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					                                                                                  SITRA HOLDINGS (INTERNATIONAL) LIMITED
                                                                                  (Incorporated in the Republic of Singapore on 5 May 1979)
                                                                                             (Registration Number: 197901237E)
                                                                                  Invitation in respect of 24,000,000 New Shares comprising:-
                                                                                  (1) 1,500,000 Offer Shares at $0.21 for each Offer Share by way
                                                                                      of public offer; and
                                                                                  (2) 22,500,000 Placement Shares by way of placement, comprising:-
                                                                                     (i)    21,820,000 Placement Shares at $0.21 for each Placement
                                                                                            Share by way of Placement Shares Application Forms;
                                                                                     (ii)   180,000 Internet Placement Shares at $0.21 for each
                                                                                            Internet Placement Share reserved for application made
                                                                                            through the IPO website www.ePublicOffer.com; and
                                                                                     (iii) 500,000 Reserved Shares at $0.21 for each Reserved Share
                                                                                           reserved for our Independent Directors, Non-Executive
                                                                                           D i re c t o r, employees, business associates and those

                                         Deliver in g Q ua lit y P r od u c t s            who have contributed to the success of our Group,
                                                                                  payable in full on application.

                                         B uild in g S uc c essf ul B r a n d s                               Manager




                                                                                                 Westcomb Capital Pte Ltd
                                                                                            Placement Agent and Underwriter
                                                                                              Westcomb Securities Pte Ltd
                                                                                  PROSPECTUS DATED 7 NOVEMBER 2006
                                                                                  (registered by the Monetary Authority of Singapore
                                                                                  on 7 November 2006)

                                                                                  This document is important. If you are in any doubt as to the
                                                                                  action you should take, you should consult your legal, financial,
                                                                                  tax or other professional adviser.

                                                                                  We have made an application to the Singapore Exchange
                                                                                  Securities Trading Limited (the “SGX-ST”) for permission to
                                                                                  deal in, and for quotation of, all the ordinary shares ("Shares")
                                                                                  in the capital of Sitra Holdings (International) Limited
                                                                                  (the “Company”) already issued as well as the new Shares
                                                                                  (the “New Shares”) which are the subject of the Invitation
                                                                                  (as defined herein). Such permission will be granted when our
                                                                                  Company has been admitted to the Official List of the SGX-
                                                                                  ST Dealing and Automated Quotation System (the “SGX-
                                                                                  SESDAQ”). The dealing in and quotation of our Shares will
                                                                                  be in Singapore dollars.

                                                                                  Acceptance of applications will be conditional upon, inter alia,
                                                                                  permission being granted by the SGX-ST to deal in, and for
                                                                                  quotation of, all our existing issued Shares as well as the New
                                                                                  Shares. If completion of the Invitation does not occur because
                                                                                  the SGX-ST’s permission is not granted or for any other
                                                                                  reasons, moneys paid in respect of any application accepted
                                                                                  will be returned to you at your own risk, without interest or
Sitra Holdings (International) Limited




                                                                                  any share of revenue or other benefit arising therefrom and
                                                                                  you will not have any claims against us, the Manager,
                                                                                  the Placement Agent and Underwriter.

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

                                                                                  A copy of this Prospectus has been lodged with and registered
                                                                                  by the Monetary Authority of Singapore (the “Authority”).
                                                                                  The Authority assumes no responsibility for the contents of
                                                                                  this Prospectus. Registration of this Prospectus by the
                                                                                  Authority does not imply that the Securities and Futures Act
                                                                                  (Chapter 289) of Singapore, or any other legal or regulatory
                                                                                  requirements have been complied with. The Authority has not,
                                                                                  in any way, considered the merits of our existing Shares or
                                                                                  the New Shares, as the case may be, being offered or in
                                                                                  respect of which an Invitation is made, for investment.
                                                                                  We have not lodged or registered this Prospectus in any
                                                                                  other jurisdiction.

                                                                                  Investing in our Shares involves risks which are described
                                                                                  in the Section “RISK FACTORS” of this Prospectus.
                                                                                  No Shares shall be allotted on the basis of this Prospectus
                                                                                  later than six months after the date of registration of this
                                                                                  Prospectus by the Authority.
                      O ur Bu sin e ss                                                 Our Pr oducts
IN T ROD UC T I O N




                      Sitra Holdings (International) Limited is a brand-               Our products are categorized into two main
                      centric distributor of quality wood-based products               product segments:
                      and lifestyle outdoor furniture carrying our
                                                                                       G High value wood-based products
                      proprietary brands. We develop and market our
                                                                                       We provide a wide range of quality wood-based
                      products in two main segments - wood-based
                                                                                       products such as decking, flooring, fencing,
                      products (such as decking, flooring, fencing,
                                                                                       door and window components and other
                      door and window components and other moulded
                                                                                       moulded products.
                      products) and lifestyle outdoor furniture.

                      At Sitra, we run an international operation, with
                      our headquarters in Singapore serving as the
                      marketing, customer service, operational planning
                      and administrative centre. Our lifestyle furniture
                      design function is based in Brisbane, Australia,
                      whilst the manufacturing of our products are
                      outsourced to a number of contract manufacturers
                      in Indonesia.

                      We serve a global network of customers in 48
                      countries in Australasia, Europe, Asia, Middle
                      East, Africa and North America. In all, we have
                      over 270 corporate customers who range from
                      manufacturers, wholesalers and general retailers
                      to specialist retailers and importers. We also offer
                      our products directly to retail consumers.

                      We have been recognised consistently for the
                      quality of our management and entrepreneurial
                      achievements. In March 2006, we were awarded                     GPremium lifestyle outdoor furniture
                      the Regional Headquarters Award by the Economic                  We offer a large selection of traditional and
                      Development Board of Singapore and SPRING                        contemporary designs of premium lifestyle outdoor
                      Singapore. We are also the Enterprise 50 Award                   garden furniture and garden accessories.
                      winner for three consecutive years in 2004,
                      2005 and 2006, achieving twenty-seventh, ninth
                      and twenty-third position respectively.
                                                                                                        ific Kwil        ific Teak        ific Cher         ific Ratta
                                                                                                   ac               ac               ac                ac
                      As a mark of our emphasis on quality management,
                                                                                                  P




                                                                                                                    P




                                                                                                                                     P




                                                                                                                                                       P
                                                                                                                                                  ry
                                                                                                                a




                                                                                                                                                                    n




                      we have also been awarded the BS EN ISO
                                                                              COMCIA
                      9001:2000 certification for our quality management     TM



                      system every year since 1997.
                                                 TABLE OF CONTENTS

                                                                                                                                    Page

CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    1

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

GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         11

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . .                                                        13

SELLING RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                14

DETAILS OF THE INVITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 15

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  19

THE INVITATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       22

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              23

INVITATION STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             26

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        28

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             39

MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS. . . . . . . . . . . . . .                                                        40

SELECTED GROUP FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  42

   OPERATING RESULTS OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             42

   FINANCIAL POSITION OF OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          43

MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            44

   OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     44

   REVIEW OF PAST PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         50

   REVIEW OF RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            52

   REVIEW OF PAST FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          58

   LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          60

   MATERIAL CAPITAL EXPENDITURES, DIVESTMENTS AND COMMITMENTS . . . . . . . . .                                                       63

   FOREIGN EXCHANGE EXPOSURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         64

   CREDIT MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                65

   CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                          67


                                                                     i
                                                   TABLE OF CONTENTS

EXCHANGE CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  69

DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           70

DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    71

GENERAL INFORMATION ON OUR GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  72

   SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          72

   SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             73

   MORATORIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          75

   RESTRUCTURING EXERCISE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      76
   GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                78

   OUR SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             78

HISTORY AND BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  80

   HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    80
   BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      82

   BUSINESS PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               90

   QUALITY ASSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                95

   PRE-QUALIFICATION, IN-PROCESS SUPERVISION AND PERFORMANCE EVALUATION
   OF OUR CONTRACT MANUFACTURERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                96

   GOVERNMENT REGULATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        99

   INVENTORY MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                    102
   DESIGN AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      103

   STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          104
   INSURANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        104

   MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               105

   MAJOR CONTRACT MANUFACTURERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                              105

   TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          106

   PROPERTIES AND OTHER FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               108

   COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         109
   COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   109

PROSPECTS, TRENDS AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 113

   PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       113

   TREND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               114

   FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          115



                                                                      ii
                                                 TABLE OF CONTENTS

DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                             117
  MANAGEMENT STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      117
  DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       117
  EXECUTIVE OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               122
  REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS . . . . . . . . . . . . . . . . . .                                                125
  EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       127
  SERVICE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 127
  CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                      129

INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS . . . . . . . . . .                                                         132
  PAST INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   132
  PRESENT AND ONGOING INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . .                                                    134
  CONFLICTS OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  136
  REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS . . . . .                                                               137

GENERAL AND STATUTORY INFORMATION                                                                                                     139

APPENDIX I
  TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     I-1

APPENDIX II
  DESCRIPTION OF ORDINARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            II-1

APPENDIX III
  DESCRIPTION OF RELEVANT INDONESIAN LAWS AND REGULATIONS . . . . . . . . . . .                                                      III-1

APPENDIX IV
  CLEARANCE AND SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       IV-1

APPENDIX V
  TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE . . .                                                               V-1

APPENDIX VI
  INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE AUDITED COMBINED
  FINANCIAL STATEMENTS OF THE GROUP FOR FY2003, FY2004 AND FY2005 AND THE
  UNAUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP FOR THE THREE
  MONTHS ENDED 31 MARCH 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       VI-1

APPENDIX VII
  UNAUDITED PROFORMA COMBINED FINANCIAL STATEMENTS OF THE GROUP FOR
  FY2005 AND THE THREE MONTHS ENDED 31 MARCH 2006 . . . . . . . . . . . . . . . . . . . .                                            VII-1




                                                                    iii
This page has been intentionally left blank.
                      CORPORATE INFORMATION

BOARD OF DIRECTORS     :   Chew Ah Ba (Executive Chairman)
                           Chew Chiew Siang Steven (Executive Director)
                           Tan Teresa (Executive Director)
                           Chew Chiew Hwee, Xavier (alternate Director to Tan Teresa)
                           Ng Boon Huan Daniels (Non-Executive Director)
                           Chin Sek Peng (Lead Independent Director)
                           Chen Yeow Sin (Independent Director)

COMPANY SECRETARIES    :   Joanna Lim Lan Sim, ACIS
                           Lim Aik Kun, ACIS

REGISTERED OFFICE      :   18 Genting Road
                           The Blue Building
                           Singapore 349477
                           Telephone : +65 67423223
                           Facsimile: +65 67428233

REGISTRAR AND SHARE    :   Tricor Barbinder Share Registration Services
TRANSFER OFFICE            (a business division of Tricor Singapore Pte. Ltd.)
                           8 Cross Street #11-00
                           PWC Building
                           Singapore 048424

MANAGER                :   Westcomb Capital Pte Ltd
                           5 Shenton Way #09-07
                           UIC Building
                           Singapore 068808

PLACEMENT AGENT AND    :   Westcomb Securities Pte. Ltd
UNDERWRITER                5 Shenton Way #09-08
                           UIC Building
                           Singapore 068808

AUDITORS AND           :   Nexia Tan & Sitoh
REPORTING                  Certified Public Accountants
ACCOUNTANTS                5 Shenton Way #23-03
                           UIC Building
                           Singapore 068808
                           Partner-in charge: Kristin Kim Yoon Sook

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

SOLICITORS TO THE      :   Lee & Lee
MANAGER, PLACEMENT         168 Robinson Road #25-01
AGENT AND                  Capital Tower
UNDERWRITER                Singapore 068912




                                     1
                        CORPORATE INFORMATION

LEGAL ADVISERS TO OUR    :   Raslan Loong
COMPANY ON MALAYSIAN         Level 3A, Menara Manulife RB,
LAW                          6 Jalan Gelenggang,
                             Damansara Heights,
                             50490 Kuala Lumpur,
                             Malaysia

LEGAL ADVISERS TO OUR    :   Hemming + Hart Lawyers
COMPANY ON                   Level 2/307 Queen Street
AUSTRALIAN LAW               GPO Box 142
                             Brisbane, Queensland 4001,
                             Australia

LEGAL ADVISERS TO OUR    :   William, Effendi & Co. Law Office
COMPANY ON INDONESIAN        Jl. Blora No. 31
LAW                          Menteng
                             Jakarta 10310
                             Indonesia

RECEIVING BANKER         :   The Bank of East Asia, Limited
                             137 Market Street
                             Bank of East Asia Building
                             Singapore 048943

PRINCIPAL BANKER         :   United Overseas Bank Limited
                             80 Raffles Place
                             UOB Plaza
                             Singapore 048624




                                       2
                                          DEFINITIONS

In this Prospectus and the accompanying Application Forms and, in relation to Electronic Applications,
the instructions appearing on the screens of ATMs and the IB websites of the relevant Participating
Banks or the IPO website, the following definitions apply throughout where the context so admits:–


Group Companies

“Company” or “Sitra Holdings”         :   Sitra Holdings (International) Limited

“E-Timberhub”                         :   E-Timberhub Pte Ltd

“Energetic Industries”                :   Energetic Industries Sdn. Bhd.

“Group”                               :   Our Company and its subsidiaries, following the completion
                                          of the Restructuring Exercise, treated for the purpose of this
                                          Prospectus as if our Group structure had been in existence
                                          since 1 January 2003

“Sitra Agencies”                      :   Sitra Agencies Pte Ltd

“Sitra Dove Logistics Malaysia”       :   Sitra Dove Logistics Sdn. Bhd.

“Sitra Dove Logistics Singapore”      :   Sitra Dove Logistics Pte. Ltd.

“Sitra Precision Engineering”         :   Sitra Precision Engineering (M) Sdn. Bhd.

“Suncoast Sitra Australia”            :   Suncoast Sitra Pty. Ltd.

“Suncoast Sitra Singapore”            :   Suncoast Sitra Pte Ltd


Other companies and organisations

“AJA Registrars”                      :   Anglo Japanese American Registrars, an accredited
                                          certification body, accredited by UKAS to perform ISO
                                          9001:2000 assessments across a wide range of industrial
                                          and commercial sectors

“Authority”                           :   The Monetary Authority of Singapore

“CDP”                                 :   The Central Depository (Pte) Limited

“CPF”                                 :   The Central Provident Fund

“IPO Website Operator”                :   Westcomb Securities Pte Ltd

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

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

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




                                                  3
                                        DEFINITIONS

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

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

“SGX-SESDAQ”                        :   SGX-ST Dealing and Automated Quotation System

“SGX-ST”                            :   Singapore Exchange Securities Trading Limited

“Sucofindo”                         :   PT. Superintending Company of Indonesia (Persero), an
                                        inspection company formed as a joint venture between the
                                        State of the Republic of Indonesia and SGS SA, a leading
                                        international inspection company domiciled in Switzerland

“UKAS”                              :   United Kingdom Accreditation Service, a quality standards
                                        accreditation body based in the United Kingdom which
                                        provides certification, testing, inspection and calibration
                                        services

General

“Alex Ong”                          :   Ong Chai Tiam, our Group Accountant

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

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

“associate”                         :   (a)   In relation to an entity, means:–
                                              (i)       in a case where the entity is a substantial
                                                        shareholder,        Controlling      Shareholder,
                                                        substantial interest-holder or controlling interest-
                                                        holder, its related corporation, related entity,
                                                        associated company or associated entity; or
                                              (ii)      in any other case:–
                                                        (A)   a director or an equivalent person;
                                                        (B)   where the entity is a corporation, a
                                                              Controlling Shareholder of the entity;
                                                        (C)   where the entity is not a corporation, a
                                                              controlling interest-holder of the entity;
                                                        (D)   a subsidiary, a subsidiary entity, an
                                                              associated company, or an associated
                                                              entity; or




                                                    4
                           DEFINITIONS

                                           (E)   a subsidiary, a subsidiary entity, an
                                                 associated company, or an associated
                                                 entity, of the Controlling Shareholder or
                                                 controlling interest-holder, as the case may
                                                 be,
                                           of the entity; and
                           (b)   In relation to an individual, means:–
                                 (i)       his immediate family;
                                 (ii)      a trustee of any trust of which the individual or
                                           any member of the individual’s immediate family
                                           is,
                                           (A)   a beneficiary; or
                                           (B)   where the trust is a discretionary trust, is a
                                                 beneficiary object,
                                           when the trustee acts in that capacity; or
                                 (iii)     any corporation in which he and his immediate
                                           family (whether directly or indirectly) have
                                           interests in voting shares of an aggregate of not
                                           less than 30% of the total votes attached to all
                                           the voting shares

“associated company”   :   In relation to an entity, means:–
                           (a)   any corporation, other than a subsidiary of the entity,
                                 in which:–
                                 (i)       the entity or one or more of its subsidiaries or
                                           subsidiary entities has;
                                 (ii)      the entity, one or more of its subsidiaries and one
                                           or more of its subsidiary entities together have;
                                 (iii)     the entity and one or more of its subsidiaries
                                           together have;
                                 (iv) the entity and one or more of its subsidiary
                                      entities together have; or
                                 (v)       one or more of the subsidiaries of the entity and
                                           one or more of the subsidiary entities of the entity
                                           together have,
                                 a direct interest in voting shares of not less than 20%
                                 but not more than 50% of the total votes attached to all
                                 voting shares in the corporation; or
                           (b)   any corporation, other than a subsidiary of the entity or
                                 a corporation which is an associated company by
                                 virtue of paragraph (a), the policies of which:–
                                 (i)       the entity or one or more of its subsidiaries or
                                           subsidiary entities;



                                       5
                                   DEFINITIONS

                                         (ii)    the entity together with one or more of its
                                                 subsidiaries and one or more of its subsidiary
                                                 entities;
                                         (iii)   the entity together with one or more of its
                                                 subsidiaries;
                                         (iv) the entity together with one or more of its
                                              subsidiary entities; or
                                         (v)     one or more of the subsidiaries of the entity
                                                 together with one or more of the subsidiary
                                                 entities of the entity,
                                         is or are able to control or influence materially

“ATM”                          :   Automated teller machine of a Participating Bank

“ATM Electronic Application”   :   An application for the Offer Shares made through an ATM of
                                   one of the Participating Banks, subject to and on the terms
                                   and conditions of this Prospectus

“Audit Committee”              :   The audit committee of the Company

“Board”                        :   The board of Directors of our Company

“CEO”                          :   The chief executive officer of our Company

“Companies Act”                :   Companies Act (Chapter 50) of Singapore as amended,
                                   modified or supplemented from time to time

“COO”                          :   The chief operating officer of our Company

“Controlling Shareholder”      :   In relation to a corporation, means:–
                                   (a)   a person who has an interest in the voting shares of
                                         the corporation and who exercises control over the
                                         corporation; or
                                   (b)   a person who has an interest in the voting shares of
                                         the corporation of an aggregate of not less than 15%
                                         of the total votes attached to all voting shares in the
                                         corporation, unless he does not exercise control over
                                         the corporation

“Daniels Ng”                   :   Ng Boon Huan Daniels, our Non-Executive Director

“Depositor”                    :   An account holder or a Depository Agent but does not
                                   include a sub-account holder

“Depository Agent”             :   An entity registered as a depository agent with CDP for the
                                   purpose of maintaining a securities account

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




                                            6
                                       DEFINITIONS

“Electronic Applications”          :   Applications for the New Shares made through an ATM
                                       Electronic Application, IB Application or the IPO website,
                                       subject to and on the terms and conditions of this
                                       Prospectus

“EPS”                              :   Earnings per Share

“Executive Directors”              :   The executive Directors of our Company as at the date of
                                       this Prospectus

“Executive Officers”               :   The executive officers of our Group as at the date of this
                                       Prospectus

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

“George Chew”                      :   Chew Ah Ba, our Executive Chairman and CEO

“IB”                               :   Internet Banking

“IB Application”                   :   An application for Offer Shares made through an IB website
                                       of one of the relevant Participating Banks, subject to and on
                                       the terms of and conditions of this Prospectus

“Independent Directors”            :   The independent Directors of our Company as at the date of
                                       this Prospectus

“Internet Placement Application”   :   An application by a Qualifying User for the Internet
                                       Placement Shares through the IPO website, subject to and
                                       on the terms and conditions of this Prospectus

“Internet Placement Shares”        :   The 180,000 Placement Shares available for application
                                       through the IPO website, subject to and on the terms and
                                       conditions of this Prospectus

“Invitation”                       :   Our invitation to the public in Singapore to subscribe for the
                                       New Shares at the Issue Price, subject to and on the terms
                                       and conditions of this Prospectus

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

“Issue Price”                      :   $0.21 for each New Share

“Latest Practicable Date”          :   17 September 2006, being the latest practicable date prior
                                       to the lodgement of this Prospectus

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

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

“Michael Chin”                     :   Chin Sek Peng, our Lead Independent Director

“Michael Burke”                    :   Patrick Michael Burke, our Vice-President (Technical and
                                       Design)



                                              7
                                         DEFINITIONS

“NAV”                                :   Net asset value

“New Shares”                         :   24,000,000 new Shares for which our Company invites
                                         applications to subscribe pursuant to the Invitation, subject
                                         to and on the terms and conditions of this Prospectus

“Nominating Committee”               :   The nominating committee of our Company

“Non-Executive Director”             :   The non-executive Director of our Company as at the date
                                         of this Prospectus

“NTA”                                :   Net tangible assets

“Offer”                              :   The offer by our Company to the public in Singapore of the
                                         Offer Shares for subscription at the Issue Price, subject to
                                         and on the terms and conditions of this Prospectus

“Offer Shares”                       :   1,500,000 of the New Shares which are the subject of the
                                         Offer

“PAT”                                :   Profit after tax

“PBT”                                :   Profit before tax

“PER”                                :   Price earnings ratio

“Placement”                          :   The placement by the Placement Agent on behalf of our
                                         Company of the Placement Shares for subscription at the
                                         Issue Price, subject to and on the terms and conditions of
                                         this Prospectus

“Placement Shares”                   :   22,500,000 of the New Shares (including the Reserved
                                         Shares and the Internet Placement Shares) which are the
                                         subject of the Placement

“Prospectus”                         :   This preliminary prospectus dated 29 September 2006 and
                                         lodged by our Company with the Authority

“1Q”                                 :   Financial period for the three months ended, or as the case
                                         may be, ending 31 March

“QA Personnel”                       :   Third party quality assurance personnel based in Indonesia
                                         and engaged by us for the purpose of conducting quality
                                         assurance inspections at the factories of our contract
                                         manufacturers. Please see the Section “Quality Assurance”
                                         of this Prospectus for more details

“Qualifying Internet Applicant” or   :   Any member of the public (being an individual) in Singapore
“Qualifying Users”                       who registered for and holds a valid membership account
                                         with the IPO Website Operator, subject to the terms and
                                         conditions for the membership and use of the IPO website

“Relevant Period”                    :   FY2003, FY2004, FY2005 and 1Q2006

“Remuneration Committee”             :   The remuneration committee of our Company


                                                 8
                                      DEFINITIONS

“Reserved Shares”                 :   The 500,000 Placement Shares reserved for our
                                      Independent Directors, Non-Executive Director, employees,
                                      business associates and those who have contributed to the
                                      success of our Group

“Restructuring Exercise”          :   The corporate restructuring exercise of our Group
                                      implemented in connection with the Invitation, as described
                                      in the Section “Restructuring Exercise” of this Prospectus

“Securities Account”              :   The securities account maintained by a Depositor with CDP

“Securities and Futures Act” or   :   Securities and Futures Act (Chapter 289) of Singapore, as
“SFA”                                 amended, modified or supplemented from time to time

“Service Agreements”              :   The service agreements entered into between our
                                      Company and our Executive Directors, as set out in the
                                      Section “Service Agreements” of this Prospectus

“SGXNET”                          :   The website maintained by the SGX-ST, including the
                                      restricted section (accessible with the use of a password
                                      and security token) for the submission of announcements
                                      required under the Listing Manual

“Shareholders”                    :   Registered holders of our Shares, except where the
                                      registered holder is CDP, the term “Shareholders” shall, in
                                      relation to such Shares, mean the Depositors whose
                                      Securities Accounts are credited with Shares

“Shares”                          :   Ordinary shares in the capital of our Company

“Share Split”                     :   The sub-division of every two Shares in the issued share
                                      capital of our Company into 55 Shares as described in the
                                      Section “Share Capital” of this Prospectus

“Steven Chew”                     :   Chew Chiew Siang Steven, our Executive Director and
                                      COO

“Substantial Shareholders”        :   Shareholders who each has an interest in five per cent. or
                                      more of the Shares in our Company

“Teresa Tan”                      :   Tan Teresa, our Executive Director and Senior Vice-
                                      President (Group Administration and Human Resources)

“Xavier Chew”                     :   Chew Chiew Hwee, Xavier, our Vice-President (Group
                                      Marketing and Business Development) and alternate
                                      Director to Madam Teresa Tan




                                             9
                                           DEFINITIONS

Units of Measurement, Currencies and Countries

“A$”                                   :   Australian dollars

“Australasia”                          :   Australia and New Zealand

“RM”                                   :   Malaysian Ringgit

“sq ft”                                :   Square feet

“sq m”                                 :   Square metres

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

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

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

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

The term “entity” shall have the same meaning ascribed to it in Section 2 of the Securities and Futures
Act.

The terms “associated entity”, “controlling interest-holder”, “related corporation”, “related entity”,
“subsidiary”, “subsidiary entity” and “substantial interest-holder” shall have the same meanings
ascribed to them respectively in Paragraph 1 of the Fourth Schedule of the Securities and Futures
(Offers of Investments)(Shares and Debentures) Regulations 2005.

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

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

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

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

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

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


                                                  10
                           GLOSSARY OF TECHNICAL TERMS

To facilitate a better understanding of our business, the following glossary provides a description of
some of the technical terms and abbreviations commonly found in our industry and which are used in
this Prospectus. The terms and their assigned meanings may not correspond to standard industry or
common meanings, as the case may be, or usage of these terms:–
“CNF”                                 :   Cost and freight, a term of sale where the seller pays the
                                          costs and freight necessary to transport the goods to the
                                          agreed port of destination and the buyer bears the risk of
                                          loss or damage to the goods from the time they have
                                          passed the ship’s rail at the port of shipment
“decking”                             :   Timber planks that are used for making wooden floors,
                                          usually built outside a house, in garden areas or marina
                                          areas
“DIY”                                 :   Do-it-yourself
“FOB”                                 :   Free on board, a term of sale where the seller pays the
                                          costs necessary for the transport of the goods until such
                                          time as they have passed the ship’s rail at the named port
                                          of shipment and the buyer bears the risk of loss or damage
                                          to the goods from the time they have passed the ship’s rail
                                          at the port of shipment
“hardwood”                            :   Generally used to describe a deciduous broad-leaved
                                          species of trees
“Kapur”                               :   A hardwood specie described in the Section “Business-
                                          Description of wood used in our products” of this
                                          Prospectus
“Keruing”                             :   A hardwood specie described in the Section “Business-
                                          Description of wood used in our products” of this
                                          Prospectus
“Kwila”                               :   A hardwood specie described in the Section “Business-
                                          Description of wood used in our products” of this
                                          Prospectus
“Meranti”                             :   A hardwood specie described in the Section “Business-
                                          Description of wood used in our products” of this
                                          Prospectus
“moulding” or “moulded products”      :   Generally used to describe sawn timber that has been
                                          dressed or planed on all four sides. Moulding commonly
                                          involves adding profile to at least one side of a piece of
                                          timber. In trade however, pieces that do not have any
                                          profile, but have been planed on all four sides (“S4S”) are
                                          also classified as mouldings. Common products include
                                          general mouldings, S4S, door stops, door jambs casings,
                                          skirting, architraves, door and window components such as
                                          stiles, rails, louvre blades and panelling, flooring pieces,
                                          finger joints and laminated mouldings
“Nyatoh”                              :   A hardwood specie described in the Section “Business-
                                          Description of wood used in our products” of this
                                          Prospectus


                                                 11
                 GLOSSARY OF TECHNICAL TERMS

“Palapi”               :   A hardwood specie described in the Section “Business-
                           Description of wood used in our products” of this
                           Prospectus
“RTA”                  :   Ready to assemble
“Teak”                 :   A hardwood specie described in the Section “Business-
                           Description of wood used in our products” of this
                           Prospectus
“Yellow Balau”         :   A hardwood specie described in the Section “Business-
                           Description of wood used in our products” of this
                           Prospectus




                                 12
         CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

These forward-looking statements, including without limitation, statements as to our revenue and
profitability, expected growth in demand, prospects and business strategies, other expected industry
trends and matters discussed in this Prospectus regarding matters that are not historical fact, are only
predictions. These forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our Group’s actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by such
forward-looking statements. These risk factors and uncertainties include, amongst others:–
(i)      changes in political, social and economic conditions and the regulatory environment of
         Singapore and other countries in which we conduct business;
(ii)     changes in currency exchange rates;
(iii)    our anticipated growth strategies and expected internal growth;
(iv)     changes in prices and fees for our products and services;
(v)      changes in the availability and prices of products and services we need to operate our business;
(vi)     changes in customer preferences;
(vii)    changes in competitive conditions and our ability to compete under these conditions;
(viii)   changes in our future capital needs and the availability of financing and capital to fund these
         needs;
(ix)     factors described under the Section “Risk Factors” of this Prospectus; and
(x)      other factors beyond our control.

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

Our Company, the Manager, the Placement Agent and Underwriter disclaim any responsibility to update
any of those forward-looking statements or publicly announce any revisions to those forward-looking
statements to reflect future developments, events or circumstances for any reason, even if new
information becomes available or other events occur in the future. We are, however, subject to the
provisions of the Listing Manual regarding corporate disclosure and the requirements of the Securities
and Futures Act. In particular, pursuant to Section 241 of the Securities and Futures Act, if after this
Prospectus is registered but before the close of the Invitation, our Company becomes aware of (a) a
false or misleading statement or matter in this Prospectus; (b) an omission from this Prospectus of any
information that should have been included in it under Section 243 of the Securities and Futures Act;
or (c) a new circumstance has arisen since the Prospectus was lodged with the Authority and would
have been required by Section 243 of the Securities and Futures Act to be included in this Prospectus,
if it had arisen before this Prospectus was lodged and that is materially adverse from the point of view
of an investor, our Company may lodge a supplementary or replacement prospectus with the Authority.


                                                      13
                                    SELLING RESTRICTIONS

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for the New Shares
in any jurisdiction in which such an offer, solicitation or invitation is unlawful or is not authorized or to
any person to whom it is unlawful to make such an offer, solicitation or invitation. No action has been
or will be taken under the requirements of the legislation or regulations of, or of the legal or regulatory
authorities of, any jurisdiction, except for the lodgement and registration of this Prospectus in Singapore
in order to permit a public offering of the New Shares and the public distribution of this Prospectus in
Singapore. We have not lodged or registered this Prospectus in any other jurisdiction. The distribution
of this Prospectus and the offering of the New Shares in certain jurisdictions may be restricted by the
relevant laws in such jurisdictions. Persons who may come into possession of this Prospectus are
required by our Company, the Manager, the Placement Agent and Underwriter to inform themselves
about, and to observe and comply with, any such restrictions.




                                                     14
                                DETAILS OF THE INVITATION

Listing on the SGX-SESDAQ
We have applied to the SGX-ST for permission to deal in, and for quotation of, all our Shares already
issued and the New Shares which are the subject of the Invitation. Such permission will be granted
when our Company has been admitted to the Official List of the SGX-SESDAQ. Our acceptance of
applications will be conditional upon, inter alia, the SGX-ST granting permission to deal in, and for
quotation for all our existing issued Shares as well as the New Shares. If completion of the Invitation
does not occur because the SGX-ST’s permission is not granted or for any other reasons, moneys paid
in respect of any application accepted will be returned to you at your own risk, without interest or any
share of revenue or other benefit arising therefrom, and you will not have any claim against our
Company, the Manager, or the Placement Agent and Underwriter.

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

A copy of this Prospectus has been lodged with and registered by the Authority. The Authority assumes
no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority
does not imply that the Securities and Futures Act or any other legal or regulatory requirements have
been complied with. The Authority has not, in any way, considered the merits of our Shares or the New
Shares being offered or in respect of which an Invitation is made, for investment. We have not lodged
or registered this Prospectus in any other jurisdiction.

No shares shall be allotted on the basis of this Prospectus later than six months after the date of
registration of this Prospectus by the Authority.

This Prospectus has been seen and approved by our Directors and they individually and collectively
accept full responsibility for the accuracy of all the information given in this Prospectus and confirm,
having made all reasonable enquiries, that, to the best of their knowledge, information and belief, the
facts contained in this Prospectus are true and accurate and not misleading in all material aspects, and
that all expressions of opinion, intention and expectation contained herein are honestly held and made
after due and careful consideration, and that this Prospectus constitutes full and true disclosure of all
material facts as at the date of this Prospectus about the Invitation, our Group and our Shares and there
are no other material facts the omission of which would make any statement in this Prospectus
misleading.

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


                                                   15
                                  DETAILS OF THE INVITATION

Where prior to the lodgement of the supplementary or replacement prospectus, you have made
applications under this Prospectus to subscribe for the New Shares, and:–
(a)   where the New Shares have not been issued to you, our Company shall either:–
      (i)    within seven days from the date of lodgement of the supplementary or replacement
             prospectus, give you the supplementary or replacement prospectus, as the case may be,
             and provide you with an option to withdraw your applications; or
      (ii)   treat your applications as withdrawn and cancelled, in which case your applications shall be
             deemed to have been withdrawn and cancelled, and our Company shall, within seven days
             from the date of lodgement of the supplementary or replacement prospectus, return to you
             all moneys paid in respect of the applications, without interest or any share of revenue or
             other benefits arising therefrom; or
(b)   where the New Shares have been issued to you, our Company shall either:–
      (i)    within seven days from the date of lodgement of the supplementary or replacement
             prospectus, give you the supplementary or replacement prospectus, as the case may be,
             and provide you with an option to return to our Company the Shares, which you do not wish
             to retain title in; or
      (ii)   treat the issue of the New Shares as void, in which case the issue shall be deemed void and
             our Company shall, within seven days from the date of lodgement of the supplementary or
             replacement prospectus, return all moneys paid in respect of your application to you, without
             interest or any share of revenue or other benefit arising therefrom.

If you wish to exercise your option under paragraph (a)(i) to withdraw your application, you shall, within
14 days from the date of lodgement of the supplementary or replacement prospectus, notify our
Company of this, whereupon we shall within seven days from the receipt of such notification, return to
you all moneys paid in respect of your application, without interest or any share of revenue or other
benefits arising therefrom, at your own risk.

If you wish to exercise your option under paragraph (b)(i) to return our Shares issued to you, you shall,
within 14 days from the date of lodgement of the supplementary or replacement prospectus, notify our
Company of this and return all documents, if any, purporting to be evidence of title to those Shares, to
our Company, whereupon we shall, within seven days from the receipt of such notification and
documents, if any, return to you all moneys in respect of your application, without interest or any share
of revenue or other benefit arising therefrom, at your own risk, and the issue of those Shares shall be
deemed to be void.

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

Where the Authority issues a stop order pursuant to Section 242 of the Securities and Futures Act and
you have made applications to subscribe for the New Shares to which this Prospectus relates prior to
the stop order, and:–
(a)   where the New Shares have not been issued to you, your applications shall be deemed to have
      been withdrawn and cancelled and our Company shall, within 14 days from the date of the stop
      order, pay to you all moneys you have paid on account of your applications for the New Shares;
      or

                                                    16
                                 DETAILS OF THE INVITATION

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

Where moneys are to be returned to you for the New Shares, it shall be paid to you without interest or
any share of revenue or other benefit arising therefrom, and at your own risk, and you will not have any
claim against our Company, the Manager or the Placement Agent and Underwriter.

Neither our Company, the Manager, the Placement Agent and Underwriter or any parties involved in the
Invitation is making any representation to any person regarding the legality of an investment in our
Shares by such person under any investment or other laws or regulations. No information in this
Prospectus should be considered as being business, legal or tax advice regarding an investment in our
Shares. Investors should be aware that they may be required to bear the financial risk of an investment
in our Shares for an indefinite period of time. Each prospective investor should consult his own
professional or other advisers for business, legal or tax advice regarding an investment in our Shares.

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

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

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

                                    Westcomb Securities Pte Ltd
                                      5 Shenton Way #09-08
                                           UIC Building
                                         Singapore 068808
and from members of the Association of Banks in Singapore, members of the SGX-ST and merchant
banks in Singapore. A copy of this Prospectus is also available on:–
(i)    the SGX-ST’s website at http://www.sgx.com; and
(ii)   the Authority’s website at http://www.mas.gov.sg.

The Application List will open at 10.00 a.m. on 15 November 2006 and will remain open until
12.00 noon on the same day or for such further period or periods as our Directors may, in
consultation with the Manager, decide, subject to any limitations under all applicable laws. In
the event a supplementary or replacement prospectus is lodged with the Authority, the
Application List will remain open for at least 14 days from the date of lodgement of the
supplementary or replacement prospectus.

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




                                                   17
                                 DETAILS OF THE INVITATION

Indicative Timetable for Listing
An indicative timetable for listing is set out below for your reference:–


Indicative Time and Date                    Event

9.00 a.m. on 8 November 2006                Opening of the Offer

12.00 noon on 15 November 2006              Close of Application List

16 November 2006                            Balloting of applications, if necessary (in the event of an
                                            over-subscription for the Offer Shares)

9.00 a.m. on 17 November 2006               Commence trading on a “ready” basis

22 November 2006                            Settlement date for all trades done on a “ready” basis on 17
                                            November 2006

The above timetable is only indicative as it assumes that (i) the date of closing of the Application List
will be on 15 November 2006, (ii) the date of admission of our Company to the Official List of the
SGX-SESDAQ will be on 17 November 2006, (iii) the SGX-ST’s shareholding spread requirement will
be complied with and (iv) the New Shares will be issued and fully paid-up prior to 17 November 2006.

The above timetable and procedure may be subject to such modification as the SGX-ST may, in its
absolute discretion, decide, including the commencement date of trading on a “ready” basis.

In the event of any changes in the closure of the Application List or the time period during which the
Invitation is open, we will publicly announce the same:–
(i)    through a SGXNET announcement to be posted on the Internet at the SGX-ST website at
       http://www.sgx.com; and
(ii)   in a local English newspaper.

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

We will provide details of the results of the Invitation through the channels in (i) and (ii) above.




                                                    18
                                    PROSPECTUS SUMMARY

The following summary highlights certain information found in greater detail elsewhere in this
Prospectus. It is qualified in its entirety by, and is subject to, the more detailed information and financial
statements, including the notes thereto, appearing elsewhere in this Prospectus. Prospective investors
should carefully consider all information presented in this Prospectus, particularly the matters set out
under the Section “Risk Factors” of this Prospectus, before making an investment decision.


BUSINESS
We are one of the leading brand-centric distributors of quality wood-based products and lifestyle
outdoor furniture carrying our proprietary brands. Our products can be categorised into two main
product segments:–
(a)   High-value wood-based products such as decking, flooring, fencing, door and window
      components and other moulded products. These products are marketed and distributed mainly
      under our brands “COMCIA” and “decKING”; and
(b)   Premium lifestyle outdoor furniture such as outdoor garden furniture and garden accessories.
      These products are marketed and distributed mainly under our “Pacific” brand range. Since 2005,
      our product range has expanded to include lifestyle indoor furniture. Revenue derived from the
      sales of lifestyle indoor furniture has been insignificant as at the Latest Practicable Date. For the
      purpose of segmentation, we have incorporated lifestyle indoor furniture under this product
      segment.

Our products are produced mainly from quality hardwood of different species such as Kwila, Yellow
Balau, Meranti, Kapur, Nyatoh, Keruing, Teak and Palapi.

We operate from our headquarters in Singapore which serve as our marketing and customer service,
operational planning, treasury and administrative centre. Our lifestyle furniture design function is based
in Brisbane, Australia.

Our customers include manufacturers, wholesalers, major retailers, specialist retailers and consumers
in the furniture industry. We derive our revenue from a wide customer base and well-diversified
geographical markets. As at the end of FY2005, our corporate customer base included 277 different
corporate customers and they span across 48 countries in Australasia, Europe, Asia, Middle East,
Africa and North America. We also offer our products directly to retail consumers through our showroom
at our headquarters in Singapore.

Our core competencies lie in the development of our proprietary brands of products and the expansion
of markets for our products. We outsource our manufacturing activities to our extensive network of third
party contract manufacturers in Indonesia. As at the Latest Practicable Date, our network of third party
contract manufacturers in Indonesia includes 43 pre-qualified contract manufacturers.

Please refer to the Section “Business” of this Prospectus for more details.


OUR COMPETITIVE STRENGTHS
Our Directors believe the following are our competitive strengths:–

(a)   We have an established track record
      We have been in the timber industry since 1979. We have developed from a commodity trader of
      sawn timber into one of the leading brand-centric distributors of high-value wood-based products
      and premium lifestyle outdoor furniture. We believe that our proprietary brands have gained
      recognition in the industry and we have developed a reputation for quality, reliability, timely
      delivery and competitive products and customer service.


                                                     19
                                   PROSPECTUS SUMMARY

(b)   We have well-established proprietary brand names
      Our well-established proprietary brand names have enabled consumers to identify us with the
      quality products that carry our brands. This differentiation has increased awareness of our
      existence and products in the market among consumers.


(c)   We have a well-diversified global customer base
      As at the end of FY2005, our corporate customer base included 277 different corporate customers
      and they span across 48 countries in Australasia, Europe, Asia, Middle East, Africa and North
      America. The major markets for our Group’s products are Australasia and Europe which are in the
      Southern and Northern hemispheres respectively. As such, we are able to enjoy a balanced
      revenue stream throughout the year as the lull season experienced by countries in one
      hemisphere is typically balanced by the peak season experienced by countries in the other
      hemisphere. Due to our well-diversified global customer base, we are thus not heavily dependent
      on the health and growth of the economy of a single country or region.


(d)   We have well-established relationships with our customers
      We have established strong relationships with most of our customers. We have 45 repeat
      corporate customers who bought products from us in FY2003, FY2004 and FY2005
      consecutively.


(e)   We focus on design, innovation and product quality
      We focus on design, innovation and product quality. We are able to produce innovative and quality
      designs that appeal to our customers and consumers. We have instituted and maintained
      stringent quality control measures to ensure the quality of our products.

(f)   We are able to increase our efficiencies by outsourcing our production to third party
      contract manufacturers located in Indonesia
      We are able to increase our efficiencies by outsourcing our production requirements to a pool of
      43 pre-qualified third party contract manufacturers as at the Latest Practicable Date. This allows
      us to increase our supply capacity, as and when required, diversify our supplier risks and obtain
      competitive pricing among these third party contract manufacturers. At the same time, the
      outsourcing of our manufacturing process allows us to better utilise our capital in areas other than
      investment in fixed assets and minimise inventory holding and warehousing costs.

(g)   We have well-established relationships with our wide network of third party contract
      manufacturers
      We have developed close working relationships with many of our contract manufacturers which
      has enabled us to source for different species of hardwood and procure the production of our
      products at competitive prices. In addition, our wide network of third party contract manufacturers
      of wood-based products and lifestyle outdoor furniture has also increased our procurement
      capacity and enabled us to better meet the demand of our customers.

(h)   We have an experienced and committed management team
      We have an experience and committed management team led by our Executive Chairman and
      CEO, Mr George Chew, who has more than 30 years of experience in the timber industry.




                                                   20
                                   PROSPECTUS SUMMARY

Please refer to the Sections “Competition” and “Competitive Strengths” of this Prospectus for more
details.

FUTURE PLANS
Our future plans for the growth and expansion of our business are as follows:–

(a)   To expand our distribution channels and market presence
      We intend to expand our market presence by penetrating further into our existing markets as well
      as enter into new geographical markets through the expansion of our distribution channels in
      these markets. We intend to achieve this objective by widening our corporate customer base,
      increasing the number of sales and marketing personnel in our Group, expanding our network of
      overseas sales representatives and increasing our retail presence in selected markets.

(b)   To enhance our design and innovation capabilities and to expand our product range and
      variety
      We intend to work closely with our contract manufacturers to focus on product design and
      innovation efforts and develop new and innovative products that cater to the changing needs,
      tastes and preferences of consumers. We will also enhance our design and innovation capabilities
      by engaging reputable international designers on a project basis and recruiting talented designers
      in Singapore.

      If we are successful in our plan to develop an international outdoor lifestyle garden centre in
      Singapore, we intend to introduce to our customers a wide range of quality outdoor lifestyle
      products from different countries.

(c)   To expand our network of contract manufacturers
      We intend to source for and increase our network of contract manufacturers, both within and
      outside Indonesia.

(d)   To strengthen our proprietary brands and enhance our corporate profile
      We intend to strengthen our proprietary brands “COMCIA”, “decKING”, “Pacific Kwila”, “Pacific
      Cherry”, “Pacific Teak” and “Pacific Rattan” and enhance our corporate profile so as to increase
      market awareness and recognition of our proprietary brands through inter alia, increased
      advertising and promotional activities as well as participation in more domestic and international
      trade fairs and exhibitions.

(e)   To expand our business through mergers and acquisitions, joint ventures or strategic
      alliances
      We may expand our business through mergers and acquisitions, joint ventures or strategic
      alliances with suitable parties who could synergise with our existing business.

Please refer to the Section “Future Plans” of this Prospectus for more details.

WHERE YOU CAN FIND US
Our registered office is located at 18 Genting Road, The Blue Building, Singapore 349477. Our
telephone number is +65 67423223, our facsimile number is +65 67428233 and our Internet address
is www.sitraholdings.com. Information contained on our website does not constitute part of this
Prospectus.



                                                  21
                                       THE INVITATION

Issue Size                  :   24,000,000 New Shares, comprising 1,500,000 Offer Shares and
                                22,500,000 Placement Shares

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

Issue Price                 :   $0.21 for each New Share

The Offer                   :   The Offer comprises an invitation by our Company to the public in
                                Singapore to subscribe for 1,500,000 Offer Shares at the Issue
                                Price, subject to and on the terms and conditions of this
                                Prospectus.

The Placement               :   The Placement comprises a placement by the Placement Agent
                                on behalf of our Company of 22,500,000 Placement Shares at
                                the Issue Price, subject to and on the terms and conditions of this
                                Prospectus, consisting of:–
                                (i)     21,820,000 Placement Shares for application by way of
                                        Placement Shares Application Forms;
                                (ii)    180,000 Internet Placement Shares reserved for application
                                        made through the IPO website www.ePublicOffer.com; and
                                (iii)   500,000 Reserved Shares reserved for our Independent
                                        Directors, Non-Executive Director, employees, business
                                        associates and those who have contributed to the success
                                        of our Group.

Purpose of the Invitation   :   Our Directors consider that the listing of our Company and the
                                quotation of our Shares on the SGX-SESDAQ will enhance our
                                public image locally and overseas and enable us to tap the capital
                                markets to finance the expansion of our business. The Invitation
                                will also provide members of the public, our Independent
                                Directors, Non-Executive Director, employees, business
                                associates as well as those who have contributed to our success
                                with an opportunity to participate in the equity of our Company.

Listing Status              :   Our Shares will be quoted in Singapore dollars on the SGX-
                                SESDAQ, subject to the admission of our Company to the Official
                                List of the SGX-SESDAQ and permission for dealing in, and
                                quotation for our Shares being granted by the SGX-ST.

Risk Factors                :   Investing in our Shares involves risks which are described in the
                                Section “Risk Factors” of this Prospectus.




                                              22
                                    PLAN OF DISTRIBUTION

This section should be read in conjunction with, and is qualified in its entirety by reference to Appendix
V “Terms, Conditions and Procedures for Application And Acceptance” of this Prospectus.

The Issue Price is determined by us, in consultation with the Manager and the Placement Agent and
Underwriter based on market conditions and estimated market demand for our Shares. The Issue Price
is the same for all the New Shares and is payable in full on application.

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

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


PUBLIC OFFER
Pursuant to the terms and conditions contained in the management and underwriting agreement (“the
“Management and Underwriting Agreement”) entered into between our Company, the Manager and the
Underwriter, the Underwriter agreed to underwrite the Offer Shares.

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

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


Offer Shares
The Offer Shares are made available to the members of the public in Singapore for subscription at the
Issue Price. Investors may apply for New Shares pursuant to the Offer by way of Application Forms, or
by Electronic Applications.

Terms and conditions and procedures for the application for Offer Shares by way of Application Forms,
or by Electronic Applications are described in Appendix V of this Prospectus.


PLACEMENT
Pursuant to the terms and conditions in the placement agreement (the “Placement Agreement”) entered
into between our Company, the Manager and the Placement Agent, the Placement Agent agreed to
subscribe for and/or procure subscriptions for the Placement Shares (including the Internet Placement
Shares and the Reserved Shares) at the Issue Price.

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



                                                   23
                                    PLAN OF DISTRIBUTION

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

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

Subscribers of Placement Shares (other than Reserved Shares) may be required to pay a brokerage
of up to 1.0% of the Issue Price to the Placement Agent.


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

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

If you have applied for the Placement Shares (other than the Reserved Shares) by way of a Placement
Shares Application Form, you may not make any separate application for the Placement Shares (other
than Reserved Shares) using another Placement Shares Application Form or by way of an Internet
Placement Application or for the Offer Shares (either using an Offer Shares Application Form or by way
of an Electronic Application). Such separate applications will be deemed to be multiple applications and
shall be rejected.

Additional terms and conditions and procedures for the application for Placement Shares are described
in Appendix V of this Prospectus.


Internet Placement Shares
The Internet Placement Shares are reserved for placement to Qualifying Internet Applicants.

Qualifying Internet Applicants may apply for Internet Placement Shares through the IPO website.

The offer of the Internet Placement Shares through the IPO website, will be on a first-come-first-served
cum balloting basis where:–
(a)   each valid application (“Valid FCFS Application(s)”) received for Internet Placement Shares shall
      first be deemed to be made for 90,000 Internet Placement Shares on first-come-first-served basis
      (“FCFS Internet Placement Shares”), and is subject to availability at the time of application; and
(b)   each excess valid application (“Valid Ballot Application(s)”) for the FCFS Internet Placement
      Shares shall then be deemed to be made for the remaining 90,000 Internet Placement Shares
      (“Ballot Internet Placement Shares”).

In the event that there are excess Valid Ballot Applications for Ballot Internet Placement Shares,
successful Valid Ballot Applications for Ballot Internet Placement Shares shall be determined by ballot
conducted by the IPO Website Operator.


                                                    24
                                   PLAN OF DISTRIBUTION

If you have applied for Internet Placement Shares via (a) above, you will be prohibited from applying
for additional Internet Placement Shares via (b) above.

If you are a Qualifying Internet Applicant who has made an application for Internet Placement Shares
through the IPO website, you shall not make any separate application for Placement Shares by way of
a Placement Shares Application Form or by way of another application through the IPO website, or for
the Offer Shares (either using an Offer Shares Application Form or by way of an Electronic Application).
Such separate applications will be deemed to be multiple applications and shall be rejected.

If you are a Qualifying Internet Applicant whose application for Internet Placement Shares is
rejected because of multiple applications, you will be levied an administrative fee amounting to
20% of the Qualifying Internet Applicant’s application moneys (subject to Singapore Goods and
Services Tax).

Additional terms and conditions of and the procedures for the application for Internet Placement Shares
through the IPO website are set out in Appendix V of this Prospectus.


Reserved Shares
We have reserved 500,000 Placement Shares for subscription by our Independent Directors,
Non-Executive Director, employees, business associates and those who have contributed to the
success of our Group at the Issue Price.

These Reserved Shares (other than those subscribed by our Independent Directors and Non-Executive
Director) are not subject to any moratorium and may be disposed of after the admission of our
Company to the Official List of the SGX-SESDAQ.

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

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


Subscription of our Shares
None of our Directors (other than our Independent Directors and Non-Executive Director who will be
offered Reserved Shares) or Substantial Shareholders intend to subscribe for the New Shares in the
Invitation.

To the best of our Directors’ knowledge, we are not aware of any person who intends to subscribe for
more than five per cent. of the New Shares.

Further, no Shares shall be allotted on the basis of this Prospectus later than six months after the date
of registration of this Prospectus by the Authority.




                                                   25
                                   INVITATION STATISTICS

Issue Price                                                                       21.0 cents


NAV

NAV per Share based on the combined balance sheet of our Group as at 31
December 2005:–

(a)   before adjusting for the estimated net proceeds from the issue of the New   5.75 cents
      Shares and based on our Company’s pre-Invitation share capital of
      55,000,000 Shares

(b)   after adjusting for the estimated net proceeds from the issue of the New    8.65 cents
      Shares and based on our Company’s post-Invitation share capital of
      79,000,000 Shares

Premium of Issue Price over the NAV per Share as at 31 December 2005:–

(a)   before adjusting for the estimated net proceeds from the issue of the New   265.2%
      Shares and based on our Company’s pre-Invitation share capital of
      55,000,000 Shares

(b)   after adjusting for the estimated net proceeds from the issue of the New    142.77%
      Shares and based on our Company’s post-Invitation issued share capital of
      79,000,000 Shares


EPS

Historical net EPS of our Group for FY2005 based on the combined results of our   3.56 cents
Group and our Company’s pre-Invitation share capital of 55,000,000 Shares

Historical net EPS of our Group for FY2005 based on the combined results of our   2.98 cents
Group and our Company’s pre-Invitation share capital of 55,000,000 Shares
assuming that the Service Agreements had been in place since the beginning of
FY2005


PER

Historical PER based on the Issue Price and historical net EPS of our Group for   5.90 times
FY2005 and our Company’s pre-Invitation share capital of 55,000,000 Shares

Historical PER based on the Issue Price and historical net EPS of our Group for   7.05 times
FY2005 and our Company’s pre-Invitation share capital of 55,000,000 Shares
assuming that the Service Agreements had been in place since the beginning of
FY2005


Net Operating Cash Flow(1)

Historical net operating cash flow per Share of our Group for FY2005 based on     3.70 cents
our Company’s pre-Invitation share capital of 55,000,000 Shares

Historical net operating cash flow per Share of our Group for FY2005 based on     3.11 cents
our Company’s pre-Invitation share capital of 55,000,000 Shares assuming that
the Service Agreements had been in place since the beginning of FY2005




                                                 26
                                               INVITATION STATISTICS

Price to Net Operating Cash Flow Ratio

Ratio of Issue Price to historical net operating cash flow per Share of our Group                                 5.68 times
for FY2005 based on our Company’s pre-invitation share capital of 55,000,000
Shares

Ratio of Issue Price to historical net operating cash flow per Share of our Group                                 6.75 times
for FY2005 based on our Company’s pre-invitation share capital of 55,000,000
Shares assuming that the Service Agreements had been in place since the
beginning of FY2005


Market Capitalisation

Our market capitalisation based on the post-Invitation share capital of 79,000,000                                $16.59 million
Shares and the Issue Price of 21.0 cents per Share

Note:–
(1)   Net operating cash flow is defined as net profit after taxation attributable to Shareholders with depreciation for property, plant
      and equipment added back.




                                                                  27
                                          RISK FACTORS

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

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

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


RISKS RELATING TO OUR INDUSTRY

We are dependent on the adequate supply of Indonesian hardwood and are affected by any
significant increase in the prices of Indonesian hardwood
Our wood-based products and lifestyle outdoor furniture are produced substantially from hardwood
sourced from Indonesian forests. Our business operations are thus dependent on the adequate supply
of Indonesian hardwood. The demand for Indonesian hardwood has generally been in excess of its
supply due to a number of factors. These include a reduction in the quota of Indonesian hardwood that
can be legally supplied to the market as well as the loss of forests due to widespread forest and land
fires and the conversion of natural forests (land clearing) for development and open pit mining
operations and transmigration settlement areas. The Indonesian government had introduced a number
of regulations and policies with the objective of controlling the rate of deforestation in Indonesia,
deterring the incidence of forest and land fires, as well as rehabilitating and conserving the natural
forests in Indonesia. All these regulations affect the supply of raw timber to the market. In the event of
any change in or the introduction of more regulations and policies which further curtail the legal supply
of Indonesian hardwood to the market, or in the event of the occurrence of more forest and land fires
in Indonesia, our contract manufacturers may be unable to obtain adequate supply of Indonesian
hardwood to meet our production requirements. If such an event occurs and we are unable to obtain
an alternative supply of or substituted raw timber materials for our production requirements, our
business operations will be materially and adversely affected.

The raw timber materials required for the production of our products are typically procured by our
contract manufacturers directly from timber suppliers in Indonesia. Although we do not procure the raw
timber materials ourselves, we are affected by any increase in timber prices, as any price increase is
likely to be passed down to us to a certain extent by our contract manufacturers. Factors resulting in
an increase in timber prices include rising fuel and labour costs as well as shortage of supply of
hardwood. Our Directors expect timber prices to increase further at least for FY2006. The increase in
timber prices will result in an increase in our costs and if we are unable to pass on such increase in
costs to our customers, our financial performance will be materially and adversely affected.




                                                    28
                                           RISK FACTORS

Our inability to meet the changing tastes and preferences of consumers and produce
commercially viable and quality products may adversely affect our brand names and business
Our business is design-oriented. The customers of our products are discerning customers who place
high value in aesthetic designs and quality materials and finishes. In order to effectively market our
brand names and to stay ahead of our competitors, we have to constantly produce and distribute
innovative and commercially viable products which meet the changing tastes and preferences of
consumers. Further, the majority of our products are currently produced from wood species such as
Kwila, Yellow Balau, Kapur and Teak. Should the preferences of consumers change to products
manufactured from other types of wood species not available in Indonesia, we have to respond in a
timely manner to any such change by inter alia, procuring the production of products using such wood
species and with designs that meet the tastes of consumers. In addition, stringent quality control during
production and the use of quality hardwood is important in ensuring that our products are of premium
grade. In the event that we are unable to keep abreast of evolving industry standards, design
developments and consumers preferences and produce commercially suitable products for a long
period of time, or we are not able to control the quality of our products during production by our contract
manufacturers, or our products do not meet consumers’ tastes and preferences (including any change
in preference for certain type(s) of wood species), our brand names and business may be adversely
affected. This in turn will have a material and adverse impact on our growth and financial performance.


We are affected by the economic, legal, social and political conditions in Indonesia and/or the
countries to which our products are exported
At present, we outsource our production requirements to our pre-qualified third party contract
manufacturers located in Indonesia. Our business is thus subject to the economic, legal, social and
political conditions in Indonesia affecting the operations of our contract manufacturers as well as the
timber industry in Indonesia. Any change in the regulations or the implementation of new regulations
and government policies relating to the timber industry may curtail the availability of timber, or restrict
the export of wood-based products and furniture, or impose more onerous requirements for such supply
and trading. This may increase timber costs as well as operating costs in respect of the compliance with
new regulatory requirements, which in turn may have a material and adverse impact on our financial
performance.

Any other negative developments with respect to inflation, interest rates, government policies, price
and wage controls, exchange control regulations, taxation, expropriation, and other economic, legal,
social or political conditions in or affecting Indonesia, particularly the timber industry may materially and
adversely affect our business, earnings and prospects.

As at the Latest Practicable Date, to the best of our Directors’ knowledge, there are no regulatory
environmental requirements or restrictions relating to the import of wood-based products and lifestyle
outdoor furniture in the countries to which our products are exported, that may affect our current
business operations. However, we are unable to assure you that such environmental requirements or
restrictions that may affect our business operations will not be imposed by regulatory bodies or by our
customers on a voluntary basis in the future. In the event that any such requirements or restrictions are
imposed which we are unable to fulfil or comply, our financial performance may be materially and
adversely affected.


We are affected by the cyclical demand for furniture
Historically, the furniture industry has been fluctuating with economic cycles and is sensitive to general
economic conditions, including interest rate levels and credit availability, inclement weather and other
factors that affect consumer spending habits. As most furniture purchases are discretionary in nature
and may represent a significant expenditure to the average consumer, such purchases may be deferred

                                                     29
                                          RISK FACTORS

during times of economic uncertainty. Any prolonged global economic slowdown may have a material
and adverse effect on our financial performance.

In addition, sales of our lifestyle outdoor furniture are generally seasonal in nature. In countries which
experience the four seasons in a year, demand for our products is usually higher in summer and
reduces towards winter. A lull winter season in Europe, which is in the Northern hemisphere, typically
coincides with a peak summer season in Australasia, which is in the Southern hemisphere. As we
export to countries in both Northern and Southern hemispheres, we strive to balance the opposing peak
and lull seasons in the two hemispheres. However, if we are unsuccessful in maintaining an effective
balance in our sales between the two different hemispheres, our financial performance may be affected
by the seasonal nature of our products.


We are exposed to the credit risks of our customers and contract manufacturers
In relation to the sale of our wood-based products, we usually require cash payment and additionally,
deposits in certain circumstances. For a small percentage of our regular customers, we extend credit
terms of between 14 and 60 days to such customers. In relation to the sale of our lifestyle outdoor
furniture products, we usually require our customers to pay us in cash against documents or letters of
credits. We may also extend credit terms of between 60 and 90 days to certain regular customers. As
we extend credit terms to our customers, we are exposed to the risk that our customers may delay in
making payments to us for the products sold and delivered to them. In more severe cases, our
customers may default in their payment to us. The risk of overly delayed payment or default will be
greater in an economic downturn. Further, as the majority of our customers are located overseas, it may
not always be possible or viable to recover payment from them through legal proceedings, which can
be costly and time-consuming, and may not always be certain under some jurisdictions. If such an
event occurs and we are unable to recover payment from our customers, whether through legal
proceedings or otherwise, we would have to make appropriate allowance for doubtful debts or to incur
bad debt write-offs. This in turn will have a material and adverse impact on our financial performance.
Please see the Section “Credit Management” of this Prospectus for more details.

In addition, we make advance payments to some of our contract manufacturers for some of our
purchase orders. If these contract manufacturers fail to produce and/or deliver the products to us after
accepting our advance payments, we may not be able to recover payment or compensation from them
due to their financial condition. Although we may commence legal proceedings against our contract
manufacturers to enforce our rights, such legal proceedings can be costly and time-consuming without
any certainty of recovery. Further, such legal proceedings will unavoidably result in a diversion of our
management time and resources. In the event of our contract manufacturers’ default as aforesaid, our
business operations and financial performance may be materially and adversely affected.


We are affected by any significant hikes in freight rates and/or transportation disruptions
Our products are transported by sea to our customers. Our sales are generally on terms that we bear
the freight costs in respect of the shipment of our products to our customers. Freight costs constituted
a significant portion of our costs of sales. Freight outward and handling charges accounted for 6.7%,
7.3%, 4.7% and 2.6% of our costs of sales for FY2003, FY2004, FY2005 and 1Q2006 respectively.
Freight rates are affected by various factors, such as oil prices and market demand for shipping
services. In the event that there is a significant hike in freight rates, and we are unable to pass on the
increase in cost to our customers, our financial performance will be materially and adversely affected.

Our products are transported by land from the factories of our contract manufacturers to the designated
ports of shipment and then by sea to the destinations of our customers. We are therefore subject to land
transport and shipping disruptions caused by bad weather conditions, political turmoil, social unrest,


                                                   30
                                          RISK FACTORS

port strikes, fires, earthquakes, floods, typhoons or other calamities which may lead to delayed or lost
containers and/or shipments. If any such event occurs, we may not be able to meet the delivery
schedules of our customers which may result in an adverse impact on our reputation. Our customers
may also as a result give us less sales orders or even cease to deal with us thereby materially and
adversely affecting our business operations and financial performance.


We are affected by competition
We face competition from other operators in the furniture and furnishing industries. Although we offer
wood-based products and lifestyle outdoor furniture marketed under our own brand names, “COMCIA”,
“decKING” and the range of “Pacific” brand names, we cannot give you any assurance that consumers
will not prefer other types of products offered by our competitors, which can be wood-based or non
wood-based products and/or designs.

Some of our competitors may have longer operating histories and greater financial, technical,
marketing and other resources and could therefore be in a better position to undertake product
development and customer support and to expand their business and market share. They may also
engage in aggressive pricing in procurement and/or sales which may necessitate us to increase our
purchase prices or lower the sale prices of our products significantly in order to remain competitive. If
we fail to compete successfully against existing competitors and new entrants, our business operations
and financial performance will be materially and adversely affected.


We may face product liability claims or product recalls which are costly and may create adverse
publicity
Currently, we have not procured any product liability insurance. If any of our products are found to be
unsafe or unfit for their intended purpose, we may face product liability claims arising from any bodily
injury, loss or damage suffered as a result of the use of our products. If we are found liable under
product liability claims, we may be required to pay substantial monetary damages. In addition, we may
have to recall the relevant products. We may not be able to obtain full or any indemnification from our
contract manufacturers as a result of any loss or damage suffered by us arising from product liability
claims against us. Further, even if we successfully defend ourselves against any such claims, we may
have to incur substantial expense and resources in the process. All of the aforesaid would have a
material and adverse impact on our reputation and financial performance.


Terrorism and armed conflicts and the spread of communicable diseases may have an adverse
impact on our business
Terrorism and armed conflicts, such as those that occurred in the United States of America, Indonesia,
Turkey and Spain between 2001 and 2004, have resulted in global economic uncertainties. The
uncertainties in the Middle East and the possible occurrence of major terrorist strikes may result in a
global economic downturn which may reduce consumers’ disposable income and spending. Political
instability in some parts of the world may also result therefrom. These may negatively affect the
demand for our products and consequently have a material and adverse impact on our business
operations and financial performance.

The spread of communicable diseases such as the severe acute respiratory syndrome (“SARS”) and
avian influenza (“bird flu”) may affect our operations as well as those of our contract manufacturers and
customers. In the event any of the employees in our contract manufacturers’ or customers’ office or
facilities is affected with any communicable diseases, we or our contract manufacturer or customer may
be required to temporarily shut down the affected office or facility to prevent the spread of the disease.
This may have a material and adverse impact on our business operations.


                                                   31
                                          RISK FACTORS

RISKS RELATING TO OUR COMPANY

We rely on our contract manufacturers to meet our production requirements and are affected if
they face disruptions in the operations of their production facilities
We do not carry out our own production. We outsource our production requirements to third party
contract manufacturers in Indonesia. As such, we rely on the capacities of our contract manufacturers
and the continued operations of their production facilities to meet our production requirements. In the
event that the production capacities of our contract manufacturers are insufficient to meet our
production requirements or our contract manufacturers are unable to continue with their present
operations as a result of a revocation of their operating licences or for any other reason whatsoever,
and we are unable to source for additional or alternative manufacturers that satisfy our criteria, we will
not be able to meet the demands of our customers. Further, if there is any disruption in the supply of
utilities, failure or substandard performance of our contract manufacturers’ machinery, labour strikes,
terrorist acts, outbreak of communicable diseases, fires, earthquakes, volcano eruptions, typhoons,
floods or other calamities resulting in significant damage to the production facilities of our contract
manufacturers, the production and eventual delivery of our orders could be interrupted. This may result
in a longer production lead time and delay in delivery to us. Further, the occurrence of any major floods
or other natural calamites within Indonesia may also result in a delay in the transportation of finished
products within Indonesia to the designated ports of departure. Consequently we may not be able to
meet the delivery schedules of our customers. The occurrence of any such event may result in the loss
of business or claims against us thereby materially and adversely affecting our reputation and financial
performance.

Our operating results will be adversely affected if we do not manage our pre-production
procurement planning effectively
We seek to be able to meet our customers’ orders within the shortest timeframe. As our production lead
time is about one to three months, we constantly review our subsisting purchase orders with our
contract manufacturers, to ensure that we can fulfil confirmed sales orders as well as our sales
forecasts. Our success depends upon our ability to anticipate and respond to changing market trends
and customer preferences in a timely manner. We base our forecasts on our projections of consumer
demand and preferences in a future period, which may change between the time we place an order with
our contract manufacturers and the time the product becomes available for sales and delivery, and our
forecasts may not be accurate. As a result, we are vulnerable to consumer demands and trends and
to misjudgements in our forecasts.

In addition, our contract manufacturers require advance notice of our requirements in order to be able
to produce the quantities we requested for. If we do not accurately predict our customers’ preference
and acceptance levels of our products, or misjudge market trends and procure in excess of our
requirements, our working capital and financial performance may be adversely affected. Conversely,
shortages could result in loss of sales and may have a material and adverse effect on our financial
performance.

We are dependent on our major contract manufacturers
Our major contract manufacturers collectively accounted for approximately 70.9%, 70.0% and 56.8%
of our total purchases in FY2003, FY2004 and FY2005 respectively. Two of our major contract
manufacturers for FY2005 are CV Karya Mina Putra and PT Kayu Lapis Indonesia which accounted for
24.0% and 22.1% of our total purchases respectively for FY2005. Please refer to the Section “Major
Contract Manufacturers” of this Prospectus for more details. In order to ensure that we are able to
deliver to our customers quality products at competitive prices and in a timely manner, we need to
procure and reserve from our contract manufacturers sufficient production capacities. As we do not
enter into any long-term supply agreements with our contract manufacturers, there is no assurance that


                                                   32
                                          RISK FACTORS

these contract manufacturers will continue to produce or reserve their production capacities for us. In
the event that our major contract manufacturers are unable to fulfil our production needs, or limit the
supply of their products or increase the prices of their products to us, we may not be able to find timely
replacements or alternative sources for such products at competitive prices. An insufficient supply of
our wood-based products and lifestyle outdoor furniture will result in our inability to satisfy customer
needs. Consequently, our financial performance would be materially and adversely affected.


We may be affected by any negative publicity arising from illegal logging operations or other
forestry activities
There had been negative publicity in relation to illegal logging operations and other forestry activities
in regions such as South America, Africa, East Asia and South-east Asia, including Indonesia. Such
negative publicity may extend to and affect forest concession owners and/or our contract
manufacturers in Indonesia. Specifically, there was an article in 2006 by a non-profit organization
alleging that one of our contract manufacturers, which accounted for more than 5.0% of our total
purchases for FY2005, was involved in illegal logging activities. Negative publicity of this nature
surrounding our contract manufacturers may affect the willingness of the international market to
purchase wood-based products and furniture from us. In such an event, our financial performance may
be materially and adversely affected.


Our business and reputation will be adversely affected if any of our contract manufacturers
uses timber that is obtained from illegal sources
The Indonesian government has implemented certain laws and regulations to safeguard against illegal
logging and the trade of timber obtained from illegal sources. Based on the existing regulatory
framework in Indonesia, we have put in place certain procedures to satisfy ourselves that the raw
timber used by our contract manufacturers for the production of our products originates from legal
sources. Please see the Sections “Quality Assurance”, “Pre-Qualification, In-Process Supervision And
Performance Evaluation Of Our Contract Manufacturers”, “Government Regulations” and Appendix III
“Description of Relevant Indonesian Laws and Regulations” of this Prospectus for more information.

Notwithstanding the precautionary measures taken by us and the Indonesian government, in the event
that any of our contract manufacturers uses timber that is obtained from illegal sources and that is not
detected by us or the QA Personnel, we may face censure or sanction from our customers or the
relevant authorities. We have on 10 May 2006 and for the purpose of this Prospectus, been advised by
our Legal Advisers on Indonesian Law that we will not be legally liable in connection with any alleged
illegal logging operations on the part of such contract manufacturers or the procurement of products
manufactured from timber obtained from illegal sources if we have exercised due process and care and
acted in good faith in our procurement. Notwithstanding, we may be affected by the negative publicity
that may arise from any such illegal activity and our reputation and financial performance may, as a
consequence, be materially and adversely affected.


Our financial performance will be materially and adversely affected if we are unsuccessful in our
marketing and branding strategies
Our business strategy is to become a globally recognized brand-centric company which epitomizes the
high quality of our products. We believe this in turn will lead to a greater demand for our branded
products thus enabling us to maintain and increase our customer base, capture a bigger market share
and thereby increase our turnover. To this end, other than those carrying our own brand names, we
have substantially reduced the supply of products built to the order of our customers’ specifications and
instead focus only on the supply of products under our own brand names of “COMCIA”, “decKING” and
the range of “Pacific” brand names.


                                                   33
                                           RISK FACTORS

The success of our business strategy depends on our ability to establish effective strategies on
marketing and branding. In the event that we are not successful in our marketing and branding
strategies, as a result of which there is a lack of demand for our products, our financial performance
may be materially and adversely affected.


We are affected if our contract manufacturers and third party personnel fail to adhere to our
quality control standards
We impose strict quality control standards on our contract manufacturers. As part of our quality control
procedure, we regularly visit our contract manufacturers to monitor the progress and production of our
wood-based products and lifestyle furniture. We also procure the services of a third party company to
engage quality control personnel (“QA Personnel”) to carry out quality control inspections and
supervisions at the premises of our contract manufacturers during production. Please see the Section
“Quality Assurance” of this Prospectus for more details. Notwithstanding the quality control procedures
set by us, in the event that one or more of our contract manufacturers fail to adhere to our quality control
standards, and we or the QA Personnel are not able to identify any deficiencies before the products are
shipped to our customers, our reputation may be affected. This in turn may have a material and adverse
impact on our financial performance.


We cannot assure you of the success of our business expansion or that we will be able to
manage our business expansion and growth effectively
We intend to expand our business by inter alia, expanding our distribution channels and market
presence in existing as well as new markets. Such expansion plans include opening new retail outlets
and increasing market awareness and recognition of our proprietary brands through increased
advertising and promotional activities. Please see the Section “Future Plans” of this Prospectus for
more details.

Our expansion plans involve a number of risks, including but not limited to, capital expenditures
incurred in respect of the costs of setting up new retail outlets and business overseas, investment in
property and renovation costs, costs of working capital tied up in inventories, increased marketing and
promotional expenses as well as other working capital requirements. Whilst we may have incurred
significant capital resources in our business expansion plans, there is no assurance that we will be
successful in increasing our market share or net revenue through such business expansion. Any failure
to do so will result in our Group incurring expenses, and perhaps losses, without significant increase
in our revenue.

Further, to manage any future growth of our operations and personnel resulting from our business
expansion, we must improve and effectively utilize our existing operational, management, marketing
and financial systems and successfully recruit, hire, train and manage additional personnel. Our failure
to manage our business expansion and growth may materially and adversely affect our business
operations and financial performance.


We rely on our trademarks which are essential to the development of our business
We have registered our trademarks in our principal place of business in Singapore and our markets in
Australia, New Zealand and United States of America. Effective enforcement of intellectual property
rights is important for the protection of our interests as we consider the recognition of these trademarks
to be vital in the sales of our products. Unauthorised use of our trademarks and brand names may
damage the brand and name recognition and reputation of our Group. Although we have registered our
trademarks, it may be possible for third parties to unlawfully pass-off their products as ours or to infringe
our intellectual property rights in the design of their products. In certain jurisdictions which do not have


                                                     34
                                            RISK FACTORS

developed intellectual property laws or a record of protecting intellectual property rights, we may face
considerable difficulties and costly litigation in order to protect and enforce such rights. In the event that
we are not able to protect our intellectual property rights, our business operations and financial
performance may be materially and adversely affected.

Further, there is no assurance that our products do not and will not infringe other registered trademarks
or intellectual property rights belonging to third parties. As such, we may be subject to legal
proceedings and claims relating to such infringement. In the event of any claims or litigation involving
infringement of the intellectual property rights of third parties, whether with or without merit, it could
result in a diversion of our management time and resources and our business operations may be
materially and adversely affected. In addition, any successful claim against us arising out of such
proceedings could result in substantial monetary liability and will materially affect the continued sale of
the affected products and consequently, our financial performance.


We may be affected if our major customers reduce their purchases or cease to purchase from
us
As at the end of FY2005, our corporate customer base included 277 different corporate customers
spanning across 48 countries in Australasia, Europe, Asia, Middle East, Africa and North America.
Revenue contribution from our customers in Australasia and Europe accounted for 43.6% and 50.9%
of our total revenue respectively for FY2005. Our major customers accounted for 55.6%, 54.5% and
46.2% of our total revenue in FY2003, FY2004 and FY2005. Please refer to the Section “Major
Customers” of this Prospectus for further details. For FY2005, seven of our customers accounted for
five per cent. or more of our Group’s total revenue. Out of these seven customers, two each were from
Australia and Germany and one each was from New Zealand, Belgium and Lithuania. We have not
entered into any long-term supply agreements with any of our customers. There is therefore no
assurance that our customers will continue to purchase wood-based products and lifestyle outdoor
furniture from us. In the event that our customers reduce their purchases from us or cease to purchase
from us and we are unable to replace their sales contributions with those from other existing or new
customers, our financial performance will be materially and adversely affected.


We rely on our Executive Directors and Executive Officers and the inability to attract, retain and
motivate them will adversely affect our business and financial performance
Our Executive Directors and Executive Officers have made significant contributions to the overall
business strategies and growth of our Group. We rely, in particular, on our Executive Chairman and
CEO, Mr George Chew, and our Executive Director and COO, Mr Steven Chew, to oversee our
business operations, development, strategies and expansion. The continuing development and growth
of our Group is dependent, to a large extent, on the continuing active involvement of our Executive
Directors and Executive Officers.

We believe that our future success will depend upon our ability to attract, retain and motivate our
Executive Directors and Executive Officers. Our inability to do so resulting in the loss of the services
of any of our Executive Directors or Executive Officers or that of other key personnel without adequate
and timely replacements could materially and adversely affect our business operations and financial
performance.


We are exposed to foreign exchange risks
In FY2005, our revenues were in US$, A$ and S$ in the proportion of 97.5%, 1.8% and 0.7% while our
costs of purchases and operating expenses were mainly in US$, A$, S$ and RM in the proportion of
93.8%, 1.0%, 5.1% and 0.1%. To the extent that our revenue, purchases and operating expenses are


                                                     35
                                          RISK FACTORS

not matched in the same currency and there are timing differences in between collection and payment,
we may be exposed to foreign currency exchange risks. In addition, any adverse movement in the
currency of the countries where we export to versus the US$ may result in our products being less
competitive which may in turn affect the demand for our products.

Our financial statements are reported in S$. As such, any unfavourable movement in any of the above
foreign currencies versus the S$ will adversely affect us. As we continue in our global expansion, we
anticipate more of our revenue to be denominated in foreign currencies. Any significant unfavourable
movement of such foreign currency rates in which our revenue is received will materially and adversely
affect us.

Currently, we do not have a formal foreign currency hedging policy in respect of our foreign exchange
exposure and therefore are exposed to any adverse fluctuations in exchange rates. We have not used
any financial hedging instruments to manage our foreign exchange risks. We will however continue to
monitor our foreign exchange exposure closely and take appropriate measures to hedge our foreign
currency exposure, if required. However, as the costs of hedging can be substantial, our financial
performance may be affected as a result.

We may be affected by changes in the government policies of Malaysia, including changes to
the Guidelines on the Acquisition of Interests, Mergers and Take-overs by Local and Foreign
Interests issued by the Foreign Investment Committee (“FIC”) of Malaysia
Pursuant to the Guidelines on the Acquisition of Interests, Mergers and Take-overs by Local and
Foreign Interests issued by the FIC (“FIC Guidelines”) which took effect on 21 May 2003, the prior
approval of the FIC is required, for inter alia,:–
(a)   any proposed acquisition of 15% or more of the voting rights of any local companies or businesses
      in Malaysia by a foreign interest; or
(b)   any proposed acquisition of an aggregate of 30% or more of the voting rights in such companies
      or businesses by an associated or non-associated group of foreign interests.

A foreign interest means any interest, associated group of interests or parties acting in concert which
comprises (a) individuals who are not Malaysian citizens including permanent residents (b) companies
or institutions incorporated outside Malaysia and (c) local companies or institution in Malaysia whereby
the parties as stated in (a) and/or (b) hold more than 50% of the voting rights in it. Any proposed
acquisition by foreign interests which will result in an increase of their voting rights to 15% or more in
any local companies or business in Malaysia (or to 30% or more, where the proposed acquirors are an
associated or non-associated group of foreign interests) will also require FIC’s approval.

Conditions which may be imposed by the FIC under the FIC Guidelines include the condition that at
least 30% of the equity in the subject company to be acquired must be held by Bumiputeras (Malay
individuals or aborigines as defined under the Federal Constitution of Malaysia), if such requirement is
not already met. It is also a requirement under the FIC Guidelines that any company to be acquired by
foreign interests must have an issued and paid-up share capital of RM250,000 within the stipulated
time. Further, the said subject company must also use its best endeavours to recruit and train
Malaysian citizens so as to reflect Malaysia’s population composition at every level of employment.

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


                                                   36
                                           RISK FACTORS

As at the Latest Practicable Date, we have three wholly-owned Malaysian subsidiaries (“Malaysian
Subsidiaries”). One of our Malaysian Subsidiaries owns a factory whilst the other owns a residential
property. Please see the Sections “Our Subsidiaries” and “Properties And Other Fixed Assets” for more
details. Apart from the ownership of the said immovable properties and the receipt of income derived
from the present or possible future lease(s) of any one or both of the immovable properties, our
Malaysian Subsidiaries currently do not undertake any other business activity. However, we may in the
future expand our business into Malaysia. In such an event, we may use either one or more of our
Malaysian Subsidiaries to undertake the relevant business activities in Malaysia.

As we have not made the relevant applications to the FIC for approval to hold our current 100% voting
rights in all of our Malaysian Subsidiaries, any possible plan by us in the future to use any one or more
of our Malaysian Subsidiaries as the vehicle(s) to undertake business activities in Malaysia could be
materially affected if such business activities require us to apply for any licences or permits from the
Malaysian authorities for our business activities or any other specific purpose relevant to our business
activities. Our Malaysian Subsidiaries may not be able to obtain the grant of the relevant licence or
permits as we have not obtained the FIC approval for our current shareholding or voting rights in our
Malaysian Subsidiaries.

In addition, future changes to the existing FIC Guidelines or the introduction of new regulations
governing foreign ownership could affect our investment in our Malaysian Subsidiaries. We may be
required by the FIC Guidelines or other government guidelines, laws or regulations and the Malaysian
authorities to restructure our equity interest and divest part of our interest in our Malaysian Subsidiaries.
In such an event, we may not be able to retain full management or operational control over our
Malaysian Subsidiaries or the immovable properties currently under their ownership.


RISKS RELATING TO AN INVESTMENT IN OUR SHARES

Additional funds raised through equity financing for our future growth will dilute Shareholders’
equity interests and any additional debt financing may inter alia, restrict our ability to pay
dividends to our Shareholders
The expansion and development of our business requires significant additional capital. In particular,
substantial additional funds are required if we wish to expand our capabilities and business through
acquisitions, joint ventures and strategic partnerships with parties who can add value to our business.

We may, from time to time, obtain additional capital through debt or equity financing to fund our future
capital expenditures. Financing through the issue of new equity securities may result in dilution to the
holders of our Shares and such new equity securities may have rights, preferences or privileges senior
to those of existing Shareholders. Additional debt financing, if obtained, may expose us to the
covenants imposed by the financial institutions or lenders. These covenants may include, among
others, restrictions to pay dividends or require us to dedicate a substantial portion of our cash flow from
operations to the payments of our debt. All these restrictions will reduce the availability of our cash flow
to fund capital expenditures, working capital and other general corporate purposes and limit our
flexibility in planning for, or reacting to, changes in our business and industry.


Substantial future sale of our Shares could adversely affect the market price of our Shares
Immediately following the Invitation, our Company will have 79,000,000 issued and paid-up Shares.
Such Shares, except for those under moratorium, may be sold in the public market in Singapore. Any
future sale or availability of our Shares in the public market can have a downward pressure on our




                                                     37
                                          RISK FACTORS

Share price. The sale of a significant amount of Shares in the public market after the Invitation, or the
perception that such sale may occur, could materially and adversely affect the market price of our
Shares.

Except as otherwise described under the Section “Moratorium” of this Prospectus, there will be no
restriction on the ability of our Substantial Shareholders to sell their Shares either on the SGX-ST or
otherwise. If our Substantial Shareholders sell substantial amounts of our Shares in the public market
following the expiry of the moratorium, the market price of our Shares could fall.

Our Executive Directors and their associates will collectively own approximately 69.6% of our
Shares after the Invitation, which will allow them to influence the outcome of matters submitted
to our Shareholders for approval
Upon completion of the Invitation, our Executive Directors, Mr George Chew, Mr Steven Chew and
Madam Teresa Tan, our Vice President (Group Marketing and Business Development), Mr Xavier Chew
and Fine Prospect Investments Limited (the investment holding company of the Blessing Trust of which
Mr Steven Chew and Mr Xavier Chew are beneficiaries) will beneficially own in the aggregate
approximately 69.6% of our enlarged share capital after the Invitation. Mr George Chew and Madam
Teresa Tan are husband and wife. Mr Steven Chew and Mr Xavier Chew are siblings and the sons of
Mr George Chew and Madam Teresa Tan. As a result of the combined shareholdings of these persons,
these persons, if they act together, will be able to exercise significant influence over all matters
requiring approval by our Shareholders, including the election of Directors and the approval of
significant corporate transactions such as mergers. These persons will also have veto power, if they act
together with respect to any Shareholder action or approval requiring a majority vote except where they
are required by the Listing Manual to abstain from voting. This concentration of ownership will place
these major Shareholders in a position to affect significantly our corporate actions such as mergers or
takeover attempts (notwithstanding that the same may be synergistic or beneficial to our Group) in a
manner that could conflict with the interest of public Shareholders.

There has been no prior market for our Shares and the Invitation may not result in an active or
liquid market and there is a possibility that our Share price may be volatile
Prior to the Invitation, there has been no public market for our Shares. Although we have made an
application to the SGX-ST to list our Shares on the SGX-SESDAQ, there is no assurance that an active
trading market for our Shares will develop, or if it develops, will be sustained. The Issue Price was
determined by negotiations between the Manager and the Placement Agent and Underwriter and
ourselves and may not be indicative of prices that may prevail in the trading market after the completion
of the Invitation. There is also no assurance that the market price for our Shares will not decline below
the Issue Price. The market price of our Shares could be subject to significant fluctuations due to
various external factors which are outside our control and which may be unrelated or disproportionate
to our financial performance. Such events include the liquidity of our Shares in the market, difference
between our actual financial performance and those expected by investors and analysts, the general
market conditions and broad market fluctuations.

Investors in our Shares would face immediate and substantial dilution in the NAV per Share and
may experience future dilution
Our Issue Price of $0.21 is substantially higher than our Group’s NAV per Share of $0.10 as at 31 March
2006 adjusted for the net proceeds from the Invitation and after adjusting for any disposal or acquisition
which occurred between 31 March 2006 and the date of registration of this Prospectus. Please see the
Section “Dilution” of this Prospectus for more details. If we were liquidated for NAV immediately
following the Invitation, each Shareholder subscribing pursuant to the Invitation would receive less than
the price they paid for their Shares and suffer dilution in the value of their investments as a result.


                                                   38
                                                  USE OF PROCEEDS

The net proceeds to be raised by our Company from the issue of the New Shares (after deducting the
estimated expenses in relation to the Invitation, comprising, inter alia, underwriting commissions,
professional fees and other expenses, of approximately $1.4 million) are estimated to be approximately
$3.6 million.

We intend to utilise the proceeds from the issue of the New Shares for the following purposes:–

                                                                                                          Amount allocated for
                                                                                                           each dollar of the
                                                                                                       proceeds raised from the
                                                                                     Estimated          Invitation (as a % of the
                                                                                      amount             gross proceeds due to
Use of proceeds                                                                       ($’000)                our Company)

(a)    Expansion of our distribution channels and market presence
       and strengthening our proprietary brands, through:–
       (i)     Sales and marketing activities, including participation in                 200                         4.0
               new trade fairs and exhibitions and recruiting additional
               sales and marketing personnel
       (ii)    Opening of new retail outlets                                              500                         9.9
       (iii)   Development of our outdoor garden lifestyle centre in                      500                         9.9
               Singapore(1)
(b)    Strengthening of our design capabilities and capacity and                          300                         5.9
       expansion of our product range and variety through the
       innovation and development of new products
(c)    Working capital of our Group to increase the scale of our                        2,171                        43.1
       Singapore business operations(2)

(d)    Invitation expenses
       •       Listing fees                                                                 30                        0.6
       •       Professional fees and charges                                              658                        13.1
       •       Underwriting commission, placement commission and                          113                         2.2
               brokerage
       •       Miscellaneous expenses                                                     568                        11.3

TOTAL                                                                                   5,040                      100.0


Notes:–
(1)   In the event that we are unsuccessful in our tender for the lease of a piece of vacant land in Singapore for our outdoor
      garden lifestyle centre, we intend to utilise the $0.5 million reserved for such purpose for working capital of our Group.
(2)   In the event any suitable opportunity arises for us to enter into any strategic alliances or joint ventures with third parties or
      the acquisition of any businesses and we decide to make such investment, we intend to fund the investment from our
      working capital, bank borrowings and/or equity funding.


Please refer to the Section “Future Plans” of this Prospectus for further details on our plans above.

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


                                                                  39
      MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

Pursuant to a management and underwriting agreement dated 7 November 2006 (the “Management
and Underwriting Agreement”) entered into between our Company, the Manager and the Underwriter,
our Company appointed the Manager, and the Manager has agreed to manage the Invitation. The
Manager will receive a management fee from our Company for its services rendered in connection with
the Invitation.

Pursuant to the Management and Underwriting Agreement, the Underwriter agreed to underwrite the
subscription of the Offer Shares at the Issue Price on the terms and conditions stated therein. In
consideration thereof, our Company has agreed to pay the Underwriter an underwriting commission of
2.00% of the aggregate Issue Price for the total number of Offer Shares. Payment of the underwriting
commission shall be made whether or not any allotment or issue of the Offer Shares is made to the
Underwriter or its nominees, including any portion of the Offer Shares which have been applied to
satisfy excess applications for Placement Shares.

Pursuant to a placement agreement dated 7 November 2006 (the “Placement Agreement”) entered into
between our Company and the Placement Agent, the Placement Agent agreed to subscribe for and/or
procure subscriptions for the Placement Shares at the Issue Price on the terms and conditions stated
therein. In consideration thereof, our Company has agreed to pay the Placement Agent a placement
commission of 2.25% of the aggregate Issue Price for the Placement Shares. Payment of the
placement commission shall be made whether or not any allotment or issue of the Placement Shares
is made to the Placement Agent or its nominees, including any portion of the Placement Shares which
have been applied to satisfy excess applications for Offer Shares.

Brokerage will be paid by our Company to the Underwriter, members of the SGX-ST, merchant banks
and banks in Singapore in respect of accepted applications made on Application Forms bearing their
respective stamps, or to the Participating Banks in respect of accepted applications made through
Electronic Applications at the rate of 0.25% of the Issue Price for each Offer Share. In addition, DBS
Bank will levy a minimum brokerage fee of S$5,000.

Subscribers of Placement Shares (excluding Reserved Shares) may be required to pay a brokerage of
up to 1.0% of the Issue Price to the Placement Agent.

Save as aforesaid, no commission, discount or brokerage has been paid or other special terms granted
within the two years preceding the date of this Prospectus or is payable to any Directors, promoter,
expert, proposed Director or any other person for subscribing or agreeing to subscribe, or procuring or
agreeing to procure subscriptions for any Shares in, or debentures of, our Company.

If there shall have been, since the date of the Management and Underwriting Agreement and prior to
or on the close of the Application List:–
(a)   any breach of the warranties or undertakings in the Management and Underwriting Agreement; or
(b)   any occurrence of certain specified events which comes to the knowledge of the Manager or the
      Underwriter; or
(c)   any adverse change, or any development involving a prospective adverse change, in the
      condition (financial or otherwise) of our Company or our Group as a whole; or
(d)   any introduction or prospective introduction of or any change or prospective change in any
      legislation, regulation, order, notice, policy, rule, guideline or directive (whether or not having the
      force of law and including, without limitation, any directive, notice or request issued by the
      Authority, the Securities Industry Council of Singapore or the SGX-ST) or in the interpretation or
      application thereof by any court, government body, regulatory authority or other competent
      authority in Singapore; or



                                                     40
      MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

(e)   any change, or any development involving a prospective change or any crisis, in national or
      international monetary, financial economic or political conditions (including but without limitations
      conditions in the stock market, in the foreign exchange market and conditions with respect to
      interest rates in Singapore and overseas); or
(f)   any occurrence or any local, national or international outbreak or escalation of hostilities,
      insurrection or armed conflict (whether or not involving financial markets and including but not
      limited to any act of terrorism); or
(g)   foreign exchange controls in Singapore and overseas or any occurrence of a combination of any
      such changes or developments or crises, or any deterioration of any such conditions; or
(h)   any other occurrence of any nature whatsoever,
which has resulted in or is in the reasonable opinion of the Manager likely to result in the conditions in
the stock market and/or stock markets overseas being materially and adversely affected; or the
success of the Invitation being materially prejudiced; or it becoming inadvisable, inexpedient or not
commercially viable or otherwise contrary to or outside the usual commercial customs or practices in
Singapore for the Manager or the Underwriter to observe or perform or be obliged to observe or perform
the terms of the Management and Underwriting Agreement or the Invitation; or the business, trading
position, operations or prospects of our Group being materially and adversely affected, the Manager
(for itself and for and on behalf of the Underwriter) may at any time prior to the close of the Application
List by notice in writing to our Company rescind or terminate the Management and Underwriting
Agreement.

The Manager or the Underwriter may by notice in writing to our Company terminate the Management
and Underwriting Agreement if:–
(a)   at any time up to the commencement of trading of our Shares on the SGX-SESDAQ, a stop order
      shall have been issued by the Authority in accordance with Section 242 of the Securities and
      Futures Act; or
(b)   at any time after the registration of this Prospectus by the Authority but before the close of the
      Application List, our Company fails and/or neglects to lodge a supplementary or replacement
      prospectus (as the case may be) if it becomes aware of:–
      (i)     a false or misleading statement in this Prospectus;
      (ii)    an omission from this Prospectus of any information that should have been included in it
              under Section 243 of the Securities and Futures Act; or
      (iii)   a new circumstance that has arisen since this Prospectus was lodged with the Authority and
              would have been required by Section 243 of the Securities and Futures Act to be included
              in the Prospectus if it had arisen before this Prospectus was lodged,
(c)   the Shares have not been admitted to the Official List of the SGX-SESDAQ on or before 17
      November 2006 (or such other date as our Company and the Manager may agree).

The obligations under the Placement Agreement are conditional upon the Management and
Underwriting Agreement not being determined or rescinded pursuant to the provisions of the
Management and Underwriting Agreement. In the case of the non-fulfilment of any of the conditions in
the Management and Underwriting Agreement or the release or discharge of the Manager and/or
Underwriter (as the case may be) from their obligations under or pursuant to the Management and
Underwriting Agreement, the Placement Agreement shall be terminated and the parties shall be
released from their respective obligations under the Placement Agreement.

Save as disclosed above, we do not have any material relationship with the Manager and the
Placement Agent and Underwriter.


                                                    41
                          SELECTED GROUP FINANCIAL INFORMATION

The following selected financial information should be read in conjunction with the full text of this
Prospectus, including Appendix VI “Independent Auditors’ Report in relation to the Audited Combined
Financial Statements of the Group for FY2003, FY2004 and FY2005 and the Unaudited Combined
Financial Statements of the Group for the three months ended 31 March 2006” and Appendix VII
“Unaudited Proforma Combined Financial Statements of the Group for FY2005 and the three months
ended 31 March 2006” of this Prospectus.


OPERATING RESULTS OF OUR GROUP

                                                                      Audited                            Unaudited
S$’000                                               FY2003           FY2004         FY2005          1Q2005     1Q2006
Revenue                                               27,764          43,290          58,734          15,417          18,625
Cost of sales                                        (25,254)         (38,768)       (52,360)        (13,760)        (16,480)

Gross profit                                           2,510           4,522            6,374           1,657           2,145
Other operating income                                     78             155             429              17              30
Selling and distribution expenses                        (325)         (1,052)         (1,486)           (359)           (510)
Administrative expenses                                (1,254)         (1,543)         (2,046)           (423)           (580)
Other operating expenses                                 (221)           (512)           (859)             —              (49)
Finance cost                                             (152)           (118)           (135)            (27)            (73)

Profit before tax                                         636          1,452            2,277             865             963
Tax                                                       (21)           (246)           (376)           (142)           (124)

Profit after tax                                          615          1,206            1,901             723             839
Minority interests                                        (41)            (11)             58               (1)           (45)

Net profit attributable to Shareholders                   574          1,195            1,959             722             794

EPS (based on the pre-Invitation share
 capital)(cents)(1)                                      1.04            2.17            3.56            1.31            1.44
EPS (based on the post-Invitation share
 capital)(cents)(2)                                      0.73            1.51            2.48            0.91            1.01

Notes:–
(1)   For comparative purposes, EPS (based on the pre-Invitation share capital) for the Relevant Period is computed based on
      the net profit attributable to Shareholders and the pre-Invitation share capital of 55,000,000 Shares.
(2)   For comparative purposes, EPS (based on the post-Invitation share capital) for the Relevant Period is computed based on
      the net profit attributable to Shareholders and the post-Invitation share capital of 79,000,000 Shares.
(3)   Had the sale of the Company’s residential property situated at 203G Ponggol Seventeenth Avenue, Singapore been in effect
      from 1 January 2005, our profit before tax and net profit attributable to Shareholders for FY2005 would have been S$2.3
      million and S$2.0 million respectively, whilst our profit before tax and net profit attributable to Shareholders for 1Q2006
      would have been S$1.0 million and S$0.8 million respectively. Please refer to Appendix VII “Unaudited Proforma Combined
      Financial Statements of the Group for FY2005 and the three months ended 31 March 2006” of this Prospectus for more
      details.




                                                                 42
                          SELECTED GROUP FINANCIAL INFORMATION

FINANCIAL POSITION OF OUR GROUP

                                                                                     Audited                 Unaudited
                                                                                      As at                    As at
S$’000                                                                          31 December 2005           31 March 2006
Non-Current Assets
Property, plant and equipment                                                           1,130                    1,109
Financial asset at fair value through profit or loss                                      133                      133
Goodwill on consolidation                                                                  29                      668
                                                                                        1,292                    1,910
Current Assets
Assets held for sale                                                                    1,880                       —
Inventories                                                                               332                    1,205
Trade receivables                                                                       5,121                    5,367
Other receivables                                                                       2,218                    2,757
Prepayments                                                                                30                      123
Cash and bank balances                                                                  1,169                    1,592
                                                                                       10,750                   11,044
Total Assets                                                                           12,042                   12,954
Current Liabilities
Trade payables                                                                            582                      673
Bills payables                                                                          4,769                    5,926
Other payables                                                                            705                      687
Hire purchase creditors                                                                     6                        6
Interest-bearing borrowings (secured)                                                   1,861                      297
Provision for tax                                                                         592                      712
                                                                                        8,515                    8,301
Net Current Assets                                                                      2,235                    2,743
Non-Current Liabilities
Hire-purchase creditors                                                                     23                      21
Interest-bearing borrowings (secured)                                                      323                     317
Deferred tax                                                                                16                      16
                                                                                           362                     354
Total Liabilities                                                                       8,877                    8,655
              (1)
Net Assets                                                                              3,165                    4,299
Share Capital and Reserves
Share capital                                                                           3,000                    2,000
Capital reserve                                                                            82                       82
Foreign currency translation reserve                                                      (32)                      26
Unappropriated profits                                                                     97                    2,128
                                                                                        3,147                    4,236
Minority interest                                                                          18                       63
                                                                                        3,165                    4,299
Note:–
(1)   Had the sale of the Company’s residential property situated at 203G Ponggol Seventeenth Avenue, Singapore been in effect
      from 1 January 2005, our net assets as at 31 December 2005 and 31 March 2006 would have been S$3.2 million and S$4.3
      million respectively. Please refer to Appendix VII “Unaudited Proforma Combined Financial Statements of the Group for
      FY2005 and the three months ended 31 March 2006” of this Prospectus for more details.


                                                             43
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

The following discussion of our results of operations and financial position should be read in
conjunction with Appendix VI “Independent Auditors’ Report in relation to the Audited Combined
Financial Statements of the Group for FY2003, FY2004 and FY2005 and the Unaudited Combined
Financial Statements Of The Group for the three months ended 31 March 2006” of this Prospectus.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual
results may differ significantly from those projected in the forward-looking statements. Factors that
might cause future results to differ significantly from those projected in the forward-looking statements
include, but not limited to, those discussed below and elsewhere in this Prospectus, particularly in the
Section “Risk Factors”.


OVERVIEW
We are one of the leading brand-centric distributors of quality wood-based products and lifestyle
outdoor furniture carrying our proprietary brands. Our products can be categorised into two main
product segments:–
(a)   High-value wood-based products such as decking, flooring, fencing, door and window
      components and other moulded products. These products are marketed and distributed mainly
      under our brands “COMCIA” and “decKING”; and
(b)   Premium lifestyle outdoor furniture such as outdoor garden furniture and garden accessories.
      These products are marketed and distributed mainly under our range of “Pacific” brand range.
      Since 2005, our product range has expanded to include lifestyle indoor furniture. Revenue derived
      from the sales of lifestyle indoor furniture has been insignificant as at the Latest Practicable Date.
      For the purpose of segmentation, we have incorporated lifestyle indoor furniture under this
      product segment.

Our customers include manufacturers, wholesalers, major retailers, specialist retailers and consumers
in the furniture industry. We derive our revenue from a wide customer base and well-diversified
geographical markets. As at the end of FY2005, our corporate customer base included 277 different
corporate customers which span across (a) Australasia (Australia and New Zealand), (b) Europe
(Belgium, Croatia, Cyprus, Finland, France, Germany, Greece, Holland, Hungary, Ireland, Italy,
Lithuania, Poland, Russia, Spain, Turkey, United Kingdom and Ukraine) and (c) others which includes
Asia (Hong Kong, India, Indonesia, Japan, Malaysia, Singapore and Sri Lanka), Middle East (Egypt,
Israel, Jordan, Saudi Arabia and United Arab Emirates), Africa (Mauritius and Seychelles) and the North
America (United States of America and Canada). We offer our products directly to consumers through
our showroom at our headquarters in Singapore.

Please refer to the Section “Business” of this Prospectus for further details of our principal activities.


Revenue
Our revenue stream can be broadly categorised into the following product segments:–

(i)   Wood-based products
      We offer a wide range of quality wood-based products such as decking, flooring, fencing, door and
      window components and other moulded products. Each category of our wood-based products
      offers different designs, specifications and dimensions to suit the varying requirements of our
      customers. Our wood-based products are mainly marketed and distributed under our proprietary
      brands “COMCIA” and “decKING”.




                                                    44
            MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                   OPERATIONS AND FINANCIAL POSITION

       Revenue from our wood-based products contributed 91.3%, 90.8%, 85.5% and 89.2% of our
       revenue for FY2003, FY2004, FY2005 and 1Q2006 respectively. This decreasing trend was
       mainly attributable to the continued expansion of our lifestyle outdoor furniture segment thus
       resulting in a more than proportionate increase in revenue from our lifestyle outdoor furniture
           `
       vis-a-vis our wood-based products. Revenue contribution for our wood-based products for
       1Q2006 was marginally higher than FY2005 as the first quarter coincided with the peak season
       in Europe, where our European customers purchase proportionately more wood-based products
       when compared to our Australasian customers. Please see the subsection “Seasonality” in this
       section for more information.

(ii)   Lifestyle outdoor furniture
       We offer a large selection of premium lifestyle outdoor furniture, which includes outdoor garden
       furniture and garden accessories, of both traditional as well as contemporary designs. We also
       offer indoor furniture, the sales of which has been insignificant as at the Latest Practicable Date.
       Our lifestyle outdoor furniture include tables, chairs, bench sets, loungers, bar stools and cushion
       boxes. We market our lifestyle furniture mainly under our range of “Pacific” brand names and have
       launched several ranges of lifestyle outdoor furniture under the brands “Pacific Kwila”, “Pacific
       Cherry”, “Pacific Teak” and “Pacific Rattan” respectively. Each of these brands, which carry the
       name of a type of wood or material, is used to brand the different ranges of our lifestyle outdoor
       furniture according to the same type of wood or material used for its manufacture.

       Revenue from lifestyle outdoor furniture contributed 8.7%, 9.2%, 14.5% and 10.8% of our revenue
       for FY2003, FY2004, FY2005 and 1Q2006 respectively.

Our sales are denominated mainly in US$, save for certain sales to Australia and Singapore which are
in A$ and S$ respectively and which in aggregate accounted for less than 3.0% of our revenue for the
Relevant Period. Revenue is recognised upon passage of title to customers which generally takes
place when the goods pass the ship’s rail at the named port of shipment.

We have not categorised our revenue between our distribution business and our retail business as
revenue contribution from our retail sales in Singapore accounted for less than 1.0% of our revenue for
the Relevant Period.

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

(a)    Supply and price of Indonesian hardwood
       Our wood-based products and lifestyle outdoor furniture is produced substantially from hardwood
       sourced from Indonesian forests. Our business operations are thus dependent on the supply and
       prices of Indonesian hardwood. Our revenue would, therefore, fluctuate with the level of
       Indonesian hardwood prices and supply available.

(b)    Our contract manufacturers’ production capacities
       We do not carry out our own production. We outsource our production requirements to third party
       contract manufacturers in Indonesia. As such, we rely on the capacities of our contract
       manufacturers and the continued operations of their production facilities to meet our production
       requirements. In the event that the capacities of our contract manufacturers are insufficient to
       meet our production requirements and we are unable to source for additional or alternative
       contract manufacturers that satisfy our criteria, our revenue would be materially and adversely
       affected.


                                                    45
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

(c)   Negative publicity arising from illegal logging operations or other forestry activities
      Negative publicity arising from illegal logging operations or other forestry activities may extend to
      and affect forest concession owners and/or our contract manufacturers in Indonesia. Negative
      publicity of this nature surrounding our contract manufacturers may affect the willingness of our
      customers in the international market to purchase wood-based products and furniture from us. In
      such an event, our revenue may be materially and adversely affected.

(d)   Our ability to meet the changing tastes and preferences of consumers and produce commercially
      viable and good quality products
      In the event that we are unable to keep abreast of evolving industry standards, design
      developments and consumers preferences and produce commercially viable products for a long
      period of time, or we are not able to control the quality of our products during production by our
      contract manufacturers, or our products do not meet consumers’ tastes and preferences
      (including any change in preference for certain type(s) of wood species), our brand names and
      revenue may be materially and adversely affected.

(e)   Fluctuations in foreign currencies
      Our revenue is mainly denominated in US$ and to a much lesser extent in A$ and S$, whilst our
      financial statements are reported in S$. As such, any unfavourable movement in US$ and A$
      versus the S$ will adversely affect us. In addition, any adverse movement in the currency of the
      countries where we export to versus the US$ may result in our products being less competitive
      which may in turn affect the demand for our products.

(f)   Our ability to compete successfully with our competitors
      We face competition from other operators in the furniture and furnishing industries. If we fail to
      compete successfully against existing competitors and new entrants, our market share and
      revenue may be materially and adversely affected.

(g)   Changes in the economic, legal, social and political conditions in Indonesia and/or the countries
      to which our products are exported
      Our business operations are subject to the economic, legal, social and political conditions in
      Indonesia and/or the countries to which our products are exported. Any changes affecting the
      operations of our contract manufacturers as well as the timber industry in Indonesia or the export
      of our products to overseas markets may materially and adversely affect our revenue.

Please refer to the Section “Risk Factors” of this Prospectus for more information on other factors which
may affect our business operations, sales and overall financial performance.


Cost of sales
Our cost of sales comprises cost of products, freight outward and handling charges and other variable
overheads.




                                                    46
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

Our cost of products represents mainly the price charged by our contract manufacturers for producing
our products. The main material used for our products is timber, which is procured by our contract
manufacturers directly from timber suppliers. Other materials used for the production of our products
include rattan, fabric, joining and reclining mechanisms. Cost of products comprised 93.0%, 92.6%,
95.2% and 97.3% of our cost of sales for FY2003, FY2004, FY2005 and 1Q2006 respectively. This
increasing trend was due mainly to the increase in prices charged by our contract manufacturers as a
result of timber prices increase over the Relevant Period.

Our freight outward and handling charges relate to expenses incurred in the delivery of our products to
our customers. As almost all our sales are exported to overseas markets, freight and handling charges
is one of the main components of our cost of sales. Freight outward and handling charges comprised
6.7%, 7.3%, 4.8% and 2.6% of our cost of sales for FY2003, FY2004, FY2005 and 1Q2006
respectively.

Our other variable overheads include miscellaneous labour charges, marine insurance and related
expenses. Other variable overheads comprised 0.3% for FY2003 and 0.1% for each of FY2004,
FY2005 and 1Q2006.

Our cost of sales are affected by, inter alia, the following key factors:–
(a)   Price fluctuations in product prices charged by our contract manufacturers, including any price
      fluctuations of timber and other materials purchased by our contract manufacturers, the increase
      of which is likely to be passed down to us to a certain extent by our contract manufacturers. Our
      gross profit margin may thus be adversely affected if we are not able to fully pass down any
      significant increases in costs of products to our customers by way of increases in selling prices
      of our products.
(b)   Price fluctuations in freight rates. As most of our sales are conducted on a CNF basis, freight rates
      and other costs incurred for delivering our products to our customer’s specified port of destination
      are incorporated into our selling prices. Our gross profit margin may thus be adversely affected
      if we are not able to fully pass down any significant increases in freight rates to our customers by
      way of increases in selling prices of our products.
(c)   Fluctuations in foreign currencies as our purchases are mainly denominated in US$.

Please refer to the Section “Risk Factors” of this Prospectus for more information on other factors that
may affect our cost of sales.


Gross profit margin
Our overall gross profit margin is affected by changes in the gross profit margins and the relative
revenue contribution of our two product segments. The gross profit margin for each of our product
segment may vary widely, hence our overall gross profit margin are affected by our sales mix. Our gross
profit margin was 9.0%, 10.4%, 10.9% and 11.5% for FY2003, FY2004, FY2005 and 1Q2006
respectively as we continued to increase the revenue contributions from our lifestyle outdoor furniture
segment which usually generates relatively higher gross profit margin. This is because our lifestyle
outdoor furniture generally has a higher value add content as they require much more product design
and production efforts as compared to wood-based products. In addition, we managed to increase the
gross profit margin for our lifestyle outdoor furniture segment throughout the Relevant Period through
the (i) continued success of our two-pronged product differentiation approach, namely branding our
lifestyle outdoor furniture and establishing our in-house furniture design capabilities; and (ii) improved
product sales mix through proportionately greater contribution from products with better gross profit
margins.

                                                    47
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

Any decrease in the selling price of our products and components without a corresponding decrease
in our cost of sales, or conversely any increase in our cost of sales without a corresponding increase
in the selling price of our products and components would have an adverse effect on our gross profit
margin. Besides sales mix, the key factors that affect the revenue and cost of sales for each product
segment would also affect our gross profit margin.


Other operating income
Our other operating income represented approximately 0.3%, 0.4%, 0.7%, and 0.2% of our revenue for
FY2003, FY2004, FY2005 and 1Q2006 respectively. Our other operating income comprised rental
income, gain on disposal of financial asset, gain on revaluation of financial asset, gain on disposal of
fixed assets, write-back of allowance for doubtful trade receivables, negative goodwill arising from the
acquisition of Suncoast Sitra Singapore in FY2004 and sundry income.

Rental income from our Far East Shopping Centre office unit in Singapore and our Bandar Seri Alam
factory unit in Johor Bahru, Malaysia contributed 68.2%, 31.2%, 10.7%, and 38.5% of our other
operating income for FY2003, FY2004, FY2005 and 1Q2006 respectively. Sundry income which
includes interest income, dividend income from financial asset, commission received and exchange
gain contributed 25.6%, 7.4%, 32.8%, and 36.7%, of our other operating income for FY2003, FY2004,
FY2005 and 1Q2006 respectively.


Selling and distribution expenses
Our selling and distribution expenses comprised 1.2%, 2.4%, 2.5%, and 2.7% of our revenue for
FY2003, FY2004, FY2005 and 1Q2006 respectively. This increasing trend was mainly a result of
increased product related branding and marketing activities for the purpose of entering new markets in
Europe (such as Finland, Ireland, Spain and Ukraine) and Middle East (such as United Arab Emirates,
Jordan, Egypt and Saudi Arabia) and to further penetrate our existing markets. Selling and distribution
expenses include sales commission expenses, salary expenses relating to our sales and marketing
personnel, travelling expenses and exhibition expenses.

Sales commission expenses, which relate to payment to our overseas sales representatives who
assisted us in servicing existing customers and recommending and sourcing for new customers,
accounted for 2.7%, 35.7%, 44.8% and 44.7% of our selling and distribution expenses for FY2003,
FY2004, FY2005 and 1Q2006 respectively. The relatively higher sales commission expenses since
FY2004 was due mainly to our increased collaboration with our overseas sales representatives to
promote our products and to introduce new customers. Salary and welfare benefits paid to our sales
and marketing personnel accounted for 25.2%, 10.0%, 9.8% and 9.2% of our selling and distribution
expenses for FY2003, FY2004, FY2005 and 1Q2006 respectively. Travelling expenses, incurred as a
result of travel trips made to meet with customers and suppliers, accounted for 46.9%, 24.6%, 22.6%
and 10.9% of our selling and distribution expenses for FY2003, FY2004, FY2005 and 1Q2006
respectively. Exhibition expenses, incurred mainly for our participation in various annual international
trade fairs, namely the International Furniture Fair in Singapore, SPOGA Cologne in Germany and
Furnitex in Melbourne and Sydney, Australia, accounted for 19.4%, 15.0%, 10.9% and 20.8% of our
selling and distribution expenses for FY2003, FY2004, FY2005 and 1Q2006 respectively. Our other
selling and distribution expenses comprised mainly advertising expenses and entertainment expenses.




                                                  48
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

Administrative expenses
Our administrative expenses represented approximately 4.5%, 3.6%, 3.5%, and 3.1% of our revenue
for FY2003, FY2004, FY2005 and 1Q2006 respectively. Our administrative expenses are generally in
the nature of fixed costs. Hence, this decreasing trend was due mainly to the less than proportionate
increase in administrative expenses compared to our revenue. Administrative expenses include salary
and welfare benefits relating to our management and administrative personnel, legal and professional
fees, bank charges and rental expenses.

Salary expenses and welfare benefits paid to our management and administrative personnel accounted
for 46.7%, 43.7%, 41.0% and 49.8% of our administrative expenses for FY2003, FY2004, FY2005 and
1Q2006 respectively. Legal and professional fees accounted for 15.4%, 12.0%, 12.5% and 10.1% of
our administration expenses for FY2003, FY2004, FY2005 and 1Q2006 respectively. Bank charges,
incurred mainly for remittance to our contract manufacturers and other suppliers and remittance from
our customers, accounted for 8.3%, 9.8%, 9.4% and 7.3% of our administration expenses for FY2003,
FY2004, FY2005 and 1Q2006 respectively. Rental expenses incurred for the rental of our office,
warehousing and showroom premises in Singapore and Australia accounted for 4.8%, 9.5%, 10.5%
and 13.2% of our administration expenses for FY2003, FY2004, FY2005 and 1Q2006 respectively. Our
other administrative expenses comprised mainly depreciation, telephone expenses, postage, printing
and stationery and other office-related expenses.


Other operating expenses
Our other operating expenses were expenses directly related to our business activities, such as
exchange losses, amortisation of goodwill, bad debts write-off, allowance for doubtful trade
receivables, impairment losses on property, plant and equipment, loss on disposal of investments and
allowance for diminution in value of financial asset. Other operating expenses accounted for 0.8%,
1.2%, 1.5% and 0.3% of our revenue for FY2003, FY2004, FY2005 and 1Q2006 respectively.


Finance cost
Our finance cost accounted for 0.5%, 0.3%, 0.2% and 0.4% of our revenue for FY2003, FY2004,
FY2005 and 1Q2006 respectively. These costs were attributable to interest expense on bills payables,
term loans, bank overdraft and hire purchase. Interest rates for the Relevant Period ranged from (i)
5.0% to 6.5% per annum for bills payables, (ii) 2.5% to 6.5% per annum for bank overdraft, (iii) 2.5%
to 7.0% per annum for term loans and (iv) 3.4% per annum for hire purchase.


Taxation
The corporate tax rates for the jurisdictions in which the Group operates were 30.0% for FY2003 to
FY2005 in Australia, 22.0% for FY2003 and 20.0% for both FY2004 and FY2005 in Singapore and
28.0% for FY2003 to FY2005 in Malaysia. The Company has been granted the Development and
Expansion Incentive under the Regional Headquarters (“RHQ”) Award by the Economic Development
Board of Singapore and SPRING Singapore. Pursuant to the RHQ Award, the Company will be entitled
to a tax concessionary rate of 15.0% for qualifying income in excess of the income base of S$435,333
from FY2005 to FY2007 (and thereafter for an additional period of two years provided certain conditions
are satisfied).




                                                  49
            MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                   OPERATIONS AND FINANCIAL POSITION

Our Group’s income tax expense for FY2003, FY2004, FY2005 and 1Q2006 was as follows:–
                                                          <                     Audited                   >      Unaudited
                                                              FY2003            FY2004           FY2005           1Q2006
Income tax expense (S$’000)                                      21               246             376                 124
As a percentage of profit before tax                             3.4             17.0             16.5                12.9

The relatively lower effective tax rate in FY2003 compared to the other years was due mainly to the
utilisation of unabsorbed tax losses and unabsorbed capital allowance from prior years.

Inflation
Our financial performance for the Relevant Period was not materially affected by inflation on a
consolidated basis.

Seasonality
Sales of our products are generally seasonal in nature. In countries which experience four seasons in
a year, consumers’ demand for and use of our products is usually higher during spring and summer and
lower during autumn and winter.

As we export to countries in both Northern (mainly Europe) and Southern (mainly Australasia)
hemispheres, a lull season in Europe generally coincides with a peak season in Australasia. Our sales
are usually higher in the months of December to April for our European market (Northern hemisphere)
while our sales are usually higher in the months of July to December for our Australasian market
(Southern hemisphere). As a result, our overall sales are generally lower in the months of May and
June.

REVIEW OF PAST PERFORMANCE

Breakdown of Past Performance by Product Segments
A breakdown of our revenue, gross profit, and gross profit margin by product segments for FY2003,
FY2004, FY2005, 1Q2005 and 1Q2006 is set out below:–

Revenue
                              <                     Audited                        > <            Unaudited       >
                                  FY2003            FY2004            FY2005                1Q2005        1Q2006
                              S$’000    %       S$’000    %       S$’000    %           S$’000    %   S$’000    %
Wood-based products           25,358     91.3   39,300    90.8    50,207        85.5    13,901     90.2   16,605        89.2
Lifestyle outdoor furniture    2,406      8.7    3,990     9.2         8,527    14.5     1,516      9.8       2,020     10.8

Total                         27,764    100.0   43,290   100.0    58,734       100.0    15,417    100.0   18,625       100.0



Gross Profit
                              <                     Audited                        > <            Unaudited       >
                                  FY2003            FY2004            FY2005                1Q2005        1Q2006
                              S$’000    %       S$’000    %       S$’000    %           S$’000    %   S$’000    %
Wood-based products           1,852      73.8   3,350     74.1     3,724        58.4    1,260      76.0       1,224     57.1
Lifestyle outdoor furniture       658    26.2   1,172     25.9     2,650        41.6      397      24.0        921      42.9

Total                         2,510     100.0   4,522    100.0     6,374       100.0    1,657     100.0       2,145    100.0



                                                         50
              MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                     OPERATIONS AND FINANCIAL POSITION

Gross Profit Margin
                               <                         Audited                              > <          Unaudited                      >
                                    FY2003               FY2004                FY2005                1Q2005        1Q2006
                                      %                    %                     %                     %             %
Wood-based products                      7.3                   8.5                   7.4                   9.1                   7.4
Lifestyle outdoor furniture          27.3                 29.4                  31.1                  26.2                  45.6

We have not segmented our profit before tax by product segment as the allocation of costs cannot be
done in a similar manner with reasonable accuracy. This is because our selling and distribution
expenses, administrative expenses and other operating expenses incurred for our wood-based
products and lifestyle outdoor furniture segments such as marketing expenses, management and
administrative personnel expenses and office-related expenses are general costs which are accounted
for on a group-wide basis. It is not meaningful to track our selling and distribution expenses,
administrative expenses and other operating expenses by product segment. We therefore do not show
our profit before tax on a segmental basis.


Analysis of Past Performance by Geographical Region
For the segmentation of our revenue by geographical region, we have attributed the revenue earned
from a customer by the customer’s mailing address. This location or geographical region may be
different from the customer’s head office or destination of shipment. A breakdown of our Group’s
revenue by geographical markets in accordance with the basis set out above for FY2003, FY2004,
FY2005, 1Q2005 and 1Q2006 is set out below:–

Revenue
                               <                          Audited                             > <           Unaudited       >
                                   FY2003                 FY2004                FY2005                1Q2005        1Q2006
                               S$’000    %            S$’000    %           S$’000    %           S$’000    %   S$’000    %
Australasia(1)                 15,415          55.5   28,185         65.1   25,623         43.6    8,018         52.0    8,370         44.9
Europe                         10,870          39.2   13,657         31.5   29,886         50.9    6,673         43.3    9,777         52.5
        (2)
Others                           1,479          5.3    1,448          3.4    3,225          5.5     726           4.7     478           2.6

Total                          27,764      100.0      43,290     100.0      58,734     100.0      15,417     100.0      18,625     100.0


Notes:–
(1)   Australasia comprises Australia and New Zealand. Revenue derived from Australasia were mainly due to sales made in
      Australia.
(2)   Others include Asia, Middle East, Africa and North America.


While it is possible to segment our revenue by geographical regions, the allocation of costs cannot be
done in a similar manner with reasonable accuracy. We do not track the allocation of our cost of sales
by geographical region and any attempt to match these expenses to the revenue derived from the
various geographical regions is not meaningful.




                                                                 51
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

REVIEW OF RESULTS OF OPERATIONS

FY2003 vs FY2004

Revenue
Our revenue increased by S$15.5 million or 55.9%, from S$27.8 million in FY2003 to S$43.3 million in
FY2004. The increase in revenue was due to an increase in revenue contribution of S$13.9 million from
our wood-based products segment and an increase in revenue contribution of S$1.6 million from our
lifestyle outdoor furniture segment. These revenue increases were due mainly to higher sales volumes
as a result of successful marketing strategies. As a result of our successful marketing strategies to
further penetrate our existing markets and enter into new markets, which included increased direct
marketing efforts, continued focus on product differentiation, participation in various international trade
fairs and increased collaboration with our overseas sales representatives, we were able to capture a
bigger market share and hence experienced higher sales volumes in FY2004 as compared to FY2003.
In FY2004, we penetrated new markets such as Russia for our wood-based products segment and new
markets such as Cyprus, France, Germany and Ukraine for our lifestyle outdoor furniture segment. In
addition, we also secured new contracts from new customers in existing markets (such as our
Australasian market). Further, with the increase in timber prices, we increased the prices of our
products so as to pass on such price increases to our customers. This also contributed partly to the
increase in revenue registered in FY2004 over FY2003’s.

Revenue for our wood-based products segment increased by S$13.9 million or 55.0%, from S$25.4
million in FY2003 to S$39.3 million in FY2004. This increase was mainly a result of our successful
marketing strategies and higher timber prices as aforesaid. In particular, the continued success of our
“COMCIA” branding strategy led to greater product differentiation and increased demand and premium
for our products. The increase in revenue for our wood-based products was mainly attributable to
increase in revenue from the following geographical markets:–
(a)   our Australasian market of S$11.8 million, from S$14.5 million in FY2003 to S$26.3 million in
      FY2004, due to an increase in sales to existing customers of S$8.8 million and sales to new
      customers of S$3.0 million; and
(b)   our European market of S$2.2 million, from S$10.3 million in FY2003 to S$12.5 million in FY2004,
      due mainly to an increase in sales to existing customers in Germany and France of S$1.2 million
      and S$1.0 million respectively. Sales to a new market, Russia accounted for S$0.1 million of the
      increase.

Revenue for our lifestyle outdoor furniture segment increased by S$1.6 million or 65.8%, from S$2.4
million in FY2003 to S$4.0 million in FY2004. This increase was mainly a result of our successful
marketing strategies, particularly our focus on product differentiation. We widened our existing product
offerings under our “Pacific Kwila” and our “Pacific Cherry” range and expanded our lifestyle outdoor
furniture range with the introduction of our “Pacific Teak” range in FY2004. We were also able to
penetrate new markets in Europe. The increase of S$1.6 million from our lifestyle outdoor furniture
segment was mainly attributable to increase in revenue from the following geographical markets:–
(a)   our Australasian market of S$1.0 million, from S$0.9 million in FY2003 to S$1.9 million in FY2004,
      due to sales to new customers of S$1.1 million, which was partially offset by a marginal decrease
      of S$0.1 million in sales to existing customers; and
(b)   our European market of S$0.5 million from S$0.8 million in FY2003 to S$1.3 million in FY2004,
      due mainly to sales to new markets in Europe, which accounted for S$0.4 million of the increase
      and comprised countries such as Cyprus, France, Germany and Ukraine.



                                                    52
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

Cost of sales and gross profit margin
In line with the increase in revenue, our cost of sales increased by S$13.5 million or 53.5%, from S$25.3
million in FY2003 to S$38.8 million in FY2004. Our cost of sales as a percentage of revenue decreased
marginally from 91.0% in FY2003 to 89.6% in FY2004, thus resulting in an increase in our gross profit
margins from 9.0% in FY2003 to 10.4% in FY2004. This was due to increases in gross profit margins
of both our wood-based products and lifestyle outdoor furniture segments.

Gross profit margin for our wood-based products segment increased from 7.3% in FY2003 to 8.5% in
FY2004 due mainly to the continued success of our “COMCIA” branding strategy which enabled us to
achieve greater product differentiation and hence increased demand and premium for our wood-based
products. In addition, gross profit margin for our lifestyle outdoor furniture segment increased from
27.3% in FY2003 to 29.4% in FY2004. This was due mainly to increased demand and better margins
for our “Pacific Kwila”, “Pacific Cherry” and “Pacific Teak” range of products as we achieved greater
brand premium and recognition as a result of our focus on product differentiation and improving product
sales mix through proportionately greater contribution from products with better gross profit margins.

Other operating income
Our other operating income increased by S$77,000 from S$78,000 in FY2003 to S$155,000 in FY2004.
The increase in our other operating income was mainly attributable to a write-back of allowance for
doubtful trade receivables of S$43,000 in FY2004 and an increase in sundry income of S$46,000.

Selling and distribution expenses
Our selling and distribution expenses increased by S$0.7 million or 223.6%, from S$0.3 million in
FY2003 to S$1.0 million in FY2004. The increase in our selling and distribution expenses was directly
attributable to increased marketing activities and initiatives in FY2004, which contributed to our
increased sales commission expenses, exhibition expenses and travelling expenses. We also
appointed a new overseas sales representative in Ukraine towards the end of FY2004. Sales
commissions paid to our overseas sales representatives increased by S$0.4 million while travelling
expenses increased by S$0.1 million over this period. Exhibition expenses also increased by S$0.1
million during this period as we increased our profile in international trade fairs to promote our existing
and new product ranges such as “Pacific Teak”. In FY2004, we occupied a booth of 300 sq m for the
International Furniture Fair in Singapore as compared with 80 sq m in FY2003.

Administrative expenses
Our administrative expenses increased by S$0.2 million or 23.0% from S$1.3 million in FY2003 to
S$1.5 million in FY2004. Salary and welfare expenses paid to our management and administrative staff
increased by S$0.1 million due mainly to increasing salaries and staff numbers. We recruited two
additional staff during this period, which led to an increase in staff headcount from 14 staff in FY2003
to 16 staff in FY2004. Rental expenses also increased by S$0.1 million during this period, due to the
set-up of office, warehousing cum showroom premises in Singapore and Australia by our subsidiaries,
Suncoast Sitra Singapore and Suncoast Sitra Australia respectively.

Other operating expenses
Our other operating expenses increased by S$0.3 million or 132.1% from S$0.2 million in FY2003 to
S$0.5 million in FY2004. Our other operating expenses in FY2004 were mainly attributable to a bad
debt of S$0.3 million written-off and allowance for impairment losses of S$0.2 million on our Oasis
Garden property (which was subsequently disposed off in FY2005). By comparison, our operating
expenses in FY2003 of S$0.2 million were mainly in relation to allowance for doubtful trade receivables
and diminution in value of financial asset.

                                                    53
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

Finance cost
Our finance cost decreased by S$34,000 from S$152,000 in FY2003 to S$118,000 in FY2004. The
decrease was mainly attributable to a decrease in term loan interest by S$32,000 due to partial
repayment of a term loan.


Profit before tax and profit before tax margin
Our profit before tax increased by S$0.8 million or 128.3%, from S$0.6 million in FY2003 to S$1.4
million in FY2004. The increase in our profit before tax was largely attributed to our increased business
activities as aforesaid. As our administrative expenses are generally in the nature of fixed indirect
overheads and/or fixed costs, the increase in revenue resulted in a more than proportionate increase
in our profit before tax during this period.

As a result, our profit before tax margin increased from 2.3% in FY2003 to 3.4% in FY2004.


FY2004 vs FY2005

Revenue
Our revenue increased by S$15.4 million or 35.7%, from S$43.3 million in FY2004 to S$58.7 million in
FY2005. The increase in revenue was due to a S$10.9 million increase in revenue from our
wood-based products segment and an increase in revenue contribution of S$4.5 million from our
lifestyle outdoor furniture segment. These revenue increases were due mainly to further increases in
our sales volumes. Our sales volumes had continued to rise in FY2005 as we continued our successful
marketing strategies, particularly in new markets. In FY2005, we penetrated new markets such as
Croatia, Finland, Holland and India for our wood-based products segment and new markets such as
Ireland and Spain for our lifestyle outdoor furniture segment. In addition, we also secured new contracts
from new customers in existing markets (such as our European and Australasian markets). Further,
with the increase in timber prices, we also increased the prices of our products so as to pass on such
price increases to our customers. This also contributed partly to the increase in revenue registered in
FY2005 over FY2004’s.

Revenue for our wood-based products segment increased by S$10.9 million or 27.8%, from S$39.3
million in FY2004 to S$50.2 million in FY2005. This increase was mainly a result of our continued
successful marketing strategies and higher timber prices as aforesaid. In particular, we widened our
product offerings and had launched our second brand “decKING” for our range of decking products in
December 2004. The increase of S$10.9 million from our wood-based products was mainly attributable
to increase in revenue from the following geographical markets:–
(a)   our European market of S$14.5 million, from S$12.3 million in FY2004 to S$26.8 million in
      FY2005 due mainly to an increase in sales to existing customers and sales to new customers. The
      increase in sales to two existing customers in Germany and Lithuania accounted for
      approximately S$5.0 million of the increase. Other existing customers accounted for an aggregate
      increase of approximately S$8.5 million. Sales to new markets in Europe such as Croatia, Cyprus,
      Finland, Holland and Ukraine accounted for S$1.0 million of the increase; and
(b)   our Asian and Middle Eastern market of S$1.3 million, from S$0.5 million in FY2004 to S$1.7
      million in FY2005, due mainly to an increase in sales to new market, India of $0.8 million.

The increase in revenue from our wood-based products segment was partially offset by a decrease in
revenue of our Australasian market of S$4.7 million, which was mainly attributed to a decrease in sales
to our existing customers in these countries.

                                                   54
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

Revenue for our lifestyle outdoor furniture segment increased by S$4.5 million or 113.7%, from S$4.0
million in FY2004 to S$8.5 million in FY2005. This increase was mainly a result of our continued
successful marketing strategies, particularly on our product differentiation. In FY2005, we expanded
our lifestyle outdoor furniture products range to include rattan furniture and indoor furniture (such as
living and dining room sets). The increase of S$4.5 million from our lifestyle outdoor furniture segment
was mainly attributable to an increase in revenue from the following geographical markets:–
(a)   our Australasian market of S$2.2 million, from S$1.9 million in FY2004 to S$4.1 million in FY2005,
      due mainly to sales to new customers of S$2.5 million, which was partially offset by the decrease
      in sales to existing customers of S$0.3 million; and
(b)   our European market of S$1.7 million from S$1.3 million in FY2004 to S$3.0 million in FY2005,
      due mainly to an increase in sales to existing customers in Croatia which accounted for S$0.7
      million of the increase. Sales to new markets in Europe accounted for S$0.6 million of the increase
      and comprised countries such as Ireland and Spain.


Cost of sales and gross profit margin
In line with the increase in revenue, our cost of sales increased by S$13.6 million or 35.1%, from S$38.8
million in FY2004 to S$52.4 million in FY2005. Our cost of sales as a percentage of revenue decreased
marginally from 89.6% in FY2004 to 89.1% in FY2005, thus resulting in an increase in our gross profit
margins from 10.4% in FY2004 to 10.9% in FY2005. This was due to an increase in gross profit margin
of our lifestyle outdoor furniture segment, which was partially offset by a decrease in gross profit margin
of our wood-based products segment.

Gross profit margin for our wood-based products segment decreased from 8.5% in FY2004 to 7.4% in
FY2005. The decrease was due mainly to our adoption of a competitive pricing approach in our
expansion strategy during the introduction of our second brand “decKING”. On the other hand, gross
profit margin for our lifestyle outdoor furniture segment increased from 29.4% in FY2004 to 31.1% in
FY2005. This was mainly a result of increased demand and better margins arising from the greater
brand premium and recognition as we achieved continued success in our branding strategy for our
range of “Pacific” brand names and our introduction of “Pacific Rattan” range of products and indoor
furniture. There was also improved product sales mix through proportionately greater contribution from
products with better gross profit margins within our lifestyle outdoor furniture segment.


Other operating income
Our other operating income increased by S$274,000 from S$155,000 in FY2004 to S$429,000 in
FY2005. The increase in our other operating income was mainly attributable to a gain on revaluation
of financial asset of S$99,000 in FY2005, a gain on sale of fixed assets of S$65,000 in FY2005 and an
exchange gain of S$124,000 in FY2005.


Selling and distribution expenses
Our selling and distribution expenses increased by S$0.4 million or 41.3%, from S$1.1 million in
FY2004 to S$1.5 million in FY2005. The increase in our selling and distribution expenses was directly
attributable to the further increase in our marketing activities and initiatives in FY2005, which led to
increases in our sales commission expenses and travelling expenses. Sales commissions paid to our
overseas sales representatives increased by S$0.3 million while travelling expenses increased by
S$0.1 million over this period.




                                                    55
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

Administrative expenses
Our administrative expenses increased by S$0.5 million or 32.7% from S$1.5 million in FY2004 to
S$2.0 million in FY2005. Salary and welfare expenses paid to our management and administrative staff
increased by S$0.2 million due mainly to increasing salaries and staff numbers. We recruited three
additional staff during this period, which led to an increase in staff headcount from 16 staff in FY2004
to 19 staff in FY2005. Our legal and professional fees and rental expenses each increased by S$0.1
million during this period. The increase in our rental expenses was due mainly to the relocation of our
headquarters to our current premises in July 2005.


Other operating expenses
Our other operating expenses increased by S$0.4 million or 67.9% from S$0.5 million in FY2004 to
S$0.9 million in FY2005. Our other operating expenses in FY2005 were mainly attributable to an
allowance for doubtful trade receivables of S$0.8 million. In comparison, our operating expenses in
FY2004 were mainly in relation to bad debt written off of S$0.3 million and allowance for impairment
losses on our Oasis Garden property of S$0.2 million.


Finance cost
Our finance cost increased by S$17,000 from S$118,000 in FY2004 to S$135,000 in FY2005. The
increase was mainly attributable to an increase in interest expense arising from our increased utilisation
of our trade finance facilities due to higher levels of business activities in FY2005.


Profit before tax and profit before tax margin
Our profit before tax increased by S$0.8 million or 56.8%, from S$1.5 million in FY2004 to S$2.3 million
in FY2005. The increase in our profit before tax was largely attributed to our increased business
activities as aforesaid. As our administrative expenses are generally in the nature of fixed indirect
overheads and/or fixed costs, the increase in revenue resulted in the more than proportionate increase
in our profit before tax during this period.

As a result, our profit before tax margin increased from 3.4% in FY2004 to 3.9% in FY2005.


1Q2005 vs 1Q2006

Revenue
Our revenue increased by S$3.2 million or 20.8%, from S$15.4 million in 1Q2005 to S$18.6 million in
1Q2006. The increase in revenue was due to an increase in revenue contribution of S$2.7 million from
our wood-based products segment and an increase in revenue contribution of S$0.5 million from our
lifestyle outdoor furniture segment. These revenue increases were due mainly to increases in our sales
volumes to our existing customers in existing markets. The increased sales volumes were mainly
attributable to the continuation of our successful marketing strategies, particularly in our collaboration
with our overseas sales representatives in our European market. In particular, our revenue recognised
in the European market increased by approximately S$3.1 million from S$6.7 million in 1Q2005 to
S$9.8 million in 1Q2006. There was also marginal increase in timber prices.

Revenue for our wood-based products segment increased by S$2.7 million or 19.5%, from S$13.9
million in 1Q2005 to S$16.6 million in 1Q2006. This increase was mainly a result of our continued
successful marketing strategies, particularly in our collaboration with overseas sales representatives in
the European market and a marginal increase in timber prices as aforesaid.


                                                   56
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

The increase of S$2.7 million from our wood-based products segment was mainly attributable to an
increase in revenue from our European market of S$2.8 million, from S$6.0 million in 1Q2005 to S$8.8
million in 1Q2006, due mainly to an increase in sales to existing customers in Germany of S$3.1 million.
This increase was partially offset by a decrease in sales to existing customers in France of S$0.4
million.

Revenue for our lifestyle furniture segment increased by S$0.5 million or 33.2%, from S$1.5 million in
1Q2005 to S$2.0 million in 1Q2006. This increase was mainly a result of (i) an increase in revenue
contribution from our European market of S$0.3 million from S$0.7 million in 1Q2005 to S$1.0 million
in 1Q2006, due mainly to an increase in sales of S$0.3 million to existing customers in Croatia; and (ii)
an increase in revenue contribution from our Australasian market of S$0.4 million from S$0.3 million in
1Q2005 to S$0.7 million in 1Q2006, due mainly to an increase in sales of S$0.4 million to existing
customers. These increases in revenue contribution were partially offset by a decrease in revenue of
S$0.2 million to our Middle Eastern market.


Cost of sales and gross profit margin
In line with the increase in revenue, our cost of sales increased by S$2.7 million or 19.8%, from S$13.8
million in 1Q2005 to S$16.5 million in 1Q2006. Our cost of sales as a percentage of revenue decreased
marginally from 89.3% in 1Q2005 to 88.5% in 1Q2006, thus resulting in an increase in our gross profit
margins from 10.7% in 1Q2005 to 11.5% in 1Q2006. This was due to an increase in gross profit margin
of our lifestyle outdoor furniture segment, which was partially offset by a decrease in gross profit margin
of our wood-based products segment.

Gross profit margin for our wood-based products segment decreased from 9.1% in 1Q2005 to 7.4% in
1Q2006. The decrease was due mainly to our adoption of a competitive pricing approach in our
expansion strategy during the introduction of our second brand “decKING”. On the other hand, gross
profit margin for our lifestyle outdoor furniture segment increased from 26.2% in 1Q2005 to 45.6% in
1Q2006. This was mainly a result of the relatively more profitable product sales mix in 1Q2006 when
compared to 1Q2005 as there was proportionately greater contribution from products with better gross
profit margins such as those from our “Pacific Kwila” range.


Other operating income
Our other operating income increased by S$13,000 from S$17,000 in 1Q2005 to S$30,000 in 1Q2006,
due mainly to the increase in sundry income of S$12,000.


Selling and distribution expenses
Our selling and distribution expenses increased by S$0.1 million or 41.9%, from S$0.4 million in
1Q2005 to S$0.5 million in 1Q2006, due mainly to the increase of S$0.1 million in sales commission
expenses paid to our overseas sales representatives. The increase in our selling and distribution
expenses was directly attributable to our increased marketing activities and initiatives between the two
quarters.


Administrative expenses
Our administrative expenses increased by S$0.2 million or 37.1% from S$0.4 million in 1Q2005 to
S$0.6 million in 1Q2006, due mainly to the increase in salary and welfare expenses paid to our
management and administrative staff of S$0.1 million, which was mainly caused by increased salaries
and staff numbers.


                                                    57
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

Other operating expenses
Our other operating expenses increased by S$49,000 from nil in 1Q2005 to S$49,000 in 1Q2006, which
was mainly attributable to exchange losses incurred in 1Q2006.


Finance cost
Our finance cost increased by S$46,000 from S$27,000 in 1Q2005 to S$73,000 in 1Q2006. The
increase was mainly attributable to higher interest expense arising from our increased utilisation of our
trade finance facilities as a result of relatively higher levels of business activities in 1Q2006.


Profit before tax and profit before tax margin
Our profit before tax increased by S$0.1 million or 11.3%, from S$0.9 million in 1Q2005 to S$1.0 million
in 1Q2006. This was a result of the higher gross profit in 1Q2006, which was partially offset by the
increase in operating expenses in the same period.

As a result, our profit before tax margin decreased from 5.6% in 1Q2005 to 5.2% in 1Q2006.


REVIEW OF PAST FINANCIAL POSITION

Non-current assets
Non-current assets comprised property, plant and equipment, financial asset at fair value through profit
or loss and goodwill on consolidation.

Our non-current assets as at 31 December 2005 had a net book value of S$1.3 million or 10.7% of our
total assets. Our property, plant and equipment had an aggregate net book value of S$1.1 million and
accounted for 87.5% of our non-current assets. Our property, plant and equipment comprised freehold
properties, freehold land, renovations, plant and equipment, furniture, fixtures and office equipment,
motor vehicles and computers. Freehold properties accounted for S$0.7 million or 60.0% of our
property, plant and equipment and freehold land accounted for S$0.2 million or 18.1% of our property,
plant and equipment. Our financial asset at fair value through profit or loss comprised investments in
shares listed on the Johannesburg Stock Exchange and amounted to S$0.1 million or 10.3% of our
non-current assets as at 31 December 2005. Our goodwill on consolidation which arose as a result of
our Group’s acquisition of our wholly-owned subsidiary, E-Timberhub amounted to S$29,000 or 2.2%
of our non-current assets as at 31 December 2005.

Our non-current assets increased marginally by S$0.6 million to S$1.9 million as at 31 March 2006,
accounting for 14.7% of our total assets as at 31 March 2006. The increase in our non-current assets
was due mainly to the increase in goodwill on consolidation of S$0.6 million which arose as a result of
our Group’s acquisition of our subsidiaries, Sitra Dove Logistics Singapore and Sitra Agencies
amounting to S$638,000 and S$1,000 respectively pursuant to the Restructuring Exercise.


Current assets
Current assets comprised of trade receivables, other receivables, assets held for sale, cash and bank
balances, inventories and prepayments.

Our current assets as at 31 December 2005 amounted to S$10.7 million or 89.3% of our total assets.
The largest component of our current assets is trade receivables, which stood at S$5.1 million and
accounted for 47.6% of our current assets as at 31 December 2005. Other receivables, which


                                                   58
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

comprised mainly advanced payments to contract manufacturers, sundry deposits and other non-trade
receivables accounted for S$2.2 million or 20.6% of our current assets. Assets held for sale which
relates to our residential property situated at 203G Ponggol Seventeenth Avenue, Singapore accounted
for S$1.9 million or 17.5% of our current assets as at 31 December 2005. Our cash and bank balances,
which comprised cash on hand and at bank and deposits with financial institutions, stood at S$1.2
million and accounted for 10.9% of our current assets as at 31 December 2005. Our inventories, which
comprised stocks of our finished products, stood at S$0.3 million and accounted for 3.1% of our current
assets as at 31 December 2005. Prepayments accounted for S$30,000 or 0.3% of our current assets
as at 31 December 2005.

Our current assets increased by S$0.3 million to S$11.0 million as at 31 March 2006, accounting for
85.3% of our total assets. This was mainly a result of the increase in inventories of S$0.9 million, other
receivables of S$0.5 million, cash and bank balances of S$0.4 million, trade receivables of S$0.3
million and prepayments of S$0.1 million. The increase was partially offset by the absence of assets
held for sale of S$1.9 million as a result of the disposal of our residential property situated at 203G
Ponggol Seventeenth Avenue, Singapore in 1Q2006.


Current liabilities
Current liabilities comprised of bills payables, other payables, trade payables, allowance for tax,
interest-bearing borrowings and hire purchase creditors.

As at 31 December 2005, current liabilities accounted for S$8.5 million or 95.9% of our total liabilities.
The largest component of our current liabilities is bills payables, which stood at S$4.8 million and
accounted for 56.0% of our current liabilities as at 31 December 2005. Other payables, which
comprised mainly of a loan from a minority shareholder of a subsidiary, a loan from a director, sundry
payables and accrued operating expenses, stood at S$0.7 million and accounted for 8.3% of our
current liabilities as at 31 December 2005. Trade payables accounted for S$0.6 million or 6.8% of our
current liabilities. Provision for tax accounted for S$0.6 million or 7.0% of our current liabilities.
Interest-bearing borrowings, which comprised mainly bank overdraft and term loan, stood at S$1.8
million and accounted for 21.9% of our current liabilities as at 31 December 2005. Hire purchase
creditors accounted for S$6,000 or 0.07% of our current liabilities.

Our current liabilities decreased by S$0.2 million to S$8.3 million as at 31 March 2006, accounting for
95.9% of our total liabilities. This was due mainly to a decrease in interest-bearing borrowings of S$1.5
million caused primarily by the redemption of the loan for the disposal of our residential property
situated at 203G Ponggol Seventeenth Avenue, Singapore which was partially offset by an increase in
bills payables of $1.2 million. This increase in bills payables was mainly due to us using more bills for
the purchase of our wood-based products as we had to use cash to make advance payments to our
contract manufactures for our lifestyle outdoor furniture business. We had lesser advance payment
made and accordingly, we utilised less bills payable for the purchase of our wood-based products.

Non-current liabilities
Non-current liabilities comprised of interest-bearing borrowings, hire purchase creditors and deferred
taxation.

As at 31 December 2005, non-current liabilities accounted for S$0.4 million or 4.1% of our total
liabilities. Interest-bearing borrowings, which comprised term loan, accounted for S$0.3 million or
89.2% of our non-current liabilities. Hire purchase creditors accounted for S$23,000 or 6.4% of our
non-current liabilities as at 31 December 2005. Deferred taxation accounted for S$16,000 or 4.4% of
our non-current liabilities.

                                                   59
             MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL POSITION

There was no significant variation in our non-current liabilities between 31 December 2005 and 31
March 2006.


Share capital and reserves
Share capital and reserves comprised share capital, capital reserve, foreign currency translation
reserve, unappropriated profits and minority interest.

As at 31 December 2005, our share capital and reserves stood at S$3.2 million.

Our share capital and reserves increased by S$1.1 million from S$3.2 million as at 31 December 2005
to S$4.3 million as at 31 March 2006 due mainly to the increase in unappropriated profits of S$2.0
million as a result of the net profit attributable to Shareholders for 1Q2006 amounting to S$0.8 million
and the effects of our Group’s acquisition of Sitra Dove Logistics Singapore and Sitra Agencies
pursuant to the Restructuring Exercise.


LIQUIDITY AND CAPITAL RESOURCES
Our operations are funded by a combination of internal and external sources of funds. Internal sources
of funds comprise mainly cash generated from our operating activities while external sources comprise
mainly facilities from banks and financial institutions for trade finances, capital contribution from
Shareholders, loan from minority shareholder and director and credit granted by our suppliers.

The principal uses of these funds are for working capital purposes such as payment of inventories and
trade payables, advanced payments to contract manufacturers, financing of trade receivables balances
and operating expenses, as well as for our capital expenditure and repayment of loans and advances.

As at 31 March 2006, we had total credit facilities of S$7.2 million, of which S$6.5 million were utilised,
and cash and cash equivalents of approximately S$1.6 million. Brief particulars of our borrowings as at
31 March 2006 are as follows:–

                                                  Total
                                                 amount
                                                available         Utilised   Unutilised    Maturity       Interest rates
Nature of facilities           Purpose           S$’000           S$’000      S$’000       Profile      (% per annum)(1)
Term loans                    Purchase of           424              339         85        15 years          6.25%
                               property
Hire purchase              Purchase of plant          52              27         25        7 years           3.40%
                            and equipment
Overdraft                   Working capital         360              274         86       Repayable          6.25%
                                                                                          on demand
Letters of credit/Trust        Operation          6,300            5,926        374       Up to 30 or        6.51%
  receipts                                                                                 120 days
VISA business card             Operation              60              —          60           —               —

Total                                             7,196            6,566        630


Note:–
(1)   Based on interest rates payable as at 31 March 2006.




                                                             60
             MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL POSITION

Based on our shareholders’ equity of S$4.3 million as at 31 March 2006, our net gearing ratio, which
is defined as net borrowings (comprising bills payables, interest-bearing borrowings and hire-purchase
creditors net of cash and cash equivalents) divided by shareholders’ equity, is 1.1 times.

As at the Latest Practicable Date, we have cash and cash equivalents amounting to S$1.3 million.
Please see the Section “Capitalisation and Indebtedness” of this Prospectus for more details. Our
Group has access to credit facilities amounting to approximately S$9.7 million as at the Latest
Practicable Date, of which S$5.4 million has been utilised and S$4.3 million has not been utilised.

Our Directors are of the opinion that, after taking into account amounts available under our present
banking facilities, cash generated from operating activities and our cash and bank balances, our Group
has adequate working capital as at the date of lodgement of this Prospectus to meet our present
requirements.

To the best of our Directors’ knowledge, we are not in breach of any of the terms and conditions or
covenants associated with any credit arrangement or bank loan which could materially affect our
financial position and results of business operations or the investment by our Shareholders.

We set out below a summary of our Group’s net cash flows for FY2003, FY2004, FY2005 and
1Q2006:–

                                                               <                  Audited                    >   Unaudited
S$’000                                                             FY2003         FY2004          FY2005          1Q2006
Net cash inflow/(outflow) from operating activities                 253            1,069              (52)            493
Net cash (outflow)/inflow from investing activities                  (38)         (2,005)            992            1,504
Net cash (outflow)/inflow from financing activities                 (146)            917               24          (1,436)

Net increase/(decrease) in cash and cash
 equivalents                                                         69               (19)           964              561
Cash and cash equivalents at beginning of
 year/period                                                        (257)           (188)            (207)            757

Cash and cash equivalents at end of year/period                     (188)           (207)            757(1)         1,318(1)

Cash and cash equivalents representing:
Cash and bank balances                                              175              128           1,169            1,592
Bank overdrafts                                                     (363)           (335)            (412)           (274)

                                                                    (188)           (207)            757            1,318

Note:–
(1)   Had the sale of the Company’s residential property situated at 203G Ponggol Seventeenth Avenue, Singapore been in effect
      from 1 January 2005, our cash and cash equivalents at the end of FY2005 and 1Q2006 would have been S$1.2 million and
      S$1.4 million respectively. Please refer to Appendix VII “Unaudited Proforma Combined Financial Statements of the Group
      for FY2005 and the three months ended 31 March 2006” for more details.




                                                             61
          MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                 OPERATIONS AND FINANCIAL POSITION

FY2003
In FY2003, we generated cash from operating activities before working capital changes of S$1.1
million. Cash generated from operations was S$0.4 million. The net increase in cash utilised for working
capital purposes was mainly attributed to an increase in trade receivables of S$0.8 million and a
decrease in bills payables of S$1.1 million, which were partially offset by an increase in trade payables
of S$1.4 million. We recorded a net cash inflow from operating activities of S$253,000 after payment
of interest expenses and tax.

We recorded a net cash outflow from investing activities of S$38,000 due mainly to the purchase of
property, plant and equipment such as motor vehicles and computers.

We recorded a net cash outflow from financing activities of S$0.1 million due mainly to partial
repayment of our interest-bearing borrowings.


FY2004
In FY2004, we generated cash from operating activities before working capital changes of S$2.1
million. Cash generated from operations was S$1.2 million. The net increase in cash utilised for working
capital purposes was mainly attributed to an increase in trade receivables of S$1.5 million and a
decrease in bills payables of S$1.1 million, which were partially offset by an increase in trade payables
and decrease in other payables of S$1.1 million and S$0.6 million respectively. We recorded a net cash
inflow from operating activities of S$1.1 million after payment of interest expenses and tax.

We recorded a net cash outflow from investing activities of S$2.0 million due mainly to the purchase of
our property at 203G Ponggol Seventeenth Avenue, Singapore at the end of FY2004.

We recorded a net cash inflow from financing activities of S$0.9 million due mainly to the increase in
our interest-bearing borrowings arising from the loan taken for our property at 203G Ponggol
Seventeenth Avenue, Singapore at the end of FY2004.


FY2005
In FY2005, we generated cash from operating activities before working capital changes of S$3.1
million. Cash generated from operations was S$0.1 million. The net increase in cash utilised for working
capital purposes was mainly attributed to an increase in trade receivables and other receivables of
S$2.6 million and S$2.0 million respectively and a decrease in trade payables and other payables of
S$2.3 million and S$0.3 million respectively. These were partially offset by an increase in bills payables
of S$4.3 million. We recorded a net cash outflow from operating activities of S$52,000 after payment
of interest expenses and tax.

We recorded a net cash inflow from investing activities of S$0.9 million due mainly to the proceeds from
the disposal of our Oasis Garden property of S$1.1 million, which was partially offset by our acquisition
of additional investment in Suncoast Sitra Singapore amounting to S$0.2 million and purchase of
property, plant and equipment amounting to S$0.2 million.

We recorded a net cash inflow from financing activities of S$24,000 due mainly to partial repayment of
our interest-bearing borrowings.




                                                   62
            MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                   OPERATIONS AND FINANCIAL POSITION

1Q2006
In 1Q2006, we generated cash from operating activities before working capital changes of S$1.1
million. Cash generated from operations was S$0.6 million. The net increase in cash utilised for working
capital purposes was mainly attributed to an increase in inventories, other receivables and trade
receivables of S$0.9 million, S$0.5 million and S$0.2 million respectively, which were partially offset by
an increase in bills payables amounting to S$1.2 million. We recorded a net cash inflow from operating
activities of S$0.5 million after payment of interest expenses and tax.

We recorded a net cash inflow from investing activities of S$1.5 million due mainly to the proceeds from
the disposal of our property at 203G Ponggol Seventeenth Avenue, Singapore of S$1.9 million, which
was partially offset by our acquisition of Sitra Agencies amounting to S$0.4 million.

We recorded a net cash outflow from financing activities of S$1.4 million, which was due mainly to the
repayment of our interest-bearing borrowings of S$1.4 million as we repaid the term loan for 203G
Ponggol Seventeenth Avenue, Singapore.


MATERIAL CAPITAL EXPENDITURES, DIVESTMENTS AND COMMITMENTS
The material expenditures and divestments of capital investment made by our Group for FY2003,
FY2004, and FY2005 and for the period from 1 January 2006 up to the Latest Practicable Date were
as follows:–

                                                                                         1 January 2006
                                                                                         up to the Latest
S$’000                                           FY2003        FY2004        FY2005      Practicable Date
Acquisition
Interest in Suncoast Sitra Singapore(1)            —               38          160              240
100.0% of Sitra Agencies                           —               —             —              362
                      (2)
Freehold properties                                —            1,805            88               —
Furniture, fixtures and office equipment           —                3            20                8
Renovations                                        —               81          129               39
Computers                                           6               6            11                8
Motor vehicles                                     52              —             —              423

                                                   58           1,933          408            1,080

Divestment(3)
Freehold properties(4)                             —               —          1,048           1,878
Furniture, fixtures and office equipment           —               —             —                —
Plant and equipment                                —               —             —                —
Motor vehicles                                     10              —             —                —

                                                   10              —          1,048           1,878




                                                   63
             MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL POSITION

Notes:–
(1)   In FY2004, we increased our shareholding stake in our subsidiary, Suncoast Sitra Singapore from 56.0% to 80.0% by
      acquiring 24.0% of its share capital from an outgoing shareholder for S$38,000. In FY2005, Suncoast Sitra Singapore
      increased its share capital from S$10,000 to S$210,000, resulting in our additional investment in Suncoast Sitra Singapore
      of S$160,000. In April 2006, Suncoast Sitra Singapore increased its share capital to S$510,000, resulting in our additional
      investment in Suncoast Sitra Singapore of S$240,000.
(2)   Acquisition of freehold properties relate to our property at 203G Ponggol Seventeenth Avenue, Singapore which we
      disposed in 1Q2006.
(3)   Divestment figures are based on net book values at time of divestment.
(4)   Divestment of freehold properties relate to the disposal of our Oasis Garden property in FY2005 and our property at 203G
      Ponggol Seventeenth Avenue, Singapore in 1Q2006.


We plan to procure a lease of a piece of vacant land in Singapore for development into an international
outdoor garden lifestyle centre where we will showcase to both our local and international customers,
our premium lifestyle garden concepts encompassing a wide range of quality outdoor lifestyle products
from different countries in a complete natural garden setting. We estimate that apart from the monthly
rental payable for the lease, we expect to incur a capital expenditure of approximately S$1.0 million to
develop the site if we are successful in procuring the lease, of which S$0.5 million will be funded
through internal sources of funds and the remaining S$0.5 million is intended to be funded through the
net proceeds from the Invitation.

Save as disclosed above, we do not have any material commitments for capital expenditure as at the
Latest Practicable Date.

As at the Latest Practicable Date, our Group has operating lease commitments in respect of rental
payable and hire purchase commitments as follows:–

                                                                                                            As at the Latest
S$’000                                                                                                      Practicable Date
Future minimum lease payments
— within 1 year                                                                                                     263
— after 1 year but not more than 5 years                                                                              22

                                                                                                                    285


Our Group expects to meet our operating lease commitments through our existing cash and bank
balances.

Save as disclosed above and in the Section “Prospects, Trends and Future Plans” of this Prospectus,
we do not have other material plans on capital expenditures, divestments and commitments as at the
Latest Practicable Date.


FOREIGN EXCHANGE EXPOSURE
Our revenue and purchases are mainly denominated in US$ whilst our operating expenses are
denominated in other currencies. We are thus exposed to foreign exchange risks arising from the
different exchange rates at the time of receipt of funds from our customers and at the time of payment
to our creditors.




                                                               64
           MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                  OPERATIONS AND FINANCIAL POSITION

The proportion of our revenue and purchases and expenses in the various currencies are shown
below:–

% of Sales                                               FY2003       FY2004      FY2005      1Q2006
US$                                                         99.6        97.1        97.5        97.5
A$                                                            —          2.2         1.8         1.8
S$                                                           0.4         0.7         0.7         0.7

Total                                                     100.0        100.0       100.0       100.0


% of Purchases and Operating Expenses                    FY2003       FY2004      FY2005      1Q2006
US$                                                         93.0        94.0        93.8        91.7
A$                                                            —          0.6         1.0         2.3
S$                                                           6.8         5.3         5.1         5.8
RM                                                           0.2         0.1         0.1         0.2

Total                                                     100.0        100.0       100.0       100.0


Our Group’s foreign currency exchange gain/(loss) for FY2003, FY2004, FY2005 and 1Q2006 are as
follows:–

                                                         FY2003       FY2004      FY2005      1Q2006
Foreign exchange gain/(loss) (S$’000)                       16          (12)        124         (49)
                                                                       not
As a percentage of revenue (%)                              0.1     meaningful      0.2         0.3
As a percentage of profit before tax (%)                    2.5        (0.8)        5.4         5.0

We are also subject to foreign exchange exposure in the form of translation risk as our consolidated
financial statements are denominated in S$ while the financial statements of our subsidiaries are
prepared in A$ and RM. Any translation gains or losses will be recorded as corresponding changes in
translation reserves.

We do not have a formal foreign currency hedging policy with respect to our foreign exchange
exposure, and we have not used any financial hedging instruments to manage our foreign exchange
risks. We will continue to monitor our foreign exchange exposure in the future and will consider the use
of hedging instruments to manage our foreign exchange exposure should the need arise. However as
the costs of hedging can be substantial, any hedging policy may have an adverse effect on our profits.

CREDIT MANAGEMENT
Typically, we will ship our products to our customers. For our wood-based products, all our sales are
on a CNF basis whilst for our lifestyle outdoor furniture, approximately 75.0% of our sales are on a FOB
basis and 25.0% are on a CNF basis.

For wood-based products, we usually require our customers to pay us in cash against documents (that
is, we receive payment from our customers on presentation of shipping documents) or letters of credit.
In the case of our customers located in certain countries, instead of letters of credit, we may require
deposits ranging from 30% to 50% when our customers place their orders with us. We usually will
release the shipment only upon full payment from our customers. For a small percentage of our regular


                                                  65
             MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL POSITION

customers, we extend to them credit terms of between 14 and 60 days. For lifestyle outdoor furniture
products, we usually require our customers to place deposits at the time of ordering or pay us in cash
against documents or letters of credits. We may also extend credit terms of between 60 and 90 days
to certain regular customers. As part of our business strategy to penetrate further into our existing
markets, we sell to some of our existing customers with whom we have well-established business
relationships, products or variation of existing products which are new to and have previously not been
purchased by these customers. Such cross-selling strategy enables us to leverage on the sales and
distribution network of our customers to further promote our products. To encourage our customers to
increase their product range by marketing our other products, we may grant to such customers longer
credit terms which will allow them sufficient time to market and establish a stable demand for our
products.

All credit terms and limits for each customer are reviewed and are generally approved by our CEO and
COO. The amount of deposit, credit terms and limit for each customer are based on factors such as our
assessment of the customer’s financial condition, financial strength, credit history, past collection
history, volume of sales and its business performance. If necessary, we will amend the credit terms we
grant to our customers.

Our Group Accountant monitors all outstanding trade receivables. If a customer fails to issue payment
on our invoice within the credit term granted, our marketing personnel will contact the customer to
follow up on the payment status of the overdue trade receivable. If we are still unable to collect
payment, we may proceed to issue a letter of demand to the customer and may ultimately consider
legal action, depending on the materiality of the trade receivable and our relationship with the customer.
We will make specific allowance for doubtful trade receivables on a case-by-case basis based on the
likelihood of recovery of a particular trade receivable, the credit standing of the customer and the
customer’s response to our follow-up on the outstanding trade receivable. We will write off a trade
receivable upon identifying the trade receivable as unrecoverable and as recommended by our Group
Accountant and approved by our CEO. As at 25 September 2006, we have long outstanding debts of
S$264,230.55 and S$182,458.52. The sum of S$264,230.55 has been repaid as at 25 October 2006.
The other sum of S$182,458.52, which had been outstanding for more than 150 days as at 25
September 2006, are owed to us by three of our customers. As part of our strategy to further penetrate
our existing markets with more of our products, we had given these customers a longer payment period
for the said debts which arose from the sale of products new to and not previously purchased by these
customers. No allowance has been made for the said sum of S$182,458.52 as we are confident, due
to our good relationship with these customers, of collecting the same by the end of December 2006.

Our bad debts written off and allowance for doubtful trade receivables as well as average trade
receivables turnover for FY2003, FY2004, FY2005 and 1Q2006 are as follows:–

                                                                     FY2003        FY2004        FY2005        1Q2006
Bad debts written off (S$’000)                                           —           224             22            —
Allowance for doubtful trade receivables made during the
  year (S$’000)                                                        155             —           825             —
Bad debts written off and allowance for doubtful trade
  receivables as a % of revenue                                         0.6           0.5           1.4            —
                                      (1)
Trade receivables turnover (days)                                       23             23            26            26

Note:–
(1)   Trade receivables turnover (days) = (Average trade receivables/revenue) X 365 days (pro-rated for 1Q2006).



                                                            66
             MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL POSITION

Our trade receivables as at 31 December 2005 and 31 March 2006 were S$5.1 million and S$5.3
million respectively.

The allowance for doubtful trade receivables made in FY2005 of S$0.8 million was in relation to
overdue trade receivables owing from one of our customers whom we understand had entered into a
Deed of Company Arrangement with its creditors under the laws of Australia. Our bad debts written off
in FY2004 of S$0.2 million were due mainly to long outstanding trade receivables which became
uncollectible.

The marginal increase in our trade receivables turnover during FY2005 and 1Q2006 was due mainly
to the increase in revenue contribution from our lifestyle outdoor furniture segment as we extended
relatively longer credit terms for our lifestyle outdoor furniture products to certain regular customers.

Credit terms granted by our contract manufacturers and other suppliers vary from supplier to supplier
and are also dependent on our relationship with them and the nature and size of transactions. We
generally issue trust receipts of up to 120 days tenure to our suppliers. Certain suppliers grant us credit
terms of up to 14 days. Our average trade payables turnover for FY2003, FY2004, FY2005 and 1Q2006
are as follows:–

                                                                     FY2003        FY2004         FY2005        1Q2006
                                   (1)                                                    (2)
Trade payables turnover (days)                                            48         34              32            33

Note:–
(1)   Trade payables turnover = (Average trade payables and bills payables/purchases) X 365 days (pro-rated for 1Q2006).
(2)   The trade payables turnover has decreased from FY2003 to FY2004 due to our Group making earlier payments to our
      contract manufacturers as part of our strategy to increase our competitiveness and enhance our procurement capability.


CAPITALISATION AND INDEBTEDNESS
The following table shows the cash and bank balances, capitalisation and indebtedness of our Group
as at 31 March 2006:–
(a)    based on the unaudited balance sheet of our Group as at 31 March 2006;
(b)    as at the Latest Practicable Date; and
(c)    as adjusted for the application of the net proceeds from the Invitation, after deducting the
       estimated expenses relating to the Invitation.

The table should be read in conjunction with Appendix VI “Independent Auditors’ Report in relation to
the Audited Combined Financial Statements of the Group for FY2003, FY2004 and FY2005 and the
Unaudited Combined Financial Statements of the Group for the three months ended 31 March 2006”
of this Prospectus.

                                                                                                          As adjusted for
                                                                                                          the application
                                                                                                             of the net
                                                                As at            As at the Latest         proceeds from
(S$’000)                                                    31 March 2006        Practicable Date          the Invitation
Cash and bank balances                                            1,592                 1,277                  4,948




                                                             67
             MANAGEMENT DISCUSSION AND ANALYSIS OF RESULTS OF
                    OPERATIONS AND FINANCIAL POSITION

                                                                                                             As adjusted for
                                                                                                             the application
                                                                                                                of the net
                                                                  As at              As at the Latest        proceeds from
(S$’000)                                                      31 March 2006          Practicable Date         the Invitation
Short-term debts
— secured and guaranteed(1),        (2)
                                                                     6,223                  5,116                   5,116
                                      (3)
— secured and non-guaranteed                                              6                     78                     78
— unsecured and non-guaranteed                                       2,072                  1,217                   1,217

Long-term debts
— secured and guaranteed(1),        (2)
                                                                       316                     311                    311
                                      (3)
— secured and non-guaranteed                                            21                    306                     306
— unsecured and non-guaranteed                                          16                      16                     16

Total Indebtedness                                                   8,654                  7,044                   7,044
Shareholders’ Equity                                                 4,299                  5,119                   8,790

Total Capitalisation and Indebtedness                               12,953                 12,163                 15,834


Notes:–
(1)   Secured by way of legal mortgage over our Group’s freehold and leasehold properties, fixed deposit of S$1.0 million pledged
      and letter of authority and earmarking of an aggregate amount of S$1.2 million from certain of our Directors.
(2)   Guarantees given for the facilities include a corporate guarantee given by our Company amounting to S$0.5 million and
      personal guarantees given by certain of our Directors for S$9.3 million and RM1.4 million.
(3)   Secured and non-guaranteed short-term and long-term debts relate to amounts due to hire purchase creditors.


Save as disclosed above and in the Section “Liquidity and Capital Resources” of this Prospectus,
Appendix VI “Independent Auditors’ Report in relation to the Audited Combined Financial Statements
of the Group for FY2003, FY2004 and FY2005 and the Unaudited Combined Financial Statements of
the Group for the three months ended 31 March 2006” and Appendix VII “Unaudited Proforma
Combined Financial Statements of the Group for FY2005 and the three months ended 31 March 2006”
of this Prospectus, we do not have any other borrowings or indebtedness in the nature of borrowings,
including bank overdrafts and liabilities under acceptances (other than normal trading bills) or
acceptance credits, mortgages, charges, hire purchase commitments, guarantees or other material
contingent liabilities as at the Latest Practicable Date.




                                                               68
                                     EXCHANGE CONTROL

The following is a description of the exchange controls that exist in the jurisdictions in which our Group
operates:–


Singapore
There are currently no laws, decrees, regulations or other legislation in Singapore that may affect the
following:–
(a)   the repatriation of capital, including the availability of cash and cash equivalents for use by our
      Group; or
(b)   the remittance of profits affecting dividends, interest or other payments to our Shareholders.


Malaysia
Under the current Exchange Control Notices of Malaysia issued by Bank Negara Malaysia (“Bank
Negara”), foreign direct investors are freely allowed to repatriate their investment including capital,
profit and dividends without being subject to any levy. There is also no restriction on the repatriation of
interest and rental incomes. However, Bank Negara requires the completion of a prescribed form and
documentary evidence to be furnished to the remitting banks for any remittance or payment in foreign
currency exceeding the equivalent of RM50,000 by a resident to a non-resident. To date, we have not
experienced any difficulty in importing and exporting capital and remitting dividends, interest and other
payments to and from Malaysia. Our Directors do not expect any difficulty on such repatriation or
remittance in the future, unless there are changes to the present exchange controls in Malaysia.


Australia
Save as discussed below, there are no governmental laws, decrees, regulations or other legislation in
Australia that may affect the following:–
(a)   the repatriation of capital, including the availability of cash and cash equivalents for use by our
      Group; and
(b)   the remittance of profits affecting dividends, interest or other payments out of Australia.

The Australian Financial Transaction Reports Act 1998 (Cth) provides that a transfer of Australian or
foreign currency (coin and paper money), in the amount of A$10,000 or more, into or out of Australia,
unless exempted in respect of certain transactions and businesses, has to be reported to the Australian
Transaction Reports Analysis Centre or a customs officer. Failure to do so is an offence.




                                                    69
                                         DIVIDEND POLICY

Our Company declared and paid a net dividend of $230,000 on our Shares in respect of FY2005. Save
as aforesaid, our Company has not declared or paid any dividend on our Shares in the past three
financial years and for the period beginning 1 January 2006 and ending on the Latest Practicable Date.

Currently, we do not have a fixed dividend policy. As part of the preparation for the Invitation, our
Directors have considered the general principles that they intend to apply when recommending
dividends for approval by our Shareholders or when declaring interim dividends. The actual dividend
that our Directors may recommend or declare in respect of any particular financial year or period will
be subject to the factors outlined below as well as any other factors deemed relevant by our Directors.

In considering the form, frequency and amount of future dividends, if any, our Directors will take into
account various factors, including but not limited to:–
(i)     the level of our cash and retained earnings;
(ii)    our expected financial performance and financial condition; and
(iii)   the projected levels of capital expenditure and other investment plans.

Our Company may declare annual dividends with the approval of our Shareholders in a general
meeting, but the amount of such dividends shall not exceed the amount recommended by our Directors.
Our Directors may also declare an interim dividend without seeking Shareholders’ approval. We must
pay all dividends out of profits. We will pay cash dividends, if any, in Singapore dollars.

For FY2006, subject to the factors outlined above, our Directors intend to recommend and distribute not
less than 50% of our net profit attributable to our Shareholders as dividends. However, investors should
note that the intention to recommend the aforesaid dividends should not be treated as a legal obligation
on our Company to do so. The level of dividends should also not be treated as an indication of our
Company’s future dividend policy. There is no assurance that dividends will be paid in the future or
timing of any dividends that are to be paid in the future. In determining dividends in respect of
subsequent financial years, consideration will be given to maximising Shareholders’ value.

Information relating to taxes payable on dividends is set out in Appendix I “Taxation” of this Prospectus.




                                                    70
                                                DILUTION

Dilution is the amount by which the Issue Price to be paid by the subscribers of our Shares in the
Invitation exceeds the NAV per Share immediately after the Invitation. Our unaudited NAV per Share
as at 31 March 2006, based on the unaudited combined balance sheet of our Group as at 31 March
2006, adjusted for the Share Split but before adjusting for the net proceeds of the Invitation, and based
on the pre-Invitation issued share capital of 55,000,000 Shares, was 7.82 cents per Share.

Based on the issue of 24,000,000 New Shares at the Issue Price pursuant to the Invitation, and after
deducting the estimated expenses of the Invitation and adjusting for any disposal or acquisition which
occurred between 31 March 2006 and the date of registration of this Prospectus, the NAV of our
Company as at 31 March 2006 after adjusting for the Invitation, would have been 10.09 cents per
Share. This represents an immediate increase in NAV of 2.27 cents per Share to our existing
Shareholders and an immediate dilution in NAV of 10.91 cents per Share or approximately 51.95% to
our new investors.

The following table illustrates the dilution per Share:–

                                                                                             Cents
                                                                                           Per Share
Issue Price per Share                                                                         21.00

NAV per Share as at 31 March 2006 based on the pre-Invitation share capital of
55,000,000 Shares                                                                              7.82
Increase in NAV per Share attributable to existing Shareholders                                2.27

Adjusted NAV per Share after the Invitation (after deducting the Invitation expenses of
approximately $1.4 million and adjusting for any disposal or acquisition which occurred
between 31 March 2006 and the date of registration of this Prospectus)                        10.09
Dilution in NAV per Share to new investors                                                    10.91


Please see the Section “Invitation Statistics” of this Prospectus for more details on the dilution of the
New Shares.

As at the date of lodgement of this Prospectus, our Executive Director and COO, Mr Steven Chew owns
4,400,000 Shares and our Substantial Shareholders, Mr Xavier Chew and Fine Prospect Investments
Limited own 2,750,000 Shares and 5,500,000 Shares respectively. The Shares held by Mr Steven
Chew and Mr Xavier Chew were transferred to them by Mr George Chew and Madam Teresa Tan
respectively as gifts. The Shares held by Fine Prospect Investments Limited were transferred to it by
Mr George Chew and Madam Teresa Tan pursuant to a trust settlement. Please see the Section
“Shareholders — Significant Changes to Shareholdings” of this Prospectus for more details.

As Mr Steven Chew, Mr Xavier Chew and Fine Prospect Investments Limited did not pay any cash
consideration for the Shares owned by them, there is no effective cash cost to them in respect of their
respective acquisition of the said Shares. The Shares owned by Mr George Chew and Madam Teresa
Tan were acquired by them more than three years prior to the date of lodgement of this Prospectus.

The effective cash cost to our new investors pursuant to the Invitation is 21.0 cents per Share.




                                                     71
                        GENERAL INFORMATION ON OUR GROUP

SHARE CAPITAL
Our Company was incorporated in Singapore on 5 May 1979 under the Companies Act as a private
company with limited liability under the name of Sitra Agencies Pte. Ltd. Our name was last changed
to Sitra Holdings (International) Pte Ltd on 22 October 1997. On 22 September 2006, we changed our
name to Sitra Holdings (International) Limited in connection with our conversion into a public company
limited by shares.

As at 31 December 2005, our issued and paid-up share capital was $2,000,000 comprising 2,000,000
ordinary shares.

At an extraordinary general meeting held on 19 September 2006, our Shareholders approved, inter alia,
the following:–
(a)   the sub-division of every two Shares in the issued share capital of our Company into 55 Shares
      such that the issued and paid-up share capital of our Company is $2,000,000 divided into
      55,000,000 Shares (“Share Split”);
(b)   the conversion of our Company into a public limited company and the consequential change of our
      name to Sitra Holdings (International) Limited;
(c)   the adoption of a new set of Articles of Association of our Company;
(d)   the issue of 24,000,000 New Shares which is the subject of the Invitation on the basis that the
      New Shares, when allotted, issued and fully paid-up, will rank pari passu in all respects with our
      existing Shares;
(e)   the listing and quotation of the issued Shares of our Company (including the 24,000,000 New
      Shares to be issued pursuant to Resolution (d) above) on the Official List of the SGX-SESDAQ;
      and
(f)   the authorisation for our Directors, pursuant to Section 161 of the Companies Act and the Articles
      of Association of our Company, to allot and issue Shares or convertible securities at any time and
      from time to time (whether by way of rights, bonus or otherwise) and upon such terms and
      conditions and for such purposes and to such person as our Directors may in their absolute
      discretion deem fit, provided that the aggregate number of Shares and convertible securities
      issued pursuant to such authority shall not exceed 50% of the post-Invitation issued share capital
      of our Company, of which the aggregate number of Shares and convertible securities issued other
      than on a pro-rata basis to our then existing Shareholders shall not exceed 20% of the
      post-Invitation issued share capital of our Company. Unless revoked or varied by our Company in
      general meeting, such authority shall continue in force until the conclusion of the next annual
      general meeting of our Company or on the date by which the next annual general meeting is
      required by law to be held, whichever is earlier. For this purpose and pursuant to Rules 806(3) and
      806(4) of the Listing Manual, “post-Invitation issued share capital” shall mean the enlarged issued
      and paid-up share capital of our Company after the Invitation after adjusting for new Shares
      arising from the conversion or exercise of convertible securities, new Shares arising from the
      exercise of share options or vesting of share awards outstanding or subsisting at the time such
      authority is given, provided the options or awards were granted in compliance with the Listing
      Manual, and any subsequent consolidation or sub-division of Shares.

As at the Latest Practicable Date, there is only one class of shares in the capital of our Company, being
ordinary shares which are in registered form. There is no founder, management or deferred shares
reserved for issuance for any purpose. The rights and privileges attached to our Shares are stated in
the Articles of Association of our Company. There is no restriction on the transfer of Shares in scripless
form except to the extent imposed by law or the Listing Manual.


                                                   72
                           GENERAL INFORMATION ON OUR GROUP

Details of the changes in the issued and paid-up share capital of our Company for the period of three
years preceding the Latest Practicable Date and the resultant issued and paid-up share capital
immediately after the Invitation are as follows:–

                                                                                      Number of
                                                                                       Shares               $
Issued and fully paid-up ordinary shares as at 1 January 2003                          2,000,000       2,000,000
Share Split — issued and paid-up Shares before the Invitation                         55,000,000       2,000,000
Pre-Invitation issued share capital                                                   55,000,000       2,000,000
New Shares to be issued pursuant to the Invitation                                    24,000,000       5,040,000

Post-Invitation issued share capital                                                  79,000,000       7,040,000


The Shareholders’ funds of our Company, after adjustments to reflect the Share Split and the issue of
New Shares pursuant to the Invitation are set forth below. These statements should be read in
conjunction with Appendix VI “Independent Auditors’ Report in relation to the Audited Combined
Financial Statements of the Group for FY2003, FY2004 and FY2005 and the Unaudited Combined
Financial Statements of the Group for the three months ended 31 March 2006” of this Prospectus.

                                                                     After adjusting for
                                                                     payment of FY2005
                                                                      Dividend and the
                                                                       Share Split but
                                                      As at              prior to the
                                                31 December 2005          Invitation           After the Invitation
Shareholders’ Funds
  Issued and paid-up share capital                    2,000,000           2,000,000                 7,040,000
  Capital reserve                                       14,393               14,393                    14,393
  Retained earnings                                   1,222,453             992,453                   992,453
  Expenses in connection with the Invitation                  —                  —                 (1,369,000)

Total Shareholders’ Funds                             3,236,846           3,006,846                 6,677,846


SHAREHOLDERS
Our Shareholders and their respective shareholdings in our Company immediately before (as at the
Latest Practicable Date) and after the Invitation are set out below:–

                                          Before Invitation                         After Invitation
                                Direct Interest     Deemed Interest       Direct Interest     Deemed Interest
                                 No of                No of                No of                No of
                                Shares       %       Shares     %         Shares       %       Shares     %
Directors
George Chew(1)(2)              24,238,142      44.0           —    —     24,238,142     30.6            —        —
            (1)(3)
Teresa Tan                     18,111,858      33.0           —    —     18,111,858     22.9            —        —
               (2)(3)(4)
Steven Chew                     4,400,000       8.0   5,500,000   10.0    4,400,000      5.6    5,500,000       7.0
Daniels Ng                             —        —             —    —            —         —             —        —
Michael Chin                           —        —             —    —            —         —             —        —
Chen Yeow Sin                          —        —             —    —            —         —             —        —




                                                         73
                                   GENERAL INFORMATION ON OUR GROUP

                                                Before Invitation                               After Invitation
                                      Direct Interest     Deemed Interest             Direct Interest     Deemed Interest
                                       No of                No of                      No of                No of
                                      Shares       %       Shares     %               Shares       %       Shares     %
Substantial Shareholders
Xavier Chew(2)(3)(4)                  2,750,000      5.0    5,500,000      10.0      2,750,000        3.5   5,500,000       7.0
Fine Prospect Investments
  Limited(4)(5)                       5,500,000     10.0             —        —      5,500,000        7.0            —       —
                       (4)(5)(6)
SG Trust (Asia) Ltd                          —        —     5,500,000      10.0               —        —    5,500,000       7.0

Others
Public (including Reserved
  Shares)                                    —        —              —        —     24,000,000      30.4             —       —

Total                                55,000,000    100.0                            79,000,000     100.0


Notes:–
(1)   Our Executive Chairman and CEO, Mr George Chew and our Executive Director and Senior Vice-President (Group
      Administration and Human Resources), Madam Teresa Tan are husband and wife.
(2)   Our Executive Chairman and CEO, Mr George Chew is the father of our Executive Director and COO, Mr Steven Chew and
      our alternate Director and Vice-President (Group Marketing and Business Development), Mr Xavier Chew.
(3)   Our Executive Director and Senior Vice-President (Group Administration and Human Resources), Madam Teresa Tan is the
      mother of our Executive Director and COO, Mr Steven Chew and our alternate Director and Vice-President (Group
      Marketing and Business Development), Mr Xavier Chew.
(4)   Messrs Steven Chew and Xavier Chew are deemed to be interested in the Shares held by Fine Prospect Investments
      Limited. Their deemed interests arise because they fall within the class of beneficiaries of a discretionary and irrevocable
      trust, the Blessing Trust of which SG Trust (Asia) Ltd has been appointed as the trustee. As trustee of the Blessing Trust,
      SG Trust (Asia) Ltd owns 100.0% of the issued and paid-up share capital of Fine Prospect Investments Limited.
(5)   Fine Prospect Investments Limited is an investment holding company incorporated in the British Virgin Islands and is
      wholly-owned by SG Trust (Asia) Ltd, a trustee of the Blessing Trust pursuant to a trust settlement executed by our
      Executive Chairman and CEO, Mr George Chew and our Executive Director and Senior Vice-President (Group
      Administration and Human Resources), Madam Teresa Tan on 11 May 2006. Fine Prospect Investments Limited possesses
      the voting rights over the 5,500,000 Shares.
(6)   SG Trust (Asia) Ltd is deemed to be interested in the 5,500,000 Shares held by Fine Prospect Investments Limited. SG Trust
      (Asia) Ltd’s deemed interest arises from its 100.0% shareholding in Fine Prospect Investments Limited as trustee of the
                                                                                                                   ´ ´ ´ ´
      Blessing Trust. SG Trust (Asia) Ltd is a Singapore registered public trust company, wholly-owned by the Societe Generale
                   ´ ´ ´ ´
      Group. Societe Generale is listed on the Paris Stock Exchange.


Save as disclosed above, there is no other relationship between our Directors and our Substantial
Shareholders.

Save as disclosed above, each of our Shareholders has confirmed that as at the date of this
Prospectus, he does not hold any Shares on trust for any person and no other Shareholder is holding
any Shares on trust for him.

Save as disclosed above and to the best of our knowledge, our Company is not directly or indirectly
owned or controlled, whether jointly or severally, by another corporation, or any government or other
natural or legal persons.




                                                               74
                        GENERAL INFORMATION ON OUR GROUP

The Shares owned by our Directors and Substantial Shareholders do not carry any different voting or
other rights from the New Shares which are the subject of the Invitation.

There is no arrangement known to our Directors the operation of which may, at a subsequent date,
result in a change in control of our Company.

There has not been any public take-over offer by a third party in respect of our Shares or by our
Company in respect of the shares of another corporation which has occurred between the beginning
of the financial year ended 31 December 2005 and the Latest Practicable Date.


Significant Changes to Shareholdings
Save as set out below, there has been no significant change in the percentage of ownership of shares
in our Company held by our Directors and Substantial Shareholders during the last three financial years
up to the Latest Practicable Date:–
(a)   On 28 September 2006, our Executive Chairman and CEO, Mr George Chew transferred
      4,400,000 Shares, equivalent to eight per cent. of our issued and paid-up share capital prior to the
      Invitation, to our Executive Director and COO, Mr Steven Chew as a gift.
(b)   On 28 September 2006, our Executive Director and Senior Vice-President (Group Administration
      and Human Resources), Madam Teresa Tan transferred 2,750,000 Shares, equivalent to five per
      cent. of our issued and paid-up share capital prior to the Invitation, to our Vice-President (Group
      Marketing and Business Development), Mr Xavier Chew as a gift.
(c)   On 28 September 2006, pursuant to a trust settlement executed by Mr George Chew and Madam
      Teresa Tan on 11 May 2006, Mr George Chew and Madam Teresa Tan each transferred 2,750,000
      Shares, equivalent to five per cent. of our issued and paid-up share capital prior to the Invitation
      to Fine Prospect Investments Limited. Fine Prospect Investments Limited is an investment
      holding company wholly-owned by SG Trust (Asia) Ltd as trustee of the Blessing Trust. It holds
      the aggregate 5,500,000 Shares, equivalent to ten per cent. of the issued and paid-up share
      capital of our Company prior to the Invitation.


MORATORIUM
To demonstrate their commitment to our Group:–
(1)   Our Executive Directors, Mr George Chew, Madam Teresa Tan and Mr Steven Chew, our
      Vice-President (Group Marketing and Business Development), Mr Xavier Chew and our
      Substantial Shareholder, Fine Prospect Investments Limited who/which in aggregate own
      55,000,000 Shares representing 69.6% of our Company’s issued and paid-up share capital after
      the Invitation, has each given an undertaking not to sell, realize, transfer, assign or otherwise
      dispose of any part of his/her/its respective shareholdings or interests in our Company for a period
      of six months commencing from the date of our Company’s admission to the Official List of the
      SGX-SESDAQ and in the six months thereafter, not to sell, realize, transfer, assign or otherwise
      dispose of more than 50% of their respective shareholdings or interest in our Company
      immediately after the Invitation.
(2)   SG Trust (Asia) Ltd, which owns the entire issued share capital of Fine Prospect Investments
      Limited has also given an undertaking not to sell, realize, transfer, assign or otherwise dispose of
      any part of its interest in Fine Prospect Investments Limited for a period of 12 months
      commencing from the date of our Company’s admission to the Official List of the SGX-SESDAQ.
      In addition, Mr George Chew and Madam Teresa Tan who are the settlors of the Blessing Trust
      of which SG Trust (Asia) Ltd is a trustee, as well as Mr Steven Chew and Mr Xavier Chew who
      are beneficiaries of the Blessing Trust, have each given an undertaking to procure that SG Trust

                                                   75
                        GENERAL INFORMATION ON OUR GROUP

      (Asia) Ltd will not transfer or dispose of, in any of the ways set out above, any part of its
      shareholdings in Fine Prospect Investments Limited for a period of 12 months commencing from
      the date of our Company’s admission to the Official List of the SGX-SESDAQ. Further, Mr George
      Chew and Madam Teresa Tan have also undertaken not to change or include any other persons
      as beneficiaries of the Blessing Trust for a period of 12 months commencing from the date of our
      Company’s admission to the Official List of the SGX-SESDAQ.
(3)   Mr George Chew and Madam Teresa Tan who are the sole directors of Fine Prospect Investments
      Limited, as well as Mr Steven Chew, Mr Xavier Chew and SG Trust (Asia) Ltd who have an indirect
      and/or a deemed interest in the 5,500,000 Shares of our Company, have each given an
      undertaking to procure that Fine Prospect Investments Limited does not transfer or dispose of, in
      any of the ways set out above, any part of its shareholdings in our Company for a period of six
      months commencing from the date of our Company’s admission to the Official List of the
      SGX-SESDAQ, and in the six months thereafter, not transfer or dispose of, in any of the ways set
      out above, more than 50% of its shareholdings in our Company immediately after the Invitation.
(4)   In the event that our Independent Directors, Messrs Michael Chin and Chen Yeow Sin, and our
      Non-Executive Director, Mr Daniels Ng, are allotted any of the Reserved Shares offered to them
      at the Issue Price in recognition of their past and future contributions to our Group, they will each
      give an undertaking not to sell, realize, transfer, assign or otherwise dispose of any part of their
      interest in our Company for a period of three months commencing from the date of our Company’s
      admission to the Official List of the SGX-SESDAQ.

RESTRUCTURING EXERCISE
We undertook the following Restructuring Exercise in connection with the Invitation:–

1.    Acquisition of Sitra Agencies Pte Ltd
      On 24 February 2006, our Company acquired the entire issued and paid-up share capital of Sitra
      Agencies Pte Ltd, comprising 130,001 ordinary shares from our Executive Directors, Mr George
      Chew, Madam Teresa Tan and Mr Steven Chew at a consideration of $362,274, based on the
      audited net tangible asset value of Sitra Agencies Pte Ltd of $362,274 as at 31 December 2005.
      The consideration was satisfied by our Company in cash. The transaction was undertaken based
      on normal commercial terms and on an arm’s length basis. Pursuant to the said acquisition, Sitra
      Agencies Pte Ltd becomes a wholly-owned subsidiary of our Company.

2.    Acquisition of Sitra Dove Logistics Pte. Ltd.
      On 16 March 2006, our Company acquired the entire issued and paid-up share capital of Sitra
      Dove Logistics Pte. Ltd., comprising 870,002 ordinary shares from our Executive Directors, Mr
      George Chew and Madam Teresa Tan at a nominal consideration of $2.00. Sitra Dove Logistics
      Pte. Ltd. has a net tangible liability of $703,224 as at 31 December 2005 based on its audited
      financial statements for FY2005. The consideration was satisfied by our Company in cash. The
      transaction was undertaken based on normal commercial terms and on an arm’s length basis.
      Pursuant to the said acquisition, Sitra Dove Logistics Pte. Ltd. becomes a wholly-owned
      subsidiary of our Company.

3.    Sitra Dove Logistics Sdn. Bhd.
      On 15 April 2006, our Company acquired 29 ordinary shares of par value RM1.00 each in the
      capital of Sitra Dove Logistics Sdn. Bhd. from our Executive Directors, Mr George Chew, Madam
      Teresa Tan and Mr Steven Chew (“SDL Sale Shares”) at an aggregate consideration of RM3.00
      and 71 ordinary shares of par value RM1.00 each in the capital of Sitra Dove Logistics Sdn. Bhd.
      from Mr Ng Kim Teck at a consideration of RM71.00. Sitra Dove Logistics Sdn. Bhd. has a net
      tangible liability of RM55,259 as at 31 December 2005 based on its audited financial statements

                                                      76
                       GENERAL INFORMATION ON OUR GROUP

     for FY2005. The consideration was satisfied by our Company in cash. The transaction was
     undertaken based on normal commercial terms and on an arm’s length basis. Pursuant to the said
     acquisition, Sitra Dove Logistics Sdn Bhd becomes a wholly-owned subsidiary of our Company.

     In addition to the 100 issued and paid-up ordinary shares, Sitra Dove Logistics Sdn. Bhd. has an
     issued and paid-up preference share capital of RM150,000 comprising 150,000 preference
     shares of RM1.00 each, which is entirely owned by our Company.

     On 29 September 2006, our Company entered into an agreement with Mr George Chew, Madam
     Teresa Tan and Mr Steven Chew (collectively, the “Assignee”) and Sitra Dove Logistics Sdn. Bhd.
     pursuant to which the Assignee agreed to accept the assignment of an outstanding loan of
     RM230,243 owing by Sitra Dove Logistics Sdn. Bhd. to our Company as at 31 December 2005
     (the “Outstanding Loan”). Accordingly, Sitra Dove Logistics Sdn.Bhd. will recognise RM230,243
     as other income. This will result in Sitra Dove Logistics Sdn. Bhd.’s net tangible assets to be
     RM174,984. In consideration thereof, our Company agreed to increase the consideration for the
     Company’s acquisition of the SDL Sale Shares from the Assignee as above mentioned by
     RM174,910 (“Additional Consideration”), based on approximately the assumed net tangible asset
     value of Sitra Dove Logistics Sdn. Bhd. after repayment of the Outstanding Loan. As at the date
     of this Prospectus, the Outstanding Loan and Additional Consideration have been fully settled by
     the Assignee and our Company respectively.

4.   Sitra Asia Pacific Sdn. Bhd.
     Sitra Asia Pacific Sdn. Bhd. is a company incorporated under the laws of Malaysia with an issued
     and paid-up share capital of RM 50,010 comprising 50,010 ordinary shares of par value RM1.00
     each. On 25 May 2006, our Company transferred all the beneficial interest in the 60%
     shareholding in Sitra Asia Pacific Sdn. Bhd. owned by it, comprising 30,006 issued and fully-paid
     ordinary shares, to our Executive Chairman and CEO, Mr George Chew at a nominal
     consideration of RM211. Sitra Asia Pacific Sdn. Bhd. has a net tangible asset of RM351 as at 31
     December 2005 based on its unaudited financial statements for FY2005. The consideration was
     satisfied by our Executive Chairman and CEO, Mr George Chew in cash. The transfer was
     effected by way of a deed of declaration of trust executed by our Company pursuant to which our
     Company declared that the said 30,006 ordinary shares are held on trust by it as trustee for the
     sole and absolute benefit of Mr George Chew. The transaction was undertaken based on normal
     commercial terms and on an arm’s length basis. Pursuant to the said transfer, Sitra Asia Pacific
     Sdn Bhd ceased to be a subsidiary of our Company. Sitra Asia Pacific Sdn. Bhd. has been
     dormant since 2000. It is currently in the process of applying for members’ voluntary winding-up.

5.   Shuimu Lifestyle Pte. Ltd.
     Shuimu Lifestyle Pte. Ltd. is a company incorporated under the laws of Singapore with an issued
     and paid-up share capital of $20,000 comprising 20,000 ordinary shares. On 5 May 2006, our
     subsidiary, Suncoast Sitra Singapore transferred all the 60% shareholding in Shuimu Lifestyle
     Pte. Ltd. owned by it, comprising 12,000 issued and fully-paid ordinary shares, to our Vice-
     President (Group Marketing and Business Development), Mr Xavier Chew at a nominal
     consideration of S$1.00. Shuimu Lifestyle Pte. Ltd. has a net tangible liability of $29,638.08 as at
     31 December 2005 based on its unaudited financial statements for FY2005. The consideration
     was satisfied by our Vice-President (Group Marketing and Business Development), Mr Xavier
     Chew in cash. The transaction was undertaken based on normal commercial terms and on an
     arm’s length basis. Pursuant to the said transfer, Shuimu Lifestyle Pte. Ltd. ceased to be an
     ultimate subsidiary of our Company. Shuimu Lifestyle Pte. Ltd. has been dormant since June
     2005. The shareholders of Shuimu Lifestyle Pte. Ltd. had resolved to wind-up Shuimu Lifestyle
     Pte. Ltd..


                                                  77
                              GENERAL INFORMATION ON OUR GROUP

GROUP STRUCTURE
Our corporate structure after the Restructuring Exercise and as at the Latest Practicable Date is set out
below:–


                                                      Sitra Holdings
                                                      (International)
                                                          Limited


 100%                   80%                   100%                 100%                100%                    100%

  E-Timberhub          Suncoast Sitra           Energetic            Sitra Dove             Sitra Agencies        Sitra Dove
     Pte Ltd             Pte Ltd(1)             Industries            Logistics                 Pte Ltd            Logistics
                                                Sdn. Bhd.            Sdn. Bhd.                                     Pte. Ltd.

                        75%                                                                                     100%

                        Suncoast Sitra                                                                          Sitra Precision
                          Pty. Ltd.(2)                                                                           Engineering
                                                                                                                (M) Sdn. Bhd.
Notes:–
(1)   The remaining 20% of the shareholding in Suncoast Sitra Pte Ltd is held by our Vice-President (Technical and Design), Mr
      Michael Burke and his wife, Madam Margaret Lynne Burke. The board of directors of Suncoast Sitra Pte Ltd comprises our
      Executive Directors, Mr George Chew, Mr Steven Chew and Madam Teresa Tan and our Vice-President (Technical and
      Design), Mr Michael Burke.
(2)   The remaining 25% of the shareholding in Suncoast Sitra Pty. Ltd. is held by Galba Pty Ltd as trustee for the Stimpson
      Family Trust founded by our Vice-President (Australian Operations), Mr James Kevin Stimpson. The board of directors of
      Suncoast Sitra Pty. Ltd. comprises our Executive Director, Mr George Chew and our Executive Officers, Messrs Xavier
      Chew, Michael Burke and James Kevin Stimpson.


OUR SUBSIDIARIES
The details of our subsidiaries as at the Latest Practicable Date are as follows:–

                                                                                                                    Effective
                                   Date of incorporation/                                                          percentage
                                  country of incorporation/                                      Issued and          owned
                                     principal place of                                         paid-up share        by our
Name of company                          business                   Principal activities           capital          Company
Sitra Agencies Pte Ltd                    5 January 1983/           Importer, exporter of           $130,001           100%
                                             Singapore/               wood-based and
                                         18 Genting Road,              other related
                                         The Blue Building               products
                                         Singapore 349477
Sitra Dove Logistics Pte.                10 December 1986/          Investment holding              $870,002           100%
  Ltd.(1)                                    Singapore/               and provision of
                                          18 Genting Road,           logistics services
                                          The Blue Building
                                          Singapore 349477
Suncoast Sitra Pte Ltd(2)                   5 May 1994/             Investment holding              $510,000           80%
                                             Singapore/                 and importer,
                                         18 Genting Road,           exporter of lifestyle
                                         The Blue Building          furniture and other
                                         Singapore 349477             related products




                                                              78
                              GENERAL INFORMATION ON OUR GROUP

                                                                                                                         Effective
                                     Date of incorporation/                                                             percentage
                                    country of incorporation/                                      Issued and             owned
                                       principal place of                                         paid-up share           by our
Name of company                            business                    Principal activities          capital             Company
E-Timberhub Pte Ltd                     19 October 2000/              Importer, exporter of               $2               100%
                                           Singapore/                   wood-based and
                                        18 Genting Road,                 other related
                                        The Blue Building                  products
                                        Singapore 349477
Suncoast Sitra Pty. Ltd.               26 November 2002/                   Wholesaler of                 A$4                75%
                                             Australia/               lifestyle furniture and
                                      Unit 17, 129 Robinson                other related
                                      Road East, Geebung,                     products
                                        Queensland 4034,
                                             Australia
Sitra Precision Engineering               5 January 1995/                     Inactive             RM1,000,000             100%
  (M) Sdn. Bhd.                              Malaysia/
                                         21, Jalan Bukit 1,
                                         Bandar Seri Alam,
                                           Masai, 81750
                                        Johor Bahru, Johor,
                                             Malaysia
Energetic Industries Sdn.                 15 March 1995/                      Inactive             RM1,450,000             100%
  Bhd.(3)                                    Malaysia/
                                         21, Jalan Bukit 1,
                                         Bandar Seri Alam,
                                           Masai, 81750
                                        Johor Bahru, Johor,
                                             Malaysia
Sitra Dove Logistics Sdn.                  4 April 1996/                      Inactive              RM150,100              100%
  Bhd.(4)                                    Malaysia/
                                         21, Jalan Bukit 1,
                                         Bandar Seri Alam,
                                           Masai, 81750
                                        Johor Bahru, Johor,
                                             Malaysia
Notes:–
(1)   Sitra Dove Logistics Pte. Ltd. deals with the freight forwarders to provide freight forwarding services to the Group. Sitra Dove
      Logistics Pte. Ltd. will coordinate the shipment with our contract manufacturers and customers on the delivery schedules
      and prepare the necessary documents needed by our customers. Such documents include export documents and certificate
      of origin.
(2)   Our lifestyle design function is based in Brisbane, Australia and is conducted through Suncoast Sitra Pte Ltd.
(3)   Energetic Industries Sdn. Bhd. owns the factory premises situated at 21 Jalan Bukit 1, Bandar Seri Alam, Masai, 81750
      Johor Bahru, Johor, Malaysia which are leased to a third party for a term of two years commencing from 1 February 2005
      and expiring on 31 January 2007 at a monthly rent of RM6,750. Please see the Section “Properties And Other Fixed Assets”
      of this Prospectus for more details.
(4)   Sitra Dove Logistics Sdn. Bhd. owns the residential premises situated at 20 Lorong 3, Lorong, Projek Perumahan MIEL,
      Taman Air Biru, 81700 Pasir Gudang, Johor, Malaysia which are vacant as at the Latest Practicable Date. Please see the
      Section “Properties And Other Fixed Assets” of this Prospectus for more details. We do not have any other intention for this
      Company except to cater for freight arrangements for goods originating out of Malaysia in the future.


None of the above companies is listed on any stock exchange.




                                                                 79
                                  HISTORY AND BUSINESS

HISTORY
Our Company was incorporated in Singapore on 5 May 1979 under the Companies Act as a private
company with limited liability. Our name was last changed to Sitra Holdings (International) Pte Ltd on
22 October 1997. On 22 September 2006, we changed our name to Sitra Holdings (International)
Limited in connection with our conversion into a public company limited by shares.

Our Company was founded inter alia, by our Executive Directors, Mr George Chew and Madam Teresa
Tan. We started our business in 1979 as a timber trader, supplying sawn timber to customers located
in different parts of Australia and Western Europe. Our customers were mainly timber importers and
manufacturers of wood-based products which require sawn timber of different wood species for their
manufacturing purposes. We obtained our sawn timber supply from saw-millers located in Malaysia and
Indonesia which we exported directly from these countries to our customers.

Between 1979 and 1989, our business was focused mainly on the trading of sawn timber. During this
period, we developed close working relationships with many of the local saw-millers in Indonesia. As
a result of our good track record and reputation as a reliable company, our network of timber suppliers
in Indonesia grew over the years. This increased our procurement capability in terms of volume as well
as the range of wood species. The species of hardwood which we were then able to procure included
Kwila, Kapur, Palapi and various types of Meranti and Balau.

In 1990, in order to remain competitive and improve our profit margin, we started to distribute
value-added wood-based products, such as hardwood decking, interior flooring and other moulded
products, to our customers. These products were built to the order of our customers’ specifications and
were either semi-finished or finished products based on their requirements. We engaged third party
contract manufacturers in Indonesia to produce the products we required. At that time and in line with
the Indonesian government’s plan to increase the value-add in the Indonesian timber industry, many of
our sawn timber suppliers upgraded themselves in tandem with us and moved downstream to
producing value-added wood-based products. The close relationship which had developed between us
and our sawn timber suppliers laid the foundation for us to assist them in expanding their production
capabilities downstream and to transfer market and industry knowledge to them. The range of
wood-based products supplied by us grew over the years to include window frames, doors and furniture
components.

In 1997, recognising the need to stay ahead of and differentiate ourselves from our competitors, we
embarked on a branding strategy for our products. Our maiden brand “COMCIA”, which is a direct
romanised translation of the Hokkien dialect words meaning “thank you”, was born in 1998. Since then,
we started to use the brand “COMCIA” for our wood-based products such as decking, interior floorings
and other moulded products. Our products come in ready-to-assemble form, each carrying the
“COMCIA” brand label. The branding enabled our customers and consumers to identify our quality
products with our brand. The successful branding further increased awareness of our products in the
international market and enhanced our competitiveness. We began to experience higher customer
retention rates and increased demand for our branded wood-based products. In line with the shift in our
business focus to the distribution of branded high value-added wood-based products, our customer
base expanded to include furniture wholesalers and retailers of ready-to-assemble products (DIY
shops).

In 1997, our Company was awarded the ISO 9002 certification by the AJA Registrars in recognition of
our commitment and efforts in implementing and maintaining a quality management system. The said
certification was upgraded in 2003 to BS EN ISO 9001:2000. Our ISO certification has been maintained
every year since 1997.



                                                  80
                                    HISTORY AND BUSINESS

In October 2000, we incorporated E-Timberhub to carry on the business of distributing, buying, selling
and marketing of wood-based and other related products over the internet. Sales undertaken through
such e-marketing and online transactions had been insignificant as at the Latest Practicable Date.

In December 2000, we started to distribute to one of our customers in Australia, outdoor garden
furniture based on their design and specifications. Through our extensive network of suppliers and with
our industry knowledge and experience, we were able to source the production of quality lifestyle
outdoor furniture at competitive rates. We procured production from third party contract manufacturers
in Indonesia with the requisite capability. That began our successful expansion into the distribution of
lifestyle outdoor furniture and launched our entry into the lifestyle outdoor furniture industry in the
Australian and other international markets. By leveraging on our experience and wide network of
customers to whom we supply our wood-based products, we gradually increased our lifestyle outdoor
furniture sales and customer base. We also started participating in international furniture exhibitions
such as the International Furniture Fair in Singapore, SPOGA/GAFA Show in Cologne, Germany and
Furnitex exhibitions in Melbourne and Sydney, Australia. These exhibitions enabled us to reach out to
new customers and markets and served as a platform for our new product launches in each season.

In 2000, our Company acquired Suncoast Sitra Singapore for a nominal consideration of $2.00. In
2001, Suncoast Sitra Singapore was used by us as a vehicle to form a joint venture with Mr Michael
Burke, who is now our Vice-President (Technical and Design). Mr Michael Burke held ten per cent. of
the shares and two other Australian joint venture partners held 39%. The balance 51% in Suncoast
Sitra Singapore was held by our Company. The joint venture was formed with a view to undertaking the
distribution of outdoor lifestyle furniture. In 2002, we acquired the 39% shares of the other two joint
venture partners and disposed 10% to Madam Lynne Michael Burke, the wife of Mr Michael Burke and
24% to a third party. Suncoast Sitra Singapore thereafter became a 56% owned subsidiary of our
Company.

Encouraged by the success of our wood-based products branding strategy, we adopted a two-pronged
product differentiation approach, which involved branding our lifestyle outdoor furniture and
establishing our in-house furniture design capabilities, to add value to our lifestyle outdoor furniture
distribution business. We originated our flagship “Pacific” range of brand names and launched several
ranges of lifestyle outdoor furniture under the brands “Pacific Kwila”, “Pacific Cherry”, “Pacific Teak” and
“Pacific Rattan” in 2001, 2003, 2004 and 2005 respectively. Each of these brands, which carry the
name of a type of wood or material, is used to brand the different range of our lifestyle outdoor furniture
according to the same type of wood or material used for its manufacture. In 2002, as part of the
measures taken by us to establish our in-house design capabilities, we appointed Mr Michael Burke
through Tolka Enterprises Pty Ltd, a company incorporated in Australia and controlled by Mr Burke, to
provide us consultancy services and lead our lifestyle design function. In June 2006, we appointed Mr
Michael Burke as our Vice-President (Technical and Design). Our lifestyle furniture design function is
based in Brisbane, Australia.

In December 2003, our subsidiary, Suncoast Sitra Australia in Queensland, Australia was converted
from a wholly-owned subsidiary of Suncoast Sitra Singapore into a joint venture between Suncoast
Sitra Singapore and Galba Pty Ltd in the proportion of 75% and 25% respectively. Galba Pty Ltd is an
Australian company which holds the 25% interest in Suncoast Sitra Australia on trust for a family trust
founded by our Vice-President (Australian Operations), Mr James Kevin Stimpson. Suncoast Sitra
Australia was established as a wholesale distributor to furniture retailers in the eastern coast of
Australia. As at the Latest Practicable Date, it has served more than 250 retail outlets which spread
across the eastern states of Australia.

In 2004, we increased our shareholding in our subsidiary, Suncoast Sitra Singapore from 56% to 80%
by acquiring 24% of its share capital from the outgoing third party shareholder. The balance 20%

                                                    81
                                    HISTORY AND BUSINESS

shareholding interest in Suncoast Sitra Singapore remained held by our Vice-President (Technical and
Design), Mr Michael Burke and his wife.

In December 2004, after observing the continued growth of our wood-based products sales and market
opportunities, we launched a second brand “decKING” for our range of decking products with the aim
of penetrating new markets and further entrenching our presence in existing markets. We believe that
our strategy of marketing and distributing decking products under two separate brands “COMCIA” and
“decKING” will enable us to capture new customers and thus increase our market share.

In both 2004 and 2005, we were awarded the prestigious Enterprise 50 awards and ranked 27th and
ninth positions respectively. Further, as evidence of our commitment and dedication to service and
design excellence, we were presented the merit award in the best exhibit competition for one of our
outdoor garden furniture exhibits at the International Furniture Fair Singapore in 2004.

In 2005, we expanded our product range to include furniture produced from rattan, and indoor lifestyle
furniture such as living and dining room sets. We also increased our marketing activities and were able
to penetrate several new markets in Europe and Middle East and widen our customer base.

In March 2006, we were awarded the Regional Headquarters Award by the Economic Development
Board of Singapore and SPRING Singapore. The award aims to encourage local companies to build a
strong Singapore base from which to expand their business activities into Asia and beyond. The award
entitles us to a tax concessionary rate of 15.0% for qualifying income in excess of the income base of
S$435,333 from FY2005 to FY2007 (and thereafter for an additional period of two years provided
certain conditions are satisfied).

In November 2006, we were again awarded the prestigious Enterprise 50 award for the third
consecutive year and ranked 23rd in position.


BUSINESS

Overview
We are one of the leading brand-centric distributors of quality wood-based products and lifestyle
outdoor furniture carrying our proprietary brands. Our products can be categorised into two main
product segments:–
(a)   High-value wood-based products such as decking, flooring, fencing, door and window
      components and other moulded products. These products are marketed and distributed mainly
      under our brands “COMCIA” and “decKING”; and
(b)   Premium lifestyle outdoor furniture such as outdoor garden furniture and garden accessories.
      These products are marketed and distributed mainly under our “Pacific” brand range. Since 2005,
      our product range has expanded to include lifestyle indoor furniture. Revenue derived from the
      sales of lifestyle indoor furniture has been insignificant as at the Latest Practicable Date. For the
      purpose of segmentation, we have incorporated lifestyle indoor furniture under this product
      segment.

Our products are produced mainly from quality hardwood of different species. We use various wood
species of different strengths, density and characteristics, such as Kwila, Yellow Balau, Meranti, Kapur,
Nyatoh, Keruing, Teak and Palapi for our products.

We operate from our headquarters in Singapore which also serve as our marketing and customer
service, operational planning and administrative centre. Our lifestyle furniture design function is based
in Brisbane, Australia.


                                                    82
                                          HISTORY AND BUSINESS

Our customers include manufacturers, wholesalers, major retailers, specialist retailers and consumers
in the furniture industry. We derive our revenue from a wide customer base and well-diversified
geographical markets. As at the end of FY2005, our corporate customer base included 277 different
corporate customers and they span across 48 countries in Australasia, Europe, Asia, Middle East,
Africa and North America. We also offer our products directly to consumers through our showroom at
our headquarters in Singapore.

The contributions to our revenue from the different geographical markets for the last three financial
years ended 31 December 2005 were as follows:–

                                                                                   Revenue contribution (%)
Markets                                                                       FY2003       FY2004         FY2005
Australasia(1)                                                                  55.5              65.1              43.6
Europe                                                                          39.2              31.5              50.9
         (2)(3)
Others                                                                           5.3               3.4               5.5

                                                                               100.0            100.0             100.0

Notes:–
(1)   Australasia comprises Australia and New Zealand. Revenue derived from Australasia were mainly due to sales made in
      Australia.
(2)   Others include Asia, Middle East, Africa and North America.
(3)   Revenue contribution from our retail sales in Singapore accounts for approximately less than one per cent. of our total
      revenue for each of the last three financial years.


Our core competencies lie in the development of our proprietary brands of products and expansion of
markets for our products. We do not independently own any manufacturing or processing facilities but
outsource our manufacturing activities to our extensive network of third party contract manufacturers in
Indonesia. The outsourcing of our manufacturing process allows us to focus on our core competencies,
enhance our operational efficiencies and minimise inventory holding costs and fixed assets
investments.

Our contract manufacturers are selected by us based on inter alia, their relevant capabilities and
available production capacities. They manufacture our products according to our designs,
specifications and/or requirements or based on their own product designs selected by us. As at the
Latest Practicable Date, our network of third party contract manufacturers in Indonesia includes 43
pre-qualified contract manufacturers. They procure their supply of timber from legal forest concessions
that span across the Indonesian archipelago. With our extensive network of third party contract
manufacturers, we are able to increase our supply capacities to our customers and at the same time
reduce production risks through the allocation of such risks among our contract manufacturers. In
addition, by outsourcing, we are able to minimise our inventory holding and capital expenditure, thereby
achieving optimal utilisation of our capital resources. The proximity between our Singapore
headquarters and Indonesian contract manufacturers also allows us to work closely and effectively with
them.




                                                             83
                                       HISTORY AND BUSINESS

The following diagram illustrates our value chain and our comparative advantage in each section:–


                                                                                               Sales,
        Production                    Quality                        Shipping &             Marketing &
       Procurement                   Assurance                        Logistics             Distribution

(i) Extensive network         (ii) Consistent product        (iii) Economies of        (iv) Well-diversified
    of contract                    quality and                     scale and our            global customer
    manufacturers                  customer service                close partnership        base
                                                                   with logistics      (v) Well-established
                                                                   service supplier         proprietary
                                                                                            brands and focus
                                                                                            on design
(i)      Our extensive network of third party contract manufacturers and our well-established
         relationships with many of them allow us to increase our supply capacities and achieve supplier
         risk diversification, competitive pricing and supply stability and reliability.
(ii)     Our quality assurance system and focus on product quality and customer service ensures the
         consistency of the quality of our products and services to our customers.
(iii)    Our large supply volume enables us to achieve economies of scale in our shipping and logistics
         process and obtain competitive freight rates. We also employ the strategy of establishing a
         long-standing relationship with a pre-qualified freight-forwarder to obtain the most competitive
         rates.
(iv) Our well-diversified global customer base allows us to reduce dependency on any individual
     customer and/or geographical market and achieve scalability in our businesses.
(v)      Our well-established proprietary brands, “COMCIA”, “decKING” and the range of “Pacific” brand
         names have enabled our products to establish market recognition in the wood-based products
         and furniture industries as being associated with quality and reliability. In addition, our focus on
         design and our customers’ needs and preferences further enhances the premium of our brands.

Please see the Section “Competitive Strengths” of this Prospectus for more details.


Our Products

Wood-Based Products
We offer a wide range of quality wood-based products which are mainly marketed and distributed under
our proprietary brands “COMCIA” and “decKING”. Each category of our wood-based products offers
different designs, specifications and dimensions to suit the varying requirements of our customers. Our
wood-based products comprise mainly the following categories:–




                                                        84
                                     HISTORY AND BUSINESS

Decking
Our decking products are for use in houses, patios, garden areas, marina areas, ramps, walkways and
bridges under various climates and weather conditions. They come in smooth, reeded, anti-skid or
other surfaces. Our decking products are durable, low maintenance, aesthetically pleasing and easy to
install. Most of our decking products are delivered to customers in DIY and RTA forms. Our decking
products are generally made from Kwila, Yellow Balau, Kapur and Keruing.




Flooring
Our flooring products are for use in houses,
hotels, restaurants, schools and other types of
premises. They can be installed as a traditional
structural floor laid on bearers and joists or glued
directly to concrete or plywood sub-floors. The
precision tongue and groove construction used
in some of our products ensure a well-fitted,
appealing natural timber floor which matches to
its architectural surroundings.




                                                            Our floorings are versatile, durable and able to
                                                            meet heavy usage, high traffic conditions and
                                                            family activities. Some of our flooring products
                                                            are delivered to customers in DIY and RTA
                                                            forms. Our flooring products are generally made
                                                            from Kwila, Balau and other hardwood species.




                                                       85
                                   HISTORY AND BUSINESS

Fencing
Our fencing products are for outdoor usages and
include framed fences, deco fences, framed
lattices, garden fences, combination fences and
fencing accessories.




                                                        Our fencing products are generally made from
                                                        Kwila and Balau.


Door and window components
Our door and window components are for residential and commercial usages. Wooden doors and
windows are still very popular with certain properties and consumers in parts of our markets such as
Australasia and Europe, as these products are aesthetically appealing, strong and have good insulating
qualities. Our door and window components are generally made from Kwila and Meranti.


Other moulded products
Our moulded products include laminated and finger-jointed products for construction and furnishing
usages. These products can be used to form, inter alia, beams, posts and table tops. Our laminated and
finger-jointed products are generally manufactured from Palapi, Meranti and mixed light hardwoods.

Lifestyle Outdoor Furniture
We offer a large selection of traditional and contemporary designs of premium lifestyle outdoor
furniture, which includes outdoor garden furniture and garden accessories. Since 2005, our product
range has expanded to include lifestyle indoor furniture. Our outdoor and indoor furniture include
tables, chairs, bench sets, loungers, bar stools and cushion boxes. Most of the designs of our lifestyle
furniture originate from our design function in Brisbane, Australia. Shown below is some of our lifestyle
outdoor furniture:–




                                                   86
                                        HISTORY AND BUSINESS




We market our lifestyle outdoor furniture mainly under our range of “Pacific” brand names and have
launched several ranges of lifestyle furniture under the brands “Pacific Kwila”, “Pacific Cherry”, “Pacific
Teak” and “Pacific Rattan”. Each of these brands, which carry the name of a type of wood or material,
is used to brand the different range of our lifestyle furniture according to the same type of wood or
material used for its manufacture.


Description of wood used in our products
The major species of hardwood used for our products and their general characteristics are as follows:–

Name                                            Mechanical
(Botanical)        Description                  properties              Durability                Uses

Kwila              The yellowish-brown          The       timber    has Durable and resistant     General and heavy
(Intsia)           colour        of      the    medium           bending to        preservative   constructional     work,
                   heartwood darkens to         strength, stiffness and treatment.                decking,        flooring,
                   dark red-brown upon          resistance to shock                               panelling, high-class
                   exposure.         Lighter    loads, and a high                                 joinery,       furniture
                   coloured parenchyma          crushing strength. It                             making,     agricultural
                   markings provide an          has only a moderate                               implements, axe and
                   attractive figure on         steam            bending                          tool handles, and when
                   tangential      surfaces.    classification due to                             treated, for railway
                   The         grain       is   gum exudation.                                    sleepers.      Selected
                   interlocked, sometimes                                                         logs are sliced for
                   wavy, providing a                                                              veneering.
                   ribbon stripped figure
                   on radial surfaces. The
                   texture is coarse but
                   even. Liable to stain if
                   in contact with iron
                   compounds in damp
                   conditions and to
                   corrode ferrous metals.
                   Vessel cavities are
                   often filled with sulphur
                   yellow      and      dark
                   deposits.




                                                           87
                                         HISTORY AND BUSINESS

Name                                             Mechanical
(Botanical)          Description                 properties                 Durability                Uses

Yellow Balau         The heartwood is            Hard, heavy and very       Very durable and          Heavy constructional
(Shorea including:   yellow-brown, varying       dense with a very high     immune from insect or     work, bridge and wharf
S. glauca,           to brown and dark           bending and crushing       fungal         attack.    construction, sleepers,
S. maxwelliana)      reddish-brown, with an      strength,          and     Extremely resistant to    boats and decking.
                     interlocked grain and a     resistance to shock        preservation
                     moderately fine and         loads      and    high     treatment.
                     even texture.               stiffness. It has a
                                                 moderate        steam
                                                 bending classification
                                                 requiring       strong
                                                 support on the outer
                                                 face.

Meranti              The heartwood colour        The wood has medium        Sapwood is liable to      Exterior and interior
(Shorea spp.         is medium to dark red       bending and crushing       attack by powder post     joinery,       carpentry,
including:           brown               with    strengths, but the         beetle. All species       domestic         flooring,
S. pauciflora,       conspicuous        white    stiffness factor is low    ranges             from   panelling,         interior
S. acuminata,        dammar       or    resin    and        also     low    moderately durable to     framing, shop fitting,
S. negrosensis,      streaks.     Grain    is    resistance to shock        durable, and from         boatbuilding           and
S. polysperma,       interlocked.    Texture     loads. Severe buckling     moderately resistant to   flooring. When treated,
S. squamata,         rather coarse. Brittle-     occurs       in  steam     extremely resistant to    it can be used for
S. agsaboensis)      heart can be present.       bending and distortion     preservative treatment.   exterior cladding and in
                                                 during drying. It has                                exposed situations. It
                                                 poor steam bending                                   can be rotary cut for
                                                 classification.                                      plywood manufacture
                                                                                                      and       sliced        for
                                                                                                      decorative veneers.

Kapur                The wood is a uniform       A      heavy     density   The sapwood is liable     The wood is excellent
(Dryobalanops        light to deep red-          material with high         to attack by powder       for external structural
including            brown,         with     a   bending strength and       post     beetle.   The    purposes,           farm
D. aromatica,        camphor-like odour. It      crushing strength. It      heartwood is very         buildings,         wharf
D. oblongifolia,     is straight grained to      has medium stiffness       durable and extremely     decking,         exterior
D. lanceolata,       shallowly interlocked       and shock resistant        resistant            to   joinery     (such     as
D. beccarii,         with a fairly coarse but    qualities. It has only a   preservative treatment,   windows, doors and
D. fusca)            even texture, and has       moderate          steam    but the sapwood is        stairways), cladding,
                     resin      filled    with   bending classification     permeable.                outdoor garden seats,
                     continuous gum ducts        and            steaming                              flooring, vehicle doors,
                     in concentric lines.        produces           resin                             fittings and furniture
                                                 exudation.                                           making. Also used
                                                                                                      above water line for
                                                                                                      docks,         wharves,
                                                                                                      bridges      and      for
                                                                                                      plywood manufacture.
                                                                                                      Selected logs are used
                                                                                                      for sliced decorative
                                                                                                      veneers for panelling.

Nyatoh               The heartwood colour        It has medium bending      It    is    moderately    Furniture and cabinet,
(Palaquium           varies according to the     and crushing strength,     durable. The sapwood      high-class       joinery,
maingayi,            species, but generally      with low stiffness and     is liable to attack by    pattern making, and
P. rostratum,        from pale pink to           resistance to shock        powder post beetle. It    interior        building
P.xanthochymum,      reddish-brown,              loads.    Its    steam     is very resistant to      construction. Rotary
payena maingayii)    sometimes with darker       bending classification     preservative treatment.   cut veneer is used for
                     streaks. The grain is       is moderate.                                         plywood manufacture
                     straight or shallowly                                                            or core stock. Selected
                     interlocked or wavy                                                              logs are used to
                     and      the    texture                                                          produce             very
                     moderately fine.                                                                 decorative veneers for
                                                                                                      panelling, cabinets and
                                                                                                      marquetry.



                                                             88
                                        HISTORY AND BUSINESS

Name                                            Mechanical
(Botanical)         Description                 properties                  Durability                    Uses

Keruing             The wood varies in          It is high in bending       It    is     moderately       Heavy      and       light
(Dipterocarpus      colour from pinkish-        and crushing strengths      durable. The sapwood          construction,      wharf
spp.)               brown to dark brown         and in stiffness, but       is liable to attack by        decking,        bridges,
                    heartwood, often with a     with only medium            powder post beetle. It        flooring in domestic
                    tint of purple. The grain   resistance to shock         is moderately resistant       and public buildings,
                    is straight to shallowly    loads. Some species         or      resistant      to     but not heavy-duty
                    interlocked, and the        are unsuitable for          preservative treatment        floors. Vehicle building,
                    texture is moderately       steam bending, while        and reportedly non-           sills, wagon sides and
                    coarse but even. Some       others have moderate        resistant to termites.        floors, and exterior
                    species contain oleo-       steam         bending                                     joinery when treated,
                    resin which exudes,         properties but suffer                                     although liable to
                    especially on the end       from resin exudation                                      exude resin if exposed
                    grain.                      during the steaming                                       to strong sunlight.
                                                process.

Teak                Indonesian teak is rich     A       hard,    medium     It is very durable but        It is extensively used
(Tectona grandis)   brown with darker           density wood. It has        liable to insect attack. It   for ship and boat
                    chocolate-brown             medium           bending    is extremely resistant        building for decking,
                    markings.                   strength and high           to           preservation     rails and hatches.
                                                crushing         strength   treatment.                    Furniture and cabinet,
                                                combined with low                                         interior and exterior
                                                stiffness            and                                  joinery,        flooring,
                                                resistance to shock                                       exterior structural work
                                                loads. It is fissile and                                  and garden furniture. It
                                                brittle     with    great                                 is also used for acid
                                                dimensional stability. It                                 resistant      purposes
                                                is fire and acid                                          such as chemical vats,
                                                resistant. It can be                                      fume      ducts      and
                                                steam bent to a                                           laboratory     benches.
                                                moderate radius of                                        Also used in all grades
                                                curvature.                                                of plywood and sliced
                                                                                                          for decorative and face
                                                                                                          veneers.

Palapi              The heartwood colour        It is a high density        The wood is non-              General construction,
(Tarrietia)         varies from medium to       wood with medium            durable and resistant         carpentry,     interior
                    dark        red-brown,      bending strength and        to          preservative      joinery,     panelling,
                    sometimes with dark         medium stiffness. It        treatment.            The     cabinet and furniture
                    streaks on longitudinal     has high crushing           sapwood is moderately         fitments,       wheel
                    surfaces, and fairly        strength and medium         resistant. It is liable to    wrighting,   domestic
                    large rays appear as        resistance to shock         powder post beetle            flooring. It is also
                    conspicuous red flecks      loads. But it is not a      attack.                       peeled for plywood
                    on quartered surfaces.      steam bending wood.                                       manufacture. Selected
                    The wood is lustrous,                                                                 logs are sliced for
                    the grain interlocked                                                                 decorative veneers for
                    and      marks     are                                                                panelling and cabinet
                    commonly present.                                                                     work, and marquetry.




                                                            89
                                                  HISTORY AND BUSINESS

BUSINESS PROCESS
Our business process can be illustrated as follows:–


                   Design &                                                Sales &                                               Operational
                  Innovation                                              Marketing                                               Planning




                                                                                                                                 Pre-production
                     Market
                                                                           Participation in                                       Procurement
                   Assessment
                                                                      international trade fairs                                     Planning

                                                                     Provision of support to
                                                                     customers in regional
                                                                          trade shows
                 Product Design                                                                                                   Production
                                                                       Advertisements and
                                                                                                                                 Procurement
                      and                                             promotional materials
                  Development                                          (such as brochures
                                                                         and catalogues)

                                                                         Appointment of
                                                                       sales representatives
                                                                                                                                  Shipping &
                    Market                                                                                                         Logistics
                   Feedback                                               Showroom at
                                                                           Singapore
                                                                          headquarters

                                                                          On-going
                                                                                                                                 Distribution &
                                                                      communications with
                                                                                                                                  Customer
                                                                          customers
                                                                                                                                    Service
                                                                        Our website -
                                                                     www.sitraholdings.com
                                                                                                   Representatives
                                  Manufacturers



                                                     Wholesalers




                                                                                                                     Consumers
                                                                                      Specialist
                                                                       Retailers



                                                                                      Retailers


                                                                                                       Sales
                                                                        Major




                                                                   Global Distribution Channels




                                                                               90
                                      HISTORY AND BUSINESS

Design and Innovation

Lifestyle Outdoor Furniture
Our lifestyle outdoor furniture business is design-orientated. The designs of our lifestyle outdoor
furniture are either developed in-house or based on selected product designs of our contract
manufacturers. Our lifestyle furniture design function is based in Brisbane, Australia and is headed by
our Vice-President (Technical and Design), Mr Michael Burke. Occasionally, we outsource our design
function on a project basis to a third party designer in Australia as well as a local design firm in
Singapore. Sales of our lifestyle outdoor furniture designed in-house accounted for approximately
49.9%, 63.4%, 69.7% and 89.7% of the total revenue derived from our sales of lifestyle outdoor
furniture for FY2003, FY2004, FY2005 and 1Q2006 respectively.

The design process for our lifestyle furniture can be divided into three broad phases: (i) market
assessment; (ii) product design and development; and (iii) market feedback.

Market Assessment
We undertake, on a continual basis, market assessments of current trends and consumers’
preferences. Our products are targeted primarily at consumers in the middle to upper income group in
developed markets (such as Western Europe, USA and Australia) and emerging markets (such as
Eastern Europe and Middle East). We identify emerging trends and preferences of consumers in the
international market primarily through the following methods:–
(i)     Observing and analysing market developments;
(ii)    Interacting with our customers, furniture contract manufacturers, industry players and business
        associates;
(iii)   Attending international and local furniture trade shows and exhibitions on a regular basis to keep
        abreast of the global development in the industry and to obtain market feedback on our existing
        and new products;
(iv) Undertaking market research through various media such as the internet, industry journals and
     market reports; and
(v)     Monitoring the activities of other industry players.


Product Design and Development
Through our market assessments, we conceptualise new ideas for our products. These new designs
may be new originations or improvisations of our existing designs or those of our contract
manufacturers. We strive to stay at the forefront of changing trends in the industry so as to anticipate
the demands of our target markets. Taking into account the results of market assessments, our
Vice-President (Technical and Design), Mr Michael Burke takes the lead in conceptualising design
ideas with contributions from our Executive Directors, Messrs George Chew and Steven Chew.

Following the initiation of a new design idea, draft drawings and design specifications are prepared by
Mr Michael Burke. Our designs are focused on achieving the following qualities:–
(i)     The designs must be creative, functional and cost effective to produce;
(ii)    The designs do not violate any safety or other regulatory standards in the different countries in
        which we sell our products;
(iii)   The designs can be broken down into components where our customers’ RTA requirements can
        be fulfilled. The majority of our furniture is designed as RTA. RTA furniture, which can be
        flat-packed, requires relatively sophisticated design skills; and

                                                      91
                                    HISTORY AND BUSINESS

(iv) The designs can be extended to a full suite or collection, such as matching tables and chairs, side
     tables and occasional items.

Our senior management will also be consulted at design stage. The drawings and specifications are
then discussed with the design department of our contract manufacturers for the purposes of obtaining
quotations and producing samples of our new product. The sample pieces are then inspected and
tested by us. Flaws or inadequacies in the sample pieces are addressed and the designs are rectified.


Market Feedback
We conduct soft launches of prototypes of new designs in our showroom in Singapore to our key
customers as well as showcase/launch such new designs at furniture exhibitions or trade shows to
obtain market feedback and response on design, pricing and possible order quantity. Based on market
feedback and response, we may modify and/or improve upon the design to satisfy our customers’
needs. Once the design of the product is finalised, we will induct the product into our sales and
marketing activities.


Wood-based products
The designs of our wood-based products, such as decking and flooring, generally adopt industry
standards and specifications. They therefore require much less product design and development efforts
as compared to lifestyle furniture. We have not undertaken any significant product design and
development activities for our wood-based products in the last three financial years. Notwithstanding,
we undertake on a continual basis, market assessments of current trends and consumer preferences
for our wood-based products to identify new ideas and opportunities. With the extensive experience
and vast industry knowledge possessed by our senior management, we also constantly innovate to
improve the functionality and cost effectiveness of our wood-based products to give them more
value-add. Where required, we will adopt a design process similar to the one for our lifestyle outdoor
furniture, to develop new wood-based products or modify existing ones.


Sales and Marketing
Our customers include manufacturers, wholesalers, major retailers, specialist retailers and consumers
in the furniture industry. We conduct our sales and marketing activities through the various channels
described below.

We participate in various international trade fairs to promote our products and to secure new
customers. These trade fairs include the International Furniture Fair in Singapore, the SPOGA/GAFA
Show in Cologne, Germany and the Furnitex exhibitions in Melbourne and Sydney, Australia. We have
been a participant of such trade fairs since 2001, which attract thousands of international visitors in the
industry annually. We generally exhibit our latest products and design innovations during these trade
fairs which allow us to market our products to a large number of potential customers.

We also reach and help support our customers in their attendance of regional trade shows, such as the
Index Dubai and the International Casual Furniture and Accessories Market, Chicago. We provide our
customers samples of our products for exhibit and advertising materials such as brochures, catalogues
and price lists. Occasionally, we will send our sales and marketing personnel to assist our customers
in these trade shows.




                                                    92
                                      HISTORY AND BUSINESS

We utilise a wide range of advertising and promotional materials to promote our wood-based products
and lifestyle outdoor furniture. We advertise in trade directories and magazines such as Kompass,
                                                                   ¨
Singapore Information Directory, Landscape Today, Inwood and Mobelmarkt. In addition, we also send
colour brochures and catalogues of our products and new designs to our existing and potential
customers and sales representatives regularly.

We appoint a number of sales representatives in selected markets such as Germany, Ukraine,
Australia, New Zealand, France and United Kingdom to conduct and promote the sales of our products.
Our sales representatives undertake sales and marketing strategies to increase awareness of our
brands and products in their respective territories. We select our sales representatives based on their
experience, track records and capabilities.

As part of our direct marketing strategies, we invite our corporate customers to visit us from overseas
regularly to view our new products which are showcased at our showroom in Singapore. We also reach
out to retail consumers directly through our Singapore showroom.

We communicate with our customers on a regular basis to secure new purchase orders and to collate
their feedback and response on market trends, industry competition, pricing concerns and forecasts of
their future purchase orders for the various designs of our products.

Our website www.sitraholdings.com was set up as a means to increase awareness of our business and
our products and to reach out to potential customers. Information contained on our website does not
constitute a part of this Prospectus.


Operational Planning

Our operational planning process is conducted from our headquarters in Singapore. Effective planning
of our operations plays a crucial part to the success of our business. Operational planning for our Group
comprises the following:–
(i)     Pre-production procurement planning;
(ii)    Production procurement;
(iii)   Shipping and logistics; and
(iv) Distribution and customer service.


Pre-production Procurement Planning
Through our sales and marketing activities, we collate confirmed purchase orders from our customers
as well as their feedback on market trends, industry competition, pricing concerns and forecasts of their
future purchase requirements for a specified period. This applies in respect of existing products as well
as new products which have received positive market feedback from our customers. We plan our
production procurement schedules based on such confirmed purchase orders and order indication or
forecasts from our customers. Our management will decide on the production quantity and distribution
and approach our pre-qualified contract manufacturers to procure the production of the relevant
products.

With effective pre-production procurement planning, we aim to achieve better profit margins. We
generally plan our production procurement on the basis of bulk production. Our wide distribution
network and customer base enable us to play an aggregator role thereby achieving greater economies
of scale and better pricing from our contract manufacturers.



                                                   93
                                  HISTORY AND BUSINESS

Production Procurement
We have a wide network of third party contract manufacturers to whom we outsource our production
requirements. Our contract manufacturers procure their supply of timber from legal forest concessions
that span across the Indonesian archipelago. For each production, we select our contract
manufacturers from our pre-qualified list based on inter alia, criteria such as their production
capabilities and capacity which best meet our production requirements as well as competitive pricing.
As at the Latest Practicable Date, we have 43 pre-qualified contract manufacturers.

On average, delivery time from our contract manufacturers is approximately one to three months from
the day of confirmation of order for wood-based products and approximately two to three months from
the day of confirmation of order for lifestyle furniture.

We make our production procurement in accordance with our pre-production procurement planning
process described above. For popular products which have a high turnover rate, we may place orders
for production in advance of our anticipated requirements and before we receive confirmed purchase
orders from our customers. This is to reduce our delivery turnaround time and improve our
responsiveness to our customers’ demand. Our competitiveness in the market is thus increased where
price and short turnaround time are crucial factors in securing customers’ orders. In addition, we would
generally place purchase orders in bulk for such popular products so as to achieve greater economies
of scale and better pricing from our contract manufacturers and ensure a stable supply of such popular
products. This enhances our competitiveness and enables us to enjoy a better profit margin as well as
better meet the needs of our customers. Due to the production lead time of up to three months required
and the quantities of our bulk purchases, our contract manufacturers generally require us to make
advance payment for our purchase orders. As at 31 December 2005 and 31 March 2006, the total
advance payments made by us amounted to $1.7 million and $2.5 million respectively.

We co-ordinate and work closely with our contract manufacturers on the specifications and designs of
our products. For our new in-house designed products, we will test the samples produced before
instructing our contract manufacturers to proceed with bulk production. During production, we conduct
quality control on our contract manufacturers to ensure that the production and workmanship complies
with our quality standards. Please see the Section “Quality Assurance” of this Prospectus for more
details.


Shipping and Logistics
After completion of production, our products are assembled and packed in accordance with the
requirements of our customers. Most of our customers are large wholesalers, distributors and major
retailers and they generally order in large quantities and often only in flat-packed and RTA form in
respect of our lifestyle outdoor furniture, or container jumbo-packed in respect of our wood-based
products.

As part of our value-added services, we devise from time to time innovative ways of packing which
maximise container space and allows more products to be loaded onto a container. This reduces freight
charges for our customers. We also ensure that our packing methods preserve the quality of our
products and reduce damage in the course of transit.




                                                  94
                                    HISTORY AND BUSINESS

Our transactions with our contract manufacturers are mainly on a FOB or CNF basis. For FOB
transactions, upon receipt of notice to take delivery from our contract manufacturers, the freight
forwarder engaged by us will issue the relevant shipping instructions to our contract manufacturers. For
CNF transactions, our contract manufacturers will make the necessary shipping arrangements directly
with their appointed freight-forwarder. Our contract manufacturers are responsible for arranging the
loading of products into containers arranged by the relevant freight-forwarder and transporting the
loaded containers to the designated ports of embarkation. Based on our customers’ instructions, we will
ship our products directly to the country and port designated by our customers.

We engage the services of a freight-forwarding company to transact the shipment of all our products
from Indonesia. Due to the high volume of our Group’s transactions, we are able to obtain competitive
pricing for the provision of such freight-forwarding services to our Group.


Distribution and customer service
Owing to our effective pre-production procurement planning and our production procurement capability
and capacity, we are able to make delivery to our customers within a short turnaround time. Delivery
to our customers is generally between one and three months from the receipt of a confirmed order in
respect of our wood-based products and between two and three months from the receipt of a confirmed
order in respect of our lifestyle outdoor furniture. For popular products which we have planned our
procurement orders in advance, the delivery turnaround time is generally shorter.

We emphasise on providing reliable services to our customers, including making prompt deliveries.
This has enabled us to establish a good reputation in the market as a reliable supplier and increased
our competitiveness, as customers generally prefer suppliers who are able to deliver promptly within a
short lead time.

We offer after-sales support to our customers by keeping constant contact with them, including keeping
them updated on our latest product offering. We obtain feedback from them on the latest market trends
and consumers’ preferences and needs so as to increase and improve on our product range and
functionality to better meet their needs.

As our customers comprise inter alia, wholesalers, major retailers and specialist retailers, our services
include providing them support in their sales and marketing activities as well as assisting them in setting
up their display or retail outlets. Please see the Section “Sales and Marketing” of this Prospectus for
more details.


QUALITY ASSURANCE
Quality control is given high priority by our management and is one of our key competitive strengths on
which we build our branding. Our continuous emphasis on the quality of our products, both in the raw
timber materials used as well as the quality of production has enabled us to establish a good track
record in the industry and enhanced the value of our proprietary brands.

In recognition of our commitment to supply quality wood-based products, our Company obtained the
ISO9002 certification in 1997, which was later upgraded to the BS EN ISO 9001:2000 certification in
2003 issued by AJA Registrars. Our quality control system is subject to annual internal audit and
re-certification by AJA Registrars to ensure our ability to comply with the required standards. Our ISO
certification has been maintained every year since 1997.

We have experienced minimal sales returns for our products. For FY2003, FY2004 and FY2005, sales
returns were less than one per cent. of our total sales for each of the financial years.


                                                    95
                                   HISTORY AND BUSINESS

We engage third party quality assurance personnel based in Indonesia (“QA Personnel”) to conduct
quality control inspections at the factories of our contract manufacturers. The QA Personnel are
engaged through a third party company with whom we have entered into a contract to provide such
quality assurance services. The principal duties of the QA Personnel are to ensure that our contract
manufacturers comply with the quality control procedures laid down by our Group. Based on our
instructions, the QA Personnel will undertake the following tasks:–

•    Inspections of incoming raw materials
     Random inspections of incoming raw timber at the factories of our contract manufacturers to
     satisfy ourselves that the raw timber used for the manufacture of our products comply with the
     quality standards, specifications and other requirements prescribed by our Group.

•    Inspection during production process
     Random inspections during various critical stages of production to ensure that the machining
     and/or production processes, including the packing of the products, undertaken by our contract
     manufacturers comply with the requirements prescribed by our Group.

•    Final inspection of finished products
     Random inspections of finished products to ensure conformity with our specifications and
     requirements, such as product consistency and material grade. We also carry out random testing
     for moisture content. Upon final inspection of each batch of finished products, the QA Personnel
     will furnish a quality assurance report to us.

•    Supervision of loading
     Before the containers are transported to the relevant ports for shipment, the QA Personnel will
     monitor the loading of the packed finished products by our contract manufacturers to ensure that
     the containers are loaded in accordance with the requirements prescribed by our Group.

Please also see the Section “Pre-qualification, In-Process Supervision And Performance Evaluation of
Our Contract Manufacturers” for information in relation to the internal control procedures adopted by us
in the audit of our contract manufacturers.


PRE-QUALIFICATION, IN-PROCESS SUPERVISION AND PERFORMANCE EVALUATION OF OUR
CONTRACT MANUFACTURERS

We place great emphasis on the selection of our contract manufacturers as we believe that high quality
contract manufacturers which possess the relevant expertise, production capabilities and track record
are key factors in ensuring that we are able to consistently deliver quality products to our customers in
a timely manner.

We impose certain criteria and have put in place certain procedures for the pre-qualification of new
contract manufacturers and the in-process supervision of our existing contract manufacturers during
production and prior to delivery. In addition, as from April 2006, our pre-qualification and in-process
supervision procedures include the inspection and collation of some of the essential licences and
certifications which are required to be obtained by our contract manufacturers under relevant
Indonesian laws and regulations in respect of their operations.




                                                   96
                                     HISTORY AND BUSINESS

Below is a diagrammatic representation of the internal control procedure adopted by us in respect of
the pre-qualification, in-process supervision and performance evaluation of our contract manufacturers
(“CM Audit System”). Our Executive Director and COO, Mr Steven Chew is in charge of overseeing the
implementation of the CM Audit System:–


                                            CM AUDIT SYSTEM




         PRE-QUALIFICATION                 IN-PROCESS SUPERVISION             PERFORMANCE EVALUATION

        Prior to appointment of              In the course of business         Annual evaluation of existing
      new contract manufacturers            transactions with existing          contract manufacturers for
                                              contract manufacturers               performance ratings




   Fulfilment of       Regulatory           Quality            Regulatory
 Pre-qualification     Compliance          Assurance           Compliance
     Criteria



Pre-Qualification

Fulfilment of pre-qualification criteria
Before any new contract manufacturer is appointed by us, we undertake an assessment of such
contract manufacturer to ascertain whether it meets our pre-qualification criteria, which include the
contract manufacturer’s operating history, reputation in the market and track record, competitive
pricing, management competency and manufacturing capabilities. Factors taken into consideration by
us in assessing the manufacturing capabilities of a contract manufacturer include its relevant expertise,
internal quality control system, product quality, state of technology used in production, production
capacity and reliability in meeting delivery schedules. As part of our pre-qualification procedure, we will
visit the premises and production facilities of a new contract manufacturer and conduct interviews with
its management to assess its suitability and ability to meet our pre-qualification criteria.

Regulatory Compliance
Upon satisfying our pre-qualification criteria assessment, we will inspect and ensure that a newly
identified contract manufacturer has obtained the following licences and certifications before it is
appointed as one of our pre-qualified contract manufacturers:–
(a)   Industrial business licence — an operational licence issued by the Ministry of Forestry for certain
      forest-based industries. We will request for the industrial business licence from contract
      manufacturers which are required to obtain such licences in accordance with the prevailing
      Indonesian laws and regulations;
(b)   ETPIK registration certificate — a registration certificate issued by the Ministry of Trade of
      Indonesia confirming that a contract manufacturer has been registered as an exporter of forestry
      products. Such registration is required before a contract manufacturer is permitted to export any
      wood-based products or wood furniture produced by it; and




                                                       97
                                    HISTORY AND BUSINESS

(c)   BRIK membership certificate — a membership of the Forestry Industry Revitalising Agency
      (Badan Revitalisasi Industri Kehutanan) (BRIK). In addition to being an ETPIK, an exporter of
      wood-based products is also required to obtain an endorsement from BRIK for each of its export
      of wood-based products. BRIK endorsements are issued only to exporters which have been
      registered as BRIK members.

Please see the Section “Government Regulations” and Appendix III “Description of Relevant
Indonesian Laws and Regulations” of this Prospectus for more information.

In addition to the above, we will conduct informal checks and enquiries with other industry players on
the background of our new contract manufacturers.


In-Process Supervision

Quality Assurance
We constantly monitor the quality and performance of our contract manufacturers during production to
ensure that the products they manufacture for us meet our quality standards and the requirements of
our customers. Towards this end, our management team and QA Personnel regularly visit the factories
of our contract manufacturers to conduct inspections. In addition, our contract manufacturers are
required to implement production processes that are prescribed by us or have similar quality standards
as our Group’s. Please see the Section “Quality Assurance” of this Prospectus for more details.


Regulatory Compliance
As part of our procedure to ensure that the timber used by our contract manufacturers is obtained from
legal sources, for each shipment of wood-based products produced for us, we will request the following
documents from our contract manufacturers:–
(a)   BRIK endorsement certification (Surat Pengesahan) issued by BRIK; and
(b)   PEB export notification issued by the Indonesian custom authority with the attached timber
      legality verification report issued by Sucofindo.

Please see the Section “Government Regulations” and Appendix III “Description of Relevant
Indonesian Laws and Regulations” of this Prospectus for more information.

We have been advised by our Legal Advisers on Indonesian Law that the issuance of the above
documents in respect of our wood-based products is sufficient to ensure the legality of the timber used
for the manufacture of our wood-based products.

All our contract manufacturers are required to be registered as exporters of forest industry products
(ETPIK) before they are allowed to export products of the forestry industry. Although the export of each
batch of wood furniture is not, unlike wood-based products, subject to timber legality verification by
BRIK or Sucofindo, all ETPIK forestry manufacturers are subject to the general supervision of the
relevant authorities as they are required to report to and file with the (a) Ministry of Trade and Industry,
(b) Ministry of Forestry and (c) BRIK, an annual production plan and half-yearly production realization
report as well as an annual export plan and half-yearly export realization report. A forestry products
manufacturer’s registration as ETPIK may be suspended or revoked if it is found to be in breach of, inter
alia, the conditions to make such reporting and filing or other violations of export regulations. Therefore,
notwithstanding that the Indonesian laws do not require the export of wood furniture to be accompanied
by a BRIK endorsement certification issued by BRIK nor a timber legality verification report issued by
Sucofindo, our Directors reasonably believe that the production of our wood furniture uses timber that


                                                    98
                                   HISTORY AND BUSINESS

is obtained from legal sources as we engage only the services of pre-qualified contract manufacturers
which are registered exporters of forestry products (ETPIK) to produce our wood furniture for us.

In the event that we receive any negative publicity or information relating to any of our contract
manufacturers, including any allegation that such contract manufacturer was involved in illegal logging
activities, we will conduct an investigation on the veracity of such allegation or information. Our
investigation will involve us making enquiries with relevant persons in the industry, carrying out
searches with government authorities where possible, and interviewing our contract manufacturers on
the validity of such allegation or information. After our investigation, we will conduct an assessment of
our risks before undertaking further transaction with such contract manufacturer. In 2006, we obtained
an article written by a non-profit organization alleging that one of our contract manufacturers, which
accounted for more than 5.0% of our total purchases in FY2005, was involved in illegal logging
activities. We conducted the relevant investigation and enquiries to ascertain whether there is any basis
for the allegation contained in the article. We carried out a risk assessment before we decided to
continue transacting with such contract manufacturer. Other than this incident, we had not encountered
any other incidents or occasions where any of our contract manufacturers had been alleged to have
carried out illegal logging activities.


Performance Evaluation
We have implemented a performance evaluation process to evaluate the performance of our contract
manufacturers. We intend to undertake, on an annual basis, an assessment of the performance of our
pre-qualified contract manufacturers based on factors such as delivery promptness, degree of
regulatory compliance, competitive pricing and the level of compliance with our quality standards,
procedures and other requirements. Only contract manufacturers which have been assessed
satisfactorily by us under the evaluation exercise will be retained as our pre-qualified contract
manufacturers.


GOVERNMENT REGULATIONS
Our business operations are not directly subject to any special legislation or regulatory controls other
than those generally applicable to companies operating in Singapore, Malaysia and Australia as well as
the relevant exchange control regulations applicable to our Group as set out under the Section
“Exchange Control” of this Prospectus.

However, as our production requirements are procured from contract manufacturers operating in
Indonesia, we are indirectly affected by the relevant Indonesian laws and regulations which are
applicable to and affect the business operations of our contract manufacturers and other operators
involved in the supply chain of our products.




                                                   99
                                          HISTORY AND BUSINESS

Regulatory framework in Indonesia governing the supply chain of our products
The following is an illustration of the supply chain for our products and a brief description of some of
the essential licences, certifications and documentation required in Indonesia for the operation of the
various stages of the supply chain.


                           Inter-island                                                  Sitra’s
                              timber                                                   customers
                             traders


    Logs                                             Logs/Sawn timber




      Forest                 Logs             Wood-based              Export           International
    concessions                                industries                             shipping lines



Forest Exploitation and Utilisation       Supervision of Forest-based Industries   Verification of Legality of Timber
 • IUPHHK licence                          • Industrial business licence            • BRIK endorsement certification
 • SKSHH                                   • BRIK membership                        • PEB export notification/
 • Packing List (DHH)                      • ETPIK certification                      Sucofindo survey report
                                           • SKSHH
                                           • Packing List (DHH)


Forest Exploitation and Utilisation

IUPHHK Licence
Persons and companies conducting the business of forest exploitation are required to be licensed and
issued with the forest exploitation licence (izin usaha pemanfaatan hasil hutan kayu) (“IUPHHK”). The
IUPHHK licence is issued by the Ministry of Forestry of Indonesia and it sets out, inter alia, the forest
land location and area the licence holder is permitted to exploit.


SKSHH and Packing List (DHH)
All timber harvested from a forest land must be issued with a certificate of timber origin (Surat
Keterangan Sahnya Hasil Hutan) (“SKSHH”)) by the regional Forestry Department office in the area
where the timber is harvested, as evidence of the legality of the timber. Before the certificate of timber
origin (SKSHH) may be issued, the official from the relevant regional Forestry Department office will
physically inspect, examine and measure the timber harvested to ensure that the timber has been
harvested in accordance with prescribed conditions. The timber is then marked for identification
purposes. In addition, the IUPHHK licence holder is required to prepare a packing list (Daftar Hasil
Hutan) (“DHH”) for the timber harvested and submit to the regional Forestry Department for verification
against the relevant SKSHH, and for endorsement. The SKSHH and DHH are required to accompany
the transportation of the log timber from the port of embarkation to the port of destination. The SKSHH
and DHH will be examined by the relevant forestry law enforcement officials at the port of destination
to ascertain that the log timber in transport matches the description on the SKSHH and DHH. It is only
upon satisfactory examination would the log timber be permitted to pass through the inter-island
custom and be received at the port of destination.




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                                   HISTORY AND BUSINESS

The log timber is typically sold by forestry enterprises directly to wood products and furniture
manufacturers or to registered inter-island timber traders who will either on-sell the log timber or
process it into sawn timber before on-selling the same to wood products and furniture manufacturers.
Since 2002, the export of timber logs and sawn timber out of Indonesia is legally prohibited. The trading
of logs and sawn timber may be carried out only within Indonesia by traders which have been registered
by the Director General of Domestic Trade of the Department of Trade of the Republic of Indonesia.


Supervision of Forest-based Industries

Industrial business licence
Primary forest-based industries such as the sawmill industry, veneer industry, plywood mill, laminating
veneer lumber, and chips industry are required to apply for and obtain an industrial licence from the
Ministry of Forestry for its respective operations.


BRIK membership
The Forestry Industry Revitalization Agency (Badan Revitalisasi Industri Kehutanan) (“BRIK”) was set
up jointly by the Ministry of Trade and Industry and the Ministry of Forestry in December 2002. Its broad
brief encompasses “realising sustainable forest management, supporting forest industry revitalization
and improving the development and utilisation of technology in the forest sector”. Its principal activity
is to accept applications from forestry products manufacturers for permission to export processed
timber.

To register as a BRIK member, applicants have to be a registered exporter of forestry products (ETPIK)
and be issued with an industrial business licence on the basis of the applicable laws and regulations
in force.


ETPIK
All forestry products can only be exported by forestry products manufacturers which have been
registered as Registered Exporter of Forest Industry Product (Eksportir Terdaftar Produk Industri
Kehutanan)(“ETPIK”) by the Director General of Foreign Trade in the Ministry of Trade of the Republic
of Indonesia. Forestry products manufacturers may be registered as ETPIK if they satisfy the conditions
prescribed by the relevant regulations. Such conditions include being issued with the relevant industrial
business licences on the basis of the laws in force, the submission of an industry survey report (Berita
Acara Pemeriksaan Fisisk Industri) and a recommendation from the local relevant forestry industry.

ETPIK forestry products manufacturers are required to report to and file with the (a) Ministry of Trade
and Industry, (b) Ministry of Forestry and (c) BRIK an annual production plan and half-yearly production
realization report as well as an annual export plan and half-yearly export realization report.

Forestry products manufacturers’ registration as ETPIK may be suspended or revoked if they are found
to be in breach of the conditions prescribed by the relevant regulations. Such conditions include the
failure to make the filing of the annual reports as set out above, violation of export regulations and
falsification or misuse of export documents.




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                                    HISTORY AND BUSINESS

Verification of Legality of Timber

BRIK endorsement certification
Forestry products of certain prescribed categories require an endorsement certification (Surat
Pengesahan) from BRIK before they may be exported. These products comprise mainly wood-based
products and do not include most wood furniture products. The primary function of BRIK is to check the
legality of timber used in the wood products for which it receives an application for permission to export.
The issuance of the BRIK endorsement is an indication or proof of the legality of the timber used in the
wood products to be exported.


PEB export notification/Sucofindo survey report
The PEB export notification (Pemberitahuan Eksport Barang) is required to be issued by the Indonesian
custom authority before our products are permitted to be exported out of Indonesia. With effect from 3
March 2006, Sucofindo has been appointed by the Indonesian government as the authorised body to
carry out a survey to verify the source of wood used in the export of certain prescribed categories of
wood products. These prescribed categories of products comprise mainly wood-based products and do
not include most wood furniture products. In addition to the BRIK endorsement certification, the
Indonesian laws now provide that the survey report produced by Sucofindo is required to be submitted
to the Indonesian custom authority before the PEB export notification may be issued for the export of
the prescribed categories of wood products. The survey report forms an attachment to the PEB export
endorsement.

Please see Appendix III on “Description of Relevant Indonesian Laws and Regulations” of this
Prospectus for more information.


INVENTORY MANAGEMENT
As we outsource all our production requirements, we do not keep any inventory of raw materials. Our
inventory comprises mainly finished products. Most of our long term customers provide us with their
sales forecasts which we use in our pre-production procurement planning. For popular products which
have a high turnover rate, we usually place orders for production up to three months in advance of our
anticipated requirements and before we receive confirmed purchase orders from our customers. We
have established inventory management control procedures to track incoming and outgoing inventory
by type of finished products. Our management monitors inventory levels to ensure that we will not carry
quantities in excess of our confirmed and forecast requirements and that we will have sufficient
inventory to meet anticipated demands.

Due to the experience and ability of our management to read the market trend and gauge demand for
our products, and to accurately forecast our production requirements in advance of confirmed purchase
orders, we are generally able to obtain confirmed purchase orders for most of our products while they
are still under production or before we take their delivery from our contract manufacturers.

We have made arrangements with some of our contract manufacturers to store the products they
produce for us in their warehouse. Such arrangements reduce our warehousing and logistic costs.
These goods generally do not form part of our inventory until we take delivery of the goods. We
generally will take delivery of the goods only when they are due for shipment to our customers. As a
result, we are able to maintain a low inventory level of finished goods. This has substantially reduced
our inventory holding costs.




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                                           HISTORY AND BUSINESS

For the last three financial years ended 31 December 2005 and the first quarter ended 31 March 2006,
our inventory turnover rate, as a percentage of our total revenue for each of the Relevant Period, were
as follows:–
                                                                             FY2003        FY2004           FY2005    1Q2006
                             (1)
Inventory turnover (days)
(based on year-end/quarter-end inventory and cost of sales)                      2.4           2.4           2.3       6.7

Note:–
(1)   Inventory turnover (days) = (Year-end inventory/costs of sales) x 365 days (pro-rated for 1Q2006).
(2)   The increase in inventory turnover days for 1Q2006 was a result of a planned increase in inventories for certain of our
      Group’s more popular products, which demand was expected to increas towards the second half of FY2006.


During the last three financial years ended 31 December 2005 and the first quarter ended 31 March
2006, no amount was written-off for obsolete inventory and no allowance was made for slow-moving
or obsolete inventory.


DESIGN AND DEVELOPMENT
We place continuous emphasis on product design and development, in particular for our lifestyle
outdoor furniture products. As part of our business strategy to maintain customers’ and consumers’
interests in our lifestyle outdoor furniture, we constantly create and develop new designs and concepts
so as to give them more choices that meet their expectations.

Our lifestyle furniture design function is based in Brisbane, Australia and is headed by our
Vice-President (Technical and Design), Mr Michael Burke. Occasionally, we outsource some of our
design work on a project basis to a designer in Australia as well as a local design firm in Singapore.
Sales of our lifestyle outdoor furniture designed in-house accounted for approximately 49.9%, 63.4%,
69.7% and 89.7% of the total revenue derived from our sales of lifestyle outdoor furniture segment for
FY2003, FY2004, FY2005 and 1Q2006 respectively. We have not undertaken any significant design
and development activities for our wood-based products in the last three financial years.

In the last three financial years, we have produced a number of innovative designs for our lifestyle
outdoor furniture, which have received favourable response from our customers as well as the industry.
These include automatic extension tables and tables with in-built lazy Susan mechanism. As evidence
of our commitment and dedication to service and design excellence, we were presented the merit
award in the best exhibit competition for one of our outdoor garden furniture exhibits at the International
Furniture Fair Singapore in 2004.

Please see the Section “Business Process” of this Prospectus for more details on our product design
and innovation process.

The following table sets out the expenditures incurred by our Group for product design and
development during the last three financial years ended 31 December 2005 and the first quarter ended
31 March 2006:–
                                         FY2003                 FY2004                  FY2005                    1Q2006
                                   (S$’000)   %(1)        (S$’000)   %(1)         (S$’000)   %(1)           (S$’000)   %(1)
Design and development
 expenses                             126.0        *(2)      151.6        *(2)         160.2         *(2)      41.2     *(2)

Notes:–
(1)   As a percentage of our total revenue.
(2)   Lower than 1%.


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                                   HISTORY AND BUSINESS

All the above design and development costs have been charged to our Group’s profit and loss account
in the years/period that they were incurred.


STAFF TRAINING
We place emphasis on the training of our staff so as to enhance the productivity and service levels of
our staff. New employees are put through an orientation program which seeks to provide them with
knowledge of our Group’s business and operations. The principal mode of staff training is on-the-job
training. Our employees are trained in-house and on the job by their immediate superiors, and
sometimes, by members of the senior management, who act as mentors and career coaches. Our
training programmes are tailored to target specific areas of the employees’ job functions such as sales
and marketing. Sometimes, more experienced staff will also conduct in-house training sessions where
they would impart new industry knowledge to their colleagues. We did not incur significant expenses
with respect to staff training in the past three financial years.

In addition, we also provide training to some of our customers who are wholesalers and retailers so as
to equip them with relevant knowledge of our products.


INSURANCES
Our Group has taken up inter alia, the following insurance policies:–
•    All risks insurance in respect of our assets such as office equipment, furniture, fixtures and fittings
     and finished goods stored at our headquarters in Singapore and the premises of our Australian
     subsidiary, Suncoast Sitra Australia;
•    General fire insurance policies for the three immovable properties owned by our Group;
•    Public liability insurance against accidental personal injury or loss of or damage to property
     occurring at our headquarters in Singapore and anywhere within Singapore;
•    Accidental personal injury or loss of or damage to property occurring at the premises of our
     Australian subsidiary, Suncoast Sitra Australia;
•    Workmen compensation insurance for certain of our employees;
•    Group term life insurance and hospital and surgical insurance for certain of our employees; and
•    Death and permanent disability insurances for our Executive Directors and some of our Executive
     Officers and employees.

Our Directors believe that existing insurance policies are sufficient to cover the risks we may be
exposed to with regard to loss or damage caused by fire to our abovementioned assets and claims from
our employees.

Our Group is not insured for product liability. However, to minimise our product liability risk, we have
instituted production quality assurance inspections, which are carried out by the QA Personnel at the
factories of our contract manufacturers, so as to avoid or reduce the incidence of production defects.
There has been no product liability claims against us in the last three financial years ended 31
December 2005.

For some of our purchase orders which we have made advance payments but have not taken delivery
of the finished products, we have made arrangements to be included as a co-insured under the relevant
insurance against, inter alia, fire, lightning, flood and other risks for the products.




                                                   104
                                  HISTORY AND BUSINESS

MAJOR CUSTOMERS
Our customers include manufacturers, wholesalers, major retailers, specialist retailers and consumers
in the furniture industry. Customers which accounted for five per cent. or more of our Group’s total
revenue during the last three financial years ended 31 December were as follows:–

Customer                                                      Percentage of total sales (%)
                                                       FY2003           FY2004              FY2005
Hyne & Son Pty Ltd                                       5.4                5.0               5.5
PHD Timber Importer Pty Ltd                              5.4                5.3               2.4
Crown Timber Wholesale Pty Ltd                           6.2                6.2               4.0
Dindas Lew Australia Pty Ltd                             8.9                5.9                —
Fowles Timber Group                                      3.0                8.8               5.0
J.Scott & Co Ltd                                         6.3               10.5               6.4
Denderwood NV                                            3.6                3.2               5.4
Heinr Krueger & Sohn Gmbh                               12.8                5.5               6.0
Klopferholz Gmbh & Co. Kg.                               1.8                2.9               6.1
Dominga Hardwood                                         2.2                1.2               5.4

The increase in revenue contribution from our European customers, Denderwood NV, Heinr Krueger &
Sohn Gmbh, Klopferholz Gmbh & Co. Kg. and Dominga Hardwood in FY2005 were due mainly to the
increased sales in Europe as a result of the success in our marketing strategies.

The percentage revenue contribution derived from sales to our corporate customers in Australasia,
PHD Timber Importer Pty Ltd, Crown Timber Wholesale Pty Ltd, Fowles Timber Group and J.Scott &
Co Ltd decreased in FY2005 as a result of the increased sales in Europe in FY2005. We have no
business dealings with Dindas Lew Australia Pty Ltd in FY2005 due to the change of management in
the said customer.

None of our Directors or Substantial Shareholders has any interest, direct or indirect, in the above
customers.


MAJOR CONTRACT MANUFACTURERS
Contract manufacturers which supply us wood-based products and/or lifestyle outdoor furniture and
which accounted for five per cent. or more of our total purchases during the last three financial years
ended 31 December 2005 were as follows:–

                                                            Percentage of total purchases (%)
                                                        FY2003          FY2004             FY2005
CV Karya Mina Putra                                       21.0             19.8              24.0
PT Kayu Lapis Indonesia                                   28.2             36.7              22.1
PT Indo Veneer Utama                                       1.1              2.5               6.2
PT Hargas Industries Indonesia                             8.4              7.0               3.9
PT Andalas Utama                                           5.3              2.8               0.6
PT Indo Pool Jaya                                          6.9              1.2         not meaningful




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                                    HISTORY AND BUSINESS

Variations from year to year for the last three financial years in the percentages of our total purchases
from the above major contract manufacturers were due mainly to the different purchasing volumes by
us from these contract manufacturers, determined in accordance with our pre-production procurement
process after taking into account criteria such as delivery lead time, competitive pricing and availability
of supply.

None of our Directors or Substantial Shareholders has any interest, direct or indirect, in the above
major contract manufacturers and suppliers.

TRADEMARKS
As at the date of this Prospectus, our Group has registered or applied for the registration of the
following trademarks with the relevant trademarks registries in Singapore and other relevant countries,
the status of which are as follows:–
                                Place of         Registration   Date of filing/        Status
Trademark             Class     Registration     Number         registration           (Expiry Date)

                       31       Singapore        T8900961I      20 February 1989       Registered
                                                                                       (20 February 2016)



                       31       Singapore        T8900958I      20 February 1989       Registered
                                                                                       (20 February 2016)
                       20       Singapore        T8900962G      20 February 1989       Registered
                                                                                       (20 February 2016)



                       20       Singapore        T8900959G      20 February 1989       Registered
                                                                                       (20 February 2016)
                       19       Singapore        T8905379J      16 August 1989         Registered
                                                                                       (16 August 2016)
                       19       Singapore        T8905380D      16 August 1989         Registered
                                                                                       (16 August 2016)



                       19       Singapore        T9807001E      14 July 1998           Registered
      COMCIA                                                                           (14 July 2008)
     TM




                       20       Singapore        T9807002C      14 July 1998           Registered
      COMCIA                                                                           (14 July 2008)
     TM




                       20       Singapore        T0310699H      15 July 2003           Registered
                                                                                       (15 July 2013)




                                                   106
                                     HISTORY AND BUSINESS

                                 Place of         Registration     Date of filing/        Status
Trademark              Class     Registration     Number           registration           (Expiry Date)
                        19       Singapore        T0310697A        15 July 2003           Registered
                                                                                          (15 July 2013)




                        20       New Zealand      700563           15 July 2003           Registered
                                                                                          (15 July 2013)




                        20       Australia        968686           3 September 2003       Registered
                                                                                          (3 September 2013)




                        20       United States    3022943          6 December 2005        Registered
                                 of America                                               6 December 2015




                        20       Singapore        T0318532D        17 November 2003       Registered
                                                                                          (17 November 2013)




                        19       Singapore        T0422568J        22 December 2004       Registered
                                                                                          (22 December 2014)




The above trademarks have been registered or applied for under Classes 19, 20 and 31 of the
International Trade Mark Classification of Goods and Services. Class 19 covers the specifications of,
inter alia, building materials (non-metallic). Class 20 covers the specifications of, inter alia, furniture and
goods (not included in other classes) of wood. Class 31 covers the specifications of, inter alia, forestry
products.




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                                            HISTORY AND BUSINESS

Currently, we do not register any of our product designs in any of the countries where we sell our
products. Our Directors are of the view that to compete effectively, the ability to continuously develop
new and innovative designs is more important than registering existing designs, as consumers are
constantly looking for new ideas and more choices to suit their needs and changing preferences.

No patent has been registered by our Group. Our Group is not aware of any infringement of the
proprietary rights set out above.


PROPERTIES AND OTHER FIXED ASSETS

Properties
We currently own the following properties:–

                                                                    Area              Use of
Location                                    Tenure                  (sq m)            property        Encumbrances

545 Orchard Road                            999 years               23                Office          Mortgaged to United
#05-36                                      commencing from         (built-in area)                   Overseas Bank
Far East Shopping Centre                    30 October 1871                                           Limited
Singapore(1)
20 Lorong 3,                                Leasehold for 99        130               Residence       Nil
Lorong, Projek                              years expiring on       (provisional
Perumahan MIEL,                             9 November 2085         land area)
Taman Air Biru,
81700 Pasir Gudang,
Johor, Malaysia(2)

21 Jalan Bukit 1,                           Freehold                1,672             Factory         Nil
Bandar Seri Alam, Masai,                                            (provisional
81750 Johor Bahru,                                                  land area)
Johor, Malaysia(3)

Notes:–
(1)   The office unit is leased to a third party for a term of two years commencing from 1 August 2006 and expiring on 31 July
      2008 at a monthly rent of S$1,200.
(2)   The residential premises are vacant as at the Latest Practicable Date. We are in the process of procuring a tenant for the
      premises.
(3)   The factory premises are leased to a third party for a term of two years commencing from 1 February 2005 and expiring on
      31 January 2007 at a monthly rent of RM6,750.


We currently rent the following properties/premises:–
                                    Area
Description                        (sq m)      Use of property            Term of lease                 Lessor

18 Genting Road,                   1,579       Office/showroom/           2 years from                  Jhamatmall
The Blue Building                              warehouse                  15 August 2005 to             Gurbamall Pte Ltd
Singapore 349477                                                          14 August 2007
Lot 17 on SP100611                   949       Warehousing and            3 years from                  Skyring Pty Ltd
County of Stanley                              assembly of                1 June 2004 to
Parish of Kedron                               prefabricated timber       31 May 2007
Queensland, Australia                          furniture products




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                                    HISTORY AND BUSINESS

The aggregate annual rental expenses for FY2003, FY2004, FY2005 were approximately $60,000,
$147,000 and $216,000 respectively.


Fixed assets
As at 31 December 2005, the aggregate net book value of the fixed assets of our Group, comprising
immovable properties, machinery, furniture and fittings, renovations, office equipment and motor
vehicles, was $3.0 million.

No valuation has been made on the fixed assets of our Group for the purpose of inclusion in this
Prospectus.

To the best of our Directors’ knowledge, there are no environmental regulations that may materially
affect our utilisation of the above fixed assets.


COMPETITION
Singapore market
We do no compete within Singapore as our products are sold mainly to the international market. To the
best of our Directors’ knowledge and belief, there is no company in Singapore which supplies the same
type of products as us to the international market using the same business model and operations as
ours. Other companies listed in Singapore which supply furniture to the international market include
Koda Ltd, HTL Corporation Limited, Man Wah Holdings Limited and Lorenzo International Limited.


Overseas market
The global wood-based products and lifestyle outdoor furniture industries are fragmented. There are
many companies engaging in the same or similar business as our Group competing in the international
market. However, to the best of our Directors’ knowledge and belief, there are no dominant global
players in either the wood-based products industry or the lifestyle outdoor furniture industry. Our main
markets are Australasia and Europe. Examples of distributors of wood-based products or lifestyle
furniture operating in the same markets include Gloster Furniture Limited (United Kingdom), Barlow
Tyrie Ltd (United Kingdom), Smith and Hawken (United States Of America) and Gunnersen Timbermark
Pty Ltd (Australia).


COMPETITIVE STRENGTHS
Our Directors believe that the following are our competitive strengths:–

(a)   We have an established track record
      We have been in the timber industry since 1979. We have developed from a commodity trader of
      sawn timber into one of the leading brand-centric distributors of high-value wood-based products
      and premium lifestyle outdoor furniture carrying our own designs and proprietary brand names.
      Please refer to the Section “History” of this Prospectus for more details.

      With our experience acquired over the years and knowledge of the timber industry and
      wood-based products and furniture, we are able to provide value-added services to our
      customers. We are able to meet the varying tastes and requirements of our customers and
      consumers by offering a wide range of product designs and hardwood species. We believe that
      our proprietary brands have gained recognition in the industry and our track record has enabled
      us to develop a reputation for quality, reliability, timely delivery, competitive products and customer
      service.

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                                    HISTORY AND BUSINESS

      As a testament to our track record, we were awarded the Enterprise 50 Award in 2004, 2005 and
      2006. Enterprise 50 is an annual ranking of Singapore’s fifty most enterprising, privately-held local
      companies. In addition, we were presented the merit award in the best exhibit competition for one
      of our garden furniture products at the International Furniture Fair Singapore in 2004. In 2006, we
      were awarded the Regional Headquarters Award by the Economic Development Board of
      Singapore and SPRING Singapore.


(b)   We have well-established proprietary brand names
      We established our proprietary brand names “COMCIA”, “decKING”, “Pacific Kwila”, “Pacific
      Cherry”, “Pacific Teak” and “Pacific Rattan” in 1998, 2004, 2001, 2003, 2004 and 2005
      respectively. “COMCIA” and “decKING” are brandings for our value-added wood-based products
      whilst “Pacific Kwila”, “Pacific Cherry”, “Pacific Teak” and “Pacific Rattan” are brandings for our
      range of lifestyle furniture.

      Our well-established proprietary brand names have enabled consumers to identify us with the
      quality products that carry our brands. This has increased awareness of our existence and
      products in the market among consumers and resulted in more repeat orders and increased
      demand for our branded products.

      Being a supplier of quality, branded products, we continue to emphasize on developing and
      establishing greater awareness of our brand names. To this end, we are committed to developing
      brand building strategies to enhance the level of awareness of our branding for our products. We
      believe that this will develop brand loyalty with our customers. In addition, we believe that our
      responsiveness, professionalism and emphasis on quality products have been crucial factors in
      building our customers’ loyalty to our brand names.


(c)   We have a well-diversified global customer base
      Our customers include manufacturers, wholesalers, major retailers, specialist retailers and
      consumers in the furniture industry. As at the end of FY2005, our corporate customer base
      included 277 different corporate customers which span across 48 countries in Australasia,
      Europe, Asia, Middle East, Africa and North America.

      The major markets for our Group’s products are Australasia and Europe. Due to its nature,
      outdoor furniture and decking is best marketed and sold during the summer season. Being in the
      Southern and Northern hemispheres respectively, a peak summer season in Australasia
      coincides with a lull winter season in Europe. As such, we are able to enjoy a balanced revenue
      stream throughout the year as the lull season experienced by countries in one hemisphere is
      typically balanced by the peak season experienced by countries in the other hemisphere. Due to
      our well-diversified global customer base, we are thus not heavily dependent on the health and
      growth of the economy of a single country or region.


(d)   We have well-established relationships with our customers
      We have established strong relationships with most of our customers. Our customer-centric
      approach to business development has enabled us to gain the confidence and trust of our
      customers. We have 45 repeat corporate customers who bought products from us in FY2003,
      FY2004 and FY2005 consecutively. These repeat corporate customers generated 69.0%, 69.3%
      and 67.4%, of our revenue in FY2003, FY2004 and FY2005 respectively.




                                                   110
                                    HISTORY AND BUSINESS

      In addition, based on the rate of repeat customers, we believe that we have established brand
      loyalty with our customers through our products. This is a competitive strength which we can
      leverage on to further increase our market share in the industry.


(e)   We focus on design, innovation and product quality
      We focus on design, innovation and product quality. As our customers and consumers are
      generally more willing to pay a premium for products with better designs and which are made of
      better quality and longer lasting timbers, our products are more design and quality sensitive than
      price sensitive. We keep abreast of the latest industry trends and changes in customers’ and
      consumers’ tastes and preferences by, inter alia, attending international furniture exhibitions and
      interacting with our customers, contract manufacturers, industry players and business associates.

      Our Vice-President (Technical and Design), Mr Michael Burke, manages our technical and design
      capabilities and needs. Led by him and with input from other senior management staff, our Group
      is able to produce innovative and quality designs that appeal to our customers and consumers.
      The majority of our lifestyle outdoor furniture designs are developed in-house. Occasionally, we
      outsource some of our design work on a project basis to a designer in Australia as well as a local
      design firm in Singapore. Currently, we produce about seven new lifestyle furniture designs each
      year. Our Directors believe that our ability to keep abreast of the latest industry trends,
      developments and designs and produce innovative and up-to-date designs will result in a
      continuing demand for our products, and enable us to stay competitive.

      We have instituted and maintained stringent quality control measures to ensure the quality of our
      products. Please refer to the Section on “Quality Assurance” of this Prospectus for more details.
      As a testament to our emphasis on quality, we were awarded and have maintained the BS EN ISO
      9001:2000 certification (and its predecessor ISO 9002 certification) by AJA Registrars every year
      since 1997, for having a quality management system. Our emphasis on and commitment to
      quality has earned us a reputation in the market as a supplier of quality wood-based products and
      lifestyle outdoor furniture.


(f)   We are able to increase our efficiencies by outsourcing our production to third party
      contract manufacturers located in Indonesia
      We outsource the manufacturing of our products to our network of pre-qualified third party
      contract manufacturers located in Indonesia. This enables us to increase our efficiencies as we
      are able to increase our supply capacity, as and when required, through outsourcing our
      production requirements. At the same time, outsourcing enables us to allocate our production
      risks, including the risk of production facility under-utilisation, to such third-party contract
      manufacturers. We are also better able to utilise our capital in areas other than investment in fixed
      assets and minimise our inventory holding and warehousing costs. We have a pool of 43
      pre-qualified third party contract manufacturers as at the Latest Practicable Date, which allows us
      to diversify our supplier risks and obtain competitive pricing among these third party contract
      manufacturers.

      Our large supply volume also enables us to achieve economies of scale in our shipping and
      logistics process and obtain competitive freight rates. We also employ the strategy of establishing
      a long-standing relationship with a pre-qualified freight-forwarder to obtain the most competitive
      rates.




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                                   HISTORY AND BUSINESS

(g)   We have well-established relationships with our wide network of third party contract
      manufacturers
      Since the commencement of our business in 1979, we have established a wide network of timber
      suppliers as well as third party contract manufacturers of both wood-based products and lifestyle
      outdoor furniture. We have developed close working relationships with many of our contract
      manufacturers. As a result of our track record and reputation as a reliable company and our
      well-established relationships with our contract manufacturers, we are able to source for different
      species of hardwood and procure the production of our products at competitive prices. In this
      regard, we have established ourselves as one of the leading suppliers of Kwila-based outdoor
      garden furniture in Australasia, Middle East and Europe.

      In addition, our wide network of third party contract manufacturers of wood-based products and
      lifestyle outdoor furniture has also increased our procurement capacity. This enables us to better
      meet the demand of our customers as we are able to allocate our production requirements among
      different third party contract manufacturers of various expertise and specialisation as well as
      production capacities. All these factors have enhanced our competitiveness as we have a high
      supply capacity and are able to supply within a short turnaround time. Our Directors believe that
      this competitive edge we have is not easily replicated by any new entrants to the industry and we
      are able to compete effectively against any existing competitor and any potential new entrants to
      this market.


(h)   We have an experienced and committed management team
      Our Group is led by our Executive Chairman and CEO, Mr George Chew, who has more than 30
      years of experience in the timber industry. He is assisted by our senior management, most of
      whom have more than seven years of experience in the timber industry in their respective areas
      of expertise. Under their management and direction, our Group’s business has grown over the
      years and our products have become well-known brand names in the industry. Our management
      team is familiar with our business and operating environment, and understands the needs and
      requirements of our customers. They are committed to the development of our Group’s business
      and will continue to spearhead our operations and future plans in order to ensure the continuing
      success of our Group. For more information on our Directors and Executive Officers and their
      experience, please refer to the Sections “Directors” and “Executive Officers” of this Prospectus.




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                       PROSPECTS, TRENDS AND FUTURE PLANS

PROSPECTS
Our Directors believe that the overall outlook for our industry and the demand for our products is
positive based on the following factors:–


Increasing consumer demand for wood-based products and lifestyle outdoor furniture
Our Directors observed that in the last five years, there is an increasing consumer demand for lifestyle
outdoor furniture and wood-based products in both developed markets (such as Western Europe, USA
and Australasia) as well as new markets with emerging opportunities (such as Eastern Europe and
Middle East). Our Directors believe that factors which contribute to this upward trend include a growing
refurbishment market in developed countries, a burgeoning middle class in the emerging markets which
has similar spending power as consumers in the developed markets, as well as increasing consumer
preferences for premium wood-based products and lifestyle outdoor furniture.

In developed countries where the construction of residential housing is generally more mature, there is
a greater propensity for consumers to spend more on renovating and refurbishing their homes instead
of rebuilding new ones. The rising number of dual-income households in these markets has also
increased disposable income and encouraged more spending on wood-based products and lifestyle
outdoor furniture. On the other hand, the increase in consumer demand in emerging markets is fuelled
by the building of more residential housing due to the rising affluence among the middle to upper class
consumers as the social and economic conditions of the countries in these emerging markets
developed.

In addition, our Directors believe that the increasing consumer emphasis on lifestyle and quality living
in the developed markets as well as by the affluent community in emerging markets has resulted in
growing consumer interests in quality wood-based lifestyle outdoor furniture and furnishings. Our
Directors believe that top-end buyers are slowly moving towards solid wood-based furniture and
products with an increasing focus on quality, durability, functionality and comfort. These discerning
consumers are generally more willing to pay a premium for higher quality lifestyle products to enhance
their standard of living.


High import growth potential in the furniture industry of developed markets
Our Directors are of the view that there is high import growth potential in the furniture industry of
developed markets due to the increasing trend of furniture industry players in these developed markets
to outsource their manufacturing activities to low-cost countries. Our Directors believe that the relatively
lower manufacturing costs in low-cost countries such as Indonesia has exerted pricing pressures
domestically in these developed countries, thereby driving the market players towards manufacturing
outsourcing in order to remain competitive. In addition, wholesalers and specialist retailers in
developed markets, which generally dominate the furniture industry in these markets, will increasingly
look to import from low-cost countries as they are able to achieve greater economies of scale from
overseas outsourcing with their large trading volumes. Our Directors are of the view that imports by the
furniture industry of developed markets will see an upward growth trend as the current import levels of
furniture products, particularly the wood side of the business, in these developed markets is still
relatively low compared to the consumption levels in these countries.


Singapore’s position as an international furniture hub and government initiatives to enhance
this position
Singapore has over the years grown to become an established international hub that provides total
solutions to the international furniture industry. The International Furniture Fair Singapore has become
Asia’s leading furniture trade fair and a landmark event in the international furniture industry calendar.

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                      PROSPECTS, TRENDS AND FUTURE PLANS

The Singapore Furniture Industries Council announced in March 2006 that a series of initiatives will be
launched under the Singapore government’s Local Enterprise and Association Development to further
enhance Singapore’s position as an international furniture hub. These initiatives, which include
establishing a permanent International Furniture Centre in Singapore and promoting design excellence
as a competitive edge, are expected to boost Singapore’s share of the global furniture market. This
augurs well for the development of our business. As demonstrated by the grant of the prestigious
Enterprise 50 awards to our Company in 2004, 2005 and 2006, and our receipt of the Regional
Headquarters Award conferred by the Economic Development Board of Singapore and SPRING
Singapore in March 2006, our Directors believe that we are at the forefront of, and is poised to
spearhead the future growth of, Singapore’s furniture industry.


TREND INFORMATION
The hardwood used in our products by our pre-qualified contract manufacturers is sourced from
Indonesia. Our Directors observed that prices of most Indonesian hardwood and wood-based products
have been moving in an upward trend in the last five years. The rise in prices is primarily due to the
reducing supply of hardwood in Indonesia. Although timber from Brazil and certain African countries
could substitute for Indonesian hardwood, Indonesian hardwood is generally more stable and is a
preferred choice among consumers. As part of the measures undertaken to reduce the rate of
deforestation and degradation of the forests in Indonesia, the Indonesian government has imposed
reductions in the timber supply quota. These reductions are also with the aim of creating more value
in the timber industry in Indonesia, where local manufacturers will be compelled to improve on their
value-add in order to remain competitive.

Besides the reduction in the supply of hardwood, our Directors are of the view that the increase in
prices of Indonesian hardwood and wood-based products is also attributable to various other factors
such as increase in production costs as a result of increased labour, utility and fuel costs as well as
increased demand for hardwood and wood-based products from the industry globally. Barring the
unforeseen, our Directors expect the prices of wood-based products and lifestyle outdoor furniture
produced from Indonesian hardwood to continue their upward trend for at least FY2006.

Notwithstanding the increase in prices of Indonesian hardwood and wood-based products, our
Directors observed that the market has been able to absorb the increase in prices without any
significant impact on our profitability. In the last three financial years ended 31 December 2005, our
Group has generally been successful in passing the increase in costs to our customers. Going forward,
our Directors do not expect that our gross margins will be significantly affected by these price increases
in FY2006.

To the best of their knowledge and save as disclosed in this Prospectus, our Directors believe that there
are no other known trends in our revenue and costs, or other known trends, uncertainties, demands,
commitments or events that are reasonably likely to have a material effect on our turnover, profitability,
liquidity or capital resources, or that would cause our financial information disclosed in this Prospectus
to be misleading.


Order book
Based on our Directors’ knowledge and experience of the industry, our order book visibility is typically
between one to three months based on the procurement patterns of our corporate customers. As at 31
March 2006, our Group has an order book of approximately $9.8 million. This order book consists of
orders for which we have received confirmed purchase orders and which are scheduled for delivery in
2006. Although we have secured these purchase orders from our customers, they may be subject to



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                         PROSPECTS, TRENDS AND FUTURE PLANS

cancellations or deferral. Hence our order book as of any particular date may not be indicative of our
revenues for the succeeding period.


FUTURE PLANS
Our future plans for the growth and expansion of our business are as follows:–

(a)   To expand our distribution channels and market presence
      We have supplied to 48 different countries across Australasia, Europe, Asia, Middle East, Africa
      and North America. We intend to expand our market presence by penetrating further into our
      existing markets as well as enter into new geographical markets through the expansion of our
      distribution channels in these markets. We intend to take the following measures to achieve this
      objective:–
      (i)     widen our corporate customer base by increasing our sales and marketing activities and
              sourcing for more wholesalers and retailers to gain entry into or enhance our presence in
              these markets;
      (ii)    increase the number of sales and marketing personnel in our Group to undertake increased
              sales and marketing activities;
      (iii)   expand our network of overseas sales representatives by appointing more sales
              representatives in selected markets. Our sales representatives are expected to employ
              sales and marketing strategies to increase awareness of our brands and products in their
              respective territories. We will select our sales representatives based on their experience,
              track records and capabilities; and
      (iv) expand our direct distribution channels to consumers by increasing our retail presence in
           selected markets. We intend to achieve this by opening new retail outlets. Prior to opening
           any new retail outlet, we will conduct feasibility studies to assess the proposed outlet
           location, traffic flow, expected profitability and other relevant criteria.

      We intend to procure the lease of a piece of vacant land in Singapore for development into an
      international outdoor garden lifestyle centre where we will showcase to both our local and
      international customers, our premium lifestyle garden concepts encompassing a wide range of
      quality outdoor lifestyle products from different countries in a natural garden setting. The
      establishment of the outdoor garden lifestyle centre will enhance our international profile and
      serve as an additional channel through which we can distribute our products.


(b)   To enhance our design and innovation capabilities and to expand our product range and
      variety
      Our focus on product design and innovation has been instrumental to the development of our
      product brands and has significantly contributed to our growth. To maintain our competitive edge,
      we intend to leverage on our experience in the furniture industry and continue to work closely with
      our contract manufacturers to focus on product design and innovation efforts and develop new
      and innovative products that cater to the changing needs, tastes and preferences of consumers.
      In addition, we will enhance our design and innovation capabilities by engaging reputable
      international designers on a project basis and recruiting talented designers in Singapore. We may
      explore entering into collaborations with design schools to develop new designs and products.

      If we are successful in our plan to develop an international outdoor lifestyle garden centre in
      Singapore, we intend to introduce to our customers a wide range of quality outdoor lifestyle
      products from different countries such as water features, pottery, outdoor garden landscaping,

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                       PROSPECTS, TRENDS AND FUTURE PLANS

      garden sculptures, garden plants as well as garden accessories like decorative garden display
      and wood edgings, which are related to and complementary to our lifestyle garden concepts.


(c)   To expand our network of contract manufacturers
      As at the Latest Practicable Date, our network of third party contract manufacturers includes 43
      pre-qualified contract manufacturers located in different parts of Indonesia. To further increase our
      production procurement capacity, diversify our risks and obtain more competitive pricing from our
      contract manufacturers, we intend to increase our network of contract manufacturers, both within
      and outside Indonesia. We will source and select contract manufacturers through referrals and
      market research based on their track records, production capacities, and technical competencies,
      quality and pricing. Please see the Section “Quality Assurance” for more information on our
      selection and engagement of contract manufacturers.


(d)   To strengthen our proprietary brands and enhance our corporate profile
      Consumers’ awareness and recognition of our proprietary brands is crucial to our success and
      growth. We intend to strengthen our proprietary brands “COMCIA”, “decKING”, “Pacific Kwila”,
      “Pacific Cherry”, “Pacific Teak” and “Pacific Rattan” and enhance our corporate profile so as to
      increase market awareness and recognition of our proprietary brands. We intend to achieve these
      through, inter alia, increased advertising and promotional activities as well as participation in more
      domestic and international trade fairs and exhibitions.


(e)   To expand our business through mergers and acquisitions, joint ventures or strategic
      alliances
      In addition to growing organically, we may assess whether to expand our business through
      mergers and acquisitions, joint ventures or strategic alliances with suitable parties who could
      synergize with our existing business. Through mergers and acquisitions, joint ventures and
      strategic alliances of this nature, we seek to strength our market position, enhance the value-add
      in our products, and/or expand into new business areas that are complementary to our existing
      business. As at the Latest Practicable Date, we have not engaged in any discussions with any
      potential party to merge or acquire its business or establish joint ventures or strategic alliances.
      Our Directors believe that as a listed company, we will be better positioned to exploit such
      opportunities as and when they arise. In the event that such opportunities arise, we will seek
      approval from our Shareholders and the relevant authorities, if required under the relevant laws
      and regulations and the Listing Manual.




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                             DIRECTORS, MANAGEMENT AND STAFF

MANAGEMENT STRUCTURE
The management structure chart showing the reporting lines and the functional responsibilities of our
Directors and Executive Officers as at the Latest Practicable Date is set out below:–

                                                     BOARD OF
                                                     DIRECTORS



                                                    Executive Chairman
                                                         and CEO
                                                       Chew Ah Ba



                      Group                         Executive Director
                    Accountant                         and COO
                   Ong Chai Tiam                    Chew Chiew Siang
                                                        Steven



   Executive Director           Vice-President         Vice-President          Vice-President           Vice-President
& Senior Vice-President     (Group Marketing and     (Group Operations)    (Technical and Design)   (Australian Operations)
 (Group Administration     Business Development)
and Human Resources)          Alternate Director

      Tan Teresa          Chew Chiew Hwee, Xavier   Lim Sook Hwa Jacinta       Michael Burke        James Kevin Stimpson


DIRECTORS
Our Board of Directors is entrusted with the responsibility for the overall management of our Group. The
particulars of our Directors are set out below:–


Name                                Age     Address                                        Current Occupation

Chew Ah Ba                          57      203G Ponggol Seventeenth Avenue                Executive Chairman and
(“George Chew”)                             Singapore 829670                               CEO

Chew Chiew Siang Steven             36      203G Ponggol Seventeenth Avenue                Executive Director and
(“Steven Chew”)                             Singapore 829670                               COO

Tan Teresa                          59      203G Ponggol Seventeenth Avenue                Executive Director and
(“Teresa Tan”)                              Singapore 829670                               Senior Vice-President
                                                                                           (Group Administration
                                                                                           and Human Resources)

Ng Boon Huan Daniels                45      Blk 123 Serangoon North Avenue 1               Managing Director —
(“Daniels Ng”)                              #02-163                                        Advisor Associates (S)
                                            Singapore 550123                               Pte Ltd

Chin Sek Peng                       50      61 Irrawaddy Road                              Director — Corporate
(“Michael Chin”)                            #05-03                                         Advisory Partners Pte Ltd
                                            Singapore 329557                               Partner — Cap
                                                                                           Partnership

Chen Yeow Sin                       44      28 Burgundy Rise                               Audit Partner — LTC &
                                            Singapore 658879                               Associates


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                        DIRECTORS, MANAGEMENT AND STAFF

Information on the business and working experience of our Directors is set out below:–

Mr George Chew is our Executive Chairman and CEO. He is a co-founder of our Group. Mr George
Chew has been with our Company since its incorporation in 1979. He is responsible for the overall
management, strategic planning and business development of our Group in Singapore and globally. He
has more than 30 years of experience in the timber industry and was instrumental to the establishment,
development and expansion of our Group’s business. Prior to joining our Group, Mr George Chew was
a director of Joseph Timbermart Pte Ltd from 1975 to 1979 where he was responsible for its sales and
marketing. Mr George Chew is a council member and assistant treasurer of the Singapore Timber
Association. He is also the chairman of the publicity and membership committee of the Singapore
National Shipper Council.

Mr Steven Chew is our Executive Director and COO. He is responsible for the overall operations of our
Group in Singapore and globally. He has more than seven years of experience in the timber industry.
Mr Steven Chew joined our Company in 1999 and was in charge of overseeing the full spectrum of the
sales, purchasing, operations and finance functions of our Group. Mr Steven Chew is in charge of the
distribution and marketing of our Group’s products to overseas clients and the sourcing of contract
manufacturers, suppliers and products in Indonesia. From 1993 to 1999, Mr Steven Chew was with our
subsidiary Sitra Precision Engineering Pte Ltd, which was then in the business of manufacturing
precision components for the semi-conductor industry. He joined as its marketing executive and was
later promoted to the position of sales manager in 1993. Mr Steven Chew has been an active standing
committee member of the Singapore Furniture Industries Council since 2002. He obtained a Diploma
in Manufacturing Engineering from the Singapore Polytechnic in 1990 and holds a NCC Diploma in
Computer Studies which he obtained in 1988.

Madam Teresa Tan is our Executive Director and Senior Vice-President (Group Administration and
Human Resources). Madam Teresa Tan has been with our Company since its incorporation in 1979.
She is a co-founder of our Group and was instrumental to our growth and development. Madam Teresa
Tan is responsible for the overall management of our administration, information technology, training
and human resources functions. Prior to joining our Group, Madam Tan worked as an administrator in
a printing company from 1967 to 1978. She completed her secondary education in 1964.

Mr Daniels Ng is appointed our Non-Executive Director on 20 September 2006. He is currently the
Managing Director of Advisor Associates (S) Pte Ltd, a business advisory firm which he founded in
2001. He has been involved in business advisory and consulting work for more than ten years. Mr Ng
started his consultancy career in 1991 as a consultant with Alexander Proudfoot Productivity
Management Services Company Singapore Pte Ltd (now known as Management Consulting Group
PLC, listed on the London Stock Exchange). He left in 1992 to join Levis Strauss Eximco (Asia) Pte Ltd,
which is engaged in the sourcing and marketing of fashion apparels as its Regional Merchandising
Manager. From 1993 to 1996, Mr Ng was invited by Hing Yiap Knitting Industries Sdn Bhd, a garment
conglomerate, as its divisional head (business development), culminating in the listing of the company
on the Kuala Lumpur Stock Exchange. From 1996 to March 2000, he was inducted by Enterprise
Promotion Centre Pte Ltd, as its divisional head of management consultancy to groom local SMEs. Mr
Ng left to serve as the marketing director of GhimLi Fashion (Asia) Pte Ltd, a garment manufacturing
conglomerate (now listed as GLG Corp Ltd on the Australian Stock Exchange) and to assist in its initial
public offering preparation. Mr Ng left in 2001 to establish Advisor Associates (S) Pte Ltd. Mr Ng
obtained a Bachelor of Business degree from Edith Cowan University, Australia in 1992 under a
scholarship offered by the university and a Master of Business Administration from Birmingham
University, UK in 2002. He is also a Certified Management Consultant with the Institute of Management
Consultants, Singapore since 2001.




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                         DIRECTORS, MANAGEMENT AND STAFF

Mr Michael Chin is appointed our Lead Independent Director on 20 September 2006. Mr Chin is one
of the founding directors of his consultancy and business advisory firm, Corporate Advisory Partners
Pte Ltd and co-founding partner of Cap Partnership, a certified public accounting practice. Mr Chin
started his career with Casson Beckman, a medium-sized firm of chartered accountants in London and
after three years of audit training, qualified as a UK chartered accountant. In 1983, Mr Chin joined the
audit and business advisory division of legacy Price Waterhouse in London and with the same firm, he
worked and lived in Istanbul, Frankfurt and The Hague. In 1990, he returned to legacy Price
Waterhouse Singapore and in 1992 was promoted to senior audit manager and worked in that position
until 1994 when he joined the Institute of Certified Public Accountants of Singapore as its first Practice
Review Director monitoring and regulating the compliance of work standards of all audit firms in
Singapore. In 1999, Mr Chin joined Arthur Andersen Singapore as a partner of the firm’s assurance and
business advisory division and he left in 2002 to set up his own firms. Mr Chin is currently an
independent director of several companies listed on the SGX-ST. Mr Chin graduated with a BA (Hons.)
Accounting and Finance from Lancaster University and is a Fellow (practising) certified public
accountant of Singapore and a Fellow member of the Institute of Chartered Accountants in England and
Wales. He is also an associate member of the Institute of Internal Auditors of Singapore.

Mr Chen Yeow Sin is appointed our Independent Director on 27 September 2006. He has been
involved in audit and financial advisory services work for about 20 years. From 1992 to 1996, Mr Chen
was an audit manager at Deloitte & Touche where he was responsible for financial audit, due diligence
reviews and initial public offerings. He subsequently joined Unocal Corporation as its South East Asian
internal audit manager in 1997, where he was responsible for risk management, internal audit, business
process evaluations and conflict of interest investigations for the South East Asian subsidiaries. He left
in 1999. In 2000, he joined LTC & Associates as an audit partner and has been serving in that capacity
ever since. Mr Chen is currently an independent director of Metax Engineering Corporation Limited, a
company listed on the SGX-ST. Mr Chen graduated with a Bachelor of Science degree from the
University of London (Westfield College) and is a Certified Public Accountant. He is also a Fellow
member of the Institute of Chartered Accountants in England and Wales as well as a Fellow member
of Certified Public Accountants of Australia.

Our Executive Chairman and CEO, Mr George Chew, is the spouse of our Executive Director and
Senior Vice-President (Group Administration and Human Resources), Madam Teresa Tan. Our
Executive Director and COO, Mr Steven Chew is the son of Mr George Chew and Madam Teresa Tan.


Experience and Expertise of the Board of Directors
All our Directors possess the relevant experience and expertise to act as directors of our Company. Our
Directors, Mr George Chew, Mr Steven Chew, Madam Teresa Tan, Mr Xavier Chew (alternate Director
to Madam Teresa Tan), Mr Daniels Ng and Mr Chen Yeow Sin have attended courses to familarise
themselves with the roles and responsibilities of a director of a public listed company in Singapore. Mr
Michael Chin is currently an independent director of several companies listed on the SGX-ST. Mr Chen
Yeow Sin is also currently an independent director of a company listed on the SGX-ST.




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                       DIRECTORS, MANAGEMENT AND STAFF

The present and past directorships (held in the five years preceding the Latest Practicable Date) of
each of our Directors in companies other than our Company are as follows:–

Name of Director            Present Directorships                Past Directorships

George Chew                 Group Companies                      Group Companies
                            Singapore                            Nil
                              E-Timberhub Pte Ltd
                              Sitra Agencies Pte Ltd
                              Sitra Dove Logistics Pte. Ltd.
                              Suncoast Sitra Pte Ltd
                            Australia
                              Suncoast Sitra Pty. Ltd.
                            Malaysia
                             Energetic Industries Sdn. Bhd.
                             Sitra Dove Logistics Sdn. Bhd.
                             Sitra Precision Engineering (M)
                                Sdn. Bhd.
                            Other companies                      Other companies
                            Singapore                            Singapore
                              Shuimu Lifestyle Pte. Ltd.           Sitra Dove Pte Ltd
                                                                       (struck-off on 17 November
                            Australia                                  2001)
                              PWP (Aust) Pty Ltd

                            Malaysia
                             Sitra Asia Pacific Sdn. Bhd

Steven Chew                 Group Companies                      Group Companies
                            Singapore                            Nil
                              E-Timberhub Pte Ltd
                              Sitra Agencies Pte Ltd
                              Suncoast Sitra Pte Ltd

                            Malaysia
                             Energetic Industries Sdn. Bhd.
                             Sitra Dove Logistics Sdn. Bhd.
                             Sitra Precision Engineering (M)
                                Sdn. Bhd.
                            Other companies                      Other companies
                            Singapore                            Nil
                              Shuimu Lifestyle Pte. Ltd.




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                   DIRECTORS, MANAGEMENT AND STAFF

Name of Director     Present Directorships              Past Directorships

Teresa Tan           Group Companies                    Group Companies
                     Singapore                          Nil
                       Sitra Agencies Pte Ltd
                       Sitra Dove Logistics Pte. Ltd.
                       Suncoast Sitra Pte Ltd

                     Malaysia
                      Energetic Industries Sdn. Bhd.
                      Sitra Dove Logistics Sdn. Bhd.
                      Sitra Precision Engineering (M)
                         Sdn. Bhd.
                     Other companies                    Other companies
                     Australia                          Nil
                       PWP (Aust) Pty Ltd

Daniels Ng           Group Companies                    Group Companies
                     Nil                                Nil
                     Other companies                    Other companies
                     Singapore                          Singapore
                       Advisor Associates (S) Pte Ltd           ´
                                                          De-Decor Singapore Pte Ltd
                                                          Faith Holdings Pte Ltd
                     Australia                                (struck-off on 24 June 2005)
                       Advisor Associates Pty Ltd
                                                        China
                                                               ´
                                                         De-Decor (China) Private
                                                            Limited

Michael Chin         Group Companies                    Group Companies
                     Nil                                Nil
                     Other companies                    Other companies
                     Singapore                          Singapore
                       Corporate Advisory Partners        Ezra Holdings Limited
                          Pte. Ltd.
                                                        Cayman Islands
                       C&L Business Advisers Pte Ltd
                                                         Nagacorp Ltd
                       Fragrance Group Limited
                       I’M Technologies Limited
                       Thomson Medical Centre
                          Limited

                     Bermuda
                       Sunpower Group Ltd




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                         DIRECTORS, MANAGEMENT AND STAFF

Name of Director              Present Directorships                  Past Directorships

Chen Yeow Sin                 Group Companies                        Group Companies
                              Nil                                    Nil
                              Other companies                        Other companies
                              Singapore                              Singapore
                                Metax Engineering Corporation          Shamid Sathya Surya Pte. Ltd.
                                  Limited                              (struck off on 11 February 2004)
                                Eltici Financial Advisory              Win Capital Pte. Ltd.
                                  Services Pte Ltd
                                Eltici Consulting Pte Ltd
                                SWP Consulting Pte Ltd


EXECUTIVE OFFICERS
Our day-to-day operations are entrusted to our Executive Directors who are assisted by a management
team of experienced key Executive Officers. The particulars of our Executive Officers are set out
below:–


Name                           Age    Address                                   Current Occupation

Chew Chiew Hwee, Xavier        27     203G Ponggol Seventeenth Avenue           Vice-President
(“Xavier Chew”)                       Singapore 829670                          (Group Marketing and
                                                                                Business Development)
                                                                                and alternate Director to
                                                                                Madam Teresa Tan

Lim Sook Hwa Jacinta           35     203G Ponggol Seventeenth Avenue           Vice-President
                                      Singapore 829670                          (Group Operations)

Michael Burke                  53     75 Darlington Circuit                     Vice-President
                                      Queensland 4551                           (Technical and Design)
                                      Australia

James Kevin Stimpson           46     48 Flower St., Northgate                  Vice-President
                                      Brisbane Queensland 4013                  (Australian Operations)
                                      Australia

Ong Chai Tiam                  43     Blk 535 Serangoon North Avenue 4          Group Accountant
(“Alex Ong”)                          #06-165
                                      Singapore 550535

Information on the business and working experience of our Executive Officers is given below:–

Mr Xavier Chew is our Vice-President (Group Marketing and Business Development) and the alternate
Director to Madam Teresa Tan. Mr Xavier Chew joined our Group in 2003. He is responsible for the
overall sales, marketing, business development, advertising and promotional activities of our Group. Mr
Xavier Chew is principally in charge of the sales and marketing functions of our Group and in
conceptualising and implementing our participation in international furniture trade fairs in Asia, Europe,
Australia and Middle East. Mr Xavier Chew has made significant contributions to the development of



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                          DIRECTORS, MANAGEMENT AND STAFF

new markets for our Group’s business. Mr Xavier Chew obtained a Bachelor of Business Administration
(Merit) from the National University of Singapore in 2003.

Madam Lim Sook Hwa Jacinta is our Vice-President (Group Operations). Madam Lim Sook Hwa
Jacinta joined our Company in 1999 as Operations Manager. She is responsible for the overall
procurement, logistics, shipping and warehouse functions of our Group. Prior to 1999, she was with our
subsidiary, Sitra Precision Engineering Pte Ltd, where she was its marketing executive from 1993 to
1996 and assistant manager from 1996 to 1999. From 1991 to 1993, Madam Lim worked as an
assistant technician with the Singapore Blood Bank. Madam Lim obtained a Diploma in Chemical
Process Technology from the Singapore Polytechnic in 1991.

Mr Michael Burke is our Vice-President (Technical and Design). Mr Burke was appointed by us
through Tolka Enterprises Pty Ltd, a company incorporated in Australia and controlled by Mr Burke, in
2002 to lead our lifestyle furniture design function. Mr Burke is responsible for conceptualising and
developing new designs for our lifestyle furniture as well as the technical aspect of our lifestyle furniture.
He has more than 30 years of experience in the timber industry, out of which more than ten years was
spent in the furniture industry in Australia. Prior to joining our Group, Mr Burke was with Suncoast Kwila
Outdoor Furniture Specialists Company, an Australian business based in Queensland, Australia from
1996 to 2002 where he first worked as a production supervisor and was subsequently promoted to the
level of factory manager. Mr Burke rose to become the manufacturing director of that company in 2000.
From 1969 to 1996, Mr Burke worked for Magnet Joinery, one of the largest manufacturers of joinery
products in Europe based in West Yorkshire, England. Mr Burke joined Magnet Joinery as an
apprentice. After finishing his apprenticeship, he was appointed as a wood machinist and subsequently
went through several ranks of promotion from the position of wood machinist to autocad draughtsman,
S.P.C. technician, quality control officer and then production supervisor. Mr Burke obtained a Certificate
of Apprenticeship in the Craft of Woodwork Machining from the National Joint Apprenticeship Board,
London, England in 1973, a Certificate in Computer Aided Draughting and Design using the Autocad
Software Package from Bradford & Ilkley Community College, England in 1988 and a Certificate in Total
Quality Problem Solving Skills from Magnet Joinery in 1996.

Mr James Kevin Stimpson is our Vice-President (Australian Operations). Mr Stimpson was appointed
by us in 2003 to oversee our Australian domestic operations. He is responsible for the overall Australian
functions of our Group. Prior to joining us, he was with Gradwell & Co Pty Ltd, a family-owned company
engaged in the manufacturing and sale of outdoor garden furniture, where he was its Finance Director
from 1998 to 2001 and its Finance Director/General Manager from 2001 to 2003. From 1980 to 1998
Mr Stimpson worked for the National Australia Bank Limited, where he was its clerical officer from 1980
to 1990, its manager (Mackay and Airlie Beach branches) from 1990 to 1994 and its commercial
(portfolio) business manager from 1994 to 1998. Mr Stimpson obtained a Graduate Management
Qualification from the University of New South Wales, Australia, in 1998.

Mr Alex Ong is our Group Accountant. Mr Alex Ong joined our Company in January 2006. He is
responsible for the financial and accounting matters of our Group. He has more than 15 years of
experience in finance and accounting. Prior to joining our Group, Mr Ong was the finance and
administration manager of UPC Holdings Pte Ltd from 2004 to 2005. Prior to that, he was the finance
and administration manager of Technic Asia-Pacific Pte Ltd from 2002 to 2004. From 1989 to 2002, Mr
Ong worked with AGRA Baymont Pte Ltd as an accounting manager. Mr Ong obtained a Bachelor of
Arts (Honours) in Business Accounting from Oxford Brookes University, UK in 2002. He is a member
of the Institute of Certified Public Accountants of Singapore and The Association of Chartered Certified
Accountants, UK.

Our Vice-President (Group Marketing and Business Development), Mr Xavier Chew, is the son of our
Executive Chairman and CEO, Mr George Chew and our Executive Director and Senior Vice-President

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                        DIRECTORS, MANAGEMENT AND STAFF

(Group Administration and Human Resources), Madam Teresa Tan. He is the brother of our Executive
Director and COO, Mr Steven Chew. Our Vice-President (Group Operations), Madam Lim Sook Hwa
Jacinta, is the spouse of Mr Steven Chew and the daughter-in-law of Mr George Chew and Madam
Teresa Tan.

Save as disclosed above and under the Section “Shareholders” of this Prospectus, none of our
Directors, Executive Officers and Substantial Shareholders is related by blood or marriage to one
another. Save as disclosed, no relative of our Directors or Substantial Shareholders has been
appointed to a managerial position or above in our Group as at the date of this Prospectus.

To the best of our Directors’ knowledge and belief, there are no arrangements or undertakings with any
Substantial Shareholders, customers, suppliers or others, pursuant to which any of our Directors and
Executive Officers was appointed.

The present and past directorships (held in the five years preceding the Latest Practicable Date) of
each of our Executive Officers are as follows:–

Name of Executive            Present Directorships                Past Directorships
Officer
Xavier Chew                  Group Companies                      Group Companies
                             Singapore                            Nil
                               E-Timberhub Pte Ltd

                             Australia
                               Suncoast Sitra Pty. Ltd.

                             Malaysia
                              Sitra Dove Logistics Sdn. Bhd.
                             Other companies                      Other companies
                             Singapore                            Nil
                               Shuimu Lifestyle Pte. Ltd.

Lim Sook Hwa Jacinta         Group Companies                      Group Companies
                             Nil                                  Suncoast Sitra Pte Ltd
                             Other companies                      Other companies
                             Nil                                  Nil

Michael Burke                Group Companies                      Group Companies
                             Singapore                            Nil
                               Suncoast Sitra Pte Ltd

                             Australia
                               Suncoast Sitra Pty. Ltd.
                             Other companies                      Other companies
                             Australia                            Australia
                               Tolka Enterprises Pty Ltd            Ochboy Pty Ltd
                                                                        (deregistered on 7 August 2005)




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                         DIRECTORS, MANAGEMENT AND STAFF

Name of Executive          Present Directorships                      Past Directorships
Officer

James Kevin Stimpson       Group Companies                            Group Companies
                           Australia                                  Nil
                             Suncoast Sitra Pty. Ltd.
                           Other companies                            Other Companies
                           Australia                                  Australia
                             Galba Pty Ltd                              IJD Management Pty Ltd
                             Gradwell & Co Pty Ltd                          (deregistered on 30 September
                             Gradwell Manufacturing Pty Ltd                 2002)
                                 (in the process of members’
                                 voluntary winding-up)
                             Gradwell Timber Products Pty
                               Ltd
                                 (in the process of creditors’
                                 voluntary winding-up)
                             Stoker Fireplaces Pty Ltd
                                 (in the process of members’
                                 voluntary winding-up)

Alex Ong                   Group Companies                            Group Companies
                           Nil                                        Nil
                           Other companies                            Other companies
                           Nil                                        Singapore
                                                                        Spectrocan Monenco Pte Ltd


REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS
The remuneration(1) paid or payable to our Directors and Executive Officers in FY2004, FY2005 and
FY006 (estimated) for services rendered to our Group in all capacities were or are as follows:–

                                                                                               Estimated
                                                             FY2004            FY2005          FY2006(2)
Directors
  George Chew                                                Band A            Band B            Band B
  Steven Chew                                                Band A             Band A           Band A
  Teresa Tan                                                 Band A             Band A           Band A
  Daniels Ng                                                     —                —              Band A
  Michael Chin                                                   —                —              Band A
  Chen Yeow Sin                                                  —                —              Band A

Executive Officers
  Xavier Chew                                                Band A             Band A           Band A
  Lim Sook Hwa Jacinta                                       Band A             Band A           Band A
  Michael Burke(3)                                           Band A             Band A           Band A
  James Kevin Stimpson                                       Band A             Band A           Band A
  Alex Ong                                                       —                —              Band A



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                               DIRECTORS, MANAGEMENT AND STAFF

Notes:–
(1)   Remuneration includes salary, bonus, directors’ fee and benefits-in-kind. Remuneration that has already been paid includes
      deferred remuneration accrued for the financial year in question and payable at a later date.
(2)   The estimated amount of remuneration payable in FY2006 excludes any bonus or profit-sharing plan or any other
      profit-linked agreement or arrangement which has not been paid.
(3)   In FY2004, FY2005 and the period between 1 January 2006 and 31 May 2006, we paid consultancy fees of amounts not
      exceeding Band A in each period to Tolka Enterprises Pty Ltd for services rendered to our Group. Tolka Enterprises Pty Ltd
      is a company controlled by Mr Michael Burke which was engaged in the provision of design consultancy services to our
      Group. Please see the Section “History” of this Prospectus for more details. On 31 May 2006, we entered into a service
      agreement with Mr Michael Burke and appointed him as our Vice-President (Technical and Design). We had ceased to
      engage the services of Tolka Enterprises Pty Ltd.
(4)   Band A means up to $249,999 per annum.
(5)   Band B means from $250,000 to $499,999 per annum.


Save as disclosed under the Section “Service Agreements” of this Prospectus, no compensation was
paid or is to be paid to any of our Directors or Executive Officers in FY2004, FY2005 and FY2006
pursuant to any bonus or profit-sharing plan or any other profit-linked agreement or arrangement.

No compensation was paid or is to be paid in the form of stock options to any of our Directors or
Executive Officers.

No amount has been set aside or accrued by our Company or our subsidiaries to provide for any
pension, retirement or similar benefit. There is also no policy relating to pension, retirement or similar
benefits other than those required under the relevant laws.


Review of Remuneration of Employees Related to our Directors or Substantial Shareholders
Our employees, Madam Tang Ai Mai and Madam Ang Soo Ling Sherilyn, are related to our Directors.
Madam Tang Ai Mai is the sister of Madam Teresa Tan, our Executive Director and Senior
Vice-President (Group Administration and Human Resources). Madam Ang Soo Ling Sherilyn is the
spouse of Mr Xavier Chew who is our Vice-President (Group Marketing and Business Development)
and alternate Director to Madam Teresa Tan. Madam Tang and Madam Ang commenced their
employment with our Group in January 2004 and July 2005 respectively. The aggregate remuneration
paid to them in FY2005 (comprising salary, bonus, CPF contribution and benefits-in-kind) was
approximately $35,000. The basis for determining Madam Tang’s and Madam Ang’s remunerations was
the same as the basis for determining the remuneration of unrelated employees. Save as disclosed in
this sub-Section and under the Sections “Directors” and “Executive Officers” of this Prospectus, as at
the Latest Practicable Date, none of our Executive Officers or other employees is related to any of our
Directors or Substantial Shareholders.

Any new employment of related employees and the proposed terms of their employment will be subject
to the review and approval of our Nominating Committee. The remuneration of employees who are
related to our Directors and Substantial Shareholders will be reviewed annually by our Remuneration
Committee. This is to ensure that their remuneration packages are in line with our staff remuneration
guidelines and commensurate with their respective job scopes and level of responsibilities. Any
bonuses, pay increases and/or promotions for any employees who are related to our Directors and
Substantial Shareholders will also be subject to the review and approval of our Remuneration
Committee. In the event that a member of our Remuneration Committee or Nominating Committee is
related to the employee under review, he will abstain from the review.

The remuneration paid to employees who are immediate family members of our Directors will be
disclosed in our annual reports in the event that such remuneration exceeds $150,000 for that financial
year.

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                            DIRECTORS, MANAGEMENT AND STAFF

EMPLOYEES
The number of full-time employees in our Group and the functional distribution of our employees as at
the end of each of the last three financial years ended 31 December 2005 were as follows:–

Function                                                                         Number of employees
                                                                      FY2003          FY2004         FY2005
Operations and Administration                                           8                 9            10
Sales, Marketing and Business Development                               5                 6            8
Design                                                                    1                  1                  1

Total                                                                    14                 16                 19


The geographical distribution of our employees as at the end of each of the last three financial years
ended 31 December 2005 were as follows:–

Geographical regions                                                             Number of employees
                                                                      FY2003          FY2004         FY2005
Singapore                                                               13               13            14
Australia                                                                1                3             4
Europe                                                                  —                —             1

Total                                                                    14                 16                 19


Note:-
We increased our employees from 14 in FY2003 to 19 in FY2005 to support the increase in our business volume and sales and
marketing activities.

Our average staff turnover rate for the last three financial years ended 31 December 2005 was
insignificant. We do not employ a significant number of temporary employees.

All our employees are not unionised. The relationship and co-operation between our management and
employees have been good and are expected to continue to be good in the future. There has not been
any incidence of work stoppages or labour disputes with our employees which affected our operations.


SERVICE AGREEMENTS
Our Company has entered into separate service agreements (“Service Agreements”) with our
Executive Directors, Mr George Chew, Mr Steven Chew and Madam Teresa Tan (collectively, the
“Appointees” and individually, an “Appointee”). The Service Agreements are for a term of three years
each commencing from the date our Company is admitted to the Official List of the SGX-SESDAQ and
renewable automatically thereafter for an indefinite period unless terminated by the giving of three
months’ written notice by either party to the other or otherwise terminated in accordance with the terms
of the Service Agreements. Instead of giving notice, our Company may choose to pay the Appointee the
equivalent of his or her salary payable in respect of the notice period required for termination. Except
for such payment in lieu of notice as provided under the Service Agreements, no compensation or
damages is payable by our Company to an Appointee in respect of his or her termination provided such
termination is in accordance with the terms of the Service Agreements. The Service Agreements may
also be terminated by our Company at any time without notice or payment upon the occurrence of
events such as default or misconduct of an Appointee in connection with or affecting the business of
our Company, wilful neglect by an Appointee in the discharge of his or her duties, commission of a
serious breach of the Service Agreement by an Appointee or disqualification of an Appointee from
acting as a Director for any reason.

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                          DIRECTORS, MANAGEMENT AND STAFF

The Service Agreements cover the terms of employment, specifically salaries and the duties and
obligations of the Appointee. Directors’ fees do not form part of the terms of the Service Agreement as
these require the approval of Shareholders in our Company’s annual general meeting. There are
non-competition covenants and confidentiality obligations under the Service Agreements.

Under the Service Agreements, Mr George Chew, Mr Steven Chew and Madam Teresa Tan are entitled
to a monthly salary of $27,000, $14,000 and $16,500 respectively and an annual bonus of not less than
one month’s salary. Under the Service Agreements, the salaries of our Executive Directors are subject
to annual review by our Board.

In addition, Mr George Chew and Mr Steven Chew are each entitled to an annual performance bonus
based on a proportion of our Group’s audited consolidated profit before tax and before payment of the
performance bonus in a financial year excluding any extraordinary and exceptional items
(“Consolidated Profit Before Tax”). The performance bonus will be calculated based on the audited
consolidated financial statements of our Group for the financial year preceding the date of payment of
the performance bonus.

The performance bonus is calculated on the Consolidated Profit Before Tax as follows:–
Consolidated Profit Before Tax                 Amount of performance bonus
On the first $1,000,000                        2.0% of the Consolidated Profit Before Tax — George Chew
                                               1.0% of the Consolidated Profit Before Tax — Steven Chew

On the next $1,000,000                         3.0% of the Consolidated Profit Before Tax — George Chew
                                               1.5% of the Consolidated Profit Before Tax — Steven Chew
On the subsequent amounts above $2,000,000     4.0% of the Consolidated Profit Before Tax — George Chew
                                               2.0% of the Consolidated Profit Before Tax — Steven Chew

In addition, our Company will provide each Appointee with the use of a motor car of a make and model
and a driver determined in accordance with the Company’s then current policy for his or her business
and personal use. The cost of insurance, repairs, maintenance and running expenses in respect of the
motor car provided shall be borne by our Company. Our Company will also provide each Appointee with
a club membership. The monthly subscription fees and other expenses incurred in respect of the club
membership shall be borne by our Company. Both the motor car and the club membership will be
transferred to the Appointee after five years of continuous service from the commencement of service.

All travelling and travel-related expenses, entertainment expenses and other out-of-pocket expenses
properly incurred by our Executive Directors in the process of discharging their duties on behalf of our
Group will be borne by us.

Had the Service Agreements been in effect for FY2005, the aggregate remuneration (including
contribution to CPF and other benefits) paid to our Executive Directors would have been approximately
$0.8 million instead of $0.5 million and our profit before income tax and profit attributable to
Shareholders for FY2005 would have been $1.90 million and $1.64 million respectively instead of $2.28
million and $1.96 million.


Executive Officers
We have also entered into various employment contracts with our Executive Officers. Such contracts
typically provide for the salary payable to the Executive Officers, grounds of termination and certain
restrictive covenants. The employment contracts with our Executive Officers are governed by the laws
of Singapore or Australia, as may be appropriate.


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                         DIRECTORS, MANAGEMENT AND STAFF

Save as disclosed above, there are no other existing or proposed service agreements entered or to be
entered into between our Company or any of our subsidiaries and any Director which provide for
benefits upon termination of employment.


CORPORATE GOVERNANCE
Our Directors recognise the importance of good corporate governance and the offering of high
standards of accountability to our Shareholders. To this end, our Board of Directors has established
three committees (i) the Audit Committee; (ii) the Remuneration Committee; and (iii) the Nominating
Committee.

In addition, Messrs Michael Chin and Chen Yeow Sin have been appointed as our Independent
Directors. Our Directors consider Messrs Michael Chin and Chen Yeow Sin to be independent as they
do not have any existing business or professional relationship with our Group, our Directors or
Substantial Shareholders. They are also not related to any of our Directors or Substantial Shareholders.

In view of Mr George Chew’s concurrent appointment as our Executive Chairman and CEO, we have
appointed Mr Michael Chin as our Lead Independent Director, pursuant to the recommendations in
Commentary 3.3 of the Code of Corporate Governance 2005. In accordance with the recommendations
in the said Commentary 3.3, the Lead Independent Director will be available to Shareholders where
they have concerns which contact through the normal channels of our Executive Chairman and CEO
or Group Accountant has failed to resolve or for which such contact is inappropriate.


Audit Committee
Our Audit Committee as at the date of this Prospectus comprises Messrs Michael Chin, Chen Yeow Sin
and Daniels Ng. Mr Michael Chin is the Chairman of our Audit Committee.

Our Audit Committee will meet periodically to perform, inter alia, the following functions:–
(a)   review the audit plans of our external auditors and where applicable, our internal auditors,
      including the results of our auditors’ review and evaluation of our system of internal controls. In
      this regard, we intend to outsource our internal audit function to an independent professional
      service firm;
(b)   review the balance sheet of our Company and consolidated financial statements of our Group and
      the external auditors’ reports on those financial statements, and discuss any significant
      adjustments, major risk areas, changes in accounting policies, compliance with Singapore
      financial reporting standards, concerns and issues arising from their audits including any matters
      which the auditors may wish to discuss in the absence of management, where necessary, before
      submission to our Board for approval;
(c)   review and discuss with auditors any suspected fraud, irregularity or infringement of any relevant
      laws, rules or regulations, which has or is likely to have a material impact on our operating results
      or financial position and our management’s response;
(d)   review the co-operation given by our Company’s officers to the auditors;
(e)   nominate auditors for appointment or re-appointment;
(f)   review internal control procedures and guidelines for all interested person transactions, and if
      during these periodic reviews, the Audit Committee believes that the procedures are not sufficient,
      we will revise our internal control procedures;
(g)   review and ratify all interested person transactions falling within the scope of Chapter 9 of the
      Listing Manual, if any;

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                          DIRECTORS, MANAGEMENT AND STAFF

(h)   review any potential conflicts of interest;
(i)   undertake such other reviews and projects as may be requested by our Board and report to our
      Board its findings from time to time on matters arising and requiring the attention of our Audit
      Committee; and
(j)   generally, perform such other functions and duties as may be required by the relevant laws or
      provisions of the Listing Manual (as may be amended from time to time).

Apart from the above functions, our Audit Committee will commission and review the findings of internal
investigations into matters where there is suspicion of fraud or irregularity, or failure of internal controls
or infringement of any Singapore law, rule or regulation, which has or is likely to have a material impact
on our operating results and/or financial position.

In the event that a member of our Audit Committee is interested in any matter being considered by our
Audit Committee, he will abstain from reviewing that particular transaction or voting on that particular
resolution.


Remuneration Committee
Our Remuneration Committee as at the date of this Prospectus comprises Messrs Michael Chin, Chen
Yeow Sin and Daniels Ng. Mr Chen Yeow Sin is the Chairman of our Remuneration Committee. Our
Remuneration Committee oversees executive remuneration and development in our Company with the
goal of building a capable and committed management team.

Our Remuneration Committee will recommend to our Board a framework of remuneration for our
Directors and key executives, and determine specific remuneration packages for each of our Executive
Directors. The recommendations of our Remuneration Committee will be submitted for endorsement by
the entire Board. All aspects of remuneration, including but not limited to Directors’ fees, salaries,
allowances, bonuses, options and benefits-in-kind shall be reviewed by our Remuneration Committee.

Each member of our Remuneration Committee will abstain from reviewing and approving his own
remuneration and the remuneration packages of persons related to him. Our Company will disclose in
our annual report the total remuneration paid to our Directors.


Nominating Committee
Our Nominating Committee as at the date of this Prospectus comprises Messrs Michael Chin, Chen
Yeow Sin and Daniels Ng. Mr Michael Chin is the Chairman of our Nominating Committee.

Our Nominating Committee will be responsible for:
(a)   re-nominating our Directors, having regard to each Director’s contribution and performance;
(b)   determining annually whether or not a Director is independent; and
(c)   deciding whether or not a Director is able to and has been adequately carrying out his duties as
      a director.

Our Nominating Committee will decide on how our Board’s performance is to be evaluated and propose
objective performance criteria, subject to the approval of our Board, which address how our Board has
enhanced long-term Shareholders’ value. Our Board will also implement a process to be carried out by
our Nominating Committee for assessing the effectiveness of our Board as a whole and for assessing
the contribution of each individual Director to the effectiveness of our Board.



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                         DIRECTORS, MANAGEMENT AND STAFF

Each member of our Nominating Committee shall abstain from voting on any resolution in respect of
the assessment of his performance or re-nomination as Director.


Board Practices
Our Directors are appointed by our Shareholders at a general meeting and an election of Directors is
held annually. One third, or if their number is not a multiple of three, the number nearest to but not lesser
than one-third of our Directors, are required to retire from office at each annual general meeting.
Further, all our Directors are required to retire from office by rotation at least once in every three years.
However, a retiring Director is eligible for re-election at the meeting at which he retires.




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     INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

Save as disclosed below and under the Section “Restructuring Exercise” of this Prospectus, none of our
Directors, Controlling Shareholders or their respective associates was or is interested in any material
transaction undertaken by our Group within the last three financial years ended 31 December 2005 and
for the period from 1 January 2006 up to the Latest Practicable Date.


PAST INTERESTED PERSON TRANSACTIONS

1.    Sale of Residential Property by our Company to our Executive Directors, Mr George Chew and
      Madam Teresa Tan
      On 1 November 2005, our Company entered into a sale and purchase agreement (“S&P”) with our
      Executive Directors, Mr George Chew and Madam Teresa Tan, pursuant to which our Company
      agreed to sell to our said Directors the residential property situated at 203G Ponggol Seventeenth
      Avenue, Singapore 829670 for a consideration of $1,750,000. The sale and purchase was carried
      out on an arm’s length basis and the consideration was based on a market valuation of the
      property carried out by a third party valuer. The transaction was completed on 6 March 2006 and
      the consideration of $1,750,000 has been fully settled in cash.

      In April 2006, our Executive Directors, Mr George Chew and Madam Teresa Tan, reimbursed our
      Company with an aggregate sum of $128,000 being the net book value of the capitalised
      expenditures (such as stamp fees, renovation costs, legal and other expenses) incurred by our
      Company in respect of its acquisition of the above property. The reimbursement had been fully
      made by setting-off the dividends payable by our Company to Mr George Chew and Madam
      Teresa Tan from the net dividends declared by our Company for FY2005. Please see the Section
      “Dividend Policy” of this Prospectus for more details.

2.    Transactions entered into with PWP (Aust) Pty Ltd (formerly known as Profile Wood Products Pty
      Ltd) (“PWP”)
      Our Executive Directors, Mr George Chew and Madam Teresa Tan, are directors and
      shareholders of PWP, a company incorporated in Perth, Australia. PWP was in the business of
      providing agency services and had provided us with such services in the last three financial years
      ended 31 December 2005. The total commission, rounded to the nearest dollar, paid by our Group
      to PWP in the last three financial years ended 31 December 2005 were as follows:–

                                                            FY2003           FY2004          FY2005
      Commission paid to PWP by our Group                    $2,537          $13,619         $9,130

      Our Directors are of the view that the above transactions were carried out on normal commercial
      terms and on an arm’s length basis. As at the Latest Practicable Date, there is no amount due to
      or from PWP. We have since 1 January 2006 ceased all such transactions with PWP and do not
      intend to enter into any such transaction with PWP in the future.

3.    Lease of property by our Executive Director, Mr George Chew to our Company
      On 25 April 2000, our Company entered into a tenancy agreement with our Executive Director, Mr
      George Chew pursuant to which Mr George Chew agreed to lease the property situated at 37
      Tannery Lane #05-01, Tannery House, Singapore 347790 to our Company for a term of two years
      commencing on 1 May 2000 and expiring on 30 April 2002, at a monthly rent of $2,500. Upon its
      expiry, the tenancy was renewed at an increased rent of $5,000 per month from 1 May 2003 to
      31 December 2005. Our Directors are of the view that the increased rent was in accordance with
      the prevailing market rent of the property at the time of the renewal and the transaction was on



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     INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

      normal commercial terms carried out on an arm’s length basis. We do not intend to lease the
      above property from our Executive Director, Mr George Chew in the future.

4.    Loans from our Executive Director, Mr George Chew, to our Company
      Our Executive Director, Mr George Chew, had granted loans to our Company, the outstanding
      amount as at the end of FY2003, FY2004 and FY2005 and 1Q2006, were as follows:–

                                                      FY2003               FY2004              FY2005              1Q2006
      Loans granted to our Company                   $177,439             $26,221              $38,881             $46,671

      The largest amount outstanding to Mr George Chew during the said period and up to the Latest
      Practicable Date is $177,439. The loans were granted for working capital purposes of our Group.
      No interest was charged to our Company for the said loans. As such, the transactions are not
      deemed to have been conducted on an arm’s length basis. The outstanding loans were fully
      repaid to Mr George Chew as at the Latest Practicable Date, and no outstanding amount is due
      to Mr George Chew by our Company. We do not intend to procure such loans from our Director,
      Mr George Chew in the future.

5.    Guarantees for Term Loans
      Our Executive Directors, Mr George Chew, Madam Teresa Tan and Mr Steven Chew had provided
      guarantees for term loans granted to our Group. Such term loans had been fully repaid in the first
      half of FY2006. Particulars of the guarantees provided are as follows:–

                                                                          Amount of           Principal amount
      Facility for use by            Nature of Term Laon                  Term Loan           guaranteed(3)
      Our Company                    Property loan to finance the         $1,448,000          $650,000 by Mr George
                                     purchase of 203G Ponggol                                 Chew and Madam Teresa
                                     Seventeenth Avenue,                                      Tan
                                     Singapore 829670(1)
                                                                                              $500,000 by Mr George
                                                                                              Chew and Mr Steven Chew
                                                                                              $7,500,000 by Mr George
                                                                                              Chew and Madam Teresa
                                                                                              Tan
      Energetic Industries           Property loan to finance the         RM98,000            RM480,000 by Mr George
                                     purchase of 21 Jalan Bukit 1,                            Chew, Madam Teresa Tan
                                     Bandar Seri Alam, Masai,                                 and Mr Steven Chew
                                     81750 Johor Bahru, Johor,
                                                                                              RM920,000 by Mr George
                                     Malaysia(2)
                                                                                              Chew, Madam Teresa Tan
                                                                                              and Mr Steven Chew

      Notes:–
      (1)   The property loan of $1,448,000 was fully repaid on 6 March 2006 following the completion of the sale of the property
            at 203G Ponggol Seventeenth Avenue, Singapore 827670 by our Company to Mr George Chew and Madam Teresa
            Tan on 6 March 2006.
      (2)   The property term loan of RM98,000 was fully repaid in April 2006.
      (3)   The same guarantees currently secure the existing banking facilities granted to the Group. Please see the Section
            “Present and Ongoing Interested Person Transactions - Guarantees and Earmarking For Banking Facilities” of this
            Prospectus for more details.




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     INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

PRESENT AND ONGOING INTERESTED PERSON TRANSACTIONS

1.    Guarantees and Earmarking For Banking Facilities
      Our Executive Directors, Mr George Chew, Madam Teresa Tan and Mr Steven Chew, have
      provided personal guarantees and/or earmarked the banking facilities extended to them, as
      securities for banking facilities granted to our Group. Particulars of the personal guarantees and
      earmarking given by our said Executive Directors as at the Latest Practicable Date are as
      follows:–

                                                          Aggregate                                  Principal amount
                                                          amount of       Principal amount           secured by
      Facility for use by       Nature of facilities      facilities      guaranteed(1)              earmarking
      Our Company               Overdraft, letters of     $8,160,000      $650,000 by Mr             $650,000 by Mr
                                credit, trust receipts,   US$200,000      George Chew and            George Chew and
                                credit limit, booking                     Madam Teresa Tan           Madam Teresa Tan
                                of foreign exchange                       $500,000 by Mr             $500,000 by Mr
                                contracts                                 George Chew and Mr         George Chew and Mr
                                                                          Steven Chew                Steven Chew
                                                                          $7,500,000 by Mr
                                                                          George Chew and
                                                                          Madam Teresa Tan

      Suncoast Sitra            Credit Bills              $500,000        $40,000 by Mr Steven       —
      Singapore                 Purchase, overdraft                       Chew
                                and booking of
                                foreign exchange
                                contracts

      Energetic Industries      Overdraft                 RM267,000       RM480,000 by Mr            —
                                                                          George Chew, Madam
                                                                          Teresa Tan and Mr
                                                                          Steven Chew
                                                                          RM920,000 by Mr
                                                                          George Chew, Madam
                                                                          Teresa Tan and Mr
                                                                          Steven Chew

      Sitra Dove Logistics      Term loan                 $424,000        $630,000 by Mr             —
      Singapore                                                           George Chew and
                                                                          Madam Teresa Tan

      Notes:–
      (1)   The same guarantees previously secured the term loans granted to the Group which had been fully repaid in the first
            half of FY2006. Please see the Section “Past Interested Person Transactions - Guarantees For Term Loans” of this
            Prospectus for more details.


      The largest aggregate amount of outstanding banking facilities secured by the above guarantees
      and earmarking provided by our Directors, Mr George Chew, Madam Teresa Tan and Mr Steven
      Chew, during the last three financial years ended 31 December 2005 and for the period from 1
      January 2006 up to the Latest Practicable Date, based on the month-end outstanding balances,
      was $6,879,384. As at the Latest Practicable Date, the aggregate outstanding amount secured as
      aforesaid was $6,879,384.




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     INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

      No fee was paid to our Executive Directors, Mr George Chew, Mr Steven Chew and Madam
      Teresa Tan, for the provision of the guarantees and/or earmarkings. As such, the transactions are
      not deemed to have been conducted on an arm’s length basis.

      Subsequent to the Invitation, Mr George Chew, Madam Teresa Tan and Mr Steven Chew intend
      to procure the release of the above guarantees and earmarkings. They have however, agreed to
      continue providing the above guarantees and earmarking until such time as our bankers may
      agree to the release of the same on terms satisfactory to our Group, or on the termination of the
      facilities, or upon us securing alternative facilities on acceptable terms.

2.    Consultancy Agreement with Advisor Associates (S) Pte Ltd (“Advisor Associates”)
      Our Non-Executive Director, Mr Daniels Ng, is the managing director and controlling shareholder
      of Advisors Associates. Advisor Associates is involved in the business of providing business
      advisory services and has provided us with such consultancy services. The total amounts,
      rounded to the nearest dollar, charged by Advisor Associates to our Company during the last three
      financial years ended 31 December 2005 and for the period from 1 January 2006 up to the Latest
      Practicable Date, were as follows:–

                                                                                                         From 1 January
                                                                                                        2006 to the Latest
                                               FY2003              FY2004              FY2005            Practicable Date
      Amount charged by Advisor
       Associates to our Company                  —                $8,000              $40,000               $22,000(1)

      Note:-
      (1)   This includes a sum of $20,000 paid as part of the consultancy fee of $60,000 payable to Advisor Associates for the
            services rendered in connection with the Invitation.


      Prior to Mr Daniels Ng’s appointment as a Non-Executive Director of our Company, our Company
      has entered into a Consultancy Agreement with Advisor Associates on 7 January 2005 pursuant
      to which Advisor Associates has agreed to provide advisory services to our Group in connection
      with our preparation for the proposed listing of our Company on the Official List of the
      SGX-SESDAQ.

      The services rendered by Advisor Associates for the listing of our Company included:–
      (a)      assisting our Company in appointing the professional parties for the listing;
      (b)      assisting our Company in collating the information required by the professional parties for
               the drafting of the listing documents;
      (c)      assisting our Company in coordinating meetings and discussions with all professional
               parties; and
      (d)      other business advisory services such as assisting our Group in assessing its market
               potential, improving its present financial policies and practices and reviewing its corporate
               group strategy, human resources policies and debt structure.

      In consideration of the services provided by Advisor Associates, we have agreed to pay to Advisor
      Associates a consultancy fee of $60,000 (out of which a sum of $20,000 has been paid as at the
      Latest Practicable Date), and upon successful Invitation, an amount equivalent to 4% of the gross
      proceeds of the Invitation.

      Our Directors are of the view that the above arrangement was on normal commercial terms and
      on an arm’s length basis. It is envisaged that we may continue to engage the services of Advisors

                                                             135
      INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

       Associates in future as and when the need arises, after admission of our Company to the Official
       List of the SGX-SESDAQ. In such an event, we shall ensure that the transactions will be
       conducted in accordance with the guidelines described under Chapter 9 of the Listing Manual and
       the Section “Review Procedures for Future Interested Person Transactions” of this Prospectus.


CONFLICTS OF INTERESTS
Our Executive Chairman and CEO, Mr George Chew, owns shares in each of York Timber Organisation
Limited (“York Timber”) and LHT Holdings Limited (“LHT”) which are listed on the Johannesburg Stock
Exchange and the SGX-ST respectively. York Timber and LHT are both engaged in the business of
manufacturing and supplying wood related products. However, our Directors do not consider them as
our competitors as we do not compete in the same market segments. The interests held by Mr George
Chew in each of the aforesaid companies are for investment purposes. Mr George Chew’s direct
interests in LHT constitute less than 1.5% of its share capital whilst his interest in York Timber is
negligible. Mr George Chew is not involved (whether directly or indirectly) in the management of either
of the aforesaid companies. Accordingly, there is no conflict of interest arising from Mr George Chew’s
holding of the said shares in both companies.

Our Executive Directors, Messrs George Chew and Steven Chew and Madam Teresa Tan, have in their
Service Agreements with our Company respectively covenanted inter alia, that they will not, during the
term of their employment with our Company and for a period of six months thereafter, whether for their
own account, or jointly with another, or for and on behalf of any individual, partnership, corporation or
other legal entity, directly or indirectly, as principal, agent or otherwise, own, control, manage, be
employed by, consult with, or otherwise participate in any business, service or activity which is
competitive with the businesses, services or activities which are or have been performed by our Group
at any time during the two years preceding the cessation of their employment with our Company. Our
Executive Officers have also respectively executed similar undertakings not to compete with our Group
whilst they are in the employment of our Group.

Save as disclosed under the Section “Interested Person Transactions and Conflicts of Interests” of this
Prospectus, none of our Directors and Controlling Shareholders or their respective associates has any
material interest, direct or indirect, in:–
(a)    any company carrying on the same business or dealing in similar products as our Group;
(b)    any enterprise or company that is our Group’s customer or supplier of goods or services; and
(c)    any transaction to which we are a party.




                                                  136
      INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS
Our Group will implement the following procedures for the identification of interested persons and the
recording of interested person transactions:–
(a)    Our Company will maintain a list of interested persons (which is to be updated immediately if there
       are any changes) and disclose the list to relevant key personnel of each subsidiary to enable
       identification of interested persons. The master list of interested persons shall be reviewed at least
       half yearly or when there are any changes to the list (whichever is the shorter period), by our Audit
       Committee and maintained by our Group Accountant (each of whom shall not be an interested
       person); and
(b)    Our Company will maintain a register of transactions carried out with all interested persons
       (including those transactions below $100,000 and recording the basis, including the comparable
       quotations obtained (if available) to support such basis on which they are entered into).

Our Audit Committee will adopt the following procedures when reviewing interested person
transactions:–
(1)    When purchasing items from or engaging the services of an interested person, two other
       quotations from non-interested persons will be obtained for comparison, to ensure that the
       interests of minority Shareholders are not disadvantaged. The purchase price or fee for services
       shall not be higher than the most competitive price or fee of the two other quotations from
       non-interested persons. In determining the most competitive price or fee, all pertinent factors,
       including but not limited to quality, quantity, delivery time and track record will be taken into
       consideration;
(2)    When selling items or supplying services to an interested person, the price or fee and terms of two
       other successful sales of a similar nature with non-interested persons will be used for comparison,
       to ensure that the interests of minority Shareholders are not disadvantaged. The sale price or fee
       for the supply of services shall not be lower than the lowest sale price or fee of the two other
       successful transactions with non-interested persons; and
(3)    When renting properties from or to an interested person, our Directors shall take appropriate steps
       to ensure that such rent is commensurate with the prevailing market rates, including adopting
       measures such as making relevant inquiries with landlords of similar properties and obtaining
       suitable reports or reviews published by property agents (including an independent valuation
       report by a property valuer, where appropriate). The rent payable shall be based on the most
       competitive market rental rate of similar property in terms of size and location, based on the
       results of the relevant inquiries.

All future interested person transactions will be properly documented and submitted to our Audit
Committee for periodic review. Our Audit Committee will review all interested person transactions, if
any, at least half-yearly to ensure that they are conducted on arm’s length basis in accordance with the
review procedures outlined above, and that the transactions are not prejudicial to the interest of our
Shareholders. Furthermore, our Audit Committee will review the above guidelines and procedures to
ensure that they remain effective and relevant to the Group. At our Audit Committee’s discretion, our
Company shall engage an independent professional services firm to review all interested person
transactions, including the procedures for reviewing interested person transactions. In the event that a
member of our Audit Committee is interested in any interested person transaction, he will abstain from
reviewing and voting that particular transaction.




                                                     137
   INTERESTED PERSON TRANSACTIONS AND CONFLICTS OF INTERESTS

Our Audit Committee and Board of Directors will also review the internal controls relating to future
interested person transactions of our Group and will include such review as part of the standard
procedures during the Audit Committee’s examination of the adequacy of the Company’s internal
controls. Our Directors and the Audit Committee will ensure that all disclosure requirements on
interested person transactions, including those required by prevailing legislation, Chapter 9 of the
Listing Manual and applicable financial reporting standards, are complied with. In addition, such
transactions will also be subject to Shareholders’ approval, if required under Chapter 9 of the Listing
Manual.

Currently, we have not sought and we do not intend to seek a Shareholders mandate for interested
person transactions. We will comply with the provisions of Chapter 9 of the Listing Manual in respect
of all future interested person transactions. Our Board of Directors will also ensure compliance with all
disclosure requirements on interested person transactions, including those of prevailing legislation and
applicable standards.




                                                  138
                         GENERAL AND STATUTORY INFORMATION

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1.   Save as disclosed below, none of our Directors, Executive Officers or Controlling Shareholders:–
     (i)      had at any time during the last ten years, an application or a petition under any bankruptcy
              laws of any jurisdiction filed against him or against a partnership of which he was a partner
              at any time within two years from the date he ceased to be a partner;
     (ii)     had at any time during the last ten years, an application or a petition under any law of any
              jurisdiction filed against an entity (not being a partnership) of which he was a director or an
              equivalent person or a key executive at the time when he was a director or an equivalent
              person or a key executive of that entity or at any time within two years from the date he
              ceased to be a director or an equivalent person or a key executive of that entity, for the
              winding-up or dissolution of that entity or, where that entity is the trustee of a business trust,
              that business trust, on the ground of insolvency;
     (iii)    has any unsatisfied judgments against him;
     (iv)     has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or
              dishonesty which is punishable with imprisonment, or has been the subject of any criminal
              proceedings (including any pending criminal proceedings of which he is aware) for such
              purpose;
     (v)      has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of
              any law or regulatory requirement that relates to the securities or futures industry in
              Singapore or elsewhere, or been the subject of any criminal proceedings (including any
              pending criminal proceedings of which he is aware) for such breach;
     (vi)     had at any time during the last ten years, received judgment against him in any civil
              proceedings in Singapore or elsewhere involving a breach of any law or regulatory
              requirement that relates to the securities or futures industry in Singapore or elsewhere, or
              a finding of fraud, misrepresentation or dishonesty on his part, or been the subject of any
              civil proceedings (including any pending civil proceedings of which he is aware) involving
              an allegation of fraud, misrepresentation or dishonesty on his part;
     (vii)    has ever been convicted in Singapore or elsewhere of any offence in connection with the
              formation or management of any entity or business trust;
     (viii)   has ever been disqualified from acting as a director or an equivalent person of any entity
              (including the trustee of a business trust), or from taking part directly or indirectly in the
              management of any entity or business trust;
     (ix)     has ever been the subject of any order, judgment or ruling of any court, tribunal or
              governmental body permanently or temporarily enjoining him from engaging in any type of
              business practice or activity;
     (x)      has ever, to his knowledge, been concerned with the management or conduct, in
              Singapore or elsewhere, of the affairs of:–
              (a)   any corporation which has been investigated for a breach of any law or regulatory
                    requirement governing corporations in Singapore or elsewhere;
              (b)   any entity (not being a corporation) which has been investigated for a breach of any
                    law or regulatory requirement governing such entities in Singapore or elsewhere;
              (c)   any business trust which has been investigated for a breach of any law or regulatory
                    requirement governing business trusts in Singapore or elsewhere; or




                                                      139
                  GENERAL AND STATUTORY INFORMATION

       (d)   any entity or business trust which has been investigated for a breach of any law or
             regulatory requirement that relates to the securities or futures industry in Singapore
             or elsewhere,
       in connection with any matter occurring or arising during the period when he was so
       concerned with the entity or business trust; and
(xi)   has ever been the subject of any current or past investigation or disciplinary proceedings,
       or has been reprimanded or issued any warning, by the Authority or any other regulatory
       authority, exchange, professional body or government agency, whether in Singapore or
       elsewhere.


George Chew
Our Executive Chairman and CEO, Mr George Chew, is a director of Sitra Asia Pacific Sdn. Bhd.
and Shuimu Lifestyle Pte. Ltd..

Sitra Asia Pacific Sdn. Bhd. was formed as a joint venture between our Company and another
party in 1997 to conduct timber agency business in Malaysia. The business of Sitra Asia Pacific
Sdn. Bhd. had ceased since 2000 due to differences between the joint venture partners in the
management of the company. As part of the Restructuring Exercise prior to the Invitation, our
shares in Sitra Asia Pacific Sdn. Bhd. was transferred by our Company to Mr George Chew. Sitra
Asia Pacific Sdn. Bhd. is now in the process of applying for members’ voluntary winding-up.
Please refer to the Section “Restructuring Exercise” of this Prospectus for more details.

Shuimu Lifestyle Pte. Ltd. was formed as a joint venture between our subsidiary, Suncoast Sitra
Singapore and three other parties in 2005 as a trading company for lifestyle concept products. As
the business of Shuimu Lifestyle Pte. Ltd. did not develop as intended, its operations ceased a few
months after its commencement. As part of the Restructuring Exercise prior to the Invitation, our
shares in Shuimu Lifestyle Pte. Ltd. was transferred by our Company to our Vice-President
(Group Marketing and Business Development), Mr Xavier Chew on 5 May 2006. The
shareholders of Shuimu Lifestyle Pte. Ltd. have resolved to wind-up Shuimu Lifestyle Pte. Ltd..
Please refer to the Section “Restructuring Exercise” of this Prospectus for more details.


Steven Chew
Our Executive Director and COO, Mr Steven Chew, is a director of Shuimu Lifestyle Pte. Ltd..
Please refer to the disclosures under “George Chew” in this Section for more details.

In the last quarter of 2005, Mr Steven Chew assisted the Commercial Affairs Department (“CAD”)
in an investigation concerning an Australian company and the latter’s canvass for share
placement funds in Singapore in the earlier part of 2005. Mr Steven Chew was acquainted with
the Australian company through a newspaper advertisement it made in Singapore in 2005 seeking
investors to subscribe for shares in the said company. Mr Steven Chew has no interest and does
not hold any position in the Australian company. He was not the subject of the investigation and
there was no subsequent follow-up action by the CAD after the one-off interview.




                                             140
                       GENERAL AND STATUTORY INFORMATION

     Xavier Chew
     Our Vice-President (Group Marketing and Business Development), Mr Xavier Chew, is a director
     of Shuimu Lifestyle Pte. Ltd.. Please refer to the disclosures under “George Chew” in this Section
     for more details.

     In 2005, Mr Xavier Chew was fined $2,200 for an offence relating to drink driving and was
     suspended from driving for one year.


     Michael Burke
     On 10 January 2005, the Deputy Commissioner of Taxation (the “Commissioner”) commenced an
     action in the District Court of Queensland against our Vice-President (Technical and Design), Mr
     Michael Burke for accrued taxes in the amount of approximately A$60,000 owed to the
     Commissioner by Ochboy Pty Ltd, in which Mr Michael Burke was then a director and minority
     shareholder. Mr Michael Burke had settled the outstanding tax of A$60,000 to the Commissioner
     and the action against him has been discontinued.


     James Kevin Stimpson
     Our Vice-President (Australian Operations), Mr James Kevin Stimpson, held the office of director
     in the following companies incorporated in Australia which were wound-up or in the process of
     winding-up, particulars of which are as follows:–

                                         Date of appointment
     Name of company                     as director              Status of company
     Gradwell Manufacturing Pty Ltd      20 August 1998           In the process of external administration
                                                                  on account of members’ voluntary
                                                                  winding-up
     Stoker Fireplaces Pty Ltd           19 October 1998          In the process of external administration
                                                                  on account of members’ voluntary
                                                                  winding-up
     Gradwell Timber Products Pty Ltd    18 December 2001         In the process of creditors’ voluntary
                                                                  winding-up

     Gradwell Manufacturing Pty Ltd and Stoker Fireplaces Pty Ltd are subsidiaries of Gradwell & Co
     Pty Ltd. Upon the cessation of its business in 2003, Gradwell & Co Pty Ltd applied for the
     members’ voluntary winding-up of Gradwell Manufacturing Pty Ltd and Stoker Fireplaces Pty Ltd.

     Gradwell Timber Products Pty Ltd is a subsidiary of Gradwell & Co Pty Ltd. Upon Gradwell & Co
     Pty Ltd’s cessation of its business in 2003, an application was made by Gradwell & Co Pty Ltd for
     the creditors’ voluntary winding-up of Gradwell Timber Products Pty Ltd.

2.   There is no shareholding qualification for Directors in the Articles of Association of our Company.

3.   No option to subscribe for shares in, or debentures of our Company or any of our subsidiaries has
     been granted to, or was exercised by any of our Directors or Executive Officers.

4.   Save as disclosed under the Sections “Interested Person Transactions and Conflicts of Interests”
     and “Restructuring Exercise” of this Prospectus, none of our Directors or Substantial
     Shareholders is interested, directly or indirectly, in the promotion of, or in any property or assets
     which have, within the two years preceding the date of this Prospectus, been acquired by or


                                                  141
                        GENERAL AND STATUTORY INFORMATION

      disposed of or leased to or by our Company or any of our subsidiaries, or are proposed to be
      acquired or disposed of or leased to or by our Company or any of our subsidiaries.

5.    No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any firm
      in which such Director or expert is a partner or any corporation in which such Director or expert
      holds shares or debentures, in cash or shares or otherwise, by any person to induce him to
      become, or to qualify him as, a Director, or otherwise for services rendered by him or by such firm
      or corporation in connection with the promotion or formation of our Company.

6.    None of our Directors has any interest in any existing contract or arrangement which is significant
      in relation to the business of our Company and our subsidiaries, taken as a whole.


SHARE CAPITAL

7.    The changes in the issued and paid-up share capital of our subsidiaries within the three years
      preceding the Latest Practicable Date were as follows:–

                                    Number of             Resultant issued
      Date of issue                 shares Issued         share capital         Purpose of Issue
      Suncoast Sitra Singapore
      27 August 2005                200,000               S$210,000             Working capital
      24 April 2006                 300,000               S$510,000             Working capital

      Suncoast Sitra Australia
      31 December 2003              3                     A$4                   Pursuant to joint venture
                                                                                arrangement

8.    Save as disclosed in paragraph 9 above and in the Section “Share Capital” of this Prospectus, no
      shares in or debentures of our Company or any of our subsidiaries have been issued, or are
      proposed to be issued, as fully or partly paid-up for cash, or for a consideration other than cash,
      within the three years preceding the Latest Practicable Date.

9.    No person has been, or is entitled to be granted an option to subscribe for shares in, or
      debentures of our Company or any of our subsidiaries.


MEMORANDUM AND ARTICLES OF ASSOCIATION

10. Memorandum and Articles of Association and Registration Number
      Our Company’s constitution is our Memorandum and Articles of Association (“Articles”). The
      registration number of our Company is 197901237E. The Memorandum of Association of the
      Company states, inter alia, that the liability of members is limited. The objects of the Company are
      set out in full in Clause 3 of the Memorandum of Association which is available for inspection at
      our registered office as stated in the Section “General And Statutory Information — Documents
      Available For Inspection” of this Prospectus.

11.   The discussion below provides information in respect of certain provisions of our Articles. This
      description is only a summary and is qualified by reference to our Articles, a copy of which will be
      displayed at our registered office as mentioned in paragraph 35 below.




                                                    142
                  GENERAL AND STATUTORY INFORMATION

Directors
(a)   Ability of interested Directors to vote
      A Director shall not vote in respect of any contract or proposed contract or arrangement or
      any other proposal whatsoever in which he has any personal material interest, directly or
      indirectly. A Director shall not be counted in the quorum at a meeting in relation to any
      resolution on which he is debarred from voting.

(b)   Remuneration
      The ordinary fees of the Directors shall from time to time be determined by an ordinary
      resolution of the Company and shall not be increased except pursuant to an ordinary
      resolution passed at a general meeting where notice of the proposed increase shall have
      been given in the notice convening the general meeting and shall (unless such resolution
      otherwise provides) be divisible among the Directors as they may agree, or failing
      agreement, equally, except that any Director who shall hold office for part only of the period
      in respect of which such fees is payable shall be entitled only to rank in such division for a
      proportion of fees related to the period during which he has held office.

      Any Director who holds any executive office, or who serves on any committee of the
      Directors, or who otherwise performs services which in the opinion of the Directors are
      outside the scope of ordinary duties of a Director, may be paid such extra remuneration by
      way of salary, commission or otherwise as the Directors may determine. The fees in the case
      of a Director other than an Executive Director shall be payable by a fixed sum and shall not
      at any time be by commission on or a percentage of the profits and no Director whether an
      Executive Director or otherwise shall be remunerated by a commission on or a percentage
      of turnover.

      The Directors may repay to any Director all such reasonable expenses as he may incur in
      attending and returning from meetings of the Directors or of any committee of the Directors
      or general meetings or otherwise in or about the business of the Company.

      The Directors shall have power to pay and agree to pay pensions or other retirement,
      superannuation, death or disability benefits to (or to any person in respect of) any Director
      for the time being holding any executive office and for the purpose of providing any such
      pensions or other benefits to contribute to any scheme or fund or to pay premiums.

      A Director may be party to or in any way interested in any contract or arrangement or
      transaction to which the Company is a party or in which the Company is in any way
      interested and he may hold and be remunerated in respect of any office or place of profit
      (other than the office of Auditor of the Company or any subsidiary thereof) under the
      Company or any other company in which the Company is in any way interested and he (or
      any firm of which he is a member) may act in a professional capacity for the Company or any
      such other company and be remunerated therefor and in any such case as aforesaid (save
      as otherwise agreed) he may retain for his own absolute use and benefit all profits and
      advantages accruing to him thereunder or in consequence thereof.

      The remuneration of a Managing Director or Chief Executive Officer or President (or person
      holding an equivalent position) shall from time to time be fixed by the Directors and may,
      subject to these Articles, be by way of salary or commission or participation in profits or by
      any or all these modes but he shall not under any circumstances be remunerated by a
      commission on or a percentage of turnover.


                                                143
                  GENERAL AND STATUTORY INFORMATION

(c)   Borrowing
      Subject as provided in the Articles and to the provisions of the Companies Act, the Directors
      may exercise all the powers of the Company to borrow money, to mortgage or charge its
      undertaking, property and uncalled capital and to issue debentures and other securities,
      whether outright or as collateral security for any debt, liability or obligation of the Company
      or of any third party.

(d)   Retirement Age Limit
      There is no retirement age limit for Directors under our Articles. Section 153(1) of the
      Companies Act however provides that no person of or over the age of 70 years shall be
      appointed a director of a public company, although a person of or over the age of 70 years,
      may, by ordinary resolution passed at an annual general meeting of a company, be
      appointed or re-appointed as a director of the company to hold office or be authorised to
      continue in office as a director of the company, until the next annual general meeting of the
      company.

(e)   Shareholding Qualification
      There is no shareholding qualification for Directors in our Articles.

Share Rights and Restrictions
Our Company currently has one class of shares, namely, ordinary shares. Under the Companies
Act, only persons who are registered on our register of members are recognised as our
Shareholders. Notwithstanding the foregoing, the Companies Act also provides that Depositors
whose Securities Accounts are credited with Shares will be deemed to be our Shareholders.

(a)   Dividends and distribution
      The Company may by ordinary resolution declare dividends but no such dividends shall
      exceed the amount recommended by the Directors.

      If and so far as in the opinion of the Directors the profits of the Company justify such
      payments, the Directors may declare and pay the fixed dividends on any class of shares
      carrying a fixed dividend expressed to be payable on fixed dates on the half-yearly or other
      dates prescribed for the payment thereof and may also from time to time declare and pay
      interim dividends on shares of any class of such amounts and on such dates and in respect
      of such periods as they think fit.

      Subject to any rights or restrictions attached to any shares or class of shares and except as
      otherwise permitted under the Companies Act:–
      (a)   all dividends in respect of shares must be paid in proportion to the number of shares
            held by a member but where shares are partly paid all dividends must be apportioned
            and paid proportionately to the amounts paid or credited as paid on the partly paid
            shares; and
      (b)   all dividends must be apportioned and paid proportionately to the amounts so paid or
            credited as paid during any portion or portions of the period in respect of which the
            dividend is paid.

      An amount paid or credited as paid on a share in advance of a call is to be ignored.




                                             144
                    GENERAL AND STATUTORY INFORMATION

      No dividend shall be paid otherwise than out of profits available for distribution under the
      provisions of the Companies Act.

      The Directors may retain any dividend or other moneys payable on or in respect of a share
      on which the Company has a lien and may apply the same in or towards satisfaction of the
      debts, liabilities or engagements in respect of which the lien exists.

      All dividends unclaimed after being declared may be invested or otherwise made use of by
      the Directors for the benefit of the Company and any dividend unclaimed after a period of six
      years from the date of declaration of such dividend may be forfeited and if so shall revert to
      the Company but the Directors may at any time thereafter at their absolute discretion annul
      any such forfeiture and pay the dividend so forfeited to the person entitled thereto prior to the
      forfeiture.

(b)   Voting rights
      At any general meeting, a resolution put to the vote of the meeting shall be decided on a
      show of hands unless a poll is (before or on the declaration of the result of the show of
      hands) demanded by:–
      (i)     the chairman of the meeting; or
      (ii)    not less than five members present in person or by proxy and entitled to vote; or
      (iii)   a member present in person or by proxy and representing not less than one-tenth of
              the total voting rights of all the members having the right to vote at the meeting; or
      (iv) a member present in person or by proxy holding not less than ten per cent. of the total
           number of paid-up shares of the Company (excluding treasury shares),

      Provided always that no poll shall be demanded on the choice of a chairman or on a question
      of adjournment.

      A demand for a poll may be withdrawn only with the approval of the meeting. Unless a poll
      is required, a declaration by the chairman of the meeting that a resolution has been carried,
      or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the
      minute book, shall be conclusive evidence of that fact without proof of the number or
      proportion of the votes recorded for or against such resolution. If a poll is required, it shall
      be taken in such manner (including the use of ballot or voting papers or tickets) as the
      chairman of the meeting may direct, and the result of the poll shall be deemed to be the
      resolution of the meeting at which the poll was demanded. The chairman of the meeting may
      (and if so directed by the meeting shall) appoint scrutineers and may adjourn the meeting to
      some place and time fixed by him for the purpose of declaring the result of the poll.

      In the case of an equality of votes, whether on a show of hands or on a poll, the chairman
      of the meeting at which the show of hands takes place or at which the poll is demanded shall
      be entitled to a casting vote.

      A poll demanded on any question shall be taken either immediately or at such subsequent
      time (not being more than thirty days from the date of the meeting) and place as the
      chairman may direct. No notice need be given of a poll not taken immediately. The demand
      for a poll shall not prevent the continuance of the meeting for the transaction of any business
      other than the question on which the poll has been demanded.




                                                145
                  GENERAL AND STATUTORY INFORMATION

      Subject and without prejudice to any special privileges or restrictions as to voting for the time
      being attached to any special class of shares for the time being forming part of the capital
      of the Company, each member entitled to vote may vote in person or by proxy. On a show
      of hands, every member who is present in person or by proxy shall have one vote (provided
      that in the case of a member who is represented by two proxies, only one of the two proxies
      as determined by that member or, failing such determination, by the chairman of the meeting
      (or by a person authorised by him) in his sole discretion shall be entitled to vote on a show
      of hands) and on a poll, every member who is present in person or by proxy shall have one
      vote for every share which he holds or represents. For the purpose of determining the
      number of votes which a member, being a Depositor, or his proxy may cast at any general
      meeting on a poll, the reference to shares held or represented shall, in relation to shares of
      that Depositor, be the number of shares entered against his name in the Depository Register
      as at forty-eight hours before the time of the relevant general meeting as certified by the
      Depository to the Company.

      No member shall, unless the Directors otherwise determine, be entitled in respect of shares
      held by him to vote at a general meeting either personally or by proxy or to exercise any
      other right conferred by membership in relation to meetings of the Company if any call or
      other sum presently payable by him to the Company in respect of such shares remains
      unpaid.

      On a poll, votes may be given personally or by proxy and a person entitled to more than one
      vote need not use all his votes or cast all the votes he uses in the same way.

Change in capital
The Company may from time to time by ordinary resolution increase its capital by such sum as
the resolution shall prescribe.

Subject to any direction to the contrary that may be given by the Company in a general meeting
and except as permitted under the listing rules of the SGX-ST, all new shares shall, before issue,
be offered to such persons who as at the date of the offer are entitled to receive notices from the
Company of general meetings in proportion, as far as the circumstances admit, to the number of
the existing shares to which they are entitled. The offer shall be made by notice specifying the
number of shares offered, and limiting a time within which the offer, if not accepted, will be
deemed to be declined, and, after the expiration of that time, or on the receipt of an intimation from
the person to whom the offer is made that he declines to accept the shares offered, the Directors
may dispose of those shares in such manner as they think most beneficial to the Company. The
Directors may likewise so dispose of any new shares which (by reason of the ratio which the new
shares bear to shares held by persons entitled to an offer of new shares) cannot, in the opinion
of the Directors, be conveniently offered under the foregoing.

The Company may by ordinary resolution in general meeting give to the Directors a general
authority, either unconditionally or subject to such conditions as may be specified in the ordinary
resolution, to:–
(i)   (a)   issue shares in the capital of the Company (“shares”) whether by way of rights, bonus
            or otherwise; and/or
      (b)   make or grant offers, agreements or options (collectively, “Instruments”) that might or
            would require shares to be issued, including but not limited to the creation and issue
            of (as well as adjustments to) warrants, debentures or other instruments convertible
            into shares; and


                                              146
                     GENERAL AND STATUTORY INFORMATION

(ii)    (notwithstanding the authority conferred by the ordinary resolution may have ceased to be
        in force) issue shares in pursuance of any Instrument made or granted by the Directors while
        the ordinary resolution was in force,
        Provided That:–
        (I)    the aggregate number of shares to be issued pursuant to the ordinary resolution
               (including shares to be issued in pursuance of Instruments made or granted pursuant
               to the ordinary resolution) shall be subject to such limits and manner of calculation as
               may be prescribed by the SGX-ST;
        (II)   in exercising the authority conferred by the ordinary resolution, the Company shall
               comply with the provisions of the listing rules of the SGX-ST for the time being in force
               (unless such compliance is waived by the SGX-ST) and the Articles; and
        (III) (unless revoked or varied by the Company in general meeting) the authority conferred
              by the ordinary resolution shall not continue in force beyond the conclusion of the
              annual general meeting of the Company next following the passing of the ordinary
              resolution, or the date by which such annual general meeting of the Company is
              required by law to be held, or the expiration of such other period as may be prescribed
              by the Companies Act (whichever is the earliest).

The Company may by ordinary resolution:–
(i)     consolidate and divide all or any of its share capital;
(ii)    sub-divide its shares, or any of them, (subject, nevertheless, to the provisions of the
        Companies Act), and so that the resolution whereby any share is sub-divided may determine
        that, as between the holders of the shares resulting from such sub-division, one or more of
        the shares may, as compared with the others, have any such preferred, deferred or other
        special rights, or be subject to any such restrictions, as the Company has power to attach
        to unissued or new shares; or
(iii)   subject to the provisions of the Articles and Companies Act, convert any class of shares into
        any other class of shares.

The Company may reduce its share capital or other undistributable reserve in any manner and
with and subject to any incident authorised and consent required by law.

Subject to and in accordance with the provisions of the Companies Act, the Company may
authorise the Directors in general meeting to purchase or otherwise acquire ordinary shares
issued by it on such terms as the Company may think fit and in the manner prescribed by the
Companies Act. If required by the Companies Act, all shares purchased by the Company shall,
unless held in treasury in accordance with the Companies Act, be cancelled immediately upon
purchase. On the cancellation of the shares aforesaid, the rights and privileges attached to those
shares shall expire and the number of issued shares of the Company shall be diminished by the
number of shares so cancelled; where any such cancelled share was purchased or acquired out
of the capital of the Company, the amount of share capital of the Company shall be reduced
accordingly. Where the shares purchased by the Company are not cancelled, the Company may
hold or deal with any such share so purchased by it in such manner as may be permitted by, and
in accordance with, the Companies Act.




                                                 147
                       GENERAL AND STATUTORY INFORMATION

     Variation of rights of existing shares or classes of shares
     Whenever the share capital of the Company is divided into different classes of shares, the special
     rights attached to any class may, subject to the provisions of the Companies Act, be varied or
     abrogated either with the consent in writing of the holders of three-quarters of the total voting
     rights of the issued shares of the class or with the sanction of a special resolution passed at a
     separate general meeting of the holders of the shares of the class (but not otherwise) and may
     be so varied or abrogated either whilst the Company is a going concern or during or in
     contemplation of a winding-up. To every such separate general meeting, all the provisions of the
     Articles relating to general meetings of the Company and to the proceedings thereat shall mutatis
     mutandis apply, except that the necessary quorum shall be two persons at least holding or
     representing by proxy at least one-third of the total voting rights of the issued shares of the class
     and that any holder of shares of the class present in person or by proxy may demand a poll and
     that every such holder shall on a poll have one vote for every share of the class held by him,
     Provided Always That where the necessary majority for such a special resolution is not obtained
     at such general meeting, consent in writing if obtained from the holders of three-quarters of the
     total voting rights of the issued shares of the class concerned within two months of such general
     meeting shall be as valid and effectual as a special resolution carried at such general meeting.
     The foregoing provisions shall apply to the variation or abrogation of the special rights attached
     to some only of the shares of any class as if each group of shares of the class differently treated
     formed a separate class the special rights whereof are to be varied.

     The repayment of preference capital other than redeemable preference capital, or any alteration
     of preference shareholders’ rights, may only be made pursuant to a special resolution of the
     preference shareholders concerned Provided Always That where the necessary majority for such
     a special resolution is not obtained at the general meeting, consent in writing if obtained from the
     holders of three-fourths of the preference shares concerned within two months of the general
     meeting, shall be as valid and effectual as a special resolution carried at the general meeting.

     The special rights attached to any class of shares having preferential rights shall not, unless
     otherwise expressly provided by the terms of issue thereof, be deemed to be varied by the
     creation or issue of further shares ranking as regards participation in the profits or assets of the
     Company in some or all respects pari passu therewith but in no respect in priority thereto.

     Limitations on Shareholders regarded as non-residents of Singapore
     There are no limitations on the rights of our Shareholders who are regarded as non-residents of
     Singapore to hold or vote their shares.


MATERIAL CONTRACTS

12. The following contracts, not being contracts entered into in the ordinary course of business of our
    Group, have been entered into by our Company and our subsidiaries within the two years
    preceding the date of lodgement of this Prospectus, and are or may be material:–
     (a)   a Deed of Declaration of Trust dated 25 May 2006 entered into between our Company of the
           one part and George Chew of the other part pursuant to which our Company agreed to sell
           and George Chew agreed to purchase 60% of the issued and paid-up share capital in Sitra
           Asia Pacific Sdn. Bhd., comprising 30,006 ordinary shares at a nominal consideration of
           RM211.




                                                  148
                      GENERAL AND STATUTORY INFORMATION

     (b)   a Sale and Purchase Agreement dated 15 April 2006 entered into between George Chew,
           Teresa Tan and Steven Chew of the one part and our Company of the other part pursuant
           to which George Chew, Teresa Tan and Steven Chew agreed to sell and our Company
           agreed to purchase 29 issued and paid-up ordinary shares of Sitra Dove Logistics Sdn. Bhd.
           at a nominal consideration of RM3.
     (c)   a Sale and Purchase Agreement dated 16 March 2006 entered into between George Chew
           and Teresa Tan of the one part and our Company of the other part pursuant to which George
           Chew and Teresa Tan agreed to sell and our Company agreed to purchase the entire issued
           and paid-up share capital of Sitra Dove Logistics Pte. Ltd. comprising 870,002 ordinary
           shares at a nominal consideration of $2.00.
     (d)   a Sale and Purchase Agreement dated 24 February 2006 entered into between George
           Chew, Teresa Tan and Steven Chew of the one part and our Company of the other part
           pursuant to which George Chew, Teresa Tan and Steven Chew agreed to sell and our
           Company agreed to purchase the entire issued and paid-up share capital of Sitra Agencies
           Pte Ltd, comprising 130,001 ordinary shares at a purchase consideration based on the
           audited net tangible asset value of Sitra Agencies Pte Ltd as at 31 December 2005.
     (e)   a Sale and Purchase Agreement dated 1 November 2005 entered into between our
           Company of the one part and George Chew and Teresa Tan of the other part pursuant to
           which our Company agreed to sell and George Chew and Teresa Tan agreed to purchase
           the property situate at 203G Ponggol Seventeenth Avenue, Singapore at a consideration of
           S$1,750,000.
     (f)   a Sale and Purchase Agreement dated 31 August 2005 between Kim Suzanne Ramsay as
           trustee for the Ramsay Family Trust, our subsidiary, Suncoast Sitra Pte Ltd and The Outdoor
           Furniture Warehouse (Queensland) Pty Ltd (“TOFW”) pursuant to which Suncoast Sitra Pte
           Ltd has agreed to acquire one ordinary share in the capital of TOFW from Kim Suzanne
           Ramsay at a consideration of A$400,000. The said acquisition was not completed in
           accordance with the terms of the agreement by Kim Suzanne Ramsay and as such has been
           aborted by us.
     (g)   a Collective Sale Agreement dated 1 February 2005 entered into between our Company and
           other owners of the development, Oasis Garden at Bunga Rampai Place, Singapore
           pursuant to which our Company agreed to join in the collective sale of Oasis Garden.
     (h)   An Option to Purchase granted by Greenleaf Development Pte Ltd on 21 November 2004
           and duly exercised by our Company on 6 December 2004 pursuant to which Greenleaf
           Development Pte Ltd agreed to sell and our Company agreed to purchase the property
           situate at 203G Ponggol Seventeenth Avenue, Singapore at a consideration of S$1,750,000.

LITIGATION, ARBITRATION AND BANKRUPTCY PROCEEDINGS

13. On 13 December 2005, an action in MC Suit No. 28948/2005 was commenced against our
    subsidiary, Suncoast Sitra Singapore for the payment of $23,500 plus interest thereon and costs,
    such sum being alleged outstanding rent owing by Suncoast Sitra Singapore in respect of the
    lease of a certain property by the landlord of the said property to Suncoast Sitra Singapore. On
    20 October 2006, summary judgement was awarded against us for the sum of $23,500 plus
    interest at 6% per annum and costs of $2,500. We have settled the judgement sum of $23,500 and
    costs of $2,500 as at the date of this Prospectus.




                                                 149
                       GENERAL AND STATUTORY INFORMATION

14. On 28 August 2006, our subsidiary, Suncoast Sitra Singapore filed a proof of debt with the
    administrator of one of our customers for the payment of an aggregate amount of A$685,975, of
    which A$531,114 is under objection by the administrator. The said sum of A$685,975 claimed
    comprises unpaid invoices totalling A$144,861, legal costs of A$10,000 and non-liquidated
    damage of A$531,114. As at the Latest Practicable Date, we had received payment (by way of
    cash and return of goods) of an amount aggregating A$26,299 from the administrator. The said
    customer is now subject to a Deed of Company Arrangement and any funds recovered will come
    from a finite pool of funds as dividends payable to creditors. We have instructed legal counsels
    in Australia to take action to recover the balance sum. An allowance equivalent to S$825,000 for
    doubtful trade receivables had been made for FY2005, which include the unpaid invoices of
    A$144,861. Please refer to the Section “Credit Management” of this Prospectus for more details.
    We are contemplating legal proceedings against the director and/or shareholder of such customer
    for a sum of A$489,451.

     Save as disclosed above, neither our Company nor any of our subsidiaries is engaged in any legal
     or arbitration proceedings, including those which are pending or known to be contemplated, which
     may have, or which have had in the 12 months immediately preceding the date of lodgement of
     this Prospectus, a material effect on the financial position or profitability of our Group.


MISCELLANEOUS

15. The nature of the business of our Company and our subsidiaries is stated under the Section “Our
    Subsidiaries” of this Prospectus. As at the date of this Prospectus, all the corporations which are,
    by virtue of Section 6 of the Companies Act, deemed to be related to our Company, are set out
    in Appendix VI “Independent Auditors’ Report in relation to the Audited Combined Financial
    Statements of the Group for FY2003, FY2004 and FY2005 and the Unaudited Combined
    Financial Statements of the Group for the three months ended 31 March 2006” of this Prospectus.

16. There has been no previous issue of Shares by our Company or offer for sale of our Shares to the
    public within the two years preceding the date of this Prospectus.

17. No amount of cash or securities or benefit has been paid or given to any promoter within the two
    years preceding the Latest Practicable Date or is proposed or intended to be paid or given to any
    promoter at any time.

18. Save as disclosed in this Prospectus, no expert is interested, directly or indirectly, in the promotion
    of, or in any property or assets which have, within two years preceding the Latest Practicable
    Date, been acquired or disposed of by or leased to our Company or any of our subsidiaries or are
    proposed to be acquired or disposed of by or leased to our Company or any of our subsidiaries.

19. Application moneys received by our Company in respect of successful applications (including
    successful applications which are subsequently rejected) will be placed in a separate non-interest
    bearing account with Bank of East Asia, Limited (“Receiving Bank”). In the ordinary course of
    business, the Receiving Bank will deploy these moneys in the interbank money market. All profits
    derived from the deployment of such moneys will accrue to the Receiving Bank. Any refund of all
    or part of the application moneys to unsuccessful or partially successful applicants will be made
    without any interest or any share of revenue or any other benefit arising therefrom.




                                                   150
                       GENERAL AND STATUTORY INFORMATION

20. Details, including the names, addresses and professional qualifications (including membership in
    a professional body) of the auditors of our Company for the financial years ended 31 December
    2003, 31 December 2004 and 31 December 2005 and for the three month period ended 31 March
    2006 are as follows:–

                                                                      Partner-in-charge
     Name and address                 Professional body               Professional qualification
     FY2003 and FY2004
     Boon Suan Lee & Co               Institute of Certified Public   FY2003
     220 Orchard Road #05-02          Accountants of Singapore
                                                                      Boon Suan Aik
     Midpoint Orchard
                                                                      Certified Public Accountant
     Singapore 238852

                                                                      FY2004

                                                                      Poon Yew Wah
                                                                      Certified Public Accountant

                                                                      A practising member of the Institute of
                                                                      Certified Public Accountants of
                                                                      Singapore

     FY2005 and unaudited 1Q2006
     Nexia Tan & Sitoh                Institute of Certified Public   Kristin Kim Yoon Sook
     5 Shenton Way #23-03             Accountants of Singapore        Certified Public Accountant
     UIC Building
                                                                      A practising member of the Institute of
     Singapore 068808
                                                                      Certified Public Accountants of
                                                                      Singapore

     We currently have no intention of changing our auditors after the listing of our Company on the
     SGX-SESDAQ.

21. No property has been purchased or acquired or proposed to be purchased or acquired by our
    Group which is to be paid for, wholly or partly, out of the proceeds of the Invitation or the purchase
    or acquisition of which has not been completed at the date of this Prospectus, other than property
    the contract for the purchase or acquisition whereof was entered into in the ordinary course of
    business of our Company or our subsidiaries, such contract not being made in contemplation of
    the Invitation nor the Invitation in consequence of the contract.

22. Save as disclosed in this Prospectus, our Directors are not aware of any event which has occurred
    since the end of the period covered by Appendix VI “Independent Auditors’ Report in relation to
    the Audited Combined Financial Statements of the Group for FY2003, FY2004 and FY2005 and
    the Unaudited Combined Financial Statements of the Group for the three months ended 31 March
    2006” of this Prospectus, that is 31 March 2006 to the Latest Practicable Date, which may have
    a material effect on the financial information provided in the Independent Auditors’ Report in
    Appendix VI of this Prospectus.

23. Save as disclosed under the Section “Interested Person Transactions And Conflicts of Interests
    — Present and Ongoing Interested Person Transactions” in respect of our Non-Executive
    Director, no expert is employed on a contingent basis by our Company or any of our subsidiaries,
    has a material interest, whether direct or indirect, in our Shares or the shares of any of our
    subsidiaries, or has a material economic interest, whether direct or indirect, in our Company,
    including an interest in the success of the Invitation.


                                                    151
                       GENERAL AND STATUTORY INFORMATION

24. As at the date of this Prospectus, we are not materially dependent on any patent or licence,
    industrial, commercial or financial contract (including a contract with a customer or contract
    manufacturer) nor are we dependent on any single contract manufacturer or supplier for the
    supply of any particular product.


CONSENTS

25. Nexia Tan & Sitoh, the Auditors and Reporting Accountants has given and has not withdrawn its
    written consent to the issue of this Prospectus with the inclusion herein of the “Independent
    Auditors’ Report in relation to the Audited Combined Financial Statements of the Group for
    FY2003, FY2004 and FY2005 and the Unaudited Combined Financial Statements of the Group
    for the three months ended 31 March 2006” in Appendix VI and the “Unaudited Proforma
    Combined Financial Statements of the Group for FY2005 and the three months ended 31 March
    2006” in Appendix VII and to the references to its name in the form and context in which they
    appear in this Prospectus and to act in such capacity in relation to this Prospectus.

26. Boon Suan Lee & Co has given and has not withdrawn its written consent to the issue of this
    Prospectus with the inclusion herein of its name and references to its name in the form and
    context in which they appear in this Prospectus.

27. The Manager and the Placement Agent and Underwriter have given and have not withdrawn their
    written consent to the issue of this Prospectus with the inclusion herein of and reference to their
    respective names in the form and context in which they appear in this Prospectus and to act in
    such capacities in relation to this Prospectus.

28. Our Legal Advisers on Malaysian Law, Raslan Loong, has given and has not withdrawn its written
    consent to the issue of this Prospectus with the inclusion herein of and references to its name in
    the form and context in which it appears in this Prospectus and to act in such capacity in relation
    to this Prospectus.

29. Our Legal Advisers on Indonesian Law, William, Effendi & Co. Law Office, has given and has not
    withdrawn its written consent to the issue of this Prospectus with the inclusion herein of its opinion
    in the form and context in which it appears in the Sections “Risk Factors - Our business and
    reputation will be adversely affected if any of our contract manufacturers uses timber that is
    obtained from illegal sources” and “History and Business - In-Process Supervision” on pages 33
    and 98 respectively of this Prospectus and references to its name in the form and context in which
    it appears in this Prospectus and to act in such capacity in relation to this Prospectus.

30. Each of the Manager, the Placement Agent and Underwriter, Solicitors to the Invitation, the Legal
    Advisers to our Company on Malaysian Law, the Legal Advisers to our Company on Australian
    Law, the Share Registrar, the Principal Banker and the Receiving Banker do not make, or purport
    to make, any statement in this Prospectus or any statement upon which a statement in this
    Prospectus is based and, to the maximum extent permitted by law, expressly disclaim and take
    no responsibility for any liability to any person which is based on, or arises out of, the statements,
    information or opinions in this Prospectus.




                                                   152
                       GENERAL AND STATUTORY INFORMATION

RESPONSIBILITY STATEMENT BY THE DIRECTORS OF OUR COMPANY

31. This Prospectus has been seen and approved by our Directors and they collectively and
    individually accept full responsibility for the accuracy of the information given in this Prospectus
    and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief,
    the facts stated and the opinions expressed in this Prospectus are fair and accurate in all material
    respects as at the date of this Prospectus and that there are no material facts the omission of
    which would make any statements in this Prospectus misleading, and that this Prospectus
    constitutes full and true disclosure of all material facts about the Invitation, our Company and our
    subsidiaries.


RESPONSIBILITY STATEMENT BY THE MANAGER

32. The Manager acknowledges that, having made due and careful enquiry and to the best of its
    knowledge and belief, based on information furnished to it by our Group, this Prospectus
    constitutes full and true disclosure of all material facts about the Invitation and our Group and it
    is not aware of any other facts, the omission of which would make any statements herein
    misleading.


DOCUMENTS AVAILABLE FOR INSPECTION

33. Copies of the following documents may be inspected at the registered office of our Company at
    18 Genting Road, The Blue Building, Singapore 349477 during normal business hours for a period
    of six months from the date of registration of this Prospectus by the Authority:–
     (a)   the Memorandum and Articles of Association of our Company;
     (b)   the material contracts referred to in the Section “General and Statutory Information —
           Material Contracts” of this Prospectus;
     (c)   the Service Agreements referred to in the Section “Service Agreements” of this Prospectus;
     (d)   the letters of consent referred to in the Section “General and Statutory Information —
           Consents” of this Prospectus;
     (e)   the “Independent Auditors’ Report in relation to the Audited Combined Financial Statements
           of the Group for FY2003, FY2004 and FY2005 and the Unaudited Combined Financial
           Statements of the Group for the three months ended 31 March 2006” in Appendix VI of this
           Prospectus;
     (f)   the “Unaudited Proforma Combined Financial Statements of the Group for FY2005 and the
           three months ended 31 March 2006” in Appendix VII of this Prospectus; and
     (g)   the audited financial statements of our Company’s subsidiaries (other than Suncoast Sitra
           Australia) for FY2003, FY2004 and FY2005.




                                                  153
                                   APPENDIX I — TAXATION

The following is a discussion of certain tax matters arising under the current tax laws in Singapore and
is not intended to be and does not constitute legal or tax advice. While this discussion is considered to
be a correct interpretation of existing laws in force as at the date of this Prospectus, no assurance can
be given that courts or fiscal authorities responsible for the administration of such laws will agree with
this interpretation or that changes in such laws will not occur. The discussion is limited to a general
description of certain tax consequences in Singapore with respect to subscription, ownership and
disposal of our Shares by Singapore investors, and does not purport to be a comprehensive nor
exhaustive description of all of the tax considerations that may be relevant to a decision to subscribe,
own and dispose of our Shares. Prospective investors should consult their tax advisors regarding
Singapore tax and other tax consequences of subscribing, owning and disposing our Shares. It is
emphasised that neither our Company, our Directors nor any other persons involved in the Invitation
accepts responsibility for any tax effects or liabilities resulting from the subscription for, purchase,
holding or disposal of our Shares. Dividends declared by our Company will be paid out in Singapore
dollars to our Shareholders.

SINGAPORE INCOME TAX

General

Individuals
All individuals, resident or non-resident, with certain exceptions, are subject to income tax on income
accruing in or derived from Singapore. With effect from the year of assessment 2005 (i.e. for calendar
year ending in 2004), all foreign-sourced income received in Singapore by resident individuals will be
exempt from Singapore tax. However, this exemption will not apply to foreign-sourced income received
through a partnership in Singapore. Non-resident individuals are not subject to income tax on
foreign-sourced income.

An individual is tax resident in Singapore in a year of assessment if, in the preceding year, he was
physically present in Singapore or exercised an employment in Singapore (other than as a director of
a company) for 183 days or more, or if he normally resides in Singapore (except for temporary
absences).

For a Singapore tax resident individual, his taxable income (after deduction of personal reliefs) are
subject to tax on a progressive rate varying from 0% to a maximum rate of 21% with effect from the year
of assessment 2006 i.e. calendar year 2005.

Corporations
Corporate taxpayers, resident or non-resident, are subject to Singapore income tax on income that is
accrued in or derived from Singapore and on foreign income received or deemed to be received in
Singapore, unless specifically exempted. Since 1 June 2003, tax exemption has been granted to all
foreign-sourced income in the form of dividends, branch profits and services income, which are derived
from and have been subject to tax, with certain exceptions, in foreign jurisdictions that have headline
tax rates of at least 15%.

A corporate taxpayer is regarded as tax resident in Singapore if the control and management of its
business is exercised in Singapore.

The corporate tax rate in Singapore is 20% for the year of assessment 2006 i.e. the financial year
ended in 2005. In addition, three-quarters of up to the first $10,000 of a company’s chargeable income
and one-half of up to the next $90,000 will be exempt from corporate tax. The remaining chargeable
income (after the tax exemption) will be taxed at 20%. The above tax exemption will not apply to
Singapore dividends received by companies.


                                                   I-1
                                  APPENDIX I — TAXATION

Dividend Distributions

Imputation Tax System
Up to 31 December 2002, Singapore adopted an imputation system of taxation. Under this system, the
tax assessed on a tax resident company in respect of its normal chargeable income are passed on as
tax credits to its shareholders upon distribution of dividends. These dividends are taxable in the hands
of shareholders and the shareholders can claim tax credits attached to the dividends as a set-off
against their final tax payable in Singapore.


One-Tier Tax System
Singapore adopted the “one-tier” corporate tax system with effect from 1 January 2003. Under this
system, tax collected from corporate profits is final and Singapore dividends are tax exempt in the
hands of the shareholder. To enable companies to make use of the unutilised dividend franking credits
as at 31 December 2002, a five-year transition period from 1 January 2003 to 31 December 2007 has
been introduced for such companies to pay franked dividends out of its unutilised dividend franking
credits. During this period, the shareholders will continue to receive these dividends with credits
attached.

As we have moved to the one-tier corporate tax system on 28 April 2006, our Shareholders would
receive tax exempt dividends as described above.

Foreign shareholders are advised to consult their own tax advisors to take into account the tax laws of
their respective countries of residence and the existence of any double taxation agreement which their
country of residence may have with Singapore.


Gains on Disposal of our Shares
Singapore does not impose tax on capital gains. Any profits from the disposal of our Shares if regarded
as capital gains by the Inland Revenue Authority of Singapore (“IRAS”) are not taxable in Singapore.

However, gains may be construed to be of an income nature and subject to income tax if they arise from
activities which the IRAS regards as the carrying on of a trade in Singapore. Therefore, where the
taxpayer is deemed to be carrying on a trade of dealing in shares in Singapore, gains on disposal of
our Shares are of an income nature and subject to Singapore income tax.


Stamp Duty
There is no stamp duty payable on the issuance and subscription of our Shares.

Stamp duty is payable on the instrument of conveyance, assignment or transfer of our Shares or any
interest thereof at the rate of $2.00 for every $1,000 computed based on the value of the consideration
or the market value of our Shares registered in Singapore, whichever is higher.

The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty is
payable if no instrument of transfer is executed (such as in the case of scripless shares) or the
instrument of transfer is executed outside Singapore. However, stamp duty may be payable if the
instrument of transfer which is executed outside Singapore is subsequently received in Singapore.

The above stamp duty is not applicable to electronic transfers of our Shares through the CDP.




                                                  I-2
                                  APPENDIX I — TAXATION

Estate Duty
Singapore estate duty is imposed on the value of immovable properties situated in Singapore owned
by deceased individuals who died domiciled outside Singapore, subject to specific exemption limits.
Movable assets of non-domiciles will be exempt from estate duty with respect to deaths occurring on
or after 1 January 2002. Singapore estate duty is imposed on the value of immovable properties
situated in Singapore and movable properties, wherever it may be, owned by deceased individuals who
died domiciled in Singapore, subject to specific exemption limits. Our Shares are considered to be
movable property situated in Singapore as we are a company incorporated in Singapore and maintains
a share register in Singapore.

Accordingly, our Shares held by an individual domiciled in Singapore are subject to Singapore estate
duty upon such individual’s death. Singapore estate duty is payable to the extent that the value of our
Shares aggregated with any other assets subject to Singapore estate duty exceeds $600,000. Unless
other exemptions apply to the other assets, for example, the separate exemption limit for residential
properties, any excess beyond $600,000 will be taxed at 5% on the first $12,000,000 of the deceased
individual’s chargeable assets and thereafter at 10%. Individuals should consult their own tax advisors
regarding the Singapore estate duty consequences of their ownership of our Shares.


Goods and Services Tax (“GST”)
The sale of shares is considered a supply of services for Singapore GST purposes. Generally, a supply
of services made by a GST-registered person is subject to GST at the current standard rate of 5%
unless the supply of services can qualify for zero-rating (i.e. charge GST at 0%) under the Goods and
Services Tax Act, Cap. 117A (“GST Act”) or is exempt under the GST Act. The sale of our Shares by
an investor belonging in Singapore through an SGX-ST member or to another person belonging in
Singapore is an exempt sale not subject to GST.

No GST is payable on the purchase of our Shares except for possible GST payable on other incidental
charges such as brokerage. The sale of our Shares by a GST-registered investor in the course of or
furtherance of a business carried on by him through the Singapore exchange or another person
belonging in Singapore qualifies for exemption under the GST Act. However, any possible input GST
which is incurred by the investor in making wholly exempt supplies is not recoverable from the
Comptroller.

If the sale of our Shares by a GST-registered investor is made to another person belonging outside
Singapore, and that person is outside Singapore when the sale is executed, the sale would qualify for
zero-rating under the GST Act. Any possible input GST which is incurred by the investor in making
zero-rated supplies is recoverable from the Comptroller.

Services such as brokerage, handling and clearing charges rendered by a GST registered person (e.g.
broker) to an investor belonging in Singapore in connection with the investor’s purchase, sale, holding
of shares will be subject to GST at the current rate of 5%. Similar services rendered to an investor
belonging outside Singapore will be zero-rated provided that the investor is outside Singapore when the
services are performed and the services provided do not benefit any Singapore persons.




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                APPENDIX II — DESCRIPTION OF ORDINARY SHARES

DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES
The following statements are brief summaries of our capital structure and of the more important rights
and privileges of our Shareholders as conferred by the laws of Singapore and the Articles of Association
of our Company (“Articles of Association”). These statements summarise the material provisions of our
Articles of Association but are qualified in entirety by reference to our Articles of Association, a copy of
which will be available for inspection at our office during normal business hours for a period of six
months from the date of registration of this Prospectus.


Ordinary Shares
There are no founder, management, deferred or unissued shares reserved for issue for any purpose.
The rights and privileges of our shares are stated in our Articles of Association.

We have only one class of shares, namely, our ordinary shares. Our Articles of Association provide that
we may issue shares of a different class with preferential, deferred, qualified or special rights, privileges
or conditions as our Board may think fit and issue preference shares which are, or at our option are,
redeemable, subject to certain limitations.

As at the date of this Prospectus, 55,000,000 Shares have been issued and fully paid. All of our Shares
are in registered form. We may, subject to the provisions of the Companies Act and the listing rules of
the SGX-ST, purchase our own Shares. However, we may not, except in circumstances permitted by
the Companies Act, grant any financial assistance for the acquisition or proposed acquisition of our own
Shares.


New Shares
New Shares and/or convertible securities (where the maximum number of shares to be issued upon
conversion is determinable at the time of the issue of such securities) may only be issued with the prior
approval of our Shareholders in a general meeting. The aggregate number of Shares and/or convertible
securities to be issued pursuant to such approval may not exceed 50% (or such other limit as may be
prescribed by the SGX-ST) of our issued share capital, of which the aggregate number of Shares
and/or convertible securities to be issued other than on a pro-rata basis to our Shareholders may not
exceed 20% (or such other limit as may be prescribed by the SGX-ST) of our issued share capital (the
percentage of issued share capital being based on the issued share capital at the time such authority
is given after adjusting for new Shares arising from the conversion of convertible securities or employee
share options on issue at the time such authority is given and any subsequent consolidation or
subdivision of Shares). The approval, if granted, will lapse at the conclusion of our annual general
meeting following the date on which the approval was granted or the date by which the annual general
meeting is required by law to be held, whichever is the earlier. Subject to the foregoing, the provisions
of the Companies Act and any special rights attached to any class of shares currently issued, all new
Shares are under the control of our Board who may allot and issue the same with such rights and
restrictions as they may think fit.


Shareholders
Only persons who are registered in our Register of Shareholders and, in cases in which the person so
registered is CDP, the persons named as the depositors in the depository register maintained by CDP
for our Shares, are recognised as our Shareholders.

We will not, except as required by the law, recognise any equitable, contingent, future or partial interest
in any Share or other rights for any Share other than the absolute right thereto of the registered holder
of that Share or of the person whose name is entered in the depository register for that Share. We may

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                APPENDIX II — DESCRIPTION OF ORDINARY SHARES

close our Register of Shareholders for any time or times if we provide the Accounting & Corporate
Regulatory Authority of Singapore with at least fourteen days’ notice and the SGX-ST at least ten clear
market days’ notice. However, the register may not be closed for more than 30 days in aggregate in any
calendar year. We typically close the Register of Shareholders to determine our Shareholders’
entitlement to receive dividends and other distributions.


Transfer of Shares
There is no restriction on the transfer of fully-paid Shares except where required by law or the Listing
Manual or the rules or by-laws of SGX-ST. Our Board may decline to register any transfer of Shares
which are not fully-paid Shares or Shares on which we have a lien. Our Shares may be transferred by
a duly signed instrument of transfer in a form approved by SGX-ST. Our Board may also decline to
register any instrument of transfer unless, among other things, it has been duly stamped and is
presented for registration together with the share certificate and such other evidence of title as they
may reasonably require. We will replace lost or destroyed certificates for Shares if we are properly
notified and the applicant pays a fee which will not exceed S$2 for each share certificate and furnishes
any evidence and indemnity that our Board may require.


General Meetings of Shareholders
We are required to hold an annual general meeting every year. Our Board may convene an
extraordinary general meeting whenever it thinks fit and must do so if our Shareholders representing
not less than 10% of the total voting rights of all our Shareholders request in writing that such a meeting
be held. In addition, two or more of our Shareholders holding not less than 10% of our issued share
capital may call for an extraordinary general meeting. Unless otherwise required by law or by our
Articles of Association, voting at general meetings is by ordinary resolution, requiring an affirmative vote
of a simple majority of the votes cast at that meeting. An ordinary resolution suffices, for example, for
the appointment of Directors. A special resolution, requiring the affirmative vote of at least 75% of the
votes cast at the meeting, is necessary for certain matters under Singapore law, including voluntary
winding up, amendments to our Memorandum of Association and Articles of Association, a change of
our corporate name and a reduction in our share capital. We must give at least 21 days’ notice in writing
for every general meeting convened for the purpose of passing a special resolution. Ordinary
resolutions generally require at least 14 days’ notice in writing. The notice must be given to each of our
Shareholders who have supplied us with an address in Singapore for the giving of notices and must set
forth the place, the day and the hour of the meeting and, in the case of special business, the general
nature of that business.


Voting Rights
A holder of Shares is entitled to attend, speak and vote at any general meeting, in person or by proxy.
A proxy need not be a Shareholder. A person who holds Shares through the SGX-ST book-entry
settlement system will only be entitled to vote at a general meeting as a Shareholder if his name
appears on the depository register maintained by CDP 48 hours before the general meeting. Except as
otherwise provided in our Articles of Association, two or more Shareholders must be present in person
or by proxy to constitute a quorum at any general meeting. Under our Articles of Association, on a show
of hands, every Shareholder present in person or by proxy shall have one vote, and on a poll, every
Shareholder present in person or by proxy shall be entitled to one vote for every Share which he or she
holds or represents. A poll may be demanded in certain circumstances, including by the chairman of the
meeting or by any Shareholder present in person or by proxy and representing not less than 10% of the
total voting rights of all Shareholders having the right to attend and vote at the meeting or by any two
Shareholders present in person or by proxy and entitled to vote. In the case of a tie vote, whether on
a show of hands or a poll, the chairman of the meeting shall be entitled to a casting vote.

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                  APPENDIX II — DESCRIPTION OF ORDINARY SHARES

Dividends
We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we
may not pay dividends in excess of the amount recommended by our Board. We must pay all dividends
out of our profits. See “Bonus and Rights Issue” below. Our Board may also declare interim dividends
without the approval of our Shareholders. All dividends are paid pro-rata amongst our Shareholders in
proportion to the amount paid-up on each Shareholder’s Shares, unless the rights attached to an issue
of any Share provide otherwise. Unless otherwise directed, dividends are paid by cheque or warrant
sent through the post to each Shareholder at his registered address. Notwithstanding the foregoing, the
payment by us to CDP of any dividend payable to a Shareholder whose name is entered in the
depository register shall, to the extent of payment made to CDP, discharge us from any liability to that
Shareholder in respect of that payment.


Bonus and Rights Issue
Our Board may, with the approval of our Shareholders at a general meeting, capitalise any reserves or
profits (including profits or moneys carried and standing to any reserve) and distribute the same as
bonus shares credited as paid-up to our Shareholders in proportion to their shareholdings. Our Board
may also issue rights to take up additional Shares to Shareholders in proportion to their shareholdings.
Such rights are subject to any conditions attached to such issue and the regulations of the SGX-ST or
any stock exchange on which we are listed.


Takeovers
The SFA and the Singapore Code on Take-overs and Mergers (“Singapore Take-over Code”) regulate
the acquisition of ordinary shares of public companies and contain certain provisions that may delay,
deter or prevent a future takeover or change in control of our Company. Any person acquiring an
interest, either on his own or together with persons acting in concert with him, in 30% or more of our
voting shares must extend a takeover offer for the remaining voting shares in accordance with the
provisions of the Singapore Take-over Code. An offer for consideration other than cash must be
accompanied by a cash alternative at not less than the highest price paid by the offeror or parties acting
in concert with the offeror within the preceding six months. A mandatory takeover offer is also required
to be made if a person who, either on his own or together with persons acting in concert with him, holds
not less than 30% but not more than 50% of the voting shares and such person, or any person acting
in concert with him, acquires in any six month period additional voting shares representing more than
1% of our voting shares. Under the Singapore Take-over Code, the following individuals and companies
will be presumed to be persons acting in concert with each other unless the contrary is established:–
(a)   the following companies:–
      (i)     a company;
      (ii)    the parent company of (i);
      (iii)   the subsidiaries of (i);
      (iv) the fellow subsidiaries of (i);
      (v)     the associated companies of any of (i), (ii), (iii) or (iv); and
      (vi) companies whose associated companies include any of (i), (ii) (iii), (iv) or (v);
(b)   a company with any of its directors (together with their close relatives, related trusts as well as
      companies controlled by any of the directors, their close relatives and related trusts);
(c)   a company with any of its pension funds and employee share schemes;



                                                       II-3
                   APPENDIX II — DESCRIPTION OF ORDINARY SHARES

(d)   a persons with any investment company, unit trust or other fund whose investment such person
      manages on a discretionary basis, but only in respect of the investment account which such
      person manages;
(e)   a financial or other professional adviser, including a stockbroker, with its client in respect of the
      shareholdings of:–
      (i)     the adviser and persons controlling, controlled by or under the same control as the adviser;
              and
      (ii)    all the funds which the adviser manages on a discretionary basis, where the shareholdings
              of the adviser and any of those funds in the client total 10% or more of the client’s equity
              share capital;
(f)   directors of a company (together with their close relatives, related trusts and companies controlled
      by any of such directors, their close relatives and related trusts) which is subject to an offer or
      where the directors have reason to believe a bona fide offer for their company may be imminent;
(g)   partners; and
(h)   the following persons and entities:–
      (i)     an individual;
      (ii)    the close relatives of (i);
      (iii)   the related trusts of (i);
      (iv) any person who is accustomed to act in accordance with the instructions of (i); and
      (v)     companies controlled by any of (i), (ii), (iii), or (iv).


Liquidation or Other Return of Capital
If we liquidate or in the event of any other return of capital, holders of our Shares will be entitled to
participate in any surplus assets in proportion to their shareholdings, subject to any special rights
attaching to any other class of shares.


Indemnity
As permitted by Singapore law, our Articles of Association provide that, subject to the Companies Act,
our Board and officers shall be entitled to be indemnified by us against any liability incurred in defending
any proceedings, whether civil or criminal, which relate to anything done or omitted to have been done
as an officer, Director or employee and in which judgement is given in their favour or in which they are
acquitted or in connection with any application under any statute for relief from liability in respect thereof
in which relief is granted by the court. We may not indemnify our Directors and officers against any
liability which by law would otherwise attach to them in respect of any negligence, default, breach of
duty or breach of trust of which they may be guilty in relation to us.


Limitations on Rights to Hold or Vote on our Shares
Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed by
Singapore law or by our Articles of Association on the rights of non-resident Shareholders to hold or
vote on our Shares.




                                                         II-4
                APPENDIX II — DESCRIPTION OF ORDINARY SHARES

Minority Rights
The rights of minority shareholders of Singapore-incorporated companies are protected under Section
216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon
application by any of our Shareholders, as they think fit to remedy any of the following situations:–
(a)   our affairs are being conducted or the powers of our Board are being exercised in a manner
      oppressive to, or in disregard of the interests of, one or more of our Shareholders; or
(b)   we take an action, or threaten to take an action, or our Shareholders pass a resolution, or propose
      to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or
      more of our Shareholders, including the applicant.

Singapore courts have a wide discretion as to the reliefs they may grant and those reliefs are in no way
limited to those listed in the Companies Act itself.

Without prejudice to the foregoing, Singapore courts may:–
(a)   direct or prohibit any act or cancel or vary any transaction or resolution;
(b)   regulate the conduct of our affairs in the future;
(c)   authorise civil proceedings to be brought in our name, or on our behalf, by a person or persons
      and on such terms as the court may direct;
(d)   provide for the purchase of minority Shareholder’s Shares by our other Shareholders or by us
      and, in the case of a purchase of Shares by us, a corresponding reduction of our share capital;
      or
(e)   provide that we be wound up.




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                     APPENDIX III — DESCRIPTION OF RELEVANT
                       INDONESIAN LAWS AND REGULATIONS

The following is a general description of certain laws and regulations relating to the forestry industry in
Indonesia. As there are many laws and regulations governing the forestry industry in Indonesia, the
following does not purport to be a comprehensive nor exhaustive description of all of the relevant laws
and regulations. Some of these laws are unclear and may sometimes conflict. Therefore, while this
discussion is considered to be a correct interpretation and description of existing laws in force as at the
date of this Prospectus, no assurance can be given that courts or fiscal authorities for the administration
of such laws will agree with this interpretation or that changes in such laws will not occur.

In 1999, the Indonesian Government introduced the Forestry Law No. 41/1999 (“Forestry Law”) to
foster the management of forests in Indonesia. The law covers, inter alia, forest zoning and planning,
forest utilisation, harvesting, rehabilitation and reclamation of forests and the protection and
conservation of forests.

In addition to the Forestry Law, a number of forestry ministerial decrees and implementing regulations,
including Government Regulation No. 34/2002 Concerning Forestry and the Formulation of Plans on
the Management, Exploitation and Use of Forest Lands, Government Regulation No. 45/2004
Concerning Forest Conservation and Government Regulation No. 35/2002 Concerning Reforestation
Fund (collectively, “Forestry Regulations”) were issued.

Pursuant to Government Regulation No. 34/2002, the Ministry of Forestry of Indonesia has the
authority to monitor, guide and develop the primary forestry industry in Indonesia. The central
government has, through the Ministry of Forestry devolved some of the responsibilities for forest
management to the provincial and local authorities. The provincial forestry authority is responsible for
making long-term and medium-term forest management and planning to achieve effectiveness in forest
exploitation in their respective regions. However, forest planning made by the provincial forestry
authority is required to be approved by the Ministry of Forestry.


Forest Exploitation and Utilisation
Under the Forestry Law, all forest lands may be exploited except those in conservation zones and the
“core” and “wilderness” zones of National Parks. “Forest lands” are areas defined and delineated by the
Indonesian government as those to be maintained under permanent forest cover i.e. not agricultural
land or forest scheduled to be converted to agricultural land.

Forest exploitation includes planting, cultivating, harvesting, processing and marketing forest products.
Harvesting and processing of forest products must not exceed the sustainable yields prescribed by the
Ministry of Forestry. Forests are classified according to their functional types such as production forest,
protection forest, conservation forest, nature reserves etc. A forest is to be exploited only to the extent
permitted by its functional category and is limited to protect the forests and sustainable production.

Exploitation of production forests may take the form of using the land, environmental services, timber
and non-timber products and forest products (usufruct). Forest use licences are required for each type
of exploitation and all licence holders are responsible for guarding, protecting and conserving the
forests they exploit. Persons and companies conducting the business of forest exploitation (“forestry
enterprises”) are therefore required to be licensed and issued with the timber exploitation licence (izin
usaha pemanfaatan hasil hutan kayu (“IUPHHK”), formerly known as Hak Penguasaaan Hutan
(“HPH”)) which sets out the forest land location and area the licence holder is permitted to exploit.

The Forestry Regulations regulate the procedure and requirements for the issue of commercial licences
for the timber forest product primary industry. Government Regulation No. 34/2002 and the Ministry of
Forestry Decree No. 125/Kpts-II/2003 dated 4 April 2003 set out the conditions which must be satisfied


                                                   III-1
                       APPENDIX III — DESCRIPTION OF RELEVANT
                         INDONESIAN LAWS AND REGULATIONS

for the issue of the IUPHHK and any operational licence. Such conditions include obtaining the
necessary licence from the responsible body of the provincial government confirming that the proposed
use of the land is not against the environmental planning of such region and the applicant’s proposal
in relation to the exploitation of the forest, transportation, processing and/or marketing.


Forest Rehabilitation and Reclamation
The rehabilitation of forests and land refers to the restoration, maintenance and improvement of the
functions of forest lands so as to sustain their carrying capacity, productivity and other life-supporting
roles. This includes afforestation, planting shrubs and other plants, species enrichment and various
biological and engineering techniques of soil conservation. Forest reclamation involves efforts to
improve or restore damaged land or forest vegetation to fulfil their designated functions.

Under the relevant Forestry Regulations, all licensed forest users are required to pay various fees to
the Indonesian government for the purpose of rehabilitating and conserving the forests. Such fees
include operating fees and reforestation funds and forest conservation investment fund levies. The
reforestation fund is managed by the government. 40% of the funds collected from licensed forest users
will be distributed to regional governments for, inter alia the purposes of forest rehabilitation, forest
re-greening and maintenance.


Forest Protection and Conservation

Controlling illegal forestry activities
Under the Forestry Law, forest protection includes the prevention of forest damage by human activities,
livestock, natural forces and pests and diseases. Destruction of forests and anything intended to
protect the forests are forbidden. Prohibited activities include the following:–
•    Illegal working, use or occupation of any forest land;
•    Forest clearance and trees cutting at places less than 500 metres from a lakeside or reservoir, 200
     metres from a water source or river in swampy area, 100 metres either side of a river bank, close
     to gorges or 130 times the difference between the highest and lowest tides on a beach;
•    Burning of forests or felling of trees or harvesting forest products without authorisation;
•    Receipt, purchase, sale, exchange, storage or ownership of any forest products known to have
     been obtained illegally;
•    Carrying out any research or mining exploration/exploitation without the Ministry of Forest’s
     permission;
•    Grazing of livestock in forests except where authorised;
•    Bringing into forests equipment which could be used to fell trees or remove forest products without
     authorisation;
•    Discarding objects which could cause fires; and
•    Removal of any wild plants or animals from forest without authorisation.


SKSHH- Certificate of Timber Origin
As a measure to curb any unauthorised forestry activity, the Ministry of Forestry has in 2003 issued the
Decree No. 126/Kpts-II/2003 which provides that all timber harvested from a forest land shall be issued
with a certificate of timber origin (Surat Keterangan Sahnya Hasil Hutan)(“SKSHH”) by the regional


                                                  III-2
                       APPENDIX III — DESCRIPTION OF RELEVANT
                         INDONESIAN LAWS AND REGULATIONS

Forestry Department office in the area where the timber is harvested, as evidence of the legality of the
timber. Before the certificate of timber origin (SKSHH) may be issued, the official from the relevant
regional Forestry Department office will physically inspect, examine and measure the timber harvested
to ensure that the timber has been harvested in accordance with prescribed conditions. The timber is
then marked for identification purposes. In addition, a packing list (Daftar Hasil Hutan) (“DHH”) for the
timber harvested is required to be submitted to the regional Forestry Department for verification against
the relevant SKSHH, and for endorsement.

The Indonesian government has, through the issuance of joint decrees by the Ministry of Forestry,
Ministry of Transportation and Ministry of Trade and Industry, implemented several policies and
regulations concerning transportation of log timber. The primary objective of these regulations is to curb
illegal logging and trading of timber obtained from illegal sources. These regulations in essence provide
that (i) the transportation of log timber from the port of embarkation to the port of disembarkation and
to its ultimate destination (such as the factory of the manufacturer) shall be supervised by the relevant
forestry officer, (ii) all log timber must possess certificates of timber origin (SKSHH) issued by the
relevant Forestry Department office. The SKSHH and DHH are required to accompany the
transportation of the log timber from the timber harvest location to its ultimate destination as indicated
in the SKSHH and DHH. The SKSHH and DHH will be examined by the relevant forestry law
enforcement officials at the port of disembarkation to ascertain that the log timber in transport matches
the description on the SKSHH and DHH. It is only upon satisfactory examination would the log timber
be permitted to be received at the port of disembarkation by the buyer/user/manufacturer, (iii)
inter-island timber trading can only be conducted by a trader registered by the Director General of
Domestic Trade of Department of Trade of the Republic of Indonesia. The Ministry of Forestry has also
sought the support and joint co-ordination of the Indonesian Navy (TNI AL) and the Indonesian National
Police (POLRI) in the enforcement of the above policies and regulations.


Controlling forest and land fire
The Indonesian government has enacted several laws such as Law No. 23/1997 Jo. and Law No.
41/1999 with the aim to control forest and land fire. To implement such laws, the Indonesian
government has enacted Government Regulation No. 4/2001 concerning Control of Environment
Degradation and/or Pollution Related to Forest and/or Land Fires.

In essence, the above mentioned laws and regulation require inter alia, forestry enterprises to manage
the prevention of forest and/or land fires in their respective forest land. Forestry enterprises are
required to have adequate infrastructure to prevent forest fires in their respective forest land area. The
infrastructure required are, inter alia (a) installation of early fire detection system; (b) installation of fire
equipment, and (c) adoption of standard operational procedure to prevent and manage forest fires.
Forestry enterprises are required to file a report on the actions taken by them to prevent forest and land
fires within their respective locations once in every six months to their respective provincial, municipal
or local authorities as required by the said regulations.

The said laws and regulation also regulate the level of authority responsible for controlling forest and
land fire. The central government, through the Ministry of Forestry, is responsible for coordinating the
extinguishment and prevention of land and forest fires in cross border provinces within Indonesia
and/or cross border country. The provincial government is responsible for coordinating the
extinguishment and prevention of land and forest fires within its province. Violation of the government
regulation is punishable by a sanction in the form of compensation and/or criminal punishment.




                                                      III-3
                     APPENDIX III — DESCRIPTION OF RELEVANT
                       INDONESIAN LAWS AND REGULATIONS

Restructuring of Forest-based Industries

Prohibition against export of logs and sawn timber
Pursuant to Government Regulation No. 34/2002, the export of timber logs and sawn timber out of
Indonesia is legally prohibited with effect from June 2002. The trading of logs and sawn timber may be
carried out only within Indonesia by traders which have been registered as inter-island timber traders
by the Director General of Domestic Trade of The Trade Department of the Republic of Indonesia.


Registered Exporter of Forestry Products (ETPIK)
Primary forest-based industries such as the sawmill industry, veneer industry, plywood mill, laminating
veneer lumber, and chips industry shall be required to apply and obtain an industrial licence from the
Ministry of Forestry for its respective operations.

With effect from March 2003, products of forestry industry (as defined in the said Decree) can only be
exported by forestry products manufacturers which have been registered as Registered Exporter of
Forest Industry Product (Eksportir Terdaftar Produk Industri Kehutanan) (“ETPIK”) by the Director
General of Foreign Trade in the Ministry of Trade. Forestry products manufacturers may be registered
as ETPIK only if they have the relevant industrial licences issued to them on the basis of the laws in
force and other applicable requirements. This requirement was imposed through the Ministry of Trade
and Industry’s Decree No. 32/MPP/Kep/1/2003 dated 22 January 2003 as amended by the Ministry of
Trade and Industry’s Decree No. 647/MPP/Kep/10/2003 dated 16 October 2003, which was last
amended by the Ministry of Trade’s Decree No. 02/M-DAG/PER/2/2006 dated 2 February 2006.

ETPIK forestry products manufacturers are required to report to and file with the relevant authorities an
annual production plan and half yearly production realization as well as an annual export plan and half
yearly export realization. In addition, ETPIK operating in the sawmill industry, veneer industry, plywood
mill industry, laminating veneer lumber industry, and chips industry shall also file an annual plan in
relation to its use of industrial raw materials and monthly realization of the use of raw materials in the
current year. Forestry products manufacturers’ registration as ETPIK may be suspended or revoked if
they are found to be in breach of the conditions prescribed by the said regulation.


BRIK membership
In December 2002, pursuant to the Decree No. 803/MPP/Kep/12/2002 and No.10267/Kpts-II/2002
dated 13 December 2002, the Ministry of Trade and Industry and the Ministry of Forestry jointly set up
The Forestry Industry Revitalization Agency (Badan Revitalisasi Industri Kehutanan) (“BRIK”). BRIK’s
broad brief encompasses “realising sustainable forest management, supporting forest industry
revitalization and improving the development and utilisation of technology in the forest sector”. Its
principal activity is to accept applications from forestry products manufacturers for permission to export
processed timber.

To register as a BRIK member, applicants have to be a registered exporter of forestry products (ETPIK)
and be issued with an industrial business licence on the basis of the applicable laws and regulations
in force.


BRIK endorsement certification
With effect from March 2003, forestry products of certain prescribed categories require an endorsement
certification (Surat Pengesahan) from BRIK before they may be exported. These products comprise
mainly wood-based products and do not include most wood furniture products. The primary function of

                                                  III-4
                     APPENDIX III — DESCRIPTION OF RELEVANT
                       INDONESIAN LAWS AND REGULATIONS

BRIK is to check the legality of timber used in the wood products for which it receives an application
for permission to export. The issuance of the BRIK endorsement is an indication or proof of the legality
of the timber used. This requirement was imposed through the Ministry of Trade and Industry’s Decree
No. 32/MPP/Kep/1/2003 dated 22 January 2003 as amended by the Ministry of Trade and Industry’s
Decree No. 647/MPP/Kep/10/2003 dated 16 October 2003, which was last amended by the Ministry of
Trade’s Decree No. 02/M-DAG/PER/2/2006 dated 2 February 2006.


PEB export notification/Sucofindo survey report
The PEB export notification (Pemberitahuan Eksport Barang) is required to be issued by the Indonesian
custom authority before certain prescribed categories of wood products are permitted to be exported
out of Indonesia.

Under Regulation No. 02/M-DAG/PER/2/2006 dated 2 February 2006 issued by the Ministry of Trade
of the Republic of Indonesia, with effect from 3 March 2006, Sucofindo has been appointed by the
Indonesian government as the authorised body to carry out a survey to verify the source of wood used
in the export of certain prescribed categories of wood products. These prescribed categories of
products comprise mainly wood-based products and do not include most wood furniture products. In
addition to the BRIK endorsement certification, the Indonesian laws now provide that the survey report
produced by Sucofindo is required to be submitted to the Indonesian custom authority before the PEB
export notification may be issued for the export of the prescribed categories of wood products. The
survey report forms an attachment to the PEB export endorsement.




                                                  III-5
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                   APPENDIX IV — CLEARANCE AND SETTLEMENT

Upon listing and quotation on the SGX-SESDAQ, our Shares will be traded under the book-entry
settlement system of the CDP, and all dealings in and transactions of our Shares through the
SGX-SESDAQ will be effected in accordance with the terms and conditions for the operation of
securities accounts with CDP, as amended from time to time.

Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf
of persons who maintain, either directly or through Depository Agents, Securities Accounts with CDP.
Persons named as direct Securities Account holders and Depository Agents in the Depository Register
maintained by the CDP, rather than CDP itself, will be treated, under our Articles of Association and the
Companies Act, as members of our Company in respect of the number of Shares credited to their
respective Securities Accounts.

Persons holding our Shares in Securities Account with CDP may withdraw the number of Shares they
own from the book-entry settlement system in the form of physical share certificates. Such share
certificates will, however, not be valid for delivery pursuant to trades transacted on the SGX-SESDAQ,
although they will be prima facie evidence of title and may be transferred in accordance with our Articles
of Association. A fee of $10.00 for each withdrawal of 1,000 Shares or less and a fee of $25.00 for each
withdrawal of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry
settlement system and obtaining physical share certificates. In addition, a fee of $2.00 or such other
amount as our Directors may decide, is payable to the share registrar for each share certificate issued
and a stamp duty of $10.00 is also payable where our Shares are withdrawn in the name of the person
withdrawing our Shares or $0.20 per $100.00 or part thereof of the last-transacted price where it is
withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade
on the SGX-SESDAQ must deposit with CDP their share certificates together with the duly executed
and stamped instruments of transfer in favour of CDP, and have their respective Securities Accounts
credited with the number of Shares deposited before they can effect the desired trades. A fee of $20.00
is payable upon the deposit of each instrument of transfer with CDP.

Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s
Securities Account being debited with the number of Shares sold and the buyer’s Securities Account
being credited with the number of Shares acquired. No transfer stamp duty is currently payable for the
Shares that are settled on a book-entry basis.

A Singapore clearing fee for trades in our Shares on the SGX-SESDAQ is payable at the rate of 0.05%
of the transaction value subject to a maximum of $200.00 per transaction. The clearing fee, instrument
of transfer deposit fee and share withdrawal fee may be subject to Singapore Goods and Services Tax
at the prevailing rate.

Dealings in our Shares will be carried out in Singapore dollars and will be effected for settlement on
CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-SESDAQ
generally takes place on the third Market Day following the transaction date, and payment for the
securities is generally settled on the following business day. CDP holds securities on behalf of investors
in Securities Accounts. An investor may open a direct account with CDP or a sub-account with a CDP
Depository Agent. The CDP Depository Agent may be a member company of the SGX-ST, bank,
merchant bank or trust company.




                                                  IV-1
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                 APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                        FOR APPLICATION AND ACCEPTANCE

You are invited to apply and subscribe for the New Shares at the Issue Price for each New Share
subject to the following terms and conditions:–

1.   YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES AND INTEGRAL
     MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF NEW SHARES
     WILL BE REJECTED.

2.   Your application for Offer Shares may be made by way of printed Offer Shares Application Forms
     or by way of Electronic Applications through ATMs of the Participating Banks (“ATM Applications”)
     or through the Internet Banking (“IB”) websites of the relevant Participating Banks (“IB
     Applications”).

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

     Your application for Internet Placement Shares (“Internet Placement Application”) may only be
     made by way of an application through the IPO website at “ www.ePublicOffer.com ” if you have a
     valid membership account with the IPO Website Operator. IB Applications and Internet Placement
     Applications (collectively, the “Internet Electronic Applications”), together with ATM Applications,
     shall be referred to as “Electronic Applications”.

     Your application for Reserved Shares may only be made by way of Reserved Shares Application
     Forms.

     YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE NEW SHARES.

3.   You (not being an approved nominee company in this paragraph) are allowed to submit
     ONLY one application in your own name for:–
     (a)   the Offer Shares by any one of the following:–
           (i)    Offer Shares Application Form;
           (ii)   ATM Application;
           (iii) IB Application,
     OR
     (b)   the Placement Shares (other than Reserved Shares) by any one of the following:–
           (i)    Placement Shares Application Form;
           (ii)   Internet Placement Application.

     If you have made an application for Reserved Shares using the Reserved Shares
     Application Form, you may submit ONE application for Offer shares OR ONE application
     for Placement Shares (other than Reserved Shares) provided that you adhere to the terms
     and conditions of this Prospectus. Such separate applications shall not be treated as
     multiple applications.

     If more than one application is submitted for either the Offer Shares and/or the Placement
     Shares (other than Reserved Shares), such separate applications shall be deemed to be
     multiple applications.



                                                  V-1
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

     If you have made an application for Placement Shares (other than Reserved Shares), you
     should not make any application for Offer Shares and vice versa. Such separate
     applications shall be deemed to be multiple applications.

     JOINT OR MULTIPLE APPLICATIONS SHALL BE REJECTED. If you submit or procure
     submissions of multiple applications, you may be deemed to have committed an offence
     under the Penal Code, Chapter 224 of Singapore and the Securities and Futures Act,
     Chapter 289 of Singapore, and your applications may be referred to the relevant authorities
     for investigation. Multiple applications or those appearing to be or suspected of being
     multiple applications will be liable to be rejected at the discretion of our Company.

     A Qualifying Internet Applicant whose application for Internet Placement Shares is rejected
     because of multiple applications will be levied an administrative fee amounting to 20% of
     the Qualifying Internet Applicant’s application moneys (subject to Singapore goods and
     services tax).

4.   We will not accept applications from any person under the age of 21 years, undischarged
     bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities
     Account holders of CDP and from applicants whose addresses (furnished in their Application
     Forms or, in the case of Electronic Applications, contained in the records of the relevant
     Participating Banks or the IPO Website Operator, as the case may be) bear post office box
     numbers.

     In addition, applicants who wish to subscribe for the Internet Placement Shares through the IPO
     website (a) must not be corporations, sole proprietorships, partnerships or any other business
     entities; (b) must be over the age of 21 years; (c) must not be undischarged bankrupts; (d) must
     apply for the Placement Shares in Singapore; (e) must have a mailing address in Singapore; and
     (f) must be customers who maintain valid membership accounts with the IPO Website Operator.

5.   We will not recognise the existence of a trust. Any application by a trustee or trustees must be
     made in his/their own name(s) and without qualification or, where the application is made by way
     of an Application Form, in the name(s) of an approved nominee company or approved nominee
     companies after complying with paragraph 6 below.

6.   WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BY
     APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are defined as
     banks, merchant banks, finance companies, insurance companies, licensed securities dealers in
     Singapore and nominee companies controlled by them. Applications made by persons acting as
     nominees other than approved nominee companies shall be rejected.

7.   IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A
     SECURITIES ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR
     APPLICATION. If you do not have an existing Securities Account with CDP in your own name at
     the time of your application, your application will be rejected (if you apply by way of an Application
     form), or you will not be able to complete your Electronic Application (if you apply by way of an
     Electronic Application). If you have an existing Securities Account but fail to provide your
     Securities Account number or provide an incorrect Securities Account number in Section B of the
     Application Form or in your Electronic Application, as the case may be, your application is liable
     to be rejected. Subject to paragraph 8 below, your application shall be rejected if your particulars,
     such as name, NRIC/passport number, nationality and permanent residence status provided in
     your Application Form or in the records of the relevant Participating Bank or the IPO Website

                                                   V-2
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

      Operator at the time of your Electronic Application, as the case may be, differ from those
      particulars in your Securities Account as maintained with CDP. If you possess more than one
      individual direct Securities Account with CDP, your application shall be rejected.

8.    If your address as stated in the Application Form or, in the case of an Electronic Application,
      contained in the records of the relevant Participating Bank or the IPO Website Operator, as the
      case may be, is different from the address registered with CDP, you must inform CDP of your
      updated address promptly, failing which the notification letter on successful allotment and other
      correspondence from the CDP will be sent to your address last registered with CDP.

9.    Our Company reserves the right to reject any application which does not conform strictly
      to the instructions set out in this Prospectus (including the accompanying Application
      Forms or the instructions for Electronic Applications) or with the terms and conditions of
      this Prospectus or which is illegible, incomplete, incorrectly completed or which is
      accompanied by an improperly drawn up or improper form of remittance. Our Company
      further reserves the right to treat as valid any applications not completed or submitted or
      effected in all respects in accordance with the instructions set out in this Prospectus
      (including the accompanying Application Forms or the instructions for Electronic
      Applications) or the terms and conditions of this Prospectus, and also to present for
      payment or other processes all remittances at any time after receipt and to have full access
      to all information relating to, or deriving from, such remittances or the processing thereof.

10. Our Company reserves the right to reject or to accept, in whole or in part, or to scale down or to
    ballot any application, without assigning any reason therefor, and we will not entertain any enquiry
    and/or correspondence on our decision. This right applies to applications made by way of
    Application Forms and by way of Electronic Applications. In deciding the basis of allotment, our
    Company will give due consideration to the desirability of allotting the New Shares to a reasonable
    number of applicants with a view to establishing an adequate market for the Shares.

11.   Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It is
      expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the
      Application List, a statement of account stating that your Securities Account has been credited
      with the number of New Shares allotted to you. This will be the only acknowledgement of
      application moneys received and is not an acknowledgement by our Company. You irrevocably
      authorise CDP to complete and sign on your behalf as transferee or renouncee any instrument of
      transfer and/or other documents required for the issue or transfer of the New Shares allotted to
      you. This authorisation applies to applications made by way of Application Forms and by way of
      Electronic Applications.

12. In the event of an under-subscription for the Offer Shares as at the close of the Application List,
    we will make available that number of Offer Shares not subscribed for to satisfy excess
    applications for Placement Shares to the extent that there is an over-subscription for Placement
    Shares as at the close of the Application List.

      In the event of an under-subscription for the Placement Shares as at the close of the Application
      List, we will make available that number of Placement Shares not subscribed for to satisfy excess
      applications for Offer Shares to the extent that there is an over-subscription for Offer Shares as
      at the close of the Application List.

      In the event of an under-subscription for the Internet Placement Shares to be applied for through
      the IPO website as at the close of the Application List, we will make available that number of

                                                  V-3
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

     Internet Placement Shares not subscribed for to satisfy excess applications for Placement Shares
     by way of Placement Shares Application Forms to the extent that there is an over-subscription for
     such Placement Shares as at the close of the Application List or to satisfy excess applications for
     the Offer Shares, to the extent that there is an over-subscription for the Offer Shares as at the
     close of the Application List.

     In the event of an under-subscription for the Reserved Shares as at the close of the Application
     List, we will make available that number of Reserved Shares not subscribed for to satisfy excess
     applications for Placement Shares by way of Placement Shares Application Forms to the extent
     that there is an over-subscription for such Placement Shares as at the close of the Application List
     or to satisfy excess applications for the Offer Shares, to the extent that there is an over-
     subscription for the Offer Shares as at the close of the Application List.

     In the event of an over-subscription for Offer Shares and/or Placement Shares as at the close of
     the Application List, the successful applications for Offer Shares will be determined by ballot or
     otherwise as determined by our Directors and approved by the SGX-ST.

     In all of the above instances, the basis of allotment of the New Shares as may be decided upon
     by our Company in ensuring a reasonable spread of shareholders of our Company, shall be made
     public, as soon as is practicable, via an announcement through the SGX-ST and through a paid
     advertisement in a local newspaper.

13. You irrevocably authorise CDP to disclose the outcome of your application, including the number
    of New Shares allotted to you pursuant to your application, to our Company, the Manager, the
    Underwriter, the Placement Agent and any other parties so authorised as the foregoing persons.

14. Any reference to “you” in this section shall include an individual, a corporation, an approved
    nominee and trustee applying for the New Shares.

15. By completing and delivering an Application Form or by making and completing an Electronic
    Application by (in the case of an ATM Application) pressing the “Enter” or “OK” or “Confirm” or
    “Yes” key on the ATM (as the case may be) or by (in the case of an Internet Electronic Application)
    clicking “Submit” or “Continue” or “Yes” or “Confirm” on the IB website screen (as the case may
    be) in accordance with the provisions of this Prospectus, you:–
     (a)   irrevocably offer to subscribe for the number of New Shares specified in your application (or
           such smaller number for which the application is accepted) at the Issue Price and agree that
           you will accept such New Shares as may be allotted to you, in each case on the terms of,
           and subject to the conditions set out in, this Prospectus and the Memorandum and Articles
           of Association of our Company;
     (b)   agree that in the event of any inconsistency between the terms and conditions for application
           set out in this Prospectus and those set out in the IPO website, or the IB websites or ATMs
           of the Participating Banks, the terms and conditions set out in this Prospectus shall prevail;
     (c)   agree that the aggregate Issue Price for the New Shares applied for is due and payable to
           our Company forthwith;
     (d)   warrant the truth and accuracy of the information contained, and representations and
           declarations made, provided in your application, and acknowledge and agree that such
           information, representations and declarations will be relied on by our Company in
           determining whether to accept your application and/or whether to allot any New Shares to
           you; and


                                                  V-4
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

     (e)   agree and warrant that if the laws of any jurisdictions outside Singapore are applicable to
           your application, you have complied with all such laws and none of our Company, the
           Manager, the Underwriter and/or the Placement Agent will infringe any such laws as a result
           of the acceptance of your application.

16. Our acceptance of applications will be conditional upon, inter alia, our Company being satisfied
    that:–
     (a)   permission has been granted by the SGX-ST to deal in, and for quotation of, all our existing
           Shares and the New Shares on a “ready” basis on the SGX-SESDAQ;
     (b)   the Management and Underwriting Agreement and the Placement Agreement referred to in
           the Section “Management, Underwriting and Placement Agreements” of this Prospectus
           have become unconditional and have not been terminated or cancelled prior to such date as
           our Company may determine; and
     (c)   the Authority has not served a stop order which directs that no further Shares to which this
           Prospectus relates be allotted.

17. Our Company will not hold any applications in reserve.

18. Our Company will not allot or allocate Shares on the basis of this Prospectus later than six months
    after the date of registration of this Prospectus.

19. Additional terms and conditions for applications by way of printed Application Forms are set out
    below.

20. Additional terms and conditions for applications by way of Electronic Applications are set out on
    pages V-9 to V-15 of this Prospectus.


ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION
FORMS
You shall make an application by way of Application Forms made on and subject to the terms and
conditions of this Prospectus including but not limited to the terms and conditions appearing below as
well as those set out under the Section on “TERMS, CONDITIONS AND PROCEDURES FOR
APPLICATION AND ACCEPTANCE” of this Prospectus, as well as the Memorandum and Articles of
Association of our Company.

1.   Your application must be made using the WHITE Application Forms for Offer Shares, the BLUE
     Application Forms for Placement Shares and the PINK Application Forms for Reserved Shares
     accompanying and forming part of this Prospectus. We draw your attention to the detailed
     instructions contained in the respective Application Forms and this Prospectus for the completion
     of the Application Forms which must be carefully followed. Our Company reserves the right to
     reject applications which do not conform strictly to the instructions set out in this
     Prospectus (and the accompanying Application Forms) or to the terms and conditions of
     this Prospectus or which are illegible, incomplete, incorrectly completed or which are
     accompanied by improperly drawn remittances or improper form of remittances.

2.   Your Application Forms must be completed in English. Please type or write clearly in ink using
     BLOCK LETTERS.




                                                 V-5
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

3.   All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY”
     must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any space
     that is not applicable.

4.   Individuals, corporations, approved nominee companies and trustees must give their names in
     full. You must make your application, in the case of individuals, in your full names appearing in
     your identity cards (if applicants have such identification documents) or in your passports and, in
     the case of corporations, in your full names as registered with a competent authority. If you are
     a non-individual completing the Application Form under the hand of an official, you must state the
     name and capacity in which that official signs. If you are a corporation completing the Application
     Form, you are required to affix your Common Seal (if any) in accordance with your Memorandum
     and Articles of Association or equivalent constitutive documents. If you are a corporate applicant
     and your application is successful, a copy of your Memorandum and Articles of Association or
     equivalent constitutive documents must be lodged with the Share Registrar and Share Transfer
     Office. Our Company reserves the right to require you to produce documentary proof of
     identification for verification purposes.

5.   (a)   You must complete Sections A and B and sign page 1 of the Application Form.
     (b)   You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form.
           Where paragraph 7(a) is deleted, you must also complete Section C of the Application Form
           with particulars of the beneficial owner(s).
     (c)   If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be,
           on page 1 of the Application Form, your application is liable to be rejected.

6.   You (whether an individual or corporate applicant, whether incorporated or unincorporated and
     wherever incorporated or constituted), will be required to declare whether you are a citizen or
     permanent resident of Singapore or a corporation in which citizens or permanent residents of
     Singapore or any body corporate constituted under any statute of Singapore have an interest in
     the aggregate of more than 50 per cent. of the issued share capital of or interests in such
     corporations. If you are an approved nominee company, you are required to declare whether the
     beneficial owner of the New Shares is a citizen or permanent resident of Singapore or a
     corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in
     which citizens or permanent residents of Singapore or any body corporate whether incorporated
     or unincorporated and wherever incorporated or constituted under any statute of Singapore have
     an interest in the aggregate of more than 50 per cent. of the issued share capital of or interests
     in such corporation.

7.   Your application must be accompanied by a remittance in Singapore currency for the full amount
     payable, in respect of the number of New Shares applied for, in the form of a BANKER’S DRAFT
     or CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “SITRA SHARE
     ISSUE ACCOUNT” crossed “A/C PAYEE ONLY”, with your name and address written clearly on
     the reverse side. We will not accept applications accompanied by ANY OTHER FORM OF
     PAYMENT. We will reject remittances bearing “NOT TRANSFERABLE” or “NON
     TRANSFERABLE” crossings. No acknowledgement or receipt will be issued by our
     Company, the Manager, the Placement Agent or the Underwriter for applications and
     application moneys received.




                                                 V-6
                 APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                        FOR APPLICATION AND ACCEPTANCE

8.   Unsuccessful applications are expected to be returned (without interest or any share of revenue
     or other benefit arising therefrom) to you by ordinary post within 24 hours of the balloting after the
     close of the Application List at your own risk. Where your application is rejected or accepted in part
     only, the full amount or the balance of the application moneys, as the case may be, will be
     refunded (without interest or any share of revenue or other benefit arising therefrom) to you by
     ordinary post at your own risk in the shortest possible time.

9.   Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
     meanings assigned to them in this Prospectus.

10. By completing and delivering the Application Form in accordance with the provisions of this
    Prospectus, you agree that:–
     (a)   in consideration of our Company having distributed the Application Form to you and
           agreeing to close the Application List at 12.00 noon on 15 November 2006 or such other
           date and time as our Company may, in consultation with the Manager, decide, subject to
           any limitations under all applicable laws, you agree that:–
           (i)    your application is irrevocable; and
           (ii)   your remittance will be honoured on first presentation and that any moneys returnable
                  may be held pending clearance of your payment without interest or any share of
                  revenue or other benefit arising therefrom;
     (b)   all applications, acceptances and contracts resulting therefrom under the Invitation shall be
           governed by and construed in accordance with the laws of Singapore and that you
           irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
     (c)   in respect of the New Shares for which your application has been received and not rejected,
           acceptance of your application shall be constituted by written notification and not otherwise,
           notwithstanding any remittance being presented for payment by or on behalf of our
           Company;
     (d)   you will not be entitled to exercise any remedy of rescission for misrepresentation at any
           time after acceptance of your application; and
     (e)   in making your application, reliance is placed solely on the information contained in this
           Prospectus and none of our Company, the Manager, the Underwriter, the Placement Agent
           or any other person involved in the Invitation shall have any liability for any information not
           so contained.


Applications for Offer Shares

1.   Your applications for Offer Shares MUST be made using the WHITE Offer Shares Application
     Forms and official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosed in each
     envelope.

2.   You must:–
     (a)   enclose the WHITE Offer Shares Application Form, duly completed and signed, together
           with your remittance in the official envelope “A” provided;
     (b)   in the appropriate spaces on official envelope “A”:–
           (i)    write your name and address;
           (ii)   state the number of Offer Shares applied for; and

                                                   V-7
              APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                     FOR APPLICATION AND ACCEPTANCE

           (iii)   affix adequate Singapore postage;
     (c)   seal official envelope “A”; and
     (d)   write, in the appropriate box provided on the larger official envelope “B”, the number of Offer
           Shares you have applied for; and insert official envelope “A” into official envelope “B”, seal
           official envelope “B” and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
           HAND at your own risk to Tricor Barbinder Share Registration Services, 8 Cross Street
           #11-00, PWC Building, Singapore 048424, so as to arrive by 12.00 noon on 15 November
           2006 or such other date and time as our Company may, in consultation with the
           Manager, decide, subject to any limitations under all applicable laws. Local Urgent
           Mail or Registered Post must NOT be used. No acknowledgement of receipt will be issued
           for any application or remittance received.

3.   Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly
     drawn remittances are liable to be rejected.


Applications for Placement Shares (other than Internet Placement Shares and Reserved Shares)

1.   Your application for Placement Shares MUST be made using the BLUE Placement Shares
     Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope.

2.   The completed and signed BLUE Placement Shares Application Form and your remittance, in
     accordance with the terms and conditions of this Prospectus, for the full amount payable in
     respect of the number of Placement Shares applied for, with your name and address written
     clearly on the reverse side, must be enclosed and sealed in an envelope to be provided by you.
     You must affix adequate Singapore postage on the envelope (if despatching by ordinary post) and
     thereafter the sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED
     BY HAND at your own risk to Tricor Barbinder Share Registration Services, 8 Cross Street
     #11-00, PWC Building, Singapore 048424, to arrive by 12.00 noon on 15 November 2006 or
     such other date and time as our Company may, in consultation with the Manager, decide,
     subject to any limitations under all applicable laws. Local Urgent Mail or Registered Post
     must NOT be used. No acknowledgement of receipt will be issued for any application or
     remittance received.

3.   Alternatively, you may remit your application moneys by electronic transfer to the account of
     BANK OF EAST ASIA LIMITED, account number 90093609, in favour of “SITRA SHARE ISSUE
     ACCOUNT” for the number of Placement Shares applied for by 12.00 noon on 15 November 2006
     or such other date and time as our Company may, in consultation with the Manager, decide. If you
     remit your application moneys via electronic transfer, you should fax and send a copy of the
     remittance advice to Westcomb Capital Pte Ltd at fax number 6227 3936 to arrive by 12.00 noon
     on 15 November 2006 or such other date and time as our Company may, in consultation with the
     Manager, decide, subject to any limitations under all applicable laws.




                                                   V-8
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

Applications for Reserved Shares

1.    Your application for Reserved Shares MUST be made using the PINK Reserved Shares
      Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope.

2.    The completed and signed PINK Reserved Shares Application Form and your remittance in
      accordance with the terms and conditions of this Prospectus for the full amount payable in respect
      of the number of Reserved Shares applied for, with your name and address written clearly on the
      reverse side, must be enclosed and sealed in an envelope to be provided by you. You must affix
      adequate Singapore postage on the envelop (if dispatching by ordinary post) and thereafter
      DESPATCH BY ORDINARY POST OR DELIVER BY HAND at your own risk to Tricor
      Barbinder Share Registration Services, 8 Cross Street #11-00, PWC Building, Singapore
      048424, so as to arrive by 12.00 noon on 15 November 2006 or such other date and time as
      our Company may, in consultation with the Manager, decide, subject to any limitations
      under all applicable laws. Local Urgent Mail or Registered Post must NOT be used. No
      acknowledgement of receipt will be issued for any application or remittance received.


ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS
The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case of ATM
Applications), the IB website screens (in the case of IB Applications) of the relevant Participating Banks
and the IPO website (in the case of Internet Placement Applications).

Currently, DBS Bank and the UOB Group are the only Participating Banks through which an IB
Application can be made on the respective IB websites of DBS Bank and the UOB Group.

Internet Placement Applications may be made through the IPO website.

For illustration purposes, the procedures for Electronic Applications through ATMs, the IB website of
DBS Bank and the IPO website are set out respectively in the “Steps for Applications for Offer Shares
through ATMs of DBS Bank”, “Steps for Applications for Offer Shares through the IB website of DBS
Bank” and the “Steps for Applications for Internet Placement Shares through the IPO website”
(collectively known as the “Steps”) appearing on pages V-16 to V-19 of this Prospectus.

The Steps set out the actions that you must take at an ATM, the IB website of DBS Bank or the IPO
website to complete an Electronic Application. Please read carefully the terms of this Prospectus, the
Steps and the terms and conditions for Electronic Applications set out below before making an
Electronic Application.

Any reference to “you” in the additional terms and conditions for Electronic Applications and the Steps
shall refer to you making an application for:–
(a)   Offer Shares through an ATM or the IB website of a relevant Participating Bank; and
(b)   Internet Placement Shares through the IPO website.

To make an ATM Application:–
(a)   You must have an existing bank account with and be an ATM cardholder of one of the Participating
      Banks before you can make an Electronic Application at the ATMs. An ATM card issued by one
      Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to other
      Participating Banks. Upon the completion of your ATM Application transaction, you will receive an



                                                   V-9
                 APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                        FOR APPLICATION AND ACCEPTANCE

       ATM transaction slip (“Transaction Record”), confirming the details of your ATM Application. The
       Transaction Record is for your retention and should not be submitted with any Application Form.
(b)    You must ensure that you enter your own Securities Account number when using the ATM card
       issued to you in your own name. If you operate a joint bank account with any of the Participating
       Banks, you must ensure that you enter your own Securities Account number when using the ATM
       card issued to you in your own name. Using your own Securities Account number with an ATM
       card which is not issued to you in your own name will render your Electronic Application liable to
       be rejected.

To make an IB Application, you must have an existing bank account with and an IB User Identification
(“User ID”) and a Personal Identification Number/Password given by the relevant Participating Bank.
Upon completion of your IB Application, there will be an on-screen confirmation (“Confirmation Screen”)
of the application which you can print out for your record. This printed record of the Confirmation Screen
is for your retention and should not be submitted with any Application Form.

To make an Internet Placement Application, you must be registered as a user of the IPO website and
have a User Name (“User Name”) and a Password given by the IPO Website Operator. Upon
completion of your Internet Placement Application, there will be an on-screen confirmation (“Provisional
Allocation Screen”) of the application and you will receive an electronic mail (email) confirmation
(containing the information in the Provisional Allocation Screen and sent to you at your email address
registered with the IPO Website Operator) to advise you of the status of your application. The email
confirmation is for your retention and is to accompany your payment for the Internet Placement Shares,
and should not be submitted with any Application Form.

Further, you must ensure, when making an IB Application or Internet Placement Application that:–
(a)    you are in Singapore at the time of making of such application;
(b)    your mailing address for IB with the relevant Participating Bank and the IPO website is in
       Singapore;
(c)    you are not a US person(1) (as such term is defined in Regulation S under the United States
       Securities Act of 1933, as amended from time to time),
and you will be asked to declare the above accordingly. Otherwise, your application is liable to
be rejected.

Note:–
(1)   For details, please refer to definition of “US person” on the IB websites or the IPO website.


Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectus
including but not limited to the terms and conditions appearing below and those set out under this
section on pages V-9 to V-15 of this Prospectus as well as the Memorandum and Articles of Association
of our Company.

1.     In connection with your Electronic Application for New Shares, you may be required to confirm
       statements to the following effect in the course of activating the Electronic Application:–
       (a)    that you have received a copy of this Prospectus and have read, understood and
              agreed to all the terms and conditions of application for the New Shares and this
              Prospectus prior to effecting the Electronic Application and agree to be bound by the
              same;



                                                              V-10
            APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                   FOR APPLICATION AND ACCEPTANCE

     (b)   that you consent to the disclosure of your name, NRIC/passport number, address,
           nationality, permanent resident status, CDP Securities Account number, and share
           application amount (the “Relevant Particulars”) from your account with that
           Participating Bank to the Share Registrar, CDP, SCCS, the SGX-ST, our Company and
           the Manager (the “Relevant Parties”); and
     (c)   that this is your only application and it is made in your own name and at your own
           risk.
     Your application will not be successfully completed and cannot be recorded as a completed
     transaction in the ATM unless you press the “Enter” or “OK” or “Confirm” or “Yes” key. By doing
     so, you shall be treated as signifying your confirmation of each of the above three statements. In
     respect of statement 1(b) above, your confirmation, by pressing the “Enter” or “OK” or “Confirm”
     or “Yes” key, shall signify and shall be treated as your written permission, given in accordance with
     the relevant laws of Singapore including Section 47(2) of the Banking Act (Chapter 19) of
     Singapore to the disclosure by that Participating Bank of your Relevant Particulars to the Relevant
     Parties.

2.   BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT
     APPLYING FOR NEW SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY
     ELECTRONIC APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU
     AS BENEFICIAL OWNER.
     YOU SHALL MAKE ONLY ONE ELECTRONIC APPLICATION FOR OFFER SHARES AND
     SHALL NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARE, WHETHER AT THE
     ATM OR THE IB WEBSITES OF ANY PARTICIPATING BANK OR ON THE APPLICATION
     FORMS. IF YOU HAVE MADE AN APPLICATION FOR OFFER SHARES OR PLACEMENT
     SHARES ON AN APPLICATION FORM, YOU SHOULD NOT MAKE AN APPLICATION FOR
     OFFER SHARES AND VICE VERSA.

3.   For an ATM Application or IB Application, you must have sufficient funds in your bank account with
     your Participating Bank at the time you make your ATM Application or IB Application, failing which
     your ATM Application or IB Application will not be completed. Any ATM Application or IB
     Application which does not conform strictly to the instructions set out on the screens of
     the ATM or IB website through which your ATM Application or IB Application is being made
     shall be rejected.

     An applicant who makes an application for New Shares through the IPO website will be advised
     through the IPO website on the amount payable and the method(s) of payment.

4.   You irrevocably agree and undertake to subscribe for and to accept the number of New Shares
     applied for as stated on the Transaction Record or Confirmation Screen. You also irrevocably
     agree and undertake to subscribe for and to accept any lesser number of New Shares that may
     be allotted to you in respect of your Electronic Application. In the event that our Company decides
     to allot any lesser number of such New Shares or not to allot any New Shares to you, you agree
     to accept such decision as final.

     If your Electronic Application is successful, your confirmation (by your action of pressing the
     “Enter” or “OK” or “Confirm” or “Yes” key on the ATM, clicking “Confirm” or “OK” on the IB website
     screen or “Confirm” on the IPO website screen) of the number of New Shares applied for shall




                                                  V-11
            APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                   FOR APPLICATION AND ACCEPTANCE

     signify and shall be treated as your acceptance of the number of New Shares that may be allotted
     to you and your agreement to be bound by the Memorandum and Articles of Association of our
     Company.

5.   Our Company will not keep any applications in reserve. Where your Electronic Application is
     unsuccessful, the full amount of the application moneys will be refunded (without interest or any
     share of revenue or other benefit arising therefrom) to you by being automatically credited to your
     account with your Participating Bank within twenty-four hours after the close of the Application
     List. Trading on a “READY” basis, if applicable, is expected to commence after such refund
     has been made.

     Where your Electronic Application is rejected or accepted in part only, the full amount or the
     balance of the application moneys, as the case may be, will be refunded (without interest or any
     share of revenue or other benefit arising therefrom) to you by being automatically credited to your
     account with your Participating Bank or if you have applied for the Internet Placement Shares
     through the IPO website, by ordinary post or such other means as the IPO Website Operator may
     agree with you, at your own risk, within 14 Market Days after the close of the Application List
     provided that the remittance in respect of such application which has been presented for payment
     or other processes has been honoured and the application moneys received in the designated
     share issue account.

     Responsibility for timely refund of application moneys arising from unsuccessful or partially
     unsuccessful Electronic Applications lies solely with the respective Participating Banks or the IPO
     Website Operator. Therefore, you are strongly advised to consult your Participating Bank or the
     IPO Website Operator as to the status of your Electronic Application and/or the refund of any
     moneys to you from unsuccessful or partially unsuccessful Electronic Application, to determine
     the exact number of New Shares allotted to you before trading the New Shares on the
     SGX-SESDAQ. Neither the SGX-ST, the CDP, the SCCS, the Participating Banks, the IPO
     Website Operator, our Company, the Manager, the Placement Agent or the Underwriter assume
     any responsibility for any loss that may be incurred as a result of you having to cover any net sell
     positions or from buy-in procedures activated by the SGX-ST.

6.   If your ATM Application or IB Application is unsuccessful, no notification will be sent by the
     Participating Bank.

     You may check the results of your ATM Application as follows:–




                                                 V-12
               APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                      FOR APPLICATION AND ACCEPTANCE


                                                                                                           Service
      Bank              Telephone                 Available at                  Operating hours            expected from

      DBS Bank          1800 339 6666             Internet Banking              24 hours                   Evening of the
                        (for POSB account                                                                  balloting day
                                                  www.dbs.com
                        holders)
                        1800 111 1111
                        (for DBS Bank
                        account holders)

      OCBC              1800 363 3333             ATM/Internet Banking/         24 hours                   Evening of the
                                                  Phone Banking(2)                                         balloting day

      UOB Group         1800 222 2121             ATM (Other Transactions       ATM/Phone Banking          Evening of the
                                                  — “IPO Enquiry”)              24 hours                   balloting day
                                                  www.uobgroup.com(1)(3)        Internet Banking           Evening of the
                                                                                24 hours                   balloting day

     Notes:–
     (1)   You may also check the results of your application through UOB Personal Internet Banking, UOB Group ATMs or
           UOB PhoneBanking Services.
     (2)   If you have made your Electronic Application through the ATMs of OCBC, you may check the result of your application
           through the same channels listed in the table above.
     (3)   If you have made your Electronic Application through the IB websites, you may check the results of your application
           through the same channels listed in the table above in relation to ATM Applications made at the ATMs of DBS Bank
           or UOB Group.


     If you make your Electronic Application through the IPO website, you can check the result of your
     application through the IPO website. Whether or not your application is successful, you will be
     notified of the results of your application via an email sent to the email address registered with the
     IPO website.

7.   ATM Applications and IB Applications shall close at 12.00 noon on 15 November 2006 or such
     other date and time as our Company may, in consultation with the Manager, decide, subject to any
     limitations under all applicable laws. Internet Placement Applications will be opened from 9.00
     a.m. to 11.00 a.m. on 8 November 2006 or such other period or periods as our Company may, in
     consultation with the Manager, decide, subject to any limitations under all applicable laws.

8.   You are deemed to have requested and authorised us to:–
     (a)    register the Offer Shares or Placement Shares allotted to you in the name of CDP for deposit
            into your Securities Account;
     (b)    send the relevant Share certificate(s) to CDP;
     (c)    (for ATM Applications or IB Applications) return or refund (without interest or any share of
            revenue earned or other benefit arising therefrom) the application moneys, should your ATM
            Applications or IB Applications be rejected, by automatically crediting your bank account with
            your Participating Bank with the relevant amount within twenty-four hours after the close of
            the Application List;
     (d)    (for ATM Applications or IB Applications) return or refund (without interest or any share of
            revenue or other benefit arising therefrom) the balance of the application moneys, should
            your ATM Applications or IB Applications be accepted in part only, by automatically crediting



                                                           V-13
                  APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                         FOR APPLICATION AND ACCEPTANCE

            your bank account with your Participating Bank with the relevant amount within the shortest
            possible time after the close of the Application List; and
      (e)   (for Internet Placement Applications) return or refund (without interest or any share of
            revenue or other benefit arising therefrom) of the full application moneys, should your
            Internet Placement Application be rejected, is expected to be effected to you by ordinary
            post at your own risk within 14 days after the close of the Application List).

9.    You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
      electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God
      and other events beyond the control of the Participating Banks or the IPO Website Operator and
      if, in any such event, our Company, the Manager, the Placement Agent, the Underwriter, the
      relevant Participating Bank or the IPO Website Operator do not receive your Electronic
      Application, or data relating to your Electronic Application is lost, corrupted or not otherwise
      accessible, whether wholly or partially for whatever reason, you shall be deemed not to have
      made an Electronic Application and you shall have no claim whatsoever against our Company, the
      Manager, the Placement Agent, the Underwriter, the relevant Participating Bank or the IPO
      Website Operator for New Shares applied for or for any compensation, loss or damage.

10. Our Company does not recognise the existence of a trust. Any Electronic Application by a trustee
    must be made in your own name and without qualification. Our Company will reject any
    application by any person acting as nominee.

11.   All your particulars in the records of your Participating Bank or the IPO Website Operator at the
      time you make your Electronic Application shall be deemed to be true and correct and your
      Participating Bank or the IPO Website Operator and the Relevant Parties shall be entitled to rely
      on the accuracy thereof. If there has been any change in your particulars after making your
      Electronic Application, you shall promptly notify your Participating Bank or the IPO Website
      Operator.

12. You should ensure that your personal particulars as recorded by both CDP, the relevant
    Participating Bank or the IPO Website Operator are correct and identical, otherwise, your
    Electronic Application is liable to be rejected. You should promptly inform CDP of any change
    in address, failing which the notification letter on successful allotment will be sent to your address
    last registered with CDP.

13. By making and completing an Electronic Application, you are deemed to have agreed that:–
      (a)   in consideration of our Company making available the Electronic Application facility, through
            the Participating Banks or the IPO Website Operator acting as agents of our Company, at the
            ATMs, the IB websites and the IPO website:–
            (i)    your Electronic Application is irrevocable; and
            (ii)   your Electronic Application, the acceptance of our Company and the contract resulting
                   therefrom under the Invitation shall be governed by and construed in accordance with
                   the laws of Singapore and you irrevocably submit to the non-exclusive jurisdiction of
                   the Singapore courts;
      (b)   none of our Company, the Manager, the Placement Agent, the Underwriter, the Participating
            Banks or the IPO Website Operator shall be liable for any delays, failures or inaccuracies in
            the recording, storage or in the transmission or delivery of data relating to your Electronic
            Application to us or CDP due to breakdowns or failure of transmission, delivery or


                                                    V-14
        APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
               FOR APPLICATION AND ACCEPTANCE

      communication facilities or any risks referred to in paragraph 9 above or to any cause
      beyond their respective controls;
(c)   in respect of Offer Shares for which your Electronic Application has been successfully
      completed and not rejected, acceptance of your Electronic Application shall be constituted
      by written notification by or on behalf of our Company and not otherwise, notwithstanding
      any payment received by or on behalf of our Company;
(d)   you will not be entitled to exercise any remedy of rescission for misrepresentation at any
      time after acceptance of your application; and
(e)   reliance is placed solely on information contained in this Prospectus and that none of our
      Company, the Manager, the Placement Agent, the Underwriter nor any other person involved
      in the Invitation shall have any liability for any information not so contained.




                                           V-15
             APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                    FOR APPLICATION AND ACCEPTANCE

Steps For Applications for Offer Shares through ATMs of DBS Bank
Instructions for ATM Applications will appear on the ATM screens of the Participating Bank. For
illustration purposes, the steps for making an ATM Application through a DBS Bank or POSB ATM are
shown below. Certain words appearing on the screen are in abbreviated form (“A/c”, “amt”, “appln”, “&”,
“I/C”, “SGX”, “No.” and “Max” refer to “Account”, “amount”, “application”, “and”, “NRIC”, “SGX-ST”,
“Number” and “Maximum”, respectively. Instructions for ATM Applications on the ATM screens of
Participating Banks (other than DBS Bank) may differ slightly from those represented below.

Step   1:   Insert your personal DBS Bank or POSB ATM Card.

       2:   Enter your Personal Identification Number.

       3:   Select “CASHCARD & MORE SERVICES”.

       4:   Select “ESA-IPO SHARE/INVESTMENTS”.

       5:   Select “ELECTRONIC SECURITY APPLN (IPOS/BONDS/ST-NOTES)”.

       6:   Read and understand the following statements which will appear on the screen:–
            THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN, OR
            ACCOMPANIED BY, A COPY OF THE PROSPECTUS/OFFER INFORMATION
            STATEMENT/DOCUMENT OR PROFILE STATEMENT (AND IF APPLICABLE, A COPY
            OF   THE   REPLACEMENT    OR    SUPPLEMENTARY    PROSPECTUS/OFFER
            INFORMATION STATEMENT/DOCUMENT OR PROFILE STATEMENT) WHICH CAN BE
            OBTAINED FROM ANY DBS/POSB BRANCH IN SINGAPORE AND, WHERE
            APPLICABLE, THE VARIOUS PARTICIPATING BANKS DURING BANKING HOURS,
            SUBJECT TO AVAILABILITY.
            ANYONE WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES)
            SHOULD READ THE PROSPECTUS/OFFER INFORMATION STATEMENT/DOCUMENT
            OR PROFILE STATEMENT (AS SUPPLEMENTED OR REPLACED, IF APPLICABLE)
            BEFORE SUBMITTING HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE
            MANNER SET OUT IN THE PROSPECTUS/OFFER INFORMATION STATEMENT/
            DOCUMENT OR PROFILE STATEMENT (AS SUPPLEMENTED OR REPLACED, IF
            APPLICABLE). A COPY OF THE PROSPECTUS/OFFER INFORMATION STATEMENT/
            DOCUMENT OR PROFILE STATEMENT, AND IF APPLICABLE,A COPY OF THE
            REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/OFFER INFORMATION
            STATEMENT DOCUMENT OR PROFILE STATEMENT HAS BEEN LODGED WITH AND
            REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE WHO ASSUMES NO
            RESPONSIBILITY FOR ITS OR THEIR CONTENTS.
            Press the “Enter” key to confirm that you have read and understood.

       7:   Select “SITRA” to display details.




                                                 V-16
              APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                     FOR APPLICATION AND ACCEPTANCE

        8:   Press the “ENTER” key to acknowledge:–
             You have read, understood and agreed to all terms of the application and Prospectus/Offer
             Information Statement/Document or Profile Statement, and if applicable, the Replacement
             or Supplementary Prospectus/Offer Information Statement/Document or Profile Statement.
             You consent to disclose your name, NRIC/Passport No., address, nationality, CDP
             Securities A/c No., CPF Investment A/c No. and securities application amount from your
             Bank Account(s) to share registrars, SGX, SCCS, CDP, CPF and the issuer/vendor(s).
             For FIXED and MAX price security application, this is your only application and it is made
             in your own name and at your own risk.
             The maximum price for each Share is payable in full on application and subject to refund
             if the final price is lower.
             For TENDER security applications, this is your only application at the selected tender price
             and it is made in your own name and at your own risk.
             You are not a US Person as referred to in the Prospectus/Offer Information Statement/
             Document or Profile Statement and if applicable, the Replacement or Supplementary
             Prospectus/Offer Information Statement/Document or Profile Statement.

        9:   Select your nationality.

       10:   Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSB
             account (current/savings) from which to debit your application moneys.

       11:   Enter the number of securities you wish to apply for using cash.

       12:   Enter or confirm (if your CDP Securities Account number has already been stored in DBS
             Bank’s records) your own 12-digit CDP Securities Account number.

       13:   Check the details of your security application, your CDP Securities Account number and
             number of securities on the screen and press the “ENTER” key to confirm your application.

       14:   Remove the Transaction Record for your reference and retention only.


Steps for Applications for Offer Shares through the IB website of DBS Bank
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS Bank
IB website are shown below. Certain words appearing on the screen are in abbreviated form (“A/C”,
“amt”, “&”, “I/C”, “SGX” and “No.” refer to “Account”, “Amount”, “and”, “NRIC”, “SGX-ST” and “Number”
respectively).

Step    1:   Click on to DBS Bank website (www.dbs.com).

        2:   Login to Internet Banking.

        3:   Enter your User ID and PIN.

        4:   Select “Electronic Security Application (ESA)”.

        5:   Click “Yes” to proceed and to warrant, inter alia, that you are currently in Singapore, you
             have observed and complied with all applicable laws and regulations and that your mailing
             address for DBS Internet Banking in Singapore.



                                                  V-17
              APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
                     FOR APPLICATION AND ACCEPTANCE

        6:   Select your country of residence.

        7:   Click on “SITRA” and click the “Submit” button.

        8:   Click “Confirm” to confirm, inter alia:–
             (a)   You have read, understood and agreed to all terms of application and the
                   Prospectus or Profile Statement and if applicable, the Supplementary or
                   Replacement Prospectus/Document or Profile Statement.
             (b)   You consent to disclose your name, I/C or Passport No., address, nationality,
                   CDP Securities Account number, CPF Investment Account number (if
                   applicable) and securities application amount from your DBS/POSB Account(s)
                   to registrars of securities, SGX, SCCS, CDP, CPF Board and issuer/vendor(s).
             (c)   You are not a US Person (as such term is defined in Regulation S under the
                   United States Securities Act of 1933, as amended).
             (d)   You understand that the securities mentioned herein have not been and will not
                   be registered under the United States securities law, and subject to certain
                   exceptions, may not be offered or sold within the United States. There will be no
                   public offer of the securities mentioned herein in the United States. Any failure
                   to comply with this restriction may constitute a violation of the United States
                   securities law.
             (e)   This application is made in your name and at your own risk.
             (f)   For FIXED/MAX price securities application, this is your only application. For
                   TENDER price securities application, this is your only application at the
                   selected tender price.

        9:   Fill in details for share application and click “Submit”.

       10:   Check the details of your share application, your NRIC or passport number and click “OK”
             to confirm your application.

       11:   Print Confirmation Screen (optional) for your reference & retention only.


Steps for Applications for Internet Placement Shares through the IPO website
The steps for making an Internet Placement Application through the IPO website is shown below.
Certain words appearing on the screen are in abbreviated form (“A/C”, “&”, “I/C” and “No.” refer to
“Account”, “NRIC” and “Number” respectively).

Step    1:   Click on to the IPO website ( www.ePublicOffer.com).

        2:   Login to the IPO website by entering your User Name and Password.

        3:   Select the counter “SITRA” from the list of current counters offered by clicking “APPLY
             NOW”.

        4:   Click “I Agree” to proceed and to warrant that you have observed and complied with all
             applicable laws and regulations and agree to the terms and conditions stated in the IPO
             website.




                                                   V-18
      APPENDIX V — TERMS, CONDITIONS AND PROCEDURES
             FOR APPLICATION AND ACCEPTANCE

5:   View and/or download a copy of the Prospectus.

6:   Click the check box provided next to the following statements to confirm your declaration:–
     (1)   I have read, understood & agreed to these terms and conditions, and the
           Prospectus/Document or Profile Statement and if applicable, the Replacement
           or Supplementary Prospectus/Document or Profile Statement in relation to the
           IPO Shares;
     (2)   I consent to the disclosure of my name, I/C or passport number, address,
           nationality, CDP Securities Account number, and securities application amount
           to share registrars of the securities, the SGX-ST, SCCS, CDP, the issuer/
           vendor(s) of the IPO Shares;
     (3)   I am currently resident in Singapore;
     (4)   I am not a US person (as such term is defined in Regulation S under the United
           States Securities Act of 1933, as amended) and not currently resident in the
           United States;
     (5)   I understand that the IPO Shares have not been and will not be registered under
           the United States securities laws and, subject to certain exceptions, may not be
           offered or sold within the United States, that there will be no public offer of the
           IPO Shares in the United States, and any failure to comply with this restriction
           may constitute a violation of the United States securities laws;
     (6)   This application for the IPO Shares is made in my own name and at my own
           risk; and
     (7)   I am not an associate (as defined in the Listing Manual of the SGX-ST) or a
           director or substantial shareholder (as defined in the Company Act (Chapter 50)
           of Singapore) of the Issuer.

7:   Press “Confirm” when you have completed the above steps.

8:   Check details of your application, (including information on your name, your CDP number,
     your NRIC number, your email address and the amount payable) on the screen and click
     “CONFIRM” to confirm your application.

9:   Print Provisional Allocation Screen and proceed to make payment as described in the
     Provisional Allocation Screen.




                                          V-19
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  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006




SITRA HOLDINGS (INTERNATIONAL) LIMITED
COMBINED FINANCIAL STATEMENTS


31 DECEMBER 2003, 2004, 2005 AND 3 MONTHS
ENDED 31 MARCH 2006




                                      VI
This page has been intentionally left blank.
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

INDEPENDENT AUDITORS’ REPORT


7 November 2006

The Board of Directors
Sitra Holdings (International) Limited
18 Genting Road
The Blue Building
Singapore 349477

Dear Sirs

We have audited the accompanying combined financial statements of Sitra Holdings (International)
Limited (the “Company”) and its subsidiaries (collectively the “Group”) as set out on pages VI-3 to
VI-48, comprising the combined Group’s balance sheets as at 31 December 2003, 2004 and 2005, and
the combined profit and loss accounts, combined statements of changes in equity and combined
statements of cash flows for each of the 3 financial years then ended and the notes thereto. These
combined financial statements of the Group, are the responsibility of the Company’s directors. Our
responsibility is to express an opinion on these financial statements based on the audit.

We conducted the audits 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 combined 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 the audit provide a reasonable
basis for our opinion.

In our opinion, the accompanying combined financial statements of the Group, are properly drawn up
in accordance with Singapore Financial Reporting Standards so as to present fairly, in all material
respects, the state of affairs of the Group as at 31 December 2003, 2004 and 2005 and of the results,
changes in equity and cash flows of the Group for the financial years then ended.

This report has been prepared for inclusion in the Prospectus of Sitra Holdings (International) Limited
to be issued by the Company after its conversion to a public company and the change of its name to
Sitra Holdings (International) Limited. No audited financial statements of the Company or its
subsidiaries have been prepared for any period subsequent to 31 December 2005.

Yours faithfully



Nexia Tan & Sitoh
Certified Public Accountants
Singapore


Kristin YS Kim
Partner-in-charge

                                                 VI-1
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

INDEPENDENT REVIEW REPORT FROM THE AUDITORS
IN RELATION TO THE UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 31 MARCH 2006


7 November 2006

The Board of Directors
Sitra Holdings (International) Limited
18 Genting Road
The Blue Building
Singapore 349477

Dear Sirs

This report has been prepared for inclusion in the offering document for Sitra Holdings (International)
Limited (the “Company”) to be issued in connection with the initial public offering of the shares of the
Company.

We have reviewed the unaudited interim combined financial statements of the Company and its
subsidiaries ( the “ Group”) for the three months ended 31 March 2006 as set out in pages VI-3 to VI-48
of the Prospectus. These financial statements are the responsibility of the directors of the Company.
Our responsibility is to issue a report on these financial statements.

We conducted our review in accordance with the Singapore Standard on Auditing applicable to review
engagements. This standard requires that we plan and perform the review to obtain moderate
assurance as to whether the financial statements are free of material misstatements. A review is limited
primarily to inquiries of the Group personnel and analytical procedures applied to financial data and
thus provide less assurance than an audit. We have not performed an audit, and, accordingly, we do
not express an opinion.

Based on our review, nothing has come to our attention that causes us to believe that the unaudited
interim combined financial statements as set out in pages VI-3 to VI-48 of the Prospectus are not
presented fairly, in all material respects, in conformity with the accounting policies normally adopted by
the Company as set out in pages VI-11 to VI-23 of the Prospectus.


Yours faithfully



Nexia Tan & Sitoh
Certified Public Accountants
Singapore



Kristin YS Kim
Partner-in-charge


                                                  VI-2
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Combined Balance Sheets
As at 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006

                                                                                                      Unaudited as
                                                                      As at 31 December
                                                                                                      at 31 March
                                                Notes          2003         2004           2005           2006
                                                                $            $              $               $
Non-Current Assets
Property, plant and equipment                    4         2,205,564      3,854,591      1,130,056      1,108,682
Other investments                                5              33,781      115,307               —           —
Financial assets at fair value through profit
  or loss                                        5                    —            —      132,655        132,655
Goodwill on consolidation                        6                    —      28,982        28,982        668,715

                                                           2,239,345      3,998,880      1,291,693      1,910,052

Current Assets
Assets held for sale                             7                    —            —     1,880,283            —
Inventories                                                    168,158      260,137       331,920       1,204,933
Trade receivables                                8         2,072,670      3,348,046      5,120,865      5,366,500
Other receivables                                9             370,589      206,917      2,218,504      2,757,441
Prepayments                                                      8,301       47,617        30,450        122,624
Cash and bank balances                           10            175,009      128,449      1,168,818      1,592,177

                                                           2,794,727      3,991,166     10,750,840     11,043,675

Total Assets                                               5,034,072      7,990,046     12,042,533     12,953,727

Current Liabilities
Trade payables                                   11        1,741,422      2,899,499       582,224        673,249
Bills payables (secured)                         12        1,502,392        447,156      4,769,475      5,926,242
Other payables                                   13            482,229    1,037,427       704,985         687,311
Hire purchase creditors                          14              5,358        5,790         5,790           5,790
Interest-bearing borrowings (secured)            15            758,056      480,653      1,861,461       296,307
Provision for tax                                               23,430      236,864       591,961         711,555

                                                           4,512,887      5,107,389      8,515,896      8,300,454

Net Current (Liabilities)/Assets                           (1,718,160)    (1,116,223)    2,234,944      2,743,221




                                                        VI-3
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Combined Balance Sheets
As at 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006

                                                                                             Unaudited as
                                                              As at 31 December
                                                                                             at 31 March
                                        Notes          2003         2004          2005           2006
                                                        $            $             $               $
Non-Current Liabilities
Hire purchase creditors                  14             37,125       31,335        23,367        21,375
Interest-bearing borrowings (secured)    15            422,778    1,594,913       322,662       316,908
Deferred tax                                              124        15,802        15,802        15,802

                                                       460,027    1,642,050       361,831       354,085

Total Liabilities                                  4,972,914      6,749,439    8,877,727      8,654,539

                                                        61,158    1,240,607    3,164,806      4,299,188

Share Capital and Reserves
Share capital                            16        3,000,048      3,000,048    3,000,048      2,000,045
Capital reserve                                         81,593       81,593        81,593        81,593
Foreign currency translation reserve                   (30,409)     (14,743)      (31,890)       26,178
(Accumulated Losses)/Unappropriated
  Profit                                           (3,057,708) (1,862,313)         96,685     2,128,464

                                                        (6,476)   1,204,585    3,146,436      4,236,280
Minority Interest                                       67,634       36,022        18,370        62,908

                                                        61,158    1,240,607    3,164,806      4,299,188




                                                VI-4
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Combined Profit and Loss Accounts
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


                                                Year ended 31 December                  Unaudited 3 months ended
                                                                                         31 March      31 March
                                  Notes      2003           2004            2005           2005          2006
                                              S$             S$              S$             S$            S$
Revenue                            17     27,763,627      43,289,967      58,734,134     15,417,307    18,625,311
Cost of sales                             (25,253,849) (38,767,997) (52,360,436)        (13,759,571)   (16,480,575)

Gross profit                               2,509,778       4,521,970       6,373,698      1,657,736     2,144,736
Other operating income             18         77,864            155,111     429,884         16,647         29,667
Selling and distribution
  expenses                                  (325,049)     (1,051,799)     (1,485,866)      (359,254)     (509,695)
Administrative expenses                    (1,254,347)    (1,542,648)     (2,045,907)      (423,013)     (580,074)
Other operating expenses                    (220,561)       (511,965)       (859,709)            (7)       (48,505)
Finance cost                       19       (151,506)       (118,157)       (135,149)       (26,641)       (73,228)

Profit before tax                  20        636,179       1,452,512       2,276,951       865,468        962,901
Tax                                21        (21,543)       (246,330)       (375,605)      (142,163)     (123,867)

Profit after tax                             614,636       1,206,182       1,901,346       723,305        839,034

Attributable to:
Equity holders of parent                     573,955       1,195,395       1,958,998       722,615        794,496
Minority interests                            40,681            10,787       (57,652)          690         44,538

                                             614,636       1,206,182       1,901,346       723,305        839,034

EPS (based on the
  pre-Invitation share capital)
  (cents)                          22            1.04              2.17         3.56           1.31           1.44
EPS (based on the
  post-Invitation share
  capital) (cents)                 22            0.73              1.51         2.48           0.91           1.01




                                                         VI-5
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Combined Statement of Changes in Equity
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006

                                                                                    Total
                                                        Foreign    (Accumulated Attributable
                                                       Currency      Losses)/    To Equity
                               Share        Capital   Translation Unappropriated Holders of     Minority
                               Capital      Reserve    Reserve        Profits      Parent       Interest     Total
                                  S$          S$         S$            S$            S$           S$           S$
 Balance at 1 January 2003    3,000,048     81,593     (38,858)     (3,631,663)    (588,880)     26,953     (561,927)
 Net translation during the            —        —        8,449              —         8,449            —       8,449
   year
 Net Profit                            —        —             —       573,955       573,955      40,681      614,636

 Balance at 31 December       3,000,048     81,593     (30,409)     (3,057,708)       (6,476)    67,634       61,158
   2003

 Balance at 1 January 2004    3,000,048     81,593     (30,409)     (3,057,708)       (6,476)    67,634       61,158
 Net translation during the            —        —       15,666              —        15,666            —      15,666
   year
 Net profit                            —        —             —      1,195,395    1,195,395     (31,612)   1,163,783

 Balance at 31 December       3,000,048     81,593     (14,743)     (1,862,313)   1,204,585      36,022    1,240,607
   2004

 Balance at 1 January 2005    3,000,048     81,593     (14,743)     (1,862,313)   1,204,585      36,022    1,240,607
 Net translation during the            —        —      (17,147)             —       (17,147)           —     (17,147)
   year
 Issue of share capital                —        —             —             —             —      40,000       40,000
 Net Profit                            —        —             —      1,958,998    1,958,998     (57,652)   1,901,346

 Balance at 31 December       3,000,048     81,593     (31,890)        96,685     3,146,436      18,370    3,164,806
   2005

 Balance at 1 January 2006
 — As previously stated       3,000,048     81,593     (31,890)        96,685     3,146,436      18,370    3,164,806
 — Effect of elimination of   (1,000,003)       —             —             —     (1,000,003)          —   (1,000,003)
   share capital of
   subsidiaries
 — Effect of elimination of            —        —             —      1,237,283    1,237,283            —   1,237,283
   pre-acquisition reserves
   of subsidiaries

 — As restated at 1 January   2,000,045     81,593     (31,890)      1,333,968    3,383,716      18,370    3,402,086
   2006
 Translation difference on             —        —             —             —             —            —             —
   subsidiaries
 Net translation during the            —        —       58,068              —        58,068            —      58,068
   period
 Net Profit                            —        —             —       794,496       794,496      44,538      839,034

 Balance at 31 March 2006     2,000,045     81,593      26,178       2,128,464    4,236,280      62,908    4,299,188




                                                         VI-6
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Combined Cash Flow Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006

                                                                                                             Unaudited
                                                                        Year ended 31 December               3 months
                                                                                                            ended March
                                                  Notes          2003           2004             2005          2006
                                                                  $               $               $              $
Cash Flow From Operating Activities
Net Profit before taxation                                   636,179           1,452,512    2,276,951          962,901
Adjusted for:
Bad debt written off                                                    —       336,086           22,478             —
Depreciation                                        4            72,581          67,692           73,979        17,905
Amortisation of goodwill                                                —         7,245                 —            —
Impairment loss on property, plant and
  equipment                                         4                   —       156,891                 —            —
Interest expenses                                            151,506            118,157          135,149        73,228
Investment written off                                                  —              —          12,000             —
Gain on fair value adjustment of quoted
  Investments                                                           —              —         (98,874)            —
Gain on disposal of property, plant and
  equipment                                                       (1,981)              —         (64,500)         (870)
Gain on disposal of quoted investments                            (2,149)         (1,896)         (5,014)            —
Interest income                                                   (4,015)         (2,404)         (1,310)       (1,279)
Dividend income                                                         —         (3,625)               —            —
Negative goodwill written off                                           —         (3,881)               —            —
Allowance for diminution in value of unquoted
   investment                                                    65,460                —                —            —
Allowance for doubtful debts/(written back)                  155,102             (43,159)        825,231             —
Exchange difference arising on consolidation                     (13,856)         (1,779)        (80,948)       37,831

Operating profit before working capital changes             1,058,827          2,081,839    3,095,142        1,089,716
  Change in inventories                                          (62,596)        (91,979)        (71,783)     (873,013)
  Change in trade receivables                                (774,155)        (1,486,845)   (2,598,050)       (245,635)
  Change in other receivables                                (107,925)           82,214     (2,011,587)       (538,937)
  Change in other prepayment                                      9,697          (39,316)         17,167       (92,174)
  Change in trade payables                                  1,363,202          1,158,077    (2,317,275)         91,025
  Change in bills payables                                 (1,066,889)        (1,055,236)   4,322,319        1,156,767
  Change in other payables                                       (14,223)       555,198      (332,442)         (17,674)

Cash generated from operation                                405,938           1,203,952         103,491       570,075
Interest expenses                                            (151,506)          (118,157)    (135,149)         (73,228)
Tax paid                                                          (1,338)        (17,144)        (20,619)       (4,193)

Net cash inflow/(outflow) from operating
 activities                                                  253,094           1,068,651         (52,277)      492,654



                                                          VI-7
   APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
       AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
     FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                FINANCIAL STATEMENTS OF THE GROUP
            FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Combined Cash Flow Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006

                                                                                                           Unaudited
                                                                      Year ended 31 December               3 months
                                                                                                          ended March
                                                Notes          2003           2004             2005          2006
                                                                $               $                $             $
Cash Flow From Investing Activities
Acquisition of goodwill                                             —          (36,227)               —            —
Purchase of quoted investments                             (16,160)           (142,075)               —            —
Increased in share capital of a subsidiary                          —                —         200,000             —
Investment in subsidiaries                                          —                —     (160,000)        (362,276)
Purchase of property, plant and equipment                  (58,410)         (1,894,757)    (248,293)         (13,398)
Proceeds from disposal of property, plant and
  equipment                                                    11,449                —    1,112,500        1,878,000
Proceeds from disposal of quoted investments                   21,166          62,445           86,540             —
Dividend income                                                     —            3,625                —            —
Interest Income                                                 4,015            2,404           1,310         1,279

Net cash (outflow)/inflow from investing
  activities                                               (37,940)         (2,004,585)        992,057     1,503,605

Cash From Financing Activities
Redemption/repayment of Interest bearing
  borrowings                                              (183,495)           (389,459)    (967,696)       (1,433,514)
Proceeds from interest bearing
Borrowings                                                          —        1,312,000                —            —
Proceeds from fixed deposits                                        —                —    1,000,000                —
Increase in obligation under hire purchase                     42,483                —                —            —
Repayment of hire purchase obligations                         (5,129)          (5,358)         (7,968)        (1,992)

Net cash (outflow)/inflow from financing
  activities                                              (146,141)           917,183           24,336     (1,435,506)

Net increase/(decrease) in cash and cash
  equivalents                                                  69,013          (18,751)        964,116       560,753
Cash and cash equivalents at beginning of
  year/period                                             (257,024)           (188,011)    (206,762)         757,354

Cash and cash equivalents at end of
  year/period                                             (188,011)           (206,762)        757,354     1,318,107

Cash and cash equivalents representing:
Cash and Bank balances                           10        175,009            128,449     1,168,818        1,592,177
Bank overdrafts                                  15       (363,020)           (335,211)    (411,464)        (274,070)

                                                          (188,011)           (206,762)        757,354     1,318,107




                                                        VI-8
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


1.    Introduction
      The combined financial statements of Sitra Holdings (International) Limited (the “Company”) and
      its subsidiary companies (the “Group”) for the years ended 31 December 2003, 2004, 2005 and
      3 months ended 31 March 2006 have been prepared for inclusion in the Prospectus dated 7
      November 2006. The Prospectus is issued in connection with the invitation by the Company
      comprising 24,000,000 new ordinary shares by way of public offer payable in full on application.

2.    Corporate Information
      The Company was incorporated in the Republic of Singapore on 5 May 1979 as a private limited
      company under the name of Sitra Agencies Pte Ltd. The Company last changed its name to Sitra
      Holdings (International) Pte Ltd. Subsequently, on 22 September 2006, the name was changed to
      “Sitra Holdings (International) Limited”.

      The registered office and business address is at 18 Genting Road, The Blue Building, Singapore
      349477.

      The combined financial statements of Sitra Holdings (International) Limited for the years ended 31
      December 2003, 2004, 2005 and 3 months ended 31 March 2006 were authorised for issue in
      accordance with a resolution of the Directors on 7 November 2006. The Company is a limited
      liability company.

      The principal activities of the Company are that of investment holding and importer, exporter of
      wood-based and other related products. The principal activities of its subsidiary companies are as
      set out in note 2. There have been no significant changes in the activities of the Group during the
      years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006.

      The Group comprises the Company and the following subsidiaries:–
                                                               Country of
                                                             incorporation
      Name of subsidiary                                      and place of
      Companies                Principal activities             business      Group’s effective equity held
                                                                             2003    2004      2005     2006
                                                                              %       %         %        %
      Held by the Company
      Suncoast Sitra Pte Ltd   Investment holding             Singapore       56       80       80       80
                               and importer, exporter
                               of lifestyle furniture
                               and other related
                               products
      E-Timberhub Pte Ltd      Importer, exporter of          Singapore      100      100      100      100
                               wood-based and
                               other related products



                                                      VI-9
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


2.    Corporate Information (cont’d)

                                                                Country of
                                                              incorporation
      Name of subsidiary                                       and place of
      Companies                   Principal activities           business            Group’s effective equity held
                                                                                   2003     2004      2005     2006
                                                                                    %        %         %         %
      Energetic Industries        Inactive                        Malaysia          100        100        100        100
        Sdn. Bhd.
      Sitra Dove Logistics        Inactive                        Malaysia          100        100        100        100
        Sdn. Bhd.
      Sitra Agencies Pte Ltd      Importer, exporter, of          Singapore         100        100        100        100
                                  wood-based and
                                  other related products
      Sitra Asia Pacific Sdn.     Inactive                        Malaysia           60         60          60         60
        Bhd.(1)
      Sitra Dove Logistics        Investment holding              Singapore         100        100        100        100
        Pte. Ltd.                 and provision of
                                  logistics services

      Held by Sitra Dove Logistics Pte. Ltd.
      Subsidiary
      Sitra Precision             Inactive                        Malaysia          100        100        100        100
        Engineering (M)
        Sdn. Bhd.

      Held by Suncoast Sitra Pte Ltd
      Subsidiary
      Suncoast Sitra Pty.         Wholesaler of lifestyle         Australia          75         75          75         75
        Ltd.                      furniture and other
                                  related products
      Shuimu Lifestyle Pte.       Inactive                        Singapore          —           —          60         60
        Ltd.(1)

      Note 1:
      In 2006, as part of restructuring exercise for the IPO, Sitra Asia Pacific Sdn Bhd and Shuimu Lifestyle Pte. Ltd. were
      disposed. Details of disposal of the subsidiaries are included in the note 3(a).




                                                          VI-10
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies

      (a)   Restructuring Exercise
            The Company undertook the following exercise (“Restructuring Exercise”) in connection with
            the invitation:–

            1.   Acquisition of Sitra Agencies Pte Ltd
                 On 24 February 2006, the Company acquired the entire issued and paid-up share
                 capital of Sitra Agencies Pte Ltd, comprising 130,001 ordinary shares from the
                 Directors, Mr George Chew, Madam Teresa Tan and Mr Steven Chew at a
                 consideration of $362,274.09, based on audited net tangible asset value of Sitra
                 Agencies Pte Ltd as at 31 December 2005. The consideration was satisfied by the
                 Company in cash. The transaction was undertaken based on normal commercial terms
                 and on an arm’s length basis.


            2.   Acquisition of Sitra Dove Logistics Pte Ltd
                 On 16 March 2006, the Company acquired the entire issued and paid-up share capital
                 of Sitra Dove Logistics Pte Ltd, comprising 870,002 ordinary shares from the Directors,
                 Mr George Chew and Madam Teresa Tan at a norminal consideration of $2.00, based
                 on audited net tangible liability of $703,224 as at 31 December 2005. The
                 consideration was satisfied by the Company in cash. The transaction was undertaken
                 based on normal commercial terms and on an arm’s length basis.


            3.   Sitra Dove Logistics Sdn. Bhd.
                 On 15 April 2006, the Company acquired 29 ordinary shares of par value RM1.00 each
                 in the capital of Sitra Dove Logistics Sdn. Bhd. from our Executive Directors, Mr
                 George Chew, Madam Teresa Tan and Mr Steven Chew (“SDL Sale Shares”) at an
                 aggregate consideration of RM3.00 and 71 ordinary shares of par value RM1.00 each
                 in the capital of Sitra Dove Logistics Sdn. Bhd. from Mr Ng Kim Teck at an aggregate
                 consideration of RM71.00. Sitra Dove Logistics Sdn Bhd has a net tangible liability of
                 RM55,259 as at 31 December 2005 based on its audited financial statements for
                 FY2005. The consideration was satisfied by the Company in cash. The transaction was
                 undertaken based on normal commercial terms and on an arm’s length basis. Pursuant
                 to the said acquisition, Sitra Dove Logistics Sdn Bhd becomes a wholly-owned
                 subsidiary of the Company.

                 In addition to the 100 issued and paid-up ordinary shares, Sitra Dove Logistics Sdn.
                 Bhd. has an issued and paid-up preference share capital of RM150,000 comprising
                 150,000 preference shares of RM1.00 each, which is entirely owned by the Company.



                                                  VI-11
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (a)   Restructuring Exercise (cont’d)
            3.   Sitra Dove Logistics Sdn. Bhd. (cont’d)

                 On 29 September 2006, the Company entered into an agreement with Mr George
                 Chew, Madam Teresa Tan and Mr Steven Chew (collectively, the “Assignee”) and Sitra
                 Dove Logistics Sdn. Bhd. pursuant to which the Assignee agreed to accept the
                 assignment of an outstanding loan of RM230,243 owing by Sitra Dove Logistics Sdn.
                 Bhd. to the Company as at 31 December 2005 (the “Outstanding Loan”). Accordingly,
                 Sitra Dove Logistics Sdn. Bhd. will recognise RM230,243 as other income. This will
                 result in Sitra Dove Logistics Sdn. Bhd.’s net tangible assets to be RM174,984. In
                 consideration thereof, the Company agreed to increase the consideration for the
                 Company’s acquisition of the SDL Sale Shares from the Assignee as above mentioned
                 by RM174,910 (“Additional Consideration”) based on approximately the assumed net
                 tangible asset value of Sitra Dove Logistics Sdn. Bhd. after repayment of the
                 outstanding loan. As at the date of this Prospectus, the Outstanding Loan and
                 Additional Consideration have been fully settled by the Assignee and the Company
                 respectively.

            4.   Sitra Asia Pacific Sdn. Bhd.
                 Sitra Asia Pacific Sdn. Bhd. is a company incorporated under the laws of Malaysia with
                 an issued and paid-up share capital of RM 50,010 comprising 50,010 ordinary shares
                 of par value RM1.00 each. On 25 May 2006, the Company transferred all the 60%
                 shareholding owned by it, comprising 30,006 issued and fully-paid ordinary shares in
                 the capital of Sitra Asia Pacific Sdn. Bhd., to Executive Chairman and CEO, Mr George
                 Chew of the Company at a nominal consideration of RM211. Sitra Asia Pacific Sdn.
                 Bhd. has a net tangible asset of RM351 as at 31 December 2005 based on its
                 unaudited financial statements for FY2005. The consideration was satisfied by our
                 Executive Chairman and CEO, Mr George Chew in cash. The transfer was effective by
                 way of a deed of declaration of trust executed by the Company pursuant to which the
                 Company declared that the said 30,006 ordinary shares are held in trust by it as trustee
                 for the sole and absolute benefit of Mr George Chew. The transaction was undertaken
                 based on normal commercial terms and on an arm’s length basis. Pursuant to the said
                 transfer, Sitra Asia Pacific Sdn Bhd ceased to be a subsidiary of our Company. Sitra
                 Asia Pacific Sdn. Bhd. has been dormant since 2000. It is currently in the process of
                 applying for members’ voluntary winding-up.




                                                 VI-12
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (a)   Restructuring Exercise (cont’d)

            5.   Shuimu Lifestyle Pte. Ltd.
                 Shuimu Lifestyle Pte. Ltd. is a company incorporated under the laws of Singapore with
                 an issued and paid-up share capital of $20,000 comprising 20,000 ordinary shares. On
                 5 May 2006, the subsidiary, Suncoast Sitra Pte Ltd transferred all the 60%
                 shareholding owned by it, comprising 12,000 issued and fully-paid ordinary shares in
                 the capital of Shuimu Lifestyle Pte. Ltd. to Vice-President (Group Marketing and
                 Business Development), Mr Xavier Chew at a nominal consideration of S$1.00.
                 Shuimu Lifestyle Pte. Ltd. has a net tangible liability of $29,638.08 as at 31 December
                 2005 based on its unaudited financial statements for FY2005. The consideration was
                 satisfied by Vice-President (Group Marketing and Business Development), Mr Xavier
                 Chew in cash. The transaction was undertaken based on normal commercial terms
                 and on an arm’s length basis. Pursuant to the said transfer, Shuimu Lifestyle Pte. Ltd.
                 ceased to be an ultimate subsidiary of the Company. Shuimu Lifestyle Pte. Ltd. has
                 been dormant since June 2005. The shareholders of Shuimu Lifestyle Pte. Ltd. had
                 resolved to wind-up Shuimu Lifestyle Pte. Ltd. and it is in the course of preparing for
                 winding up.

      (b)   Basis of preparation
            The Restructuring Exercise involves companies which are under common control. The
            combined financial statements of the Group for the financial years ended 31 December
            2003, 2004, 2005 and 3 months ended 31 March 2006 were prepared using the historical
            cost method in a manner similar to the “pooling-of-interests” method as if the Restructuring
            Exercise had been completed on 1 January 2003. Such manner of presentation reflects the
            economic substance of the combining entities as a single economic enterprise, although the
            legal parent-subsidiary relationship was not established until after the balance sheet date.

            These combined financial statements of the Group are a combination or aggregation of the
            financial statements of the companies of the Group.

            The audited statutory financial statements of Sitra Holdings (International) Pte Ltd and its
            subsidiary companies and Sitra Dove Logistics Pte Ltd and Sitra Agencies Pte Ltd for the
            relevant period were prepared in accordance with Singapore Financial Reporting Standards
            (“FRS”).




                                                 VI-13
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (b)   Basis of preparation (cont’d)

            Sitra Dove Logistics Sdn Bhd, Energetic Industries Sdn Bhd and Sitra Precision Engineering
            (M) Sdn Bhd covered by the relevant period were prepared in accordance with Generally
            Accepted Accounting Principles (‘GAAP”) applicable in Malaysia. Suncoast Sitra Pty Ltd is
            not required to be audited in the country of origin. For the purpose of this report, the financial
            statements of Sitra Dove Logistics Sdn Bhd, Energetic Industries Sdn Bhd, Sitra Precision
            Engineering (M) Sdn Bhd and Suncoast Sitra Pty Ltd for the relevant period have been
            prepared in accordance with FRS and audited by Nexia Tan & Sitoh in accordance with
            Singapore Standards on auditing.

            The financial statements for the year ended 31 December 2005 are audited by Nexia Tan &
            Sitoh and for the years ended 31 December 2003 and 31 December 2004, they are audited
            by Boon Suan Lee & Co., Certified Public Accountants.

            The combined financial statements are prepared in accordance with FRS including related
            interpretations promulgated by the Council on Corporate Disclosure and Governance.

            The measurement basis used for the preparation of the combined financial statements is
            historical cost for financial years 2003, 2004, 2005 and 3 months ended 31 March 2006
            except where revised FRSs are applicable. The combined financial statements are
            presented in Singapore Dollars.

            The preparation of combined financial statements in accordance with FRS requires
            management to make estimations and assumptions that affect the reported amounts of
            assets and liabilities and disclosure of contingent assets and liabilities at the date of the
            combined financial statements and the reported amounts of revenue and expenses during
            the relevant period.

            In 2005, the Group adopted the following new/revised FRSs which are relevant to its
            operations:–

            FRS 1 (revised 2004)          —      Presentation of Financial Statements
            FRS 2 (revised 2004)          —      Inventories
            FRS 8 (revised 2004)          —      Accounting Policies, Changes in Accounting Estimates
                                                 and Errors
            FRS 10 (revised 2004)         —      Events after the Balance Sheet Date
            FRS 16 (revised 2004)         —      Property, Plant and Equipment
            FRS 17 (revised 2004)         —      Leases



                                                    VI-14
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (b)   Basis of preparation (cont’d)

            FRS   21 (revised   2004)    —      The Effects of Changes in Foreign Exchange Rates
            FRS   24 (revised   2004)    —      Related Party Disclosures
            FRS   27 (revised   2004)    —      Consolidated and Separate Financial Statements
            FRS   28 (revised   2004)    —      Investment in Associates
            FRS   32 (revised   2004)    —      Financial Instruments: Disclosure and Presentation
            FRS   36 (revised   2004)    —      Impairment of Assets
            FRS   38 (revised   2004)    —      Intangible Assets
            FRS   39 (revised   2004)    —      Financial Instruments: Recognition and Measurement
            FRS   103                    —      Business Combinations

            The effects of the adoption of the following FRS in 2005 are set out below:

            FRS 27 (revised 2004) Consolidated and Separate Financial Statements
            Previously, there was no requirement for the presentation of minority interests within equity.
            FRS 27 (revised 2004) requires minority interests to be presented with equity of the Group
            retrospectively.

            FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement and FRS
            32 (revised 2004) Financial Instruments: Disclosure and Presentation

            (i)   Classification and consequential accounting for financial assets and financial
                  liabilities
                  Previously, the Group investments in equity interest of other companies were stated at
                  cost less provision for diminution in value that was other than temporary, which was
                  charged to the income statement when it arose. Any reversal of the provision was also
                  included in the income statement.

                  In accordance with FRS 39 (revised 2004), the investments are classified as financial
                  assets available-for-sale and are initially recognised at its fair value plus transaction
                  costs and subsequently measured at the fair value at the balance sheet date with all
                  gains and losses other than impairment loss taken to profit and loss account.
                  Impairment losses are taken to the income statement in the period it arises. This
                  change was effected prospectively from 1 January 2005.




                                                   VI-15
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (b)   Basis of preparation (cont’d)

            FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement and FRS
            32 (revised 2004) Financial Instruments: Disclosure and Presentation (cont’d)

                This change did not materially affect the financial statement for the financial year
                ended 31 December 2005 nor 3 months ended 31 March 2006. The fair value
                adjustment was not made for the unaudited 3 months ended 31 March 2006.

                                                                                             Group
                                                                                           Unaudited
                                                                                         31 March 2006
                Increase in:
                Financial assets are fair value through profit and loss                      1,965
                Deferred tax                                                                  (393)

                Profit and loss accounts                                                     1,572


                Previously, the Group’s trade and other payables and bank borrowings were stated at
                cost. Bank borrowings were stated at the proceeds received and transaction costs on
                borrowings were classified as deferred charges and amortised on a straight-line basis
                over the period of the borrowings.

                In accordance with FRS 39 (revised 2004), they are initially recognised at fair value
                less transaction costs and subsequently accounted for at amortised cost using the
                effective interest method. This change did not materially affect the financial statements
                for the financial year ended 31 December 2005 nor 3 months ended 31 March 2006.




                                                    VI-16
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (b)   Basis of preparation (cont’d)

            FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement and FRS
            32 (revised 2004) Financial Instruments: Disclosure and Presentation (cont’d)

            (ii)   Fair values of financial assets and liabilities
                   Previously, the Group used the last transacted prices of quoted financial assets or
                   liabilities as the market values.

            Fair value estimation is now carried out in accordance with guidance set out in FRS 39
            (revised 2004).

            This change did not materially affect the financial statements for the financial year ended 31
            December 2005 nor 3 months ended 31 March 2006.


            FRS 103 Business Combinations, FRS 36 (revised 2004) Impairment of Assets and
            FRS 38 (revised 2004) Intangible Assets

            Goodwill
            Until 31 December 2004, goodwill was amortised on a straight line basis over a period
            ranging from 10 years; and at each balance sheet date, the Group assessed if there was any
            indication of impairment of the cash-generating-unit in which the goodwill is attached to. In
            accordance with FRS 103 and FRS 36 (revised 2004), the Group ceased amortization of
            goodwill from 1 January 2005 and accumulated amortization as at 31 December 2004
            amounting to $7,245 has been eliminated with a corresponding decrease in the cost of
            goodwill. Goodwill is thereafter tested at least annually for impairment.


            FRS yet to be adopted
            The Group has yet to adopt FRS 40 Investment Property, which will be effective from 1
            January 2007. Under FRS 40, investment properties are permitted to be stated at either fair
            value or cost less accumulated depreciation. Investment properties held under operating
            leases are required to be measured at fair value. The Group expects to measure all its
            investment properties at fair value.




                                                  VI-17
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (c)   Basis of consolidation
            The combined financial statements include the financial statements of the Company and all
            its subsidiaries made up to the end of the financial year. Subsidiaries are those enterprises
            controlled by the Company. Control exists when the company has the power, directly or
            indirectly, to govern the financial and operating policies of an enterprise so as to obtain
            benefits from its activities. The financial statements of subsidiaries are included in the
            combined financial statements from the date that control commences until the date that
            control ceases.

            Intra-group balances and transactions, and any unrealised gains arising from inter-group
            transactions are eliminated in preparing the combined financial statements. Unrealised
            losses are eliminated in the same way as unrealised gains to the extent that there is no
            evidence of impairment.


      (d)   Property, plant and equipment and depreciation
            Property, plant and equipment are stated at cost less accumulated depreciation and any
            impairment in value.

            Depreciation is calculated using the straight line method to write off the cost or valuation of
            the assets over their estimated useful lives. The rates adopted are as follows:–

            Freehold buildings                             —        1% to 2%
            Furniture, fixtures and office equipment       —       5% to 15%
            Plant and equipment                            —     7.5% to 10%
            Renovations                                    —      10% to 20%
            Motor vehicles                                 —             20%
            Computers                                      —          33.33%

            Where assets are revalued, any surplus on revaluation is credited to capital reserve. A
            decrease in net carrying amount arising on revaluation of fixed assets is charged to the
            income statement to the extent that it exceeds any surplus held in capital reserve relating to
            previous revaluation of the same class of assets.

            No depreciation is provided for freehold land. Fully depreciated assets are retained in the
            financial statements until they are no longer in use.




                                                   VI-18
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (e)   Impairment
            The carrying amounts of the Group’s assets are reviewed at each balance sheet date to
            determine whether there is any indication of impairment. If any such indication exists, the
            asset’s recoverable amount is estimated. All impairment losses are recognised in the income
            statement whenever the carrying amount of an asset exceeds its recoverable amount.

            An impairment loss is only reversed to the extent that the asset’s carrying amount does not
            exceed the carrying amount that would have been determined, net of depreciation or
            amortisation, if no impairment loss had been recognised. All reversals of impairment are
            recognised in the income statement.


      (f)   Investments
            Investments held as fair value through profit and loss account are stated at fair value less
            any impairment loss on the investment.


      (g)   Inventories
            Inventories are valued at the lower of cost and net realizable value. Cost is determined on
            the first-in first-out basis. Net realizable value is the amount at which the inventories can be
            realised.


      (h)   Trade and other receivables
            Trade receivables, which generally have 30–60 days terms, are recognised and carried at
            fair value and subsequently measured at amortised cost using effective interest method,
            less allowance for impairment. An allowance for doubtful debts is made when collection of
            the full amount is no longer probable.

            Other receivables are recognised at fair value and subsequently measured at amortised cost
            less an allowance for any impairment.


      (i)   Cash and cash equivalents
            Cash and cash equivalents include cash on hand and deposits with financial institutions net
            of bank overdrafts.




                                                   VI-19
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)

      (j)   Trade and other payables
            Liabilities for trade and other amounts payable which are normally settled on 30–60 days
            terms, are initially measured at fair value, and subsequently measured at amortised cost,
            using the effective interest method which is the fair value of the consideration to be paid in
            the future for goods and services received, whether or not billed to the Company.


      (k)   Employee benefits

            (i)    Defined contribution plans
                   Defined contribution plans are post-employment benefit plans under which the Group
                   pays fixed contributions into separate entities such as Central Provident Fund, and will
                   have no legal or constructive obligation to pay further contributions if any of the funds
                   does not hold sufficient assets to pay all employee benefits relating to employee
                   service in the current and preceding financial years. The Group’s contribution to
                   defined contribution plans are recognised in the financial year to which they relate.


            (ii)   Employee leave entitlement
                   Employee entitlements to annual leave and long service leave are recognised when
                   they accrue to employees. A provision is made for the estimated liability for annual
                   leave and long service leave as a result of services rendered by employees up to the
                   balance sheet date.


      (l)   Foreign currency transactions

            (i)    Functional and presentation currency
                   Items included in the financial statements of each entity in the Group are measured
                   using the currency of the primary economic environment in which the entity operates
                   (“the functional currency”). The consolidated financial statements are presented in
                   Singapore Dollars, which is the Company’s functional and presentation currency.




                                                    VI-20
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)
      (l)   Foreign currency transactions (cont’d)

            (ii)   Transactions and balances
                   Transactions in a currency other than the functional currency (“foreign currency”) are
                   translated into the functional currency using the exchange rates prevailing at the dates
                   of transactions. Currency translation gains and losses resulting from settlement of such
                   transactions and from the translation at year-end rates of monetary assets and
                   liabilities denominated in foreign currencies are recognised in the income statement,
                   except for currency translation differences on net investment in foreign operations and
                   borrowings.

                   Currency translation differences on non-monetary items when the gain or loss is
                   recognised in profit or loss, such as equity investments held at fair value through profit
                   or loss, are reported as part of the fair value gain or loss. Currency translation
                   differences on non-monetary items when the gain or loss is recognised directly in
                   equity, such as equity investments classified as available-for-sale financial assets, are
                   included in the fair value reserve within equity.


            (iii) Translation of Group entities’ financial statements
                   The results and financial position of all the group entities (none of which has the
                   currency of a hyperinflationary economy) that have a functional currency different from
                   the presentation currency are translated into the presentation currency as follows:

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

                   Income and expenses for each income statement are translated at average exchange
                   rate (unless this average is not a reasonable approximation of the cumulative effect of
                   the rates prevailing on the transaction dates, in which case income and expenses are
                   translated at the dates of the transactions); and

                   All resulting exchange differences are taken to the foreign currency translation reserve
                   within equity.

                   Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or
                   after 1 January 2005 are treated as assets and liabilities of the foreign entity and
                   translated at the closing rate. For acquisitions prior to 1 January 2005, the exchange
                   rates at the dates of acquisition were used.




                                                    VI-21
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)
      (l)   Foreign currency transactions (cont’d)

            (iv) Consolidation adjustments
                  On consolidation, currency translation differences arising from the net investment in
                  foreign operations and borrowings are taken to the foreign currency translation
                  reserve. When a foreign operation is disposed of, such currency translation differences
                  are recognised in the income statement as part of the gain or loss on disposal.


      (m) Deferred income taxes
            Deferred income tax is provided in full, using the liability method, on temporary differences
            arising between the tax bases of assets and liabilities and their carrying amounts in the
            financial statements. However, if the deferred income tax arises from initial recognition of an
            asset or liability in a transaction other than a business combination that at the time of the
            transaction affects neither accounting nor taxable profit or loss, it is not accounted for.
            Deferred income tax is determined using tax rates (and laws) that have been enacted or
            substantially enacted by the balance sheet date and are expected to apply when the related
            deferred income tax asset is realised or the deferred income tax liability is settled.

            Deferred income tax assets are recognised to the extent that it is probable that future taxable
            profit will be available against which the temporary differences can be utilised.

            Deferred income tax is provided on temporary differences arising on investments in
            subsidiaries, except where the timing of the reversal of the temporary difference can be
            controlled and it is probable that the temporary difference will not reverse in the foreseeable
            future.


      (n)   Leases

            (i)   Finance leases
                  Leases of assets in which the Group assumes substantially the risks and rewards of
                  ownership are classified as finance leases. Finance leases are capitalised at the
                  inception of the lease at the lower of the fair value of the leased property and the
                  present value of the minimum lease payments. Each lease payment is allocated
                  between the liability and finance charges so as to achieve a constant rate on the
                  finance balance outstanding. The corresponding rental obligations, net of finance
                  charges, are included in borrowings. The interest element of the finance cost is taken
                  to the income statement over the lease period so as to produce a constant periodic rate
                  of interest on the remaining balance of the liabilities for each period.



                                                   VI-22
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


3.    Summary of Significant Accounting Policies (cont’d)
      (n)   Leases (cont’d)

            (ii)   Operating leases
                   Leases of assets in which a significant portion of the risks and rewards of ownership
                   are retained by the lessor are classified as operating leases. Payments made under
                   operating leases (net of any incentives received from the lessor) are taken to the
                   income statement on a straight-line basis over the period of the lease.

                   When an operating lease is terminated before the lease period has expired, any
                   payment required to be made to the lessor by way of penalty is recognised as an
                   expense in the period in which termination takes place.


      (o)   Revenue recognition
            Revenue is recognised upon passage of title to customers which generally coincides with
            their delivery and acceptance.


      (p)   Share capital
            Incremental costs directly attributable to the issuance of new equity instruments, other than
            for the acquisition of businesses, are taken to equity as a deduction, net of tax, from the
            proceeds.


      (q)   Segment reporting
            A business segment is a group of assets and operations engaged in providing products or
            services that are subject to risks and returns that are different from those of other business
            segments. A geographical segment is engaged in providing products or services within a
            particular economic environment that is subject to risks and returns that are different from
            those of segments operating in other economic environments.




                                                  VI-23
                                           APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
                                               AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
                                             FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                                                        FINANCIAL STATEMENTS OF THE GROUP
                                                    FOR THE THREE MONTHS ENDED 31 MARCH 2006

        Sitra Holdings (International) Limited

        Notes to the Combined Financial Statements
        For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


        4.   Property, Plant and Equipment
                                                                           Furniture,
                                                                          Fixtures and
                                                 Freehold   Freehold          office     Plant and                  Motor
                                                   Land     Buildings      Equipment     Equipment   Renovations   Vehicles   Computers     Total
VI-24




                                                     $          $               $            $           $            $          $            $
             Cost or valuation
             At 1 January 2003                   205,335     2,020,256       76,182       189,096       15,736      47,594     64,162      2,618,361
             Additions                                —             —            —             —            —       51,888      6,522         58,410
             Disposals                                —             —            —             —            —      (47,594)        —         (47,594)
             Translation Adjustments              (3,735)       (8,772)          —             —            —           —          —         (12,507)
             At 31 December 2003                 201,600     2,011,484       76,182       189,096       15,736      51,888     70,684      2,616,670
             Additions                                —      1,804,381        2,800            —        81,200          —       6,376      1,894,757
             Translation Adjustments              (7,290)      (17,122)          —             —            —           —          —         (24,412)
             At 31 December 2004                 194,310     3,798,743       78,982       189,096       96,936      51,888     77,060      4,487,015
             Additions                                —         87,622       20,540            —       129,016          —      11,115        248,293
             Disposal                                 —     (1,200,000)          —             —            —           —          —      (1,200,000)
             Translation adjustments              10,215        23,991           —             —            —           —          —          34,206
             Transfer to assets held for sale         —     (1,892,003)          —             —            —           —          —      (1,892,003)
             At 31 December 2005                 204,525       818,353       99,522       189,096      225,952      51,888     88,175      1,677,511
             Additions                                —             —         8,439            —            —           —       4,959         13,398
             Disposal                                 —             —          (142)           —            —           —          —            (142)
             Translation adjustments              (6,840)      (16,065)          —             —            —           —        (418)       (23,323)
             At 31 March 2006                    197,685      802,288       107,819       189,096      225,952      51,888     92,716     1,667,444
                                         APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
                                             AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
                                           FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                                                      FINANCIAL STATEMENTS OF THE GROUP
                                                  FOR THE THREE MONTHS ENDED 31 MARCH 2006

        Sitra Holdings (International) Limited

        Notes to the Combined Financial Statements
        For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


        4.   Property, Plant and Equipment (cont’d)
                                                                         Furniture,
                                                                        Fixtures and
                                                Freehold   Freehold         office     Plant and                  Motor
                                                  Land     Buildings     Equipment     Equipment   Renovations   Vehicles   Computers    Total
VI-25




                                                    $          $              $            $           $            $          $           $
             Accumulated depreciation and
             impairment losses
             At 1 January 2003                     —        149,657       45,214         88,495        7,698      38,076     49,036      378,176
             Depreciation for the year             —          24,943       7,267         11,426        1,574      10,378     16,993        72,581
             Disposals                             —              —           —              —            —      (38,076)        —       (38,076)
             Translation adjustments               —          (1,575)         —              —            —           —          —         (1,575)
             At 31 December 2003                   —        173,025       52,481         99,921        9,272      10,378     66,029      411,106
             Depreciation for the year             —          24,665       6,804         11,426        9,813      10,378      4,606        67,692
             Impairment loss                       —          80,000          —              —        76,891          —          —       156,891
             Translation adjustments               —          (3,265)         —              —            —           —          —         (3,265)
             At 31 December 2004                   —        274,425       59,285        111,347       95,976      20,756     70,635      632,424
             Depreciation for the year             —          24,424       7,322         13,952        7,616       7,949     12,716        73,979
             Disposal                              —       (152,000)          —              —            —           —          —      (152,000)
             Translation adjustments               —           4,815          (7)            —            —           —         (36)        4,772
             Transfer to assets held for sale      —         (11,720)         —              —            —           —          —        (11,720)
             At 31 December 2005                   —        139,944       66,600        125,299      103,592      28,705     83,315      547,455
             Depreciation for the period           —           5,000       2,068          3,488        3,976       1,987      1,386        17,905
             Disposal                              —          (3,153)         —              —            —           —          —         (3,153)
             Translation adjustments               —          (3,309)        (23)            —            —           —        (113)       (3,445)
             At 31 March 2006                      —        138,482       68,645        128,787      107,568      30,692     84,588      558,762
                                     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
                                         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
                                       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                                                  FINANCIAL STATEMENTS OF THE GROUP
                                              FOR THE THREE MONTHS ENDED 31 MARCH 2006

        Sitra Holdings (International) Limited

        Notes to the Combined Financial Statements
        For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


        4.   Property, Plant and Equipment (cont’d)

                                                                      Furniture,
                                                                     Fixtures and
VI-26




                                             Freehold   Freehold         office     Plant and                  Motor
                                               Land     Buildings     Equipment     Equipment   Renovations   Vehicles   Computers     Total
                                                 $          $              $            $           $            $          $            $
             Net book value
             At 31 December 2003              201,600    1,838,459     23,701        89,175         6,464     41,510       4,655     2,205,564

             At 31 December 2004              194,310    3,524,318     19,697        77,749          960      31,132       6,425     3,854,591

             At 31 December 2005              204,525     678,409      32,922        63,797       122,360     23,183       4,860     1,130,056

             At 31 March 2006                 197,685     663,806      39,174        60,309       118,384     21,196       8,128     1,108,682
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


4.    Property, Plant and Equipment (cont’d)
      (a)   Freehold land and freehold buildings are pledged to secure banking facilities granted to the
            Group (note 15) as follows:

                                                                                            Unaudited
                                                               As at 31 December            31 March
                                                          2003        2004       2005         2006
                                                           $            $         $             $
            Freehold land and buildings                 2,040,059   3,718,628    882,934     861,491

      (b)   Included in property, plant and equipment are the following carrying amount of assets which
            were acquired under hire purchase agreements (note 14):

                                                                                            Unaudited
                                                               As at 31 December            31 March
                                                          2003        2004       2005         2006
                                                           $            $         $             $
            Motor Vehicles                               41,510      31,132      23,183       21,196



5.    Other Investments/Financial Assets at Fair Value through Profit or Loss

                                                                                           Unaudited
                                                              As at 31 December            31 March
                                                         2003        2004       2005         2006
      Other investments                                   $            $         $             $
      Quoted shares at cost                             33,781      115,307          —            —

      Market value                                      18,389      107,131          —            —

      Financial assets at fair value through profit or loss
      Quoted shares at fair value                             —          —      132,655     132,655


      Quoted shares in other investments are reclassified to Financial Assets at Fair Value through
      Profit and Loss to comply with changes in accounting policy.

      Financial assets at fair value through profit or loss are measured in accordance with the
      accounting policy as set out in Note 3 with effect from 1 January 2005.




                                                       VI-27
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


6.    Goodwill on Consolidation

                                                                                             Unaudited
                                                        As at 31 December                    31 March
                                                   2003        2004       2005                 2006
                                                    $            $         $                     $
      Goodwill                                         —          36,227         28,982       668,715
      Less: Accumulated amortisation                   —          (7,245)            —             —

                                                       —          28,982         28,982       668,715


      In accordance with FRS 103 and FRS 36 (revised 2004), the Group ceased amortization of
      goodwill from 1 January 2005 and accumulated amortization as at 31 December 2004 amounting
      to $7,245 has been eliminated with a corresponding decrease in the cost of goodwill. Goodwill is
      thereafter tested at least annually for impairment.


7.    Asset classified as held for sale
      Subsequent to the financial year end 2005, the directors of the Company resolved to dispose the
      Group’s freehold land and building. On 6 March 2006, disposal of property was completed and
      gain on disposal of property $870 arose. These properties are expected to be sold within twelve
      months and have been classified as assets held for sale and are separately presented on the
      balance sheet.


8.    Trade Receivables

                                                                                            Unaudited as
                                                           As at 31 December                at 31 March
                                                2003              2004           2005           2006
                                                 $                  $             $               $
      Trade receivables                      2,456,968         3,381,543       5,946,096     6,191,731
      Less: Allowance for doubtful debts
      At 1 January                             234,518          384,298          33,497        825,231
      Current allowance                        201,266                —         825,231             —
      Allowance written back                    (12,667)         (12,415)               —           —
      Allowance written off                     (38,819)        (338,386)        (33,497)           —

      At 31 December                           384,298           33,497         825,231        825,231




                                                VI-28
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


8.    Trade Receivables (cont’d)

      Trade receivables are denominated in the following currencies:

                                                                                          Unaudited as
                                                         As at 31 December                at 31 March
                                               2003             2004           2005           2006
                                                $                 $             $               $
                                             2,072,670       3,348,046       5,120,865     5,366,500

      United States dollar                   1,917,955       3,085,556       4,875,754     5,242,969
      Singapore dollars                           752          10,625          11,106         11,637
      Others                                  153,963         251,865         234,005        111,894

                                             2,072,670       3,348,046       5,120,865     5,366,500



9.    Other Receivables

                                                                                          Unaudited as
                                                       As at 31 December                  at 31 March
                                                  2003        2004       2005                 2006
                                                   $            $         $                     $
      Advance payments to suppliers                      —           —       1,710,266     2,453,699
      Others                                     375,904       186,915         409,891       207,404

                                                 375,904       186,915       2,120,157     2,661,103
      Less: Allowance for doubtful debts
      At 1 January                                48,038         48,038               —           —
      Current                                            —           —                —           —
      Allowance written back                             —      (30,744)              —           —
      Allowance written off                              —      (17,294)              —           —

      At 31 December                              48,038             —                —           —

                                                 327,866       186,915       2,120,157     2,661,103
      Sundry deposits                             42,723         20,002         98,347        96,338

                                                 370,589       206,917       2,218,504     2,757,441




                                               VI-29
     APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
         AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
       FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                  FINANCIAL STATEMENTS OF THE GROUP
              FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


9.    Other Receivables (cont’d)

      Other receivables are denominated in the following currencies:

                                                                                            Unaudited as
                                                         As at 31 December                  at 31 March
                                                    2003        2004       2005                 2006
                                                     $            $         $                     $
      United States dollar                                —         94,887    2,063,793      2,470,752
      Singapore dollars                            347,035          69,476        151,388      265,202
      Others                                        23,554          42,554          3,323       21,487

                                                   370,589         206,917    2,218,504      2,757,441



10. Cash and Bank Balances

                                                                                            Unaudited as
                                                              As at 31 December
                                                                                            at 31 March
                                                    2003            2004          2005          2006
                                                     $               $             $              $
      Bank balances                                154,588         111,282        150,939      574,706
      Fixed deposits                                17,277          16,652    1,017,401      1,016,942
      Cash on hand                                   3,144            515            478           529

                                                   175,009         128,449    1,168,818      1,592,177


      Cash and bank balances are denominated in
       following currencies:
      United States dollar                         133,460          34,899         55,123       20,069
      Australia dollar                               6,845          40,985         22,482          340
      Others                                        34,704          52,565    1,091,213      1,571,768

                                                   175,009         128,449    1,168,818      1,592,177


      The carrying amounts of cash and bank balances approximate their fair value.




                                                  VI-30
      APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
          AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
        FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
                   FINANCIAL STATEMENTS OF THE GROUP
               FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


10. Cash and Bank Balances (cont’d)

       The effective interest rate per annum at the balance sheet date are as follows:

                                                                                          Unaudited as
                                                             As at 31 December            at 31 March
                                                        2003        2004       2005           2006
                                                         %           %          %              %
       Effective interest rate                           2.29       1.87        0.78          0.22



11.    Trade Payables

                                                                                          Unaudited as
                                                             As at 31 December            at 31 March
                                                        2003        2004       2005           2006
                                                         $            $         $               $
       Trade payables                                 1,741,422   2,899,499   582,224       673,249


       Trade payables are dominated in the
         following currencies:
       United States dollar                           1,680,372   2,796,742   568,618       642,398
       Others                                            61,050    102,757     13,606        30,851

                                                      1,741,422   2,899,499   582,224       673,249



12. Bills Payables (secured)

                                                                                          Unaudited as
                                                             As at 31 December            at 31 March
                                                        2003        2004       2005           2006
                                                         $            $         $               $
       Bills payables                                 1,502,392   447,156     4,769,475    5,926,242

       The bills payables are denominated in
         United States dollars and bear interest at
         the following rates:
                                                      5.0–6.5%       6%       6.0–6.5%     6.0–6.5%




                                                      VI-31
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


12. Bills Payables (secured) (cont’d)

    The bills payables are secured on:
    (i)     Letter of guarantee by certain directors;
    (ii)    Corporate guarantee of the Company;
    (iii)   Legal mortgages on the Group’s freehold and leasehold properties; and
    (iv) Letter of authority and earmarking by certain directors.


13. Other Payables
                                                                                       Unaudited as
                                                             As at 31 December         at 31 March
                                                        2003        2004       2005        2006
                                                         $            $         $            $
    Loan from a minority shareholder of a
      subsidiary                                           —       181,630   183,650      162,579
    Loan from a director                           177,439          26,221    38,881       46,671
    Sundry payables                                 24,893         113,713   139,064      256,287
    Purchase of freehold property                          —       175,000        —            —
    Accrued operating expenses                     278,538         540,863   293,994      221,774
    GST Payables                                           —            —     49,396           —
    Advance from shareholders                           1,359           —         —            —

                                                   482,229       1,037,427   704,985      687,311


    Loans from a minority shareholder of a subsidiary and a director are unsecured, interest free and
    is payable on demand.




                                                  VI-32
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


14. Hire Purchase Creditor
                                                                                                              Unaudited as at
                                                      As at 31 December                                         31 March
                                    2003                       2004                       2005                        2006
                                     $                          $                          $                            $
                                          Present                    Present                    Present                      Present
                        Minimum           value of   Minimum         value of   Minimum         value of    Minimum          value of
                        Payments         Payments    Payments       Payments    Payments       Payments     Payments        Payments
    Within 1 year           7,968           5,358      7,968            5,790     7,968           5,790       7,968            5,790
    After 1 year but
    not more than 5
      years               43,758           37,125     35,790          31,335     27,822          23,367      25,830          21,375

    Total minimum
      lease payments      51,726           42,483     43,758          37,125     35,790          29,157      33,798          27,165
    Less: finance
      charges              (9,243)             —      (6,633)             —      (6,633)             —        (6,633)            —

    Present value of
      minimum
    lease payments        42,483           42,483     37,125          37,125     29,157          29,157      27,165          27,165

    Interest rates per annum at the balance sheet date are as follows:
    Hire Purchase
       Creditor                      3.4%                       3.4%                       3.4%                         3.4%



15. Interest-Bearing Borrowings (secured)
                                                                                                                  Unaudited as
                                                                          As at 31 December
                                                                                                                  at 31 March
                                                                2003             2004                2005             2006
                                                                 $                $                   $                 $
    Current portion
    Bank overdrafts
    —    secured                                               363,020          314,934            411,464              274,070
    —    unsecured                                                  —            20,277               —                     —
    Term loans
    —    Due within one year                                   395,036          145,442           1,449,997             22,237

                                                               758,056          480,653           1,861,461             296,307




                                                           VI-33
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


15. Interest-Bearing Borrowings (secured) (cont’d)
                                                                                             Unaudited as
                                                               As at 31 December
                                                                                             at 31 March
                                                      2003           2004           2005         2006
                                                       $              $              $             $
    Non-current portion
    Term loans
    —     Due within two to five year                422,778        367,119        103,183     104,869
    —     Due after five years                          —          1,227,794       219,479     212,039

                                                     422,778       1,594,913       322,662     316,908


    (a)    The bank overdrafts and term loans are secured on:
           (i)     Letter of guarantee by certain directors;
           (ii)    Corporate guarantee of the Company;
           (iii)   Legal mortgages on the Group’s freehold and leasehold properties; and
           (iv) Letter of authority and earmarking by certain directors.
    (b)    The effective interest rates per annum at the balance sheet date are as follows:

                                                                                             Unaudited as
                                                           As at 31 December                 at 31 March
                                                      2003        2004       2005                2006
                                                       $            $         $                    $
           Bank overdrafts                          2.5–6.5%       2.5–6.5%    2.5–6.5%       2.5–6.5%
           Term loans                               2.5–6.5%       2.5–6.5%    2.5–7.0%       2.5–7.0%




                                                   VI-34
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


16. Share Capital
                                                                                      Unaudited as
                                                      As at 31 December               at 31 March
                                                 2003        2004       2005              2006
                                                  $            $         $                  $
    Authorised:
    The Company
    Sitra Holdings (International) Pte Ltd
      2,000,000 ordinary shares of $1 each     2,000,000    2,000,000     2,000,000            —

    Sitra Dove Logistics Pte Ltd
      1,000,000 ordinary shares of $1 each     1,000,000    1,000,000     1,000,000            —

    Sitra Agencies Pte Ltd
      1,000,000 ordinary shares of $1 each     1,000,000    1,000,000     1,000,000            —

    Sitra Dove Logistics Sdn Bhd
      350,000 ordinary shares of RM1 each        156,800      156,800      156,800             —

    Issued and fully paid:
    The Company
    Sitra Holdings (International) Pte Ltd
      2,000,000 ordinary shares of $1 each     2,000,000    2,000,000     2,000,000     2,000,000

    Sitra Dove Logistics Pte Ltd
      870,002 ordinary shares of $1 each         870,002      870,002      870,002             —

    Sitra Agencies Pte Ltd
      130,001 ordinary shares of $1 each         130,001      130,001      130,001             —

    Sitra Dove Logistics Sdn Bhd
      100 ordinary shares of RM1 each                 45           45           45             45

    Total                                      3,000,048    3,000,048     3,000,048     2,000,045


    The combined capital refers to aggregate amount of paid-in capital of the Company, Sitra Dove
    Logistics Pte Ltd, Sitra Agencies Pte Ltd and Sitra Dove Logistics Sdn Bhd, after elimination of
    investments in subsidiaries.

    On 30 January 2006, the concepts of authorised capital and par value were abolished in
    accordance with the Companies (Amendment) Act 2006.




                                              VI-35
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


17. Revenue
     Revenue represents the net invoiced value of sales. All inter-company transactions have been
     eliminated in arriving at the revenue of the Group.


18. Other Operating Income
                                                                              Unaudited 3 months
                                             Year ended 31 December             ended 31 March
                                          2003        2004        2005           2005      2006
                                 Note      $            $           $             $          $
 Dividend income                             —          3,625      15,532           —       9,595
 Commission income                           —          5,450         444           —          —
 Rental income                           53,130        48,462      46,019       11,505     11,414
 Foreign exchange gain                   15,899            —      123,688           —          —
 Interest income                          4,015         2,404        1,310          69      1,279
 Gain on disposal of property,
  plant and equipment                     1,981            —       64,500           —        870
 Gain on disposal of quoted
  investments                             2,149         1,896        5,014          —          —
 Gain on fair value
  adjustment of quoted
  investment                                 —             —       98,874           —          —
 Allowance for doubtful debts
   written back
 —   trade                                   —         12,415           —           —          —
 —   non-trade                    9          —         30,744           —           —          —
 Negative goodwill written off               —          3,881           —           —          —
 Waiver of liabilities — trade               —             —       47,829           —          —
 Others                                     690        46,234      26,674        5,073      6,509

                                         77,864       155,111     429,884       16,647    29,667




                                             VI-36
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


19. Finance Costs
                                                                                      Unaudited 3 months
                                            Year ended 31 December                      ended 31 March
                                         2003        2004        2005                  2005        2006
                                          $            $           $                    $
    Interest expense:
    Bank overdraft and bills payable     71,834       77,069            74,037        15,447       64,802
    Hire purchase                         9,204           2,610             —             —            —
    Term loans                           70,468       38,478            61,112        11,194        8,426

                                        151,506      118,157           135,149        26,641       73,228



20. Profit Before Tax
                                                                                       Unaudited 3 months
                                                    Year ended 31 December               ended 31 March
                                                   2003      2004      2005             2005       2006
                                        Note        $          $        $                 $          $
    Profit from operations is arrived
      at after charging:
    Amortisation of goodwill                              —         7,245        —             —        —
    Bad debts written off
    — trade                                            —          223,884    22,478          —          —
    — non-trade                                        —          112,202        —           —          —
    Depreciation                         4         72,581          67,692    73,979      18,349     17,905
    Staff Cost                                    299,071         424,507   452,886     108,611    166,096
    Defined contribution included in
      staff cost                                   67,700          60,077    37,609       6,179     25,407
    Directors’ remuneration                       235,698         264,499   411,720      68,172    131,546
    Foreign exchange loss                              —           11,743        —            7     48,505
    Impairment losses on property,
      plant and equipment                4                —       156,891        —             —        —
    Investment written off                                —            —     12,000            —        —
    Allowance for doubtful debts
    — trade                                       155,102              —    825,231            —        —
    — non-trade                                        —               —         —             —        —
    Allowance for diminution in
      value of unquoted
      investments                                  65,460              —         —           —          —
    Operating lease — office rental                60,000         147,243   215,616      26,922     76,508




                                                  VI-37
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


20. Profit Before Tax (cont’d)
                                                                                    Unaudited 3 months
                                                     Year ended 31 December           ended 31 March
                                                    2003      2004      2005         2005       2006
                                         Note        $          $        $             $          $
    And after crediting:
    Foreign exchange gain                          15,899           —     123,688      —           —
    Interest income                                 4,015        2,404      1,310      69       1,279
    Gain on disposal of property,
       plant and equipment                          1,981           —      64,500      —         870
    Gain on disposal of quoted
       investments                                  2,149        1,896      5,014      —           —
    Gain on fair value adjustment
       of quoted investment                               —         —      98,874      —           —
    Allowance for doubtful debts
       written back
    — trade                                               —     12,415         —       —           —
    — non-trade                            9              —     30,744         —       —           —
    Negative goodwill written off                         —      3,881         —       —           —


21. Tax
    (a)   Tax Expense

                                                                                    Unaudited 3 months
                                                   Year ended 31 December             ended 31 March
                                                 2003       2004      2005           2005        2006
                                                  $           $         $              $          $
          Tax expense:
          Current income tax                     21,430       229,836    375,605    142,163    123,867
          Deferred tax                             124         15,678         —          —          —

                                                 21,554       245,514    375,605    142,163    123,867
          Under/(Over)provision in prior year:
          Current income tax                        (11)         816          —          —          —

                                                 21,543       246,330    375,605    142,163    123,867




                                                  VI-38
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


21. Tax (cont’d)
    (a)   Tax Expense (cont’d)

          Reconciliation between tax expense and accounting profit:

                                                                                       Unaudited 3 months
                                                    Year ended 31 December               ended 31 March
                                                  2003       2004      2005             2005        2006
                                                   $           $         $                $          $
          Profit before tax                      636,179     1,452,512    2,276,951    865,468    962,901

          Tax at tax rate of 20%                 127,236      290,502      455,390     173,094    192,580
          Partial tax exemption                   (18,662)     (27,194)     (31,500)   (23,457)   (27,200)
          Non-deductible expenses                 51,580       55,277       15,969       3,998      5,340
          Income not subjected to tax                  —        (1,501)     (23,243)      (514)      (515)
          Provision for taxation in respect of
            prior year                                 —            —        (1,764)        —          —
          Tax paid in foreign jurisdiction           548        5,417            —          —          —
          Utilisation of previously
            unrecognised deferred tax
            benefits                                   —       (85,061)          —          —          —
          Utilisation of previously
            unrecognised tax loss and
            unabsorbed capital allowance         (168,629)          —        (9,011)      (615)   (47,246)
          Wear and tear allowance                      —            —        (4,125)        —      (8,750)
          Effect of concession tax rate                —            —       (67,604)   (15,459)    (7,961)
          Deferred tax assets not recognised      34,287        5,554        (1,255)        —          —
          Others                                   (4,817)      3,336       42,748       5,116     17,619

                                                  21,543      246,330      375,605     142,163    123,867




                                                   VI-39
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


21. Tax (cont’d)


    (b)   Movements in provision for current tax
                                                                                                    Unaudited
                                                            Year ended 31 December               3 months ended
                                                       2003            2004          2005         31 March 2006
                                                            $            $             $               $
          Balance at 1 January                          3,356          23,430       236,864         591,961
          Translation difference                                (7)          (74)          111             (80)
          Income tax paid                              (1,338)        (17,144)      (20,619)          (4,193)
          Current financial year’s tax expense         21,430         229,836       375,605         123,867
          Under provision in prior financial year           (11)         816                —               —

          Balance at 31 December                       23,430         236,864       591,961         711,555


    (c)   Deferred tax
          Provision for deferred tax is the estimated tax expense at current tax rates on the following
          items:
                                                                                                    Unaudited
                                                            Year ended 31 December               3 months ended
                                                       2003            2004          2005         31 March 2006
                                                            $            $             $               $
          Difference in property, plant and
            equipment for accounting and income
            tax purposes                                124           73,535        77,736           75,665
          Tax losses                                        —         (57,733)      (61,934)        (59,863)

                                                        124           15,802        15,802           15,802



    (d)   Movements in provision for deferred tax
                                                                                                    Unaudited
                                                            Year ended 31 December               3 months ended
                                                       2003            2004          2005         31 March 2006
                                                            $            $             $               $
          Balance at 1 January                              —            124        15,802           15,802
          Transfer from income statement                124           15,678               —               —

          Balance at 31 December                        124           15,802        15,802           15,802




                                                    VI-40
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


21. Tax (cont’d)

    (e)   The following deferred tax liabilities/(deferred tax benefits) have not been recognised:
                                                                                             Unaudited
                                                       Year ended 31 December             3 months ended
                                                     2003       2004      2005             31 March 2006
                                                      $           $         $                    $
          Difference in plant and equipment for
            accounting and income tax purposes      (114,963)      (85,039)    (85,270)           —
          Tax losses                                (131,233)      (71,481)   (105,438)      (47,637)
          Others                                          (339)         —           —             —

                                                    (246,535)     (156,520)   (190,708)      (47,637)



22. Earnings per Share
    The calculation of basic earnings per share for the relevant period are based on the net profit
    attributable to ordinary shareholders for the years ended 31 December 2003, 2004, 2005 and 3
    months ended 31 March 2006 and on the assumption that pre-invitation share capital of
    55,000,000 shares are in issue as at the date of the Prospectus.

    Earnings per share computed for post-invitation share for relevant periods are based on the net
    profit attributable to ordinary shareholders for the years ended 31 December 2003, 2004, 2005
    and 3 months ended 31 March 2006 and post-invitation share capital of 79,000,000 shares.


23. Segment Information
    A segment is a distinguishable component of the Group that is engaged either in providing an
    individual product or service or a group of related 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
    control reporting structure.




                                                  VI-41
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


23. Segment Information (cont’d)

    Geographical and business information about the Group’s revenue are as follows:
                                                                                            Unaudited 3 months
                                                            Year ended 31 December            ended 31 March
                                                         2003           2004       2005      2005       2006
                                                         $’000         $’000       $’000     $’000      $’000
    (a)   Revenue
          Wood-based products                           25,358         39,300      50,207   13,901     16,605
          Outdoor lifestyle Furniture                     2,406         3,990       8,527    1,516      2,020

          Total                                         27,764         43,290      58,734   15,417     18,625


          The Group have not identified profit before tax by product segment as the allocation of costs
          cannot be done in a similar manner with reasonable accuracy. This is because the selling
          and distribution expenses, administrative expenses and other operating expenses incurred
          for wood-based products and outdoor lifestyle furniture segments such as marketing
          expenses, management and administrative personnel expenses and office-related
          expenses are general costs which are accounted for on a group-wide basis. It is not
          meaningful to track the Group’s selling and distribution expenses, administrative expenses
          and other operating expenses by product segment. We therefore do not show profit before
          tax on a segmental basis.
                                                                                            Unaudited 3 months
                                                            Year ended 31 December            ended 31 March
                                                         2003           2004       2005      2005       2006
                                                         $’000         $’000       $’000     $’000      $’000
    (b)   Revenue
          Australasia                                   15,415         28,185      25,623    8,018      8,370
          Europe                                        10,870         13,657      29,886    6,673      9,777
          Others                                          1,479         1,448       3,225      726        478

                                                        27,764         43,290      58,734   15,417     18,625

          Notes:–
          (1)     Australasia comprises Australia and New Zealand.
          (2)     Others include Asia, Middle East, Africa and the North America


          While it is possible to segment the Group’s revenue by geographical regions, the allocation
          of costs cannot be done in a similar manner with reasonable accuracy. The Group does not
          track the allocation of cost of sales by geographical region and any attempt to match these
          expenses to revenue to the various geographical regions is not meaningful.

                                                          VI-42
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


24. Related Party Transactions
    In addition to the related party information disclosed elsewhere in the financial statements, the
    following transactions between the Group and related parties took place during the financial year
    at terms agreed between the parties.
                                                                                                     Unaudited 3 months
                                                           Year ended 31 December                      ended 31 March
                                                         2003           2004          2005            2005            2006
                                                           $              $              $              $              $
    Purchase of a subsidiary from a director                    —             2              —              —                —
    Loan from a director                               177,439         26,221         38,881          5,281           46,671
    Sale of residential property to a director(1)               —             —              —              —     1,880,000
    Commission paid(2)                                    2,537        13,619          9,130          2,750                  —
                        (3)
    Rental expenses                                             —      60,000         60,000         15,000                  —
    Consultancy service charged by a
     director(4)                                                —       6,000         40,000                —         20,000

    Notes:-
    (1)   The property was disposed to executive directors, Mr George Chew and Madam Teresa Tan.
    (2)   The executive directors, Mr George Chew and Madam Teresa Tan are directors and shareholders of PWP (Aust) Pty
          Ltd, a company incorporated in Perth, Australia.
    (3)   On 25 April 2000, the company entered into a tenancy agreement with the executive director, Mr George Chew,
          pursuant to which our said director agreed to lease the property situated at 37 Tannery Lane #05-01, Tannery House,
          Singapore 347790.
    (4)   The non-executive director, Mr Daniels Ng is the managing director and controlling shareholder of Advisors
          Associates(s) Pte Ltd.


25. Commitments
    Operating Lease Commitments
    The Group has entered into non-cancellable lease agreements for office premises with remaining
    lease terms of not more than 5 years.

                                                                Year ended 31 December                      Unaudited
                                                                                                         3 months ended
                                                          2003             2004              2005         31 March 2006
                                                            $                 $                  $                $
    Not later than 1 year                               141,700          227,400          220,700               135,000
    After 1 year                                        151,100               4,700       135,000                     —

                                                        292,800          232,100          355,700               135,000



                                                          VI-43
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


26. Contingent Liabilities

                                                                                                            Unaudited
                                                               Year ended 31 December
                                                                                                         3 months ended
                                                           2003            2004             2005          31 March 2006
                                                            $               $                $                  $
    Legal proceedings(1)                                          —               —          23,500            23,500
    Letter of credits                                     914,254        2,920,950       1,788,288                   —
    Letter of Guarantee                                      1,000            1,000                —                 —
    Import bills                                           61,359          167,772           63,471                  —
    Trust receipts                                      1,509,102          453,401       3,274,649                   —
    L/C Negotiations                                       20,289           98,661                 —                 —
    Guarantee issued                                              —         78,203                 —                 —
    Outward bills on collection                                   —               —         121,338                  —

    Note:–
    (1)   On 13 December 2005, Universal M.F.I.P commenced an action in MC Suit No. 28948/2005 against our subsidiary,
          Suncoast Sitra Pte Ltd claiming payment of $23,500 plus interest thereon and costs, such sum being alleged
          outstanding rent owing by Suncoast Sitra Pte Ltd to Universal M.F.I.P in respect of the lease of certain premises by
          Universal M.F.I.P to Suncoast Sitra Pte Ltd.


27. Financial Risk Management Objectives and Policies
    Exposure to credit, liquidity, foreign currency and interest rate risks arises in the normal course of
    the Group’s business. The management continually monitors the Group’s risk management
    process to ensure that an appropriate balance between risk and control is achieved. The detail of
    the Group’s exposure to financial risk and the methods used by management to control such risk
    are summarised below:


    Credit risk
    All credit terms and limits for each customer are reviewed and are approved by the management.
    The amount of deposit, credit terms and limit for each customer is based on factors such as
    assessment of the customer’s financial condition, financial strength, credit history, past collection
    history, volume of sales and its business performance. If necessary, the management will amend
    the credit terms granted to the customers.

    At the balance sheet date, there were no significant concentrations of credit risk.




                                                          VI-44
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


27. Financial Risk Management Objectives and Policies (cont’d)

    Credit risk (cont’d)
    The maximum exposure to credit risk is represented by the carrying amount of each financial
    asset in the combined balance sheet. The carrying amount of trade and other receivables
    represents the Group’s exposure to credit risk. Policies are in place to ensure on-going credit
    evaluation and active account monitoring.


    Foreign currency risk
    The Group’s foreign currency risk arises from certain trading activities denominated in foreign
    currencies and its investments in subsidiaries which are located in foreign countries. The Group
    will hedge its exposure to foreign currency risk through foreign currency forward exchange
    contracts where necessary.


    Interest rate risk
    The Group obtains financing through bank borrowings and hire purchase financing and seeks to
    minimize its interest rate exposure by obtaining the most favourable interest rate available.

    The Group places its cash surplus funds with reputable banks.


    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 to mitigate the effects of fluctuation in cash
    flows.

    Fair value of financial instruments
    The carrying amounts of the Group’s financial assets and liabilities approximate fair values due
    at the balance sheet date.

    In the directors’ opinion, it is not practicable to determine the fair value of the unquoted equity
    investment held as unquoted investment. The fair value of the quoted investments is reflected in
    the notes to the financial statements.




                                               VI-45
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


28. Subsequent events

    1.   On 15 April 2006, the Company acquired 29 ordinary shares of par value RM1.00 each in the
         capital of Sitra Dove Logistics Sdn. Bhd. from our Executive Directors, Mr George Chew,
         Madam Teresa Tan and Mr Steven Chew (“SDL Sale Shares”) at an aggregate consideration
         of RM3.00 and 71 ordinary shares of par value RM1.00 each in the capital of Sitra Dove
         Logistics Sdn. Bhd. from one Mr Ng Kim Teck at an aggregate consideration of RM71.00.
         Sitra Dove Logistics Sdn Bhd has a net tangible liability of RM55,259 as at 31 December
         2005 based on its audited financial statements for FY2005. The consideration was satisfied
         by the Company in cash. The transaction was undertaken based on normal commercial
         terms and on an arm’s length basis. Pursuant to the said acquisition, Sitra Dove Logistics
         Sdn Bhd becomes a wholly-owned subsidiary of the Company.

         In addition to the 100 issued and paid-up ordinary shares, Sitra Dove Logistics Sdn. Bhd.
         has an issued and paid-up preference share capital of RM150,000 comprising 150,000
         preference shares of RM1.00 each, which is entirely owned by the Company.

         On 29 September 2006, the Company entered into an agreement with Mr George Chew,
         Madam Teresa Tan and Mr Steven Chew (collectively, the “Assignee”) and Sitra Dove
         Logistics Sdn. Bhd. pursuant to which the Assignee agreed to accept the assignment of an
         outstanding loan of RM230,243 owing by Sitra Dove Logistics Sdn. Bhd. to the Company as
         at 31 December 2005 (the “Outstanding Loan”). Accordingly, Sitra Dove Logistics Sdn. Bhd.
         will recognise RM230,243 as other income. This will result in Sitra Dove Logistics Sdn.
         Bhd.’s net tangible assets to be RM174,984. In consideration thereof, our Company agreed
         to increase the consideration for the Company’s acquisition of the SDL Sale Shares from the
         Assignee as above mentioned by RM174,910 (“Additional Consideration”) based on
         approximately the assumed net tangible asset value of Sitra Dove Logistics Sdn. Bhd. after
         repayment of the outstanding loan. As at the date of this Prospectus, the Outstanding Loan
         and Additional Consideration have been fully settled by the Assignee and the Company
         respectively.




                                              VI-46
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


28. Subsequent events (cont’d)

    2.   Sitra Asia Pacific Sdn. Bhd. is a company incorporated under the laws of Malaysia with an
         issued and paid-up share capital of RM 50,010 comprising 50,010 ordinary shares of par
         value RM1.00 each. On 25 May 2006, the Company transferred all the 60% shareholding
         owned by it, comprising 30,006 issued and fully-paid ordinary shares in the capital of Sitra
         Asia Pacific Sdn. Bhd., to Executive Chairman and CEO, Mr George Chew of the Company
         at a nominal consideration of RM211. Sitra Asia Pacific Sdn. Bhd. has a net tangible assets
         of RM351 as at 31 December 2005 based on its unaudited financial statements for FY2005.
         The consideration was satisfied by our Executive Chairman and CEO, Mr George Chew in
         cash. The transfer was effected by way of a deed of declaration of trust executed by the
         Company pursuant to which the Company declared that the said 30,006 ordinary shares are
         held on trust by it as trustee for the sole and absolute benefit of Mr George Chew. The
         transaction was undertaken based on normal commercial terms and on an arm’s length
         basis. Pursuant to the said transfer, Sitra Asia Pacific Sdn Bhd ceased to be a subsidiary of
         our Company. Sitra Asia Pacific Sdn. Bhd. has been dormant since 2000. It is currently in the
         process of applying for members’ voluntary winding-up.


    3.   Shuimu Lifestyle Pte. Ltd. is a company incorporated under the laws of Singapore with an
         issued and paid-up share capital of $20,000 comprising 20,000 ordinary shares. On 5 May
         2006, the subsidiary, Suncoast Sitra Pte Ltd transferred all the 60% shareholding owned by
         it, comprising 12,000 issued and fully-paid ordinary shares in the capital of Shuimu Lifestyle
         Pte. Ltd. to Vice-President (Group Marketing and Business Development), Mr Xavier Chew
         at a nominal consideration of S$1.00. Shuimu Lifestyle Pte. Ltd. has a net tangible liability
         of $29,638.08 as at 31 December 2005 based on its unaudited financial statements for
         FY2005. The consideration was satisfied by Vice-President (Group Marketing and Business
         Development), Mr Xavier Chew in cash. The transaction was undertaken based on normal
         commercial terms and on an arm’s length basis. Pursuant to the said transfer, Shuimu
         Lifestyle Pte. Ltd. ceased to be an ultimate subsidiary of the Company. Shuimu Lifestyle Pte.
         Ltd. has been dormant since June 2005. The shareholders of Shuimu Lifestyle Pte. Ltd. had
         resolved to wind-up Shuimu Lifestyle Pte. Ltd. and it is in the course of preparing for winding
         up.


    4.   On 28 August 2006, a subsidiary, Suncoast Sitra Singapore Pte Ltd, filed a proof of debts
         with the administrator of one of the customers, which is now subject to a Deed of Company
         Arrangement under the laws of Australia. The amount due from the customer is $825,231
         and full amount was made for allowance for doubtful receivables in the year ended 31
         December 2005.




                                                VI-47
  APPENDIX VI — INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE
      AUDITED COMBINED FINANCIAL STATEMENTS OF THE GROUP
    FOR FY2003, FY2004 AND FY2005 AND THE UNAUDITED COMBINED
               FINANCIAL STATEMENTS OF THE GROUP
           FOR THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited

Notes to the Combined Financial Statements
For the years ended 31 December 2003, 2004, 2005 and 3 months ended 31 March 2006


28. Subsequent events (cont’d)


    5.   At an extraordinary general meeting held on 19 September 2006, our Shareholders
         approved, inter alia, the following:–
         (a)   the sub-division of every two ordinary shares in the issued share capital of our
               Company into 55 Shares such that the issued and paid-up share capital of our
               Company is $2,000,000 divided into 55,000,000 Shares (“Share Split”);
         (b)   the conversion of our Company into a public limited company and the consequential
               change of our name to Sitra Holdings (International) Limited;
         (c)   the adoption of a new set of Articles of Association of our Company;
         (d)   the issue of 24,000,000 New Shares which is the subject of the Invitation on the basis
               that the New Shares, when allotted, issued and fully paid-up, will rank pari passu in all
               respects with our existing Shares;
         (e)   the listing and quotation of the issued Shares of our Company (including the
               24,000,000 New Shares to be issued pursuant to Resolution (d) above) on the Official
               List of the SGX-SESDAQ; and
         (f)   the authorisation for the Directors, pursuant to Section 161 of the Companies Act and
               the Articles of Association of our Company, to allot and issue Shares or convertible
               securities at any time and from time to time (whether by way of rights, bonus or
               otherwise) and upon such terms and conditions and for such purposes and to such
               person as our Directors may in their absolute discretion deem fit, provided that the
               aggregate number of Shares and convertible securities issued pursuant to such
               authority shall not exceed 50% of the post-Invitation issued share capital of our
               Company, of which the aggregate number of Shares and convertible securities issued
               other than on a pro-rata basis to our then existing Shareholders shall not exceed 20%
               of the post-Invitation issued share capital of our Company. Unless revoked or varied by
               our Company in general meeting, such authority shall continue in force until the
               conclusion of the next annual general meeting of our Company or on the date by which
               the next annual general meeting is required by law to be held, whichever is earlier. For
               this purpose and pursuant to Rules 806(3) and 806(4) of the Listing Manual,
               “post-Invitation issued share capital” shall mean the enlarged issued and paid-up share
               capital of our Company after the Invitation after adjusting for new Shares arising from
               the conversion or exercise of convertible securities, new Shares arising from the
               exercise of share options or vesting of share awards outstanding or subsisting at the
               time such authority is given, provided the options or awards were granted in
               compliance with the Listing Manual, and any subsequent consolidation or sub-division
               of Shares.




                                                VI-48
      APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
            STATEMENTS OF THE GROUP FOR FY2005 AND
             THE THREE MONTHS ENDED 31 MARCH 2006




SITRA HOLDINGS (INTERNATIONAL) LIMITED AND ITS SUBSIDIARIES


UNAUDITED PROFORMA COMBINED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2005 AND 3 MONTHS
ENDED 31 MARCH 2006




                                  VII
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         APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
               STATEMENTS OF THE GROUP FOR FY2005 AND
                THE THREE MONTHS ENDED 31 MARCH 2006

INDEPENDENT AUDITORS’ REPORT IN RELATION TO THE UNAUDITED PROFORMA
COMBINED FINANCIAL STATEMENTS OF SITRA HOLDINGS (INTERNATIONAL) LIMITED


7 November 2006

The Board of Directors
Sitra Holdings (International) Limited
18 Genting Road
The Blue Building
Singapore 349477


Dear Sirs


Unaudited Proforma Combined Financial Statements
We report on the unaudited proforma combined financial statements of Sitra Holdings (International)
Limited (the “Company”) and its subsidiaries (collectively the “Proforma Group”) set out on pages VII-3
to VII-30 of the prospectus (the “Prospectus”). The unaudited proforma combined financial statements
have been prepared on the basis of the assumptions set out on pages VII-10 to VII-11 after making
certain adjustments to show what:
(a)   the financial position of the Proforma Group as at 31 December 2005 (“FY 2005”) and 31 March
      2006 (“FP 2006”) would have been if the proforma group structure as of the date of registration
      of the Prospectus had been in place on 31 December 2005 and 31 March 2006, respectively;
(b)   the financial position of the Proforma Group for the year ended 31 December 2005 and three
      months ended 31 March 2006 (the “Relevant Period”) would have been if the group structure as
      at the date of registration of the Prospectus had been in place since the beginning of the periods
      being reported on; and
(c)   the cash flows of the Proforma Group for the year ended 31 December 2005 and three months
      ended 31 March 2006 would have been if the proforma group structure as of the date of
      registration of the Prospectus had been in place since 1 January 2005.

The unaudited proforma combined financial information of the Proforma Group for FY2005 and
FP2006, because of their nature, may not give a true and fair view of the Proforma Group’s financial
positions, financial results, and changes in equity or cash flows.

The unaudited proforma combined financial information of the Proforma Group of FY2005 and FP2006
are the responsibility of the directors of the Company. Our responsibility is to express an opinion on the
unaudited proforma combined financial information of the Proforma Group based on our work.

We carried out our procedures in accordance with Singapore Statement of Auditing Practice 24;
“Auditors Public Offering Documents”. Our work, which involved no independent examination of the
underlying financial statements, consisted primarily of comparing the unaudited proforma combined
financial information of the Proforma Group to the audited combined financial statements (or where
financial statement is not available, to the accounting records) of Sitra Holdings (International) Limited
and its subsidiaries where applicable, considering the evidence supporting the adjustments and
discussing the unaudited proforma combined financial information of the Proforma Group for FY 2005
and FP 2006 with the Directors of the Company.



                                                  VII-1
              APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                    STATEMENTS OF THE GROUP FOR FY2005 AND
                     THE THREE MONTHS ENDED 31 MARCH 2006

In our opinion,
(a)   the unaudited proforma combined financial information of the Proforma Group for FY 2005 and FP
      2006 have been properly prepared in a manner consistent with both the format of the financial
      statements and the accounting policies of the Company, which are prepared in accordance with
      the Singapore Financial Reporting Standards (“FRS”);
(b)   the unaudited proforma combined financial information of the Proforma Group for FY 2005 and
      FP2006 have been properly compiled on the basis stated in Note 3 to the unaudited proforma
      combined financial information of the Proforma Group; and
(c)   each material adjustment made to the information used in the preparation of the unaudited
      proforma combined financial information of the Proforma Group is appropriate for the purpose of
      preparing such information.

This compilation report has been prepared for the inclusion in the Prospectus dated 7 November 2006
in connection with the Invitation in respect of 24,000,000 New shares payable in full on application as
follows:
(a)   1,500,000 Offer Shares at S$0.21 for each Offer Share by way of public offer; and
(b)   22,500,000 Placement Shares by way of placement, comprising:
      (i)      21,820,000 Placement Shares at S$0.21 for each Placement Share;
      (ii)     180,000 Internet Placement Shares at S$0.21 for each Internet Placement Share; and
      (iii)    500,000 Reserved Shares at S$0.21 for each Reserved Share.



Yours faithfully



Nexia Tan & Sitoh
Certified Public Accountants
Singapore

Kristin YS Kim
Partner-in-charge




                                                  VII-2
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Unaudited Proforma Combined Balance Sheets
As at 31 December 2005 and 3 months ended 31 March 2006


The unaudited proforma combined balance sheets of the Proforma Group as at 31 December 2005 and
31 March 2006, assuming that the events set out in Note 3 took place on 1 January 2005 and 1 January
2006 respectively, are set out as below.
                                                                                Unaudited
                                                                       31 December      31 March
                                                                Note       2005           2006
                                                                            $               $
Non-Current Assets
Property, plant and equipment                                    4       1,130,055       1,108,682
Financial assets at fair value through profit or loss            5         132,655         132,655
Goodwill on consolidation                                        6          28,982         668,715
                                                                         1,291,692       1,910,052
Current Assets
Inventories                                                                331,921       1,204,933
Trade receivables                                                7       5,120,865       5,366,501
Other receivables                                                8       2,218,504       2,757,441
Prepayments                                                                 30,450         122,624
Cash and bank balances                                           9       1,464,383       1,635,200
                                                                         9,166,123      11,086,699
Total Assets                                                            10,457,815      12,996,751
Current Liabilities
Trade payables                                                   10        582,224         673,249
Bill payables (secured)                                          11      4,769,475       5,926,242
Other payables                                                   12        704,985         687,311
Hire purchase creditors                                          13          5,790           5,790
Interest-bearing borrowings (secured)                            14        246,476         296,307
Provision for tax                                                          595,866         714,014
                                                                         6,904,816       8,302,913

Net Current Assets                                                       2,261,307       2,783,786
Non-Current Liabilities
Hire purchase creditors                                          13         23,367          21,375
Interest-bearing borrowings (secured)                            14        319,536         316,909
Deferred tax                                                                15,802          15,802
                                                                           358,705         354,086

Total Liabilities                                                        7,263,521       8,656,999

                                                                         3,194,294       4,339,752
Share Capital and Reserves
Share capital                                                    15      3,000,048       2,000,045
Capital reserve                                                             81,593          81,593
Foreign currency translation reserve                                       (31,890)         26,178
Unappropriated profit                                                      126,173       2,169,028
                                                                         3,175,924       4,276,844
Minority interest                                                           18,370          62,908
                                                                         3,194,294       4,339,752


                                                        VII-3
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Unaudited Proforma Combined Profit and Loss Accounts
For the year ended 31 December 2005 and 3 months ended 31 March 2006


The unaudited proforma combined profit and loss accounts of Sitra Holdings (International) Limited (the
“Company”) and its subsidiaries (collectively the “Proforma Group”) for the year ended 31 December
2005 and three months ended 31 March 2006 are set out below.

                                                                          Unaudited
                                                          Year ended          3 months ended
                                                         31 December              31 March
                                               Note          2005           2005           2006
                                                              S$             S$             S$
Revenue                                         16        58,734,134       15,417,307      18,625,311
Cost of sales                                             (52,360,436)    (13,759,571)    (16,480,575)

Gross profit                                               6,373,698        1,657,736       2,144,736
Other operating income                          17           429,883           16,647          28,797
Selling and distribution expenses                          (1,485,865)       (359,254)       (509,695)
Administrative expenses                                    (2,034,187)       (420,083)       (576,920)
Other operating expenses                                    (873,712)         (11,080)        (48,505)
Finance cost                                    18            (99,474)        (18,200)        (65,881)

Profit before tax                               19         2,310,343         865,766          972,532
Tax                                             20          (379,509)        (142,208)       (122,422)

Profit after tax                                           1,930,834         723,558          850,110

Attributable to:
Equity holders of parent                                   1,988,486         722,867          805,572
Minority interests                                            (57,652)           691           44,538

                                                           1,930,834         723,558          850,110

EPS (based on the pre-Invitation share
 capital) (cents)                               21               3.62            1.31            1.46
EPS (based on the post-Invitation share
 capital) (cents)                               21               2.52            0.92            1.02




                                                 VII-4
                                                  APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                                                        STATEMENTS OF THE GROUP FOR FY2005 AND
                                                         THE THREE MONTHS ENDED 31 MARCH 2006

        Sitra Holdings (International) Limited and its Subsidiaries

        Unaudited Proforma Combined Statement of Changes in Equity
        For the year ended 31 December 2005 and 3 months ended 31 March 2006


                                                                                                                            Total
                                                                                             Foreign    (Accumulated    Attributable
                                                                                            Currency      Losses)/       To Equity
                                                                    Share        Capital   Translation Unappropriated   Holders of     Minority
                                                                    Capital      Reserve    Reserve        Profits         Parent      Interest     Total
                                                                      $             $           $             $               $            $          $
        Balance at 1 January 2005                                  3,000,048     81,593     (14,743)     (1,862,313)     1,204,585      36,022    1,240,607
VII-5




        Increase in share capital                                          —         —           —               —              —       40,000       40,000
        Net translation during the year                                    —         —      (17,147)             —         (17,147)         —       (17,147)
        Net Profit                                                         —         —           —        1,988,486      1,988,486     (57,652)   1,930,834

        Balance at 31 December 2005                                3,000,048     81,593     (31,890)        126,173      3,175,924      18,370    3,194,294

        Balance at 1 January 2006
        — As previously stated                                     3,000,048     81,593     (31,890)        126,173      3,175,924      18,370    3,194,294
        — Effect of elimination of share capital of subsidiaries   (1,000,003)       —           —               —      (1,000,003)         —     (1,000,003)
        — Effect of elimination of pre-acquisition reserves of
          subsidiaries                                                     —         —           —        1,237,283      1,237,283          —     1,237,283

        — As restated at 1 January 2006                            2,000,045     81,593     (31,890)      1,363,456      3,413,204      18,370    3,431,574
        Net translation during the period                                  —         —       58,068              —          58,068          —        58,068
        Net profit                                                         —         —           —          805,572        805,572      44,538      850,110

        Balance at 31 March 2006                                   2,000,045     81,593      26,178       2,169,028      4,276,844      62,908    4,339,752
           APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                 STATEMENTS OF THE GROUP FOR FY2005 AND
                  THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Unaudited Proforma Combined Cash Flow Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


The unaudited proforma combined cash flow statements of the Proforma Group for the year ended 31
December 2005 and three months ended 31 March 2006, assuming that the events set out in Note 3
took place since 1 January 2005 are set out as below.

                                                                              Unaudited
                                                                                   3 months ended
                                                                    31 December       31 March
                                                            Notes       2005            2006
                                                                         $                   $
Cash Flow From Operating Activities
Net Profit before taxation                                           2,310,343            972,532
Adjusted for:
Depreciation                                                  4         62,259             17,905
Depreciation of disposed property overcharged                                —              (3,153)
Interest Expenses                                                       99,474             65,881
Gain on disposal of property, plant and equipment                      (64,500)                  —
Loss on disposal of property, plant and equipment                       14,003                   —
Gain on disposal of quoted investments                                   (5,014)                 —
Gain on revaluation of quoted investment                               (98,874)                  —
Interest income                                                          (1,310)            (1,279)
Exchange difference arising on consolidation                           131,054             37,831
Bad debt written off                                                    22,478                   —
Investment written off                                                  12,000                   —
Allowance for doubtful debt                                            825,231                   —

Operating profit before working capital changes                      3,307,144        1,089,717
  Change in inventories                                                (71,783)           (873,012)
  Change in trade receivables                                        (2,598,050)          (245,636)
  Change in other receivables                                        (2,011,587)          (538,937)
  Change in other prepayment                                            17,167             (92,174)
  Change in trade payables                                           (2,317,275)           91,025
  Change in bills payables                                           4,322,319        1,156,767
  Change in other payables                                            (332,442)            (17,674)

Cash generated from operation                                          315,493            570,076
Interest expenses                                                      (99,474)            (65,881)
Tax paid                                                               (20,619)             (4,193)

Net cash generated from operating activities                           195,400            500,002



                                                    VII-6
         APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
               STATEMENTS OF THE GROUP FOR FY2005 AND
                THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Unaudited Proforma Combined Cash Flow Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


                                                                              Unaudited
                                                                                   3 months ended
                                                                     31 December       31 March
                                                             Notes       2005            2006
                                                                          $                $
Cash Flow From Investing Activities
Additional investment in subsidiaries                                  (172,000)             —
Purchase of property, plant & equipment                                (248,293)        (13,398)
Investment in subsidiaries                                                    —        (362,276)
Proceeds from disposal of property, plant and equipment               2,990,500              —
Proceeds from disposal of quoted investments                             86,540              —
Interest Income                                                           1,310           1,279

Net cash generated from/(used in) investing activities                2,658,057        (374,395)

Cash From Financing Activities
Redemption/repayment of Interest bearing borrowings                   (2,395,819)        (5,393)
Proceeds from fixed deposit                                           1,000,000              —
Repayment of hire purchase obligations                                    (7,968)        (1,992)

Net cash (used in)/generated from financing activities                (1,403,787)        (7,385)

Net increase in cash and cash equivalents                             1,449,670         118,222
Cash and cash equivalents at beginning of year/period                  (206,762)      1,242,908

Cash and cash equivalents at end of year/period                       1,242,908       1,361,130

Cash and cash equivalents representing:
Cash and bank balances                                        9       1,464,383       1,635,200
Bank overdrafts                                               14       (221,475)       (274,070)

                                                                      1,242,908       1,361,130




                                                     VII-7
        APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
              STATEMENTS OF THE GROUP FOR FY2005 AND
               THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


1.   Introduction
     The unaudited proforma combined financial statements of Sitra Holdings (International) Limited
     (the “Company”) and its subsidiary companies (the “Proforma Group”) for the year ended 31
     December 2005 and 3 months ended 31 March 2006 have been prepared for inclusion in the
     Prospectus dated 7 November 2006. The Prospectus is issued in connection with the invitation by
     the Company comprising 24,000,000 new ordinary shares by way of public offer payable in full on
     application.


2.   Corporate Information
     The Company was incorporated in the Republic of Singapore on 5 May 1979 as a private limited
     company under the name of Sitra Agencies Pte Ltd. The Company last changed its name to Sitra
     Holdings (International) Pte Ltd. Subsequently, on 22 September 2006, the name was changed to
     “Sitra Holdings (International) Limited”.

     The registered office address is at 18 Genting Road, The Blue Building, Singapore 349477.

     The principal activities of the Company are that of investment holding and importer, exporter of
     wood-based and other related products. The principal activities of its subsidiary companies are
     disclosed below. There have been no significant changes in the activities of the Group or of the
     Company during the year ended 31 December 2005 and 3 months ended 31 March 2006.

     The Proforma Group comprises the Company and the following subsidiaries:–

                                                                         Country of
                                                                                       Group’s effective
                                                                       incorporation
                                                                                         equity held
                                                                        and place of
     Name of subsidiary companies      Principal activities               business     2005       2006
                                                                                        %          %
     Held by the Company
     Suncoast Sitra Pte Ltd            Investment holding and          Singapore        80         80
                                       importer, exporter of
                                       lifestyle furniture and other
                                       related products
     E-Timberhub Pte Ltd               Importer, exporter of wood-     Singapore        100        100
                                       based and other related
                                       products
     Energetic Industries Sdn Bhd      Inactive                        Malaysia         100        100
     Sitra Dove Logistics Sdn Bhd      Inactive                        Malaysia         100        100




                                                  VII-8
         APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
               STATEMENTS OF THE GROUP FOR FY2005 AND
                THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


2.   Corporate Information (cont’d)

                                                                                  Country of
                                                                                                     Group’s effective
                                                                                incorporation
                                                                                                       equity held
                                                                                 and place of
     Name of subsidiary companies              Principal activities                business           2005         2006
                                                                                                       %            %
     Sitra Agencies Pte Ltd                    Importer, exporter of wood-      Singapore             100           100
                                               based and other related
                                               products
     Sitra Dove Logistics Pte Ltd              Investment holding and           Singapore             100           100
                                               provision of logistics
                                               services
     Sitra Asia Pacific Sdn Bhd(1)             Inactive                         Malaysia               60           60

     Held by Suncoast Sitra Pte Ltd
     Subsidiary
     Suncoast Sitra Pty Ltd                    Wholesaler of lifestyle          Australia              75           75
                                               furniture and other related
                                               products
     Shuimu Lifestyle Pte. Ltd.(1)             Inactive                         Singapore              60           60

     Held by Sitra Dove Logistics Pte Ltd
     Sitra Precision Engineering (M) Sdn       Inactive                         Malaysia              100           100
     Bhd

     Note 1:
     In 2006, as part of restructuring exercise for the IPO, Sitra Asia Pacific Sdn Bhd and Shuimu Lifestyle Pte. Ltd. were
     disposed. Details of disposal of the subsidiaries are included in the note 3(a).




                                                          VII-9
           APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                 STATEMENTS OF THE GROUP FOR FY2005 AND
                  THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


3.   Summary of Significant Accounting Policies

     (a)    Restructuring Exercise
            The unaudited proforma combined financial statements of Sitra Holdings (International)
            Limited and its subsidiary companies for the year ended 31 December 2005 and 3 months
            ended 31 March 2006 combined the financial results of the completion of the Restructuring
            Exercise in September 2006. Details of the Restructuring Exercise are disclosed in the
            combined financial statements included in the prospectus.


     (b)    Basis of preparation
            The unaudited proforma combined financial statements have been prepared to illustrate
            what:
            (a)    the financial results of the Proforma Group as at 31 December 2005 and 31 March
                   2006 would have been if the proforma group structure as of the date of registration of
                   the Prospectus had been in place since 1 January 2005.
            (b)    the financial position of the Proforma Group for the year ended 31 December 2005 and
                   three months ended 31 March 2006 (the “Relevant Period”) would have been if the
                   proforma group structure as at the date of registration of the Prospectus had been in
                   place since 1 January 2005; and
            (c)    the cash flows of the Proforma Group for the year ended 31 December 2005 and three
                   months ended 31 March 2006 would have been if the proforma group structure as of
                   the date of registration of the Prospectus had been in place since 1 January 2005.

            The unaudited proforma combined financial statements have been prepared based on the
            audited combined financial statements of the combined group disclosed in combined
            financial statements for the year ended 31 December 2005 and three months ended 31
            March 2006, after giving effect to disposal of freehold property at 203G Ponggol
            Seventeenth Avenue, Singapore and sale of Sitra Asia Pacific Sdn. Bhd. and Shuimu
            Lifestyle Pte. Ltd..

            For illustrative purposes, it was assumed that the following events took place on 1 January
            2005 in arriving at the unaudited proforma combined financial statements as at 31
            December 2005 and 31 March 2006:
            (i)    sale of freehold property at 203G Ponggol Seventeenth Avenue, Singapore; and
            (ii)   disposal of subsidiaries, Sitra Asia Pacific Sdn Bhd and Shuimu Lifestyle Pte. Ltd..

            The unaudited proforma combined financial statements have been prepared for illustrative
            purposes only and, because of their nature, may not give a true picture of the actual financial
            position, results of operations and cash flows of the Proforma Group.




                                                  VII-10
           APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                 STATEMENTS OF THE GROUP FOR FY2005 AND
                  THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


3.   Summary of Significant Accounting Policies (cont’d)
     (b)    Basis of preparation (cont’d)

            These unaudited proforma combined financial statements of the Group are a combination or
            aggregation of the financial statements of the companies of the Proforma Group.

            The audited statutory financial statements of Sitra Holdings (International) Pte Ltd and its
            subsidiary companies and Sitra Dove Logistics Pte Ltd and Sitra Agencies Pte Ltd for the
            relevant period were prepared in accordance with Singapore Financial Reporting Standards
            (“FRS”). Sitra Dove Logistics Sdn Bhd, Energetic Industries Sdn. Bhd. and Sitra Precision
            Engineering (M) Sdn Bhd covered by the relevant period were prepared in accordance with
            Generally Accepted Accounting Principles (“GAAP”) applicable in Malaysia. Suncoast Sitra
            Pty Ltd is not required to be audited in the country of origin. For the purpose of this report,
            the financial statements of Sitra Dove Logistics Sdn Bhd, Energetic Industries Sdn Bhd, Sitra
            Precision Engineering (M) Sdn Bhd and Suncoast Sitra Pty Ltd for the relevant period have
            been prepared in accordance with FRS and audited by Nexia Tan & Sitoh in accordance with
            Singapore Standards on Auditing.

            The financial statements for the year ended 31 December 2005 are audited by Nexia Tan &
            Sitoh.

            The unaudited Proforma combined financial statements are prepared in accordance with
            FRS including related interpretations promulgated by the Council on Corporate Disclosure
            and Governance.

            Summary of Significant Accounting Policies are disclosed in Auditors’ Report on Combined
            Financial Statements of the prospectus.




                                                  VII-11
                                          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                                                STATEMENTS OF THE GROUP FOR FY2005 AND
                                                 THE THREE MONTHS ENDED 31 MARCH 2006

         Sitra Holdings (International) Limited and its Subsidiaries

         Notes to the Unaudited Proforma Combined Financial Statements
         For the year ended 31 December 2005 and 3 months ended 31 March 2006


         4.   Property, Plant and Equipment

                                                                   Furniture,
                                                                  Fixtures and
                                        Freehold    Freehold         Office      Plant and                  Motor
                                          Land      Buildings      Equipment     Equipment   Renovations   Vehicles   Computers     Total
VII-12




                                            $           $               $            $           $            $          $            $
              Cost and valuation
              At 1 January 2005          194,310    3,798,743        78,982       189,096       96,936     51,888      77,060     4,487,015
              Additions                       —        87,622        20,540            —       129,016          —       11,115      248,293
              Disposal                        —     (3,092,003)          —             —            —           —          —      (3,092,003)
              Translation adjustments     10,216       23,989            —             —            —           —          —         34,205

              As at 31 December 2005     204,526      818,351        99,522       189,096      225,952     51,888      88,175     1,677,510
              Additions                       —             —         8,439            —            —           —       4,959        13,398
              Disposal                        —             —          (142)           —            —           —          —           (142)
              Translation adjustments     (6,841)     (16,065)           —             —            —           —        (417)      (23,323)

              As at 31 March 2006        197,685      802,286       107,819       189,096      225,952     51,888      92,717     1,667,443
                                             APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                                                   STATEMENTS OF THE GROUP FOR FY2005 AND
                                                    THE THREE MONTHS ENDED 31 MARCH 2006

         Sitra Holdings (International) Limited and its Subsidiaries

         Notes to the Unaudited Proforma Combined Financial Statements
         For the year ended 31 December 2005 and 3 months ended 31 March 2006


         4.   Property, Plant and Equipment (cont’d)

                                                                    Furniture,
                                                                   Fixtures and
                                            Freehold   Freehold       Office      Plant and                  Motor
                                              Land     Buildings    Equipment     Equipment   Renovations   Vehicles   Computers    Total
VII-13




                                                $          $             $            $           $            $          $           $
              Accumulated depreciation
              and impairment losses
              At 1 January 2005                —        274,425      59,285        111,347       95,976     20,756      70,635     632,424
              Depreciation for the year        —         12,704        7,322        13,952        7,616       7,949     12,716      62,259
              Disposal                         —       (152,000)          —             —            —           —          —      (152,000)
              Translation adjustment           —          4,815           (7)           —            —           —         (36)       4,772

              At 31 December 2005              —        139,944      66,600        125,299      103,592     28,705      83,315     547,455
              Depreciation for the period      —          5,000        2,068         3,488        3,976       1,987      1,386      17,905
              Translation adjustments          —         (3,310)         (23)           —            —           —        (113)      (3,446)
              Disposal                         —         (3,153)          —             —            —           —          —        (3,153)

              At 31 March 2006                 —        138,481      68,645        128,787      107,568     30,692      84,588     558,761
                                               APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                                                     STATEMENTS OF THE GROUP FOR FY2005 AND
                                                      THE THREE MONTHS ENDED 31 MARCH 2006

         Sitra Holdings (International) Limited and its Subsidiaries

         Notes to the Unaudited Proforma Combined Financial Statements
         For the year ended 31 December 2005 and 3 months ended 31 March 2006


         4.   Property, Plant and Equipment (cont’d)
                                                                            Furniture,
                                                                           Fixtures and
                                             Freehold       Freehold          Office        Plant and                         Motor
                                               Land         Buildings       Equipment       Equipment      Renovations       Vehicles       Computers          Total
                                                 $              $                $              $              $                $              $                 $
VII-14




              Net book value
              At 31 December 2005             204,526        678,407          32,922          63,797         122,360          23,183           4,860        1,130,055

              At 31 March 2006                197,685        663,805          39,174          60,309         118,384          21,196           8,129        1,108,682


              (a)   Freehold land and freehold buildings are pledged to secure banking facilities granted to the Group (note 14) as follows:
                                                                                            31 December
                                                                                                2005                   31 March 2006
                                                                                                 $                           $
                      Freehold land and Buildings                                             882,933                     861,490


              (b)   Included in property, plant and equipment are the following carrying amount of assets which were acquired under hire purchase agreements (note 13):
                                                                                            31 December
                                                                                                2005                   31 March 2006
                                                                                                 $                           $
                      Motor Vehicles                                                           23,183                     21,196
        APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
              STATEMENTS OF THE GROUP FOR FY2005 AND
               THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


5.   Financial Assets at Fair Value through Profit or Loss

                                                                      31 December       31 March
                                                                          2005            2006
                                                                           $                $
     Quoted share at fair value                                          132,655        132,655


     Financial assets at fair value through profit or loss are measured in accordance with the
     accounting policy as set out in Note 3 of the Combined Financial Statements with effect from 1
     January 2005.

     The fair value adjustment was not made for the unaudited 3 months ended 31 March 2006 and
     the effect is as follow:

                                                                                        Group
                                                                                      Unaudited
                                                                                    31 March 2006
     Increase in:
     Financial assets are fair value through profit and loss                            1,965
     Deferred tax                                                                        (393)

     Profit and loss accounts                                                           1,572



6.   Goodwill on Consolidation

                                                                      31 December       31 March
                                                                          2005            2006
                                                                           $                $
     Goodwill                                                            36,227         668,715
     Less: Accumulated amortisation                                       (7,245)               —

                                                                         28,982         668,715


     In accordance with FRS 103 and FRS 36 (revised 2004), the Group ceased amortization of
     goodwill from 1 January 2005 and accumulated amortization as at 31 December 2004 amounting
     to $ 7,245 has been eliminated with a corresponding decrease in the cost of goodwill. Goodwill
     is thereafter tested at least annually for impairment.




                                                     VII-15
        APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
              STATEMENTS OF THE GROUP FOR FY2005 AND
               THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


7.   Trade Receivables

                                                                      31 December   31 March
                                                                          2005        2006
                                                                           $            $
     Trade receivables                                                 5,946,096    6,191,732
     Less: Allowance for doubtful debts
       At 1 January                                                       33,497     825,231
       Current allowance                                                 825,231          —
       Allowance written off                                             (33,497)         —

       At 31 December/31 March                                           825,231     825,231

                                                                       5,120,865    5,366,501


     Trade receivables are denominated in the following currencies:

                                                                      31 December   31 March
                                                                          2005        2006
                                                                           $            $
     United States dollar                                              4,875,754    5,242,970
     Singapore dollar                                                     11,106      11,637
     Others                                                              234,005     111,894

                                                                       5,120,865    5,366,501



8.   Other Receivables

                                                                      31 December   31 March
                                                                          2005        2006
                                                                           $            $
     Advance payments to suppliers                                     1,710,266    2,453,699
     Others                                                              409,891     207,404

                                                                       2,120,157    2,661,103
     Sundry deposits                                                      98,347      96,338

                                                                       2,218,504    2,757,441




                                              VII-16
         APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
               STATEMENTS OF THE GROUP FOR FY2005 AND
                THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


8.   Other Receivables (cont’d)

     Other receivables are denominated in the following currencies:

                                                                      31 December    31 March
                                                                          2005         2006
                                                                           $             $
     United States dollar                                              2,063,793     2,470,752
     Singapore dollar                                                    151,388      265,202
     Others                                                                 3,323      21,487

                                                                       2,218,504     2,757,441



9.   Cash and Bank Balances

                                                                      31 December    31 March
                                                                          2005         2006
                                                                           $             $
     Bank balances                                                       446,504      617,729
     Fixed deposits                                                    1,017,401     1,016,942
     Cash on hand                                                            478          529

                                                                       1,464,383     1,635,200


     Cash and bank balances are denominated in the following currencies:

                                                                      31 December    31 March
                                                                          2005         2006
                                                                           $             $
     United States dollar                                                  55,123      20,069
     Australia dollar                                                      22,482         340
     Others                                                            1,386,778     1,614,791

                                                                       1,464,383     1,635,200


     The carrying amounts of cash and bank balances approximate their fair values.




                                              VII-17
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


9.    Cash and Bank Balances (cont’d)

      The effective interest rate per annum at the balance sheet date are as follows:

                                                                        31 December      31 March
                                                                            2005           2006
                                                                             $               $
      Effective interest rate                                                 0.28         0.22



10. Trade Payables

                                                                        31 December      31 March
                                                                            2005           2006
                                                                             $               $
      Trade payables                                                       582,224       673,249

      Trade payables are dominated in the following currencies:
      United States dollar                                                 568,618       642,398
      Others                                                                  13,606      30,851

                                                                           582,224       673,249


      The carrying amount of trade payables approximates their fair values.


11.   Bills Payables (secured)

                                                                        31 December      31 March
                                                                            2005           2006
                                                                             $               $
      Bills payables                                                      4,769,475     5,926,242


      The bills payables are denominated in United States dollars and bear interest at the following
      rates:

                                                                        31 December      31 March
                                                                            2005           2006
                                                                             $               $
                                                                          6%-6.5%       6.0%-6.5%




                                                   VII-18
              APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                    STATEMENTS OF THE GROUP FOR FY2005 AND
                     THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


11.   Bills Payables (secured) (cont’d)

      The bills payables are secured on:
      (i)      Letter of guarantee by certain directors;
      (ii)     Corporate guarantee of the Company;
      (iii)    Legal mortgages on the Group’s freehold and leasehold properties; and
      (iv) Letter of authority and earmarking by certain directors


12. Other Payables
                                                                            31 December      31 March
                                                                                2005           2006
                                                                                 $               $
      Loan from a minority shareholder of a subsidiary                        183,650        162,579
      Loan from a director                                                     38,881          46,671
      Sundry payables                                                         139,064        256,287
      Accrued operating expenses                                              293,994        221,774
      GST Payables                                                             49,396              —

                                                                              704,985         687,311


      Loans from a minority shareholder of a subsidiary and a director are unsecured, interest free and
      is payable on demand.


13. Hire Purchase Creditor
                                                    31 December 2005                31 March 2006
                                                 Minimum    Present value     Minimum      Present value
                                                 Payments    of Payments      Payments      of Payments
                                                     $            $               $               $
      Within 1 year                                 7,968        5,790          7,968          5,790
      After 1 year but not more than 5 years       25,909       23,367         23,917         21,375

      Total minimum lease payments                 33,877       29,157         31,885         27,165
      Less amounts representing finance
        charges                                    (4,720)           —          (4,720)           —

      Present value of minimum lease
        payments                                   29,157       29,157         27,165         27,165




                                                    VII-19
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


14. Interest-Bearing Borrowings (secured)

                                                                          31 December        31 March
                                                                              2005             2006
                                                                               $                 $
    Current portion
    Bank overdrafts                                                          221,475          274,070
    Term loans
    — Due within one year                                                     25,001           22,237

                                                                             246,476          296,307

    Non-current portion
    Term loans
    — Due within two to five years                                           106,554          104,870
    — Due after five years                                                   212,982          212,039

                                                                             319,536          316,909


    (a)    Bank overdrafts (secured) and term loans are secured on the freehold land and freehold
           properties of the Group, and a fixed and floating charge over all the assets of a wholly owned
           subsidiary. In addition, the directors of the Company also provided guarantees for banking
           facilities.
    (b)    The effective interest rate per annum at the balance sheet date are as follows:

                                                                          31 December        31 March
                                                                              2005             2006
           Bank overdrafts                                                  2.5–6.5%         2.5–6.5%
           Term loan                                                        2.5–7.0%         2.5–7.0%




                                                 VII-20
        APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
              STATEMENTS OF THE GROUP FOR FY2005 AND
               THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


15. Share Capital

                                                                       31 December       31 March
                                                                           2005            2006
                                                                            $                $
    Authorised:
    The Company
    Sitra Holdings (Int’l) Pte Ltd
    2,000,000 ordinary shares of $1 each                                 2,000,000              —

    Sitra Dove Logistics Pte Ltd
    1,000,000 ordinary shares of $1 each                                 1,000,000              —

    Sitra Agencies Pte Ltd
    1,000,000 ordinary shares of $1 each                                 1,000,000              —

    Sitra Dove Logistics Sdn Bhd
    350,000 ordinary shares of RM1 each                                    156,800              —

    Issued and fully paid:
    The Company
    Sitra Holdings (Int’l) Pte Ltd
    2,000,000 ordinary shares of $1 each                                 2,000,000       2,000,000

    Sitra Dove Logistics Pte Ltd
    870,002 ordinary shares of $1 each                                     870,002              —

    Sitra Agencies Pte Ltd
    130,001 ordinary shares of $1 each                                     130,001              —

    Sitra Dove Logistics Sdn Bhd
    100 ordinary shares of RM1 each                                             45              45

    Total                                                                3,000,048       2,000,045


    The actual acquisitions took place in 2006 under restructuring exercise.

    For year 2005, the combined capital refers to aggregate amount of paid-in capital of the Company,
    Sitra Dove Logistics Pte Ltd, Sitra Agencies Pte Ltd and Sitra Dove Logistics Sdn Bhd, after
    elimination of investments in subsidiaries.


                                              VII-21
       APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
             STATEMENTS OF THE GROUP FOR FY2005 AND
              THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


15. Share Capital (cont’d)

    On 30 January 2006, the concepts of authorised capital and par value were abolished in
    accordance with the Companies (Amendment) Act 2005.


16. Revenue
    Revenue represents the net invoiced value of sales. All inter-company transactions have been
    eliminated in arriving at the revenue of the Group.


17. Other Operating Income

                                                                             3 months ended
                                                          31 December   31 March       31 March
                                                              2005        2005           2006
                                                               $            $              $
    Commission income                                          444           —              —
    Rental income                                            46,019      11,505         11,414
    Foreign exchange gain                                   123,688          —              —
    Interest income                                           1,310         69           1,279
    Gain on disposal of property, plant and equipment        64,500          —              —
    Gain on disposal of quoted investments                    5,014          —              —
    Gain on fair value adjustment of quoted investment       98,874          —              —
    Others                                                   90,034       5,073         16,104

                                                            429,883      16,647         28,797



18. Finance Cost

                                                                             3 months ended
                                                          31 December   31 March       31 March
                                                              2005        2005           2006
                                                               $            $              $
    Bank overdraft and bills payable                        74,037       15,447         64,001
    Term loans                                              25,437        2,753          1,880

                                                            99,474       18,200         65,881




                                                 VII-22
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


19. Profit Before Tax

                                                                                          3 Months ended
                                                                           31 December       31 March
                                                                               2005            2006
                                                                                $                $
    Profit before tax is arrived at after charging:
    Bad debts written off
    — trade                                                                   22,478               —
    Directors’ remuneration                                                  411,720          131,546
    Depreciation                                                              62,259           17,905
    Foreign exchange loss                                                         —            48,003
    Loss on disposal of a property                                            14,003               —
    Staff cost                                                               452,886          166,096
    Defined contribution included in staff cost                               37,609           25,407
    Allowance for doubtful debts                                             825,231               —
    Operating lease — office rental                                          215,616           76,508

    And after crediting:
    Foreign exchange gain                                                    123,688               —
    Interest income                                                            1,310            1,279
    Gain on disposal of property, plant and equipment                         64,500               —
    Gain on disposal of quoted investments                                     5,014               —
    Gain on fair value adjustment of quoted investment                        98,874               —


20. Tax

    (a)    Tax expense:

                                                                                     3 months ended
                                                               31 December      31 March       31 March
                                                                   2005           2005           2006
                                                                    $               $              $
           Current income tax                                    379,509        142,208        122,422

                                                                 379,509        142,208        122,422




                                                      VII-23
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


20. Tax (cont’d)

    (a)    Tax expense: (cont’d)

           Reconciliation between tax expense and accounting profit:

                                                                                      3 months ended
                                                              31 December        31 March       31 March
                                                                  2005             2005           2006
                                                                   $                 $              $
           Profit before tax                                   2,310,343         865,766         972,532

           Tax at tax rate of 20%                                462,069         173,153         194,506
           Partial tax exemption                                 (31,500)         (23,457)        (27,200)
           Non-deductible expenses                                13,624          21,415            4,709
           Income not subjected to tax                           (23,243)            (514)           (515)
           Provision for taxation in respect of prior year        (1,764)                —             —
           Utilisation of previously unrecognised tax loss
             and unabsorbed capital allowance                     (9,011)            (615)        (47,246)
           Wear and tear allowance                                (4,125)                —         (8,750)
           Effect of concession tax rate                         (68,034)         (17,103)        (10,701)
           Deferred tax assets not recognised                     (1,255)                —             —
           Others                                                 42,748          (10,671)        17,619

                                                                 379,509         142,208         122,422



    (b)    Movements in provision for current tax

                                                                                             3 Months ended
                                                                            31 December         31 March
                                                                                2005              2006
                                                                                 $                  $
           Balance at 1 January                                               236,864           595,866
           Translation difference                                                112                 (82)
           Income tax paid                                                    (20,619)            (4,192)
           Current financial year’s tax expense                               379,509           122,422
           Under provision in prior financial year                                 —                  —

           Balance at 31 December/31 March                                    595,866           714,014




                                                     VII-24
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


20. Tax (cont’d)

    (c)    Deferred tax
           Provision for deferred tax is the estimated tax expense at current tax rates on the following
           items:

                                                                             31 December    31 March
                                                                                 2005         2006
                                                                                  $             $
           Difference in property, plant and equipment for accounting and
             income tax purposes                                                77,736        75,665
           Tax losses                                                          (61,934)      (59,863)

                                                                                15,802        15,802



    (d)    Movements in provision for deferred tax

                                                                             31 December    31 March
                                                                                 2005         2006
                                                                                  $             $
           Balance at 1 January and 31 December/31 March                       15,802        15,802



    (e)    The following deferred tax liabilities/(deferred tax benefits) have not been recognised:

                                                                             31 December    31 March
                                                                                 2005         2006
                                                                                  $             $
           Difference in plant and equipment for accounting and income tax
             purposes                                                           (85,270)          —
           Tax losses                                                          (105,438)     (47,637)

                                                                               (190,708)     (47,637)




                                                   VII-25
       APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
             STATEMENTS OF THE GROUP FOR FY2005 AND
              THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


21. Earnings per Share
    The calculation of basis earnings per share for the relevant period is based on the Proforma
    combined net profit attributable to ordinary shareholders for the year ended 31 December 2005
    and 3 months ended 31 March 2006 and on the assumption that pre-invitation share capital of
    55,000,000 shares are in issue as at the date of the Prospectus.

    Earnings per share computed for post-invitation share for relevant periods are based on the
    Proforma combined net profit attributable to ordinary shareholders for the year ended 31
    December 2005 and 3 months ended 31 March 2006 and post-invitation share capital of
    79,000,000 shares.


22. Commitments
    Operating Lease Commitments

    The Group has entered into non-cancellable lease agreements for office premises with remaining
    lease terms of not more than 2 years.

                                                                      31 December      31 March
                                                                          2005           2006
                                                                           $               $
    Not later than 1 year                                               220,700         135,000
    After 1 year                                                        135,000              —

                                                                        355,700         135,000



23. Segment Information
    A segment is a distinguishable component of the Proforma Group that is engaged either in
    providing an individual product or service or a group of related 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 Proforma Group’s business and geographical
    segments. The primary format, business segments, is based on the Proforma Group’s
    management and internal control reporting structure.




                                             VII-26
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


23. Segment Information (cont’d)

    Geographical and business information about the Group’s revenue are as follows:

    (a)    Revenue
                                                            Year ended         3 months ended   3 months ended
                                                               2005                 2005             2006
                                                              $’000                $’000            $’000
           Wood-based products                                 50,207              13,901           16,605
           Outdoor lifestyle furniture                            8,527             1,516            2,020

                                                               58,734              15,417           18,625


           The Group have not identified profit before tax by product segment as the allocation of costs
           cannot be done in a similar manner with reasonable accuracy. This is because the selling
           and distribution expenses, administrative expenses and other operating expenses incurred
           for our wood-based products and outdoor lifestyle furniture segments such as marketing
           expenses, management and administrative personnel expenses and office-related
           expenses are general costs which are accounted for on a group-wide basis. It is not
           meaningful to track our selling and distribution expenses, administrative expenses and other
           operating expenses by product segment. We therefore do not show our profit before tax on
           a segmental basis.


    (b)    Revenue
                                                            Year ended         3 months ended   3 months ended
                                                               2005                 2005             2006
                                                              $’000                $’000            $’000
           Australasia                                         25,623               8,018            8,370
           Europe                                              29,886               6,673            9,777
           Others                                                 3,225              726              478

           Total                                               58,734              15,417           18,625


           Notes:–
           (1)   Australasia comprises Australia and New Zealand.
           (2)   Others include Asia, Middle East, Africa and North America.


           While it is possible to segment our revenue by geographical regions, the allocation of costs
           cannot be done in a similar manner with reasonable accuracy. We do not track the allocation
           of our cost of sales by geographical region and any attempt to match these expenses to
           revenue to the various geographical regions is not meaningful.

                                                         VII-27
          APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
                STATEMENTS OF THE GROUP FOR FY2005 AND
                 THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


24. Related Party Transactions
    In addition to the related party information disclosed elsewhere in the financial statements, the
    following transactions between the Proforma Group and related parties took place during the
    financial year at terms agreed between the parties.
                                                                                                             Unaudited
                                                                                                          3 Months ended
                                                                                    31 December              31 March
                                                                                        2005                   2006
                                                                                         $                       $
    Loan from a director                                                                38,881                   46,671
                                                  (1)
    Sale of residential property to a director                                               —                1,880,000
    Commission paid(2)                                                                   9,130                         —
                        (3)
    Rental expenses                                                                     60,000                         —
                                                        (4)
    Consultancy service charged by a director                                           40,000                   20,000

    Notes:–
    (1)   The residential property was disposed to executive directors, Mr George Chew and Madam Teresa Tan.
    (2)   The executive directors, Mr George Chew and Madam Teresa Tan are directors and shareholders of PWP (Aust) Pty
          Ltd, a company incorporated in Perth, Australia.
    (3)   On 25 April 2000, the company entered into a tenancy agreement with the executive director, Mr George Chew
          pursuant to which our said director agreed to lease the property situated at 37 Tannery Lane #05-01, Tannery House,
          Singapore 347790.
    (4)   The non-executive director, Mr Daniels Ng is the managing director and controlling shareholder of Advisors
          Associates (S) Pte Ltd.


25. Contingent Liabilities
                                                                                                             Unaudited
                                                                                                          3 Months ended
                                                                                    31 December              31 March
                                                                                        2005                   2006
                                                                                         $                       $
    Legal proceedings(1)                                                                  23,500               23,500
    Letter of credits                                                                 1,788,288                      —
    Import bills                                                                          63,471                     —
    Trust receipts                                                                    3,274,649                      —
    Outward bills on collection                                                         121,338                      —

    Notes:–
    (1)   On 13 December 2005, Universal M.F.I.P commenced an action in MC Suit No. 28948/2005 against our subsidiary,
          Suncoast Sitra Pte Ltd claiming payment of $23,500 plus interest thereon and costs, such sum being alleged
          outstanding rent owing by Suncoast Sitra Pte Ltd to Universal M.F.I.P in respect of the lease of certain premises by
          Universal M.F.I.P to Suncoast Sitra Pte Ltd.


                                                              VII-28
       APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
             STATEMENTS OF THE GROUP FOR FY2005 AND
              THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


26. Financial Risk Management Objectives and Policies
    Exposure to credit, liquidity, foreign currency and interest rate risks arises in the normal course of
    the Group’s business. The management continually monitors the Group’s risk management
    process to ensure that an appropriate balance between risk and control is achieved. The detail of
    the Group’s exposure to financial risk and the methods used by management to control such risk
    are summarised below:


    Credit risk
    All credit terms and limits for each customer are reviewed and are approved by the management.
    The amount of deposit, credit terms and limit for each customer is based on factors such as
    assessment of the customer’s financial condition, financial strength, credit history, past collection
    history, volume of sales and its business performance. If necessary, the management will amend
    the credit terms granted to our customers.

    At the balance sheet date, there were no significant concentrations of credit risk.

    The maximum exposure to credit risk is represented by the carrying amount of each financial
    asset in the unaudited proforma combined balance sheet. The carrying amount of trade and other
    receivables represents the Group’s exposure to credit risk. Policies are in place to ensure
    on-going credit evaluation and active account monitoring.


    Foreign currency risk
    The Group’s foreign currency risk arises from certain trading activities denominated in foreign
    currencies and its investments in subsidiaries which are located in foreign countries. The Group
    will hedge its exposure to foreign currency risk through foreign currency forward exchange
    contracts where necessary.


    Interest rate risk
    The Group obtains financing through bank borrowings and hire purchase financing and seeks to
    minimize its interest rate exposure by obtaining the most favourable interest rate available.

    The Group places its cash surplus funds with reputable banks.


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




                                                VII-29
       APPENDIX VII — UNAUDITED PROFORMA COMBINED FINANCIAL
             STATEMENTS OF THE GROUP FOR FY2005 AND
              THE THREE MONTHS ENDED 31 MARCH 2006

Sitra Holdings (International) Limited and its Subsidiaries

Notes to the Unaudited Proforma Combined Financial Statements
For the year ended 31 December 2005 and 3 months ended 31 March 2006


26. Financial Risk Management Objectives and Policies (cont’d)

    Fair value of financial instruments
    The carrying amounts of the Group’s financial assets and liabilities approximate fair values due
    at the balance sheet date.

    In the directors’ opinion, it is not practicable to determine the fair value of the unquoted equity
    investment held as unquoted investment. The fair value of the quoted investments is reflected in
    the notes to the financial statements.




                                               VII-30
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                                               PR O SPE CT S
                                               Increasing consumer demand for lifestyle
                                               outdoor furniture and wood-based products.

                                               High import growth potential in the furniture
                                               industry of developed markets.

                                               Singapore’s position as an international
                                               furniture hub and government initiatives to
                                               enhance this position.




F UT UR E PLA N S
Expanding our distribution channels and
market presence.

Enhancing our design and innovation
capabilities and expanding our product range
and variety.

Expanding our network of contract
manufacturers.

Strengthening our proprietary brands and
enhancing our corporate profile.

Expanding our business through mergers
and acquisitions, joint ventures or
strategic alliances.
C O MP ET I T I V E S T REN GT H S                                         FI NA NC I AL H IG HL IG H T S



                                     An established track record           Revenue

                                     Well-established proprietary brand                                  S$’m           CAGR:45%
                                     names                                                               60                        58.7

                                                                                                                                   15%
                                     Well-diversified global customer                                    50
                                     base and established relationships                                                   43.3
                                     with customers                                                                       9%
                                                                                                         40
                                     Focus on design, innovation and                                                                              21%
                                     product quality                                                     30      27.8
                                                                                                                 9%
                                                                                                                                   85%
                                     Ability to increase efficiencies by                                 20
                                     outsourcing production                                                               91%                           18.6
                                                                                                                                           15.4
                                                                                                                 91%                       10%          11%
                                                                                                         10
                                     Extensive network of third party                                                                                   89%
                                     contract manufacturers                                                                                90%
                                                                                                             0
                                                                                                                 FY03     FY04     FY05   1QFY05    1QFY06
                                     Experienced and committed
                                     management team                           Lifestyle outdoor furniture       2.4      4.0      8.5     1.5          2.0
                                                                               Wood-based product                25.4     39.3     50.2    13.9         16.6
                                                                                                        Total    27.8     43.3     58.7    15.4         18.6




                                                                           Gross Profit
                                                                                                         S$’m           CAGR:59%
                                                                                                             8
                                                                                                                                    6.4
                                                                                                             6
                                                                                                                                   42%
                                                                                                                           4.5                    29%
                                                                                                             4            26%

                                                                                                                  2.5              58%                   2.1
                                                                                                                 26%      74%
                                                                                                             2                              1.7         43%
                                                                                                                                           24%
                                                                                                                 74%
                                                                                                                                           76%          57%
                                                                                                             0
                                                                                                                 FY03     FY04     FY05   1QFY05    1QFY06
                                                                               Lifestyle outdoor furniture
                                                                                                                 0.7      1.2      2.7     0.4          0.9
                                                                               Wood-based product                1.8      3.3      3.7     1.3          1.2
                                                                                                        Total    2.5      4.5      6.4     1.7          2.1




                                                                           Net Profit attributable
                                                                           to Shareholders
                                                                                                         S$’m           CAGR:85%
                                                                                                             3

                                                                                                                                                  10%
                                                                                                             2                      1.9
                                                                                                                           1.2

                                                                                                             1                              0.7         0.8
                                                                                                                  0.6

                                                                                                             0
                                                                                                                 FY03     FY04     FY05   1QFY05    1QFY06
Sitra Holdings (International) Limited
18 Genting Road, The Blue Building, Singapore 349477
Tel: (65) 6742 3223/6742 2133   G   Fax: (65) 6742 8233/6841 4339
E-mail: enquiries@sitraholdings.com      G   www.sitraholdings.com

				
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