AnnuAl RepoRt 2011 - National University of...

AnnuAl RepoRt 2011

This Annual Report has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, Collins Stewart Pte. Limited, for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Collins Stewart Pte. Limited has not independently verified the contents of this Annual Report. This Annual Report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this Annual Report, including the correctness of any of the statements or opinions made or reports contained in this Annual Report.

The contact person for the Sponsor is Mr Alex Tan, Managing Director, Corporate Finance, Collins Stewart Pte. Limited at 77 Robinson Road #21-02 Singapore 068896, Telephone (65) 6854 6160.

Contents

Chairman’s Message 02 Board of Directors 04 Corporate Data 08 Our Senior Management 10Financial Highlights 11 Financial Contents 12

LERENO BIO-CHEM LTD • Annual Report 2011

Chairman’s Message

DeAR sHAReHoLDeRs

WIDeR BUsIness AnD InVestMent oUtLooK

The global economy has been stabilizing in 2011. However, there is still concern over sovereign default risks for certain European countries and that the pace of recovery will be slow with the United States of America targeted to withdraw its stimulus packages. Commodity prices continue to be strong and volatile.

In 2011, global growth continues to be mainly driven by Asia’s economic growth, urbanization and increasing consumption. Lereno Bio-Chem Ltd (“LBC”) Group is undergoing changes to adapt to the emerging landscape.

tHe GRoUP’s BUsIness AnD FInAnCIAL ResULts

The Group registered a higher loss of S$20.481 million for FY 2011 as compared to a loss of S$5.783 million incurred forFY 2010. This was mainly because provision of S$9.912 million was made for the cost of investment in Lereno Sdn Bhd in view of the difficult market conditions of the biofuel market after taking into account the share of losses of S$1.697 million of Lereno Sdn Bhd for FY 2011. As at 31 March 2011, the full cost of investment in Lereno Sdn Bhd has been written off.

02

Full provision of S$1.287 million has also been made against the agricultural assets in the wholly owned subsidiary Jarak Nursery Sdn Bhd as these represented old, unsaleable plants. The goodwill of S$3.686 million arising from the acquisition of Jarak Nursery Sdn Bhd was also written off to the profit and loss account in 4th quarter of FY 2011.

BioFuel ProcessingPalm oil prices are set to mark a third year of gains in 2011, according to a Reuters survey, extending a rally as erratic weather patterns disrupt production and tighten stocks at a time of resilient demand. Commodity prices continue to rise, stoking food inflation.

South Korea fixed its required bio-diesel mix rate system at 2 per cent from 2012, while Malaysia is expected to implement a long delayed mandate for use of biofuels in June 2011 to support its palm oil industry. However, the rest of the region have been slow to implement any government mandates to boost consumption of biodiesel.

LBC was able to make its contribution towards greener and eco-friendly cities as its 38% subsidiary, Lereno Sdn Bhd

continues to produce oleochemicals for its customers. However, we note that market conditions remain challenging for biodiesel companies in Singapore and Malaysia.

the search for Alternative FeedstockJarak Nursery Sdn Bhd (“JN”) was acquired by the LBC Group in March 2010 as its wholly owned subsidiary. JN is in the business of Plant Science and Seeds Supply and has extensive research, cultivation skills and trading opportunities for jatropha seedlings to planters and producers of crude jatropha oil. Jatropha oil is gaining a reputation as a viable and economical alternative to palm oil.

Carriers such as Germany’s Lufthansa, Brazil’s TAM Airlines, Air New Zealand and Air China are starting or have already carried out successful jatropha fuel trials on their planes.

the search for Alternative Business and new Business DevelopmentOn 14 February 2011, LBC had announced the lapse of the conditional sale and purchase agreement and supplemental deeds (collectively called “S&P Agreement”) entered into with PT. Eastbourne Minerals Resources, Teranova


03

Group Limited and Astam Mining Pte Ltd (“Astam”) to acquire a 5% stake in Astam through the issuance of S$10 million worth of LBC warrants.

LBC had announced on 25 April 2011 the signing of a Heads of Agreement (“HOA”) with Bintai Kinden Corporation Berhad (“BKCB”) for the acquisition by LBC, and the sale by BKCB, of 5,935,000 ordinary shares of Bintai Kindenko Pte Ltd (“BKS”) representing BKCB’s entire 69.82% equity interest in BKS (the “Proposed Acquisition”). The indicative consideration for the Proposed Acquisition is RM150 million (the “Indicative Purchase Consideration”) and was arrived at on a willing buyer willing seller basis, after taking into consideration the audited profit after taxation of BKS for the financial year ended 31 March 2010 of approximately S$7 million and the prospective earnings of BKS.

LBC had, on 7 June 2011, reached an understanding with Biz Investment Pte. Ltd. (“Biz Investment”) for the Proposed Acquisition by LBC, and the sale by Biz Investment, of 2,565,000 ordinary shares (“Minority Sale Shares”) of BKS representing Biz Investment’s entire 30.18% equity interest in BKS (“Biz Investment Acquisition”). The indicative purchase price for the Minority Sale Shares shall be RM 64,838,155.00.

LBC had on 8 July 2011 signed a Sale & Purchase Agreement (“SPA”) with BKCB, Biz Investment and BKS relating to LBC’s Proposed Acquisition of 100% of the issued and paid up share capital of BKS. LBC is in the midst of conducting due diligence on BKS.

Under the SPA, LBC is expected to endeavour to dispose of its existing businesses including its 38% shareholding in Lereno Sdn Bhd and its entired shareholding in Jarak Nursery Sdn Bhd after the Proposed Acquisition is completed.

BKS was incorporated in Singapore under the laws of Singapore on 6 October 1973 as a private limited company. BKS is principally involved in the business of electrical and mechanical engineering contractors and consultants, whilst its subsidiary companies are in the business of provision of technical services in the field of mechanical and electrical engineering, provision of project management and consultancy services, and the provision of energy efficiency audit and design consultancy and energy performance contracting.

BKS used to be an associated company of LBC from 2002 until 2008 when the Company disposed of its entire equity interest of 20.18% in BKS to Biz Investment Pte Ltd (of which Mr Chua Swee Ann, the chief executive officer and director of BKS, is a 49.71% shareholder). Biz Investment Pte Ltd currently holds the balance equity interest of 30.18% in BKS.

With emerging economies and urbanization, LBC is poised through BKS to take advantage of an improvement in construction activities and climate.

It is the intention of the Board to increase revenue and enhance shareholders’ value through the acquisition of a profitable business. BKS, with its headquarters in Singapore, has to-date undertaken and completed many projects in Singapore and has since expanded its operations regionally in South East Asia and China.

the Rights cum Warrants Issue and Placement exerciseTo meet the Group’s working capital requirements the Company carried out a rights cum warrants issue which was successfully completed in May 2010. As at 31 March 2011, the rights issue proceeds

has been fully used for LBC’s working capital requirements and to repay bankers and creditors.

In January 2011, the Company successfully completed a placement exercise and raised net proceeds of approximately S$2 million. As at 31 March 2011, S$1.02 million from the placement proceeds has been used for LBC’s working capital requirements.

ConCLUsIon

The Company needs to remain agile and flexible to adapt to the changing economic landscape.

I wish to express appreciation to Mr Peter John Farrar who has stepped down in May 2011, for his contributions as Director of the Company. The LBC Group has benefited from his insights and I would like to thank him for his service. I also wish to express appreciation to the Directors, shareholders, supporters, management and staff of the Company for their support all these years. As the Company embarks on a new direction to generate growth and value for shareholders, I hope that they will continue to support the Company.

tAn sRI DAto’ KAMARUZZAMAn BIn sHARIFFChairman Lereno Bio-Chem Ltd

Chairman’s Message


Board of Directors

04

tAn sRI DAto’ KAMARUZZAMAn BIn sHARIFF, 69

Tan Sri Dato’ Kamaruzzaman bin Shariff was appointed as an independent and Non-Executive Director of the Company on 1 August 2003. He was appointed as a Non-Executive Chairman and a member of the Remuneration Committee since 28 August 2003. He became the Chairman of the Remuneration Committee since 5 July 2004. He was also appointed as a member of the Nominating Committee on 15 November 2007. His last re-election as a Director was on 28 July 2008.

He obtained a Bachelor of Arts degree from the University of Malaya in 1964, a Diploma of Public Administration from Carleton University, Canada in 1969 and a Masters in Public Administration from Syracuse University, USA in 1979. He served the Malaysian Civil Service for 38 years where he held various senior positions in the Federal and State Government, having served the last six (6) years as the Mayor of Kuala Lumpur from 1995 to 2001. His other postings include Secretary General of the Ministry of Defence from 1992 to 1995, Deputy Director General of the Public Services Department in 1992, Penang State Secretary from 1988 to 1992, Secretary in the Cabinet Division of the Prime Minister’s Department from 1983 to 1987, Director of External Assistance and General Affairs in the Economic Planning Unit of the Prime Minister’s Department from 1980 to 1983 and senior positions in the Public Services Department from 1972 to 1980 and the Ministry of Education from 1964 to 1972. He has vast administrative, strategic planning and management experience by virtue of his long service in the Malaysian Civil Service.

He currently sits as the Executive Chairman of Emas Kiara Industries Berhad and Metronic Global Berhad and as the Non-Executive Chairman of Bintai Kinden Corporation Berhad and Ho Hup Construction Company Berhad. He is also a Director of Kontena National Berhad. He is also active in various charitable and voluntary organizations, including the Rotary Club DiRaja Kuala Lumpur, Lions Club and the Malaysian Humanitarian Foundation.


05

Board of Directors

onG PUAy Koon, 68

Mr Ong Puay Koon was appointed as a Director, Deputy Chairman and Chief Executive Officer of the Company on 20 June 2002. He ceased to be Deputy Chairman and was appointed Executive Vice Chairman on 29 August 2003. On 5 September 2006, Mr Ong was re-designated as Managing Director and Chief Executive Officer. Mr Ong has also been appointed as a member of the Company’s Risk Management Committee on 26 May 2007.

Mr Ong graduated with a Diploma in Electrical Engineering from Singapore Polytechnic in 1965 and was admitted as an Associate Member of the Institution of Incorporated Engineers, UK in 1978. He has extensive experience in mechanical and electrical engineering, and construction, and also covers project management and project financing. Mr Ong ventured with a Bumiputra partner and Kinden Corporation of Japan to form Bintai Kinden Corporation Berhad (“BKCB”) which was subsequently listed on the Main Board of the Kuala Lumpur Stock Exchange (“KLSE”) in 1998. Mr Ong is a substantial shareholder of BKCB.

Mr Ong’s last re-election as a Director was on 30 July 2005.

onG CHoon LUI, 39

Mr Ong Choon Lui was appointed as an Executive Director of the Company on 9 September 2003. He stepped down as a member of the Company’s Risk Management Committee on 8 November 2010. Mr Ong obtained his Bachelor Degree in Engineering (Honours Second Class Upper Division) from Nanyang Technological University, School of Electrical and Electronics Engineering, Singapore, in 1997. He began his engineering profession in 1997 as an electrical engineer with Bechtel International, Inc. where he was principally involved in electrical contracting, design and research for electrical system of industrial chemical plants. Mr Ong was attached with Kinden Corporation of Japan between 2000 – 2001. He is now overseeing the Operations Department of the Group. He has been a director of Bintai Kinden Corporation Berhad since August 2000.

Mr Ong’s last re-election as a Director of the Company was on 30 July 2009.


Board of Directors

06


WonG HeAnG FIne, 53

Mr Wong Heang Fine was appointed as a Director of the Company on 1 September 2001 and sits on the Board as an independent and Non-Executive Director of the Company. He is a member of the Audit Committee and Remuneration Committee of the Company. He stepped down as Chairman of the Risk Management Committee of the Company on 8 November 2010. Mr Wong is currently CEO of CapitaLand Residential Singapore Pte Ltd and CapitaLand ILEC Pte Ltd. He has been recently appointed as President of Real Estate Developers’ Association of Singapore (REDAS). Prior to his appointments with CapitaLand, he was the President and CEO of Sembcorp Engineers and Constructors Pte Ltd. Mr Wong was also the President and CEO of Cathay Organisation Holdings Ltd from 1999 to 2002. Mr Wong’s previous appointments included senior positions with L&M Group Investments Ltd, Singapore Technologies Industrial Corporation, SAFE Bintan Resort, Bintan Industrial Estate Management, InterIsland Marketing Service and the Economic Development Board.

Mr Wong holds a Bachelor of Science (Mechanical Engineering – First Class Honours) from the University of Leeds and Master of Science (Engineering Production and Management) degree from the University of Birmingham.

Mr Wong’s last re-election as a Director was on 29 July 2010.

GoH yeoW tIn, 60

Mr Goh Yeow Tin was appointed as an independent and Non-Executive Director of the Company on 1 October 2007. He was appointed as a member of the Remuneration Committee on 25 May 2010. On 8 November 2010, he was appointed as Chairman of the Risk Management Committee of the Company. On 24 May 2011, Mr Goh was appointed as a member of the Company’s Audit Committee and Nominating Committee respectively.

Mr Goh holds a Bachelor Degree in Mechanical Engineering (Hons) and a Masters Degree in Industrial Engineering. Mr Goh is currently the Non-Executive Chairman of Seacare Medical Holdings Pte Ltd and Seacare Manpower Pte Ltd. Mr Goh began his career with the Economic Development Board (“EDB”) where he headed the Local Industries Unit and was subsequently appointed as a Director of EDB’s Automation Applications Centre located in the Singapore Science Park. Mr Goh was the founding member of the Association of Small and Medium Enterprise (“ASME”) and founded International Franchise Pte Ltd, a pioneer in franchising business in Singapore. Mr Goh was previously the Deputy Managing Director of Tonhow Industries Ltd, the first SESDAQ listed plastic injection moulding company. Prior to his present business, Mr Goh was the Vice-President of Times Publishing Ltd and was responsible for the Group’s Retail and Distribution businesses. Mr Goh is also a member of the Singapore Institute of Directors and an Independent Director of Juken Technologies Limited, Oakwell Engineering Limited and Vicom Limited. In recognition of his many years of social and community services, Mr Goh was awarded the Public Service Medal in 1996 and the Public Service Star in 2006 by the President of the Republic of Singapore.

Mr Goh’s last re-election as a Director was on 29 July 2010.

07

Board of Directors

yAP BoH PIn, 70

Mr Yap Boh Pin was appointed to the Board as an independent and Non-Executive Director on 1 April 2004. He is the Chairman of the Nominating Committee of the Company. He was appointed as a member to the Risk Management Committee on 8 November 2010 and was appointed the Chairman of the Company’s Audit Committee on 24 May 2011. Mr Yap is currently the managing director of B.P.Y. Private Limited, a firm of management consultants which provides financial planning, financial accounting, reviewing internal control systems as well as corporate secretarial services. Between July 1975 and January 1999, Mr Yap was a senior partner at Yap Boh Pin & Co, which provided advice on auditing, taxation, liquidation and corporate restructuring matters. He is also a director of TeleChoice International Limited and Asia Mobile Holdings Pte Ltd (a subsidiary of Singapore Technologies Telemedia Pte Ltd). Mr Yap also holds directorship in Overseas Realty (Ceylon) Plc, a public listed company in Sri Lanka.

He has also held directorships in various public companies between 1975 and 2000, including Singapore Land Limited, L&M Investments Limited and Pan Pacific Public Company Limited. During his appointment by these companies, Mr Yap was a member of their executive committee and/or audit committee, assisting in the evaluation and recommendation of changes to their system of internal controls as well as corporate governance.

Beyond the corporate sector, Mr Yap is actively involved in various non-profit, educational and social welfare organisations. He is a member of the Board of Governors of the Singapore Hokkien Huay Kuan, member of the Board of Trustees of Chinese Development Assistance Council and its Audit Committee. He is also a member of the Board of Directors and Treasurer of Singapore Heart Foundation. At end January 2008, Mr Yap was appointed as Director, ACS (International).

Mr Yap qualified as Chartered Accountant from the Institute of Chartered Accountants in England and Wales in 1966. He is a Fellow of both the Institute of Certified Public Accountants of Singapore, and the Institute of Chartered Accountants in England and Wales.

Mr Yap’s last re-election as a Director was on 30 July 2009.


Corporate Data

08

AUDIt CoMMIttee Mr Yap Boh Pin (Chairman)Mr Goh Yeow Tin (appointed with effect from 24 May 2011)Mr Wong Heang Fine

ReMUneRAtIon CoMMIttee Tan Sri Dato’ Kamaruzzaman Bin Shariff (Chairman)Mr Goh Yeow TinMr Wong Heang Fine

noMInAtInG CoMMIttee Mr Yap Boh Pin (Chairman)Mr Goh Yeow Tin (appointed with effect from 24 May 2011)Tan Sri Dato’ Kamaruzzaman Bin Shariff

CoMPAny seCRetARIes Ms Foo Soon SooMs Barbara Seng Suet Shee

sHARe & WARRAnt ReGIstRAR AnDsHARe tRAnsFeR oFFICe KCK CorpServe Pte Ltd333 North Bridge Road #08-00 KH KEA BuildingSingapore 188721

AUDItoRs Foo Kon Tan Grant Thornton LLP Certified Public Accountants47 Hill Street, #05-01 Singapore Chinese Chamber of Commerce & Industry Building Singapore 179365

Partner: Mr Kon Yin Tong (Appointed on 2 April 2010)

PRInCIPAL BAnKeR United Overseas Bank LimitedRHB Bank BerhadOversea-Chinese Banking Corporation Limited

ReGIsteReD oFFICe LERENO BIO-CHEM LTD (Registration No. 197401961C)149 Rochor Road#05-13/15 Fu Lu Shou ComplexSingapore 188425Tel: 6339 2822Fax: 6339 0020Our website: www.lerenobc.com.sg

sPonsoR Collins Stewart Pte. Limited 77 Robinson Road #21-02Singapore 068896

BoARD oF DIReCtoRs Tan Sri Dato’ Kamaruzzaman Bin Shariff, Non-Executive ChairmanMr Ong Puay Koon, Managing Director and Chief Executive OfficerMr Ong Choon Lui, Executive DirectorMr Goh Yeow Tin, Non-Executive DirectorMr Peter John Farrar, Non-Executive Director (ceased with effect from 24 May 2011)Mr Wong Heang Fine, Non-Executive DirectorMr Yap Boh Pin, Non-Executive Director


09


10

Senior Management

nAMe DesIGnAtIon AGe QUALIFICAtIon exPeRIenCe

Lim Leong Kiat, PBM Deputy President and Chief Financial Officer

58 Bachelor of Commerce (Accountancy), FCPA

Mr Lim has more than 30 years of audit and finance/accounting working experience. He is a fellow member of the Institute of Certified Public Accountants of Singapore. He is also very active in community service and was conferred the Pingat Bakti Masyarakat (PBM) Award by the President of Singapore in 2002.

Seng Suet Shee, Barbara

Executive Vice President, Head (Legal and Corporate Affairs) and Joint Company Secretary

36 Bachelor of Law (Hons) Ms Seng joined the Company in September 2003 as Senior Contracts Manager of the Contracts Department. Ms Seng previously practised as an advocate and solicitor in Singapore and has more than 10 years experience dealing in diverse areas of law ranging from banking, corporate, mergers and acquisitions, joint venture, litigation, building construction and corporate secretarial services.

Lee tze Ian Senior Vice President and Head (Technical & Operations)

42 MBA (Finance & International Business), Bachelor of Engineering (Chemical)

Mr Lee joined the Company on6 November 2006. Mr Lee has over 15 years of experience in business development, project management and process engineering in the renewable energy, oleochemicals, environmental engineering and construction industries.

Chan-ong Ai Koon (Mrs)

Vice President and Head (Human Resource and Administration)

37 Bachelor of Commerce (Accounting), CPA - Singapore, CPA - Australia

Ms Ong joined the Company on1 December 2003. She has more than 10 years experience in finance and accounting and human resource management.


11

Financial Highlights

3,000

2,500

2,000

1,500

1,000

500

0

20

15

10

5

0

-5

1.5

1.2

0.9

0.6

0.3

0.0

-0.3

0

-10

-20

-30

-40

-50

tURnoVeR ($’000)

sHAReHoLDeR eQUIty ($’million) net tAnGIBLe Assets PeR sHARe (Cents)

Loss BeFoRe tAx ($’million)

2007 2008 2009 2010 2011

2007 2008 2009 2010 2011

2007 2008 2009 2010 2011

11.25 11.47

(2.15)

0.80 0.75

(0.08)

(9.9)

(20.5)

(5.7)

5.4 0.45

(45.2)

17.3 1.29

(8.8)

2007 2008 2009 2010 2011

0 0

2,750

3226

sHARe CAPItAL ($’million)

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

no. oF IssUeD sHARes (’billion)

1.2001.341 1.405

103

124

2225

311.536

2.8663.0

2.5

2.0

1.5

1.0

140

120

100

80

60

40

20

0

FInAnCIAL HIGHLIGHts FoR tHe PAst FIVe yeARs

Restated Fy 2011 FY 2010 FY 2009 FY 2008 FY 2007 s$’000 S$’000 S$’000 S$’000 S$’000 Turnover 0 0 6 322 2,750 Loss before tax (20,481) (5,783) (9,937) (8,833) (45,183) Loss after tax (20,481) (5,783) (9,962) (8,836) (45,230) Loss attributable to shareholders (20,481) (5,782) (9,961) (8,834) (45,230) Shareholder equity (2,154) 11,473 11,250 17,346 5,353 Cents Cents Cents Cents CentsEPS (0.82) (0.41) (0.72) (0.67) (6.28) NTA per share (0.08) 0.75 0.80 1.29 0.45


FInAnCIAL Contents

Statement of Corporate Governance 13 Directors’ Report 23Statement by Directors 27 Independent Auditors’ Report 28 Statements of Financial Position 30 Consolidated Statement of Comprehensive Income 31Consolidated Statement of Changes in Equity 32Consolidated Statement of Cash Flows 33 Notes to the Financial Statements 34 Shareholding Statistics 69Notice of Annual General Meeting 72 Proxy Form

13


Statement of Corporate Governance

Lereno Bio-Chem Ltd (the “Company”) is committed to ensuring and maintaining a high standard of corporate governance within the Group to ensure transparency and protection of the interests of the Company’s shareholders. This report describes the main corporate governance framework and practices of the Company with specific reference made to each of the principles of the Code of Corporate Governance 2005 (the “Code”). The Company will continue to maintain its systems and corporate governance processes to ensure compliance with the Code.

BOARD MATTERS

Principle 1: Board’s Conduct of its Affairs

The Board of Directors (the “Board”) comprises 2 Executive and 4 Non-Executive Directors having the appropriate mix of core competencies and diversity of experience to direct and lead the Company to protect and enhance long-term shareholders’ value. As at the date of this report, the Board comprises the following members:

Tan Sri Dato’ Kamaruzzaman Bin Shariff (Non-Executive Chairman and Independent Director)Ong Puay Koon (Managing Director and Chief Executive Officer)Ong Choon Lui (Executive Director)Goh Yeow Tin (Non-Executive and Independent Director)Wong Heang Fine (Non-Executive and Independent Director)Yap Boh Pin (Non-Executive and Independent Director)

Mr Peter John Farrar (Non-Executive and Independent Director) stepped down from the Board of Directors as well as resigned as the Chairman of the Audit Committee and member of the Nominating Committee of the Company with effect from 24 May 2011 .

The Board oversees the management of the Company. It sets the corporate strategies of the Group and sets directions and goals for the management. It supervises the management and monitors performance of these goals to enhance shareholders’ value. The Board is responsible for the overall corporate governance of the Group.

The primary functions of the Board, apart from its statutory responsibilities, are:

- evaluating and approving corporate policies, budgets and strategic direction of the Group;- monitoring and reviewing the financial performance including approval of all financial results announcements;- approving annual results and accounts;- approving and authorising of major investment transactions such as fund raising exercises;- authorising of material acquisitions and disposal of non-core assets and investments;- assuming responsibility for corporate governance;- establishing a framework of prudent and effective controls which enables risk to be assessed and managed; and- succession planning and management development.

Newly-appointed Directors are oriented on the Group’s strategic direction, business operations and governance practices upon their appointment. Existing Directors of the Company are encouraged to participate in seminars and/or discussion groups to be kept abreast of latest developments, such as relevant changes to statutes and regulatory requirements applicable to the Group.

To facilitate effective management, the Board has formed Board Committees namely the Audit Committee, the Nominating Committee and the Remuneration Committee to assist in carrying out and discharging its duties and responsibilities efficiently and effectively.

These Board Committees function within clearly defined terms of reference and operating procedures, which are reviewed on a regular basis. The effectiveness of each Board Committee is also constantly reviewed by the Board.

14



The Company has adopted internal guidelines setting forth matters that require Board approval. The types of material transactions that require Board approval under such guidelines include those listed below: -

(a) approval of results announcements;(b) approval of annual financial statements;(c) declaration of interim dividends and proposal of final dividends;(d) convening of shareholders’ meetings;(e) approval of corporate strategy;(f) authorization of merger and acquisition transactions; and (g) authorization of major transactions.

The Board meets regularly, at least four times a year and as warranted by circumstances to deliberate on urgent substantive matters or when required to address any specific significant matters that may arise from time to time. The Articles of Association of the Company permit the Board to hold its meetings via telephone conference and other electronic or telegraphic means. The attendance of Directors at meetings of the Board and the meetings of the various Board Committees as well as the frequency of meetings during the financial year are set out in the following Table 1:-

Table 1 Directors’ attendance at Board and Board Committee Meetings held for the financial year ended 31 March 2011

BOARD AUDIT COMMITTEE

REMUNERATION COMMITTEE

NOMINATING COMMITTEE

Name of Director No. of Meetings attendedTan Sri Dato’ Kamaruzzaman Bin Shariff 5 out of 5 - 1 out of 1 1 out of 1Ong Puay Koon 5 out of 5 - - -Ong Choon Lui 5 out of 5 - - -Goh Yeow Tin (*) 5 out of 5 - - -Peter John Farrar # 5 out of 5 4 out of 4 - 1 out of 1Wong Heang Fine 4 out of 5 3 out of 4 1 out of 1 -Yap Boh Pin 5 out of 5 4 out of 4 - 1 out of 1

* Appointed to the Remuneration Committee with effect from 25 May 2010.

# Stepped down from the Board and resigned as Chairman of the Audit Committee and member of the Nominating Committee with

effect from 24 May 2011.

Principle 2: Board Composition and Guidance

The Board now comprises 2 Executive Directors and 4 Non-Executive and Independent Directors.

The criterion for independence is based on the definition given in the Code. The Board considers an “independent” director as one who has no relationship with the Company, its related companies or officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Director’s independent business judgment of the conduct of the Group’s affairs with a view to the best interests of the Group. With the majority of our Directors being non-executive and independent of management, the Board is able to exercise objective judgment on corporate affairs and no individual or small group of individuals is able to dominate the Board’s decision making. The independence of each Director is reviewed annually by the Nominating Committee (the “NC”), which confirms that the Independent Directors make up at least one-third of the Board.

The Board members possess wide ranging experiences in the areas of strategic planning, business and management, and accounting and finance for the industry which the Group operates in. The profiles of the Board members are set out on pages 4 to 7 of this annual report.

15



The composition of the Board is reviewed on an annual basis by the NC to ensure that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective functioning and informed decision-making. The NC opined that the current size of the Board is appropriate, taking into account the nature and scope of the Group’s operations.

The Non-Executive Directors constructively challenge and help develop proposals on strategy and also review the performance of management in meeting agreed goals and objectives, and monitor the reporting of performance.

Particulars of interests of Directors who held office at the end of the financial year in shares, debentures, warrants and share awards and/or share options in the Company and in related corporations (other than wholly-owned subsidiaries) are set out in the Directors’ Report on pages 23 to 26 of this annual report.

Principle 3: Chairman and Chief Executive Officer

The Company believes that a clear division of responsibilities between the Non-Executive Chairman and Chief Executive Officer (“CEO”) ensures proper balance of power, increased accountability and greater capacity of the Board for independent decision-making. The positions of the Non-Executive Chairman and CEO are held by Tan Sri Dato’ Kamaruzzaman Bin Shariff and Mr Ong Puay Koon respectively and they are not related to each other.

The Chairman’s duties and responsibilities include:-

- scheduling meetings to enable the Board to perform its duties responsibly;- preparing meeting agenda in consultation with the CEO;- ensuring the proper conduct of meetings and accurate documentation of the proceedings;- ensuring the smooth and timely flow of information between the Board and management and between the Company

and its shareholders;- facilitating the effective contribution of Non-Executive Directors;- promoting high standards of corporate governance; and- ensuring compliance with internal policies and guidelines of the Company.

The CEO’s duties and responsibilities include:-

- improving, developing, extending, maintaining, advising and promoting the Company’s and the Group’s businesses to protect and further the reputation, interest and success of the Company and the Group;

- undertaking such duties and exercising such powers in relation to the Company, the Group and their businesses as the Board shall from time to time properly assign to or vest in him in his capacity as CEO and all other matters incidental to the same; and

- overseeing, formulating and implementing corporate strategies and directions for the affairs of the Group.

Principle 4: Board Membership

The NC currently comprises the following:-

Yap Boh Pin (Chairman of NC and Non-Executive & Independent Director)Goh Yeow Tin (Member and Non-Executive & Independent Director)Tan Sri Dato’ Kamaruzzaman Bin Shariff (Member and Non-Executive & Independent Director)

Mr Peter John Farrar stepped down from the Board of Directors as well as resigned as the chairman of the Audit Committee and member of the Nominating Committee of the Company with effect from 24 May 2011. Mr Goh Yeow Tin was appointed to the Nominating Committee with effect from 24 May 2011.

The Board considers that the members of the NC have sufficient expertise and experience to discharge its responsibilities properly.

16



The NC is established for the purpose of ensuring that there is a formal and transparent process for all board appointments. It has adopted written terms of reference defining its membership, administration and duties.

The duties and responsibilities of the NC as set out in the Terms of Reference approved by the Board include the following:-

- to make recommendations to the Board on all Board appointments and re-appointments;- to review the Board structure, size and composition and make recommendations to the Board with regards to any

necessary adjustments;- to make recommendations on re-nomination of any Director having regard to each Director’s contribution and

performance;- to determine annually whether or not a Director is independent; and ensure that the Board comprises at least one-

third of Independent Directors; and- to make recommendation to the Board on the performance criteria and appraisal process to be used for the

evaluation of the individual Director as well as the effectiveness of the Board as a whole, which criteria and process shall be subject to the Board’s approval.

Pursuant to the Articles of Association of the Company, one-third of the Directors (except the Managing Director) must retire from office at an Annual General Meeting of the Company. Therefore, all the Directors must retire and may submit themselves for re-election at regular intervals at least once in every three years.

When a Director has multiple board representations, the NC also considers whether or not the Director is able to and has adequately carried out his duties as a Director of the Company. The search and nomination process for new Directors (if any) will be conducted through contacts and recommendations that go through the normal selection process, to ensure the search for the right candidates is as objective and comprehensive as possible.

Principle 5: Board Performance

The NC has set up a framework for the formal assessment of the performance of the Board as a whole and is in the process of setting up a framework for the formal assessment of the performance and contribution by each Director. The NC has established objective performance criteria by which the Board’s performance may be evaluated.

Framework for assessment of Board performance

Based on the recommendations by the NC, the Board has established processes and objective performance criteria for evaluating the effectiveness of the Board as a whole.

In evaluating the Board’s performance, the NC considers a set of quantitative and qualitative performance criteria. These criteria have been approved by the Board and have not changed from last year. The performance criteria for the Board evaluation were in respect of Board size and composition, Board processes, Board information, Board performance in relation to discharging its principal functions and responsibilities and targets.

Principle 6: Access to Information

We believe that in order to ensure that the Board is able to fulfill its responsibilities management is required to provide timely and complete information that requires the Board’s decision as well as periodic reports on material operational and financial matters of the Company and of the Group.

As a general rule, the Board papers are required to be sent by management to Directors at least seven days before the Board meeting so that the members may better understand the matters before the Board meeting and discussion may be focused on questions that the Board has.

The Directors have separate and independent access to the Company’s senior management who together with the Joint Company Secretaries, are responsible for ensuring that the Board procedures are followed and that applicable rules and regulations are complied with. Under the Articles of Association of the Company, the decision to appoint or remove the

17



Company Secretaries can only be taken by the Board as a whole. The Company Secretaries or their respective representatives administer, attend and prepare minutes of Board and Board committee meetings as well as Shareholders’ meetings. They assist the Chairman in ensuring that Board procedures are followed and regularly reviewed to ensure effective functioning of the Board, and that the Company’s Memorandum and Articles of Association and relevant rules and regulations, including requirements of the Companies Act, Cap. 50 and the Catalist rules of Singapore Exchange Securities Trading Limited are complied with. They also assist the Chairman and the Board in implementing and strengthening corporate governance practices and processes with a view to enhancing long-term shareholders’ value. They are also the primary channel of communication between the Company, the Company’s Catalist Sponsor and the Singapore Exchange Securities Trading Limited.

The Directors may communicate directly with the management and the Joint Company Secretaries on all matters whenever they deem necessary.

The Board has the right to seek independent professional advice as and when necessary to enable it to discharge its responsibilities effectively. Subject to the approval of the Chairman, the Directors of the Company, whether as a group or individually, may seek and obtain independent professional advice to assist them in their duties, at the expense of the Company.

REMUNERATION MATTERS

Principle 7: Procedures for Developing Remuneration Policies

The Remuneration Committee (“RC”) comprises three members, all of whom are Non-Executive and Independent Directors:-

Tan Sri Dato’ Kamaruzzaman Bin Shariff (Chairman of RC and Non-Executive and Independent Director)Goh Yeow Tin (Member and Non-Executive and Independent Director)Wong Heang Fine (Member and Non-Executive and Independent Director)

The RC is established for the purpose of ensuring that there is a formal and transparent procedure for determining the remuneration packages of individual directors. In setting remuneration packages, the Company takes into account pay and employment conditions within the same industry and in comparable companies, as well as the Group’s relative performance and the performance of individual Directors. The overriding principle is that no Director should be involved in deciding his own remuneration.

The duties and responsibilities of the RC as set out in the Terms of Reference approved by the Board include the following:-

- reviewing the remuneration packages and terms of employment of all Executive Directors and the CEO;- reviewing and recommending Directors’ fees;- reviewing remuneration of all managerial staff that are related to any of the Directors, the CEO and any substantial

shareholder of the Company; and- reviewing and making recommendation to the Board on the implementation of any appropriate long term incentive

schemes for the Directors and employees of the Group.

LBC Restricted Share Scheme (“RSS”) and LBC Performance Share Scheme (“PSS”)

The Remuneration Committee administers the LBC RSS and LBC PSS.

The information required to be disclosed pursuant to Rule 851 of the Section B: Rules of Catalist of the SGX-ST Listing Manual (the “Catalist Rules”) is set out on pages 24 to 26 of this annual report.

Rules 851(1)(c) and (d) of the Catalist Rules are not applicable as the Company does not have a parent company.

No participant of the RSS and PSS received 5% or more of the total awards available under the RSS and PSS for the financial year under review and there were no shares granted at a discount under the RSS and PSS for the financial year under review.

18



Principle 8: Level and Mix of Remuneration

The remuneration of Executive Directors is based on service agreements entered into with the Company. The Executive Directors did not receive Directors’ fees in this financial year.

The remuneration of the Non-Executive Directors is set out in accordance with a framework comprising basic and Board Committees’ fees. In determining the quantum of such fees, factors such as frequency of meetings, time spent and responsibilities of Directors are taken into account. Directors’ fees are paid subject to approval of shareholders at the annual general meeting.

Principle 9: Disclosure on Remuneration

A breakdown, showing the level and mix of each Director’s remuneration for the financial year ended 31 March 2011 is as follows:

NameDirectors’

FeeBase/Fixed

Salary

Restricted/ Performance Share Award

Other Benefits Total

Directors S$500,000 to $999,999 Ong Puay Koon 0% 92% 6% 2% 100% $150,000 to $199,999 Ong Choon Lui 0% 92 % 0% 8% 100% Below S$150,000 Tan Sri Dato’ Kamaruzzaman Bin Shariff 100% 0% 0% 0% 100%Peter John Farrar # 100% 0% 0% 0% 100%Yap Boh Pin 100% 0% 0% 0% 100%Wong Heang Fine 100% 0% 0% 0% 100%Goh Yeow Tin 100% 0% 0% 0% 100%

Note: Other benefits include allowance, benefits in kind and employer CPF contributions

# Resigned from the Board, the Audit Committee and the Nominating Committee with effect from 24 May 2011.

The remuneration of the top five executives (excluding Directors) of the Group for the financial year ended 31 March 2011 is as follows:-

NameBase/Fixed

Salary

Restricted/Performance Share Award Other Benefits Total

Top 5 Executives S$200,000 to S$250,000 Lim Leong Kiat 87% 3% 10% 100%

S$150,000 to S$199,999 Seng Suet Shee, Barbara 82% 7% 11% 100%

Below S$150,000 Lee Tze Ian 66% 5% 29% 100%Ong Ai Koon 76% 3% 21% 100%

Note: Other benefits include allowance, benefits in kind and employer CPF contributions

19



Immediate Family Member of Directors or Substantial Shareholders

Save for Mr Ong Choon Lui, there are no immediate family members of Directors or substantial shareholders whose remuneration exceeded $150,000 for the financial year ended 31 March 2011.

ACCOUNTABILITY AND AUDIT

Principle 10: Accountability

The Board is accountable to the shareholders and is mindful of its obligations to furnish timely information and to ensure full disclosure of material information to shareholders in compliance with the statutory requirements and the Catalist Rules.

Price sensitive information will be publicly released either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Financial results and annual reports will be announced or issued within legally prescribed periods.

Principle 11: Audit Committee

The Audit Committee (“AC”) comprises three members, all of whom are Non-Executive and Independent Directors:-

Yap Boh Pin (Chairman of AC and Non-Executive and Independent Director)Wong Heang Fine (Member and Non-Executive and Independent Director)Goh Yeow Tin (Member and Non-Executive and Independent Director)

Mr Peter John Farrar stepped down from the Board of Directors as well as resigned as the Chairman of the Audit Committee and member of the Nominating Committee of the Company with effect from 24 May 2011. Mr Yap Boh Pin was appointed as Chairman of the Audit Committee with effect from 24 May 2011. Mr Goh Yeow Tin was appointed to the Audit Committee with effect from 24 May 2011.

The members of the AC have many years of experience in business management and financial services. The Chairman of the Audit Committee is a very experienced and qualified accountant and the other members have significant experience in financial management. The Board views the members of the AC to have sufficient financial management expertise and experience to discharge their responsibilities properly.

The primary responsibility of the AC is to provide the support and assistance to the Board in ensuring that a high standard of corporate governance is maintained and preserved at all times. It acts as a conduit between the Board and external auditors. The AC has full access to all management personnel and can call upon any member of management and staff or any member of the Board to attend its meetings.

The AC has written Terms of Reference approved by the Board. The AC’s responsibilities include the following:

- to review the audit plan of the Company’s internal and external auditors and ensure the adequacy of the Company’s system of accounting controls and the co-operation given by the Company’s management to the external and internal auditors;

- to review the Group’s financial and operating performance;- to review interested person transactions in accordance with the requirements of the Catalist Rules;- to review the cost effectiveness, independence and objectivity of the external auditors;- to evaluate the Group’s system of internal controls, including financial, operational and compliance controls and risk

management via reviews carried out by the internal auditor;- to review and make recommendations to the Board on the appointment and re-appointment of internal and external

auditors of the Company and the Group;- to review annual financial statements of the Company and the consolidated financial statements of the Group, prior

to submission to the Board together with the external auditors’ reports on those financial statements; and- other related matters raised by the Board.

20



The AC has power to conduct or authorise investigations into any matters within the AC’s scope of responsibility.

The AC conducts reviews of all non-audit services provided by the external auditors and is satisfied that the nature and extent of such services does not prejudice the independence and objectivity of the auditors. For the financial year ended 31 March 2011, there were no non-audit fees paid to the auditors. The AC has also conducted a review of interested person transactions.

The AC has met with the external auditors, without the presence of the Company’s management, 3 times in the financial year.

At the Extraordinary General Meeting held on 2 April 2010, the Company’s shareholders had approved the appointment of Foo Kon Tan Grant Thornton LLP as auditors of the Company. The AC has recommended that Foo Kon Tan Grant Thornton LLP be nominated for re-appoinment as auditors at the forthcoming Annual General Meeting. The Directors and the AC are satisfied that the appointment of a different auditor, F.M. Wong & Co, Malaysia for a significant associated company, Lereno Sdn Bhd, would not compromise the standard and effectiveness of the audit of the Company and Rule 716 of the Catalist Rules has been complied with.

The Company has put in place arrangements for a whistle-blowing framework by which staff of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters with the Audit Committee. The objective for such arrangement is to ensure independent investigation of such matters and for appropriate follow-up action.

Principle 12: Internal Controls

The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities. The Board recognises that the internal control framework is designed to manage instead of eliminate the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss. Notwithstanding the aforesaid, procedures are in place to identify major business risks and evaluate potential financial effects. In addition, the AC reviews and evaluates annually the effectiveness of the Group’s system of internal controls, including financial, operational and compliance controls and risk management.

The external auditors carry out, in the course of their statutory audit, an annual review of the effectiveness of the Company’s material internal controls to the extent laid out in their audit plan. Material internal control weaknesses noted during their audit (if any) and the auditors’ recommendations are reported to the Board and the Audit Committee. Steps are taken to rectify any weaknesses reported.

Principle 13: Internal Audit

The scope of internal audit work is determined annually by the AC. In 2008/2009, the Group engaged one of the big four international accounting firms to carry out part of the internal audit function and their work covered corporate governance and financial accounting process and controls. In the course of their work, certain reviews of operational and compliance controls and audits of other management processes were carried out and they reported directly to the AC. In 2010/2011, given the very limited extent of operations of the Group, no independent internal audit work was undertaken and the Board and AC themselves undertook to provide the necessary oversight of controls over the Group’s assets and processes.

The AC has reviewed the Company’s risk assessment and management controls in place, it is satisfied that there are adequate internal controls in the Group, including financial, operational and compliance controls, and risk management systems.

Principle 14: Communication with Shareholders Principle 15: Encourage Greater Shareholder Participation

The Board is mindful of the obligations to provide timely disclosure of material information in accordance with the Corporate Disclosure Policy of the Singapore Exchange Securities Trading Limited.

21



Information is disseminated to shareholders on a timely basis through:

(a) SGXNET announcements (which are reviewed by the Company’s Catalist Sponsor) and news releases;(b) Annual Report prepared and issued to all shareholders;(c) Press releases on major developments of the Group; and(d) Notices of and explanatory memoranda for annual general meetings (“AGMs”) and extraordinary general meetings

(“EGMs”).

The Company’s AGMs are the principal forums for dialogue with shareholders. The Chairmen of the Audit, Remuneration and Nominating Committees are normally available at the meetings to answer any questions relating to the work of these Board Committees. The External Auditors are also present to assist the Directors in addressing any relevant queries by the shareholders.

Shareholders are encouraged to attend the AGM/EGM to ensure high level of accountability and to stay informed of the Group’s strategy and goals. Notice of the meeting will be advertised in newspapers and announced on SGXNET.

The Articles of Association allow a member of the Company to appoint one or two proxies to attend and vote instead of the member. The Company is not implementing absentia-voting methods such as by mail, email or fax until security, integrity and other pertinent issues are satisfactorily resolved.

Minutes or notes of general meetings are prepared by the Company and these may be made available to shareholders upon their written application and payment of administrative fees incurred by the Company.

RISK MANAGEMENT

The Board of Directors has set up a Risk Management Committee (“RMC”) to review the overall risk management guidelines/ framework, review and recommend risk limits, assess the adequacy and effectiveness of the risk management policies and systems and to assist in reviewing the risks for significant transactions. The RMC has its own written terms of reference.

The RMC comprises the following three members: -

Goh Yeow Tin (Chairman of RMC and Non-Executive and Independent Director)Ong Puay Koon (Member and Managing Director and Chief Executive Officer)Yap Boh Pin (Member and Non-Executive and Independent Director)

Mr Wong Heang Fine, Mr Ong Choon Lui and Mr Lim Leong Kiat stepped down from the RMC on 8 November 2010. Mr Goh Yeow Tin and Mr Yap Boh Pin were appointed to the RMC on 8 November 2010.

The risks for less significant transactions are reviewed by the Group Management Committee (“GMC”). The GMC’s responsibilities include amongst other things, the monitoring and improvement of the overall effectiveness of the Group’s risk management system and to review the risk limits to manage its overall risk exposure. The GMC reports to the RMC on any matters relating to risk that it wishes to refer to the RMC.

The GMC comprises the following three members:-

Ong Puay Koon (Chairman of GMC and Managing Director and Chief Executive Officer)Ong Choon Lui (Member and Executive Director)Lim Leong Kiat (Member, Deputy President and Chief Financial Officer)

Details of the various risk factors and the management of such risks are outlined in Note 35 of the financial statements.

22



SECURITIES TRANSACTIONS

The Company has internal compliance policies to provide guidance to its officers with regard to dealing in its securities. Officers are advised not to deal in the Company’s securities on short-term considerations.

The Company has in place a policy prohibiting share dealings by Directors and employees of the Group for the period of one month prior to the announcement of the Group’s yearly results, and for the period of two weeks before the announcement of the Group’s quarterly results, and ending on the date of the announcement of the relevant results. Directors and employees are expected to observe the insider trading laws at all times even when dealing in securities within permitted trading periods.

INTERESTED PERSON TRANSACTIONS

Name of Interested Person

Aggregate value of all interested person transactions during the

financial year under review (excluding transactions less than $100,000

and transactions conducted under shareholders’ mandate pursuant to Rule 920)

Aggregate value of all interested person transactions conducted under shareholders’ mandate pursuant to Rule 920

(excluding transactions less than $100,000)

$’000 $’000

Cost and expenses

Office rental billed by Sun Continental Investment & Trading Pte. Ltd. (1)

- 255

Note:

(1) Sun Continental Investment & Trading Pte. Ltd. is a company in which Mr Ong Puay Koon and his immediate family member(s) have

an aggregate interest of more than 30%.

Material Contracts

There was no material contract entered into by the Company or any of its subsidiary companies involving the interest of the CEO, any Director, or controlling shareholder.

Non-Sponsorship Fees

An advisory fee of $25,000 was due to the company’s Sponsor, Collins Stewart Pte. Limited., in respect of the rights issue completed in May 2010. Save as disclosed above, there were no other non-sponsorship fees due to Collins Stewart Pte. Limited for the financial year under review.

23


Directors’ Reportfor the financial year ended 31 March 2011

The directors submit this annual report to the members together with the audited consolidated financial statements of the Group and the Company for the financial year ended 31 March 2011.

Names of directors

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

Tan Sri Dato’ Kamaruzzaman Bin ShariffOng Puay KoonOng Choon LuiGoh Yeow TinWong Heang FineYap Boh PinPeter John Farrar (resigned on 24.5.2011)

Arrangements to enable directors to acquire shares or debentures

Except as described in “Share Schemes in the Company” below, during and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any arrangement the object of which was to enable the directors to acquire benefits through the acquisition of shares in or debentures of the Company or of any other corporate body.

Directors’ interest in shares or debentures

According to the Register of Directors’ Shareholdings kept by the Company under Section 164 of the Companies Act, Cap. 50, none of the directors who held office at the end of the financial year was interested in shares or debentures of the Company or its related corporations, except as follows:

Number of ordinary sharesShares in which

Shares registered director is deemedin the name of director to have an interest

As at31.3.2011

As at As at As at As at andDirectors 1.4.2010 31.3.2011 21.4.2011 1.4.2010 21.4.2011

Tan Sri Dato’ Kamaruzzaman Bin Shariff 932,000 932,000 932,000 - -Ong Puay Koon 145,099,814 145,099,814 145,099,814 170,541,890 170,541,890Ong Choon Lui 2,273,000 2,273,000 2,273,000 - -Goh Yeow Tin 411,000 411,000 411,000 - -Peter John Farrar 477,000 477,000 477,000 - - (resigned on 24.5.2011)Wong Heang Fine 1,129,000 1,129,000 1,129,000 20,000 20,000Yap Boh Pin 1,414,000 1,414,000 1,414,000 - -

24



Directors’ interest in shares or debentures (Cont’d)

Except as disclosed in this report, no director who held office at the end of the financial year had interest in shares, share options, warrants or debentures of the Company, or of related corporations, either at the beginning or at the end of the financial year.

Directors’ contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit, other than as disclosed in the attached financial statements and in this report, by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member of or with a company in which he has a substantial financial interest.

Share schemes in the Company

The following table sets out the information required to be disclosed pursuant to Rule 851 of the Catalist Rules:

(a) Restricted Share Scheme (“RSS”) Share awards granted to directors of the Company:

Name of Participant

Awards under RSS granted

during thefinancial year

ended 31.3.2011

Aggregate awards granted

since thecommencement

of the RSS to end of financial

year ended 31.3.2011

Aggregate awards issued


of the RSS to end of financial


Aggregate awards under

RSS not yet issued at end of

financial year ended 31.3.2011

DirectorsTan Sri Dato’ Kamaruzzaman Bin Shariff - 315,000 315,000 -Ong Puay Koon (1) 760,000 3,800,000 3,800,000 -Ong Choon Lui (2) (4) 392,000 1,956,000 1,956,000 -Peter John Farrar - 32,000 32,000 - (resigned on 24.5.2011)Wong Heang Fine - 340,000 340,000 -Yap Boh Pin - 265,000 265,000 -

Associate of a controlling shareholderOng Ai Koon (3) (4) - 1,242,000 1,242,000 -

Note: (1) Ong Puay Koon (“OPK”) is also controlling shareholder of the Company

(2) Ong Choon Lui is the son of OPK (3) Ong Ai Koon is the daughter of OPK (4) An associate of a controlling shareholder

25



Share Schemes (Cont’d)

(b) Performance Share Scheme (“PSS”) Share awards granted to directors of the Company:

Name of Participant

Awards under PSS granted

during the financial year

ended 31.3.2011



of the PSS to end of financial




of the PSS to end of financial


Aggregate awards under

PSS not yet issued at end of

financial year ended

31.3.2011

DirectorsTan Sri Dato’ Kamaruzzaman Bin Shariff - 891,000 617,000 274,000Ong Puay Koon (1) - 11,533,000 11,533,000 -Ong Choon Lui (2) (4) - 391,000 391,000 -Goh Yeow Tin - 411,000 411,000 -Peter John Farrar - 754,000 445,000 309,000 (resigned on 24.5.2011)Wong Heang Fine - 789,000 789,000 -Yap Boh Pin - 789,000 789,000 -

Associate of a controlling shareholderOng Ai Koon (3) (4) - 915,000 915,000 -

Note: (1) Ong Puay Koon (“OPK”) is also controlling shareholder of the Company

(2) Ong Choon Lui is the son of OPK (3) Ong Ai Koon is the daughter of OPK (4) An associate of a controlling shareholder

(c) During the financial year, no new ordinary shares in the capital of the Company were granted pursuant to RSS and an aggregate of 2,409,000 ordinary shares in the capital of the Company were issued to eligible participants of the Group pursuant to the RSS.

During the financial year, 6,089,000 new ordinary shares in the capital of the Company were granted and issued to the eligible participants of the Group pursuant to the PSS.

(d) Categories of persons to whom the shares were granted since the commencement of the RSS and PSS on 14 July 2007 to 31 March 2011:

No. of RSS & PSSCategory No. of persons shares granted

Executive directors 3 47,351,000Non-executive directors 7 6,056,000Employees 22 27,881,000

Total 32 81,288,000

26



Share Schemes (Cont’d)

(i) The persons to whom the shares have been granted do not have the right to participate, by virtue of the share schemes, in any share issue of any other Company.

(ii) The aggregate number of shares granted for the financial year ended 31 March 2011 is 6,089,000 shares.

(iii) The aggregate number of shares granted since the commencement of the RSS and PSS on 14 July 2007 to 31 March 2011 is 81,288,000 shares.

(iv) The shares of the Company issued under the RSS and PSS at the end of the financial year are set out in Note 15 to the financial statements.

Audit Committee

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. Its functions are detailed in the Report on Corporate Governance.

Independent auditor

The independent auditor, Foo Kon Tan Grant Thornton LLP, Certified Public Accountants, have expressed their willingness to accept re-appointment.

On behalf of the board of directors,

ONG PUAY KOONDirector

ONG CHOON LUIDirector

Singapore8 July 2011

27


Statement By Directorsfor the financial year ended 31 March 2011

In the opinion of the Directors, the accompanying statements of financial position, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows, together with the notes thereon, are drawn up so as to give a true and fair view of state of affairs of the Group and of the Company as at 31 March 2011 and of the results, changes in equity and cash flows of the Group for the financial year ended on that date and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the board of directors,

ONG PUAY KOONDirector

ONG CHOON LUIDirector


28


Independent Auditor’s Report

To the members of Lereno Bio-Chem Ltd

We have audited the accompanying financial statements of Lereno Bio-Chem Ltd (“the Company”) and its subsidiaries (“the Group”), which comprise the statements of financial position of the Group and of the Company as at 31 March 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

29


Independent Auditor’s Report

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2011 and the results, changes in equity and the cash flows of the Group for the year ended on that date.

Emphasis of matter

Without qualifying our opinion, we draw your attention to Note 2 to the financial statements. The Group incurred a net loss of $20,481,000 and has net operating cash outflows of $3,780,000 for the financial year ended 31 March 2011; and as at that date, the Group’s and the Company’s current liabilities exceeded the Group’s and the Company’s current assets by $2,171,000 and $1,760,000, respectively, and the Group and the Company have a net deficit in equity of $2,154,000 and $1,743,000, respectively. These factors indicate the existence of a material uncertainty which may cast significant doubt about the Group’s and the Company’s ability to continue as a going concern and for its listing status to be maintained.

The validity of the going concern assumption on which these financial statements are prepared depends on the ability of the Group and the Company to generate sufficient revenues and/or to raise new funds from lenders, third parties and shareholders or through the injection or acquisition of new businesses, including the completion of the proposed acquisition of Bintai Kindenko Pte Ltd which was announced on 25 April 2011. The major shareholder has undertaken to provide financial support as and when it may be required for the Group and the Company to meet its liabilities and its normal operating expenses to be incurred to enable the Group and the Company to continue as a going concern.

If the Group and the Company are unable to generate sufficient revenues and/or raise new funds from lenders, third parties and shareholders or through the injection or acquisition of new businesses, or if the undertaking from the major shareholder to provide financial support is not fulfilled, it may not be able to continue in operational existence for the foreseeable future, and the Group and the Company may be unable to discharge its liabilities in the normal course of business. Adjustments may have to be made to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded in the balance sheet. In addition, the Group and the Company may have to reclassify long term assets and liabilities as current assets and liabilities respectively, and to provide further liabilities that may arise. No such adjustments have been made to these financial statements. In forming our opinion, we have considered the adequacy of the disclosure of this matter in the financial statements.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by the subsidiaries incorporated in the Republic of Singapore of which we are the auditor, have been properly kept in accordance with the provisions of the Act.

Foo Kon Tan Grant Thornton LLPPublic Accountants andCertified Public Accountants


30


Statements of Financial Positionfor the financial year ended 31 March 2011

The Group The Company2011 2010 2011 2010

Note $’000 $’000 $’000 $’000AssetsNon-Current Property, plant and equipment 4 117 90 117 81Agricultural assets 5 - 1,287 - -Goodwill on consolidation 6 - 3,686 - -Subsidiaries 7 - - - 842Associate companies 8 - 11,609 - 11,609Other assets 9 - 200 - 200

117 16,872 117 12,732Current Trade receivables 10 - 37 - -Other receivables 11 93 124 35 62Prepayments 57 28 55 25Amounts due from subsidiaries 12 - - - 3,727Amounts due from associate

companies 13 - 369 - 369Amounts due from related parties 13 176 180 7 7Cash and bank balances 14 980 58 951 14

1,306 796 1,048 4,204

Total assets 1,423 17,668 1,165 16,936

Equity Capital and ReservesShare capital 15 31,943 25,153 31,943 25,153Accumulated losses (37,350) (16,869) (36,836) (16,724)Other reserves 16 3,253 3,189 3,150 3,150Attributable to equity holders of the Company (2,154) 11,473 (1,743) 11,579Non-controlling interests - 2 - -

Total equity (2,154) 11,475 (1,743) 11,579

LiabilitiesNon-Current Obligations under hire-purchase 17 100 76 100 76

Current Trade payables 18 105 330 95 271Other payables 19 2,385 2,733 2,247 2,582Amounts due to bankers 20 - 1,946 - 1,946Provision for warranty and defects 21 219 225 - -Provision for litigation claims 22 430 430 430 430Amounts due to subsidiaries - - - 17Amounts due to related parties 13 338 453 36 35Total current liabilities 3,477 6,117 2,808 5,281

Total equity and liabilities 1,423 17,668 1,165 16,936

The annexed notes form an integral part of and should be read in conjunction with these financial statements.

31


Consolidated Statement of Comprehensive Incomefor the financial year ended 31 March 2011

Year ended Year ended31 March 2011 31 March 2010

Note $’000 $’000

Revenues- Construction income - -- Interest income - -Total revenues - -Other income 23 602 326Staff costs 25 (2,347) (2,504)Impairment of agricultural and other assets (1,492) -Impairment of investment in associate company (9,912) -Impairment of goodwill (3,686) -Depreciation of property, plant and equipment (53) (67)Other operating expenses (1,841) (1,534)Finance costs 24 (55) (116)Share of associate companies’ results (1,697) (1,888)Loss before taxation 25 (20,481) (5,783)Taxation 27 - -

Loss after taxation for the year (20,481) (5,783)

Other comprehensive income after taxation: 28- Foreign currency translation differences 64 18Other comprehensive income for the year, net of tax 64 18

Total comprehensive expense for the year (20,417) (5,765)

Loss after taxation for the year attributable to:Equity holders of the Company (20,481) (5,782)Non-control interests - (1)

(20,481) (5,783)

Total comprehensive expense attributable to:Equity holders of the Company (20,417) (5,764)Non-controlling interests - (1)

(20,417) (5,765)

Loss per share- Basic loss per share 29 (0.84) cents (0.41) cents

- Diluted loss per share 29 (0.84) cents (0.41) cents


32


Consolidated Statement of Changes in Equityfor the financial year ended 31 March 2011

Totalattributable

to equity Non-Share Translation Capital Accumulated holders of controlling

capital reserve reserve losses the parent interests TotalThe Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

Balance at 1 April 2009 22,316 21 - (11,087) 11,250 3 11,253Total comprehensive income/

(expense) for the year - 18 - (5,782) (5,764) (1) (5,765)Issue of new shares to

employees under the restricted share scheme 1,037 - - - 1,037 - 1,037

Issue of new ordinary shares for acquisition 1,800 - - - 1,800 - 1,800

Issue of warrants for acquisition - - 3,150 - 3,150 - 3,150Balance at 31 March 2010 25,153 39 3,150 (16,869) 11,473 2 11,475Total comprehensive income/

(expense) for the year - 64 (20,481) (20,417) - (20,417)Issue of new shares to

employees under the restricted share scheme 180 - - - 180 - 180

Issue of new ordinary shares under share placement 2,000 - - - 2,000 - 2,000

Issue of new ordinary shares for Rights Issue 4,610 - - - 4,610 - 4,610

Disposal of non-controllinginterests - - - - - (2) (2)

Balance at 31 March 2011 31,943 103 3,150 (37,350) (2,154) - 2,154


33


Consolidated Statement of Cash Flowsfor the financial year ended 31 March 2011

Year ended Year ended31 March 2011 31 March 2010

$’000 $’000

Cash Flows from Operating ActivitiesLoss before taxation (20,481) (5,783)Adjustments for:Depreciation of property, plant and equipment 53 67Share-based payment 180 1,037Gain on sale of investment - (177)(Gain)/loss on disposal of property, plant and equipment (33) 1Allowance on amount owing by associate company 369 -Impairment of goodwill 3,686 -Impairment of investment in associate company 9,912 -Impairment of agricultural and other assets 1,492 -Interest expense 56 116Share of associate companies’ results 1,697 1,888Operating loss before working capital changes (3,069) (2,851)Decrease/(increase) in operating receivables 68 (13)(Increase)/decrease in prepayments (29) 127Decrease in amount owing by related parties 4 -(Decrease)/increase in operating payables (584) 781Increase in amounts due from associate companies - 18(Decrease)/increase in amounts due from related parties (115) 2,077Cash (used in)/generated from operations (3,725) 139Interest paid (56) (116)Net cash (used in)/generated from operating activities (3,781) 23

Cash Flows from Investing ActivitiesAcquisition of property, plant and equipment (Note A) (10) -Proceeds from sale of investment - 349Proceeds from disposal of property, plant and equipment 48 -Net cash generated from investing activities 38 349

Cash Flows from Financing ActivitiesPayments made to bankers and financial institutions (1,326) (180)Payment made to hire-purchase creditors (63) (29)Repayment of bank overdraft (620) (309)Proceeds from Rights Issue 4,610 -Proceeds from issuance of new ordinary shares under share placement 2,000 -Net cash generated from/(used in) financing activities 4,601 (518)

Net increase/(decrease) in cash and cash equivalents 858 (146)Non-cash movement relating to acquisition of Jarak Nursery - (23)Cash and cash equivalents at beginning of year 58 209Effect of exchange differences on opening cash 64 18

Cash and cash equivalents at end of year (Note 14) 980 58

Note A: Property, plant and equipment

During the financial year, the Group acquired property, plant and equipment with an aggregate cost of $102,000 (2010 - $Nil) of which $92,000 (2010 - $Nil) was acquired by means of hire-purchase. Cash payment of $10,000 (2010 - $Nil) were made to purchase property, plant and equipment.


34


Notes to Financial Statementsfor the financial year ended 31 March 2011

1 General information

The financial statements of the Company and of the Group for the year ended 31 March 2011 were authorised for issue in accordance with a resolution of the directors on the date of the Statement By Directors.

The Company is incorporated as a limited liability company and domiciled in the Republic of Singapore and is listed on the Catalist with effect from 7 May 2009.

The registered office of the Company is located at 149 Rochor Road, #05-13/15 Fu Lu Shou Complex, Singapore 188425.

The principal activities of the Company are those of biofuel and investment holding. The principal activities of the subsidiaries are disclosed in Note 7 to the financial statements.

2 Going concern

The financial statements have been prepared on a going concern basis. The Group incurred a net loss of $20,481,000 (2010 - $5,783,000) and a net operating cash (outflow)/inflow of ($3,780,000) (2010 - $23,000) for the year ended 31 March 2011. At 31 March 2011, the current liabilities of the Group and the Company exceeded current assets by $2,171,000 (2010 - $5,321,000) and $1,760,000 (2010 - $1,077,000) respectively.

As of the date of this report, the directors believe that the Group and Company will be able to meet their obligations as and when they fall due in the next 12 months based on the ability of the Group and the Company to generate sufficient revenues and/or to raise new funds from lenders, third parties and shareholders or through the injection or acquisition of new businesses, including the completion of the proposed acquisition of Bintai Kindenko Pte Ltd which was announced on 25 April 2011.

If the Group and the Company are unable to continue to generate sufficient revenues and/or raise new funds from lenders, third parties and shareholders or through the injection or acquisition of new businesses, and are unable to discharge their liabilities in the normal course of business, adjustments may have to be made to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded in the balance sheet. In addition, the Group and the Company may have to reclassify long term assets and liabilities as current assets and liabilities respectively, and to provide further liabilities that may arise. No such adjustments have been made to these financial statements.

3(a) Basis of preparation

The financial statements are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) including related Interpretations to FRS (“INT FRS”) promulgated by the Accounting Standards Council. The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial information is presented in Singapore dollars, unless otherwise stated.

Significant accounting estimates and judgementsThe preparation of the financial statements in conformity with FRS requires the use of judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management’s best knowledge of current events and actions, actual results may differ from those estimates.

35



3(a) Basis of preparation (Cont’d)

The critical accounting estimates and assumptions used and areas involving a high degree of judgement are described below:

Critical assumptions used and accounting estimates in applying accounting policies

Depreciation of property, plant and equipmentProperty, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of these plant and equipment to be within 3 to 10 years. The carrying amount of the Group’s and the Company’s property, plant and equipment as at 31 March 2011 are $117,000 (2010 - $90,000) and $117,000 (2010 - $81,000) respectively. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

Income taxThe Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Provision for warranty and defectsThe Group has exposure to warranties and defects arising from obligations stated in its project contracts. Management estimates the amount of warranty and defects to be provided based on available knowledge and its prior experience, if any. The carrying amount of the Group’s provision for warranty and defects at 31 March 2011 approximated $219,000 (2010 - $225,000).

Impairment of investment in subsidiaries and associate companiesManagement performs impairment testing of investments in subsidiaries and associate companies when there are indications of impairment. When value-in-use calculations are used, management makes an estimate of the future cash flows from the cash-generating unit and also choose a suitable discount rate in order to calculate the present value of those cash flows.

When the subsidiaries and associate companies are assessed to have been impaired, impairment losses will be recognised in the profit or loss.

The carrying amounts of the Company’s investment in subsidiaries as at 31 March 2011 is $Nil (2010 - $842,000). The carrying amounts of the Group and Company’s investment in associate companies as at 31 March 2011 are $Nil (2010 - $11,609,000) and $Nil (2010 - $11,609,000) respectively. These are due to full impairment of investment in associate company.

Allowance for bad and doubtful debtsAllowances for bad and doubtful debts are based on an assessment of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances may not be collectible. The identification of bad and doubtful debts requires the use of judgement and estimates. When the expected outcome is different from the original estimate, such difference will impact carrying value of trade and other receivables and doubtful debt expenses in the period in which such estimate has been changed.

The accounting policies used by the Group have been applied consistently to all periods presented in these financial statements.

36



3(b) Interpretations and amendments to published standards effective from 2010

On 1 April 2010, the Group adopted the new or amended FRS and INT FRS that are mandatory for application from that date. This includes the following FRS and INT FRS, which are relevant to the Group:

Reference Description

FRS 27 Consolidated and Separate Financial StatementsFRS 101 First-Time Adoption of Financial Reporting Standards FRS 103 Business CombinationsINT FRS 117 Distributions of Non-Cash Assets to OwnersINT FRS 118 Transfer of Assets from CustomersImprovement to FRSs 2009

The adoption of these new/revised FRS and INT FRS did not result in substantial changes to the Group’s accounting policies nor any significant impact on these financial statements except for the following:

FRS 27 (revised) Consolidated and Separate Financial StatementsThe revised FRS 27 requires the effects of all transactions with non-controlling interests to be accounted for as equity transactions if there is no change in control. Such a change will have no impact on goodwill, nor will it give rise to a gain or loss recognised in profit or loss.

When control over a subsidiary is lost, any interest retained is re-measured to fair value and the resulting gain or loss is recognised in profit or loss.

Losses incurred by a subsidiary are allocated to the non-controlling interest even if these results in the non-controlling interests having deficit balances.

According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not impact the Group’s consolidated financial statements in respect of transactions with non-controlling interests, attribution of losses to non-controlling interests and disposal of subsidiaries before 1 January 2010. These changes will affect future transactions with non-controlling interests.

3(c) FRS and INT FRS not yet effective

As at the date of authorisation of these financial statements, the following FRS and INT FRS were issued but not yet effective:

Reference Description Effective date (Annual period

beginning on or after)

FRS 24 (Revised) Related Party Disclosures 01.01.11Amendments to FRS 32 Classification of Rights Issues 01.02.10Amendments to FRS 101 Limited Exemption from Comparative 01.07.10

FRS 107 Disclosure for First-Time AdoptersAmendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 01.01.11INT FRS 115 Agreements for Construction of Real Estate 01.01.11INT FRS 119 Extinguishing Financial Liabilities with Equity 01.07.10

InstrumentsImprovement to FRSs 2010 01.07.10/

01.01.11

The directors do not anticipate that the adoption of these FRS and INT FRS in future periods will have a material impact on the financial statements of the company in the period of their initial adoption, except for amendments to FRS 24 - Related Party Disclosures.

37



3(c) FRS and INT FRS not yet effective (Cont’d)

FRS 24 (Revised) Related Party DisclosuresThe amendment removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. It also clarifies and simplifies the definition of a related party. However, the revised definition of a related party will also mean that some entities will have more related parties and will be required to make additional disclosures.

Management is currently considering the revised definition to determine whether any additional disclosures will be required and has yet to put systems in place to capture the necessary information. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group when implement in 2011.

3(d) Summary of significant accounting policies

ConsolidationThe financial statements of the Group include the financial statements of the Company and its subsidiaries made up to the end of the financial year. Information on its subsidiaries is given in Note 7.

The results of the subsidiaries acquired during the year are included in the consolidated profit or loss from the effective date of acquisition. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All significant inter-company balances and significant inter-company transactions are eliminated on consolidation.

Business combinations are accounted for using the acquisition method. The consideration transferred for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of acquisition. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Costs attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition costs.

Any excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition date fair value of previous equity interest in the acquiree over the fair value of the net identifiable assets acquired represents goodwill. The goodwill is accounted for in accordance with the accounting policy for goodwill stated below. In instances where the latter amount exceeds the former, the excess is recognised as a gain from bargain purchase in the profit or loss on the date of acquisition.

When the control over a subsidiary is lost, the assets and liabilities of the subsidiary, including any goodwill, are derecognised. Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss.

When accounting policies of a subsidiary do not conform to those of the Company, adjustments are made on consolidation when the amounts involved are considered significant to the Group.

Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. They are presented in the consolidated statement of financial position within equity, separately from the parent shareholders’ equity, and are separately disclosed in the consolidated statement of comprehensive income. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this result in the non-controlling interests having deficit balances.

Non-controlling interestsNon-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. They are presented in the consolidated statement of financial position within equity, and are separately disclosed in the consolidated statement of comprehensive income. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this result in the non-controlling interest having deficit balances. Transactions with non-controlling interests are accounted for using the entity concept method whereby transactions with non-controlling interests are accounted for as transactions with equity holders. On acquisition of non-controlling interests, the difference between the consideration and book value of the share of the net assets acquired is reflected as being a transaction between owners and recognised directly in equity. Gain or loss on disposal to non-controlling interests is recognised directly in equity.

38



3(d) Summary of significant accounting policies (Cont’d)

GoodwillGoodwill acquired in a business combination represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable asset acquired. Goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Goodwill is allocated to cash-generating units (“CGU”) for the purpose of impairment testing.

An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.

Intangible assets in associate companiesIntangible assets acquired as part of investment in associate companies are recognised at fair value at the acquisition date. Such intangible assets are included in the carrying amount of investment in associate companies.

Intangible assets included in the carrying amount of investment in the associate companies are not tested for impairment separately. The entire carrying amount of the investment in associate companies is tested under FRS 36 for indicators of impairment as detailed in the accounting policy on “Impairment of non-financial assets”.

SubsidiariesA subsidiary is an entity controlled by the Group. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether there is control.

Shares in subsidiaries are stated at cost less allowance for any impairment losses on an individual subsidiary basis. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values on the date of acquisition, irrespective of the extent of non-controlling interest.

Associate companiesAn associate is defined as a company, not being a subsidiary or jointly controlled entity, in which the Group has significant influence, but not control, over its financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.

Investments in associate companies at company level are stated at cost. Allowance is made for any impairment losses on an individual company basis.

The Group’s share of results of associates based on the latest available audited financial statements, is included in the consolidated income statement using the equity method of accounting. In applying the equity method, unrealised gains on transactions between the Group and its associate companies are eliminated to the extent of the Group’s interest in the associate companies. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When the Group’s share of losses of an associate company equals or exceeds the carrying amount of an investment, the Group ordinarily discontinues including its share of further losses. The investment is reported at nil value. Additional losses are provided for to the extent that the Group has incurred obligations or made payments on behalf of the associate companies to satisfy obligations of the associate company that the Group has guaranteed or otherwise committed, for example in the form of loans. When the associate company subsequently reports profits, the Group resumes including its share of those profits only after its share of the profits equals the share of net losses not recognised.

39




Associate companies (Cont’d)

The Group’s share of the net assets and post-acquisition retained profit and reserves of associate companies are reflected in the book value of the investments in the consolidated statement of financial position.

When the accounting policies of an associate company do not conform with those of the Company, adjustments are made on consolidation when the amounts involved are considered significant to the Group.

Property, plant and equipment and depreciationProperty, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses, if any. Depreciation is computed utilising the straight-line method to write off the cost of these assets over their estimated useful lives as follows:

Office furniture and equipment 3 to 10 yearsMotor vehicles 5 yearsRenovation 5 years

The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items. Dismantling, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantling, removal or restoration is incurred as a consequence of acquiring or using the asset. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent expenditure relating to property, plant and equipment that has been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of performance of the asset before the expenditure was made, will flow to the Company and the cost can be reliably measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred.

For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition and to the month before disposal respectively. Fully depreciated property, plant and equipment are retained in the books of accounts until they are no longer in use.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at the end of each reporting period as a change in estimates.

Agricultural assetsAgricultural assets, which primarily comprise jatropha seedlings, are stated at fair value less estimated point-of-sale costs. Gain or loss arising on initial recognition of jatropha seedlings at fair value less estimated point-of-sale costs and from changes in such values at each reporting date are included in the profit or loss for the period in which they arise.

The fair value of the seedlings is estimated by reference to their market value.

Financial assetsFinancial assets include cash and financial instruments. Financial assets, other than hedging instruments, can be divided into the following categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which the investments were acquired. The designation of financial assets is re-evaluated and classification may be changed at the reporting date except that reclassifications into and out of financial assets at fair value through profit or loss is not permitted while the financial asset is held or issued.

All financial assets are recognised on their trade date - the date on which the Company and the Group commit to purchase or sell the asset. Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.

40




Financial assets (Cont’d)

Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at the end of each reporting period whether or not there is objective evidence that a financial asset or a group of financial assets is impaired.

Non-compounding interest and other cash flows resulting from holding financial assets are recognised in profit or loss when received, regardless of how the related carrying amount of financial assets is measured.

The Group does not have any financial assets that are designated as available-for-sale, fair value through profit and loss or held-to-maturity.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets.

Loans and receivables include trade and other receivables, amount owing due from subsidiaries, associate companies, related parties and bank balances. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. If there is objective evidence that the asset has been impaired, the financial asset is measured at the present value of the estimated future cash flows discounted at the original effective interest rate. Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. The impairment or write back is recognised in profit or loss.

Cash and cash equivalentsCash and cash equivalents include cash on hand, deposits with financial institutions which are subject to an insignificant risk of change in value. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand and which form an integral part of cash management.

Share capitalOrdinary shares are classified as equity. Proceeds from issuance of shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

Financial liabilitiesThe Group’s financial liabilities include borrowings, trade and other payables and hire purchase creditors.

Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest-related charges are recognised as an expense in “finance cost” in profit or loss. Financial liabilities are derecognised if the Group’s obligation specified in the contract expire or are discharged or cancelled.

Borrowings are recognised initially at the fair value of proceeds received less attributable transaction costs, if any. Borrowings are subsequently stated at amortised cost which is the initial fair value less any principal repayments. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to profit or loss over the period of the borrowings using the effective interest method. The interest expense is chargeable on the amortised cost over the period of the borrowings using the effective interest method.

Gains and losses are recognised in the profit and loss account when the liabilities are derecognised as well as through the amortisation process.

41




Financial liabilities (Cont’d)

Borrowings which are due to be settled within twelve months after the end of the reporting period are included in current borrowings in the statement of financial position even though the original terms was for a period longer than twelve months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the end of the reporting period. Borrowings to be settled within the Group’s normal operating cycle are classified as current. Other borrowings due to be settled more than twelve months after the end of the reporting period are included in non-current borrowings in the statement of financial position.

Trade and other payables, amount due to subsidiaries and related parties are initially recognised at fair value, and subsequently measured at amortised cost, using the effective interest method.

Finance lease liabilities are measured at initial value less the capital element of lease repayments (see policy on finance leases).

Related partiesParties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.

ProvisionsProvisions are recognised when the Group have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Present obligations arising from onerous contracts are recognised as provisions.

The directors review provisions annually and where, in their opinion, the provision is inadequate or excessive due adjustment is made.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance costs.

Provision for warranty and defectsA provision is recognised for expected warranty claims on services rendered or product sales during the year. It is expected that most of these costs will be incurred within 12 months after the completion of a project. Assumptions used to calculate the provision of warranties were based on current project sales and percentage of warranties claimed for the year.

Provision for litigation claimsA provision is recognised for expected litigation claims for on-going litigation cases, based on consultation with its lawyers.

ContingenciesA contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group.

Contingent liabilities and assets are not recognised on the statement of financial position of the Group.

42




Leases

Finance leasesWhere assets are financed by lease agreements that give rights approximating to ownership, the assets are capitalised as if they had been purchased outright at values equivalent to the lower of the fair values of the leased assets and the present value of the total minimum lease payments during the periods of the leases. The corresponding lease commitments are included under liabilities. The excess of the lease payments over the recorded lease obligations is treated as finance charges which are amortised over each lease term to give a constant effective rate of charge on the remaining balance of the obligation.

The leased assets are depreciated on a straight-line basis over their estimate useful lives as detailed in the accounting policy on “Property, plant and equipment”.

Operating leasesRentals on operating leases are charged to profit or loss on a straight-line basis over the lease term. Lease incentives, if any, are recognised as an integral part of the net consideration agreed for the use of the leased asset. Penalty payments on early termination, if any, are recognised in profit or loss when incurred.

Income taxesCurrent income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax is recognised for all taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither the accounting or taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period; and

(ii) based on the tax consequence that will follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in profit or loss.

Employee benefits

Pension obligationsThe Group and the Company participate in the defined contribution national pension scheme as provided by the laws of the countries in which it has operations. In particular, the Singapore incorporated companies in the Group contribute to the Central Provident Fund, a defined contribution plan regulated and managed by the Government of Singapore, which applies to the majority of the employees. The contributions to the national pension scheme are charged to profit or loss in the period to which the contributions relate.

43




Employee benefits (Cont’d)

Employee leave entitlementsEmployee leave entitlement to annual leave is recognised when it accrues to the employees. Accrual is made for estimated liability for untaken leave as a result of services rendered by employees up to the end of the reporting period.

Key management personnelKey management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity. Directors and certain managers are considered key management personnel.

Equity compensation benefitsEmployees of the Group may receive remuneration in the form of equity-settled, share-based compensation plan as consideration for services rendered. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the shares at the date on which the shares are granted excluding the impact of any non-market vesting conditions (for example, profit and sales growth targets). This cost is recognised in the income statement, with a corresponding increase in the share capital of the Company over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of shares that will ultimately vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for shares that do not ultimately vest, except for shares where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided all other performance and/or service conditions are satisfied.

Impairment of non-financial assetsThe carrying amounts of the Group’s and the Company’s non-financial assets subject to impairment are reviewed at end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the cash-generating unit to which the assets belong will be identified.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Company at which management controls the related cash flows.

Individual assets or cash-generating units that include goodwill or other intangible assets with an indefinite useful life or those not yet available for use are tested for impairment at least annually. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value in use, based on an internal discounted cash flow evaluation. Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.

Any impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is charged to equity.

44




Impairment of non-financial assets (Cont’d)

With the exception of goodwill,

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount or when there is an indication that the impairment loss recognised for the asset no longer exists or decreases.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised.

A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation surplus. However, to the extent that an impairment loss on the same revalued assets was previously recognised as an expense in profit or loss, a reversal of that impairment loss is recognised as income in profit or loss.

An impairment loss in respect of goodwill is not reversed, even if it relates to impairment loss recognised in an interim period that would have been reduced or avoided had the impairment assessment been made at a subsequent reporting or at the end of the reporting period.

Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

Revenue from construction contractsRevenue from construction contracts is recognised by reference to the stage of completion of the contract activity at the end of the reporting period. The stage of completion is measured by the proportion that the costs incurred to date bear to the estimated total costs of the contract if it represents work done. An expected loss on the construction contract is recognised as an expense immediately when it is probable that total contract costs will exceed total contract revenue.

Sale of goodsRevenue from sales of goods is recognised upon the transfer of significant risks and rewards of ownership of the goods to the customer, which generally coincides with delivery and acceptance of the goods sold. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

Interest incomeInterest income is recognised on a time-apportioned basis using the effective interest rate method.

Government grantsGovernment grants are recognised at their fair value where there is reasonable assurance that the grant will be received and attaching conditions will be complied with. When the grant relates to an expense item, it is recognised in the profit and loss account over the period necessary to match them on a systematic basis to the costs that it is intended to compensate.

Functional and presentation currencyItems included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (“the functional currency”). The consolidated financial statements of the Group and the statement of financial position of the Company are presented in Singapore dollars, which is also the functional currency of the Company.

45




Conversion of foreign currencies

Transactions and balancesTransactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the date of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates of the financial position date are recognised in the income statement, unless they arise from borrowing and net investment in foreign operations. Those currency translation differences are recognised in the currency translation reserve in the consolidated financial statements and transferred to the profit or loss as part of the gain or loss on disposal of the foreign operation.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

Group entitiesThe results and financial position of all the entities within the Group that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the end of the reporting period;

(ii) Income and expenses are translated at actual exchange rates or average exchange rates if they approximate actual exchange rates; and

(iii) All resulting currency translation differences are recognised in the currency translation reserve in equity.

Operating segmentFor management purposes, operating segments are organised based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segment under their charge. The segment managers are directly accountable to their chief executive officer who regularly reviews the segment results in order to allocate resources to the segments and to assess segment performance.

Financial instrumentsFinancial instruments carried on the statement of financial position include cash and cash equivalents, financial assets and financial liabilities.

The particular recognition methods adopted are disclosed in the individual policy statement associated with each item. These instruments are recognised when contracted for.

Disclosures on financial risk management objectives and policies are provided in Note 35.

46



4 Property, plant and equipment

OfficeThe Group furniture and Motor

equipment vehicles Renovation Total$’000 $’000 $’000 $’000

CostAt 1 April 2009 383 233 10 626Additions - - - -Disposals (5) - (1) (6)At 31 March 2010 378 233 9 620Additions 2 100 - 102Disposals - (96) - (96)

At 31 March 2011 380 237 9 626

Accumulated depreciationAt 1 April 2009 345 118 5 468Depreciation for the year 24 41 2 67Disposals (4) - (1) (5)At 31 March 2010 365 159 6 530Depreciation for the year 10 41 2 53Disposals - (79) - (79)Impairment loss 4 - 1 5

At 31 March 2011 379 121 9 509

Net book valueAt 31 March 2011 1 116 - 117

At 31 March 2010 13 74 3 90

Officefurniture and Motor

equipment Vehicles TotalThe Company $’000 $’000 $’000

CostAt 1 April 2009 338 203 541Additions 3 - 3At 31 March 2010 341 203 544Additions 2 100 102Disposals - (96) (96)

At 31 March 2011 343 207 550

Accumulated depreciationAt 1 April 2009 311 88 399Depreciation for the year 21 41 62Transfer from subsidiary 2 - 2At 31 March 2010 334 129 463Depreciation for the year 8 41 49Disposals - (79) (79)

At 31 March 2011 342 91 433

Net book valueAt 31 March 2011 1 116 117

At 31 March 2010 7 74 81

47



4 Property, plant and equipment (Cont’d)

The Group and the Company had motor vehicles under hire-purchase with net book value of $116,000 (2010 - $74,000).

Motor vehicles costing $207,000 (2010 - $203,000) for the Company are registered in the names of certain directors and employees. These are held in trust for the Company.

The impairment losses represent the write-down of certain property, plant and equipment to its recoverable amount.

5 Agricultural assets

2011 2010The Group $’000 $’000

Agricultural assets, at fair value 1,287 1,287Impairment loss (1,287) -

- 1,287

In FY2010, Jarak Nursery Sdn Bhd was acquired as a wholly-owned subsidiary of the Group. The nursery assets of Jarak Nursery Sdn Bhd, which comprise mainly jatropha seedlings are recorded as agricultural assets. These assets had a fair value less estimated point-of-sale costs of approximately RM3 million. The fair value was determined with reference to the market price.

The impairment loss represents the write-down of agricultural assets to its estimated recoverable amount. The write down is because the agricultural assets represented old and unsaleable plants.

6 Goodwill on consolidation

2011 2010The Group $’000 $’000

Goodwill on consolidation 3,686 3,686Impairment loss (3,686) -

- 3,686

The goodwill represents the excess of the cost of acquiring a business over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. For purpose of impairment testing, the above goodwill is allocated to Jarak Nursery Sdn Bhd which represents the lowest level within the Group at which the goodwill is monitored for internal management purposes.

The recoverable amount of the goodwill is based on its value-in-use. Cash flow projections used in these calculations were based on financial budgets approved by management covering a three-year period. Cash flows beyond the three-year period were extrapolated using the estimated growth rates stated below. The growth rate did not exceed the long-term average growth rate for the component parts business in which the CGU operates. Value-in-use was determined by discounting the future cash flows generated from the continuing operation of the business acquired and was based on the following assumptions:

cash flows were projected based on actual operating results and the three-year business plan; the anticipated annual growth is based on equal division of delivery over contract period of 3 years; and a pre-tax discount of 10% was applied in determining the recoverable amount. The discount rate reflects the

current market assessments of time value of money.

48



6 Goodwill on consolidation (Cont’d)

These assumptions were used for the analysis of each CGU within the business segment. Management determined budgeted gross margin based on past performance and its expectations of the market development. The anticipated annual growth rates used were consistent with the forecasts included in industry reports. The discount rates used reflected specific risks relating to the relevant segments.

Based on the value-in-use computation, an impairment charge of $3,686,000 ($2010 - $Nil) is made during the financial year.

7 Subsidiaries

2011 2010The Company $’000 $’000

Unquoted shares, at cost 2,345 3,078Allowance for impairment loss (2,345) (2,236)

- 842

Analysis of impairment loss:

2011 2010The Company $’000 $’000

Balance at beginning of year 2,236 2,236Impairment loss for the year 842 -Allowance no longer required (733) -

Balance at end of year 2,345 2,236

The subsidiaries are:

Country ofincorporation/principal place Cost of Percentage

Name of business investment of equity held Principal activities2011 2010 2011 2010$’000 $’000

Held by the CompanyLiving Ocean Australia - 507 - 100% Application for voluntary International Pty Ltd deregistration approved

Living Ocean International Singapore - 226 - 100% Application for strike-off Construction Pte Ltd approved

MAE Engineers Pte Ltd* Singapore 1,503 1,503 100% 100% Electrical and mechanicalengineering consultantsand contractors

MAE (China) Pte Ltd Singapore - -¢ - 100% Application for strike-offapproved

LBC Estate Holdings Malaysia 842 842 100% 100% Investment holding Sdn Bhd**

Lereno Bio-Chem Holdings Pte Ltd* Singapore -§ -§ 100% 100% Investment holding

2,345 3,078

49



7 Subsidiaries (Cont’d)

Country ofincorporation/principal place Cost of Percentage

Name of business investment of equity held Principal activities2011 2010 2011 2010$’000 $’000

Held through a subsidiaryLereno BC (Singapore) Singapore - -§ - 100% Struck off on 8 March 2011 Pte Ltd

HML Green Estates Singapore - 20 - 77% Sold to third party during Pte Ltd the year

Jarak Nursery Sdn Bhd** Malaysia 4,975 4,975 100% 100% “Plant Science and Seeds Supply” research, cultivation and trading of jatrophaseedlings

4,975 4,995

¢ Investment cost of $1, comprising 1 ordinary share

§ Investment cost of $100, comprising 100 ordinary shares

* Audited by Foo Kon Tan Grant Thornton LLP

** Audited by member of Grant Thornton International

8 Associate companies

The Group The Company2011 2010 2011 2010$’000 $’000 $’000 $’000

Unquoted shares, at cost 58,043 58,043 58,043 58,043Allowance for impairment loss (50,162) (40,250) (58,043) (46,434)

7,881 17,793 - 11,609

Share of post-acquisition losses (5,681) (4,534) - - of associate companiesAdjustment for amortisation of intangible assets (2,200) (1,650) - -Total share of post-acquisition losses (7,881) (6,184) - -

- 11,609 - 11,609

Movement for impairment loss:


Balance at beginning of year 40,250 40,250 46,434 40,250Impairment loss for the year 9,912 - 11,609 6,184

Balance at end of year 50,162 40,250 58,043 46,434

50



8 Associate companies (Cont’d)

Details of the associate companies at 31 March are as follows:

Country ofIncorporation/principal place Cost of Percentage

Name of business investment of equity held Principal activities

Held by the Company 2011 2010 2011 2010$’000 $’000

Lereno Sdn Bhd# Malaysia 58,043 58,043 38% 38% Production of bio-dieseland relatedoleochemicals

Held through a subsidiary

REI Horizon Private Singapore - -@ - 36% Applied for strike-off Limited approved

58,043 58,043

# Audited by F.W. Wong & Co, Malaysia. The most recent audited accounts of Lereno Sdn Bhd issued are for year ended 31

December 2010.

@ Investment cost of $36 comprising 36 ordinary shares

Lereno Sdn Bhd is audited by Foo Kon Tan Grant Thornton LLP for consolidation purposes.

The summarised aggregate financial information of the associate companies is as follows:

2011 2010The Group $’000 $’000

Assets and liabilities:Current assets 557 589Non-current assets 35,342 38,175Total assets 35,899 38,764

Current liabilities (44,876) (15,653)Non-current liabilities (5,724) (23,118)Total liabilities (50,600) (38,771)

Net liabilities (14,701) (7)

Results:Revenue 2,880 3,271

Loss for the year (4,466) (4,422)

51



8 Associate companies (Cont’d)

Acquisition of associate company - Lereno Sdn BhdIn accordance with FRS 103, the acquirer shall measure the cost of a business combination as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer, in exchange for control of the acquiree plus any costs directly attributable to the business combination. The acquirer shall, at the acquisition date, allocate the costs of a business combination by recognising the acquiree’s identifiable assets, liabilities and contingent liabilities at their fair values at that date.

Any difference between the cost of business combination and the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities so recognised represents goodwill.

The Company engaged an independent professional valuer to perform an independent fair valuation as at the date of exchange/acquisition of the identifiable assets, liabilities and contingent liabilities of the associate company.

Identifiable intangible assetBased on the valuation, the licence to use the “Winterisation” technology in Lereno Sdn Bhd is identified as an intangible asset worth $11 million as at the date of acquisition. The useful life of the technology had also been determined to be 20 years based on the licence period. This asset is amortised on a straight line basis over of the 20 years.

GoodwillAs at the date of acquisition, a positive goodwill of $6.20 million was ascertained. The positive goodwill is stated at cost less any impairment losses and is included in the carrying amount of the investment in associate companies. Management is of the opinion that the goodwill is fully impaired as at 31 March 2011.

Impairment exerciseThe directors have carried out a review of the carrying value of the investments that is based on the cash flow projections. Based on the projections, the directors have taken the view that full allowance for impairment should be made given the current market conditions and the operating results of the associate company.

9 Other assets

2011 2010The Group and The Company $’000 $’000

Dinosaurs exhibits 200 200Impairment loss (200) -

- 200

Assets comprising exhibits held by the Company under the now-discontinued Edutainment segment were reclassified from non-current assets held-for-sale disclosed under current assets to other assets disclosed under non-current assets in FY2010.

10 Trade receivables

The Group 2011 2010$’000 $’000

Trade receivables - 37

In FY2010, trade receivables were generally due within 30 to 60 days and do not bear any interest. The amounts were denominated in Australian dollars.

52



11 Other receivables

The Group The Company 2011 2010 2011 2010$’000 $’000 $’000 $’000

Sundry deposits 75 91 30 45Sundry receivables 18 33 5 17

93 124 35 62

12 Amounts due from subsidiaries

2011 2010The Company $’000 $’000

Amounts due from subsidiaries 12,005 11,238Allowance for doubtful debts (12,005) (7,511)

- 3,727

The non-trade amounts due from subsidiaries, representing advances, are unsecured, interest-free, repayable on demand and are to be settled in cash.

13 Amounts due from/(to) associate companies and related parties


Amounts due from associate companies:- Non-trade 364 369 364 369Allowance for doubtful debts (364) - (364) -

- 369 - 369

Amounts due from related parties:- Trade 169 173 - -- Non-trade 7 7 7 7

176 180 7 7

Amounts due (to) related parties:- Non-trade (338) (453) (36) (35)

An entity or individual is considered a related party of the Group for the purpose of the financial statements if i) it possesses the ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the Group or vice versa; or ii) it is subject to common control or common significant influence.

The non-trade amounts due from associate companies and amounts due from/(to) related parties, representing advances, are unsecured, interest-free, repayable on demand and are to be settled in cash.

The amounts due from/(to) related parties are denominated mainly in Malaysian Ringgit.

53



14 Cash and bank balances


Cash and bank balances 980 58 951 14

Cash and bank balances are denominated in the following currencies:


Singapore dollar 958 26 949 12Malaysia ringgit 11 - - -United States dollar 11 12 2 2Chinese renminbi - 20 - -

980 58 951 14

15 Share capital

No. of shares Amounts2011 2010 2011 2010

The Group and The Company $’000 $’000 $’000 $’000

Issued and fully paid with no par value:At beginning of year 1,536,442 1,404,619 25,153 22,316Issued to employees under the Performance Share Scheme 6,089 - 61 -Issued to employees under the Restricted Share Scheme 2,409 11,823 119 1,037Issued for acquisition - 120,000 - 1,800Issued under share placement 400,000 - 2,000 -Issued for Rights Issue 921,865 - 4,610 -

At end of year 2,866,805 1,536,442 31,943 25,153

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

During the current financial year, the Company had issued the following shares:

(a) 6,089,000 share to directors and employees of the Group at an issue price of $0.01 pursuant to the Performance Share Scheme;

(b) 2,409,000 shares to directors and employees of the Group at an average issue price of $0.05 pursuant to the Restricted Share Scheme;

(c) 400,000,000 shares at an issue price of $0.005 per share under share placement; and

(d) 921,864,972 shares at an issue price of $0.005 per share in relation to the Rights Issue with 115,233,017 Warrants.

The new shares issued are ranked pari passu with the existing shares of the Company.

54



16 Other reserves


Capital reserve 3,150 3,150 3,150 3,150Translation reserve 103 39 - -

3,253 3,189 3,150 3,150

The capital reserve amount represents the fair value of 210 million non-listed warrants issued at $0.015 per warrant in FY2010 in conjunction with the acquisition of Jarak Nursery Sdn Bhd. The warrants can be converted to the Company’s shares subject to the fulfilment of certain terms and conditions.

The translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

17 Obligations under hire-purchase

The Group and The Company 2011 2010$’000 $’000

Minimum instalments payable Not later than one year 38 34 Later than one year and not later 111than five years - 83 Later than five years - -

149 117Finance charges allocated to future years (16) (12)

Present value of minimum instalment payments 133 105

Due not later than one year 33 29Due later than one year and not later

than five years 100 76Due later than five years - -

Present value of minimum instalment payments 133 105

The instalments payable after one year are shown under non-current liabilities whilst the instalments payable within one year are shown under current liabilities.

The Group and the Company conduct their operations using certain leased motor vehicles. These leases are classified as finance leases. The average discount rate implicit in the leases for the Group and the Company range from 2.2% to 5.6% (2010 - 2.5% to 6.7%) per annum.

18 Trade payables


Trade payables 105 330 95 271

Trade payables are generally on 30 to 60 days (2010 - 30 to 60 days) credit terms.

55



19 Other payables


Hire-purchase creditors (Note 17) 33 29 33 29Accruals 1,735 2,326 1,626 2,192Interest payable 1 3 1 3Miscellaneous creditors 173 318 144 301Loan from a director 443 57 443 57

2,385 2,733 2,247 2,582

The loan from a director is unsecured, interest-free, repayable on demand and is to be settled in cash.

20 Amounts due to bankers


Unsecured bank overdrafts - 1,326Unsecured short-term loans - 620

- 1,946

In FY2010, bank overdrafts were unsecured and bore interest at 5.00% per annum. The bank overdrafts were fully repaid during the financial year.

In FY2010, the short-term loans were unsecured, bore interest between 3.54% and 3.91% per annum. The short-term loans were fully repaid during the financial year.

21 Provision for warranty and defects

2011 2010The Group $’000 $’000

Balance at beginning of year 225 218Translation differences (6) 7

Balance at end of year 219 225

Provisions are recognised for expected warranty claims on services rendered or product sales. It is expected that most of these costs will be incurred within 12 months after the completion of a project. Assumptions used to calculate the provision of warranties were based on current project sales and percentage of warranties claimed for the year. Management concluded based on these expectations, that no additional provision for warranty needed to be provided for the current financial year and the current amount is adequate to cover possible claims as of 31 March 2011.

22 Provision for litigation claims


Balance at beginning and end of year 430 430

A provision is recognised for expected litigation claims for on-going litigation cases. Management concluded that no additional provision for litigation claims was necessary to cover possible litigation costs as of 31 March 2011.

56



23 Other income

2011 2010The Group $’000 $’000

Gain on disposal of investment in quoted shares - 177Gain on disposal of property, plant and equipment 33 -Government grant - jobs credit 3 43Rental income from dinosaurs exhibits - 44Write back of trade payables 175 -Project billing for cost reimbursement 385 -Others 6 62

602 326

24 Finance costs

2011 2010The Group $’000 $’000

Interest expense- bank overdrafts 37 82 - finance lease 5 6- loan interest 13 28

55 116

25 Loss before taxation

2011 2010The Group Note $’000 $’000

Loss before taxation is arrived at after charging:

Depreciation of property, plant and equipment 4 53 67Exchange loss 148 56Loss on disposal of property, plant and equipment - 1Legal and other professional fees 442 596Operating lease expenses 485 531Staff costs- short-term employee benefits 2,068 1,376- share-based payment 180 1,037- CPF or equivalent fund contributions 99 91

2,347 2,504

57



26 Key management personnel compensation

2011 2010The Group $’000 $’000

Short-term employee benefits 923 761Central Provident Fund contributions 52 47Other short-term benefits 71 88Share-based payments 138 925

1,184 1,821

Comprise amounts paid/payable to:

2011 2010The Group $’000 $’000

- Directors of the Company 545 926- Other key management personnel 639 895

1,184 1,821

Directors’ interest in share schemeDuring the current financial year, Nil (2010 - Nil) shares were granted to directors under Restricted Share Scheme (“RSS”). The Company has already issued a total of 24,210,000 (2010 - 24,210,000) shares to the directors under RSS of which Nil were issued during the year. All RSS shares granted to the Directors have now been issued.

During the current financial year, 4,555,000 (2010 - Nil) shares were granted and 4,555,000 (2010 - Nil) shares were issued to directors under Performance Share Scheme (“PSS”).

The number of directors of the Company with remuneration for the year from the Company and all of its subsidiaries is in the following ranges:

2011 2010

$750,000 and above - -$500,000 to $749,999 - 2$250,000 to $499,999 1 -Below $250,000 6 7

7 9

27 Taxation

2011 2010The Group $’000 $’000

Current taxation - -

58



27 Taxation (Cont’d)

The tax expense on results of the financial year varies from the amount of income tax determined by applying the Singapore statutory rate of income tax as a result of the following:

2011 2010The Group $’000 $’000

Loss before taxation (20,481) (5,783)

Tax at statutory rate of 17% (3,482) (983)Tax effect on non-deductible expenses 2,698 143Difference in foreign tax rate (8) (17)Share of loss of associate companies 288 321Income not subject to tax (2) (22)Deferred tax asset not recognised 506 558

- -

No current taxation has been provided in the financial statements as the Company and the Group have no taxable income.

Subject to agreement with tax authorities, the Group has unabsorbed capital allowances and tax losses amounting to approximately S$3,763,000 (2010 - $3,754,000) and S$42,908,000 (2010 - $34,330,000) respectively. These unabsorbed capital allowances and tax losses can be carried forward for offsetting against future taxable income provided that the provisions of Sections 23 and 37 of the Singapore Income Tax Act, Cap. 134 are complied with.

28 Other comprehensive income

Disclosure of tax effect relating to each component of other comprehensive income:

2011Before tax Taxation Net of tax

The Group $’000 $’000 $’000

Currency translation differences 64 - 64

2010Before tax Taxation Net of tax

The Group $’000 $’000 $’000

Currency translation differences 18 - 18

29 Loss per share

Basic loss per share is calculated by dividing the loss from continuing operations attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted loss per share is calculated by dividing loss from continuing operations attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

59



29 Loss per share (Cont’d)

The following reflects the results and share data used in the computation of basis and diluted loss per share for the years ended:

The Group 2011 2010$’000 $’000

Net loss attributable to ordinary shareholders used in computation of basic and diluted loss per share (20,481) (5,783)

Weighted average number of ordinary shares used for the computation of:

No. of sharesThe Group 2011 2010

- Basic loss per share 2,447,178,397 1,418,879,225

- Diluted loss per share 2,447,178,397 1,418,879,225

There have been no other transactions involving ordinary shares or potential ordinary shares since the end of the reporting period and before the completion of these financial statements.

30 Contingent liabilities

Litigation claimsIncluded in the provision for litigation claims amounting to approximately $430,000 (2010 - $430,000) (Note 22) is the following legal claim:-

In September 2005, a creditor of the Company filed an arbitration claim against the Company for, inter alia, the sum of approximately $2,100,000 for certain project work. The Company has counterclaimed against this creditor for approximately $380,000 (including goods and services tax) arising from, inter alia, advance payments and backcharges. The arbitration proceedings are currently pending.

No additional amount of potential legal claims had been provided for in the income statement during the financial year. Management, based on legal advice, is of the opinion that part of the claim by this creditor is possible, but not probable to succeed, and accordingly, believes the provision is adequate as at 31 March 2011.

31 Related party transactions

An entity or individual is considered a related party of the Group for the purpose of the financial statement if i) it possesses the ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the Group or vice versa; or ii) it is subject to common control or common significant influence.

60



31 Related party transactions (Cont’d)

In addition to the related party information disclosed elsewhere in the financial statements, the following are transactions with related parties at agreed amounts:


Related parties- Services rendered - (3) - (3)- Administrative income - (2) - (2)- Purchase of goods - 6 - -- Sales of services - (6) - -- Rental fees 271 320 - -

32 Operating lease commitments

At the end of reporting period, the Group were committed to make the following payments in respect of operating leases with a term of more than one year:

The Group 2011 2010$’000 $’000

Not later than one year 485 343Later than one year and not later than five years - -

485 343

33 Share schemes

The Restricted Share Scheme (“RSS”) and Performance Share Scheme (“PSS”) of the Company were approved and adopted by its members at an extraordinary meeting and annual general meeting held respectively on 14 July 2007 and 28 July 2008. The share schemes are supervised by the Remuneration Committee comprising directors of the Company, duly authorised and appointed by the Board. The total share-based payment for the year is $0.18 million (2010 - $1.037 million), which comprise $0.119 million and $0.061 million of RSS and PSS respectively.

Restricted Share Scheme (“RSS”) The RSS shares will typically vest only after the satisfactory completion of time-based service conditions, that is, after the employees and directors of the Company and its subsidiaries (“Participants”) have served the Company and/or any of its subsidiaries for a specified number of years (also known as time-based restricted awards). No minimum vesting periods are prescribed under RSS, and the length of the vesting period(s) in respect of each RSS share will be determined on a case-by-case basis. The eligible Participants are to receive fully paid shares free of charge. The RSS may be granted at any time in the year although it is anticipated this would be once a year. The RSS shall continue in force at the discretion of the Committee, subject to a maximum period of ten (10) years commencing on the date on which the RSS was approved.

During the year, Nil (2010 - 2,788,000) shares were granted under RSS and 2,409,000 (2010 - 11,823,500) shares at an average price of $0.05 (2010 - $0.090) per share were issued in the year to eligible Participants.

61



33 Share schemes (Cont’d)

Performance Share Scheme (“PSS”)The PSS is based on specific and pre-determined measurable targets which are not time-related. The PSS contemplates the award of fully paid shares when and after pre-determined measurable performance and/or any significant contribution to the Company has been achieved. The eligible Participants are to receive fully paid shares free of charge. The PSS may be granted at any time in the year although it is anticipated this would be once a year. The PSS shall continue in force at the discretion of the Remuneration Committee, subject to a maximum period of ten (10) years commencing on the date on which the PSS was approved.

During the financial year, 6,089,000 (2010 - Nil) shares were granted and 6,089,000 (2010 - Nil) shares were issued under PSS.

34 Segment information

Reporting formatThe primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and services different markets.

Business segmentsThe Group organises its businesses into “Biofuel and related business” and “Others” segment.

The Group’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The biofuel and related business cover biodiesel and bioethanol manufacturing, oleochemical production, plantations and other upstream and downstream businesses.

Geographical segmentsThe Group’s geographical segments are based on the geographical location of the assets. Sales to external customers disclosed in geographical segments are attributed to geographic areas based on origins of the Group’s customers.

Allocation basis and transfer pricingSegment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly tax expenses and provision for taxation. Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties.

62



34 Segments information (Cont’d)

(a) Business segments

(i) The following table presents revenue and results information regarding the Group’s business segments for the years ended 31 March 2011 and 2010:

Biofuel and related business Others Eliminations Total

2011 2010 2011 2010 2011 2010 2011 2010$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue:Sales to external

customers - - - - - - - -

Results:Amount excluding

depreciation andimpairment loss (2,510) (2,913) (1,076) (799) - - (3,586) (3,712)

Impairment loss (15,090) - - - - - (15,090) -Depreciation (49) (63) (4) (4) - - (53) (67)Segment results (17,649) (2,976) (1,080) (803) - - (18,729) (3,779)Finance costs (55) (116)Share of results of

associate companies (1,697) (1,888) - - - - (1,697) (1,888)Loss before taxation (20,481) (5,783)Taxation - -

Loss for the year (20,481) (5,783)

(ii) The following table presents assets, liabilities and other segment information regarding the Group’s business segments for the years ended 31 March 2011 and 2010:

Biofuel andrelated business Others Eliminations Total

2011 2010 2011 2010 2011 2010 2011 2010$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Assets and liabilities:Segment assets 2,458 14,630 5,224 709 (6,259) (9,280) 1,423 6,059Investment in

associate companies - 13,497 - - - (1,888) - 11,609Total assets 2,458 28,127 5,224 709 (6,259) (11,168) 1,423 17,668

Segment liabilities 2,908 2,636 12,935 15,217 (12,266) (11,660) 3,577 6,193Unallocated liabilities - -

Total liabilities 3,577 6,193

Other segment information:Depreciation 49 62 4 5 - - 53 67

63



34 Segments information (Cont’d)

(b) Geographical segments

The following table presents revenue, capital expenditure and certain assets information regarding the Group’s geographical segments for the years ended 31 March 2011 and 2010:

Singapore Malaysia Others Eliminations Total

2011 2010 2011 2010 2011 2010 2011 2010 2011 2010$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

RevenueSales to

external customers - - - - - - - - - -

Other segment information:

Segment assets 1,232 10,123 6,450 5,179 - 37 (6,259) (9,280) 1,423 6,059Investment

in associate companies - 13,497 - - - - - (1,888) - 11,609

Total assets 1,423 17,668

35 Financial risk management objectives and policies

The Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include interest rate risk, liquidity risk, foreign currency risk and credit risk. The Group’s principal financial instruments comprise bank loans, bank overdrafts, amounts due to related parties, hire purchase creditors and cash and bank balances. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The Group and the Company do not hold or issue derivative financial instruments.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

35.1 Foreign currency riskForeign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates.

The Group has significant operations in Malaysia and movements in the Malaysia Ringgit/SGD exchange rates may affect the Group’s balance sheet.

The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s functional currency.

As at the end of the reporting period, the Group’s currency exposures are insignificant.

35.2 Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from their finance lease obligations as represented by the carrying amounts of amounts due to bankers and hire purchase creditors. The Group’s policy is to manage its exposure to interest rate risks using a mix of fixed and variable rate debts. The Group does not use

64



35 Financial risk management objectives and policies (Cont’d)

35.2 Interest rate risk (Cont’d)

derivative financial instruments to hedge its investment portfolio. The Group’s policy is to obtain financing at the most favourable interest rates available.

The following table sets out the carrying amount, by maturity, of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

TotalLess than

1 year1 to 5 years

31 March 2011 $’000 $’000 $’000

The GroupFixed rateHire purchase creditors (133) (33) (100)

Floating rateCash and short-term deposits 980 980 -

The CompanyFixed rateHire purchase creditors (133) (33) (100)

Floating rateCash and short-term deposits 951 951 -

TotalLess than

1 year1 to 5 years

31 March 2010 $’000 $’000 $’000

The GroupFixed rateHire purchase creditors (105) (29) (76)

Floating rateCash and short-term deposits 58 58 -Bank overdrafts (1,326) (1,326) -Bank loans (620) (620) -

The CompanyFixed rateHire purchase creditors (105) (29) (76)

Floating rateCash and short-term deposits 14 14 -Bank overdrafts (1,326) (1,326) -Bank loans (620) (620) -

65




35.3 Credit risk

Credit risk arises from the possibility that the customers may not be able to settle their obligations within the normal trading terms of transactions.

The carrying amounts of trade and other receivables, amounts due from subsidiaries, associate companies and related parties and cash and bank balances represent the Group’s and the Company’s exposure to credit risk. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents and other receivables (including related parties balances), the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

The maximum exposure to credit risk is represented by the carrying amount of each class of financial assets in the statement of financial position.

(i) Financial assets that are neither past due nor impaired

Cash at banks and fixed deposits that are neither past due nor impaired are mainly deposits with banks which have high credit-ratings as determined by international credit-rating agencies.

Trade and other receivables that are neither past due nor impaired are substantially companies with good collection track records with the Company and the Group.

(ii) Financial assets that are past due but not impaired

The aging analysis of trade receivables past due but not impaired is as follows:


Trade receivable past due: Past due 0 to 3 months - - - - Past due 3 to 6 months - - - - Past due over 6 months - 37 - -

Based on historical default rates, the Group believes that no impairment allowance is necessary in respect of trade receivables not past due or past due but not impaired. These receivables are mainly arising by customers that have a good credit record with the Group.

66




35.3 Credit risk (Cont’d)

(iii) Financial assets that are past due and impaired

The carrying amount of other receivables individually determined to be impaired and the movements in the related allowance for impairment are as follows:


Gross amount - -Less: Allowance for impairment - -

- -

Movement in allowance for impairment: At beginning of the year - 41 Allowance no longer required - (41)

At end of the year - -

35.4 Liquidity risk

Liquidity or funding risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group’s objective is to maintain a balance between continuity of funding and flexibility through amounts due to related parties, hire purchase contracts, cash and short-term deposits. To ensure the continuity of funding for the Group’s operations, the Group obtains short-term funding from reputable financial institutions.

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities based on contractual undiscounted cash flows:

BetweenLess than 2 and 5 Over

1 year years 5 years TotalThe Group $’000 $’000 $’000 $’000

31 March 2011Trade and other payables 2,828 100 - 2,928Other liabilities and derivatives 649 - - 649

3,477 100 - 3,577

31 March 2010Trade and other payables 3,516 76 - 3,592Other liabilities and derivatives 655 - - 655Loans and borrowings 1,946 - - 1,946

6,117 76 - 6,193

67




35.4 Liquidity risk (Cont’d)

BetweenLess than 2 and 5 Over

1 year Years 5 years TotalThe Company $’000 $’000 $’000 $’000

31 March 2011Trade and other payables 2,378 100 - 2,478Other liabilities and derivatives 430 - - 430

2,808 100 - 2,908

31 March 2010Trade and other payables 2,905 76 - 2,981Other liabilities and derivatives 430 - - 430Loans and borrowings 1,946 - - 1,946

5,281 76 - 5,357

36 Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustment to it, in the light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended 31 March 2011.

The Group monitors capital using a gearing ratio, which is net debt divided by sum of shareholders’ funds and net debt. The Group includes within net debt are amounts due to bankers, hire-purchase creditors, less cash and bank balances. Shareholders’ funds include share capital, other reserves and accumulated losses. There is no fixed dividend policy.

2011 2010The Group $’000 $’000

Debts Amounts due to bankers - 1,946 Hire-purchase creditors 133 105 Less: cash and bank balances (980) (58)Net debt (847) 1,993

Shareholders’ funds Share capital 31,943 25,153 Other reserves 3,253 3,189 Accumulated losses (37,350) (16,869)Total shareholders’ funds (2,154) 11,473

Total shareholders’ funds and net debts (3,001) 13,466

Gearing ratio N.A. 17.4%

68



37 Financial instruments

Fair value

The carrying amount of financial assets and liabilities as reflected in the statement of financial position approximate their fair values.

38 Subsequent events

The Company had, on 25 April 2011, entered into a Heads of Agreement (“HOA”) with Bintai Kinden Corporation Berhad (“BKCB”) for the acquisition of 5,935,000 ordinary shares of Bintai Kindenko Pte Ltd (“Bintai Kindenko”) representing BKCB’s entire 69.82% equity interest in Bintai Kindenko (the “Proposed Acquisition”).

The indicative consideration for the Proposed Acquisition is RM150 million and was arrived at on a willing buyer willing seller basis after taking into consideration the audited profit after taxation of Bintai Kindenko of approximately S$7 million for the financial year ended 31 March 2010 and the prospective earnings of Bintai Kindenko.

The Company had, on 7 June 2011, reached an understanding with Biz Investment Pte. Ltd. (“Biz Investment”) for the proposed acquisition by the Company, and the sale by Biz Investment, of 2,565,000 ordinary shares (“Minority Sale Shares”) of Bintai Kindenko representing Biz Investment’s entire 30.18% equity interest in Bintai Kindenko (“Biz Investment Acquisition”). The indicative purchase price for the Minority Sale Shares shall be RM64,838,155.

The HOA and understanding with Biz Investment are subject to a Sale and Purchase Agreement being entered into and due diligence.

69


Shareholding StatisticsAs at 15 June 2011

Share Capital Information

Issued and fully paid-up capital : S$33,743,155.96Number of Shares : 2,866,804,592Class of shares : Ordinary SharesVoting rights : One vote per share

SHAREHOLDINGS HELD IN HANDS OF PUBLIC

Based on information available to the Company as at 15 June 2011, approximately 73.93% of the issued ordinary shares of the Company is held by the public, and therefore Rule 723 of Section B: Rules of Catalist of the SGX-ST Listing Manual (the “Catalist Rules”) issued by the Singapore Exchange Securities Trading Limited is complied with.

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings No. of Shareholders % No. of Shares %1 - 999 21 0.45 5,579 0.00 1,000 - 10,000 1,053 22.51 4,669,200 0.16 10,001 - 1,000,000 3,383 72.32 497,309,220 17.35 1,000,001 and above 221 4.72 2,364,820,593 82.49

TOTAL 4,678 100.00 2,866,804,592 100.00

LIST OF 20 LARGEST SHAREHOLDERS

No. Name of Shareholders No. of Shares %1 DMG & PARTNERS SECURITIES PTE LTD 290,826,000 10.14 2 ONG PUAY KOON 196,528,702 6.86 3 BIN TAI HOLDINGS PTE LTD 195,707,200 6.83 4 PHILLIP SECURITIES PTE LTD 129,037,400 4.50 5 LIM TJHUN SENG OR LIE SIOE GIAN 104,800,000 3.66 6 NGAKAN PUTU ADHIRIANA 100,000,000 3.49 7 PINAWATI KUSAMA KHOUW 100,000,000 3.49 8 ANDREA RUTH BOULT 94,080,000 3.28 9 DESA KONSEP SDN BHD 78,700,000 2.75 10 BINTAI KINDEN CORPORATION BERHAD 62,658,890 2.19 11 UOB KAY HIAN PTE LTD 56,301,000 1.96 12 SEOW KUI LIM 50,000,000 1.74 13 YEO CHUN HEONG 49,968,000 1.74 14 KONG OI-YI DAWN 48,062,400 1.68 15 AMFRASER SECURITIES PTE. LTD. 34,545,000 1.21 16 FOOK YUAN INTERNATIONAL PTE. LTD. 31,500,000 1.10 17 YEO TSUNG TONG 28,500,067 0.99 18 DBS NOMINEES PTE LTD 26,806,400 0.94 19 CHENG SHAO SHIONG @BERTIE CHENG 25,000,000 0.87 20 HSBC (SINGAPORE) NOMS PTE LTD 19,120,000 0.67

TOTAL 1,722,141,059 60.09

70



SUBSTANTIAL SHAREHOLDERS

Name of Substantial Shareholders

Direct Interest Number of Shares %

Deemed InterestNumber of Shares %

Ong Puay Koon 196,528,702 6.855 258,366,090 (1) 9.012Spektra Anggun Sdn Bhd 278,265,000(2) 9.706 - -Bin Tai Holdings Private Limited 195,707,200 6.830 - -

Notes(1) By virtue of Section 7 of the Companies Act, Cap.50, Mr Ong Puay Koon is deemed to be interested in 195,707,200

shares held by Bin Tai Holdings Private Limited and 62,658,890 shares held by Bintai Kinden Corporation Berhad.(2) 278,265,000 shares held in the name of DMG & Partners Securities Pte Ltd.

WARRANT STATISTICS - W150430As at 15 June 2011

DISTRIBUTION OF WARRANT HOLDINGS

Size of Warrant Holdings No. of Holders % No. of Warrants %1 - 999 247 11.09 121,622 0.11 1,000 - 10,000 1,309 58.75 5,637,760 4.89 10,001 - 1,000,000 651 29.22 40,286,786 34.96 1,000,001 and above 21 0.94 69,186,849 60.04

TOTAL 2,228 100.00 115,233,017 100.00

LIST OF 20 LARGEST REGISTERED WARRANT HOLDERS

No. Name of Warrant Holders No. of Warrants %1 BIN TAI HOLDINGS PTE LTD 9,173,775 7.96 2 GOO SENG LIN (WU CHENGLIN) 9,000,000 7.81 3 DMG & PARTNERS SECURITIES PTE LTD 8,842,000 7.67 4 ONG PUAY KOON 5,868,486 5.09 5 ANDREA RUTH BOULT 4,410,000 3.83 6 UOB KAY HIAN PTE LTD 3,980,375 3.45 7 TAN CHING HEAN 3,947,000 3.43 8 PHILLIP SECURITIES PTE LTD 3,774,748 3.28 9 KONG OI-YI DAWN 2,487,300 2.16 10 CHUA SEONG SENG 2,093,675 1.82 11 SIOW SWEE KUEN 2,000,000 1.74 12 BINTAI KINDEN CORPORATION BERHAD 1,804,250 1.57 13 ANG SOK HOON 1,800,000 1.56 14 HO SIN YUNG TIMOTHY 1,700,000 1.48 15 TAN HOCK HEE 1,608,875 1.40 16 YEO KIM HOE FREDDY 1,500,000 1.30 17 NG AIK SENG 1,114,125 0.97 18 TAN CHENG SOI 1,054,000 0.91 19 CHENG SHAO SHIONG @BERTIE CHENG 1,027,500 0.89 20 YEAP LAM WAH 1,000,625 0.87

TOTAL 68,186,734 59.19

71



WARRANT STATISTICS - W110728As at 15 June 2011

DISTRIBUTION OF WARRANT HOLDINGS

Size of Warrant Holdings No. of Holders % No. of Warrants %1 - 999 50 13.77 31,313 0.01 1,000 - 10,000 47 12.95 229,068 0.10 10,001 - 1,000,000 243 66.94 32,309,161 13.98 1,000,001 and above 23 6.34 198,503,030 85.91

TOTAL 363 100.00 231,072,572 100.00

*Warrants W110728 expire on 28 July 2011 at 5.00 p.m.

LIST OF 20 LARGEST REGISTERED WARRANT HOLDERS

No. Name of Warrant Holders No. of Warrants %1 BIN TAI HOLDINGS PTE LTD 40,695,525 17.61 2 ONG PUAY KOON 39,755,636 17.20 3 BINTAI KINDEN CORPORATION BERHAD 27,208,571 11.77 4 FOOK YUAN INTERNATIONAL PTE. LTD. 26,309,483 11.39 5 KELLY KONG OI-HUA 10,741,183 4.65 6 LEE CHOON LAIN @ CECILIA TAN 10,061,185 4.35 7 KONG OI-YI DAWN 9,191,489 3.98 8 PHILLIP SECURITIES PTE LTD 7,221,079 3.13 9 LEE PUI CHEE 4,140,508 1.79

10 KHONG HENG POH 3,102,599 1.34 11 OCBC SECURITIES PRIVATE LTD 3,049,045 1.32 12 GUY AUGUSTUS VAZ 2,156,515 0.93 13 DBS VICKERS SECS (S) PTE LTD 2,038,253 0.88 14 SEACARE FOUNDATION PTE LTD 1,808,690 0.78 15 LIAN SIEW KIEN 1,530,430 0.66 16 TAN JIT KWANG 1,391,300 0.60 17 AMFRASER SECURITIES PTE. LTD. 1,252,170 0.54 18 TANYA FONG MEI LIN (TANYA FENG MEILING) 1,252,170 0.54 19 WONG FOOK SANG 1,209,039 0.52 20 KOH SIONG LIM @ NGE CHANG LIM 1,182,605 0.51

TOTAL 195,297,475 84.49

LIST OF UNLISTED WARRANT HOLDERS As at 15 June 2011

No. Name of Warrant Holders No. of Warrants %1 CHUA SEONG SENG 106,890,000 50.90 2 ANDREA RUTH BOULT 102,900,000 49.00 3 CHOONG WENG CHENG 210,000 0.10

TOTAL 210,000,000 100.00

72

Notice of Annual General MeetingLERENO BIO-CHEM LTD.(Incorporated in the Republic of Singapore)Registration No. 197401961C

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at 149 Rochor Road Fu Lu Shou Complex #05-13/15 Singapore 188425 on Friday, 29 July 2011 at 11.30 a.m. to transact the following business:-

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 March 2011 and the Directors’ Report and the Auditors’ Report thereon. (Resolution 1)

2. To re-elect Tan Sri Dato’ Kamaruzzaman Bin Shariff, a Director retiring pursuant to Article 95 of the Company’s Articles of Association. (Resolution 2)

3. To consider, and if thought fit, to pass the following resolution:

“That pursuant to Section 153(6) of the Companies Act, Cap. 50, Mr Yap Boh Pin be and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting.” (Resolution 3)

Mr Yap Boh Pin will, upon re-appointment as Director of the Company, remain as Chairman of the Audit Committee and will be considered independent for the purposes of Rule 704(7) of Section B: Rules of Catalist of the SGX-ST Listing Manual. He will also remain as Chairman of the Nominating Committee.

4. To approve the Directors’ fees of S$72,000 for the financial year ended 31 March 2011. (2010: S$82,297)

(Resolution 4) 5. To re-appoint Foo Kon Tan Grant Thornton LLP as auditor of the Company and to authorise the Directors to fix their

remuneration. (Resolution 5)

AS SPECIAL BUSINESS

To consider and if thought fit, pass the following resolutions, with or without modifications:-

6. Renewal of the Shareholders’ Mandate for Interested Person Transactions

“(a) That approval be and is hereby given, for the purposes of Chapter 9 of the Catalist Rules, for the Company, its subsidiaries and associated companies that are considered to be “entities at risk” under Chapter 9, or any of them, to enter into any of the transactions falling within the types of Interested Person Transactions as set out in the Appendix to this Notice of Annual General Meeting (the “Appendix”), with any party who falls within the classes of Interested Persons as described in the Appendix, provided that such transactions are made on normal commercial terms and in accordance with the review procedures for Interested Person Transactions as set out in the Appendix (the “IPT Mandate”);

(b) That the IPT Mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the date on which the next Annual General Meeting of the Company is held or is required by law to be held, whichever is earlier;

(c) That the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including, without limitation, executing all such documents as may be required) as they may consider expedient or necessary or in the interests of the Company to give effect to the IPT Mandate and/or this Resolution.”

[See Explanatory Note] (Resolution 6)

73


Notice of Annual General Meeting

7. Renewal of Lereno Bio-Chem Ltd Restricted Share Scheme (“THE LBC RSS”) and Lereno Bio-Chem Ltd Performance Share Scheme (“THE LBC PSS”)

“That authority be and is hereby given to the Directors of the Company to grant awards and to issue and allot shares under the LBC RSS and the LBC PSS (“the Schemes”) established by the Company from time to time and in accordance with the terms and conditions of the Schemes provided always that the aggregate number of shares to be allotted and issued pursuant to the Schemes collectively shall not exceed 15% of the Company’s issued share capital on the day preceding the relevant date of award of the shares subject to the following:

(i) the aggregate number of shares available to eligible controlling shareholders and their associates under each of the Schemes shall not exceed 25% of the shares available under each of the Schemes which may be issued by the Company, and

(ii) the aggregate number of shares to be issued to any one controlling shareholder or his associate under each of the Schemes shall not exceed 10% of the total number of shares which may be issued by the Company under each of the Schemes.”


8. Renewal of Share Issue Mandate

“That pursuant to Section 161 of the Companies Act, Chapter 50 and the Catalist Rules, approval and authority be and is hereby given to the Directors to:

(a) (i) issue shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options or convertible securities (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into Shares:

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit;

(b) issue shares in pursuance of any Instruments made or granted by the Directors or conversion of securities while this resolution was in force (notwithstanding that the authority conferred by this resolution may have ceased to be in force), provided that:

(i) the aggregate number of Shares and convertible securities/ Instruments to be issued pursuant to this resolution (including Shares to be issued in pursuance of Instruments made or granted pursuant to this resolution) does not exceed 100% of the total number of issued shares of the Company (excluding treasury shares), of which the aggregate number of Shares and convertible securities to be issued other than on a pro rata basis to existing shareholders does not exceeed 50% of the total number of issued Shares excluding treasury shares, (as calculated in accordance with sub-paragraph (ii) below);

(ii) for the purpose of determining the aggregate number of Shares that may be issued under sub-paragraph (i) above, the percentage of issued shares (excluding treasury shares) shall be based on the total number of issued shares of the Company (excluding treasury shares), at the time of passing of this resolution, after adjusting for:

(1) new Shares arising from the conversion or exercise of convertible securities,

(2) new Shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time of passing of this resolution, provided the options or awards were granted in compliance with Part VIII of Chapter 8 of the Rules of Catalist of the SGX-ST; and

74



(3) any subsequent bonus issue, consolidation or subdivision of Shares;

(i) in exercising the authority conferred by this resolution, the Company shall comply with the provisions of the Rules of Catalist of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST, the Monetary Authority of Singapore or the Sponsor) and the Articles of Association for the time being of the Company; and

(ii) such authority shall, unless revoked or varied by the Company at a general meeting, continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier; and

(c) the Directors be and are hereby authorized to do any and all acts which they deem necessary and expedient in connection with paragraphs (a) and (b) above.”


ANY OTHER BUSINESS

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

BY ORDER OF THE BOARD

Foo Soon Soo Seng Suet Shee Joint Company Secretaries

14 July 2011, Singapore

Explanatory Notes:-

1. The ordinary resolution in item 6 relates to the renewal of a mandate given by Shareholders on 29 July 2010 allowing the Company, its subsidiaries and associated companies to enter into transactions with interested persons as defined in Chapter 9 of Catalist Rules. Please refer to the Appendix to this Notice of Annual General Meeting for details.

2. The resolution in item 7 if passed will empower the Directors of the Company to grant awards and to issue and allot shares in the capital of the Company pursuant to the Lereno Bio-Chem Ltd Restricted Share Scheme and the Lereno Bio-Chem Ltd Performance Share Scheme, collectively called (“the Schemes”) up to an amount in aggregate not exceeding 15% of the issued share capital of the Company.

3. The resolution proposed in item 8 above, if passed, will empower the Directors of the Company from the date of this

meeting until the date of the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting is required by law to be held or when varied or revoked by the Company in the general meeting, whichever is the earlier, to allot and issues shares and/or convertible securities in the Company at any time. The number of Shares and/or convertible securities that the Directors may allot and issue under this resolution would not exceed 100 per cent (100%) of the issued share capital excluding treasury shares, of which the total number of Shares and convertible securities issued other than on a pro rata basis to existing shareholders shall not exceed 50% of the total number of issued Shares excluding treasury shares of the Company, at the time the resolution is passed.

75



DIRECTORS’ RECOMMENDATION

The Directors are all eligible to participate in, and are therefore interested in the LBC PSS and/or LBC RSS. They have accordingly abstained from making any recommendation on, and in the case of Directors who are Controlling Shareholders, shall abstain from voting in respect of Resolution 7.

Each Director shall also decline to accept appointment as proxies for any Shareholder to vote in respect of the said Resolution 7 unless specific instructions have been given in the Proxy Form on how the Shareholders wish for their votes to be cast in respect of the said Resolution.

ABSTENTION FROM VOTING

Pursuant to Rule 858 of the Catalist Rules, Shareholders who are eligible to participate in the LBC RSS and LBC PSS should abstain from voting on resolution 7, and should not accept nominations as proxies unless specific instructions have been given in the proxy instrument by the Independent Shareholders appointing them on how they wish their votes to be cast for resolution 7.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors collectively and individually accept full responsibility for the accuracy of the information given herein and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and opinions expressed in this Notice are fair and accurate in all material respects and there are no material facts the omission of which would make any statement in this Notice misleading in any material respect.

SGX-ST DISCLAIMER

This Notice has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, Collins Stewart Pte. Limited, for compliance with the relevant rules of the SGX-ST. Collins Stewart Pte. Limited has not independently verified the contents of this Notice. This Notice has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this Notice, including the correctness of any of the statements or opinions made or reports contained in this Notice.

The contact person for the Sponsor is Mr Alex Tan, Managing Director, Corporate Finance, Collins Stewart Pte. Limited at 77 Robinson Road #21-02 Singapore 068896, telephone (65) 6854 6160.

Notes:

1. A member of the Company entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy in his stead.

2. A proxy need not be a member of the Company.

3. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney.

4. The instrument appointing a proxy must be deposited at the registered office of the Company at 149 Rochor Road, #05-13/15 Fu Lu Shou Complex, Singapore 188425 not later than 48 hours before the time appointed for the Meeting.

This page has been intentionally left blank.

PROXY FORM

LERENO BIO-CHEM LTD.(Incorporated in the Republic of Singapore)(Registration No. 197401961C)

IMPORTANT1. For investors who have used their CPF monies to buy the ordinary shares in the

capital of Lereno Bio-Chem Ltd., this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to vote should contact their CPF Approved Nominees.

I/We, (Name) NRIC/Passport No. of

(Address)being *a member/members of LERENO BIO-CHEM LTD. (the “Company”), hereby appoint:

Name AddressNRIC/

Passport No.

Proportion ofShareholdings to be represented by

proxy (%)

*and/or (delete as appropriate)

Name AddressNRIC/

Passport No.

Proportion ofShareholdings to be represented by

proxy (%)

or failing *him/them, the Chairman of the Annual General Meeting of the Company as *my/our *proxy/proxies, to vote for *me/us on *my/our behalf and, if necessary, to demand a poll at the Annual General Meeting of the Company to be held at 149 Rochor Road Fu Lu Shou Complex #05-13/15 Singapore 188425 on Friday, 29 July 2011 at 11.30 a.m. and at any adjournment thereof.

*I/We direct *my/our *proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the Annual General Meeting as indicated with an “X” in the spaces provided hereunder. If no specified directions as to voting are given, the *proxy/proxies will vote or abstain from voting at *his/her/their discretion.

No. Ordinary Resolutions For Against1. To receive and adopt the Audited Financial Statements of the Company for the financial year

ended 31 March 2011 and the Directors’ Report and the Auditors’ Report thereon. 2. To re-elect Tan Sri Dato’ Kamaruzzaman Bin Shariff, a Director retiring pursuant to Article 95

of the Company’s Articles of Association.3. To re-appoint Mr Yap Boh Pin, a Director pursuant to Section 153(6) of the Companies Act,

Cap. 50.4. To approve the Directors’ fees of S$72,000 for the financial year ended 31 March 2011. (2010:

S$ 82,297)5. To re-appoint Foo Kon Tan Grant Thornton LLP as auditor of the Company and to authorise

the Directors to fix their remuneration. 6. To approve the Renewal of the Shareholders’ Mandate for Interested Person Transactions.7. To authorise Directors to grant awards and to issue and allot shares under the LBC Restricted

Share Scheme (“RSS”) and LBC Performance Share Scheme (“PSS”) respectively.8. To authorise Directors to issue shares pursuant to Section 161 of the Companies Act, Cap. 50.

Dated this day of 2011

Total number of Shares in Number of Shares(a) CDP Register(b) Register of Members

Signature of Shareholder(s) or, Common Seal of Corporate Shareholder*Delete accordingly

IMPORTANT: PLEASE READ NOTES FOR PROXY FORM

Notes:1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more

than two proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each such proxy.

3. This instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorized in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or duly authorised officer.

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

5. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at 149 Rochor Road, #05-13/15 Fu Lu Shou Complex, Singapore 188425 not less than 48 hours before the time set for holding the Annual General Meeting.

6. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he should insert the aggregate number of shares. If no number of shares is inserted, this form of proxy will be deemed to relate to all the shares held by the member of the Company.

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company.

8. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the time set for the Annual General Meeting.

This page has been intentionally left blank.

149 Rochor Road #05-13/15,Fu Lu Shou Complex Singapore 188425Tel: 6339-2822 • Fax: 6339-0020

AnnuAl RepoRt 2011 - National University of...

Documents

Transcript of AnnuAl RepoRt 2011 - National University of...