prospectus dated 30 november 2004 business … · prospectus. admission to the ... “risk...

Select C

atering S

ervices Limited

This document is important. If you are in any doubt as to theaction you should take, you should consult your stockbroker, bankmanager, solicitor, accountant or other professional adviser.

We have made an application to the Singapore Exchange SecuritiesTrading Limited (the “SGX-ST”) for permission to deal in and for quotationof all the ordinary shares of $0.045 each (the "Shares") in the capitalof Select Catering Services Limited (the "Company") already issued,the new Shares (the “New Shares”) which are the subject of the Invitation(as defined herein) and the new shares which may be issued upon theexercise of the options to be granted under the Select Employee ShareOption Scheme (the “Option Shares”). Such permission will be grantedwhen we have been admitted to the Official List of the SGX-ST Dealingand Automated Quotation System (the “SGX-SESDAQ”). The dealingin and quotation of our Shares will be in Singapore dollars.

Acceptance of applications for the New Shares will be conditional upon,inter alia, permission being granted by the SGX-ST to deal in and forquotation of all our existing issued Shares, the New Shares and theOption Shares. If completion of the Invitation does not occur becausethe SGX-ST’s permission is not granted or for any other reasons,moneys paid in respect of any application accepted will be returned toyou at your own risk, without interest or any share of revenue or otherbenefit arising therefrom and you will not have any claim against us,the Manager, the Placement Agent and Underwriter.

The SGX-ST assumes no responsibility for the correctness of any ofthe statements made, opinions expressed or reports contained in thisProspectus. Admission to the Official List of the SGX-SESDAQ is notto be taken as an indication of the merits of the Invitation, our Company,our subsidiaries, our Shares, the New Shares or the Option Shares.

A copy of this Prospectus together with copies of the Application Forms(as defined herein) have been lodged with and registered by the MonetaryAuthority of Singapore (the “Authority”). The Authority assumes noresponsibility for the contents of this Prospectus. Registration of thisProspectus by the Authority does not imply that the Securities AndFutures Act (Chapter 289) of Singapore, or any other legal or regulatoryrequirements have been complied with. The Authority has not, in anyway, considered the merits of our Shares, the New Shares or the OptionShares, as the case may be, being offered or in respect of which aninvitation is made, for investment.

No Shares shall be allotted on the basis of this Prospectus later thansix months after the date of registration of this Prospectus. We havenot lodged or registered this Prospectus in any other jurisdiction.Investing in our Shares involves risks which are described in the“RISK FACTORS” section beginning on page 32 of this Prospectus.

PROSPECTUS DATED 30 NOVEMBER 2004(Registered by the Monetary Authority of Singapore on 30 November 2004)

Business OverviewWe are an integrated food catering and management services provider in Singapore.

Our business can be categorised into the following 3 divisions:-

Institutional Catering• Provide food management services to our corporate customers• Operate and manage staff cafeterias, on a contract basis, at the premises of our

corporate customers• Value-added services include menu planning, operation and maintenance of food service

and facilities, advice and technical support and design and layout of staff cafeterias and kitchen

• Our customers include Agilent Technologies Singapore Pte Ltd;Infineon Technologies Asia Pacific Pte Ltd; Maxtor Periperals (S) Pte Ltd;Motorola Electronics Pte Ltd; STATS ChipPAC Ltd.; and STMicroelectronics Pte Ltd

Food Catering• Provide events catering services for corporate, community or private functions• Daily meal delivery services to workplaces and family units

Food Retail• Operate dedicated food court stalls and public cafeterias specialising in international and

local fare• Operating 39 dedicated food stalls (37 in Singapore and 2 in Malaysia) and 2 public

cafeterias at Caltex House and Shaw House• Commenced the operation of our first restaurant in Singapore specialising in Thai cuisine

in March 2004.

Select Catering Services Limited(Incorporated in the Republic of Singapore on 27 January 1995

with Company Registration Number 199500697Z)

Invitation in respect of 17,500,000 New Shares of $0.045 each comprising:-(1) 1,000,000 Offer Shares at $0.235 for each Offer Share by way of

public offer; and(2) 16,500,000 Placement Shares by way of placement, comprising:-

(i) 14,500,000 Placement Shares at $0.235 for each PlacementShare for applications by way of Placement Shares ApplicationForms;

(ii) 500,000 Internet Placement Shares at $0.235 for each InternetPlacement Share for applications made through the IPO website www.ePublicOffer.com ; and

(iii) 1,500,000 Reserved Shares at $0.235 for each Reserved Share reserved for our employees, business associates andthose who have contributed to the success of our Group,

payable in full on application.

Business Address : 36 Senoko Cresent Singapore 758282

Telephone : 6852 3333 (10 lines)

Facsimile : 6852 3335

Email : [email protected]

URL : www.select.com.sg

(Information contained on our website does not constitute a part of this Prospectus)

Select Catering Services Limited

Integrated foodcatering andmanagement

services provider

Inst

itutio

nal C

ater

ing

Food Retail

Food Catering

Manager

Placement Agent and Underwriter

Westcomb Securities Pte Ltd

Westcomb Capital Pte Ltd

Our Achievements

Experienced management team• Led by an experienced management team,

most of whom have more than 10 years of experience in the F&B industry

• Management team is familiar with our businessand understands our customers’ needs and requirements

Use of IT in our operations• Integrated computer systems developed over

the years and customised specially to suit ourbusiness requirements and operations

• System analyses sales data, and automaticallyprocesses raw material requirements,procurement and allocation to the different kitchens

• Minimizes errors and food wastage• Higher operation efficiency and better quality

of service

Ability to control costs• Adopt several cost-controlling measures:-

- bulk purchasing- cost control incentive scheme

i) aligns chefs’ and employees’ remunerationwith the profits of the food establishmentunder their charge

ii) encourages chefs to minimize food wastage

Quality of chefs• Master chefs and Head Chefs have an average

of 10 years of experience in the F&B industry• Our chefs undergo regular and continual

training to upgrade their culinary skills

Ability to provide quality service• Focused on providing friendly and prompt

service• In recognition of our commitment to service,

we have been granted the Singapore ServiceClass award in 2004 by SPRING Singapore

Broad customer base• Broad and varied customer base resulting

from our 3 business divisions• Better gauge on the changing trends in

consumer tastes and preferences• Greater opportunity for cross selling

Ability to provide Halal food• One of the few and leading food catering and

management service providers in Singaporewhich can provide Halal and non-Halal food

• This ability enables us to attract a broader customer base

Our Competitive Strengths Our Prospects

S$

mill

ion

1.4

0.8

0.6

0.4

1.2

1

0.2

FY2001 FY2002 FY20030

Profit Before Tax

0.1

1H2003 1H2004

0.3

1.3

0.1

1.41.6

S$

mill

ion

20

10

5

15

FY2001 FY2002 FY20030

Gross Profit

1H2003 1H2004

25

S$

mill

ion

35

20

15

10

30

25

5

FY2001 FY2002 FY20030

Revenue

20.4

1H2003 1H2004

26.9

33.8

15.3

20.2

40

The dining-out trend inSingapore

Regional economicrecovery

Singapore – hub forinternational exhibitionsand conventions

Relocation of productionfacilities to the PRC byMNCs

Outsourcing ofcatering servicesin other businesssegments

Develop, operate and manage the Singapore ExpoF&B Hub

• Occupy approximately 2,600 sq m with seating capacity forapproximately 2,300 patrons

• Planning 6 restaurants, 2 fast food outlets, 3 cafeterias, a pub and a food court

• Offers a variety of international and local cuisines and beverages

Increase food retail outlets in Singapore• Increase number of dedicated food court stalls in Singapore

as and when strategic locations are available• Establish new food court stalls at schools and hospitals other

than shopping centres• Intend to open one new restaurant in 2005 and another 5

to 10 mid-range restaurants in Singapore in the next 3 years

Expand institutional catering business into othersegments

• Growing trend for private and public institutions to outsourcetheir non-core food and management services

• Plan to target new market segments such as hospitals, tertiary institutions and the uniformed services

Expand institutional catering business into thePRC market

• Established wholly-owned subsidiary, Select Suzhou inApril 2004

• Offer institutional catering services to our existing corporate customers which have or will set up manufacturing operationsin the PRC

• Secured 7 contracts in the PRC

Our Future Plans

Our Financial Highlights

Singapore Service Class

2001

ISO 9001: 2000 (Stamford)2003

2002 ISO 9001: 2000 (Select)

20.9

9.5

12.713.2

17.2

2004

Singapore SME 5002000 / 2001 Company

Select C

atering S

ervices Limited

This document is important. If you are in any doubt as to theaction you should take, you should consult your stockbroker, bankmanager, solicitor, accountant or other professional adviser.

We have made an application to the Singapore Exchange SecuritiesTrading Limited (the “SGX-ST”) for permission to deal in and for quotationof all the ordinary shares of $0.045 each (the "Shares") in the capitalof Select Catering Services Limited (the "Company") already issued,the new Shares (the “New Shares”) which are the subject of the Invitation(as defined herein) and the new shares which may be issued upon theexercise of the options to be granted under the Select Employee ShareOption Scheme (the “Option Shares”). Such permission will be grantedwhen we have been admitted to the Official List of the SGX-ST Dealingand Automated Quotation System (the “SGX-SESDAQ”). The dealingin and quotation of our Shares will be in Singapore dollars.

Acceptance of applications for the New Shares will be conditional upon,inter alia, permission being granted by the SGX-ST to deal in and forquotation of all our existing issued Shares, the New Shares and theOption Shares. If completion of the Invitation does not occur becausethe SGX-ST’s permission is not granted or for any other reasons,moneys paid in respect of any application accepted will be returned toyou at your own risk, without interest or any share of revenue or otherbenefit arising therefrom and you will not have any claim against us,the Manager, the Placement Agent and Underwriter.

The SGX-ST assumes no responsibility for the correctness of any ofthe statements made, opinions expressed or reports contained in thisProspectus. Admission to the Official List of the SGX-SESDAQ is notto be taken as an indication of the merits of the Invitation, our Company,our subsidiaries, our Shares, the New Shares or the Option Shares.

A copy of this Prospectus together with copies of the Application Forms(as defined herein) have been lodged with and registered by the MonetaryAuthority of Singapore (the “Authority”). The Authority assumes noresponsibility for the contents of this Prospectus. Registration of thisProspectus by the Authority does not imply that the Securities AndFutures Act (Chapter 289) of Singapore, or any other legal or regulatoryrequirements have been complied with. The Authority has not, in anyway, considered the merits of our Shares, the New Shares or the OptionShares, as the case may be, being offered or in respect of which aninvitation is made, for investment.

No Shares shall be allotted on the basis of this Prospectus later thansix months after the date of registration of this Prospectus. We havenot lodged or registered this Prospectus in any other jurisdiction.Investing in our Shares involves risks which are described in the“RISK FACTORS” section beginning on page 32 of this Prospectus.

PROSPECTUS DATED 30 NOVEMBER 2004(Registered by the Monetary Authority of Singapore on 30 November 2004)

Business OverviewWe are an integrated food catering and management services provider in Singapore.

Our business can be categorised into the following 3 divisions:-

Institutional Catering• Provide food management services to our corporate customers• Operate and manage staff cafeterias, on a contract basis, at the premises of our

corporate customers• Value-added services include menu planning, operation and maintenance of food service

and facilities, advice and technical support and design and layout of staff cafeterias and kitchen

• Our customers include Agilent Technologies Singapore Pte Ltd;Infineon Technologies Asia Pacific Pte Ltd; Maxtor Periperals (S) Pte Ltd;Motorola Electronics Pte Ltd; STATS ChipPAC Ltd.; and STMicroelectronics Pte Ltd

Food Catering• Provide events catering services for corporate, community or private functions• Daily meal delivery services to workplaces and family units

Food Retail• Operate dedicated food court stalls and public cafeterias specialising in international and

local fare• Operating 39 dedicated food stalls (37 in Singapore and 2 in Malaysia) and 2 public

cafeterias at Caltex House and Shaw House• Commenced the operation of our first restaurant in Singapore specialising in Thai cuisine

in March 2004.

Select Catering Services Limited(Incorporated in the Republic of Singapore on 27 January 1995

with Company Registration Number 199500697Z)

Invitation in respect of 17,500,000 New Shares of $0.045 each comprising:-(1) 1,000,000 Offer Shares at $0.235 for each Offer Share by way of

public offer; and(2) 16,500,000 Placement Shares by way of placement, comprising:-

(i) 14,500,000 Placement Shares at $0.235 for each PlacementShare for applications by way of Placement Shares ApplicationForms;

(ii) 500,000 Internet Placement Shares at $0.235 for each InternetPlacement Share for applications made through the IPO website www.ePublicOffer.com ; and

(iii) 1,500,000 Reserved Shares at $0.235 for each Reserved Share reserved for our employees, business associates andthose who have contributed to the success of our Group,

payable in full on application.

Business Address : 36 Senoko Cresent Singapore 758282

Telephone : 6852 3333 (10 lines)

Facsimile : 6852 3335

Email : [email protected]

URL : www.select.com.sg

(Information contained on our website does not constitute a part of this Prospectus)


Integrated foodcatering andmanagement

services provider

Inst

itutio

nal C

ater

ing

Food Retail

Food Catering

Manager

Placement Agent and Underwriter

Westcomb Securities Pte Ltd

Westcomb Capital Pte Ltd

TABLE OF CONTENTS

Page

CORPORATE INFORMATION .......................................................................................................... 4

DEFINITIONS .................................................................................................................................... 6

GLOSSARY OF TECHNICAL TERMS .............................................................................................. 14

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS.................................... 15

SELLING RESTRICTIONS ................................................................................................................ 17

DETAILS OF THE INVITATION.......................................................................................................... 18

Listing On The SGX-SESDAQ ................................................................................................ 18

Indicative Timetable For Listing................................................................................................ 21

PROSPECTUS SUMMARY .............................................................................................................. 23

Overview Of Our Group .......................................................................................................... 23

Our Competitive Strengths ...................................................................................................... 23

Our Future Plans...................................................................................................................... 24

Our Ownership Structure ........................................................................................................ 24

Where You Can Find Us .......................................................................................................... 24

THE INVITATION................................................................................................................................ 25

DISTRIBUTION PLAN ...................................................................................................................... 27

INVITATION STATISTICS .................................................................................................................. 30

RISK FACTORS ................................................................................................................................ 32

USE OF PROCEEDS ........................................................................................................................ 40

SELECTED GROUP FINANCIAL INFORMATION............................................................................ 41

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL POSITION .................................................... 43

Overview .................................................................................................................................. 43

Breakdown Of Financial Performance By Business Divisions ................................................ 49

Seasonality .............................................................................................................................. 50

Review Of Past Operating Results .......................................................................................... 51

Review Of Financial Position.................................................................................................... 61

Liquidity And Capital Resources .............................................................................................. 63

Capitalisation And Indebtedness.............................................................................................. 66

Credit Policy ............................................................................................................................ 68

Exchange Controls .................................................................................................................. 70

DIVIDEND POLICY ............................................................................................................................ 72

DILUTION .......................................................................................................................................... 73

1

TABLE OF CONTENTS

Page

GENERAL INFORMATION ON OUR GROUP .................................................................................. 74

Share Capital .......................................................................................................................... 74

Shareholders ............................................................................................................................ 77

Moratorium .............................................................................................................................. 80

Group Structure........................................................................................................................ 80

HISTORY AND BUSINESS................................................................................................................ 82

Our History .............................................................................................................................. 82

Our Business............................................................................................................................ 84

Management Of Our Kitchens And Operations ...................................................................... 90

Cash Management .................................................................................................................. 93

Quality Control.......................................................................................................................... 93

Staff Training ............................................................................................................................ 94

Major Customers...................................................................................................................... 95

Major Suppliers ........................................................................................................................ 95

Inventory Management ............................................................................................................ 96

Insurance.................................................................................................................................. 96

Marketing Channels ................................................................................................................ 96

Awards...................................................................................................................................... 97

Trademark And Patent.............................................................................................................. 98

Properties And Other Fixed Assets.......................................................................................... 98

Catering Capacity .................................................................................................................... 103

Cuisine and Service Development .......................................................................................... 103

Government Regulations.......................................................................................................... 104

Competition .............................................................................................................................. 107

Competitive Strengths .............................................................................................................. 108

INDUSTRY OUTLOOK AND FUTURE PLANS ................................................................................ 110

Industry Outlook ...................................................................................................................... 110

Future Plans ............................................................................................................................ 113

DIRECTORS, MANAGEMENT AND STAFF .................................................................................... 115

Our Management Structure...................................................................................................... 115

Directors .................................................................................................................................. 115

Executive Officers .................................................................................................................... 117

Remuneration Of Directors And Executive Officers ................................................................ 118

Employees................................................................................................................................ 119

Service Agreements ................................................................................................................ 121

Corporate Governance ............................................................................................................ 122

Select Employee Share Option Scheme.................................................................................. 123

2

TABLE OF CONTENTS

Page

INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS ............................ 131

Past Interested Person Transactions........................................................................................ 131

Present And On-Going Interested Person Transactions .......................................................... 133

Conflicts Of Interest.................................................................................................................. 135

Review Procedures For Future Interested Person Transactions.............................................. 135

GENERAL AND STATUTORY INFORMATION ................................................................................ 136

Information On Directors And Executive Officers .................................................................... 136

Share Capital .......................................................................................................................... 140

Bank Borrowings And Working Capital .................................................................................... 141

Material Contracts .................................................................................................................... 141

Litigation, Arbitration And Bankruptcy Proceedings ................................................................ 142

Management, Underwriting And Placement Arrangements .................................................... 142

Miscellaneous .......................................................................................................................... 143

Consents .................................................................................................................................. 145

Responsibility Statement By Our Directors.............................................................................. 145

Responsibility Statement By The Manager .............................................................................. 145

Documents Available For Inspection........................................................................................ 145

APPENDIX A

Taxation .................................................................................................................................... A-1

APPENDIX B

Extract Of The Memorandum And Articles Of Association Of Our Company.......................... B-1

APPENDIX C

Description Of Ordinary Shares .............................................................................................. C-1

APPENDIX D

Rules of Select Employee Share Option Scheme .................................................................. D-1

APPENDIX E

Clearance And Settlement ...................................................................................................... E-1

APPENDIX F

Terms And Conditions And Procedures For Application.......................................................... F-1

APPENDIX G

Independent Auditors’ Report And Audited Consolidated Financial Statements ofSelect Catering Services Limited ............................................................................................ G-1

APPENDIX H

Independent Auditors’ Review Report And Unaudited Consolidated Financial Statements of Select Catering Services Limited ........................................................................................ H-1

3

CORPORATE INFORMATION

BOARD OF DIRECTORS : Tan Chor Khoon (Managing Director)Tan Choh Peng (Executive Director)Professor Low Teck Seng (Independent Director)Sim Beng Chye (Independent Director)Kwah Thiam Hock (Independent Director)

COMPANY SECRETARY : Tan Siok Kheng ACIS, LL.B. (Hons)(London)

REGISTERED OFFICE : 36 Senoko CrescentAND PRINCIPAL PLACE OF BUSINESS Singapore 758282

Telephone : (65) 6852 3333Facsimile : (65) 6852 3335

COMPANY REGISTRATION NUMBER : 199500697Z

REGISTRAR AND : Lim Associates (Pte) LtdSHARE TRANSFER AGENT 10 Collyer Quay #19-08

Ocean BuildingSingapore 049315

MANAGER : Westcomb Capital Pte Ltd5 Shenton Way #09-07 UIC BuildingSingapore 068808

PLACEMENT AGENT AND : Westcomb Securities Pte LtdUNDERWRITER 5 Shenton Way #09-08

UIC BuildingSingapore 068808

AUDITORS AND REPORTING AUDITORS : Chio Lim & AssociatesCertified Public Accountants18 Cross Street #09-01Marsh & McLennan CentreSingapore 048423

SOLICITORS TO THE INVITATION : Hee Theng Fong & Co.7 Temasek Boulevard #13-02Suntec Tower OneSingapore 038987

LEGAL ADVISER TO THE COMPANY : H & Y Law FirmON PRC LAW Suite 21 & 25 China Merchants Tower

161 Lujiazui East RoadShanghai 200120People’s Republic of China

LEGAL ADVISER TO THE COMPANY : Raslan LoongON MALAYSIAN LAW Level 3A, Menara John Hancock

6 Jalan GelenggangDamasara Heights50490 Kuala LumpurMalaysia

4

CORPORATE INFORMATION

RECEIVING BANKER : The Bank of East Asia, Limited137 Market StreetBEA BuildingSingapore 048943

PRINCIPAL BANKERS : DBS Bank Ltd6 Shenton WayDBS Building Tower OneSingapore 068809

Oversea-Chinese Banking Corporation Limited65 Chulia Street #29-02/04OCBC CentreSingapore 049513

5

DEFINITIONS

In this Prospectus and the accompanying Application Forms and, in relation to Electronic Applications,the instructions appearing on the screens of ATMs of the Participating Banks, the IB websites of therelevant Participating Banks or the IPO Website of the IPO Website Operator, the following definitionsapply throughout where the context so admits:-

Group Companies

“Company” or “Select” : Select Catering Services Limited. The terms “we”, “our”, “our Company” and “us” have correlativemeanings

“Group” : Select Catering Services Limited and itssubsidiaries

“Lerk Thai” : Lerk Thai Restaurant Pte Ltd

“Select Investment” : Select (F&B) Investment Pte Ltd

“Select Suzhou” : Select F&B (Suzhou) Co., Ltd.

“Select FM (Singapore)” : Select Food Management Pte Ltd

“Select FM (Malaysia)” : Select Food Management Sdn Bhd

“Stamford” : Stamford Catering Services Pte Ltd

“SCS” : SCS Food Services Pte Ltd

Other companies, organisations and agencies

“Authority” : The Monetary Authority of Singapore

“CDP” : The Central Depository (Pte) Limited

“CPF” : The Central Provident Fund

“HDB” : Housing and Development Board

“IPO Website Operator” : Westcomb Securities Pte Ltd

“ISO” : International Organization for Standardisation, aworld-wide federation of national standard bodies

“ITE” : Institute of Technical Education

“Manager” or “Westcomb” : Westcomb Capital Pte Ltd

“MEWR” : The Ministry of the Environment and Water Resources

“MUIS” : Majlis Ugama Islam Singapura, the IslamicReligious Council of Singapore

“NEA” : National Environment Agency (an agency ofMEWR)

6

DEFINITIONS

“Participating Banks” : DBS Bank Ltd (including POSB) (“DBS Bank”),Oversea-Chinese Banking Corporation Limited(“OCBC”) and United Overseas Bank Limited andits subsidiary, Far Eastern Bank Limited (“UOBGroup”)

“Placement Agent and Underwriter”, : Westcomb Securities Pte Ltd “Placement Agent” or “Underwriter”

“SCCS” : Securities Clearing & Computer Services (Pte) Ltd

“Select Eastern Investment” : Select Eastern Investment Pte Ltd

“SGX-ST” or “Singapore Exchange” : Singapore Exchange Securities Trading Limited

“SGX-SESDAQ” : SGX-ST Dealing and Automated QuotationSystem

“SPRING Singapore” : Standards, Productivity and Innovation Board(formerly known as “Singapore Productivity andStandards Board” or “PSB Singapore” )

“STATS” : STATS ChipPAC Ltd.

“Zhangzhou Select Eastern Fast Food” : Zhangzhou Select Eastern Fast Food Co., Ltd.

General

“Application Forms” : The official printed application forms to be used forthe purpose of the Invitation which are issued withand form part of this Prospectus

“Application List” : The list of applications for subscription of the NewShares

“Articles” : The Articles of Association of our Company

“Associate” (a) In relation to a corporation, means:-

(i) a director or Controlling Shareholder;

(ii) a subsidiary or Associated Company;or

(iii) a subsidiary or Associated Companyof the Controlling Shareholder,

of the corporation;

7

DEFINITIONS

(b) In relation to any director, chief executiveofficer, Substantial Shareholder or ControllingShareholder of a corporation who is anindividual, means:-

(i) his immediate family;

(ii) a trustee, when acting in his capacityas such trustee, of any trust of whichthe individual or his immediate familyis a beneficiary or, in the case of adiscretionary trust, is a discretionaryobject; or

(iii) any corporation in which he and hisimmediate family together (directly orindirectly) have an interest of not lessthan 30% of the aggregate of thenominal amount of all the votingshares; and

(c) In relation to a Substantial Shareholder, orControlling Shareholder, which is acorporation, means, notwithstandingparagraph (a), any corporation which is itsrelated corporation or Associated Company

“Associated Company” : In relation to a corporation, means:-

(a) any corporation in which the corporation orits subsidiary has, or the corporation and itssubsidiary together have, a direct interest ofnot less than 20% but not more than 50% ofthe aggregate of the nominal amount of allthe voting shares; or

(b) any corporation, other than a subsidiary ofthe corporation or a corporation which is anAssociated Company by virtue of paragraph(a), the policies of which the corporation orits subsidiary, or the corporation togetherwith its subsidiary, is able to control orinfluence materially

“ATM” : Automated teller machine of a Participating Bank

“ATM Electronic Application” : Application for the New Shares made through anATM

“Audit Committee” : The audit committee of our Company

“Board” : The Board of Directors of our Company

8

DEFINITIONS

“Bonus Issue” : The bonus issue of 1,540,598 ordinary shares of$1.00 each credited as fully paid, in the capital ofour Company prior to the Invitation by way ofcapitalising the share premium account of ourCompany

“Companies Act” or “Act” : The Companies Act (Chapter 50) of Singapore

“Controlling Shareholder” : A person who:-

(i) holds directly or indirectly 15% or more ofthe nominal amount of all voting shares in acompany. The SGX-ST may determine that aperson who satisfies this definition is not aControlling Shareholder; or

(ii) in fact exercises control over a company

“Directors” : The directors of our Company as at the date ofthis Prospectus

“Doris Pek” : Pek Poh Cheng, our Executive Officer

“Electronic Applications” : Applications for the Offer Shares made through anATM Electronic Application, IB Application orInternet Placement Application, in accordance withand subject to the terms and conditions of thisProspectus

“EPS” : Earnings per Share

“Executive Directors” : The executive directors of our Company as at thedate of this Prospectus

“Executive Officers” : The executive officers of our Company as at thedate of this Prospectus

“FY” : Financial year ended or, as the case may be,ending 31 December

“IB” : Internet banking

“IB Application” : An application for the Offer Shares made throughan IB Website, in accordance with and subject tothe terms and conditions of this Prospectus

“IB Websites” : The IB websites of the relevant Participating Banks

“1H2003” : The six-month period ended 30 June 2003

“1H2004” : The six-month period ended 30 June 2004

“Independent Directors” : The independent directors of our Company as atthe date of this Prospectus

“Internet Electronic Application” : An application for the Offer Shares made throughan IB Application or an Internet PlacementApplication

9

DEFINITIONS

10

“Internet Placement Application” : An application by a Qualifying User for the InternetPlacement Shares through the IPO Website, inaccordance with and subject to the terms andconditions of this Prospectus

“Internet Placement Shares” : The 500,000 Placement Shares available forapplication through the IPO Website, inaccordance with and subject to the terms andconditions of this Prospectus

“Invitation” : Our invitation to the public in Singapore tosubscribe for the New Shares at the Issue Price,subject to and in accordance with the terms andconditions of this Prospectus

“IPO Website” : The Internet website www.ePublicOffer.com ofthe IPO Website Operator

“ISO 9001” : An abbreviation for “International StandardsOrganisation ISO-9001”. It is a certification inrespect of quality management system of specificbusiness activities

“Issue Price” : $0.235 for each New Share

“Jack Tan” : Tan Choh Peng, our Executive Director

“Latest Practicable Date” : 15 October 2004, being the latest practicable datebefore the lodgement of this Prospectus with theAuthority

“Listing Manual” : Listing Manual of the SGX-ST

“Management and Underwriting Agreement” : The management and underwriting agreementdated 30 November 2004 made between ourCompany, the Manager and the Underwriter for themanagement of the Invitation and the underwritingof the New Shares

“Market Day” : A day on which the SGX-ST is open for trading insecurities

“MRT” : Mass Rapid Transit

“New Shares” : The 17,500,000 new Shares for which ourCompany invites applications to subscribepursuant to the Invitation, subject to and inaccordance with the terms and conditions of thisProspectus

“NTA” : Net tangible assets

“Offer” : The offer of the Offer Shares by our Company tothe public in Singapore for subscription at theIssue Price, subject to and in accordance with theterms and conditions of this Prospectus

DEFINITIONS

“Offer Shares” : 1,000,000 New Shares which are the subject ofthe Offer

“Options” : The options granted or which may be grantedunder the Select Employee Share Option Scheme

“Option Shares” : The new Shares which may be allotted and issuedupon the exercise of the options to be grantedunder the Scheme

“PER” : Price to earnings ratio

“Placement” : The placement of the Placement Shares by thePlacement Agent on behalf of our Company forsubscription at the Issue Price, subject to and inaccordance with the terms and conditions of thisProspectus

“Placement Agreement” : The placement agreement dated 30 November2004 entered into between our Company, theManager and the Placement Agent, for theplacement of the Placement Shares

“Placement Shares” : 16,500,000 New Shares (including the InternetPlacement Shares and Reserved Shares), whichare the subject of the Placement

“Pre-Invitation Investors” : Thang Him Tee, Lin Li Fang, Hoon Pang HengJoanna, Kork Hoe Soon and Avia GrowthOpportunities Limited

“Prospectus” : This Prospectus dated 30 November 2004 issuedby our Company in respect of the Invitation

“Qualifying User” or “Qualifying : Any member of the public (being an individual) Internet Applicant” in Singapore who has registered for and holds a

valid membership account with the IPO Website Operator, subject to the terms and conditions for the membership and use of the IPO Website

“Reserved Shares” : 1,500,000 Placement Shares reserved for ouremployees, business associates and those whohave contributed to the success of our Group

“SARS” : Severe Acute Respiratory Syndrome

“Securities Account” : The securities account maintained by a Depositorwith CDP but does not include a securities sub-account

“Securities and Futures Act” or “SFA” : The Securities and Futures Act (Chapter 289) ofSingapore

“Select Employee Share Option : The Select Employee Share Option Scheme as Scheme” or “Scheme” described under the section on “Select Employee

Share Option Scheme” on pages 123 to 130 of thisProspectus and the rules of which are set out inAppendix D of this Prospectus

11

DEFINITIONS

“Service Agreements” : The service agreements entered into between ourCompany and our Executive Directors, asdescribed on page 121 of this Prospectus

“Shareholders” : Registered holders of Shares, except where theregistered holder is CDP, the term “Shareholders”shall, in relation to such Shares, mean theDepositors whose Securities Accounts are creditedwith Shares

“Shares” : Ordinary shares of $0.045 each in the capital ofour Company

“Share Consolidation” : The consolidation of nine ordinary shares of $1.00each in the authorised and issued and paid-upshare capital of our Company into one ordinary of$9.00 each

“Share Split” : The sub-division of each ordinary share of $9.00each in the authorised and issued and paid-upshare capital of our Company into 200 ordinaryshares of $0.045 each

“Steven Tan” : Tan Poey Chew, our Executive Officer

“Subscription” : The subscription of 184,400 new ordinary sharesof $1.00 each in the share capital of our Companyby the Pre-Invitation Investors, as described onpage 76 of this Prospectus

“Subscription Agreement” : The subscription agreement dated 21 May 2004entered into between our Company and the Pre-Invitation Investors

“Substantial Shareholder” : A person who has an interest in shares thenominal amount of which is not less than 5% ofthe nominal amount of all the voting shares of acompany

“Vincent Tan” Tan Chor Khoon, our Managing Director

Units of Measurement, Currencies and Countries

“PRC” : The People’s Republic of China, but for thepurposes of this Prospectus and for geographicalreference only, unless otherwise indicated,excludes Taiwan, Macau and Hong Kong

“RM” : Malaysian Ringgit

“RMB” : PRC Renminbi

“sq ft” : Square feet

“sq m” : Square metres

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

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DEFINITIONS

“US$” or “US dollars” and “US cents” : United States dollars and cents respectively

“%” or “per cent.” : Per centum or percentage

The expressions “Depositor”, “Depository Agent” and “Depository Register” shall have the samemeanings ascribed to them respectively in Section 130A of the Companies Act.

Any discrepancies in tables included herein between the amounts listed and the totals thereof are due torounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation ofthe figures which precede them.

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 Prospectus, the Application Forms and Electronic Applications to any statute orenactment is a reference to that statute or enactment as for the time being amended or re-enacted. Anyword defined under the Companies Act, the Securities and Futures Act or any statutory modificationthereof and used in this Prospectus, the Application Forms and Electronic Applications shall, whereapplicable, have the meaning assigned to it under the Companies Act, the Securities and Futures Act orany statutory modification thereof, as the case may be.

Any reference in this Prospectus, the Application Forms and Electronic Applications to Shares beingallotted to an applicant includes allotment to CDP for the account of that applicant.

Any reference to a time of day in this Prospectus, the Application Forms and Electronic Applications shallbe a reference to Singapore time unless otherwise stated.

Any reference to “our”, “us” and “we” or other grammatical variations thereof in this Prospectus shall,unless otherwise stated, mean our Company, our Group or any member of our Group as the contextrequires.

Certain names with Chinese characters have been translated into English names. Such translations areprovided solely for the convenience of Singapore-based investors and may not have been registered withthe relevant PRC authorities and should not be construed as representation that the English namesactually represent the Chinese characters.

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GLOSSARY OF TECHNICAL TERMS

To facilitate a better understanding of our business, the following glossary provides a description of someof the technical terms and abbreviations commonly found in our industry and which are used in thisProspectus. The terms and their ascribed meanings may not correspond to standard industry or commonmeanings, as the case may be, or usage of these terms:-

“Ampang Yong Tau Fu” : A local delight comprising an assortment of beancurds and vegetables packed with fish paste, andother meat items

“Central Senoko Kitchen” : Our kitchen facilities at 36 Senoko CrescentSingapore 758282

“Chinese Mixed Rice” : A meal comprising rice and a combination ofseveral food items selected by the patrons from amenu of Chinese cuisines

“Expo F&B Hub” : The food and beverage hub which is to beestablished at Singapore Expo, details of whichare set out in the section on “Industry Outlook andFuture Plans” on pages 110 to 114 of thisProspectus

“F&B” : Food and beverage

“food establishments” : Staff cafeterias (for our Institutional CateringDivision), dedicated food court stalls, publiccafeterias and restaurant (for our Food RetailDivision) set up by our Group

“Head Chef” : Our chef who is in charge of a food establishment

“Halal” : Arabic for that which is legally permitted under theSyariah school of Islamic law

“Kitchens” : Our Central Senoko Kitchen and Simei EasternKitchen

“MNC” : Multi-national corporations

“Master Chefs” : Our chefs who are overall in charge of the differentcuisines or who is in charge of our InstitutionalCatering Division

“Nasi Padang” : A meal comprising rice and a combination ofseveral food items selected by the patrons from amenu of Malay cuisines

“staff cafeterias” : The staff cafeterias and canteens of ourinstitutional catering corporate customers

“Simei Eastern Kitchen” : Our kitchen facilities at 3017 Bedok North Street 5,#02-33 and 34, Singapore 486121

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus, statements made in press releases and oral statements thatmay be made by us or our officers, Directors, Executive Officers or employees acting on our behalf, thatare not statements of historical fact, constitute “forward-looking statements”. Some of these statementscan be identified by forward-looking terms such as “expect”, “believe”, “plan”, “intend”, “estimate”,“anticipate”, “may”, “will”, “would”, “forecast”, “if”, “possible”, “probable”, “project”, “should” and “could” orsimilar words and phrases. However, these words are not the exclusive means of identifying forward-looking statements. All statements regarding the expected financial position, business strategy, plans andprospects of our Group and future prospects of the industry that we are in are forward-lookingstatements.

These forward-looking statements, including without limitation, statements as to:-

– our revenue and profitability;– expected growth in demand;– prospects and business strategies;– other expected industry trends; and– other matters discussed in this Prospectus regarding matters that are not historical fact,

are only predictions. These forward-looking statements involve known and unknown risks, uncertaintiesand other factors that may cause our Group’s actual future results, performance or achievements to bematerially different from any future results, performance or achievements expected, expressed or impliedby such forward-looking statements. These risk factors and uncertainties include, amongst others:-

– changes in political, social and economic conditions and the regulatory environment of Singaporeand other countries in which we conduct business;

– our anticipated growth strategies and expected internal growth;– changes in customer tastes and preferences;– changes in competitive conditions and our ability to compete under these conditions;– changes in prices we charge for our F&B items and services;– changes in our future capital needs and the availability of financing and capital to fund these

needs;– factors described under “Risk Factors” in this Prospectus; and– other factors beyond our control.

All forward-looking statements by or attributable to us, or persons acting on our behalf, contained in thisProspectus are expressly qualified in their entirety by such factors. The risks and uncertainties that maycause our actual future results, performance or achievements to be materially different from any futureresults, performance or achievements expected, expressed or implied by the forward-looking statementsin this Prospectus apply only as at the date of this Prospectus.

Given the risks and uncertainties that may cause our Group’s actual future results, performance orachievements to be materially different from that expected, expressed or implied by the forward-lookingstatements in this Prospectus, undue reliance must not be placed on those statements. Neither ourCompany, the Manager, the Placement Agent and Underwriter nor any other person represents orwarrants that our Group’s actual future results, performance or achievements will be as discussed inthose statements.

Our actual future results, performance or achievements may differ materially from those anticipated inthese forward looking statements. Our Company, the Manager, and the Placement Agent andUnderwriter disclaim any responsibility to update any of those forward-looking statements or publiclyannounce any revisions to those forward-looking statements to reflect future developments, events orcircumstances. We are, however, subject to the provisions of the Securities and Futures Act and theListing Manual regarding corporate disclosure. In particular, pursuant to Section 241 of the Securities andFutures Act, if after the Prospectus is registered but before the close of the Invitation, we become aware

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

of (a) a false or misleading statement or matter in the Prospectus, (b) an omission from the Prospectusof any information that should have been included in it under Section 243 of the Securities and FuturesAct or (c) a new circumstance that has arisen since the Prospectus was lodged with the Authority andwould have been required by Section 243 of the Securities and Futures Act to be included in theProspectus, if it had arisen before the Prospectus was lodged and that is materially adverse from thepoint of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority.

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SELLING RESTRICTIONS

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for the New Shares inany jurisdiction in which such an offer, solicitation or invitation is unlawful or is not authorised. ThisProspectus does not constitute an offer, solicitation or invitation to subscribe for the New Shares to anysuch person to whom it is unlawful to make such an offer, solicitation or invitation. No action has been orwill be taken under the requirements of the legislation or regulations of, or of the legal or regulatoryauthorities of, any jurisdiction, except for the filing and/or registration of this Prospectus in Singapore inorder to permit a public offering of the New Shares and the public distribution of this Prospectus inSingapore. We have not lodged or registered this Prospectus in any other jurisdiction. The distribution ofthis Prospectus and the offering of the New Shares in certain jurisdictions may be restricted by therelevant laws in such jurisdictions. Persons who may come into possession of this Prospectus arerequired by our Company, the Manager, and the Placement Agent and Underwriter to inform themselvesabout, and to observe and comply with, any such restrictions.

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DETAILS OF THE INVITATION

Listing on the SGX-SESDAQ

We have applied to the SGX-ST for permission to deal in and for quotation of all our Shares alreadyissued as well as the New Shares and the Option Shares on the SGX-SESDAQ. Such permission will begranted when we have been admitted to the Official List of the SGX-SESDAQ. Our acceptance ofapplications for the New Shares will be conditional upon, inter alia, permission being granted by theSGX-ST to deal in and for quotation of all our existing issued Shares, the New Shares and the OptionShares. Moneys paid in respect of any application accepted will, in the event such permission is notgranted, be returned to you at your own risk, without interest or any share of revenue or other benefitarising therefrom, and you will not have any claim whatsoever against us or the Manager.

The SGX-ST assumes no responsibility for the correctness of any statements made, opinions expressedor reports contained in this Prospectus. Admission to the Official List of the SGX-SESDAQ is not to betaken as an indication of the merits of the Invitation, our Company, our subsidiaries, our Shares, the NewShares or the Option Shares.

A copy of this Prospectus together with copies of the Application Forms have been lodged with andregistered by the Authority. The Authority assumes no responsibility for the contents of this Prospectus.Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act, orany other legal or regulatory requirements, have been complied with. The Authority has not, in any way,considered the merits of our Shares, the New Shares or the Option Shares, as the case may be, beingoffered or in respect of which an invitation is made, for investment.

We are subject to the provisions of the Securities and Futures Act and the Listing Manual regardingcorporate disclosure. In particular, if after this Prospectus is registered but before the close of theInvitation, we become aware of:-

(a) a false or misleading statement or matter in this Prospectus;

(b) an omission from this Prospectus of any information that should have been included in it underSections 243 of the Securities and Futures Act; or

(c) any new circumstances that has arisen since this Prospectus was lodged with the Authority whichwould have been required by Sections 243 of the Securities and Futures Act to be included in thisProspectus, if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary orreplacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act.

Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop order (the“stop order”) to our Company, directing that no or no further Shares to which this Prospectus relates, beallotted, issued or sold. Such circumstances will include a situation where this Prospectus (i) contains astatement or matter, which in the opinion of the Authority is false or misleading, (ii) omits any informationthat should be included in accordance with the Securities and Futures Act or (iii) does not, in the opinionof the Authority, comply with the requirements of the Securities and Futures Act.

Where the Authority issues a stop order pursuant to Section 242 of the Securities and Futures Act andapplications to subscribe for the New Shares have been made prior to the stop order, and

(a) in the case where the New Shares have not been issued to the applicants, the applications for theNew Shares pursuant to the Invitation shall be deemed to have been withdrawn and cancelled andour Company shall, within 14 days from the date of the stop order, pay to the applicants allmoneys the applicants have paid on account of their applications for the New Shares; or

(b) in the case where the New Shares have been issued to the applicants, the issue of the NewShares pursuant to the Invitation shall be deemed to be void and our Company shall, within 14days from the date of the stop order, pay to the applicants all moneys paid by them for the NewShares.

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Such moneys paid in respect of your application will be returned to you at your own risk, without interestor any share of revenue or other benefit arising therefrom, and you will not have any claim against us orthe Manager.

No shares shall be allotted or allocated on the basis of this Prospectus later than six months after thedate of registration of this Prospectus.

This Prospectus has been seen and approved by our Directors and they individually and collectivelyaccept full responsibility for the accuracy of all the information given in this Prospectus and confirm,having made all reasonable enquiries, that, to the best of their knowledge, information and belief, (i) thefacts stated and opinions expressed in this Prospectus are fair and accurate in all material respects as atthe date of this Prospectus; (ii) there are no other material facts the omission of which would make anystatement in this Prospectus misleading; (iii) this Prospectus constitutes a full and true disclosure of allmaterial facts about the Invitation, our Group and our Shares.

Neither our Company, our Directors, the Manager, the Placement Agent and Underwriter nor any otherparties involved in the Invitation is making any representation to any person regarding the legality of aninvestment in our Shares by such person under any investment or other laws or regulations. Noinformation in this Prospectus should be considered as being business, legal or tax advice regarding aninvestment in our Shares. Each prospective investor should consult his own professional or otheradvisers for business, legal or tax advice regarding an investment in our Shares.

The New Shares are offered for subscription solely on the basis of the information contained and therepresentations made in this Prospectus.

We have not authorised any person to give any information or to make any representation not containedin this Prospectus in connection with the Invitation and, if given or made, such information orrepresentation must not be relied upon as having been authorised by our Company, our Directors, theManager, and the Placement Agent and Underwriter. Neither the delivery of this Prospectus and theApplication Forms nor any documents relating to the Offer or the Placement, nor the Invitation shall,under any circumstances, constitute a continuing representation or create any suggestion or implicationthat there has been no change in the affairs of our Company or our subsidiaries or in the statements offact or information contained in this Prospectus since the Latest Practicable Date. Where such changesoccur, our Company may make an announcement of the same to the SGX-ST and/or the Authority, and ifrequired, lodge a supplementary or replacement prospectus pursuant to Section 241 of the Securitiesand Futures Act and take immediate steps to comply with the requirements of Section 241. You shouldtake note of any such announcement or supplementary or replacement prospectus and, upon release ofsuch announcement or supplementary or replacement prospectus, shall be deemed to have notice ofsuch changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as,a promise or representation as to the future performance or policies of our Company or our subsidiaries.

This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied uponby you in connection with your application for the New Shares and may not be relied upon by any otherperson or for any other purpose. This Prospectus does not constitute an offer of, or invitation tosubscribe for, the New Shares in any jurisdiction in which such offer or invitation is unauthorisedor unlawful nor does it constitute an offer or invitation to any person to whom it is unlawful tomake such an offer or invitation.

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Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, duringnormal business hours, subject to availability, from:-

Westcomb Securities Pte Ltd5 Shenton Way

#09-08 UIC BuildingSingapore 068808

and from members of the Association of Banks in Singapore, members of the SGX-ST and merchantbanks in Singapore. A copy of this Prospectus is also available on the SGX-ST websitehttp://www.sgx.com, as well as the MAS website http://www.mas.gov.sg.

The Application List will open at 10.00 a.m. on 13 December 2004 and will remain open until 12.00noon on the same day or for such further period or periods as our Directors may, in consultationwith the Manager, decide, subject to any limitation under all applicable laws. In the event asupplementary or replacement prospectus is lodged with the Authority, the Application List willremain open for at least 14 days from the date of lodgement of the supplementary or replacementprospectus.

Where prior to the lodgement of the supplementary or replacement prospectus, applications have beenmade under this Prospectus to subscribe for the New Shares and:-

(a) where our Shares have not been issued to the applicants, our Company shall either:-

(i) within seven days from the date of lodgement of the supplementary or replacementprospectus, give the applicants the supplementary or replacement prospectus, as the casemay be, and provide the applicants with an option to withdraw their applications; or

(ii) treat the applications as withdrawn and cancelled, in which case the applications shall bedeemed to have been withdrawn and cancelled, and our Company shall, within seven daysfrom the date of lodgement of the supplementary or replacement prospectus, return allmoneys paid in respect of any application; or

(b) where our Shares have been issued to the applicants, our Company shall either:-

(i) within seven days from the date of lodgement of the supplementary or replacementprospectus, give the applicants the supplementary or replacement prospectus, as the casemay be, and provide the applicants with an option to return our Shares, which they do notwish to retain title in; or

(ii) treat the issue of our Shares as void, in which case the issue shall be deemed void and ourCompany shall, within seven days from the date of lodgement of the supplementary orreplacement prospectus, return all moneys paid in respect of any application.

An applicant who wishes to exercise his option under paragraph (a)(i) to withdraw his application shall,within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify ourCompany of this, whereupon our Company shall, within seven days from the receipt of such notification,pay to him all monies paid by him on account of his application for those Shares without interest or ashare of revenue or benefit arising therefrom, at the applicant’s risk.

An applicant who wishes to exercise his option under paragraph (b)(i) to return our Shares issued to himshall, within 14 days from the date of lodgement of the supplementary or replacement prospectus, notifyour Company of this and return all documents, if any, purporting to be evidence of title to those Shares,to our Company, whereupon our Company shall, within seven days from the receipt of such notificationand documents, if any, pay to him all moneys paid by him for those Shares and the issue of those Sharesshall be deemed to be void.

Details of the procedures for application of the New Shares are set out in Appendix F of this Prospectus.

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Indicative Timetable for Listing

In accordance with the SGX-ST’s News Release of 28 May 1993 on the trading of initial public offeringshares on a “when issued” basis, an indicative timetable is set out below for your reference:-

Indicative time/date Event

12.00 noon on 13 December 2004 Close of Application List

14 December 2004 Balloting of applications, if necessary, or otherwise as maybe approved by the SGX-ST (in the event of over-subscription for the Offer Shares)

9.00 a.m. on 15 December 2004 Commence trading on a “when issued” basis

24 December 2004 Last day of trading on a “when issued” basis

9.00 a.m. on 27 December 2004 Commence trading on a “ready” basis

30 December 2004 Settlement date for all trades done on a “when issued” basisand for trades done on a “ready” basis on 27 December2004

The above timetable is only indicative as it assumes that (i) the date of closing of the Application List willbe 13 December 2004, (ii) the date of admission of our Company to the Official List of the SGX-SESDAQwill be 15 December 2004, (iii) the SGX-ST’s shareholding spread requirement will be complied with and(iv) the New Shares will be issued and fully paid-up prior to 15 December 2004. The actual date onwhich our Shares will commence trading on a “when issued” basis will be announced when it isconfirmed by the SGX-ST.

The above timetable and procedures may be subject to such modification as the SGX-ST may, in itsabsolute discretion, decide, including the decision to permit trading on a “when issued” basis and thecommencement date of such trading. The commencement of trading on a “when issued” basis will beentirely at the discretion of the SGX-ST. All persons trading in our Shares on a “when issued” basis doso at their own risk.

The Invitation will open from 2 December 2004 to 12.00 noon on 13 December 2004.

In the event of any changes in the closure of the Application List or the time period during which theInvitation is open, we will publicly announce the same:-

(i) through a MASNET announcement to be posted on the Internet at the SGX-ST websitehttp://www.sgx.com; and

(ii) in a major Singapore English newspaper, such as The Straits Times or The Business Times.

We will publicly announce the level of subscription for the New Shares and the basis of allotment of theNew Shares pursuant to the Invitation, as soon as it is practicable after the closure of the Application Listthrough the channels in (i) and (ii) above.

All persons trading in our Shares on a “when issued” basis do so at their own risk. In particular,persons trading in our Shares before their Securities Accounts with CDP are credited with therelevant number of Shares do so at the risk of selling Shares which neither they nor theirnominees, as the case may be, have been allotted with or are otherwise beneficially entitled to.Such persons are exposed to the risk of having to cover their net sell positions earlier if “whenissued” trading ends sooner than the indicative date shown above. Persons who have a net sellposition traded on a “when issued” basis should close their position on or before the first day of“ready” basis trading.

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Investors should consult the SGX-ST announcement on “ready” trading date on the Internet (at SGX-STwebsite http://www.sgx.com) or the newspapers or check with their brokers on the date on which tradingon a “ready” basis will commence.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and is subject to, the more detailed information andfinancial statements, including the notes thereto, appearing elsewhere in this Prospectus. Prospectiveinvestors should carefully consider all information presented in this Prospectus, particularly the mattersset out under the section on “Risk Factors”, before making an investment decision.

Overview of our Group

Our Company was incorporated under the Companies Act on 27 January 1995 as a private limitedcompany under the name of Select Food & Beverage Pte Ltd. Our name was subsequently changed toSelect Catering Services Pte Ltd on 21 April 1997. On 2 November 2004, pursuant to our conversioninto a public limited company, we changed our name to Select Catering Services Limited.

We are an integrated food catering and management services provider in Singapore. Our business canbe categorised into the following three divisions:-

(a) Institutional Catering – we provide food management services. We operate and manage staffcafeterias, on a contract basis, at the premises of our corporate customers from various industries.Our customers include leading MNCs in various industries such as Advanced Micro Devices (S)Pte Ltd, Agilent Technologies Singapore Pte Ltd, Maxtor Peripherals (S) Pte Ltd, STATS,STMicroelectronics Pte Ltd, Infineon Technologies Asia Pacific Pte Ltd and Motorola ElectronicsPte Ltd. As at the end of FY2001, FY2002, FY2003 and the date of this Prospectus, we managedeight, 13, 20 and 20 staff cafeterias respectively. The daily average number of patrons served atour staff cafeterias has increased from approximately 3,000 in FY2001 to approximately 33,700 in1H2004.

(b) Food Catering – we provide events catering services for corporate, community or private functions,to commercial customers and public agencies, as well as daily meal delivery services toworkplaces and family units. For FY2001, FY2002, FY2003, we have respectively catered forapproximately 13,000, 15,000 and 14,000 events.

(c) Food Retail – we operate dedicated food court stalls and public cafeterias specialising ininternational and local fare. As at the date of this Prospectus, we operate 39 dedicated stalls inthird-party-operated food courts and two public cafeterias. We commenced the operation of ourfirst restaurant in Singapore specialising in Thai cuisine in March 2004.

Please refer to the section on “Our Business” on pages 84 to 89 of this Prospectus for more details.

Our Competitive Strengths

Our Directors consider the following to be our core competitive strengths:-

– We have an experienced management team, led by our Managing Director, Mr Vincent Tan. Mostof our senior management has more than ten years of experience in the F&B industry.

– We have installed an integrated computer system which has enabled us to provide consistentservice to our customers, enhance our level of productivity and quality of service, control our costsand increase our revenue.

– We adopt several cost-controlling measures, such as bulk procurement of raw materials and costcontrol incentives for our chefs, which have assisted in increasing our profit.

– We have quality chefs. Our seven Master Chefs and 58 Head Chefs have an average of at leastten years of experience in the F&B industry. Their skills, experiences and creativity are some ofthe most important factors that enable us to attract and retain customers.

– We are able to provide friendly and prompt service. We were granted the Singapore Service Classaward in 2004 by SPRING Singapore in recognition of our commitment to service.

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PROSPECTUS SUMMARY

– We have a broad and varied customer base from which our revenue is generated. We are alsobetter able to gauge the changing trends in consumer tastes and preferences and cross-sell ourproducts and services to our customers in the three business divisions.

– We are able to offer both non-Halal and Halal food which enable us to attract a broader customerbase.

Please refer to the section on “Competitive Strengths” on pages 108 to 109 of this Prospectus for moredetails.

Our Future Plans

Our future plans are as follows:-

– To develop, operate and manage the Expo F&B Hub which will be established at the SingaporeExpo. We plan to develop the Expo F&B Hub into a prominent food and entertainment hub in theeastern region of Singapore, which caters not only to the participants of the events held atSingapore Expo, but also to the general public.

– To further expand our institutional catering business into the PRC market. We plan to offer ourinstitutional catering services to our existing corporate customers which have or will set upmanufacturing operations in the PRC.

– To expand our institutional catering business into other market segments such as hospitals, tertiaryinstitutions and the uniformed services.

– To increase the number of our restaurants and dedicated food court stalls in Singapore as andwhen strategic locations are available.

Please refer to the section on “Industry Outlook and Future Plans” on pages 110 to 114 of thisProspectus for more details.

Our Ownership Structure

Following the Invitation, our Group will be substantially owned by our Managing Director, Mr Vincent Tan,and our Executive Director, Mr Jack Tan, who respectively hold 34.3% and 14.0% in the capital of ourCompany after the Invitation.

Where you can find us

Our registered office is located at 36 Senoko Crescent Singapore 758282. Our telephone number is (65)6852 3333 and our facsimile number is (65) 6852 3335. Our company registration number is199500697Z. Our website address is http://www.select.com.sg. Information contained on our websitedoes not constitute a part of this Prospectus.

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THE INVITATION

Issue Size : 17,500,000 New Shares comprising 1,000,000Offer Shares and 16,500,000 Placement Shares(comprising 500,000 Internet Placement Shares,1,500,000 Reserved Shares and 14,500,000Placement Shares by way of Placement SharesApplication Forms).

The New Shares will, upon issue and allotment,rank pari passu in all respects with our existingissued Shares.

Issue Price : $0.235 for each New Share.

The Offer : The Offer comprises an invitation by the Companyto the public in Singapore to subscribe for1,000,000 Offer Shares at the Issue Price, subjectto and on the terms and conditions of thisProspectus.

In the event of an under-subscription for the OfferShares, that number of Offer Shares notsubscribed for shall be used to satisfy excessapplications for the Placement Shares to the extentthat there is an over-subscription for the PlacementShares as at the close of the Application List.

The Placement : The Placement comprises a placement of16,500,000 Placement Shares, including 500,000Internet Placement Shares, 1,500,000 ReservedShares and 14,500,000 Placement Shares by wayof Placement Shares Application Forms.

In the event of an under-subscription for thePlacement Shares, that number of PlacementShares not subscribed for shall be used to satisfyexcess applications for the Offer Shares to theextent that there is an over-subscription for theOffer Shares as at the close of the Application List.

Reserved Shares : 1,500,000 Placement Shares will be reserved forour employees, business associates and thosewho have contributed to the success of our Group.

In the event that any of the Reserved Shares arenot taken up, they will be made available to satisfyexcess applications for the Placement Shares, orin the event of any under-subscription for thePlacement Shares, to satisfy excess applicationsmade by members of the public in Singapore forthe Offer Shares.

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THE INVITATION

Purpose of the Invitation : Our Directors consider that the listing of ourCompany and the quotation of our Shares on theSGX-SESDAQ will enhance our public imagelocally and regionally and enable us to raise fundsfrom the capital markets to finance our businessexpansion. The Invitation will also providemembers of the public, our employees, businessassociates, as well as others who have contributedto our success, with an opportunity to participate inthe equity of our Company.

Listing Status : Prior to the Invitation, there had been no publicmarket for our Shares. Our Shares will be quotedin Singapore dollars on the SGX-SESDAQ, subjectto admission of our Company to the Official List ofthe SGX-SESDAQ and permission to deal in andfor quotation of our Shares being granted by theSGX-ST.

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DISTRIBUTION PLAN

27

The Issue Price is determined by us, in consultation with the Manager, based on market conditions andestimated market demand for our Shares determined through a book-building process. The Issue Price isthe same for all the New Shares and is payable in full on application.

This section should be read in conjunction with, and is qualified in its entirety by reference to, the sectionon “Terms and Conditions and Procedures for Application” set out in Appendix F of this Prospectus.

Investors may apply to subscribe for any number of the New Shares in integral multiples of 1,000 Shares.In order to ensure a reasonable spread of shareholders, we have the absolute discretion to prescribe alimit to the number of the New Shares to be allotted to any single applicant and/or to allot New Sharesabove or under such prescribed limit as we shall deem fit.

Application for the New Shares may be made by one of the following methods:-

1. Offer

Pursuant to the terms and conditions contained in the Management and Underwriting Agreemententered into between our Company, the Manager and the Underwriter, the Underwriter has agreedto underwrite our Offer Shares.

In the event of an under-subscription for the Offer Shares as at the close of the Application List,that number of Offer Shares not subscribed for shall be made available to satisfy excessapplications for the Placement Shares to the extent there is an over-subscription for the PlacementShares as at the close of the Application List.

In the event of an over-subscription for the Offer Shares as at the close of the Application Listand/or the Placement Shares are fully subscribed or over-subscribed as at the close of theApplication List, the successful applications for the Offer Shares will be determined by ballot orotherwise as determined by our Directors, in consultation with the Manager, and approved by theSGX-ST.

Offer Shares

The Offer Shares are made available to the members of the public in Singapore for subscription atthe Issue Price. Investors may apply for the Offer Shares by way of Offer Shares Application Formsor by way of IB Applications or ATM Electronic Applications.

An applicant (other than an approved nominee company) who has made an application forthe Offer Shares in his own name may not submit another separate application for the OfferShares whether by way of an Offer Shares Application Form or by way of an IB Applicationor ATM Electronic Application, for any other person. Such separate applications shall bedeemed to be multiple applications and shall be rejected.

An applicant who has made an application for the Offer Shares by way of an Offer SharesApplication Form may not make another separate application for the Offer Shares by way ofan IB Application or ATM Electronic Application and vice versa. Such separate applicationsshall be deemed to be multiple applications and shall be rejected.

An applicant who has made an application for the Offer Shares either by way of an OfferShares Application Form or by way of an IB Application or ATM Electronic Application shallnot make any separate application for the Placement Shares by way of a Placement SharesApplication Form or by way of an Internet Placement Application. Such separateapplications shall be deemed to be multiple applications and shall be rejected.

Additional terms and conditions of and the procedures for the application for Offer Shares are setout in Appendix F of this Prospectus.

DISTRIBUTION PLAN

2. Placement

Pursuant to the terms and conditions in the Placement Agreement signed between our Company,the Manager and the Placement Agent, the Placement Agent has agreed to subscribe and/orprocure subscriptions for the Placement Shares (including the Internet Placement Shares and theReserved Shares) at the Issue Price.

In the event of an under-subscription for the Placement Shares as at the close of the ApplicationList, that number of Placement Shares not subscribed for shall be made available to satisfy excessapplications for the Offer Shares, to the extent that there is an over-subscription for the OfferShares as at the close of the Application List.

In the event of an under-subscription for the Internet Placement Shares as at the close of theApplication List, that number of Internet Placement Shares not subscribed for shall be madeavailable to satisfy excess applications for the Placement Shares by way of Placement SharesApplication Forms to the extent that there is an over-subscription for the Placement Shares as atthe close of the Application List or to satisfy excess applications for the Offer Shares, to the extentthat there is an over-subscription for the Offer Shares as at the close of the Application List.

In the event that any of the Reserved Shares are not taken up, they will be made available tosatisfy excess applications for the Placement Shares (other than Reserved Shares) to the extentthat there is an over-subscription for the Placement Shares (other than Reserved Shares) and tosatisfy excess application for the Offer Shares to the extent that there is an over-subscription forthe Offer Shares as at the close of the Application List.

(a) Placement Shares (other than Internet Placement Shares and Reserved Shares)

The Placement Shares (other than Internet Placement Shares and Reserved Shares) arereserved for placement to members of the public and institutional investors in Singapore atthe Issue Price.

Applications for the Placement Shares (other than Internet Placement Shares and ReservedShares) may only be made by way of Placement Shares Application Forms.

An applicant who applies for the Placement Shares (other than Reserved Shares) byway of a Placement Shares Application Form shall not make any separate applicationfor the Placement Shares (other than Reserved Shares) using another PlacementShares Application Form or by way of an Internet Placement Application, or for theOffer Shares (either using an Offer Shares Application Form or by way of an IBApplication or ATM Electronic Application). Such separate applications will bedeemed to be multiple applications and shall be rejected.

Additional terms and conditions and procedures for the application for Placement Sharesare described in Appendix F of this Prospectus.

(b) Internet Placement Shares

The Internet Placement Shares are reserved for placement to Qualifying Internet Applicants.Qualifying Internet Applicants may apply for the Internet Placement Shares through the IPOWebsite.

The placement of the Internet Placement Shares through the IPO Website will be on a “first-come-first-served” basis, and is subject to availability at the time of application.

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DISTRIBUTION PLAN

A Qualifying Internet Applicant who has made an application for Internet PlacementShares through the IPO Website shall not make any separate application forPlacement Shares by way of a Placement Shares Application Form or by way ofanother application through the IPO Website, or for the Offer Shares (either using anOffer Shares Application Form or by way of an IB Application or ATM ElectronicApplication). Such separate applications will be deemed to be multiple applicationsand shall be rejected.

A Qualifying Internet Applicant whose application for Internet Placement Shares isrejected because of multiple applications will be levied an administrative feeamounting to 20% of the Qualifying Internet Applicant’s application subscriptionmoney (GST included).

Additional terms and conditions of and the procedures for the application of InternetPlacement Shares are set out in Appendix F of this Prospectus.

(c) Reserved Shares

To recognise their contributions to our Group, we have reserved certain Placement Sharesfor subscription at the Issue Price by our employees, business associates and those whohave contributed to the success of our Group.

These Reserved Shares are not subject to any moratorium and may be disposed of after theadmission of our Company to the Official List of the SGX-SESDAQ.

In the event that any of the Reserved Shares are not taken up, they will be made availableto satisfy excess applications for the Placement Shares to the extent that there is an over-subscription for the Placement Shares as at the close of the Application List or, in the eventof an under-subscription for the Placement Shares as at the close of the Application List, tosatisfy excess applications made by members of the public for the Offer Shares to the extentthat there is an over-subscription for the Offer Shares as at the close of the Application List.

Application for the Reserved Shares may only be made by way of Reserved SharesApplication Forms.

Additional terms and conditions of and the procedures for the application for ReservedShares are set out in Appendix F of this Prospectus.

Subscribers of Placement Shares (other than Reserved Shares) may be required to pay abrokerage of up to 1% of the Issue Price to the Placement Agent.

None of our Directors or Substantial Shareholders intends to subscribe for the New Shares in theInvitation. To the best of our knowledge, we are not aware of any member of our Company’smanagement or employees who intends to subscribe for more than 5% of the New Shares.

We are also not aware of any person who intends to subscribe for more than 5% of the New Shares.However, through a book-building process to assess market demand for our Shares, there may beperson(s) who may indicate an interest to subscribe for our Shares amounting to more than 5% of theNew Shares. The final allocation of Shares will be in accordance with the shareholding spread anddistribution guidelines set out in Rule 210 of the Listing Manual.

Further, no Shares shall be allotted or allocated on the basis of this Prospectus later than six monthsafter the date of registration of this Prospectus.

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INVITATION STATISTICS

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Issue Price for each Share

NTA

NTA per Share based on the balance sheet of our Group as at 30 June 2004:-

(a) before adjusting for the estimated net proceeds from the issue of theNew Shares and based on our Company’s pre-Invitation share capitalof 75,213,400 Shares

(b) after adjusting for the estimated net proceeds from the issue of theNew Shares and based on our Company’s post-Invitation share capitalof 92,713,400 Shares

Premium of Issue Price over the NTA per Share as at 30 June 2004:-

(a) before adjusting for the estimated net proceeds from the issue of theNew Shares and based on our Company’s pre-Invitation share capitalof 75,213,400 Shares

(b) after adjusting for the estimated net proceeds from the issue of theNew Shares and based on our Company’s post-Invitation issued sharecapital of 92,713,400 Shares

EPS

Historical net EPS for FY2003 based on our Company’s pre-Invitation share capitalof 75,213,400 Shares

Adjusted historical net EPS for FY2003 had the Service Agreements set out onpages 121 to 122 of this Prospectus been in effect from the beginning of FY2003and based on the pre-Invitation share capital of 75,213,400 Shares(1)

Price Earnings Ratio

Historical PER for FY2003 based on the Issue Price and the historical net EPS andour Company’s pre-Invitation share capital of 75,213,400 Shares

Adjusted historical PER for FY2003 had the Service Agreements set out on pages121 to 122 of this Prospectus been in effect from the beginning of FY2003 andbased on the adjusted historical net EPS for FY2003 and our Company’s pre-Invitation share capital of 75,213,400 Shares

Net Operating Cash Flow(2)

Historical net operating cash flow per Share for FY2003 based on our Company’spre-Invitation share capital of 75,213,400 Shares

Historical net operating cash flow per Share for FY2003 had the ServiceAgreements set out on pages 121 to 122 of this Prospectus been in effect from thebeginning of FY2003 and based on our Company’s pre-Invitation share capital of75,213,400 Shares(2)

Price to Net Operating Cash Flow Ratio

Ratio of Issue Price to historical net operating cash flow per Share of our Group forFY2003 based on our Company’s pre-Invitation share capital of 75,213,400 Shares

$0.235

6.90 cents

8.95 cents

240.6%

162.6%

1.21 cents

1.09 cents

19.42 times

21.56 times

2.63 cents

2.51 cents

8.94 times

INVITATION STATISTICS

Ratio of Issue Price to historical net operating cash flow per Share of our Group forFY2003 had the Service Agreements set out on pages 121 to 122 of thisProspectus been in effect from the beginning of FY2003 and based on ourCompany’s pre-Invitation share capital of 75,213,400 Shares

Market Capitalisation

Our market capitalisation based on the post-Invitation share capital of 92,713,400Shares and the Issue Price

Notes:-

(1) Had the Service Agreements (as described under “Directors, Management and Staff – Service Agreements” in thisProspectus) been in effect from the beginning of FY2003, the profit after taxation would have been approximately $0.8 millioninstead of $0.9 million.

(2) Net operating cash flow is defined as net profit after taxation attributable to shareholders with provision for depreciationadded back.

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9.36 times

21.8 million

RISK FACTORS

We are vulnerable to a number of risks applicable to the industry and the areas in which we operate.Our business, financial condition or results of operations could be materially and adversely affectedshould any of these risks materialises. To the best of our Directors’ knowledge and belief as at the dateof this Prospectus, all risks that (i) are material to investors in making an informed judgment and (ii) upondeveloping into actual events would have a material adverse impact on our business, results ofoperations or financial condition, are set out below.

If any of the following considerations and uncertainties developed into actual events, our business,financial condition or results of operations and prospects could be materially and adversely affected. Insuch cases, the trading price of our Shares could decline and you may lose all or part of your investmentin our Shares.

You should consider carefully, together with all other information contained elsewhere in this Prospectus,the factors described below before deciding to invest in our Shares. Before deciding to invest in ourShares, you should seek professional advice from the relevant advisers about your particularcircumstances.

RISKS RELATING TO OUR INDUSTRY

We will be affected by any outbreak of SARS or spread of other contagious or virulent diseases

The majority of our kitchens and food establishments are located in Singapore. A resurgence of theSARS outbreak or the spread of any other contagious or virulent diseases in Singapore may negativelyaffect consumer confidence and sentiments, leading to a reduced willingness by the public to dine at ourfood establishments or engage our food catering services. Our revenue may consequently be adverselyaffected. Further, if any of the employees in our facilities and/or the facilities of our suppliers and/or thefacilities of our institutional catering corporate customers is infected with SARS or other contagious orvirulent disease, we and/or our suppliers and/or our corporate customers may be required to temporarilyshut down the affected facility to prevent the spread of the disease. This will have a negative impact onour business operations and financial performance.

We will be affected by any outbreak of food-related diseases

Any outbreak of diseases in livestock or food scares in the region and around the world (for instance, theAvian or bird flu) may lead to a reduction in the consumption of the affected type of meat or food byconsumers. We would not be able to predict the further occurrences of such diseases, or when there willbe an outbreak of new diseases affecting not only meat, but vegetables or other ingredients used in ourfood recipes. In the event of any such outbreaks resulting in severe loss of consumer confidence anddeclined patronage at our food establishments, our business may be materially and adversely affected.Further, sources of supply for the affected type of meat or food may also be reduced leading to anincrease in the prices of such meat or food. This will cause our costs of sales to increase and our profitmargin to decrease. Any such increase in cost or loss of business will adversely affect our profitabilityand financial performance. In addition, a loss in consumer confidence arising from an outbreak ofdisease concerning any particular raw material may force us to reduce or totally eliminate the use of thatraw material in our menu thereby affecting our ability to offer our customers a wide variety of food items.This may lead to declined patronage at our food establishments and thus affect our business andfinancial performance.

We may be affected by any adverse change in economic conditions and discretionary consumerspending

Our business is subject to prevailing economic conditions. Any adverse change in economic conditionsmay affect consumers’ disposable income and confidence. In the event of an economic downturn,consumers tend to be more budget-conscious in the amount which they spend on food. Any suchnegative change in discretionary consumer spending will have an adverse impact on our revenue andhence our financial performance. Our institutional catering customers may also choose to reduce theiroperation costs by downsizing. This will lead to reduced patronage at the staff cafeterias we operatethereby affecting the revenue derived from our institutional catering operations. In addition, we may alsobe compelled to lower the food prices offered at our food establishments which will cause our profitmargins and profitability to decrease.

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RISK FACTORS

Our business is highly competitive and we may not be able to compete successfully in ourindustry

We operate in an industry which is highly competitive and with low barriers of entry. We compete byoffering inter alia, a variety of cuisines, good food quality and taste, competitive pricing and goodcustomer service. We cannot assure you that our competitors, some of which may have a better namerecognition and more financial resources than we have, will not compete with us in the markets that weoperate. In the event that we are unable to compete effectively in our industry, our profitability will bematerially and adversely affected. For more information on our competitors, please refer to the sectionon “Competition” on page 107 of this Prospectus.

We are susceptible to changes in raw materials costs

Our profitability depends, in part, on our ability to anticipate and react to changes in raw materials costs.Our raw materials are mainly food products and ingredients such as meat, vegetables, dairy products,spices and condiments. These raw materials as a percentage of our revenue for FY2003 and 1H2004were approximately 38.0% and 37.3% respectively. The prices of these raw materials are subject toprice fluctuation due to various factors beyond our control, including but not limited to severe climaticconditions, outbreak of diseases and governmental regulations, which may reduce supply and lead toincrease in food and supply costs. In the event that we are unable to anticipate and react to changingfood and supply costs by adjusting our purchasing practices or passing on any increase in such costs toour customers, our business, profitability and financial performance may be materially and adverselyaffected.

We are affected by regulations governing our operations and any change in such regulations

We are subject to the laws and regulations governing the F&B industry, including but not limited to thoserelating to food safety, handling and storage, hygiene standards, sale of food and beverages andsanitation, building and zoning requirements. We are required to obtain and maintain for our operations,certain licences, permits and approvals from the relevant authorities. In respect of the operation of ourtwo food court stalls in Malaysia, we are required to obtain a business licence from the relevantMalaysian authorities for the conduct of our business. We are also required to obtain the service taxlicence as the annual turnover of our subsidiary, Select FM (Malaysia), exceeds RM0.5 million. We arecurrently applying for the business licence in respect of the operation of our food court stall at PetalingJaya. We are also applying for the service tax licence in respect of the operation of our food court stallsat Petaling Jaya and Kuala Lumpur. We had commenced operations prior to such licences having beenobtained. Under Malaysian laws, a penalty comprising a fine not exceeding RM2,000 and/orimprisonment not exceeding one year may be imposed where a person fails to obtain a business licencewhere such a licence is legally required. A fine not exceeding RM5,000 and/or imprisonment notexceeding two years may be imposed for failing to obtain a service tax licence where such a licence islegally required. We are currently in the process of applying for such licenses. For the purpose of thisProspectus, our legal adviser on Malaysian law had on 3 August 2004 advised us that the penalty that ismore likely to be imposed (if any) for such breaches is a compound or a fine. The Directors are howeverunable to assure that the aforesaid breach would not affect Select FM (Malaysia)’s ability to obtain therelevant licences, permits and approvals from the relevant authorities in respect of any future expansionof its business in Malaysia. Further, should we be unable to continue the operation of our Malaysian foodcourt stalls as a result of the above, the revenue contribution from our Malaysian food court stalls, whichaccounted for approximately 2% of our total revenue in 1H2004, will be affected.

Please refer to the section on “Government Regulations” in this Prospectus for more details of thelicences held by our Group.

In the event that we are unable at any time to comply with the existing regulations, such as obtaining,maintaining or renewing the relevant licences required to operate our Kitchens, food court stalls, publiccafeterias, staff cafeterias or restaurant, or any changes in such regulations, or any new regulationsintroduced by the relevant authorities, our operations may be adversely affected if we are not allowed tooperate or if our operations are substantially curtailed as a result. In addition, any change in orintroduction of new regulations which require our compliance may increase our costs of operations. Allthese will have an adverse effect on our profitability.

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RISK FACTORS

In addition, we are subject to labour and immigration laws that govern the employment of our local andforeign employees. Our business operations are labour intensive. Staff costs (excluding Directors’remuneration) as a percentage of total revenue for 1H2004 were approximately 32.2%. In the event ofany change in the labour laws such as an increase in foreign worker levy or CPF contributions, our totalcosts of sales will increase. In such an event, our business operations and financial performance may beadversely affected.

RISKS RELATING TO OUR GROUP

Our business will be adversely affected by complaints from customers and bad publicity

Like any operator in the F&B industry, we can be adversely affected by negative publicity concerning foodquality, illness, injury, hygiene standards, publication of government or industry findings concerning foodproducts served by us, or other health concerns or operating issues arising from one food establishment,a limited number of food establishments or food processing facilities or any catering companies. At anyinstance, our food establishments can be subject to negative allegations from our customers regardingour food quality, hygiene standards and operational inefficiency, as well as complaints of illnesses andinjuries suffered at our premises or arising from the consumption of our food. We may also be the subjectof malicious or groundless rumours which may be easily transmitted through the increased use of theinternet and the increasingly popular mobile phone text messaging. Such bad publicity will materiallyaffect the business of our food establishments regardless of whether or not these allegations aregenuine. If there are incidences of poor hygiene with regard to food preparation or lack of cleanliness atour food establishments and food processing facilities, the bad publicity arising from such incidenceswould damage our image, reduce customers’ confidence in our products and result in reduced patronageof our food establishments. All these occurrences will have an adverse impact on our business,profitability and financial performance.

In addition, if complaints of our customers escalate to become lawsuits against us, resources (includingbut not limited to time and legal costs) would have to be utilised to contest the lawsuits, thereby furtheraffecting our financial performance. We cannot assure you that no material litigation will be broughtagainst us in the future.

We will be affected by any failure to maintain the quality of the food we offer

It is essential in the F&B industry that the quality of food served must be consistent. Inconsistency in thefood quality would result in customers’ dissatisfaction and hence a reduction in their patronage. High staffturnover, shortage of staff or the lack of proper supervision may affect the quality of food served at ourfood establishments.

In addition to the food quality, it is important that the furniture and fixtures in our public cafeterias andrestaurant are properly maintained in order to uphold our image and branding and encourage repeatpatronage by our customers. Failure to do so would adversely affect our business and profitability andthus affect our financial performance.

We may be adversely affected if our intellectual property rights are not protected

As at the date of this Prospectus, all except one of our trademarks and service marks have not beenregistered. We have filed applications for the registration of our trademarks and service marks with theIntellectual Property Office of Singapore. Please see the section on “Trademark and Patent” on page 98in this Prospectus for more details. We are unable to confirm the date on which our trademarks andservice marks will be registered. Pending registration, any unauthorised use of our trademarks or servicemarks may harm our reputation and consequently our business, profitability and financial performance.We have received initial objection from the Intellectual Property Office of Singapore to the registration ofthe trademarks which are still pending.

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RISK FACTORS

There is no assurance that our application for registration of our trademarks and service marks will beapproved. In the event that any third party alleges proprietary rights over such marks, we may beexposed to legal proceedings brought against us by such third parties in respect of our use of thetrademarks and service marks. These legal proceedings may result in monetary liability in the form ofdamages and/or an account of profit and prevent us from further using our trademarks and servicemarks. Our sales and profitability will be adversely affected in such an event.

We may be affected by any increase in rental or the failure to procure the renewal of our existingleases and licences

We lease or license our premises from third parties for the operation of our food retail business. Rentalcosts form a significant component of our total costs. For FY2001, FY2002, FY2003 and 1H2004, rentalexpenses as a percentage of our total revenue were approximately 11.1%, 11.5%, 9.3% and 9.9%respectively. These rental expenses included rental for our dedicated food court stalls, public cafeteriasand restaurant. An increase in rental expenses may erode our profit.

In addition, upon expiry of our existing leases and licences, the landlords and licensors have the right toreview and change the terms and conditions of the lease and licence agreements. We may not be ableto renew the leases and licences on terms and conditions which are favourable to us. The non-renewalof these leases or licences or renewal upon less favourable terms may have a material adverse effect onour operations and profitability.

We may not be able to renew our contracts with our institutional catering customers

The duration of our institutional catering contracts typically ranges from one to three years. Upon expiry,these contracts are renewable for further periods at the sole option of our customers. In addition, thecontracts generally provide for termination by either party with notice as well as unilateral termination bythe customer upon our breach of the contract, insolvency or liquidation.

If we are not able to renew our contracts with our institutional catering corporate customers or ourcontracts are terminated unilaterally by our customers, our revenue and overall financial performancemay be affected.

We may not be able to secure good locations for further expansion of our food retail business

The business turnover of our Food Retail Division is to a certain extent dependent on our ability tosecure additional good locations for our food court stalls, public cafeterias and restaurants. A goodlocation possesses characteristics such as heavy human traffic flow, reasonable rental costs, safe andconducive environment for dining and close proximity to patrons. There is no assurance that we will beable to continue to secure good locations to expand our food retail business, and this may affect ourbusiness and financial performance.

We may be affected by any change in tenant mix and poor maintenance of the shopping malls inwhich our food retail outlets are situated

Before we decide to set up a food court stall, public cafeteria or restaurant at a particular complex orshopping mall, we would evaluate its viability based on the location and tenant mix. A change in thetenant mix or anchor tenant of a complex or shopping mall in which our food court stalls, public cafeteriasor restaurant are situated may result in fewer customers visiting and patronising the complex or shoppingmall and reduces the human traffic flow to our food court stalls, public cafeterias or restaurant. Inaddition, poor maintenance of the complex or shopping mall may also result in less patronage at our foodestablishments. This will negatively affect our business and financial performance.

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RISK FACTORS

Pilferage by our employees and outsiders will harm our financial performance, reputation andbranding

As most of our sales are on cash basis, our employees handle cash and food items. Although we havecash management and control measures in place, lapses in such internal controls may occur. Should wefail to impose or enforce strict supervision on our staff to prevent any malpractices such as pilferage ofcash and/or raw materials, our financial performance, reputation and branding will be adversely affectedif any such wrongdoings are committed at our food establishments.

We rely on our senior management staff and the inability to retain or attract staff will adverselyaffect our business and financial performance

We rely on our senior management staff, in particular, our founder and Managing Director, Mr VincentTan, and our Executive Director, Mr Jack Tan, to oversee our business operations, development,strategies and expansion. Most of our senior management staff has more than ten years of experience inthe F&B industry. Please see the sections on “Directors” and “Executive Officers” on pages 115 to 118 ofthis Prospectus for more details on the background and responsibilities of our Directors, Messrs VincentTan and Jack Tan, and our Executive Officers.

The loss of the services of Messrs Vincent Tan and/or Jack Tan or any of our Executive Officers or that ofother key personnel without adequate and timely replacements could adversely affect our business. Wealso believe that our future success will depend upon our ability to attract, retain and motivate our seniormanagement staff. Our inability to do so would adversely affect our business and financial performance.

Our business is largely service-oriented and our employees are important to us

In addition to our senior management staff, our continued success depends in part upon our ability toattract, motivate and retain a sufficient number of qualified and skilled employees. Qualified individuals ofthe requisite calibre are in short supply in the F&B industry. In particular, experienced and skilled chefsare scarce and difficult to attract. Any failure to recruit skilled personnel and to retain our key staff mayadversely impact our operations and expansion plans. Any material increases in employee turnover ratesin any of our existing food establishments could have a material adverse effect on our businessoperations, financial condition, operating results or cash flows. Additionally, competition for qualifiedemployees would require us to pay higher wages to attract and retain sufficient and capable employeeswhich could result in higher labour costs, thereby adversely affecting our business, profitability andfinancial performance.

There are uncertainties associated with our business expansion

We intend to expand our presence in new markets, both overseas and in Singapore. We have set up oursubsidiary, Select Suzhou, to expand our institutional catering business into the PRC. Further, we havealso expanded our business into the area of F&B concession management and operation. Under ourcontract with the appointed manager of Singapore Expo, we will develop, manage and operate the ExpoF&B Hub which will be established at Singapore Expo. We intend to lease out available food facilities atthe Expo F&B Hub to third party operators. These food facilities are expected to include one food court,six restaurants, three cafeterias, two fast food outlets and one pub. Please see the section on “IndustryOutlook and Future Plans” on pages 110 to 114 of this Prospectus for more details. Our expansion plansinvolve a number of risks, including but not limited to the costs of setting up our business overseas,investment in property, plant and equipment and renovation costs, costs of working capital tied up ininventories as well as other working capital requirements. As we have no prior experience in thedevelopment, management and operation of food facilities of a scale equivalent to that of the Expo F&BHub or in operating our institutional catering business in the PRC, there is no certainty that we will beable to manage our business expansion plans effectively and successfully. If we are unable to do so, ourfinancial performance will be materially and adversely affected.

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RISK FACTORS

Economic, social and political situations in the countries in which we propose to expand ourbusiness may affect our business adversely

At present, our businesses are substantially located in Singapore. However, we have plans to commenceour institutional catering operations in the PRC. If we expand to other countries, our business will befurther subject to the economic, social and political conditions in these countries. Our business, earnings,asset values and prospects may be materially and adversely affected by developments with respect toinflation, interest rates, government policies, price and wage controls, exchange control regulations,taxation, expropriation, social instability and other political, economic or diplomatic developments in oraffecting the PRC. We have no control over such conditions and developments and can provide noassurance that such conditions and developments will not adversely affect our operations or the price ofor market for our Shares.

We may be affected by changes in the government policies of Malaysia, including changes to theGuidelines on the Acquisition of Interests, Mergers and Take-overs by Local and Foreign Interestsissued by the Foreign Investment Committee (“FIC”) of Malaysia

We began our operations in Malaysia in 2000. For FY2003, business from our Malaysian operationsaccounted for 1.6% of our total revenue. As at the Latest Practicable Date and pursuant to the Guidelineson the Acquisition of Interests, Mergers and Take-overs by Local and Foreign Interests issued by the FIC(“FIC Guidelines”) which took effect on 21 May 2003, the prior approval of the FIC is required for, interalia,:-

(a) any proposed acquisition of 15% or more of the voting right of any local companies or businessesin Malaysia by a foreign interest; or

(b) any proposed acquisition of an aggregate of 30% or more of the voting right in such companies orbusinesses by foreign interests or by an associated group.

A foreign interest includes companies or institutions incorporated outside Malaysia and natural personswho are not Malaysian citizens (including those who are non-Malaysian citizens but who have permanentresident status in Malaysia).

Any proposed acquisition by foreign interests which will increase their voting right to 15% in any localcompanies or business in Malaysia (or to 30% or more, where the proposed acquirors are an associatedgroup) will also require FIC’s approval.

Conditions which may be imposed by the FIC under the FIC Guidelines include the condition that at least30% of the equity in the subject company to be acquired must be held by Bumiputeras (Malayindividuals or indigenous people as defined under the Federal Constitution of Malaysia), if suchrequirement is not already met. It is also a requirement under the FIC Guidelines that any company to beacquired by foreign interests must have an issued and paid up share capital of RM250,000 within thestipulated time. Further the said subject company must also use its best endeavours to recruit and trainMalaysian citizens so as to reflect Malaysia’s population composition at every level of employment.

Although the FIC Guidelines do not have the force of law (as they are not legislation passed byParliament or regulations under any existing laws) and do not impose any penalty for non-compliance,the FIC Guidelines are recognised by other governmental authorities or bodies in Malaysia (such as theimmigration department and land registries). These authorities may refuse to grant to companies whichare not in compliance with the FIC Guidelines, licences or permits that may be required under Malaysianlaw relating to the operations of such companies or reject any registrations relating to dealings in land.

We have not made the relevant applications for FIC approval to hold 15% or more of the voting rights inSelect FM (Malaysia), our Malaysian subsidiary.

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RISK FACTORS

Any future changes to existing FIC Guidelines or the introduction of new regulations governing foreignownership could affect our investment in Select FM (Malaysia) as we may be required by the Malaysianauthorities to restructure our equity interest in our Malaysian subsidiary. In the event that we are requiredpursuant to the FIC Guidelines or other government guidelines, laws or regulations to divest part of ourinterest in Select FM (Malaysia), we may not be able to retain full management or operations control overour Malaysian subsidiary. In such an event, our Group’s operations in Malaysia may be materially andadversely affected.

RISKS RELATING TO OWNERSHIP OF OUR SHARES

Substantial future sale of Shares could adversely affect the market price of our Shares

Immediately following the Invitation, our Company will have 92,713,400 issued and paid-up Shares. SuchShares, except for those under moratorium, may be sold in the public market in Singapore. Any futuresale or availability of our Shares in the public market can have a downward pressure on our Share price.The sale of a significant amount of Shares in the public market after the Invitation, or the perception thatsuch sale may occur, could materially and adversely affect the market price of our Shares.

Except as otherwise described under “Moratorium” on page 80 of this Prospectus, there will be norestriction on the ability of our Substantial Shareholders to sell their Shares either on the SGX-ST orotherwise. If our Substantial Shareholders sell substantial number of our Shares in the public marketfollowing the expiry of the moratorium, the market price of our Shares could fall.

In addition, in the event that we sell new Shares, we will be under no obligation to offer those Shares toour existing Shareholders at the time of sale, except in the event that we elect to conduct a rights issue.However, in the event that we elect to conduct a rights issue or certain other equity issue, we will havethe discretion and may also be subject to certain procedures and regulations such that we may offer thenew Shares to existing Shareholders. In addition, we may not offer such rights to our existingShareholders having an address in jurisdictions outside Singapore.

Accordingly, certain Shareholders may be unable to participate in future equity offerings by us and mayexperience dilution in their shareholdings as a result.

New investors in our Shares will face immediate and substantial dilution in the NTA per Share andmay experience future dilution

Our Issue Price of 23.5 cents is higher than our Group’s NTA per Share of approximately 8.95 cents asat 30 June 2004, based on the post-Invitation issued share capital of 92,713,400 Shares and afteradjusting for the estimated net proceeds from the Invitation. Thus, there is an immediate and substantialdilution in the NTA per Share for investors who purchase our Shares in the Invitation. We also intend togrant share options to various eligible persons to acquire our Shares under the Select Employee ShareOption Scheme. To the extent that such outstanding options are exercised, there will be further dilution toShareholders following the Invitation. Please refer to “Dilution” on page 73 of this Prospectus for moredetails.

Our Directors, Controlling Shareholders and their Associate will retain majority control over ourGroup after the Invitation, which will allow them to influence the outcome of matters submitted toShareholders for approval

Upon completion of the Invitation, our Directors Messrs Vincent Tan and Jack Tan, and their Associate,Madam Tay Bock Hiang, will, in aggregate, beneficially own approximately 54.6% of our enlarged sharecapital after the Invitation. As a result, these persons, if they act together, will be able to exercisesignificant influence over all matters requiring approval by our Shareholders, including the election ofDirectors and the approval of significant corporate transactions including mergers. These persons willalso have veto power, if they act together with respect to any shareholder action or approval requiring amajority vote except where they are required by the Rules of the Listing Manual to abstain from voting.This concentration of ownership will place these major Shareholders in a position to affect significantlyour corporate actions such as mergers or takeover attempts (notwithstanding that the same may besynergistic or beneficial to our Group) in a manner that could conflict with the interest of publicShareholders.

38

RISK FACTORS

Our Share price may be volatile, which could result in substantial losses for investors purchasingour Shares pursuant to the Invitation

The market price of our Shares may fluctuate significantly and rapidly as a result of, inter alia, the factorsmentioned below:-

– differences between our actual financial and operating results and those expected by investors andanalysts;

– announcements by us or our competitors of significant contracts, acquisitions, strategic alliances,joint ventures or capital commitments;

– fluctuations in stock market prices and volume;

– changes in our operating results;

– changes in securities analysts’ estimates of our financial performance and recommendations;

– changes in market valuation of similar companies;

– our involvement in litigation, arbitration or other forms of dispute resolution;

– additions or departures of key personnel; and

– changes in general economic and stock market conditions.

There has been no prior market for our Shares and the Invitation may not result in an active orliquid market and there is a possibility that our Share price may be volatile

Prior to the Invitation, there has been no public market for our Shares. Although we have made anapplication to the SGX-ST to list our Shares on the SGX-SESDAQ, there is no assurance that an activetrading market for our Shares will develop, or if it develops, will be sustained. The Issue Price wasdetermined by negotiations between the Manager, the Placement Agent, the Underwriter and ourselvesand may not be indicative of prices that may prevail in the trading market after the completion of theInvitation. There is also no assurance that the market price for our Shares will not decline below theIssue Price. The market price of our Shares could be subject to significant fluctuations due to variousexternal factors which are outside our control and which may be unrelated or disproportionate to ourfinancial results. Such events include the liquidity of our Shares in the market, difference between ouractual financial or operating results and those expected by investors and analysts, the general marketconditions and broad market fluctuations.

Negative publicity, including those relating to any of our Directors, Substantial Shareholders orkey personnel, may adversely affect our Share price

Any negative publicity or announcement relating to any of our Directors, Substantial Shareholders or keypersonnel may adversely affect the stock performance of our Company, whether or not this is justifiable.Such negative publicity or announcement may include, inter alia, involvement in insolvency proceedingsand failed attempts in takeovers and joint ventures.

39

USE OF PROCEEDS

The net proceeds attributable to us from the issue of the New Shares (after deducting the estimatedexpenses in relation to the Invitation, comprising underwriting commissions, professional fees and otherexpenses, of approximately $1.0 million) are estimated to be approximately $3.1 million.

We intend to utilise the net proceeds for the following purposes:-

(a) approximately 70% of the net proceeds or $2.2 million for the expansion of our food catering andfood retail business (including the development of the Expo F&B Hub at the Singapore Expo andincreasing the number of restaurants and food court stalls in Singapore);

(b) approximately 20% of the net proceeds or $0.6 million for the expansion of our institutionalcatering business into the PRC;

(c) approximately 5% of the net proceeds or $0.2 million for the expansion of our institutional cateringbusiness into other market segments; and

(d) the remaining as working capital for our Group.

Please refer to “Industry Outlook and Future Plans” on pages 110 to 114 of this Prospectus for furtherdetails on our plans above.

Pending the deployment of the net proceeds from the issue of the New Shares as aforesaid, the fundswill be placed in short-term time deposits with financial institutions or invested in short-term moneymarket instruments and/or used as working capital, as our Directors may in their absolute discretiondeem fit.

In the reasonable opinion of our Directors, no minimum amount must be raised by the Invitation.

The estimated expenses payable by our Company in connection with the Invitation and the application forlisting, including underwriting commission, placement commission, brokerage, professional fees andcharges and miscellaneous expenses are set out as follows:-

($’000)

Listing fees 11Professional fees and charges 610Underwriting commission, placement commissionand brokerage 103

Miscellaneous expenses 276

Total estimated expenses 1,000

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SELECTED GROUP FINANCIAL INFORMATION

The following financial information is prepared for illustration purposes only and should be read inconjunction with the full text of the Prospectus, including the “Independent Auditors’ Report and AuditedConsolidated Financial Statements of Select Catering Services Limited” and the “Independent Auditors’Review Report and Unaudited Consolidated Financial Statements of Select Catering Services Limited”set out respectively in Appendix G on pages G-1 to G-25 and Appendix H on pages H-1 to H-24 of thisProspectus and the related notes thereto, and the section on “Management’s Discussion and Analysis ofResults of Operations and Financial Position” on pages 43 to 71 of this Prospectus.

OPERATING RESULTS OF OUR GROUP

Audited Unaudited$’000 FY2001 FY2002 FY2003 1H2003 1H2004

Revenue 20,408 26,889 33,790 15,328 20,179

Cost of sales (7,253) (9,677) (12,843) (5,798) (7,533)

Gross profit 13,155 17,212 20,947 9,530 12,646

Other operating income 66 22 27 5 71

Distribution costs (225) (289) (243) (123) (175)

Administrative expenses (8,192) (10,352) (12,964) (6,199) (7,414)

Other operating expenses (4,344) (5,837) (6,255) (2,952) (3,690)

Other (charges)/credits (45) (52) 33 5 (16)

Profit from operations 415 704 1,545 266 1,422

Finance costs (308) (231) (169) (97) (62)

Profit before income tax for on-going operation 107 473 1,376 169 1,360

Discontinued operation (40) (204) (111) (111) –

Profit before income tax 67 269 1,265 58 1,360

Income tax expenses (112) (163) (352) (49) (280)

(Loss)/profit after income tax (45) 106 913 9 1,080

Minority interests(3) 13 47 – – –

Net (loss)/profit for the year(1) (32) 153 913 9 1,080

EPS (cents)(2) (0.04) 0.20 1.21 0.01 1.44

Notes:-

(1) Had the Service Agreements been in existence since the beginning of FY2003, our net profit after tax would have been $0.8million instead of $0.9 million. Please refer to the section on “Service Agreements” on pages 121 to 122 of this Prospectusfor details of the Service Agreements.

(2) For comparative purposes, the EPS for the year/period under review has been computed based on our net profit after taxand our pre-Invitation issued share capital of 75,213,400 Shares.

(3) Minority interests relate to profits attributable to minority shareholders of our previous subsidiaries, Select Eastern Investmentand Zhangzhou Select Eastern Fast Food.

41

SELECTED GROUP FINANCIAL INFORMATION

FINANCIAL POSITION OF OUR GROUP

Audited Unaudited$’000 As at As at

31 December 30 June2003 2004

ASSETS

Current assets:Cash and cash equivalents 1,674 2,214Trade receivables 2,120 2,753Other receivables and prepayments 962 1,023Inventories 118 277

Total current assets 4,874 6,267

Non-current assets:Property, plant and equipment 7,315 8,032

Total non-current assets 7,315 8,032

Total assets 12,189 14,299

LIABILITIES AND EQUITY

Current liabilities:Short term borrowings 883 93Trade payables and accrued liabilities 5,304 5,464Other payables 249 157Income tax payable 118 205Current portion of interest-bearing borrowings 443 446Current portion of finance leases 69 37

Total current liabilities 7,066 6,402

Non-current liabilities:Deferred tax liabilities 517 517Interest-bearing borrowings 2,226 2,130Finance lease – 64

Total non-current liabilities 2,743 2,711

Capital and reserves:Share capital 1,660 1,844Reserves 720 3,342

Total equity 2,380 5,186

Total liabilities and equity 12,189 14,299

NTA per share (cents)(1) 3.16 6.90

Note:-

(1) For comparative purposes, NTA per Share for the year/period under review have been computed based on the net tangibleassets and the pre-Invitation issued share capital of 75,213,400 Shares.

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This section should be read in conjunction with the “Independent Auditors’ Report and AuditedConsolidated Financial Statements of Select Catering Services Limited” and the “Independent Auditors’Review Report and Unaudited Consolidated Financial Statements of Select Catering Services Limited”set out respectively in Appendix G on pages G-1 to G-25 and Appendix H on pages H-1 to H-24 of thisProspectus and the related notes thereto and the section on “Review of Past Operating Results” and“Review of Financial Position” as set out on pages 51 to 62 of this Prospectus.

OVERVIEW


(a) Institutional Catering – we provide food management services to our corporate customers. Weoperate and manage staff cafeterias on a contract basis, at the premises of our corporatecustomers from various industries;

(b) Food Catering – we provide events catering services for corporate, community or private functions,as well as meal delivery services to workplaces and family units;

(c) Food Retail – we operate dedicated food court stalls and public cafeterias specialising ininternational and local fare. We commenced the operation of our first restaurant in Singaporespecialising in Thai cuisine in March 2004.

Revenue

Institutional Catering

We derive our revenue from the sale of food and beverage items to the staff of our corporate customersunder contracts with durations that range from one to three years. The contracts with our corporatecustomers take the following three forms:-

Profit and Loss (no-subsidy) Contracts

In profit and loss contracts, we generally receive all our revenue from, and bear all the expenses of theprovision of our services under the contracts. We derive our revenue from the sale of food and beverageitems to the staff of our corporate customers. Expenses under profit and loss contracts generally includelabour, raw materials and utilities costs. However, they may also include rental or licence fees payable toour corporate customers for the use of their premises to operate the staff cafeterias. The amount of rentalor licence fees payable per month may be a fixed sum or a variable amount based on a percentage ofthe net receipts derived from the operation of the staff cafeterias. Under such contracts, the staff of ourcustomers generally pay the full prices of their own purchases, as agreed under the contracts with ourcorporate customers. We recognise revenue when the food and beverage items are sold and cash iscollected.

Partial-Subsidy Contracts

In such contracts, we generally charge a lower price to the staff of our corporate customers for the foodand beverages served at our staff cafeterias. Prices of food and beverage items served are agreed byour corporate customers when the contracts are entered into, and are reviewed periodically. In return forthe lower prices charged to their staff, we receive a subsidy from our customers for our operations. Thesubsidy takes the form of a waiver of rent and/or utility charges. In addition to the waiver, in some of thecontracts, we also receive a fixed monthly payment. We negotiate with our corporate customers on thequantum of the fixed monthly payment when the contracts are entered into. The fixed monthly paymenttakes into consideration our customers’ staff headcount, the requirements of their staff and the estimatedcost of operating the cafeteria.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONSAND FINANCIAL POSITION


We recognise revenue from sale of food and beverage items when cash is collected after the items aresold. We recognise revenue as and when the invoices for the fixed monthly payment are issued, usuallyat the end of every month.

Catering and Management (full-subsidy) Contracts

Under these contracts, we do not charge the staff of our corporate customers for the food and beverageitems they purchase at the staff cafeterias. Instead, our corporate customers bear the costs of managingthe staff cafeterias and providing meals to their staff. Our corporate customers pay us a fixed monthlysum based either on the estimated or actual headcounts served. Some of the contracts allow for dailyvariations in headcounts as the monthly payments are based on unit headcount prices. In suchcontracts, we measure staff headcounts at every meal, by way of electronic cards or manual recordingcards at the cashier. We recognise revenue for full-subsidy contracts at the end of every month when weissue invoices to our customers.

Our Institutional Catering Division contributed 8.4%, 17.2%, 35.2% and 35.2% of our total revenue inFY2001, FY2002, FY2003 and 1H2004 respectively. The revenue contribution from our InstitutionalCatering Division increased significantly for the period under review, as we increased our focus on thisdivision which provides a high profit before tax margin and greater future growth opportunities.

Food Catering

Our revenue from our Food Catering Division is generated from the provision of one-off catering servicesfor special events and functions (“Events Catering Services”) and meal delivery services to work placesand family units (“Meal Delivery Services”). Customers of our Events Catering Services comprisedindividuals who require our services for private functions and corporate customers including corporations,government bodies, institutions, hospitals and schools. Customers of our Meal Delivery Services aremainly individuals who work in locations with no easy access to food outlets and who have very few orno lunch options outside their offices. We also cater to family units that prefer the convenience and time-saving option of prepared meals delivered to their doorsteps. For customers of our Events CateringServices, we recognise revenue after the food items and catering services are delivered and provided.For individual and family customers of our Meal Delivery Services, we recognise revenue at the end ofevery month for the items delivered in that month.

Our Food Catering Division contributed 44.2%, 34.3%, 25.0% and 21.8% of our total revenue in FY2001,FY2002, FY2003 and 1H2004 respectively. The revenue contribution of our Food Catering Division hasdecreased during the period under review as we increased our focus on our Institutional CateringDivision.

Food Retail

Under this division, we operate dedicated food court stalls, public cafeterias and a foreign cuisinerestaurant. As at the date of this Prospectus, we operate 37 food court stalls in Singapore and two foodcourt stalls in Malaysia. We also operate two public cafeterias in Singapore. Our first restaurant, LerkThai Restaurant, located at Victoria Street, commenced business in March 2004. Revenue is derivedfrom the sale of food and beverage items in these food establishments.

All the sales made in our Food Retail Division are on cash basis. We therefore recognise revenue whenfood and beverage items are served to our customers.

Our Food Retail Division contributed 47.4%, 48.5%, 39.8% and 43.0% of our total revenue in FY2001,FY2002, FY2003 and 1H2004 respectively. The decrease in contribution made by our Food RetailDivision was a result of the significant relative increase in contribution made by our Institutional CateringDivision.

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Our revenue is affected by, inter alia, the following key factors:-

(a) Changes in economic conditions in Singapore, which may affect customer sentiments, theirdisposable income and discretionary spending;

(b) Our ability to compete successfully with our competitors in terms of competitive pricing, good foodquality, variety of cuisines and high standard of service;

(c) The change in staff headcounts of our corporate customers in the Institutional Catering Division asa result of, inter alia, retrenchment or restructuring of operations;

(d) Our ability to secure contracts from corporate customers with large workforce;(e) Our ability to expand our penetration to new geographical markets by opening more food

establishments at strategic locations;(f) Our customers’ acceptance of and demand for the cuisines we develop and offer;(g) Our ability to maintain our reputation among our customers;(h) Our ability to secure good locations for expansion of our food retail business; and(i) Significant events or operational cycles at our customers’ premises such as building renovations

and school holidays.

Please refer to the section on “Risk Factors” on pages 32 to 39 of this Prospectus for more informationon other factors which may affect our business operations, revenue and overall financial performance.

Cost of Sales

Our cost of sales comprised cost of raw materials, including raw meat items, fresh vegetables and fruits,eggs, milk, flour, seasoning ingredients and various types of packaging materials which are sourced inSingapore. As most of these raw materials are easily sourced from various suppliers, we have notexperienced any significant price fluctuation of these raw materials for FY2001, FY2002, FY2003 and1H2004.

Our cost of sales is affected by, inter alia, the following key factors:-

(a) Price fluctuation of raw materials purchased from our suppliers;(b) Our ability to capitalise on increased sales volume and obtain favourable pricing from bulk

procurement of raw materials from our suppliers;(c) Any outbreak of diseases in livestock and food scares in the region and around the world that may

affect the supply and consequently the prices of such products;(d) Our ability to control our costs by reducing food wastage through cost control incentive schemes

implemented by the management;(e) Severe climatic conditions or any natural disasters that may affect the supply of any of our raw

materials; and(f) Change in governmental regulations that affect the prices of any of our raw materials imported

from overseas.

Please refer to the section on “Risk Factors” on pages 32 to 39 of this Prospectus for more informationon other factors that may affect our cost of sales.

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Gross profit margin

Our overall gross profit margin is affected by changes in the gross profit margins and the relative revenuecontribution of our three business divisions. Generally, the gross profit margin of our InstitutionalCatering Division is lower than our other divisions as the prices of the food and beverage items wecharge at the staff cafeterias are typically lower than those we charge at our other food retail outlets andfor our food catering services. The gross profit margin for our Institutional Catering Division is furtheraffected by partial-subsidy contracts which accounted for a substantial portion of all the contracts underthe Institutional Catering Division. For partial-subsidy contracts, we charge lower prices for the food andbeverage items we serve in exchange for waivers of rental and/or utility charges from our corporatecustomers. These waivers of rental and utility charges appear as savings in other operating expenses atthe expense of our gross profit margin. As such, the gross profit margin from partial-subsidy contractstends to be lower as compared to the other contracts.

The overall gross profit margin of our Group is 64.5%, 64.0%, 62.0% and 62.7% in FY2001, FY2002,FY2003 and 1H2004 respectively. The slight decrease in our overall gross profit margin was due to theincreased revenue contribution from our Institutional Catering Division. This is despite improvements ingross profit margin from each individual division.

Other operating income

Our other income was mainly attributable to interest earned from banks on our cash and bank balancesand miscellaneous receipts from non-related parties. The average bank deposits interest rates forFY2001, FY2002, FY2003 and 1H2004 ranged from 0.6% to 2.8%.

Operating expenses

Our operating expenses comprised mainly administrative expenses, other operating expenses,distribution costs, and other charges or credits. Our operating expenses, as a percentage of our totalrevenue for FY2001, FY2002, FY2003 and 1H2004, were approximately 62.7%, 61.5%, 57.5% and56.0% respectively.

Administrative expenses

Our administrative expenses accounted for 64.0%, 62.6%, 66.7% and 65.6% of our total operatingexpenses incurred in FY2001, FY2002, FY2003 and 1H2004 respectively. Our overall administrativeexpenses accounted for an average of 38.4% of our total revenue for the period under review.

These expenses comprised the following:-

(a) Staff costs which were the largest component of our administrative expenses. These includedwages, salaries and bonuses paid to our full-time staff, CPF contributions, incentives andcommissions paid to our part-time administrative staff and kitchen helpers, staff welfare, andforeign worker levies which were paid for our foreign chefs and kitchen helpers. We also engagedsub-contractors to deliver food and beverage items for our Meal Delivery Services, using their ownvehicles. Staff costs accounted for 74.9%, 80.4%, 84.8% and 87.6% of our total administrativeexpenses for FY2001, FY2003, FY2003 and 1H2004 respectively.

(b) Depreciation expenses were expenses related to property, plant and equipment, such as kitchenequipment, office equipment, motor vehicles, electrical works and renovations at our publiccafeterias, food court stalls, restaurant, kitchens at the premises of our corporate customers,Central Senoko Kitchen and Simei Eastern Kitchen. Depreciation expenses accounted for 11.2%,9.4%, 8.2% and 7.5% of our total administrative expenses in FY2001, FY2002, FY2003 and1H2004 respectively;

(c) Directors’ remuneration, which was paid to our Directors, namely Messrs Vincent Tan and JackTan. Directors’ remuneration accounted for 5.1%, 4.3%, 2.0% and 1.6% of our total administrativeexpenses in FY2001, FY2003, FY2003 and 1H2004 respectively;

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(d) The balance being other administrative expenses which comprised property tax for our CentralSenoko Kitchen and Simei Eastern Kitchen, general office expenses such as printing andstationery costs, telephone charges, rental expenses of office equipment, insurance expensessuch as car insurance, theft insurance and insurance for plant and equipment, and professionalexpenses paid to the ISO consultant and company secretary.

The administrative expenses for our Institutional Catering, Food Catering and Food Retail Divisionsaccounted for an average of 43.2%, 47.0% and 29.8% of their respective divisional revenue for theperiod under review. Our Food Catering Division typically incurred higher administrative expenses as apercentage of its revenue as this division incurred higher depreciation expenses and property tax relatingto the kitchens and its equipments. Also, more printing and stationery costs, telephone charges andoffice equipment rentals were attributed to this division due to its heavy usage.

Other operating expenses

Our other operating expenses were expenses directly related to our business activities, such as rentalexpenses for our food court stalls, public cafeterias and our staff cafeterias, service and maintenanceexpenses on food court stalls, disposable tableware costs, gas and utilities charges, kitchen supplies,laundry expenses, equipment maintenance expenses and upkeep of motor vehicles used for our fooddelivery services.

Other operating expenses accounted for 33.9%, 35.3%, 32.2% and 32.7% of our total operatingexpenses incurred in FY2001, FY2002, FY2003 and 1H2004 respectively. Our total other operatingexpenses, as a percentage of our total revenue accounted for an average of 19.9% for the period underreview. Since our other operating expenses were expenses related to our business activities, theygenerally changed in line with our total revenue in each division. The other operating expenses for ourInstitutional Catering, Food Catering and Food Retail Divisions as a percentage of their respectivedivisional revenue for the period under review, accounted for an average of 4.4%, 14.0% and 32.7% oftheir respective divisional revenue for the period under review.

Our Institutional Catering Division incurred the lowest other operating expenses, mainly due to thewaivers of rental and/or utility charges mentioned in the paragraph on “Gross Profit Margin”. In addition,our Institutional Catering Division generally did not incur any expense for upkeep of motor vehicles, whichwere mainly incurred by our Food Catering Division which utilised such vehicles for food delivery.

Distribution costs

In FY2001, FY2002 and FY2003, our distribution costs were incurred mainly by our Food Catering andFood Retail Divisions, comprising advertisement and promotional expenses in relation to radio, TV andnewspaper advertising campaigns and travelling expenses in relation to distribution of leaflets, corporatebrochures and loyalty cards. In 1H2004, distribution costs were incurred by our Institutional CateringDivision due to the increased overseas travelling in relation to the start-up of our operations in Suzhou,PRC.

Our distribution costs accounted for 1.8%, 1.7%, 1.3% and 1.5% of our total operating expenses incurredin FY2001, FY2002, FY2003 and 1H2004 respectively. Our total distribution costs, as a percentage ofour total revenue for FY2001, FY2003, FY2003 and 1H2004 were an average of 0.9%. Distribution costsfor our Institutional Catering, Food Catering and Food Retail Divisions accounted for an average of 0.2%,2.2% and 0.4% of their respective divisional revenue for the period under review.

For FY2001, FY2002 and FY2003, we did not incur substantial distribution costs for our InstitutionalCatering Division as we generally secured our contracts by way of public or private tenders as well asprivate invitation through customer referrals. For our Food Catering Division, which accounted for thebulk of our total distribution costs, we incurred advertisement and promotional expenses regularly topromote our island-wide food catering services. Distribution costs incurred by our Food Catering Divisionaccounted for more than 70% of our total distribution costs in FY2001, FY2002, and FY2003. For ourFood Retail Division, we typically incurred distribution costs during the short period after thecommencement of our food establishments, to promote public awareness. As such, we would generally

47



expect higher distribution costs in a financial year when more food establishments are opened. Suchpromotional activities typically ceased a few months after the opening of our food retail establishments.For 1H2004, distribution costs incurred by our Food Catering Division accounted for approximately 55.8%of our total distribution costs, mainly as a result of the increased travelling expenses incurred by ourInstitutional Catering Division in relation to the establishment of our food catering facility in Suzhou, PRC.

Other (charges)/credits

Other (charges)/credits in the period under review relate to bad debts written off, loss from disposal ofplant and equipment, our rental deposits forfeited and waiver of an amount owed to a minorityshareholder of our previous subsidiary, Select Eastern Investment. In absolute terms, other(charges)/credits accounted for less than 1.0% of the total revenue for the period under review.

Finance costs

Our finance costs accounted for 1.5%, 0.9%, 0.5% and 0.3% of our revenue for FY2001, FY2002,FY2003 and 1H2004 respectively. These costs were attributable to interest on hire purchase, bankoverdrafts and long-term loans. Interest rates charged by the banks on our loans ranged from 3.3% to6.5% per annum over the period under review. Interest rates on hire purchase ranged from 2.9% to 6.3%per annum.

Discontinued operation

The losses were incurred by our subsidiary, Zhangzhou Select Eastern Fast Food, which carried out ourGroup’s fast food business in China. We disposed of our interest in this subsidiary in February 2003, tofocus on our core activities as a provider of food catering and food management services. In accordancewith generally accepted accounting principles, the results of operations from this subsidiary werereported in a separate line item. The loss incurred by Zhangzhou Select Eastern Fast Food in FY2001,FY2002 and FY2003 amounted to approximately $40,000, $0.2 million and $0.1 million respectively.

Profit before income tax margin

Our overall profit before income tax margin, as well as profit before income tax margin for all our threedivisions, increased over the period under review. Our overall profit before income tax margin was 0.3%,1.0%, 3.7% and 6.7% in FY2001, FY2002, FY2003 and 1H2004 respectively. Our profit before incometax margin was 2.7%, 4.2%, 6.0% and 7.2% from our Institutional Catering Division, 1.7%, 1.9%, 4.0%and 8.1% from our Food Catering Division, and 2.0%, 2.8%, 3.2% and 5.7% from our Food RetailDivision, in the same period respectively.

Despite registering the lowest gross profit margin among the three divisions, our Institutional CateringDivision enjoyed the highest profit before income tax margin for FY2001, FY2002, and FY2003. This wasmainly due to substantially lower other operating expenses and distribution costs as explained earlier. In1H2004, our Food Catering Division recorded the highest profit before income tax margin, mainly due tolower food cost arising from bulk procurement. This was further increased by higher distribution costsincurred by our Institutional Catering Division as we incurred preliminary costs prior to thecommencement of our operations in Suzhou, PRC.

Income Tax Expenses

Currently, the majority of our operations are in Singapore, and as such our Company and its subsidiariesare subject to income tax in accordance with the prevailing tax regulations in Singapore. Our tax expenseand corporate income tax rates in each of the past three financial years were as follows:-

FY2001 FY2002 FY2003

Tax expense ($’000) 112 163 352Statutory tax rate 24.5% 22.0% 22.0%Effective tax rate 167.2% 60.6% 27.8%

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Our income tax expense based on the statutory rate for FY2001, FY2002 and FY2003 were $16,000,$59,000 and $0.3 million respectively. Our total income tax expense for FY2001 was $96,000 higherthan our income tax expense based on the statutory rate. Our effective tax rate for FY2001 wassubstantially higher than the prevailing statutory tax rates mainly due to non-allowable expenses andprior year under-provision, offset by tax exemptions. Our effective tax rate for FY2002 was higher thanthe prevailing statutory tax rates mainly due to non-allowable expenses, offset by prior year overprovision in FY2001.

BREAKDOWN OF FINANCIAL PERFORMANCE BY BUSINESS DIVISIONS

We set out below the breakdown of our revenue and operating profit by the three business divisions forFY2001, FY2002, FY2003, 1H2003 and 1H2004.

Revenue

DivisionFY2001 FY2002 FY2003 1H2003 1H2004

$’000 % $’000 % $’000 % $’000 % $’000 %

Institutional Catering 1,719 8.4 4,632 17.2 11,905 35.2 5,350 34.9 7,099 35.2Food Catering 9,017 44.2 9,218 34.3 8,437 25.0 3,935 25.7 4,398 21.8Food Retail 9,672 47.4 13,039 48.5 13,448 39.8 6,043 39.4 8,682 43.0

Total 20,408 100.0 26,889 100.0 33,790 100.0 15,328 100.0 20,179 100.0

Profit/(Loss) Before Tax


$’000 % $’000 % $’000 % $’000 % $’000 %

Institutional Catering 47 11.9 195 26.6 714 48.1 237 92.5 512 37.5Food Catering 153 38.8 177 24.1 339 22.8 (135) (52.7) 358 26.1Food Retail 194 49.3 362 49.3 432 29.1 154 60.2 497 36.4

Total 394 100.0 734 100 1,485 100.0 256 100.0 1,367 100.0Unallocated expenses(1) (327) (465) (220) (198) (7)

Profit Before Tax 67 269 1,265 58 1,360

Note:-

(1) Unallocated expenses comprised other charges, finance costs and discontinued operation, offset by other operating income.

Profit /(Loss) Before Tax Margin


% % % % %

Institutional Catering 2.7 4.2 6.0 4.4 7.2Food Catering 1.7 1.9 4.0 (3.4) 8.1Food Retail 2.0 2.8 3.2 2.5 5.7Overall 0.3 1.0 3.7 0.4 6.7

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SEASONALITY

For FY2001, FY2002 and FY2003, we experienced seasonality. Approximately 45% of our revenue wasgenerated in the first half of the financial year and 55% in the second half. The revenue derived from thefirst half and second half of each of the past three financial years were as follows:-

2001 2002 2003Revenue % Revenue % Revenue %($’000) ($’000) ($’000)

Six months ended 30 June 8,901 43.6 12,491 46.5 15,328 45.4

Six months ended 31 December 11,507 56.4 14,398 53.5 18,462 54.6

Total 20,408 100.0 26,889 100.0 33,790 100.0

The seasonality trends for our three business divisions were as follows:-

Institutional Catering Division

Our Institutional Catering Division recorded lower revenue in January and February during the periodunder review. The lower revenue was due to the reduced patronage at our customers’ staff cafeterias,which was a result of the lower work attendance at our corporate customers’ premises during the NewYear and Chinese New Year festive seasons.

Food Catering Division

Our Food Catering Division traditionally generated more revenue in the second half of each of the pastthree financial years as a result of a larger number of celebrations for events such as Christmas,weddings, annual dinner and dance, being held in the second half of every year. In the past threefinancial years, revenue generated in the second half of each year accounted for 52.9% to 54.7% of theannual revenue from this division. We recorded the highest monthly revenue in the month of Decemberfor each of the past three financial years.

Food Retail

The Christmas festive season from November to December has seen higher revenue in our Food RetailDivision in the past three financial years as potential patrons of our food establishments tend to do moreshopping in these months. The increased human traffic benefited our dedicated food court stalls andpublic cafeterias.

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REVIEW OF PAST OPERATING RESULTS

FY2001 vs FY2002

Revenue

Our revenue increased by approximately $6.5 million or 31.8% from $20.4 million in FY2001 to $26.9million in FY2002. This increase in revenue was due to an increase in revenue of $2.9 million from ourInstitutional Catering Division, an increase of $0.2 million from our Food Catering Division and anincrease of $3.4 million from our Food Retail Division.


The increase of $2.9 million or 169.5% from $1.7 million in FY2001 to $4.6 million in FY2002 from ourInstitutional Catering Division was mainly due to:-

(a) the maiden revenue contribution of $2.3 million from seven new corporate customers secured inFY2002, five of which entered into long-term contracts for terms of more than one year and two ofwhich entered into short-term contracts expiring in the same year; and

(b) the increase in revenue of $0.9 million from our five existing corporate customers as a result of afull year contribution in FY2002 as compared to a partial-year contribution in FY2001.

The increase was partially offset by a decrease in contribution of $0.1 million mainly as a result of theexpiration of contract with one corporate customer in FY2002 resulting in a partial-year contribution inFY2002 as compared to a full-year contribution in FY2001, and an absence of revenue contribution of$0.2 million from two corporate customers, namely Honeywell Pte Ltd, and Carrier RefrigerationSingapore Pte Ltd, whose contracts expired in FY2001.

The new corporate customers secured in FY2002 included STATS, Asahi Techno Vision (S) Pte Ltd,STMicroelectronics Pte Ltd and Maxtor Peripherals (S) Pte Ltd (Ang Mo Kio Factory). The existingcustomers (which included Takashimaya Singapore Ltd, Pepperl + Fuchs Manufacturing Pte Ltd, AgilentTechnologies Singapore Pte Ltd, the Institute of Public Administration and Management and UnitedParcel Services) contributed $2.3 million in FY2002 as compared to $1.7 million in FY2001.


The increase of $0.2 million or 2.2% from $9.0 million in FY2001 to $9.2 million in FY2002 from our FoodCatering Division was mainly due to increase in orders from our corporate customers for our EventsCatering Services, the revenue of which increased by approximately $0.5 million, and offset by adecrease of approximately $0.3 million from our Meal Delivery Services.

The increase in revenue from our corporate customers for our Events Catering Services was a result ofour marketing efforts. In FY2002, we increased our expenditure on mass media advertisements byapproximately 30.8% mainly to promote our Events Catering Services. In addition, as a result of ourefforts to provide high quality services to our existing customers, we were able to secure more newcustomers and business through referral by our existing customers.

The decrease in revenue from our Meal Delivery Services was mainly due to competition from small-scale catering service providers. As we have increased our focus on our Institutional Catering Division,we have not competed aggressively in our Meal Delivery Services.

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Food Retail Division

The increase of $3.4 million or 34.8% from $9.7 million in FY2001 to $13.1 million in FY2002 from ourFood Retail Division was mainly due to:-

(a) the maiden revenue contribution of $1.9 million from nine new food court stalls which commencedoperations in late FY2001; and

(b) the increase in revenue contribution of $2.4 million from eight food court stalls and one publiccafeteria (namely People’s Association Headquarters), as a result of full-year contributions inFY2002 as compared to partial-year contributions in FY2001.

The increase was partially offset by:-

(a) the net decrease in revenue contribution of $0.4 million from 14 existing food court stalls and threepublic cafeterias, mainly due to lower human traffic and/or increased competition in the vicinity atlocations such as Causeway Point (Chinese Mixed Rice), Novena Square, Scotts Shopping Centreand Takashimaya Department Store; and

(b) the absence of revenue contribution of $0.5 million due to two food court stalls, namely Admiraltyand Tampines Mall, which contracts expired in FY2001.

The location of the nine new food court stalls were at Anchor Point, Compass Point, Holland Village,Changi General Hospital (two stalls), Power Gas Building, Smith Street, Thomson Plaza and JalanTodak. The locations of the eight food court stalls which showed increased revenue contributions were atCauseway Point (Nasi Padang), Bedok Block 213, Bishan, Bugis Junction, Millennia Walk, Plaza by thePark, Smith Street and Turf City.

Cost of sales

Our cost of sales increased by $2.4 million or 33.4% from $7.3 million in FY2001 to $9.7 million inFY2002. This $2.4 million increase was attributable to an increase in cost of sales of $1.4 million or169.1% from our Institutional Catering Division, approximately $41,000 or 1.3% from our Food CateringDivision, and $1.0 million or 29.4% from our Food Retail Division, which was in line with the increase inour revenue.

Our overall gross profit margin decreased slightly from 64.5% in FY2001 to 64.0% in FY2002 mainly as aresult of a significant increase in revenue contribution from our Institutional Catering Division whichtypically recorded lower gross profit margin, despite increases in the divisional gross profit margin ofeach of our individual business divisions. The gross profit margins of our Institutional Catering, FoodCatering and Food Retail Divisions increased slightly from 52.0%, 66.0%, and 65.3% in FY2001 to52.1%, 66.3% and 66.7% in FY2002 respectively. These individual improvements were due to morefavourable pricing from bulk procurement as a result of increased business volume.


Other operating income decreased by approximately $44,000 from $66,000 in FY2001 to $22,000 inFY2002. This was mainly due to lower miscellaneous receipts from non-related parties and the absenceof a Local Enterprise Technical Assistance Scheme grant of $19,000 from PSB Singapore (now knownas SPRING Singapore) under their Corporate Image Programme.

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Operating expenses

Our total operating expenses increased by $3.7 million or 29.1% from $12.8 million in FY2001 to $16.5million in FY2002. This increase was mainly attributable to an increase of $2.2 million in administrativeexpenses, an increase of $1.5 million in other operating expenses, an increase of $64,000 in distributioncosts and a marginal increase of $7,000 in other charges.

(a) Administrative expenses

Our administrative expenses increased by $2.2 million or 26.4% from $8.2 million in FY2001 to$10.4 million in FY2002.

The increase in administrative expenses was mainly due to an increase of $2.4 million in salariesand bonus expense from $2.9 million in FY2001 to $5.3 million in FY2002, which was a result ofan increase in our staff headcount. Our staff headcount grew from 378 as at 31 December 2001to 568 as at 31 December 2002 as we hired 84 new chefs and 106 new kitchen helpers. In linewith our strategy to increase the business activities of our Institutional Catering Division, over 60%of the increase in staff headcount, comprising 69 chefs and 57 kitchen helpers were assigned towork in this division. Additional five and two new kitchen helpers were assigned to our CentralSenoko Kitchen and Simei Eastern Kitchen respectively, and 15 chefs and 42 kitchen helpers wereassigned to our Food Retail Division. In FY2002, we paid higher discretionary bonuses to our staffas a reward for their contribution towards our financial performance in FY2002.

The increase in salaries and bonus expense was offset by a total savings of approximately $0.2million from our general office expenses.

(b) Other operating expenses

Our other operating expenses increased by $1.5 million or 34.4% from $4.3 million in FY2001 to$5.8 million in FY2002. As other operating expenses were directly related to our sales activities,the increase in other operating expenses was in line with the increase in our total revenue inFY2002.

The increase in rental expenses, which was approximately $0.8 million or 35.9%, accounted forapproximately half of the increase in other operating expenses as we commenced the operationsof more food establishments. Our service and maintenance expenses on food court stallsincreased by approximately $0.2 million. The expenses for disposable tableware increased byapproximately $0.1 million or 30.0%. Our utility charges expenses also increased by approximately$0.2 million or 30.0%. These increases were in line with the increase in our total revenue ofapproximately 31.8%.

(c) Distribution costs

Our distribution costs increased by approximately $64,000 or 28.4% from $0.2 million in FY2001 to$0.3 million in FY2002. This increase was mainly attributable to the increase in advertisementexpenses in relation to the mass media advertisement campaigns run to promote and maintainpublic awareness of our Events Catering Services, as a result of intensive competition in the foodcatering business.

(d) Other charges

Our other charges increased marginally by $7,000 from $45,000 in FY2001 to $52,000 in FY2002.

Finance costs

Our finance costs decreased by approximately $77,000 from $0.3 million in FY2001 to $0.2 million inFY2002. This was mainly due to the repayment of hire purchase and short-term loans. In addition, werefinanced part of our long-term loans and lower interests were charged.

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Our previous subsidiary, Zhangzhou Select Eastern Fast Food, incurred $0.2 million loss in FY2002, ascompared to a loss of approximately $40,000 incurred in FY2001.

Profit before income tax

Our profit before income tax increased by approximately $0.2 million from $67,000 in FY2001 toapproximately $0.3 million in FY2002. This was a result of higher gross profit in FY2002, which waspartially offset by the increase in operating expenses.

Profit before tax margin increased from 0.3% of our total revenue in FY2001 to 1.0% in FY2002. Thiswas a result of lower administrative expenses in terms of our total revenue, partially offset by marginallyhigher other operating expenses. In FY2001, our administrative expenses amounted to 40.1% of ourtotal revenue. In FY2002, we were able to control our administrative expenses, which accounted for38.5% of our revenue in FY2002.

By business division, our profit before income tax margin for our Institutional Catering, Food Catering andFood Retail Divisions increased from 2.7%, 1.7%, and 2.0% to 4.2%, 1.9% and 2.8% respectively.

FY2002 vs FY2003

Revenue

Our revenue increased by $6.9 million or 25.7% from $26.9 million in FY2002 to $33.8 million in FY2003.This increase in revenue was attributable to an increase of $7.3 million from our Institutional CateringDivision and an increase of $0.4 million from our Food Retail Division, offset by a decrease of $0.8million from our Food Catering Division


The increase of $7.3 million or 157.0% from our Institutional Catering Division was mainly due to:-

(a) the revenue contribution of $3.9 million from 11 new corporate customers secured in FY2003, nineof which entered into long-term contracts and two of which entered into short-term contracts withus;

(b) the increase in revenue of $3.5 million from our three existing corporate customers as a result of afull-year contribution in FY2003 as compared to a partial-year contribution in FY2002; and

(c) the increase in revenue of $0.2 million from our existing corporate customers with full-yearcontributions in both FY2002 and FY2003, mainly due to the increased revenue of $0.2 million asa result of increased patrons in one of our staff cafeterias. The corporate customer restructured itsoperations and consolidated its island-wide workforce in one location.

The increase was partially offset by an absence of revenue contribution of $0.3 million from threecustomers which contracts expired in FY2002.

The new corporate customers secured in FY2003 include Maxtor Peripherals (S) Pte Ltd (Yishunfactory), Outward Bound School, Tyco Electronics Singapore Pte Ltd and NCS Pte Ltd. The existingcustomers (which included Maxtor Peripherals (S) Pte Ltd (Ang Mo Kio factory), STATS, Asahi TechnoVision (S) Pte Ltd and Agilent Technologies Singapore Pte Ltd), contributed $8.0 million in FY2003 ascompared to $4.6 million in FY2002.

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The decrease of $0.8 million or 8.5% from our Food Catering Division was mainly due to decreases inrevenue from our Events Catering Services of $0.5 million and our Meal Delivery Services of $0.3 million.As a result of intensive competition from small-scale catering service providers, we had not competedaggressively in this segment of our business but instead focused our efforts on our Institutional CateringDivision.


The increase of $0.4 million or 3.1% from our Food Retail Division was mainly attributable to:-

(a) the maiden revenue contribution of $1.2 million from eight new food court stalls which startedoperations in FY2003; and

(b) the increase in revenue contribution of $0.7 million from three food court stalls, mainly due to theirfull-year contributions in FY2003 as compared to partial-year contributions in FY2002.


(a) the net decrease in revenue of $0.7 million from 21 existing food court stalls and four publiccafeterias, mainly due to the outbreak of SARS which led to reduced public confidence in dining atour food establishments;

(b) the decrease in revenue of $0.7 million from four food court stalls, mainly due to shorter periods ofoperation in FY2003 as compared to FY2002. The contracts of these food court stalls expired inFY2003; and

(c) the absence of $0.1 million in revenue due to expiration of contracts of three food court stalls inFY2002.

The new food court stalls were located at Scotts Shopping Centre (Thai cuisine), Jalan Besar Stadium,Tampines Mart, National University Hospital, Bukit Panjang Ring Road, Hougang Festival Market,Harbour Front Office Tower and Ikano Power Centre at Petaling Jaya, Malaysia. The food court stallswhich increased revenue contribution were Holland Village, Compass Point and Smith Street.

Cost of sales

Our cost of sales increased by $3.1 million or 32.7% from $9.7 million in FY2002 to $12.8 million inFY2003. This increase was attributable to an increase of $3.2 million or 146.7% from our InstitutionalCatering Division and a small increase of $0.2 million or 3.7% from our Food Retail Division, offset by adecrease of $0.3 million or 8.2% from our Food Catering Division.

Our overall gross profit margin decreased slightly from 64.0% in FY2002 to 62.0% in FY2003. Grossprofit margin of our Institutional Catering Division increased slightly from 52.1% to 54.0%, and decreasedfrom 66.3% and 66.7% to 66.1% and 66.5% in our Food Catering Division and Food Retail Divisionrespectively. Revenue contributed by our Institutional Catering Division, which generally registers thelowest gross profit margin, increased from 17.2% to 35.2%. As such, our overall gross profit margindecreased slightly.

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Our other income increased slightly by $5,000 from approximately $22,000 in FY2002 to $27,000 inFY2003. This was mainly due to a Local Enterprise Technical Assistance Scheme grant of approximately$10,000 from PSB Singapore (now known as SPRING Singapore) for our ISO 9001 certification andmiscellaneous receipts from non-related parties, which was partially offset by lower interest received.

Operating expenses

Our total operating expenses increased by $2.9 million or 17.5% from $16.5 million in FY2002 to $19.4million in FY2003, due to an increase of $2.6 million in administrative costs and $0.4 million in otheroperating expenses, offset by $46,000 decrease in distribution costs and increase in other credits ofapproximately $85,000.


Our administrative expenses accounted for 66.7% of our total operating expenses in FY2003. Ouradministrative expenses increased by $2.6 million or 25.2% from $10.4 million in FY2002 to $13.0million in FY2003.

The increase in administrative costs was mainly due to an increase in salaries, bonus expensesand CPF contributions of $2.8 million. This was mainly a result of the increase in our staffheadcount in FY2003 as we hired 43 new chefs and 79 new kitchen helpers, more than half ofwhom were for our Institutional Catering Division. Despite the lower increase in headcounts from568 as at 31 December 2002 to 690 as at 31 December 2003, our salaries, bonus expenses andCPF contributions increased by a larger amount as compared to FY2002 mainly because of full-year salaries paid to our staff operating the staff cafeterias of Maxtor Peripherals (S) Pte Ltd (AngMo Kio factory) and STATS in FY2003 as compared to partial year payments in FY2002.


Other operating expenses, which accounted for 32.2% of our total operating expenses in FY2003,increased by $0.4 million or 7.2% from $5.9 million in FY2002 to $6.3 million in FY2003. As otheroperating expenses included expenses that were directly related to our business activities, theincrease in other operating expenses was in line with the increase in our revenue. Our utilitycharges expenses and rental expenses increased by an aggregate of approximately $0.2 million.The balance increase in other operating expenses came from the increase in other expenses suchas disposable tableware, laundry and kitchen supplies expenses.


Our distribution cost decreased by approximately $46,000 or 15.9% from $0.3 million in FY2002 to$0.2 million in FY2003. The decrease was mainly due to the cost-control strategy adopted by ourFood Catering Division as we expected revenue from this division to be adversely affected by theoutbreak of SARS in FY2003.

(d) Other credit

We generated net other credits of approximately $33,000 in FY2003. This was due to the waiverby a minority shareholder of our previous subsidiary, Select Eastern Investment, of the amountowed by us.

Finance costs

Our finance costs decreased by approximately $62,000 or 26.8%, due mainly to repayments made toreduce our hire purchase and bank loans.

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Our previous subsidiary, Zhangzhou Select Eastern Fast Food, incurred a loss of approximately $0.1million in FY2003, as compared to $0.2 million in FY2002.


Our profit before income tax increased by approximately $1.0 million from $0.3 million in FY2002 to $1.3million in FY2003. This was a result of the increase in gross profit and lower distribution costs, whichwas partially offset by the increase in administrative expenses and other operating expenses.

Profit before tax margin increased from 1.0% in FY2002 to 3.7% in FY2003. The improvement in ourprofit before tax margin was the result of lower other operating expenses and distribution costs, as apercentage of our total revenue. In FY2003, our other operating expenses and distribution costsaccounted for 18.5% and 0.7% of our total revenue respectively, as compared to 21.7% and 1.1% inFY2002. The improvement in our overall other operating expenses and distribution costs was a result oflarger revenue contribution made by our Institutional Catering Division, which generally incurred lowerother operating expenses and distribution costs than our other two divisions.

By business division, our profit before income tax margin for our Institutional Catering, Food Catering andFood Retail Divisions increased from 4.2%, 1.9% and 2.8% in FY2002 to 6.0%, 4.0% and 3.2% inFY2003, respectively.

1H2003 vs 1H2004

Revenue

Our revenue increased by approximately $4.9 million or 31.6% from $15.3 million in 1H2003 to $20.2million in 1H2004.

The increase in revenue was due to an increase in revenue of $1.7 million from our Institutional CateringDivision, an increase of $0.5 million from our Food Catering Division and an increase of $2.7 million fromour Food Retail Division.


The increase of $1.7 million or 32.7% from $5.4 million in 1H2003 to $7.1 million in 1H2004 from ourInstitutional Catering Division was mainly due to:-

(a) the revenue contribution of $1.7 million from nine corporate customers secured after June 2003,which include Motorola Electronics Pte Ltd, Philips Electronics Singapore Pte Ltd and GeneralElectronics Aviation Service Operation Pte Ltd;

(b) the increase in revenue of $0.6 million from five customers with revenue contribution for the entiresix months in 1H2004 as compared to revenue contribution for less than six months in 1H2003 asthese customers were secured during 1H2003; and

(c) a net increase in revenue of $0.1 million from nine customers with revenue contribution for theentire six months in both 1H2003 and 1H2004, due mainly to increased staff headcounts of ourcustomers. Our customers increased their workforce in anticipation of better business outlook in1H2004.

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(a) the decrease in revenue of $0.5 million from three customers, which contracts expired during1H2004, due to the revenue contribution for the entire six months in 1H2003 as compared torevenue contribution for less than six months in 1H2004; and

(b) the absence of revenue contribution of $0.2 million from three customers which contracts expiredbefore January 2004, therefore making no revenue contribution in 1H2004.


The increase of $0.5 million or 11.8% from $3.9 million in 1H2003 to $4.4 million in 1H2004 from ourFood Catering Division was mainly due to increased revenue of $0.5 million from our Events CateringServices as a result of our established track record with our existing corporate customers whichsubsequently referred new customers to us. There was an additional increase in revenue of $0.2 millionfrom food fairs held in 1H2004 as a result of improved consumer confidence following the recovery of thegeneral economy from the SARS outbreak in 1H2003. The increase was offset by decreased revenue of$0.2 million from our Events Catering Services in relation to private functions and our Meal DeliveryServices to family units, as a result of increased competition from small-scale catering service providers.


Revenue from our Food Retail Division increased by $2.7 million or 43.7% from $6.0 million in 1H2003 to$8.7 million in 1H2004. The SARS outbreak in 1H2003, which had discouraged patronage to crowdedfood establishments, had a direct impact on our Food Retail Division. As the general economy recoveredfrom the SARS outbreak, this division experienced growth in 1H2004. The increase was attributable to:-

(a) the maiden revenue contribution of $2.1 million from nine new food court stalls which startedoperations after June 2003;

(b) the maiden revenue contribution of $0.3 million from our Lerk Thai Restaurant located at VictoriaStreet and our food court stall, specialising in Thai cuisine, located at Takashima DepartmentStore, which commenced operations in March and June 2004 respectively;

(c) the increase in revenue contribution of $0.2 million from two food court stalls, mainly due torevenue contributions for the entire 6 months in 1H2004 as compared to revenue contributions forless than 6 months in 1H2003. The locations of these food court stalls were at Bishan and HarbourFront Office Tower; and

(d) the increase in revenue contribution of $0.7 million from our existing food court stalls as a result ofimproved general economy and consumer confidence after the recovery of the SARS outbreak in1H2003.


(a) the decrease in revenue of $0.2 million from one food court stall and one public cafeteria as aresult of revenue contributions for less than six months in 1H2004 as compared to revenuecontributions for the entire six months in 1H2003, as the contracts for the food court stall andpublic cafeteria expired during 1H2004; and

(b) the absence of revenue contribution of $0.4 million due to the expiration of contracts for five foodcourt stalls in FY2003.

The location of the new food court stalls were at Scotts Shopping Centre, Jalan Besar, Tampines Mart,National University Hospital, Bukit Panjang Ring Road, Hougang Festival Market, Ikano Power Centre atPetaling Jaya, Malaysia, Suntec City, and Tiong Bahru Plaza.

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Cost of sales

Our cost of sales increased by $1.7 million or 29.9% from $5.8 million in 1H2003 to $7.5 million in1H2004. This increase was attributable to increases of $0.7 million or 29.3% from our InstitutionalCatering Division, $32,000 or 2.3% from our Food Catering Division and $1.0 million or 49.7% from ourFood Retail Division.

Our overall gross profit margin increased marginally from 62.2% in 1H2003 to 62.7% in 1H2004. Thegross profit margin for our Institutional Catering Division and Food Catering Division increased from53.4% to 54.6% and from 65.7% to 68.6% respectively. The gross profit margin for our Food RetailDivision decreased from 67.6% to 66.3% from 1H2003 to 1H2004. The marginal change in our overallgross profit margin was a result of steady revenue contribution by our three business divisions in 1H2003and 1H2004. Our Institutional Catering, Food Catering and Food Retail divisions accounted for 34.9%,25.7% and 39.4% of our total revenue in 1H2003 and 35.2%, 21.8% and 43.0% of our total revenue in1H2004.


Our other operating income increased by $66,000 from $5,000 in 1H2003 to $71,000 in 1H2004. Thisincrease was mainly due to a rebate from HDB in relation to the relocation of our operations at Aljuniedto Simei Eastern Kitchen as a result of the redevelopment of the Aljunied area by the governmentauthorities.

Operating expenses

Our total operating expenses increased by $2.0 million from $9.3 million in 1H2003 to $11.3 million in1H2004, comprising an increase of $1.2 million in administrative expenses, $0.7 million in other operatingexpenses and $52,000 in distribution costs.


Our administrative expenses accounted for 66.9% and 65.6% of our total operating expenses in1H2003 and 1H2004 respectively. Administrative expenses increased by $1.2 million or 19.6%from $6.2 million in 1H2003 to $7.4 million in 1H2004.

The increase in administrative expenses was mainly due to an increase in salaries, bonuses andCPF contributions of a total amount of $1.1 million, such increase being attributable to the increasein our staff headcounts in line with the growth of our business activities. Our staff headcount grewfrom 610 as at 30 June 2003 to 738 as at 30 June 2004. The increase was partially offset bysavings in our general office expenses as a result of our cost-control measures.


Our other operating expenses accounted for 31.9% and 32.9% of our total operating expenses in1H2003 and 1H2004 respectively. Other operating expenses increased by $0.7 million or 25%from $3.0 million in 1H2003 to $3.7 million in 1H2004.

The increase in other operating expenses was mainly due to the increase in rental, gas anddisposable tableware expenses, which accounted for increases of $0.5 million, $0.2 million and$0.1 million respectively in 1H2004. As these expenses were directly related to our businessactivities, they increased in line with our increase in revenue from 1H2003 to 1H2004. As ourFood Retail Division incurred the bulk of the rental expenses, the high growth of this division in1H2004 led to the increase in rental expenses. Disposable tableware and gas expenses increasedas our food preparation activities increased and more catering services were provided to ourcustomers.

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Our distribution costs accounted for 1.3% and 1.5% of our total operating expenses incurred in1H2003 and 1H2004 respectively. Our distribution costs increased by $52,000 or 42.3% from $0.1million in 1H2003 to $0.2 million in 1H2004. This was a result of increased overseas travelling inconnection with the start-up of our operations in Suzhou, PRC.

(d) Other charges

We incurred other charges of $16,000 in 1H2004, as compared to other credits of $5,000 in1H2003. Other charges incurred in 1H2004 were due to the loss arising from the disposal of plantand equipment.

Finance costs

Our finance costs decreased marginally by $35,000 from $97,000 in 1H2003 to $62,000 in 1H2004, aswe reduced our hire purchase and long-term loans and bank overdrafts.


Our profit before income tax increased by approximately 22 times from $58,000 in 1H2003 to $1.4 millionin 1H2004. This was a result of higher gross profit in 1H2004, higher other income and lower financecosts, which was partially offset by an increase in operation expenses.

Profit before tax margin increased from 0.4% in 1H2003 to 6.7% in 1H2004. This was a result of highergross profit margin, lower administrative expenses, other operating expenses, finance costs and higherother income, in terms of our total revenue. In 1H2004, the administrative expenses and other operatingexpenses accounted for 36.7% and 18.3% of our total revenue respectively, as compared to 40.4% and19.3% in 1H2003. This decrease was mainly due to the significant increase in our revenue in 1H2004 ascompared to our revenue in 1H2003 which was affected by the SARS outbreak.

By business division, our profit/(loss) before income tax margin improved from 4.4%, (3.4%), and 2.5% in1H2003 to 7.2%, 8.1%, and 5.7% in 1H2004 in our Institutional Catering, Food Catering and Food RetailDivisions respectively.

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REVIEW OF FINANCIAL POSITION

Current Assets

Our current assets comprised mainly cash and cash equivalents, trade receivables, other receivables andprepayment and inventories.

As at 31 December 2003, our current assets amount of $4.9 million accounted for 40.0% of our totalassets. Cash and cash equivalents accounted for $1.7 million or 34.3% of our current assets. Tradereceivables due to credit sales to our corporate customers in the Institutional Catering and Food CateringDivisions, formed the largest component of our current assets, accounting for $2.1 million or 43.5% ofour current assets. We had inventories of $0.1 million or 2.4% of our current assets. Inventoriescomprised mainly raw materials including food items such as raw meat and dry items such as disposablefood containers. Other receivables and prepaid expenses accounted for $1.0 million or 19.7% of ourcurrent assets. These include security and rental deposits amounting to approximately $0.7 million andnon-trade receivables amounting to $0.1 million.

As at 30 June 2004, our current assets increased by $1.4 million to $6.3 million, accounting for 43.8% ofour total assets. Cash and cash equivalents increased by $0.5 million to $2.2 million or 35.3% of ourcurrent assets. Trade receivables increased by $0.7 million to $2.8 or 43.9% of our current assets. Ourother receivables and prepayments remained unchanged. We had inventories of $0.3 million or 4.4% ofour current assets.

Non-Current Assets

Non-current assets are assets relating to property, plant and equipment.

As at 31 December 2003, the net book value of our property, plant and equipment amounted to $7.3million, accounting for 60.0% of our total assets.

As at 30 June 2004, the net book value of our property, plant and equipment amounted to $8.0 million,accounting for 56.2% of our total assets.

Current Liabilities

Our current liabilities comprised trade payables and accrued liabilities, short-term borrowings, otherpayables, income tax payable, current portion of interest-bearing borrowings and current portion offinance leases.

As at 31 December 2003, our current liabilities amounted to $7.1 million or 72.0% of our total liabilities.Trade payables and accrued liabilities of $5.3 million or 75.1% of our current liabilities, formed the largestcomponent of our current liabilities. They relate mainly to purchase of raw materials from local suppliers.Short-term borrowings of $0.9 million accounted for 12.5% of our current liabilities. Current portion ofinterest-bearing borrowings, amounting to $0.4 million, formed the portion of long-term interest-bearingborrowings from banks that was due within the next financial year. Income tax payable amounted to $0.1million. Current portion of finance leases of $69,000 relate mainly to hire purchase. Other payablesamounted to $0.2 million.

As at 30 June 2004, our current liabilities declined by $0.7 million to $6.4 million or 70.3% of our totalliabilities. This decline was mainly due to the decrease in short-term borrowings as a result of therepayment of our short-term borrowings. Trade payables and accrued liabilities amounted to $5.5 millionor 85.3% of our current liabilities. Short-term borrowings declined from $0.9 million to $0.1 million.

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Non-current liabilities and other items

Non-current liabilities comprised interest-bearing borrowings, deferred tax liabilities and finance leases.

As at 31 December 2003, non-current liabilities accounted for $2.7 million or 28.0% of our total liabilities.Interest-bearing borrowings amounted to $2.2 million. Deferred tax liabilities amounted to $0.5 million.

As at 30 June 2004, non-current liabilities remained at $2.7 million, which comprised interest-bearingborrowings of $2.1 million, deferred tax liabilities of $0.5 million and finance lease of $64,000.

Shareholders’ Equity

As at 31 December 2003, our shareholders’ equity amounted to $2.4 million. This comprised issuedshare capital of $1.7 million and reserves of $0.7 million.

As at 30 June 2004, our shareholders’ equity amounted to $5.2 million. This comprised issued sharecapital of $1.8 million and reserves of $3.4 million. The increase in our shareholders’ equity of $2.8million was due primarily to a capital injection of $1.7 million from the Pre-Invitation Investors. Thebalance of $1.1 million was attributed to earnings generated in 1H2004.

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LIQUIDITY AND CAPITAL RESOURCES

Cash Flow

We set out below a summary of our Group’s cash flow for FY2002, FY2003, and 1H2004:-

$’000 FY2002 FY2003 1H2004

Net cash generated from operating activities 1,799 2,294 958

Net cash used in investing activities (483) (1,694) (1,188)

Net cash (used in)/generated from financing activities (811) (119) 1,559

Net effect of exchange rate changes in consolidating subsidiaries (8) 1 1

Net increase in cash and cash equivalents 497 482 1,330

Cash and cash equivalents at the beginning of period (850) (353) 129

Cash and cash equivalents at end of period (353) 129 1,459

FY2002

We recorded a net inflow from operating activities of $1.8 million. This comprised cash generated fromoperating activities before changes in working capital of $1.5 million, interest receipt of $16,000 and networking capital inflow of $0.6 million, offset by interest paid of $0.2 million and income tax paid of$52,000.

Net working capital inflow was mainly due to a decrease in other receivables and prepayments of $0.3million, and a net increase of $0.5 million in trade payables, accrued liabilities and other payables. Thiswas partially offset by the increase in trade receivables of $0.2 million.

We recorded a net cash outflow from investment activities of $0.5 million, which was mainly due to anoutflow of $0.5 million for the purchase of plant and equipment.

Net cash outflow for financing activities amounted to $0.8 million. This was mainly due to a decrease inborrowings of $0.5 million and a decrease in finance lease of $0.3 million.

We recorded a net effect of exchange rate changes of $8,000 in consolidating our subsidiaries.

FY2003

We recorded a net inflow from operating activities of $2.3 million. This comprised mainly cash generatedfrom operating activities before changes in working capital of $2.6 million, which was offset by interestpaid, income tax paid and changes in working capital in the aggregate amount of $0.3 million.

The change in working capital was mainly due to an increase in cash of $0.1 million with maturity overthree months, an increase in trade and other receivables and prepayments of $0.4 million, and adecrease in other payables of $0.3 million. This was partially offset by a cash inflow from an increase intrade payables and accrued liabilities of $0.7 million.

We recorded a net cash outflow from investment activities of $1.7 million, which was due to the purchaseof plant and equipment.

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Net cash outflow for financing activities amounted to $0.1 million. This was due to a reduction in theamount of finance leases of $0.2 million, which was partially offset by a cash inflow of $0.1 from termloan borrowings to partially fund our fixed assets acquisition.

1H2004

We recorded a net inflow from operating activities of $1.0 million. This comprised mainly cash generatedfrom operating activities before changes in working capital of $2.0 million, which was offset by interestpaid and income tax paid of $0.2 million and changes in working capital of $0.8 million.

Our change in working capital of $0.8 million was mainly due to an increase in trade and otherreceivables of $0.7 million, increases in inventory of $0.2 million, and a decrease in other payables of$0.1 million. This was partially offset by a cash inflow from an increase in trade payables and accruedliabilities of $0.2 million.

We recorded a net cash outflow from investment activities of $1.2 million, which was due to the purchaseof plant and equipment.

Net cash inflow from financing activities amounted to $1.6 million. This was due to net proceeds of $1.7million pursuant to the Subscription Agreement, which was partially offset by decreases in borrowingsand finance leases of $0.1 million.

Capital Resources

Our sources of cash include cash generated from operations and capital provided by our Shareholders,and the utilisation of bank borrowings. Cash generated from operations are derived from our InstitutionalCatering, Food Catering and Food Retail Divisions. Our main uses of cash for operations have been forthe acquisition of raw materials and the payment of staff salaries and other operating expenses such asgeneral office expenses, rental for food retail outlets and purchase of kitchen supplies.

As at 31 December 2003, our cash and cash equivalent was $0.1 million, comprising cash on hand andbank balances of $1.0 million with no restriction on the use, net of overdraft of $0.9 million. In addition,we have fixed deposit of approximately $0.7 million.

As at the Latest Practicable Date, our cash and cash equivalent was $0.4 million overdrawn, comprisingcash on hand and bank balances of $0.2 million with no restriction on its use, net of overdraft of $0.6million. In addition, we have fixed deposit of approximately $0.7 million.

Our Directors are of the opinion that, after taking into account amounts available under existing bankfacilities, our Group has adequate working capital to meet its present requirements. Please refer to“Capitalisation and Indebtedness” on pages 66 to 67 of this Prospectus for further details.

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Material Capital Expenditure and Divestment of Capital Investment

The material capital expenditure on and divestment of capital investment of our Group for FY2001,FY2002, FY2003 and the period from 1 January 2004 up to the Latest Practicable Date, were as follows:-

From 1 January2004 to the Latest

Description FY2001 FY2002 FY2003 Practicable Date($’000) ($’000) ($’000) ($’000)

Acquisition (1)

Leasehold Properties 353 – 909 406Plant and Equipment 2,131 521 791 1,155Construction-in-progress – – – 1,389

Total 2,484 521 1,700 2,950

Divestment (2)

Leasehold Properties – – – –Plant and Equipment 81 66 100 362

Total 81 66 100 362

Notes:-

(1) This relates to the cost of property, plant and equipment acquired during the respective financial years.

(2) This relates to the cost of property, plant and equipment disposed during the respective financial years.

In FY2001, we acquired a food court stall used by our Food Retail Division, for an amount of $0.4 million.In FY2003, we acquired the premises where our Simei Eastern Kitchen is currently situated for anamount of approximately $0.9 million. We incurred $2.1 million, $0.5 million and $0.8 million in FY2001,FY2002 and FY2003 respectively for the acquisition of kitchen and office equipment, furniture, renovationand motor vehicles.

In 1H2004, we incurred an amount of $0.8 million for the renovation of the kitchen and installation ofkitchen facilities at our food catering facility in Suzhou, PRC. We expect to incur an estimated amount of$1.6 million in setting up our Suzhou food catering facility for the purpose of expanding our institutionalcatering business into the PRC. The capital expenditure will be funded from both bank borrowings andinternal sources of funds. We commenced renovations in the second quarter of 2004 and havecompleted the renovations in August 2004. Further expansion of our Suzhou food catering facility as setout in the section on “Industry Outlook and Future Plans” on page 113 of this Prospectus is expected tobe partially funded by the net proceeds from the Invitation.

In 1H2004, we were awarded the tender to develop, operate and manage the Expo F&B Hub. The totaldevelopment cost (including advertising and promotional expenses) is estimated to be $2.8 million. Wehave commenced renovations of the Expo F&B Hub in the third quarter of 2004 and renovations areexpected to be completed by the first quarter of 2005. The capital expenditure will be funded partly frominternal sources of funds and partly from the net proceeds of the Invitation. Please see the section on“Industry Outlook and Future Plans” on page 113 of this Prospectus for more details.

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CAPITALISATION AND INDEBTEDNESS

The following table shows our cash and cash equivalents and capitalisation: -

(i) based on our unaudited consolidated balance sheet as at 30 September 2004 as adjusted for theBonus Issue, Share Consolidation and Share Split but before adjusting for the net proceeds of theInvitation; and

(ii) after the issue of New Shares pursuant to the Invitation and the application of net proceeds.

As at 30 September 2004 After adjusting for the on an actual basis issuance of New Sharesas adjusted for the pursuant to the Bonus Issue, Share Invitation and theConsolidation and application of net

Share Split but proceeds$’000 before adjusting for

the net proceeds of the Invitation

Cash and cash equivalents 1,542 4,655

IndebtednessShort-term debt (secured and guaranteed) 1,120 1,120Short-term debt (unsecured) – –

1,120 1,120

Long term debt (secured and guaranteed) 2,077 2,077Long term debt (unsecured) – –

2,077 2,077

Total Indebtedness 3,197 3,197

Shareholders’ equityIssued and paid-up capital 3,385 4,172Share premium – 2,325Reserves 1,916 1,916Total Shareholder’s Equity

5,301 8,413

Total Capitalisation and Indebtedness 8,498 11,610

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As at the Latest Practicable Date, our Group had access to banking facilities from DBS Bank Ltd (“DBS”),Oversea-Chinese Banking Corporation Limited (“OCBC”) and RHB Bank (“RHB”) amounting toapproximately $5.3 million as follows:-

InterestTotal amount rates

Nature of facilities Purpose available Utilized Unutilized Maturity (% per$’000 $’000 $’000 Profile annum)

Term loans

- Term loan 1 Purchase of 287 287 – February 2008 5.00

- Term loan 2 property, plant 81 81 – August 2008 5.00

- Term loan 3 and equipment 1,357 1,357 – December 2011 3.50

- Term loan 4 and working 556 556 – November 2013 3.25

- Term loan 5 capital 6 6 – October 2004 6.25

- Term loan 6 80 80 – April 2006 4.25

- Term loan 7 380 367 12 February to 5.54March 2005

- Non-Revolving 300 83 200(1) April 2006 4.25

credit line

Hire purchase

- Hire Purchase 1 Purchase of plant 2 2 – January 2005 2.90

- Hire Purchase 2 and equipment 86 86 – May 2007 3.10

Overdraft Working capital 1,630 580 1,050 N.A 5.25 to 7.38

Performance guarantee Operation 500 427 73 N.A N.A.

Total 5,265 3,912 1,335 – –

Note:-

(1) Maximum available facility is $200,000.

As at the date of this Prospectus, none of our short term or long-term borrowings has been recalled byour bankers. We are able to service our borrowings and repay our debts as and when they fall due.

The facilities were secured by our fixed deposits, legal mortgage of our leasehold properties, personalguarantees by our Directors Messrs, Vincent Tan and Jack Tan, and the corporate guarantees by oursubsidiaries, namely Stamford and Select FM (Singapore).

Contingent Liabilities

We have provided guarantees for our subsidiaries’ bank loans. The balance outstanding of these loansamounted to $0.1 million and $0.5 million as at 31 December 2003 and the Latest Practicable Daterespectively. In FY2003, our subsidiaries provided guarantees for our bank loans. The balanceoutstanding of these loans amounted to $0.6 million and $0.9 million as at 31 December 2003 and theLatest Practicable Date respectively. As at 31 December 2003 and the Latest Practicable Date, we hadan unsecured bank letter of guarantee of $69,640 and $0.4 million respectively.

As at 31 December 2003 and the Latest Practicable Date, we had insurance or performance guaranteesfor certain of our food court stalls or kitchen premises amounting to $68,589 and nil respectively. Theseinsurance or performance guarantees are counter-indemnified by our Directors and their Associates.

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Capital Commitment

As at 31 December 2003, we did not have any material commitment for capital expenditure.

As at the Latest Practicable Date, our Group had material commitments for capital expenditureamounting to $2.3 million, out of which $166,000 is in respect of our Suzhou food catering facility and thebalance $2.1 million is for our Expo F&B Hub development. Both commitments are expected to befunded from our internal sources of funds and bank borrowings.

Operating Lease Commitments

As at 31 December 2003, we had operating lease commitments to make rental payments totallingapproximately $6.1 million, of which $3.0 million is due no later than one financial year, $2.1 million isdue between two to five financial years, with the remaining $1.0 million being payable after five financialyears. These lease payments represent rentals payable by us for our leasehold property, staff cafeterias,restaurant and food court stalls.

As at the Latest Practicable Date, we had operating lease commitments to make rental paymentstotalling approximately $11.6 million, of which $4.1 million is due no later than one financial year, $5.8million is due between two to five financial years, with the remaining $1.7 million being payable after fivefinancial years. These lease payments represent rentals payable by us for our leasehold property, staffcafeterias, restaurant, food court stalls, Expo F&B Hub and our food catering facility in Suzhou, PRC.

CREDIT POLICY

More than 98% of our sales are denominated in Singapore Dollars.

The staff of our corporate customers in our Institutional Catering Division makes payment in cash whenfood and beverage items are purchased at our staff cafeterias. We extend credit terms of up to 30 daysto our corporate customers of partial-subsidy contracts and full-subsidy contracts. Such customers areusually invoiced at the end of every month, depending on their creditworthiness.

In our Food Catering Division, payments are made by way of cash on delivery by our individualcustomers and family units of our Events Catering Services. Our Events Catering Services corporatecustomers are usually invoiced after the services have been provided. Credit terms of up to 60 days,based on their payment track record, are usually granted to such corporate customers. Our MealDelivery Services customers are normally invoiced upfront at the beginning of the month or at thecommencement of our services.

All of our food and beverage items are sold on cash basis by our Food Retail Division.

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Our management, specifically our Managing Director Mr Vincent Tan, closely monitors all outstandingpayments and reviews debtor balances on a monthly basis to ensure that steps are taken to collect anylong outstanding trade debts. We periodically review the credit terms, our customers’ financial condition,the volume of their order and previous payment track record. We may amend the credit terms granted toour customers if necessary. We will make specific provision for doubtful trade receivables when themanagement is of the view that the debts are deemed uncollectible. Our specific provision for doubtfultrade receivables for FY2001, FY2002, FY2003 and 1H2004 is as follows:-

FY2001 FY2002 FY2003 1H2004Bad trade debt written off during the year ($’000)

16 – 6 –Trade Receivables Turnover (Days)(1) 22 25 22 22

Note:-

(1) The trade receivables turnover days = (average trade receivables/revenue) x 365 days (or 180 days for 1H2004).

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EXCHANGE CONTROLS

Singapore

There are no Singapore governmental laws, decrees, regulations or other legislation that may affect thefollowing:-

(a) the import or export of capital, including the availability of cash and cash equivalents for use by ourGroup; and

(b) the remittance of dividends, interest or other payments to non-resident holders of our Company’ssecurities.

Malaysia

Foreign exchange controls in Malaysia are governed by the Exchange Control Act 1953 (“ECA”) and theExchange Control of Malaysia Notices (“ECM Notices”) issued pursuant thereto. The principal authorityresponsible for exchange control matters is the Controller of Foreign Exchange, Bank Negara Malaysia(“Controller”).

In relation to foreign direct investment, there is no restriction on repatriation of capital, profits, dividends,interest and rental income by foreign direct investors. “Foreign direct investment” includes an investmentmade by a non-resident in a company where the non-resident is entitled to exercise or control theexercise of not less than 10% of the votes attached to the voting shares of the company.

Generally, the Controller requires the completion of a prescribed form and documentary evidence to befurnished to the remitting banks for any remittance or payment in foreign currency exceeding theequivalent of RM10,000 to a non-resident. However remittances, if made for purposes of investmentabroad in any form or for payment under a guarantee for non-trade purposes will also require the priorpermission of the Controller.

Further, if Select FM (Malaysia) as a non-resident controlled company (“NRCC”) were to obtain from aresident the following:-

(a) any credit facilities for short-term trade financing in RM or any foreign currency where the tenure ofthe credit exceeds 12 months; and/or

(b) any other credit facility in RM or any foreign currency which exceeds RM50 million,

the said resident will be required to obtain the prior written permission of the Controller to extend suchfacilities. The NRCC has to comply with the 3:1 gearing ratio requirement between its domestic debt andeligible capital funds only for amounts that exceed RM50 million. Higher gearing may be allowed on acase-by-case basis.

Select FM (Malaysia) is permitted to operate one or more inter-company accounts in foreign currencywith its associated companies, branches or other companies which is incorporated or registered outsideMalaysia (but not in certain specified countries) provided monthly returns as specified by the Controllerare submitted to the Controller.

Notes:-

For the purposes of the ECA and ECM Notices:-

1. A “resident” means:-- a citizen of Malaysia, excluding a person who has obtained permanent resident status in a territory outside Malaysia

and is residing outside Malaysia;- a non-citizen of Malaysia who has obtained permanent resident status in Malaysia and is residing permanently in

Malaysia; orperson, whether body corporate or unincorporated, whether head office or branch, incorporated or registered with, or

approved by any authority in Malaysia.

2. An NRCC includes a company in Malaysia where more than 50% of its shareholding is held by non-residents and/or NRCCs.

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The PRC

Foreign exchange receipts and payments in the PRC are distinguished and categorised as “currentaccount” items and “capital account” items, respectively. The deposit, sale and purchase of foreignexchange and other related matters is administered in accordance with this categorisation as well as thenature of the item for which the foreign exchange is required.

“Current account items” refer to transactions entered into in the normal day-to-day business of acompany, such as payment and receipt in the normal course of trade and provision of services. Mostforeign exchange revenue derived from current account items must be sold to or, subject to approval,deposited in a foreign exchange account in a designated foreign exchange bank. Foreign investmententerprises however may retain, up to a designated level, foreign exchange from current transactions, intheir foreign currency accounts. The designated level is determined with reference to the investmentamount, the ability to create foreign exchange and foreign currency working requirements of the foreigninvestment enterprise. RMB is fully convertible for current account items. Enterprises registered in thePRC which require foreign exchange for current account items may purchase that foreign exchange froma designated foreign exchange bank. However, in order to do so, they will be required to furnish to thebank relevant supporting documents with respect to the current account item for which foreign exchangeis required.

“Capital account items” refer to transactions which serve to either increase or decrease the debt or equityof an enterprise through the inflow or outflow of capital, including investments and loans. All enterprisesin the PRC must repatriate their foreign exchange revenue derived from capital account items to PRCand sell them to a designated foreign exchange bank unless permitted otherwise by the StateAdministration of Foreign Exchange (“SAFE”). The approval of the SAFE and other relevant governmentbodies is required for the conversion of RMB for capital transactions.

A foreign investment enterprise may remit out of PRC, profits and dividends distributed in proportion tothe registered capital actually paid in. The foreign party in a foreign investment enterprise must submitthe prescribed documents to a designated foreign exchange bank in order to make such a remittance.These include, inter alia, documents verifying the tax payment and tax returns, an auditors’ report issuedby an accounting firm on the profit, dividends or bonuses, the resolution of the board of directors on thedistribution of the profits and dividends, the foreign exchange registration certification of a foreigninvestment enterprise, the capital verification report provided by an accounting firm. The foreigninvestment enterprise must also appoint an accounting firm to conduct an audit of their funds for the yearin which the profits or dividends were generated and submit the auditors’ report to a designated foreignexchange bank. Subject to the necessary supporting documents being furnished, all foreign exchangerequired for the purpose of payment of profits and dividends to foreign investors may be withdrawn fromthe foreign exchange account of a foreign investment enterprise maintained with a designated foreignexchange bank and if there are insufficient funds, purchased from a designated bank.

Upon the termination of the operations of a foreign investment enterprise, it may convert any balanceRMB owned by it into foreign exchange at a designated foreign exchange bank after undergoing thenecessary liquidation proceedings in the PRC and meeting all its tax obligations in the PRC. Uponfurnishing the relevant documents, the converted foreign exchange may be remitted out of the PRC to itsforeign investors.

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DIVIDEND POLICY

We currently do not have a dividend policy. The form, frequency and amount of future dividends on ourShares will depend on our earnings and financial position, our results of operations, our capital needs,our plans for expansion and other factors as our Directors may deem appropriate.

For FY2001, we declared a dividend of an aggregate amount of $0.5 million net of income tax of 24.5%.Save as disclosed, we have not distributed any dividends on our ordinary shares in the past threefinancial years.

We may declare dividends by ordinary resolution of our Shareholders at a general meeting, but may notpay dividends in excess of the amount recommended by our Board. We must pay all dividends out of theprofits or pursuant to Section 69 of the Companies Act which permits us to apply accumulated profits topay dividends in the form of Shares. Our Directors may also declare an interim dividend without seekingShareholders’ approval. Further dividends will be paid by us as and when approved by our Shareholdersand Directors.

There is no assurance that dividends will be paid in the future. Neither is there any assurance regardingthe amount or timing of any dividends that will be paid in the future.

Information relating to taxes payable on dividends are set out on pages A-2 to A-3 of Appendix A of thisProspectus.

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DILUTION

Dilution is the amount by which the Issue Price paid by the applicants for our New Shares in theInvitation (“New Investors”) exceeds the NTA per Share after the Invitation. Our unaudited NTA per Shareas at 30 June 2004, based on the consolidated balance sheet of our Group after adjusting for theSubscription, Bonus Issue, Share Consolidation and Share Split but before adjusting for the net proceedsof the Invitation and based on the pre-Invitation issued share capital of 75,213,400 Shares, was 6.90cents per Share.

Based on the issue of 17,500,000 New Shares pursuant to the Invitation at the Issue Price and afteradjusting for the estimated proceeds from the Invitation, the adjusted NTA of our Group as at 30 June2004 would have been 8.95 cents per Share based on the post-Invitation issued and paid-up sharecapital of 92,713,400 Shares. This represents an immediate increase in NTA of 2.05 cents per Share toour existing Shareholders and an immediate dilution in NTA of 14.55 cents per Share or approximately61.9% to the New Investors.

The following table illustrates the dilution on a per Share basis:-

Per Share(cents)

Issue Price per Share 23.5

Adjusted NTA per Share as at 30 June 2004 based on the pre-Invitation share capital of 75,213,400 Shares 6.90

Increase in NTA per Share attributable to our existing Shareholders 2.05

NTA per Share after the Invitation 8.95

Dilution in NTA per Share to New Investors 14.55

Dilution in NTA per Share to New Investors as a percentage of Issue Price 61.9%

The following table summarises the total number of Shares issued by us to our Directors and SubstantialShareholders, the total consideration paid to us and the average price per Share paid by them (afteradjusting for the Bonus Issue, Share Consolidation and Share Split) and the effective cash cost to theNew Investors:-

AveragePrice per

Shares Amount Share

Number % $ cents

Directors

Vincent Tan(1) 31,815,400 34.3 1,431,693 4.5Jack Tan(1) 12,996,800 14.0 584,856 4.5

Substantial Shareholders

Tay Bock Hiang 5,753,800 6.2 258,921 4.5Tan Sok Huang 4,400,000 4.8 198,000 4.5

New public investors 17,500,000 18.9 4,112,500 23.5

Note:-

(1) These do not include the 7,521,400 ordinary shares of $0.045 each in the capital of our Company (“Pre-Invitation InvestorsShares”) which Messrs Vincent Tan and Jack Tan, our Directors, have the right to acquire from the Pre-Invitation Investorsunder the Subscription Agreement if our Company is not admitted to the Official List of SGX-SESDAQ within 18 months fromthe date of the Subscription Agreement. Please see the section on “Shareholders” on page 77 of this Prospectus for moredetails.

Please see “Invitation Statistics” on pages 30 and 31 of this Prospectus for more details on the dilution ofthe New Shares.

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GENERAL INFORMATION ON OUR GROUP

SHARE CAPITAL

Our Company was incorporated in the Republic of Singapore on 27 January 1995 under the CompaniesAct as a private company with limited liability under the name of Select Food & Beverage Pte Ltd. Wechanged our name to Select Catering Services Pte Ltd on 21 April 1997. On 2 November 2004, we wereconverted into a public company with limited liability and assumed our present name, Select CateringServices Limited.

At an extraordinary general meeting held on 30 June 2004, our Shareholders approved the allotment andissue of an aggregate of 184,400 new ordinary shares of $1.00 each in the capital of our Company to thePre-Invitation Investors pursuant to the Subscription Agreement for an aggregate consideration of$1,725,000 (“Subscription”).

Following the Subscription, the authorised share capital of our Company as at 30 June 2004 was$2,000,000 comprising 2,000,000 ordinary shares of $1.00 each and our issued and paid-up sharecapital was $1,844,005 comprising 1,844,005 ordinary shares of $1.00 each.

At an extraordinary general meeting held on 28 October 2004, our Shareholders approved, inter alia, thefollowing:-

(1) the increase in our authorised share capital from $2,000,000 divided into 2,000,000 ordinaryshares of $1.00 each to $10,350,000 divided into 10,350,000 ordinary shares of $1.00 each;

(2) a bonus issue of 1,540,598 new ordinary shares of $1.00 each, credited as fully paid upon thecapitalisation of $1,540,598 out of the share premium account of the Company (“Bonus Issue”);

(3) the consolidation of nine ordinary shares of $1.00 each in the authorised and issued and paid-upshare capital of our Company into one ordinary share of $9.00 each (“Share Consolidation”);

(4) the sub-division of each ordinary share of $9.00 each in the capital of our Company into 200ordinary shares of $0.045 each such that our authorised share capital is $10,350,000 divided into230,000,000 shares of $0.045 each of which 75,213,400 ordinary shares of $0.045 each areissued and fully paid-up (“Share Split”);

(5) the conversion of our Company into a public limited company and the consequential change of ourname to Select Catering Services Limited;

(6) the adoption of a new set of Articles of our Company;

(7) the issue of 17,500,000 New Shares which is the subject of the Invitation on the basis that theNew Shares, when allotted, issued and fully paid-up, will rank pari passu in all respects with theexisting Shares;

(8) the listing and quotation of the issued ordinary shares of our Company (including the 17,500,000New Shares to be issued pursuant to Resolution (7) above) on the Official List of SGX-SESDAQ;

(9) the authorisation of our Directors, pursuant to Section 161 of the Companies Act, to allot andissue, whether by way of rights, bonus or otherwise (including but not limited to the allotment andissue of Shares at any time, whether during the continuance of such authority or thereafter,pursuant to offers, agreements or options made or granted by our Company while this authorityremains in force), or otherwise dispose of Shares (including making and granting offers,agreements and options which would or which might require Shares to be issued, allotted orotherwise disposed of, whether during the continuance of such authority or thereafter) at any timeto such persons (whether or not such persons are Shareholders), upon such terms and conditionsand for such purposes as our Directors may in their absolute discretion deem fit PROVIDEDTHAT:-

(i) the aggregate number of Shares to be issued pursuant to the resolution shall not exceed50% of the issued share capital of our Company; and

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(ii) where Shareholders with registered addresses in Singapore are not given the opportunity toparticipate in the same on a pro rata basis, then the Shares to be issued under suchcircumstances shall not exceed 20% of the issued share capital of our Company,

and for the purpose of this resolution and pursuant to Rules 806(3) and 806(4) of the ListingManual, the percentage of the issued share capital shall be based on the issued share capital atthe time the resolution is passed, calculated on the post-Invitation share capital of our Companyand taking into account the issue of new Shares arising from the conversion of or exercise of anyconvertible securities and employee share options on issue at the time the resolution is passed,which were issued pursuant to any previous shareholders’ approval, and adjusting for anysubsequent consolidation or sub-division of our Shares. Unless revoked or varied by our Companyin general meeting, such authority shall continue in full force until the conclusion of the nextgeneral meeting of our Company or the date by which the next annual general meeting of ourCompany is required by law to be held, whichever is earlier; and

(10) the adoption of the Select Employee Share Option Scheme and that the Directors of our Companybe authorised to allot and issue Option Shares upon the exercise of Options granted under theScheme.

As at the Latest Practicable Date, there is only one class of shares in the capital of our Company, beingordinary shares of $0.045 each. There is no founder, management or deferred shares reserved forissuance for any purpose. The rights and privileges attached to our Shares are stated in the Articles ofour Company.

The authorised share capital of our Company as at the date of lodgement of this Prospectus was$10,350,000 comprising 230,000,000 ordinary shares of $0.045 each and our issued and paid-up sharecapital was $3,384,603 comprising 75,213,400 ordinary shares of $0.045 each.

Details of the changes in the issued and paid-up share capital of our Company since incorporation andthe resultant issued and paid-up share capital immediately after the Invitation are as follows:-

Resultant issued and

Number Issue price/ paid-up Par value of Shares consideration share capital

($) ($) ($)

Issued and fully paid-up ordinary shares of 1.00 4 4.00 4.00nominal value $1.00 each as at incorporation on 27 January 1995

Allotment and issue of ordinary shares of 1.00 49,996 49,996.00 50,000.00$1.00 each on 12 September 1996 for working capital

Allotment and issue of ordinary shares of 1.00 50,000 50,000.00 100,000.00$1.00 each on 21 September 1998 for working capital

Allotment and issue of ordinary shares of 1.00 400,000 400,000.00 500,000.00$1.00 each on 16 July 1999 for working capital

Allotment and issue of ordinary shares of 1.00 500,000 500,000.00 1,000,000.00$1.00 each on 3 April 2001 for working capital

Allotment and issue of ordinary shares of 1.00 659,605 659,605.00 1,659,605.00$1.00 each on 18 October 2001 as consideration for the Company’s purchase of shares in Select FM (Singapore)(1)

75


Resultant issued and

Number Issue price/ paid-up Par value of Shares consideration share capital

($) ($) ($)

Issued and paid-up share capital of nominal 1.00 184,400 184,400.00 1,844,005.00value $1.00 each to Pre-Invitation Investors(2)

Bonus Issue to existing Shareholders 1.00 1,540,598 1,540,598.00 3,384,603.00

Share Consolidation 9.00 376,067 – 3,384,603.00

Share Split 0.045 75,213,400 – 3,384,603.00

New Shares to be issued pursuant to the 0.045 17,500,000 0.235 4,172,103.00Invitation

Issued and paid-up Shares of nominal 0.045 92,713,400 0.235 4,172,103.00value $0.045 each after the Invitation

Notes:-

(1) The allotment and issue of 659,605 ordinary shares of $1.00 each in the capital of our Company, which was made for non-cash consideration, constitutes 19.5% of the share capital of our Company as at the date of lodgement of this Prospectus.Please refer to the section on “Interested Persons Transactions and Conflicts of Interest” on page 131 of this Prospectus formore details.

(2) Under the Subscription Agreement, the Pre-Invitation Investors have granted Messrs Vincent Tan and Jack Tan, our Directors,a call option and Messrs Vincent Tan and Jack Tan have granted the Pre-Invitation Investors a put option pursuant to which ifour Company is not admitted to the Official List of SGX-SESDAQ within 18 months from the date of the SubscriptionAgreement (that is, by 20 November 2005), our said Directors can, under the call option require the Pre-Invitation Investorsto sell to them and the Pre-Invitation Investors can, under the put option require our said Directors to purchase from them theentire 184,400 ordinary shares of $1.00 each in the capital of our Company acquired by the Pre-Invitation Investors pursuantto the Subscription at the price of $1,725,000 plus accrued interest at the rate of 5% per annum. The call option and putoption are valid for a period of three months from 20 November 2005 and will lapse immediately upon our Company’sadmission to the Official List of the SGX-SESDAQ.

76


SHAREHOLDERS

Our Shareholders and their respective shareholdings in our Company immediately before (as at theLatest Practicable Date) and after the Invitation are set out below:-

Before Invitation After InvitationDirect Interest Deemed Interest Direct Interest Deemed Interest

No of No of No of No ofShares Shares Shares Shares(’000) % (’000) % (’000) % (’000) %

DirectorsVincent Tan 31,815,400 42.3 – – 31,815,400 34.3 – –

Jack Tan 12,996,800 17.3 – – 12,996,800 14.0 – –

Substantial ShareholdersTay Bock Hiang 5,753,800 7.6 – – 5,753,800 6.2 – –Tan Sok Huang 4,400,000 5.9 – – 4,400,000 4.8 – –

Other Shareholders(1)

(each holding less than 5%) 12,726,000 16.9 – – 12,726,000 13.7 – –

Pre-Invitation Investors(2)

(each holding less than 5%) 7,521,400 10.0 – – 7,521,400 8.1 – –

Public (including shareholders for Reserved Shares) – – – – 17,500,000 18.9 – –

Total 75,213,400 100.0 92,713,400 100.0

Notes:-

(1) Refers to eight individuals and one corporation. The individuals are Messrs Pek Poh Kwee, Pek Poh Sien, Toh Peng Seng,Ng Tee Khiang, Steven Tan (our Executive Officer), Kork Hoe Soon, Tay Soo Teck and Madam Ang Poon Hong. Thecorporation is Wing Huat Loong (Pte) Ltd. The shareholders of Wing Huat Loong (Pte) Ltd. comprise nine individuals whoare not related to any of our Directors or Substantial Shareholders.

(2) Refers to four individuals and one corporation. The individuals are Mr Thang Him Tee, Mesdames Lin Li Fang and HoonPang Heng, Joanna and Mr Kork Hoe Soon. Mr Kork Hoe Soon is one of our existing Shareholders before the Subscription.The corporation is Avia Growth Opportunities Limited.

Avia Growth Opportunities Limited

Avia Growth Opportunities Limited is a fund managed by Avia Capital Partners Limited (“Avia Capital”)which is incorporated in the British Virgin Islands. As at the Latest Practicable Date, the shareholders ofAvia Capital are BroadVen Limited (as to 60%) and Westcomb Financial Group Limited (as to 40%).BroadVen Limited is a holding company owned as at the Latest Practicable Date by Ng Tee Khiang,David Su Tiong Seng and Low Kiam Cheow. Westcomb Capital Pte Ltd, the Manager, is a wholly-ownedsubsidiary of Westcomb Financial Group Limited. Westcomb Securities Pte Ltd, the Placement Agent andUnderwriter is a subsidiary of Westcomb Financial Group Limited. The subscribers of Avia GrowthOpportunities Limited comprise, as at the Latest Practicable Date, the three shareholders of BroadVenand various high net worth individuals.

Messrs Vincent Tan and Jack Tan, our Directors, are brothers. Madam Tay Bock Hiang, our SubstantialShareholder, is the mother of Messrs Vincent Tan and Jack Tan. Madam Tan Sok Huang, our SubstantialShareholder, is the aunt of Messrs Vincent Tan and Jack Tan. Ms Doris Pek, our Executive Officer, is thespouse of Mr Vincent Tan. Messrs Pek Poh Kwee and Pek Poh Sien, two of our Shareholders, are thebrothers of Ms Doris Pek and the brothers-in-law of Mr Vincent Tan. Madam Ang Poon Hong is themother of Messrs Pek Poh Kwee and Pek Poh Sien and Ms Doris Pek and the mother-in-law of MrVincent Tan.

Save as disclosed above, there is no family relationship between our Directors and Shareholders.

77


Our Company is not directly or indirectly owned or controlled by another corporation, or any governmentor other natural or legal persons, whether jointly or severally.

The Shares owned by our Directors and Substantial Shareholders do not carry any different voting orother rights from the New Shares which are the subject of the Invitation.

There is no arrangement known to our Directors the operation of which may, at a subsequent date, resultin a change in control of our Company.

There has not been any public take-over offer by a third party in respect of our Shares or by ourCompany in respect of the shares of another corporation which has occurred during the last and currentfinancial year.

78

GENERAL INFORMATION ON OUR GROUPS

ign

ific

ant

Ch

ang

es t

o S

har

eho

ldin

gs

Sav

e as

dis

clos

ed b

elow

, th

ere

has

been

no

sign

ifica

nt c

hang

e in

the

per

cent

age

of o

wne

rshi

p of

sha

res

in o

ur C

ompa

ny h

eld

by o

ur D

irect

ors

and

Sub

stan

tial S

hare

hold

ers

durin

g th

e la

st t

hree

yea

rs a

nd u

p to

the

Lat

est

Pra

ctic

able

Dat

e:-

As

at 3

0 Ju

ne

A

s at

th

e L

ates

tA

s at

As

atA

s at

20

04 (

but

bef

ore

S

har

e P

ract

icab

le D

ate

1 Ja

nu

ary

2001

1 Ja

nu

ary

2002

(1)

1 Ja

nu

ary

2003

(2)

Su

bsc

rip

tio

n)(3

)S

ub

scri

pti

on

(4)

Bo

nu

s Is

sue(5

)C

on

solid

atio

n(5

)af

ter

Sh

are

Sp

lit(5

)

Ord

inar

yO

rdin

ary

Ord

inar

yO

rdin

ary

Ord

inar

yO

rdin

ary

Ord

inar

yO

rdin

ary

shar

essh

ares

shar

essh

ares

shar

essh

ares

shar

essh

ares

of

$1.0

0o

f $1

.00

of

$1.0

0o

f $1

.00

of

$1.0

0o

f $1

.00

of

$9.0

0o

f $0

.045

each

%

each

%

each

%

each

%

each

%

each

%

each

%

each

%

Dir

ecto

rs:-

Vin

cent

Tan

240,

000

48.0

862,

995

52.0

079

6,61

148

.078

0,01

547

.078

0,01

542

.31,

431,

693

42.3

159,

077

42.3

31,8

15,4

0042

.3Ja

ck T

an75

,000

15.0

360,

134

21.7

034

3,53

820

.731

8,64

419

.231

8,64

417

.358

4,85

617

.364

,984

17.3

12,9

96,8

0017

.3

Su

bst

anti

al

Sh

areh

old

ers

Tay

Boc

k H

iang

75,0

0015

.014

1,06

78.

5014

1,06

78.

514

1,06

78.

514

1,06

77.

625

8,92

17.

628

,769

7.6

5,75

3,80

07.

6Ta

n S

ok H

uang

50,0

0010

.010

7,87

46.

5010

7,87

46.

510

7,87

46.

510

7,87

45.

919

8,00

05.

922

,000

5.9

4,40

0,00

05.

9

Pre

-Inv

itat

ion

Inve

sto

rs–

––

––

––

184,

400

10.0

338,

463

10.0

37,6

0710

.07,

521,

400

10.0

Oth

ers(6

)60

,000

12.0

187,

535

11.3

027

0,51

516

.331

2,00

518

.831

2,00

516

.957

2,67

016

.963

,630

16.9

12,7

26,0

0016

.9

TOTA

L50

0,00

010

0.0

1,65

9,60

510

0.0

1,65

9,60

510

0.0

1,65

9,60

510

0.0

1,84

4,00

510

0.0

3,38

4,60

310

0.0

376,

067

100.

075

,213

,400

100.

0

Not

es:-

(1)

On

3 A

pril

2001

, ou

r C

ompa

ny a

llotte

d an

d is

sued

240

,000

, 75

,000

, 75

,000

and

50,

000

ordi

nary

sha

res

of $

1.00

eac

h at

par

to

Mr

Vin

cent

Tan

, M

r Ja

ck T

an,

Mad

am T

ay B

ock

Hia

ng a

nd M

adam

Tan

Sok

Hua

ngre

spec

tivel

y.

On

18 O

ctob

er 2

001,

our

Com

pany

allo

tted

and

issu

ed 4

41,

935

and

151,

709

ordi

nary

sha

res

of $

1.00

eac

h to

Mr

Vin

cent

Tan

and

Mr

Jack

Tan

, re

spec

tivel

y as

con

side

ratio

n fo

r th

e ac

quis

ition

fro

m t

hem

of

335,

000

and

115,

000

ordi

nary

sha

res

of $

1.00

eac

h in

the

sha

re c

apita

l of

Sel

ect

FM

(S

inga

pore

) re

spec

tivel

y.O

n th

e sa

me

day,

Mr

Vin

cent

Tan

tra

nsfe

rred

58,

425

and

515

ordi

nary

sha

res

in o

ur C

ompa

ny t

o M

r Ja

ck T

anan

d M

r P

ek P

oh K

wee

res

pect

ivel

y.A

t th

e sa

me

time,

Mad

am T

ay B

ock

Hia

ng t

rans

ferr

ed 1

,059

ord

inar

y sh

ares

and

7,8

74 o

rdin

ary

shar

es i

n ou

r C

ompa

ny t

o M

r P

ek P

oh K

wee

and

Mad

am T

an S

ok H

uang

resp

ectiv

ely.

(2)

On

10 O

ctob

er 2

002,

Mr

Vin

cent

Tan

tra

nsfe

rred

58,

086

and

8,29

8 or

dina

ry s

hare

s of

$1.

00 e

ach

in o

ur C

ompa

ny t

o W

ing

Hua

t Lo

ong

(Pte

) Lt

d.an

d M

r Ta

y S

oo T

eck

resp

ectiv

ely.

On

the

sam

e da

y, M

r Ja

ck T

antr

ansf

erre

d 16

,596

ord

inar

y sh

ares

in o

ur C

ompa

ny t

o M

r N

g Te

e K

hian

g.

(3)

On

12 M

arch

200

4, M

r V

ince

nt T

an t

rans

ferr

ed 1

6,59

6 or

dina

ry s

hare

s of

$1.

00 e

ach

in o

ur C

ompa

ny t

o M

r S

teve

n Ta

n.O

n th

e sa

me

day,

Mr

Jack

Tan

tra

nsfe

rred

16,

596

and

8,29

8 or

dina

ry s

hare

s in

our

Com

pany

to M

r To

h P

eng

Sen

g an

d M

r K

ork

Hoe

Soo

n re

spec

tivel

y.

(4)

On

30 J

une

2004

, th

e C

ompa

ny a

llotte

d an

d is

sued

184

,400

ord

inar

y sh

ares

of

$1.0

0 ea

ch t

o th

e P

re-I

nvita

tion

Inve

stor

s pu

rsua

nt t

o th

e S

ubsc

riptio

n.

(5)

At

an e

xtra

ordi

nary

gen

eral

mee

ting

held

on

28 O

ctob

er 2

004,

our

Sha

reho

lder

s ap

prov

ed,

inte

r al

ia,

(i) a

Bon

us I

ssue

of

1,54

0,59

8 ne

w o

rdin

ary

shar

es o

f $1

.00

each

;(ii

) co

nsol

idat

ion

of n

ine

ordi

nary

sha

res

of$1

.00

each

in t

he a

utho

rised

and

issu

ed a

nd p

aid-

up s

hare

cap

ital o

f ou

r C

ompa

ny in

to o

ne o

rdin

ary

shar

e of

$9.

00 e

ach

and

(iii)

the

Sha

re S

plit

of e

ach

ordi

nary

sha

re o

f $9

.00

each

in t

he c

apita

l of

our

Com

pany

into

200

ord

inar

y sh

ares

of

$0.0

45 e

ach.

(6)

One

of

our

exis

ting

Sha

reho

lder

s, M

r P

ek P

oh K

wee

, tr

ansf

erre

d by

way

of

sale

an

aggr

egat

e of

165

,960

ord

inar

y sh

ares

of

$1.0

0 ea

ch in

the

cap

ital o

f ou

r C

ompa

ny o

n 28

Jul

y 20

04 t

o M

essr

s To

h P

eng

Sen

g an

dP

ek P

oh S

ien

and

Mad

am A

ng P

oon

Hon

g.H

is s

hare

hold

ings

bef

ore

and

afte

r th

e sa

id t

rans

fer

wer

e 10

.2%

and

1.2

% r

espe

ctiv

ely.

If ou

r C

ompa

ny is

not

adm

itted

to

the

Offi

cial

Lis

t of

SG

X-S

ES

DA

Q o

n or

bef

ore

31

Dec

embe

r 20

05,

the

said

sha

res

will

be

sold

bac

k to

Mr

Pek

Poh

Kw

ee.

79


MORATORIUM

To demonstrate their commitment to our Group, our Directors and Shareholders Messrs Vincent Tan,Jack Tan, Pek Poh Kwee and Pek Poh Sien and Mesdames Tay Bock Hiang, Tan Sok Huang and AngPoon Hong, who in aggregate hold 58,553,600 Shares representing 63.2% of our Company’s issued andpaid-up share capital after the Invitation, have each undertaken not to sell, transfer or otherwise disposeof any part of their respective interests in our Company for a period of six months commencing from thedate of admission of our Company to the Official List of the SGX-SESDAQ and in the six monthsthereafter not to sell, transfer or otherwise dispose of more than 50% of their respective interests in ourCompany immediately after the Invitation.

Avia Growth Opportunities Limited, which holds 2,632,600 Shares representing approximately 2.8% ofour Company’s issued and paid-up share capital after the Invitation, has undertaken not to sell, transferor otherwise dispose 56,014 Shares, as calculated based on the formula provided in Rule 229(3) of theListing Manual for a period of six months commencing from the date of admission of our Company to theOfficial List of the SGX-SESDAQ and in the six months thereafter not to sell, transfer or otherwisedispose of more than 28,007 Shares.

GROUP STRUCTURE

Our corporate structure as at the Latest Practicable Date is set out below:-

The details of our subsidiaries as at the Latest Practicable Date are as follows:-

Effectivepercentage

Name of company Date of incorporation / owned country of incorporation by our

and principal place Issued and Companyof business Principal businesses paid-up capital (%)

Select Food 3 May 1999 Operator of food court $500,000 100Management Pte Ltd Singapore stalls

36 Senoko CrescentSingapore 758282

Stamford Catering 11 January 2000 Operator of food court $250,005 100Services Pte Ltd Singapore stalls, catering services

36 Senoko Crescent and staff cafeteriasSingapore 758282

Select Food 19 December 2000 Operator of food court RM100,000 100Management Malaysia stallsSdn. Bhd. 104-A Jalan Harimau

Tarum, Taman Century80250 Johor BahruJohor Malaysia

80



Select FM (Singapore)

Stamford

Select FM (Malaysia)

Lerk ThaiSelect

Investment

Select Suzhou

SCS

100% 100% 100%

100%

100% 100%

100%


Effectivepercentage

Name of company Date of incorporation / owned country of incorporation by our

and principal place Issued and Companyof business Principal businesses paid-up capital (%)

Lerk Thai Restaurant 28 November 2003 Operator of restaurants $200,000 100Pte Ltd Singapore and food court stalls

249 Victoria StreetSingapore 188034

Select (F&B) 17 March 2004 Investment holding $100,000 100Investment Pte Ltd Singapore

36 Senoko CrescentSingapore 758282

Select F&B 2 April 2004 Processing of fast US$3,500,000 (1) 100(Suzhou) Co., Ltd. PRC food, catering services

Dun Huang Road, and staff cafeterias(2) East Lou Feng District

Suzhou Industrial parkPRC

SCS Food Services 2 July 2004 Operator of catering $100,000 100Pte Ltd Singapore services and

36 Senoko Crescent restaurants, cafes,Singapore 758282 snack bars, creameries,

fast food outlets and food courts

Notes:-

(1) The registered capital is US$3,500,000. As at the date of this Prospectus, US$600,000 has been paid-up. The balanceamount of the registered capital is payable by 2 April 2007 and will be funded from our internal sources of funds and/or bankborrowings.

(2) The term of operation for Select Suzhou is 50 years commencing from 2 April 2004 and expiring on 1 April 2054.

None of the above companies is listed on any stock exchange. We do not have any associated company.

81

HISTORY AND BUSINESS

OUR HISTORY

Our Company was incorporated in Singapore under the Companies Act on 27 January 1995 as a privatelimited company under the name of Select Food & Beverage Pte Ltd. Our name was subsequentlychanged to Select Catering Services Pte Ltd on 21 April 1997. On 2 November 2004, pursuant to ourconversion into a public limited company, we changed our name to Select Catering Services Limited.

Our business can trace its origins back to August 1991 when Select Cafeteria & Catering Services wasfounded by our Managing Director, Mr Vincent Tan, to provide catering services to household parties andlunch box delivery services. We first started our operations from a 56 sq m rented kitchen, supported bythree vehicles and approximately ten staff members. In 1992, to meet the rising demand for ourservices, we set up our first commercial kitchen in Siglap and increased our vehicles to ten andsupporting staff members to 20. We established another kitchen in Hougang in 1993 to cope with ourbusiness expansion as our Siglap kitchen neared its full capacity. In order to better serve our customersand reduce our operating costs, our Siglap kitchen served mainly customers in the eastern part ofSingapore while our Hougang kitchen served mainly customers in the northern part.

In 1995, our Company was formed to take over and operate our business. In the same year, we openeda third kitchen in Aljunied as demand for our services exceeded the capacity of both our Siglap andHougang kitchens. Our Aljunied kitchen concentrated on customers in the western part of Singapore. Itoccupied an area of approximately 335 sq m. Our supporting staff strength then grew to approximately80. Encouraged by the popularity and success of our food catering services for private functions, weexpanded our food catering services to corporate and community functions. Our customer basebroadened to include companies, government ministries, statutory boards, hospitals and schools.

In 1997, our Managing Director, Mr Vincent Tan, saw the market potential in the food retail business,particularly with the growth in the number of food courts in locations such as shopping malls andneighbourhood centres and office buildings which have relatively high concentration of shopping andworking crowds. We expanded our business to food retail by operating dedicated food court stalls andpublic cafeterias. Our food retail outlets increased from an initial three in 1997 to 39, which include twofood court stalls in Malaysia, as at the Latest Practicable Date.

In 1999, in order to rationalize our operations and cater for our future business expansion, wecommenced the development of our integrated computer system which was completed in 2000. Pleasesee “Integrated Computer System” on page 91 of this Prospectus for more details. At the same time, weacquired a property of approximately 4,600 sq m in Senoko for use as our Central Kitchen. Our SenokoCentral Kitchen had a kitchen area of approximately 1,900 sq m. The operations at our Siglap andHougang kitchens were ceased and relocated to our Senoko Central Kitchen so as to rationalise ouroperations. Our staff strength in our Central Senoko Kitchen was increased to over 200. In order tobetter serve our customers, we set up a Halal sub-kitchen at our Senoko Central Kitchen and obtainedthe Halal certification from MUIS in 2000. Our Senoko Central Kitchen was awarded “A” grading inhygiene and cleanliness by MEWR.

In 2000, we commenced our institutional catering business and secured our first three corporatecustomers which had in aggregate approximately 834 employees. Since then, owing to the quality of ourservices, our institutional catering business has seen a steady growth. As at the Latest Practicable Date,we have 20 subsisting contracts from large corporations and MNCs operating in Singapore.

In 2000, we were ranked as one of the top 500 small medium enterprises by DP Information Network PteLtd and were awarded the “Singapore SME 500 2000/2001 Company” recognition.

In December 2000, we formed Select Eastern Investment as a joint venture with a third party to operatea fast food restaurant business in Zhangzhou, Fujian province, PRC. Zhangzhou Select Eastern FastFood was established in July 2001 as a wholly owned subsidiary of Select Eastern Investment to operatethe fast food restaurant business, offering Singaporean cuisines. However, due to unfavourable businessconditions and consistent with our Group’s long-term strategy to focus our activities on food catering andfood retail, we disposed of our interests in Zhangzhou Select Eastern Fast Food in 2003. Select EasternInvestment, the joint venture vehicle, was struck off on 17 September 2004.

82


As part of our continuing efforts to promote and maintain the quality of our services and standard ofcuisines, we conducted training courses for our staff in the various areas of food service and preparation.In 2002, we were granted the “Approved Training Centre” status by the ITE. Our training courses, suchas “Certificate of Competency in Food Preparation”, are offered to both our own staff as well as thepublic.

In December 2003, we vacated our Aljunied kitchen due to redevelopment of the area by governmentauthorities. We moved its operations to our present Simei Eastern Kitchen in Bedok. Our Simei EasternKitchen occupies an area of approximately 342 sq m and was acquired by us at a consideration ofapproximately $0.9 million. The acquisition was funded by our own internal sources of funds as well asbank borrowing.

In March 2004, we started our first restaurant, Lerk Thai Restaurant, located at Victoria Street,specialising in Thai cuisines.

To meet the needs of MNCs which have established their manufacturing facilities in Suzhou, PRC, weexpanded our institutional catering business to the PRC in 2004. We rented a premises in the Suzhou-Singapore Industrial Park for the purpose of setting up a food catering facility. Our primary objective is toprovide institutional catering services to the MNCs in Suzhou. We commenced operation of ourinstitutional catering business in the PRC in September 2004. Please see “Industry Outlook” and “FuturePlans” on pages 111 and 113 of this Prospectus for more details.

In June 2004, we successfully tendered for the development, operation and management of the food andbeverage hub to be established at Singapore Expo. The Expo F&B Hub is estimated to occupy an area ofabout 2,628 sq m with approximately 13 different food outlets and establishments, ranging from foodcourt stalls to mid-range restaurants as well as a Chinese banquet hall. We plan to develop the ExpoF&B Hub to be a place of interest that meets not only the needs of the visitors to the conventions,seminars and events held at Singapore Expo but also the general public. Please see “Industry Outlook”and “Future Plans” on pages 111 and 113 of this Prospectus for more details.

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OUR BUSINESS


(a) Institutional Catering – we provide food management services to our corporate customers. Weoperate and manage staff cafeterias, on a contract basis, at the premises of our corporatecustomers from various industries;

(b) Food Catering – we provide events catering services for corporate, community or private functionsas well as daily meal delivery services to workplaces and family units; and

(c) Food Retail – we operate dedicated food court stalls and public cafeterias specialising ininternational and local fare. We commenced the operation of our first restaurant in Singaporespecialising in Thai cuisine in March 2004.

To support our island-wide catering and food retail operations, we established our Central SenokoKitchen, with a land area of approximately 4,600 sq m, as our main kitchen and our Simei EasternKitchen, with a land area of approximately 342 sq m, as our supporting kitchen. In order to serve theMuslim community in Singapore, our subsidiary, Stamford, obtained the Halal certification issued byMUIS which allows us to provide food catering and retail services to our Muslim customers.

With 13 years of operating history, we believe we have established recognition in the F&B industrythrough our efforts in serving quality cuisines at affordable prices and providing customers with efficientand friendly services. The key elements of our management focus include:-

Quality cuisines – We provide a wide range of cuisines to meet the varied tastes and preferences of ourcustomers. Our chefs are highly experienced and well-trained and their culinary skills ensure the highstandards of our food.

Affordability and convenience – We seek to offer value-for-money catering services to all our customersby catering to their budget and specific requirements.

Efficient and friendly service – Our staff are well-trained, efficient and friendly. We continuously strive todevelop and maintain customer satisfaction through our efficiency and dependability.

Hygienic environment – We emphasize on cleanliness and good hygiene practices in all areas of ouroperations. Further, we seek to maintain and enhance the level of trust which our customers have in usthrough regular maintenance and inspections.


We operate and manage the staff cafeterias at the premises of our corporate customers from variousindustries in Singapore. Our customers include leading MNCs in the electronics and semi-conductorindustries such as Advanced Micro Devices (S) Pte Ltd, Agilent Technologies Singapore Pte Ltd, MaxtorPeripherals (S) Pte Ltd, STATS, STMicroelectronics Pte Ltd, Infineon Technologies Asia Pacific Pte Ltdand Motorola Electronics Pte Ltd. As at the end of FY2001, FY2002, FY2003 and the date of thisProspectus, we managed eight,13, 20 and 20 staff cafeterias respectively. The daily average number ofpatrons served at our staff cafeterias has increased from approximately 3,000 in FY2001 toapproximately 33,700 in 1H2004.

Our services comprise the whole supply chain of food and beverage procurement, menu planning andpreparation, as well as the operation and maintenance of food service and facilities at our customers’premises. Our services include provision of on-site meal service to our customers’ employees andgeneral maintenance and cleaning of the staff cafeterias. Occasionally, we provide advice and technicalsupport to our customers with respect to the installation of kitchen facilities and the design and layout oftheir staff cafeteria and kitchen.

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The number of food stalls at our staff cafeterias ranges from one to ten, offering different types ofcuisines to suit the varied tastes of our customers’ staff. We aim to serve healthy, appetising and varieddishes at our customers’ staff cafeterias. The cuisines comprise international and local fare. In mostcases, food is prepared on-site by our chefs at the staff cafeterias on the day of expected consumption toensure freshness. We aim to achieve central quality control at our staff cafeterias without compromisingon the need for continual variety in our menus. Towards this end, half of the selection from the dailymenu at our staff cafeterias is derived from a prescribed menu prepared by our Central Senoko Kitchenwhile the remaining half is decided by our staff cafeteria manager from our approved list of optionalmenus. Our staff cafeteria manager takes into account the tastes, preferences and budgetaryconsiderations of the patrons at each cafeteria in planning the menu. In addition, to add variety to themenus, our Central Senoko Kitchen supplies on a daily basis certain selection of cooked food notprepared by our staff cafeteria chefs to the various staff cafeterias operated by us. In a small number ofcontracts where there are no on-site kitchen facilities at our customers’ premises, food is prepared anddelivered by our Central Senoko Kitchen.

Raw materials, comprising mainly food ingredients required by our staff cafeterias are substantiallyprocured directly by them from our approved suppliers. Most of the staff cafeterias we operate areequipped with kitchen facilities such as cold rooms and freezers for the storage of food ingredients.

As part of our value-added services, we also provide customised events catering services to ourinstitutional catering corporate customers. These events include training seminars, conventions andmeetings conducted by our customers, family-day functions and food fairs which are usually held at thepremises of our customers.

The contracts in our Institutional Catering Division can be broadly categorised into the following threetypes:-

(a) Profit and Loss (no-subsidy) Contracts

In profit and loss contracts, we generally receive all our revenue from, and bear all the expensesof, the provision of our services under the contracts. Expenses under profit and loss contractsgenerally include labour, raw materials and utilities. However, they may also include rental orlicence fees payable to our corporate customers for the use of their premises to operate the staffcafeterias. The amount of rental or licence fees payable per month may be a fixed sum or avariable amount based on a percentage of the net receipts derived from the operation of the staffcafeterias. Under such contracts, the staff of our customers generally pays the full prices of theirown purchases.

(b) Partial-Subsidy Contracts

In partial subsidy contracts, we receive subsidies from our customers for our operations. Thesubsidy takes the form of a waiver from the payment of rent and/or utility charges to ourcustomers. In addition, in some of the contracts, we may also receive payment of a fixed monthlysum. The quantum of the fixed amount, which is determined after we have considered ouroperation cost, is agreed by our corporate customers when the contracts are formed. Generally, inview of the subsidy given to us, our customers will require us to reduce the selling prices of ourfood and beverages served at the staff cafeterias. The staff of our customers bears the costs oftheir own purchases. Under such contracts, our profit potential and risk of loss are reduced ascompared to profit and loss contracts.

(c) Catering and Management (full-subsidy) Contracts

Under catering and management contracts, our corporate customers bear the costs of managingtheir staff cafeterias and providing meals to their staff. In such cases, our customers either pay usa lump sum per month for the provision of meals or an amount calculated based on theheadcounts that we serve in that month, which is usually a fixed amount for each headcount. Inmost cases, we do not pay rent or utility charges for our operations. Under such contracts, ourprofit potential and risk of loss are reduced compared to profit and loss contracts.

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Generally, the prices of food and beverages that we sell at the staff cafeterias are agreed and fixed underthe contracts. The agreed prices take into account, amongst others, factors such as industry of ourcustomers and the amount of management fee or subsidy paid to us. The contracts generally alsorequire us to obtain the approval of our customers before we may increase the prices of the food andbeverages that we serve.

The duration of each contracts varies, ranging from one to three years, with most of the contracts beingrenewable for further periods at the sole option of our customers. The contracts generally provide fortermination by either party with notice as well as unilateral termination by the customer upon our breachof the contract, insolvency or liquidation.

We commenced operations of our institutional catering business in Suzhou, PRC in September 2004. Asat the date of this Prospectus, we have secured six institutional catering contracts in Suzhou. Food isprepared by us at our kitchen facility in Suzhou and delivered to the premises of our corporatecustomers. In addition, we have secured a contract to provide catering services for functions, exhibitionsand events held at an exposition hall in Suzhou.


We provide one-off catering services for special events and functions (“Events Catering Services”), aswell as daily meal delivery services (“Meal Delivery Services”) to workplaces and family units.

Our Events Catering Services offer catering services for a wide variety of private, corporate andcommunity events and functions. Our customers include individuals who require our services for privatefunctions such as weddings, indoor and outdoor parties, housewarming parties, anniversaries andbirthday celebrations. Our corporate customers include corporations, government bodies, institutions,hospitals and schools such as DBS Bank, SingTel, IBM, Singapore Armed Forces, Singapore PoliceForce, CPF Board, Singapore General Hospital, Changi General Hospital, National University Hospital,National University of Singapore and Nanyang Technological University. We are engaged for events suchas conventions, seminars, opening ceremonies and product launches.

We offer our customers a wide selection of buffet menus that range from International, Chinese, Malay,Japanese and Northern Indian cuisines to local fare which are tailored according to our customers’ tastesand budgets. These menus are designed for lunch, dinner, high-tea or barbecue or customised forspecific functions or theme parties. Our customised buffet packages come with complimentary servicessuch as full table setting, dish warmers, disposable table wares, serviettes, condiments and garbagebags. We also provide set-up and clearing services. In addition, we are able to offer our customers othervalue-added services such as provision of service staff to serve at our customers’ functions, chefs tocarry out on-site cooking or meal preparation and wedding or event consultancy and services.

For FY2001, FY2002, FY2003, we have catered for approximately 13,000, 15,000 and 14,000 eventsrespectively.

Our Meal Delivery Services cater mainly to customers who work in locations with no easy access to foodoutlets and who have very few or no lunch-out options. We also cater to family units which prefer theconvenience and time-saving option of prepared meals delivered to their doorsteps. We aim to providecomplete and good quality meals at affordable prices which are delivered to our customers in reusablehygienic containers, colloquially known as “lunch boxes” or “tingkats”. These containers are collectedwhen we make our next delivery. Besides lunch, we also cater for dinner. Contracts for our Meal DeliveryServices are generally for a specified period of not less than one month.

We serve Chinese, Japanese, Western and vegetarian cuisines for our Meal Delivery Services. Weprovide a different menu for each day of the week to offer variety and cater to specific tastes orpreferences of our customers. Our Directors believe that our prompt and efficient services and high foodquality have enhanced our customer base and increased orders from our customers. This hascontributed to the growth of our Meal Delivery Services over the years.

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The business of our Food Retail Division comprises the operation of (a) dedicated food court stalls (b)public cafeterias and (c) a foreign cuisine restaurant.

As at the date of this Prospectus, we operate 39 dedicated stalls in third-party-operated food courts (37in Singapore and two in, Malaysia), two public cafeterias and one mid-range Thai cuisine restaurant. Thefollowing map illustrates the geographical coverage of our food retail outlets in Singapore:-

(a) Operation of dedicated food court stalls

We cater mainly to the general public which prefers to have a fast meal during their meal breaks orwhile carrying out their daily activities, at affordable prices. We specialise in common but popularlocal fare such as Chinese Mixed Rice, Ampang Yong Tau Fu, and Nasi Padang. Since thecommencement of our food retail business in 1997, we have evolved from a small food court stalloperator to become one of the leading food court stall operators in Singapore.

Our dedicated food court stalls are located mainly in the food courts of shopping malls, hospitalsand neighbourhood centres with a relatively high concentration of shopping and working crowd.They are generally easily accessible by public transport and/or within the proximity of shoppingmalls and workplaces. Most of our stalls were procured through invitation by food court operators.In certain cases, we procured our dedicated food court stalls through advertisements placed byfood court operators. Generally, we are selective in our choice of locations. Factors that we willtake into consideration in evaluating the viability of a new food court stall include the following:-

Geographical location

Location of the food court is a major factor in our decision on whether to open a new outlet at thefood court. The expected customer traffic flow is critical to the success of a food court. The totalgross building area, the number of floors and the gross floor area of the building in which the foodcourt is located have an impact on the potential patronage of the shopping mall, which in turn willaffect the number of customers visiting the food court and our dedicated food court stalls. Thepresence of departmental stores, cinemas, amusement centres and supermarkets are among thepositive factors that may help to attract more customers to the location.

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Convenience

Easy accessibility or close proximity to public transport systems including bus terminals, the MRTstations and the Light Rapid Transit stations, is an important factor that will affect the potentialpatronage of the food court. The number of parking lots in the building and the availability of thecar park space in the vicinity of the building are also taken into consideration by us in ourevaluation.

Management of the food court

Good management of a food court is an important criterion to the success of the food court. Assuch, the experience, reputation and management style of the food court operators are importantfactors that we take into consideration in our evaluation.

Competition

We would take into account the food stalls mix in the food court and other restaurants or foodestablishments in the building in our consideration. Potential competition arising from same orsimilar cuisines being offered by nearby food establishments may affect the patronage of our foodcourt stalls.

Our contracts with the food court operators generally require us to pay a monthly rent or licencefee to the food court operators. Subject to a minimum fixed amount to be paid, such rent or licencefee takes the form of either a fixed amount per month or an amount calculated based on a fixedpercentage of our sales revenue or proceeds. In addition, we also pay a fixed amount of service orcleaning charges every month to the food court operators which are responsible for the cleaningand general maintenance of the food courts. All utility charges are borne by us based on ouractual usage and reimbursed to the food court operators. In some of our contracts, we are requiredto contribute towards the advertising and promotional expenses and/or a one-off renovation ordesign fee incurred by the food court operators.

Our dedicated food court stalls are each managed by a head chef who is assisted typically by anaverage of four kitchen and stall helpers. Food is cooked at the kitchens of our food court stalls byour chefs although a substantial part of the food preparation, such as cutting, slicing andseasoning of meats, is done by our Central Senoko Kitchen and delivered to our various food courtstalls for cooking. This is to improve the efficiency of our food court stalls as our chefs aregenerally constrained by the space and facilities available in the respective food court stall kitchensto carry out preparation of food items, particularly meat. The preparation and cooking of vegetablesand food ingredients are however carried out by our food court stalls directly as the preparationwork involved in such dishes is generally less. This is also to ensure the freshness and quality ofthe food prepared as non-meat raw materials, such as vegetables and other ingredients, areprocured by and delivered to our food court stalls directly.

Procurement of raw meat is made by our Central Senoko Kitchen, which has cold storage facilitiesto keep the raw meat fresh. Our food court stalls will place orders for their requirements of rawmaterials, such as meat, with our Central Senoko Kitchen one day before the expectedconsumption. Our Central Senoko Kitchen will procure, semi-process and deliver such food itemsto our food court stalls in time for preparation and cooking. Other raw materials such as produceand dried stocks are procured by the food court stalls directly from an approved list of suppliersand delivered to the food court stalls on the day of expected consumption.

The chef at each food court stall plans the daily menu from a prescribed menu prepared by ourCentral Senoko Kitchen with the flexibility to incorporate a certain proportion of the selection withoptional menus approved by our Central Senoko Kitchen. This flexibility is to allow our chefs to addvariety to the food selection based on customers’ preferences, which vary among the food courtstalls that we operate.

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(b) Operation of public cafeterias

As at the date of this Prospectus, we operate two public cafeterias at the following locations inSingapore and they are established on the dates shown below:-

Buildings Location Date of establishment

Caltex House Raffles Place 1 July 1999

Shaw House Orchard Road 16 July 2000

Each of our public cafeterias occupies an area of between 14 sq m and 270 sq m. Our two publiccafeterias have shared seating with other adjourning cafeterias. Customers of our public cafeteriasare mainly the general public who prefer to savour their meals at a more leisurely pace in a caféambience. We serve local fare as well as budget Western food at our public cafeterias.

We procured our public cafeterias through invitations by owners of the buildings under a fixedrental arrangement. Our public cafeterias are operated substantially in the same manner as ourfood court stalls.

(c) Operation of foreign cuisine restaurant

We commenced operations of a mid-range Thai cuisine restaurant named Lerk Thai Restaurant,located at 249 Victoria Street, in March 2004. Our restaurant has an area of approximately 115 sqm with a seating capacity for about 70 customers. Our head chef at the restaurant hasapproximately 20 years of experience in preparing Thai cuisines. The restaurant appeals tocustomers who seek authentic Thai cuisines at budget to middle-range prices, coupled with aunique, hassle-free dining experience. Although the restaurant is distinctly different from our otherfood establishments in the cuisine it serves, it shares certain common traits such as quality food,prompt and efficient service, as well as clean and friendly environment. Over and above that, westrive to differentiate this restaurant from our public cafeterias by providing attractive interiordecorations and uniformed service staff to complement the ambience. All our service staff istrained with the necessary skills and menu knowledge to provide a consistent level of customerservice and to assist our customers in food selection. We also offer attractive set menus ataffordable prices to cater to the working public.

We adopt a self-service ordering system at the restaurant. Our customers will place and pay fortheir orders at the service counter and food will be served at the customers’ tables by our servicestaff. Our service staff is also available to assist our customers with their selection from the menu.This system reduces our operating costs and assists in orderly and speedy food preparation andservice, hence promoting good customer turnover during peak periods.

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MANAGEMENT OF OUR KITCHENS AND OPERATIONS

As at 30 June 2004, we employ an aggregate of 738 employees and operate 58 food establishments inSingapore and Malaysia, comprising both food retail outlets and institutional catering staff cafeterias. Inaddition, our food catering business is able to serve up to an average maximum capacity of 2.92 millionheadcounts a year. Such large scale operations require us to be able to manage our operationsefficiently and effectively so as to remain profitable and further expand our business. Our managementcapabilities can be seen from the manner in which we manage our operations, details of which are setout below.

Our Kitchens

Central Senoko Kitchen

Our Central Senoko Kitchen houses three sub-kitchens, namely Stamford Kitchen, Select CateringKitchen and Select Food Management Kitchen. As at 30 June 2004, it was operated by 83 employees,comprising two operations personnel, four Master Chefs, 17 chefs, 30 kitchen helpers and 30 deliverypersonnel. Our Central Senoko Kitchen serves customers island-wide.

Our Central Senoko Kitchen is equipped with all the necessary kitchen facilities, including cold roomsand freezers for the storage of perishable raw materials.

Stamford Kitchen

Our Stamford Kitchen meets the certification requirements of MUIS for the preparation of Halalfood. All Halal food items are prepared, cooked and packed by a separate staff group. OurStamford Kitchen supports our Food Catering Division and Institutional Catering Division bypreparing Halal meals for our customers.

In addition, our Stamford Kitchen also prepares and delivers semi-processed Halal food items,which are raw food that has undergone preparation such as cutting, slicing and seasoning, to ourdedicated food court stalls and public cafeterias under our Food Retail Division.

Select Catering Kitchen

Our Select Catering Kitchen prepares non-Halal cooked food that serves our Food CateringDivision. In addition, it also prepares and supplies a small quantity of cooked food for ourinstitutional catering customers.

Select Food Management Kitchen

Our Select Food Management Kitchen was established to serve our Food Retail Division. Itessentially prepares semi-processed food items for distribution to our various food court stalls andpublic cafeterias under our Food Retail Division. Due to space constraints and lack of kitchenfacilities in many of our food retail outlets, the preparation of raw food such as slicing, cutting andseasoning of meat is carried out by our Select Food Management Kitchen. The semi-processedfood is delivered to the various food retail outlets and is ready to be cooked at any time whenrequired. In this manner, we are also able to leverage on the benefits of economy of scale derivedfrom bulk preparation of semi-processed food at our Central Senoko Kitchen.

Simei Eastern Kitchen

As at 30 June 2004, our Simei Eastern Kitchen is operated by 26 employees, comprising one operationsmanager, four chefs, eight kitchen helpers and 13 delivery personnel. Located in Bedok, our SimeiEastern Kitchen provides non-Halal food services to our Food Catering Division customers in the easternregion of Singapore. Our close proximity to our customers enables us to provide prompt and efficientservices, reduces operating costs and delivery time and maximize our resources.

Our Simei Eastern Kitchen is managed by an operations manager. It procures all raw materials, includingmeat and perishable items, from our approved suppliers and has cold room facilities for the storage ofsuch raw materials.

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Although our Central Senoko Kitchen and Simei Eastern Kitchen operate independently of each other,they each serve as a secondary source of food supply to the other when demand exceeds the capacityof the other kitchen.

The production flow chart at our Central Senoko Kitchen can be illustrated as follows:-

Integrated Computer System

We have installed a computer system which integrates all departments and functions in our Group, otherthan our human resource, into a single computer system. It consists of software modules for businessareas such as marketing and sales, raw material costs, profit margins, production and inventory control,procurement, distribution, cuisine and service development, finance and accounting. Our computersystem has been developed by our Group and is customised to meet our specific business needs.

The integrated computer system also contains all essential data relating to our cuisines and menus, suchas the ingredients and portions required in any food item. This assists us in controlling our costs andmonitoring our gross profit margins. The integrated computer system is able to process our raw materialsrequirements and allocate them to our various kitchens for preparation and distribution.

Upon receipt of sales orders from, for example, our food catering customers, our sales department willkey in the selected information such as the menu, quantity required (in terms of headcount), deliverylocation and time into our integrated computer system. Our computer system will, based on suchinformation, process the purchase orders for raw materials required and the ingredients list. The initialdata (comprising delivery location, time, selected menu, and quantity required) and the requiredingredients list and quantity are then forwarded to the respective kitchens for preparation. Our productiondepartment will, based on information processed by the computer system, allocate the necessary rawmaterials required by the different kitchens for the preparation of the sales orders.

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Stamford Kitchen(Halal)

Select Food Management Kitchen (Non-Halal)

Institutional Catering DivisionPreparation and processing of cooked food

Food Retail DivisionPreparation and processing of semi-processed food

End customers

Food Catering DivisionPreparation and processing of cooked food

Institutional Catering DivisionPreparation and processing of cooked food

End customers Institutionalcatering staff cafeterias

Food RetailPreparation and processing of semi -processed food

Food court stalls and public cafeterias

Production controlAllocation of raw materials to different kitchens

Food Catering DivisionPreparation and processing of cooked food

Institutional catering staff cafeterias

Food court stalls and public cafeterias

SalesReceipt of orders from food catering customers and food retail outlets

PurchasingProcurement of raw materials

Select Catering Kitchen(Non-Halal)


Our integrated computer system has enabled us to achieve short turnaround time and prompt customerservice notwithstanding the large scale of our operations. It reduces the amount of time required foroperations planning and assists us in managing our operations efficiently. This raises our productivitylevel and increases the quality of our services. In addition, our integrated computer system assists tostandardise the use of raw materials and ingredients in each particular food item. This ensures that weserve our customers with food items of consistent quality.

Bulk Procurement

We source our raw materials requirements, comprising raw food such as meat, vegetables and fruits,locally. We negotiate the pricing and other terms for the majority of our purchases directly with oursuppliers. We ensure the quality of our raw materials by having a list of approved suppliers which areassessed on factors such as the quality of their products, pricing and service level and their ability tomeet delivery schedules.

Generally, raw food such as meat is procured in bulk by us and stored in the cold rooms at our CentralSenoko Kitchen. By procuring in bulk, we are able to enjoy better pricing offered by our suppliers.Although our dedicated food court stalls, public cafeterias and staff cafeterias source for some of theirraw material requirements directly, such purchases are procured from our approved suppliers. We aretherefore still able to enjoy better pricing as prices of raw materials are generally negotiated by us on aGroup basis.

Cost Control Incentives

We monitor the cost of our raw materials closely. Our senior management collates periodic data such asrevenue and gross profit margins from each kitchen and food establishment, to (i) assess the justificationfor, and reasonableness of, raw materials request; (ii) ensure minimum wastage on raw materials; and(iii) detect possible pilferage by employees. Immediate investigation will be conducted at the kitchen orfood establishment involved if material deviations are detected.

In 2002, we implemented an incentive scheme which has enabled us to minimise wastage of rawmaterials and cooked food, thus reducing our food costs and increasing our net profits. Essentially, thescheme involves rewarding our chefs and employees with a commission based on a certain percentageof the net profit derived from the operations of the food retail outlet or kitchen under their charge. Thisserves as an incentive to our chefs and employees to control the food costs in order to minimize wastageof raw materials and cooked food, so as to maximize the profits earned.

Delivery and Distribution

As at 30 June 2004, our experienced delivery team comprises 15 full-time drivers, 28 sub-contractdrivers and four operations personnel who oversee the operation of our delivery team. Our operationspersonnel from time to time serve as delivery drivers when the situation requires. We have a fleet of 47vehicles to support our operations, out of which 19 are owned by us and the remaining 28 are owned byour sub-contract drivers engaged to assist us in our delivery.

After examination which is done in accordance with our quality assurance procedures, the cooked food ispacked and delivered to our customers. We provide prompt and on-time delivery to all locations inSingapore. Depending on traffic conditions, we are generally able to deliver to our desired destinationswithin 45 minutes after leaving the kitchen. For the past three years, we have not had any significantcomplaints relating to delays in our delivery.

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CASH MANAGEMENT

It is our policy to have all cash collected by our delivery staff from customers of our Food CateringDivision to be delivered to our accounts department, which will deposit the cash with the bank on thenext available working day. Cash collected at our various food retail outlets and staff cafeterias aredeposited by our stall operators, cafeteria and restaurant managers and operations executives into thebank accounts designated by our accounts department on the next available working day. Under some ofour contracts, cash collected daily from our dedicated food court stalls are deposited with the food courtoperators and returned to us usually at the end of the month after deducting the amounts due to thempursuant to the contract.

In order to prevent pilferage of cash by our staff, we have installed close-circuit television (“CCTV”)systems at each cashier location of the staff cafeterias under our Institutional Catering Division. CCTVsystems at our dedicated food court stalls are installed and monitored by the respective food courtoperators. We have also installed CCTV systems at the cashier locations of our public cafeterias andrestaurant. Our senior management performs regular cash float checks on our food establishments.

We maintain insurance against loss of cash from money-in-transit, money kept in locked safe and cashregisters during and after office hours.

QUALITY CONTROL

We believe in the importance of the quality of our food and service, as well as the maintenance ofcleanliness and hygiene at all our kitchens and food establishments in accordance with standards set bythe relevant government authorities.

Our Company and Stamford were awarded the ISO 9001 certification by IQNet and SPRING Singapore,which are quality standards accreditation bodies, in recognition of our commitment and efforts inimplementing and maintaining a quality management system in respect of the provision of food cateringservices.

Quality of food

Raw materials purchased by us from suppliers are checked upon their delivery to our kitchens and foodestablishments. Where the raw materials are not of an acceptable quality, they will be rejected andreturned to the suppliers. If accepted, they will be properly stored by our kitchens. To ensure that weuse fresh ingredients, we have put in place, as part of our quality control procedures, the maximumstorage time permitted for each type of ingredients. Generally, perishables such as fruits and vegetablesare stored for up to one day, while frozen meat and other dry stocks are stored for a period of up to oneweek. In addition to checking through our computerised database, physical stock takes are conductedweekly at the kitchens by our store keepers. All outgoing prepared food (both cooked and semi-processed) undergo random quality inspection by our quality control officer before they are allowed toleave our premises.

We implement standardisation processes to ensure consistency in the quality of our cuisines. Ourintegrated computer system standardizes the portion of each ingredient for a particular food item. Wehave also prepared and compiled a manual on “Standardised Food Preparation and Portioning” to ensurethat our kitchens and food establishments prepare, portion and season all ingredients in a standardizedmanner. This will ensure consistency in the flavours and tastes of our cuisines. In addition, to enhancethe cooking standards of our experienced chefs, we also compiled a manual on “Standardised Recipes”and our chefs undergo both on-the-job training by our Master Chefs as well as internal and externalcourses conducted on cuisine preparation.

We place emphasis on the freshness of the food items we deliver to our customers. It is our policy toprepare and cook the food no more than two hours before the required delivery time. We also assure ourcustomers that our delivery will be done promptly. We guarantee full refund to our customers if the food isdelivered more than 90 minutes later than the required delivery time.

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Feedback forms are circulated to our customers when the food is delivered. We believe that the feedbackforms give us first-hand information with regard to our customers’ preferences and concerns. Weconstantly modify our operating procedures in accordance with the requirements under the ISO 9001certification as well as to improve the level of our service.

Hygiene control in our kitchens

We have implemented strict personal hygiene guidelines including requiring staff to:-

(a) wear disposable gloves or use utensils and avoid handling cooked food with bare hands,(b) wear uniforms and footwear provided by us during production hours,(c) wash their hands with detergent before each production shift, after handling raw food, after meals,

after visiting the washrooms, after touching their hair or face, or after touching or handling non-food contact surfaces or equipment,

(d) not smoke in the kitchens and when handling food,(e) wear face masks when handling cooked food, and(f) wear covered shoes in the kitchens.

Our quality assurance officer is responsible for conducting random checks on the cleanliness andhygiene practices at all our kitchens, including those at our food establishments.

All our food establishments and kitchen facilities have either an “A” (representing “excellent”) or a “B”(representing “good”) grading by MEWR based on housekeeping, food hygiene and personal hygiene.Other factors such as quality control, food transportation and training of food handlers are also taken intoconsideration in the grading.

STAFF TRAINING

We place strong emphasis on the training of our staff to ensure and enhance the quality of our service.We believe in providing attentive, friendly, prompt and efficient service to our customers. Our stafftraining aims to provide our employees with relevant skills and knowledge.

Our training essentially comprises the following two types:-

(a) On-the-job training; and(b) Instructional courses conducted internally and externally

On-the-job training

New employees are stationed at our food establishments to receive on-the-job training for one to twoweeks by our chefs and other supporting staff before commencement of work. Continuous training isprovided on the job.

All employees who handle food are required to undergo the “Basic Food Hygiene Training” courseconducted by either the Society of Environmental Health or the Restaurant Association of Singapore.Some employees are selected by us to undergo training conducted at our ITE-certified training centre,which is approved by the ITE to conduct training and assessment leading to “Certificate of Competencyin Food Preparation”.

In addition, from time to time, we sponsor our employees to attend courses and seminars such as thoserelating to customer service and communication skills. The courses that our staff members have attendedinclude:-

– “Food Hygiene Officer Courses” conducted by the Singapore Environmental Institute;– “Chinese Cuisine Courses” conducted by the Restaurant Association of Singapore;– “HACCP Concept and Implementation” courses conducted by the Society of Environmental Health;– “National Certificate in Supervisory Skills” courses conducted by SPRING Singapore;– “Professional Sales Negotiation and Techniques” courses conducted by Greshirl Consulting; and– “Train the Trainer” courses conducted by Institute of Technical Education.

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In the past three years, expenses we incurred with respect to staff training were insignificant.

MAJOR CUSTOMERS

Our Institutional Catering Division customers include local and multinational corporations with productionfacilities in Singapore. Customers of our Food Retail Division and Food Catering Division comprise thegeneral public, family units, as well as corporations, government bodies, hospitals and schools.

The following customers accounted for 5% or more of our Group’s total revenue in the last three financialyears and 1H2004:-

Services Provided Percentage of total revenue (%)

FY2001 FY2002 FY2003 1H2004

Maxtor Peripherals (S) Pte Ltd(1) Institutional Catering – 0.9 9.5 7.9

STATS(1) Institutional Catering – 0.5 5.5 5.1

Note:-

(1) As our contracts with Maxtor Peripherals (S) Pte Ltd and STATS commenced only in November 2002 and December 2002respectively, revenue derived in FY2002 from these contracts contributed to less than 5% of our total revenue in FY2002.

Save as disclosed above, none of our customers accounted for 5% or more of our Group’s total revenuefor the past three financial years and 1H2004

None of our Directors or Executive Officers or any of their Associates has any interest, direct or indirect,in any of the above major customers.

MAJOR SUPPLIERS

We purchase our raw materials, such as meat, vegetables, fruits, dairy products and dry stocks fromsuppliers who are able to offer us the most competitive terms and quality ingredients. To mitigate anypossible effect from dependence on major suppliers, it is our policy to procure from at least two suppliersfor each raw material.

The following suppliers accounted for 5% or more of our Group’s total purchases of raw materials in thelast three financial years and first half of FY2004:-

Product supplied Percentage of total purchases (%)

FY2001 FY2002 FY2003 1H2004

Angliss Singapore Pte Ltd Frozen poultry 21.0 13.1 23.3 19.4

Aw Guan Hong Vegetable Wholesaler Vegetable – 6.7 4.5 6.8

Song Heng Kern Kee Vegetable – – 7.1 –

Chip Seng Impex (S) Pte Ltd Rice 5.3 5.3 6.7 5.4

Han Tat Seafood & Cold Storage Seafood 6.4 13.9 5.9 3.6

Yit Seng Trading Company Dry goods 5.0 7.1 6.2 4.4

Lim Thiam Chwee Vegetable – – – 6.1

We select our suppliers based on factors such as price, quality of products, delivery lead time and creditterms granted to us.

None of our Directors or Executive Officers or any of their Associates has any interest, direct or indirect,in any of the above major suppliers.

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INVENTORY MANAGEMENT

Our Company’s inventory comprises raw materials such as frozen meats, fresh fruits, vegetables, dairyproducts, eggs, and dry stocks.

We do not keep a high inventory of raw materials required for our production as they are readily availablefrom the market and can be purchased at any time. Our policy is to store perishables such as fresh fruitsand vegetables for up to one day, and frozen meats and other dry stocks for a period of up to one week.Our integrated computer system enables us to monitor the level of inventory and our inventoryrequirements at any one time. In addition, we carry out physical stock takes weekly at our kitchens.

Our inventories are managed on a “first-in-first-out” basis whereby supplies first received will be the firstto be used for our production process.

In the past three financial years and 1H2004, we did not write off any inventories due to obsolescence.

Our average inventory turnover based on the level of inventory carried by our Group for each of the lastthree financial years and first half of FY2004 are as follows:-

FY2001 FY2002 FY2003 1H2004

Number of days(1) 5 5 3 5

Note:-

(1) Average inventory turnover = (Average inventory/Cost of Sales) x 365 or 180 for 1H2004

INSURANCE

We have insurance policies covering losses due to fire and extraneous perils, theft, loss of money, aswell as public liability insurance (which cover accidental injury directly caused by or arising from anythingharmful or defective in food and drink supplied or from poisoning of any kind caused by food and drinksold or supplied by our Group). We have also insured our staff for workmen’s compensation insuranceand our management staff with group hospitalisation and surgery insurance.

We also maintain Keyman and Personal Accident Insurance for our Managing Director, Mr Vincent Tan.

Our Directors believe that these insurance policies are adequate for the operations of our Group.

MARKETING CHANNELS


Our General Manager (Institutional Catering), Mr Steven Tan, is responsible for promoting the business ofour Institutional Catering Division. Leveraging on our experience and network in the industry, we closelymonitor the market for business opportunities and present our proposals and quotations to themanagement of potential corporate customers which require or will, by virtue of the impending expirationof their existing contracts, require our services. We also source for projects through public channels suchas newspapers advertisements, websites, GeBiz (a government website), as well as private invitations.Our corporate customers which have used the services provided by our Food Catering Division alsopresent a good potential source of business for us. After conducting our feasibility study and assessingthe viability of any particular project, Mr Steven Tan actively pursues the procurement of the project.

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Food Catering

As at 30 June 2004, the marketing activities of our Food Catering Division are undertaken by anexperienced marketing team of 10 sales executives and customer service officers led by our sales andmarketing manager, Ms Wenna Kan. All our marketing personnel are equipped with detailed knowledgeof our services and products. The marketing team is responsible for market penetration and marketdevelopment. Our marketing personnel meet frequently with our potential customers to discuss theservices that we can offer.

We utilise marketing channels such as newspaper advertisements, corporate leaflets, TV and radiocommercials, food exhibitions and wedding workshops to promote our services. We also conduct massmailing to family units to promote our catering services.

We have a loyalty card programme for our repeat family unit customers under which they enjoy certainspecial offers and promotions, such as 5% to 15% discounts for catering services or welcome vouchers.As at 30 June 2004, we have approximately 345 customers who have signed up and received our loyaltycards.

We value the opportunities of providing catering services and one-off events to our corporate customers,where we strive to enhance awareness of our products and services, and image of our Group.


Our Executive Director, Mr Jack Tan, is responsible for promoting the business of our Food RetailDivision and securing new food retail outlets. We monitor closely the development of new shopping mallsor other commercial buildings which are at strategic locations. We generally carry out an internalfeasibility study of any potential new food retail outlet at existing or new shopping malls or othercommercial buildings. We may also occasionally engage part-time personnel to carry out a marketsurvey to collect relevant data, such as human traffic flow and type of crowd that are likely to patronizethe building. Upon deciding on a new location for our food retail outlet, Mr Jack Tan will present ourproposal or tender documents to the developer or food court operator.

AWARDS

The following awards and certificates have been granted to our Group:-

Award/Certificate Issuing Organisation Awarded/Granted for Date of Grant/Validity

1. Singapore SME 500 DP Information Network Awarded to our Company Granted in 20012000/2001 Company Pte Ltd for being ranked among

the top 500 SMEs in Singapore

2. ISO 9001:2000 IQNet and SPRING Granted to our Company Granted on 30 SeptemberSingapore for having a Quality 2002 and valid till 30

Management System in September 2005the provision of food catering services

3. ISO 9001:2000 IQNet and SPRING Granted to Stamford Granted on 18 July 2003Singapore for having a Quality and valid till 30 September

Management System in 2005the provision of foodcatering services

4. Singapore Service Class SPRING Singapore Awarded to our Company Granted on 28 June 2004for service excellence

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TRADEMARK AND PATENT

As at the date of this Prospectus, our Group has applied for registration of the following trade marks andservice marks with the Intellectual Property Office of Singapore, the status of which is as follows:-

Trademark Place of ApplicationApplication Number Representation Application Class Date Status

T0406648E Singapore 43 28 April 2004 Applicationpending

T0407608A Singapore 43 13 May 2004 Applicationpending

T0406651E Singapore 43 28 April 2004 Applicationpending

T0407599I Singapore 43 13 May 2004 Registered

T0415549F Singapore 43 16 September 2004 Applicationpending

T0415547Z Singapore 43 16 September 2004 Applicationpending

The registration of the above trade marks and service marks have been applied for under Class 43 of theInternational Trade Mark Classification of Goods and Services, covering the specifications of, inter alia,food and drink catering, canteens, cafes and cafeteria. We have received initial objection from theIntellectual Property Office of Singapore to the registration of the trademarks which are still pending. Wehave or are in the process of responding to the objection. We cannot assure that we will be successful inobtaining approval for the registration of the trademarks.

PROPERTIES AND OTHER FIXED ASSETS

Real Properties

As at the date of this Prospectus, our Group owns the following properties:-

Net book Area Use of value as at

Description Tenure (sq m)(1) property Encumbrance 31 December 2003

36 Senoko Crescent 30 year lease 4,638 Headquarters Mortgaged to $2,136,533.00Singapore 758282 expiring on 15 and kitchen OCBC

March 2020

3017 Bedok North 30 year lease 171 kitchen Mortgaged to $439,432.00Street 5 #02-33 expiring on 31 DBS BankSingapore 486121 October 2033

3017 Bedok North 30 year lease 171 kitchen Mortgaged to $439,432.00Street 5 #02-34 expiring on 31 DBS BankSingapore 486121 October 2033

51 Telok Ayer Street, 10 year lease 14 Dedicated Mortgaged to $171,702.00#B1-06 China expiring on 27 Food Stalls DBS BankSquare Food Centre, March 2008Singapore 048441(1)

Note:-

(1) Property is currently held by our Managing Director, Mr Vincent Tan, on trust for our subsidiary, Select FM (Singapore). Stepsare currently taken to transfer the legal title of the property to our subsidiary, Select FM (Singapore).

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As at the date of this Prospectus, our Group leases or rents or occupies under lease or licences thefollowing properties/premises:-

Description Approx. area Term of lease/(sq m)(1) Use of property Licence Lessor/licensor

Dun Huang Road, East Lou 3,700 Office and kitchen 9 years Yin He ConstructionFeng District, Suzhou commencing Materials Co, Ltd.Industrial Park, PRC 11 August 2004

6 Scotts Road 25 Food stall 2 years The Ascott Group #B1-04 Scotts Shopping Centre (Chinese Mixed commencing LimitedSingapore 228209 Rice) 16 January 2004

6 Scotts Road 34 Food stall 3 years The Ascott Group #B1-23 Scotts Shopping Centre (Thai/Viet Food) commencing LimitedSingapore 228209 29 August 2003

238 Thomson Road 25 Food stall 7 December 2003 Food Junction #01-43/53 Stall No. 4 (Chinese Mixed to 30 June 2005 Management Pte LtdNovena Square Rice)Singapore 307683

230 Victoria Street 17 Food stall 1 year Food Junction #B1-01 Stall No. 2 (Chinese Mixed commencing Management Pte LtdBugis Junction Rice) 1 August 2004Singapore 188024

9 Raffles Boulevard 15 Food stall 1 year Food Junction #02-02/22 Stall No. 5 (Ampang Yong commencing Management Pte LtdMillenia Walk Tau Fu) 1 November 2004Singapore 039596

1 Maritime Square 29 Food stall 2 years Food Junction #03-01 to #03-14 Stall No. 7 (Thai/Viet Food) commencing Management Pte LtdWorld Trade Centre 17 February 2003Singapore 099253

9 Bishan Place 13 Food stall 1 year commencing Food Junction #04-01 Stall No. 12 (Nasi Padang) 1 December 2004 Management Pte LtdJunction 8 Shopping CentreSingapore 579837

21 Choa Chu Kang 14 Food stall 2 years Food Junction Avenue 4 #B1-05 (Chinese Mixed commencing from Management Pte LtdStall No. 14 Lot 1 Rice) 1 May 2003Shopper’s MallSingapore 689812

68 Orchard Road 19 Food stall 1 March 2003 to Kopitiam Investment #06-15/16/17 Stall 15 (Chinese Mixed 3 December 2005 Pte LtdPlaza Singapura Rice)Singapore 238839

51 Bras Basah Road 14 Food stall 7 November 2002 Kopitiam Investment #01-03 Stall No. 11 (Chinese Mixed to 31 March 2005 Pte LtdPlaza By The Park Rice)Singapore 189554

1 Sengkang Square 25 Food stall 7 August 2002 to Kopitiam Investment #04-14 to #04-19 (Chinese Mixed 28 August 2005 Pte LtdStall No. 18D Compass Point Rice)Singapore 545078

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5 Lower Kent Ridge Road 14 Food stall 3 years Kopitiam Investment National University Hospital (Nasi Padang) commencing Pte LtdMain Building Stall No. 7 1 September 2003Singapore 119074

1 Hougang Street 91 29 Food stall 10 October 2003 Kopitiam Investment #01-40 Stall No. #01-38 (Chinese Mixed to 29 September Pte LtdHougang Festival Market Rice) 2006Singapore 538692

1 Jelebu Road 26 Food stall 1 May 2004 to Kopitiam Investment #03-08/09 Stall No. 2 (Chinese Mixed 31 March 2007 Pte LtdBukit Panjang Plaza Rice)Singapore 677743

1 Jurong West Central 2 17 Food stall 1 November 2003 Kopitiam Investment#03-42 Stall No. 20 (Chinese Mixed to 20 December Pte LtdJurong Point Shopping Centre Rice) 2005Singapore 648886

1 Woodlands Square 23 Food stall 3 years Horizon Foodmalls #05-11 Stall No. 9 (Nasi Padang) commencing (Causeway) Pte LtdCauseway Point 1 November 2003Singapore 738099

1 Woodlands Square 20 Food stall 3 years Horizon Foodmalls #05-11 Stall No. 27 (Chinese Mixed commencing (Causeway) Pte LtdCauseway Point Rice) 1 November 2003Singapore 738099

51 Cuppage Road 19 Food stall 3 years Foods First Pte Ltd#02-01 Stall No. 02-13 (Chinese Mixed commencing 15 Starhub Centre Rice) September 2004Singapore 229469

11 Rivervale Crescent 36 Food stall 2 years NTUC Foodfare #02-01 Stall No.11 (Chinese Mixed commencing Co-operative LimitedRivervale Mall Rice) 1 December 2002 Singapore 545082

301 Upper Thomson Road 22 Food stall 7 January 2004 to ISR Singapore Pte Ltd#01-113 Stall No. 11 (Nasi Padang) 14 January 2006Thomson PlazaSingapore 574408

2 Simei Street 3 16 Food stall 3 years Forward Food #01-20-00 Stall No. 1 (Chinese Mixed commencing Management Pte LtdChangi General Hospital Rice) 16 January 2002Singapore 529889

2 Simei Street 3 16 Food stall 3 years Forward Food #01-20-00 Stall No. 4 (Nasi Padang) commencing Management Pte LtdChangi General Hospital 1 February 2002Singapore 529889

9 Lorong Liput 14 Food stall 1 year Holland Valley Pte Ltd#01-05 Stall No. 4 (Nasi Padang) commencing The Windmill 1 September 2004Singapore 277728

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13 & 29 Smith Street 8 Drinks stall Monthly basis Chinatown Business Stall No. 9 commencing AssociationSingapore 058927 1 October 2004

13 & 29 Smith Street 8 Fruits stall Monthly basis Chinatown Business Stall No. 19 commencing AssociationSingapore 058927 1 October 2004

9 Tampines Street 32 29 Food stall 20 September Aik Hua Pte Ltd#01-01 Stall Nos. 13 & 14 (Nasi Padang) 2003 to 15 Singapore 529286 February 2005

3 Temasek Boulevard 20 Food stall 2 years Suntec Food & #B1-025/045 Stall No. 4 (Nasi Padang) commencing Leisure Pte LtdFountain Food Terrace, 9 January 2004Suntec City MallSingapore 038983

391A Orchard Road 20 Food stall 1 year Takashimaya #B210-5-1 Takashimaya (Chinese Mixed commencing Singapore LtdDepartment Store Rice) 4 July 2004Ngee Ann CitySingapore 238873

391A Orchard Road 19 Food stall 3 years Takashimaya #B210-5-5 Takashimaya (Thai/Viet Food) commencing Singapore LtdDepartment Store 18 June 2004Ngee Ann CitySingapore 238873

302 Tiong Bahru Road 19 Food stall 3 years Kopisi Pte Ltd#03-01/02/31-55 (Chinese Mixed commencing

Stall No. 13 Rice) 1 February 2004Tiong Bahru PlazaSingapore 168732

Stall No. 2, Unit S3, 23 Food stall 3 years Horizon Foodmalls 2nd Floor, Ikano Power Centre, (Chinese Mixed commencing 23 (Malaysia) Sdn BhdJalan PJU 7/2, Rice) December 2003Mutiara Damansara,47500 Petaling Jaya,Selangor Darul EhsanMalaysia

Stall No. 19, Food Junction 20 Food stall 1 year T&W Food Junction 3rd Floor, (Chinese Mixed commencing 13 Sdn BhdMid Valley Megamall, Rice) December 2004Mid Valley Centre,Lingkaran Syed Putra59200 Kuala LumpurMalaysia

30 Raffles Place 34 Cafeteria 3 years Savu Properties Ltd#B1-05A Caltex House commencing Singapore 048622 1 July 2002

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350 Orchard Road 14 Cafeteria 1 year Shaw House Pte Ltd#05-06 Lido Cineplex Foyer commencing Shaw House 16 July 2004Singapore 238868

249 Victoria Street 115 Restaurant 3 years Rochor Square Bugis Village commencing Private LimitedSingapore 188034 9 March 2004

2 Jurong East Street 21 33 Food Stall 1 October 2004 Kopitiam #02-111 Stall No. 2 (Chinese Mixed to 31 August 2007 InvestmentIMM Building Rice) Pte LtdSingapore 609601

18 Raffles Quay 24 Food Stall 2 years Renaissance Stall Nos. 10 & 11 (Chinese Mixed commencing PropertiesLau Pa Sat Festival Market Rice) 4 October 2004 Pte LtdSingapore 048582

1 Expo Drive 2,628 Expo F&B Hub 14 June 2004 to Singex Venues Pte LtdSingapore 486150 28 February 2009

6 Raffles Boulevard 20 Food Stall 3 years Marina Food Court Pte Ltd#04-101 Stall No. 13A (Chinese Mixed commencingMarina Square Rice) 9 November 2004Singapore 039594

Note:-

(1) Some of the areas are derived from physical measurements.

The leases and licences listed above do not include premises occupied under our institutional cateringcontracts.

The aggregate annual rental expenses for FY2001, FY2002, FY2003 and 1H2004 were approximately$2.3 million, $3.1 million, $3.2 million and $2.0 million respectively.

Fixed assets

The fixed assets of our Group as at the end of FY2003 and 1H2004 were as follows:-

Accumulated Cost depreciation Net book value

Fixed assets ($’000) ($’000) ($’000)

As at end As at end As at end As at end As at end As at endFY2003 1H2004 FY2003 1H2004 FY2003 1H2004

Leasehold properties 3,957 3,957 769 870 3,188 3,087

Plant and machinery 7,413 7,698 3,286 3,541 4,127 4,157

Construction-in-progress – 788 – – – 788

Total 11,370 12,443 4,055 4,411 7,315 8,032

No valuation has been made on the fixed assets of our Group for the purpose of inclusion in thisProspectus. There are no environmental regulations that would affect our utilisation of our fixed assets.

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CATERING CAPACITY


Taking into consideration the size of our kitchens, current kitchen facilities, number of vehicles used tosupport our operations and current staff strength, we estimate that we have the capacity to cater to adaily average of 8,000 headcounts. The actual headcount and utilisation rates for our Food CateringDivision in each of the last three financial years were as follows:-

FY2001 FY2002 FY2003Headcounts

Annual Capacity (million)(1) (2) 2.92 2.92 2.92

Actual Headcount (million) 1.80 1.84 1.6

Average Utilisation Rate (%)(3) 61.6 63.0 54.8

Notes:-

(1) The annual capacity is computed as follows:-Annual Capacity = Average Daily Capacity X 365 days

(2) The maximum daily capacity is 12,000 (headcount), which may occur during festive seasons such as Christmas and NewYear. Our Directors estimate the maximum Average Daily Capacity on a long-term basis to be 8,000 (headcount) as ourKitchens are unable to operate at full maximum capacity on a daily basis.

(3) The utilisation rates are computed as follows:-Utilisation Rate (%) = Actual Headcount Served / Annual Capacity


As the preparation of food under our institutional catering contracts takes place largely at the premises ofour customers, our capacity is therefore not limited by the capacity and facilities of our kitchens. We areable, as and when required, to increase our staff strength to operate the institutional catering staffcafeterias.

Our Directors are therefore of the view that it is not meaningful to estimate the capacity level in relation toour institutional catering business as our capacity is determined principally by the terms of the contractswhich were negotiated and entered into with our institutional catering corporate customers.


The capacity level of our business under the Food Retail Division cannot be determined to a level ofsatisfactory accuracy due to the number of variable factors that affect the capacity of our food retailoutlets. Such factors include different tenant mix, seating capacities at the various food courts andcustomers having the choice to request take-away instead of dining in. Furthermore, excess demand atour food retail outlets can always be met by our Central Senoko Kitchen which prepares and deliverssemi-processed food to such outlets.

CUISINE AND SERVICE DEVELOPMENT

Our ability to attract and retain customers depends not only on the cost, quality and efficiency of ourservice, but also on our ability to gauge and cater to consumer preferences. Consequently, we see thedesign, customisation and innovation of our menu options as a key aspect of the services we provide.Our cuisine and service development team comprises seven Master Chefs which is led by our ManagingDirector, Mr Vincent Tan, and our General Manager (Institutional Catering), Mr Steven Tan. The purposeof our cuisine and service development activities is to monitor the quality of the cuisines developed byour chefs and encourage creation of novel recipes for our menus.

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Our seven Master Chefs are highly trained and experienced and each has been in the F&B industry forat least 10 years. Four of our seven Master Chefs are respectively in charge of Pastry, Chinese, Westernand Malay cuisines and they operate from our Central Senoko Kitchen under the direction of ourManaging Director, Mr Vincent Tan. Our other Master Chef is overall in charge of the cuisines of ourInstitutional Catering Division under the direction of our General Manager (Institutional Catering), MrSteven Tan.

On a monthly basis, our cuisine and service development team meets at our kitchens to discuss, tasteand improve on new recipes that are developed by them. Approximately five to 10 new recipes arecreated monthly. All approved recipes are documented and shared among all our other foodestablishments. Our Master Chefs conduct training for our chefs on the new recipes to ensure quality.

In respect of our Lerk Thai restaurant, since the commencement of its business, our Executive Director,Mr Jack Tan, and our senior management have been meeting with the Head Chef of the restaurant on amonthly basis to discuss customers’ preferences and create new cuisines that may interest ourcustomers. Due to their efforts, we have been able to introduce approximately five new recipes everymonth.

In addition, as part of our cuisine development, we strive to meet the specific needs of our customers byvarying the food items and portions, or creating menus which address the special needs of ourcustomers. For instance, in developing the menus for certain institutional catering corporate customerssuch as schools, we have incorporated food items with better nutritional value suitable for children.

As our cuisine development activities involve mainly the creation of new ideas and concepts whileutilising existing supplies and resources, as opposed to requiring additional resources and facilities whichmay be capital intensive, the expenditure incurred by us in our cuisine development activities for the pastthree financial years, as a percentage of our Company’s total revenue, has been insignificant.

GOVERNMENT REGULATIONS

The following is a description of the licences required for the operation of our businesses in Singaporeand overseas (apart from those pertaining to general business requirements):-

TYPE OF LICENCE LICENSING BODY DESCRIPTION

Singapore

Foodshop Licence Environmental Health The Environmental Public Health Act (ChapterDepartment (“EHD”) 95) of Singapore (“EPHA”) requires that a (a department under licence be obtained from the Director-GeneralNEA) of Public Health for the purposes of carrying on

the business of a retail food or cateringestablishment.

The licence is usually granted for a period ofone year and is renewable at the discretion ofthe Director-General and subject to suchrestrictions and conditions as the Director-General may think fit. The licence may also besuspended or cancelled if there is a breach ofany of the provisions of the EPHA.

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Grading Scheme for NEA In 1997, MEWR introduced a grading Food Establishments scheme to grade food establishments based on

their standard of cleanliness and food hygiene.

The four grades for assessment of food outletsare: Grade A (Excellent), Grade B (Good),Grade C (Average) and Grade D (BelowAverage).

Liquor Licence Liquor Licensing Board of The Customs Act (Chapter 70) of Singapore the Singapore Police Force requires that a liquor licence be obtained from

the Liquor Licensing Board for the retail sale ofintoxicating liquor on premises.

The liquor licence is valid for a one-year period.The grant and renewal of the liquor licence is atthe discretion of the Liquor Licensing Board,which also has the discretion to suspend orcancel the liquor licence.

Signboard Licence Building and Construction The Building Control Act (Chapter 29) ofAuthority Singapore requires that a licence be obtained

from the Commissioner of Building for thepurposes of displaying outdoors any signboardof certain descriptions.

The licence is typically granted for a period ofone to three years and is renewable at thediscretion of the Commissioner. It may begranted or renewed subject to such conditionsand restrictions as the Commissioner may thinkfit. The Commissioner may by notice in writingamend, suspend or revoke any licence.

Electrical Installation Energy Market Authority The Electricity Act (Chapter 89A) of Singapore Licence (“EMA”) (“EA”) requires that a licence be obtained from

EMA for the use or operation of an electricalinstallation.

The licence is valid for a one-year period, andEMA may in its discretion reject the applicationor renewal of such licence. The licence may besuspended or revoked by EMA on breach ofany of the licensing conditions or the provisionsof the EA.

Written Approval to Public Utilities The Sewerage and Drainage Act (ChapterDischarge Trade Effluent Board of MEWR 293A) of Singapore requires a written approval

to be obtained from MEWR for the purposes ofdischarging any trade effluent into any publicsewer. MEWR may, in granting approval,impose such conditions as it thinks fit.

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PRC

Sanitation Licence Local Health Department The Law of Food Hygiene of the PRC (“Law of (“LHD”) (a department Food Hygiene”) requires that a licence be under the Ministry of obtained from LHD for the purposes of Health of the PRC) carrying on the business of food production in

the PRC.

The licence is usually granted for a period ofone year and is renewable after the applicanthas passed the annual inspections carried outby LHD. The licence may also be suspended orcancelled if there is a serious breach of theprovisions of the Law of Food Hygiene or if therectification requested is not complied with.

Malaysia

Business licence (1) Relevant municipal or This licence is required for the conduct ofdistrict councils or business in the two areas where Select FMcity halls (Malaysia) conducts its business, namely in

Petaling Jaya and in Kuala Lumpur, Malaysia.

The licence is issued pursuant to the LocalGovernment Act 1976 and usually granted for aperiod of one year and is renewable bypayment of a stipulated fee.

Signage licence Relevant municipal or This licence is required for a company to havedistrict or councils or a signage placed outside its premises and iscity halls issued pursuant to the Local Government Act

1976.

Service tax licence(1) Director General of This licence is issued pursuant to Section 8 of Customs and Excise the Service Tax Act 1975 and is required in the

event Select FM (Malaysia)’s annual turnover isRM500,000 or more.

The said Section 8 provides that no taxableperson shall carry on a business of providingtaxable service unless it is in possession of aservice tax licence. According to Schedule 2 ofthe Service Tax Act, a taxable person includesa person who operates one or more placeswhich provide food or drinks with a total annualsales turnover of more than RM500,000.Taxable services are defined to include theprovision or sale of food or drinks.

Note:-

(1) We are currently applying for the business licence for the operation of the food court stall at Petaling Jaya and the service taxlicence for the food court stalls at Petaling Jaya and Kuala Lumpur.

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Pursuant to the Grading Scheme for food establishments, regular inspections and grading exercisesbased on the facilities’ standard of cleanliness, housekeeping and hygiene are carried out by the NEAofficers. As at the Latest Practicable Date, all of our facilities have either an “A” or a “B” grading.

As at the Latest Practicable Date, none of the aforesaid licences, permits or approvals have beensuspended or revoked and to the best of our knowledge and belief, there are at present no facts orcircumstances which would cause such licences, permits or approvals to be suspended or revoked or forany applications for, or for the renewal of, any of these licences to be rejected by the relevant authorities.

As at the Latest Practicable Date, we have not obtained and are applying for the business licence for theoperation of the food court stall at Petaling Jaya and the service tax licence for the food court stalls atPetaling Jaya and Kuala Lumpur. Please refer to page 33 of the Prospectus for further information on therisk factor in relation to these licences.

Save as disclosed above, we do not require any other governmental licences, permits or approvals inrespect of our operations apart from those pertaining to general business registration requirements.

COMPETITION

We operate in a highly competitive market with low barriers to entry. We are subject to competition fromexisting competitors as well as new and future market entrants. There are a number of small operators inthe catering and food retail businesses. Our Directors believe that competition is based on, inter alia,quality and breath of services and management talent, pricing, variety of cuisines offered, location,service innovation, hygiene, reputation within the industry and financial strength and stability.

To the best of our knowledge, we consider the following companies, which are in the F&B industry, to beour closest competitors:-


– Stamfles Food Management Pte Ltd– Sodexho Singapore Pte Ltd– Singapore Food Industries Limited


– Kriston Food & Beverage Pte Ltd– Continental Delight Catering Service Pte Ltd


In general, we consider all food establishments operating within the proximity of our food court stalls orpublic cafeterias as our competitors.

To the best of our knowledge, we are not aware of any published statistics regarding our market share inthe F&B industry on a national level.

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108

COMPETITIVE STRENGTHS

Our Directors believe the following are our competitive strengths:-

(a) Experienced Management Team

Our Group is led by our Managing Director, Mr Vincent Tan, who has 13 years of experience in theF&B industry. He is assisted by our senior management, most of whom have more than ten yearsof experience in the F&B industry. Under their management, our business has grown over theyears and we have become a well-known local name in the industry. Our management team isfamiliar with our business and understands our customers’ needs and requirements. They arecommitted to the development of our business and will continue to spearhead our Group’sbusiness operations and future plans so as to ensure the continuing success of our Group. Formore information on our Directors and our Executive Officers and their experience, please refer topages 115 to 118 of this Prospectus.

(b) Use of Information Technology in our Operations

We have installed an integrated computer system, which is customised specifically and developedover the years to suit our business requirements and assist us in our operations. The use of thecomputer system minimizes errors and food wastage. It also reduces time in our operations. Thesystem has enabled us to provide consistent service to our customers, enhance our level ofproductivity and quality of service, control our costs and increase our revenue.

(c) Ability to Control Costs

The ability to control costs incurred in our operations is essential to ensure our profitability. Weadopt several cost-controlling measures which have assisted in increasing our profit. Suchmeasures include the following:-

Cost control measures in the procurement of raw materials

We procure our raw materials requirements in bulk and negotiate the prices for our raw materialson a Group basis. As such, we have been able to enjoy better pricing from our suppliers arisingfrom such bulk purchases. Please refer to “Bulk Procurement” on page 92 of this Prospectus formore details.

Cost control incentive

We have implemented a cost control incentive scheme, which aligns the chefs’ remuneration withthe profits of the food establishment under his charge. This is to encourage our chefs to minimizefood wastage so as to minimise our costs and increase our net profits. Please refer to “CostControl Incentives” on page 92 of this Prospectus for more details.

(d) Quality of Chefs

As at the Latest Practicable Date, we employed a total of seven Master Chefs and 58 Head Chefs.They have an average of at least ten years of experience in the F&B industry. Their skills,experiences and creativity are some of the most important factors that enable us to attract andretain customers.

Our chefs undergo regular and continual training to upgrade their culinary skills. Please see “StaffTraining” on page 94 of this Prospectus for more details. Our continuing training of our chefsensure that we constantly deliver quality cuisines to our customers.

(e) Ability to provide quality service

Our business is service-oriented, and providing friendly and prompt service has been the focus inall our three business divisions. As a testimony to our efforts to become a customer-focusedorganisation, we were granted the Singapore Service Class award in 2004 by SPRING Singapore,in recognition of our commitment to service.


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(f) Broad Customer Base

We have a broad and varied customer base arising from our three business divisions from whichour revenue is generated. We are also better able to gauge the changing trends in consumertastes and preferences as we reach out to more customers. In addition, we are able to cross sellour products and services to our customers in the three business divisions.

(g) Ability to provide both non-Halal and Halal food

We are one of the few and leading food catering and management service providers in Singaporewhich can offer and serve both non-Halal and Halal food. We believe that has enabled us toattract a broader customer base.

INDUSTRY OUTLOOK AND FUTURE PLANS

INDUSTRY OUTLOOK

(a) The dining-out trend in Singapore

Singapore is popularly known as a food paradise offering a great variety of cuisines in differenttypes of eating or dining environment, from hawker centres, food courts to mid or high rangerestaurants. The general lifestyle in Singapore is characterised by time pressure and consequentlySingaporeans’ emphasis on convenience. This, coupled with the availability of a wide variety ofcooked food offered at convenient locations, makes eating or dining out a common lifestyle amongthe general population in Singapore.

Hawker centres and food courts are popular eating places for the general public, in particular theworking population, as these places offer fast meals with a wide variety of cuisines at affordableprices. Since the early 1990s, there has been a steady growth in the number of food courts alongwith the development of suburban shopping malls in major HDB town centres and along MRTroutes and office developments. Our Directors believe that food courts are increasing in popularitydue to their comfortable air-conditioned environment in a modern indoor setting and theconvenience of being located within a shopping mall or office development. There has been asteady increase in the number of food courts since the early 1990s, indicating the growingacceptance and popularity of eating out at food courts in Singapore.

We have over the last nine years established our reputation as one of the leading food court stallsoperators in Singapore. Our Directors believe that we are well-positioned to take advantage of thegrowing popularity of food courts as one of the affordable choice eating or dining out places inSingapore.

(b) Regional economic recovery

The F&B industry is vulnerable to economic conditions. The outbreak of SARS and Iraq war in2003 had affected the economies in the region, including Singapore. Notwithstanding this, theSingapore economy saw stronger growth of 12.5% in the second quarter of 2004, up from 7.5% inthe first three months of 2004.1 Visitor arrivals improved by 186.4% from 698,000 visitors in thesecond quarter of 2003 to 1,999,000 visitors in the second quarter of 2004.2 With a bettereconomic outlook, we believe that people are less budget-conscious and more willing to spend onfood and beverages, including eating out more often. Our Directors believe that the improvedeconomy will have a positive impact on our business and financial performance.

The SARS outbreak that occurred in 2003 had resulted in the general public taking variousprecautionary measures against the infectious disease such as avoiding the visit of public placesincluding our food establishments. Social contact among people was also substantially reduced asan added precautionary measure against the disease. This had led to a reduction in demand forour food catering services as the number of private and public functions declined. Consequently,our financial performance in FY2003 was adversely affected. With the recovery from SARS, ourDirectors believe that our revenue in FY2004 should improve compared to FY2003 as the generalpopulation resumes its normal routine.

1 Statistics on general economic conditions are obtained from Chapter 2 of “Economic Survey of Singapore SecondQuarter 2004” published by the Ministry of Trade and Industry (“MTI”), which attributed the source of the figures to theSingapore Department of Statistics. The report appears on the internet website of the MTI(http://www.mti.gov.sg/public/PDF/CMT/EDA_2004Q2_ch2.pdf?sid=44&cid=2071)*.

2 Statistics are obtained from “Main Indicators of the Singapore Economy Quarterly” published by the Ministry of Tradeand Industry (“MTI”), which attributed the source of the figures to the Singapore Tourism Board. The report appears onthe internet website of MTI (http://www.mti.gov.sg/public/PDF/CMT/EDA_2004Q2_Quarter.pdf?sid=43&cid=117)*.

* The Ministry of Trade and Industry, the Singapore Tourism Board and the Singapore Department of Statistics have notprovided their respective consents to the inclusion of the relevant information extracted from the relevant reports anddisclaim any responsibility in relation to reliance on these statistics. While reasonable actions have been taken by ourDirectors to ensure that the relevant statements from the relevants reports are reproduced in their proper form andcontext, and that the information is extracted accurately and fairly from the relevant reports, all other parties andourselves have not conducted an independent review of the information contained in the relevant reports and have notverified the accuracy of the contents of the relevant statements.

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(c) Singapore as a hub for international exhibitions and conventions

Singapore has become an important hub for international conventions and exhibitions. Based onour Directors’ knowledge, in 2003, Singapore hosted more than 500 conventions which generatedan estimated $615 million in economic spin-offs. Singapore was ranked by a prominent tradeorganisation in the global conventions arena as the world’s third top convention city, making it thethird preferred city among international associations for the hosting of conventions in 2003.

Singapore Expo, an international exhibitions and conventions centre in Singapore, offers 60, 000sq m of indoor exhibition space and another 25,000 sq m of outdoor exhibition space with 19conference halls and meeting rooms and other support services. It is easily accessible from thecity and the Changi Airport via the Expo MRT station and the three major highways, namely theEast Coast Parkway (ECP), the Pan Island Expressway (PIE) and the Tampines Expressway(TPE). All these amenities, including its 2,200 dedicated car park lots make Singapore Expo agood and convenient venue for mega conferences and exhibitions, regional corporate productlaunchings, large scale entertainment and civic events.

Singapore Expo has, since its opening in March 1999, become an important venue forinternational exhibitions and conventions held in Singapore. Based on our Directors’ knowledge, in2003, 77 exhibitions were held at Singapore Expo, hosting 3.4 million visitors. This was anincrease from the 2.8 million visitors hosted by it (generated from the 80 exhibitions held thereat)in 2002.

Plans are presently underway to enhance the existing infrastructures at Singapore Expo, includingadding four new halls to the existing six and expanding its total exhibition space from 60,000 sq mto 100,000 sq m. With the increased facilities, Singapore Expo is expected to be able to host moreevents and receive more visitors than its current capacity. The existing dining facilities at SingaporeExpo include one food court, two fast food outlets and two permanent and six ad-hoc cafeterias.Singapore Expo has planned to expand the food facilities within its premises to meet the needs ofthe visitors to Singapore Expo. We have been awarded the contract to operate, manage anddevelop the Expo F&B Hub to be established at Singapore Expo of a total area of approximately2,628 sq m. The Expo F&B Hub will comprise food stalls and mid-range restaurants offering localfare and international cuisines and a high-end banquet restaurant serving premier Chinesecuisines. In addition to meeting the dining requirements of visitors at Singapore Expo, the newExpo F&B Hub is also planned to be a place of interest that attracts tourists and the generalpublic.

Please see “Future Plans” on page 113 of this Prospectus for more details. With the potentiallylarge pool of visitors, both local and international, to Singapore Expo, our Directors are optimisticabout the prospects of our plans in managing and operating the Expo F&B Hub at SingaporeExpo.

(d) Relocation of production facilities to the PRC by MNCs

Over the last decade, an increasing number of MNCs have moved their manufacturing operationsto the PRC to take advantage of the relatively low operating costs and the potential consumermarket in the PRC. In particular, there has been substantial foreign direct investment in Suzhoucity, Jiangsu province. Suzhou’s close proximity to Shanghai, the PRC’s economic and financialcentre, further enhances Suzhou’s position as an industrial centre. Consequently, Suzhou, with itsfive industrial parks, namely Suzhou Industrial Park, Suzhou Hi-tech Industrial Park, KunshanIndustrial Park, Japanese Industrial Park and American Industrial Park, has become a majordestination for leading MNCs from the United States, Japan, Taiwan, South Korea and Europe.

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Our Directors believe that it is a common trend for MNCs to outsource, instead of self-operate, themanagement of their staff cafeterias to professional operators in the F&B industry like us. Due tothe large number of MNCs in Suzhou, our Directors believe that there will be a demand for foodand management services providers of international standard to serve the catering needs of theseMNCs. MNCs generally prefer operators with an established track record and ISO certification tomeet their food and management services needs. As these companies place emphasis on thewelfare of their staff, they are likely to spend more on staff cafeterias. This trend has provided uswith growth potential at the international stage. With our expertise and established track record ininstitutional catering in Singapore and the quality of our services as evidenced by the SPRINGSingapore Service Class award and ISO 9001 certification awarded to us, our Directors areconfident that we will be able to compete effectively in the PRC market in our plans to expand ourinstitutional catering business to Suzhou. Please see “Future Plans” on page 113 of thisProspectus for more details.

(e) Outsourcing of food and management services in other market segments

Our Directors believe that there is a steady increase in the outsourcing of food and managementservices over the past years by different market segments, such as the education, healthcare andpublic sectors. Private and public institutions increasingly make strategic decisions to focus on theircore activities and seek cost efficiencies by outsourcing non-core functions, including food andmanagement services. Our Directors believe that this trend will be reinforced by the growingadvantages of outsourcing peripheral activities in favour of large, experienced contractors capableof providing higher quality services at a lower cost. Specifically, outsourcing allows enterprises toimprove the quality and consistency of support services through professional management, benefitfrom the current, innovative trends in procurement and delivery of these services and improve costeffectiveness through the economies of scale and operational synergies that a specialised providercan achieve.

In addition to the market potential, our Directors are optimistic about the prospects of this businessbecause of low capital requirements, as operations are generally conducted at customers’ sites,low fixed costs and predictable cash flow from the customer payments, which reduces workingcapital needs.

Order Book

As at the date of this Prospectus, we have secured 20 contracts for the management and operation ofthe staff cafeterias of our institutional catering customers in Singapore, two of which expire on 30November 2004 and 18 of which will expire between February 2005 and June 2007. We have secured sixinstitutional catering contracts and one event catering contract in Suzhou which will expire betweenAugust 2005 and November 2005. A substantial part of the revenue from our institutional cateringcontracts is not fixed but depends on the patronage of our customers’ employees. Please see the sectionon “Our Business – Institutional Catering Division” on page 84 of this Prospectus for more details of thenature of our institutional catering contracts.

Although we have already entered into these contracts with our customers, they may be subject tocancellation or deferral. Hence, our order book as of any particular date may not be indicative of ourrevenue for the succeeding period due to the possibility of cancellation by our customers or delay incommencement of services provided by us.

We do not keep any order books for our food catering and food retail businesses due to their retailnature.

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FUTURE PLANS

Our future plans for our business are as follows:-

(a) Developing, operating and managing the Expo F&B Hub

In June 2004, our Group successfully tendered for the contract to develop, operate and managethe Expo F&B Hub which will be established at Singapore Expo. The term of the contract isapproximately four and a half years. To cater to the potentially large pool of visitors to SingaporeExpo and the cosmopolitan crowd there, the Expo F&B Hub will occupy approximately 2,628 sq mwith an estimated seating capacity for approximately 2,300 patrons. It is planned to house sixrestaurants, two fast food outlets, three cafeterias, one pub and one food court, offering a varietyof international and local cuisines and beverages. The Expo F&B Hub will provide quality cateringand banqueting services for all exhibitions, conferences, events, functions, concerts, dinners,carnivals and any other events held at Singapore Expo.

We have plans to develop the Expo F&B Hub into a prominent food and entertainment hub in theeastern region of Singapore, which caters not only to the participants of the events held atSingapore Expo, but also to the general public. We intend to introduce a branding concept to theExpo F&B Hub. The restaurants will come from both local home grown and international brandnames offering specialised international cuisines such as Japanese, Thai, American, Italian,Chinese and seafood buffet. To leverage on our experiences in food catering, the exhibition hallsare also slated for hosting both private and corporate functions such as wedding banquets andannual dinner-and-dance parties. We intend to operate and manage the food court which willcomprise nine stalls offering local fare. We intend to operate three of the food court stalls andlease out the remaining stalls to third party food court stalls operators. We intend to retain theexisting two fast food outlets at Singapore Expo to complement the whole Expo F&B Hub and tocater to the student population in the vicinity. To increase our revenue, we intend also to operatemobile kiosks or carts that can be positioned at high traffic areas during event days wheremechanical and electrical facilities are not readily available.

We have taken over the operation and management of the existing food facilities at SingaporeExpo in the third quarter of 2004. At the same time, we plan to commence the renovation of theinfrastructure for the Expo F&B Hub sometime in the fourth quarter of 2004. The first phase of theExpo F&B Hub, comprising the food court and one restaurant, will be operational by the end ofNovember 2004. We expect the Expo F&B Hub to be fully operational by the end of the firstquarter of 2005. We intend to use part of the net proceeds from the Invitation to partially fund thedevelopment of the Expo F&B Hub, which includes renovations and marketing and promotionalexpenses.

(b) Further expansion of our institutional catering business into the PRC market

On 2 April 2004, we established our wholly-owned subsidiary, Select Suzhou, to expand ourinstitutional catering business into the PRC. We plan to offer our institutional catering services toour existing corporate customers which have or will set up manufacturing operations in the PRC.We seek to be in close proximity of our customers, thereby allowing us to anticipate and satisfytheir needs promptly with service solutions tailored to their specific situations. Our services includeoperating and managing our customers’ staff cafeterias and/or providing catering services to theiremployees.

We have entered into a nine-year operating lease of a premise of approximately 3,700 sq m inSuzhou to be used as our kitchen. We commenced operations of our Suzhou kitchen in September2004.

As at the date of this Prospectus, we have secured six institutional catering contracts and oneevents catering contract in Suzhou, PRC.

We have plans to further expand our Suzhou operations and use part of the net proceeds toacquire additional kitchen equipment to increase our capacity so as to expand our business.

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(c) Expansion of our institutional catering business into other market segments

Currently, our institutional catering services are offered mainly to MNCs. Our Directors believe thatthere is potential for such services in other market segments due to the increasing outsourcingtrend. As consumers’ needs become more sophisticated, there is a continuous need forinstitutions, both private and public, to seek service contractors who are able to provide solutionsfor all their non-core food and management services on a quality, efficient and cost-effective basis.We plan to target new market segments such as hospitals, tertiary institutions and the uniformedservices for our institutional catering business.

We intend to use part of the net proceeds from the Invitation to expand our institutional cateringbusiness.

(d) Increase our food retail outlets in Singapore

We plan to increase our dedicated food court stalls in Singapore as and when strategic locationsare available. Our expansion plans in this respect will depend on the availability of our cash flowand human resources. Other than shopping malls, we intend to establish new food court stalls atschools and hospitals to increase our market penetration and extend our reach into new markets.We expect to open a few more new food court stalls in Singapore in the next two years.

In addition, we intend to increase the number of restaurants in different parts of Singapore. Theincrease will help to diversify our earnings base and reduce our operational costs. We intend toopen one new restaurant in 2005 and another five to 10 mid-range restaurants in Singapore in thenext three years.

We intend to use part of the net proceeds from the Invitation for the above expansion plans.

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DIRECTORS, MANAGEMENT AND STAFF

OUR MANAGEMENT STRUCTURE

Our management reporting structure is set out below:-

DIRECTORS

Our Directors are entrusted with the responsibility for the overall management of our Group. Theparticulars of our Directors are set out below:-

Name Age Address Principal Occupation

Vincent Tan 40 65 Shelford Road Managing Director#04-02Singapore 288455

Jack Tan 35 1 Tanah Merah Kechil Road #11-02 Executive DirectorSingapore 466663

Low Teck Seng 49 6 Hacienda Grove #02-05 Principal and Chief Singapore 457912 Executive Officer,

Republic Polytechnic

Sim Beng Chye 48 58 Jalan Kechubong Company DirectorSingapore 799413

Kwah Thiam Hock 58 11 Wimborne Road Chief Executive Officer andSingapore 436640 Principal Officer, ECICS Limited

Information on the business and working experience of our Directors is set out below:-

Mr Vincent Tan has been our Director since 27 January 1995. He is the founder and Managing Directorof our Company. Mr Vincent Tan is responsible for the overall management, strategic planning andbusiness development of our Group in Singapore and regionally. Mr Vincent Tan has 13 years ofexperience in the F&B industry and was instrumental in the establishment, development and expansionof our Group’s business. Mr Vincent Tan started his career in the furniture industry in 1988 as anassistant to the superintendent of a subsidiary of an MNC. In 1990, he left the company and joinedanother furniture manufacturing company in Surabaya, Indonesia as an assistant to the operationsmanager. In 1991, he left Indonesia and established our business. Mr Vincent Tan obtained a diploma incivil engineering from the Singapore Polytechnic in 1985.

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BOARD OFDIRECTORS

Managing DirectorVincent Tan

General Manager (Group Administration)

Doris Pek

Financial Controller Jordan Aw Yong

Kwok Kong

General Manager (Institutional Catering)

Steven Tan

Executive DirectorJack Tan


Mr Jack Tan has been our Director since 27 January 1995. Mr Jack Tan is a co-founder of our Group.He has 13 years of experience in the F&B industry and was instrumental in the development of our FoodRetail Division and expansion into Malaysia. Under his leadership, we have established 39 food retailestablishments in Singapore and Malaysia as at the Latest Practicable Date. Mr Jack Tan is responsiblefor overseeing the business and sales development strategies of our Food Retail Division. Mr Jack Tanobtained a National Trade Certificate (NTC2) in “Electronics Engineering” from the Institute of TechnicalEducation in 1989.

Professor Low Teck Seng was appointed our Independent Director on 26 October 2004. Professor Lowis the chairman of our Nominating Committee. Professor Low is currently a professor of electricalengineering at the National University of Singapore and the Principal and Chief Executive Officer ofRepublic Polytechnic. He was the Director of Data Storage Institute, Singapore from 1992 to 1998. From1998 to 2000, he was the Dean of the Faculty of Engineering of the National University of Singapore.Professor Low has been the associate editor of the journal “IEEE Transactions on Industrial Electronics”since 1995 and sits on the editorial committees of various international journals such as “COMPEL – TheInternational Journal for Computation and Mathematics in Electrical Engineering”, “Journal on InformationStorage and Processing Systems” and “SIM Management Review”. Professor Low obtained a Bachelor ofScience degree with first class honours from the University of Southampton in 1978 and a Doctor inPhilosophy from the same university in 1982. He is a Chartered Engineer, UK and a Fellow of theInstitute of Electrical and Electronics Engineers. Professor Low is currently a board member of the HealthSciences Authority in Singapore.

Mr Sim Beng Chye was appointed our Independent Director on 26 October 2004. He is the chairman ofour Remuneration Committee. Mr Sim was a founding member of Omni Industries Limited, anelectronics manufacturing service provider. Omni Industries Limited began as Omni Plastics Pte Ltd in1991, and by 1994, Mr Sim had expanded its plastics business to four manufacturing plants, including amould manufacturing unit in Singapore. He spearheaded the regional expansion of the plastics businesswhich began in 1995 into Malaysia and continued in 1996 to Shanghai, PRC. The Omni business units,including the plastics business, were merged to form Omni Industries Limited, which was listed on theSingapore Stock Exchange in 1997. Mr Sim was appointed an Executive Director of Omni IndustriesLimited. He continued to grow the plastics business of Omni aggressively, and by 2001, Omni IndustriesLimited had a manufacturing presence in the PRC, Malaysia, Thailand, Indonesia, the United States ofAmerica and Mexico. In October 2001, Omni Industries Limited merged into Celestica Inc (“Celestica”),and Mr Sim was appointed Vice President of Celestica’s Global Plastics Operations. Since June 2002,Mr Sim has been self-employed and making his own private investments. He has a wealth of experiencein doing business in a global environment as well as an in-depth understanding of the complexities of thecomponents industry and contract manufacturing. Prior to his entrepreneurial career, Mr Sim wasemployed by Hewlett Packard Singapore (“HP”) from 1979 to 1991, during which he progressed from anEngineer to a Senior Manager and Engineering Manager of HP’s Plastics Technology Centre. Mr Simgraduated with a Diploma in Chemical Process Technology and has a Certificate in IndustrialManagement from the Singapore Institute of Management. Mr Sim also holds a Graduate Diploma inBusiness Administration from the Singapore Institute of Management. Mr Sim is presently a non-executive director of Nylect Technology Limited and an independent director of Spindex Industries Ltdand First Engineering Limited.

Mr Kwah Thiam Hock was appointed our Independent Director on 26 October 2004. He is the chairmanof our Audit Committee. Mr Kwah is currently the Chief Executive Officer and Principal Officer of ECICSLimited. Mr Kwah started his career in 1964 with the Port of Singapore Authority. From 1969 to 1970, hewas an assistant accountant with the Singapore Textile Industries Limited. Subsequently, he served assecretary and assistant accountant in Singapore Spinners Private Limited from 1970 to 1973. In 1974, hebecame the Regional Accountant and Deputy Manager of IMC (Singapore). Mr Kwah left to join ECICSHoldings Ltd in 1976 and rose to become its President and Chief Executive Officer. He stepped downfrom ECICS Holdings Ltd in May 2003 to assume his current position in ECICS Limited. Mr Kwahgraduated with a Bachelor of Accountancy from the University of Singapore in 1973. He is a Fellow of theCPA Australia and a Certified Public Accountant of the Institute of Certified Public Accountants ofSingapore.

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We have not entered into any agreement, arrangement or understanding with our SubstantialShareholders, customers, suppliers or any other person pursuant to which we will appoint any of ourDirectors or any person nominated by any of them as a director of our Company.

The list of present and past directorships of each of our Directors, other than directorship in our Group,as at the date of this Prospectus and over the past five years preceding the date of this Prospectus is setout under “General and Statutory Information” on pages 136 to 137 of this Prospectus.

EXECUTIVE OFFICERS

The day-to-day operations of our Group are assisted by our Executive Officers. The particulars of ourExecutive Officers are set out below:-

Name Age Address Current Occupation

Doris Pek 38 65 Shelford Road #04-02 General Manager Singapore 288455 (Group Administration)

Steven Tan 41 Blk 467B Admiralty Drive #12-147 General ManagerSingapore 752467 (Institutional Catering)

Jordan Aw Yong 34 Blk 6 Holland Close #14-34 Financial ControllerKwok Kong Singapore 271006

Information on the business and working experience of our Executive Officers is set out below:-

Ms Doris Pek is our General Manager (Group Administration). She joined our Group in 1991. She isresponsible for the overall management of our administration, treasury, information technology, trainingand human resource functions. Ms Pek spearheaded the implementation of our integrated computersystem, human resource/payroll system as well as accounting and full operational processes. She alsoplays a vital role in the strategic positioning of our Group. From 1991 to 2000, she was overall in chargeof the full spectrum of our office administration, including sales and marketing. Ms Pek was responsiblefor our Group’s financial reporting, internal control and accounting processes till May 2004. Prior tojoining our Group, Ms Pek worked in various companies between 1987 and 1991 carrying out secretarial,administrative, human resource and accounts duties. Ms Pek completed her secondary education (GCE“O” Levels) in 1984.

Mr Steven Tan has been our General Manager (Institutional Catering) since July 2001. Mr Tan isresponsible for overseeing and developing our institutional catering business in Singapore and the PRC.He has more than 21 years of working experience in the F&B industry. Mr Tan started his career in 1983as a trainee baker with Marie Chantale (S) Pte Ltd, a confectionary, and later rose to the post of head ofconfectionary. In 1988, he joined Cooking Art, a cooking school, as vice principal cum lecturer. From1989 to 1990, he was the restaurant manager of a Thai restaurant operated by Asian Food Services PteLtd. In 1990, Mr Tan joined Sunshine Bakeries, a company engaged in the business of bread andcooked food manufacturing, as an operations manager in charge of production. Mr Tan left SunshineBakeries in 1997. Between April and December 1997, Mr Tan was the general manager of DragonShokuhim Pte Ltd, a food company engaged in the manufacturing of cooked food and was in charge ofoverseeing its operations. Mr Tan served as the deputy general manager of FoodFare Catering Pte Ltdbetween January 1998 and June 2001 before he joined our Company. Mr Tan completed his secondaryeducation (GCE “O” Levels) in 1979.

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Mr Jordan Aw Yong Kwok Kong was appointed our Financial Controller in May 2004. He is responsiblefor the financial matters of our Group. Prior to joining our Group, Mr Aw Yong was with the Delifrancegroup from March 2001 to May 2004. He first joined Delifrance group as its finance manager and wassubsequently deployed to the CEO department as a planning and analysis manager. From December1999 to February 2001, Mr Aw Yong was a senior consultant with Arthur Andersen, Singapore in chargeof financial accounting services. From October 1996 to November 1999, he was a business analyst withUnited Overseas Land group where his duties included business analysis and financial accounting. FromJuly 1994 to October 1996, Mr Aw Yong was an auditor with Ernst & Young, Singapore. Mr Aw Yonggraduated with a Bachelor of Accountancy degree from the Nanyang Technological University in 1994and a Master in Business Administration from the University of London in 2001. He is a certified publicaccountant and a member of the Institute of Certified Public Accountants in Singapore.

We have not entered into any agreement, arrangement or understanding with our SubstantialShareholders, customers, suppliers or any other person pursuant to which we will appoint any of ourExecutive Officers or any person nominated by any of them as an executive officer of our Company.

The list of present and past directorships of each of our Executive Officers, as at the date of thisProspectus and for the past five years preceding the date of this Prospectus is set out under “Generaland Statutory Information” on page 138 of this Prospectus.

Our Managing Director, Mr Vincent Tan, and our Executive Director, Mr Jack Tan, are siblings. OurGeneral Manager (Group Administration), Ms Doris Pek, is the spouse of Mr Vincent Tan.

Save as disclosed above and on page 77 of this Prospectus under the section “Shareholders”, none ofour Directors, Executive Officers and Substantial Shareholders is related by blood or marriage to oneanother.

Madam Tay Bock Hiang, our Substantial Shareholder and mother of our Directors Messrs Vincent Tanand Jack Tan, is one of our Head Chefs. Mr Pek Poh Kwee, the brother-in-law of Mr Vincent Tan, is ouroperations manager. Madam Ang Poon Hong, the mother-in-law of Mr Vincent Tan, is an outletsupervisor.

As at the date of this Prospectus, no relative of our Directors or Substantial Shareholders has beenappointed to a managerial position or above in our Group.

REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS

The remuneration (including benefits in kind) paid or payable to each of our Directors and our ExecutiveOfficers for services rendered to us in all capacities in remuneration bands during FY2002, FY2003 andFY2004 (estimated) were or are as follows:-

Names FY2002 FY2003 FY2004 (estimated)(1)

Directors (2), (3)

Vincent Tan Band B Band A Band AJack Tan Band A Band A Band AProfessor Low Teck Seng Nil Nil Band ASim Beng Chye Nil Nil Band AKwah Thiam Hock Nil Nil Band A

Executive Officers

Doris Pek Band A Band A Band ASteven Tan Band A Band A Band AJordan Aw Yong Kwok Kong Nil Nil Band A

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Notes:-

(1) The estimated remuneration for FY2004 does not include any bonuses and annual profit sharing. All our IndependentDirectors will be paid with effect from FY2004.

(2) Band A means up to $249,999.(3) Band B means between $250,000 and $499,999.

No compensation was paid or is to be paid to any of our Directors or Executive Officers in FY2002 andFY2003 pursuant to any bonus or profit-sharing plan or any other profit-linked agreement orarrangement.

In FY2003, our Executive Officers received from our Group an aggregate amount of approximately $0.2million as compensation comprising salaries, bonuses, CPF contributions and benefits-in-kind.

No compensation was paid or is to be paid in FY2002 and FY2003 in the form of stock options to any ofour Directors or Executive Officers.

No amount has been set aside or accrued by our Company or subsidiaries to provide for any pension,retirement or similar benefits for any of our Directors, Executive Officers or staff.

EMPLOYEES

The number of full-time employees in our Group as at the end of each of the last three financial yearswere as follows:-

Function Number of EmployeesFY2001 FY2002 FY2003 1H2004

Management, Administration and Sales 33 87 81 88

Operations 345 481 609 650

Total 378 568 690 738

The geographical distribution of our employees as at the end of each of the last three financial yearswere as follows:-

Number of EmployeesFY2001 FY2002 FY2003 1H2004

Singapore 350 542 679 725

PRC(1) 20 20 – –

Malaysia 8 6 11 13

Total 378 568 690 738

Note:-

(1) Employees in the PRC were engaged for the operations of Zhangzhou Select Eastern Fast Food which was formerly asubsidiary of our Company.

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We do not experience any significant staff turnover for the last three financial years.

We do not employ a significant number of temporary employees.

Our employees are not unionised. The relationship and cooperation between our management andemployees has been good and is expected to continue in the future. There has not been any incidence ofwork stoppages or labour disputes with our employees which affected our operations.

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SERVICE AGREEMENTS

Directors

On 3 August 2004, we entered into separate service agreements (“Service Agreements”) with ourManaging Director, Mr Vincent Tan, and our Executive Director, Mr Jack Tan (collectively, the“Appointees” and individually, an “Appointee”). The Service Agreements are each for a term of 3 yearscommencing from the date of our listing and renewable automatically thereafter unless otherwiseterminated by three months’ written notice given by either party to the other. Instead of giving notice, wemay choose to pay an Appointee the equivalent of his salary payable in respect of the notice periodrequired for termination. Except for such payment in lieu of notice as provided for under the ServiceAgreements and any payment required to be made pursuant to the laws of Singapore, no compensationor damages is payable by us to an Appointee in respect of his termination in accordance with the termsof the Service Agreements. The Service Agreements may also be terminated by us at any time withoutnotice or payment upon the occurrence of events such as default by or misconduct of an Appointee inconnection with or affecting the business of the company, wilful neglect by an Appointee in the dischargeof his duties, commission of a serious breach of the Service Agreement by an Appointee ordisqualification of an Appointee from acting as a director for any reason.

The Service Agreements cover the terms of employment, specifically salaries and the duties andobligations of the Appointee.

Under the Service Agreements, Messrs Vincent Tan and Jack Tan are paid an annual salary of $180,000and $96,000 respectively. Their salaries are subject to annual review by our Board. They are entitled toan annual bonus of not less than one month’s salary or such other higher amount as the Company mayin its absolute discretion decide. Messrs Vincent Tan and Jack Tan are also each entitled to a monthlycar allowance of $1,500. Under his Service Agreement, Mr Vincent Tan is entitled to a club membership.The monthly subscription fees of and expenses incurred at the club shall be borne by the Company. Theclub membership shall be held in trust for the Company provided that it shall belong to Mr Vincent Tanafter a period of five years of continuous service from the effective date of commencement ofemployment.

In the event that our Group’s audited consolidated profit before tax before payment of the performancebonus and excluding any gains earned from extraordinary and exceptional items (“Consolidated PBT”) is$5.0 million or less, Messrs Vincent Tan and Jack Tan shall be paid a performance bonus equivalent to3.0% and 0.5% of the Consolidated PBT respectively. In the event that the Consolidated PBT exceed$5.0 million, (i) Mr Vincent Tan shall be paid a performance bonus equivalent to 3.0% of the ConsolidatedPBT up to $5.0 million and 4.0% of any amount of Consolidated PBT in excess of $5.0 million, and (ii) MrJack Tan shall be paid a performance bonus equivalent to 0.5% of the Consolidated PBT up to $5.0million and 0.75% of any amount of Consolidated PBT in excess of $5.0 million.

There are non-competition covenants under the Service Agreements which are effective during the termof the Service Agreements and for a period of six months following the termination of employment. Inaddition, there are confidentiality obligations under the Service Agreement which are effective during andafter the termination of the Service Agreements.

Save as disclosed above, there are no other existing or proposed service agreements between us andour Directors which provide for benefits upon termination of employment.

Had the Service Agreements been in place since the beginning of January 2003, the aggregateremuneration (including CPF contributions thereon and benefits-in-kind) payable to our ManagingDirector and Executive Director in FY2003 would have been approximately $0.3 million instead of $0.2million and profit before income tax of our Group for FY2003 would have been approximately $0.8 millioninstead of $0.9 million.

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Executive Officers

We have also entered into various employment contracts with our Executive Officers. Such contractstypically provide for the salary payable to our Executive Officers, their working hours, annual leave,medical benefits and grounds of termination.

CORPORATE GOVERNANCE

Our Directors recognise the importance of good corporate governance and the offering of high standardsof accountability to our Shareholders. To this end, our Board of Directors has established the followingthree committees: (i) the Audit Committee; (ii) the Remuneration Committee; and (iii) the NominatingCommittee.

In addition, Messrs Low Teck Seng, Sim Beng Chye and Kwah Thiam Hock have been appointed as ourIndependent Directors. Our Directors consider them to be independent as they do not have any existingbusiness or professional relationship with our Group, our Directors or Substantial Shareholders. They arealso not related to any of our Directors or Substantial Shareholders.

Audit Committee

Our Audit Committee comprises Messrs Low Teck Seng, Sim Beng Chye and Kwah Thiam Hock. TheChairman of our Audit Committee is Mr Kwah Thiam Hock. Our Audit Committee will meet periodically toperform, inter alia, the following functions:-

(a) review the audit plans of our external auditors;

(b) review the external auditors’ reports;

(c) review the co-operation given by our Company’s officers to the external auditors;

(d) review the financial statements of our Company and our Group before their submission to ourBoard;

(e) review the independence and objectivity of the external auditors and nominate external auditors forre-appointment;

(f) review and rectify all interested person transactions, if any, to ensure that they comply with theapproved internal control procedures and have been conducted on an arms’ length basis; and

(g) generally, perform such other functions and duties as may be required by the relevant laws orprovisions of the Listing Manual (as may be amended from time to time).

Apart from the above functions, our Audit Committee will commission and review the findings of internalinvestigations into matters where there is suspicion of fraud or irregularity, or failure of internal controls orinfringement of any Singapore law, rule or regulation, which has or is likely to have a material impact onour operating results and/or financial position. In the event that a member of our Audit Committee isinterested in any matter being considered by our Audit Committee, he will abstain from reviewing thatparticular transaction or voting on that particular resolution.

Remuneration Committee

Our Remuneration Committee comprises Messrs Low Teck Seng, Sim Beng Chye and Vincent Tan. TheChairman of our Remuneration Committee is Mr Sim Beng Chye. Our Remuneration Committeeoversees executive remuneration and development in our Company with the goal of building capable andcommitted management teams.

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Our Remuneration Committee will review annually the remuneration of each of our Directors andExecutive Officers and make recommendations to our Board. Our Remuneration Committee willrecommend to our Board a framework of remuneration for our Directors and Executive Officers, anddetermine specific remuneration packages for each Director. The recommendations of our RemunerationCommittee will be submitted for endorsement by our entire Board. All aspects of remuneration, includingbut not limited to Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind shall bereviewed by our Remuneration Committee. Each member of our Remuneration Committee will abstainfrom reviewing and approving his own remuneration and the remuneration packages of persons relatedto him. Our Company will disclose in our annual report the total remuneration paid to our Directors.

Nominating Committee

Our Nominating Committee comprises Messrs Low Teck Seng, Kwah Thiam Hock and Vincent Tan. TheChairman of our Nominating Committee is Professor Low Teck Seng.

Our Nominating Committee will be responsible for:-

(i) re-nomination of our Directors, having regard to each Director’s contribution and performance;

(ii) determining annually whether or not a Director is independent; and

(iii) deciding whether or not a Director is able to and has been adequately carrying out his duties as aDirector.

Our Nominating Committee will decide how our Board’s performance is to be evaluated and proposeobjective performance criteria, subject to the approval of our Board, which address how our Board hasenhanced long-term shareholders’ value. Our Board will also implement a process to be carried out byour Nominating Committee for assessing the effectiveness of our Board as a whole and for assessing thecontribution of each individual Director to the effectiveness of our Board. Our Nominating Committee isalso charged with the responsibility of determining annually whether a Director is independent. Eachmember of our Nominating Committee shall abstain from voting on any resolution in respect of theassessment of his performance or re-nomination as Director.

Board Practices

Our Articles provide that our Board of Directors will consist of not less than two Directors. None of ourDirectors is appointed for any fixed term, but under our Articles, at least one third, or if their number isnot a multiple of three, the number nearest to but not lesser than one-third of our Directors, shall retirefrom office by rotation once in every three years. A retiring Director is eligible for re-election at themeeting at which he retires.

SELECT EMPLOYEE SHARE OPTION SCHEME

On 28 October 2004, our Shareholders approved a share option scheme known as the Select EmployeeShare Option Scheme, the rules of which are set out in Appendix D of this Prospectus. The Schemecomplies with the relevant rules of Chapter 8 of the Listing Manual. The Scheme will provide eligibleparticipants with an opportunity to participate in the equity of our Company as well as to motivate themto perform better through increased loyalty and dedication to our Company. The Scheme, which forms anintegral and important component of a remuneration and compensation plan, is designed to primarilyreward and retain Executive Directors and employees whose services are crucial to our Group’s well-being, development and success.

As at the Latest Practicable Date, no Options have been granted under the Scheme.

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A summary of the Rules of the Scheme is set out as follows:-

1. Objectives

The objectives of the Scheme are as follows:-

(a) to motivate each participant to optimise his performance standards and efficiency and tomaintain a high level of contribution to our Group;

(b) to retain key employees and Directors whose contributions are essential to the long-termgrowth and profitability of our Group;

(c) to instil loyalty to, and a stronger identification by the participants with the long-termprosperity of, our Group;

(d) to attract potential employees with relevant skills to contribute to our Group and to createvalue for our Shareholders; and

(e) to align the interests of the participants with the interests of our Shareholders.

2. Participants

Under the Rules of the Scheme, Executive, Non-executive and Independent Directors and full-timeemployees of our Group are eligible to participate in the Scheme. Directors who are ControllingShareholders of our Company and their Associates are not eligible to participate in the Scheme.

To be eligible to participate in the Scheme, a participant (“Participant”) must:-

(i) be confirmed in his/her employment with our Company or any of our subsidiaries and not beon probation and have been in the full time service of our Company or any of oursubsidiaries for at least six months on or prior to the date of the grant of the Option (the“Date of Grant”);

(ii) have attained the age of 21 years on or before the Date of Grant; and

(iIi) not be an undischarged bankrupt and must not have entered into a composition with hiscreditors.

3. Scheme administration

The Scheme shall be administered by a committee comprising Directors (including Directors whomay be participants of the Scheme) (“Committee”), with powers to determine, inter alia, thefollowing:-

(a) persons to be granted Options;

(b) number of Options to be offered; and

(c) recommendations for modifications to the Scheme.

The Committee comprises members of the Remuneration Committee. A member of the Committeewho is also a Participant of the Scheme must not be involved in its deliberation in respect ofOptions granted or to be granted to him.

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4. Size of the Scheme

The nominal amount of the aggregate number of Shares over which the Committee may grantOptions on any date, when aggregated with the nominal amount of the number of Shares issuedand issuable in respect all Options granted under the Scheme and any other share optionschemes of our Company, shall not exceed 15% of the issued share capital of our Company onthe day preceding the date of the relevant grant.

Our Company believes that this 15% limit set by the SGX-ST gives our Company sufficientflexibility to decide upon the number of Option Shares to offer to our existing and new employees.15% of our post-Invitation issued share capital constitutes approximately 13,907,010 Shares. As itis intended that the Scheme shall last for 10 years, assuming that there is no change in the totalissued share capital of the Company, the number of Options that may be granted in a year willaverage approximately 1,390,701. The number of eligible participants is expected to grow over theyears. Our Company, in line with its goals of ensuring sustainable growth, is constantly reviewingour position and considering the expansion of our talent pool which may involve employing newemployees. The employee base, and therefore the number of eligible participants will increase as aconsequence. If the number of Options available under the Scheme is limited, we may only be ableto grant a small number of Options to each eligible participant which may not be a sufficientlyattractive incentive. Our Company is of the opinion that it should have sufficient number of Optionsto offer to new employees as well as to existing employees. The number of Options offered mustalso be significant enough to constitute a meaningful reward for contribution to our Group.However, this does not mean that the Committee will issue Option Shares up to the prescribedlimit. The Committee shall exercise its discretion in deciding the number of Option Shares to begranted to each employee, which will depend on, inter alia, the employee’s performance and valueto our Group.

5. Entitlement

Subject to such adjustments as may be made under the Rules, the number of Options to beoffered to a Participant of the Scheme shall be determined at the absolute discretion of theCommittee, who shall take into account criteria such as the rank, performance, years of serviceand potential for future development of that Participant.

6. Participants in other schemes

Participants who participate in the Scheme are eligible to participate in other schemesimplemented by other companies, if approved by the Committee.

7. Grant of Options

Subject to the Rules, the Committee may make offers of grant of Options (“Offers”) to such eligibleParticipants as it may in its sole and absolute discretion select at any time during the period whenthe Scheme is in force, except that no Offers shall be made during the period of 30 daysimmediately preceding the date our Company announces its interim and/or final results (whicheverthe case may be). In the event of our Company announcing any matter of an exceptional natureinvolving unpublished price sensitive information (“Exceptional Announcements”), Offers may onlybe made on or after the third Market Day on which such Exceptional Announcement is released.

8. Acceptance of Offer

The Offer to a Participant, if not accepted by the Participant before 5.00 p.m. on the 30th day fromthe date of such Offer, will lapse. Upon acceptance of the Offer, the Participant to whom the Optionis granted will pay to our Company a consideration of $1.00 or such other amount and deliver suchother documentation as the Committee may require.

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9. Exercise price and exercise period

9.1 Subject to any adjustment to be made pursuant to the Rules, the exercise price for eachShare in respect of which an Option is exercisable shall be determined by the Committee atits absolute discretion and fixed by the Committee at:-

(a) a price equal to the average of the last dealt prices for a Share on the SGX SESDAQfor the period of five consecutive Market Days immediately prior to the relevant Dateof Grant (“Market Price”) but in no event shall the exercise price per Share be lessthan its par value (“Market Price Options”); or

(b) a price which is set at a discount to the Market Price, provided that the maximumdiscount shall not exceed 20% of the Market Price but in no event shall the exerciseprice per Share be less than its par value (“Incentive Options”).

9.2 Each eligible Participant who has been granted Market Price Options shall be entitled toexercise at any time after the first anniversary of the Date of Grant of that Option, Providedalways that the Options granted to employees shall be exercised before the tenthanniversary of the relevant Date of Grant and Options granted to non-executive Directorsand Independent Directors shall be exercised before the fifth anniversary of the relevantDate of Grant, or such earlier date as may be determined by the Committee, failing which allunexercised Options shall immediately lapse and become null and void and a Participantshall have no claims against the Company.

9.3 Each eligible Participant who has been granted Incentive Options shall be entitled toexercise at any time after the second anniversary of the Date of Grant of that Option,Provided always that the Options granted to employees shall be exercised before the tenthanniversary of the relevant Date of Grant and Options granted to non-executive Directorsand Independent Directors shall be exercised before the fifth anniversary of the relevantDate of Grant, or such earlier date as may be determined by the Committee, failing which allunexercised Options shall immediately lapse and become null and void and a Participantshall have no claims against the Company.

10. Variation of share capital

If a variation in our issued share capital occurs (whether by way of capitalisation or rights issue,reduction of capital, sub-division or consolidation of Shares or distribution), the exercise price, thenominal value, class and/or number of Shares comprised in an Option or over which Options maybe granted will be adjusted in such manner as the Committee may determine to be appropriateand upon the written confirmation of our auditors (acting only as experts and not as arbitrators)that in their opinion, such adjustment is fair and reasonable. The issue of Shares as considerationfor an acquisition by us or a private placement of Shares will not be regarded as a circumstancerequiring adjustment. An increase in the number of issued Shares as a consequence of theexercise of Options or other convertibles issued by us will also not be a circumstance requiringadjustment.

11. Exercise of Options

Options which are accepted by the Participants may be exercised during the periods and at therelevant exercise prices. All Options must be exercised before the expiry of 10 years from the Dateof Grant in the case of employees and before the expiry of five years in the case of non-executiveDirectors and Independent Directors, or such earlier date as may be determined by theCommittee, failing which the Options shall be deemed to have expired and shall cease to be valid.

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Special provisions dealing with the lapsing or permitting the earlier exercise of Options undercertain circumstances include:-

(a) the termination of the Participant’s employment or appointment in our Group, as the casemay be;

(b) the bankruptcy of the Participant;

(c) the death of the Participant;

(d) a take-over of our Company; and

(e) the winding-up of our Company (voluntary or otherwise).

12. Shares issued under the Scheme

Shares arising from the exercise of the Options shall be subject to the provisions of theMemorandum and Articles of our Company. The Shares so allotted will upon issue rank paripassu in all respects with the then existing issued Shares for any dividends, rights, allotments ordistributions the record date (“Record Date”) of which falls after the relevant date of exercise of theOption. “Record Date” means the date fixed by our Company for the purposes of determiningentitlements of Shareholders to dividends, rights, allotments or other distributions.

13. Changes in the Scheme

Subject to the prior approval of the SGX-ST or any other stock exchange on which the Shares arelisted or quoted and other regulatory authorities as may be necessary, the Scheme may be alteredfrom time to time by a resolution of the Committee. However, no alteration shall be made whichwould adversely affect the rights attached to Options granted prior to such alteration except withthe prior consent in writing of such number of Participants who, if they exercised their Options infull, would thereby become entitled to not less than three-quarters in nominal amount of all Shareswhich would fall to be allotted and issued upon exercise in full of all outstanding Options. Also, noalteration shall be made to certain rules of the Scheme to the advantage of Participants exceptwith the prior approval of our Shareholders in general meeting.

14. Duration of the scheme

The Scheme shall continue in operation for a maximum period of ten years commencing on theAdoption Date. “Adoption Date” means the date upon which the Scheme is adopted by ourCompany in general meeting which is 28 October 2004. The Scheme may be continued for anyfurther period thereafter with the approval of our Shareholders in general meeting and of anyrelevant authorities which may then be required.

Grant of Options at Discounted Exercise Price

The Scheme which forms an integral component of our remuneration and compensation plan, isdesigned to reward and retain eligible Participants whose services are crucial to our well-being andsuccess. The ability to grant Options with exercise prices set at a discount to the prevailing Market Pricesof our Shares, is intended, inter alia, to operate as a means to recognise Participants for theiroutstanding performance as well as to motivate them to continue to excel while encouraging them tofocus more on improving our profitability and return above a certain level which will benefit allShareholders when these are eventually reflected through share price appreciation. The flexibility indetermining the quantum of discount would enable the Committee to tailor the incentives in the grant ofOptions to commensurate with the performance and contribution of each individual Participant.

The flexibility of granting Options with discounted prices is also intended to cater for situations where themarket conditions are bullish and the market price of our Shares are traded at high premiums. In suchevents, we may grant Options to our employees at a discount to the Market Price.

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In deciding whether to give a discount and the quantum of such discount, the Committee shall be atliberty to take into consideration factors including performance of our Company, the years of service andindividual performance of the Participant concerned, the contribution of the Participant to our successand development, and the prevailing market conditions. All Participants, regardless of their rank, shall beeligible to a discount of up to 20%.

It is envisaged that we may consider granting the Options with Exercise Prices set at a discount to theMarket Price of our Shares prevailing at the time of grant under circumstances including (but not limitedto) to the following:-

(a) where, due to speculative forces in the stock market resulting in an overrun of the market, themarket price of our Shares at the time of the grant of Options is not a true reflection of ourfinancial performance;

(b) to enable us to offer competitive remuneration packages in the event that the practice of grantingOptions with exercise prices that have a discount element becomes a general market norm. Asshare options become more significant components of executive remuneration packages, adiscretion to grant Options with discounted prices will provide us with a means to maintain thecompetitiveness of our remuneration and compensation strategy; and/or

(c) where we need to provide more compelling motivation for specific business units to improve theirperformance, grants of share options with discounted exercise prices will help to align the interestsof employees to those of our Shareholders by encouraging them to focus more on improving ourprofitability and returns above a certain level which will benefit all Shareholders when these areeventually reflected through share price appreciation. Options granted at a discount are perceivedmore positively by the employees who receive such Options.

The Committee will determine on a case-by-case basis whether a discount will be given, and if so, thequantum of the discount, taking into account the objective that is desired to be achieved by us and theprevailing market conditions. As the actual discount given will depend on the relevant circumstances, theextent of the discount may vary from one case to another, subject to a maximum discount of 20% of theMarket Price of the Share, as described above.

The discretion to grant Options to subscribe for Shares at an exercise price set at a discount to theMarket Price will, however, be used judiciously. The amount of the discount may vary from one offer toanother, and from time to time, subject to a limit of 20% on the quantum of discount in respect of Optionsgranted under the Scheme.

In respect of our Independent Directors, we have presently not made any decision on the terms of thegrant of Options and on whether Options will be granted at a discount to the Market Price. However,should we decide in the future to grant Options to them at a discount, such decision will be based onfactors such as the individual performance of the Participant and the contribution of the Participant to oursuccess and development.

We may also grant Options without any discount to the Market Price. Additionally, we may, if we deem fit,impose conditions on the exercise of the Options (whether such Options are granted at the Market Priceor at a discount to the Market Price), such as restricting the number of Shares for which the Option maybe exercised during the initial years following its vesting.

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Participants in the Scheme

Participation of our Group Employees

The extension of the Scheme to Group employees allows us to have a fair and equitable system toreward Directors and employees who have made and who continue to make significant contributions toour Group’s long-term growth.

We believe the Scheme will enable us to attract, retain and provide incentives to its Participants toproduce higher standards of performance as well as encourage greater dedication and loyalty byenabling us to give recognition to past contributions and services as well as motivating Participantsgenerally to contribute towards our long-term growth.

Participation of our non-executive Directors (if any) and Independent Directors

We do not have any non-executive Directors as at the Latest Practicable Date. However, the Schemecontemplates the participation by any future persons who may become our non-executive Directors. Ournon-executive Directors (if any) and Independent Directors, although not involved in the day-to-dayrunning of our operations, play an invaluable role in furthering the business interests of our Group bycontributing their experience and expertise. We believe that by allowing our non-executive Directors (ifany) and Independent Directors to participate in the Scheme, we will be able to provide them with anopportunity to participate in our equity. Our non-executive Directors (if any) and Independent Directorsare closely associated with our business operations even though they do not hold office in an executivecapacity. To allow them to participate in the Scheme will instil in them a greater sense of involvement andbelonging in our Group, thereby enhancing our working relationship with them.

In addition, our Independent Directors are also members of our Audit Committee. They thereforeundertake a major role in our corporate governance. It is therefore in our long-term interest that weacknowledge the services of these Directors who are members of our Audit Committee by allowing themto participate in the Scheme. Their participation in the Scheme will also attract future suitable and morequalified persons to sit on our Audit Committee. This will help to ensure the continuity of good corporategovernance in our Company in the long term.

To reflect our recognition of the valuable contributions and efforts of our non-executive Directors (if any)and Independent Directors, the Scheme will allow us flexibility in providing reward to these Directors in acombination of director’s fees and Options as it may not always be possible to compensate them fully orappropriately by increasing the directors’ fees or other forms of cash payment. We also hope that bybeing able to offer share options, it will be able to attract more well-qualified persons to act as non-executive Directors and Independent Directors of our Company.

We believe that the grant of Options to our Independent Directors will not give rise to any conflict ofinterests. In any event, to minimise any potential conflict of interests and not to compromise theindependence of our Independent Directors, we intend to grant only a nominal number of Options underthe Scheme to such Independent Directors. In addition, in the event that any conflict of interests arises inany matter to be decided by our Board, we shall procure that the relevant Independent Director abstainfrom voting on such matter at our Board meeting.

As at the date of this Prospectus, our Independent Directors Messrs Low Teck Seng, Sim Beng Chye andKwah Thiam Hock will be eligible to participate in the Scheme.

Disclosures in Annual Reports

Details of the number of Options granted, the number of Options exercised and the subscription price (aswell as the discounts involved, if any) will be disclosed in our annual report.


The Cost To Us For Granting Options Under The Scheme

Any Options granted for Shares (whether or not the exercise price is set at a discount to the prevailingmarket price of our Shares) have a fair market value. Where such Options are granted at a considerationwhich is less than their fair value, there will be a cost to us, the amount of which will depend on whetherthe Options are granted at market price or at a discount. The greater the discount granted and the longerthe option period, the greater the cost to us.

Our cost of granting Options, with or without a discounted exercise price under the Scheme, would be asfollows:-

(a) The effect of the issue of new Shares upon the exercise of Options on our NTA per Share isaccretive if the exercise price is above the NTA per Share, but dilutive otherwise;

(b) If the Options are granted with a discounted exercise price, the exercise price of an Option at adiscounted exercise price would translate to a reduction of the proceeds from the exercise of suchan Option, as compared to the proceeds that we would have received from such exercise had theexercise been made at the prevailing market price of our Shares. Such reduction of the exerciseproceeds would represent the monetary cost to us of granting Options with a discounted exerciseprice;

(c) As the monetary cost of granting Options with a discounted exercise price is borne by us, ourearnings would effectively be reduced by an amount corresponding to the reduced interestearnings that we would have received from the difference in proceeds from exercise price with nodiscount versus the discounted price. Such reduction would, accordingly, result in the dilution ofour earnings per Share; and

(d) The grant of Options under the Scheme will not have an impact on our Company’s reported profitunder current accounting rules set out in Singapore Financial Reporting Standards (FRS).However, a new accounting standard FRS 102 will require the recognition of an expense in respectof Options granted under the Scheme. The expense will be based on the fair value of the Optionsat the date of grant (as determined by an option-pricing model) and will be recognised over thevesting period. The requirement to recognise an expense in respect of options granted toemployees is set out in FRS 102, Share-based Payment. FRS 102 is effective for financial periodsbeginning on or after 1 January 2005.

It should be noted that the financial effects discussed in (a), (b) and (c) above would materialise onlyupon the exercise of the relevant Options. The cost of granting options discussed in (d) above would berecognised in the financial statements even if the options are not exercised in (d). Measured againstthese costs would be the desirable effect of the Scheme to attract, recruit, retain and motivate Directorsand employees which could, in the long term, yield greater returns for us and our Shareholders.

We have made an application to the SGX-ST for permission to deal in, and for quotation of, our Shareswhich may be issued upon the exercise of the Options to be granted under the Scheme. The approval ofthe SGX-ST is not to be taken as an indication of the merits of our Company, our subsidiaries, ourShares, the New Shares or the Option Shares.

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INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

In general, transactions entered into between our Group and any of its interested persons (namely, theDirectors or Controlling Shareholders of our Company or the Associates of such Directors or ControllingShareholders) are known as interested person transactions. Save as disclosed below, none of ourDirectors, Controlling Shareholders or their respective Associates was or is interested in any materialtransaction undertaken by our Group within the last three financial years ended 31 December 2003 andup to the Latest Practicable Date (the “Relevant Period”).

PAST INTERESTED PERSON TRANSACTIONS

1. Loans advanced by our Company to our Executive Director

We have made separate loan advances of $141,074 and $60,000 to our Executive Director, MrJack Tan, in FY2001. The loan of $141,074 was interest-free, unsecured and with no fixed term ofrepayment. The loan of $60,000 was subject to interest at the rate of 6% per annum. It wasunsecured and repayable within a period of 24 months. These amounts were the largest sums ofloan advances made to Mr Jack Tan during the Relevant Period. The said loans were fully repaidas at 31 December 2002. As at the Latest Practicable Date, no amount under the said loans isoutstanding.

We do not intend to extend such loans to any of our Directors in the future.

2. Loan advanced by our Managing Director to our Company

Our Managing Director, Mr Vincent Tan, extended a loan of $200,000 to our Company for workingcapital purposes in FY2001. The loan was drawn down from an overdraft facility extended to MrVincent Tan by a bank in Singapore.

The said loan of $200,000 was unsecured with no fixed term of repayment. Our Companyreimbursed the interest paid by Mr Vincent Tan to the bank on the amount of the overdraft facilitydrawn for the purpose of the loan advance to our Company. The interest was paid at the rate of1.5% above the then prevailing prime rate of Keppel TatLee Bank.

The sum of $200,000 was the largest loan made by Mr Vincent Tan during the Relevant Period.The loan was fully paid to Mr Vincent Tan by April 2004. As at the Latest Practicable Date, noamount is outstanding under the said loan.

We do not intend to obtain any further loans from our Directors in the future.

3. Share swap with our Directors

On 18 October 2001, our Directors, Messrs Vincent Tan and Jack Tan, respectively transferred335,000 and 115,000 ordinary shares of par value $1.00 each in the share capital of Select FM(Singapore) to our Company. In consideration for such transfer, our Company allotted and issued441,935 and 151,709 ordinary shares of par value $1.00 each in the share capital of our Companyto Messrs Vincent Tan and Jack Tan respectively.

The share swap was on a willing-buyer willing-seller basis and the consideration was derived attaking into account the financial performance of Select FM (Singapore), Stamford and ourCompany. Our Directors believe that the transaction was carried out on an arm’s length basis.

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4. Guarantees for Finance Leases

Our Directors had provided personal guarantees as securities for finance leases granted to ourGroup. Particulars of the personal guarantees are as follows:-

Financial institution Facility Guaranteed by Discharged by

DBS Finance Ltd Hire purchase facilities Vincent Tan April 2003of up to $890,527 Jack Tan

Hitachi Leasing (Singapore) Hire purchase facility Vincent Tan June 2004Pte. Ltd. of $40,120

5. Counter-indemnity

Our Directors, Messrs Vincent Tan and Jack Tan, and their respective Associates, Ms Doris Pekand Madam Tay Bock Hiang, had provided the following counter-indemnities in respect of theobligations of our Group:-

Counter- Counter-Year indemnity given indemnity given Dischargedprovided Amount to by Purpose by

FY2000 $27,000 NTUC Income Vincent Tan In respect of a November Insurance Co- Jack Tan guarantee provided 2002operative Limited Doris Pek by NTUC Income(“NTUC Income”) Tay Bock Hiang to NTUC Foodfare

Co-operative Limitedas security for ourobligations under a licence agreement for one of our food court stalls

$12,600 Asia Insurance Co Vincent Tan In respect of an May 2004Ltd Jack Tan insurance

Tay Bock Hiang performance bond provided by Asia Insurance Co Ltd to Health Promotion Board, Ministry of Health, as security for our obligations under a lease agreement for one of our cafeterias

FY2001 $18,000 NTUC Income Vincent Tan In respect of a guarantee January 2003Jack Tan provided by NTUCDoris Pek Income to LPS KopitiamTay Bock Hiang (TOO) Pte Ltd as

security for our obligations under a licence agreement for one of our food court stalls

$19,989 Yasuda Fire & Vincent Tan In respect of an insurance February Marine Insurance Tay Bock Hiang guarantee provided by 2004Co (Asia) Pte Ltd Yasuda Fire & Marine

Insurance Co (Asia) Pte Ltd to HDB in lieu of rental and reinstatement deposits for our kitchen premises at Aljunied

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Counter- Counter-Year indemnity given indemnity given Dischargedprovided Amount to by Purpose by

FY2002 $18,000 NTUC Income Vincent Tan In respect of a guarantee December Jack Tan provided by NTUC 2003Doris Pek Income to Kopitiam Tay Bock Hiang Investment Pte Ltd

as security for our obligations under a licence agreement for one of our food court stalls

PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS

1. Guarantees for Banking Facilities

Our Directors, Messrs Vincent Tan and Jack Tan and their Associate, Madam Tan Bock Hiang,have provided personal guarantees as securities for banking facilities granted to our Group.Particulars of the personal guarantees are as follows:-

Bank Facility Guaranteed by

DBS Bank Ltd Overdrafts, term loans, guarantee and Vincent Tanother facilities of up to $2,513,738 Jack Tan

Oversea-Chinese Banking Overdrafts, term loans and guarantee Vincent TanCorporation Limited facilities of up to $3,048,018 Jack Tan

Tay Bock Hiang

Oversea-Chinese Banking Overdraft of $100,000 Vincent TanCorporation Limited Jack Tan

RHB Bank Berhad Overdraft of $500,000 Vincent TanJack Tan

2. Guarantees for Operating Leases

Under some of our leases and licences, the lessors and licensors require our Directors to provideguarantees to secure our obligations under the relevant leases and licences. As at the LatestPracticable Date, guarantees provided by Directors Messrs Vincent Tan and Jack Tan to secure ourobligations under the leases and licences were as follows:-

Location Lessor/Licensor Lessee/Licensee Guaranteed by

302 Tiong Bahru Road Kopisi Pte Ltd Select FM Vincent Tan#03-01/02/31-55 Stall No. 13 (Singapore) Jack TanTiong Bahru PlazaSingapore 168732

9 Tampines Street 32 Aik Hua Pte Ltd Select FM Vincent Tan#01-01 Stalls Nos. 13 & 14 (Singapore) Jack TanSingapore 529286

68 Orchard Road Kopitiam Investment Select FM Vincent Tan#06-15/16/17 Stall 15 Pte Ltd (Singapore)Plaza SingapuraSingapore 238839

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Location Lessor/Licensor Lessee/Licensee Guaranteed by

51 Bras Basah Road Kopitiam Investment Select FM Vincent Tan#01-03 Stall No. 11 Pte Ltd (Singapore) Jack TanPlaza By The ParkSingapore 189554

5 Lower Kent Ridge Road Kopitiam Investment Stamford Vincent TanNational University Hospital Pte Ltd Jack TanMain Building Stall No. 7Singapore 119074

1 Jurong West Central 2 Kopitiam Investment Select FM Vincent Tan#03-42 Stall No. 20 Pte Ltd (Singapore) Jack TanJurong Point Shopping CentreSingapore 648886

1 Sengkang Square Kopitiam Investment Select FM Vincent Tan#04-14 to #04-19 Pte Ltd (Singapore) Jack TanCompass Point Stall No. 18DSingapore 545078

1 Hougang Street 91 Kopitiam Investment Select FM Vincent Tan#01-40 Stall No. #01-38 Pte Ltd (Singapore) Jack TanHougang Festival MarketSingapore 538692

1 Jelebu Road Kopitiam Investment Select FM Vincent Tan#03-08/09 Stall No. 2 Pte Ltd (Singapore) Jack TanBukit Panjang PlazaSingapore 677743

3. Guarantees for Finance Leases

Our Directors, Messrs Vincent Tan and Jack Tan have provided guarantees as securities forfinance leases granted to our Group. Particulars of the personal guarantees provided as at theLatest Practicable Date, are as follows:-

Financial institution Facility Guaranteed by

DBS Finance Ltd Local Enterprise Finance Scheme Vincent Tanhire purchase facility of $558,900 Jack Tan

DBS Bank Ltd Hire purchase facilities of up to $105,190 Vincent Tan

4. Counter-indemnity

On 21 April 2003, our Directors, Messrs Vincent Tan and Jack Tan, and their respectiveAssociates, Ms Doris Pek and Madam Tay Bock Hiang provided a counter-indemnity for the sum of$27,000 in favour of NTUC Income. The counter-indemnity was in relation to a guarantee providedby NTUC Income to NTUC Foodfare Co-operative Limited to secure our obligations under alicence agreement for one of our food court stalls.

Upon the listing and quotation of our Shares on SGX-SESDAQ, we intend to procure the discharge of theabovementioned personal guarantees and counter-indemnity from the respective lessors, licensors,financial institutions and NTUC Income, as the case may be, by providing our corporate guarantees. Inthe event that the lessors, licensors, financial institutions and/or NTUC Income do not agree to thedischarge of the said personal guarantees and/or counter-indemnify, our said Directors and theirrespective Associates, as the case may be, will continue to provide such personal guarantees and/orcounter-indemnity in respect of such obligations.

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CONFLICTS OF INTEREST

Save as disclosed under the section on “Interested Person Transactions”, none of our Directors,Controlling Shareholders or their Associates has any material interest, direct or indirect, in:-

(a) any company carrying on the same business;

(b) any enterprise or company that is our Group’s customer or supplier of goods or services; and

(c) any transaction to which we are a party.

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS

All future transactions with interested persons shall comply with the requirements of the Listing Manual.In compliance with Rule 210(7) of the Listing Manual, our Articles require a Director to abstain fromvoting in any contract or arrangement in which he has a personal material interest.

All future interested person transactions will be properly documented and submitted to our AuditCommittee for periodic review to ensure that they are conducted at arm’s length basis, on normalcommercial terms and in accordance with the review procedures outlined below and that the transactionsare not prejudicial to the interest of our Shareholders. Our Company will prepare the relevant informationto assist our Audit Committee in its review.

Review Procedures

In respect of all interested person transactions, our Directors will ensure that all such dealings will beconducted on an arm’s length basis by undertaking the following procedures:-

(a) market rates will be used as benchmarks for interested person transactions;

(b) should any future business dealings between our Group and our interested persons be on termsless favourable than to our Group as compared to what may be procured from independent thirdparties, prior approval from our Board will be obtained; and

(c) in determining the most competitive purchase price, the suitability, quality and the cost of theproduct, and the experience and expertise of the supplier will be taken into consideration.

Furthermore, if during periodic reviews, the Audit Committee believes that the guidelines and proceduresas stated above are not sufficient to ensure that interests of minority Shareholders are not prejudiced, wewill adopt new guidelines and procedures. In the event that a member of our Audit Committee isinterested in any interested person transaction, he will abstain from reviewing that particular transaction.

Our Audit Committee will also review the internal controls relating to future interested person transactionsof our Group and will include such review as part of the standard procedures during the AuditCommittee’s examination of the adequacy of the Company’s internal controls. Our Directors and the AuditCommittee will ensure that all disclosure requirements in respect of interested person transactions,including those required by prevailing legislation, Chapter 9 of the Listing Manual and applicableaccounting standards, are complied with. In addition, such transactions will also be subject toShareholders’ approval, if required under Chapter 9 of the Listing Manual.

Currently, we have not sought and we do not intend to seek a Shareholders mandate for interestedperson transactions as we will comply with the provisions of Chapter 9 of the Listing Manual.

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GENERAL AND STATUTORY INFORMATION

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS

1. The name, age, address, principal occupation and business and working experience of each of ourDirectors and Executive Officers are set out on pages 115 to 118 respectively of this Prospectus.

2. The present and past directorships (held in the five years preceding the date of this Prospectus) ofeach of our Directors in companies other than our Company are as follows:-

Name of Director Other Directorships Past Directorships

Vincent Tan Group Companies– Select Food Management Pte Ltd– Select Food Management Sdn. Bhd– Select (F&B) Investment Pte Ltd– Select F&B (Suzhou) Co. Ltd– Stamford Catering Services Pte Ltd– Lerk Thai Restaurant Pte Ltd– SCS Food Services Pte. Ltd.

Other companies Other companies– Select Eastern Investment Pte Ltd – Zhangzhou Select Eastern

(struck off) Fast Food Co., Ltd– LTL Timber World Pte Ltd

(struck off)

Jack Tan Group Companies Group Companies– Select Food Management Pte Ltd None– Select Food Management Sdn. Bhd– Select (F&B) Investment Pte Ltd– Select F&B (Suzhou) Co. Ltd– Stamford Catering Services Pte Ltd– Lerk Thai Restaurant Pte Ltd– SCS Food Services Pte. Ltd.

Other companies Other companies– Select Eastern Investment Pte Ltd – Zhangzhou Select Eastern

(struck off) Fast Food Co., Ltd

Low Teck Seng Group Companies Group CompaniesNone

Other companies– Semicaps Corporation Pte Ltd– Electrotech Investments Ltd Other companies– Magnecomp International Limited – Data Storage Institute– Precico Singapore Pte Ltd – Parkway Laboratory Services Ltd– DSI Holdings (Pte) Ltd (to be – IEEE Inc (USA)

dissolved) – Flextech Holdings Limited– Collibro Technologies (S) Pte Ltd – Stormwater (Asia) Pte Ltd

(to be dissolved) – Institute of Microelectronics

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Name of Director Other Directorships Past Directorships

Sim Beng Chye Group Companies Group CompaniesNone

Other companies Other companies– Spindex Industries Limited – Celestica Singapore Pte Ltd – Nylect Technology Limited (formerly known as Omni – First Engineering Limited Industries Limited)– Nico Steel Holdings Pte Ltd – Omni Plastics Pte Ltd

– Omni Plastics (China) Pte Ltd (gazetted to be struck off)

– Omni Plastics Shanghai Co Ltd– Omni Plastics Technology

Shanghai Co Ltd– Omni Plastics Xiamen Co Ltd– Omni Precision Pte Ltd– Omni Engineering Shanghai Co Ltd– Omni Manufacturing Services– Omni Plastics Suzhou Co Ltd– PT Omni Precision Batam– Amnitek Limited– Fowseng Plastics Industries Pte Ltd

(in members' voluntary winding up)– I.C. Equipment Pte Ltd– Jin Li Mould Manufacturing Pte Ltd– Kojin Mould Manufacturing Pte Ltd

Kwah Thiam Hock Group Companies Group CompaniesNone

Other companies– ECICS Limited– EHGroup Ltd Other companies– ECIL Ltd – EPL - Cornwall Pte Ltd– ECGC Ltd – ECICS Management Pte Ltd– EPL Ltd – ECICS Ventures Pte Ltd– ECICS Ventures 2 Ltd – Intraco Limited– Credinet (Singapore) Pte Ltd – Far East Bunkering Services – International Factors (Singapore) Ltd Pte Ltd– International Factors Leasing Pte Ltd – Parkstone Real Estate Pte Ltd– China Walden Venture Investment Ltd – New Venture Pte Ltd– China Walden Management Ltd – Teledata Singapore Limited– PB International Sdn Bhd – Coface Infoasia Pte Ltd– Ayudhya International Factors Co Ltd– Red Sea Maritime Pte Ltd

(to be dissolved)– Maritime Holdings Ltd (in members'

voluntary winding up)– Maritime Shipping (1988) Pte Ltd

(to be dissolved)– Maritime (Private) Limited (in

members' voluntary winding up)– Beppeb Capital Pte Ltd (in members'

voluntary winding up)

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3. The present and past directorships (held in the five years preceding the date of this Prospectus) of each ofour Executive Officers in companies other than our Company are as follows:-

Name of Present Directorship Past DirectorshipExecutive Officer

Doris Pek Group Companies Group CompaniesNone None

Other companies Other companiesNone None

Steven Tan Group Companies Group CompaniesSelect F&B (Suzhou) Co. Ltd None


Jordan Aw Yong Kwok Kong Group Companies Group CompaniesNone None


4. Save as disclosed below, none our Directors, Executive Officers or Controlling Shareholders has:-

(i) at any time during the last ten years, had a petition under any bankruptcy laws of anyjurisdiction filed against him or against a partnership of which he was a partner;

(ii) at any time during the last ten years, had a petition under any laws of any jurisdiction filedagainst a corporation of which he was a director or key executive for the winding-up of thatcorporation on the ground of insolvency;

(iii) any unsatisfied judgments against him;

(iv) ever been convicted of any offence, in Singapore or elsewhere, involving fraud or dishonestywhich is punishable with imprisonment for three months or more, or has been the subject ofany criminal proceedings (including any pending criminal proceedings which he is aware of)for such purpose;

(v) ever been convicted of any offence, in Singapore or elsewhere, involving a breach of anylaw or regulatory requirement that relates to the securities or futures industry in Singaporeor elsewhere, or has been the subject of any criminal proceedings (including any pendingcriminal proceedings which he is aware of) for such breach;

(vi) at any time during the last ten years, had judgment entered against him in any civilproceedings in Singapore or elsewhere involving a breach of any law or regulatoryrequirement that relates to the securities or futures industry in Singapore or elsewhere, or afinding of fraud, misrepresentation or dishonesty on his part, or has been the subject of anycivil proceedings (including any pending civil proceedings which he is aware of) involving anallegation of fraud, misrepresentation or dishonesty on his part;

(vii) ever been convicted in Singapore or elsewhere of any offence in connection with theformation or management of any corporation;

(viii) ever been disqualified from acting as a director of any corporation, or from taking partdirectly or indirectly in the management of any corporation;

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(ix) ever been the subject of any order, judgment or ruling of any court, tribunal or governmentalbody permanently or temporarily enjoining him from engaging in any type of businesspractice or activity; and

(x) ever to his knowledge, been concerned with the management or conduct, in Singapore orelsewhere, of the affairs of:-

(a) any corporation which has been investigated for a breach of any law or regulatoryrequirement governing corporations in Singapore or elsewhere; or

(b) any corporation or partnership which has been investigated for a breach of any law orregulatory requirement that relates to the securities or futures industry in Singapore orelsewhere,

in connection with any matter occurring or arising during the period when he was soconcerned with the corporation or partnership.

Jack Tan

On one occasion some time three to five years ago, Mr Jack Tan was arrested for a gamblingrelated offence that took place at the residence of a friend during a birthday party which heattended. He was subsequently charged and convicted in the Subordinate Courts of Singapore. MrJack Tan paid a fine of approximately $2,000.

Steven Tan

A bankruptcy petition was filed against Mr Steven Tan in 1999 by NTUC Income Insurance Co-operative Limited (“NTUC Income”) but was subsequently withdrawn in the same year after heentered into a settlement with NTUC Income. The bankruptcy petition was in respect of the liabilityof Mr Steven Tan as a guarantor under a personal guarantee which he provided to NTUC Incomewhilst he was in the employ of Dragon Shokuhim (S) Pte Ltd (“Dragon”). Mr Steven Tan was one ofthe four personal guarantors in respect of a guarantee issued by NTUC Income for a sum of rentaldeposit payable to the landlord of a subsidiary of Dragon. NTUC Income enforced the personalguarantee when the subsidiary of Dragon became insolvent.

5. The aggregate emoluments (including salaries, bonuses, fees, CPF contributions and otherallowances) paid or distributed by our Group to our Directors for their services rendered in allcapacities to our Company and our subsidiaries for FY2002 and FY2003 amounted toapproximately $0.4 million and $0.2 million respectively. For the current FY2004, the estimatedaggregate emoluments payable to our Directors under the arrangements in force at the date of thisProspectus, including the Service Agreements (excluding any incentive bonus or profit-sharingscheme payable under the Service Agreements with certain of our Directors referred to on pages121 to 122 of this Prospectus) is estimated to be approximately $0.3 million.

6. Save as described under “Service Agreements” on pages 121 to 122 of this Prospectus, there areno existing or proposed service contracts between any of our Directors or Executive Officers andour Company or any of our subsidiaries.

7. There is no shareholding qualification for Directors in the Articles of our Company.

8. No option to subscribe for shares in or debentures of our Company or any of our subsidiaries hasbeen granted to, or was exercised by, any of our Directors or Executive Officers within the twoyears preceding the date of this Prospectus.

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9. Save as disclosed on pages 131 to 135 of this Prospectus under “Interested Person Transactionsand Conflicts of Interests”, none of our Directors or Substantial Shareholders is interested, directlyor indirectly, in the promotion of, or in any property or assets which have, within the two yearspreceding the date of this Prospectus, been acquired by or disposed of by or leased to ourCompany or any of our subsidiaries, or are proposed to be acquired or disposed of by or leased toour Company or any of our subsidiaries.

10. Save as disclosed on page 135 of this Prospectus under “Interested Person Transactions andConflicts of Interests”, none of our Directors, Executive Officers or Substantial Shareholders hasany substantial interest, direct or indirect, in any company carrying on similar trade as ourCompany or any of our subsidiaries.

11. Save as disclosed on pages 77 and 118 of this Prospectus, none of our Directors and ExecutiveOfficers is related by blood or marriage to one another nor are they so related to any of ourSubstantial Shareholders.

12. The interests of our Directors and Substantial Shareholders in our Shares as at the LatestPracticable Date are set out under “Shareholders” on page 77 of this Prospectus.

13. No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any firm inwhich such Director or expert is a partner or any corporation in which such Director or expertholds shares or debentures, in cash or shares or otherwise, by any person to induce him tobecome, or to qualify him as, a Director, or otherwise for services rendered by him or by such firmor corporation in connection with the promotion or formation of our Company.

14. None of our Directors has any interest in any existing contract or arrangement which is significantin relation to the business of our Company and our subsidiaries, taken as a whole.

SHARE CAPITAL

15. The changes in the issued and paid-up share capital of our subsidiaries since the date of theirrespective incorporation are set out below:-

Date of issue Number of Par Value/ Resultant Issued Purpose of IssueShares Issue Price Share Capital Issued

Select Food Management Pte Ltd

3 May 1999 3 $1 $3 Incorporation23 June 2000 499,997 $1 $500,000 Working capital

Stamford Catering Services Pte Ltd

11 January 2000 5 $1 $5 Incorporation7 August 2001 250,000 $1 $250,005 Working capital

Select Food Management Sdn. Bhd.

19 December 2000 2 RM1 RM2 Incorporation1 May 2001 99,998 RM1 RM100,000 Working capital

Lerk Thai Restaurant Pte Ltd

28 November 2003 2 $1 $2 Incorporation5 January 2004 199,998 $1 $200,000 Working capital

Select (F&B) Investment Pte. Ltd.

17 March 2004 2 $1 $2 Incorporation2 July 2004 99,998 $1 $100,000 Working capital

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Select F&B (Suzhou) Co. Ltd

15 May 2004 N.A. N.A. US$300,000 Registered capital contribution

6 July 2004 N.A. N.A. US$300,000 Registered capital contribution

SCS Food Services Pte. Ltd.

2 July 2004 2 $1 $2 Incorporation23 September 2004 99,998 $1 $100,000 Working capital

16. Save as disclosed in the section on “Share Capital” on pages 74 to 76 of this Prospectus, noshares in or debentures of our Company or any of our subsidiaries have been issued, or areproposed to be issued, as fully or partly paid-up for cash, or for a consideration other than cash,within the three years preceding the date of lodgement of this Prospectus.

BANK BORROWINGS AND WORKING CAPITAL

17. Save as disclosed in “Capitalisation and Indebtedness” on pages 66 to 68 of this Prospectus andin the Independent Auditors’ Report, our Group has no other bank borrowings or indebtedness inthe nature of borrowings including bank overdrafts and liabilities under acceptances (other thannormal trading bills) or acceptance credits, mortgages, charges, hire purchase commitments,guarantees or other material contingent liabilities as at 30 June 2004.

18. In the opinion of our Directors, there is no minimum amount which must be raised by the issue ofthe New Shares in order to provide for the following:-

(i) the purchase price of any property purchased or to be purchased which is to be defrayed inwhole or in part out of the proceeds of the issue of the New Shares;

(ii) estimated expenses (including underwriting and placement commission and brokerage) forthe Invitation payable by our Company;

(iii) the repayment of any money borrowed by our Company in respect of any of the foregoingmatters; and

(iv) working capital.

Although no minimum amount must be raised by the Invitation in order to provide for the items setout above, the estimated amount to be provided for the item set out in (ii) above is approximately$1.0 million. Such amount is proposed to be provided out of the proceeds of the Invitation or, inthe event the Invitation is cancelled, out of the existing banking facilities or internal funds.

19. Our Directors are of the opinion that, after taking into account the present banking facilities, andthe net proceeds from the issue of the New Shares by our Company, our Group will have adequateworking capital for our present requirements.

MATERIAL CONTRACTS

20. The following contracts, not being contracts entered into in the ordinary course of business, havebeen entered into by our Company and our subsidiaries within the two years preceding the date oflodgement of this Prospectus and are or may be material:-

(a) the Depository Agreement dated 30 November 2004 entered into between our Companyand CDP pursuant to which CDP will act as central depository for our Group’s securities fortrades in the securities of our Group through the SGX-ST;

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(b) the Management and Underwriting Agreement dated 30 November 2004 made between ourCompany, the Manager and the Underwriters for the management of the Invitation and theunderwriting of the Offer Shares referred to in paragraphs 22 and 23 below;

(c) the Placement Agreement dated 30 November 2004 made between our Company and thePlacement Agent for the placement of the Placement Shares referred to in paragraph 24below; and

(d) the Subscription Agreement dated 21 May 2004 made between our Company and the Pre-Invitation Investors in relation to the subscription of 184,400 ordinary shares of $1.00 eachin the share capital of our Company by the Pre-Invitation Investors for an aggregateconsideration of $1.725 million.

LITIGATION, ARBITRATION AND BANKRUPTCY PROCEEDINGS

21. Neither our Company nor any of our subsidiaries is engaged in any legal or arbitration proceedingsin the last 12 months before the date of the lodgement of this Prospectus, as plaintiff or defendantin respect of any claims or amounts which are material in the context of the Invitation and ourDirectors have no knowledge of any proceedings pending or threatened against our Company orany of our subsidiaries or any facts likely to give rise to any litigation, claims or proceedings whichmight materially affect the financial position or profitability of our Company or any of oursubsidiaries.

MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

22. Pursuant to the Management and Underwriting Agreement, our Company appointed WestcombCapital Pte Ltd to manage the Invitation and Westcomb Securities Pte Ltd as the Underwriter tounderwrite the Offer Shares. The Manager will receive a management fee from our Company for itsservices rendered in connection with the Invitation.

23. Pursuant to the Management and Underwriting Agreement, the Underwriter agreed to underwritethe Offer Shares for a commission of 2.25% of the aggregate Issue Price for the total number ofOffer Shares, payable by our Company, for subscribing and/or procuring subscription for any OfferShares not subscribed for pursuant to the Invitation and will pay or procure payment to ourCompany for such Offer Shares. The Underwriters may, at its absolute discretion appoint one ormore sub-underwriters to sub-underwrite the Offer Shares.

24. Pursuant to the Placement Agreement, the Placement Agent agreed to subscribe for and/orprocure subscribers for the Placement Shares for a placement commission of 2.5% of the IssuePrice for the total number of Placement Shares, payable by our Company, for subscribing and/orprocuring subscription for any Placement Shares not subscribed for pursuant to the Invitation andwill pay or procure payment to our Company for such Placement Shares.

Subscribers of Placement Shares may be required to pay a brokerage of up to 1.0% of the IssuePrice to the Placement Agent or sub-placement agents.

25. Brokerage will be paid by our Company on the New Shares at the rate of 0.25% of the Issue Pricefor each Offer Share. The brokerage will be paid to the Underwriter, members of the SGX-ST,merchant banks and members of the Association of Banks in Singapore in respect of acceptedapplications made on Application Forms bearing their respective stamps, or to the ParticipatingBanks in respect of successful applications made through Electronic Applications at theirrespective ATMs.

Save as aforesaid, no commission, discount or brokerage has been paid or other special termsgranted within the two years preceding the date of this Prospectus or is payable to any Directors,promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe,or procuring or agreeing to procure subscription for any shares in, or debentures of, our Companyor any of our subsidiaries.

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26. The Management and Underwriting Agreement may be terminated by the Manager at any time onor before the close of the Application List on the occurrence of certain events. These eventsinclude:-

(a) any change or development involving a prospective change or any crisis in local, national orinternational, financial (including stock market, foreign exchange market, inter-bank marketor interest rates or money market) political, industrial, economic, legal or monetaryconditions, taxation or exchange controls; or

(b) the issue of a stop order by the Authority in accordance with Section 242 of the Securitiesand Futures Act; or

(c) the occurrence of event or events which shall in the opinion of the Manager (exercised ingood faith) (1) result or be likely to result in a material adverse fluctuation or adverseconditions in the stock market in Singapore or elsewhere or (2) be likely to prejudice thesuccess of the offer, subscription of the New Shares (whether in the primary market or inrespect of dealings in the secondary market) or (3) make it impracticable, inadvisable,inexpedient or uncommercial to proceed with any of the transactions contemplated in theManagement and Underwriting Agreement or (4) be likely to have an adverse effect on thebusiness, trading position, operations or prospects of our Company or of our Group as awhole or (5) be such that no reasonable underwriter would have entered into theManagement and Underwriting Agreement or (6) make it uncommercial or otherwisecontrary to or outside the usual commercial practices of underwriting in Singapore for theUnderwriter to observe or perform or be obliged to observe or perform the terms of theManagement and Underwriting Agreement.

27. The Placement Agreement is conditional upon the Management and Underwriting Agreement nothaving been terminated or rescinded pursuant to the provisions of the Management andUnderwriting Agreement and may be terminated on the occurrence of certain events, includingthose specified in paragraph 26 above. In the event that the Management and UnderwritingAgreement is terminated, our Company reserves the right, at the absolute discretion of ourDirectors, to cancel the Invitation.

28. Our public relations consultant, Quattro Media Pte Ltd, is an associated company of the Managerand an associated company of Westcomb Securities Pte Ltd, our Placement Agent andUnderwriter. Save as disclosed in paragraphs 22 to 28 and under the section “Shareholders” onpage 77, we do not have any material relationship with the Manager, Underwriter and PlacementAgent.

MISCELLANEOUS

29. There has been no previous issue of Shares by our Company or offer for sale of our Shares to thepublic within the two years preceding the date of this Prospectus.

30. No amount of cash or securities or benefit has been paid or given to any promoter within the twoyears preceding the Latest Practicable Date or is proposed or intended to be paid or given to anypromoter at any time.

31. Save as disclosed on pages 142 to 143 under “Management, Underwriting and PlacementArrangements”, no commission, discount or brokerage has been paid or other special termsgranted within the two years preceding the Latest Practicable Date or is payable to any Director,promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribeor procuring or agreeing to procure subscriptions for any shares in, or debentures of, our Group orany of our subsidiaries.

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32. Save as disclosed in this Prospectus, no expert is interested, directly or indirectly, in the promotionof, or in any property or assets which have, within two years preceding the Latest Practicable Date,been acquired or disposed of by or leased to our Company or any of our subsidiaries or areproposed to be acquired or disposed of by or leased to our Company or any of our subsidiaries.

33. Application moneys received by our Company in respect of successful applications (includingsuccessful applications which are subsequently rejected) will be placed in a separate non-interestbearing account with the Bank of East Asia, Limited (“Receiving Banker”). In the ordinary course ofbusiness, the Receiving Banker will deploy these moneys in the interbank money market. All profitsderived from the deployment of such moneys will accrue to the Receiving Banker. Any refund of allor part of the application moneys to unsuccessful or partially successful applicants will be madewithout any interest or any share of revenue or any other benefit arising therefrom.

34. Save as disclosed in this Prospectus, our Directors are not aware of any relevant materialinformation including trading factors or risks which are unlikely to be known or anticipated by thegeneral public and which could materially affect the profits of our Company and our subsidiaries.

35. Save as disclosed in this Prospectus, the financial condition and operations of our Group are notlikely to be affected by any of the following:-

(i) known trends or demands, commitments, events or uncertainties that will result in or arereasonably likely to result in our Group’s liquidity increasing or decreasing in any materialway;

(ii) material commitments for capital expenditure;

(iii) unusual or infrequent events or transactions or any significant economic changes that willmaterially affect the amount of reported income from operations; and

(iv) known trends or uncertainties that have had or that our Group reasonably expects will havea material favourable or unfavourable impact on revenue or operating income.

36. We currently have no intention of changing our auditors after the listing of our Company on theOfficial List of the SGX-SESDAQ.

37. No property has been purchased or acquired or proposed to be purchased or acquired by ourGroup which is to be paid for, wholly or partly, out of the proceeds of the Invitation or the purchaseor acquisition of which has not been completed at the date of this Prospectus, other than propertythe contract for the purchase or acquisition whereof was entered into in the ordinary course ofbusiness of our Company or our subsidiaries, such contract not being made in contemplation ofthe Invitation nor the Invitation in consequence of the contract.

38. The Directors are not aware of any event which has occurred since 30 June 2004 and up to theLatest Practicable Date which may have a material effect on the financial position or results of ourGroup.

39. No expert is employed on a contingent basis by our Company or any of our subsidiaries, has amaterial interest, whether direct or indirect, in our Shares or the shares of our subsidiaries, or hasa material economic interest, whether direct or indirect, in our Company, including an interest inthe success of the Invitation.

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CONSENTS

40. Chio Lim & Associates, the Auditors and Reporting Auditors, have given and have not withdrawntheir written consent to the issue of this Prospectus with the inclusion herein of their IndependentAuditors’ Report and Audited Consolidated Financial Statements of Select Catering ServicesLimited and the Independent Auditors’ Review Report and Unaudited Consolidated FinancialStatements of Select Catering Services Limited and their name, address and professionalqualification and references thereto in the form and context in which they appear in this Prospectusand to act in such capacities in relation to this Prospectus. Raslan Loong has given and has notwithdrawn its written consent to the issue of this Prospectus with the inclusion herein of its opinionin the form and context in which it appears in this Prospectus and references to its name in theform and context in which it appears in this Prospectus and to act in such capacity in relation tothis Prospectus.

41. Each of the Solicitors to the Invitation, the Share Registrar, the Receiving Bank and the PrincipalBankers do not make, or purport to make, any statement in this Prospectus or any statement uponwhich a statement in this Prospectus is based and, to the maximum extent permitted by law,expressly disclaim and take no responsibility for any liability to any person which is based on, orarises out of, the statements, information or opinions in this Prospectus.

RESPONSIBILITY STATEMENT BY OUR DIRECTORS

42. This Prospectus has been seen and approved by our Directors and they collectively andindividually accept full responsibility for the accuracy of the information given in this Prospectusand confirm, having made all reasonable enquiries, that to the best of their knowledge and belief,the facts stated and the opinions expressed in this Prospectus are fair and accurate in all materialrespects as at the date of this Prospectus and that there are no other material facts the omissionof which would make any statements in this Prospectus misleading, and that this Prospectusconstitutes full and true disclosure of all material facts about the Invitation, our Company and oursubsidiaries.

RESPONSIBILITY STATEMENT BY THE MANAGER

43. The Manager acknowledges that, having made due and careful enquiry and to the best of itsknowledge and belief, based on information furnished to it by our Group, this Prospectusconstitutes full and true disclosures of all the material facts about the Invitation and the Companyand its subsidiaries and it is not aware of any other facts the omission of which would make anystatements herein misleading.

DOCUMENTS AVAILABLE FOR INSPECTION

44. Copies of the following documents may be inspected at the registered office of our Company at 36Senoko Crescent, Singapore 758282 during normal business hours for a period of six months fromthe date of registration of this Prospectus by the Authority:-

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

(b) the material contracts referred to in paragraph 20 on pages 141 and 142 of this Prospectus;

(c) the letters of consent referred to in paragraph 40 and 41 on page 145 of this Prospectus;

(d) the Service Agreements referred to on pages 121 and 122 of this Prospectus;

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(e) the Independent Auditors’ Report and Audited Consolidated Financial Statements of SelectCatering Services Limited as set out in Appendix G of this Prospectus; and

(f) the Independent Auditors’ Review Report and Unaudited Consolidated Financial Statementsof Select Catering Services Limited as set out on in Appendix H of this Prospectus.

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APPENDIX A – TAXATION

A-1

The following is a discussion of certain tax matters arising under the current tax laws in Singapore and isnot intended to be and does not constitute legal or tax advice. While this discussion is considered to bea correct interpretation of existing laws in force as at the date of this Prospectus, no assurance can begiven that courts or fiscal authorities responsible for the administration of such laws will agree with thisinterpretation or that changes in such laws will not occur. The discussion is limited to a generaldescription of certain tax consequences in Singapore with respect to ownership of our Shares bySingapore investors, and does not purport to be a comprehensive nor exhaustive description of all of thetax considerations that may be relevant to a decision to purchase our Shares. Prospective investorsshould consult their tax advisors regarding Singapore tax and other tax consequences of owningand disposing our Shares. It is emphasised that neither our Company, our Directors nor anyother persons involved in the Invitation accepts responsibility for any tax effects or liabilitiesresulting from the subscription for, purchase, holding or disposal of our Shares. Dividendsdeclared by our Company will be paid out in Singapore dollars to our Shareholders.

General

Singapore tax residents, which include individuals who are residing in Singapore and companies whichare controlled or managed in Singapore, are subject to Singapore income tax on income that is accruedin or derived from Singapore and on foreign income received or deemed to be received in Singaporesubject to certain exceptions.

In the 2003 Budget Statement, the Minister for Finance has announced that with effect from 1 June 2003,all foreign sourced income in the form of dividends, branch profits and services income (derived fromjurisdictions that have headline tax rates of at least 15%) received in Singapore will be exempt from tax,subject to certain conditions.

In the 2004 Budget Statement, the Minister for Finance has announced that all foreign-sourced personalincome remitted or deemed remitted by Singapore resident individuals shall be exempt from tax witheffect from year of assessment 2005. In addition, certain proposed Singapore sourced investmentincome derived by individuals on or after 1 January 2004 will also be exempt from tax.

A company is tax resident in Singapore if the control and management of its business is exercised inSingapore. A company will usually be regarded as being tax resident in Singapore if the company’sboard of directors meets in Singapore to discuss overall management policy and high-level businessmatters in relation to the business of the company. An individual is tax resident in Singapore in a year ofassessment if, in the preceding year, he resides in Singapore (except for temporary absences fromSingapore) or if he was physically present in Singapore or exercised an employment in Singapore (otherthan as a director of a company) for 183 days or more.

Non-resident corporate taxpayers are subject to income tax on income that is accrued in or derived fromSingapore, and on foreign income received in Singapore, subject to certain exceptions. Non-residentindividuals, subject to certain exceptions, are subject to income tax on the income accrued in or derivedfrom Singapore.

The corporate tax rate in Singapore is 22% for the years of assessment 2003 (i.e. financial year ended2002) and 2004 (i.e. financial year ended 2003) and 20% with effect from the year of assessment 2005(.e. financial year ended 2004). Three quarters of up to the first $10,000 of a company’s normalchargeable income and one half of up to the next $90,000 will be exempt from tax. The remainingchargeable income (after tax exemption) will be taxed at 22% (for financial years ended 2002 and 2003)or 20% (for financial year ended 2004 onwards). The above tax exemption will not apply to Singaporedividends received by companies.


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For a Singapore tax resident individual, the rate of tax will vary according to the individual’scircumstances but is subject to a maximum rate of 22% with effect from the year of assessment 2003 i.e.calendar year 2002. In the Budget Statement 2003 announced on 28 February 2003, the FinanceMinister also reaffirmed the Government’s intention to reduce the top individual tax rate to 20% by theyear of assessment 2005 (financial year ended in 2004). However, the Minister has announced in theBudget Statement 2004 that the reduction in the top tax rate will be deferred to a future year ofassessement.

Subject to any applicable tax treaty, non-Singapore resident taxpayers are subject to a withholding tax ofthe prevailing corporate tax rate in respect of income derived from technical or management servicesprovided in Singapore, or generally 15% in the case of interest, royalty and rental of movable property ifsuch interest, royalty or rental is not derived by the non-resident from any trade or business carried on inSingapore and is not effectively connected with any permanent establishment in Singapore of the non-resident person. In respect of royalty payment due payable on or after 1 January 2005 which is notderived by the non-resident from any trade or business carried on in Singapore and is not effectivelyconnected with any permanent establishment in Singapore of the non-resident person, the FinanceMinister has proposed in the 2004 Budget Statement to reduce the withholding tax rate to 10%.

Dividend Distributions

Dividend Distributions – Imputation Tax System

Singapore adopted the imputation tax system up to 31 December 2002. Under the imputation taxsystem, the tax we pay at the prevailing corporate tax rate is deemed to be paid by our Shareholders.Our Shareholders receive dividends net of such tax. Our Shareholders are taxed on the gross amount ofdividends (that is, on the amount of net dividends plus an amount equal to the amount of gross dividendsmultiplied by the prevailing corporate tax rate). The tax we pay effectively becomes available to ourShareholders as a tax credit to offset their Singapore income tax liability on the gross amount ofdividends paid by us.

Dividends on our Shares received by a Singapore resident individual will be liable to tax in Singapore.The rate of tax will vary according to the individual’s circumstances. The tax we pay can be set off as atax credit against the individual’s income tax liabilities where the individual’s income tax liabilities on thedividends are lower (or, as the case may be, higher) than the tax credit, such individual may receive arefund from (or, as the case may be, have to pay further tax to) the Inland Revenue Authority ofSingapore.

Dividends on our Shares received by a Singapore resident company will be liable to tax in Singapore atthe corporate income tax rate. In the absence of any expenses which may be deductible against thedividends, the Singapore resident company will not receive any tax refund from the Inland RevenueAuthority of Singapore, nor be required to pay a further tax, since tax has been deducted at theprevailing corporate tax rate.

A non-resident Shareholder is effectively taxed on dividends on our Shares at the corporate income taxrate. Thus, no further Singapore income tax will be imposed on the net dividends received by a non-resident holder of our Shares. Further, the non-resident Shareholder which does not have a permanentestablishment in Singapore and deductible expenses attributable to such dividend income will normallynot receive any tax refund from the Inland Revenue Authority of Singapore.

Dividend Distributions – One-Tier Corporate Tax System

Singapore adopted the “one-tier” corporate tax system with effect from 1 January 2003. Under this newsystem, the tax collected from corporate profits is final and Singapore dividends are tax exempt in thehands of the shareholder, regardless of whether this is a corporate or individual shareholder and whetherthe shareholder is a Singapore tax resident. To enable companies to make use of the unutilised dividendfranking credits as at 31 December 2002, a five-year transition period from 1 January 2003 to 31December 2007 has been introduced for such companies to pay franked dividends out of its unutiliseddividend franking credits. During this period, the shareholders will continue to receive these dividendswith credits attached as mentioned above under the current tax system.


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As we intend to make use of our unutilised dividend franking credits, we have not elected to adopt theone-tier corporate tax system which was introduced since 1 January 2003. As such, our Shareholderswill continue to receive dividends with credits attached until the dividend franking credits are utilised or 31December 2007, whichever is the earlier. Foreign Shareholders are advised to consult their own taxadvisors in respect of the tax laws of their respective countries of residence and the applicability of anydouble taxation agreement that their country may have with Singapore.

Where our Company receives foreign dividends for which a tax credit has been allowed, the dividendpayments from these foreign dividends to the holders of our Shares will be exempt from tax. The taxcredit could be obtained pursuant to a double taxation treaty with one of Singapore’s treaty partners or itcould be unilaterally granted under the Income Tax Act. Where the credit is available under any of theoptions above, a special account is to be created for the purposes of ensuring that the payment ofexempt dividends is restricted to the amount of the dividends for which foreign tax credit has beenallowed.

Gains on Disposal of our Shares

Currently, Singapore does not impose tax on capital gains. Thus any gains derived from the disposal ofour Shares acquired for long term investments will not be taxable in Singapore. However, capital gainsmay be construed to be of an income nature (rather than capital gains) and subject to tax especially ifthey arise from activities which the Inland Revenue Authority of Singapore regards as the carrying on ofa trade in Singapore i.e. a company carrying on a trade or business of dealing in shares in Singapore.

Any profits from the disposal of our Shares are not taxable in Singapore unless the seller is regarded ashaving derived gains of an income nature, in which case, the disposal profits would be taxable.

Stamp Duty

There is no stamp duty payable on the subscription and issuance of our Shares.

Where existing Shares evidenced in certificated form are acquired in Singapore, stamp duty is payableon the instrument of transfer of our Shares at the rate of $2.00 for every $1,000 market value of ourShares registered in Singapore.

The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty ispayable if no instrument of transfer is executed (such as in the case of scripless shares, the transfer ofwhich does not require instrument of transfers to be executed) or the instrument of transfer is executedoutside Singapore. However, stamp duty may be payable if the instrument of transfer which is executedoutside Singapore is received in Singapore.

The above stamp duty is not applicable to electronic transfers of our Shares through the CDP.

Estate Duty

Singapore estate duty is imposed on the value of immovable property situated in Singapore owned byindividuals who are not domiciled in Singapore, subject to specific exemption limits. Movable assets ofnon-domiciles will be exempt from estate duty with respect to deaths occurring on or after 1 January2002. Singapore estate duty is imposed on the value of most immovable property situated in Singaporeand on most movable property, wherever it may be, owned by individuals who are domiciled inSingapore, subject to specific exemption limits. Our Shares are considered to be movable propertysituated in Singapore as we are a company incorporated in Singapore.

Accordingly, our Shares held by an individual domiciled in Singapore are subject to Singapore estateduty upon such individual’s death. Singapore estate duty is payable to the extent that the value of ourShares aggregated with any other assets subject to Singapore estate duty exceeds $600,000. Unlessother exemptions apply to the other assets, for example, the separate exemption limit for residentialproperties, any excess beyond $600,000 will be taxed at 5% on the first $12,000,000 of the individual’sSingapore chargeable assets and thereafter at 10%. Individuals should consult their own tax advisorsregarding the Singapore estate duty consequences of their ownership of our Shares.


Goods and Services Tax (“GST”)

The sale of shares by an investor belonging in Singapore through an SGX-ST member or to anotherperson belonging in Singapore is an exempt sale not subject to GST.

Where the Shares are sold by the investor to a person belonging outside Singapore, the sales isgenerally a taxable sale subject to GST at zero-rate. Any GST incurred by a GST registered investor inthe making of this supply in the course or furtherance of a business may be recovered from theComptroller of GST.

Services such as brokerage, handling and clearing charges rendered by a GST registered person to aninvestor belonging in Singapore in connection with the investor purchase, sale, holding of shares will besubject to GST at the current rate of 5%. Similar services rendered to an investor belonging outsideSingapore will be zero-rated.

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APPENDIX B – EXTRACT OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF OUR COMPANY

Place of Incorporation

We are incorporated in Singapore with the Registrar of Companies and Businesses. Our Companyregistration number is 199500697Z.

Our objects

One of our principal objects as set out in our Memorandum of Association is to carry on the business ofan investment holding company.

The objects of our Company are set out in full in Clause 3 of our Memorandum of Association which isavailable for inspection at our registered office as stated in “Documents for Inspection” on page 145 ofthis Prospectus.

Selected Extracts of our Articles of Association

1. The following provisions in the Articles of our Company relate to Directors’ voting rights on

proposals, arrangements or contracts in which Directors are interested:-

Article 95

A Director may be or become a director or other officer of, or otherwise interested in, any companypromoted by the Company or in which the Company may be interested as a shareholder orotherwise, and unless otherwise agreed shall not be accountable for any remuneration or otherbenefits received by him as a director or officer of, or by virtue of his interest in, such othercompany unless the Company otherwise directs at the time of his appointment. The Directors mayexercise the voting power conferred by the shares or other interest in any such other corporationheld or owned by the Company, or exercisable by them as directors of such other corporation insuch manner and in all respects as they think fit (including the exercise thereof in favour of anyresolution appointing themselves or any of the directors or other officers of such corporation), andany Director may vote in favour of the exercise of such voting rights in the manner aforesaid,notwithstanding that he may be, or is about to be appointed a director or other officer of suchcorporation and as such is or may become interested in the exercise of such voting rights in themanner aforesaid.

Article 96

A Director may contract with and be interested in any contract or proposed contract with theCompany and shall not (unless otherwise agreed) be liable to account for any profit made by himby reason of any such contract Provided always that the nature of the interest of the Director inany such contract be declared at a meeting of the Directors as required by the Act. A Directorshall not vote in respect of any contract or proposed contract or arrangement or any other proposalwhatsoever in which he has any personal material interest, directly or indirectly. A Director shall notbe counted in the quorum at a meeting in relation to any resolution on which he is debarred fromvoting.

2. The following provisions in the Articles of our Company relate to the remuneration of Directors:-

Article 92

(1) The Directors shall be entitled to receive by way of fees for their services as Directors ineach year such sum as shall from time to time, be determined by the Company by resolutionpassed at a General Meeting in accordance with the Act, the notice of which shall specifythe proposals concerning the same. Such remuneration shall be divided amongst theDirectors as they shall determine or failing agreement equally.

(2) The fees payable to the Directors shall not be increased except pursuant to a resolutionpassed at a General Meeting, where notice of the proposed increase has been given in thenotice convening the Meeting.


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(3) The remuneration of a non-executive Director shall be by a fixed sum and not be bycommission on or percentage of profits or turnover.

(4) The provisions of this Article are without prejudice to the power of the Directors to appointany of their number to be employee or agent of the Company at such remuneration andupon such terms as they think fit without the approval of the Members in General MeetingProvided that such remuneration may include a commission on or percentage of profits butnot a commission on or percentage of turnover.

Article 93

If any Director, being willing and having been called upon to do so, shall hold an executive office inthe Company, shall render or perform extra or special services of any kind, including services onany committee established by the Directors, or shall travel or reside abroad for any business orpurposes of the Company, he shall be entitled to receive such sum as the Directors maythink fit for expenses, and also such remuneration as the Directors may think fit (but not by wayof commission on or percentage of turnover) and such remuneration may, as the Directors shalldetermine, be either in addition to or in substitution for any other remuneration he may be entitledto receive.

Article 94

The Directors may be paid all travelling, hotel and other expenses properly incurred by them inattending and returning from meetings of the Directors or any committee of the Directors orGeneral Meetings of the Company or in connection with the business of the Company.

Article 95

A Director may be or become a director or other officer of, or otherwise interested in, any companypromoted by the Company or in which the Company may be interested as a shareholder orotherwise, and unless otherwise agreed shall not be accountable for any remuneration or otherbenefits received by him as a director or officer of, or by virtue of his interest in, such othercompany unless the Company otherwise directs at the time of his appointment. The Directors mayexercise the voting power conferred by the shares or other interest in any such other corporationheld or owned by the Company, or exercisable by them as directors of such other corporation insuch manner and in all respects as they think fit (including the exercise thereof in favour of anyresolution appointing themselves or any of the directors or other officers of such corporation), andany Director may vote in favour of the exercise of such voting rights in the manner aforesaid,notwithstanding that he may be, or is about to be appointed a director or other officer of suchcorporation and as such is or may become interested in the exercise of such voting rights in themanner aforesaid.

Article 101

The Directors may from time to time appoint one or more of their body to be Managing Director(s)(or any equivalent appointment(s) howsoever described) of the Company and may from time totime (subject to the provisions of any contract between him or them and the Company) remove ordismiss him or them from office and appoint another or others in his or their places. Where anappointment is for a fixed term, such term shall not exceed five years. The Directors may vest insuch Managing Director(s) such of the powers hereby vested in the Directors generally as theymay think fit, and such powers may be made exercisable for such period or periods, and uponsuch conditions and subject to such restrictions, and generally upon such terms as toremuneration and otherwise as they may determine. The remuneration of a Managing Director (orany Director holding an equivalent appointment) may subject to these Articles be by way of salaryor commission or participation in profits, or by any or all of these modes or otherwise as may bethought expedient but shall not under any circumstances be by way of commission on or apercentage of the turnover of the Company.

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Article 104(4)

An alternate Director may be reimbursed by the Company such expenses as might properly bereimbursed to him if he were a Director and he shall be entitled to receive from the Company suchproportion (if any) of the remuneration otherwise payable to his appointer as such appointer mayby notice in writing to the Company from time to time direct, but save as aforesaid he shall not inrespect of such appointment be entitled to receive any remuneration from the Company. A personshall not act as an alternate Director to more than one Director at the same time.

Article 116

The Directors shall have the power to pay and agree to pay pensions or other retirement,superannuation, death or disability benefits to or to any person in respect of any Director or ex-Director who may hold or have held any executive office or any office of profit under the Companyor any subsidiary company and for the purpose of providing any such pensions or other benefits tocontribute to any scheme or fund or to pay premiums.

Article 127

Any Director may act by himself or his firm in a professional capacity for the Company, and he orhis firm shall be entitled to remuneration for professional services as if he were not a Director,provided that nothing herein contained shall authorise a Director or his firm to act as Auditor of theCompany.

3. The following provisions in the Articles of our Company relate to the borrowing powers ofDirectors:-

Article 55

The Directors may from time to time at their discretion raise or borrow for the purposes of theCompany, such sums of money as they think proper.

Article 56

Subject as provided in the Articles of Association and to the provisions of the Act, the Directorsmay exercise all the powers of the Company to mortgage or charge its undertaking, property anduncalled capital and to issue debentures, debenture stock, bonds and other securities, whetheroutright or as collateral security for any debt, liability or obligation of the Company or of any thirdparty.

Article 57

Debentures, debenture stock or other securities may be made assignable free from any equitiesbetween the Company and the person to whom the same may be issued.

Article 58

Any debentures, debenture stock, bonds or other securities may be issued at a discount, premiumor otherwise, and with any special privileges as to redemption, surrender, drawings, allotment ofshares, attending and voting at General Meetings of the Company, appointment of Directors andotherwise.

4. We do not have any provision in the Articles of our Company relating to the retirement or non-retirement of a director under an age limit requirement. It is however provided in section 153(1) ofthe Companies Act that no person of or over the age of 70 years shall be appointed or act as adirector of a public company or of a subsidiary of a public company.


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5. The following provisions in the Articles of our Company relate to the number of shares required forDirectors’ qualification:-

Article 91

A Director shall not be required to hold any shares in the capital of the Company to qualify to be aDirector. A Director who is not a Member shall be entitled to attend and speak at any GeneralMeeting.

6. At present, there is only one class of shares in our Company, namely, ordinary shares.

The following provisions in the Articles of our Company relate to the dividend rights ofShareholders and rights to share in our Company’s profits:-

Article 130

The Company may by ordinary resolution declare dividends but (without prejudice to the powers ofthe Company to pay interest on share capital as hereinbefore provided) no dividend shall bepayable except out of the profits of the Company, or in excess of the amount recommended by theDirectors. The Directors may, if they think fit, from time to time declare and pay to the Memberssuch interim dividends as appear to them to be justified by the position of the Company.

Article 131

Subject to the provisions hereinafter contained and to the preferential or other special rights for thetime being attached to any preference shares or any other special class of shares, the profits ofthe Company which it shall from time to time determine by ordinary resolution to distribute by wayof dividend shall be applied in payment of dividends upon the shares of the Company in proportionto the amounts paid up or credited as paid up thereon respectively, provided that where capital ispaid up on any shares in advance of calls such capital shall not whilst carrying interest confer aright to participate in profits.

Article 132

The Company may, upon the recommendation of the Directors, by ordinary resolution directpayment of a dividend either wholly or in part by the distribution of specific assets and in particularof paid-up shares or debentures of any other company in any one or more of such ways and theDirectors shall give effect to such resolution. Where any difficulty arises in regard to suchdistribution, the Directors may settle the same as they think expedient, and in particular may issuefractional certificates and fix the value for distribution of such specific assets or any part thereofand may determine that cash payments shall be made to any Members upon the footing of thevalue so fixed, in order to adjust the rights of all Members, and may vest any such specific assetsin trustees upon trust for the Members entitled to the dividend as may seem expedient to theDirectors.

Article 134

No dividend or other moneys payable on or in respect of a share shall bear interest against theCompany.

Article 135

The Directors may deduct from any dividend or other moneys including interests and expensespayable to any Member on or in respect of a share all sums of money (if any) presently payable byhim to the Company on account of calls or in connection therewith whether such call shall havebeen made before or after the declaration of the dividend in question.

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Article 136

The Directors may retain the dividends payable on shares in respect of which any person is underthe provisions as to the transmission of shares hereinbefore contained entitled to become aMember, or which any person under those provisions is entitled to transfer, until such person shallbecome a Member in respect of such shares or shall duly transfer the same.

Article 137

The payment by the Directors of any unclaimed dividend or other moneys payable on or in respectof a share into a separate account shall not constitute the Company a trustee in respect thereofand any dividend unclaimed after a period of six years from the date of declaration of suchdividend may be forfeited and if so shall revert to the Company but the Directors may at any timethereafter at their absolute discretion annul any such forfeiture and pay the dividend so forfeited tothe person entitled thereto prior to the forfeiture.

Article 138

Any dividend, interest or other moneys payable in respect of shares may be paid by cheque orwarrant sent through the post to the registered address appearing in the Register of Members or(as the case may be) the Depository Register of the member or person entitled thereto, or, if twoor more persons are registered in the Register of Members or (as the case may be) the DepositoryRegister as joint holders of the shares or are entitled thereto in consequence of the death orbankruptcy of the holder, to any one of such persons or to such person and such address as suchperson or persons may be in writing direct. Every such cheque or warrant shall be made payableto the order of the person to whom it is sent or to such person as the holder or joint holders orperson or persons entitled to the share in consequence of the death or bankruptcy of the holdermay direct and payment of the cheque shall be a good discharge to the Company. Every suchcheque or warrant shall be sent at the risk of the person entitled to the money representedthereby. Notwithstanding the provisions of this Article, the payment by the Company to theDepository of any dividend payable to a Depositor shall, to the extent of the payment made to theDepository, discharge the Company from any liability to the Depositor in respect of such payment.

Article 139

If two or more persons are registered in the Register of Members or (as the case may be) theDepository Register as joint holders of any share, or are entitled jointly to a share in consequenceof the death or bankruptcy of the holder, any of them may give effectual receipts for any dividendor other moneys payable or in respect of the share.

7. The following provisions in the Articles of our Company relate the voting rights of Shareholders:-

Article 76

Subject and without prejudice to any special privileges or restrictions as to voting for the timebeing attached to any special class of shares for the time being forming part of the capital of theCompany, each Member entitled to vote may vote in person or by proxy or by attorney or in thecase of a corporation by a representative and on a show of hands, shall have one vote and upon apoll shall have one vote for every share which he holds or represents.

Article 77

Any Member of unsound mind or in respect of whom an order has been made at any court havingjurisdiction in lunacy may vote whether on a show of hands or by poll by his committee, receiver,curator bonis or other legal curator, and such last mentioned persons may give their votes eitherpersonally, by proxy or attorney Provided that such evidence as the Directors may require of theauthority of the person claiming to vote shall have been deposited at the Office not less than forty-eight hours before the time appointed for holding the meeting.


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Article 78

No objection shall be raised as to the qualification of any voter except at the meeting or adjournedmeeting at which the vote objected to is given or tendered, and every vote not disallowed at suchmeeting shall be valid for all purposes. Any such objection made in due time shall be referred tothe Chairman of the meeting whose decision shall be final and conclusive.

Article 79

No Member shall be entitled to vote at any General Meeting unless all calls or other sumspresently payable by him in respect of shares in the Company have been paid.

Article 80

On a poll votes may be given either personally or by proxy or by attorney or in the case of acorporation by its representative, and a person entitled to more than one vote need not use all hisvotes or cast all the votes he used in the same way.

Article 81

A proxy, attorney or representative need not be a Member.

Article 82

In the case of joint holders of shares, any one of such persons may vote and be reckoned in aquorum at any meeting either personally or by proxy or by attorney or in the case of a corporationby a representative as if he were solely entitled thereto, and if more than one of such persons bepresent at a meeting, the person whose name stands first on the Register of Members or (as thecase may be) the Depository Register shall alone be entitled to vote. Several executors oradministrators of a deceased Member in whose name any share stands shall for the purposes ofthis Article be deemed joint holders thereof.

Article 83

(1) An instrument appointing a proxy shall be in writing in any usual or common form or in anyother form which the Directors may approve and:-

(a) in the case of an individual, shall be signed by the appointor or his attorney; and

(b) in the case of a corporation, shall be either given under common seal or signed on itsbehalf by an attorney or a duly authorised officer of the corporation.

(2) The signature on such instrument need not be witnessed. Where an instrument appointinga proxy is signed on behalf of the appointor, (which shall, for purposes of this Article 83(2),include a Depositor) by an attorney, the letter or power of attorney or a duly certified copythereof must (failing previous registration with the Company) be lodged with the instrumentof proxy pursuant to Article 85, failing which the instrument may be treated as invalid.

(3) The Company shall be entitled and bound, in determining rights to vote and other matters inrespect of a completed instrument of proxy submitted to it, to have regard to the instructions,(if any), given by and the notes (if any) set out in the instrument of proxy.

Article 84

(1) A Member may appoint not more than two proxies to attend and vote at the same GeneralMeeting Provided that if a Member shall nominate two proxies, then the Member shallspecify the proportion of his shares to be represented by each such proxy, failing which thefirst named proxy shall be treated as representing 100% of the shareholding and anysecond named proxy as an alternate to the first named.

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(2) A proxy shall be entitled to vote on a show of hands on any matter at a General Meeting.

(3) An instrument appointing a proxy shall be deemed to confer authority to demand or join indemanding a poll, to move any resolution or amendment thereto and to speak at a Meetingand shall, unless the contrary is stated thereon, be valid as well for any adjournment of theMeeting as for the Meeting to which it relates.

Article 85

An instrument appointing a proxy and, where the instrument of proxy is signed on behalf of theappointor (which shall, for the purposes of this Article, include a Depositor) by an attorney, thepower of attorney or other authority, if any, under which it is signed, or a notarially certified copy ofthat power of authority (failing previous registration with the Company), shall be deposited at theOffice or such other place (if any) as is specified for the purpose in the notice convening theMeeting not less than forty-eight hours before the time appointed for the time of holding theMeeting or adjourned Meeting (or in the case of a poll before the time appointed for the taking ofthe poll) at which it is to be used and in default shall not be treated as valid.

Article 86

(1) A Depositor shall only be entitled to attend any General Meeting and to speak and votethereat if his name appears on the Depository Register forty-eight hours before the GeneralMeeting as a Depositor (the “Relevant Time”). The Company shall then be entitled to deemeach such Depositor as holding such number of shares as is entered against suchDepositor’s name in the Depository Register as at the Relevant Time, according to therecords of the Depository as supplied by the Depository to the Company.

(2) Where the Depositor has appointed a proxy, the Company shall be entitled to deem eachproxy of a Depositor who is to represent the entire shareholding of the Depositor asrepresenting such number of shares as is entered against such Depositor’s name in theDepository Register as at the Relevant Time, according to the records of the Depository assupplied by the Depository to the Company.

(3) Where the Depositor has appointed two proxies and specified the proportion of his shareswhich each proxy is to represent, the Company shall be entitled to apportion such numberof shares as is entered against such Depositor’s name in the Depository Register as at theRelevant Time, according to the records of the Depository as supplied by the Depository tothe Company, between the two proxies in the same proportion as specified by the Depositorin appointing the proxies.

(4) No instrument appointing a proxy of a Depositor shall be rendered invalid merely by reasonof any discrepancy between the Depositor’s shareholding as specified in the instrument ofproxy, or, where the same has been apportioned between two proxies, the aggregate of theproportions of the Depositor’s shareholding which they are specified to represent, and theshareholding of a Depositor as appears on the Depository Register forty-eight hours beforethe General Meeting.

(5) The Company shall be entitled to reject an instrument of proxy lodged by any Depositorwhose name does not appear on the Depository Register as at forty-eight hours before theGeneral Meeting at which the proxy is to act as certified by the Depository to the Company.


Article 87

A vote given in accordance with the terms of an instrument of proxy (which for the purposes ofthese Articles shall also include a Power of Attorney) shall be valid, notwithstanding the previousdeath or unsoundness of mind of the principal or revocation of the proxy, or the authority underwhich the proxy was executed, or the transfer of the share in respect of which the proxy wasexecuted, or the transfer of the share in respect of which the proxy is given Provided that nointimation in writing of such death, insanity, revocation or transfer shall have been received by theCompany at the Office (or at such other place as may be specified for the deposit of instrumentsappointing proxies) before the commencement of the meeting or adjourned meeting (or in the caseof a poll before the time appointed for the taking of the poll) at which the proxy is used.

Article 88

Any corporation which is a Member may by resolution of its Directors or other governing bodyauthorise such person as it thinks fit to act as its representative at any meeting of the Company orof any class of Members of the Company, and the person so authorised shall be entitled toexercise the same powers on behalf of such corporation as the corporation could exercise if itwere an individual Member of the Company.

8. The following provisions in the Articles of our Company relate to the rights of Shareholders toshare in any surplus in the event of liquidation:-

Article 155

(1) If the Company shall be wound up and the assets available for distribution among theMembers as such shall be insufficient to repay the whole of the paid up capital, such assetsshall be distributed so that as nearly as may be, the losses shall be borne by the Membersin proportion to the capital paid up, or which ought to have been paid up at thecommencement of the winding-up on the share held by them respectively. And if in awinding-up, the assets available for distribution among the Members shall be more thansufficient to repay the whole of the capital paid up at the commencement of the winding-up,the excess shall be distributed among the Members in proportion of the capital, at thecommencement of the winding-up, paid up or which ought to have been paid up on theshares held by them respectively. But this Article is to be without prejudice to the rights ofthe holders of shares issued upon special terms and conditions.

(2) If the Company shall be wound up (whether the liquidation is voluntary, under supervision,or by the court) the Liquidator may, with the sanction of a special resolution of the Companyand any other sanction required by the Act, divide among the Members in specie or kind thewhole or any part of the assets of the Company and whether or not the asset shall consistof property of one kind or shall consist of properties of different kinds, and may for suchpurpose set such value as he deems fair upon any one or more class or classes of propertyto be divided aforesaid and may determine how such division shall be carried out asbetween the Members or different classes of Members. The Liquidator may, with the likesanction vest any part of the assets in trustees upon such trusts for the benefit of Membersas the Liquidator shall think fit, and the liquidation of the Company may be closed and theCompany dissolved, but so that no contributory shall be compelled to accept any shares inrespect of which there is a liability.

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9. The following provisions in the Articles of our Company relate to the rights of holders of preferenceshares:-

Article 4

(1) The rights attached to shares issued upon special conditions shall be clearly defined in theMemorandum of Association or these Articles. In the event of preference shares beingissued, the total nominal value of issued preference shares shall not at any time exceed thetotal nominal value of the issued ordinary shares and preference shareholders shall havethe same rights as ordinary shareholders as regards receiving of notices, reports andbalance sheets and attending General Meetings of the Company. Preference shareholdersmust also have the right to attend and vote at any meeting of the Company convened for thefollowing purposes:-

(a) the reduction of capital of the Company; or

(b) the winding-up of the Company; or

(c) sanctioning a sale of the undertaking of the Company; or

(d) any resolution which directly affects any of the rights attaching to the preferenceshares; or

(e) where the dividend on the preference shares is more than six months in arrears.

(2) Subject to Section 70 of the Act, any preference shares may be issued on the terms thatthey are, or at the option of the Company are liable, to be redeemed. The Company shallalso have the power to issue further preference shares ranking equally with, or in priority to,any preference shares already issued.

10. The following provisions in the Articles of our Company relate to the redemptive provision ofpreference shares and the right of our Company to repurchase our own Shares:-

Article 10

Subject to and in accordance with the provisions of the Act and to any other applicable rules,regulations or legislation, the Company may purchase or otherwise acquire shares issued(including ordinary or preference shares) in the issued share capital of the Company on suchterms as the Company may think fit and in the manner prescribed by the Act. If required by theAct, any share which is so purchased or acquired by the Company shall be deemed to becancelled immediately on purchase or acquisition by the Company. On the cancellation of anyshare as aforesaid, the rights and privileges attached to that share shall expire. In any otherinstance, the Company may deal with any such share which is so purchased or acquired by it insuch manner as may be permitted by, and in accordance with the Act or any applicable rulesprescribed by the SGX-ST.

11. The following provision in the Articles of our Company relates to the procedures required tochange the rights of Shareholders:-

Article 5

(1) If at any time the share capital of the Company by reason of the issue of preference sharesor otherwise is divided into different classes of shares, the repayment of such preferencecapital other than redeemable preference capital, or all or any of the rights and privilegesattached to each class may, subject to the provisions of the Act, be varied modifiedcommuted abrogated affected or dealt with, either with the consent in writing of the holdersof three-quarters in nominal value of the issued shares of the class or with the sanction of a


Special Resolution passed at a separate General Meeting of the holders of that class ofshares but not otherwise and may be so repaid varied modified commuted abrogatedaffected or dealt with either whilst the Company is a going concern or during or incontemplation of a winding up. To every such separate General Meeting, the provisions ofthese Articles relating to General Meetings of the Company and to proceedings thereat shallmutatis mutandis apply, but so that the necessary quorum shall be two persons at leastholding or representing by proxy one-third in nominal amount of the issued shares of theclass (but so that if at any adjourned meeting a quorum as above defined is not present, anytwo holders of shares of the class present in person or by proxy shall be a quorum) and thatany holder of shares of the class present in person or by proxy may demand a poll, and thatevery such holder shall on a poll have one vote for every share of the class held by him.Provided however that in the event of the necessary majority for such a Special Resolutionnot having been obtained in the General Meeting in the manner aforesaid, consent in writingmay be obtained from Members holding at least three-fourths of the issued shares of theclass and such consent, if obtained within two months from the date of the separate GeneralMeeting, shall have the force and validity of a Special Resolution duly carried by a vote inperson or by proxy. The foregoing provisions of this Article shall apply to the variation orabrogation of the special rights attached to some only of the shares of any class as if eachgroup of shares of the class differently treated formed a separate class the special rights ofwhich are to be varied.

(2) The rights conferred upon the holders of the shares of any class issued with preferred orother rights shall not, unless otherwise expressly provided by the terms of issue of that classof shares be deemed to be varied by the creation or issue of further shares ranking asregards participation in the profits or assets of the Company in some or all respects paripassu therewith but in no respect in priority thereto.

12. The following provisions in the Articles of our Company relate to restrictions on the transferabilityof Shares:-

Article 26

Subject to the provisions of these Articles, the Company shall accept for registration all transfers oflegal title in shares effected by written instrument of transfer in the form approved by the SGX-ST.

Article 27

The instrument of transfer of the legal title in any share shall be signed by or on behalf of both thetransferor and the transferee, and be witnessed Provided that an instrument of transfer in respectof which the transferee is the Depository shall be effective although not signed or witnessed by oron behalf of the Depository. Notwithstanding the foregoing, the Directors may waive the signing ofan instrument of transfer by the transferee in the case of fully paid shares if in their discretion theythink proper to do so. The transferor shall remain the holder of the share concerned until the nameof the transferee is entered in the Register of Members or, as the case may be, the DepositoryRegister in respect thereof.

Article 28

The legal title in shares shall not in any circumstances be transferred to any infant, bankrupt orperson of unsound mind.

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Article 29

(1) There shall be no restriction on the transfer of fully paid shares (except where required bylaw or by the rules, bye-laws or listing rules of the SGX-ST) but the Directors may decline toregister the transfer of any share (not being a fully paid share) to a person whom they shallnot approve, and they may also decline to register the transfer of a share on which theCompany has a lien Provided always that in the event of the Directors refusing to register atransfer of shares, they shall within one month beginning with the day on which theapplication for a transfer of shares was made, serve a notice in writing to the transferor, thetransferee and the lodging party, stating the precise reasons and the facts which areconsidered to justify the refusal as required by the Act.

(2) The Directors may also decline to register any instrument of transfer, unless:-

(a) the instrument of transfer is duly stamped and such fee, not exceeding SingaporeDollars two ($2.00) (or such other fee as the Directors may determine having regardsto any limitation thereof as may be prescribed by the SGX-ST) as the Directors mayfrom time to time require, per transfer is paid to the Company in respect thereof; and

(b) the instrument of transfer is deposited at the Office or at such other place (if any) asthe Directors may appoint accompanied by the certificates of the shares to which itrelates and such other evidence as the Directors may reasonably require to show theright of the transferor to make the transfer and if the instrument of transfer is executedby some other person on his behalf, the authority of the person to so do; and

(c) the instrument of transfer is in respect of only one class of shares.

(3) All instruments of transfer which are registered may be retained by the Company, but anyinstrument of transfer which the Directors may decline to register shall (except in the case offraud) be returned to the person depositing the same.

(4) The Company shall be entitled to destroy:-

(a) all instruments of transfer which have been registered at any time after the expirationof seven years from the date of registration thereof;

(b) all dividend mandates and notifications of change of address at any time after theexpiration of seven years from the date of recording thereof; and

(c) all share certificates which have been cancelled at any time after the expiration ofseven years from the date of the cancellation thereof.

(5) It shall conclusively be presumed in favour of the Company that every entry in the Registerof Members purporting to have been made on the basis of an instrument of transfer or otherdocument so destroyed was duly and properly made and every instrument of transfer sodestroyed was a valid and effective instrument duly and properly registered and every sharecertificate so destroyed was a valid and effective certificate duly and properly cancelled andevery other document hereinbefore mentioned so destroyed was a valid and effectivedocument in accordance with the recorded particulars thereof in the books or records of theCompany Provided always that:-

(a) the provisions aforesaid shall apply only to the destruction of a document in good faithand without notice of any claim (regardless of the parties thereto) to which thedocument might be relevant;


(b) nothing herein contained shall be construed as imposing upon the Company anyliability in respect of the destruction of any such document earlier than as aforesaid orin any other circumstances which would not attach to the Company in the absence ofthis Article; and

(c) references herein to the destruction of any document include references to thedisposal thereof in any manner.

13. The following provisions in the Articles of our Company relate to limitations on the rights to ownsecurities:-

Article 3

Subject to the Act and the Articles of Association, no shares may be issued by the Directorswithout the prior approval of an Ordinary Resolution of the Company in General Meeting butsubject thereto, and to Articles 52 and 53, and to any special rights attached to any shares for thetime being issued, the Directors may allot (with or without conferring a right of renunciation) orgrant options over or otherwise dispose of the same to such persons on such terms and conditionsand for such consideration and at such time and whether or not subject to the payment of any partof the amount thereof in cash or otherwise as the Directors may think fit and with full power to giveany person the call of any shares either at par or at premium as the Directors may determine, andany shares maybe issued with such preferential, deferred, qualified or special rights, privileges,conditions or restrictions, whether as regards dividend, return of capital, participation in surplus,voting, conversion or otherwise, as the Directors may think fit, and preference shares may beissued which are or at the option of the Company are liable to be redeemed, the terms andmanner of redemption being determined by the Directors in accordance with the Act Providedalways that no shares shall be issued at a discount or options granted over unissued sharesexcept in accordance with the Act.

Article 9

(1) Except as required by law, no person other than the Depository shall be recognised by theCompany as holding any share upon any trust, and the Company shall not be bound by orbe compelled in any way to recognise (even when having notice thereof) any equitable,contingent, future or partial interest in any share or unit of share or (except only as by theseArticles or by law otherwise provided) any right whatsoever in respect of any share otherthan an absolute right to the entirety thereof in the person whose name is entered in theRegister of Members or (as the case may be) the Depository Register.

(2) No person shall be recognised by the Company as having title to a fractional part of a shareotherwise than as a sole or joint holder of the entirety of such share.

(3) Subject to the terms and conditions of any application for shares, the Directors shall allotshares applied for within ten market days of the closing date (or such other period as maybe approved by the SGX-ST) of any such application. The Directors may, at any time afterthe allotment of any share but before any person has been entered in the Register ofMembers as the holder or (as the case may be) before that share is entered against thename of a Depositor in the Depository Register, recognise a renunciation thereof by theallottee in favour of some other person and may accord to any allottee of a share a right toeffect such renunciation upon and subject to such terms and conditions as the Directorsmay think fit to impose.

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14. The following provisions in the Articles of our Company relate to the conditions governing thechanges in the capital:-

Article 50

The Company may in General Meeting alter the conditions of its Memorandum of Association byOrdinary Resolution:-

(a) to consolidate and divide its share capital into shares of larger amount than its existingshares; or

(b) to cancel any share or shares which, at the date of passing of the resolution, has or havenot been taken or agreed to be taken by any person and diminish the amount of its capitalby the amount of shares so cancelled; or

(c) to divide its share capital or any part thereof into shares of smaller amount than is fixed byits Memorandum of Association by sub-division of its existing shares or any of them, subjectnevertheless to the provisions of the Act, and so that as between the resulting shares, oneor more of such shares may by the resolution by which such sub-division is effected begiven any preference or advantage as regards dividends, capital, voting or otherwise overthe shares or any other of such shares; and

(d) subject to the provisions of these Articles and the Act, convert any class of shares into anyother class of shares.

Article 51

The Company may by Special Resolution reduce its capital, any capital redemption reserve fundor any share premium account in any manner authorised and subject to any conditions required bylaw.

Article 52

(1) The Company in General Meeting may from time to time, whether all the shares for the timebeing authorised shall have been issued or all the shares for the time being issued shallhave been fully called up or not, increase its share capital by the creation of new shares,such new capital to be of such amount and to be divided into shares of such respectiveamounts as the General Meeting resolving upon such increase directs.

(2) Subject to any special rights for the time being attached to any existing class of shares, thenew shares shall be issued upon such terms and conditions and with such rights andprivileges annexed thereto as the General Meeting resolving upon the creation thereof shalldirect and if no direction be given as the Directors shall determine; subject to the provisionsof these Articles and in particular (but without prejudice to the generality of the foregoing)such shares may be issued with a preferential or qualified right to dividends and in thedistribution of assets of the Company or otherwise.

Article 53

(1) Unless otherwise determined by the Company in General Meeting or except as permittedunder the listing rules of the SGX-ST, all new shares shall, before they are issued, beoffered to Members who as at the date of such offer are entitled to receive notices from theCompany of General Meetings in proportion, as far as the circumstances admit, to theamount of the existing shares to which they are entitled. The offer shall be made by noticespecifying the number of shares offered, and limiting a time within which the offer, if notaccepted, will be deemed to be declined, and after the expiration of such time or on thereceipt of an intimation from the person to whom the offer is made that he declines to accept


the shares offered, the Directors may, subject to these Articles, dispose of the same in suchmanner as they think most beneficial to the Company. The Directors may, in like mannerdispose of any new shares which (by reason of the ratio to which the new shares bear to theshares held by such Members or by reason of any other difficulty in apportioning the same),cannot in the opinion of the Directors be conveniently offered in the manner hereinbeforeprovided.

(2) Notwithstanding Article 53(1), the Company may by Ordinary Resolution in General Meetinggive to the Directors a general authority, either unconditionally or subject to such conditionsas may be specified in the Ordinary Resolution to:-

(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights,bonus or otherwise; and/or

(ii) make or grant Instruments; and

(b) (notwithstanding the authority conferred by the Ordinary Resolution may have ceasedto be in force) issue shares in pursuance of any Instrument made or granted by theDirectors while the Ordinary Resolution was in force,

provided that:-

(I) the aggregate number of shares to be issued pursuant to the Ordinary Resolution(including shares to be issued in pursuance of Instruments made or granted pursuantto the Ordinary Resolution) does not exceed 50% (or such other limit as may beprescribed by the SGX-ST) of the issued share capital of the Company (as calculatedin accordance with sub-paragraph (II) below), of which the aggregate number ofshares issued other than on a pro rata basis to shareholders of the Company(including shares to be issued pursuance of Instruments made or granted pursuant tothe Ordinary Resolution) does not exceed 20% (or such other limit as may beprescribed by the SGX-ST) of the issued share capital of the Company (as calculatedin accordance with sub-paragraph (II) below);

(II) (subject to such manner of calculation as may be prescribed by the SGX-ST) for thepurpose of determining the aggregate number of shares that may be issued undersub-paragraph (I) above, the percentage of issued share capital shall be based on theissued share capital of the Company at the time the Ordinary Resolution is passedafter adjusting for:-

(a) new shares arising upon the conversion or exercise of any convertiblesecurities or share options or vesting of share awards which are outstanding orsubsisting at the time that the Ordinary Resolution is passed, provided theoptions or awards were granted in compliance with Part VIII of Chapter 8 of theListing Manual of the SGX-ST; and

(b) any subsequent consolidation or subdivision of shares;

(III) in exercising the authority conferred by the Ordinary Resolution, the Company shallcomply with the provisions of the Listing Manual of the SGX-ST for the time being inforce (unless such compliance is waived by the SGX-ST) and these Articles; and

(IV) (unless revoked or varied by the Company in General Meeting) the authority conferredby the Ordinary Resolution shall not continue in force beyond the conclusion of theAnnual General Meeting of the Company next following the passing of the OrdinaryResolution, or the date by which such Annual General Meeting of the Company isrequired by law to be held, or the expiration of such other period as may beprescribed by the Act (whichever is the earliest).

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15. The following provisions in the Articles of our Company relate to the right of our Shareholders toreceive notices from our Group:-

Article 149

A notice or any other document may be served by the Company upon any Member eitherpersonally or by sending it through the post in a prepaid letter addressed to such Member at hisregistered address as appearing in the Register of Members or (as the case may be) theDepository Register.

Article 150

All notices directed to be given to the Members shall, with respect to any share to which personsare jointly entitled, be given to whichever of such persons is named first in the Register ofMembers or (as the case may be) the Depository Register with a registered address withinSingapore, and any notice so given shall be sufficient notice to all the joint holders of such share.For such purposes, a joint holder having no registered address and not having supplied anaddress within the Republic of Singapore for the service of notices shall be disregarded.

Article 151

Any Member described in the Register of Members or (as the case may be) the DepositoryRegister by an address not within the Republic of Singapore who shall from time to time give theCompany an address within the Republic of Singapore at which notices may be served upon him,shall be entitled to have served upon at such address any notice to which he is entitled underthese Articles.

Article 152

Notwithstanding Article 151, a Member who (having no registered address within Singapore) hasnot supplied to the Company or (as the case may be) the Depository an address within Singaporefor the service of notices shall not be entitled to receive notices from the Company.

Article 153

A person entitled to a share in consequence of the death or bankruptcy of a member, uponsupplying to the Company such evidence as the Directors may think necessary to show his title tothe share and upon supplying also to the Company or (as the case may be) the Depository anaddress within Singapore for the service of notices, shall be entitled to be served upon him at suchaddress any notice or document to which the Member but for his death or bankruptcy would beentitled, and such service shall for all purposes be deemed a sufficient service of such notice ordocument on all persons interested (whether jointly with or as claiming through or under him) inthe share. Save as aforesaid, any notice or document delivered or sent by post to or left at theregistered address of any Member in pursuance of these Articles shall, notwithstanding that suchMember be then dead or bankrupt, and whether or not the Company has notice of his death orbankruptcy, be deemed to have been duly served in respect of any share registered in thename of such Member in the Register of Members or where such Member is a Depositor, enteredagainst his name in the Depository Register as sole or joint holder.

16. There is no limitation on the right to own shares or vote on shares imposed by Singapore law or inthe Articles of our Company on any potential shareholders who are regarded as foreigners or non-residents of Singapore.

APPENDIX C – DESCRIPTION OF ORDINARY SHARES

DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES

The following statements are brief summaries of our capital structure and of the more important rightsand privileges of our Shareholders as conferred by the laws of Singapore and the Articles of ourCompany. These statements summarise the material provisions of our Articles but are qualified inentirety by reference to our Articles, a copy of which will be available for inspection at our office duringnormal business hours for a period of six months from the date of registration of this Prospectus.

Shares

There is no founder, management, deferred or unissued Shares reserved for issue for any purpose. Wehave only one class of shares, namely, our ordinary shares which have identical rights in all respects andrank equally with one another. As at the date of this Prospectus, 75,213,400 Shares have been issuedand are fully paid. All of our Shares are in registered form. Fully-paid Shares are not subject to anyfurther capital calls by our Company. We may, subject to the provisions of the Companies Act and therules of the SGX-ST, purchase our own Shares. However, we may not, except in circumstancespermitted by the Companies Act, grant any financial assistance for the acquisition or proposedacquisition of our own Shares.

The rights and privileges of our Shares are stated in our Articles.

New Shares

New Shares may only be issued with the prior approval of our Shareholders in a general meeting. Theaggregate number of Shares to be issued pursuant to such approval may not exceed 50% (or such otherlimit as may be prescribed by the SGX-ST) of our issued share capital, of which the aggregate number ofShares to be issued other than on a pro-rata basis to our Shareholders may not exceed 20% (or suchother limit as may be prescribed by the SGX-ST) of our issued share capital. The approval, if granted,shall remain in force until (a) the conclusion of the first annual general meeting following the passing ofthe resolution at which time it shall lapse unless, by ordinary resolution passed at that meeting, thatmandate is renewed, either unconditionally or subject to conditions or (b) it is revoked or varied byordinary resolution of our Shareholders in general meeting, whichever occurs first.

Our Articles provide that we may issue shares of a different class with preferential, deferred, qualified orspecial rights, privileges, conditions or restrictions as our Board may think fit and may issue preferenceshares which are, or at our option are, redeemable, the terms and manner of redemption beingdetermined by our Directors in accordance with the Act. Our Board may issue Shares at a premium. IfShares are issued at a premium, a sum equal to the aggregate amount or value of the premium will,subject to certain exceptions, be transferred to a share premium account.

Subject to the foregoing, the provisions of the Companies Act and any special rights attached to anyclass of shares currently issued, all new Shares are under the control of our Board who may allot andissue the same with such rights and restrictions as it may think fit.

Shareholders

Only persons who are registered in our Register of Shareholders and, in cases in which the person soregistered is CDP, the persons named as the depositors in the depository register maintained by CDP forour Shares, are recognised as our Shareholders.

We will not, except as required by the law, recognise any equitable, contingent, future or partial interestin any Share or other rights for any Share other than the absolute right thereto of the registered holder ofthat Share or of the person whose name is entered in the depository register for that Share. We mayclose our register of Shareholders for any time or times if we provide the Accounting and CorporateRegulatory Authority at least 14 days’ notice and the SGX-ST at least ten clear market days’ notice.However, the register may not be closed for more than 30 days in aggregate in any calendar year. Wetypically close the register to determine our Shareholders’ entitlement to receive dividends and otherdistributions.

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Transfer of Shares

There is no restriction on the transfer of fully-paid Shares except where required by law or the listingrules or the rules or by-laws of SGX-ST. Our Board may decline to register any transfer of Shares whichare not fully-paid to a person whom they shall not approve, and they may also decline to register thetransfer of a Share on which we have a lien. Shares may be transferred by a duly signed instrument oftransfer in a form approved by SGX-ST. Our Board may also decline to register any instrument oftransfer unless, among other things, it has been duly stamped and is presented for registration togetherwith the share certificate and such other evidence of title as they may reasonably require. We willreplace lost or destroyed certificates for Shares on such evidence being produced and a letter ofindemnity (if required) being given by the shareholder, transferee, person entitled or purchaser and theapplicant pays a fee which will not exceed $2 for each share certificate.

General Meetings of Shareholders

We are required to hold an annual general meeting every year. Our Board may convene anextraordinary general meeting whenever it thinks fit and must do so if our Shareholders representing notless than 10% of the total voting rights of all our Shareholders request in writing that such a meeting beheld. In addition, two or more of our Shareholders holding not less than 10% of our issued share capitalmay call for an extraordinary general meeting. Unless otherwise required by law or by our Articles, votingat general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of thevotes cast at that meeting. An ordinary resolution suffices, for example, for the appointment of Directors.A special resolution, requiring the affirmative vote of at least 75% of the votes cast at the meeting, isnecessary for certain matters under Singapore law, including voluntary winding up, amendments to ourMemorandum of Association and Articles, a change of our corporate name and a reduction in our sharecapital, share premium account or capital redemption reserve fund. We must give at least 21 days’notice in writing for every general meeting convened for the purpose of passing a special resolution.Ordinary resolutions generally require at least 14 days’ notice in writing. The notice must be given toeach of our Shareholders who are entitled to receive notices from the Company and at least 14 daysnotice of such meeting shall be given by advertisement in the daily press and in writing to the SGX-ST.Every notice of calling a General Meeting must specify the place, the day and the hour of the meetingand, in the case of special business, the general nature of that business.

Voting Rights

A holder of Shares is entitled to attend, speak and vote at any general meeting, in person or by proxy. Aproxy need not be a Shareholder. A person who holds Shares through the SGX-ST book-entrysettlement system will only be entitled to vote at a general meeting as a Shareholder if his name appearson the depository register maintained by CDP 48 hours before the general meeting. Two or moreShareholders must be present in person or by proxy to constitute a quorum for any business to betransacted at any general meeting. Under our Articles, a resolution put to the vote of the meeting shall bedecided on a show of hands unless a poll is demanded. Every Shareholder present in person or by proxyshall have one vote on a show of hands and on a poll, shall be entitled to one vote for every Share whichhe or she holds or represents. A poll may be demanded in certain circumstances, for example, by theChairman of the meeting or by any Shareholder present in person or by proxy and representing not lessthan one tenth of the total voting rights of all Shareholders having the rights to attend and vote at themeeting or by any two or more Shareholders present in person or by proxy and entitled to vote.

Dividends

We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we maynot pay dividends in excess of the amount recommended by our Board. We must pay all dividends out ofour profits; however, we may capitalise our share premium account and / or our capital redemptionreserve fund to be appropriated in pro-rata to our Shareholders in the form of fully paid up Shares. See“Bonus and Rights Issue” below. Our Board may also declare interim dividends without the approval ofour Shareholders. All dividends are paid pro-rata amongst our Shareholders in proportion to the amountpaid-up on each Shareholder’s Shares, unless the rights attached to an issue of any Shares provideotherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent through the post to


each Shareholder at his registered address appearing in the Register of Members or (as the case maybe) the depository register. Notwithstanding the foregoing, the payment by us to CDP of any dividendpayable to a Shareholder whose name is entered in the depository register shall, to the extent ofpayment made to CDP, discharge us from any liability to that Shareholder in respect of that payment.

Bonus and Rights Issue

Our Board may, with the approval of our Shareholders at a general meeting, capitalise any reserves orprofits (including profits or moneys carried and standing to any capital redemption reserve or to the sharepremium account) and distribute the same as bonus shares credited as paid-up to our Shareholders inproportion to their shareholdings. Our Board may also issue rights to take up additional Shares to theShareholders in proportion to their shareholdings. Such rights are subject to any conditions attached tosuch issue and the rules and regulations of the SGX-ST.

Variation of Rights

Under our Articles, the rights attached to any class of shares may, subject to the provisions of theCompanies Act, be varied or abrogated or with the sanction of a special resolution passed at a separategeneral meeting of the holders of the shares of that class but not otherwise. The quorum for suchseparate general meeting is two persons at least holding or representing by proxy one-third in nominalvalue of the issued shares of that class. Any holder of shares of that class may demand a poll and everysuch holder shall on a poll have one vote for every share of that class held by him. Where the necessarymajority for a special resolution is not obtained at such general meeting, consent in writing from theholders of three quarters in nominal value of the issued shares of that class obtained within two monthsof such general meeting shall be as valid and effectual as a special resolution carried at such generalmeeting.

Takeovers

From 1 January 2002, a revised Singapore Code on Take-overs and Mergers (“Revised Take-over Code”)issued by the Monetary Authority of Singapore pursuant to Section 321 of the Securities and Futures Acthas come into effect. The Securities and Future Act and the Revised Take-over Code regulate theacquisition of ordinary shares of public companies and contain certain provisions that may delay, deter orprevent a future takeover or change in control of our Company. Under the Revised Take-over Code, anyperson acquiring an interest, either on his own or together with persons acting in concert with him, in30% or more of our voting Shares must extend a takeover offer for the remaining voting Shares inaccordance with the provisions of the Revised Take-over Code. In addition, a mandatory takeover offer isalso required to be made if a person holding, either on his own or together with persons acting in concertwith him, between 30% and 50% of the voting Shares acquires, either on his own and/or together withpersons acting in concert with him, additional voting Shares representing more than 1% of the votingshares in any six month period. Under the Revised Take-over Code, the following individuals andcompanies will be presumed to be persons acting in concert with each other unless the contrary isestablished:-

(a) the following companies:-

(i) a company;

(ii) the parent company of (i);

(iii) the subsidiaries of (i);

(iv) the fellow subsidiaries of (i);

(v) the associated companies of any of (i), (ii), (iii) or (iv); and

(vi) companies whose associated companies include any of (i), (ii) (iii), (iv) or (v);

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(b) a company with any of its directors (together with their close relatives, related trusts as well ascompanies controlled by any of the directors, their close relatives and related trusts);

(c) a company with any of its pension funds and employee share schemes;

(d) a person with any investment company, unit trust or other fund whose investment such personmanages on a discretionary basis, but only in respect of the investment account which suchperson manages;

(e) a financial or other professional adviser, including a stockbroker, with its customer in respect of theshareholdings of:-

(i) the adviser and persons controlling, controlled by or under the same control as the adviser;and

(ii) all the funds which the adviser manages on a discretionary basis, where the shareholdingsof the adviser and any of those funds in the customer total 10% or more of the customer’sequity share capital;

(f) directors of a company (together with their close relatives, related trusts and companies controlledby any of such directors, their close relatives and related trusts) which is subject to an offer orwhere the directors have reason to believe a bona fide offer for their company may be imminent;

(g) partners; and

(h) the following persons and entities:-

(i) an individual;

(ii) the close relatives of (i);

(iii) the related trusts of (i);

(iv) any person who is accustomed to act in accordance with the instructions of (i); and

(v) companies controlled by any of (i), (ii), (iii), or (iv).

Under the Revised Take-over Code, a mandatory offer made with consideration other than cash must beaccompanied by a cash alternative at not less than the highest price paid by the offeror or any personacting in concert with the offeror within the preceding six months.

Liquidation or Other Return of Capital

If we liquidate or in the event of any other return of capital, holders of our Shares will be entitled toparticipate in any surplus assets in proportion to their shareholdings, subject to any special rightsattaching to any other class of shares.

Indemnity

As permitted by Singapore law, our Articles provide that, subject to the Companies Act, our Board andofficers shall be entitled to be indemnified by us against any liability incurred in defending anyproceedings, whether civil or criminal, which relate to anything done or omitted to have been done as anofficer, Director or employee and in which judgement is given in their favour or in which they areacquitted or in connection with any application under any statute for relief from liability in respect thereofin which relief is granted by the court. We may not indemnify our Directors and officers against anyliability which by law would otherwise attach to them in respect of any negligence, default, breach of dutyor breach of trust of which they may be guilty in relation to us.


Limitations on Rights to Hold or Vote on our Shares

Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed bySingapore law or by our Articles on the rights of non-resident Shareholders to hold or vote on ourShares.

Minority Rights

The rights of minority shareholders of Singapore-incorporated companies are protected under Section216 of the Companies Act, which gives the Singapore courts a general power to make any order, uponapplication by any of our Shareholders, as they think fit to remedy any of the following situations:-

(a) our affairs are being conducted or the powers of our Board are being exercised in a manneroppressive to, or in disregard of the interests of, one or more of our Shareholders, including theapplicant; or

(b) an action is taken, or threaten to be taken by us, or our Shareholders’ resolution is passed, orpropose to be passed, which unfairly discriminates against, or is otherwise prejudicial to, one ormore of our Shareholders, including the applicant.

Singapore courts have a wide discretion as to the remedies and relieves they may grant and thoserelieves are not limited to those listed in the Companies Act. For example, Singapore courts may grantorder(s) that:-

(i) direct or prohibit any act or cancel or vary any transaction or resolution;

(ii) regulate the conduct or our affairs in the future;

(iii) authorise civil proceedings to be brought in our name, or on our behalf, by a person or personsand on such terms as the court may direct;

(iv) provide for the purchase of minority Shareholder’s Shares by our other Shareholders or by us andin the case of a purchase of Shares by our Company, provide for a reduction accordingly of ourCompany’s capital;

(vi) alter or add to any of our Memorandum of Association or Articles of Association; or

(vii) provide that our Company be wound up.

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APPENDIX D – RULES OF SELECT EMPLOYEE SHARE OPTION SCHEME

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1. NAME OF THIS SCHEME

This Scheme shall be called the “Select Employee Share Option Scheme”.

2. DEFINITIONS

2.1 In this Scheme, unless the context otherwise requires, the following words and expressions shallhave the following meanings:-

“Act” : The Companies Act (Chapter 50) of Singapore, asamended, modified or supplemented from time to time.

“Adoption Date” : The date on which this Scheme is adopted by the Companyin general meeting.

“Aggregate Subscription Cost” : The total amount payable for Shares which may beacquired on the exercise of an Option.

“Associate” : Shall bear the meaning ascribed to it by the Listing Manualof the SGX-ST (as amended, modified or supplementedfrom time to time).

“Auditors” : The auditors of the Company for the time being.

“Board” : The board of Directors of the Company.

“CDP” : The Central Depository (Pte) Limited.

“Committee” : A committee comprising Directors of the Company dulyauthorised and appointed by the Board pursuant to theRules to administer this Scheme.

“Company” or “Select Catering” : Select Catering Services Limited, a company incorporatedin the Republic of Singapore.

“control” : The capacity to dominate decision-making, directly orindirectly, in relation to the financial and operating policiesof the Company.

“Controlling Shareholder” : A shareholder who:-

(a) holds directly or indirectly 15% or more of the issuedshare capital of the Company; or

(b) in fact exercises control over the Company.

“CPF” : Central Provident Fund.

“Date of Grant” : In relation to an Option, the date on which the Option isgranted pursuant to Rule 6.

“Director” : A person holding office as a director for the time being ofthe Company and/or its Subsidiaries, as the case may be.

“Employee” : An employee of the Group (including any Group ExecutiveDirector and any employee holding a non-managerialposition), selected by the Committee to participate in thisScheme in accordance with Rule 4.1.


“Exercise Period” : Subject as provided in Rules 8 and 9, the period for theexercise of an Option, being a period commencing:-

(1) in the case of a Market Price Option granted to anEmployee, a period commencing after the firstanniversary of the Date of Grant and expiring on thetenth anniversary of such Date of Grant, or suchother period determined by the Committee; and

(2) in the case of a Market Price Option granted to aNon-executive Director or an Independent Director, aperiod commencing after the first anniversary of theDate of Grant and expiring on the fifth anniversary ofsuch Date of Grant, or such other period determinedby the Committee,

Provided that in the case of an Incentive Option, suchOption may not be exercised before the second anniversaryof the Date of Grant.

“Exercise Price” : The price at which a Participant shall subscribe for eachShare upon the exercise of an Option which shall be theprice as determined in accordance with Rule 7.1, asadjusted in accordance with Rule 11.

“Grantee” : The person to whom an offer of an Option is made.

“Group” : The Company and its Subsidiaries for the time being.

“Group Executive Director” : A Director who performs an executive function within theGroup.

“Incentive Options” : An Option granted with the Exercise Price set at a discountto the Market Price.

“Independent Director” : An independent Director for the time being of the Companyand/or its Subsidiaries, as the case may be.

“Market Day” : A day on which the Stock Exchange is open for trading insecurities.

“Market Price” : A price equal to the average of the last dealt prices for theShares on the Stock Exchange over the five consecutiveTrading Days immediately preceding the Date of Grant ofthat Option, as determined by the Committee by referenceto the daily official list or any other publication published bythe Stock Exchange, rounded to the nearest whole cent inthe event of fractional prices.

“Market Price Option” : An Option granted with the Exercise Price set at the MarketPrice.

“Non-executive Director” : A Director of the Company and/or its Subsidiaries, as thecase may be, but not a Group Executive Director or anIndependent Director.

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“Offer” : The Company’s offer to a Selected Employee, a Non-executive Director or an Independent Director of an Optionto subscribe for Shares under this Scheme.

“Option” : The right to subscribe for Shares granted or to be grantedto a Selected Employee, a Non-executive Director or anIndependent Director pursuant to this Scheme and for thetime being subsisting.

“Participant” : The holder of an Option.

“Record Date” : The date fixed by the Company for the purposes ofdetermining entitlements to dividends, rights, allotments orother distributions to or rights of holders of Shares.

“Rules” : The rules of the Select Employee Share Option Schemeand any reference to a particular Rule shall be construedaccordingly.

“Scheme” : The Select Employee Share Option Scheme, as the samemay be modified or altered from time to time pursuant tothe terms and conditions set out herein.

“Securities Account” : The securities account maintained by a Depositor with CDP.

“Selected Employee” : An Employee eligible under Rule 4 and who has beenselected by the Committee for the purposes of making anOffer.

“Shareholders” : The registered holders of Shares, except where theregistered holder is CDP, the term “Shareholders” shall, inrelation to such Shares, mean the Depositors whoseSecurities Accounts are credited with Shares.

“Shares” : Fully-paid ordinary shares of par value $0.045 (or suchother par value) each in the capital of the Company.

“Stock Exchange” or “SGX-ST” : The Singapore Exchange Securities Trading Limited.

“Subsidiaries” : The subsidiaries of a company (as defined in Section 5 ofthe Act) and “Subsidiary” shall be construed accordingly.

“Trading Day” : A day on which the Shares are traded on the StockExchange.

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

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

The terms “Depositor” and “Depository Agent” shall have the meanings ascribed to themrespectively by Section 130A of the Act.

Words importing the singular number shall, where applicable, include the plural number and viceversa. Words importing the masculine gender shall, where applicable, include the feminine andneuter genders.


2.4 Any reference to a time of a day in this Scheme is a reference to Singapore time.

2.5 Any reference in this Scheme to any enactment is a reference to that enactment as for the timebeing amended or re-enacted. Any word defined under the Act or any statutory modificationthereof and used in this Scheme shall have the meaning assigned to it under the Act.

3. OBJECTIVES OF THIS SCHEME

This Scheme is a share incentive plan. This Scheme is proposed on the basis that it is importantto retain staff whose contributions are essential to the well-being and prosperity of the Group andto give recognition to outstanding Employees, Non-executive Directors and Independent Directorswho have contributed to the growth of the Group. This Scheme will give Participants anopportunity to have a personal equity interest in the Company and will help to achieve thefollowing positive objectives:-

(a) the motivation of each Participant to optimise his performance standards and efficiency andto maintain a high level of contribution to the Group;

(b) the retention of key Employees and Directors whose contributions are essential to the long-term growth and profitability of the Group;

(c) to instil loyalty to, and a stronger identification by the Participants with the long-termprosperity of the Group;

(d) to attract potential employees with relevant skills to contribute to the Group and to createvalue for the Shareholders; and

(f) to align the interests of the Participants with the interests of Shareholders.

4. ELIGIBILITY OF PARTICIPANTS

4.1 An Employee’s eligibility to participate in this Scheme shall be at the absolute discretion of theCommittee, which would be exercised judiciously, and in addition, such person must:-

(i) be confirmed in his/her employment with the Company or any Subsidiary and not be onprobation and have been in the full time service of the Company or any Subsidiary for atleast 6 months on or prior to the Date of Grant;

(ii) have attained the age of 21 years on or before the Date of Grant; and

(iii) not be an undischarged bankrupt and must not have entered into a composition with hiscreditors.

4.2 Non-executive Directors and Independent Directors who satisfy the eligibility requirements in Rule4.1(ii) and (iii) and who have been a director of the Company or any Subsidiary for at least 12months on or prior to the Date of Grant shall also be eligible to participate in this Scheme.

4.3 Persons who are Controlling Shareholders or their Associates shall, notwithstanding that theymeet the requirements in Rule 4.1 (i), (ii) and (iii), not be entitled to participate in this Scheme.

4.4 Participants of this Scheme shall be eligible to participate in other share option schemesimplemented by any other company if approved by the Committee.

4.5 Subject to the Act and any requirement of the Stock Exchange, the terms of eligibility forparticipation in this Scheme may be amended from time to time at the absolute discretion of theCommittee, which would be exercised judiciously.

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5. LIMITATION ON THE SIZE OF THIS SCHEME

5.1 The aggregate nominal amount of new Shares in respect of which Options may be granted by theCommittee, on any date, when added to the number of Shares issued and issuable in respect of(a) all Options granted under this Scheme, and (b) all awards granted under any other shareoption, share incentive, performance share or restricted share plan implemented by the Companyand for the time being in force, shall not exceed 15% of the issued share capital of the Companyon the day preceding that date. The Options which have already been granted shall not beinvalidated in the event that a reduction of the Company’s capital or a buy back of its Sharesresults in the Shares issuable under outstanding Options exceeding 15% of the Company’s issuedshare capital.

5.2 Subject to Rule 5.1, the aggregate number of Shares in respect of which Options may be offeredto a Grantee for subscription in accordance with this Scheme shall be determined at the discretionof the Committee, which would be exercised judiciously, who shall take into account criteria suchas the rank and responsibilities within the Group, performance, years of service/appointment andpotential for future development of the Grantee and the performance of the Group.

6. GRANT AND ACCEPTANCE OF OPTIONS

6.1 Subject to Rule 11, the Committee may grant Options at any time during the period when thisScheme is in force, except that no Offers shall be made during the period of 30 days immediatelypreceding the date the Company announces its interim and/or final results (whichever the casemay be) provided that in the event of the Company announcing any matter of an exceptionalnature involving unpublished price sensitive information (“Exceptional Announcements”), Offersmay only be made on or after the third Market Day on which such Exceptional Announcement isreleased.

6.2 The Letter of Offer to grant an Option shall be in, or substantially in, the form set out in ScheduleA, subject to such modification as the Committee may from time to time determine.

6.3 An Option shall be personal to the Participant to whom it is granted and shall not be transferred(other than to a Participant’s personal representative on the death of that Participant), charged,assigned, pledged or otherwise disposed of, in whole or in part, except with the prior approval ofthe Committee.

6.4 An Option granted to a Grantee by the Committee under this Rule 6 shall be accepted by theGrantee within 30 days from the Date of Grant of that Option and, in any event, not later than 5.00p.m. on the 30th day from such Date of Grant by completing, signing and returning the AcceptanceForm in or substantially in the form set out in Schedule B, subject to such modification as theCommittee may from time to time determine, accompanied by the payment of S$1.00 asconsideration. The Grantee must accept or refuse the whole or any part of the Offer. TheCommittee shall within 15 Market Days of receipt of the Acceptance Form and considerationthereof, acknowledge receipt of the same.

6.5 Offers shall automatically cease and lapse forthwith and become null and void and of no effectand shall no longer be available for acceptance in the following events:-

(i) the Offer is not accepted within the time stated therein;

(ii) the death of the Grantee prior to his acceptance of the Offer;

(iii) the Grantee ceases to be in the employment of the Group or to be a Director, in each case,for any reason whatsoever prior to his acceptance of the Offer;


(iv) the Grantee is adjudicated a bankrupt or enters into composition with his creditors prior tohis acceptance of the Offer; or

(v) the liquidation or winding-up of the Company prior to the Grantee’s acceptance of theOption.

6.6 Failure by the Grantee to complete the Company’s prescribed Acceptance Form in accordancewith its requirements may render invalid the Grantee’s acceptance of an Offer. Any AcceptanceForm received after the closing date shall not be valid. The Offer is deemed not accepted untilactual receipt by the Company of the Acceptance Form.

6.7 The Company shall be entitled to reject any purported acceptance of a grant of an Option madepursuant to this Rule 6 which does not comply strictly with the terms of this Scheme.

6.8 In the event that a grant of an Option results in a contravention of any applicable law or regulation,such grant shall be null and void and of no effect and the relevant Participant shall have no claimwhatsoever against the Company.

7. EXERCISE PRICE

7.1 Subject to any adjustment pursuant to Rule 11, the Exercise Price for each Share in respect ofwhich an Option is exercisable shall be determined by the Committee, in its absolute discretion,on the Date of Grant, at:-

(a) a price equal to the Market Price; or

(b) a price which is set at a discount to the Market Price, provided that:-

(i) the maximum discount shall not exceed 20% of the Market Price (or such otherpercentage or amount as may be determined by the Committee and permitted by theStock Exchange);

(ii) the Shareholders in general meeting shall be authorised in a separate resolution, tomake offers and grants of Options under this Scheme at a discount not exceedingthe maximum discount as aforesaid;

(iii) the Committee shall exercise any decision to offer Options with an Exercise Price setat a discount in good faith and only when circumstances require; and

(iv) if and only if the Committee verily believes that the discount and the quantum thereofwould be in furtherance of the core objectives of this Scheme and would be in thebest interests of the Company and the prevailing market conditions. In making anydetermination as to the actual discount applicable to any Option, the Committee shalltake into account such criteria as the Committee may, in its absolute discretion, deemappropriate, including but not limited to:-

(aa) the performance of the Company and its Subsidiaries, on the basis of theGroup’s sales, turnover, profit and/or any other financial parameters as theCommittee may, in its absolute discretion, deem appropriate;

(bb) the years of service and individual performance of the Participant, hiseffectiveness and contribution to the success and development of the Group;

(cc) the potential for future development of the Participant and his potentialcontribution to the success and development of the Group in the future; and/or

(dd) the prevailing market conditions.

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7.2 The Exercise Price shall in no event be less than the nominal value of a Share.

8. RIGHTS TO EXERCISE OPTIONS

8.1 Options granted with the Exercise Price set at Market Price shall only be exercisable, in whole orin part (provided that an Option may be exercised in part only in respect of 1,000 Shares or anymultiple thereof), by a Participant after the first anniversary of the Date of Grant of that Option,Provided always that the Options granted to Employees shall be exercised before the tenthanniversary of the relevant Date of Grant and Options granted to Non-executive Directors andIndependent Directors shall be exercised before the fifth anniversary of the relevant Date of Grant,or such earlier date as may be determined by the Committee, failing which all unexercisedOptions shall immediately lapse and become null and void and a Participant shall have no claimsagainst the Company.

8.2 Options granted with the Exercise Price set at a discount to Market Price shall only beexercisable, in whole or in part (provided that an Option may be exercised in part only in respectof 1,000 Shares or any multiple thereof), by a Participant after the second anniversary of the Dateof Grant of that Option, Provided always that the Options granted to Employees shall be exercisedbefore the tenth anniversary of the relevant Date of Grant and Options granted to Non-executiveDirectors and Independent Directors shall be exercised before the fifth anniversary of the relevantDate of Grant, or such earlier date as may be determined by the Committee, failing which allunexercised Options shall immediately lapse and become null and void and a Participant shallhave no claims against the Company.

8.3 An Option shall, to the extent unexercised, immediately lapse without any claim whatsoeveragainst the Company:-

(a) upon the expiry of the Exercise Period;

(b) in the event of misconduct on the part of the Participant as determined by the Committee inits absolute discretion or any breach of any regulation of the Company or the Group, suchbreach being regarded as serious by the Committee in its absolute discretion;

(c) subject to Rule 8.4, upon the Participant ceasing at any time to be in the employment ofany member of the Group, for any reason whatsoever;

(d) upon the bankruptcy of the Participant or the happening of any other event which results inhis being deprived of the legal or beneficial ownership of an Option; or

(e) upon the company by which he is employed ceasing to be a company within the Group, orthe undertaking or part of the undertaking of such company being transferred otherwisethan to another company within the Group.

For the purpose of Rule 8.3(c), the Participant shall be deemed to have ceased to be soemployed as of the last day of his employment.

For avoidance of doubt, no Option shall lapse pursuant to Rule 8.3(c) in the event of any transferof employment of a Participant between the Group.

8.4 In any of the following events, namely:-

(a) where the Participant ceases at any time to be in the employment of any member of theGroup by reason of:-

(i) ill health, injury or disability (in each case, evidenced to the satisfaction of theCommittee);


(ii) redundancy;

(iii) retirement at or after the legal retirement age;

(iv) retirement before the legal retirement age with the consent of the Committee; or

(b) any other event approved in writing by the Committee,

the Participant may exercise any Option during the periods specified in Rule 8.5.

8.5 In respect of Rule 8.4, the Options may be exercised:-

(a) in the case where the cessation of employment or cessation to be a Director, as the casemay be, occurs after the first day of the Exercise Period in respect of such Option, withinthe period of 18 months after the date of such cessation of employment or such cessationto be a Director, as the case may be, or before the expiry of the Exercise Period in respectof that Option, whichever is earlier, and upon expiry of such period, the Option shall lapse;and

(b) in the case where the cessation of employment or cessation to be a Director, as the casemay be, occurs before the first day of the Exercise Period in respect of such Option, withinthe period of 18 months after the first day of the Exercise Period in respect of that Option,and upon expiry of such period, the Option shall lapse.

8.6 If a Participant dies, whether or not while still in the employment of any of the Group and at thedate of his death holds any unexercised Option, such Option shall continue to be exercisable bythe duly appointed personal representatives of the Participant:-

(a) in the case where death occurs after the first day of the Exercise Period in respect of suchOption, within the period of 18 months after the date of such death or before the expiry ofthe Exercise Period in respect of that Option, whichever is earlier, and upon expiry of suchperiod, the Option shall lapse; and

(b) in the case where the death occurs before the first day of the Exercise Period in respect ofsuch Option, within the period of 18 months after the first day of the Exercise Period inrespect of that Option, and upon expiry of such period, the Option shall lapse.

9. TAKE-OVER AND WINDING-UP OF THE COMPANY

9.1 Notwithstanding Rule 8 but subject to Rule 9.5, in the event of a take-over being made for theShares, a Participant shall be entitled to exercise any Option held by him and as yet unexercised,in respect of such number of Shares comprised in that Option as may be determined by theCommittee in its absolute discretion, in the period commencing on the date on which such offer ismade or, if such offer is conditional, the date on which such offer becomes or is declaredunconditional, as the case may be, and ending on the earlier of:-

(a) the expiry of six months thereafter, unless prior to the expiry of such six-month period, atthe recommendation of the offeror and with the approvals of the Committee and the StockExchange, such expiry date is extended to a later date (in either case, being a date fallingnot later than the expiry of the Exercise Period relating thereto); or

(b) the date of expiry of the Exercise Period relating thereto,

whereupon the Option then remaining unexercised shall lapse.

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Provided that if during such period, the offeror becomes entitled or bound to exercise rights ofcompulsory acquisition under the provisions of the Act and, being entitled to do so, gives notice tothe Participants that it intends to exercise such rights on a specified date, the Option shall remainexercisable by the Participant until the expiry of such specified date or the expiry of the ExercisePeriod relating thereto, whichever is earlier. Any Option not so exercised shall lapse provided thatthe rights of acquisition or obligations to acquire shall have been exercised or performed, as thecase may be. If such rights or obligations have not been exercised or performed, the Option shall,notwithstanding Rule 8, remain exercisable until the expiry of the Exercise Period relating thereto.

For the avoidance of doubt, the provisions of Rule 9.1 shall not come into operation in the eventthat a take-over offer which is conditional does not become or is not declared to be unconditional.

9.2 If under any applicable laws, the court sanctions a compromise or arrangement proposed for thepurposes of, or in connection with, a scheme for the reconstruction of the Company or itsamalgamation with another company or companies, each Participant shall be entitled,notwithstanding Rule 8 but subject to Rule 9.5, to exercise any Option then held by him, in respectof such number of Shares comprised in that Option as may be determined by the Committee in itsabsolute discretion, during the period commencing on the date upon which the compromise orarrangement is sanctioned by the court and ending either on the expiry of 60 days thereafter orthe date upon which the compromise or arrangement becomes effective, whichever is later (butnot after the expiry of the Exercise Period relating thereto), whereupon the Option shall lapse andbecome null and void.

9.3 If an order is made for the winding-up of the Company on the basis of its insolvency, all Options,to the extent unexercised, shall lapse and become null and void.

9.4 In the event a notice is given by the Company to its members to convene a general meeting forthe purposes of considering and, if thought it, approving a resolution to voluntarily wind-up theCompany, the Company shall on the same date as or soon after it despatches such notice toeach member of the Company give notice thereof to all Participants (together with a notice of theexistence of the provision of this Rule 9.4) and thereupon, each Participant (or his personalrepresentative) shall be entitled to exercise all or any of his Options at any time not later than twobusiness days prior to the proposed general meeting of the Company by giving notice in writing tothe Company, accompanied by a remittance for the Aggregate Subscription Cost whereupon theCompany shall as soon as possible and in any event, no later than the business day immediatelyprior to the date of the proposed general meeting referred to above, allot the relevant Shares tothe Participant credited as fully-paid.

9.5 If in connection with the making of a general offer referred to in Rule 9.1 or the scheme referred toin Rule 9.2 or the winding-up referred to in Rule 9.4, arrangements are made (which areconfirmed in writing by the Auditors, acting only as experts and not as arbitrators, to be fair andreasonable) for the compensation of Participants, whether by the continuation of their Options orthe payment of cash or the grant of other options or otherwise, a Participant holding an Option, asyet not exercised, may not, at the discretion of the Committee, be permitted to exercise thatOption as provided for in this Rule 9.

9.6 To the extent that an Option is not exercised within the periods referred to in this Rule 9, it shalllapse and become null and void.


10. EXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES AND NON-EXERCISE OFOPTIONS IN CERTAIN SITUATIONS

(A) Exercise of Options, Allotment and Listing of Shares

10.1 Subject to Rules 8.1 and 8.2, an Option may be exercised, in whole or in part, by a Participantgiving notice in writing to the Company in or substantially in the form set out in Schedule C,subject to such modification as the Committee may make from time to time determine. Suchnotice must be accompanied by payment for the Aggregate Subscription Cost in respect of theShares for which that Option is exercised, the relevant Depository Charges (as defined in Rule18.1) and such other documentation as the Committee may require. An Option shall be deemed tobe exercised upon receipt by the Company of the said notice, duly completed, and the AggregateSubscription Cost, the relevant Depository Charges and such other documentation as theCommittee may require. All payments pursuant to this Rule shall be made by cheque, cashier’sorder, banker’s draft or postal order made out in favour of the Company or such other mode ofpayment as may be acceptable to the Company.

10.2 Subject to such consents or other required action of any competent authority under anyregulations or enactment for the time being in force as may be necessary and subject to thecompliance with the terms of this Scheme and the Memorandum and Articles of the Company, theCompany shall, within ten Market Days after the exercise of an Option, allot and issue the relevantShares and within five Market Days after the date of such allotment and issue, despatch to CDPthe relevant share certificates by ordinary post or such other mode as the Committee may deemfit.

The Company shall, as soon as practicable after such allotment and issue, apply to the StockExchange for the permission to deal in, and for quotation of, such Shares, if necessary.

10.3 Shares which are allotted on the exercise of an Option by a Participant shall be issued in thename of CDP to the credit of the securities account of that Participant maintained with CDP, thesecurities sub-account of that Participant maintained with a Depository Agent or the CPFinvestment account maintained with a CPF agent bank.

10.4 Shares allotted and issued on the exercise of an Option shall:-

(a) be subject to all the provisions of the Memorandum and Articles of the Company; and

(b) rank in full for all entitlements, including dividends or other distributions declared orrecommended in respect of the then existing Shares, the Record Date of which is on orafter the date of exercise of the Option, and shall in all other respects rank pari passu withother existing Shares then in issue.

10.5 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of allOptions for the time being remaining capable of being exercised.

(B) Non-exercise of Options

10.6 Upon the expiry of any Option or Options to which a Participant is entitled (which Option has notbeen exercised or fully exercised), or upon receipt of an irrevocable notice in writing from aParticipant to the effect that he does not wish to exercise his entitlement or balance of hisentitlement to any Option or Options granted to or accepted by him, the Company shall forthwithcancel the relevant Option or Options but all moneys paid by the Participant under Rule 6.4 shallbe forfeited to the Company.

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11. ADJUSTMENT EVENTS

11.1 If a variation in the issued ordinary share capital of the Company (whether by way of acapitalisation of profits or reserves or rights issue, capital reduction, sub-division or consolidationof Shares, distribution or otherwise) shall take place or if there is an offer or invitation made by theCompany to Shareholders whereunder they may acquire rights to acquire or subscribe for Shares,then:-

(a) the Exercise Price;

(b) the nominal amount, class and/or number of Shares comprised in an Option to the extentunexercised; and/or

(c) the nominal amount, class and/or number of Shares over which Options may be grantedunder this Scheme,

shall be adjusted in such manner as the Committee may determine to be appropriate, except inrelation to a capitalisation issue, upon the written confirmation of the Auditors (acting only asexperts and not as arbitrators) that in their opinion, such adjustment is fair and reasonable. Alladjustments (if any) shall give the Grantee the same proportion of the equity capital as that towhich he was previously entitled.

11.2 Unless the Committee considers an adjustment to be appropriate, the following (whether singly orin combination) shall not be regarded as events requiring adjustment:-

(a) any issue of securities as consideration for an acquisition or a private placement ofsecurities or pursuant to any initial public offering of the Shares on the Stock Exchange;

(b) any increase in the number of issued Shares as a consequence of the exercise of optionsor other convertibles issued from time to time by the Company entitling the holders thereofto acquire new Shares in the capital of the Company (including the exercise of any Optionsgranted pursuant to the Scheme and any previous or future employee share optionscheme(s));

(c) any issue of Shares pursuant to any scrip dividend scheme for the time being of theCompany; and

(d) any reduction in the number of issued Shares as a result of the cancellation of issuedShares purchased by the Company by way of market purchase(s) effected on the StockExchange on which the Company is listed pursuant to a share purchase mandate (or anyrenewal thereof) given by the shareholders of the Company in general meeting and for thetime being in force.

11.3 Notwithstanding the provisions of Rule 11.1:-

(a) no such adjustment shall be made if as a result:-

(i) the Exercise Price shall fall below the nominal amount of a Share and if suchadjustment would, but for this paragraph (a), result in the Exercise Price being lessthan the nominal amount of a Share, the Exercise Price payable shall be the nominalamount of a Share; or

(ii) the Participant receives a benefit that a Shareholder does not receive; and

(b) any adjustment (except in relation to a capitalisation issue) must be confirmed in writing bythe Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair andreasonable.


11.4 Upon any adjustment required to be made pursuant to this Rule 11, the Company shall notify theParticipant (or his duly appointed personal representatives where applicable) in writing and deliverto him (or his duly appointed personal representatives where applicable) a statement setting forththe Exercise Price thereafter in effect and the nominal value, class and/or number of Sharesthereafter to be issued on the exercise of the Option. Any adjustment shall take effect upon suchwritten notification being given.

12. ADMINISTRATION OF THIS SCHEME

12.1 This Scheme shall be administered by the Committee in its absolution discretion with such powersand duties as are conferred on it by the Board from time to time, including but not limited to thefollowing powers:-

(a) to determine the number of Shares to be offered by way of Options to Participants withinthe maximum limits set out in this Scheme;

(b) to determine the Exercise Price and any adjustments thereto in accordance with the termsof this Scheme;

(c) to decide whether Offers made or Options granted shall be terminated or allowed tocontinue in the event of death or cessation of employment or appointment (as the case maybe); and

(d) to recommend to the Board modifications to this Scheme, where necessary.

12.2 The Committee shall have the power, from time to time, to make and vary such regulations (notbeing inconsistent with this Scheme) for the implementation and administration of this Scheme asthey think fit.

12.3 Neither this Scheme nor the grant of Options under this Scheme shall impose on the Company orthe Committee any liability whatsoever in connection with:-

(a) the lapsing or early expiry of any Options pursuant to any provision of this Scheme;

(b) the failure or refusal by the Committee to exercise, or the exercise by the Committee of anydiscretion under this Scheme; and/or

(c) any decision or determination of the Committee made pursuant to any provision of thisScheme.

12.4 Any decision or determination of the Committee made pursuant to any provision of this Scheme(other than a matter to be certified by the Auditors) shall be final, binding and conclusive includingany matter pertaining or pursuant to this Scheme and any dispute and uncertainty as to theinterpretation of this Scheme, any rule, regulation or procedure thereunder or any rights under thisScheme.

12.5 The Committee shall consist of Directors of the Company (including Directors who may beparticipants of this Scheme). Any member of the Committee who is a Participant shall abstainfrom deliberating on the Options to be granted to him.

12.6 The Options may, at the discretion of the Committee, be vested partially over a number of years.The periods over which the Options will vest may exceed any minimum vesting periods prescribedby any laws, regulations or rules to which this Scheme may be subject, including the regulationsof any stock exchange on which the Shares may be listed and quoted. Further, the Shares to beissued and allotted to a Participant pursuant to the exercise of any Option under this Scheme mayor may not, at the discretion of the Committee, be subject to any retention period.

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13. NOTICES

13.1 Any notice required to be given by a Participant to the Company shall be sent or made to theprincipal place of business of the Company or such other addresses (including electronic mailaddresses) or facsimile number, and marked for the attention of the Committee, as may benotified by the Company to him in writing.

13.2 Any notices or documents required to be given to a Participant or any correspondence to be madebetween the Company and the Participant shall be given or made by the Committee (or suchperson(s) as it may from time to time direct) on behalf of the Company and shall be delivered tohim by hand or sent to him at his home address, electronic mail address or facsimile numberaccording to the records of the Company or the last known address, electronic mail address orfacsimile number of the Participant.

13.3 Any notice or other communication from a Participant to the Company shall be irrevocable, andshall not be effective until received by the Company. Any notice or other communication from theCompany to a Participant shall be deemed to be received by that Participant, when left at theaddress specified in Rule 13.2 or, if sent by post, on the day following the date of posting or, ifsent by electronic mail or facsimile transmission, on the day of despatch.

14. MODIFICATIONS TO THIS SCHEME

14.1 Any or all the provisions of this Scheme may be modified and/or altered at any time and from timeto time by resolution of the Committee, except that:-

(a) no modification or alteration shall alter adversely the rights attaching to any Option grantedprior to such modification or alteration except with the consent in writing of such number ofParticipants who, if they exercised their Options in full, would thereby become entitled to notless than three-quarters in nominal amount of all the Shares which would fall to be allottedupon exercise in full of all outstanding Options;

(b) any modification or alteration which would be to the advantage of Participants under thisScheme shall be subject to the prior approval of the Shareholders in general meeting; and

(c) no modification or alteration shall be made without the prior approval of the Stock Exchangeand such other regulatory authorities as may be necessary.

14.2 Notwithstanding anything to the contrary contained in Rule 14.1, the Committee may at any timeby resolution (and without other formality, save for the prior approval of the Stock Exchange)amend or alter this Scheme in any way to the extent necessary to cause this Scheme to complywith any statutory provision or the provision or the regulations of any regulatory or other relevantauthority or body (including the Stock Exchange).

14.3 Written notice of any modification or alteration made in accordance with this Rule 14 shall begiven to all Participants.

15. TERMS OF EMPLOYMENT UNAFFECTED

15.1 This Scheme or any Option shall not form part of any contract of employment between theCompany or any Subsidiaries and any Participant or Grantee and the rights and obligations of anyindividual under the terms of the office or employment with such company shall not be affected byhis participation in this Scheme or any right which he may have to participate in it or any Optionwhich he may hold. Neither this Scheme nor any Option shall afford such an individual anyadditional rights to compensation or damages in consequence of the termination of such office oremployment for any reason whatsoever.


15.2 This Scheme shall not confer on any person any legal or equitable rights (other than thoseconstituting the Options themselves) against the Company directly or indirectly or give rise to anycause of action at law or in equity against the Company and/or any of its Subsidiaries.

16. DURATION OF THIS SCHEME

16.1 This Scheme shall continue to be in force at the discretion of the Committee, subject to amaximum period of 10 years commencing on the Adoption Date, provided always that thisScheme may continue beyond the above stipulated period with the approval of the Shareholdersby ordinary resolution in general meeting and of any relevant authorities which may then berequired.

16.2 This Scheme may be terminated at any time by the Committee or, by ordinary resolution of theCompany in general meeting, subject to all relevant approvals which may be required and if thisScheme is so terminated, no further Options shall be offered by the Company hereunder.

16.3 The termination or discontinuance or expiry of this Scheme for any reason, shall not affectOptions which have been granted and accepted as provided in Rule 6.4, whether such Optionshave been exercised (whether fully or partially) or not.

17. TAXES

All taxes (including income tax) arising from the exercise of any Option granted to any Participantunder this Scheme shall be borne by that Participant.

18. COSTS AND EXPENSES OF THIS SCHEME

18.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issueand allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit ofshare certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’ssecurities sub-account with a Depository Agent or CPF investment account with a CPF agentbank (collectively, the “Depository Charges”).

18.2 Save for the taxes referred to in Rule 18 and such other costs and expenses expressly provided inthis Scheme to be payable by the Participants, all fees, costs and expenses incurred by theCompany in relation to this Scheme including but not limited to the fees, costs and expensesrelating to the allotment and issue of Shares pursuant to the exercise of any Option, shall beborne by the Company.

19. DISCLAIMER OF LIABILITY

Notwithstanding any provisions contained herein, the Board, the Committee and the Companyshall not be held liable under any circumstances to any Participant, Grantee or any personwhomsoever for any costs, losses, expenses and damages whatsoever and howsoever arising inconnection with this Scheme or the administration thereof including but not limited to theCompany’s delay in issuing the Shares and/or in procuring listing of and quotation for the Shareson the Stock Exchange (and any other stock exchange on which the Shares may be listed orquoted).

20. DISCLOSURE IN ANNUAL REPORT

The following disclosures (as applicable) will be made by the Company in its annual report for solong as this Scheme continues in operation:-

(a) The names of the members of the Committee administering this Scheme;

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D-15

(b) The information in respect of Options granted to the following Participants in the table setout below:-

(i) Directors; and

(ii) Participants, other than those in (i) above, who receive 5% or more of the totalnumber of Options available under this Scheme.

Name of Options granted Options granted Aggregate AggregateParticipant during financial since number of Options number of Options

year under review commencement exercised since outstanding as at(including terms) of Scheme to commencement end of financial

end of financial of Scheme to year under reviewyear under review end of financial

year under review

(c) The number and proportion of Incentive Options during the financial year under review inthe following bands:-

Discount to the Market Aggregate number of Proportion of Incentive Options Price % Incentive Options granted to total number of Options

during the financial year granted during the financialunder review year under review

0-10

11-20

21. ABSTENTION FROM VOTING

21.1 Shareholders who are eligible to participate in this Scheme must abstain from voting on anyresolution relating to this Scheme.

21.2 Directors and Employees of the Subsidiaries of the Company, who are also Shareholders and areeligible to participate in this Scheme must abstain from voting on any resolution relating to theparticipation of, or grant of Options to, Directors and Employees of the Subsidiaries of theCompany.

22. DISPUTES

Any dispute or difference of any nature in connection with this Scheme (including theinterpretation or administration thereof) shall be referred to the Committee whose decision shallbe final and binding in all respects.

23. CONDITION OF OPTION

Every Option shall be subject to the conditions that no Shares shall be issued pursuant to theexercise of an Option if such issue would be contrary to any law or enactment, or any rules orregulations of any legislative or non-legislative governing body for the time being in force in thejurisdiction of Singapore or any other relevant country.


24. GOVERNING LAW

This Scheme shall be governed by, and construed in accordance with the laws of the Republic ofSingapore. The Participants, by accepting Options in accordance with this Scheme, and theCompany irrevocably submit to the exclusive jurisdiction of the courts of the Republic ofSingapore.

D-16


Schedule A


LETTER OF OFFER

PRIVATE AND CONFIDENTIAL

Serial No. :

Date :

To : [Name][Designation][Address]

Dear Sir/Madam,

1. We have the pleasure of informing you that, pursuant to the Select Employee Share OptionScheme (“Scheme”), you have been nominated to participate in the Scheme by the Committee(“Committee”) appointed by the Board of Directors of Select Catering Services Limited(“Company”) to administer the Scheme. Terms as defined in the Scheme shall have the samemeanings when used in this letter.

2. Accordingly, in consideration of the payment of a sum of S$1.00, an offer is hereby made to grantyou an option (“Option”), to subscribe for and be allotted Shares at the price ofS$ for each Share.

3. The Option is personal to you and shall not be transferred, charged, pledged, assigned orotherwise disposed of by you, in whole or in part, save as provided in the Scheme.

4. The Option shall be subject to the terms of this Letter of Offer and the Rules of the Scheme (asthe same may be amended from time to time pursuant to the terms and conditions of theScheme). A copy of the Rules of the Scheme is attached hereto.

5. If you wish to accept the offer of the Option on the terms of this letter, please sign and return theenclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on ,failing which this offer will lapse.

Yours faithfully,

The CommitteeSelect Employee Share Option Scheme

Name :Designation :

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Schedule B


ACCEPTANCE FORM

Serial No. :

Date :

To : The Company SecretarySelect Employee Share Option SchemeSelect Catering Services Limited

Closing Date and Time for Acceptance of Offer :

Number of Shares Offered :

Exercise Price for each Share : S$

Total Amount Payable for the Shares : S$(exclusive of the relevant Depository Charges)

I have read your Letter of Offer dated and agree to be bound by the terms of theLetter of Offer and the Scheme referred to therein. Terms defined in your Letter of Offer shall have thesame meanings when used in this Acceptance Form.

I hereby accept the Option to subscribe for Shares at S$ for each Share. Ienclose cash for S$1.00 in payment for the purchase of the Option.

I understand that I am not obliged to exercise the Option.

I acknowledge and confirm that I shall be responsible for the payment (if any) of all fees of the CDPrelating to or in connection with the allotment and issue of any Shares in the CDP’s name, the deposit ofshare certificate(s) with the CDP, my securities account with the CDP or my securities sub-account with aDepository Agent (as the case may be) (collectively, the “Depository Charges”).

I confirm that as at the date hereof:-

(a) I am not less than 21 years old nor an undischarged bankrupt nor have I entered into acomposition with any of my creditors;

(b) I satisfy the eligibility requirements to participate in the Scheme as set out in Rule 4 therein; and

(c) I satisfy the other requirements to participate in the Scheme as set out in the Rules of theScheme.

I further confirm that my acceptance of the Option will not result in the contravention of any applicablelaw or regulation in relation to the ownership of shares in the Company or options to subscribe for suchshares.


I further acknowledge that you have not made any representation to induce me to accept the offer andthat the terms of the Letter of Offer and this Acceptance Form constitutes the entire agreement betweenus relating to the offer.

I agree to keep all information pertaining to the grant of the Option to me confidential.

Please print in block letters

Name in full :

Designation :

Address :

Nationality :

*NRIC/Passport No. :

Signature :

Date :

Notes:-

1. Options must be accepted in full or in multiples of 1,000.

2. The Acceptance Form must be forwarded to the Company Secretary in an envelope marked “Private and Confidential”.

3. The Participant shall be informed by the Company of the relevant Depository Charges payable at the time of the exercise ofan option, if any.

*Delete accordingly

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Schedule C


FORM OF EXERCISE OF OPTION

Total number of ordinary shares of S$ each (“Share”) offer at S$ ] for each Share (“ExercisePrice”) under Option dated (Date of Grant) :

Number of Shares previously allotted under the Option :

Outstanding balance of Shares to be allotted under the Option :

Number of Shares now to be subscribed :

To : The Company SecretarySelect Employee Share Option SchemeSelect Catering Services Limited

1. Pursuant to your Letter of Offer dated (Date of Grant) and my acceptancethereof, I hereby exercise the Option to subscribe for Shares in the capital of SelectCatering Services Limited (“Company”) at S$ for each Share.

2. I request the Company to allot and issue the Shares in the name of The Central Depository (Pte)Limited (“CDP”) to be credited direct to *Securities Account with CDP/Sub-Account with theDepository Agent with my Agent Bank specified below and to deliver the share certificates theretoto the CDP at my own risk. I hereby agree to bear such fees or other charges as may be imposedby CDP (“Depository Charges”) in respect thereof.

3. I enclose a *cheque/cashier’s order/banker’s draft/postal order no. forS$ in payment for the following:-

Exercise Price of S$ for the total number of said Shares; andDepository Charges of S$ .

4. I agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the SelectEmployee Share Option Scheme and the Memorandum and Articles of the Company.

5. I declare that I am subscribing for the said Shares for myself and not as a nominee for any otherperson.


Please print in block letters

Name in full :

Designation :

Address :

Nationality :

*NRIC/Passport No. :

*Direct Securities Account No. :

OR

*Sub-account No. :

Name of Depository Agent :

Notes:-

1. An Option may be exercised, in whole or in part, provided that an Option may be exercised in part only in respect of 1,000Shares or any multiple thereof.

2. The Exercise of Option to Subscribe must be forwarded to the Company Secretary in an envelope marked “Private andConfidential”.

*Delete accordingly

D-21

APPENDIX E – CLEARANCE AND SETTLEMENT

E-1

Upon listing and quotation on the SGX-SESDAQ, our Shares will be traded under the book-entrysettlement system of the CDP, and all dealings in and transactions of our Shares through the SGX-SESDAQ will be effected in accordance with the terms and conditions for the operation of SecuritiesAccounts with the CDP, as amended from time to time.

Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf ofpersons who maintain, either directly or through depository agents, Securities Accounts with CDP.Persons named as direct securities account holders and depository agents in the depository registermaintained by the CDP, rather than CDP itself, will be treated, under our Articles and the Companies Act,as members of our Company in respect of the number of Shares credited to their respective SecuritiesAccounts.

Persons holding our Shares in Securities Account with CDP may withdraw the number of Shares theyown from the book-entry settlement system in the form of physical share certificates. Such sharecertificates will, however, not be valid for delivery pursuant to trades transacted on the SGX-SESDAQ,although they will be prima facie evidence of title and may be transferred in accordance with our Articles.A fee of $10.00 for each withdrawal of 1,000 Shares or less and a fee of $25.00 for each withdrawal ofmore than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement systemand obtaining physical share certificates. In addition, a fee of $2.00 or such other amount as ourDirectors may decide, is payable to the share registrar for each share certificate issued and a stamp dutyof $10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing ourShares or $0.20 per $100.00 or part thereof of the last-transacted price where it is withdrawn in thename of a third party. Persons holding physical share certificates who wish to trade on the SGX-SESDAQ must deposit with CDP their share certificates together with the duly executed and stampedinstruments of transfer in favour of CDP, and have their respective Securities Accounts credited with thenumber of Shares deposited before they can effect the desired trades. A fee of $20.00 is payable uponthe deposit of each instrument of transfer with CDP.

Transactions in our Shares under the book-entry settlement system will be reflected by the seller’sSecurities Account being debited with the number of Shares sold and the buyer’s Securities Accountbeing credited with the number of Shares acquired. No transfer of stamp duty is currently payable for ourShares that are settled on a book-entry basis.

A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.05% of thetransaction value subject to a maximum of $200 per transaction. The clearing fee, instrument of transferdeposit fee and share withdrawal fee may be subject to Singapore Goods and Services Tax of 5%.

Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement on CDPon a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST generally takesplace on the third business day following the transaction date, and payment for the securities is generallysettled on the following business day. CDP holds securities on behalf of investors in Securities Accounts.An investor may open a direct account with CDP or a sub-account with a CDP depository agent. TheCDP depository agent may be a member company of the SGX-ST, bank, merchant bank or trustcompany.

APPENDIX F – TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

F-1

You are invited to apply and subscribe for the 17,500,000 New Shares at the Invitation Price for eachNew Share subject to the following terms and conditions:-

1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES AND HIGHERINTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OFNEW SHARES WILL BE REJECTED.

2. Your application for Offer Shares may be made by way of printed Offer Shares Application Formsor by way of Electronic Applications through ATMs of the Participating Banks (“ATM ElectronicApplications”) or through the Internet Banking (“IB”) websites of the relevant Participating Banks(“IB Applications”).

Your application for Internet Placement Shares (“Internet Placement Application”) may only bemade by way of an application through the IPO Website at “ www.ePublicOffer.com ” if you have avalid membership account with the IPO Website Operator. IB Applications and Internet PlacementApplications (collectively, the “Internet Electronic Applications”), together with ATM ElectronicsApplications, shall be referred to as “Electronic Applications”.

Your application for the Placement Shares (other than the Internet Placement Shares and theReserved Shares) may only be made by way of Placement Shares Application Forms. YOU MAYNOT USE CPF FUNDS TO APPLY FOR THE NEW SHARES.

3. You (being other than an approved nominee company) are allowed to submit ONLY oneapplication in your own name for:-

(a) the Offer Shares by any one of the following:-

(i) Offer Shares Application Form;

(ii) ATM Electronic Application; or

(iii) IB Application,

OR

(b) the Placement Shares by any one of the following:-

(i) Placement Shares Application Form;

(ii) Internet Placement Application; or

(iii) Reserved Shares Application Form.

If more than one application is submitted for either the Offer Shares or the PlacementShares (other than the Reserved Shares), such separate applications shall be deemed to bemultiple applications and shall be rejected.

If you have made an application for Placement Shares, you should not make any applicationfor Offer Shares and vice versa. Such separate applications shall be deemed to be multipleapplications and shall be rejected.

JOINT OR MULTIPLE APPLICATIONS SHALL BE REJECTED. If you submit or procuresubmissions of multiple share applications for Offer Shares, Placement Shares or bothOffer Shares and Placement Shares, you may be deemed to have committed an offenceunder the Penal Code (Chapter 224) of Singapore and the Securities and Futures Act(Chapter 289) of Singapore, and your applications may be referred to the relevantauthorities for investigation. Multiple applications or those appearing to be or suspected ofbeing multiple applications will be liable to be rejected at our discretion.


F-2

A Qualifying Internet Applicant whose application for Internet Placement Shares is rejectedbecause of multiple applications will be levied an administrative fee amounting to 20.0% ofthe Qualifying Internet Applicant’s application subscription money (GST included).

If you have make an application for the Reserved Shares, you may submit ONE separateapplication for the Offer Shares in your name, either by way of an Offer Shares Application Form orby way of an Electronic Application; OR submit ONE separate application for Placement Shares inyour own name by way of a Placement Shares Application Form or Internet Placement Application,provided you adhere to the terms and conditions of this Prospectus. Such separate applicationswill not be treated as multiple applications.

4. We will not accept applications from any person under the age of 21 years, undischargedbankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint SecuritiesAccount holders of CDP and from applicants whose addresses (furnished in their ApplicationForms or, in the case of Electronic Applications, contained in the records of the relevantParticipating Banks or the IPO Website Operator, as the case may be) bear post office boxnumbers.

In addition, applicants who wish to subscribe for the Placement Shares through the IPO Website(a) must not be corporations, sole proprietorships, partnerships or any other business entities; (b)must be over the age of 21 years; (c) must not be undischarged bankrupts; (d) must apply for thePlacement Shares in Singapore; (e) must have a mailing address in Singapore; and (f) must becustomers who maintain valid membership accounts with the IPO Website Operator.

5. We will not recognise the existence of a trust. Any application by a trustee or trustees must bemade in his/their own name(s) and without qualification or, where the application is made by wayof an Application Form, in the name(s) of an approved nominee company or approved nomineecompanies after complying with paragraph 6 below.

6. WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BYAPPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are defined as banks,merchant banks, finance companies, insurance companies, licensed securities dealers inSingapore and nominee companies controlled by them. Applications made by persons acting asnominees other than approved nominee companies shall be rejected.

7. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIESACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you donot have an existing Securities Account with CDP in your own name at the time of yourapplication, your application will be rejected (if you apply by way of an Application Form), or youwill not be able to complete your Electronic Application (if you apply by way of an ElectronicApplication). If you have an existing Securities Account but fail to provide your Securities Accountnumber or provide an incorrect Securities Account number in Section B of the Application Form orin your Electronic Application, as the case may be, your application is liable to be rejected.Subject to paragraph 8 below, your application shall be rejected if your particulars, such as name,NRIC/passport number, nationality and permanent residence status provided in your ApplicationForm or in the records of the relevant Participating Bank or the IPO Website Operator at the timeof your Electronic Application, as the case may be, differ from those particulars in your SecuritiesAccount as maintained with CDP. If you possess more than one individual direct SecuritiesAccount with CDP, your application shall be rejected.

8. If your address as stated in the Application Form or, in the case of an ElectronicApplication, contained in the records of the relevant Participating Bank or the IPO WebsiteOperator, as the case may be, is different from the address registered with CDP, you mustinform CDP of your updated address promptly, failing which the notification letter onsuccessful allotment will be sent to your address last registered with CDP.


9. We reserve the right to reject any application which does not conform strictly to theinstructions set out in the Application Form or the instruction for Electronic Applicationsand in this Prospectus or with the terms and conditions of this Prospectus, which isillegible, incomplete, incorrectly completed or which is accompanied by an improperlydrawn up or improper form of remittance. We further reserve the right to treat as valid anyapplications not completed or submitted or effected in all respects in accordance with theinstructions set out in the Application Forms or the instructions for Electronic Applicationsor the terms and conditions of this Prospectus, and also to present for payment or otherprocesses all remittances at any time after receipt and to have full access to all informationrelating to, or deriving from, such remittances or the processing thereof.

10. We reserve the right to reject or to accept, in whole or in part, or to scale down or to ballot anyapplication, without assigning any reason therefor, and we will not entertain any enquiry and/orcorrespondence on our decision. This right applies to applications made by way of ApplicationForms and by way of Electronic Applications. In deciding the basis of allotment, we will give dueconsideration to the desirability of allotting the New Shares to a reasonable number of applicantswith a view to establishing an adequate market for the Shares.

11. Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It isexpected that CDP will send to you, at your own risk, within 15 Market Days after the close of theApplication List, a statement of account stating that your Securities Account has been credited withthe number of New Shares allotted to you. This will be the only acknowledgement of applicationmoneys received and is not an acknowledgement by us. You irrevocably authorise CDP tocomplete and sign on your behalf as transferee or renouncee any instrument of transfer and/orother documents required for the issue or transfer of the New Shares allotted to you. Thisauthorisation applies to applications made by way of Application Forms and by way of ElectronicApplications.

12. In the event of an under-subscription for the Offer Shares as at the close of the Application List, wewill make available that number of Offer Shares not subscribed for to satisfy excess applicationsfor Placement Shares to the extent that there is an over-subscription for Placement Shares as atthe close of the Application List.

In the event of an under-subscription for the Placement Shares as at the close of the ApplicationList, we will make available that number of Placement Shares not subscribed for to satisfy excessapplications for Offer Shares to the extent that there is an over-subscription for Offer Shares as atthe close of the Application List.

In the event of an under-subscription for the Internet Placement Shares to be applied for throughthe IPO Website as at the close of the Application List, we will make available that number ofInternet Placement Shares not subscribed for to satisfy excess applications for Placement Sharesby way of Placement Shares Application Forms to the extent that there is an over-subscription forsuch Placement Shares (not including the Internet Placement Shares) as at the close of theApplication List or to satisfy excess applications for the Offer Shares, to the extent that there is anover-subscription for the Offer Shares as at the close of the Application List.

In the event of an under-subscription for the Reserved Shares at the close of the Application List,we will make available that number of Reserved Shares not subscribed for and/or purchased for tosatisfy excess applications for Placement Shares by way of Placement Shares Application Formsto the extent that there is an over-subscription for such Placement Shares (not including theInternet Placement Shares) as at the close of the Application List or to satisfy excess applicationsfor the Offer Shares, to the extent that there is an over-subscription for the Offer Shares as at theclose of the Application List.

In the event of an over-subscription for Offer Shares and/or Placement Shares (including theInternet Placement Shares) as at the close of the Application List, the successful applications forOffer Shares will be determined by ballot or otherwise as determined by our Directors andapproved by the SGX-ST.

F-3


F-4

In all of the above instances, the basis of allotment of the New Shares as may be decided upon byour Company in ensuring a reasonable spread of shareholders of our Company, shall be madepublic, as soon as is practicable, via an announcement through the SGX-ST and through a paidadvertisement in a local newspaper.

13. You irrevocably authorise CDP to disclose the outcome of your application, including the number ofNew Shares allotted to you pursuant to your application, to our Company, the Manager, thePlacement Agent, the Underwriter and any other parties so authorised as the foregoing persons.

14. Any reference to the “you” in this section shall include an individual, a corporation, an approvednominee and trustee applying for the Offer Shares by way of an Offer Share Application Form, anATM Electronic Application or an IB Application; an individual, a corporation, an approved nomineeand trustee applying for the Placement Shares through the Placement Agent by way of aPlacement Shares Application Form or the Internet Placement Shares by way of an InternetPlacement Application through the IPO Website or the Reserved Shares by way of a ReservedShare Application Form.

15. By completing and delivering an Application Form or by making and completing an ElectronicApplication by (in the case of an ATM Electronic Application) pressing the “Enter” or “OK” or“Confirm” or “Yes” key on the ATM (as the case may be) or by (in the case of an Internet ElectronicApplication) clicking “Submit” or “Continue” or “Yes” or “Confirm” on the IB website screen (as thecase may be) in accordance with the provisions of this Prospectus, you:-

(a) irrevocably offer to subscribe for the number of New Shares specified in your application (orsuch smaller number for which the application is accepted) at the Invitation Price and agreethat you will accept such New Shares as may be allotted to you, in each case on the termsof this Prospectus and on the terms of the conditions set out in, this Prospectus and theMemorandum and Articles of Association of our Company; and

(b) agree that in the event of any inconsistency between the terms and conditions forapplication set out in this Prospectus and those set out in the IPO Website, or the IBwebsites or ATMs of the Participating Banks, the terms and conditions set out in thisProspectus shall prevail;

(c) agree that the aggregate Invitation Price for the New Shares applied for is due and payableto our Company forthwith;

(d) warrant the truth and accuracy of the information contained, and representations anddeclarations made, provided in your application, and acknowledge and agree that suchinformation, representations and declarations will be relied on by our Company indetermining whether to accept your application and/or whether to allot any New Shares toyou; and

(e) agree and warrant that if the laws of any jurisdictions outside Singapore are applicable toyour application, you have complied with all such laws and none of our Company, theManager, the Placement Agent and/or the Underwriter will infringe any such laws as a resultof the acceptance of your application.

16. Our acceptance of applications will be conditional upon, inter alia, we being satisfied that:-

(a) permission has been granted by the SGX-ST to deal in and for quotation for all our existingShares and the New Shares on a “when issued” basis on the SGX-SESDAQ;

(b) the Management and Underwriting Agreement and the Placement Agreement referred to onpage 142 of this Prospectus have become unconditional and have not been terminated orcancelled prior to such date as our Company may determine; and

(c) the Authority has not served a stop order which directs that no further shares to which thisProspectus relates be allotted.


17. We will not hold any applications in reserve.

18. We will not allot Shares on the basis of this Prospectus later than six months after the date ofregistration of this Prospectus.

19. Additional terms and conditions for applications by way of printed Application Forms are set out onpages F-5 to F-8 of Appendix F of this Prospectus.

20. Additional terms and conditions for applications by way of Electronic Applications are set out onpages F-8 to F-16 of Appendix F of this Prospectus.

ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATIONFORMS

You shall make an application by way of Application Forms made on and subject to the terms andconditions of this Prospectus including but not limited to the terms and conditions appearing below aswell as those set out under the section on “TERMS AND CONDITIONS AND PROCEDURES FORAPPLICATION” on pages F-1 to F-5 of Appendix F of this Prospectus, as well as the Memorandum andArticles of Association of our Company.

1. Your application must be made using the WHITE Application Forms for Offer Shares and theBLUE Application Forms for Placement Shares and the PINK Application Forms for ReservedShares accompanying and forming part of this Prospectus. We draw your attention to the detailedinstructions contained in the respective Application Forms and this Prospectus for the completionof the Application Forms which must be carefully followed. We reserve the right to rejectapplications which do not conform strictly to the instructions set out in the ApplicationForms and this Prospectus or to the terms and conditions of this Prospectus or which areillegible, incomplete, incorrectly completed or which are accompanied by improperly drawnremittances or improper form of remittances.

2. Your Application Forms must be completed in English. Please type or write clearly in ink usingBLOCK LETTERS.

3. All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY”must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any spacethat is not applicable.

4. Individuals, corporations, approved nominee companies and trustees must give their names in full.You must make your application, in the case of individuals, in your full names appearing in youridentity cards (if applicants have such identification documents) or in your passports and, in thecase of corporations, in your full names as registered with a competent authority. If you are a non-individual completing the Application Form under the hand of an official, you must state the nameand capacity in which that official signs. If you are a corporation completing the Application Form,you are required to affix your Common Seal (if any) in accordance with your Memorandum andArticles of Association or equivalent constitutive documents. If you are a corporate applicant andyour application is successful, a copy of your Memorandum and Articles of Association orequivalent constitutive documents must be lodged with the Share Registrar and Share Transferoffice. We reserve the right to require you to produce documentary proof of identification forverification purposes.

5. (a) You must complete Sections A and B and sign page 1 of the Application Form.

(b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form.Where paragraph 7(a) is deleted, you must also complete Section C of the Application Formwith particulars of the beneficial owner(s).

(c) If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, onpage 1 of the Application Form, your application is liable to be rejected.

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6. You (whether you are an individual and corporate applicant, whether incorporated orunincorporated and wherever incorporated or constituted), will be required to declare whether youare a citizen or permanent resident of Singapore or a corporation in which citizens or permanentresidents of Singapore or any body corporate constituted under any statute of Singapore have aninterest in the aggregate of more than 50 per cent. of the issued share capital of or interests insuch corporations. If you are an approved nominee company, you are required to declare whetherthe beneficial owner of the New Shares is a citizen or permanent resident of Singapore or acorporation, whether incorporated or unincorporated and wherever incorporated or constituted, inwhich citizens or permanent residents of Singapore or any body corporate whether incorporated orunincorporated and wherever incorporated or constituted under any statute of Singapore have aninterest in the aggregate of more than 50 per cent. of the issued share capital of or interests insuch corporation.

7. Your application must be accompanied by a remittance in Singapore currency for the full amountpayable, in respect of the number of New Shares applied for, in the form of a BANKER’S DRAFTor CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “SELECT SHAREISSUE ACCOUNT” crossed “A/C PAYEE ONLY’”, with your name and address written clearly onthe reverse side. We will not accept applications accompanied by ANY OTHER FORM OFPAYMENT. We will reject remittances bearing “NOT TRANSFERABLE” or “NONTRANSFERABLE” crossings. No acknowledgement or receipt will be issued by us, theManager, the Placement Agent or the Underwriter for applications and application moneysreceived.

8. Unsuccessful applications are expected to be returned (without interest or any share of revenue orother benefit arising therefrom) to you by ordinary post within 24 hours of the balloting after theclose of the Application List at your own risk. Where your application is accepted in part only, thebalance of the application moneys will be refunded (without interest or any share of revenue orother benefit arising therefrom) to you by ordinary post at your own risk in the shortest possibletime.

9. Capitalised terms used in the Application Forms and defined in this Prospectus shall bear themeanings assigned to them in this Prospectus.

10. By completing and delivering the Application Form in accordance with the provisions of thisProspectus, you agree that:-

(a) in consideration of us having distributed the Application Form to you and agreeing to closethe Application List at 12.00 noon on 13 December 2004 or such other time or date aswe may, in consultation with the Manager, decide, subject to any limitation under allapplicable laws and by completing and delivering the Application Form, you agree that:-

(i) your application is irrevocable; and

(ii) your remittance will be honoured on first presentation and that any moneys returnablemay be held pending clearance of your payment without interest or any share ofrevenue or other benefit arising therefrom;

(b) all applications, acceptances and contracts resulting therefrom under the Invitation shall begoverned by and construed in accordance with the laws of Singapore and that youirrevocably submit to the non-exclusive jurisdiction of the Singapore courts;

(c) in respect of the New Shares for which your application has been received and not rejected,acceptance of your application shall be constituted by written notification and not otherwise,notwithstanding any remittance being presented for payment by or on behalf of ourCompany;

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at anytime after acceptance of your application; and


(e) in making your application, reliance is placed solely on the information contained in thisProspectus and none of our Company, the Manager, the Placement Agent, the Underwriteror any other person involved in the Invitation shall have any liability for any information notso contained.

Applications for Offer Shares

1. Your applications for Offer Shares MUST be made using the WHITE Offer Shares ApplicationForms and WHITE official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosedin each envelope.

2. You must:-

(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, togetherwith your remittance in the WHITE envelope “A” provided;

(b) in the appropriate spaces on WHITE envelope “A”:-

(i) write your name and address;

(ii) state the number of Offer Shares applied for; and

(iii) affix adequate Singapore postage;

(c) seal WHITE envelope “A”; and

(d) write, in the appropriate box provided on the larger WHITE envelope “B” addressed to LIMASSOCIATES (PTE) LTD, 10 Collyer Quay #19-08 Ocean Building Singapore 049315,the number of Offer Shares you have applied for; and insert WHITE envelope “A” intoWHITE envelope “B”, seal WHITE envelope “B” and thereafter DESPATCH BY ORDINARYPOST OR DELIVER BY HAND at your own risk to LIM ASSOCIATES (PTE) LTD, 10Collyer Quay #19-08 Ocean Building Singapore 049315, so as to arrive by 12.00 noonon 13 December 2004 or such other time or date as we may, in consultation with theManager, decide, subject to any limitation under all applicable laws. Local UrgentMail or Registered Post must NOT be used. No acknowledgement of receipt will beissued for any application or remittance received.

3. Applications that are illegible, incomplete or incorrectly completed or accompanied by improperlydrawn remittances are liable to be rejected.

Applications for Placement Shares

1. Your application for Placement Shares MUST be made using the BLUE Placement SharesApplication Forms. ONLY ONE APPLICATION should be enclosed in each envelope.

2. The completed and signed BLUE Placement Shares Application Form and your remittance, inaccordance with the terms and conditions of this Prospectus, for the full amount payable in respectof the number of Placement Shares applied for, with your name and address written clearly on thereverse side, must be enclosed and sealed in an envelope to be provided by you. You must affixadequate Singapore postage on the envelope (if despatching by ordinary post) and thereafter thesealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND atyour own risk to LIM ASSOCIATES (PTE) LTD, 10 Collyer Quay #19-08 Ocean BuildingSingapore 049315, to arrive by 12.00 noon on 13 December 2004 or such other time or dateas we may, in consultation with the Manager, decide, subject to any limitation under allapplicable laws. Local Urgent Mail or Registered Post must NOT be used. Noacknowledgement of receipt will be issued for any application or remittance received.

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3. Alternatively, you may remit your application moneys by electronic transfer to the account of TheBank of East Asia, Limited, account number 90087878, in favour of “SELECT SHARE ISSUEACCOUNT” for the number of Placement Shares applied for by 12.00 noon on 13 December2004 or such other time or date as we may, in consultation with the Manager, decide,subject to any limitation under all applicable laws. If you remit your application moneys viaelectronic transfer, you should fax and send a copy of the remittance advice to Westcomb CapitalPte Ltd at fax number 6227 3936 to arrive by 12.00 noon on 13 December 2004 or such othertime or date as we may, in consultation with the Manager, decide, subject to any limitationunder all applicable laws.

Applications for Reserved Shares

1. Your applications for Reserved Shares MUST be made using the PINK Reserved SharesApplication Forms.

2. The completed PINK Reserved Shares Application Forms and your remittance, in accordance withthe terms and conditions of this Prospectus, for the full amount payable in respect of the number ofReserved Shares applied for, with your name and address written clearly on the reverse side, mustbe enclosed and sealed in an envelope to be provided by you. You must affix adequate Singaporepostage on the envelope (if despatching by ordinary post) and thereafter the sealed envelope mustbe DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at your own risk to LIMASSOCIATES (PTE) LTD, 10 Collyer Quay #19-08 Ocean Building Singapore 049315, to arriveby 12.00 noon on 13 December 2004 or such other time or date as we may, in consultationwith the Manager, decide, subject to any limitation under all applicable laws. Local UrgentMail or Registered Post must NOT be used. No acknowledgement of receipt will be issued forany application or remittance received.

3. ONLY ONE APPLICATION should be enclosed in each envelope.

ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS

The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case of ATMElectronic Applications), the IB website screens (in the case of IB Applications) of the relevantParticipating Banks and the IPO Website (in the case of Internet Placement Applications).

Currently, DBS and the UOB group are the only Participating Banks through which an IB Application canbe made on the respective IB websites of DBS and the UOB group.

Internet Placement Applications may be made through the IPO Website.

For illustration purposes, the procedures for Electronic Applications through ATMs, the IB website of DBSand the IPO Website are set out respectively in the “Steps for Electronic Applications for Offer Sharesthrough ATMs of DBS Bank”, “Steps for Applications for Offer Shares through the IB website of DBSBank” and the “Steps for Applications for Internet Placement Shares through the IPO Website”(collectively the “Steps”) appearing on page F-16 of this Prospectus.

The Steps set out the actions that you must take at an ATM, the IB website of DBS or the IPO Website tocomplete an Electronic Application. Please read carefully the terms of this Prospectus, the Steps and theterms and conditions for Electronic Applications set out below before making an Electronic Application.

Any reference to “you” in the additional terms and conditions for Electronic Applications and the Stepsshall refer to you making an application for:

(a) Offer Shares through an ATM or the IB website of a relevant Participating Bank; and

(b) Internet Placement Shares through the IPO Website.


To make an ATM Electronic Application:-

(a) You must have an existing bank account with and be an ATM cardholder of one of the ParticipatingBanks before you can make an Electronic Application at the ATMs. An ATM card issued by oneParticipating Bank cannot be used to apply for Offer Shares at an ATM belonging to otherParticipating Banks. Upon the completion of your ATM Electronic Application transaction, you willreceive an ATM transaction slip (“Transaction Record”), confirming the details of your ATMElectronic Application. The Transaction Record is for your retention and should not be submittedwith any Application Form.

(b) You must ensure that you enter your own Securities Account number when using the ATM cardissued to you in your own name. If you operate a joint bank account with any of the ParticipatingBanks, you must ensure that you enter your own Securities Account number when using the ATMcard issued to you in your own name. Using your own Securities Account number with an ATMcard which is not issued to you in your own name will render your Electronic Application liable tobe rejected.

To make an IB Application, you must have an existing bank account with and an IB user Identification(“User ID”) and a Personal Identification Number/Password given by the relevant Participating Bank.Upon completion of your IB Application, there will be an on-screen confirmation (“Confirmation Screen”)of the application which you can print out for your record. This printed record of the confirmation screenis for your retention and should not be submitted with any Application Form.

To make an Internet Placement Application, you must be registered as a User of the IPO Website andhave a User Name (“User Name”) and a Password. Upon completion of your Internet PlacementApplication, there will be an on-screen confirmation of the application (“Submission of Application for IPOShares”) and you will receive an electronic mail (email) confirmation to advise you of the status of yourapplication. The email confirmation that your application has been successful, is to accompany yourpayment for the Internet Placement Shares, and should not be submitted with any Application Form.

Further, you must ensure, when making an IB Application or Internet Placement Application that :

(a) you are currently in Singapore at the time of making of such application;

(b) your mailing address for IB with the relevant Participating Bank and the IPO Website Operator is inSingapore;

(c) you are not a US person(1) (as such term is defined in Regulation S under the United StatesSecurities Act of 1933, as amended from time to time),

and you will be asked to declare the above accordingly. Otherwise, your application is liable to berejected.

Note:-

(1) For details, please refer to definition of “US person” on the IB websites or the IPO Website

Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectusincluding but not limited to the terms and conditions appearing below and those set out under the sectionon “TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION” on pages F-1 to F-5 of thisProspectus as well as the Memorandum and Articles of Association of our Company.

1. In connection with your Electronic Application for New Shares, you may be required to confirmstatements to the following effect in the course of activating the Electronic Application:-

(a) that you have received a copy of this Prospectus and has read, understood andagreed to all the terms and conditions of application for New Shares and thisProspectus prior to effecting the Electronic Application and agrees to be bound bythe same;

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(b) that you consent to the disclosure of your name, NRIC/passport number, address,nationality, permanent resident status, CDP Securities Account number, and shareapplication amount (the “Relevant Particulars”) from your account with thatParticipating Bank to the Share Registrar, CDP, SCCS, our Company, the Manager, thePlacement Agent and the Underwriter (the “Relevant Parties”); and

(c) that this is your only application and it is made in your own name and at your ownrisk.

Your application will not be successfully completed and cannot be recorded as a completedtransaction in the ATM unless you press the “Enter” or “OK” or “Confirm” or “Yes” key. By doing so,you shall be treated as signifying your confirmation of each of the above three statements. Inrespect of statement 1(b) above, your confirmation, by pressing the “Enter” or “OK” or “Confirm” or“Yes” key, shall signify and shall be treated as your written permission, given in accordance withthe relevant laws of Singapore including Section 47(2) of the Banking Act (Chapter 19) ofSingapore to the disclosure by that Participating Bank of your Relevant Particulars to the RelevantParties.

2. BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT APPLYINGFOR NEW SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONICAPPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS BENEFICIALOWNER.

3. For an ATM Electronic Application or IB Application, you must have sufficient funds in your bankaccount with your Participating Bank at the time you make your ATM Electronic Application or IBApplication, failing which your ATM Electronic Application or IB Application will not be completed.Any ATM Electronic Application or IB Application which does not conform strictly to theinstructions set out on the screens of the ATM or IB website through which your ATMElectronic Application or IB Application is being made shall be rejected.

An applicant who makes an application for New Shares through the IPO Website will be advisedthrough the IPO Website on the amount payable and the method(s) of payment.

4. You irrevocably agree and undertake to subscribe for and to accept the number of New Sharesapplied for as stated on the Transaction Record or Confirmation Screen. You also irrevocablyagree and undertake to subscribe for and to accept any lesser number of New Shares that may beallotted to you in respect of your Electronic Application. In the event that we decide to allot anylesser number of such New Shares or not to allot any New Shares to you, you agree to acceptsuch decision as final.

If your Electronic Application is successful, your confirmation (by your action of pressing the“Enter” or “OK” or “Confirm” or “Yes” key on the ATM, clicking “Confirm” or “OK” on the IB websitescreen or “Confirm” on the IPO Website screen) of the number of New Shares applied for shallsignify and shall be treated as your acceptance of the number of New Shares that may be allottedto you and your agreement to be bound by the Memorandum and Articles of Association of ourCompany.

5. Our Company will not keep any applications in reserve. Where your Electronic Application isunsuccessful, the full amount of the application moneys will be refunded (without interest or anyshare of revenue or other benefit arising therefrom) to you by being automatically credited to youraccount with your Participating Bank within 24 hours after the close of the Application List. Tradingon a “WHEN ISSUED” basis, if applicable, is expected to commence after such refund hasbeen made.


Where your Electronic Application is rejected or accepted in part only, the full amount or thebalance of the application moneys, as the case may be, will be refunded (without interest or anyshare of revenue or other benefit arising therefrom) to you by being automatically credited to youraccount with your Participating Bank or if you have applied for the Internet Placement Sharesthrough the IPO Website, by ordinary post or such other means as the IPO Website Operator mayagree with you, at your own risk, within 14 Market Days after the close of the Application Listprovided that the remittance in respect of such application which has been presented for paymentor other processes has been honoured and the application moneys received in the designatedshare issue account.

Responsibility for timely refund of application moneys arising from unsuccessful or partiallysuccessful Electronic Applications lies solely with the respective Participating Banks or the IPOWebsite Operator. Therefore, you are strongly advised to consult your Participating Bank or theIPO Website Operator as to the status of your Electronic Application and/or the refund of anymoneys to you from unsuccessful or partially successful Electronic Application, to determine theexact number of New Shares allotted to you before trading the New Shares on the SGX-ST.Neither the SGX-ST, the CDP, the SCCS, the Participating Banks, the IPO Website Operator, ourCompany, the Manager, the Placement Agent or the Underwriter assume any responsibility for anyloss that may be incurred as a result of you having to cover any net sell positions or from buy-inprocedures activated by the SGX-ST.

6. If your ATM Electronic Application is made through the ATMs of DBS (including POSBank), OCBC,or the UOB Group, and is unsuccessful, no notification will be sent by such Participating Bank.

If your IB Application made through the IB website of DBS or UOB Group is unsuccessful, nonotification will be sent by such Participating Bank.

Any Internet Placement Application made through the IPO Website is on a first-come-first-servedbasis, and is subject to availability at the point of application. If your Internet Placement Applicationis unsuccessful, an email notification will be sent to the applicant’s registered address with the IPOWebsite Operator.

If you make ATM Electronic Applications through the ATMs of the following Participating Banks,you may check the results of your ATM Electronic Applications as follows:-

Bank Telephone Available at Operating Hours Service expected from

DBS 1800 339 6666 Internet Banking 24 hours a day Evening of the Bank (for POSB account balloting day

holders)www.dbs.com

1800 111 1111(for DBS account holders)

OCBC 1800 363 3333 ATM ATM / Phone Banking Evening of the24 hours a day balloting day

UOB 1800 222 2121 ATM (Other ATM* / Phone Banking Evening of the Group Transactions – “IPO 24 hours a day balloting day

Enquiry”)Internet Banking Evening of the

www.uobgroup.com * 24 hours a day balloting day

* You may also check the results of your application through UOB Personal Internet Banking, UOB Group ATMs or UOBPhoneBanking Services.

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If you make your Electronic Application through the IPO Website, you can check the result ofyour application through the IPO Website. If your application is successful, you will be notifiedof the results of your application via an email sent to the email address registered with the IPOWebsite Operator.

7. Electronic Applications shall close at 12.00 noon on 13 December 2004 or such other time as ourCompany may, in consultation with the Manager, decide, subject to any limitation under allapplicable laws.

8. You are deemed to have requested and authorised us to:-

(a) register the New Shares allotted to you in the name of CDP for deposit into your SecuritiesAccount;

(b) send the relevant Share certificate(s) to CDP;

(c) (for ATM Electronic Applications or IB Applications) return or refund (without interest or anyshare of revenue earned or other benefit arising therefrom) the application moneys, shouldyour ATM Electronic Applications or IB Applications be rejected, by automatically creditingyour bank account with your Participating Bank with the relevant amount within 24 hoursafter the close of the Application List;

(d) (for ATM Electronic Applications or IB Applications) return or refund (without interest or anyshare of revenue or other benefit arising therefrom) the balance of the application moneys,should your ATM Electronic Applications or IB Applications be accepted in part only, byautomatically crediting your bank account with your Participating Bank with the relevantamount within the shortest possible time after the close of the Application List; and

(e) (for Internet Placement Applications) return or refund (without interest or any share ofrevenue or other benefit arising therefrom) of the full application moneys, should yourInternet Placement Application be rejected, is expected to be effected to you by ordinarypost at your own risk within 14 days after the close of the Application List).

9. You irrevocably agree and acknowledge that your Electronic Application is subject to risks ofelectrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God andother events beyond the control of the Participating Banks or the IPO Website Operator and if, inany such event, our Company, the Manager, the Placement Agent, the Underwriter and/or therelevant Participating Bank or the IPO Website Operator do not receive your Electronic Application,or data relating to your Electronic Application is lost, corrupted or not otherwise accessible,whether wholly or partially for whatever reason, you shall be deemed not to have made anElectronic Application and you shall have no claim whatsoever against our Company, the Manager,the Placement Agent, the Underwriter and/or the relevant Participating Bank or the IPO WebsiteOperator for New Shares applied for or for any compensation, loss or damage.

10. Our Company does not recognise the existence of a trust. Any Electronic Application by a trusteemust be made in your own name and without qualification. Our Company will reject any applicationby any person acting as nominee.

11. All your particulars in the records of your Participating Bank or the IPO Website Operator at thetime you make your Electronic Application shall be deemed to be true and correct and yourParticipating Bank or the IPO Website Operator and the Relevant Parties shall be entitled to relyon the accuracy thereof. If there has been any change in your particulars after making yourElectronic Application, you shall promptly notify your Participating Bank or the IPO WebsiteOperator.


12. You should ensure that your personal particulars as recorded by both CDP, the relevantParticipating Bank or the IPO Website Operator are correct and identical, otherwise, yourElectronic Application is liable to be rejected. You should promptly inform CDP of any changein address, failing which the notification letter on successful allotment will be sent to your addresslast registered with CDP.

13. By making and completing an Electronic Application, you are deemed to have agreed that:-

(a) in consideration of our Company making available the Electronic Application facility, throughthe Participating Banks or the IPO Website Operator acting as agents of our Company, atthe ATMs, the IB websites and the IPO Website:-

(i) your Electronic Application is irrevocable; and

(ii) your Electronic Application, the acceptance of our Company and the contract resultingtherefrom under the Invitation shall be governed by and construed in accordance withthe laws of Singapore and you irrevocably submit to the non-exclusive jurisdiction ofthe Singapore courts;

(b) none of our Company, the Manager, the Placement Agent, the Underwriter, the ParticipatingBanks or the IPO Website Operator shall be liable for any delays, failures or inaccuracies inthe recording, storage or in the transmission or delivery of data relating to your ElectronicApplication to us or CDP due to breakdowns or failure of transmission, delivery orcommunication facilities or any risks referred to in paragraph 9 above or to any causebeyond their respective controls;

(c) in respect of Offer Shares for which your Electronic Application has been successfullycompleted and not rejected, acceptance of your Electronic Application shall be constitutedby written notification by or on behalf of our Company and not otherwise, notwithstandingany payment received by or on our behalf;

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at anytime after acceptance of your application; and

(e) reliance is placed solely on information contained in this Prospectus and that none of ourCompany, the Manager, the Placement Agent and Underwriter nor any other personinvolved in the Invitation shall have any liability for any information not so contained.

STEPS FOR APPLICATIONS FOR OFFER SHARES THROUGH ATMS OF DBS Bank

Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating Bank. Forillustration purposes, the steps for making an ATM Electronic Application through a DBS ATM are shownbelow. Certain words appearing on the screen are in abbreviated form (“A/c”, “amt”, “appln”, “&”, “I/C”,“SGX”, “No.” and “Max” refer to “Account”, “amount”, “application”, “and”, “NRIC”, “SGX-ST”, “Number”and “Maximum”, respectively. Instructions for ATM Electronic Applications on the ATM screens ofParticipating Banks (other than DBS) may differ slightly from those represented below.

Step 1 : Insert your personal DBS Bank or POSB ATM Card.

2 : Enter your Personal Identification Number.

3 : Select “CASHCARD & MORE SERVICES”.

4 : Select “ESA-IPO SHARE/INVESTMENTS”.

5 : Select “ELECTRONIC SECURITY APPLN (IPOS/BONDS/ST-NOTES)” to “SELECT”.

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6 : Read and understand the following statements which will appear on the screen:

THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN, ORACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR PROFILESTATEMENT (AND IF APPLICABLE, A COPY OF THE REPLACEMENT ORSUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT) WHICHCAN BE OBTAINED FROM ANY DBS/POSB BRANCH IN SINGAPORE AND, WHEREAPPLICABLE, THE VARIOUS PARTICIPATING BANKS DURING BANKING HOURS,SUBJECT TO AVAILABILITY.

ANYONE WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES)SHOULD READ THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (ASSUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING HISAPPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET OUT IN THEPROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS SUPPLEMENTED ORREPLACED, IF APPLICABLE). A COPY OF THE PROSPECTUS/DOCUMENT ORPROFILE STATEMENT, AND IF APPLICABLE. A COPY OF THE REPLACEMENT ORSUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEENLODGED WITH AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPOREWHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.

Press the “Enter” key to confirm that you have read and understood.

7 : Press the “ENTER” key to acknowledge:-

You have read, understood and agreed to all terms of the application andProspectus/Document or Profile Statement, and if applicable, the Replacement orSupplementary Prospectus/Document or Profile Statement.

You consent to disclose your name, NRIC/Passport No., address, nationality, CDPSecurities A/c No., CPF Investment A/c No. and securities application amount fromyour Bank Account(s) to share registrars, SGX, SCCS, CDP, CPF and theissuer/vendor(s).

For FIXED and MAX price security application, this is your only application and it ismade in your own name and at your own risk.

The maximum price for each Share is payable in full on application and subject torefund if the final price is lower.

For TENDER securities applications, this is your only application at the selectedtender price and it is made in your own name and at your own risk.

You are not a US Person as referred to in the Prospectus/Document or Profile Statement and if applicable, the Replacement or SupplementaryProspectus/Document or Profile Statement.

8 : Select your nationality.

9 : Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSBaccount (current/savings) from which to debit your application moneys.

10 : Enter the number of securities you wish to apply for using cash.

11 : Enter your own 12-digit CDP Securities Account number. (Note: This step will be omittedautomatically if your CDP Securities Account number has already been stored in DBSBank’s records).


F-15

12 : Check the details of your securities application, your NRIC or passport number and CDPSecurities Account number and number of securities on the screen and press the“ENTER” key to confirm your application.

13 : Remove the Transaction Record for your reference and retention only.

STEPS FOR APPLICATION FOR OFFER SHARES THROUGH THE IB WEBSITE OF DBS Bank

For illustrative purposes, the steps for making an Internet Electric Application through the DBS Bank IBwebsite are shown below. Certain words appearing on the screen are in abbreviated form (“A/C”, “amt”,“&”, “I/C”, “SGX” and “No.” refer to “Account”, “Amount”, “and”, “NRIC”, “SGX-ST”, and “Number”respectively).

Step 1 : Click on to DBS Bank website (www.dbs.com).

2 : Login to Internet Banking.

3 : Enter your User ID and PIN.

4 : Select “Electronic Security Application (ESA)”.

5 : Click “Yes” to proceed and to warrant that you have observed and complied with allapplicable laws and regulations.

6 : Select your country of residence.

7 : Click on “SELECT” and click the “Submit” button.

8 : Click “Confirm” to confirm:-

(a) You have read, understood and agreed to all terms of application and theProspectus or Profile Statement and if applicable, the Supplementary orReplacement Prospectus/Document or Profile Statement.

(b) You consent to disclose your name, I/C or Passport No., address, nationality,CDP Securities Account number, CPF Investment Account number (ifapplicable) and securities application amount from your DBS/POSBankAccount(s) to registrars of securities, SGX, SCCS, CDP, CPF Board andissuer/vendor(s).

(c) You are not a US Person (as such term is defined in Regulation S under theUnited States Securities Act of 1993, as amended).

(d) This application is made in your name and at your own risk.

(e) For FIXED/MAX price securities application, this is your only application. ForTENDER price securities application, this is your only application at theselected tender price.

9 : Fill in details for share application and click “Submit”.

10 : Check the details of your share application, your NRIC or passport number and click “OK”to confirm your application.

11 : Print Confirmation Screen (optional) for your reference & retention only.


F-16

STEPS FOR APPLICATIONS FOR INTERNET PLACEMENT SHARES THROUGH THE IPO WEBSITE

For illustrative purposes, the steps for making an Internet Placement Application through the IPOWebsite is shown below. Certain words appearing on the screen are in abbreviated form (“A/C”, “&”, “I/C”and “No.” refer to “Account”, “NRIC” and “Number” respectively).

Step 1 : Click on to the IPO Website ( www.ePublicOffer.com )

2 : Login to the IPO Website by entering your User Name and Password

3 : Select the counter “SELECT” from the list of current counters offered by clicking “APPLYNOW”.

4 : Click “I Agree” to proceed and to warrant that you have observed and complied with allapplicable laws and regulations and agree to the terms and conditions stated on the IPOWebsite

5 : View and/or download a copy of the Prospectus

6 : Click the check box provided next to the following statements to confirm your declaration:-

(1) I have read, understood & agreed to these terms and conditions, and theProspectus/Document or Profile Statement and if applicable, the Replacementor Supplementary Prospectus/Document or Profile Statement in relation to theNew Shares;

(2) I consent to the disclosure of my name, I/C or passport number, address,nationality, CDP Securities Account number, and securities applicationamount to share registrars of the securities, the SGX-ST, SCCS, CDP, theissuer/vendor(s) of the IPO Shares;

(3) I am currently resident in Singapore;

(4) I am not a US person (as such term is defined in Regulation S under theUnited States Securities Act of 1933, as amended) and not currently residentin the United States;

(5) I understand that the IPO Shares have not been and will not be registeredunder the United Stated securities laws and, subject to certain exceptions,may not be offered or sold within the United States, that there will be nopublic offer of the IPO Shares in the United States, and any failure to complywith this restriction may constitute a violation of United States securitieslaws;

(6) This application for the IPO Shares is made in my own name and at my ownrisk; and

(7) I am not an associate (as defined in the Listing Manual of the SGX-ST) or adirector or substantial shareholder (as defined in the Companies Act (Chapter50) of Singapore) of the Issuer.

7 : Press “Confirm” when you have completed the above steps.

8 : Check details of your application, (including information on your name, your CDP number,your NRIC number, your email address and the amount payable) on the screen and click“CONFIRM” to confirm your application

9 : Print email confirmation and proceed to make payment as described in the emailconfirmation.

30 November 2004

The Board of DirectorsSelect Catering Services Limited36 Senoko CrescentSingapore 758282

Dear Sirs,

We have audited the accompanying consolidated financial statements of Select Catering ServicesLimited (the “Company”) and its subsidiaries (collectively the “Group”), as set out on pages G-2 to G-25,comprising the consolidated balance sheets as at 31 December 2001, 2002 and 2003, and the relatedconsolidated statements of income, changes in equity and cash flows for each of the financial yearsended 31 December 2001, 2002 and 2003 and the notes thereon. These consolidated financialstatements of the Group are the responsibility of the Company’s directors. Our responsibility is to expressan opinion on these consolidated financial statements based on our audit. The consolidated financialstatements for the financial year ended 31 December 2001 were audited by other auditors. The otherauditors’ report dated 10 June 2002 was an unqualified opinion. Chio Lim & Associates were appointedas statutory auditors of the Company from financial year ended 31 December 2002.

In connection to the Company’s application to the Singapore Exchange Securities Trading Limited (“SGX-ST”) for a listing on the SGX-ST Dealing & Automated Quotation System (“SGX-SESDAQ”), we wereengaged as auditors to re-audit the consolidated financial statements for the year ended 31 December2001.

We conducted our audits in accordance with Singapore Standards on Auditing. Those Standards requirethat we plan and perform the audits to obtain reasonable assurance about whether the consolidatedfinancial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the consolidated financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by the directors, aswell as evaluating the overall consolidated financial statements presentation. We believe that our auditsprovide a reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements of the Group are properly drawn upin accordance with Singapore Financial Reporting Standards and so as to present fairly, in all materialrespects, the state of affairs of the Group as at 31 December 2001, 2002 and 2003 and the Group’sconsolidated results of operations, consolidated changes in equity and cash flows for each of thefinancial years ended 31 December 2001, 2002 and 2003.

This report has been prepared in accordance with the Singapore Securities and Futures (Offers ofInvestments) (Shares and Debentures) Regulations 2002 for the purpose of incorporation in theProspectus of the Company dated 30 November 2004 for the invitation of 17,500,000 ordinary shares of$0.045 each in the Company.

Yours faithfully

Chio Lim & AssociatesCertified Public AccountantsSingapore

Paul Lee Seng MengPartner-in-chargeA member of the Institute of Certified Public Accountants of Singapore

G-1

APPENDIX G – INDEPENDENT AUDITORS’ REPORT AND AUDITED CONSOLIDATEDFINANCIAL STATEMENTS OF SELECT CATERING SERVICES LIMITED

SELECT CATERING SERVICES LIMITEDCONSOLIDATED BALANCE SHEETS

As at 31 DecemberNotes 2001 2002 2003

$’000 $’000 $’000(restated)

ASSETSCurrent assets:Cash and cash equivalents 4 1,190 1,176 1,674Trade receivables 5 1,703 1,910 2,120Other receivables and prepayments 6 1,193 898 962Inventories 7 123 124 118

Total current assets 4,209 4,108 4,874

Non-current assets:Property, plant and equipment 8 7,262 6,753 7,315

Total non-current assets 7,262 6,753 7,315

Total assets 11,471 10,861 12,189

LIABILITIES AND EQUITYCurrent liabilities:Short term borrowings 9 1,513 990 883Trade payables and accrued liabilities 10 4,138 4,601 5,304Other payables 11 507 564 249Income tax payable 52 4 118Current portion of interest-bearing borrowings 12 473 432 443Current portion of finance leases 13 335 247 69

Total current liabilities 7,018 6,838 7,066

Non-current liabilities:Deferred tax liabilities 22 217 376 517Interest-bearing borrowings 12 2,550 2,097 2,226Finance leases 13 310 81 –

Total non-current liabilities 3,077 2,554 2,743

Minority interests 47 – –

Capital and reserves:Issued capital 14 1,660 1,660 1,660Reserves (331) (191) 720

Total equity 1,329 1,469 2,380

Total liabilities and equity 11,471 10,861 12,189

NTA per share (cents) 32 1.77 1.95 3.16

The notes on pages G-6 to G-25 form an integral part of these financial statements.

G-2


SELECT CATERING SERVICES LIMITEDCONSOLIDATED INCOME STATEMENTS

Financial year ended 31 DecemberNotes 2001 2002 2003

$’000 $’000 $’000(restated)

Revenue 15 20,408 26,889 33,790

Cost of sales (7,253) (9,677) (12,843)

Gross profit 13,155 17,212 20,947

Other operating income 16 66 22 27

Distribution costs (225) (289) (243)

Administrative expenses (8,192) (10,352) (12,964)

Other operating expenses (4,344) (5,837) (6,255)

Other (charges)/credits 17 (45) (52) 33

Profit from operations 415 704 1,545

Finance costs 18 (308) (231) (169)

Profit before income tax for on-going operation 19 107 473 1,376

Discontinued operation 28 (40) (204) (111)

Profit before income tax 67 269 1,265

Income tax expenses 22 (112) (163) (352)

(Loss)/profit after income tax (45) 106 913

Minority interests 13 47 –

Net (loss)/profit for the year (32) 153 913

EPS (cents) 32 (0.04) 0.20 1.21


G-3


SELECT CATERING SERVICES LIMITEDCONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FINANCIAL YEAR ENDED 31 DECEMBER 2001, 2002 AND 2003

Foreigncurrency

Issued translation Accumulatedcapital reserve (a) profits/(losses) Total$’000 $’000 $’000 $’000

Balance at 1 January 2001 – as previously reported 500 – 575 1,075

Prior year adjustments (Note 23) – – (363) (363)

Restated balance 500 – 212 712

Issue of shares (Note 14) 1,160 – – 1,160

Interim dividends paid (Note 24) – – (501) (501)

Foreign currency translation difference – as previously reported – 1 – 1

Prior year adjustments (Note 23) – (11) – (11)

Restated balance – (10) – (10)

Net profit for the year – as stated – – 13 13

Prior year adjustments (Note 23) – – (45) (45)

Restated balance – – (32) (32)

Balance as at 31 December 2001 1,660 (10) (321) 1,329

Foreign currency translation differences – (13) – (13)

Net profit for the year – – 153 153

Balance as at 31 December 2002 1,660 (23) (168) 1,469

Foreign currency translation differences – (2) – (2)

Net profit for the year – – 913 913

Balance as at 31 December 2003 1,660 (25) 745 2,380

Note:-

(a) Movements not recognised in the income statement.


G-4


SELECT CATERING SERVICES LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS

Financial year ended 31 December2001 2002 2003$’000 $’000 $’000

Cash flows from operating activities:Profit before income tax 67 269 1,265

Adjustments for:

Depreciation expense 916 969 1,064

Interest expense 308 231 169

Interest income (13) (16) (8)

Loss on disposal of subsidiary (Note 27) – – 111

Loss on disposal of plant and equipment 29 18 6

Operating profit before working capital changes 1,307 1,471 2,607

Cash with maturity over 3 months (112) (12) (123)

Trade receivables (553) (207) (211)

Other receivables and prepayments (95) 295 (146)

Inventories (52) (1) 6

Trade payables and accrued liabilities 1,000 463 723

Other payables (277) 57 (304)

Net cash generated from operations 1,218 2,066 2,552

Interest paid (308) (231) (169)

Interest received 13 16 8

Income tax paid (123) (52) (97)

Dividends paid (Note 24) (501) – –

Net cash generated from operating activities 299 1,799 2,294

Cash flows from investing activities:Acquisition of subsidiaries net of cash acquired (Note 26) 163 – –

Disposal of plant and equipment 30 38 6

Purchase of plant and equipment (1,494) (521) (1,700)

Net cash used in investing activities (1,301) (483) (1,694)

Cash flows from financing activities:Increase/(decrease) in borrowings 209 (494) 140

Decrease in finance leases (245) (317) (259)

Minority contribution to share capital 60 – –

Proceeds from issuing shares (Note 14) 500 – –

Net cash generated from/(used in) financing activities 524 (811) (119)

Net effect of exchange rate changes inconsolidating subsidiaries (10) (8) 1

Net (decrease)/increase in cash and cash equivalents (488) 497 482

Cash and cash equivalents at beginning of year (362) (850) (353)

Cash and cash equivalents at end of year (Note 25) (850) (353) 129


G-5


1. GENERAL

The Company is incorporated in Singapore. The consolidated financial statements are expressedin Singapore dollars. They are drawn up in accordance with the Singapore Financial ReportingStandards.

The principal activities of the Company are to carry on the business as caterers of food andbeverage. The principal activities of the subsidiaries are disclosed below. There have been nosignificant changes in the nature of these activities during each of the years ended 31 December2001, 2002 and 2003.

The registered office address is: 36 Senoko Crescent, Singapore 758282. The Company isdomiciled in Singapore.

Details of subsidiaries at the balance sheet dates are as follows:

Name of subsidiaries, country of Effective incorporation, place of operations Costs in books percentage of and principal activities of Company equity held by Group

2001 2002 2003 2001 2002 2003$’000 $’000 $’000 % % %

Stamford Catering Services Pte Ltd (c)

SingaporeOperator of food court stalls, catering services and staff cafeterias 250 250 250 100 100 100

Select Food Management Pte Ltd (c)

SingaporeOperator of food court stalls 660 660 660 100 100 100

Select Eastern Investment Pte Ltd (d) (g)

SingaporeInvestment in fast food restaurants and carry on business as caterers 140 140 – 70 70 70

Lerk Thai Restaurant Pte Ltd (f)

SingaporeOperators of restaurants and food court stalls – – 200 – – 100

1,050 1,050 1,110

Held by subsidiaries:

Select Food Management Sdn. Bhd. (b) (e)

MalaysiaOperator of food court stalls 47 47 47 100 100 100

Zhangzhou Select Eastern Fast Food Co.Ltd (a) (f)

People’s Republic of ChinaFast food caterers 379 379 – 70 70 –

(a) Held by Select Eastern Investment Pte Ltd. The subsidiary was disposed in 2003.(b) Held by Select Food Management Pte Ltd.(c) Audited by Chio Lim and Associates.(d) Audited by Y.H. Yip & Co., Singapore, a firm other than member firms of Howarth International of which Chio Lim &

Associates, Singapore is a member.(e) Audited by Horwath Wong & Co., Malaysia, a member firm of Horwath International of which Chio Lim & Associates,

Singapore is a member.(f) Not audited as it is immaterial. Consolidated based on unaudited management accounts.(g) The subsidiary was stuck off on 17 September 2004.

G-6


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING CONVENTION – The financial statements are prepared in accordance with thehistorical cost convention.

BASIS OF PRESENTATION – The consolidation accounting method is used for the consolidatedfinancial statements which include the financial statements made up to 31 December each year ofthe Company and of those companies in which it holds, directly or indirectly through subsidiaries,over 50 percent of the shares and voting rights. All significant intercompany balances andtransactions have been eliminated on consolidation. The results of the investees acquired ordisposed of during the financial year are consolidated from the respective dates of acquisition orup to the dates of disposal. On disposal the attributable amount of unamortised goodwill isincluded in the determination of the gain or loss on disposal.

GOODWILL – Goodwill or negative goodwill arising on acquisition is based on the purchasemethod. Goodwill arising on consolidation represents the excess of the cost of acquisition over theacquirer’s interest in the fair value of the identifiable assets and liabilities of the subsidiary,acquired as at the date of acquisition. Goodwill is carried at cost less any accumulatedamortisation and any accumulated impairment losses. It is amortised on the straight-line methodover its useful life to reflect the best estimate of the period during which future economic benefitsare expected to flow to the acquirer.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated asassets and liabilities of the foreign entity and translated at the closing rate.

MINORITY INTERESTS – Minority interests are stated at the appropriate proportion of the post-acquisition values of the identifiable assets and liabilities of the subsidiaries.

REVENUE RECOGNITION – Revenue from sale of goods is recognised when significant risks andrewards of ownership are transferred to the buyer and the amount of revenue and the costs of thetransaction (including future costs) can be measured reliably. Revenue from rendering of servicesthat are of short duration is recognised when the services are completed. Interest revenue isrecognised on a time-proportion basis using the effective interest rate.

INVENTORIES – Inventories are measured at the lower of cost (first in first out method) and netrealisable value.

PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are carried at cost lessany accumulated depreciation and any accumulated impairment losses. Depreciation is providedon gross carrying amounts in equal annual instalments over the estimated useful lives of theassets. The annual rates of depreciation are as follows:

Leasehold properties – over the remaining lease termsPlant and equipment – 10% to 20%

Depreciation is not provided for construction-in-progress.

Fully depreciated assets still in use are retained in the financial statements.

The useful life of an item of property, plant and equipment is reviewed periodically and, ifexpectations are significantly different from previous estimates, the depreciation charge for thecurrent and future periods are adjusted.

G-7


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

NON-CURRENT ASSETS – Non-current assets, such as property, plant and equipment arereviewed for impairment whenever events or changes in circumstances indicate that the net bookvalue of these assets may not be recoverable. Impairment losses are determined based on thedifference between fair value, which would generally approximate estimated future cash flowsdiscounted at the Group’s cost of capital or where appropriate the sale value, and net book value.

FOREIGN CURRENCY TRANSACTIONS – The functional currency is the Singapore dollar as itreflects the economic substance of the underlying events and circumstances of the entity.Transactions in foreign currencies are recorded in Singapore dollars at the rates ruling at the datesof the transactions. At each balance sheet date, recorded monetary balances and balances carriedat fair value that are denominated in foreign currencies are reported at the rates ruling at thebalance sheet date. All realised and unrealised exchange adjustment gains and losses are dealtwith in the income statement.

FOREIGN CURRENCY FINANCIAL STATEMENTS – In translating the financial statements of aforeign entity for incorporation in the consolidated financial statements, the assets and liabilities ofself-sustaining operations denominated in currencies other than Singapore dollars are translated atyear end rates of exchange and the income and expense items are translated at average rates ofexchange for the year.The resulting translation adjustments are accumulated in a separatecomponent of shareholders’ equity until the disposal of the entity. Other currency gains or lossesare included in the income statement. The financial statements of foreign operations are restatedin terms of the functional currency unit current at the balance sheet date before they are translatedinto the presentation currency.

INCOME TAX – The income taxes are accounted using the asset and liability method whichrequires the recognition of taxes payable or refundable for the current year and deferred taxliabilities and assets for the future tax consequence of events that have been recognised in thefinancial statement or tax returns. The measurements of current and deferred tax liabilities andassets are based on provisions of the enacted tax laws; the effects of future changes in tax laws orrates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by theamount of any tax benefits that, based on available evidence, are not expected to be realised. Adeferred tax liability is recognised for all taxable temporary differences, unless the deferred taxliability arises from (a) goodwill for which amortisation is not deductible for tax purposes; or (b) theinitial recognition of an asset or liability in a transaction which (i) is not a business combination;and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

RETIREMENT BENEFITS COSTS – Contributions to defined contribution retirement benefit plansare recorded as an expense as they fall due. Contributions made to government managedretirement benefit plans such as the Central Provident Fund which specifies the employer’sobligations are dealt with as defined contribution retirement benefit plans.

ACCOUNTING ESTIMATES – The preparation of financial statements in conformity with generallyaccepted accounting principles requires the directors to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.

LIABILITIES AND PROVISIONS – A liability and provision is recognised when there is a presentobligation (legal or constructive) as a result of a past event, it is probable that an outflow ofresources embodying economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. It is measured at the amount payable.

G-8



CASH – Cash for the cash flow statement includes cash and cash equivalents less bankoverdrafts.

FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying values of cash, accounts receivable,other current financial assets, accounts payable and other current financial liabilities approximatetheir fair market values due to the short-term maturity of these instruments. The fair value of long-term debt was not determined because the book values approximate the fair value. Those financialassets that have a fixed maturity are measured at amortised cost using the effective interest ratemethod. Those that do not have a fixed maturity are measured at cost. All financial assets aresubject to review for impairment.

RISK MANAGEMENT POLICIES FOR FINANCIAL INSTRUMENTS

CREDIT RISK ON FINANCIAL ASSETS – Financial assets that potentially subject the Group toconcentrations of credit risk consist principally of cash, cash equivalent and trade and otheraccounts receivable. The directors believe that the financial risks associated with these financialinstruments are minimal. The Group places its cash and cash equivalents with high credit qualityinstitutions. The Group performs ongoing credit evaluation of its customers’ financial condition andmaintains a provision for doubtful accounts receivable based upon the expected collectibility of allreceivables. There is no significant concentration of credit risk, as the exposure is spread over alarge number of counterparties and customers.

OTHER RISKS ON FINANCIAL INSTRUMENTS – The Group monitors its interest, foreignexchange risks, and changes in fair values from time to time and any gains and losses areincluded in the income statement. The Group is exposed to interest rate price risk for financialinstruments with a fixed interest rate and to interest rate or cash flow risk for financial instrumentswith a floating interest rate that is reset as market rates change. The Group is also exposed tochanges in foreign exchange rates and liquidity of businesses. The Group does not utilise forwardcontracts or other arrangements to minimise these risks.

3. RELATED PARTY TRANSACTIONS

Related parties are entities with common director or indirect shareholders or management. Partiesare considered to be related if one party has the ability to control the other party or exercisesignificant influence over the other party in making financial and operating decisions.

The balances are without fixed repayment terms and interest unless stated otherwise.

G-9


4. CASH AND CASH EQUIVALENTS

2001 2002 2003$’000 $’000 $’000

Not restricted in use 663 637 1,012Restricted (a) 527 539 662

1,190 1,176 1,674

(a) This is for fixed deposits held by bankers to cover the bank facilities granted to the Group.

5. TRADE RECEIVABLES

2001 2002 2003$’000 $’000 $’000

Outside parties 1,703 1,910 2,120

The average credit period taken by customers is about 22 days, 25 days and 22 days for 2001,2002 and 2003 respectively. The directors consider that the carrying amount of trade receivablesapproximates to their fair value. Short-duration receivables with no stated interest rate are normallymeasured at original invoice amount unless the effect of imputing interest would be significant.

6. OTHER RECEIVABLES AND PREPAYMENTS

2001 2002 2003$’000 $’000 $’000

Directors (Note 3) 201 – –Outside parties 141 90 138Deposits to secure services 587 577 739Prepayments 264 231 85

1,193 898 962

7. INVENTORIES

2001 2002 2003$’000 $’000 $’000

Consumables and supplies at cost 123 124 118

G-10


8. PROPERTY, PLANT AND EQUIPMENT

Leasehold Plant &properties equipment Total

$’000 $’000 $’000

Cost:At 31 December 2000 2,695 4,225 6,920Acquisition of subsidiary 353 637 990Additions – 1,494 1,494Disposals – (81) (81)

At 31 December 2001 3,048 6,275 9,323Foreign exchange adjustments – (5) (5)Additions – 521 521Disposals – (66) (66)

At 31 December 2002 3,048 6,725 9,773Foreign exchange adjustments – (3) (3)Additions 909 791 1,700Disposal of subsidiary – (75) (75)Disposals – (25) (25)

At 31 December 2003 3,957 7,413 11,370

Accumulated depreciation:At 31 December 2000 154 781 935Acquisition of subsidiary 68 164 232Additions 177 739 916Disposals – (22) (22)

At 31 December 2001 399 1,662 2,061Additions 170 799 969Disposals – (10) (10)

At 31 December 2002 569 2,451 3,020Foreign exchange adjustments – (1) (1)Additions 200 864 1,064Disposal of subsidiary – (15) (15)Disposals – (13) (13)

At 31 December 2003 769 3,286 4,055

Net book value:At 31 December 2001 2,649 4,613 7,262

At 31 December 2002 2,479 4,274 6,753

At 31 December 2003 3,188 4,127 7,315

Certain plant and equipment are under finance lease agreements (Note 13) and mortgaged tobanks (Note 9).

A leasehold property is held in trust by a Director.

G-11


9. SHORT-TERM BORROWINGS

2001 2002 2003$’000 $’000 $’000

Bank overdrafts (secured) 1,513 990 883

The bank overdrafts and other banking facilities of the Group are secured by:-

(a) pledge of fixed deposits (Note 4);

(b) legal mortgage of the leasehold properties (Note 8);

(c) joint personal guarantees by certain Directors and ex-Directors; and

(d) corporate guarantees by certain subsidiaries.

The overdraft interest rates for the Group varied from 5.5% to 6.125%, 5.5% to 6.125%, and5.25% to 5.95% per annum for 2001, 2002 and 2003 respectively.

10. TRADE PAYABLES AND ACCRUED LIABILITIES

2001 2002 2003$’000 $’000 $’000

Outside parties 2,471 3,054 3,753Accrued liabilities 1,667 1,547 1,551

4,138 4,601 5,304

The average credit period taken by the Group to settle payables is about 91 days, 104 days and 97days for 2001, 2002 and 2003 respectively.

11. OTHER PAYABLES

2001 2002 2003$’000 $’000 $’000

Outside parties 265 149 169Shareholders (Note 3) 30 62 –Directors (Note 3) 212 353 80

507 564 249

G-12


12. INTEREST-BEARING BORROWINGS

2001 2002 2003$’000 $’000 $’000

Bank loans (secured) (Note 9) 3,023 2,529 2,669

The borrowings are repayable as follows:Amounts due within a year:Bank loans (secured) (473) (432) (443)

Total current portion (473) (432) (443)

Non-current portion 2,550 2,097 2,226

The non-current portion is repayable as follows:Due within 2 to 5 years 1,206 1,001 1,306After 5 years 1,344 1,096 920

Non-current portion 2,550 2,097 2,226

The Group’s bank loans repayment schedules are as follows:

1. A $597,985 loan facility is repayable in 96 instalments commencing from March 2000;

2. A $150,000 loan facility is repayable in 96 instalments commencing from September 2000;

3. A $70,000 loan facility is repayable in 36 instalments commencing from July 2001;

4. A $1,786,000 loan facility is repayable in 120 instalments commencing from January 2002;

5. A $611,650 loan facility is repayable in 120 instalments commencing from December 2003;

6. A $226,000 machinery loan facility is repayable in 36 instalments commencing fromNovember 2001;


8. A $120,000 loan facility is repayable in 24 instalments commencing from July 2001, wasfully repaid in 2003; and

9. A $160,000 loan facility is repayable in 24 instalments commencing from October 2001, wasfully repaid in 2003.

The interest rates for the bank loans varied from 4.75% to 6.5%, 3.5% to 6.5%, 3.25% to 6.5% perannum for 2001, 2002 and 2003 respectively.

G-13


13. OBLIGATIONS UNDER FINANCE LEASES

Minimum Finance Presentpayments charges Value

$’000 $’000 $’000

2003

Minimum lease payments payable:

Due within one year 71 (2) 69Due within 2 to 5 years – – –

Total 71 (2) 69

Net book value of plant and equipment under finance leases 880

2002


Due within one year 264 (17) 247Due within 2 to 5 years 83 (2) 81

Total 347 (19) 328

Net book value of plant and equipment under finance leases 1,029

2001


Due within one year 367 (32) 335Due within 2 to 5 years 328 (18) 310

Total 695 (50) 645

Net book value of plant and equipment under finance leases 1,177

It is the Group’s policy to lease certain of its plant and equipment under finance leases. Theaverage lease terms are 3 to 5 years. The rates of interest for finance lease are varied from 2.9%to 6.25% per year in 2001, 2002 and 2003. Interest rates are fixed at the contract date. All leasesare on a fixed repayment basis and no arrangements have been entered into for contingent rentalpayments. All lease obligations are denominated in S$. The fair value of the lease obligationsapproximates to their carrying amount. The obligations under finance lease are secured by thelessor’s charge over the leased assets and covered by personal guarantees by certain of theDirectors.

G-14


14. ISSUED CAPITAL

2001 2002 2003$’000 $’000 $’000

Authorised:2,000,000 ordinary shares of $1 each 2,000 2,000 2,000

Issued and fully paid:1,659,605 ordinary shares of $1 each 1,660 1,660 1,660

In 2001, the authorised share capital of the Company was increased from $500,000 to $2,000,000by the creation of 1,500,000 shares of $1 each. In 2001, 500,000 shares of $1 each were issuedfor cash. The proceeds were used as working capital. In addition, 659,605 ordinary shares of $1each were issued at par to acquire a subsidiary (Note 26).

15. REVENUE

2001 2002 2003$’000 $’000 $’000

Sales of food and beverage 20,408 26,889 33,790

16. OTHER OPERATING INCOME

2001 2002 2003$’000 $’000 $’000

Interest income from non-related companies 10 16 8Interest income from a Director 3 – –Others 53 6 19

66 22 27

17. OTHER (CHARGES)/CREDITS

2001 2002 2003$’000 $’000 $’000

Bad debts written off – trade (outside parties) (16) – (6)– non trade (outside parties) – (34) –

Foreign exchange adjustment loss – – (2)Loss on disposal of plant and equipment (29) (18) (6)Waiver by minority shareholders of subsidiary – non trade – – 61Rental deposits forfeited – – (14)

(45) (52) 33

18. FINANCE COSTS

2001 2002 2003$’000 $’000 $’000

Interest expense to non-related companies 308 231 169

G-15


19. PROFIT BEFORE INCOME TAX FOR ON-GOING OPERATION

In addition to the charges and credits disclosed elsewhere in the notes, this item includes thefollowing charges/(credits):

2001 2002 2003$’000 $’000 $’000

Auditors’ remuneration:– Auditors of Company 18 23 23– Other auditors 2 2 2

Changes in inventories (increase) (52) (1) 6Purchases 7,305 9,678 12,837Directors’ fees:– Directors of Company 224 205 –

Directors’ remuneration:– Directors of Company 198 237 254

20. STAFF COSTS

2001 2002 2003$’000 $’000 $’000

Staff costs excluding directors 5,858 7,725 10,163Contributions to defined contribution plan 277 594 833

Total staff costs 6,135 8,319 10,996

21. NUMBER OF EMPLOYEES

2001 2002 2003

Number of employees at end of year excluding directors 378 568 690

22. INCOME TAX

2001 2002 2003$’000 $’000 $’000

Current (4) 4 211Deferred 116 159 141

Total income tax expense 112 163 352

The income tax expense varied from the amount of income tax expense determined by applyingthe Singapore income tax rate of 24.5%, 22% and 22% to profit before income tax for 2001, 2002and 2003 respectively as a result of the following differences:

2001 2002 2003$’000 $’000 $’000

Income tax expense at the statutory rate 16 59 278Non-allowable items 97 148 81Under/(over) provision in prior year 12 (44) 80Tax exemptions (13) – (35)Change in tax rate – – (52)

Total income tax expenses 112 163 352

G-16


22. INCOME TAX (Cont’d)

The net deferred tax amount in the balance sheet is as follows:

2001 2002 2003$’000 $’000 $’000

Deferred tax liabilities:Excess of net book value of plant and equipment (350) (409) (517)

Total deferred tax liabilities (350) (409) (517)

Deferred tax assets:Capital allowances carryforwards 133 33 –

Total deferred tax assets 133 33 –

Net deferred tax liabilities (217) (376) (517)

23. PRIOR YEAR ADJUSTMENTS

The comparative financial statements for the Group for 2001 have been restated for the correctionof errors listed below:-

(i) Accumulated profits brought forward as at 31 December 2000 have been decreased by$363,000 due to the following:

(a) Amortisation of premium paid for the rental agreement of $129,000 in respect of prioryears.

(b) Equipment of $234,000 that is fully written off.

(ii) Net profit for the year and foreign currency translation reserve for the Group for 2001 havebeen decreased by $11,000 and $45,000 respectively. This is due to the consolidation of asubsidiary that was not previously consolidated.

Items (a) and (b) above were classified as intangible assets amounting to $363,000 in the balancesheet as at 31 December 2001.

24. DIVIDENDS

In 2001, an interim dividend of $1.326 less income tax of 24.5% per share was paid toshareholders.

25. CASH AND CASH EQUIVALENTS IN THE CONSOLIDATED CASH FLOW STATEMENTS

2001 2002 2003$’000 $’000 $’000

Cash and bank balances (Note 4) 663 637 1,012Bank overdrafts (secured) (Note 9) (1,513) (990) (883)

Cash and cash equivalents at end of year (850) (353) 129

NON CASH TRANSACTIONS – In 2001, 659,605 ordinary shares of $1 each were issued at parto acquire a subsidiary (Note 14).

G-17


26. ACQUISITION OF SUBSIDIARY

The group acquired 100% of Select Food Management Pte Ltd on 1 January 2001. Thetransaction was accounted for by the purchase method of accounting.

The fair values of net assets acquired are as follows:

2001$’000

Cash 164Trade receivables 398Other receivables and prepaid expenses 806Property, plant and equipment 758Trade payables (1,068)Income tax payable (87)Other payables (98)Term loan (212)

Consideration 661Less: cash taken over (164)Less: issue of ordinary share (Note 14) (660)

Net cash inflow on acquisition (163)

The contributions from the subsidiary for the period between the date of acquisition on 1 January2001 and the balance sheet date as at 31 December 2001 were as follows:

2001$’000

Revenue 5,718Profit before income tax 147

27. DISPOSAL OF SUBSIDIARY

The Group disposed its subsidiary, Zhangzhou Select Eastern Fast Food Co. Ltd which carried outthe Group’s fast food business in China in February 2003.

The net assets of the subsidiary at the date of disposal was as follows:

2003$’000

Other receivables and prepayments 82Property, plant and equipment 60Trade payables (20)Other payable (11)

111Loss on disposal (111)

Total consideration –

Net cash outflow on disposal:Cash consideration –

Net cash outflow –

G-18


27. DISPOSAL OF SUBSIDIARY (Cont’d)

The effect of the disposal of subsidiary on the financial position is shown above. The results at thereporting date and on the corresponding amounts for the preceding period is disclosed in Note 28.

28. DISCONTINUED OPERATION

The Group disposed its subsidiary, Zhangzhou Select Eastern Fast Food Co. Ltd, which carriedout the Group’s fast food business in China in February 2003. The disposal is consistent with theGroup’s long-term strategy to focus its activities as caterers of food and beverage and operator ofstalls at food courts, and to divest unrelated activities.

The results of the fast food business which have been included in the consolidated financialstatements, were as follows:

2001 2002 2003$’000 $’000 $’000

Revenue 20 103 –Cost of goods sold (18) (64) –Distribution costs (29) – –Administrative expenses (13) (196) –Operating expenses – (47) –Other charges – – (111)

Loss before income tax (40) (204) (111)Income tax expense – – –

Loss from ordinary activities after income tax (40) (204) (111)

The subsidiary contributed $140,796, $137,215, and $740 to the Group’s net operating cashoutflows, paid $60,942, $20,758 and Nil in respect of investing activities and contributed $269,983,$102,304 and Nil in respect of financing activities respectively.

29. CONTINGENT LIABILITIES

The Company has guaranteed its subsidiaries’ bank loans (Notes 9 and 12). The balanceoutstanding of these loans amounted to $569,770, $329,821 and $133,651 as at balance sheetdate respectively.

In 2003, the subsidiaries have guaranteed the Company’s bank loans (Notes 9 and 12). Thebalance outstanding of these loans amounted to $603,962 as at balance sheet date.

The Group has an unsecured bank letter of guarantee of $40,000, $40,000 and $69,640 as at 31December 2001, 2002 and 2003 respectively.

The Group has insurance or performance guarantees for certain of its food court stalls or kitchenpremises amounting to $77,589, $95,589 and $68,589 as at 31 December 2001, 2002 and 2003respectively. These insurance or performance guarantees are counter indemnified by certain of theDirectors and certain related parties.

G-19


30. CAPITAL EXPENDITURE COMMITMENTS

2001 2002 2003$’000 $’000 $’000

Estimated amounts committed for future capital expenditure but not provided for in the financial statements 883 883 –

31. OPERATING LEASE COMMITMENTS

At the balance sheet date the commitment in respect of operating leases with a term of more thanone year were as follows:

2001 2002 2003$’000 $’000 $’000

Within one year 2,434 2,621 2,980Within 2 to 5 years 1,924 1,376 2,069After 5 years 1,105 1,057 1,001

Rental expense for the year 2,272 3,087 3,157

Operating lease payments represent rentals payable by the Group for its leasehold property, staffcafeterias, canteens and food court stalls. The leases from Jurong Town Council are ranged from22 to 30 years from January 1999 and November 2003 respectively. The lease rental terms for thecanteens and food stalls are negotiated for an average term of three years and certain rental aresubject to an escalation clause. Such increases are not included in the above amounts. In addition,certain of the leases are covered by personal guarantees of certain of the Directors.

32. EARNINGS PER SHARE AND NET TANGIBLE ASSETS PER SHARE

Earnings per share for the financial years ended 31 December 2001, 2002 and 2003 have beencalculated by dividing the Group’s net profit for the year and on the basis that at the end of eachfinancial year, the issued share capital of the Group comprised of 75,213,400 shares of $0.045each which represents the pre-Invitation share capital of the Company.

Net tangible assets per share as at 31 December 2001, 2002 and 2003 have been calculated bydividing the Group’s net tangible assets and on the basis that as at these dates, the issued sharecapital of the Group comprised of 75,213,400 shares of $0.045 each which represents the pre-Invitation share capital of the Company.

G-20


33. SEGMENTAL INFORMATION

For management purposes, the Group’s operating businesses are organised according to theirnature of activities. These are grouped into the following three market segments and form the basison which the Group reports its primary segment:-

(a) Institutional Catering (“IC”) segment – This segment provides food management services tothe corporate customers. They operate and manage staff cafeterias, on a contract basis, atthe premises of its corporate customers from various industries;

(b) Food Catering (“FC”) segment – This segment provides events catering services forcorporate, community or private functions as well as daily meal delivery services toworkplaces and family units; and

(c) Food Retail (“FR”) – This segment comprises of operation of dedicated food court stalls andpublic cafeterias specialising in international and local fare. It includes the operation of itsfirst restaurant in Singapore specialising in Thai cuisine in March 2004.

Segment results includes items directly attributable to a segment as well as those that can beallocated on a reasonable basis. Where costs cannot be directly attributable to a market segment,they were allocated based on revenue to each market segment.

Segment assets consist principally of trade receivables that are directly attributable to a segment.

Unallocated items comprise cash and cash equivalents, other receivables and prepayments,inventories, property, plant and equipment, short-term borrowings, trade payables and accruedliabilities, other payables, income tax payable, interest-bearing borrowings, finance leases, deferredtax liabilities, minority interests, other operating income, other (charges)/credits, and finance costsand discontinued operations.

G-21


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33. SEGMENTAL INFORMATION (Cont’d)

Geographical segments

The following table provides an analysis of the Group revenue by geographical market which isanalysed based on the country of domicile of the customers:-

Sales revenue

2001 2002 2003$’000 $’000 $’000

Singapore 20,016 26,401 33,256Malaysia 392 488 534

20,408 26,889 33,790

The following is an analysis of the carrying amount of segment assets and additions to property,plant and equipment analysed by the geographical area in which the assets are located:-

Carrying amount of segment assets

2001 2002 2003$’000 $’000 $’000

Singapore 11,114 10,551 11,980Malaysia 123 163 209China 234 147 –

11,471 10,861 12,189

Additions to property, plant and equipment

2001 2002 2003$’000 $’000 $’000

Singapore 1,389 485 1,673Malaysia 44 15 27China 61 21 –

1,494 521 1,700

34. SUBSEQUENT EVENTS

The following significant events took place subsequent to the year ended 31 December 2003:

(a) the Company incorporated a new wholly-owned subsidiary, Select (F&B) Investment Pte.Ltd, with an issued share capital of $2 on 17 March 2004. The issued share capital wasincreased to $100,000 on 2 July 2004;

(b) the Company incorporated a new wholly-owned subsidiary, Select F&B (Suzhou) Co., Ltd.,with a registered share capital of US$3,500,000 on 2 April 2004. As of the date of thisreport, US$600,000 has been paid up. The balance of the registered capital is payable by 2April 2007;

G-23


34. SUBSEQUENT EVENTS (Cont’d)

(c) the Company incorporated a new wholly-owned subsidiary, SCS Food Services Pte Ltd, withan issued share capital of $2 on 2 July 2004. The issued share capital was increased to$100,000 on 23 September 2004.

(d) At an extraordinary general meeting held on 30 June 2004, the shareholders of theCompany approved the allotment and issue of an aggregate of 184,400 new ordinary sharesof $1.00 each in the capital of the Company for an aggregate consideration of $1,725,000.

(e) At an extraordinary general meeting held on 28 October 2004, the shareholders of theCompany approved, inter alia, the following:-

(1) the increase in the authorised share capital from $2,000,000 divided into 2,000,000ordinary shares of $1.00 each to $10,350,000 divided into 10,350,000 ordinary sharesof $1.00 each;

(2) a bonus issue of 1,540,598 new ordinary shares of $1.00 each, credited as fully paidupon the capitalisation of $1,540,598 out of the share premium account of theCompany (the “Bonus Issue”);

(3) the consolidation of nine ordinary shares of $1.00 each in the authorised and issuedand paid-up share capital of the Company into one ordinary share of $9.00 each(“Share Consolidation”);

(4) the sub-division of each ordinary share of $9.00 each in the capital of the Companyinto 200 ordinary shares of $0.045 each such that the authorised share capital is$10,350,000 divided into 230,000,000 shares of $0.045 each of which 75,213,400ordinary shares of $0.045 each are issued and fully paid-up (“Share Split”);

(5) the conversion of the Company into a public limited company and the consequentialchange of the name to Select Catering Services Limited;

(6) the adoption of a new set of Articles of the Company;

(7) the issue of 17,500,000 New Shares which is the subject of the Invitation on the basisthat the New Shares, when allotted, issued and fully paid-up, will rank pari passu in allrespects with the existing Shares;

(8) the listing and quotation of the issued ordinary shares of the Company (including the17,500,000 New Shares to be issued pursuant to Resolution (7) above) on the OfficialList of SGX-SESDAQ;

G-24



(9) the authorisation of the Directors, pursuant to Section 161 of the Companies Act, toallot and issue, whether by way of rights, bonus or otherwise (including but not limitedto the allotment and issue of Shares at any time, whether during the continuance ofsuch authority or thereafter, pursuant to offers, agreements or options made orgranted by the Company while this authority remains in force), or otherwise dispose ofShares (including making and granting offers, agreements and options which would orwhich might require Shares to be issued, allotted or otherwise disposed of, whetherduring the continuance of such authority or thereafter) at any time to such persons(whether or not such persons are Shareholders), upon such terms and conditions andfor such purposes as the Directors may in their absolute discretion deem fit providedthat:-

(i) the aggregate number of Shares to be issued pursuant to this resolution shallnot exceed 50% of the issued share capital of the Company; and

(ii) where Shareholders with registered addresses in Singapore are not given theopportunity to participate in the same on a pro rata basis, then the Shares tobe issued under such circumstances shall not exceed 20% of the issued sharecapital of the Company,

and for the purpose of this resolution and pursuant to Rules 806(3) and 806(4) of theListing Manual, the percentage of the issued share capital shall be based on theissued share capital at the time this resolution is passed, calculated on the post-Invitation share capital of the Company and taking into account the issue of newShares arising from the conversion of or exercise of any convertible securities andemployee share options on issue at the time this resolution is passed, which wereissued pursuant to any previous shareholders’ approval, and adjusting for anysubsequent consolidation or sub-division of the Shares. Unless revoked or varied bythe Company in general meeting, such authority to continue in full force until theconclusion of the next general meeting of the Company or the date by which the nextannual general meeting of the Company is required by law to be held, whichever isearlier; and

(10) the adoption of the Select Employee Share Option Scheme and that the Directors ofthe Company be authorised to allot and issue Option Shares upon the exercise ofOptions granted under the Scheme.

35. CHANGES AND ADOPTION OF ACCOUNTING STANDARDS

The accounting standards were previously known as Statements of Accounting Standards inSingapore. These have been replaced by the Singapore Financial Reporting Standards from 1January 2003 which were issued following legislative changes to make compliance with accountingstandards a legal requirement. The new standards did not require any material modification of thepresentation in the financial statements.

36. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the board of directors on 30November 2004.

G-25


30 November 2004

The Board of DirectorsSelect Catering Services Limited36 Senoko CrescentSingapore 758282

Dear Sirs

We have reviewed the accompanying unaudited consolidated balance sheet of Select Catering ServicesLimited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) as at 30 June 2004,and the income statement and cash flows for the six-month period ended 30 June 2004 as set out onpages H-2 to H-24. These unaudited consolidated financial statements are the responsibility of theCompany’s directors. Our responsibility is to issue a report on these unaudited consolidated financialstatements based on our review.

We conducted our review in accordance with Singapore Standard on Auditing applicable to reviewengagements. This Standard requires that we plan and perform the review to obtain moderate assuranceas to whether the unaudited consolidated financial statements are free of material misstatement. Areview is limited primarily to inquiries of Company personnel and analytical procedures applied tofinancial data and thus provides less assurance than an audit. We have not performed an audit and,accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the accompanyingunaudited consolidated financial statements are not presented fairly, in all material respects, inaccordance with the Singapore Financial Reporting Standards.

The comparative figures for the corresponding six-month period ended 30 June 2003 were extractedfrom the unaudited management financial information and we have not carried out a review of thosefinancial statements. The unaudited consolidated financial information is the responsibility of the Directorsof the Company.

This report has been prepared in accordance with the Singapore Securities and Futures (Offers ofInvestments) (Shares and Debentures) Regulations 2002 for the purpose of incorporation in theProspectus of the Company dated 30 November 2004 for the invitation of 17,500,000 ordinary shares of$0.045 each in the Company.

Yours faithfully

Chio Lim & AssociatesCertified Public AccountantsSingapore

Paul Lee Seng MengPartner-in-chargeA member of the Institute of Certified Public Accountants of Singapore

H-1

APPENDIX H – INDEPENDENT AUDITORS’ REVIEW REPORT AND UNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS OF

SELECT CATERING SERVICES LIMITED

H-2



SELECT CATERING SERVICES LIMITEDCONSOLIDATED BALANCE SHEETS

As at As at31 December 30 June

Notes 2003 2004$’000 $’000

(Audited) (Unaudited)

ASSETSCurrent assets:Cash and cash equivalents 4 1,674 2,214Trade receivables 5 2,120 2,753Other receivables and prepayments 6 962 1,023Inventories 7 118 277

Total current assets 4,874 6,267

Non-current assets:Property, plant and equipment 8 7,315 8,032

Total non-current assets 7,315 8,032

Total assets 12,189 14,299

LIABILITIES AND EQUITYCurrent liabilities:Short term borrowings 9 883 93Trade payables and accrued liabilities 10 5,304 5,464Other payables 11 249 157Income tax payable 118 205Current portion of interest-bearing borrowings 12 443 446Current portion of finance leases 13 69 37

Total current liabilities 7,066 6,402

Non-current liabilities:Deferred tax liabilities 22 517 517Interest-bearing borrowings 12 2,226 2,130Finance leases 13 – 64

Total non-current liabilities 2,743 2,711

Capital and reserves:Issued capital 14 1,660 1,844Reserves 720 3,342

Total equity 2,380 5,186

Total liabilities and equity 12,189 14,299

NTA per share (cents) 29 3.16 6.90

The notes on pages H-6 to H-24 form an integral part of these financial statements.

H-3



SELECT CATERING SERVICES LIMITEDUNAUDITED CONSOLIDATED INCOME STATEMENTS

Six-month periodended 30 June

2003 2004Notes $’000 $’000

(Unaudited) (Unaudited)

Revenue 15 15,328 20,179

Cost of sales (5,798) (7,533)

Gross profit 9,530 12,646

Other operating income 16 5 71

Distribution costs (123) (175)

Administrative expenses (6,199) (7,414)

Other operating expenses (2,952) (3,690)

Other credits/(charges) 17 5 (16)

Profit from operations 266 1,422

Finance costs 18 (97) (62)

Profit before income tax for on-going operation 19 169 1,360

Discontinued operation 25 (111) –

Profit before income tax 58 1,360

Income tax expenses 22 (49) (280)

Net profit for the period 9 1,080

EPS (cents) 29 0.01 1.44


H-4



SELECT CATERING SERVICES LIMITEDUNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Issued Share Translation AccumulatedCapital Premium (b) Reserve (a) Profits/(Losses) Total

$ $ $ $ $

Balance as at 31 December 2002 1,660 – (23) (168) 1,469

Foreign currency translation differences – – (4) – (4)

Net profit for the period – – – 9 9

Balance as at 30 June 2003 1,660 – (27) (159) 1,474

Balance as at 31 December 2003 1,660 – (25) 745 2,380

Issue of share capital (Note 14) 184 1,541 – – 1,725

Foreign currency translation differences – – 1 – 1

Net profit for the period – – – 1,080 1,080

Balance as at 30 June 2004 1,844 1,541 (24) 1,825 5,186

Note:

(a) Movements not recognised in the income statement.

(b) Not available for distribution.


H-5



SELECT CATERING SERVICES LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS

Six-month periodended 30 June

2003 2004$’000 $’000

(Unaudited) (Unaudited)

Cash flows from operating activities:Profit before income tax 58 1,360Adjustments for:

Depreciation expense 492 559Interest expense 97 62Interest income (1) (1)Loss on disposal of subsidiary (Note 24) 111 –Loss on disposal of plant and equipment 6 17

Operating profit before working capital changes 763 1,997Cash with maturity over 3 months (19) –Trade receivables 588 (633)Other receivables and prepayments (163) (61)Inventories 29 (159)Trade payables and accrued liabilities (221) 160Other payables (53) (92)

Net cash generated from operations 924 1,212Interest paid (97) (62)Interest received 1 1Income tax paid (64) (193)

Net cash generated from operating activities 764 958

Cash flows from investing activities:Disposal of plant and equipment – 70Purchase of plant and equipment (155) (1,258)

Net cash used in investing activities (155) (1,188)

Cash flows from financing activities:Decrease in borrowings (255) (93)Decrease in finance leases (153) (73)Proceeds from issuing shares – 1,725

Net cash (used in)/ generated from financing activities (408) 1,559

Net effect of exchange rate changes in consolidating subsidiaries (4) 1

Net increase in cash and cash equivalents 197 1,330Cash and cash equivalents at beginning of period (353) 129

Cash and cash equivalents at end of period (Note 23) (156) 1,459


1. GENERAL

The Company is incorporated in Singapore. The consolidated financial statements are expressedin Singapore dollars. They are drawn up in accordance with the Singapore Financial ReportingStandards.

The principal activities of the Company are to carry on the business as caterers of food andbeverage. The principal activities of the subsidiaries are disclosed below. There have been nosignificant changes in the nature of these activities during each of the periods ended 30 June 2003and 2004.

The registered office address is: 36 Senoko Crescent, Singapore 758282. The Company isdomiciled in Singapore.

Details of subsidiaries at the balance sheet dates are as follows

Name of subsidiaries, country of incorporation, Costs in books Effective percentageplace of operations and principal activities of company of equity held by group

2003 2004 2003 2004$’000 $’000 % %

Stamford Catering Services Pte Ltd SingaporeOperator of food court stalls, catering services and staff cafeterias 250 250 100 100

Select Food Management Pte Ltd SingaporeOperator of food court stalls 660 660 100 100

Lerk Thai Restaurant Pte Ltd SingaporeOperators of restaurants and food court stalls 200 200 100 100

Select (F&B) Investment Pte Ltd (c)

SingaporeInvestment holding – – – 100

1,110 1,110

Held by subsidiaries:

Select Food Management Sdn Bhd (a) 47 47 100 100MalaysiaOperator of food court stalls

Select F&B (Suzhou) Co Ltd (b) (d) – 514 – 100People’s Republic of ChinaProcessing of fast food, catering services and staffcafeterias

(a) Held by Select Food Management Pte Ltd.(b) Held by Select (F&B) Investment Pte Ltd.(c) Incorporated on 17 March 2004 with an issued and paid up capital of $2. The issued and paid up capital was

increased to $100,000 on 2 July 2004.(d) Incorporated on 2 April 2004 with a registered capital of US$3,500,000. As at the date of this report, US$600,000

has been paid up. The balance amount of the registered capital is payable by 2 April 2007.

H-6



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING CONVENTION – The financial statements are prepared in accordance with thehistorical cost convention.

BASIS OF PRESENTATION – The consolidation accounting method is used for the consolidatedfinancial statements which include the financial statements made up to 31 December each year ofthe Company and of those companies in which it holds, directly or indirectly through subsidiaries,over 50 percent of the shares and voting rights. All significant intercompany balances andtransactions have been eliminated on consolidation. The results of the investees acquired ordisposed of during the financial year are consolidated from the respective dates of acquisition orup to the dates of disposal. On disposal the attributable amount of unamortised goodwill isincluded in the determination of the gain or loss on disposal.

GOODWILL – Goodwill or negative goodwill arising on acquisition is based on the purchasemethod. Goodwill arising on consolidation represents the excess of the cost of acquisition over theacquirer’s interest in the fair value of the identifiable assets and liabilities of the subsidiary,acquired as at the date of acquisition. Goodwill is carried at cost less any accumulatedamortisation and any accumulated impairment losses. It is amortised on the straight-line methodover its useful life to reflect the best estimate of the period during which future economic benefitsare expected to flow to the acquirer.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated asassets and liabilities of the foreign entity and translated at the closing rate.

REVENUE RECOGNITION – Revenue from sale of goods is recognised when significant risks andrewards of ownership are transferred to the buyer and the amount of revenue and the costs of thetransaction (including future costs) can be measured reliably. Revenue from rendering of servicesthat are of short duration is recognised when the services are completed. Interest revenue isrecognised on a time-proportion basis using the effective interest rate.

INVENTORIES – Inventories are measured at the lower of cost (first in first out method) and netrealisable value.

PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are carried at cost lessany accumulated depreciation and any accumulated impairment losses. Depreciation is providedon gross carrying amounts in equal annual instalments over the estimated useful lives of theassets. The annual rates of depreciation are as follows:

Leasehold properties – over the remaining lease termsPlant and equipment – 10% to 20%

Depreciation is not provided for construction-in-progress.

Fully depreciated assets still in use are retained in the financial statements.

The useful life of an item of property, plant and equipment is reviewed periodically and, ifexpectations are significantly different from previous estimates, the depreciation charge for thecurrent and future periods are adjusted.

NON-CURRENT ASSETS – Non-current assets, such as property, plant and equipment arereviewed for impairment whenever events or changes in circumstances indicate that the net bookvalue of these assets may not be recoverable. Impairment losses are determined based on thedifference between fair value, which would generally approximate estimated future cash flowsdiscounted at the Group’s cost of capital or where appropriate the sale value, and net book value.

H-7




FOREIGN CURRENCY TRANSACTIONS – The functional currency is the Singapore dollar as itreflects the economic substance of the underlying events and circumstances of the entity.Transactions in foreign currencies are recorded in Singapore dollars at the rates ruling at the datesof the transactions. At each balance sheet date, recorded monetary balances and balances carriedat fair value that are denominated in foreign currencies are reported at the rates ruling at thebalance sheet date. All realised and unrealised exchange adjustment gains and losses are dealtwith in the income statement.

FOREIGN CURRENCY FINANCIAL STATEMENTS – In translating the financial statements of aforeign entity for incorporation in the consolidated financial statements, the assets and liabilities ofself-sustaining operations denominated in currencies other than Singapore dollars are translated atyear end rates of exchange and the income and expense items are translated at average rates ofexchange for the year. The resulting translation adjustments are accumulated in a separatecomponent of shareholders’ equity until the disposal of the entity. Other currency gains or lossesare included in the income statement. The financial statements of foreign operations are restatedin terms of the functional currency unit current at the balance sheet date before they are translatedinto the presentation currency.

INCOME TAX – The income taxes are accounted using the asset and liability method whichrequires the recognition of taxes payable or refundable for the current year and deferred taxliabilities and assets for the future tax consequence of events that have been recognised in thefinancial statement or tax returns. The measurements of current and deferred tax liabilities andassets are based on provisions of the enacted tax laws; the effects of future changes in tax laws orrates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by theamount of any tax benefits that, based on available evidence, are not expected to be realised. Adeferred tax liability is recognised for all taxable temporary differences, unless the deferred taxliability arises from (a) goodwill for which amortisation is not deductible for tax purposes; or (b) theinitial recognition of an asset or liability in a transaction which (i) is not a business combination;and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

RETIREMENT BENEFITS COSTS – Contributions to defined contribution retirement benefit plansare recorded as an expense as they fall due. Contributions made to government managedretirement benefit plans such as the Central Provident Fund which specifies the employer’sobligations are dealt with as defined contribution retirement benefit plans.

LEASES – A finance lease is recognised as an asset and as liability in the balance sheet atamounts equal at the inception of the lease to the fair value of the leased assets or, if lower, at thepresent value of the lease payments based on the interest rate implicit in the lease. The excess ofthe lease payments over the recorded lease obligations are treated as finance charges which areallocated to each lease term so as to produce a constant rate of charge on the remaining balanceof the obligations. The assets are depreciated as owned depreciable assets. Leases where thelessor effectively retains substantially all the risks and benefits of ownership of the leased assetsare classified as operating leases. For operating leases, lease payments are recognised as anexpense in the income statement on a straight line basis unless another systematic basis isrepresentative of the time pattern of the user’s benefit, even if the payments are not on that basis.

ACCOUNTING ESTIMATES – The preparation of financial statements in conformity with generallyaccepted accounting principles requires the directors to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates.

H-8




LIABILITIES AND PROVISIONS – A liability and provision is recognised when there is a presentobligation (legal or constructive) as a result of a past event, it is probable that an outflow ofresources embodying economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. It is measured at the amount payable.

CASH – Cash for the cash flow statement includes cash and cash equivalents less bankoverdrafts.

FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying values of cash, accounts receivable,other current financial assets, accounts payable and other current financial liabilities approximatetheir fair market values due to the short-term maturity of these instruments. The fair value of long-term debt was not determined because the book values approximate the fair value. Those financialassets that have a fixed maturity are measured at amortised cost using the effective interest ratemethod. Those that do not have a fixed maturity are measured at cost. All financial assets aresubject to review for impairment.

RISK MANAGEMENT POLICIES FOR FINANCIAL INSTRUMENTS

CREDIT RISK ON FINANCIAL ASSETS – Financial assets that potentially subject the Group toconcentrations of credit risk consist principally of cash, cash equivalent and trade and otheraccounts receivable. The directors believe that the financial risks associated with these financialinstruments are minimal. The Group places its cash and cash equivalents with high credit qualityinstitutions. The Group performs ongoing credit evaluation of its customers’ financial condition andmaintains a provision for doubtful accounts receivable based upon the expected collectibility of allreceivables. There is no significant concentration of credit risk, as the exposure is spread over alarge number of counterparties and customers.

OTHER RISKS ON FINANCIAL INSTRUMENTS – The Group monitors its interest, foreignexchange risks, and changes in fair values from time to time and any gains and losses areincluded in the income statement. The Group is exposed to interest rate price risk for financialinstruments with a fixed interest rate and to interest rate or cash flow risk for financial instrumentswith a floating interest rate that is reset as market rates change. The Group is also exposed tochanges in foreign exchange rates and liquidity of businesses. The Group does not utilise forwardcontracts or other arrangements to minimise these risks.

3. RELATED PARTY TRANSACTIONS

Related parties are entities with common director or indirect shareholders or management. Partiesare considered to be related if one party has the ability to control the other party or exercisesignificant influence over the other party in making financial and operating decisions.

The balances are without fixed repayment terms and interest unless stated otherwise.

H-9



4. CASH AND CASH EQUIVALENTS

31 December 30 June2003 2004$’000 $’000

Not restricted in use 1,012 1,552Restricted (a) 662 662

1,674 2,214

(a) This is for fixed deposits held by bankers to cover the bank facilities granted to the Group.

5. TRADE RECEIVABLES

31 December 30 June2003 2004$’000 $’000

Outside parties 2,120 2,753

The average credit periods taken by customers are about 22 days and 22 days for 2003 and 2004respectively. The directors consider that the carrying amount of trade receivables approximates totheir fair value. Short-duration receivables with no stated interest rate are normally measured atoriginal invoice amount unless the effect of imputing interest would be significant.

6. OTHER RECEIVABLES AND PREPAYMENTS

31 December 30 June2003 2004$’000 $’000

Outside parties 138 118Deposits to secure services 739 744Prepayments 85 101Deferred expenditure relating to IPO exercise – 60

962 1,023

7. INVENTORIES

31 December 30 June2003 2004$’000 $’000

Consumables and supplies at cost 118 277

H-10



8. PROPERTY, PLANT AND EQUIPMENT

Leasehold Plant & Constructionproperties Equipment in-progress Total

$’000 $’000 $’000 $’000

Cost:At 31 December 2002 3,048 6,725 – 9,773Foreign exchange adjustments – (3) – (3)Additions 909 791 – 1,700Disposal of subsidiary – (75) – (75)Disposals – (25) – (25)

At 31 December 2003 3,957 7,413 – 11,370Additions – 575 788 1,363Disposals – (290) – (290)

At 30 June 2004 3,957 7,698 788 12,443

Accumulated depreciation:At 31 December 2002 569 2,451 – 3,020Foreign exchange adjustments – (1) – (1)Additions 200 864 – 1,064Disposal of subsidiary – (15) – (15)Disposals – (13) – (13)

At 31 December 2003 769 3,286 – 4,055Additions 101 458 – 559Disposals – (203) – (203)

At 30 June 2004 870 3,541 – 4,411

Net book value:At 31 December 2003 3,188 4,127 – 7,315

At 30 June 2004 3,087 4,157 788 8,032

Certain plant and equipment are under finance lease arrangements (Note 13) and mortgaged tobanks (Note 9).

A leasehold property is held in trust by a Director.

Construction-in-progress relates to renovation and fabrication work-in-progress for a food cateringfacility in Suzhou, PRC.

H-11



9. SHORT-TERM BORROWINGS

31 December 30 June2003 2004$’000 $’000

Bank overdrafts (secured) 883 93

The bank overdrafts and other banking facilities of the Group are secured by: -

(a) pledge of fixed deposits (Note 4);

(b) legal mortgage of the leasehold properties (Note 8);

(c) joint personal guarantees by certain Directors and ex-Directors; and

(d) corporate guarantees by certain subsidiaries.

The overdraft interest rates for the Group varied from 5.25% to 5.95% per annum and 5.95% perannum for 2003 and 2004 respectively.

10. TRADE PAYABLES AND ACCRUED LIABILITIES

31 December 30 June2003 2004$’000 $’000

Outside parties 3,753 3,878Accrued liabilities 1,551 1,586

5,304 5,464

The average credit period taken by the Group to settle payables is about 97 days and 92 days for2003 and 2004 respectively.

11. OTHER PAYABLES

31 December 30 June2003 2004$’000 $’000

Outside parties 169 157Directors (Note 3) 80 –

249 157

H-12



12. INTEREST-BEARING BORROWINGS

31 December 30 June2003 2004$’000 $’000

Bank loans (secured) (Note 9) 2,669 2,576

The borrowings are repayable as follows:Amounts due within a year:Bank loans (secured) (443) (446)

Total current portion (443) (446)

Non-current portion 2,226 2,130

The non-current portion is repayable as follows:Due within 2 to 5 years 1,306 1,289After 5 years 920 841

Non-current portion 2,226 2,130

The Group’s bank loans repayment schedules are as follows:

1. A $597,985 loan facility is repayable in 96 instalments commencing from March 2000;


3. A $70,000 loan facility is repayable in 36 instalments commencing from July 2001, was fullyrepaid in 2004;

4. A $1,786,000 loan facility is repayable in 120 instalments commencing from January 2002;

5. A $611,650 loan facility is repayable in 120 instalments commencing from December 2003;

6. A $100,000 loan facility is repayable in 24 instalments commencing from May 2004;

7. A $300,000 non-revolving credit loan facility is repayable in 24 instalments commencing fromJune 2004;

8. A $226,000 machinery loan facility is repayable in 36 instalments commencing fromNovember 2001;

9. A $151,098 loan facility is repayable in 50 instalments commencing from September 2001,was fully repaid in 2004;

10. A $120,000 loan facility is repayable in 24 instalments commencing from July 2001, wasfully repaid in 2003; and

11. A $160,000 loan facility is repayable in 24 instalments commencing from October 2001, wasfully repaid in 2003.

The interest rates for the bank loans varied from 3.25% to 6.5% per annum and 3.25% to 7.25%per annum for 2003 and 2004 respectively.

H-13



13. OBLIGATIONS UNDER FINANCE LEASES

Minimum Finance Presentpayments charges Value

$’000 $’000 $’000

31 December 2003Minimum lease payments payable:Due within one year 71 (2) 69Due within 2 to 5 years – – –

Total 71 (2) 69


30 June 2004Minimum lease payments payable:Due within one year 41 (4) 37Due within 2 to 5 years 70 (6) 64

Total 111 (10) 101


It is the Group’s policy to lease certain of its plant and equipment under finance leases. Theaverage lease terms are 3 to 5 years. The rates of interest for finance lease are varied from 2.9%to 3.1% per annum and 2.9% to 6.25% per annum for 2003 and 2004 respectively. Interest ratesare fixed at the contract date. All leases are on a fixed repayment basis and no arrangementshave been entered into for contingent rental payments. All lease obligations are denominated inS$. The fair value of the lease obligations approximates to their carrying amount. The obligationsunder finance lease are secured by the lessor’s charge over the leased assets and covered bypersonal guarantee by certain of the Directors.

14. ISSUED CAPITAL

31 December 30 June2003 2004$’000 $’000

Authorised:2,000,000 ordinary shares of $1 each 2,000 2,000

Issued and fully paid:1,844,005 (2003 : 1,659,605) ordinary shares of $1 each 1,660 1,844

On 30 June 2004, 184,400 ordinary shares of $1 each were issued for cash at a premium of$8.3546 each. The proceeds were used as working capital and for purchasing plant andequipment respectively.

H-14



15. REVENUE

Six-month period Ended 30 June

2003 2004$’000 $’000

Sales of food and beverage 15,328 20,179

16. OTHER OPERATING INCOME


2003 2004$’000 $’000

Interest income from non-related companies 1 1Others 4 70

5 71

17. OTHER CREDITS/(CHARGES)


2003 2004$’000 $’000

Foreign exchange adjustment gain 11 1Loss on disposal of plant and equipment (6) (17)

5 (16)

18. FINANCE COSTS


2003 2004$’000 $’000

Interest expense to non-related companies 97 62

H-15



19. PROFIT BEFORE INCOME TAX FOR ON-GOING OPERATION

In addition to the charges and credits disclosed elsewhere in the notes, this item includes thefollowing charges/(credits):


2003 2004$’000 $’000

Auditors’ remuneration:- Auditors of Company 12 8- Other auditors 1 –

Changes in inventories (increase) 29 (159)Purchases 5,769 7,692Directors’ fees:- Directors of Company – –

Directors’ remuneration:- Directors of Company 114 117

20. STAFF COSTS


2003 2004$’000 $’000

Staff costs excluding directors 4,936 6,085Contributions to defined contribution plan 402 410

Total staff costs 5,338 6,495

21. NUMBER OF EMPLOYEES


2003 2004

Number of employees at end of year excluding directors 610 738

22. INCOME TAX


2003 2004$’000 $’000

Current 49 280Deferred – –

Total income tax expense 49 280

H-16



22. INCOME TAX (Cont’d)

The income tax expense varied from the amount of income tax expense determined by applyingthe Singapore income tax rate of 22% and 20% to profit before income tax for 2003 and 2004respectively as a result of the following differences:


2003 2004$’000 $’000

Income tax expense at the statutory rate 13 272Non-allowable items 71 40Tax exemptions (35) (32)

Total income tax expenses 49 280

The net deferred tax amount in the balance sheet is as follows:

31 December 30 June2003 2004$’000 $’000

Deferred tax liabilities:Excess of net book value of plant and equipment (517) (517)

Total deferred tax liabilities (517) (517)

23. CASH AND CASH EQUIVALENTS IN THE CONSOLIDATED CASH FLOW STATEMENTS

As at 30 June2003 2004$’000 $’000

Cash and bank balances 899 1,552Bank overdrafts (secured) (Note 9) (1,055) (93)

Cash and cash equivalents at end of period ( 156) 1,459

NON CASH TRANSACTIONS - Additions to plant and equipment in 2004 amounting to $105,000were financed by new finance leases.

H-17



24. DISPOSAL OF SUBSIDIARY

The Group disposed its subsidiary, Zhangzhou Select Eastern Fast Food Co Ltd which carried outthe Group’s fast food business in China in February 2003.

The net assets of the subsidiary at the date of disposal was as follows:

2003$’000

Other receivables and prepayments 82Property, plant and equipment 60Trade payables (20)Other payable (11)

111Loss on disposal (111)

Total consideration –

Net cash outflow on disposal:Cash consideration –

Net cash outflow –

The effect of the disposal of subsidiary on the financial position is shown above. The results at thereporting date and on the corresponding amounts for the preceding period are disclosed in Note25.

25. DISCONTINUED OPERATION

The Group disposed its subsidiary, Zhangzhou Select Eastern Fast Food Co Ltd, which carried outthe Group’s fast food business in China in February 2003. The disposal is consistent with thegroup’s long-term strategy to focus its activities as caterers of food and beverage and operator ofstalls at food courts, and to divest unrelated activities.

The results of the fast food business which have been included in the consolidated financialstatements, were as follows:

30 June 30 June2003 2004$’000 $’000

Revenue – –Cost of goods sold – –Distribution costs – –Administrative expenses – –Operating expenses – –Other charges (111) –

Loss before income tax (111) –Income tax expense – –

Loss from ordinary activities after income tax (111) –

The subsidiary contributed $740 to the Group’s net operating cash outflows, paid nil in respect ofinvesting activities and contributed nil in respect of financing activities.

H-18



26. CONTINGENT LIABILITIES

The Company has guaranteed its subsidiaries’ bank loans (Notes 9 and 12). The balanceoutstanding of these loans amounted to $133,651 and $80,793 as at 31 December 2003 and 30June 2004 respectively.

The subsidiaries have guaranteed the Company’s bank loans (Notes 9 and 12). The balanceoutstanding of these loans amounted to $603,962 and $759,769 as at 31 December 2003 and 30June 2004 respectively.

The Group has an unsecured bank letter of guarantee of $69,640 and $266,640 as at 31December 2003 and 30 June 2004 respectively.

The Group has insurance or performance guarantees for certain of its food court stalls or kitchenpremises amounting to $68,589 and nil as at 31 December 2003 and 30 June 2004 respectively.These insurance or performance guarantees are counter indemnified by certain of the Directorsand certain related parties.

27. CAPITAL EXPENDITURE COMMITMENTS

31 December 30 June2003 2004$’000 $’000

Estimated amounts committed for future capital expenditure but not provided for in the financial statements – 2,015

28. OPERATING LEASE COMMITMENTS

At the balance sheet date the commitment in respect of operating leases with a term of more thanone year were as follows:

31 December 30 June2003 2004$’000 $’000

Within one year 2,980 3,123Within 2 to 5 years 2,069 5,069After 5 years 1,001 1,699

Rental expense for the year/period 3,157 1,996

Operating lease payments represent rentals payable by the Group for its leasehold property, staffcafeterias, restaurant, food court stalls, The Expo F&B Hub, and food catering facility in Suzhou,PRC. The leases for the leasehold property from Jurong Town Council ranged from 22 to 30 yearsfrom January 1999 and November 2003 respectively. The lease rental terms for the canteens andfood stalls are negotiated for an average term of three years and certain rental are subject to anescalation clause. Such increases are not included in the above amounts. In addition, certain ofthe leases are covered by personal guarantees of certain of the Directors.

H-19



29. EARNINGS PER SHARE AND NET TANGIBLE ASSETS PER SHARE

Earnings per share for the financial periods ended 30 June 2003 and 2004 have been calculatedby dividing the Group’s net profit for the period and on the basis that at the end of each financialperiod, the issued share capital of the Group comprised of 75,213,400 shares of $0.045 eachwhich represents the pre-Invitation share capital of the Company.

Net tangible assets per share as at 31 December 2003 and 30 June 2004 have been calculated bydividing the Group’s net tangible assets and on the basis that as at these dates, the issued sharecapital of the Group comprised of 75,213,400 shares of $0.045 each which represents the pre-Invitation share capital of the Company.

30. SEGMENTAL INFORMATION

For management purposes, the Group’s operating businesses are organised according to theirnature of activities. These are grouped into the following three market segments and form the basison which the Group reports its primary segment:-

a) Institutional Catering (“IC”) segment – This segment provides food management services tothe corporate customers. They operate and manage staff cafeterias, on a contract basis, atthe premises of its corporate customers from various industries;

b) Food Catering (“FC”) segment – This segment, provides events catering services forcorporate, community or private functions as well as daily meal delivery services toworkplaces and family units; and

c) Food Retail (“FR”) – This segment comprises of operation of dedicated food court stalls andpublic cafeterias specialising in international and local fare. It includes the operation of itsfirst restaurant in Singapore specialising in Thai cuisine in March 2004.

Segment results includes items directly attributable to a segment as well as those that can beallocated on a reasonable basis. Where costs cannot be directly attributable to a market segment,they were allocated based on revenue to each market segment.

Segment assets consist principally of trade receivables that are directly attributable to a segment.

Unallocated items comprise cash and cash equivalents, other receivables and prepayments,inventories, property, plant and equipment, short-term borrowings, trade payables and accruedliabilities, other payables, income tax payable, interest-bearing borrowings, finance leases, deferredtax liabilities, minority interests, other operating income, other (charges)/credits, and finance costsand discontinued operations.

H-20



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Geographical segments

The following table provides an analysis of the Group revenue by geographical market which isanalysed based on the country of domicile of the customers:-


2003 2004$’000 $’000

Singapore 15,092 19,802Malaysia 236 377

15,328 20,179

The following is an analysis of the carrying amount of segment assets and additions to property,plant and equipment analysed by the geographical area in which the assets are located:-

Carrying amount ofSegment assets

31 December 30 June2003 2004$’000 $’000

Singapore 11,980 13,230Malaysia 209 220China – 849

12,189 14,299

Additions to property,Plant and equipment

31 December 30 June2003 2004$’000 $’000

Singapore 1,673 564Malaysia 27 11China – 788

1,700 1,363

H-22



H-23



31. SUBSEQUENT EVENTS

The following significant events took place subsequent to the period ended 30 June 2004:

(a) the Company incorporated a new subsidiary, SCS Food Services Pte Ltd, with an issuedshare capital of $2 on 2 July 2004. The issued share capital was increased to $100,000 on23 September 2004.

(b) At an extraordinary general meeting held on 28 October 2004, the Shareholders of theCompany approved, inter alia, the following:-

(1) the increase in the authorised share capital from $2,000,000 divided into 2,000,000ordinary shares of $1.00 each to $10,350,000 divided into 10,350,000 ordinary sharesof $1.00 each;

(2) a bonus issue of 1,540,598 new ordinary shares of $1.00 each, credited as fully paidupon the capitalisation of $1,540,598 out of the share premium account of theCompany (the “Bonus Issue”);

(3) the consolidation of nine ordinary shares of $1.00 each in the authorised and issuedand paid-up share capital of the Company into one ordinary share of $9.00 each(“Share Consolidation”);

(4) the sub-division of each ordinary share of $9.00 each in the capital of the Companyinto 200 ordinary shares of $0.045 each such that the authorised share capital is$10,350,000 divided into 230,000,000 shares of $0.045 each of which 75,213,400ordinary shares of $0.045 each are issued and fully paid-up (“Share Split”);

(5) the conversion of the Company into a public limited company and the consequentialchange of the name to Select Catering Services Limited;

(6) the adoption of a new set of Articles of the Company;

(7) the issue of 17,500,000 New Shares which is the subject of the Invitation on the basisthat the New Shares, when allotted, issued and fully paid-up, will rank pari passu in allrespects with the existing Shares;

(8) the listing and quotation of the issued ordinary shares of the Company (including the17,500,000 New Shares to be issued pursuant to Resolution (7) above) on the OfficialList of SGX-SESDAQ;


(9) the authorisation of the Directors, pursuant to Section 161 of the Companies Act, toallot and issue, whether by way of rights, bonus or otherwise (including but not limitedto the allotment and issue of Shares at any time, whether during the continuance ofsuch authority or thereafter, pursuant to offers, agreements or options made orgranted by our Company while this authority remains in force), or otherwise disposeof Shares (including making and granting offers, agreements and options which wouldor which might require Shares to be issued, allotted or otherwise disposed of, whetherduring the continuance of such authority or thereafter) at any time to such persons(whether or not such persons are Shareholders), upon such terms and conditions andfor such purposes as the Directors may in their absolute discretion deem fit providedthat:-

(i) the aggregate number of Shares to be issued pursuant to this resolution shallnot exceed 50% of the issued share capital of the Company; and

(ii) where Shareholders with registered addresses in Singapore are not given theopportunity to participate in the same on a pro rata basis, then the Shares tobe issued under such circumstances shall not exceed 20% of the issued sharecapital of the Company,

and for the purpose of this resolution and pursuant to Rules 806(3) and 806(4) of theListing Manual, the percentage of the issued share capital shall be based on theissued share capital at the time this resolution is passed, calculated on the post-Invitation share capital of the Company and taking into account the issue of newShares arising from the conversion of or exercise of any convertible securities andemployee share options on issue at the time this resolution is passed, which wereissued pursuant to any previous shareholders’ approval, and adjusting for anysubsequent consolidation or sub-division of the Shares. Unless revoked or varied bythe Company in general meeting, such authority to continue in full force until theconclusion of the next general meeting of the Company or the date by which the nextannual general meeting of the Company is required by law to be held, whichever isearlier; and

(10) the adoption of the Select Employee Share Option Scheme and that the Directors ofthe Company be authorised to allot and issue Option Shares upon the exercise ofOptions granted under the Scheme.

32. COMPARATIVE FIGURES

The financial information for the corresponding six-month period ended 30 June 2003 wereincluded for comparative purposes. These financial information were extracted from the unauditedmanagement financial statements and have not been reviewed or audited.

33. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the board of directors on 30November 2004.

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