.67% 40.15%Limited (Circular 110 option shares S$0.10 57.29%dated 20 September2005)

Econ International 3,500 placement S$0.0043 26 Jul 2005 S$0.01 (57.00)% 47.46%Ltd (Circular dated shares19 Aug 2005) 1,750 option shares S$0.0045 57.53%

Startech 200 option shares S$0.01 21 Apr 2006 S$0.02 (50.00)% 49.92%Electronics Ltd(Circular dated22 May 2006)

Mayfran 103.125 placement S$0.04 11 May 2006 S$0.045 (11.11)% 30.01%International Ltd shares(Circular dated 103.125 option shares S$0.045 46.20%14 Jul 2006)

Hitchins Group Ltd 120 placement shares S$0.05 20 Sep 2006 S$0.1061 (52.87)% 51.47%(Circular dated 120 option shares S$0.05 60.04%7 December 2006)

High 66.67%

Low (57.00)%

Simple Average (20.86)%

Median (50.00)%

Company 167.3 Strategic Shares S$0.13 10 September S$0.1864 (30.26) % 53.7%2007

155.7 Warrants 33.3%

Source: SGX-ST website

Solely for illustration purposes only, the discount of 30.26% of the Issue Price over the lasttransacted price on the last trading day prior to the Announcement Date is less favourable than thehigh premium of 66.67% but slightly more favourable than the lowest discount of 57.00% of theOther Placement and Option Transactions. It is also slightly less favourable than the simpleaverage discount of 20.86% and more favourable than the median discount of 50.00% for theOther Placement and Option Transactions.

We wish to highlight that the circumstances of the Proposed Placement are unique and differentfrom the Other Placement and Option Transactions listed above for reasons such as, inter alia,size of consideration, differing corporate objectives and business activities. Accordingly, each ofthe Other Placement and Option Transactions must be judged on its own commercial and financialmerits and any comparison merely serves as an illustrative guide to Shareholders.

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8. EVALUATION OF THE WARRANTS

In connection with the subscription of the Strategic Shares by the Subscriber, up to 155,653,846free warrants will also be issued to the Subscriber subject to the terms and conditions of theStrategic Pacement Agreement. Shareholders should note that the Warrants give the Subscriberthe right, but not the obligation, to acquire Shares in the Company at a fixed exercise price ofS$0.13 per Warrant. In the event that the share price of the Company is higher than the exerciseprice of S$0.13, the Subscriber would still be able to acquire shares at the fixed exercise price ofS$0.13. On the contrary, in the event that the share price of the Company is lower than theexercise price of S$0.13, the Subscriber is not obliged to exercise the Warrants. If all the Warrantsare exercised, the Company would receive gross proceeds amounting to approximately S$20.2million. However, Shareholders should note that there would be a dilution effect on theirshareholdings in the Company of approximately 33.3% if all the Warrants are exercised.

8.1 Exercise Price

In evaluating the reasonableness of the exercise price of $0.13 for each of the Warrants, we notethat the exercise price represents a

i) discount of 24.3% to the weighted average price for trades done on the SGX-SESDAQ on 7September 2007, being the full market day prior to the signing of the Strategic PlacementAgreement;

ii) discount of 30.3% to the prevailing market price of the Shares for 7 September 2007, priorto the signing of the Strategic Placement Agreement; and

iii) premium of 9.80% to the weighted average price of the Shares of S$0.1184 as at the LatestPracticable Date.

8.2 Cost of Issuing the Warrants

The Warrants may be exercised at any time during the Exercise Period. As at the AnnouncementDate, the last transacted Share price of $0.195 is above the exercise price of $0.13, which meansthe Warrants would have been in-the-money had they been issued at that time. However, as at theLatest Practicable Date, the last transacted Share price of $0.12 is below the exercise price of$0.13, and hence the Warrants are out-of-the-money.

The Warrants have a theoretical market value which is dependent on, inter alia, the exercise pricevis-à-vis the current price of the underlying Shares, the length of the exercise period, the pricevolatility of the underlying Shares and the risk-free interest rate. Notwithstanding such a theoreticalmarket value, the Warrants were issued to the Subscriber at no additional consideration and henceshould be seen as part of the package together with the issuance of the Strategic Shares.

The implication of the issuance of these free Warrants is that it means that the Strategic Sharesmay effectively have an issue price lower than 13 cents assuming the Warrants are in-the-moneyand have a certain intrinsic value. We note that the Warrants would not be listed on the SGX-ST. Itis commonly accepted that unlisted warrants typically have a lower warrant premium compared tolisted warrants, assuming all other parameters are the same. Purely for discussion purposes, inorder for one to estimate the theoretical worth of these Warrants, we assume that the value ofeach Share which could be issued pursuant to the exercise of the Warrants to be equal to S$0.13,which is the same as the Issue Price of the Strategic Shares, and assuming that such Warrants

have an implied premium equal to 10.01%, each Warrant could have theoretically been worthS$0.0132. Accordingly, the total theoretical value of the Warrants could have been equal toapproximately $2.02 million (the “Theoretical Warrant Value”). This theoretical value of theWarrants is only for illustration purposes and there is no assurance that if these Warrants weretraded or sold to a third party, they would achieve such a price.

As the Warrants are packaged with the Strategic Shares and granted for free to the Subscriber, thenet effect is similar to the Subscriber buying the Strategic Shares at a theoretical subsidized priceof approximately S$0.1183, versus the actual Issue Price of S$0.13. We would like to point out thatthis subsidized price is only a theoretical value and that the Subscriber would benefit from thesubsidy only if it is able to sell the Warrants at the Theoretical Warrant Value or more. We note thatthe Warrants would not be listed on the SGX-ST and hence there is no ready market for theWarrants to be traded. We further note that this theoretical subsidized price of S$0.118 is at aslight premium to the 12 months VWAP preceding the last trading day prior to the AnnouncementDate of S$0.1117.

As at the Latest Practicable Date, the last transacted Share price of S$0.12 is lower than theexercise price of S$0.13. This implies that the Warrants are out-of-the-money and have no intrinsicvalue. At this Share price of S$0.12, the Warrants would have an exercise premium of 8.33%. Inthis scenario, the issue of these free Warrants would not be deemed prejudicial to the interests ofthe Company and its minority Shareholders if we assumed a warrant premium of 10% to berequired for the issue of such unlisted warrants.

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1 A list of warrants with a five year expiry duration that are currently traded on the SGX-ST was compiled from Bloomberg L.P..It was found that the simple average premium of these warrants was 36.0%. After factoring in a discount factor typicallyassociated with new warrant issues and also taking into account the unlisted status of the Warrants, a theoretical 10.0%premium value was attributed to the Warrants. Companies used in the compilation of the warrants list were AdvancedModules Group Ltd, Compact Metal Industries Ltd, Eastgate Technology Ltd, Firstlink Investments Corporation Ltd andUnited Pulp & Paper Co. Ltd.

2 For the purpose of estimating the Theoretical Warrant Value, we used S$0.13 per Share as this is the same price at whichthe Subscriber is able to acquire the Strategic Shares in the Proposed Placement, as compared to the last traded marketprice prior to the Announcement Date of S$0.195. We believe the Issue Price is a more appropriate price to be used for thecalculation as this represents the actual price that the Subscriber is able to acquire Shares rather than the last traded marketprice prior to the Announcement Date of S$0.195.

3 The theoretical subsidized price was calculated as follows:- [(Number of Strategic Shares * Issue Price) – TheoreticalWarrant Value] / Number of Strategic Shares.

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9. FINANCIAL CONDITION AND PERFORMANCE OF THE GROUP

9.1 Financial Information

Below are extracts of financial information from the audited financial statements for the twofinancial years ended 31 December 2006 as released by the Company on the SGXNet and theunaudited half year financial results for the period ended 30 June 2007 announced by theCompany on 13 August 2007 on the SGXNet.

HY2007 FY2006 FY2005S$’000 S$’000 S$’000

Consolidated Balance Sheets (Extracts)

Current assets 17,755 18,918 20,016

Non-current assets 6,280 6,945 7,309

24,035 25,863 27,325

Current liabilities 12,050 13,901 14,267

Non-current liabilities 1,409 1,499 1,706

13,459 15,400 15,973

Net Assets 10,576 10,463 11,352

Consolidated Income Statements (Extracts)

Revenue 13,267 38,759 32,951

Profit / (Loss) before income tax 102 (792) (2,090)

Profit / (Loss) after income tax 107 (796) (2,097)

Consolidated Cash Flow Statements (Extracts)

Net cash flows (used in) / generated from operating activities (232) (8) (1,799)

Net cash flows (used in) / generated from investing activities (46) (86) (177)

Net cash flows (used in) / generated from financing activities (112) (201) (235)

Cash and cash equivalents 2,058 2,448 2,743

Source: Company’s audited FY2006 financial statements and Company’s unaudited HY07 financial results.

We note from the financial statements of the Group that its financial position has been weak withlosses suffered in the last 2 financial years. Furthermore, we note that the Group has beenexperiencing negative cashflows from operations, investing and financing activities, leading to adecline in its cash and cash equivalent balances in the last two and a half years.

We recommend that the Independent Directors advise the Independent Shareholders to read therelevant annual reports and financial reports as released on the SGXNet carefully.

9.2 Financial Effects of the Strategic Shares and Warrants

Detailed information on the financial effects are set out in section 8 of the Letter to Shareholdersincluded in the Circular, summarised extracts of which are set out below. We recommend that theIndependent Directors advise the Independent Shareholders to read section 8 of the Letter toShareholders included in the Circular carefully, in particular the assumptions relating to thepreparation of the financial effects.

(a) The effect of the aforesaid transactions on the share capital and total equity of the Companyare as follows:-


TransferAgreement




Share Capital (S$’000) 15,046 17,926 39,676 59,911 59,911

Total Equity (’000) 10,423 13,303 35,053 55,288 55,288

(b) The effect of the aforesaid transactions on the NTA per Share of the Group based on theunaudited consolidated balance sheet of the Group as at 30 June 2007 are as follows:-


TransferAgreement



NTA (S$’000) 9,574 12,454 34,204 54,439 54,440


NTA per Share (Singapore cents) 9.97 8.65 10.99 11.66 11.66

(c) The effect of the aforesaid transactions on the gearing of the Group based on the unauditedconsolidated balance sheet of the Group as at 30 June 2007 are as follows:-


TransferAgreement



Net Borrowings (S$’000) 1,221 1,221 1,221 1,221 1,221

Total Equity (S$’000) 10,576 13,456 35,206 55,441 55,441

Gearing 0.12 0.09 0.03 0.02 0.02

Note:-

For the purposes of the above calculation:-

Net Borrowings means the total borrowings of the Group minus fixed deposits pledged with banks;

Total Equity means the aggregate amount of share capital, revenue reserves, other reserves and minority interestsof the Group; and

Gearing means the ratio of the Net Borrowings to the shareholders’ funds.

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Assuming the proceeds from the aforesaid transactions is used to repay the borrowings,there would be no borrowings.

(d) The effect of the aforesaid transactions on the loss per Share of the Group based on theaudited profit and loss statement of the Group for FY2006 and assuming the Rights Issueand the aforesaid transactions are completed on 1 January 2006 are as follows:-


TransferAgreement

After Rights Assuming Assuming and theIssue in the issue of the exercise exercise of

September the Strategic of the the Shop UnitFY2006 2007 Shares Warrants Call Option

Loss after tax (S$’000) (796) (796) (796) (796) (728)


Loss per Share (Singapore cents) (0.83) (0.55) (0.26) (0.17) (0.16)

10. OTHER RELEVANT CONSIDERATIONS

10.1 The Potential Dilution Impact of the Proposed Placement

It would be pertinent to note that pursuant to the Proposed Placement, the shareholding structureof the Company would change significantly and existing Shareholders will be diluted following theissue of the Strategic Shares and the exercise of the Warrants.

10.2 No Assurance of Future Profitability

We note from the section under “Rationale for the Proposed Transactions” that “The overalloutcome of the Proposed Placement and the proposed shareholders’ mandate for residentialproperty development would enable the Company to transform itself beyond merely a supportingand facilitating supplier and contractor to the property market to becoming a real estate developerin its own right.” However, Shareholders should note that there is no assurance of the Group’sprofitability after the completion of the Proposed Placement.

10.3 No Alternative Proposals

We have enquired about the possibility of alternative proposals, other than the ProposedPlacement, that the Directors may have considered or are considering for the Company. TheDirectors have advised that as at the Latest Practicable Date and at the time of consideration ofthe Proposed Placement, they do not have any alternative which is considered to be moreattractive to the Shareholders.

10.4 Inter-conditionality between the Proposed Placement, the Proposed Whitewash Resolutionand the Proposed Shining IPT Transactions

We note that the Proposed Placement, the Proposed Whitewash Resolution and the ProposedShining IPT Transactions are inter-conditional upon one and the other. Accordingly, ifIndependent Shareholders do not vote in favour of the Proposed Whitewash Resolution, theProposed Placement will not take place. As completion of the Proposed Shining IPTTransactions is also conditional upon the completion of the Proposed Placement takingplace simultaneously, the Proposed Shining IPT Transactions will also not take place.

10.5 Warrants

Shareholders should note that Warrants are a right but not an obligation for the Subscriber toexercise into Shares of the Company. Hence there is no assurance that the Warrants may beexercised and the Company may not receive the proceeds as set out in section 8 of this letter.

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11. THE PROPOSED SHINING IPT TRANSACTIONS

The full context of the Proposed Shining IPT Transactions can be found in section 4 of the Circular,summarized extracts of which have been reproduced here.

The Proposed Shining IPT Transactions are set out in the following four agreements:-

(i) the Business Transfer Agreement;

(ii) the Shop Unit Option Agreement;

(iii) the Deed of Mutual Covenants; and

(iv) the Deed of Covenant.

11.1 The proposed divestment of the Hardware Business – Business Transfer Agreement

The Company’s wholly-owned subsidiary, Builders Shop, carries on the Hardware Business at sixshop units in Singapore including at the Shop Unit.

Builders Shop has entered into the Business Transfer Agreement to sell the Hardware Business toShining Holdings. Shining Holdings is controlled by the Executive Directors.

Accordingly, the proposed divestment of the Hardware Business is an interested persontransaction within the scope of Chapter 9 of the SGX-ST Listing Manual.

The Hardware Business comprises the distribution and retailing of hardware by the Group ascarried out by Builders Shop. After the divestment of the Hardware Business, it is the intention ofthe Subscriber that Builders Shop will continue to be involved in the import and agency for stones,tiles and marbles.

As the Subscriber does not presently intend to modify the scope of the other ongoing businessescarried on by the Group, the Group will also continue to engage in the following activities after thedivestment of the Hardware Business:-

(a) construction;

(b) retailing and trading of furniture and home lifestyle products and design; and

(c) manufacture of furniture.

Divestment details

Pursuant to the Business Transfer Agreement, Builders Shop shall sell, transfer and assign theHardware Business to Shining Holdings all rights, title and interests of Builders Shop in theHardware Business as a going concern and the assets owned by or under the control or in thepossession of Builders Shop and used in the conduct of the Hardware Business.

All liabilities of Builders Shop in respect of the Hardware Business (including but not limited totrade payables, other payables, finance leases and the obligations in respect of certain premisesleases) whether current, long term or contingent of Builders Shop as at 1 January 2008 togetherwith (but subject to completion) all such liabilities of Builders Shop from 1 January 2008 down tothe completion date shall be assumed by Shining Holdings.

Subject to completion of the Business Transfer Agreement, property in and title to the HardwareBusiness and its assets to be transferred under the Business Transfer Agreement shall pass toShining Holdings on 1 January 2008.

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Consideration payable for the Hardware Business

The consideration (“Consideration”) payable by Shining Holdings for the sale and transfer of theHardware Business and its assets is effectively the net tangible assets of the said HardwareBusiness as at 1 January 2008. Such net tangible assets shall be the sum that is equal to the netbook values of the assets as recorded in the audited books of Builders Shop less the liabilities attheir net book values being assumed by Shining Holdings.

The Consideration shall be satisfied by Shining Holdings paying at completion in cash to BuildersShop according to the following schedule:-

(i) 20% of the Consideration on completion;

(ii) four equal payments of 20% of the Consideration at the end of each consecutive month inthe four-month period following completion,

provided that the Consideration shall be based on the net book value set out in the completionaccounts and in the event of dispute, the determination of the auditors of the Company as expertshall be binding. In preparing the completion accounts, the auditors of the Company shall apply thesame accounting policies and principles as that of prior years.

11.2 Divestment of Shop Unit and other tenancy arrangements – Shop Unit Option Agreement

(a) In connection with the sale of the Hardware Business, another integral transaction is thesale of the Shop Unit by Shining Construction (which is a sister subsidiary of Builders Shop)to Shining Holdings at the book value of the Shop Unit as recorded in the books of ShiningConstruction as at 31 December 2006.

(b) In respect of the lease over the Shop Unit, Shining Construction will by way of an optionexercisable by Shining Holdings (“Shop Unit Call Option”) within 3 months from theCompletion Date sell and convey the Shop Unit at its book value to Shining Holdings or asShining Holdings may nominate. Upon such conveyance and completion of the sale of theShop Unit, the lease over the Shop Unit with Builders Shop shall end.

(c) The consideration, which is the underlying net book value of the Shop Unit of $213,887 asat 31 December 2006, is 0.76% of the Company’s market capitalisation of $28.1 million asat 7 September 2007. The net book value of the Shop Unit is S$212,827 as at 30 June2007.

(d) In respect of the other tenancy arrangements which are between Builders Shop and othermembers of the Group for the Hardware Business, Builders Shop shall procure the novationand/or assignment of such other tenancy arrangements on the same terms and conditionsto the Purchaser for the balance of the tenancy period.

(e) In addition, the Hardware Business requires the tenancy over 11 Changi South Street 3,#01-01, Singapore 486122 (the “Required Unit”) (in respect of which Builders Shop is themaster tenant). Builders Shop shall procure a sub-tenancy agreement over the RequiredUnit to be entered into in favour of Shining Holdings for a period of 3 years from completionof the Shop Unit Option Agreement and at the same rent.

(f) In respect of third party tenancy agreements, which are between Builders Shop and thirdparties, Builders Shop shall procure for the novation and/or assignment of the other tenancyagreements on the same terms and conditions to Shining Holdings for the remainder of thetenancy period.

(g) The Company has obtained a valuation on the Shop Unit from Knight Frank, who has valuedthe Shop Unit at S$800,000. A copy of the valuation certificate is attached as Appendix 2 tothis Circular.

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11.3 Continued use of the name “Shining” by the Shining Entities – Deed of Mutual Covenants

(a) The Company and its subsidiary, Shining Construction on the one hand (the ““A”Covenantors”) and Shining Holdings and Shining Development which is also controlled bythe Executive Directors (the ““B” Covenantors”) have each been using the name “Shining”as part of its respective name and/or for its respective business for a number of years andsuch use was in their own respective business and not confusing to the public or theircustomers.

(b) In contemplation of the Completion of the Strategic Placement Agreement whereupon thefuture businesses of the Company and the Group may change and as a result, possibleconfusion may happen, each of the covenantors has acknowledged that each can continueto use the name “Shining” in the same manner as they have done so previously except thatin the case of:

(i) the Company, the use shall be for a period of at most one (1) year after theCompletion of the Strategic Placement Agreement after which the Company shallchange its name and not use the name “Shining”;

(ii) Shining Construction, for an indefinite period after the completion of the StrategicPlacement Agreement provided that the name “Shining” is used in conjunction withanother name.

(c) In the event that the Company sells its present subsidiaries (the “Transfer”) or the Companydecides that the present subsidiaries shall cease, sells and liquidate their currentbusinesses and return their capital to the Company and thereby become dormant shells (the“Cessation”) then the Company shall do the following:

(i) in the case of the Transfer, the Company shall procure and offer for assignment by thesubsidiaries for a sum of S$10,000 in aggregate the names “Cream Homestore” and“Builders Shop” (as corporate names or other usages) to Shining Holdings or itsnominees;

(ii) in the case of the Cessation, the Company shall procure and offer for sale for a sumof S$10,000 in aggregate the subsidiaries Cream Homestore Pte Ltd and BuildersShop to Shining Holdings or its nominees on the basis that such subsidiaries areclean shells with no assets or liabilities save for their ownership of such names andtheir uses.

The Deed of Mutual Covenants is inter-conditional upon the performance of each of theProposed Transactions.

11.4 Novation or sub-contract of the Retro-Fitting Contract to Shining Holdings – Deed ofCovenant

(a) The Company through its subsidiary, Shining Construction, has submitted a tender for acontract value of approximately $30 million for the refurbishment of an industrial warehouse.The tender is currently pending award by the owner, AFP Warehouse Pte Ltd.

(b) In the event that the Proposed Transactions are completed, the Deed of Covenant providesthat the Retro-Fitting Contract shall be novated or sub-contracted in its entirety to ShiningHoldings or its nominees on the basis as if Shining Construction has not entered into theRetro-Fitting Contract. Both the economic benefit and losses in respect of the Contract shallbe transferred and belong to Shining Holdings.

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12. EVALUATION OF THE PROPOSED SHINING IPT TRANSACTIONS

In our evaluation and recommendation thereon of the Proposed Shining IPT Transactions, we havegiven due consideration to the following key factors:

(a) rationale for the Proposed Shining IPT Transactions;

(b) consideration payable for the Hardware Business and the Shop Unit;

(c) the simultaneous completion of the Strategic Placement Agreement, the proposeddivestment of the Hardware Business and the exercise of the purchase of the Shop Unit.

12.1 Rationale for the Proposed Shining IPT Transactions

It is important for the Independent Shareholders to understand the rationale of the Company inundertaking the Proposed Shining IPT Transactions. The rationale for the Proposed Shining IPTTransactions can be found in section 4.5 of the Circular, extracts of which have been reproducedhere.

As the Hardware Business would not be in line with the proposed future business direction of theCompany (which is to engage in property development in Singapore), the Company is proposing todispose of the Hardware Business through the Proposed Shining IPT Transactions.

We further note that following the completion of the Proposed Placement, control of the Companywould pass to the Subscriber. We understand that under the control of the Subscriber, theCompany will no longer have any desire to pursue the Hardware Business and as such thedisposal of this business would be in line with the Company’s plan to pursue propertydevelopments.

12.2 Consideration payable for the Hardware Business and the Shop Unit

In assessing the financial terms of the consideration payable for the Hardware Business and theShop Unit, we have taken into account the following factors namely the net tangible assets of thesaid Hardware Business, the book value of the Shop Unit and the payment terms. Theconsideration (“Consideration”) payable by Shining Holdings for the sale and transfer of theHardware Business and its assets is effectively the net tangible assets of the said HardwareBusiness as at 1 January 2008. The underlying net book value of the Hardware Business isapproximately $ 0.52 million as at 30 June 2007.

In connection with the sale of the Hardware Business, another integral transaction is the sale ofthe Shop Unit by Shining Construction (which is a sister subsidiary of Builders Shop) to ShiningHoldings at the book value of the Shop Unit as recorded in the books of Shining Construction as at31 December 2006.

We note that based on a recent independent valuation commissioned by the Company (SeeAppendix II) to appraise the Shop Unit, the open market value of the Shop Unit is S$800,000 (the“Open Market Value”) . On the other hand, according to the Business Transfer Agreement, theShop Unit would be sold to Shining Holdings (the “Shop IPT Sale”) at the book value of the ShopUnit as recorded in the books of Shining Construction as at 31 December 2006 (the “Shop UnitBook Value”) which is S$213,887, or approximately S$0.59 million lower than the Open MarketValue. This implies that the Company would not be able to realise the Shop Unit’s full potentialvalue through this sale as compared to the scenario if the Company had sought for unrelatedbuyers from the market. However, we understand from the Directors that the Shop IPT Sale is anintegral part of the Business Transfer Agreement and there was no intention by the Directors tosolicit buyers from the open market for the Shop Unit.

We note that the Hardware Business was loss-making in the financial year ended 31 December2006. We further note that for the half year ended 30 June 2007, the net profits attributable to theHardware Business is $52,147, which is 48.7% of the Group’s net profits of $107,000 for the sameperiod.

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Although the Shop IPT Sale at the Shop Unit Book Value on its own does not appear to be atnormal commercial terms, we note that the Shop IPT Sale is interlinked with the proposeddivestment of the Hardware Business and the Strategic Placement Agreement. In the event thatthe Shop IPT Sale does not take place, the Proposed Placement contemplated under the StrategicPlacement Agreement will also not take place and the Company would be deprived of theplacement proceeds and the potential benefits of the Proposed Placement.

12.3 The simultaneous completion of the Strategic Placement Agreement, the proposeddivestment of the Hardware Business and the exercise of the purchase of the Shop Unit.

With reference to section 4.1 (e) of the Circular in which detailed information on the conditionsprecedent for the completion of the Proposed Shining IPT Transactions are set out, we note thatone of the conditions precedent is the simultaneous completion of the Strategic PlacementAgreement, together with the proposed divestment of the Hardware Business and the exercise ofthe purchase of the Shop Unit. Thus the Proposed Shining IPT Transactions and the StrategicPlacement Agreement are inter-linked, and one will not proceed if the other is terminatedand vice versa.

13. RECOMMENDATION FOR THE PROPOSED PLACEMENT, THE PROPOSED WHITEWASHRESOLUTION AND THE PROPOSED SHINING IPT TRANSACTIONS

In arriving at our recommendation on whether the Proposed Placement and the ProposedWhitewash Resolution are not prejudicial to the interests of the Company and its minorityshareholders, and whether the Proposed Shining IPT Transactions are on normal commercialterms and whether they are prejudicial to the interests of the Company and its minorityshareholders, we have deliberated on, inter alia, the following factors summarised below which weconsider to be pertinent in our assessment of the Proposed Placement, the Proposed WhitewashResolution and the Proposed Shining IPT Transactions. The factors set out therein have beenmore fully explained in the preceding sections of this Letter and should therefore be considered inthe context of the entirety of this Letter and the Circular.

(a) The rationale for the Proposed Transactions as described under section 7 of this Circular. Inparticular, we note that the “Directors had prioritized, amongst others, property business inits 30th July 2007 announcement because the Group’s current building material andconstruction businesses are complementary and supportive to property developmentactivities” and the “Directors believe that the resources and experience of Nico Po and ofGoldenFlowerGroup, taking into account their experiences in real estate in Indonesia, andtheir growing participation in the Singapore real-estate market would benefit the Group in itsfuture direction of residential property development.” ;

(b) Market quotations of the Shares and the movements in the periods preceding the LatestPracticable Date. We note from the Share Price Movement Graph that the Share price hasstayed above the Issue Price Line for the period commencing from the Announcement Dateup to 17 January 2008, and that the Issue Price was 43.38% below the VWAP for the lasttrading price prior to the Announcement Date. However, the Issue Price was largely at apremium to market prices of the Shares for 12 months prior to Announcement Date. But thispremium of the Issue Price versus the market price of the Shares for 12 months prior to theAnnouncement Date would have been eroded if we take into account the issuance of thefree Warrants to the Investor;

(c) Market quotations of the Shares up to the Latest Practicable Date. We note that the Shareprice as at the Latest Practicable Date was S$0.12. The Issue Price, as well as the Warrantexercise price, is equal to a premium of 8.33% to S$0.12, which is favourable to theCompany;

(d) Based on the PBR analyses, we noted that the implied PBR based on the Issue Price islower than the simple average of the Comparable Companies.

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(e) Based on the financial effects of the Proposed Placement, we noted that:

(i) LPS will decrease from 0.55 cents to 0.26 cents (after the issuance of StrategicShares) and decrease from 0.55 cents to 0.17 cents (after the issuance of StrategicShares and after the full exercise of the Warrants) due primarily to the increase in thenumber of issued shares pursuant to the Strategic Placement Agreement;

(ii) NTA per Share will increase from 8.65 cents to 10.99 cents (after the issuance ofStrategic Shares) and increase from 8.65 cents to 11.66 cents (after the issuance ofStrategic Shares and after the full exercise of the Warrants) due primarily to theincrease in the number of issued shares pursuant to the Strategic PlacementAgreement; and

(iii) Gearing will decrease from 0.09 times to 0.03 times (after the issuance of StrategicShares) and decrease from 0.09 times to 0.02 times (after the issuance of StrategicShares and after the full exercise of the Warrants) due primarily to the increase inshare capital pursuant to the Strategic Placement Agreement.

(f) The discount of 30.26% of the Issue Price over the last transacted price on the last tradingday prior to the Announcement Date is less favourable than the high premium of 66.67% butslightly more favourable than the lowest discount of 57.00% of the Other Placement andOption Transactions. It is also slightly less favourable than the simple average discount of20.86% and more favourable than the median discount of 50.00% for the Other Placementand Option Transactions.

(g) The Directors have confirmed that, as at the Latest Practicable Date, they are not aware ofany alternate proposals available to the Group which is considered to be more attractive tothe Group.

(h) Independent Shareholders should note that by voting in favour of the Proposed WhitewashResolution, Independent Shareholder will be waiving their rights to receive a mandatorygeneral offer under rule 14.1 of the Code from the Subscriber and parties acting in concertwith it for the Shares, which the Subscriber and parties acting in concert with it wouldotherwise have been obliged to make at the highest price paid or agreed to be paid by theSubscriber and parties acting in concert with it for the shares in the six (6) monthspreceding the commencement of the Proposed Placement.

(i) In addition, Independent Shareholders should note that by voting for the ProposedWhitewash Resolution, Independent Shareholders could be foregoing the opportunity toreceive a General Offer from other parties, who may be discouraged from making a GeneralOffer in view of the potential dilution effect of the Placement Shares and the Option Shares.

(j) If the Independent Shareholders do not vote in favour of the Whitewash Resolution, theProposed Placement WILL NOT take place. The approval by the Independent Shareholdersof the Proposed Whitewash Resolution is a condition precedent in the Proposed Placement.

(k) None of the Directors, controlling shareholders or substantial shareholders has any interest,direct or indirect, in the Proposed Placement.

(l) The inter-linked nature between the Strategic Placement Agreement and the ProposedShining IPT Transactions. If Shareholders do not vote for the Proposed Shining IPTTransactions, the Proposed Placement will not take place.

Having considered all of the above, subject to the assumptions and qualifications set out hereinand taking into account the prevailing conditions and market expectations as at the LatestPracticable Date, we conclude that the Proposed Placement and the Proposed WhitewashResolution is not prejudicial to the Company and its Independent Shareholders.

The Proposed Shining IPT Transactions, if evaluated on a stand alone basis, do not seem tobe on normal commercial terms as there is a material difference between the Open MarketValue and the Shop Unit Book Value. Although the Shop IPT Sale is not at a compellingprice for the Company, one should also consider it in the context that the HardwareBusiness is a relatively small business when compared to the total proceeds raised fromthe Proposed Placement. Furthermore, we took into account that the Proposed Shining IPTTransactions and the Proposed Placement are inter-linked and interdependent on eachother. Hence, even though the Proposed Shining IPT Transactions may not be on normalcommercial terms and may be prejudicial to the Company and its IndependentShareholders, we advise the Independent Directors to recommend that the IndependentShareholders vote in favour of the Proposed Placement, the Proposed WhitewashResolution and the Proposed Shining IPT Transactions. Shareholders should note thatvoting for one resolution but not the other, would not enable the Company to proceed withthe Proposed Placement. By voting in favour of the Proposed Whitewash Resolution, whichis a condition for the completion of the Proposed Placement and the Proposed Shining IPTTransactions, the Company would transform itself beyond merely a supporting andfacilitating supplier and contractor to the property market to becoming a real estatedeveloper in its own right. The entry of Nico Po as a new controlling shareholder throughthe Proposed Placement would increase the market capitalization of the Company, and withthe potential of further increases in its financial resources in the future through possibleexercise of the Warrants will enable the Company to better compete in the propertydevelopment industry.

In arriving at our recommendations, we wish to emphasize that the Directors have not provided uswith any profit projections of the Company or the Group and that we have, inter alia, relied onrepresentations made by the Directors and the management of Company relating to currentintentions and future directions of the Company and/or the Group (as the case maybe). In addition,the Directors should note that we have arrived at these conclusions based on information madeavailable to us prior to and including the Latest Practicable Date.

Independent Directors should note that the trading of the Shares is subject to possible marketfluctuations and accordingly, our advice on the Proposed Placement, the Proposed WhitewashResolution and the Proposed Shining IPT Transactions do not and cannot take into account thefuture trading activities or patterns or price levels that may be established for the Shares as theseare governed by factors beyond the ambit of our review.

Our advice is addressed to the Independent Directors for their benefit, in connection with and forthe purpose of their consideration of the Proposed Placement, the Proposed WhitewashResolution and the Proposed Shining IPT Transactions. Their recommendation to the Shareholdersshall remain the sole responsibility of the Independent Directors. Whilst a copy of this Letter maybe reproduced in the Circular, neither the Company nor the Directors may reproduce, disseminateor quote this Letter or any part thereof for any other purpose at any time and in any mannerwithout our prior written consent in each specific case. Our advice is governed by and construed inaccordance with the laws in Singapore and is strictly limited to the matters stated herein and doesnot apply by implication to any other matter.

Yours faithfullyFor and on behalf of Hong Leong Finance Limited

Ong Soon Teik Tit Wei HanSenior Vice President Assistant Vice PresidentHead, Corporate Finance Corporate Finance

58

59

APPENDIX 2

60

SHINING CORPORATION LTD(the “Company”)

Company Registration Number 199904729G(Incorporated in the Republic of Singapore)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an Extraordinary General Meeting of the Company will be held at 11Changi South Street 3, #04-01, Singapore 486122 on 18 March 2008 at 10.00 a.m. for the purpose ofconsidering and, if thought fit, passing the following resolutions as ordinary resolutions (with or withoutany modifications).

All capitalised terms in this Notice which are not defined herein shall have the same meanings ascribedto them in the Circular to Shareholders of the Company dated 26 February 2008.

Ordinary Resolution 1: The Proposed Placement

THAT contingent upon the passing of Resolutions 2, 3, 4, 5, 6 and 7, authority be and is hereby given tothe Directors of the Company and/or any of them to:-

(a) allot and issue 167,307,692 new ordinary shares in the capital of the Company (the “StrategicShares”) at an issue price of S$0.13 per Strategic Share to Citipoint Asia Real Estate Capital Ltd(the “Subscriber”) and/or its nominee, on the terms and subject to the conditions of the StrategicPlacement Agreement dated 10 September 2007 between the Company and the Subscriber (the“Strategic Placement Agreement”);

(b) create and issue up to 155,653,846 free warrants (the “Warrants”) in registered form to theSubscriber and/or its nominee, each such Warrant to entitle the holder thereof to subscribe for one(1) new ordinary share in the capital of the Company (“New Share”), at an exercise price ofS$0.13 per New Share at any time during the period commencing on the date of issue of theWarrants and expiring at 5.00 p.m. (Singapore time) on the date immediately preceding the fifth(5th) anniversary of the date of issue of the Warrants, subject to the terms and conditions of theWarrants to be set out in the deed poll (the “Deed Poll”) constituting the Warrants to be executedby the Company on such terms and conditions as the Directors may deem fit;

(c) create and issue such additional warrants as may be required or permitted to be issued inaccordance with the terms and conditions of the Warrants to be set out in the Deed Poll (any suchadditional warrants to rank pari passu with the Warrants and for all purposes to form part of thesame series, save as may otherwise be provided in the terms and conditions of the Deed Poll);

(d) allot and issue (notwithstanding that the issue thereof may take place after the next or any ensuinggeneral meeting of the Company):-

(i) up to 155,653,846 New Shares arising from the exercise of the Warrants, subject to and inaccordance with the terms and conditions of the Warrants to be set out in the Deed Poll,such New Shares to be credited as fully paid when issued and to rank pari passu in allrespects with the then existing shares of the Company save for any dividends, rights,allotments or other distributions that may be declared or paid, the record date for which fallsbefore the relevant date of issue of the New Shares; and

(ii) on the same basis as paragraph (d)(i) above, such additional new ordinary shares in thecapital of the Company as may be required to be allotted and issued on the exercise of anyof the additional warrants referred to in paragraph (c) above; and

(e) complete and do all such acts and things (including without limitation executing all such documentsand approving any amendments to the Strategic Placement Agreement and/or the Deed Poll) asthey or he may consider desirable, expedient or necessary in connection with the transactionscontemplated under the Strategic Placement Agreement and the Deed Poll and/or to give effect tothis Resolution.

61

Ordinary Resolution 2: The Proposed Whitewash Resolution

THAT contingent upon the passing of Resolutions 1, 3, 4, 5, 6 and 7, the shareholders of the Companywho are independent of the Subscriber and parties acting in concert with the Subscriber, do hereby, on apoll taken, unconditionally and irrevocably waive their rights to receive a mandatory general offer from theSubscriber and its concert parties pursuant to Rule 14 of the Singapore Code on Take-overs andMergers as a result of the allotment and issue of the Strategic Shares, the issue of the Warrants and theallotment and issue of the New Shares arising from the conversion of the Warrants.

Ordinary Resolution 3: The Proposed Disposal of the Hardware Business

THAT contingent upon the passing of Resolutions 1, 2, 4, 5, 6 and 7, approval be and is hereby givenfor:-

(a) the proposed disposal of the Hardware Business (as defined in the circular to shareholders dated26 February 2008 (the “Circular”)) by Builders Shop Pte Ltd (a subsidiary of the Company) toShining Holdings Pte Ltd (an “interested person” for the purposes of the SGX-ST Listing Manual)on the terms and subject to the conditions of the Business Transfer Agreement (as defined in theCircular) and the execution of the Business Transfer Agreement be and is hereby ratified, approvedand confirmed; and

(b) the Directors and each of them be and are hereby authorised and empowered to complete and doall such acts and things, and to approve, modify and execute all documents and to approve anyamendment, alteration or modification to any document as they may consider necessary, desirableand expedient for the purposes of giving effect to the proposed sale of the Hardware Businesspursuant to the Business Transfer Agreement.

Ordinary Resolution 4: The Proposed Sale of the Shop Unit

THAT contingent upon the passing of Resolutions 1, 2, 3, 5, 6 and 7, approval be and is hereby givenfor:-

(a) the proposed sale of the Shop Unit (as defined in the Circular) by Shining Construction Pte Ltd (asubsidiary of the Company) to Shining Holdings Pte Ltd (an “interested person” for the purposes ofthe SGX-ST Listing Manual) on the terms and subject to the conditions of the Shop Unit OptionAgreement (as defined in the Circular) and the execution of the Shop Unit Option Agreement beand is hereby ratified, approved and confirmed; and

(b) the Directors and each of them be and are hereby authorised and empowered to complete and doall such acts and things, and to approve, modify and execute all documents and to approve anyamendment, alteration or modification to any document as they may consider necessary, desirableand expedient for the purposes of giving effect to the proposed sale of the Shop Unit pursuant tothe Shop Unit Option Agreement.

Ordinary Resolution 5: The Deed of Mutual Covenants

THAT contingent upon the passing of Resolutions 1, 2, 3, 4, 6 and 7:-

(a) the execution of the Deed of Mutual Covenants (as defined in the Circular) by the Company andShining Construction Pte Ltd (a subsidiary of the Company) in favour of Shining Holdings Pte Ltdand Shining Development Pte Ltd (who are “interested persons” for the purposes of the SGX-STListing Manual) be and is hereby ratified, approved and confirmed;

(b) the Directors and each of them be and are hereby authorised and empowered to complete and doall such acts and things, and to approve, modify and execute all documents and to approve anyamendment, alteration or modification to any document as they may consider necessary, desirableand expedient for the purposes of giving effect to the transactions contemplated under the Deed ofMutual Covenants.

Ordinary Resolution 6: The Deed of Covenant

THAT contingent upon the passing of Resolutions 1, 2, 3, 4, 5 and 7:-

(a) the execution of the Deed of Covenant (as defined in the Circular) by the Company and ShiningConstruction Pte Ltd (a subsidiary of the Company) in favour of Shining Holdings Pte Ltd and TanKay Kiang (who are “interested persons” for the purposes of the SGX-ST Listing Manual) be and ishereby ratified, approved and confirmed;

(b) the Directors and each of them be and are hereby authorised and empowered to complete and doall such acts and things, and to approve, modify and execute all documents and to approve anyamendment, alteration or modification to any document as they may consider necessary, desirableand expedient for the purposes of giving effect to the transactions contemplated under the Deed ofCovenants.

Ordinary Resolution 7: Proposed Mandate to Engage in Property Development in Singapore

THAT contingent upon the passing of Resolutions 1, 2, 3, 4, 5 and 6 and subject to the relevantregulatory approvals and licences being obtained by the Company, the Company be and is herebyauthorised to engage in property development activities in Singapore and the Directors be and arehereby authorised to complete and do all such acts and things as they may consider necessary,desirable and expedient for the purposes of giving effect to this Resolution.

The approval of the Resolutions 1, 2, 3, 4, 5, 6 and 7 as listed above are inter-conditional. This meansthat if any one of these resolutions in the Notice of EGM is not approved, the other resolutions would betaken to have been not approved.

By Order of the BoardSHINING CORPORATION LTD

Tan Kay KiangChairman

26 February 2008Singapore

Notes:

(1) A member entitled to attend and vote at the said Meeting may appoint not more than two proxies to attend and vote insteadof him. A proxy need not be a member of the Company and where there is more than one proxy, the proportion (expressedas a percentage of the whole) of his shareholding to be represented by each proxy must be stated.

(2) All proxies should be lodged with the Secretary of the Company at the registered office of the Company at 11 Changi SouthStreet 3, #04-11, Singapore 486122 not less than 48 hours before the time appointed for the said Meeting or anyadjournment thereof.

62

SHINING CORPORATION LTDCompany Registration No. 199904729G)


PROXY FORM – EXTRAORDINARY GENERAL MEETING

I/We NRIC/Passport No.

of

being a member/members of Shining Corporation Ltd (the “Company”) hereby appoint Mr/Mrs/Ms

NRIC/ Proportion ofName Address Passport Number Shareholdings (%)

and/or (delete as appropriate)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand apoll at the Extraordinary General Meeting of the Company to be held at 11 Changi South Street 3,#04-01, Singapore 486122 on 18 March 2008 at 10.00 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for oragainst the resolution as set out in the Notice of Extraordinary General Meeting. In the absence ofspecific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on anyother matter arising at the Extraordinary General Meeting).

To be used on a To be used in theshow of hands event of a poll

Ordinary Resolutions For* Against* For** Against**

1. To approve the Proposed Placement

2. To approve the Proposed Whitewash Resolution

3. To approve the proposed disposal of the HardwareBusiness

4. To approve the proposed sale of the Shop Unit

5. To approve the Deed of Mutual Covenants

6. To approve the Deed of Covenant

7. To approve the proposed mandate for the Companyto engage in property development in Singapore

* Please indicate your vote “For” or “Against”.** If you wish to use all your votes “For” or “Against”, please indicate with an “X” within the box provided. Otherwise please

indicate the number of votes.

Total Number of Shares Held

Dated this day of 2008.

Signature(s) of Member(s) or Common Seal

No. of Shares

CDP Register

Register of Members�

Notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the DepositoryRegister (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number. If you have Sharesregistered in your name in the Register of Members of the Company, you should insert that number. If you have Sharesentered against your name in the Depository Register and Shares registered in your name in the Register of Members, youshould insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the Sharesheld by you.

2. A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attendand vote on his behalf. A proxy need not be a member of the Company.

3. The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 11 Changi SouthStreet 3, #04-01, Singapore 486122 not less than 48 hours before the time set for the meeting.

4. Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented byeach proxy. If no such proportion or number is specified, the first named proxy may be treated as representing 100% of theshareholding and any second named proxy as an alternate to the first named.

5. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised inwriting. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under itscommon seal or under the hand of its officer or attorney duly authorised.

6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointer by an attorney, the power of attorney(or other authority) or a duly certified copy thereof must (failing previous registration with the Company) be lodged with theinstrument of proxy, failing which the instrument may be treated as invalid.

7. A corporation, which is a member, may authorise by resolution of its directors or other governing body such person as itthinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act, Cap. 50.

8. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or wherethe true intentions of the appointer are not ascertainable from the instructions of the appointer specified on the instrument ofproxy. In addition, in the case of Shares entered in the Depository Register, the Company may reject an instrument of proxy ifthe member, being the appointer, is not shown to have Shares entered against his name in the Depository Register as at 48hours before the time appointed for holding the meeting, as certified by The Central Depository (Pte) Limited to theCompany.

Tel: (

65) 6

3278

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