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					    NORTH                                                                                                       ASIA
   AMERICA                                    EUROPE
                                                                  Georgia                             Kazakhstan
                                                                   Armenia                                            Mongolia
                                                                          Uzbekistan                  Kyrgystan
                                                     Azerbaijan
                                                                                    Turkmenistan                          South Korea
                                                        Kuwait                                 Tajikistan

                                          Egypt       Bahrain                                               Nepal
                                                         Qatar
                                                                                         Bangladesh                 Myanmar       Hong Kong
                                                                         JEL DUBAI
                                AFRICA                                                 India                             Laos
                                                                 Yemen                                                     Vietnam
                                                  Djibouti
        Panama                                                                                                            Cambodia
                                Nigeria                                  Maldives
                                                                                          Sri Lanka                              Brunei
                                   Cameroon
                  SOUTH
                                                                                                                          JEL SINGAPORE
                 AMERICA                   Congo
                                                             Kenya
                                                                                                                           Indonesia
                                                    Tanzania
                       Brazil       Angola
                                         Malawi
                                     Mozambique                   Madagascar
                                Botswana




                                           JEL SOUTH AFRICA




JEL’S INTERNATIONAL NETWORKS
Singapore office and warehouse




                           who we are
JEL Corporation is a leading distributor of fast-moving
consumer goods, consumer electronic, IT, photographic and
telecommunication products, with distribution network
spanning many emerging markets in Africa, Asia, Middle East and
the Americas. Headquartered in Singapore, JEL Corporation
distributes a wide range of well-established brands such as
Gillette, Oral-B, Duracell, Parker, Waterman, Papermate, Titan,
Chupa Chups, Sanyo, Casio, IBM, Acer, Nikon, Konica Minolta
and Motorola.                                                                          South Africa office and warehouse


Founded in 1984, the Group reached an important milestone in its
corporate history with the launch of its Initial Public Offer on the
22 August 2003.

The Group also distributes its in-house brands, efiniti and Eco-
chem. efiniti, carries a range of photographic and consumer
electronic products targeted at the emerging markets. Eco-
chem offers business-to-business photo-processing chemicals,
which are able to complement our existing network and our                              Dubai office and warehouse
principals’ range of products.



                                 JEL CORPORATION (HOLDINGS) LTD   1   ANNUAL REPORT 2005
life’s rewards...




efiniti is a one-stop total lifestyle concept offering a unique product and
service mix that is ideally suited to customer’s needs, in a way that creates
special moments, bringing experiences to our every day lives.

efiniti brings customers the best and most stylish products in the market at
competitive prices, offering individuals the opportunity to purchase products
in ways that are best suited to their individual needs.




www.efiniti.biz
corporate                                   information

BOARD OF DIRECTORS                          REMUNERATION                                   REGISTERED OFFICE
Tan Boon Yong, Eric                         COMMITTEE                                      JEL CENTRE
Chairman and Chief Executive Officer        Tan Kok Hiang                                  11 Changi North Way
Leow Hock Leong                             Chairman                                       Singapore 498796
Chief Operating Officer                     Lee Choon Hui, Francis                         Tel: (65) 6841 1000
                                                                                           Fax: (65) 6881 1000
Wee Teck Han                                Tan Boon Yong, Eric
                                                                                           www.jelcorp.com
Chief Financial Officer
Sim Cheok Lim                               COMPANY SECRETARY
                                                                                           REGISTRATION NUMBER
Independent Director                        Tan Cher Liang
                                                                                           200106139K
Lee Choon Hui, Francis
Independent Director                        SHARE REGISTRAR
                                                                                           BANKERS
Tan Kok Hiang                               Lim Associates (Pte) Ltd                       BNP Paribas
Independent Director                        10 Collyer Quay                                Bangkok Bank Public Company Limited
                                            #19-08 Ocean Building                          Citibank Singapore Limited
Curtis Jerry Montgomery
                                            Singapore 068808                               DBS Bank Ltd
Independent Director, appointed on
27 March 2006                                                                              Moscow Narodny Bank Ltd
                                            AUDITORS                                       Malayan Banking Ltd
AUDIT COMMITTEE                             Ernst & Young                                  Overseas-Chinese Banking
                                            Certified Public Accountants                   Corporation Limited
Sim Cheok Lim
                                            10 Collyer Quay                                Raiffeisen Zentralbank öesterreich
Chairman
                                            #21-01 Ocean Building                          Aktiengesellschaft
Lee Choon Hui, Francis                      Singapore 049315                               Standard Chartered Bank
Tan Kok Hiang                               Partner-in-Charge                              The Bank of Tokyo – Mitsubishi UFJ, Ltd
                                            Steven Phan Swee Kim                           United Overseas Bank Limited
NOMINATING COMMITTEE
Sim Cheok Lim
Chairman
Tan Boon Yong, Eric
Tan Kok Hiang




                                 JEL CORPORATION (HOLDINGS) LTD   3   ANNUAL REPORT 2005
At JEL, we are riding on the wave of technological convergence.
We believe that the worlds of IT, telecommunications, photography and consumer
electronics are inevitably merging into one universe of multi-functional products. JEL
aims to be the global bridge that links them with people across the planet.




                    JEL CORPORATION (HOLDINGS) LTD   4   ANNUAL REPORT 2005
chairman’s          statement
                         “A         s we believe a company needs
                                 to be dynamic and proactive,
                                 and able to move fast to take
                                 advantage of any opportunities in
                                 the current competitive landscape,
                                 we have already taken steps
                                 to ride on the wave of
                                 convergence in the photographic,



                                                                           ”
                                 telecommunication, IT and
                                 consumer electronic industries.




                   Dear Shareholders,
                   2005 has been a year of unprecedented growth for JEL. Revenue
                   grew by a robust 50%. Growth was strong and broad-based. We
                   achieved double-digit growth, in all our product segments and
                   geographical areas.

                   3 years ago, JEL focused on photographic products and fast-moving
                   consumer goods. Today, we have expanded into telecommunication,
                   IT and consumer electronic products. Expanding into these
                   products was a logical and synergistic move, to ride on the
                   convergence of the photographic, telecommunication, IT and
                   consumer electronics technology. In 2005, we were appointed
                   authorised distributor by Motorola, IBM and Sanyo, for various
                   markets. In the same year, our product portfolio increased to
                   7,000 product items, 40% higher than that of the previous year.




        JEL CORPORATION (HOLDINGS) LTD   5   ANNUAL REPORT 2005
chairman’s                             statement
JEL always takes pride to expand into new                       Where we see opportunities, we have developed
unchartered frontiers. We have a simple goal,                   our 2 in-house brands, namely efiniti and Eco-
that is, to bridge the emerging markets to the                  chem. The former covers a wide range of
developed world. In 2005, our distribution                      consumer electronics and photographic products,
network increased to 15,000 sales points,                       while the latter is a brand of photo processing
50% higher than the previous year, covering                     chemical products.
more emerging countries in Asia, Middle East,
Africa and the Americas. We are honoured                        I am pleased to report that we have appointed
to be recognised by International Enterprise                    more than 20 efiniti distributors and launched
Singapore, as one of the TOP 100 Singapore                      more than 150 efiniti products, by the end of 2005.
International Companies, as well as one of the
TOP 10 Singapore Companies, for the African                     Though we have not adopted any fixed dividend
market. We believe that we are well positioned                  policy, JEL has never failed to reciprocate the
to enjoy the dynamic growth in these ever-                      trust and loyalty of our shareholders. Since our
expanding emerging markets.                                     listing in 2003, we have been very consistent in
                                                                rewarding dividends and bonus shares. For the
Distribution network is essential to sales and                  financial year ended 31 December 2005, the
gaining market share. Such is the value we offer                Directors have recommended a first and final
to our principals. However, gestation is inevitable             dividend of 1 Singapore cent per share, as well as
when developing new distribution networks.                      a 5-to-1 bonus issue.
Profitability depends on distribution efficiency.
Efficiency is achieved when we add more                         The company continues to see huge untapped
complimentary products to existing distribution                 potential in emerging countries. We will continue
networks. This explains why net profit did not                  to bring new products to existing markets and
exhibit similar exponential growth as revenue,                  existing products to new markets. We are
in 2005. However, going forward, we will achieve                aiming to achieve 20,000 sales points and 10,000
distribution efficiency in our newly developed                  product items, by the end of this year. I therefore
writing instrument business in South Africa.                    believe 2006 will be another year of record
                                                                growth, on the back of improved distribution and
As we continue to expand our 5 core businesses,                 logistics efficiency.
it is important to realise that each of the
telecommunication, IT, consumer electronics,                    On behalf of my Board of Directors, I thank all
fast-moving consumer goods and photographic                     our shareholders, bankers, principals, customers,
industries; exhibits different revenue and margin               suppliers, and, most importantly, my colleagues,
norms. Telecommunication, IT and consumer                       for their support and commitment. I hope we will
electronic products, are revenue drivers; while,                continue to work closely, once again, to deliver
photographic and fast-moving consumer goods,                    another fruitful and rewarding year in 2006!
are margin drivers. This explains the Group’s
average margin dropped, to 10%, from 12% in
the previous year. However, the lower margin is
justified by higher absolute profits.


                           JEL CORPORATION (HOLDINGS) LTD   6   ANNUAL REPORT 2005
board of directors

            TAN BOON YONG, ERIC founded the Group in 1984 and is our Chairman
            and Chief Executive Officer. He was appointed as one of our Executive Directors
            on 18 September 2001 and has been with the Group for more than 20 years.
            Mr Tan is in charge of formulating the Group’s business strategies and direction,
            corporate plans and policies and is responsible for the day-to-day management
            of the Group. Mr Tan has extensive knowledge and experience in the industry
            and was instrumental in spearheading our Group’s entry into the emerging
            markets in Asia, Middle East, Africa and the Americas.




            LEOW HOCK LEONG is our Chief Operating Officer and was appointed as
            one of our Executive Directors on 18 September 2001. He is jointly responsible
            for the Group’s business strategies and direction, corporate plans and policies.
            He has extensive knowledge and experience in the industry, having been in the
            Group for more than 20 years since joining the Group in 1985. Mr Leow is also
            responsible for liaising with our principals on sales and logistics matters. He
            obtained a Bachelor of Commerce, Management and Marketing Degree from
            Murdoch University, Western Australia.




            WEE TECK HAN is our Chief Financial Officer. He was appointed as one
            of our Executive Directors on 2 June 2003. Mr Wee is overall in charge of the
            Group’s financial and administrative matters. He is also actively involved in our
            Africa and Asia operations. Prior to joining the Group in 1999 as an accountant,
            Mr Wee worked as an auditor in Arthur Andersen. Mr Wee obtained a Bachelor
            of Accountancy (Honours) degree from the Nanyang Technological University.
            He is currently a member of the Institute of Certified Public Accountants of
            Singapore.




      JEL CORPORATION (HOLDINGS) LTD   7   ANNUAL REPORT 2005
board of directors
      SIM CHEOK LIM was appointed as our Independent Director on 11 July 2003. He
      is also an independent director on the board of listed companies Vicom Limited and
      Boardroom Limited. Mr Sim is also Singapore’s Ambassador (Non-Resident) to the
      Republics of Kazakhstan and Uzbekistan. He was the Chairman of the Commercial
      and Industrial Security Corporation from 1994 to 2002. Mr Sim had also held various
      executive positions in Shell Eastern Petroleum (Pte) Ltd from 1975 to 1994 and was its
      Marketing Director from 1989 to 1994. He was awarded the Friend of Labour Award
      by the National Trade Union Congress in 1991, and was conferred the Public Service
      Medal (PBM) and the Public Service Star (BBM) by the President of Singapore in 1998
      and 2003 respectively. Mr Sim graduated from the University of Adelaide with a 1st
      Class Honours Bachelor of Engineering degree. He also holds a diploma in Competitive
      Marketing Strategies from the University of California Berkeley.


      LEE CHOON HUI, FRANCIS was appointed as our Independent Director on
      11 July 2003. Mr Lee read Law in Inner Temple, London and was admitted to the
      English Bar as Barrister-At-Law, and to the Singapore Bar as Advocate & Solicitor, in
      1970. He was a senior corporate lawyer, whose principal areas of practice were in
      corporate law, civil litigation and general commercial practice. In 1992, Mr Lee retired
      from full-time legal practice to found Corporate Ventures Group, a consultancy firm
      for mergers and acquisitions, of which he is the Chairman. He is also currently serving
      as General Counsel/Group Consultant, to Phillip Capital Pte Ltd, with which the
      Corporate Ventures Group has a strategic alliance, for mergers and acquisitions and
      capital markets work. Mr Lee also sits on the boards of three other listed companies,
      namely Sunright Limited, SP Chemicals Ltd and SSH Corporation Ltd.


      TAN KOK HIANG was appointed as our Independent Director on 11 February
      2004. He is currently an Executive Director of Viz Branz Limited, a company listed
      on the SGX-ST. Mr Tan has more than 29 years experience in accounting, corporate
      finance, strategic planning and business development. He holds a Bachelor of
      Accountancy (Honours) degree from the University of Singapore and is a member of
      the Singapore Institute of Directors.




      CURTIS JERRY MONTGOMERY was appointed as our Independent Director
      on 27th March 2006. He had spent more than 15 years in various roles, including
      R&D, Technical Service, Sales and Marketing in the biotechnologhy industry in the
      United States of America, Europe and Asia. In 2001, he found Wallstaits.com Pte
      Ltd, offering Public and Investor Relations services. He is the author of numerous
      books on investing. Mr Montgomery graduated with a Bachelor of Science in
      Microbiology from Purdue University and performed additional graduate studies at the
      Univeristy of Notre Dame and the College for Financial Planning in Denver, Colorado.




      JEL CORPORATION (HOLDINGS) LTD   8   ANNUAL REPORT 2005
key management

    ADNAN SUPPIAH MUNIANDY is our Assistant Director for our Middle East
    Operations, based in our Dubai office. Formerly based in Kazakhstan, he was posted
    to our Dubai office since April 2004. Mr Adnan oversees our trading and distribution
    activities in Middle East, Central Asia and Russian speaking territories of the former
    USSR.With more than 12 years of business experience in Central Asia and Russia, his
    ability to speak Russian, in-depth understanding of the market and experience in sales
    and marketing have contributed significantly to our penetration into these markets.



    RADHAKRISHNAN VIJAYAKUMAR is our Assistant Director for
    International Sales. He has been with the Group since 2002. Mr Vijay is in charge of
    the sales function for all regions including Asia, Middle East, Africa and the Americans.
    With over 10 years of experience in international sales under his belt, he had
    established successful sales teams penetrating numerous emerging markets such as
    East, West Africa, South Asia and the Indo-China. Mr Vijay graduated with a MBA in
    Entreprenuership from the Unversity of Louisville, Kentucky, USA.



    PAUL MAURICE ALPHONSUS is our Assistant Director for our Asia
    Distribution Operations, based in our Singapore Office. Under his charge, he handles
    more than 20 international brands in his markets. Having travelled extensively, he is
    familiar with international business laws, trends and statistics, especially for the Indo-
    China and South Asia regions. Prior to being appointed as the Assistant Director of
    the Company, he was the Country Manager for our South African entity for 4 years,
    during which he was also responsible for the setup of our Durban Branch Office
    Angola Rep Office. During his stint as the business development manager, he had
    brought in new international brands for the group. Mr Paul obtained a MBA from
    Nanyang Business School, Nanyang Technological University, in 2001.



    NG SOON HENG, ALEX is our Group Finance Manager. He is responsible for
    the Group’s accounting, finance, treasury, ERP and tax functions. Formerly the Group
    Internal Auditor, where he was responsible for ensuring that the Group’s corporate
    governance, best practices, internal controls and procedures, are adhered to. Mr Ng
    holds a Bachelor of Accountancy Degree from the Nanyang Technological University,
    which he obtained in 2000. He is currently a member of the Institute of Certified
    Public Accountants of Singapore.




     JEL CORPORATION (HOLDINGS) LTD   9   ANNUAL REPORT 2005
operations review
  In 2005, the Group continued to bring existing products into new markets and new products into existing
  markets.

  FAST-MOVING CONSUMER GOODS
  The South African subsidiary, acquired in 2003, has been distributing photographic products in the local
  market, for the past 4 years. In 2005, it assumed the writing instrument distribution network from Sanford,
  who owns well-established brands such as Parker, Waterman, Papermate and etc.


  IT PRODUCTS
  The Middle Eastern subsidiary has been distributing photographic and fast-moving consumer goods in the
  Central Asian region for the past 8 years. Taking on Acer distribution for appointed Central Asian countries is
  another testament of bringing new product into existing markets.


  CONSUMER ELECTRONICS PRODUCTS
  The Group launched its second in-house brand, efiniti, in late 2004. The second year of efiniti saw much
  momentum in terms of gaining access to more markets as well as developing a wide range of consumer
  electronic products. By the end of the year, the Group has appointed more than 20 efiniti distributors and
  launched more than 150 efiniti products.


  TELECOMMUNICATION PRODUCTS
  The Far East subsidiary, having almost 20 years of distribution experience in the region, took on the distribution
  of telecommunication products during the year, when appointed by Motorola as the authorised distributor for
  Cambodia, Laos, Sri Lanka and Bangladesh.


  PHOTOGRAPHIC PRODUCTS
  The Group continues to scale its photographic business, which saw continued growth in the emerging
  markets.


  CONVERGENCE OF PRODUCTS
  The Group achieved unprecedented expansion in 2005. Strong revenue was achieved for the 3 newly established
  business segments of IT, telecommunication and consumer electronic products, as the Group took advantage
  of the inevitable convergence of IT, telecommunication, photographic and consumer electronic industries, to
  create a multi-faceted distribution network.


  RECOGNITION
  JEL was voted by International Enterprise Singapore, as a TOP 100 Singapore International Company in 2005.
  The Group was ranked number 3 in terms of business in the African continent.




                    JEL CORPORATION (HOLDINGS) LTD   10   ANNUAL REPORT 2005
operations review
  FUND RAISING
  In order to realise the numerous growth opportunities presented to the Group during the year, JEL sold a
  leasehold property, located in Singapore, on the back of a S$4.2m profit.The sale injected S$11m of additional
  working capital to fund further expansion.


  GESTATION
  As the Group expands into new products and markets, new offices were set up and more expertise recruited.
  The initial months in managing the new products and markets have contributed to gestation costs. However,
  many of these new set ups, have started to break even towards the end of 2005.


  FINANCIAL PERFORMANCE
  The Group’s revenue increased 50% to S$214.9 million for FY2005, an increase of more than S$71
  million as compared to the previous year. All operating regions and product segments, contributed to
  the growth. Geographically, Africa, Middle East and Asia contributed approximately S$69 million to the
  increase in Revenue. By product segments, IT, telecommunication and consumer electronic products,
  contributed S$49 million of the increase, while the photographic and fast-moving consumer goods
  segments, contributed the rest of the increase of S$ 22 million.



               Group Revenue (S$’000)                                 Group Profit After Tax and MI (S$’000)
   250,000                                                            7,000
                                                                      6,000
   200,000
                                                                      5,000
   150,000                                                            4,000

   100,000                                                            3,000
                                                                      2,000
    50,000
                                                                      1,000
        0                                                                 0
             2000(1) 2001(1)   2002(1)   2003   2004     2005                 2000(1) 2001(1)   2002(1)   2003   2004   2005


  Net profit for FY2005 increased to S$6.8 million, up 3% from S$6.6 million in the previous year. The
  increase was due to a S$4.2 million gain on the sale of a leasehold property and a net operating profit of
  S$2.6 million, which is approximately 42% of FY2004’s operating profit. The reduction in net operating
  profit was attributed to gestation overheads as the Group took on new product lines and opened new
  offices to handle these products.




                       JEL CORPORATION (HOLDINGS) LTD   11   ANNUAL REPORT 2005
       Revenue by Geographical Segments

70%                                                                                                          Africa
                                                                                                             Middle East
60%                                                                                                          Asia
                                                                                                             The Americas
50%

40%

30%

20%

10%

 0%
           2000(1)      2001(1)         2002(1)            2003              2004          2005


(1) The Proforma Group Revenue and Profit After Tax and Minority Interests for the periods under review have been
    prepared on the basis that the Group has been in existence since 1 January 2000.




looking ahead
The Group is confident that all new businesses, acquired during the past 2 years, will start to contribute positively to the
current year profit.

The Group expects the business environment to be dynamic, as the emerging markets will continue to grow rapidly. As
such, the Group will continue to be proactive and move fast to take advantage of any opportunities to stay ahead of the
competition.

The Group will continue to expand its distribution networks and product range.The Group is confident to achieve its target
of 20,000 sales points and 10,000 product items by end 2006.

Barring unforeseen circumstances, 2006 will be another year of record revenue growth in the all geographical and product
segments. Profitability is expected to improve as the Group enhances its distribution efficiency.




                                JEL CORPORATION (HOLDINGS) LTD   12   ANNUAL REPORT 2005
                           01 0010
     0 10                10 01
                 10
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         0
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                                         0001
            10        0
                        01 1
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        00
                  1   1
           financial00 0000
                                1000
               00 0 statements
   0
       00
  0




             0
                     001 010100
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           10 10
          0 0
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        00 & corporate governance report
       0 00      100
        0 0100
                      000 0101
   10 101
                10 100 01
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                                  Annual Report 2005
contents
1 Directors’ Report 3 Statement by Directors 4 Auditors’ Report
5 Profit and Loss Accounts 6 Balance Sheets 7 Statements of Changes in Equity
8 Consolidated Statement of Cash Flows 11 Notes to Financial Statements
44 Corporate Governance Report 52 Statistics of Shareholdings
53 Notice of Annual General Meeting Proxy Form
Directors’ Report

The directors are pleased to present their report to the members together with the audited financial statements of JEL
Corporation (Holdings) Ltd. (the “Company”) and the consolidated financial statements of the Company and its
subsidiaries (the “Group”) for the financial year ended 31 December 2005.

Directors
The directors of the Company in office at the date of this report are:

Tan Boon Yong, Eric                –       Chairman and Chief Executive Officer
Leow Hock Leong                    –       Chief Operating Officer
Wee Teck Han                       –       Chief Financial Officer
Sim Cheok Lim                      –       Independent Director
Lee Choon Hui, Francis             –       Independent Director
Tan Kok Hiang                      –       Independent Director
Curtis Jerry Montgomery            –       Independent Director (appointed on 27.3.2006)

Arrangements to enable directors to acquire shares and debentures
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose
object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares or
debentures of the Company or any other body corporate.

Directors’ interests in shares and debentures
The following directors, who held office at the end of the financial year, had, according to the register of directors’
shareholdings required to be kept under Section 164 of the Companies Act, Cap. 50 an interest in shares of the
Company and related corporations, as stated below:

                                           Direct interest                                      Deemed interest
                             1 January     31 December 21 January                  1 January     31 December      21 January
                                2005            2005          2006                    2005           2005            2006
                              Ordinary        Ordinary      Ordinary                Ordinary       Ordinary        Ordinary
                              shares of      shares of      shares of               shares of      shares of       shares of
The Company                  $0.05 each     $0.05 each     $0.05 each              $0.05 each     $0.05 each      $0.05 each

Tan Boon Yong, Eric         132,362,000     145,248,200          145,248,200       7,090,000      10,000,000      10,000,000
Leow Hock Leong               3,011,000       3,352,103            3,352,103               –               –               –
Wee Teck Han                    704,000         774,400              774,400               –               –               –

By virtue of Section 7 of the Companies Act, Messr. Tan Boon Yong, Eric is deemed to be interested in the shares held
by the Company in its subsidiaries.

Except as disclosed above, no other director had an interest in any shares or debentures of the Company or related
corporations at the beginning or end of the financial year or on 21 January 2006.

Directors’ contractual benefits
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a
benefit (other than a benefit or any fixed salary of a full-time employee of the Company included in the aggregate
amount of emoluments shown in the financial statements, or any emoluments received from related corporations) by
reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director
is a member, or with a company in which the director has a substantial financial interest.




                                    JEL CORPORATION (HOLDINGS)   1   ANNUAL REPORT 2005
Directors’ Report

Options
No options were issued by the Company or its subsidiaries during the financial year. As at 31 December 2005, there
are no options on the unissued shares of the Company or its subsidiaries which are outstanding.

Audit committee
The Audit Committee performed the functions specified in the Companies Act. The functions performed are detailed in
the Report on Corporate Governance.


Auditors
Ernst & Young have expressed their willingness to accept re-appointment as auditors of the Company.



On behalf of the Board of Directors




Tan Boon Yong, Eric
Director




Wee Teck Han
Director



Singapore
27 March 2006




                                      JEL CORPORATION (HOLDINGS)   2   ANNUAL REPORT 2005
Statement by Directors

We, Tan Boon Yong, Eric and Wee Teck Han, being two of the directors of JEL Corporation (Holdings) Ltd., do hereby
state that, in the opinion of the directors;

(i)    the accompanying balance sheets, profit and loss accounts, statements of changes in equity and consolidated
       statement of cash flows together with notes thereto are drawn up so as to give a true and fair view of the state of
       affairs of the Company and of the Group as at 31 December 2005 and of the results of the business and
       changes in equity of the Company and of the Group and cash flows of the Group for the year then ended, and

(ii)   at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its
       debts as and when they fall due.



On behalf of the Board of Directors




Tan Boon Yong, Eric
Director




Wee Teck Han
Director



Singapore
27 March 2006




                                      JEL CORPORATION (HOLDINGS)   3   ANNUAL REPORT 2005
Auditors’ Report
to the Members of JEL Corporation (Holdings) Ltd.


We have audited the accompanying financial statements of JEL Corporation (Holdings) Ltd. (the “Company”) and its
subsidiaries (collectively, the “Group”) set out on pages 5 to 43 for the year ended 31 December 2005. These financial
statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion,

(a)    the consolidated financial statements of the Group and the financial statements of the Company are properly
       drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore
       Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the
       Company as at 31 December 2005, and of the results and changes in equity of the Group and of the Company
       and cash flows of the Group for the financial year ended on that date; and

(b)    the accounting and other records required by the Act to be kept by the Company and by those subsidiaries
       incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
       provisions of the Act.




ERNST & YOUNG
Certified Public Accountants



Singapore
27 March 2006




                                   JEL CORPORATION (HOLDINGS)   4   ANNUAL REPORT 2005
Profit and Loss Accounts
For the Year Ended 31 December 2005
Amounts expressed in Singapore dollars

                                                                                   Group                   Company
                                                        Note               2005             2004       2005       2004
                                                                           $’000            $’000      $’000     $’000

Revenue                                                   3                214,878          143,328    5,403     3,000
Cost of sales                                                             (192,788)        (124,357)       –         –

Gross profit                                                                22,090           18,971    5,403     3,000

Other operating income                                    4                   5,383             537        27        –
Distribution and selling expenses                                            (2,882)         (1,720)        –        –
Administrative expenses                                                     (15,101)         (9,604)   (3,340)    (327)


Profit from operations                                    5                   9,490           8,184    2,090     2,673
Financial expenses                                        7                  (2,041)           (737)       –         –
Financial income                                          7                      33              70        6        15

Profit before tax                                                             7,482           7,517    2,096     2,688
Taxation                                                  8                    (672)           (882)    (402)     (566)

Profit for the year                                                           6,810           6,635    1,694     2,122


Attributable to:
Equity holders of the Company                                                 6,810           6,584    1,694     2,122
Minority interests                                                                –              51        –         –

                                                                              6,810           6,635    1,694     2,122

Earnings per share
Basic and diluted                                         9             3.11 cents        3.01 cents




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




                                    JEL CORPORATION (HOLDINGS)   5   ANNUAL REPORT 2005
Balance Sheets
As at 31 December 2005
Amounts expressed in Singapore dollars

                                                                                    Group                  Company
                                                         Note               2005            2004       2005       2004
                                                                            $’000           $’000      $’000     $’000

Non-current assets
Property, plant and equipment                              10                  3,947        13,185         –         –
Subsidiaries                                               11                      –             –     6,157     6,157
Investment property                                        13                  2,700             –         –         –
Deferred tax assets                                         8                    186           211         –         –
Negative goodwill on consolidation                         12                      –           (56)        –         –
Trademarks                                                 14                     42             5         7         5

Current assets
Inventories                                                15                43,115         23,496         –         –
Trade receivables                                          16                34,717         18,323         –         –
Other receivables, deposits and prepayments                17                 5,293          3,972        77        58
Due from a subsidiary (trade)                                                     –              –     3,019     2,100
Due from subsidiaries (non-trade)                          18                     –              –     6,132     6,549
Fixed deposits                                             19                   275            157         –         –
Cash and bank balances                                                       22,492          9,547     1,371       965

                                                                            105,892         55,495    10,599     9,672

Current liabilities
Trade payables                                                               20,176          2,950        –         –
Bills payable to banks                                     20                57,882         37,654        –         –
Other payables and accruals                                21                 4,048          2,478      748        20
Provision for taxation                                                          970          1,105        1         –
Finance lease obligations
 – current portion                                         22                    157           136        –         –

                                                                             83,233         44,323      749        20

Net current assets                                                           22,659         11,172     9,850     9,652
Non-current liability
Finance lease obligations
 – non-current portion                                     22                   (447)         (263)       –         –

                                                                             29,087         24,254    16,014    15,814

Equity attributable to equity holders
 of the Company
Share capital                                              23                10,956          9,960    10,956     9,960
Reserves                                                   24                18,131         14,294     5,058     5,854

Total equity                                                                 29,087         24,254    16,014    15,814




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




                                     JEL CORPORATION (HOLDINGS)   6   ANNUAL REPORT 2005
Statements of Changes in Equity
For the Year Ended 31 December 2005
Amounts expressed in Singapore dollars

                                                Attributable to equity holders of the Company

                                      Share           Share             Revenue          Capital   Translation    Total
Group                                 capital        premium            reserve          reserve     reserve     equity
                                       $’000           $’000             $’000            $’000       $’000      $’000

Balance at 1 January 2004               8,300          5,441               6,211           779         (68)      20,663
Currency translation differences            –              –                   –             –         (55)         (55)
Net profit for the year                     –              –               6,584             –           –        6,584
Bonus issue via capitalisation
 of share premium (Note 23,
 Note 24)                               1,660         (1,660)                  –             –           –            –
Dividends, net (Note 25)                    –              –              (2,938)            –           –       (2,938)


Balance at 31 December 2004             9,960          3,781               9,857           779        (123)      24,254
Currency translation differences            –              –                   –             –        (483)        (483)
Net profit for the year                     –              –               6,810             –           –        6,810
Bonus issue via capitalisation
 of share premium (Note 23,
 Note 24)                                 996           (996)                  –             –           –            –
Dividends, net (Note 25)                    –              –              (1,494)            –           –       (1,494)

Balance at 31 December 2005           10,956           2,785              15,173           779        (606)      29,087


                                                                         Share            Share     Revenue
Company                                                                  capital         premium    reserve      Total
                                                                          $’000            $’000     $’000       $’000

Balance at 1 January 2004                                                  8,300          5,441      2,889       16,630
Net profit for the year                                                        –              –      2,122        2,122
Bonus issue via capitalisation of share premium
 (Note 23, Note 24)                                                        1,660         (1,660)          –           –
Dividends, net (Note 25)                                                       –              –      (2,938)     (2,938)

Balance at 31 December 2004                                                9,960          3,781      2,073       15,814
Net profit for the year                                                        –              –      1,694        1,694
Bonus issue via capitalisation of share premium
 (Note 23, Note 24)                                                          996           (996)          –           –
Dividends, net (Note 25)                                                       –              –      (1,494)     (1,494)

Balance at 31 December 2005                                               10,956          2,785      2,273       16,014




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




                                   JEL CORPORATION (HOLDINGS)   7   ANNUAL REPORT 2005
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2005
Amounts expressed in Singapore dollars

                                                                                          2005       2004
                                                                                          $’000      $’000

Cash flows from operating activities
Profit before tax                                                                         7,482      7,517
 Adjustments:
 Amortisation of trademarks                                                                   13        1
 Negative goodwill on consolidation                                                          (56)     (21)
 Depreciation of property, plant and equipment                                               969      743
 Provision for /(write-back of) doubtful trade receivables                                    87      (62)
 Provision for stock obsolescence                                                              –       58
 (Gain)/loss on disposal of property, plant and equipment                                 (4,363)      16
 Interest expense                                                                          2,041      737
 Interest income                                                                             (33)     (70)

 Operating profit before working capital changes                                          6,140      8,919

(Increase)/decrease in current assets:
  Inventories                                                                            (19,611)   (6,705)
  Trade receivables                                                                      (15,686)   (5,216)
  Other receivables, deposits and prepayments                                             (1,007)      530
Increase/(decrease) in current liabilities:
  Trade payables                                                                         16,432        634
  Bill payable to banks                                                                  20,229     14,089
  Other payables and accruals                                                             1,093     (1,593)


Cash generated from operations                                                             7,590    10,658
Tax paid                                                                                    (777)   (1,561)
Interest expense paid                                                                     (2,041)     (737)
Translation difference                                                                      (489)      (27)

Net cash generated from operating activities                                              4,283      8,333

Cash flows from investing activities
Purchase of property, plant and equipment (Note A)                                         (797)    (7,331)
Interest income received                                                                     33         70
Proceeds from disposal of property, plant and equipment                                  11,616        329
Purchase of trademarks                                                                      (50)        (6)
Net cash inflow on acquisition of a subsidiary (Note B)                                     169          –
Additional investment in unquoted subsidiary                                                  –       (252)

Net cash generated from/(used in) investing activities                                   10,971     (7,190)




                                   JEL CORPORATION (HOLDINGS)   8   ANNUAL REPORT 2005
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2005 (Cont’d)
Amounts expressed in Singapore dollars

                                                                                                     2005           2004
                                                                                                     $’000          $’000

Cash flows from financing activities
(Increase)/decrease in fixed deposits pledged                                                         (195)         5,825
Repayment of finance lease obligations                                                                (697)          (288)
Dividends paid                                                                                      (1,494)        (2,938)
Proceeds from a minority shareholder from issue of new shares by a subsidiary                            –             71

Net cash (used in)/generated from financing activities                                              (2,386)         2,670

Net increase in cash and cash equivalents                                                           12,868          3,813

Cash and cash equivalents at beginning of year                                                       9,645          5,832

Cash and cash equivalents at end of year (Note C)                                                   22,513          9,645


Notes to the Consolidated Statement of Cash Flows
Note A: Purchase of property, plant and equipment
For the year ended 31 December 2005, the Group acquired property, plant and equipment with an aggregate cost of
$1,700,000 (2004: $7,681,000) of which $903,000 (2004: $350,000) was financed via finance lease. Cash payments of
$797,000 (2004: $7,331,000) were made to purchase property, plant and equipment.

Note B: Summary of effects on acquisition of a subsidiary
The fair value of attributable assets and liabilities of the subsidiary acquired and the cash flow effect of the acquisition is
set out as follows:

                                                                                                                    2005
                                                                                                                    $’000

Trade receivables                                                                                                    794
Other receivables, deposits and prepayments                                                                          315
Cash and bank balances                                                                                               208
Trade payables                                                                                                      (794)
Other payables and accruals                                                                                         (477)
Provision for taxation                                                                                                (7)

Net identifiable assets acquired                                                                                      39
Less:
 Cash and cash equivalents acquired                                                                                 (208)

Net cash inflow from acquisition of a subsidiary                                                                    (169)




                                     JEL CORPORATION (HOLDINGS)   9   ANNUAL REPORT 2005
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2005 (Cont’d)
Amounts expressed in Singapore dollars

Note C: Cash and cash equivalents
Cash and cash equivalents consist of cash and bank balances and unpledged fixed deposits. Fixed deposits pledged
to banks in accordance with the government regulatory requirements as disclosed in Note 19 are excluded from cash
and cash equivalents.

Cash and cash equivalents included in the consolidated statement of cash flows comprise the following balance sheet
amounts:

                                                                                               2005             2004
                                                                                               $’000            $’000

Fixed deposits                                                                                   275              157
Cash and bank balances                                                                        22,492            9,547

                                                                                              22,767            9,704

Less: Fixed deposits pledged (Note 19)                                                          (254)             (59)

Cash and cash equivalents                                                                     22,513            9,645


Cash and bank balances have an effective interest rate of 0.02% (2004 : 0.46%) in the financial year ended 31
December 2005.




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




                                  JEL CORPORATION (HOLDINGS)   10   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

1.    Corporate information
      The Company is a public limited company which is domiciled and incorporated in the Republic of Singapore with
      its registered office located at JEL Centre, 11 Changi North Way, Singapore 498796.

      The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are
      shown in Note 11 to the financial statements.

      There have been no significant changes in the nature of these activities during the financial year.

2.    Significant accounting policies
2.1   Basis of preparation
      The financial statements, expressed in Singapore dollars, have been prepared in accordance with Singapore
      Financial Reporting Standards (“FRS”).

      The financial statements have been prepared on the historical cost convention, except as disclosed in the
      accounting policies below.

      The accounting policies have been consistently applied by the Group and except for changes in accounting
      policies discussed below, are consistent with those used in the previous year.

2.2   Changes in accounting policies
      The accounting policies have been consistently applied by the Group and the Company and are consistent with
      those used in the previous financial year, except for the changes in accounting policies discussed below.

      (a)    Adoption of new FRS
             In 2005, the Group and the Company adopted the following new FRS which are relevant to its operations.

             (i)    FRS 39 – Financial Instruments : Recognition and Measurement
                    The Group and the Company adopted FRS 39 prospectively on 1 January 2005. At that date,
                    financial assets within the scope of FRS 39 were classified as either financial assets at fair value
                    through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale
                    financial assets, as appropriate. Financial assets that were classified as available-for-sale financial
                    assets were measured at fair value while loans and receivables were carried at amortised cost
                    using the effective interest method.

                    At 1 January 2005, financial liabilities within the scope of FRS 39 were measured at amortised
                    costs using the effective interest method.




                                  JEL CORPORATION (HOLDINGS)   11   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.    Significant accounting policies (cont’d)
2.2   Changes in accounting policies (cont’d)
      (a)    Adoption of new FRS (con’t’d)
             (ii)   FRS 103 – Business Combinations
                    FRS 36 (revised) – Impairment of Assets
                    FRS 38 (revised) – Intangible Assets
                    FRS 103 has been applied for business combinations on or after 1 January 2005, the adoption of
                    FRS 103 and revised FRS 36 has resulted in the Group ceasing annual goodwill amortisation and
                    commencing testing for impairment at the cash-generating unit level annually (unless an event
                    occurs during the year which requires the goodwill to be tested more frequently) from 1 January
                    2005. The transitional provisions of FRS 103 have required the Group to derecognise the
                    remaining unamortised negative goodwill included in the carrying amount of investments in
                    subsidiary as at 1 January 2005, amounting to $56,000, with a corresponding adjustment to
                    accumulated profits as at 1 January 2005. However, the management had recognised the
                    corresponding adjustment in the current financial year as the impact on the financial statements is
                    deemed to be insignificant.

                    Moreover, the useful lives of intangible assets are now assessed at the individual asset level as
                    having either a finite or indefinite life. Intangible assets were considered to have a finite useful life
                    with a rebuttable presumption that life would not exceed twenty years from the date when the
                    asset was available for use.

                    The above changes in accounting policies have no significant impact on the comparatives or the
                    opening balance of revenue reserve of the Group and the Company.

      (b)    Adoption of revised FRS
             In 2005, the Group and the Company adopted the following revised FRS which are relevant to its
             operations.

             (i)    FRS 21 (revised) – The Effects of Changes in Foreign Exchange Rates
                    As a result of the adoption of FRS 21 (revised), any goodwill arising on the acquisition of a foreign
                    subsidiary and any fair value adjustments to the carrying amounts of assets and liabilities arising
                    on the acquisition are now treated as assets and liabilities of the foreign operation and translated
                    at the closing rate accordingly. In accordance with the transitional provision of revised FRS 21,
                    this policy is adopted prospectively to all acquisitions occurring after 1 January 2005. Accordingly,
                    comparative figures are not restated.

                    Goodwill acquired and any fair value adjustments to the carrying amounts of assets and liabilities
                    which arose on acquisitions before 1 January 2005 were deemed to be assets and liabilities of the
                    parent company. This change in accounting policy has no significant impact on the financial
                    statements as at 31 December 2005 or 31 December 2004.




                                  JEL CORPORATION (HOLDINGS)   12   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.    Significant accounting policies (cont’d)
2.2   Changes in accounting policies (cont’d)
      (b)    Adoption of revised FRS (con’t’d)
             (ii)    Other revised FRS
                     In addition, the Group adopted the following revised standards which did not result in any
                     significant change in accounting policies:

                     FRS   1 (revised)        –         Presentation of Financial Statements
                     FRS   2 (revised)        –         Inventories
                     FRS   8 (revised)        –         Accounting Policies, Changes in Accounting Estimates and Errors
                     FRS   10 (revised)       –         Events after the Balance Sheet Date
                     FRS   16 (revised)       –         Property, Plant and Equipment
                     FRS   17 (revised)       –         Leases
                     FRS   24 (revised)       –         Related Party Disclosures
                     FRS   27 (revised)       –         Consolidated and Separate Financial Statements
                     FRS   31 (revised)       –         Interests in Joint Ventures
                     FRS   32 (revised)       –         Financial Instruments: Disclosure and Presentation
                     FRS   33 (revised)       –         Earnings Per Share

      (c)    FRS and INT FRS not yet effective
             The Group and the Company have not applied the following FRS and INT FRS that have been issued but
             are only effective for annual financial periods beginning on or after 1 January 2006:

             (i)     FRS 106 – Exploration for and Evaluation of Mineral Resources
                     This standard do not apply to the activities of the Group.

             (ii)    INT FRS 104 – Determining Whether an Arrangement Contains a Lease
                     This interpretation requires the determination of whether an arrangement is, or contains a lease to
                     be based on the substance of the arrangement and requires an assessment of whether the
                     arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a
                     right to use the asset.

                     The Group expects that the adoption of the pronouncements listed above will not have a
                     significant impact on the financial statements in the period of initial application.

             (iii)   INT FRS 105 – Rights to Interests Arising from Decommissioning, Restoration and Environmental
                     Rehabilitation Funds
                     This interpretation is not expected to be relevant to the activities of the Group.

2.3   Significant accounting estimates and judgements
      The preparation of financial statements in conformity with FRS requires management to make judgements,
      estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities,
      income and expenses. The estimates and associated assumptions are based on historical experience and
      various other factors that are believed to be reasonable under the circumstances, the results of which form the
      basis of making the judgements about the carrying amounts of assets and liabilities that are not readily apparent
      from other sources.




                                   JEL CORPORATION (HOLDINGS)   13   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.    Significant accounting policies (cont’d)
2.3   Significant accounting estimates and judgements (cont’d)
      The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
      estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or
      in the period of the revision and future periods, if the revision affects both current and future periods.

      (a)    Key sources of estimation uncertainty
             The key assumptions concerning the future and other key sources of estimation uncertainty at the
             balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts
             of assets and liabilities within the next financial year are discussed below.

                    Depreciation of property, plant and equipment
                    Property, plant and equipment are depreciated on a straight-line basis over their estimated useful
                    lives. Management estimates the useful lives of these property, plant and equipment to be within
                    5 to 60 years. The carrying amount of the Group’s property, plant and equipment at 31 December
                    2005 was $3,947,000 (2004: $13,185,000). Changes in the expected level of usage could impact
                    the economic useful lives and the residual values of these assets, therefore future depreciation
                    charges could be revised.

                    Income taxes
                    The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is
                    involved in determining the group-wide provision for income taxes. There are certain transactions
                    and computations for which the ultimate tax determination is uncertain during the ordinary course
                    of business. The Group recognises liabilities for expected tax issues based on estimates of
                    whether additional taxes will be due. Where the final tax outcome of these matters is different from
                    the amounts that were initially recognised, such differences will impact the income tax and
                    deferred tax provisions in the period in which such determination is made. The carrying amount of
                    the Group’s tax payables at 31 December 2005 was $970,000 (2004 : $1,105,000).

      (b)    Critical judgements made in applying accounting policies
             Judgement made by management in the application of FRS that has a significant effect on the financial
             statements and in arriving at estimates with a significant risk of material adjustment in the next year is
             discussed below:

                    Impairment of investments and financial assets
                    The Group follows the guidance of FRS 39 on determining when an investment or financial asset
                    is other-than-temporarily impaired and this requires significant judgement. The Group evaluates,
                    among other factors, the duration and extent to which the fair value of an investment or financial
                    asset is less than its cost; and the financial health of and near-term business outlook for the
                    investment or financial asset, including factors such as industry and sector performance, changes
                    in technology and operational and financing cash flow.




                                   JEL CORPORATION (HOLDINGS)   14   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.    Significant accounting policies (cont’d)

2.4   Basis of consolidation
      The consolidated financial statements include the financial statements of the Company and its subsidiaries made
      up to the end of the financial year. The results of subsidiaries acquired or disposed of during the financial year
      are included in or excluded from the consolidated financial statements with effect from the respective dates of
      acquisition or disposal, as applicable. Significant intercompany balances, transactions and unrealised profit or
      loss on intercompany transactions have been eliminated on consolidation.

      Acquisitions of subsidiaries are accounted for using the purchase method. The cost of an acquisition is
      measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at
      the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities
      and contingent liabilities assumed are measured initially at their fair values at the acquisition date, irrespective of
      the extent of any minority interest.

      Any excess or deficiency of the purchase consideration over the fair values of the Group’s share of the
      identifiable net assets acquired represents goodwill or negative goodwill, which is accounted for in accordance
      with Note 2.9. Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by
      the Group. They are presented in the consolidated balance sheet within equity, separately from the parent
      shareholders’ equity, and are separately disclosed in the consolidated profit and loss account.

2.5   Subsidiaries
      (a)    Subsidiaries
             Subsidiaries are those companies controlled by the Group. Control exists when the Group has the
             power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain
             benefits from its activities.

             Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses.

2.6   Property, plant and equipment
      Property, plant and equipment are stated at cost less accumulated depreciation and any impairment loss.

      The initial cost of property, plant and equipment comprises its purchase price, including import duties and non-
      refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and
      location for its intended use. Expenditures incurred after the property, plant and equipment has been put into
      operation, such as repairs and maintenance and overhaul costs, are normally charged to the profit and loss
      account in the period in which the costs are incurred. In situations where it can be clearly demonstrated that the
      expenditures have resulted in an increase in the future economic benefits expected to be obtained from the use
      of an asset beyond its originally assessed standard of performance, the expenditures are capitalised as an
      additional cost of property, plant and equipment
.




                                   JEL CORPORATION (HOLDINGS)   15   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.    Significant accounting policies (cont’d)

2.6   Property, plant and equipment (cont’d)
      Depreciation is computed on a straight-line basis over the estimated useful lives of property, plant and
      equipment as follows:

      Freehold premises                   35 years
      Leasehold office buildings          50-60 years
      Furniture, equipment and fittings   5 years
      Motor vehicles and yacht            5 years
      Machinery                           5 years
      Computers                           5 years

      Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer
      in use and no further charge for depreciation is made in respect of these assets.

      The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that
      the amount, method and period of depreciation are consistent with previous estimates and the expected pattern
      of consumption of the future economic benefits embodied in the items of property, plant and equipment.

      An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
      expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit
      and loss account in the year the asset is derecognised.

2.7   Investment property
      Investment properties are investments in properties that are not occupied substantially for use by or in the
      operations of the Group. They are accounted for as property, plant and equipment and are stated at cost less
      accumulated depreciation and any accumulated impairment losses.

2.8   Leases
      Leases on terms of which the Group assumes substantially all risks and rewards of ownership of the leased
      items are classified as finance lease. Property, plant and equipment acquired by way of finance lease is
      capitalised at the lower of its fair value and the present value of minimum lease payments at the inception of the
      lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the
      finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
      balance of the liability. Finance charges are charged directly to the profit and loss account.

      Leases where the lessor effectively retains substantially all the risks and rewards of ownership of the leased
      items are classified as operating leases. Operating lease payments are recognised as an expense in the profit
      and loss account on a straight-line basis over the lease term.




                                  JEL CORPORATION (HOLDINGS)   16   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.9    Intangible assets
       (a)    Trademarks
              Cost relating to trademarks, which are acquired, are stated at cost less accumulated amortisation and
              impairment loss, if any. Trademarks are amortised through the profit and loss account on a straight line
              basis over 5 years.

              The amortisation period and the amortisation method for trademarks are reviewed at least at each
              financial year-end. The amortisation expense on trademarks is recognised in the profit and loss account
              through the ‘depreciation and amortisation expenses’ line item.

       (b)    Negative goodwill
              Negative goodwill arising on acquisition represents the excess of the fair value of the Group’s share of the
              identifiable assets, liabilities and contingent liabilities, acquired over the cost of acquisition. Negative
              goodwill in excess of fair values of non-monetary assets acquired is recognised in the profit and loss
              account in the period of the acquisition.

2.10   Impairment of assets
       The Group assesses at each balance sheet date whether a financial asset or group of financial assets is
       impaired.

       Assets carried at amortised costs
       If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments
       carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the
       asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that
       have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective
       interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an
       allowance account. The amount of the loss is recognised in the profit and loss account.

       If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
       objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss
       is reversed. Any subsequent reversal of an impairment loss is recognised in the profit and loss account, to the
       extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

2.11   Financial assets
       Financial assets within the scope of FRS 39 are classified as either financial assets at fair value through profit or
       loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate.
       Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the
       contractual provisions of the financial instrument.

       When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
       assets not at fair value through profit or loss, directly attributable transaction costs. The Group determines the
       classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this
       designation at each financial year end.




                                   JEL CORPORATION (HOLDINGS)   17   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.11   Financial assets (cont’d)
       Loans and receivables
       Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are
       classified as loans and receivables. Such assets are carried at amortised cost using the effective interest
       method. Gains and losses are recognised in the profit and loss account when the loans and receivables are
       derecognised or impaired, as well as through the amortisation process.

2.12   Inventories
       Inventories are stated at the lower of cost (determined on a weighted average basis) and net realisable value.
       Cost includes costs of purchases and other costs incurred in bringing the inventories to their present location and
       condition.

       Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs
       necessary to make the sale.

       Allowance is made for deteriorated, damaged, obsolete and slow-moving inventories.

2.13   Trade and other receivables
       Trade and other receivables, including intercompany balances are classified and accounted for as loans and
       receivables under FRS 39. They are recognised and carried at original invoiced amount, which represents their
       fair value on initial recognition, less allowance for any uncollectible amounts. Allowance for doubtful receivables
       is made when collection of the full amount is no longer probable. Bad debts are written off when identified. The
       accounting policy for this category of financial assets is stated in Note 2.11.

2.14   Cash and cash equivalents
       Cash and cash equivalents comprise cash on hand and at bank, bank deposits which are readily convertible to
       known amounts of cash and which are subject to insignificant risk of changes in value.

       Cash and short term deposits carried in the balance sheets are classified and accounted for as loans and
       receivables under FRS 39. The accounting policy for this category of financial assets is stated in Note 2.11.

2.15   Trade and other payables
       Liabilities for trade and other payables, including intercompany payables, are carried at cost which is the fair
       value of the consideration to be paid in the future for goods and services received. Gains and losses are
       recognised in the profit and loss account when the liabilities are derecognised as well as through the
       amortisation process.




                                   JEL CORPORATION (HOLDINGS)   18   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.16   Provisions
       Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
       event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
       obligation and a reliable estimate can be made of the amount of the obligation.

       Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no
       longer probable that an outflow of resources embodying economic benefits will be required to settle the
       obligation, the provision is reversed.

2.17   Derecognition of financial assets and liabilities
       (a)    Financial assets
              A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial
              assets) is derecognised where:

                     The contractual rights to receive cash flows from the asset have expired;

                     The Group retains the contractual rights to receive cash flows from the asset, but has assumed an
                     obligation to pay them in full without material delay to a third party under a ‘pass-through’
                     arrangement; or

                     The Group has transferred its rights to receive cash flows from the asset and either (i) has
                     transferred substantially all the risks and rewards of the asset, or (ii) has neither transferred nor
                     retained substantially all the risks and rewards of the asset, but has transferred control of the
                     asset.

                     Where the Group has transferred its rights to receive cash flows from an asset and has neither
                     transferred nor retained substantially all the risks and rewards of the asset nor transferred control
                     of the asset, the asset is recognised to the extent of the Group ‘s continuing involvement in the
                     asset. Continuing involvement that takes the form of a guarantee over the transferred asset is
                     measured at the lower of the original carrying amount of the asset and the maximum amount of
                     consideration that the Group could be required to repay.

                     Where continuing involvement takes the form of a written and/or purchased option on the
                     transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred
                     asset that the Group may repurchase, except that in the case of a written put option on an asset
                     measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of
                     the fair value of the transferred asset and the option exercise price.

              On derecognition of a financial asset in its entirety, the difference between the carrying amount and the
              sum of (i) the consideration received (including any new asset obtained less any new liability assumed)
              and (ii) any cumulative gain or loss that has been recognised directly in equity is recognised in the profit
              and loss account.




                                   JEL CORPORATION (HOLDINGS)   19   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.17   Derecognition of financial assets and liabilities (cont’d)
       (b)    Financial liabilities
              A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
              expires.

              Where an existing financial liability is replaced by another from the same lender on substantially different
              terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
              treated as a derecognition of the original liability and the recognition of a new liability, and the difference
              in the respective carrying amounts is recognised in the profit and loss account.

2.18   Revenue recognition
       Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
       revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
       recognised:

       (a)    Sale of goods
              Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the
              customer which generally coincides with delivery and acceptance of the goods sold.

       (b)    Consultancy and commission income
              Consultancy and commission income is recognised when services have been rendered.

       (c)    Dividend and interest income
              Dividend income is recognised when the Company’s right to receive payment is established.

              Interest income is recognised on a time proportion basis (taking into account the effective yield on the
              asset) unless collectibility is in doubt.

       (d)    Rental income
              Rental income arising on investment property is accounted for on a straight-line basis over the lease
              terms on ongoing leases. The aggregate cost of incentives provided to lessees is recognised as a
              reduction of rental income over the lease term on a straight-line basis.

2.19   Employee benefits
       (a)    Defined contribution plans
              As required by law, the Group makes contributions to the state pension scheme, the Central Provident
              Fund (“CPF”) for Singapore companies. CPF is recognised as compensation expenses in the same
              period as the employment that gives rise to the contributions.

       (b)    Employee leave entitlement
              Employee entitlements to annual leave are recognised when they accrue to employees. An accrual is
              made for estimated liability for annual leave as a result of services rendered by employees up to the
              balance sheet date.




                                      JEL CORPORATION (HOLDINGS)   20   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.20   Finance costs
       Interest expense and similar charges are expensed in the profit and loss account in the period in which they are
       incurred, except to the extent that they are capitalised as being directly attributable to the acquisition,
       construction or production of an asset which necessarily takes a substantial period of time to be prepared for its
       intended use or sale. The interest component of finance lease payments is recognised in the profit and loss
       account using the effective interest method.

2.21   Income taxes
       (a)    Current tax
              Current tax assets and liabilities for the current and prior periods are measured at the amount expected to
              be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount
              are those that are enacted or substantively enacted at the balance sheet date.

       (b)    Deferred tax
              Deferred income tax is provided in full, using the liability method, on all temporary differences arising at
              the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for
              financial reporting purposes.

              Deferred tax liabilities are recognised for all taxable temporary differences, except for goodwill not
              deductible for tax purposes and for the initial recognition of assets or liabilities that affect neither
              accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of
              realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
              substantively enacted at the balance sheet date.

              Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
              assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
              which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses
              can be utilised. For deductible temporary differences associated with investments in subsidiaries,
              deferred tax assets are only recognised to the extent that it is probable that the temporary differences will
              reverse in the foreseeable future and taxable profit will be available against which the temporary
              difference can be utilised. Unrecognised deferred income tax assets are reassessed at each balance
              sheet date and are recognised to the extent that it has become probable that future taxable profit will
              allow the deferred tax asset to be recovered.

              Deferred tax liabilities are not provided on undistributed earnings of foreign subsidiaries to the extent the
              earnings are intended to remain indefinitely invested in those entities.

              The carrying amount of a deferred tax asset is reviewed at each balance sheet date and reduced to the
              extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part
              or all of the deferred tax asset to be utilised.

              Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
              when the asset is realised or the liability is settled based on tax rates (and tax laws) that have been
              enacted or substantively enacted at the balance sheet date.




                                    JEL CORPORATION (HOLDINGS)   21   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.22   Foreign currency transactions/translation
       (a)    Foreign currency transactions
              Transactions in foreign currencies are measured in the respective functional currencies of the Company
              and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates
              approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in
              foreign currencies are translated at the closing rate of exchange ruling at the balance sheet date. Non-
              monetary items that are measured in terms of historical cost in a foreign currency are translated using the
              exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a
              foreign currency are translated using the exchange rates at the date when the fair value was determined.

              Exchange differences arising on the settlement of monetary items or on translating monetary items at the
              balance sheet date are recognised in the profit and loss account except for exchange differences arising
              on monetary items that form part of the Group’s net investment in foreign subsidiaries, which are
              recognised initially in a separate component of equity as foreign currency translation reserve in the
              consolidated balance sheet and recognised in the consolidated profit and loss account on disposal of the
              subsidiary. In the Company’s separate financial statements, such exchange differences are recognised in
              the profit and loss account.

       (b)    Foreign currency translation
              The results and financial position of foreign subsidiaries are translated into Singapore dollars using the
              following procedures:

                     Assets and liabilities for each balance sheet presented are translated at the closing exchange rate
                     ruling at that balance sheet date; and

                     Income and expenses for each income statement are translated at average exchange rates for the
                     year, which approximates the exchange rates at the dates of the transactions.

              All resulting exchange differences are recognised in a separate component of equity as foreign currency
              translation reserve.

              Goodwill and fair value adjustments arising on the acquisition of foreign subsidiaries on or after 1 January
              2005 are treated as assets and liabilities of the foreign subsidiaries and are recorded in the functional
              currency of the foreign subsidiaries and translated at the closing exchange rate at the balance sheet date.

2.23   Segment reporting
       A segment is a distinguishable component of the Group that is engaged either in providing products or services
       (business segment), or in providing products or services within a particular economic environment (geographical
       segment), which is subject to risks and rewards that are different from those of other segments.

       Segment information is presented in respect of the Group’s business and geographical segments. The primary
       format, business segments, is based on the Group’s management and internal reporting structure.

       For management purposes, the Group is organised on a world-wide basis into two major operating businesses.

       Inter-segment pricing is determined on an arm’s length basis.




                                   JEL CORPORATION (HOLDINGS)   22   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

2.     Significant accounting policies (cont’d)

2.23   Segment reporting (cont’d)
       Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
       be allocated on a reasonable basis. Unallocated items mainly comprise income earning assets and revenue,
       interest-bearing loans, borrowings and expenses, and corporate assets and expenses.


       Segment capital expenditure is the total costs incurred during the financial year to acquire segment assets that
       are expected to be used for more than one year.

3.     Revenue
                                                                                   Group                Company
                                                                           2005            2004     2005       2004
                                                                           $’000           $’000    $’000     $’000

       Sale of goods                                                     214,878          143,328       –         –
       Dividend income from unquoted subsidiary                                –                –   2,000     3,000
       Management fee from subsidiaries                                        –                –   3,403         –

                                                                         214,878          143,328   5,403     3,000



4.     Other operating income
       Consultancy income                                                     241            365       –         –
       Grant received *                                                         –             59       –         –
       Gain on disposal of fixed assets **                                  4,363              –       –         –
       Other miscellaneous income                                             485            113       –         –
       Rental income                                                          294              –      27         –

                                                                            5,383            537      27         –


       *    The amount in previous financial year relates to a 2-year grant from International Enterprise Singapore for
            setting up of Overseas Marketing Office in Vietnam.

       **   The amount includes gain on disposal of JEL Centre to A-REITs on 3 August 2005 amounting to
            approximately $4.2 million.




                                   JEL CORPORATION (HOLDINGS)   23   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

5.    Profit from operations
      This is determined after charging (crediting) the following:

                                                                                   Group                 Company
                                                                          2005             2004      2005       2004
                                                                          $’000            $’000     $’000     $’000

      Provision for warranty                                                 33                 –        –        –
      Depreciation of property, plant and equipment                         969               743        –        –
      Directors’ fees                                                       101               101      101        –
      Directors’ remuneration                                             1,166             1,307    1,046        –
      Loss on disposal of property, plant and equipment                       –                16        –        –
      Exchange loss /(gain), net                                            395            (1,153)     (59)     149
      Operating lease expenses                                            1,201               869      115        –
      Personnel expenses* (Note 6)                                        7,159             5,836    1,869        –
      Provision for inventory obsolescence                                    –                58        –        –
      Provision/(write-back of) for doubtful trade debts                     87               (62)       –        –
      Negative goodwill on consolidation                                    (56)              (21)       –        –
      Amortisation of trademarks                                             13                 1        2        1
      Preliminary expenses                                                    2                 2        –        –


      *     This includes directors’ remuneration

6.    Personnel expenses
      Wages, salaries and bonuses                                         6,500            5,243     1,766       –
      Pension contributions                                                 274              224        90       –
      Other personnel expenses                                              385              369        13       –

                                                                          7,159            5,836     1,869        –




                                  JEL CORPORATION (HOLDINGS)   24   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

7.    Financial expenses and financial income
                                                                                     Group                Company
                                                                            2005             2004     2005       2004
                                                                            $’000            $’000    $’000     $’000

      Interest expense
      – bank term loans                                                         –              (14)      –        –
      – finance lease obligations                                              (9)              (9)      –        –
      – bank overdrafts                                                       (60)              (1)      –        –
      – bills payable to banks                                             (1,954)            (713)      –        –
      – others                                                                (18)               –       –        –

                                                                           (2,041)            (737)      –         –


      Interest income
      – fixed deposits                                                          3               45       –        15
      – instalment                                                             21                –       –         –
      – others                                                                  9               25       6         –

                                                                               33               70       6        15



8.    Taxation
      Current tax
      Singapore tax
      – current year                                                          270             694      401       566
      – underprovision in respect of prior year                                10               7        1         –
      Foreign tax
      – current year                                                          369             194        –         –
      Deferred tax
      Singapore
      – current year                                                          (38)             (67)      –        –
      – underprovision in respect of prior year                                61               42       –        –
      Effect of change in tax rates                                             –               12       –        –

                                                                              672             882      402       566




                                    JEL CORPORATION (HOLDINGS)   25   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

8.    Taxation (cont’d)
      A reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax
      rate for the year ended 31 December is as follows:

                                                                                   Group                Company
                                                                          2005             2004     2005       2004
                                                                          $’000            $’000    $’000     $’000

      Accounting profit before taxation                                   7,482            7,517    2,096       2,688

      Tax expense at the applicable tax rate of 20%
        (2004: 20%)                                                       1,496            1,503     419            538
      Tax effect of items not deductible for tax purposes                   304               22      (7)            30
      Underprovision in respect of prior year                                71               49       1              –
      Deferred tax assets not recognised                                     37               84       –              –
      Income not subject to tax                                          (1,192)            (797)      –              –
      Effect of change in tax rates                                           –               12       –              –
      Tax exempt and rebates                                                (31)               –       –              –
      Others                                                                (13)               9     (11)            (2)

                                                                            672             882      402            566


      Deferred taxation as at 31 December relates to the following:

                                                                                                            Group
                                                                                                    2005            2004
                                                                                                    $’000           $’000

      Deferred tax liabilities
      – excess of net book value over tax written down value of fixed assets                         (82)            (59)
      Deferred tax assets
      – provision for doubtful trade debts and impairment on balances due
         from related companies                                                                     226             228
      – provision for inventory obsolescence                                                         42              42

                                                                                                    186             211



9.    Earnings per share
      Basic earnings per share for the financial year ended 31 December 2005 is calculated by dividing net profit
      attributable to members of the Company of $6,810,000 (2004: $6,584,000) by the weighted average number of
      ordinary shares outstanding during the year of 219,120,000 (2004: 199,200,000) shares.

      The weighted average number of ordinary shares is arrived at assuming that the bonus issue of 19,920,000
      ordinary shares of $0.05 each had taken place as of 1 January 2004.

      No dilutive earnings per share is presented as there are no potential dilutive shares.




                                  JEL CORPORATION (HOLDINGS)   26   ANNUAL REPORT 2005
                             Notes to Financial Statements
                             31 December 2005
                             Amounts expressed in Singapore dollars unless otherwise stated

                             10.   Property, plant and equipment
                                   Group                                                       Leasehold    Furniture,      Motor
                                                                                    Freehold     office    equipment       vehicles                           Construction
                                                                                    premises    building   and fittings   and yacht   Machinery   Computers   -in-progress    Total
                                                                                      $’000      $’000        $’000         $’000       $’000       $’000         $’000       $’000
                                   At cost
                                   As at 1 January 2004                              1,700       3,086        1,130         1,625        54          78           543         8,216
                                   Transfer from construction-in-progress                –         543            –             –         –           –          (543)            –
                                   Additions                                             –       5,868        1,007           567       104         135             –         7,681
                                   Disposals                                             –           –          (63)         (376)        –           –             –          (439)
                                   Translation difference                                –           –           12            (2)        2           6             –            18

                                   As at 31 December 2004 and 1 January 2005         1,700       9,497        2,086         1,814       160         219             –        15,476
                                   Addition                                              –          19          406           983       161         131             –         1,700




JEL CORPORATION (HOLDINGS)
                                   Disposals                                             –      (6,430)        (710)       (1,047)      (39)        (11)            –        (8,237)




27
                                   Translation difference                                –           –          (14)           (2)       (1)         (9)            –           (26)
                                   Reclassification                                      –      (3,086)           –             –         –           –             –        (3,086)

                                   As at 31 December 2005                            1,700           –        1,768         1,748       281         330             –         5,827

                                   Accumulated depreciation and impairment losses
                                   As at 1 January 2004                                195        262          583           547         23          21             –         1,631




ANNUAL REPORT 2005
                                   Charge for the year                                  49         97          260           288         14          35             –           743
                                   Disposals                                             –          –          (10)          (84)         –           –             –           (94)
                                   Translation difference                                –          –            6             2          –           3             –            11

                                   As at 31 December 2004 and 1 January 2005           244         359          839           753        37           59            –         2,291
                                   Charge for the year                                  48         161          355           299        47           59            –           969
                                   Disposals                                             –        (134)        (183)         (650)       (9)         (10)           –          (986)
                                   Translation difference                                –           –           (5)           (2)        –           (1)           –            (8)
                                   Reclassification                                      –        (386)           –             –         –            –            –          (386)

                                   As at 31 December 2005                              292           –        1,006          400         75         107             –         1,880

                                   Net carrying amount
                                   As at 31 December 2005                            1,408           –         762          1,348       206         223             –         3,947

                                   As at 31 December 2004                            1,456       9,138        1,247         1,061       123         160             –        13,185
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

10.   Property, plant and equipment (cont’d)
      Construction-in-progress related to costs incurred for the construction of the Regional Warehouse and Logistics
      Hub at Changi North and was stated at cost. Construction-in-progress is not depreciated until such time it is
      completed and put into operational use. Construction of the Regional Warehouse and Logistics Hub has been
      completed in the current financial year. The construction-in-progress has been capitalised as leasehold office
      building and put into operational use in previous financial year.

      The net book value of motor vehicles of the Group acquired under finance leases amounted to approximately
      $1,080,000 (2004: $785,000) as at 31 December 2005.

      During the financial year, the Group reclassified a leasehold property of $2,700,000 at 43 Kaki Bukit Place,
      Singapore 41622, to investment property as the property was not in use by the Group for its own use, but was
      rented out.

      In previous financial year, pledges on the freehold premises and a leasehold office building of the Group (with a
      net book value of approximately $1,505,000 as at 31 December 2004) for the banking facilities granted to the
      subsidiaries have been replaced with a corporate guarantee given by the Company.

11.   Subsidiaries
      (a)                                                                                                     Company
                                                                                                          2005       2004
                                                                                                          $’000     $’000

             Unquoted equity shares at cost                                                               6,157        6,157


      (b)    Details of the subsidiaries are as follows:

             Name of                            Principal          Country of           Equity held by       Cost of investment
             subsidiary                         activities       incorporation            the Group           by the Company
                                                                                       2005        2004      2005         2004
                                                                                        %            %       $’000        $’000

             Held by the Company

             JEL Corporation                Trading and          Singapore                 100     100        5,989      5,989
             (Far East) Pte Ltd *           distribution of
                                            fast-moving
                                            consumer goods,
                                            consumer electronic,
                                            IT, photographic and
                                            telecommunication
                                            products




                                    JEL CORPORATION (HOLDINGS)   28   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

11.   Subsidiaries (cont’d)
             Name of                                Principal           Country of           Equity held by    Cost of investment
             subsidiary                             activities        incorporation            the Group        by the Company
                                                                                            2005        2004   2005         2004
                                                                                                %        %     $’000       $’000

             Held by the Company

             JEL Corporation                  Trading and          British Virgin               100     100     168         168
             (Middle East) Pte Ltd *          distribution of         Islands
                                              fast-moving
                                              consumer goods,
                                              consumer electronic,
                                              IT, photographic and
                                              telecommunication
                                              products

             JEL Franchise (Holdings)         Investment and           Singapore                100     100     –#          –#
             Pte. Ltd. *                      intellectual property
                                              holding

             JEL Corporation (Africa)         Trading and          British Virgin               100     100     –#          –#
             Pte Ltd *                        distribution of         Islands
                                              fast-moving
                                              consumer goods,
                                              consumer electronic,
                                              IT, photographic and
                                              telecommunication
                                              products

             Held by subsidiaries

             JEL Distribution (Cambodia)      Trading and              Cambodia                 100     100      –           –
             Pte Ltd ****                     distribution of
                                              fast-moving
                                              consumer goods,
                                              consumer electronic,
                                              IT, photographic and
                                              telecommunication
                                              products

             JEL Distribution South Africa    Trading and                  Africa               100     100      –           –
             (Pty) Ltd **                     distribution of
                                              fast-moving
                                              consumer goods,
                                              consumer electronic,
                                              IT, photographic and
                                              telecommunication
                                              products

             JEL Distribution (Kazakhstan) Trading and                 Kazakhstan               100     100      –           –
             LLP****                       distribution of
                                           fast-moving
                                           consumer goods,
                                           consumer electronic,
                                           IT, photographic and
                                           telecommunication
                                           products




                                        JEL CORPORATION (HOLDINGS)    29   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

11.   Subsidiaries (cont’d)
             Name of                                 Principal          Country of           Equity held by    Cost of investment
             subsidiary                              activities       incorporation            the Group        by the Company
                                                                                            2005        2004   2005         2004
                                                                                             %            %    $’000        $’000

             Held by subsidiaries

             JEL Corporation (Hong Kong) Trading and                   Hong Kong                100     100      –           –
             Limited ***                 distribution of
                                         photographic
                                         and fast-moving
                                         consumer goods

             Knight Alliance Inc. ****         Investment             British Virgin            100      –       –           –
                                               holding                   Islands

             Yofoto Pte Ltd *                  Trading and             Singapore                100      –       –           –
                                               distribution of
                                               photographic
                                               products

                                                                                                               6,157       6,157


             *      Audited by Ernst & Young, Singapore.
             **     Audited by Ernst & Young, South Africa.
             ***    Audited by Philip Chow & Company, Certified Public Accountants in Hong Kong.
             ****   Not required by the laws of the respective countries of incorporation to audited.
             #      Less than $1,000

             (c)      On 18 March 2005, the Group incorporated a wholly-owned subsidiary, Knight Alliance Inc. in the
                      British Virgin Islands. The authorised and paid-up share capital of Knight Alliance Inc. are
                      US$50,000 and US$2 respectively.

             (d)      On 31 March 2005, the Group acquired 100% shareholding of Yofoto Pte Ltd (“YPL”), a limited
                      liability company incorporated in Singapore. Consideration for the acquisition was US$39,000. The
                      acquisition was accounted for using the purchase method of accounting and the fair value of YPL
                      assets acquired and liabilities assumed as at 31 March 2005 is US$23,000 and the cash flows
                      effect of the acquisition were disclosed in Note B to the Consolidated Statement of Cash Flows.

             (e)      On 1 January 2005, JEL Distribution South Africa (Pty) Ltd increased its paid-in capital from
                      1,500,000 Africa Rands to 17,377,120 Africa Rands through the issuance of new shares. The new
                      shares were issued to JEL Corporation (Africa) Pte Ltd.




                                         JEL CORPORATION (HOLDINGS)   30   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

12.   Negative goodwill on consolidation
                                                                                                                 Group
                                                                                                      2005               2004
                                                                                                      $’000              $’000

      Arising from acquisition of a subsidiary                                                            84              84
      Less:
       Accumulated amortisation                                                                       (28)               (28)
       Derecognition of negative goodwill                                                             (56)                –

                                                                                                          –               56




13.   Investment property
      Cost
      At beginning of the year                                                                          –                 –
      Reclassification from property, plant and equipment                                             3,086               –

      At end of year                                                                                  3,086               –

      Accumulated depreciation
      At beginning of the year                                                                         –                  –
      Reclassification from property, plant and equipment                                             386                 –

                                                                                                      386                 –

      Net book value
      At end of year                                                                                  2,700               –



      As disclosed in Note 2.7, the property rental income earned by the Group for the year ended 31 December 2005
      from its investment property amounted to $42,500 (2004: $Nil). The property has been revalued at $2,500,000
      by an independent firm of professional valuer, Realty International Associates Pte Ltd, in February 2006 on the
      open market basis.

      The investment property held by the Group as at 31 December 2005 is:

                                                                                                                   Group
                                                                                                                  At Cost
      Name of property                                              Description     Tenure of land             2005     2004

                                                                                                               $’000      $’000

      43, Kaki Bukit, Eunos Tech Park                                Office        50 years lease              3,086          –
                                                                     Building       from October 1999
                                                                                   (44 years remaining)




                                  JEL CORPORATION (HOLDINGS)   31   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

14.   Trademarks
                                                                                            Group    Company
                                                                                         Trademarks Trademarks
                                                                                            $’000      $’000

      At cost
      As at 1 January 2004                                                                   –                –
      Addition                                                                               6                6

      As at 31 December 2004 and 1 January 2005                                              6                6
      Addition                                                                              50                4

      As at 31 December 2005                                                                56               10

      Accumulated amortisation
      As at 1 January 2004                                                                   –                –
      Amortisation for the year                                                              1                1

      As at 31 December 2004 and 1 January 2005                                              1                1
      Amortisation for the year                                                             13                2

      As at 31 December 2005                                                                14                3

      Net carrying amount
      As at 31 December 2005                                                                42                7

      As at 31 December 2004                                                                 5                5



15.   Inventories
                                                                                                    Group
                                                                                           2005             2004
                                                                                           $’000            $’000

      Finished goods
      At cost                                                                              42,724       20,239
      At net realisable value                                                                 391        3,257


                                                                                           43,115       23,496

      Finished goods at net realisable value is stated after deducting provision
       for inventory obsolescence of                                                         210             232




                                  JEL CORPORATION (HOLDINGS)   32   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

15.   Inventories (cont’d)

      Movements in provision for inventory obsolescence during the year were as follows:


                                                                                                             Group
                                                                                                    2005             2004
                                                                                                    $’000            $’000

      At beginning of year                                                                            232             175
      Provision for the year                                                                            –              58
      Write-off against provision                                                                     (15)              –
      Translation difference                                                                           (7)             (1)

      At end of year                                                                                  210             232



16.   Trade receivables


      Trade receivables                                                                             35,809       19,578
      Less: provision for doubtful trade receivables                                                (1,092)      (1,255)

                                                                                                    34,717       18,323


      Movements in provision for doubtful trade debts during the year were as follows:

      At beginning of year                                                                           1,255           1,329
      Provision for the year                                                                            87               –
      Write-back of provision                                                                            –             (62)
      Write-off against provision                                                                     (249)              –
      Translation difference                                                                            (1)            (12)

      At end of year                                                                                 1,092           1,255



17.   Other receivables, deposits and prepayments
                                                                                    Group               Company
                                                                            2005            2004    2005       2004
                                                                            $’000           $’000   $’000     $’000

      Other receivables                                                     4,750           3,383      50             58
      Deposits                                                                300             202       –              –
      Prepayments                                                             243             387      27              –

                                                                            5,293           3,972      77             58




                                    JEL CORPORATION (HOLDINGS)   33   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

18.   Due from subsidiaries (non-trade)
      These balances are unsecured, interest-free and repayable on demand.

19.   Fixed deposits
      Fixed deposits of a subsidiary amounting to approximately $254,000 (2004: $59,000) are pledged to banks in
      accordance with the regulatory requirements in the United Arab Emirates. It acts as a security against non-
      payment of custom duties and staff salaries.

      Fixed deposits earn interest ranging from 0.05% to 1.4% (2004: 0.01% to 0.5%) per annum.

20.   Bills payable to banks
      As at 31 December 2005, bills payable to banks amounting to $57,882,000 are secured by a corporate
      guarantee given by the Company.

      The average effective interest rate of bills payable of the Group is 4.09% (2004: 3.45%) per annum. These bills
      mature within 1 to 4 months from the end of the financial year.

21.   Other payables and accruals
                                                                                   Group                   Company
                                                                          2005             2004        2005       2004
                                                                          $’000            $’000       $’000     $’000

      Other payables                                                      1,914            1,080         75         –
      Accrued operating expenses                                          2,134            1,398        673        20

                                                                          4,048            2,478         748       20



22.   Finance lease obligations
                                                                                              Group
                                                                         Total                          Total
                                                                       minimum            Present     minimum    Present
                                                                         lease            value of     lease     value of
                                                                       payments          payments     payment   payments
                                                                         2005              2005         2004      2004
                                                                         $’000             $’000       $’000      $’000

      Not later than 1 year                                                 175             157          150      136
      2 to 5 years                                                          502             447          291      263

      Total minimum lease payments                                          677             604          441      399
      Less: amounts representing finance charges                            (73)              –          (42)       –

      Present value of minimum lease payments                               604             604         399       399




                                  JEL CORPORATION (HOLDINGS)   34   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

22.   Finance lease obligations (cont’d)
      The lease periods range from 1 to 5 years with options to purchase at the end of the lease term. The average
      discount rate implicit in the leases is about 4.92% (2004: 4.38%) per annum.

      Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further
      leasing.

23.   Share capital
                                                                                 Group and Company
                                                                               2005                                 2004
                                                                       Number of             Number of
                                                                        shares        $       shares                    $

      Authorised:
       400,000,000 ordinary shares of $0.05 each                      400,000,000        20,000,000   400,000,000   20,000,000

      Issued and fully paid:
      As at 1 January                                                 199,200,000        9,960,000    166,000,000   8,300,000

      – Issue of 33,200,000 ordinary shares of $0.05
        each pursuant to a bonus issue on the basis of
        1 : 5 via capitalisation from share premium account                 –                –        33,200,000    1,660,000

      – Issue of 19,920,000 ordinary shares of $0.05
        each pursuant to a bonus issue on the basis of
        1 : 10 via capitalisation from share premium account           19,920,000         996,000         –             –

      As at 31 December
       Ordinary shares of S$0.05 each                                 219,120,000        10,956,000   199,200,000   9,960,000


      The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All
      ordinary shares carry one vote per share without restriction.

24.   Reserves
                                                                                  Group                      Company
                                                       Note               2005             2004          2005       2004
                                                                          $’000            $’000         $’000     $’000

      Share premium                                      A               2,785             3,781         2,785       3,781
      Revenue reserve                                    B              15,173             9,857         2,273       2,073
      Capital reserve                                    C                 779               779             –           –
      Translation reserve                                C                (606)             (123)            –           –

                                                                        18,131            14,294         5,058       5,854




                                  JEL CORPORATION (HOLDINGS)   35   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

24.   Reserves (cont’d)
                                                                                                   Group
                                                                                           2005            2004
                                                                                           $’000           $’000

      Retained by:
      – the Company                                                                        5,058           5,854
      – subsidiaries                                                                      13,073           8,440

                                                                                          18,131           14,294


      Note A
      The share premium account may be applied only for the purposes specified in the Companies Act. The balance
      is not available for distribution of dividends except in the form of shares.

      During the financial year, 19,920,000 ordinary shares of $0.05 each, amounting to $996,000, are issued via
      capitalisation of $996,000 from the share premium account. Accordingly, share premium account decreased
      from $3,781,000 to $2,785,000.

      Note B
      The revenue reserve of the Company is available for distribution as dividends.


      Note C
      Translation and capital reserves are not available for distribution.

25.   Dividends, net
                                                                                          Group and Company
                                                                                           2005       2004
                                                                                           $’000      $’000

      Final one-tier tax exempt dividend of $0.0117 per ordinary share
       in respect of the financial year ended 31 December 2003                                 –           1,942

      Interim one-tier tax exempt dividend of $0.005 per ordinary
        share in respect of the financial year ended 31 December 2004                          –             996


      Final one-tier tax exempt dividend of $0.0075 per ordinary share in
       respect of the financial year ended 31 December 2004                                1,494               –

                                                                                          1,494            2,938




                                   JEL CORPORATION (HOLDINGS)   36   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

26.   Commitments and contingencies
      (a)    Letters of credit (secured)
             As at 31 December 2005, the Group had letters of credit amounting to approximately $4,587,000 (2004:
             $6,950,000), issued in the normal course of business in favour of third parties.

             The letters of credit are secured by a corporate guarantee given by the Company.

      (b)    Non-cancellable operating lease commitments – As lessor
             The Group has entered into commercial property lease on its investment property portfolio as disclosed in
             Note 13. This non-cancellable lease have remaining non-cancellable lease term of 3 years.

             Future minimum lease receivables under non-cancellable leases as of 31 December are as follows:

                                                                                                           Group
                                                                                                   2005            2004
                                                                                                   $’000           $’000

             Within 1 year                                                                         102              –
             Within 2 to 5 years                                                                   162              –

                                                                                                   264              –


      (c)    Non-cancellable operating lease commitments – As lessee
             The Group has various operating lease agreements in respect of the leasehold buildings and staff
             accommodation. These non-cancellable leases have remaining non-cancellable lease terms of between
             1 and 10 years. Most leases contain renewable options.

             Future minimum lease payments under non-cancellable leases as of 31 December are as follows:

                                                                                   Group               Company
                                                                           2005            2004    2005       2004
                                                                           $’000           $’000   $’000     $’000

             Within 1 year                                                 1,443             520     815             –
             Within 2 to 5 years                                           3,416           1,088   3,343             –
             After 5 years                                                 4,469           8,697   4,469             –

                                                                           9,328          10,305   8,627             –



             Lease terms do not contain restrictions on the Company’s activities concerning dividends, additional debt
             or further leasing.




                                   JEL CORPORATION (HOLDINGS)   37   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

26.   Commitments and contingencies (cont’d)
      (d)    Financial support to the subsidiaries
             The Company has committed to provide financial support to 2 of its subsidiaries, JEL Franchise
             (Holdings) Pte. Ltd. and JEL Corporation (Africa) Pte Ltd, to enable them to operate as going concerns
             and to meet their obligations for at least the next 12 months from the dates of their respective directors’
             reports in relation to the financial statements for the year ended 31 December 2005.

27.   Related party transactions
      For the purposes of these financial statements, parties are considered to be related to the Group if the Group
      has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making
      financial and operating decisions, or vice versa, or where the Group and the party are subject to common control
      or common significant influence. Related parties may be individuals or other entities.

      (a)    Sale and purchase of goods and services
             In addition to the related party information disclosed elsewhere in the financial statements, significant
             transactions with related parties, on terms agreed between the parties were as follows:

                                                                                                            Group
                                                                                                    2005            2004
                                                                                                    $’000           $’000

             Others
             Directors’ fees                                                                          101             101
             Directors’ remuneration                                                                1,166           1,307
             Key managers’ remuneration                                                               387             228


      (b)    Compensation of key management personnel
                                                                                                            Group
                                                                                                    2005            2004
                                                                                                    $’000           $’000

             Short-term employee benefits                                                           1,489           1,485
             Other long-term benefits                                                                  64              50

             Total compensation paid to key management personnel                                    1,553           1,535

             Comprise amounts paid to:
               Directors of the Company                                                             1,166           1,307
               Other key managers                                                                     387             228

                                                                                                    1,553           1,535


             The remuneration of key management personnel are determined by the remuneration committee having
             regard to the performance of individuals and market trends.




                                   JEL CORPORATION (HOLDINGS)   38   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

28.   Segment information
      The Group’s primary format for reporting segment information is business segments, with each segment
      representing a strategic business activity. For management purposes, the Group is organised into two business
      segments, namely Trading and Distribution.

      There are no inter-segment sales.

      Trading: This relates to the sale of products to mainly importers. Trading sales are normally conducted on cash
      terms, where payment is receivable upon delivery of products.

      Distribution: This relates to the sale of products to customers such as sub-distributors, wholesalers, retailers and
      mobile vendors through representative and distribution offices. Distribution sales are normally conducted on
      credit terms of between 30 – 90 days.

      Segment revenue and expense/segment assets/segment liabilities/depreciation and amortisation
      Revenue and cost of sales are directly attributable to the segments. Other segment expenses/income, segment
      assets, segment liabilities and depreciation and amortisation are allocated to the segments on a reasonable
      basis. Unallocated items mainly comprise corporate assets and liabilities.

      Capital expenditure
      Capital expenditure cannot be directly attributed to individual segments and it is impractical to allocate them to
      the segments.

      Business segments
      2005                                                                               Trading   Distribution Consolidated
                                                                                          $’000       $’000        $’000

      Segment revenue                                                                    142,758     72,120      214,878

      Profit from operations                                                               5,754      3,736         9,490
      Financial expenses, net                                                                                      (2,008)
      Tax                                                                                                            (672)
      Minority interests                                                                                                –

      Net profit attributable to equity holders of the Company                                                      6,810

      Assets                                                                             23,130      58,048       81,178
      Unallocated assets                                                                                          31,589

      Total assets                                                                                               112,767

      Liabilities                                                                        55,416      25,092       80,508
      Unallocated liabilities                                                                                      3,172

      Total liabilities                                                                                           83,680

      Depreciation and amortisation                                                        537         389         926




                                  JEL CORPORATION (HOLDINGS)   39   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

28.   Segment information (cont’d)
      2004                                                                               Trading   Distribution Consolidated
                                                                                          $’000       $’000        $’000

      Segment revenue                                                                    98,125      45,203      143,328

      Profit from operations                                                              5,603       2,581         8,184

      Financial expenses, net                                                                                        (667)
      Tax                                                                                                            (882)
      Minority interests                                                                                              (51)

      Net profit attributable to equity holders of the Company                                                      6,584


      Assets                                                                             16,888      26,692       43,580
      Unallocated assets                                                                                          25,260

      Total assets                                                                                                68,840


      Liabilities                                                                        25,906      15,453       41,359
      Unallocated liabilities                                                                                      3,227

      Total liabilities                                                                                           44,586


      Depreciation and amortisation                                                         495         228          723


      Geographical segments
      Revenue by geographical segments is based on the destination of the products sold.

                                                                                                            Revenue
                                                                                                       2005        2004
                                                                                                       $’000       $’000

      Africa                                                                                          57,141       34,779
      Middle East                                                                                     28,678       19,536
      Asia                                                                                           104,496       67,216
      The Americas                                                                                    24,563       21,797

                                                                                                     214,878      143,328




                                  JEL CORPORATION (HOLDINGS)   40   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

28.   Segment information (cont’d)
      The assets and capital expenditures are based on the location of those assets.

                                                                                       Capital                 Capital
                                                                         Assets      expenditure   Assets    expenditure
                                                                          2005          2005        2004        2004
                                                                          $’000         $’000       $’000       $’000

      Africa                                                            16,875             515      6,954        157
      Middle East                                                       21,203              37     13,784        115
      Asia                                                              74,689           1,147     48,102      7,409

                                                                        112,767          1,699     68,840       7,681



29.   Financial risk management objectives and policies
      Risk management is integral to the whole business of the Group. The Group has a system of controls in place to
      create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The
      management continually monitors the Group’s risk management process to ensure that an appropriate balance
      between risk and control is achieved.

      The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, credit risk and
      foreign exchange risk. The policies for managing each of these risks are summarised below.

      The Group does not hold or issue derivative financial instruments for trading purposes.

      Interest rate risk
      The Group’s exposure to changes in interest rates relates primarily to interest-earning financial assets and
      interest-bearing financial liabilities. Interest rate risk is managed by the Group on an on-going basis with the
      primary objective of limiting the extent to which net interest expense could be affected by an adverse movement
      in interest rates.

      The Group obtains additional financing through letter of credit and leasing arrangements. The Group’s policy is
      to obtain the most favourable interest rates available without increasing its foreign currency exposure.

      Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s
      borrowings, including finance lease arrangements.

      Liquidity risk
      The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to
      finance the Group’s operations and mitigate the effects of fluctuations in cash flows.




                                  JEL CORPORATION (HOLDINGS)   41   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

29.   Financial risk management objectives and policies (cont’d)
      Credit risk
      Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its
      financial and contractual obligations to the Group, as and when they fall due.

      The Group has established credit limits for customers and monitors their balances. Cash and fixed deposits are
      placed with banks and financial institutions which are regulated.

      It is the Group’s policy to sell to a diversity of creditworthy customers. At the balance sheet date, there is no
      significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying
      amount of cash and cash equivalents and trade and other receivables in the balance sheets.

      Foreign currency risk
      The Group is exposed to foreign exchange risk resulting from cash flows from transactions denominated in
      foreign currencies, primarily the United States dollar, Euro and Japanese Yen.

      The Group does not have any formal hedging policy against foreign exchange fluctuations. However, the Group
      continuously monitors the exchange rates of the major currencies and enters into hedging contracts with banks
      from time to time whenever the management detect any movements in the respective exchange rates which may
      impact on the Group’s profitability.

      Foreign currencies received are kept in foreign currencies accounts and are converted to the respective
      measurement currencies of the companies on a need-to basis so as to minimise the foreign exchange exposure.

30.   Fair value of financial instruments
      Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction
      between knowledgeable willing parties in an arm’s length transaction, other than in a forced or liquidation sale.
      Fair values are obtained from quoted market prices and discounted cash flow models as appropriate.

      The following methods and assumptions are used to estimate the fair value of each class of financial
      instruments:

      Cash and bank balances, and other current receivables
      The carrying amounts approximate fair values due to the relatively short-term maturity of these instruments.

      Short-term borrowings and other current payables
      The carrying amounts approximate fair values because of the short period to maturity of these instruments.

      Lease obligations
      The fair values of these financial instruments approximate the carrying amounts after discounting the relevant
      cash flows using current interest rates for similar instruments at balance sheet date.

      Disclosure of the nature of financial instruments and their significant terms and conditions that could affect the
      amount, timing and certainty of future cash flow is presented in the respective Notes to the financial statements,
      where applicable.




                                  JEL CORPORATION (HOLDINGS)   42   ANNUAL REPORT 2005
Notes to Financial Statements
31 December 2005
Amounts expressed in Singapore dollars unless otherwise stated

31.   Subsequent events
      Subsequent to the end of financial year:

      (i)     the Company proposed the issue of 43,824,000 new ordinary shares of $0.05 each pursuant to a bonus
              issue on the basis of 1 bonus share for every 5 existing shares of $0.05 each via capitalisation of
              $2,191,200 from the share premium account.

      (ii)    the Company declared a final one-tier tax exempt dividend of $0.01 per ordinary share, amounting to
              $2,191,200 in respect of the financial year ended 31 December 2005 which is subject to shareholders’
              approval at the forthcoming Annual General Meeting.

      (iii)   on 16 January 2006, one of the subsidiary, JEL Corporation (Far East) Pte Ltd, incorporated a 100%
              wholly-owned subsidiary, JEL Trading (Shenzhen) Ltd. The authorised share capital is HKD500,000.

32.   Comparatives
                                                                                                         Group
                                                                                                 2004 as
                                                                                          Note   restated      2004
                                                                                                   $’000       $’000

      Consolidated Profit and Loss Account
      Earning per share (cents)
      – Basic and diluted                                                                  (i)    3.01           3.31

      Consolidated Statement of Cash Flows
      – Cash flows from financing activities
        Proceeds from bills payable to banks                                              (ii)      –           14,089

      – Cash flows from operating activities
        Bills payable to banks                                                            (ii)   14,089            –

      (i)     The number of shares in issue used to compute basic and diluted earning per share is restated to
              219,120,000 shares (previously reported as 199,200,000).

      (ii)    The prior year comparatives have been restated to take into account the reclassification of bills payable to
              banks from cash flows from financing activities to cash flows from operating activities to better reflect the
              presentation of the financial statements.

33.   Authorisation of financial statements
      The financial statements for the year ended 31 December 2005 were authorised for issue in accordance with a
      resolution of the directors on 27 March 2006.




                                   JEL CORPORATION (HOLDINGS)   43   ANNUAL REPORT 2005
Corporate Governance Report

JEL Corporation (Holdings) Ltd. (“JEL”) is committed to a high level of corporate governance and seeks to comply with
the Code of Corporate Governance (the “Code”) wherever possible. This report outlines JEL’s corporate governance
practices and activities for the financial year ended 31 December 2005.

1.    Board of Directors
      (a)    Board Composition
             Presently, the Board of Directors (the “Board”) comprises 4 Non-Executive Independent Directors and 3
             Executive Directors, namely:-

             Non-Executive Independent Directors
             Sim Cheok Lim
             Lee Choon Hui, Francis
             Curtis Jerry Montgomery (appointed on 27 March 2006)
             Tan Kok Hiang

             Executive Directors
             Tan Boon Yong, Eric, Chairman and Chief Executive Officer
             Leow Hock Leong
             Wee Teck Han

      (b)    Role of Chairman and Chief Executive Officer
             The Code outlines that the roles of Chairman and Chief Executive Officer (“CEO”) should in principle be
             separate, to ensure an appropriate balance of power, increased accountability and greater capacity of the
             Board for independent decision making.

             The Group’s Executive Director, Tan Boon Yong, Eric, assumes the role of both the Chairman and CEO.
             The Board is of the view that it is in the best interests of the Group to adopt a single leadership structure,
             whereby the Chairman of the Board and the CEO is the same person, so as to ensure that the decision-
             making process of the Group would not be unnecessarily hindered.

             All major decisions made by the Executive Chairman and CEO are reviewed by the Audit Committee. His
             performance and appointment to the Board are reviewed periodically by the Nominating Committee and
             his remuneration package is reviewed periodically by the Remuneration Committee. As such, the Board
             believes that there are adequate safeguards in place against an uneven concentration of power and
             authority in a single individual.

      (c)    Role of the Board of Directors
             The Board sets the overall business direction, provides guidance on the Company’s strategic plans with
             particular attention to growth and financial performance, and oversees the management of the Company.

             The Board’s primary functions include:

             (i)    approving policies, strategies, structure and direction of the Group;

             (ii)   overseeing and monitoring managerial and organisational performance and the achievement of
                    strategic goals and objectives;




                                  JEL CORPORATION (HOLDINGS)   44   ANNUAL REPORT 2005
Corporate Governance Report

1.   Board of Directors (cont’d)
     (c)   Role of the Board of Directors (cont’d)
           (iii)   ensuring that there are in place appropriate and adequate systems of internal controls and risk
                   management, and effective processes for financial reporting and compliance;

           (iv)    approving the annual budget, major capital expenditures and funding proposals, and investment
                   and divestment proposals;

           (v)     assuming responsibilities for good corporate governance practices; and

           (vi)    approving half year announcement and annual announcement and financial statements.

           To discharge its duties effectively and efficiently, and to allow for detailed consideration of issues, the
           Board has established three committees, namely the Audit Committee (“AC”), Nominating Committee
           (“NC”) and Remuneration Committee (“RC”). Each committee has its own defined scope of duties and
           terms of reference setting out the manner in which it is to operate and the functions for achieving its
           stated objectives. The compositions of the committees are as follows:

                                                                      Audit            Remuneration   Nominating
           Directors                                                Committee           Committee     Committee

           Sim Cheok Lim                                              Chairman                           Chairman
           Lee Choon Hui, Francis                                     Member             Member
           Tan Kok Hiang                                              Member             Chairman        Member
           Tan Boon Yong, Eric                                                           Member          Member

           The Board has decided to meet at least three times a year. In addition, for matters requiring immediate or
           urgent consideration by the Board, ad-hoc Board meetings are also convened as and when
           circumstances require. The Company’s Articles of Association also provides for telephone conference
           and video conferencing meetings.

           In the course of the year under review, the number of meetings held and attended by each member of the
           Board is as follows:-

           Number of meetings                                                Audit          Nominating     Remuneration
           held in FY2005                             Board                Committee        Committee       Committee

           Total held in FY2005                          3                      2               1                   1
           Tan Boon Yong, Eric                           3                      –               1                   1
           Wee Teck Han                                  3                      –               –                   –
           Leow Hock Leong                               3                      –               –                   –
           Sim Cheok Lim                                 3                      2               1                   –
           Lee Choon Hui, Francis                        3                      2               –                   1
           Tan Kok Hiang                                 3                      2               1                   1




                                JEL CORPORATION (HOLDINGS)   45   ANNUAL REPORT 2005
Corporate Governance Report

1.   Board of Directors (cont’d)
     (c)   Role of the Board of Directors (cont’d)
           Newly appointed directors are given briefings by Management on the business activities and its strategic
           decisions. The Directors are also furnished with relevant information and updates relating to the Group’s
           corporate governance practices from the time of appointment, and are also provided with updates on
           changes in laws and regulations relevant to the Group’s businesses and operating environment on a
           regular basis.

           Internal guidelines and authority limits have been laid down for Management to administer the Group’s
           day-to-day operations. These guidelines and limits are reviewed by the Board from time to time, and
           adjusted when necessary. In addition, the Group has in place guidelines for approval of major capital and
           revenue expenditures and investments. The Board’s approval is required beyond authorised amounts,
           specified for transactions, including but not limited to tender participation, financing activities, investments,
           purchase of fixed assets and disposal/write-off of assets. Other matters that require Board approval
           include appointments to the Board, business plans and strategies, the annual budget, material
           transactions, public announcements, and dividends to shareholders.

     (d)   Board Committees
           To assist the Board in the execution of its duties, the Board has delegated specific functions to the Audit
           Committee, the Nominating Committee and the Remuneration Committee.

           Audit Committee
           The Audit Committee (“AC”) comprises Sim Cheok Lim, Lee Choon Hui, Francis and Tan Kok Hiang, all
           of whom are non-executive and independent directors. The Chairman of AC is Sim Cheok Lim.

           The Board is of the view that the present members of the AC are appropriately qualified to discharge their
           responsibilities. The Board reviews the composition and effectiveness of the members of the AC from
           time to time.

           The AC assists the Board in fulfilling its responsibilities to safeguard the Company’s assets, to ensure that
           Management maintains requisite accounting records, and to develop and maintain effective systems of
           internal control.

           The overall objective of AC is to ensure that Management has put in place and maintains an effective
           control environment in the Group, and that Management by example encourages respect for the internal
           control structure among all parties.

           The terms of reference of AC include, inter alia, the following:-

           (a)    Review the Company’s financial and operating results and accounting policies;

           (b)    Review the Company’s financial statements and consolidated financial statements as well as the
                  external auditors’ reports on those financial statements before submission to the Board ;

           (c)    Review the co-operation given by the Management to the auditors;

           (d)    Review the Company’s audit plans and reports of the external auditors’ examination and
                  evaluation on the internal accounting control system;

           (e)    Review transactions falling within the scope of Chapter 9 of the SGX-ST Listing Manual;

           (f)    Review the re-appointment of the external auditors;

           (g)    Review the Company’s significant financial reporting issues and judgements; and




                                JEL CORPORATION (HOLDINGS)   46   ANNUAL REPORT 2005
Corporate Governance Report

1.   Board of Directors (cont’d)
     (d)   Board Committees (cont’d)
           Audit Committee (cont’d)
           (h)    Review any formal announcements relating to the Company’s financial performance.

           The AC has full access to and co-operation of the Management, has full discretion to invite any Director
           or executive office to attend its meetings, and has been given reasonable resources to enable it to
           discharge its functions.

           The AC confirms that it has undertaken a review of all the non-audit services provided by the external
           auditors during the year and is satisfied that such services would not, in the AC’s opinion, compromise
           the independence of the external auditors.

           The AC meets with the external auditors without the presence of management at least once a year.

           Nominating Committee
           The Nominating Committee (“NC”) comprises Independent Directors Sim Cheok Lim and Tan Kok Hiang,
           and Executive Director Tan Boon Yong, Eric. The Chairman of the NC is Sim Cheok Lim. The present
           composition of the NC satisfies the requirement of the Code of Corporate Governance, which provides
           that the NC should comprise at least three Directors, a majority of whom, including the Chairman should
           be non-executive and Independent Directors.

           The NC has adopted, in its terms of reference, the criteria for determining the independence of a Director
           as set out in the Code, and will assess and review the independence of each Director at least once a
           year.

           The NC is primarily responsible for implementing a formal, transparent and objective procedure for
           appointing Board members and for assessing the effectiveness of the Board as a whole and contributions
           by each individual Director to the effectiveness of the Board.

           The NC’s principal functions are:

           (a)    To make recommendations to the Board on all Board appointments;

           (b)    To be responsible for the re-nomination of Directors, having regard to the Director’s contribution
                  and performance (e.g. attendance, preparedness, participation and candour) including, if
                  applicable, as an Independent Director.

           (c)    To determine, at least annually, whether or not a Director is independent;

           (d)    To decide whether or not a Director is able to, and has been adequately carrying out his duties as
                  a Director of the Company; and

           (e)    To assess the effectiveness of the Board as a whole, the contribution by each individual Director to
                  the effectiveness of the Board, and to decide how the Board’s performance may be evaluated.

           In respect of the current year under review, the NC has conducted a formal assessment of the
           effectiveness of the Board as a whole, and is of the view that our current Board comprises Directors who,
           as a group, possess the necessary core competencies to competently direct the Company and its
           Management to perform effectively and efficiently.




                               JEL CORPORATION (HOLDINGS)   47   ANNUAL REPORT 2005
Corporate Governance Report

1.   Board of Directors (cont’d)
     (d)   Board Committees (cont’d)
           Nominating Committee (cont’d)
           Pursuant to Article 91 of the Company’s Articles of Association, every Director shall retire from office once
           every three years and for this purpose, at each Annual General Meeting (“AGM”), one third of the
           Directors for the time being shall retire from office by rotation.

           The NC has evaluated the performance of the Directors who are retiring under rotation at the forthcoming
           AGM of the Company, and, having satisfied itself that these individual Directors are competent to
           continue, the NC has recommended to the Board for consideration for reappointment to the Board at the
           forthcoming AGM.

           Remuneration Committee
           The Remuneration Committee (“RC”) comprises Independent Directors Tan Kok Hiang and Lee Choon
           Hui, Francis, and Executive Director Tan Boon Yong, Eric. The Chairman of the Committee is Tan Kok
           Hiang.

           The primary functions of the RC are to review and recommend the remuneration terms of individual
           Directors and key managers, and to implement and administer the JEL Employees’ Share Option
           Scheme, which gives recognition to the contributions made by employees and Directors. As at the date
           of this report, there are no options on the unissued shares of the Company or its subsidiaries which are
           outstanding.

           The principal functions of the RC are:

           (a)    To recommend to the Board a framework of remuneration for the Board and key managers of the
                  Company;

           (b)    To determine specific remuneration terms for each Executive Director, the CEO, and other key
                  managers;

           (c)    To recommend to the Board for endorsement the remuneration terms of the CEO;

           (d)    To consider and approve salary and bonus recommendations in respect of key managers;

           (e)    To consider and recommend to the Board all aspects of remuneration for Directors, including but
                  not limited to Directors’ fees; and

           (f)    To administer the JEL Employees’ Share Option Scheme adopted by the Group and decide on the
                  allocations and grants of options to eligible participants under the Share Option Scheme.

           The salary and other remuneration terms of the Executive Directors and key managers are bench-marked
           against the remuneration of its industry peers and comparable companies.

           The remuneration packages of each of the Executive Directors comprise a fixed and a variable
           component. The variable component forms a significant proportion of the remuneration package and is
           dependent on the performance and profitability of the Company and individual performance. This ensures
           a close alignment of the interests of the executives with those of the shareholders.

           Directors’ fees are set in accordance with a framework comprising basic fees and additional fees for
           serving on Board committees. These fees are subject to approval by shareholders as a lump sum at the
           AGM.




                                JEL CORPORATION (HOLDINGS)   48   ANNUAL REPORT 2005
Corporate Governance Report

1.   Board of Directors (cont’d)
     (d)   Board Committees (cont’d)
           Remuneration Committee (cont’d)
           The Company has entered into a Service Agreement with Tan Boon Yong, Eric, Chairman and Chief
           Executive Officer (CEO) for a fixed period of three years with effect from 22nd August 2003, the date of
           admission of the Company to the Official List of the SGX-ST. Leow Hock Leong, Chief Operating Officer
           and Wee Teck Han, Chief Financial Officer each entered into a Service Agreement for a fixed period of
           one year with effect from 1 January 2005, and thereafter each renewable for fixed periods of three years.

           The Independent Directors have no service agreement contracts. They are appointed pursuant to, and
           hold office under and in accordance with, the Articles.

           A breakdown showing the percentage mix of each individual Director’s remuneration payable for financial
           year ended 31 December 2005 is as follows:

                                                                         Variable or
                                                                        Performance
           Remuneration Band and                                       Related Income/
           Name of Director                        Base Salary              Bonus      Directors’ Fee   Total
                                                       %                      %              %           %

           S$500,000 and above
           Tan Boon Yong, Eric                         52.1                   47.9           –          100
           Leow Hock Leong                             60.1                   39.9           –          100

           Below S$250,000

           Wee Teck Han                                59.8                   40.2          100         100
           Sim Cheok Lim                                –                      –            100         100
           Lee Choon Hui, Francis                       –                      –            100         100
           Curtis Jerry Montgomery                      –                      –             –           –
            (Appointed on 27-3-2006)
           Tan Kok Hiang                                                                    100         100


           Key Managers

           Below S$250,000
           Adnan Suppiah Muniandy                      85.7                   14.3           –          100
           Radhakrishnan Vijayakumar                   85.3                   14.7           –          100
           Paul Maurice Alphonsus                      85.5                   14.5           –          100
           Ng Soon Heng, Alex                          87.6                   12.4           –          100


           No key manager during the financial year 2005 was an immediate family member (as defined in the
           Listing Manual of the SGX-ST) of any Director of the Company.




                               JEL CORPORATION (HOLDINGS)   49   ANNUAL REPORT 2005
Corporate Governance Report

2.   Internal Controls
     The Group has a well-established internal audit programme and compliance functions. It has also put in place
     appropriate risk management processes to evaluate and manage the financial risks of the Group.

     The Board is satisfied that the Group’s system of internal control is functioning satisfactorily.

3.   Internal Audit
     The internal audit function of the Group is performed by a team from the Internal Audit Department. The Internal
     Auditor reports functionally to the Chairman of the AC and administratively to the CEO.

     The team is responsible for reviewing the effectiveness of the Group’s internal control systems, and for ensuring
     compliance in accordance with the audit plan approved by the AC.

     The activities and organisational structure of the internal audit function are monitored and reviewed by the AC
     periodically to ensure that the Internal Audit Department has the necessary resources to adequately perform its
     functions and that there is no unjustified restrictions or limitations placed in the performance of its duties.

4.   Communications with Shareholders
     The Company does not practice selective disclosure. In line with continuous disclosure obligations of the
     Company pursuant to the SGX-ST’s Listing Rules, the Board’s policy is that all shareholders should be equally
     and timely informed of all major developments that impact the Group.

     Information is communicated to shareholders on a timely basis through:

     –      annual reports that are prepared and issued to all shareholders;

     –      a summary of the financial information and affairs of the Group for the half year and full year that are
            published through the SGXNET;

     –      notices of and explanatory memoranda for annual general meetings and extraordinary general meetings;
            and

     –      web-based investor information posted on popular finance sites such as Shareinvestors.com and
            Wallstraits.com

     In addition, shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay
     informed of the Group’s strategy and plans. The AGM is the principal forum for dialogue with shareholders.

     The notice of the AGM is dispatched to shareholders, together with explanatory notes or a circular on items of
     special business, at least 14 working days before the meeting. The Board welcomes questions from
     shareholders who have an opportunity to raise issues either informally or formally before or at the AGM. The
     Chairman of the Audit, Remuneration and Nominating Committees are normally available at the meeting to
     answer those questions relating to the work of these committees.

5.   Dealings in Securities
     The Group has adopted a code of conduct which provides guidance to its officers with regard to dealings in the
     Company’s securities, in compliance with the Best Practices Guide of the SGX-ST.




                                  JEL CORPORATION (HOLDINGS)   50   ANNUAL REPORT 2005
Corporate Governance Report

6.   Interested Person Transactions
     In compliance with the SGX-ST listing requirement, the Group confirms that there was no interested person
     transaction during the financial year under review.

7.   Material Contracts
     Save for the service agreements between the Executive Directors and the Company, there were no material
     contracts of the Company or its subsidiaries involving the interest of the Chief Executive Officer or any Director
     or controlling shareholders subsisting at the end of the financial year ended 2005.




                                 JEL CORPORATION (HOLDINGS)   51   ANNUAL REPORT 2005
Statistics of Shareholdings
At at 17 March 2006


DISTRIBUTION OF SHAREHOLDINGS
                                                NO. OF
SIZE OF SHAREHOLDINGS                        SHAREHOLDERS                     %        NO. OF SHARES             %

1 - 999                                                53                    4.86            21,668              0.01
1,000 - 10,000                                        262                   24.04         1,260,657              0.58
10,001 - 1,000,000                                    763                   70.00        40,957,032             18.69
1,000,001 AND ABOVE                                    12                    1.10       176,880,643             80.72

TOTAL                                               1,090                  100.00       219,120,000            100.00


TWENTY LARGEST SHAREHOLDERS
NO.   NAME                                                                               NO. OF SHARES                 %

1     TAN BOON YONG ERIC                                                                   145,248,200            66.29
                                                                                                         (1)
2     KIM ENG SECURITIES PTE. LTD.                                                           7,147,900             3.26
                                                                                                         (2)
3     SBS NOMINEES PTE LTD                                                                   5,000,000             2.28
4     WALLSTRAITS. COM PTE LTD                                                               5,000,000             2.28
5     LEOW HOCK LEONG                                                                        3,352,103             1.53
6     PHILLIP SECURITIES PTE LTD                                                             2,960,060             1.35
7     DBS NOMINEES PTE LTD                                                                   1,718,620             0.78
8     CITIBANK CONSUMER NOMINEES PTE LTD                                                     1,680,500             0.77
9     UNITED OVERSEAS BANK NOMINEES PTE LTD                                                  1,503,120             0.69
10    DBS VICKERS SECURITIES (S) PTE LTD                                                     1,244,300             0.57
11    LIM YOU MOY                                                                            1,013,400             0.46
12    OCBC NOMINEES SINGAPORE PTE LTD                                                        1,012,440             0.46
13    TAN GEK GNEE                                                                             920,000             0.42
14    HARTOKO SARWONO                                                                          884,400             0.40
15    LIM & TAN SECURITIES PTE LTD                                                             821,520             0.37
16    WEE TECK HAN                                                                             774,400             0.35
17    TAN SIA KENG                                                                             736,900             0.34
18    NEO EE LYE                                                                               528,000             0.24
19    CHEN WEI CHING VINCENT                                                                   500,000             0.23
20    PAUL MAURICE ALPHONSUS                                                                   482,000             0.22

      TOTAL                                                                                182,527,863            83.29


(1)   As at 17 March 2006, of the 7,147,900 shares in which Kim Eng Securities Pte. Ltd. has an interest, 5,000,000
      shares are held in trust for the Chairman and CEO of the Group, Tan Boon Yong, Eric.

(2)   As at 17 March 2006, all of the 5,000,000 shares in which SBS Nominees Pte Ltd has an interest, are held in
      trust for the Chairman and CEO of the Group, Tan Boon Yong, Eric.

SUBSTANTIAL SHAREHOLDER
                                                        Direct Interest                        Deemed Interest
Name of Substantial Shareholder                 No. of Shares           %               No. of Shares        %

Tan Boon Yong, Eric                              145,248,200                66.29        10,000,000             4.56

SHAREHOLDINGS HELD BY THE PUBLIC
As at 17 March 2006, approximately 24.76% of the issued ordinary shares of the Company is held by the public. Rule
723 of the GSX Listing Manual has been complied with.




                                JEL CORPORATION (HOLDINGS)   52   ANNUAL REPORT 2005
Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of JEL Corporation (Holdings) Ltd. (“the Company”) will
be held at 11 Changi North Way, JEL Centre, Singapore 498796 on Friday, 28 April 2006 at 4.30 p.m. for the following
purposes:

AS ORDINARY BUSINESS
1.    To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31
      December 2005 together with the Auditors’ Report thereon.                                 (Resolution 1)

2.    To declare final dividend of 1.0 cent per ordinary share (one-tier tax exempt) for the year ended 31 December
      2005. (previous year: 0.75 cents per share)                                                     (Resolution 2)

3.    To re-elect the following Directors retiring pursuant to Articles 92 and 97 of the Company’s Articles of
      Association:

      Mr Francis Lee Choon Hui           (retiring under Article 92)                                   (Resolution 3)
      Mr Leow Hock Leong                 (retiring under Article 92)                                   (Resolution 4)
      Mr Curtis Jerry Montgomery         (retiring under Article 97)                                   (Resolution 5)

      Mr Francis Lee Choon Hui will, upon re-election as a Director of the Company, remain a member of the Audit
      Committee and Remuneration Committee and will be considered independent.

      Mr Leow Hock Leong will, upon re-election as a Director of the Company, remain the Chief Operating Officer and
      an Executive Director.

      Mr Curtis Jerry Montgomery will, upon re-election as a Director of the Company, be considered independent.

4.    To approve the payment of Directors’ fees of S$101,000 for the year ended 31 December 2005. (previous year:
      S$101,000)                                                                                 (Resolution 6)

5.    To approve the payment of Directors’ fees for the year ending 31 December 2006 to be paid quarterly in arrears.
                                                                                                   (Resolution 7)

6.    To re-appoint Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their remuneration.
                                                                                                       (Resolution 8)

7.    To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS
8.    To note the resignation of Mr Tan Kok Hiang with effect from the close of the AGM.

      To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any
      modifications:

9.    Authority to allot and issue shares up to 50 per centum (50%) of issued shares in the capital of the
      Company
      That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the
      Singapore Exchange Securities Trading Limited, the Directors be empowered to allot and issue shares and
      convertible securities in the Company at any time and upon such terms and conditions and for such purposes as
      the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares (including
      shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to
      this Resolution) to be allotted and issued pursuant to this Resolution shall not exceed fifty per centum (50%) of
      the issued shares in the capital of the Company at the time of the passing of this Resolution, of which the
      aggregate number of shares and convertible securities to be issued other than on a pro rata basis to all
      shareholders of the Company shall not exceed twenty per centum (20%) of the issued shares in the capital of
      the Company and that such authority shall, unless revoked or varied by the Company in general meeting,
      continue in force (i) until the conclusion of the Company’s next Annual General Meeting or the date by which the




                                 JEL CORPORATION (HOLDINGS)   53   ANNUAL REPORT 2005
Notice of Annual General Meeting

         next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case
         of shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to
         this Resolution, until the issuance of such shares in accordance with the terms of such convertible securities.
         [See Explanatory Note (i)]                                                                         (Resolution 9)

10.      Authority to allot and issue shares under the JEL Share Option Scheme
         That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be authorised and empowered to
         allot and issue shares of the Company to all the holders of options granted by the Company, whether granted
         during the subsistence of this authority or otherwise, under the JEL Share Option Scheme (“the Scheme”) upon
         the exercise of such options and in accordance with the terms and conditions of the Scheme, provided always
         that the aggregate number of additional ordinary shares to be allotted and issued pursuant to the Scheme shall
         not exceed fifteen per centum (15%) of the issued shares in the capital of the Company from time to time and
         that such authority shall, unless revoked or varied by the Company in general meeting, continue in force until the
         conclusion of the Company’s next Annual General Meeting or the date by which the next Annual General
         Meeting of the Company is required by law to be held, whichever is earlier.
         [See Explanatory Note (ii)]                                                                    (Resolution 10)



By Order of the Board




Tan Cher Liang
Secretary
Singapore, 11 April 2006


Explanatory Notes:
(i)      The Ordinary Resolution 9 proposed in item 9 above, if passed, will empower the Directors from the date of this
         Meeting until the date of the next Annual General Meeting, or the date by which the next Annual General
         Meeting is required by law to be held or when varied or revoked by the Company in general meeting, whichever
         is the earlier, to allot and issue shares and convertible securities in the Company. The number of shares and
         convertible securities that the Directors may allot and issue under this resolution would not exceed fifty per
         centum (50%) of the issued shares in the capital of the Company at the time of the passing of this resolution.
         For issue of shares and convertible securities other than on a pro rata basis to all shareholders, the aggregate
         number of shares and convertible securities to be issued shall not exceed twenty per centum (20%) of the issued
         shares in the capital of the Company.

         For the purpose of this resolution, the percentage of issued shares is based on the issued shares in the capital
         of the Company at the time this proposed Ordinary Resolution is passed after adjusting for new shares arising
         from the conversion or exercise of convertible securities, the exercise of share options or the vesting of share
         awards outstanding or subsisting at the time when this proposed Ordinary Resolution is passed and any
         subsequent consolidation or subdivision of shares.

(ii)     The Ordinary Resolution 10 proposed in item 10 above, if passed, will empower the Directors of the Company,
         from the date of the above Meeting until the next Annual General Meeting, to allot and issue shares in the
         Company of up to a number not exceeding in total fifteen per centum (15%) of the issued ordinary shares in the
         capital of the Company from time to time pursuant to the exercise of the options under the Scheme.

Notes:
1.       A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy
         to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2.       The instrument appointing a proxy must be deposited at the Registered Office of the Company at 11 Changi
         North Way, JEL Centre Singapore 498796 not less than forty-eight (48) hours before the time appointed for
         holding the Meeting.




                                    JEL CORPORATION (HOLDINGS)   54   ANNUAL REPORT 2005
JEL CORPORATION                                                      IMPORTANT:
                                                                     1.   For investors who have used their CPF monies to buy JEL Corporation
(HOLDINGS) LTD.                                                           (Holdings) Ltd. ’s shares, this Report is forwarded to them at the request of
                                                                          the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.
(Company Registration No. 200106139K)
(Incorporated In The Republic of Singapore with limited liability)   2.   This Proxy Form is not valid for use by CPF investors and shall be ineffective
                                                                          for all intents and purposes if used or purported to be used by them.

                                                                     3.   CPF investors who wish to attend the Meeting as an observer must submit
                                                                          their requests through their CPF Approved Nominees within the time frame
                                                                          specified. If they also wish to vote, they must submit their voting instructions
PROXY FORM                                                                to the CPF Approved Nominees within the time frame specified to enable
(Please see notes overleaf before completing this Form)                   them to vote on their behalf.




I/We,

of
being a member/members of JEL Corporation (Holdings) Ltd. (the “Company”), hereby appoint:

 Name                                                    NRIC/Passport No.                                     Proportion of Shareholdings

                                                                                                             No. of Shares                     %
 Address


 and/or (delete as appropriate)
 Name                                                    NRIC/Passport No.                                     Proportion of Shareholdings

                                                                                                             No. of Shares                     %
 Address


or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the
Annual General Meeting (the “Meeting”) of the Company to be held on 28 April 2006 at 4.30 p.m. and at any
adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting
as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the
Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The
authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.
(Please indicate your vote “For” or “Against” with a tick [ ] within the box provided.)
 No.     Resolutions relating to:                                                                                          For           Against
     1   Directors’ Report and Audited Accounts for the year ended 31 December 2005
     2   Payment of proposed final dividend
     3   Re-election of Mr Francis Lee Choon Hui as a Director
     4   Re-election of Mr Leow Hock Leong as a Director
     5   Re-election of Mr Curtis Jerry Montgomery as a Director
     6   Approval of Directors’ fees amounting to S$101,000.00
     7   Approval of Directors’ fees in arrears
     8   Re-appointment of Ernst & Young as Auditors
     9   Authority to allot and issue new shares
 10      Authority to allot and issue shares under the JEL Share Option Scheme


Dated this                        day of                         2006                    Total number of Shares in:                   No. of Shares

                                                                                         (a)     CDP Register

                                                                                         (b)     Register of Members
Signature of Shareholder(s) or, Common Seal of Corporate Shareholder

*Delete where inapplicable
Notes :
1.   Please insert the total number of Shares held by you. If you have Shares entered against your name in the
     Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should
     insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should
     insert that number of Shares. If you have Shares entered against your name in the Depository Register and
     Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares
     entered against your name in the Depository Register and registered in your name in the Register of Members. If
     no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares
     held by you.

2.   A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or
     two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3.   Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of
     his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4.   The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 11
     Changi North Way, JEL Centre, Singapore 498796 not less than forty-eight (48) hours before the time appointed
     for the Meeting.

5.   The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly
     authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be
     executed either under its seal or under the hand of an officer or attorney duly authorised. Where the instrument
     appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney
     or a duly certified copy thereof must be lodged with the instrument.

6.   A corporation which is a member may authorise by resolution of its directors or other governing body such person
     as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act,
     Chapter 50 of Singapore.

General:
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly
completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the
appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the
Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being
the appointor, is not shown to have Shares entered against his name in the Depository Register as at forty-eight (48)
hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the
Company.
    JEL Corporation (Holdings) Ltd.
JEL Centre, 11 Changi North Way, Singapore 498796
     Tel: (65) 6841 1000 Fax: (65) 6881 1000
                  www.jelcorp.com

				
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