Food Junction AR10_lowres

It’s All About The

Annual Report 2010

Food Junction Holdings Limitedwww.foodjunction.com

Experience!

Contents10 Chairman’s Statement

12 Managing Director’s Review

23 Customer Initiatives: Enhancing the Experiences

24 Our Outlets

26 Our People Truly Matters

27 Making A Difference

28 Our Directors

30 Corporate Structure

31 Directorate & Corporate Information

33 Corporate Governance

44 Directors’ Report

94 Statistics of Shareholdings97 Notice of Annual General Meeting

07 Financial Highlights

01 At A Glance: One Brand, Many Experiences

46 Statement by Directors

47 Independent Auditors’ Report

48 Balance Sheets49 Income Statements

50 Statements of Comprehensive Income

53 Consolidated Cash Flow Statements

51 Statements of Changes In Equity

54 Notes to the Financial Statements

1Annual Report

Food is dynamic − the intertwining, melding of the senses that enhance taste, visual appeal, and texture, evoking “so-shiok!” experiences.

At Food Junction, we are in the business of interplaying with various cuisines and flavours that are delivered in modern comfort and convenience. We define culinary journeys that are beyond the realm of simple eating. Our brands and restaurant concepts are all about enhancing the food experience that will carry you far beyond taste.

Sense our passion, savour the Food Junction experience!

At A Glance:One Brand, Many Experiences

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Food Junction has come a long way since we opened our first food court in 1993. Today, Food Junction is not just about food courts – we are a new generation lifestyle food service company offering an array of food and beverage options. From a mix of cosy food courts to novel “Food Apps”, our consumers throughout the region can look forward to interactive, multi-sensory experiences of a myriad flavours, sights and scents.

At Food Junction, we hope to bring a different dimension to the dining experience in the markets we operate in. We have proven that we can make every gastronomic experience a memorable one that goes beyond simply eating to a multi-sensory culinary adventure.

Food Junction – one brand, many experiences.

At A Glance:One Brand, Many Experiences (cont’d)

Foodjunction - Harbourfront

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One Brand,Many Experiences.

Food Courts

Restaurants Food Apps

Cooking Studios

Shanghai & Suzhou, China

Singapore Singapore

Singapore

Singapore

Kuala Lumpur, Malaysia

Hong Kong SingaporeSingapore

Jakarta, Indonesia

Singapore, Malaysia & China

At A Glance: One Brand, Many Experiences (cont’d)

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MalaysiaFood Garden• The Gardens, Mid Valley City,

Kuala Lumpur

Food Junction • Mid Valley MegaMall, Kuala Lumpur• City Square, Johor Bahru

IndonesiaFJ Square• UPH, Jakarta• Pluit Village, Jakarta

Geographical Food-print


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ChinaFood Junction• Seasons Place, Beijing

Malone’s American Café • 255 Tong Ren Road, Shanghai• 199 Fang Dian Rd, Shanghai• Regalia Shopping Mall, Suzhou City

Hong KongLippo Chiuchow Restaurant • Lippo Centre

Singapore Food Junction• Bugis Junction• Century Square• Funan Digitalife Mall• Great World City• Harbour Front Centre• Junction 8• Lot 1• NEX @ Serangoon• NUS, Yusof Ishak House• United Square

Food Culture• Century Square• Lot 1

The Food Place• Raffles City

TETSU• Tanglin Mall

Toast@Work• Bugis Junction• Century Square• Great World City• Junction 8• Lot 1• NEX @ Serangoon• NUS, Yusof Ishak House• Raffles City• United Square

SOEZ Cooking Studio• Great World City

SOEZ Cooking Playground• United Square


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Core Business Key Highlights in FY2010

Food Courts • Opened first campus Food Junction food court at the National University of Singapore’s Yusof Ishak House

• Opened our biggest foodcourt at Singapore’s newest and largest suburban mall in Serangoon, NEX

• Renovated five Food Junction food courts in Singapore at Lot 1, Century Square, Harbourfront and United Square, as well as Food Culture in Century Square

Restaurants • Tetsu Japanese restaurant in Singapore was voted one of Singapore’s Best Restaurants for the second year running, and also named Regional Best Restaurant by Singapore Tatler

• Opened a new Malone’s restaurant in Suzhou, bringing the total number to three in China

• Acquired Lippo Chiuchow Restaurant in Hong Kong

Food Apps • Expanded the number of Toast@Work outlets from 2 to 9

SoEZ Cooking Playground • Opened the new SoEZ Cooking Playground at United Square

Key Business Highlights


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Financial Ratios

Financial Highlights

FY20061.10.2005

to 30.9.2006($’000)

FY20071.10.2006

to 30.9.2007($’000)

FY20081.10.2007

to 30.9.2008($’000)

FY20091.10.2008

to 31.12.2009($’000)

2009*1.01.2009

to31.12.2009

($’000)

FY20101.01.2010

to31.12.2010($’000)

Earnings per Share (EPS)

Net profit attributable to shareholders 6,394 5,163 3,291 4,335 3,248 2,645

Earnings per Share (cents)

Dividends per Share

Exempt 1-Tier Interim Dividend Exempt 1-Tier Special DividendExempt 1-Tier Final Dividend

2,405 2,406 2,406

3,609 601

2,406

1,203 - 1,203

972 - -

972 - -

324 -

648

Total Exempt 1-Tier Dividend 7,217 6,616 2,406 972 972 972

Dividends per Share (cents)

Dividends Cover (times)

Return on Assets

Net profit attributable to shareholders Total Assets

6,394 39,487

5,163 35,691

3,291 37,576

4,335 44,963

3,248 44,963

2,645 50,181

Return on Assets 16.2% 14.5% 8.8% 9.6% 7.2% 5.3%

Return on Shareholders’ Equity

Net profit attributable to shareholdersShareholders’ Equity

6,394 24,041

5,163 22,546

3,291 23,404

4,33529,800

3,24829,800

2,645 31,169

Return on Shareholders’ Equity 26.6% 22.9% 14.1% 14.5% 10.9% 8.5%

FY200630.9.2006

FY2007 30.9.2007

FY2008 30.9.2008

FY2009 31.12.2009

FY201031.12.2010

Net Assets per Share

Net Assets 24,446 22,546 23,404 29,800 31,379

Net Assets per Share (cents)

Net Tangible Assets per Share

Net Tangible Assets 24,041 22,546 23,404 24,193 22,246

Net Tangible Assets per Share (cents)

Current Ratio

Current Assets Current Liabilities

28,138 (13,967)

24,034 (11,751)

23,478 (12,611)

25,823 (13,522)

23,522 (16,145)

Net Current Assets 14,171 12,283 10,867 12,301 7,377

Current Ratio (times)

* These figures are presented for purposes of meaningful comparison of 12-months performance.(1) Computed net of Treasury shares as at 31 December 2010

5.32 cents 4.29 cents 2.74 cents 3.34 cents 2.51 cents 2.04 cents

6.00 cents 5.50 cents 2.00 cents 0.75 cents 0.75 cents 0.75 cents

20.32 cents 18.74 cents 19.46 cents 22.99 cents 24.46 cents(1)

19.99 cents 18.74 cents 19.46 cents 18.66 cents 17.34 cents(1)

0.89 times 0.78 times 1.37 times 4.46 times 3.34 times 2.72 times

2.01 times 2.05 times 1.86 times 1.91 times 1.46 times

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Consolidated Profit & Loss StatementsFY20061.10.2005

to 30.9.2006

FY20071.10.2006

to 30.9.2007

FY20081.10.2007

to 30.9.2008

FY20091.10.2008

to 31.12.2009(15 months)

2009*1.01.2009

to31.12.2009(12 months)

FY20101.01.2010

to31.12.2010

($’000) ($’000) ($’000) ($’000) ($’000) ($’000)

Turnover 42,319 44,086 45,313 59,992 47,274 47,362

By Business SegmentsFood Court OperationsF&B Operations

16,643 25,676

16,484 27,602

15,679 29,634

21,29638,696

16,80830,466

18,75228,610

42,319 44,086 45,313 59,992 47,274 47,362

By Geographical SegmentsSingapore OperationsMalaysia OperationsIndonesia OperationsChina OperationsHong Kong Operations

38,598 3,605

116 - -

39,104 3,953

437 592 -

40,209 3,956

466 682 -

46,318 6,303

887 6,484 -

36,522 4,940

797 5,015 -

34,767 5,107 1,300 4,917 1,271

42,319 44,086 45,313 59,992 47,274 47,362

TurnoverCost of food and beveragesPersonnel expensesOperating lease expensesOther operating expenses (net of other income)

42,319 (6,877)

(10,432)(12,016)

(4,676)

44,086 (7,395)

(11,211)(12,956)

(5,851)

45,313 (8,433)

(11,735)(14,230)

(6,834)

59,992 (10,967)(16,396)(19,100)

(8,304)

47,274 (8,538)

(13,130)(15,492)

(6,266)

47,362 (7,930)

(12,131)(17,110)

(6,862)

Profit Before TaxationLess : Taxation

8,318 (1,970)

6,673 (1,710)

4,081 (790)

5,225 (890)

3,848 (600)

3,329 (656)

Profit After TaxationLess : Non-controlling Interests

6,348 46

4,963 200

3,291 -

4,335 -

3,248 -

2,673 (28)

Profit Attributable to Shareholders 6,394 5,163 3,291 4,335 3,248 2,645

Food Court OperationsF&B Operations

5,797 2,521

5,322 1,351

3,782 299

4,379 846

3,929 (81)

3,765 (436)

Profit/(Loss) Before Taxation by Business Segments 8,318 6,673 4,081 5,225 3,848 3,329

Singapore OperationsMalaysia OperationsIndonesia OperationsChina OperationsHong Kong Operations

8,808 (167) (90)

(233) -

6,625 873 16

(841) -

4,172 861

(305) (647) -

4,157 1,707 (127) (505)

(7)

3,195 1,256

(93) (503)

(7)

2,464 1,536

120 (1,130)

339

Profit/(Loss) Before Taxation by Geographical Segments 8,318 6,673 4,081 5,225 3,848 3,329

Profit Margin

By Business SegmentsFood Court OperationsF&B OperationsOverall Profit Margin

34.8%9.8%

19.7%

32.3%4.9%

15.1%

24.1%1.0%9.0%

20.6%2.2%8.7%

23.4%-0.3%8.1%

20.1%-1.5%7.0%

By Geographical SegmentsSingapore OperationsMalaysia OperationsIndonesia OperationsChina OperationsHong Kong OperationsOverall Profit Margin

22.8%-4.6%

-77.6%--

19.7%

16.9%22.1%3.7%

-142.1%-

15.1%

10.4%21.8%

-65.5%-94.9%

-9.0%

9.0%27.1%

-14.3%-7.8%

-8.7%

8.7%25.4%

-11.7%-10.0%

-8.1%

7.1%30.1%9.2%

-23.0%26.7%7.0%

* These figures are presented for purposes of meaningful comparison of 12-months performance.

Financial Highlights (cont’d)

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Consolidated Balance SheetsFinancial Highlights (cont’d)

FY200630.9.2006($’000)

FY200730.9.2007($’000)

FY200830.9.2008($’000)

FY200931.12.2009($’000)

FY201031.12.2010($’000)

Fixed AssetsInvestment PropertyIntangible AssetsNon-current Assets

6,145 1,050

-4,154

5,396 1,300

-4,961

8,198 --

5,900

8,571 -

5,607 4,962

9,122 -

9,132 8,405

11,349 11,657 14,098 19,140 26,659

Current AssetsCurrent Liabilities

28,138 (13,967)

24,034(11,751)

23,478(12,611)

25,823 (13,522)

23,522 (16,145)

14,171 12,283 10,867 12,301 7,377

(1,074) (1,394) (1,561) (1,641) (2,658)

24,446 22,546 23,404 29,800 31,378

Share CapitalTreasury SharesAccumulated ProfitsTranslation Reserves

9,623 -

14,548 (130)

9,623 -

13,096 (173)

9,623 -

13,981 (200)

12,707 -

17,344 (251)

12,707 (286)

19,016 (268)

Non-controlling Interests24,041

40522,546

-23,404

-29,800

- 31,169

209

24,446 22,546 23,404 29,800 31,378

Capital Expenditures

By Business SegmentsFood Court OperationsF&B Operations

3,102 344

2,400 265

3,592 1,405

2,317 1,239

1,706 1,636

3,446 2,665 4,997 3,556 3,342


1,297 416 156

1,577 -

1,305 4

30 1,326

-

4,685 12 34

266 -

2,309 442 388 417 -

2,795 7

320 49

171

3,446 2,665 4,997 3,556 3,342

Total Assets

By Business SegmentsFood Court OperationsF&B OperationsUnallocated

12,353 880

26,254

13,085 886

21,720

16,205 1,875

19,496

14,895 2,654

27,414

30,378 7,066

12,738

39,487 35,691 37,576 44,963 50,182


31,299 3,971

846 3,371

-

27,261 4,738

857 2,835

-

29,412 4,783

693 2,688

-

33,456 7,097

874 3,043

493

37,494 6,114

948 2,463 3,163

39,487 35,691 37,576 44,963 50,182

Non-current Liabilities

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Dear Shareholders,

Food Junction has come a long way since we were amongst the first in Singapore to introduce the modern, themed food court concept in 1993. The Group has since evolved into a new-generation lifestyle food service company with a strategic mix of food courts, restaurants and innovative F&B concepts known as “Food Apps”. This strategy has enabled us to continually stay connected with consumer demands in Singapore and the region.

Moving ahead, while the bulk of our revenue is currently generated from the food court business, the Group’s longer term strategy is to have a more balanced portfolio with equal revenue contribution from food courts and other F&B businesses.

It is for this reason that we acquired Hong Kong’s All Around Group and its famed Lippo Chiuchow Restaurant in November 2010, as a strategic step towards this direction. The acquisition will give Food Junction a strong foothold to expand our business in Hong Kong, China and beyond, as well as to expand our brand value in the Asia-Pacific region.

New StoresThis has been an exciting year for Food Junction, in terms of new store openings. In October, we opened our first campus food court in Singapore – at the National University of Singapore’s Yusof Ishak House (“NUS”). It marks our foray into non-conventional F&B locations in Singapore, such as educational institutions. Besides bringing Food Junction’s unique lifestyle dining experiences and exciting food offerings to the student and academic staff community, we also hope to cultivate a strong following among the next generation of foodies. The youth market is one specific growth segment that we have identified as being of good potential for further development. We have

observed the changing tastes and dining preferences, as well as the increasing purchasing power, of today’s students, and hence, poses a strong potential for Food Junction to tap on.

In the last quarter of the year, we opened our biggest food court to-date – at Nex Mall (“Nex”) in Serangoon Central. Our latest food court is a sprawling 17,000 sq ft with a seating capacity for 595 customers. To ride on the rising trend of interactivity with food, we added another SoEZ Cooking Playground at the kid’s enclave of United Square in November 2010, located adjacent to the new Toast@Work and Food Junction@United Square. Since the beginning of this year, we have completed renovating five food courts, as well as opened seven Toast@Work stalls.

Financial ReviewI wish to highlight that in FY2010, the Group operated for 12 months (from 1 January 2010 to 31 December 2010) whereas in FY2009, the Group had operated for 15 months (from 1 October 2008 to 31 December 2009) due to changes in accounting year-end from October to December.

Consequently, FY2010 results (Turnover of $47.36 million, net profit attributable to shareholders of $2.65 million and earnings per share of 2.04 cents) would be lower as compared to FY2009 results (Turnover of $59.99 million, net profit attributable to shareholders of $4.33 million and earnings per share of 3.34 cents) due to shorter operating period in FY2010.

For a meaningful review of the financial performance for similar 12 months period from January to December for both FY2010 and FY2009, we wish to draw your attention to the “Financial Highlights” on pages 7 to 9 of the Annual Report.

On an overall basis, turnover had increased marginally to $47.36 million (2009: $47.27

million). Turnover from food court operations increased by 11.5% to $18.75 million (2009: $16.81 million) due to turnover contribution from the opening of two new food courts (NUS and Nex) during the year. This was partly mitigated by turnover loss due to temporary closure of our existing food courts that underwent renovation and retrofitting works.

The turnover from food and beverage (“F&B”) operations have however declined by 6.1% to $28.61 million (2009: $30.47 million) as a result of lower turnover contributions from our F&B restaurants in China which encountered lower consumer patronage and spending, partly mitigated by turnover contribution of the newly acquired Lippo Chiuchow restaurant from November 2010. The overall decline in F&B turnover was also attributable to lower turnover contribution from our self-operated stalls, as management had made a conscious effort to cease or lease out these non-performing self-operated stalls as part of measures to manage operating costs to improve the bottom line.

In line with the decline in overall F&B turnover, the Group recorded lower operating expenses, as evidenced in lower cost of food and beverages (FY2010: $7.93 million; 2009: $8.54 million) and lower personnel expenses (FY2010: $12.13 million; 2009: $13.13 million). The overall lower operating expenses were however offset by higher operating lease rental expenses that increased by 10.4% (FY2010: $17.11 million; 2009: $15.49 million) as the Group contracted two new leases (NUS and Nex) and consolidated rental expense of newly acquired Lippo Chiuchow restaurant, all of which happened in the last quarter of the year. Apart from these new leases in FY2010, the overall increase in lease rental expenses was also attributable to lower rental rebates from the landlords in FY2010 as compared to 2009.

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Chairman’s Statement

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Overall, the Group remained profitable in spite of the challenges in FY2010, and recorded an earnings per share of 2.04 cents (2009: 2.51 cents).

As at 31 December 2010, the Group maintained a healthy net cash balance of $20.27 million (31 December 2009: $21.09 million) and an improvement of net asset value per share to 24.46 cents (FY2009: 22.99 cents).

DividendThe Directors have proposed a final dividend of 0.25 cents per ordinary share for the financial year ended 31 December 2010, subject to shareholders’ approval at the Annual General Meeting. We wish to highlight to shareholders that the total cash dividends paid out in 2010 was 0.75 cents per share.

The Way AheadWith economic growth in Singapore and the region expected to continue into 2011, we are optimistic of the Group’s prospects, while at the same time, we anticipate operating conditions to remain competitive. While we continue our efforts in improving our sales performance and controlling operating costs, we will also focus on growing our food court and F&B businesses in and beyond Singapore. As part of our strategy to regain market share and position the Group for new growth, we have formulated a roadmap covering four core areas, namely enhancing our customers’ dining experience through Food Apps; strengthening our capabilities; driving efficiency, and expanding our network strategically.

AppreciationOur achievements would not have been possible without the dedication of our employees and the support of our business partners and shareholders. Because of you, we have been able to accomplish a level of growth that has far exceeded our expectations.

On 15 March 2011, Mr John Chang Tong Wah had relinquished his role as Executive Director of the Company. We wish to express our appreciation to Mr John Chang for his past contributions to the Group and wish him all the best in his future endeavours.

We believe the Group is well-positioned for long-term sustainable growth and we look forward to sharing new milestones with you as they come along. We appreciate your trust in us and we will work hard to ensure that our performance continues to deliver good returns for your investment in 2011 and beyond.

Christopher James WilliamsNon-Executive Chairman

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Managing Director’s Review

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Operations Review

FY2010 was a year of consolidation for the Group. We spent the year reconfiguring our business to streamline our operations and improve efficiency, and more importantly, rejuvenating the Food Junction brand. In this aspect, we are happy to report that we have made good progress on all fronts, which we will elaborate in the next few pages.

At the start of FY2010, we set out to expand our food-print across our existing key markets of Singapore, Malaysia, Indonesia and China, and to look for opportunities in new ones. We are pleased that we have not only opened new F&B outlets under our various brands, but also acquired new ones.

NEX, Serangoon

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Food Courts:Savour the Choices

People who are passionate about their food, love the option of multiple dining choices. Our food courts, under our brands of Food Junction, Food Culture, FJ Square, Food Garden and The Food place, definitely fulfil this inherent wish in all of us to have everything we like to eat in one place!

We have worked very hard to ensure our food courts carry a good mix of both local and international cuisine so that be it a need to quieten hunger pangs or satisfy a sweet tooth, to have a leisurely meal or a quick bite, every customer who walks into Food Junction’s various branded food courts leaves with a full and sated belly.

Snapshot of our OperationsAs at 31 Dec 2010 As at 31 Dec 2009

Food courts(Brands include Food Junction, Food Culture, FJ Square, Food Garden and The Food Place)

Singapore – 13Malaysia – 3Indonesia – 2

China – 1Total: 19

Singapore – 11Malaysia – 3Indonesia – 2

China – 1Total: 17

Self-operated stalls Singapore – 34Malaysia – 7

Indonesia – 10China – 1Total: 52

Singapore – 42Malaysia – 7

Indonesia – 12China – 1Total: 62

Toast@Work(Singapore)

9 2

Tetsu Japanese Restaurant(Singapore)

1 1

SoEZ Cooking Studios(Singapore)

2 1

Malone’s Restaurants(China)

3 2

Lippo Chiuchow Restaurant(Hong Kong)

1 -

Managing Director’s Review (cont’d)

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Foodjunction - NEX, Serangoon

Two new openings in 2010 reinforced our mantra to bring delicious, affordable food to the masses at convenient locations. The addition of two new food courts to our stable brought the total number to 19, up from 17 in 2009. This included a 17,000 square feet, 595-seat Food Junction at Singapore’s newest and largest suburban mall in Serangoon, Nex, and our first on-campus food court in Singapore – a 11,438 square feet, 490-seat Food Junction at the National University of Singapore’s Yusof Ishak House.

The new Food Junction at Nex is our biggest food court and it boasts some of Singapore’s most sought-after and award-winning hawkers. These include Kim’s Hokkien Mee – winner of Heritage Brands 2007 and The Green Book Best Food Award 2009/10; Dju Dju Indonesian


Cuisine – winner of Singapore Best Food Award (Fine Culinary Skills in Indonesian Cuisine; and Cucina 17 Pasta & Grill – helmed by a former 5-star hotel chef.

The other new food court at the local university is yet another milestone for the Group as it marks our first foray beyond conventional venues into non-conventional F&B locations such as educational institutions in Singapore. We see F&B as an integral part of the modern lifestyle, which the younger generation fully embodies and this is a segment we intend to put more focus on.

Five of our food courts in Singapore have also been given facelifts, including the Food Junctions in Lot 1, Century Square, Harbourfront and United Square, as well as Food Culture in Century Square. All have

expanded menus and are looking sleeker and more contemporary. For instance, new stalls at Food Junction @ United Square include Teppanyaki, Toast@Work, Fish Soup, Soup Master and Mini Wok. The renovations were part of the brand rejuvenation we started in 2009, and we believe the new look now aptly reflects our new image as a vibrant and forward looking company.

For the time being, food courts remain our bread and butter business and we are on the constant lookout to expand our network within our home ground and beyond, to make delicious food accessible to everyone.

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Experience the Nostalgia

This Food App has grown from strength-to-strength in popularity and acceptance since we introduced it at two of our food courts in 2009. In 2010, we expanded the number of Toast@Work outlets to 9.

Despite the keen competition in this segment, we were able to differentiate ourselves with our distinct offerings and today, Toast@Work has become a quintessential part of our food courts. Its easily recognisable logo, comprising a slice of bread with the ‘@’ symbol, is synonymous with our local coffees and teas, as well as our Signature Roll, Fried Bee Hoon and Kaya Toast. Riding on the success of the existing Toast@Work outlets, we hope to offer this Food App at all our food courts in Singapore and explore opportunities to export the concept to our overseas markets.

Toast@Work - NEX, Serangoon

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Tantalise the Senses

In 2010, Tetsu won twin accolades – in addition to being voted one of Singapore’s Best Restaurants for the second year running, it was also named Regional Best Restaurant by Singapore Tatler.

Tetsu was the first to offer a Tempura and Tonkatsu menu presented Kushi-style, which means breaded and on a skewer. Its weekly promotion featuring seasonal ingredients from Japan, such as Buri (or Amberjack) and Madai (or Red Sea Bream), has gained quite a cult following among discerning diners in the Lion City. This, in addition to its wildly popular five-course kaiseki sets ranging from $35-$55 and touted as the best value in town, has cemented Tetsu’s position as a hot favourite among scores of Japanese food lovers in Singapore.

Tetsu - Tanglin Mall

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Grooming the Next Generation of Foodies

Our SoEZ concept has really taken off. Riding on the success of the SoEZ Cooking Studio in our food court at Great World City, we opened the new SoEZ Cooking Playground at United Square in November 2010.

Just like the flagship school at Great World City, the brand-new SoEZ Cooking Playground caters to a wide spectrum of

participants including tourists, adults, kids, corporate groups and even domestic helpers. All the hands-on classes are kept to a maximum of nine participants to ensure that each gets individual attention and coaching from the instructors who include top chefs from our stable of fine restaurants and guest chefs who have worked at renowned restaurants and trained under famous chefs.

SoEZ has been particularly successful with a group that is close to our hearts – children! This is also attributable to the fact that both these cooking studios are strategically located in malls that offer a high percentage of children-related goods and services, and this is where SoEZ fits right in. There is nothing more rewarding than to see a child’s face fill with concentration as he or she mixes

a cake or cookie batter, but what truly melts the heart is when their faces light up with pride and joy at the finished product. We have been told by many parents that our classes have helped their kids to gain confidence in and around the kitchen. These little chefs have also become much more interested in what goes into their food and how it is prepared.

The concept of SoEZ is simple wholesome recipes that are of course “so easy” to prepare. The studio’s inviting, open concept design also means that diners in the food court are entertained and engaged during their meals, as they watch scrumptious dishes being whipped up on the spot by aspiring cooks.

The course schedule changes every month, and there are more than 20 different things, both sweet and savoury, to choose from the menu each time. The cooking studios are available for booking for children’s parties and corporate events.

SoEZ Cooking Playground - United Square

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A League of Its Own

The Lippo Chiuchow Restaurant, a popular venue for special occasions such as wedding and birthday banquets, is a place to be seen in, thanks to its prime location in Hong Kong’s Central and its grand frontage near the entrance of Lippo Centre.

The restaurant has earned quite a reputation among aficionados of Hong Kong-style Chaozhou cuisine which hails from the eastern Guangdong province. Signature dishes include the quintessential braised goose and steamed pomfret with ginger and scallions.

In November 2010, Food Junction Holdings Ltd (Food Junction), through its subsidiary Food Junction International Pte Ltd, acquired All Around Ltd for $5.21m. All Around Ltd holds 90% of LCR Catering Services Ltd which owns and manages the Lippo Chiuchow Restaurant.

This acquisition was a strategic one as it gives Food Junction a foothold to expand its F&B business in Hong Kong and also provided opportunities for franchising in the Asia-Pacific region. In making the decision to purchase, we felt Lippo Chiuchow Restaurant fitted nicely into Food Junction’s move into the F&B concept and restaurant business.

We are pleased to have added a restaurant of such calibre to Food Junction’s growing family.

Lippo Chiuchow Restaurant, Hong Kong

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Fuel the Passion

Nothing speaks all-American than Malone’s. With its brick and wood interior, beer-lined walls, bar furniture, pub grub, and multiple TV screens blaring ‘live’ games and matches all through the restaurant, this American institution has become the place to hang out in Shanghai since it first opened its doors 17 years ago.

Popular with expats, especially those craving the taste and feel of home, Malone’s two locations in Tong Ren Road and Thumb Plaza, come to life in the late afternoons as office workers pour out of Shanghai’s numerous skyscraper offices and stream through its oak and glass doors to kick back and relax with a beer while enjoying some live music. On weekends, it is a much-loved weekend haunt for passionate sports fans wanting to catch up with friends over a drink or a meal, but more importantly to cheer on their favourite teams.

Originally part of the Canadian chain with the same name, Malone’s was imported into China 17 years ago by a group of Canadians who wanted to bring

Western-style dining and a neighbourhood pub feel to Shanghai. When it first opened, Malone’s was even the first foreign bar which is not attached to a hotel. Since then, it has found its way into the hearts of many and even won “Best Pub” at the That’s Shanghai Food & Drink Awards 2009.

The strength of Malone’s product offering, branding and success and its synergy with our Group led us to acquire it in 2008. Building on its strong foundation, we were able to add a new outlet in Suzhou, China in 2010, bringing the total number to three in China.

With more than 180 items on its menu covering pizzas, pastas, sandwiches and snacks, patrons are spoilt for choice, but those who are passionate about their burgers will fall in love with Malone’s burger menu, which offers 30 different kinds. In fact the restaurant is targeting to sell one million burgers by 2014.

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Malone’s - Shanghai

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New Projects in 2011

With our current operations and new plans, we are confident that 2011 will be an interesting year for the Group.

David LimManaging Director & Chief Executive Officer

MEDZS, Singapore

In closing, we look forward to bringing you even more exciting news in 2011. First up, would be the opening of our new open-concept Mediterranean restaurant, MEDZS, in Orchard Central target to open in March 2011. This restaurant is the first F&B outlet in Singapore to serve up all five Mediterranean fare including Spanish, Moroccan, Greek, French Normandy and Turkish in a one-stop integrated open-dining concept that promises to be a delightful and colourful experience.

Artist Impression

LiXuan, Shanghai

Another exciting opening that you can anticipate, involves the operating of a new Chinese restaurant to be known as “LiXuan”, which will adopt a similar concept to our Lippo Chiuchow restaurant in Hong Kong. This restaurant is situated at Lippo Plaza in Shanghai.

Artist Impression


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Customer Initiatives:Enhancing the ExperiencesFood Junction Privilege Card

To give fans of Food Junction’s many brands even better value for their money, we launched our Food Junction Privilege Card in Singapore on November 1, 2010. Valid for two years at a cost of only $5, it entitles card holders to a 10% discount at all our food courts including Food Junction, Food Culture, The Food Place, and Toast@Work, and a 5% discount at our other brands including Tetsu Japanese Restaurant and SoEZ Cooking Studio and Playground.

New Food Junction Website

The Food Junction website was given a facelift in September 2010 to make it more interactive and customer-focused. There is more animation on the site and it now allows visitors to check on the promotions available at all Food Junction brands. They can also apply and pay for the Food Junction Privilege Card online and cast their votes as to whether the website meets their needs or if it can be improved.

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Food Court Operations

SingaporeFood Junction• #03-30 Bugis Junction• #03-12-20/29 Century Square Shopping Centre• #05-24/34 and #05-K6 Funan Digitalife Mall• #B1-16/17 Great World City• #03-01/04 Harbour Front Centre• #04-01 Junction 8 Shopping Centre• #04-15 Lot One Shopper’s Mall• Level 2, Yusof Ishak House, National University of Singapore• #04-36/37 NEX @ Serangoon• #B1-02, #B1-56M/N & B1-57/59 United Square

Food Culture• #04-10-13 Century Square Shopping Centre• #03-02B Lot 1 Shopper’s Mall

The Food Place• #03-15/16/17 Raffles City Shopping Centre

MalaysiaFood Junction • Unit T-13, 3rd Floor, Mid Valley MegaMall• M5-02 Level 5, Johor Bahru City Square

Food Garden• Lot no. T-216A, 3rd Floor The Gardens, Mid Valley City

IndonesiaFJ Square• Ground Gedung C, UPH• #101 3rd Floor Suite, Pluit Village

ChinaFood Junction• B101 Seasons Place, Beijing

Our Outlets

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F&B Self-Operated Restaurants

SingaporeTETSU• #03-18 Tanglin Mall

Hong KongLippo Chiuchow Restaurant• Shop 4, Ground Floor, Lippo Centre

ChinaMalone’s American Café • 255 Tong Ren Road, Shanghai• Thumb Plaza #17, 199 Fang Dian Rd,

Shanghai• #318 Chang Jiang Rd, Unit 5W, Regalia Shopping Mall, Suzhou City

Cooking Studios

Singapore

SOEZ Cooking Studio• #B1-16/17 Great World City

SOEZ Cooking Playground• #B1-02 United Square

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Food Apps

Singapore Toast@Work• #03-30 Bugis Junction• #03-12-20/29 Century Square Shopping Centre• #B1-15 Great World City • #04-01 Junction 8 Shopping Centre• #04-15 Lot 1 Shopper’s Mall• Level 2, Yusof Ishak House, National University of Singapore • #04-36/37 NEX @ Serangoon• #03-15/16/17 Raffles City Shopping Centre• #B1-02, #B1-56M/N & B1-57/59 United Square

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Staff TrainingFood Junction considers our people as our most important asset and key to making the Company one of the region’s top lifestyle food service companies. The learning experience is a continuous journey and we believe in investing in our employees so that they are equipped with the requisite skills to take Food Junction to the next level of growth. In order to achieve this, we have in place a series of training and development programmes to help our people improve their management skills, as well as orientation programmes and on-the-job training to expose newbies to the various business arms of Food Junction when they join us.

In 2010, a group of 90 Food Junction employees from the supervisory to operations divisions were selected to attend a service training session with Integrated Learning Systems. Working in a service industry requires one to have specific skills and mindsets in order to understand and communicate efficiently with customers.

Our PeopleTruly Matters

Monthly Birthday Celebrations

At Food Junction, it has become a company tradition to celebrate the birthdays of everyone in the office. All the staff, including management, will take time out from their busy schedules to gather together and have some fun, food and drinks. No birthday celebration is complete without a birthday cake, and just for this occasion, the birthday ‘babies’ get to savour a specially hand-crafted cake baked personally by Food Junction’s very own pastry chef!

On 24 December, we held a birthday cum Christmas Eve party for our staff. It was a time for everyone to wind-down, enjoy the Christmas goodies and relax after a hectic year. Apart from the signed birthday cards and Food Junction vouchers, a lucky draw was also held where lucky winners walked away with many attractive prizes sponsored by the management.

Over a period of five months, our staff attended several courses such as ‘Communication & Relationship Management Program’ for those at the supervisory level, and ‘Deliver Excellence Service’ for those working at the operations level. Through a combination of active knowledge sharing, games, discussions and role plays, participants gained valuable insights into what constitutes the “right” service mindset. They also learnt to identify customers’ needs

and picked up effective customer communication techniques among other skills.

We will continue to put our employees through similar training programmes to motivate them and enhance their work performance.

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sea, and hope that it inspired new aspirations, perhaps even a career in marine biology someday!

As a growing food and beverage group in Singapore and the region, our sphere of influence is not limited to our food courts and restaurants. In fact, we see our broader role in the communities that we serve.

Children – the building blocks of society - should see that the world is their oyster and the future is filled with hope and new beginnings. At Food Junction, we believe a positive impact on young ones from underprivileged homes will resonate throughout their lives and give them the courage to dream big.

As part of our ongoing commitment to serve the local community, funds are allocated each year to support initiatives that enrich the lives of less fortunate children. In 2010, we continued to support the Children for Children event, for the second year running. This annual event raises money for both The Straits Times School Pocket Money Fund as well as The Business Times Budding Artists Fund. The former benefits school-going children from low-income families and helped an estimated 12,400 children in 2010 alone, the latter aims to enable children between the ages of five and 12 years distanced by socio-economic circumstances, to pursue their aspirations to develop artistic talents in music, dance, theatre, visual arts and theatre production.

We believe our gift of $10,000 will be used for initiatives that will make a positive impact on the lives of some of these youngsters and help ease the

financial burdens of their parents.

Held on Children’s Day (October 1), the event saw 1,000 underprivileged kids enjoying a fun-filled day at the Underwater World Singapore. Our hearts were gladdened to see their faces light up at the wonders of the

Making ADifference

Photo by Joseph Nair

Photo by Joseph Nair

In addition to the Children for Children event, Food Junction is also a corporate partner of the Learning Family Programme offered by the South East Community Development Council. In 2010, we donated close to $2,500 worth of Christmas toys to the programme, which was developed to support academically weak kindergarten children from low-income families. It seeks to help these kids enhance their self-confidence as well as improve their reading, writing and mathematical abilities. The programme is unique because it involves the parents so that they are also able to pick up the skills that will enable them to continue their child’s learning at home. It has helped some 150 children since its launch in 2007 and one of the graduates of the programme, seven year-old Muhammad Rayyan Rizduan, even topped his primary one class last year!

Since the launch of our SoEZ Cooking Studio at Great World City in 2009, we have committed 10 per cent of the membership fees collected from customers to The Straits Times School Pocket Money Fund. Last year, we were able to donate a sum of $2,226 to the charity.

Last Christmas, we played Santa and donated a whole lot of toys to the Jamiyah Children’s Home and the Pertapis Children’s Home. The screams of excitement that greeted us were enough to make it a most cheerful holiday season for us at Food Junction.

Such outcomes are certainly gratifying. In the year to come, we will definitely continue our efforts to give the less fortunate a helping hand. In addition to monetary donations, our team has pledged to volunteer more of their personal time towards fund raising activities and charitable acts of kindness.

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Mr CHRISTOPHERJAMES WILLIAMS

Mr DAVIDLIM CHIEW POH

Mr JOHNCHANG TONG WAH

Mr Christopher James Williams is a Non-Executive Chairman of the Group since 1 January 2010. He was appointed a Non-Executive Director of the Company on 18 November 2009. He currently serves as a member of the Audit Committee.

Mr Williams qualified as a solicitor in England and Wales in 1986 and was admitted as a solicitor in Hong Kong in 1991. His areas of specialization include mergers and acquisitions, cross border transactions, growth capital, joint ventures and corporate finance. He has been named one of the world’s leading mergers and acquisitions lawyers in the recent editions of the Guide to the World’s Leading Merger and Acquisitions Lawyers, published by Euromoney Publications plc, and the International Who’s Who of Merger and Acquisitions Lawyers, published by Law Business Research.Mr Williams is currently a Partner of Reed Smith Richards Butler, Hong Kong.

Mr Williams is also currently serving as Non-Executive Deputy Chairman of Overseas Union Enterprise Limited, and his past directorships include Robinson and Company Limited and Auric Pacific Group Limited.

Mr David Lim is the Managing Director and Chief Executive Officer (“CEO”) of our Group. He joined our Group on 23 January 2009 as a Non-Executive Director and was re-designated to an Executive Director on 1 June 2009. He was further re-designated to Managing Director & CEO on 16 November 2009.

Mr Lim has more than 20 years of experience in hospitality, leisure and trading industries. He holds a certificate in hotel management from the Singapore Hotel Association Training and Educational Centre.

Mr John Chang is the Executive Director of our Group. He joined our Group on 1 August 2009 as an Executive Director and assumed the role of Chief Financial Officer (“CFO”) and Company Secretary on 31 October 2009. He has relinquished his role of CFO, Company Secretary and Executive Director on 8 February 2011, 18 February 2011 and 15 March 2011 respectively.

Mr Chang has more than 19 years of experience in financial management and hospitality management. He holds a Master of Business Administration from the University of Adelaide in Australia and a Bachelor of Accountancy (Honours) from the National University of Singapore. He is a Fellow Certified Public Accountant of Singapore and a certified Financial Risk Manager.

Non-Executive Chairman Managing Director & Chief Executive Officer

Executive Director

Our Directors

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Dr RONNIETAN KAY POO

Dr Ronnie Tan Kay Poo is a Non-Executive and Non-Independent Director of our Group and was Non-Executive Chairman and Audit Committee member until 1 January 2010. He currently also serves as a Non-Executive Director of Auric Pacific Group Limited. Dr Tan holds a Master degree in Health Administration and has more than 25 years of experience in the healthcare sector.

Mr Tan Kok Hiang is a Non-Executive Independent Director of our Group since 1 October 2001. He is the Chairman of the Audit Committee and a member of the Nominating Committee and Remuneration Committee. Currently, Mr Tan sits on the Boards of a few other public listed companies in Singapore. He has more than 30 years of experience in accounting and finance. He holds a Bachelor of Accountancy (Honours) degree from the University of Singapore and is a member of the Singapore Institute of Directors.

Mr Lee Joo Hai is a Non-Executive Independent Director of our Group since 1 October 2001 and he is the Chairman of the Remuneration Committee. He is also one of the members of the Audit Committee and Nominating Committee. Mr Lee is currently a Partner in a public accounting firm in Singapore. He has more than 20 years of experience in accounting and auditing. He is a Certified Public Accountant of Singapore and is a member of the Institute of Chartered Accountants in England and Wales, United Kingdom.

Mr Teo Kiang Kok is a Non-Executive Independent Director of our Group since 1 October 2002 and he is the Chairman of the Nominating Committee. He is also one of the members of the Audit Committee and Remuneration Committee. Mr Teo is a Senior Partner of ShookLin & Bok LLP, a firm of advocates and solicitors. He has more than 28 years of experience in legal practice and is currently the head of corporate finance and China practice groups of ShookLin & Bok LLP. His main areas of practice are corporate finance, international finance and securities. In the course of his legal practice, Mr Teo has advised listed companies extensively on corporate law and compliance requirements.

Mr TAN KOK HIANG Mr LEE JOO HAI Mr TEO KIANG KOK

Non-Executive and Non-Independent Director

Non-Executive Independent Director



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Food Junction Holdings Limited

Food JunctionManagement Pte Ltd Food Junction Singapore Pte Ltd

T&W Food Junction Sdn. Bhd.

Food Culture Sdn. Bhd.

PT. FJ Square Indonesia

Malone’s Limited

Food Junction Beijing Co., Ltd

All Around Limited

Maibo Restaurant Management(Shanghai) Co., Ltd

Manages and operates food courts in Singapore

Operates F&B stalls in Singapore

Manages and operates food courts and F&B stalls in Malaysia

Dormant Company

Manages and operates food courts and F&B stalls in Indonesia

Owns and manages trademarks in Hong Kong

Manages and operates food courts and F&B stalls in Beijing

LCR Catering Services LimitedOwns and manages a Chinese restaurant in Hong Kong

Manages and operates restaurants in Shanghai

Manages and operates halal food courts and F&B stalls in Singapore

Manages and operates restaurantsand new concept F&B stalls in Singapore

Investment holding companyfor overseas businesses

Investment holding companyfor Malone’s business operations

Food JunctionInternational Pte Ltd

Food Culture Pte Ltd

FNC International Pte Ltd

Malones Holdings Pte Ltd

Corporate Structure

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Directorate & Corporate InformationBoard of DirectorsChristopher James Williams(Non-Executive Chairman)

David Lim Chew Poh(Managing Director & CEO)

John Chang Tong Wah(relinguished as Executive Directoron 15 March 2011)

Ronnie Tan Kay Poo @ Keh Poo(Non-Executive Director)

Tan Kok Hiang(Non-ExecutiveIndependent Director)

Lee Joo Hai(Non-ExecutiveIndependent Director)

Teo Kiang Kok(Non-ExecutiveIndependent Director)

Audit CommitteeTan Kok Hiang (Chairman)Lee Joo HaiTeo Kiang KokChristopher James Williams

Nominating CommitteeTeo Kiang Kok (Chairman)Tan Kok HiangLee Joo Hai

Remuneration CommitteeLee Joo Hai (Chairman)Tan Kok HiangTeo Kiang Kok

AuditorErnst & Young LLPCertified Public AccountantsOne Raffles QuayNorth Tower, Level 18Singapore 048583

Partner-in-charge: Low Yen Mei(since financial year ended31 December 2009)

Share RegistrarBoardroom Corporate & Advisory Services Pte Ltd50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

Company SecretaryJohn Chang Tong Wah (relinguished on 18 February 2011)

Eric Gan Chee Teik (appointed on 18 February 2011)

Registered Office50 Raffles Place#32-01 Singapore Land TowerSingapore 048623(since 22 February 2010)Telephone: (65) 6536 5355Facsimile: (65) 6536 1360

Business Office91 Tanglin Road#02-02 Tanglin PlaceSingapore 247918Telephone: (65) 6338 8213Facsimile: (65) 6336 6108

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Foodjunction - United Square

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Corporate Governance

33

Food Junction Holdings Limited (the “Company”) is committed to good standards of corporate governance, to promote greater transparency and enhance shareholder value. Our Company has adopted measures and practices set out in the Singapore Exchange Securities Trading Ltd (“SGX-ST”) Listing Manual. This report describes our Company’s corporate governance practices during the fi nancial year ended 31 December 2010 with specifi c reference made to the principles and guidelines as set out in the Code of Corporate Governance 2005 (the “Code”).

Board of Directors (Principle 1)The Board of Directors (“Board”) provides the entrepreneurial leadership that leads and controls the Company. The Board sets the Company’s values and standards, ensure that the necessary fi nancial and human resources are in place and works with the Management of the Company to ensure that obligations to shareholders and others are understood and met.The principal functions of the Board are:

1. Approving the board policies, strategies and fi nancial objectives of the Company and monitoring the performance of the Management;

Guideline 1.5

2. Overseeing the process for evaluating the adequacy of internal controls, risk management, fi nancial reporting and compliance;

3. Approving the nomination of board directors; and Guideline 1.5

4. Assuming responsibility for corporate governance.

Other matters requiring board approval are those involving a confl ict of interests for a substantial shareholder or a director, material acquisition and disposal of assets, share issuance, dividends and other returns to shareholders.

Guideline 1.5

The Board will meet a minimum of four times annually and for FY2010, the Board met fi ve times in total. The Board will objectively take decisions in the interest of the Company. The Board Committees comprise the Audit Committee (“AC”), Nominating Committee (“NC”) and Remuneration Committee (“RC”) and the Board delegates certain decision making authorities to these committees. Adhoc meetings are convened when circumstances require.

Guideline 1.3

The Company’s Articles of Association provide for the Board to convene meetings by means of a conference telephone video conferencing, audio visual or other similar electronic means.

In the course of the fi nancial year under review, the number of meetings held and attended by each of the Board and Board Committees together with the directors’ profi le are as below:

Guideline 1.4

Type of Meeting Board AC NC RC

Number of Meetings Held in FY2010 5 4 1 1

Attendance

Christopher James Williams 5 4 – –

David Lim Chiew Poh 5 – – –

John Chang Tong Wah1 5 – – –

Ronnie Tan Kay Poo 5 – – –

Tan Kok Hiang 5 4 1 1

Lee Joo Hai 4 3 1 1

Teo Kiang Kok 5 4 1 1

1 Mr John Chang Tong Wah relinquished as Executive Director on 15 March 2011.

Corporate Governance (cont’d)

34

Upon appointment of each director, the Company will organize orientation programme for the new directors to ensure that incoming directors are familiar with the Company’s business and governance policies, disclosure of interests in securities, disclosure of any confl ict of interest in a transaction involving the Company, prohibitions in dealing in the Company’s securities and restrictions on disclosure of price sensitive information. The Company will also fund (subject to approval by the Chairman of the Company) directors’ attendance at any course of instruction/training programme in connection with their duties as directors in areas such as accounting and legal knowledge, particularly on relevant new laws, regulations and changing commercial risks.

The non-executive directors will constructively challenge and help develop proposals on strategy. The non-executive directors will review the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.

Guideline 1.6

Mr Christopher James Williams

Mr Christopher James Williams is a non-executive Chairman of the Group since 1 January 2010. He was appointed a non-executive Director of the Company on 18 November 2009. He currently serves as a member of the AC.

Mr Williams qualifi ed as a solicitor in England and Wales in 1986 and was admitted as a solicitor in Hong Kong in 1991. His areas of specialization include mergers and acquisitions, cross border transactions, growth capital, joint ventures and corporate fi nance. He has been named one of the world’s leading mergers and acquisitions lawyers in recent editions of the Guide to the World’s Leading Merger and Acquisitions Lawyers, published by Euromoney Publications plc, and the International Who’s Who of Merger and Acquisitions Lawyers, published by Law Business Research. Mr Williams is currently a Partner of Reed Smith Richards Butler, Hong Kong.

Mr Williams is also currently serving as non-executive Deputy Chairman of Overseas Union Enterprise Limited, and his past directorships include Robinson and Company Limited and Auric Pacifi c Group Limited.

Mr David Lim Chiew Poh

Mr David Lim is the Managing Director & Chief Executive Offi cer (“CEO”) of our Group. He joined our Group on 23 January 2009 as a non-executive Director and was redesignated to an Executive Director on 1 June 2009. He was further redesignated to Managing Director & CEO on 16 November 2009.

Mr Lim has more than 20 years of experience in hospitality, leisure and trading industries. He holds a certifi cate in hotel management from the Singapore Hotel Association Training and Educational Centre.

Mr John Chang Tong Wah

Mr John Chang is the Executive Director of our Group. He joined our Group on 1 August 2009 as an Executive Director and assumed the role of Chief Financial Offi cer (“CFO”) and Company Secretary on 31 October 2009. He has relinquished his role of CFO, Company Secretary and Executive Director on 8 February 2011, 18 February 2011 and 15 March 2011 respectively.

Mr Chang has more than 19 years of experience in fi nancial management and hospitality management. He holds a Master of Business Administration from the University of Adelaide in Australia and a Bachelor of Accountancy (Honours) from the National University of Singapore. He is a Fellow Certifi ed Public Accountant of Singapore and a certifi ed Financial Risk Manager.

Dr Ronnie Tan Kay Poo

Dr Ronnie Tan is a non-executive and non-independent Director of our Group and was non-executive Chairman and AC member until 1 January 2010. He currently also serves as a non-executive Director of the Auric Pacifi c Group Limited. Dr Tan holds a Master degree in Health Administration and has more than 25 years of experience in the healthcare sector.


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Mr Tan Kok Hiang

Mr Tan Kok Hiang is a non-executive independent Director of our Group since 1 October 2001. He is the Chairman of the AC and a member of the NC and RC. Currently, Mr Tan sits on the Boards of a few other public listed companies in Singapore. He has more than 30 years of experience in accounting and fi nance. He holds a Bachelor of Accountancy (Honours) degree from the University of Singapore and is a member of the Singapore Institute of Directors.

Mr Lee Joo Hai

Mr Lee Joo Hai is a non-executive independent Director of our Group since 1 October 2001 and he is the Chairman of the RC. He is also one of the members of the AC and NC. Mr Lee is currently a Partner in a public accounting fi rm in Singapore. He has more than 20 years of experience in accounting and auditing. He is a Certifi ed Public Accountant of Singapore and is a member of the Institute of Chartered Accountants in England and Wales, United Kingdom.

Mr Teo Kiang Kok

Mr Teo Kiang Kok is a non-executive independent Director of our Group since 1 October 2002 and he is the Chairman of the NC. He is also one of the members of the AC and RC. Mr Teo is a Senior Partner of ShookLin & Bok, a fi rm of advocates and solicitors. He has more than 28 years of experience in legal practice and is currently the head of corporate fi nance and China practice groups of ShookLin & Bok. His main areas of practice are corporate fi nance, international fi nance and securities. In the course of his legal practice, Mr Teo has advised listed companies extensively on corporate law and compliance requirements.

Board Composition and Balance (Principle 2)

The Board complies with the Code’s requirement that at least one-third of the Board should be made up of independent Directors. The Board is able to exercise objective judgment on corporate affairs independently, in particularly, from the Management of the Company. The Board is also able to make decisions without the infl uence or domination by any individual or any small group of individuals.

The independence of each director is reviewed annually by the NC. The NC adopts the Code’s defi nition of what constitutes an independent director in its review. As a result of the NC’s review of the independence of each director for FY2010, the NC is of the view that the non-executive independent directors are independent.

Guideline 2.2

As at 15 March 2011, the Board comprises 1 executive director, 2 non-executive directors and 3 non-executive independent directors. While the Company’s Articles of Association allow for the appointment of a maximum of 9 directors, the NC is of the view that the current board size of 6 directors is appropriate, taking into account the nature and scope of the Company’s operations. The NC is also of the view that the current board comprises directors who as a group provide core competencies such as accounting/fi nance, business/management etc that are necessary to meet the Company’s performance targets.

Guideline 2.3

Chairman and Chief Executive Offi cer (Principle 3)

The Board is chaired by Mr Christopher James Williams, who is a non-executive Director. The roles of Chairman and CEO are kept separate to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision making. In the capacity of CEO, Mr David Lim bears the executive responsibility for the Company’s business. Mr Christopher James Williams and Mr David Lim are not related to each other.

Guideline 3.1

Our Chairman prepares the meeting agenda and schedule meetings that enable the Board to perform its duties responsibly while not interfering with the fl ow of the Company’s operations. He is also responsible to exercise control over the quality, quantity and timeliness of the fl ow of information between the Management and the Board. He will encourage constructive relationships between the Board and Management. He will ensure that the Company engages in effective communication with shareholders. He will facilitate the effective contribution of non-executive directors in particular and encourage constructive relationships between executive directors and non-executive directors. Our Chairman will assist the Board in ensuring compliance with the Company’s guidelines on corporate governance.


36

Nominating Committee (Principles 4 & 5)(Board Membership/Board Performance)

The NC comprises of 3 non-executive directors who are independent of management. The Chairman of the NC is Mr Teo Kiang Kok and the 2 other members are Mr Lee Joo Hai and Mr Tan Kok Hiang. Mr Teo, the NC Chairman, is not associated with the substantial shareholder.

Guideline 4.1

The principal functions of the NC are:

1. Make recommendations to the Board on appointment of new executive and non-executive directors, including making recommendations to the composition of the board and the balance between executive and non-executive directors appointed to the Board;

2. Responsible for identifying and nominating candidates for the approval of the Board, determining annually whether or not a director is independent, to fi ll board vacancies as and when they arise as well as put in place plans for succession, in particular for the Chairman and CEO;

3. Review board structure, size and composition and make recommendations to the Board with regards to adjustments that are deemed necessary;

4. Recommend directors who are retiring by rotation to be put forward for re-election;

5. Decide whether or not a director is able to and has been adequately carrying out his duties as a director of the Company, particularly when he has multiple board presentations; and

Guideline 4.5& Guideline 5.1

6. Responsible for assessing the effectiveness of the Board as a whole and for assessing the contribution of individual director to the effectiveness of the Board.

Guideline 5.1

New directors will be appointed by way of board resolution after the NC approves their appointment. Such new directors must submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company. Article 89 of the Company’s Articles of Association requires one third of the Board to retire by rotation at every AGM. For FY2010, the NC used the attendance, participation and contribution of individual director at board and committee meetings to evaluate the individual director’s performance.

Guideline 4.5


37

Directors’ Information Guideline 4.6

Name/Designation (Shareholdings)

Academic & Professional

Qualifi cationsDate of 1st

AppointmentDate of last Re-election AC NC RC

Christopher James Williamsnon-executive Chairman(Shareholding – 0%)

BA (Hons) Solicitor

England and Wales Solicitor

Hong Kong

18 Nov 2009 21 April 2010 Member – –

David Lim Chiew PohManaging Director & CEO(Shareholding – 0%)

Certifi cate in Hotel Management 23 Jan 2009 Not subject

to re-election – – –

John Chang Tong Wah1 Executive Director (Shareholding – 0%)

MBA, FRM & FCPAS 1 Aug 2009 21 April 2010 – – –

Ronnie Tan Kay Poo non-executive Director(Shareholding – 0%)

Master in Health Administration 1 Feb 2006 21 April 2010 – – –

Tan Kok HiangIndependent Director(Shareholding – 0%)

B.Acc (Hons) 1 Oct 2001

Stand for re-election

at the forthcoming

AGM

Chairman Member Member

Lee Joo HaiIndependent Director(Shareholding – 0%)

CPA & ICAEW 1 Oct 2001

Stand for re-election

at the forthcoming

AGM

Member Member Chairman

Teo Kiang KokIndependent Director(Shareholding – 0%)

LLB. (Hons) (Hull) Barrister-at-law(Lincoln’s Inn)

Advocate & Solicitor

1 Oct 2002 22 Jan 2009 Member Chairman Member


Access to Information (Principle 6)

In order to ensure that the Board is able to fulfi ll its responsibilities, the Management will provide the Board with complete, adequate and timely information prior to board meetings and on an on-going basis. Separate and independent access (like mobile phone numbers and e-mail addresses) of the Company’s senior management and company secretary is also given to the Board to facilitate access.

Should directors, whether as an individual or group, need independent professional advice, the company secretary will, upon direction by our Board, appoint a professional advisor selected by our Group and approved by the Chairman, to render the advice. The Company will bear the cost of professional advice and services rendered.


38

The Company Secretary attends all board meetings and is responsible to ensure that board procedures are followed. It is the Company Secretary’s responsibility to ensure that the Company complies with the requirements of the Companies Act. Together with the management staff, the company secretary is responsible for compliance with all other rules and regulations that are applicable to the Company.

Remuneration Committee (Principles 7, 8 & 9) (Remuneration Matters / Level & Mix of Remuneration / Disclosure of Remuneration)

The RC comprises 3 non-executive independent directors, Mr Tan Kok Hiang, Mr Lee Joo Hai and Mr Teo Kiang Kok. The Chairman of the RC is Mr Lee Joo Hai.

Guideline 9.1

The RC reviews and recommends to our Board in consultation, a framework of remuneration and to determine specifi c remuneration packages and terms of employment for directors and those employees related to executive directors and controlling shareholders of our Group. The RC has full authority to engage any external professional advice on matters relating to remuneration as and when the need arises.

The Executive Directors have service agreements/contracts which are renewed every three years.

The non-executive Directors are paid yearly directors’ fees of an agreed amount and the said fee is subjected to shareholders’ approval at AGM. Currently, the Company does not have any long-term incentive scheme for its directors.

There are no material contracts and loan of our Group involving the interest of the CEO, director or controlling shareholder, either still subsisting at the end of the fi nancial year or if not then subsisting, entered into since the end of the previous fi nancial year save as disclosed as Interested Person Transactions on Page 42 of the Annual report.

The remuneration policy for key executives is a fi xed salary commensurate with their job scope and responsibilities, plus a variable bonus based on the Group’s performance and that of the key executives. Our Group does not have any employee share option scheme.

Guideline 9.4

There are no employees whose remuneration exceeds $150,000 during the year who are related to the Directors or the CEO or Substantial Shareholders.

Guideline 9.3

Directors’ Remuneration Guideline 9.2

RemunerationLevel

FY2010ExecutiveDirectors

FY2010Non-Executive

Directors

FY2009ExecutiveDirectors

FY2009 Non-Executive

Directors

$500,000 and Above – – – –

$250,000 to $499,999 – – – –

Below $250,000 David Lim Chiew Poh

John Chang Tong Wah1

Christopher James Williams

Ronnie Tan Kay Poo

Tan Kok Hiang

Lee Joo Hai

Teo Kiang Kok

David Lim Chiew Poh

John Chang Tong Wah

Christopher James Williams

Ronnie Tan Kay Poo

Tan Kok Hiang

Lee Joo Hai

Teo Kiang Kok



39

Description of Remuneration Breakdown Director FeeBase/Fixed

SalaryBenefi ts-in-

kind

Variable/ Performance

Related Income/ Bonus

Christopher James William 100% – – –

Ronnie Tan Kay Poo 100% – – –

David Lim Chiew Poh – 100% – –

John Chang Tong Wah1 – 100% – –

Tan Kok Hiang 100% – – –

Lee Joo Hai 100% – – –

Teo Kiang Kok 100% – – –


Key Executives’ Remuneration (Executives who are not Directors of the Group) Guideline 9.2

Remuneration Level FY2010 FY2009

$500,000 and Above – –

$250,000 to $499,999 – –

Below $250,000 Leslie Lim Kok SingMok Chi Keong

Mike Tan Loong ChoonMartin Woo See Mui

Leslie Lim Kok SingMok Chi Keong

Mike Tan Loong ChoonMartin Woo See Mui

Kelvin Khoo Choon LamToh Cheng Chye

Information on the key management staff:

Mr Eric Gan Chee TeikMr Eric Gan is the Chief Financial Offi cer and Company Secretary of the Group. Prior to joining the Group on 8 February 2011, he had held numerous positions in his more than 15 years career, spanning from international accounting fi rms to public listed companies in Singapore. Mr Eric Gan is responsible for fi nancial reporting, corporate fi nance, treasury management, audit, taxation and company secretarial matters of our Group. He is a Fellow of The Association of Chartered Certifi ed Accountants (United Kingdom) and a member of the Institute of Certifi ed Public Accountants of Singapore.

Mr Leslie Lim Kok SingMr Leslie Lim is the General Manager, Operations in charge of the food court operations. Mr Lim has been with the Company for more than 10 years. He joined our Group in 1997 as an Operation Executive and had been promoted to various positions since then. Before the promotion to General Manager, he was the Assistant General Manager for China Operations.

Mr Mok Chi KeongMr Mok Chi Keong is the General Manager, Project Management in charge of overseeing and managing our Group’s projects, including the renovation works of our F&B outlets. Mr Mok joined our Group in 1999 as Project Executive and had been promoted to various positions since then. In 2005, he was promoted to the position of Senior Project Manager. Mr Mok holds a Diploma in Building Services Engineering.

Mr Mike Tan Loong ChoonMr Mike Tan is the General Manager, Development responsible for the Group’s IT, Procurement and Marketing & Branding functions. Prior to joining our Group in September 2009, Mr Tan was working with Emaar Hospitality Group LLC in Dubai as the Corporate IT Manager. He has more than 16 years of experience in IT, manufacturing, retail and hospitality industries. Mr Tan holds a Bachelor of Science from the National University of Ireland.


40

Mr Martin Woo See MuiMr Martin Woo is the Group Executive Chef, who is primarily responsible for ensuring the consistency of the food quality of our F&B business, menu planning and development of new F&B concepts for the Group. Mr Woo joined our Group in August 2009. Prior to joining our Group, he was Executive Sous Chef of Singapore Hilton Hotel for 12 years. He has more than 23 years of experience in the food & beverages and hospitality industries.

Accountability (Principle 10)The Board’s responsibility to shareholders, public and regulators is to provide a balance and understandable assessment of the Company’s performance, position and prospects. The Management of the Company is accountable to the Board and presents to the Board the quarterly and full-year results and the AC reports on the results for review and approval. The Board approved the results and authorized the release of results to the SGX-ST and the public via SGXNET.

Audit Committee (Principle 11)The AC comprises 4 non-executive directors of whom 3 are independent directors. The Chairman of the AC is Mr Tan Kok Hiang and the other 3 members are Mr Lee Joo Hai, Mr Teo Kiang Kok and Mr Christopher James Williams. The principal functions of the AC are:

1. Review with the external auditors the audit plans, their evaluation of the system of internal controls, their audit report, their management letter and the Company’s responses;

2. Review any formal announcements relating to the Company’s fi nancial performance;

3. Review and discuss quarterly results and annual fi nancial statements, balance sheets and profi t and loss accounts before submission to the directors for approval, focusing in particular on signifi cant fi nancial reporting issues and judgments, changes in accounting policies and practices, major risks areas, signifi cant adjustments resulting from the audit, the going concern statement, compliance with accounting standards as well as compliance with any stock exchange and statutory/regulatory requirements;

4. Review and discuss internal controls and procedures, and ensure co-ordination between external auditors and the management, reviewing the assistance given by the management to the auditors, and discussing problems and concerns, if any arising from the quarterly and fi nal audits, and any matters which the auditors may wish to discuss;

5. Review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s operating results or fi nancial position, and the management’s response;

6. Review the appointment or re-appointment of the external auditors, terms of engagement and matters relating to resignation or dismissal of the auditors;

7. Review transactions falling within the scope of Chapter 9 and Rule 1006 of the Listing Manual;

8. Review the adequacy of the internal controls as set out in Guideline 12.1 of the Code of Corporate Governance 2005.

9. Review the scope and results of the internal audit procedures including the effectiveness of the internal audit functions and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company and to review and ensure annually the adequacy of the internal audit function;


41

10. Review annually the scope and results of the audit and its cost of effectiveness and the independence and objectivity of the external auditors;

11. Review arrangements by which staff of the Company may, in confi dence, raise concerns about possible improprieties in matters of fi nancial reporting or other matters and ensure that arrangements are in place for the independent investigations of such matters and for appropriate follow up actions.

12. Such other reviews and projects as may be requested by the Board, and report to Board its fi ndings from time to time on matters arising and requiring the attention of the AC; and

13. Generally undertake such other functions and duties as may be required by statute or the Listing Manual, and by such amendments made thereto from time to time.

Guideline 11.8

The AC met once with the external auditors without the presence of the Company’s management for FY2010. The AC reviewed the independence of the external auditors annually and assessed the scope and results of the external audit versus its costs. After reviewing the non-audit services provided by the auditors, the AC is satisfi ed with the independence of the auditors and recommends to the Board, the nomination of the external auditors for re-appointment at the forthcoming AGM.

Guideline 11.8

Guideline 11.8

The AC also review and approve all Interested Person Transactions (“IPT”) as defi ned by the Listing Manual to ensure that they are on arm’s length basis. The Company has established internal control policies to ensure that the transactions with IPT are properly reviewed and approved.

All IPT above $100,000 are to be approved by a director who is not an interested person in respect of the particular transaction.

Prior to 1 June 2007, all IPT where value is more than $150,000 must be approved by AC prior to entry. IPT where value is equal or below $150,000 need not be approved by AC prior to entry but shall be reviewed on a quarterly basis by AC.

With effect from 1 June 2007, new IPT guidelines that supersede the above guidelines, stipulate that IPT shall be monitored under the following categories:

1. Category 1 for transactions that are in the ordinary course of business, falling into grouping for (a) Lease of Premises; (b) Stall Licence; and (c) Supplies & Purchases. Such IPT need not be approved by AC prior to entry but shall be reviewed on a quarterly basis by AC.

2. Category 2 for transactions that are not in the ordinary course of business. IPT where value is more than $150,000 must be approved by AC prior to entry. IPT where value is equal to or below $150,000 need not be approved by AC prior to entry but shall be reviewed on a quarterly basis by the AC.

Guideline 11.8


42

Internal Control & Audit (Principles 12 & 13)

The Board ensures that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the Company’s assets.

For Internal Audit, the Company has outsourced and appointed Deloitte & Touche as Internal Auditor since 2003. The Internal Auditor reports directly to the Chairman of the AC. The scope of internal audit is risk-based and the internal audit is carried out pursuant to the Standards for Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.

For FY2010, the Board is of the view that based on the reports from the external and internal auditors, the internal control system of the Group is adequate for its needs. As adequate system of internal controls has been implemented for all the companies within the Group, Management has ensured that the shareholders’ investment and the Company’s assets are safeguarded.

Guideline 12.2

Communication with Shareholders (Principles 14 & 15)

The Company engages in regular, effective and fair communication with its shareholders. The Company will announce its results quarterly via the SGXNET followed by a news release. For the Company’s half-year and full-year performance, the Company will hold an analyst briefi ng on the following working day after results announcements. Results are announced and annual reports are issued within mandatory period. For price sensitive information, it will be publicly released via SGXNET before the Company meets with any group of investors or analysts.

For the AGM, all shareholders of the Company will receive the notice of AGM together with the Annual report by mail. The Annual Report and Notice of AGM will also be loaded onto our website at www.foodjunction.com. The Notice of AGM is also advertised in the local newspaper as well as released via SGXNET. At the AGM, the Directors and Management together with the auditors will be present to address shareholders’ questions.

There are separate resolutions at the AGM for each distinct issue. The Company’s Articles of Association allow a member of the Company to appoint one or two proxies to attend and vote on behalf of the member.

Interested Person Transactions The aggregate value of Interested Person Transactions entered into with Lippo China Resources Limited (“Lippo Group”) (which holds 49.28% of total shares issued in Auric Pacifi c Group Limited) and its associates during the fi nancial year under review under Chapter 9 of the SGX-ST Listing Manual were as follows:-

Name of Interested Person

Aggregate value of all interested person

transactions during FY2010 (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)

IPT related to Lippo Group & its associates

$510,000 $5,210,077

It is the Group’s policy to ensure that all Interested Person Transactions are negotiated on normal commercial terms consistent with the Group’s internal control policy and usual business practices. The Group and AC are satisfi ed that all the Interested Person Transactions are entered into at arm’s length basis and not prejudicial to the interests of the Company or its minority shareholders.


43

Material ContractsIn FY2010, no material contracts were entered into between the Company or any of its subsidiaries involving the interest of any director or controlling shareholder, which are either subsisting at the end of the fi nancial year or, if not then subsisting, entered into since the end of the previous year except for directors remuneration and related party transactions as disclosed in Note 16 and Note 18 of the fi nancial statements.

Dealing in SecuritiesThe Company has adopted and implemented an internal compliance code to provide guidance to its Directors and key employees in relation to the dealings in its securities as stipulated under Rule 1207(18) of the Listing Manual issued by the SGX-ST. Directors and key employees who have access to material price sensitive information are prohibited from dealing in securities of the Company prior to the announcement of a matter that involves material unpublished price sensitive information. They are also prohibited from dealing in the Company’s securities during the period commencing two weeks before the announcement of the Company’s quarterly results and ending on the day after the announcement of the quarterly results. In addition, the Company discourages Directors and key employees from dealing in the Company’s securities on short term consideration.

The guidelines on share purchases under the Share Purchase Mandate, to be renewed at the Company’s forthcoming AGM also provides that the Company may not effect any shares purchase during the period commencing one month immediately preceding the announcement of the Company’s full year results and the period of two weeks immediately preceding the announcement of its quarterly results.

Directors' Report

44

The directors are pleased to present their report to the members together with the audited consolidated fi nancial statements of Food Junction Holdings Limited (the “Company”) and its subsidiary companies (collectively, the “Group”) for the fi nancial year ended 31 December 2010.

Directors

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

Christopher James Williams (Non-Executive Chairman)David Lim Chiew Poh (Managing Director & Chief Executive Offi cer)Ronnie Tan Kay Poo @ Key Poo (Non-Executive Director)Tan Kok Hiang (Independent Director)Lee Joo Hai (Independent Director)Teo Kiang Kok (Independent Director)

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable directors of the Company to acquire benefi ts by means of the acquisition of shares or debentures of the Company or any other body corporate.

Directors’ interests in shares and debentures

The following directors, who held offi ce at the end of the fi nancial year, had, according to the register of directors’ shareholdings required to be kept under Section 164 of the Companies Act, Cap. 50, an interest in shares of the Company, and the ultimate holding company, Auric Pacifi c Group Limited, as stated below:

Deemed interest held by directorAt 1

January2010

At 31December

2010

At 21January

2011

Ordinary shares of the Company

Ronnie Tan Kay Poo @ Keh Poo 73,000 – –

Ordinary shares of the ultimate holding company

Ronnie Tan Kay Poo @ Keh Poo 41,000 – –

Except as disclosed above, no other director who held offi ce at the end of the fi nancial year had an interest in any shares or debentures of the Company or of related corporations, either at the beginning of the fi nancial year, or date of appointment if later, or at the end of the fi nancial year or 21 January 2011.

Directors’ contractual benefi ts

Except as disclosed in Note 18 to the fi nancial statements, since the end of the previous fi nancial year, no director of the Company has received or become entitled to receive a benefi t (other than a benefi t or any fi xed salary of a full-time employee of the Company included in the aggregate amount of emoluments shown in the fi nancial statements, or any emoluments received from a related corporation) by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest.

Share options

No share options to take up unissued shares of the Company or any subsidiary company have been granted.

Directors' Report (cont’d)

45

Audit Committee

The Audit Committee comprises 4 members, of whom 3 are independent non-executive directors. The members of the Committee are:

Tan Kok Hiang (Chairman)Lee Joo HaiTeo Kiang KokChristopher James Williams

The Audit Committee performs its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50 and the requirements of the Singapore Exchange. In performing those functions, the Audit Committee reviewed the overall scope of external audit and the assistance given by the Company’s offi cers to the auditors. The Audit Committee met with the external auditors to discuss the results of their audit and their evaluation of the systems of internal accounting controls. The Audit Committee also reviewed the fi nancial statements of the Company and the consolidated fi nancial statements of the Group for the year ended 31 December 2010, as well as the external auditors’ report thereon.

The Audit Committee has recommended to the Board of directors that Ernst & Young LLP be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

Further details regarding the Audit Committee are disclosed in the Report on Corporate Governance.

Auditors

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board of Directors,

Christopher James WilliamsDirector

David Lim Chiew PohDirector

Singapore15 March 2011

Statement by Directors

46

We, Christopher James Williams and David Lim Chiew Poh, being two of the directors of Food Junction

Holdings Limited, do hereby state that, in the opinion of the directors,

(i) the accompanying balance sheets, income statements, statements of comprehensive income, statements of changes in equity and consolidated cash fl ow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results of the business, changes in equity of the Group and of the Company, and cash fl ows of the Group for the year ended on that date; and

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

On behalf of the Board of Directors,

Christopher James WilliamsDirector

David Lim Chiew PohDirector

Singapore15 March 2011

Independent Auditors' ReportTo the members of Food Junction Holdings Limited

47

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated fi nancial statements of Food Junction Holdings Limited (the “Company”) and its subsidiary companies (collectively, the “Group”), which comprise the balance sheets of the Group and the Company as at 31 December 2010, the income statements, the statements of comprehensive income, the statements of changes in equity of the Group and the Company and consolidated cash fl ow statement of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management’s responsibility for the fi nancial statements

Management is responsible for the preparation of fi nancial 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 suffi cient 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 profi t and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ responsibility

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the fi nancial statements that give a true and fair view 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 management, as well as evaluating the overall presentation of the fi nancial statements.

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

Opinion

In our opinion, the consolidated fi nancial statements of the Group and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity 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 December 2010 and the results and changes in equity of the Group and of the Company and the changes in cash fl ows of the Group for the year ended on that date.

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 those subsidiary companies incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Ernst & Young LLPPublic Accountants andCertifi ed Public AccountantsSingapore15 March 2011

Balance SheetsAs at 31 December 2010

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

48

Note Group Company

2010 2009 2010 2009

$ $ $ $

Non-current assets

Fixed assets 3 9,121,718 8,571,135 – –

Investment in subsidiary companies 4 – – 6,821,313 6,821,313

Loan to subsidiary companies 4 – – 3,250,000 3,250,000

Intangible assets 5 9,132,165 5,607,137 – –

Deposits and other receivables 6 6,743,898 3,413,159 87,150 168,970

Prepayments and other recoverables 6 1,661,591 1,548,882 17,284 –

26,659,372 19,140,313 10,175,747 10,240,283

Current assets

Inventories 332,231 93,470 – –

Trade receivables 7 28,715 – – –

Deposits and other receivables 6 1,860,849 4,007,766 3,932,925 8,201,050

Prepayments and other recoverables 6 1,029,381 635,842 8,422 41,678

Amount due from subsidiary companies (non-trade) 8 – – 8,358,488 2,798,049

Fixed deposits pledged 9 720,176 622,590 – –

Cash and cash equivalents 10 19,551,072 20,463,050 385,821 514,070

23,522,424 25,822,718 12,685,656 11,554,847

Current liabilities

Trade payables 5,873,507 4,167,716 – –

Other payables, deposits received and accruals 11 9,030,294 7,930,607 560,296 924,251

Deferred income 1,003,382 739,084 – –

Provision for income tax 237,878 684,666 134,936 34,876

16,145,061 13,522,073 695,232 959,127

Net current assets 7,377,363 12,300,645 11,990,424 10,595,720

Non-current liabilities

Deferred taxation 12 (912,702) (747,199) – –

Deferred income (806,794) (96,130) – –

Provision for reinstatement cost 13 (938,660) (797,279) – –

(2,658,156) (1,640,608) – –

Net assets 31,378,579 29,800,350 22,166,171 20,836,003

Equity attributable to owners of the parent

Share capital 14 12,707,436 12,707,436 12,707,436 12,707,436

Treasury shares 14 (286,051) – (286,051) –

Accumulated profi ts 19,016,216 17,343,514 9,744,786 8,128,567

Translation reserve (268,538) (250,600) – –

31,169,063 29,800,350 22,166,171 20,836,003

Non-controlling interests 209,516 – – –

Total equity 31,378,579 29,800,350 22,166,171 20,836,003

Income StatementsFor the fi nancial year ended 31 December 2010


49

Note Group Company1.1.2010

to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Revenue

Turnover 15 47,362,371 59,991,885 1,860,000 2,975,000

Other income 864,407 1,743,820 2,000,450 77,386

Total revenue 48,226,778 61,735,705 3,860,450 3,052,386

Cost of food and beverages (7,929,881) (10,967,338) – –

Advertising and promotion expenses (652,343) (970,294) (74,608) (60,905)

Personnel expenses 16 (12,131,285) (16,396,489) (447,197) (1,879,546)

Depreciation of fi xed assets (2,483,761) (2,861,755) – –

Operating lease expenses (17,109,877) (19,099,642) – –

Other expenses (2,138,937) (3,200,289) (626,697) (898,128)

Utilities expenses (2,691,467) (3,325,136) – –

Interest income 17 240,039 309,958 – 178

Profi t before tax 18 3,329,266 5,224,720 2,711,948 213,985

Income tax expense 19 (656,173) (889,978) (123,482) (21,519)

Profi t after tax 2,673,093 4,334,742 2,588,466 192,466

Profi t for the year/period attributable to:

Owners of the parent 2,644,950 4,334,742

Non-controlling interests 28,143 –

2,673,093 4,334,742

Earnings per share attributable to owners of the parent (cents per share)

Basic and fully diluted 20 2.04 3.34

Statements of Comprehensive IncomeFor the fi nancial year ended 31 December 2010


50

Note Group Company1.1.2010

to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Profi t after tax 2,673,093 4,334,742 2,588,466 192,466

Other comprehensive income:

Foreign currency translation (17,938) (51,021) – –

Total comprehensive income 2,655,155 4,283,721 2,588,466 192,466

Total comprehensive income attributable to:

Owners of the parent 2,627,012 4,283,721 2,588,466 192,466

Non-controlling interests 28,143 – – –

2,655,155 4,283,721 2,588,466 192,466

Sta

tem

en

ts o

f C

han

ges

in E

qu

ity

For

the fi nan

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yea

r en

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31 D

ecem

ber

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51

2010

Att

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ners

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the

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nt

Non

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Bal

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at

1 Ja

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1012

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–17

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–29

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Arisi

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––

––

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181,

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)–

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at

31 D

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36(2

86,0

51)

19,0

16,2

16(2

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6320

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631

,378

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ance

at

1 O

ctob

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–4,

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Statements of Changes in Equity (cont’d) For the fi nancial year ended 31 December 2010

52

Attributable to owners of the parent

2010

Share capital

(Note 14)

TreasuryShares

(Note 14)Accumulated

profi tsTotal

equityCompany $ $ $ $

Balance at 1 January 2010 12,707,436 – 8,128,567 20,836,003Profi t for the year – – 2,588,467 2,588,467Other comprehensive income for the year – – – –Total comprehensive income for the year – – 2,588,467 2,588,467

Contributions by and distributions to ownersPurchase of treasury shares (Note 14) – (286,051) – (286,051)Dividends on ordinary shares (Note 21) – – (972,248) (972,248)Total contributions by and distributions to owners – (286,051) (972,248) (1,258,299)Balance at 31 December 2010 12,707,436 (286,051) 9,744,786 22,166,171

2009Company

Balance at 1 October 2008 9,622,843 – 8,908,349 18,531,192Profi t for the period – – 192,466 192,466Other comprehensive income for the period – – – –Total comprehensive income for the period – – 192,466 192,466

Contributions by and distributions to ownersIssuance of ordinary shares 3,084,593 – – 3,084,593Dividends on ordinary shares (Note 21) – – (972,248) (972,248)Total contributions by and distributions to owners 3,084,593 – (972,248) 2,112,345Balance at 31 December 2009 12,707,436 – 8,128,567 20,836,003


Consolidated Cash Flow StatementsFor the fi nancial year ended 31 December 2010


53

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $

Cash fl ows from operating activities

Profi t before taxation 3,329,266 5,224,720Adjustments:

Exchange difference 31,557 (43,527)Depreciation of fi xed assets 2,483,761 2,861,755Loss on disposal of fi xed assets 94,418 82,327Fixed assets written off 99,375 171,698Finance cost on provision for reinstatement cost 40,658 48,170Write back of provision for reinstatement cost – (28,941)Amortisation of intangible assets 54,449 72,821Interest income (240,039) (309,958)Lease expense relating to fair value of rental deposits 185,976 236,163Additional lease expense on straight-line basis over the lease term 284,681 –

Operating cash fl ows before changes in working capital 6,364,102 8,315,228Decrease in inventories 45,762 51,786(Increase)/decrease in trade receivables, other receivables and deposits, and prepayments and other recoverables (1,261,891) 435,545Increase in trade payables, other payables, deposits received, accruals and deferred income 2,729,209 704,561(Increase)/Decrease in fi xed deposits pledged with banks (97,586) 108,378

Cash generated from operations 7,779,596 9,615,498Interest income received 61,967 77,081Income taxes paid (902,605) (1,013,950)Net cash fl ows generated from operating activities 6,938,958 8,678,629

Cash fl ows from investing activities

Purchase of fi xed assets (3,071,712) (3,422,683)Proceeds from disposal of fi xed assets 64,768 53,874Net cash outfl ow on acquisition of subsidiary company (Note 4) (3,585,693) (2,335,929)Net cash fl ows used in investing activities (6,592,637) (5,704,738)

Cash fl ows from fi nancing activity

Purchase of treasury shares (286,051) –Dividends paid on ordinary shares of the Company (972,248) (972,248)Net cash fl ow used in fi nancing activity (1,258,299) (972,248)

Net (decrease)/increase in cash and cash equivalents (911,978) 2,001,643Cash and cash equivalents at beginning of year/period 20,463,050 18,461,407Cash and cash equivalents at end of year/period (Note 10) 19,551,072 20,463,050

Notes to the Financial Statements31 December 2010

54

1. Corporate information

Food Junction Holdings Limited (the “Company”) is a limited liability company which is domiciled and incorporated in Singapore. The Company is listed on the Singapore Exchange Securities Trading Limited. APG Strategic Investment Private Limited is the immediate holding company of the Company. The penultimate holding company is Auric Pacifi c Investment Holdings Private Limited and the ultimate holding company is Auric Pacifi c Group Limited. Auric Pacifi c Group Limited is listed on the Singapore Exchange Securities Trading Limited. These holding companies are incorporated in Singapore.

The registered offi ce of Food Junction Holdings Limited is located at 50 Raffl es Place, #32-01 Singapore Land Tower, Singapore 048623. The principal place of business is 91 Tanglin Road, #02-02 Tanglin Place, Singapore 247918.

The principal activities of the Company are those of investment holding and the provision of management services to its subsidiary companies. The principal activities of the subsidiary companies are as shown in Note 4 to the fi nancial statements.

There have been no signifi cant changes in the nature of these activities during the fi nancial year.

The Group operates in Singapore, Malaysia, Indonesia and People’s Republic of China, including Hong Kong.

2. Summary of signifi cant accounting policies

2.1 Basis of preparation

The consolidated fi nancial statements of the Group and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The fi nancial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The fi nancial statements are presented in Singapore Dollars (“SGD” or “$”).

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous fi nancial year except in the current fi nancial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 January 2010. The adoption of these standards and interpretations did not have any effect on the fi nancial performance or position of the Group and the Company except as disclosed below.

FRS 103 Business Combinations (revised) and FRS 27 Consolidated and Separate Financial Statements (revised)

The revised FRS 103 Business Combinations and FRS 27 Consolidated and Separate Financial Statements are applicable for annual periods beginning on or after 1 July 2009. As of 1 January 2010, the Group adopted both revised standards at the same time in accordance with their transitional provisions.

Notes to the Financial Statements (cont’d)

31 December 2010

55

2. Summary of signifi cant accounting policies (cont’d)

2.2 Changes in accounting policies (cont’d)

FRS 103 Business Combinations (revised)

The revised FRS 103 introduces a number of changes to the accounting for business combinations that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. Changes in signifi cant accounting policies resulting from the adoption of the revised FRS 103 include:

– Transaction costs would no longer be capitalised as part of the cost of acquisition but will be expensed immediately;

– Consideration contingent on future events are recognised at fair value on the acquisition date and any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in profi t or loss;

– The Group elects for each acquisition of a business, to measure non-controlling interest at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifi able net assets, and this impacts the amount of goodwill recognised; and

– When a business is acquired in stages, the previously held equity interests in the acquiree is remeasured to fair value at the acquisition date with any corresponding gain or loss recognised in profi t or loss, and this impacts the amount of goodwill recognised.

According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets and liabilities that arose from business combinations whose acquisition dates are before 1 January 2010 are not adjusted.

FRS 27 Consolidated and Separate Financial Statements (revised)

Changes in signifi cant accounting policies resulting from the adoption of the revised FRS 27 include:

– A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss recognised in profi t or loss;

– Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses exceed the non-controlling interest in the subsidiary’s equity; and

– When control over a subsidiary is lost, any interest retained is measured at fair value with the corresponding gain or loss recognised in profi t or loss.

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

FRS 1 Presentation of Financial Statements – Revised presentation

The revised FRS 1 separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented in the statement of other comprehensive income. In addition, the Standard introduces the statement of comprehensive income which presents income and expense recognised in the period. This statement may be presented in one single statement, or two linked statements. The Group has elected to present this statement as two linked statements.

FRS 108 Operating Segments

FRS 108 requires disclosure of information about the Group’s operating segments and replaces the requirement to determine primary and secondary reporting segments of the Group. The Group determined that the reportable operating segments are the same as the business segments previously identifi ed under FRS 14 Segment Reporting. Additional disclosures about each of the segments are shown in Note 26, including revised comparative information.


31 December 2010

56


2.3 Standards issued but not yet effective

The Group and the Company have not adopted the following standards and interpretations that have been issued but not yet effective:

Description

Effective for annual periods beginning

on or after

Revised FRS 24 Related Party Disclosures 1 January 2011

Amendments to FRS 32 Financial Instruments Presentation: Classifi cation of Rights Issues

1 February 2010

INT FRS 114 FRS 19 The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their interaction – Amendments relating to Prepayments of a Minimum Funding requirements

1 January 2011

INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011

INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010

Improvements to FRSs issued in 2010:

– Amendments to FRS 1 Presentation of Financial Statements 1 January 2011

– Amendments to FRS 34 Interim Financial Reporting 1 January 2011

– Amendments to FRS 101 First-time Adoption of Financial Reporting Standards 1 January 2011

– Amendments to FRS 103 Business Combinations 1 July 2010

– Amendments to FRS 107 Financial Instruments: Disclosures 1 January 2011

– Transition requirements for amendments arising as a result of FRS 27 Consolidated and Separate Financial Statements

1 July 2010

– Amendments to INT FRS 113 Customer Loyalty Programmes 1 January 2011

Except for the revised FRS 24, the directors expect that the adoption of the above pronouncements will have no material impact to the fi nancial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 24 is described below.

Revised FRS 24 Related Party Disclosures

The revised FRS 24 clarifi es the defi nition of a related party to simplify the identifi cation of such relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands the defi nition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person’s family) or a third party has control or joint control over the entity, or has signifi cant infl uence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government-related entities. The Group is currently determining the impact of the changes to the defi nition of a related party has on the disclosure of related party transaction. As this is a disclosure standard, it will have no impact on the fi nancial position or fi nancial performance of the Group when implemented in 2011.


31 December 2010

57

2. Summary of signifi cant accounting policies (cont’d) 2.4 Signifi cant accounting estimates and judgements

The preparation of the Group’s fi nancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

(a) Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below:

(i) Useful lives of fi xed assets

Fixed assets are depreciated on a straight-line basis over their estimated useful lives. Management has estimated the useful lives of these fi xed assets to be 6 years. The carrying amount of the Group’s fi xed assets at 31 December 2010 was $9,121,718 (2009: $8,571,135). Changes in the expected level of usage and technological developments could impact the economic useful lives of these assets, therefore future depreciation charges could be revised.

(ii) Impairment of loans and receivables

The Group assesses at the end of each reporting period whether there is any objective evidence that a fi nancial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor and default or signifi cant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash fl ows are estimated based on historical loss experience for assets with similar credit risk characteristics.

(iii) Impairment of non-fi nancial assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing the asset. The value in use calculation is based on a discounted cash fl ow model. The cash fl ows are derived from the budget for the next fi ve years and do not include restructuring activities that the Group is not yet committed to or signifi cant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash fl ow model as well as the expected future cash infl ows and the growth rate used for extrapolation purposes. Further details of the key assumptions applied in the impairment assessment of goodwill and trademark, are given in Note 5 to the fi nancial statements.

(iv) Fair value of fi nancial instruments

Where the fair values of fi nancial instruments recorded on the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the discounted cash fl ow model. The inputs to these models are derived from observable market data where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Changes in assumptions about these factors could affect the reported fair value of fi nancial instruments. The valuation of fi nancial instruments is described in more detail in Note 25.


31 December 2010

58


2.4 Signifi cant accounting estimates and judgements (cont’d) (b) Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most signifi cant effect on the amounts recognised in the fi nancial statements:

(i) Operating lease commitments – As lessor

The Group has entered into operating leases with the landlords on its food court premises. The Group licences the use of food and beverage stalls within the food courts to individual stallholders. The Group has determined that these are operating lease arrangements where significant risks and rewards of these food court premises have not been transferred.

(ii) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Signifi cant judgement is involved in determining the group-wide provision for income taxes. Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax provisions already recorded.

The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the relevant tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group Company’s domicile.

The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the fi nal 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 year in which such determination is made. The carrying amount of the Group’s provision for income tax and deferred taxation at 31 December 2010 was $237,878 (2009: $684,666) and $912,702 (2009: $747,199) respectively.

2.5 Basis of consolidation

Business combinations from 1 January 2010

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiary companies as at the end of the reporting period. The fi nancial statements of the subsidiary companies used in the preparation of the consolidated fi nancial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-Group transactions are eliminated in full.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Business combinations are accounted for using the acquisition method. Identifi able assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.


31 December 2010

59


2.5 Basis of consolidation (cont’d)

Business combinations from 1 January 2010 (cont’d)

When the Group acquires a business, it assesses the fi nancial assets and liabilities assumed for appropriate classifi cation and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profi t or loss or as change to other comprehensive income. If the contingent consideration is classifi ed as equity, it is not be remeasured until it is fi nally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profi t or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree identifi able net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifi able assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.8(a). In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profi t or loss on the acquisition date.

Business combinations before 1 January 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifi able net assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity.

When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on acquisition unless the business combination results in a change in the terms of the contract that signifi cantly modifi es the cash fl ows that would otherwise be required under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outfl ow was more likely than not and a reliable estimate was determinable. Subsequent measurements to the contingent consideration affected goodwill.

2.6 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiary companies not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statements of comprehensive income and within equity in the consolidated balance sheet, separately from equity attributable to owners of the Company.

Changes in the Company owner’s ownership interest in a subsidiary company that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to refl ect the changes in their relative interests in the subsidiary company. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.


31 December 2010

60


2.7 Subsidiary companies

A subsidiary company is an entity over which the Group has the power to govern the fi nancial and operating policies so as to obtain benefi ts from its activities. The Group generally has such power when it directly or indirectly holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the Board of Directors.

In the Company’s separate fi nancial statements, investment in subsidiary companies are accounted for at cost less impairment losses.

2.8 Intangible assets

(a) Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefi t from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the profi t or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2005 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.9.

Goodwill and fair value adjustments which arose on acquisitions of foreign operations before 1 January 2005 are deemed to be assets and liabilities of the Company and are recorded in SGD at the rates prevailing at the date of acquisition.

(b) Other intangible assets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets are not capitalised and expenditure is refl ected in profi t or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either fi nite or indefi nite.

Intangible assets with fi nite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each fi nancial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefi ts embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with fi nite lives is recognised in the profi t or loss in the expense category consistent with the function of the intangible asset.


31 December 2010

61


2.8 Intangible assets (cont’d)

(b) Other intangible assets (cont’d)

Intangible assets with indefi nite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefi nite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefi nite to fi nite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the profi t or loss when the asset is derecognised.

(i) Trademark

The trademark was acquired in business combinations. It is estimated to have indefi nite useful life because it is expected to contribute to net cash infl ows indefi nitely. Therefore, the trademark would not be amortised until its useful life is determined to be fi nite. It would be tested for impairment in accordance with FRS 36 annually and whenever there is an indication that it may be impaired.

(ii) Management service agreement

Management service agreement was acquired in business combination and is amortised on a straight line basis over its fi nite useful life of 3 years.

2.9 Functional and foreign currency

(a) Functional currency

The Group’s consolidated fi nancial statements are presented in Singapore Dollars, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the fi nancial statements of each entity are measured using that functional currency.

(b) Foreign currency transactions and balances

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiary companies and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profi t or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassifi ed from equity to profi t or loss of the Group on disposal of the foreign operation.

(c) Group companies

The assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the end of each reporting period and their profi t or loss are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profi t or loss.


31 December 2010

62


2.9 Functional and foreign currency (cont’d)

(c) Group companies (cont’d)

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognised in profi t or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassifi ed to profi t or loss.

The Group has elected to recycle the accumulated exchange differences in the separate component of other comprehensive income that arises from the direct method of consolidation, which is the method the Group uses to complete its consolidation.

2.10 Fixed assets

All items of fi xed assets are initially recorded at cost. Such cost includes the cost of replacing part of the fi xed assets and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying fi xed asset. The cost of an item of fi xed assets is recognised as an asset if, and only if, it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, fi xed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the profi t or loss. Depreciation on the relevant assets is charged to the profi t or loss on the basis outlined in paragraph below.

Depreciation of fi xed assets begins when it is available for use and is calculated on the straight-line method to write off the cost of the fi xed assets over their estimated useful lives as follows:

Leasehold improvements - 6 years

Food court and F&B equipment - 6 years

Offi ce equipment - 6 years

Furniture and fi ttings - 6 years

Motor vehicles - 6 years

The carrying values of fi xed assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each fi nancial year-end, and adjusted prospectively, if appropriate.

An item of fi xed assets is derecognised upon disposal or when no future economic benefi ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profi t or loss in the year the asset is derecognised.

2.11 Financial assets

Initial recognition and measurement

Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument. The Group determines the classifi cation of its fi nancial assets at initial recognition.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly attributable transaction costs.


31 December 2010

63

2. Summary of signifi cant accounting policies (cont’d) 2.11 Financial assets (cont’d)

Subsequent measurement

The subsequent measurement of fi nancial assets depends on their classifi cation as follows:

Loans and receivables

Non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in the profi t or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

The Group classifi es the following fi nancial assets as loans and receivables:

- Cash and cash equivalents - Deposits and other receivables - Trade receivables

Derecognition

A fi nancial asset is derecognised where the contractual right to receive cash fl ows from the asset has expired. On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised in other comprehensive income is recognised in profi t or loss.

All regular way purchases and sales of fi nancial assets are recognised or derecognised on the trade date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of fi nancial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned.

2.12 Inventories

Inventories include foodstuff and operating supplies and are valued at the lower of cost (determined on a weighted average basis) and net realisable value.

Where necessary, allowance is provided for damage, obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value.

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

2.13 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and bank balances including fi xed deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignifi cant risk of changes in value.

Cash and bank balances and fi xed deposits carried in the balance sheets are classifi ed and accounted for as loans and receivables under FRS 39. The accounting policy for this category of fi nancial assets is stated in Note 2.11.


31 December 2010

64


2.14 Impairment

(a) Impairment of fi nancial assets

The Group assesses at each end of the reporting period whether there is any objective evidence that a fi nancial asset or group of fi nancial assets is impaired.

Financial assets carried at amortised cost

For fi nancial assets carried at amortised cost, the Group fi rst assesses individually whether objective evidence of impairment exists individually for fi nancial assets that are individually signifi cant, or collectively for fi nancial assets that are not individually signifi cant. If the Group determines that no objective evidence of impairment exists for an individually assessed fi nancial asset, whether signifi cant or not, it includes the asset in a group of fi nancial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on fi nancial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the fi nancial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in profi t or loss.

When the asset becomes uncollectible, the carrying amount of impaired fi nancial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the fi nancial asset.

To determine whether there is objective evidence that an impairment loss on fi nancial assets has been incurred, the Group considers factors such as the probability of insolvency or signifi cant fi nancial diffi culties of the debtor and default or signifi cant delay in payments.

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

(b) Impairment of non-fi nancial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash infl ows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash fl ows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.

Impairment losses are recognised in profi t or loss in those expense categories consistent with the function of the impairment asset.


31 December 2010

65


2.14 Impairment

(b) Impairment of non-fi nancial assets (cont’d)

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss be recognised previously. Such reversal is recognised in profi t or loss.

2.15 Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument. The Group determines the classifi cation of its fi nancial liabilities at initial recognition.

Financial liabilities are recognised initially at fair value and in the case of other fi nancial liabilities plus, directly attributable transaction costs.

Subsequent measurement

The measurement of fi nancial liabilities depends on their classifi cation as follows:

Financial liabilities at fair value through profi t or loss

Financial liabilities at fair value through profi t or loss includes fi nancial liabilities held for trading and fi nancial liabilities designated upon initial recognition as at fair value. Financial liabilities are classifi ed as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative fi nancial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classifi ed as held for trading unless they are designated as effective hedging instruments.

Subsequent to initial recognition, fi nancial liabilities at fair value through profi t or loss are measured at fair value. Any gains or losses arising from changes in fair value of the fi nancial liabilities are recognised in profi t or loss.

The Group has not designated any fi nancial liabilities upon initial recognition at fair value through profi t or loss.

Other fi nancial liabilities

After initial recognition, other fi nancial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profi t or loss when the liabilities are derecognised, and through the amortisation process.

Derecognition

A fi nancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing fi nancial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modifi ed, such an exchange or modifi cation is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profi t or loss.


31 December 2010

66


2.16 Trade and other payables

Liabilities for trade and other amount payables, which are normally settled on 30-90 day terms are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in profi t or loss when the liabilities are derecognised as well as through the amortisation process.

2.17 Provisions

Provisions are recognised when the Group has a present obligation (legal and constructive) as a result of a past event, it is probable that an outfl ow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at each balance sheet date and adjusted to refl ect the current best estimate. If it is no longer probable that an outfl ow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that refl ects, where appropriate, the risks specifi c to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a fi nance cost.

2.18 Employee benefi ts

(a) Defi ned contribution plans

The Group participates in the national pension schemes as defi ned by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defi ned contribution pension scheme. Contributions to national pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period.

2.19 Operating lease

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfi lment of the arrangement is dependent on the use of a specifi c asset or assets or the arrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.

(a) As lessee

Operating lease payments are recognised as an expense in profi t or loss on a straight-line basis over the lease term. The aggregate benefi t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classifi ed as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income (Note 2.20). Contingent rents are recognised as revenue in the period in which they are earned.


31 December 2010

67


2.20 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable, excluding discounts, rebates, and sales taxes or duty.

The Group assesses its revenue arrangements to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following specifi c recognition criteria must also be met before revenue is recognised.

Revenue from operation of food courts is recognised when fees are charged to the food court tenants based on a percentage of their gross sales.

Revenue from sale of food and beverage is recognised upon delivery and acceptance by customers, net of sales discounts.

Dividend income is recognised when the Group’s right to receive payment is established.

Management fee is recognised upon rendering of services.

Interest income is recognised using the effective interest method.

2.21 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profi t or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes.

Deferred tax assets and liabilities are recognised for all temporary differences, except:

— Where the deferred tax arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction affects neither the accounting profi t nor taxable profi t or loss; and

— In respect of taxable temporary differences associated with investment in subsidiary companies, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profi t will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

— Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profi t nor taxable profi t or loss; and


31 December 2010

68


2.21 Taxes (cont’d)

(b) Deferred tax (cont’d)

— In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profi t will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period.

Deferred taxes are recognised in profi t or loss except that deferred tax relating to items recognised directly in equity is recognised directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

— Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

— Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.22 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 26, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.23 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confi rmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or


31 December 2010

69


2.23 Contingencies (cont’d)

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with suffi cient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will be confi rmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

Contingent liabilities and assets are not recognised on the balance sheet of the Group, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined.

2.24 Related parties

A party is considered to be related to the Group if:

(a) The party, directly or indirectly through one or more intermediaries,

(i) controls, is controlled by, or is under common control with, the Group;

(ii) has an interest in the Group that gives it signifi cant infl uence over the Group; or

(iii) has joint control over the Group;

(b) The party is an associate;

(c) The party is a jointly-controlled entity;

(d) The party is a member of the key management personnel of the Group or its parent;

(e) The party is a close member of the family of any individual referred to in (a) or (d); or

(f) The party is an entity that is controlled, jointly controlled or signifi cantly infl uenced by or for which signifi cant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or

(g) The party is a post-employment benefi t plan for the benefi t of the employees of the Group, or of any entity that is a related party of the Group.

No

tes

to t

he F

inan

cial

Sta

tem

en

ts (c

ont’d)

31 D

ecem

ber

2010

70

3.

Fix

ed

ass

ets

Gro

upLe

aseh

old

impr

ovem

ents

Food

cou

rtan

d F&

Beq

uipm

ent

Offi c

eeq

uipm

ent

Furn

itur

ean

d fi t

ting

sM

otor

vehi

cles

Tota

l

$$

$$

$$

Cost

As

at 1

Oct

ober

2008

6,4

81,2

80

1,7

98,8

56

507,4

38

4,0

62,4

95

208,4

42

13,0

58,5

11

Arisi

ng f

rom

acq

uis

itio

n o

f a

subsi

dia

ry c

om

pan

y9,1

16

29,0

78

55,2

96

661

–94,1

51

Additio

ns

*1,9

17,3

89

630,4

03

83,8

54

832,0

37

–3,4

63,6

83

Dis

posa

ls(1

4,6

31)

(144,1

53)

–(2

26,8

76)

–(3

85,6

60)

Writt

en o

ff(4

46,1

89)

(83,0

78)

(12,3

50)

(187,4

98)

–(7

29,1

15)

Tran

slat

ion d

iffe

rence

s(1

8,6

25)

(3,6

26)

(529)

(9,5

55)

–(3

2,3

35)

As

at 3

1 D

ecem

ber

2009 a

nd 1

Jan

uar

y 2010

7,9

28,3

40

2,2

27,4

80

633,7

09

4,4

71,2

64

208,4

42

15,4

69,2

35

Arisi

ng f

rom

acq

uis

itio

n o

f a

subsi

dia

ry c

om

pan

y (

Note

4)

398,4

46

9,7

24

43,0

88

203,9

27

–655,1

85

Additio

ns

*1,3

48,2

25

716,8

33

234,6

56

871,9

98

–3,1

71,7

12

Dis

posa

ls(1

8,6

82)

(244,4

13)

(872)

(175,4

02)

–(4

39,3

69)

Writt

en o

ff(1

00,1

65)

(29,8

75)

(25,4

60)

(45,5

13)

–(2

01,0

13)

Tran

slat

ion d

iffe

rence

s(7

5,2

92)

(20,7

66)

(3,2

80)

9,6

39

–(8

9,6

99)

As

at 3

1 D

ecem

ber

2010

9,4

80,8

72

2,6

58,9

83

881,8

41

5,3

35,9

13

208,4

42

18,5

66,0

51

*

Incl

uded

in a

dditio

ns

for

the

year

was

an a

mount

of

$100,0

00 (

2009:

$41,0

00)

rela

ting t

o r

einst

atem

ent

cost

s fo

r dis

man

tlin

g, r

emov

al

and r

esto

ration o

f fi xe

d a

sset

s w

hic

h w

as

pro

vided

for

as

pro

visi

on f

or

rein

state

ment

cost

(N

ote

13).

Cash

pay

ments

of

$3,0

71,7

12

(2009:

$3,4

22,6

83)

wer

e m

ade

to p

urc

has

e fi xe

d a

sset

s during t

he

year

.

No

tes

to t

he F

inan

cial

Sta

tem

en

ts (c

ont’d)

31 D

ecem

ber

2010

71

3.

Fix

ed

ass

ets

(co

nt’

d)

Gro

upLe

aseh

old

impr

ovem

ents

Food

cou

rtan

d F&

Beq

uipm

ent

Offi c

eeq

uipm

ent

Furn

itur

ean

d fi t

ting

sM

otor

vehi

cles

Tota

l

$$

$$

$$

Acc

um

ula

ted d

epre

ciat

ion a

nd im

pai

rmen

t lo

ss

As

at 1

Oct

ober

2008

2,2

47,8

38

783,7

24

323,9

75

1,4

04,0

90

101,1

22

4,8

60,7

49

Arisi

ng f

rom

acq

uis

itio

n o

f a

subsi

dia

ry c

om

pan

y173

465

1,3

83

7–

2,0

28

Char

ge

for

the

per

iod

1,5

05,7

89

403,5

64

97,8

25

815,3

14

39,2

63

2,8

61,7

55

Dis

posa

ls(1

3,6

61)

(61,9

00)

–(1

73,8

98)

–(2

49,4

59)

Writt

en o

ff(3

76,9

26)

(70,4

30)

(9,3

89)

(100,6

72)

–(5

57,4

17)

Tran

slat

ion d

iffe

rence

s(1

2,2

43)

(2,9

10)

(1,0

53)

(3,3

50)

–(1

9,5

56)

As

at 3

1 D

ecem

ber

2009 a

nd 1

Jan

uar

y 2010

3,3

50,9

70

1,0

52,5

13

412,7

41

1,9

41,4

91

140,3

85

6,8

98,1

00

Arisi

ng f

rom

acq

uis

itio

n o

f a

subsi

dia

ry c

om

pan

y (

Note

4)

298,2

20

7,3

10

30,4

56

148,5

11

–484,4

97

Char

ge

for

the

per

iod

1,3

15,3

37

370,8

69

84,9

13

681,2

31

31,4

11

2,4

83,7

61

Dis

posa

ls(1

4,4

96)

(145,0

23)

(818)

(119,8

46)

–(2

80,1

83)

Writt

en o

ff(4

7,5

82)

(14,6

91)

(22,2

83)

(17,0

82)

–(1

01,6

38)

Tran

slat

ion d

iffe

rence

s(2

8,7

47)

(10,6

06)

(2,4

03)

1,5

52

–(4

0,2

04)

As

at 3

1 D

ecem

ber

2010

4,8

73,7

02

1,2

60,3

72

502,6

06

2,6

35,8

57

171,7

96

9,4

44,3

33

Net

book

valu

e

At

31 D

ecem

ber

2010

4,6

07,1

70

1,3

98,6

11

379,2

35

2,7

00,0

56

36,6

46

9,1

21,7

18

At

31 D

ecem

ber

2009

4,5

77,3

70

1,1

74,9

67

220,9

68

2,5

29,7

73

68,0

57

8,5

71,1

35


31 December 2010

72

4. Investment in subsidiary companies Loan to subsidiary companies

Company2010 2009

$ $

Unquoted shares, at cost

Balance at beginning of year/period 6,821,313 1,000,000

Investments during the year/period – 5,821,313

Balance at end of year/period 6,821,313 6,821,313

Loan to subsidiary companies 4,500,000 4,500,000

Less: Allowance for doubtful debt (1,250,000) (1,250,000)

3,250,000 3,250,000

This loan is interest-free, unsecured and is not expected to be repaid within the next 12 months.

At the balance sheet date, the Company has provided an allowance of $1,250,000 (2009: $1,250,000) for impairment of the unsecured loan to a subsidiary company with a nominal amount of approximately $1,469,000 (2009: $1,469,000). This subsidiary company has been suffering fi nancial losses since incorporation.

The Company had the following subsidiary companies as at 31 December 2010:

Name of subsidiary company Principal activities

Country of incorporation and place of

business

Percentage of equity held

by the GroupCost of investment by

the Company

2010 2009 2010 2009

% % $ $

Held by the Company

(1) Food Junction Management Pte Ltd

Operation and management of food courts

Singapore 100 100 200,000 200,000

(1) Food Junction International Pte Ltd

Investment holding company

Singapore 100 100 399,999 399,999

(1) Food Culture Pte Ltd Operation and management of food courts and sale of food and beverage

Singapore 100 100 400,000 400,000

(1) FNC International Pte. Ltd.

Sale of food and beverage and conduct cooking courses

Singapore 100 100 1 1

(1) Malones Holdings Pte. Ltd.

Investment holding company for Malone’s business operations

Singapore 100 100 5,821,313 5,821,313

6,821,313 6,821,313


31 December 2010

73

4. Investment in subsidiary companies Loan to subsidiary companies (cont’d)

Name of subsidiary company Principal activities

Country of incorporation and place of

business

Percentage of equity held by

the Group

Cost of investment by the Company

2010 2009 2010 2009% % $ $

Held by Food Junction Management Pte Ltd

(1) Food Junction Singapore Pte Ltd

Sale of food and beverage

Singapore 100 100 – –

(2) T&W Food Junction Sdn Bhd

Management of food courts and operation of food outlets

Malaysia 100 100 – –

(2) Food Culture Sdn Bhd (currently dormant)


Malaysia 100 100 – –

(3) PT. FJ Square Indonesia


Indonesia 0.01 0.01 – –

Held by Food Junction International Pte Ltd

(6) Food Junction Beijing Co., Limited


People’s Republic of

China

100 100 – –

(3) PT. FJ Square Indonesia


Indonesia 99.99 99.99 – –

(8) All Around Limited Investment holding company

British Virgin Islands

100 – – –

Held by Malone Holdings Pte Ltd

(4) Maibo Restaurant Management (Shanghai) Co., Limited

Management andoperation of restaurants in Shanghai and Suzhou

People’s Republic of

China

100 100 – –

(5) Malone’s Limited Owns and manages trademarks in Hong Kong

Hong Kong 100 100 – –

Held by All Around Limited(7) LCR Catering

Services LimitedOwns and operates a restaurant

Hong Kong 90 – – –

(1) Audited by Ernst & Young LLP Singapore (2) Audited by Ernst & Young Malaysia (3) Audited by Ernst & Young Indonesia (4) Audited by Ernst & Young China (5) Audited by Ernst & Young Hong Kong (6) Audited by LegendHouse CPAs (7) Audited by Peter W.H. Ma & Co. (8) Not required to be audited by the law of the country of incorporation.



31 December 2010

74

4. Investment in subsidiary companies Loan to subsidiary companies (cont’d) Impairment testing of investment in subsidiary companies

No impairment loss (2009: Nil) was recognised in the current year based on the impairment test performed by management.

Acquisition of subsidiary

On 2 November 2010, the Group acquired 100% equity interest in All Around Limited from a related party, Tamsett Holdings Limited, a wholly-owned subsidiary of Lippo China Resources Limited.

The provisional fair values of the identifi ed assets and liabilities of the subsidiary company as at acquisition date were:

Provisionalfair value

recognisedon

acquisition

Carryingamountbefore

combination$ $

Fixed assets 170,688 170,688Inventories 284,523 284,523Trade receivables 78,650 78,650Other debtors, deposits and prepayments 235,025 235,025Cash and cash equivalents 1,624,384 1,624,384Trade payables (155,079) (155,079)Other creditors and accruals (426,218) (426,218)Net identifi able assets 1,811,973 1,811,973Non-controlling interests (181,373)

1,630,600Goodwill on consolidation (Note 5) 3,579,477Total consideration 5,210,077

Pursuant to the Sale and Purchase agreement, the cash consideration for the acquisition of this subsidiary company amounted to HKD 31 million (equivalent to $5,210,077) based on the agreed exchange rate of S$1 : HKD 5.95) and negotiated on a willing-buyer willing-seller basis.

Effect of the acquisition of All Around Limited on cash fl ows

$

Total cash consideration 5,210,077Less: Cash and cash equivalents of subsidiary company acquired (1,624,384)

Net cash outfl ow on acquisition 3,585,693

Impact of the acquisition on profi t or loss

From the acquisition date, All Around Limited contributed $1,270,613 of revenue and $253,291 to the Group’s profi t for the year. If the business combination had taken place at the beginning of the year, the revenue would have been $53,083,461 and the Group’s profi t for the year would have been $3,229,951.

Provisional accounting of the acquisition of All Around Limited

As at 31 December 2010, goodwill on acquisition of All Around Limited has been determined on a provisional basis as the results of the independent purchase price allocation have not been received by the date the fi nancial statements were authorised for issue.

Goodwill arising from this acquisition, the carrying amount of intangible asset (if any), deferred tax liability, and amortisation of intangible asset (if any) will be adjusted accordingly on a retrospective basis when the purchase price allocation is fi nalised.



31 December 2010

75

4. Investment in subsidiary companies Loan to subsidiary companies (cont’d)

Transaction costs

Transaction costs related to the acquisition of $193,158 have been recognised in the “Other expenses” line item in the Group’s profi t or loss for the year ended 31 December 2010.

5. Intangible assets

GroupGoodwill on

consolidation Trademark

Managementservice

agreement Total$ $ $ $

CostAs at 1 October 2008 – – – –Arising from acquisition of a subsidiary company 3,823,014 3,977,487 216,270 8,016,771Adjustments * (2,336,813) – – (2,336,813)As at 31 December 2009 and 1 January 2010 1,486,201 3,977,487 216,270 5,679,958Arising from acquisition of a subsidiary company 3,579,477 – – 3,579,477As at 31 December 2010 5,065,678 3,977,487 216,270 9,259,435

Accumulated amortisationAs at 1 October 2008 – – – –Charge for the fi nancial period – – (72,821) (72,821)As at 31 December 2009 and 1 January 2010 – – (72,821) (72,821)Charge for the fi nancial year – – (54,449) (54,449)As at 31 December 2010 – – (127,270) (127,270)

Net carrying amountAs at 31 December 2010 5,065,678 3,977,487 89,000 9,132,165As at 31 December 2009 1,486,201 3,977,487 143,449 5,607,137

* In the prior period, management was of the view that it was highly unlikely that Malones Holdings Pte. Ltd. and its subsidiary companies would be able to achieve the profi t target set in the sales and purchase agreement. Therefore, it was not probable that the deferred cash consideration would be paid. Accordingly, the Group made the necessary adjustment to goodwill on consolidation.

Amortisation expense

The amortisation of management service agreement is included in the “Other expenses” line item in profi t or loss.

Impairment testing of goodwill and trademark

Goodwill acquired through business combination and trademark has been allocated to the cash-generating unit (“CGU”), food and beverages (“F&B”) segment that is expected to benefi t from the business combination.

The recoverable amount of the CGU has been determined based on value in use calculations using cash fl ow projections from fi nancial budget approved by management covering a fi ve-year period. The pre-tax discount rate applied to the cash fl ow projections and the forecasted growth rate used to extrapolate cash fl ows beyond the fi ve-year period are 11.87% (2009: 13.83%) and 4% (2009: 4%) respectively.



31 December 2010

76

5. Intangible assets (cont’d)

The calculations of value in use for the CGU are most sensitive to the following assumptions:

Budgeted gross margins – Gross margins are based on average values achieved in the three years preceding the start of the budget period. These are increased over the budget period for anticipated effi ciency improvements.

Growth rates – The forecasted growth rate is based on published industry research, taking into consideration China economy to expand around 8% and the long-term consumer price infl ation of China of 4%.

Pre-tax discount rates – The discount rate refl ects the current market assessment of the risks. In determining the appropriate discount rate for the CGU, regard has been given to the yield on a ten-year PRC government bond at the valuation date.

6. Deposits and other receivables, and prepayments and other recoverables

Group Company2010 2009 2010 2009

$ $ $ $

Non-current

Deposits and other receivables:-

Rental deposits 4,845,519 2,990,063 87,150 168,970

Renovation fees to be billed to tenants 1,898,379 423,096 – –

6,743,898 3,413,159 87,150 168,970

Current

Deposits and other receivables:-

Rental deposits 87,925 1,549,940 82,925 –

Renovation fees to be billed to tenants 575,733 1,194,856 – –

Other receivables 725,689 877,230 – –

Other deposits 471,502 385,740 – 1,050

Dividend receivable – – 3,850,000 8,200,000

1,860,849 4,007,766 3,932,925 8,201,050

Add:

Loan to subsidiary companies – – 3,250,000 3,250,000

Trade receivables 28,715 – – –

Amount due from subsidiary companies (non-trade) – – 8,358,488 2,798,049

Fixed deposits pledged 720,176 622,590 – –

Cash and cash equivalents 19,551,072 20,463,050 385,821 514,070

Total loans and receivables 28,904,710 28,506,565 16,014,384 14,932,139



31 December 2010

77

6. Deposits and other receivables, and prepayments and other recoverables (cont’d)

Group Company2010 2009 2010 2009

$ $ $ $

Non-current

Prepayments and other recoverables:-

Prepayments 1,224,670 1,268,368 17,284 –

Deferred lease expenses 436,921 280,514 – –

1,661,591 1,548,882 17,284 –

Current

Prepayments and other recoverables:-

Prepayments 365,779 486,024 8,422 41,678

Deferred lease expenses – 23,916 – –

Assets recoverable* 663,602 125,902 – –

1,029,381 635,842 8,422 41,678

Total prepayments and other recoverables 2,690,972 2,184,724 25,706 41,678

* This relates to renovation costs, all of which may be recoverable from tenants, upon fi nalisation of renovation works.

All deposits and other receivables are denominated in the Company’s and the respective subsidiary companies’ functional currencies.

7. Trade receivables

Trade receivables are non-interest bearing and are generally on 30 days’ credit terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

All trade receivables are denominated in a subsidiary company’s functional currency.

8. Amount due from subsidiary companies (non-trade)

These amounts are unsecured, interest-free, are repayable on demand and to be settled in cash.

9. Fixed deposits pledged

Fixed deposits pledged to banks as security for banker’s guarantees issued in lieu of rental deposits amounted to $720,176 (2009: $622,590).



31 December 2010

78

10. Cash and cash equivalents

Group Company2010 2009 2010 2009

$ $ $ $

Fixed deposits 2,016,346 10,114,007 – –

Cash and bank balances 18,254,902 10,971,633 385,821 514,070

20,271,248 21,085,640 385,821 514,070

Fixed deposits pledged with the bank (Note 9) (720,176) (622,590) – –

Cash and cash equivalents 19,551,072 20,463,050 385,821 514,070

Fixed deposits earn interest at effective interest rates ranging from 0.10% to 2.55% (2009: 0.10% to 2.00%) per annum. Short term deposits are made for varying periods of primarily less than 3 months depending on the immediate cash requirements of the Group, and earn interests at the respective short term deposit rates.

Cash and cash equivalents denominated in foreign currencies in SGD equivalents as at 31 December are as follows:

Group Company2010 2009 2010 2009

$ $ $ $

USD 357,861 156,039 2,949 2,843

11. Other payables, deposits received and accruals

Group Company2010 2009 2010 2009

$ $ $ $

Other payables * 2,391,195 2,281,836 40,547 102,876

Accrued operating expenses 3,574,235 2,992,280 519,749 821,375

Deposits from tenants 3,064,864 2,498,902 – –

Accrued renovation costs – 157,589 – –

Total other payables, deposits receivables and accruals 9,030,294 7,930,607 560,296 924,251

Add: Trade payables 5,873,507 4,167,716 – –

Total fi nancial liabilities carried at amortised cost 14,903,801 12,098,323 560,296 924,251

* This mainly relates to unpaid invoices from creditors of both food courts and food and beverage operations.

All other payables, deposits received and accruals are denominated in the Company’s and the respective subsidiary companies’ functional currencies.



31 December 2010

79

12. Deferred taxation

Group2010 2009

$ $

Balance at beginning of year/period 747,199 576,111

Charge for the year/period 217,058 122,367

(Over)/under provision in respect of prior years (52,147) 2,779

Reduction in tax rate – (7,440)

Acquisition of subsidiary – 54,068

Currency realignment 592 (686)

Balance at end of year/period 912,702 747,199

Deferred taxation arises mainly from the excess of net book value over the tax written down value of fi xed assets.

13. Provision for reinstatement cost

Group2010 2009

$ $

Balance at beginning of year/period 797,279 739,800

Charge for the year/period 100,000 41,000

Finance cost during the year/period 40,658 48,170

Translation difference during the year/period 723 (2,750)

Written back during the year/period – (28,941)

Balance at end of year/period 938,660 797,279

This provision is recognised for expected costs for dismantling, removal and restoration of fi xed assets, based on the best estimate of the expenditure with reference to past experience. It is expected that these costs will be incurred after one year from the balance sheet date and would have been incurred within 7 years of the balance sheet date. The provision is discounted using a current rate of 5% (2009: 5%) that refl ects the risks specifi c to the liability. The increase in the provision of $40,658 (2009: $48,170) due to the passage of time is recognised as fi nance costs.

During the year, the Group has not written back provision for reinstatement cost (2009: $28,941).

14. Share capital and treasury shares

(a) Share capital

2010 2009No. of shares $ No. of shares $

Issued and fully paid ordinary shares

Balance at beginning of year/period 129,632,790 12,707,436 120,285,540 9,622,843

Issued for acquisition of a subsidiary company – – 9,347,250 3,084,593

Balance at end of year/period 129,632,790 12,707,436 129,632,790 12,707,436

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares have no par value and carry one vote per share without restrictions.



31 December 2010

80

14. Share capital and treasury shares (cont’d)

(b) Treasury shares

2010 2009No. of shares $ No. of shares $

Balance at beginning of year/period – – – –

Acquired during the year 1,367,000 286,051 – –

Balance at end of year/period 1,367,000 286,051 – –

Treasury shares relate to ordinary shares of the Company that are held by the Company.

The Company acquired 1,367,000 (2009: Nil) shares in the Company through purchases on the Singapore Exchange during the fi nancial year. The total amount paid to acquire the shares was $286,051 (2009: Nil) and this was presented as a component within the shareholders’ equity.

15. Turnover

Turnover consists of the following:

Group Company1.1.2010

to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Fees charged to food court stallholders (including contingent licensing fee) 18,751,989 21,296,357 – –

Sale of food and beverage 28,610,382 38,695,528 – –

Management fees charged to a subsidiary company – – 1,860,000 2,975,000

47,362,371 59,991,885 1,860,000 2,975,000

16. Personnel expenses


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Wages, salaries and bonuses 9,687,048 12,965,502 411,432 1,748,408

Pension contributions 973,283 1,231,061 15,848 43,692

Other staff costs 1,470,954 2,199,926 19,917 87,446

12,131,285 16,396,489 447,197 1,879,546

The above amounts include directors’ remunerations as disclosed in Note 18.



31 December 2010

81

17. Interest income


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Interest income from fi xed deposits 61,967 77,081 – 178

Finance income on rental deposits 178,072 232,877 – –

240,039 309,958 – 178

18. Profi t before taxation

This is determined after charging/(crediting) the following:


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Amortisation of intangible assets 54,449 72,821 – –

Non-audit services

- auditors of the Company 71,271 119,970 21,000 63,670

- other auditors 54,796 42,445 – 36,500

Central Provident Fund contributions 973,283 1,231,061 15,848 43,692

Directors’ fees ** 80,000 350,000 80,000 350,000

Fees paid to a fi rm in which a director is a member – 35,406 – 35,406

Foreign exchange (gain)/loss (82,764) 25,427 196 78

Fixed assets written off 99,375 171,698 – –

Loss on disposal of fi xed assets 94,418 82,327 – –

Operating lease expenses (including contingent rent) 16,898,129 18,765,418 – –

Lease expense relating to fair value of rental deposits 185,976 236,163 – –

Finance cost on provision for reinstatement cost 40,658 48,170 – –

Utilities expenses 2,691,467 3,325,136 – –

Write back of provision for reinstatement cost – (28,941) – –

Inventories written off – 66,522 – –

Compensation of key management personnel:-

- Short-term employee benefi ts 992,591 2,229,219 411,432 1,809,830

- Central Provident Fund contributions 70,909 74,225 15,848 30,482

1,063,500 2,303,444 427,280 1,840,312

** Actual proposed directors’ fees after the year ended 31 December 2010 are $215,000 (2009: $230,000).



31 December 2010

82

18. Profi t before taxation (cont’d)


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Comprise amounts paid to:-

- Directors of the Company 427,280 1,800,237 427,280 1,800,237

19. Income tax expense

Major components of income tax expense

The major components of income tax expense for the year/period ended 31 December 2010 and 2009 are:


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Current taxation

- current year 665,986 934,898 106,000 21,519

- (over)/under provision in respect of prior years (174,724) (162,626) 17,482 –

Deferred taxation

- current year 217,058 122,367 – –

- reduction in tax rate – (7,440) – –

- (over)/under provision in respect of prior years (52,147) 2,779 – –

656,173 889,978 123,482 21,519



31 December 2010

83

19. Income tax expense (cont’d)

Relationship between tax expense and accounting profi t

The reconciliation of the tax expense and that of accounting profi t multiplied by the applicable tax rate is as follows:


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Profi t before taxation 3,329,266 5,224,720 2,711,948 213,985

Tax at domestic rates applicable to profi ts in the countries where the Group operates 610,904 962,088 461,031 36,377

Tax effect of:

Expenses not deductible in determining taxable profi t 178,334 162,017 14,813 8,888

Reduction in tax rates – (7,440) – –

Partial tax exemption (77,775) (100,144) – (22,369)

Non-taxable item (7,334) (132,038) (369,844) (1,377)

(Over)/Under provision in respect of prior years (226,871) (159,847) 17,482 –

Deferred tax asset not recognised 184,921 177,970 – –

Others (6,006) (12,628) – –

656,173 889,978 123,482 21,519

As at 31 December 2010, the Group has tax losses of approximately $2,550,000 (2009: $2,196,000) that are available for offset against future taxable profi ts of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its recoverability. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate.

The corporate income tax rate applicable to Singapore companies of the Group was reduced to 17% for the year of assessment 2010 onwards from 18% for the year of assessment 2009.

The above reconciliation is prepared by aggregating separate reconciliation for each national jurisdiction.

The corporate income tax rate applicable to Malaysian companies of the Group was reduced from 27% to 26% and 25% for the year of assessment 2009 and the year of assessment 2010 onwards respectively.

20. Earnings per share

Earnings per share (“EPS”) for the Group is based on the net profi t attributable to the shareholders of $2,644,950 (2009: $4,334,742) divided by the weighted average number of share capital of 129,559,897 (2009: 129,632,790) ordinary shares in issue during the year.

As there were no dilutive potential ordinary shares during the year, the basic and diluted earnings per share are the same.



31 December 2010

84

21. Dividends

Group and Company1.1.2010

to31.12.2010

1.10.2008to

31.12.2009$ $

Declared and paid during the year/period

Dividends on ordinary shares Final dividend (one-tier tax exempt) of 0.5 (2009: Nil) per share in respect of the previous period 648,164 –Interim dividend (one-tier tax exempt) of 0.25 cent (2009: 0.75 cents) per share in respect of the current year/period 324,084 972,248

972,248 972,248

The directors proposed that a fi nal tax exempt dividend of 0.25 (2009: 0.5) cent per ordinary share amounting to approximately $320,665 (2009: $648,164) be paid for the year ended 31 December 2010.

22. Related party information

In addition to the related party information disclosed elsewhere in the fi nancial statements, the Group and the Company had signifi cant transactions with related parties on terms agreed between the parties as follows:


to31.12.2010

1.10.2008to

31.12.2009

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $ $ $

Management fees charged to a subsidiary company – – 1,860,000 2,975,000Dividend income received from unquoted subsidiary companies – – 2,000,000 –Purchases from a subsidiary company – – 20,876 18,379Rental payment to related parties 510,000 245,000 – –

23. Contingent liabilities and commitments

(a) Operating lease commitments in respect of the Group’s food court premises as lessee

The Group has various operating lease agreements in respect of its food court premises. Most leases contain renewable options. Some of the leases contain escalation clauses and provide for contingent rentals based on percentage of sales in excess of base rent. Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing.

Group2010 2009

$ $

Future minimum lease paymentsWithin 1 year 19,416,000 14,200,000Between 2 to 5 years 24,071,000 18,300,000More than 5 years – –

43,487,000 32,500,000



31 December 2010

85

23. Contingent liabilities and commitments (cont’d)

(b) Operating lease commitments in respect of the Group’s license agreement to the use of the food stalls as lessor

The Group licenses the use of the F&B stalls within the food courts to individual third party stallholders and a subsidiary company.

The licenses with third party stallholders are typically for a period of one to two years and are not cancellable. In the course of a fi nancial year there may be terminations and renewals of such licenses. The Group has accounted for license fee in respect of non-cancellable leases as at annual balance sheet date. Licenses that expire during the course of a fi nancial year and have not been renewed will not be accounted for from their respective dates of expiration.

All the leases provide for contingent rentals based on a percentage of sales derived from assets held under operating leases. During the year, the contingent rentals amounted to $6,343,000 (2009: $3,418,049).

Future minimum lease rentals receivable (after group elimination):

Group2010 2009

$ $

Within 1 year 15,988,000 12,079,000

Between 2 to 5 years 4,709,000 614,000

More than 5 years – –

20,697,000 12,693,000

(c) Corporate guarantee

As at 31 December 2010, the Company has provided a corporate guarantee of $2,500,000 (2009: $2,500,000) to a bank on subsidiary company’s rent and service charge payable to the landlord.

24. Financial risk management objectives and policies

The Group and Company is exposed to fi nancial risks arising from its operations and the use of fi nancial instruments. The key fi nancial risks include liquidity risk, foreign currency risk, credit risk and interest rate risk. The Board reviews and agrees policies for the management of these risks. The audit committee provides independent oversight to the effectiveness of the risk management process. The Group and Company do not apply hedge accounting.

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

There has been no change to the Group’s exposure to these fi nancial risks or the manner in which it manages and measures the risks.

Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter diffi culty in meeting fi nancial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of fi nancial assets and liabilities. The Group’s and the Company’s objective is to maintain fl exibility through the use of liquid fi nancial assets.

The Group’s and the Company’s liquidity risk management policy is to monitor and maintain a level of cash and cash equivalents deemed adequate by the management to fi nance the Group’s operations and mitigate the effects of fl uctuations in cash fl ows.



31 December 2010

86

24. Financial risk management objectives and policies (cont’d)

Liquidity risk (cont’d)

Analysis of fi nancial instruments by remaining contractual maturities

The table below summarises the maturity profi le of the Group and the Company’s fi nancial assets and liabilities at the end of the reporting year/period based on contractual undiscounted repayment obligations.

GroupWithin 1 year

Between1 and 5

years Total2010 $ $ $

Financial assets:

Deposits and other receivables 1,860,849 7,205,731 9,066,580

Trade receivables 28,715 – 28,715

Fixed deposits pledged 720,176 – 720,176

Cash and cash equivalents 19,551,072 – 19,551,072

Total undiscounted fi nancial assets 22,160,812 7,205,731 29,366,543

Financial liabilities:

Trade payables 5,873,507 – 5,873,507

Other payables, deposits received and accruals 9,030,294 – 9,030,294

Total undiscounted fi nancial liabilities 14,903,801 – 14,903,801

Total net undiscounted fi nancial assets 7,257,011 7,205,731 14,462,742

Group

2009

Financial assets:

Deposits and other receivables 4,007,766 3,717,483 7,725,249

Fixed deposits pledged 622,590 – 622,590

Cash and cash equivalents 20,463,050 – 20,463,050



Trade payables 4,167,716 – 4,167,716

Other payables, deposits received and accruals 7,930,607 – 7,930,607

Total undiscounted fi nancial liabilities 12,098,323 – 12,098,323




31 December 2010

87


Liquidity risk (cont’d)

CompanyWithin 1 year

Between1 and 5

years Total2010 $ $ $

Financial assets:

Deposits and other receivables 3,932,925 87,150 4,020,075

Loan to subsidiary companies – 3,250,000 3,250,000

Amount due from subsidiary companies (non-trade) 8,358,488 – 8,358,488

Cash and cash equivalents 385,821 – 385,821



Other payables, deposits received and accruals 560,296 – 560,296

Total undiscounted fi nancial liabilities 560,296 – 560,296


Company

2009

Financial assets:

Deposits and other receivables 8,201,050 168,970 8,370,020

Loan to subsidiary companies – 3,250,000 3,250,000

Amount due from subsidiary companies (non-trade) 2,798,049 – 2,798,049

Cash and cash equivalents 514,070 – 514,070



Other payables, deposits received and accruals 924,251 – 924,251

Total undiscounted fi nancial liabilities 924,251 – 924,251


Foreign currency risk

The Group and the Company hold cash and cash equivalents denominated in US Dollars (USD) other than the respective functional currencies of Group entities, primarily, Singapore dollar (SGD), Malaysia Ringgit (MYR), Indonesia Rupiah (Rupiah), Renminbi (RMB) and Hong Kong dollar (HKD), for working capital purposes. At the balance sheet date, the foreign currencies held in SGD equivalents are as disclosed in Note 10.

The Group does not enter into forward exchange contracts to hedge against its foreign exchange risk. The foreign exchange loss and translation differences for the year ended 31 December 2010 was not signifi cant.



31 December 2010

88


Foreign currency risk (cont’d)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profi t after tax to a reasonably possible change in the USD exchange rates (against the respective functional currencies of the Group entities), with all other variables held constant.

Group Profi t after taxation

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009$ $

SGD - strengthened 1% (2009: 1%) 121 59

- weakened 1% (2009: 1%) (121) (59)

Rupiah - strengthened 1% (2009: 1%) 140 40

- weakened 1% (2009: 1%) (140) (40)

RMB - strengthened 1% (2009: 1%) 38 1,390

- weakened 1% (2009: 1%) (38) (1,390)

Credit risk

Credit risk is the risk of loss that may arise on outstanding fi nancial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposures to credit risk arises primarily from other receivables. The Group does not have credit risk exposure from the tenants. It is the Group’s policy that all tenants need to place a deposit before the Group license the stall to the tenants. In addition, the Group collects sales collection on behalf of the tenants and returns the net collections to the tenants upon settlement. For other fi nancial assets (include cash and cash equivalents, and fi xed deposits), the Group and the Company minimises credit risk by dealing exclusively with reputable and well-established local and foreign banks with high credit ratings and no history of defaults.

Exposure to credit risk

At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by:

— The carrying amounts of each class of fi nancial assets recognised in the balance sheets

— A nominal amount of $2,500,000 (2009: $2,500,000) relating to a corporate guarantee provided by the Company to a bank on subsidiary company’s rent and service charge payable to the landlord

No other fi nancial assets carry a signifi cant exposure to credit risk.

Credit risk concentration profi le

The Group and the Company have no signifi cant concentration of credit risk.

Financial assets that are neither past due nor impaired

Other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. Cash and bank balances, and fi xed deposits are placed with reputable and well-established local and foreign banks with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding fi nancial assets that are either past due or impaired is disclosed in Note 4.



31 December 2010

89


Interest rate risk

Interest rate risk is the risk that the fair value or future cash fl ows of the Group’s and the Company’s fi nancial instruments will fl uctuate because of changes in market interest rates. The Group’s exposure to market risk for changes in interest rates relates mainly to its surplus funds placed with banks.

Surplus funds are placed as fi xed deposits with reputable banks which yield better returns compared to cash at bank. The deposits provide the Group and the Company with the fl exibility to meet its working capital and capital investment needs.

Information relating to the Group’s and the Company’s interest rate exposure is disclosed in Note 10.

At the end of the reporting period, it is estimated that a general increase of 5 basis point in interest rates would increase the Group’s profi t after tax by $1,008 (2009: $4,197), whereas a 5 basis point decrease have an equal but opposite effect. This analysis assumes that all other variables remain constant.

25. Fair value of fi nancial instruments

Fair value of fi nancial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

Trade receivables, deposits and other receivables (current), fi xed deposit pledged, cash and cash equivalents, trade payables, other payables, deposits received and accruals, and amount due from subsidiary companies

The carrying amounts of these fi nancial assets and liabilities are reasonable approximation of fair values due to their short-term nature.

Deposits and other receivables (non-current)

Management believes that the carrying amount recorded at the balance sheet date approximate its fair value as the interest rates used to amortise the non-current deposits and other receivables closely approximate the market interest rates on or near the end of the reporting period.

Fair value of fi nancial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

2010 2009

CompanyCarryingamount Fair value

Carryingamount Fair value

$ $ $ $

Financial assets:

Loan to subsidiary companies 3,250,000 * 3,250,000 *

* Loan to subsidiary companies

Fair value information has not been disclosed for the loan to subsidiary companies that are carried at cost because fair value cannot be measured reliably. These loans have no repayment terms and are repayable only when the cash fl ows of the borrower permit.



31 December 2010

90

26. Segment information

For management purposes, the Group is organised into business units based on their products and services, and has three reportable operating segments as follows:

The food courts segment is the management of food courts.

The food and beverages (F&B) segment is in the sales of food and beverages.

The corporate segment is involved in Group-level corporate services.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profi t or loss which in certain respects, as explained in the table below, is measured differently from operating profi t or loss in the consolidated fi nancial statements.

Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly cash and bank balances, fi xed deposits, provision for income tax and deferred tax liabilities.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.

(a) Operating Segments

1.1.2010 to 31.12.2010Food

courts F&B Corporate Eliminations Group

$ $ $ $ $

Revenue:

Turnover

- external sales 18,751,989 28,610,382 – – 47,362,371

- inter-segment sales 6,324,032 – – (6,324,032) –

Other operating income 620,435 243,972 3,860,000 (3,860,000) 864,407

Total revenue 25,696,456 28,854,354 3,860,000 (10,184,032) 48,226,778

Results:

Interest income 239,872 167 – – 240,039

Depreciation 1,861,406 622,355 – – 2,483,761

Other non-cash expenses (Note i) 588,016 203,098 – – 791,114

Taxation 655,848 325 – – 656,173

Segment profi t/(loss) 3,109,787 (436,694) – – 2,673,093

Assets:

Segment assets (Note ii) 30,377,618 7,066,286 12,737,892 – 50,181,796

Liabilities:

Segment liabilities (Note iii) (15,232,316) (2,363,445) (1,207,456) – (18,803,217)

Capital expenditure (Note iv) 1,706,262 1,636,138 – – 3,342,400



31 December 2010

91

26. Segment information (cont’d)

(a) Operating Segments (cont’d)

1.10.2008 to 31.12.2009Food

courts F&B Corporate Eliminations Group

$ $ $ $ $

Revenue:

Turnover

- external sales 21,296,357 38,695,528 – – 59,991,885

- inter-segment sales 9,396,474 – – (9,396,474) –

Other operating income 1,408,747 335,073 2,975,000 (2,975,000) 1,743,820

Total revenue 32,101,578 39,030,601 2,975,000 (12,371,474) 61,735,705

Results:

Interest income 307,202 2,756 – – 309,958

Depreciation 2,248,489 613,266 – – 2,861,755

Other non-cash expenses (Note i) 324,309 214,402 – – 538,711

Taxation 616,734 273,244 – – 889,978

Assets:

Segment assets (Note ii) 14,894,971 2,653,564 27,414,496 – 44,963,031

Liabilities:

Segment liabilities (Note iii) (10,480,156) (1,806,112) (2,876,413) – (15,162,681)

Capital expenditure (Note iv) 2,317,159 1,238,647 – – 3,555,806

Note i: Other non-cash expenses comprise of loss on disposal of fi xed assets, fi xed assets written off, fi nance cost on provision of reinstatement cost, write back of provision of reinstatement cost, amortisation of intangible assets, lease expenses relating to fair value of rental deposits, additional lease expense on straight-line basis over the lease term and exchange differences.

Note ii: Total segment assets comprise fi xed and current assets.

Note iii: Total segment liabilities comprise current and non-current liabilities and tax liabilities.

Note iv: Capital expenditure refers to the acquisition of fi xed assets.



31 December 2010

92

26. Segment information (cont’d)

(b) Geographical segments

Sales to external customers

1.1.2010to

31.12.2010

1.10.2008to

31.12.2009

$ $

Singapore 34,766,770 46,318,341

Malaysia 5,107,624 6,302,615

Indonesia 1,299,918 886,669

China 4,917,446 6,484,260

Hong Kong 1,270,613 –

47,362,371 59,991,885

Non-current assets (Note v) 2010 2009

Singapore 22,088,734 14,564,612

Malaysia 2,423,505 2,627,658

Indonesia 300,976 414,491

China 1,570,070 1,533,552

Hong Kong 276,087 –

26,659,372 19,140,313

Note v: Non-current assets information presented above consist of fi xed assets, intangible assets, deposits and other receivables, prepayments and other recoverables.

(c) Information about a major customer

The Group does not have any specifi c major customer.

27. Directors’ remuneration

The number of directors of the Company in remuneration bands is as follows:

1.1.2010 to 31.12.2010 1.10.2008 to 31.12.2009

Executivedirectors

Non-executivedirectors Total

Executivedirectors

Non-executivedirectors Total

$500,000 and above – – – 1 – 1

$250,000 to $499,999 – – – 1 – 1

Below $250,000 2 5 7 2 5 7

2 5 7 4 5 9



31 December 2010

93

28. 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 from various sources of funds to fi nance its overall operations and support its business growth. No changes were made in the objectives during the year ended 31 December 2010 and period ended 31 December 2009.

The Group monitors capital using return on equity. Return on equity is derived using profi t for the fi nancial year attributable to owners of the parent over the equity attributable to shareholders. Equity comprises issued capital (net of Treasury shares), accumulated profi ts and translation reserve. The return on equity for the period ended 31 December 2010 is 8.5% (2009: 14.5%).

29. Comparative fi gures

The fi nancial statements for 2010 cover the twelve months from 1 January 2010 to 31 December 2010. The fi nancial statements for 2009 cover the fi fteen months from 1 October 2008 to 31 December 2009. Certain fi gures have been reclassifi ed to conform to present year presentation.

30. Events occurring after the reporting period

Since the end of the fi nancial year till 15 March 2011, the Company acquired 858,000 shares in the Company through purchases on the Singapore Exchange for an amount of $178,804.

31. Authorisation of fi nancial statements for issue

The fi nancial statements for the period ended 31 December 2010 were authorised for issue in accordance with a resolution of the directors on 15 March 2011.


Statistics of ShareholdingsAs at 8 March 2011

94

Total No. of Issued Shares : 129,632,790Voting Rights : One vote per shareNo./Percentage of Treasury Shares : 2,225,000 (1.75%)No. of Issued Shares (excluding Treasury Shares) : 127,407,790

DISTRIBUTION OF SHAREHOLDINGS

Size of ShareholdingsNo. of

Shareholders % No. of Shares % *

1 - 999 108 8.26 40,712 0.03

1,000 - 10,000 644 49.23 3,222,801 2.53

10,001 - 1,000,000 548 41.90 34,007,513 26.69

1,000,001 AND ABOVE 8 0.61 90,136,764 70.75

TOTAL 1,308 100.00 127,407,790 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name No. of Shares % *

1 CIMB SECURITIES (SINGAPORE) PTE LTD 65,739,725 51.60

2 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 9,785,160 7.68

3 CHIANG PO-LING 5,794,000 4.55

4 DBS NOMINEES PTE LTD 2,440,238 1.92

5 HO HON LEE 2,083,000 1.63

6 HL BANK NOMINEES (S) PTE LTD 1,577,660 1.24

7 PHILLIP SECURITIES PTE LTD 1,512,090 1.19

8 UNITED OVERSEAS BANK NOMINEES PTE LTD 1,204,891 0.94

9 BERNARD TEOH KOK KHENG 894,640 0.70

10 TAN KAY TOH OR YU HEA RYEONG 821,000 0.64

11 OCBC NOMINEES SINGAPORE PTE LTD 705,780 0.55

12 HUBERTUS JOHANNES MARINUS 701,044 0.55

13 SHAWN MICHAEL DOYLE 650,780 0.51

14 LIM CHER KHIANG 648,673 0.51

15 LIM & TAN SECURITIES PTE LTD 630,397 0.49

16 CHAN NGON YUE 581,920 0.46

17 KIM ENG SECURITIES PTE. LTD. 549,180 0.43

18 ER KONG KIONG DOMINIC 508,710 0.40

19 HSBC (SINGAPORE) NOMINEES PTE LTD 480,220 0.38

20 POOI CHOON TECK 452,000 0.36

TOTAL 97,761,108 76.73

* The percentage of issued shares is calculated based on the number of issued shares as at 8 March 2011, excluding any Treasury shares held at that date.

41.18% of the Company’s shares (excluding Treasury shares) are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of SGX-ST.


95

SUBSTANTIAL SHAREHOLDERS AS AT 8 MARCH 2011

Name of Shareholders Direct Deemed Interest

1) Lanius Limited (1) – 74,935,285

2) Lippo Capital Limited(2) – 74,935,285

3) Lippo Cayman Limited(3) – 74,935,285

4) Lippo Limited(4) – 74,935,285

5) First Tower Corporation(5) – 74,935,285

6) Skyscraper Realty Limited(6) – 74,935,285

7) Lippo China Resources Limited(7) – 74,935,285

8) Tamsett Holdings Limited(8) – 74,935,285

9) Max Turbo Limited(9) – 74,935,285

10) Win Joyce Limited(10) – 74,935,285

11) Goldmax Pacifi c Limited(11) – 74,935,285

12) Pantogon Holdings Pte Ltd(12) – 74,935,285

13) James T. Riady(13) – 74,935,285

14) Stephen Riady(14) – 74,935,285

15) Auric Pacifi c Investment Holdings Pte Ltd(15) – 74,935,285

16) Auric Pacifi c Group Limited(16) – 74,935,285

17) Goldstream Capital Limited(17) – 74,935,285

18) Bravado International Limited(18) – 74,935,285

19) Castello International Limited(19) – 74,935,285

20) Provatas Investments Limited(20) – 74,935,285

21) Oxley Capital Holdings Limited(21) – 74,935,285

22) APG Strategic Investment Pte Ltd(22) 65,474,725 –

23) Auric Pacifi c Investment Pte Ltd(23) 9,460,560 –

Notes:

1 By virture of Section 7(4) of the Companies Act, (Cap. 50), Lanius Limited is deemed to have an interest in the Food Junction Holdings Limited’s shares held by Auric Pacifi c Investment Pte Ltd (“API”) and APG Strategic Investment Pte Ltd (“APG Strategic’) through Auric Pacifi c Investment Holdings Pte Ltd (“AP Holdings”) and Auric Pacifi c Group Limited (“APGL”).

2 By virtue of Section 7 of the Companies Act (Cap. 50), Lippo Capital Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

3 By virtue of Section 7 of the Companies Act (Cap. 50), Lippo Cayman Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

4 By virtue of Section 7 of the Companies Act (Cap. 50), Lippo Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

5 By virtue of Section 7 of the Companies Act (Cap. 50), First Tower Corporation is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

6 By virtue of Section 7 of the Companies Act (Cap. 50), Skyscraper Realty Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

7 By virtue of Section 7 of the Companies Act (Cap. 50), Lippo China Resources Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

8 By virtue of Section 7(4) of the Companies Act (Cap. 50), Tamsett Holdings Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

9 By virtue of Section 7(4) of the Companies Act (Cap. 50), Max Turbo Limited is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.


96

10 By virtue of Section 7 of the Companies Act (Cap. 50), Win Joyce Limited (“Win Joyce”) is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

11 By virtue of Section 7 of the Companies Act (Cap. 50), Goldmax Pacifi c Limited (“Goldmax”) is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

12 By virtue of Section 7 of the Companies Act (Cap. 50), Pantogon Holdings Pte Ltd (“Pantogon”) is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL. Pantogon has an interest of 28.778% in APGL. Pantogon is a wholly-owned subsidiary of Goldmax, which is in turn a wholly-owned subsidiary of Win Joyce.

13 By virtue of Section 7 of the Companies Act (Cap. 50), Mr James T. Riady is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

14 By virtue of Section 7 of the Companies Act (Cap. 50), Mr Stephen Riady is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic through AP Holdings and APGL.

15 By virtue of Section 7 of the Companies Act (Cap. 50), AP Holdings is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic. Both API and APG Strategic are wholly-owned subsidiaries of AP Holdings, which is in turn a wholly-owned subsidiary of APGL.

16 By virtue of Section 7 of the Companies Act (Cap. 50), APGL is deemed to have an interest in Food Junction Holdings Limited’s shares held by API and APG Strategic. Both API and APG Strategic are wholly-owned subsidiaries of AP Holdings, which is in turn a wholly-owned subsidiary of APGL.

17 Goldstream Capital Limited (“Goldstream”) has an interest of 21.88% in APGL. By virtue of Section 7 of the Companies Act (Cap. 50), Goldstream is deemed to have an interest in Food Junction Holdings Limited’s shares held by APG Strategic and API through AP Holdings and APGL.

18 Bravado International Limited (“Bravado”) has an interest of 70% in Goldstream. By virtue of Section 7 of the Companies Act (Cap. 50), Bravado is deemed to have an interest in Food Junction Holdings Limited’s shares held by APG Strategic and API through AP Holdings, APGL and Goldstream.

19 Castello International Limited (“Castello”) has an interest of 30% in Goldstream. By virtue of Section 7 of the Companies Act (Cap. 50), Castello is deemed to have an interest in Food Junction Holdings Limited’s shares held by APG Strategic and API through AP Holdings, APGL and Goldstream.

20 Provatas Investments Limited (“Provatas”) has an interest of 50% in Castello. Castello has an interest of 30% in Goldstream. Goldstream has an interest of 21.88% in APGL. By virtue of Section 7 of the Companies Act (Cap. 50), Provatas is deemed to have an interest in Food Junction Holdings Limited’s shares held by APG Strategic and API through AP Holdings, APGL and Castello.

21 By virtue of Section 7 of the Companies Act (Cap. 50), Oxley Capital Holdings Limited (“Oxley”) is deemed to have an interest in Food Junction Holdings Limited through Provatas. Provatas has a deemed interest of 58.82%* in Food Junction Holdings Limited and is a wholly-owned subsidiary of Oxley.

22 APG Strategic is a wholly-owned subsidiary of AP Holdings which is in turn a wholly-owned subsidiary of APGL. APG Strategic’s interest is registered in the name of CIMB Securities (Singapore) Pte Ltd.

23 API is a wholly-owned subsidiary of AP Holdings which is in turn a wholly-owned subsidiary of APGL. API’s interest is registered in the name of DBS Vickers Securities (Singapore) Pte Ltd.


Notice of Annual General Meeting

97

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Food Junction Holdings Limited (“the Company”) will be held at Capricorn Room, Level 1, Marina Mandarin Singapore, 6 Raffl es Boulevard, Marina Square, Singapore 039594 on 21 April 2011 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December 2010 together with the Auditors’ Report thereon. (Resolution 1)

2. To declare an exempt one-tier fi nal dividend of 0.25 cents (2009: 0.5 cents) per share for year ended

31 December 2010. (Resolution 2)

3. To re-elect the following Directors of the Company retiring pursuant to Article 89 of the Articles of Association of the Company:

Mr Tan Kok Hiang (Resolution 3) Mr Lee Joo Hai (Resolution 4) Mr Tan Kok Hiang will, upon re-election as a Director of the Company, remain as Chairman of the

Audit Committee, member of the Nominating Committee and Remuneration Committee and will be considered independent.

Mr Lee Joo Hai will, upon re-election as a Director of the Company, remain as Chairman of the Remuneration Committee, member of Audit Committee and Nominating Committee and will be considered independent.

4. To approve the payment of Directors’ fees of $215,000 (2009: $230,000) for the year ended 31 December 2010. (Resolution 5)

5. To re-appoint Ernst & Young LLP as the Auditors of the Company and to authorise the Directors of the Company to fi x their remuneration. (Resolution 6)

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

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without any modifi cations:

7. Authority to issue shares

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Directors of the Company be authorised and empowered to:

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

and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) 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 of the Company may in their absolute discretion deem fi t; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instruments made or granted by the Directors of the Company while this Resolution was in force,


98

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) to be issued pursuant to this Resolution shall not exceed fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall 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 earlier. [See Explanatory Note (i)] (Resolution 7)

8. Renewal of Share Purchase Mandate

That for the purposes of Sections 76C and 76E of the Companies Act, Cap. 50, the Directors of the

Company be and are hereby authorised to make purchases or otherwise acquire issued shares in the capital of the Company from time to time (whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as ascertained as at the date of Annual General Meeting of the Company) at the price of up to but not exceeding the Maximum Price as defi ned in the Section entitled “Defi nitions” set out on page 2 of the Circular dated 30 December 2004 to the shareholders of the Company and in accordance with the “Guidelines on Share Purchases” set out in the Appendix I of the Annual Report, and this mandate shall, unless revoked or varied by the Company in 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 earlier. [See Explanatory Note (ii)] (Resolution 8)

By Order of the Board

Eric Gan Chee TeikCompany SecretarySingapore, 5 April 2011


99

Explanatory Notes:

(i) The Ordinary Resolution 7, if passed, will empower the Directors of the Company, effective 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 or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant Instruments convertible into shares and to issue shares pursuant to such Instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders.

For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue, consolidation or subdivision of shares.

(ii) The Ordinary Resolution 8, if passed, will empower the Directors of the Company effective 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, to repurchase ordinary shares of the Company by way of market purchases or off-market purchases of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company at the Maximum Price as defi ned in the Section entitled “Defi nitions” set out on page 2 of the Circular dated 30 December 2004 to the shareholders of the Company and in accordance with the “Guidelines on Share Purchases” set out in the Appendix I of the Annual Report.

The rationale for, the authority and limitation on, the sources of funds to be used for the purchase or acquisition including the amount of fi nancing and the fi nancial effects of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited consolidated fi nancial accounts of the Group for the year ended 31 December 2010 are set out in greater detail in Appendix I of the Annual Report.

Notes:

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

2. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at 50

Raffl es Place, #32-01 Singapore Land Tower, Singapore 048623 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

Appendix ISUMMARY SHEET FOR RENEWAL OF SHARES PURCHASE MANDATE

100

(A) SHARES PURCHASED IN THE PREVIOUS TWELVE MONTHS

Pursuant to the Shares Purchase Mandate obtained at the Annual General Meeting on 21 April 2010, the Company had bought back by way of market acquisition, 2,225,000 ordinary shares in the capital of the Company (the “Shares”). The total consideration paid for the purchases was $464,855 (inclusive of brokerage and clearing fees of $1,431). The highest price paid for the purchases was $0.21 per Share and the lowest price paid was $0.20 per Share.

(B) RENEWAL OF THE SHARES PURCHASE MANDATE

The Ordinary Resolution No. 8, if passed at the Annual General Meeting, will renew the Shares Purchase Mandate approved by the Shareholders of the Company from the date of the Annual General Meeting until the date that the next annual general meeting of the Company is held or is required by law to be held, whichever is the earlier.

(C) RATIONALE FOR THE SHARES PURCHASE MANDATE

Short-term speculation may at times cause the market price of the Company’s Shares to be depressed below the true value of the Company and the Group. The proposed Shares Purchase Mandate will provide the Directors with the means to restore investors’ confi dence and to protect existing shareholders’ investments in the Company in a depressed share-price situation through judicious Shares purchases to enhance the earnings per Share and/or the net asset value per Share. The Shares purchases will enhance the net asset value per Share if the Shares purchases are made at a price below the net asset value per Share.

The proposed Shares Purchase Mandate will also provide the Company with an expedient and cost-effective mechanism to facilitate the return of surplus cash reserves to the shareholders, as and when the Directors are of the view that this would be in the best interests of the Company and the shareholders.

The Directors will only make a Shares purchase as and when the circumstances permit and only if the Directors are of the view that such purchases are in the best interests of the Company and the shareholders. The Directors will decide whether to purchase Shares only after taking into account, among other things, the market conditions at such time, the Company’s fi nancial condition and whether such purchases will cause the Company to become insolvent (ie the Company is unable to pay its debts as they become due in the ordinary course of business, or the value of the Company’s assets is less than the value of its liabilities including contingent liabilities), and whether such purchases represent the most effi cient and cost-effective approach to enhance Share value. Shares purchases will only be made if the Directors believe that such purchases are likely to benefi t the Company and increase economic value for shareholders.

The Directors will ensure that the Shares purchases will not have any effect on the listing of the Company’s securities including the Shares listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). Clause 723 of the Listing Manual of the SGX-ST requires at least ten per cent. (10%) of any class of a company’s listed securities to be held by the public at all times. The Directors shall safeguard the interests of public shareholders before undertaking any Shares purchases. Before exercising the Shares Purchase Mandate, the Directors shall at all times take due cognisance of (a) the then shareholding spread of the Company in respect of the number of Shares held by substantial shareholders and by non-substantial shareholders and (b) the volume of trading on the SGX-ST in respect of the Shares immediately before the exercise of any Shares purchase.

Currently, 52,472,505 Shares (41.18%) of a total of 127,407,790 Shares (excluding Treasury shares) issued by the Company are held by 1,306 public shareholders. The Company is of the view that there is suffi cient number of Shares in issue held by public shareholders which would permit the Company to undertake Shares purchases of up to ten per cent. (10%) of its issued ordinary share capital without affecting the listing status of the Shares on the SGX-ST. The Company will ensure that the Shares purchases will not cause market illiquidity or affect orderly trade.


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(D) FINANCIAL IMPACT OF THE PROPOSED SHARES PURCHASES

1. The purchased Shares may be:

(i) held by the Company; or

(ii) dealt with, at any time, in accordance with Section 76K of the Companies Act (Chapter 50) (the “Act”), as Treasury Shares.

Section 76K of the Act allows the Company to:

(i) sell the Shares (or any of them) for cash;

(ii) transfer the Shares (or any of them) for the purposes of or pursuant to an employees’ share scheme;

(iii) transfer the Shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person; or

(iv) cancel the Shares (or any of them).

The aggregate number of Shares held as Treasury Shares shall not at any time exceed ten per cent. (10%) of the total number of Shares at that time. Any Shares in excess of this limit shall be disposed of or cancelled in accordance with Section 76K of the Act within six (6) months.

Any Shares Purchase will:

(i) reduce the amount of the Company’s share capital where the Shares were purchased or acquired out of the capital of the Company;

(ii) reduce the amount of the Company’s profi ts where the Shares were purchased or acquired out of the profi ts of the Company; or

(iii) reduce the amount of the Company’s share capital and profi ts proportionately where the Shares were purchased or acquired out of both the capital and the profi ts of the Company;

by the total amount of the purchase price paid by the Company for the Shares cancelled.

The Company cannot exercise any right in respect of Treasury Shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Act, the Company shall be treated as having no right to vote and the Treasury Shares will be treated as having no voting rights.

2. The fi nancial effects on the Company and the Group arising from the proposed purchases of the Company’s Shares which may be made pursuant to the proposed Shares Purchase Mandate will depend on, inter alia, the aggregate number of Shares purchased and the consideration paid at the relevant time.

3. Based on the existing issued and paid-up share capital of the Company as at 31 December 2010 and 10 March 2011 (the “Latest Practicable Date”), the proposed purchases by the Company of up to a maximum of ten per cent. (10%) of its issued share capital (excluding Treasury Shares held) under the Shares Purchase Mandate will result in the purchase of 12,740,779 Shares.

4. An illustration of the impact of Shares purchases by the Company pursuant to the Shares Purchase Mandate on the Group’s and the Company’s fi nancial position is set out below based on the following assumptions:

(a) audited accounts of the Group and the Company as at 31 December 2010;


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(b) in full exercise of the Shares Purchase Mandate, 12,740,779 Shares were purchased as at the Latest Practicable Date;

(c) the maximum price for the market purchases is $0.22, which is fi ve per cent. (5%) above the average closing prices of the Shares over the last fi ve market days preceding the Latest Practicable Date on which the transactions in Shares were recorded on the SGX-ST; and

(d) the maximum amount of funds required for the Shares purchases in the aggregate is $2,802,971 (excluding transactional costs) as at the Latest Practicable Date.

Market Purchases and Off-Market Purchases and held as Treasury Shares or cancelled

GroupBefore Shares

Purchases($’000)

After Shares Purchases ($’000)

As at 31 December 2010

Shareholders’ funds 31,169 28,366

Intangible assets 9,132 9,132

Net tangible assets 22,037 19,234

Current assets 23,522 20,719

Current liabilities 16,145 16,145

Working Capital 7,377 4,574

Total Liabilities 18,803 18,803

Cash and cash equivalents 20,271 17,468

Short-term investments – –

Number of Shares (excluding Treasury Shares) 127,407,790 114,667,011

Financial Ratios

Net tangible assets per Share (cents) 17.30 16.77

Earnings per Share (cents) 2.08 2.31

Gearing (%) – –

Current ratio 1.46 1.28


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Company

Before Shares Purchases($’000)

After Shares Purchases ($’000)

As at 31 December 2010

Shareholders’ funds 22,166 19,363

Intangible assets (Goodwill) – –

Net tangible assets 22,166 19,363

Current assets 12,686 9,883

Current liabilities 695 695

Working Capital 11,991 9,188

Total Liabilities 695 695

Cash and cash equivalents 386 (2,417)

Short-term investments – –

Number of Shares (excluding Treasury Shares) 127,407,790 114,667,011

Financial Ratios

Net tangible assets per Share (cents) 17.40 16.89

Earnings per Share (cent) 2.03 2.26

Gearing (%) – –

Current ratio 18.25 14.22

5. Shareholders should note that the fi nancial effects set out above are based on the audited fi nancial accounts of the Group and the Company for the fi nancial year ended 31 December 2010 and are for illustration only. The results of the Group and the Company for the fi nancial year ended 31 December 2010 may not be representative of future performance.

6. The Company intends to use its internal sources of funds to fi nance its purchases of the Shares. The Company does not intend to obtain or incur any borrowings to fi nance its purchases of the Shares. The Directors do not propose to exercise the Shares Purchase Mandate in a manner and to such extent that the working capital requirements of the Group would be materially affected.

7. The Company will take into account both fi nancial and non-fi nancial factors, among other things, the market conditions at such time, the Company’s fi nancial condition, the performance of the Shares and whether such Shares purchases would represent the most effi cient and cost-effective approach to enhance the Share value. Shares purchases will only be made if the Board believes that such purchases are likely to benefi t the Company and increase economic value for shareholders.

(E) CONSEQUENCES OF SHARES PURCHASES UNDER THE SINGAPORE CODE ON TAKE-OVERS AND MERGERS

1. In accordance with The Singapore Code on Take-overs and Mergers (the “Take-over Code”), a person will be required to make a general offer for a public company if:

(a) he acquires thirty per cent. (30%) or more of the voting rights of the company; or

(b) he already holds between thirty per cent. (30%) and fi fty per cent. (50%) of the voting rights of the company, and he increases his voting rights in the company by more than one per cent. (1%) in any six (6) month period.


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2. As at the Latest Practicable Date, the Directors’ and Substantial Shareholders’ shareholding interests in the Company are as follows:

Direct Interest Deemed Interest Total Interest

DirectorsNumber

of Shares %*Number

of Shares %*Number

of Shares %*

Christopher James Williams – – – – – –

David Lim Chiew Poh – – – – – –

Ronnie Tan Kay Poo @ Keh Poo – – – – – –

Tan Kok Hiang – – – – – –

Lee Joo Hai – – – – – –

Teo Kiang Kok – – – – – –

John Chang Tong Wah (relinquished on 15 March 2011) – – – – – –

Holders of 5% or more

APG Strategic Investment Pte Ltd 65,474,725 51.39 – – 65,474,725 51.39

Auric Pacifi c Investment Pte Ltd 9,460,560 7.43 – – 9,460,560 7.43


In the event the Company undertakes Shares purchases of up to ten per cent. (10%) of the issued share capital of the Company as permitted by the Shares Purchase Mandate, the shareholdings and voting rights of APG Strategic Investment Pte Ltd will remain above fi fty per cent (50%). Accordingly, no Director or Substantial Shareholder is required to make a general offer pursuant to the Take-Over Code.

(F) MISCELLANEOUS

1. Any Shares Purchases undertaken by the Company shall be at a price of up to but not exceeding the Maximum Price. The Maximum Price is a sum which shall not exceed the sum constituting fi ve per cent. (5%) above the average closing price of the Shares over the period of fi ve (5) trading days in which transactions in the Shares on the SGX-ST were recorded, in the case of a Market Purchase, before the day on which such purchase is made and deemed to be adjusted for any corporate action that occurs after the relevant fi ve (5) day period, and, in the case of an Off-Market Purchase, immediately preceding the date of offer by the Company, as the case may be.

2. In making Share Purchases, the Company will comply with the requirements of the SGX-ST Listing Manual, in particular, Rule 886 with respect to notifi cation to the SGX-ST of any Shares purchases. Rule 886 is reproduced below:

“(1) An issuer must notify the Exchange of any share buy-back as follows:

(a) In the case of a market acquisition, by 9.00 am on the market day following the day on which it purchased shares,

(b) In the case of an off market acquisition under an equal access scheme, by 9.00 am on the second market day after the close of acceptances of the offer.

(2) Notifi cation must be in the form of Appendix 8.3.1 (or 8.3.2 for an issuer with a dual listing on another stock exchange).”

3. Shares Purchases will be made in accordance with the “Guidelines on Shares Purchases” as set out in Appendix I of the Company’s Circular to Shareholders dated 30 December 2004, a copy of which is annexed. All information required under the Act relating to the shares purchase mandate is contained in the said Guidelines.


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4. The SGX-ST Listing Manual does not expressly prohibit any purchase of shares by a listed company during any particular time or times. However, as a listed company would be considered an “insider” in relation to any proposed purchase or acquisition of its shares, the Company will undertake not to purchase or acquire Shares pursuant to the proposed Share Purchase Mandate at any time after a price sensitive development has occurred or has been the subject of a decision until the price sensitive information has been publicly announced. In particular, the Company will not purchase or acquire any Shares during the period commencing one (1) month immediately preceding the announcement of the Company’s full-year results and the period of two (2) weeks immediately preceding the announcement of its quarterly results.

5. The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Appendix.

(G) DIRECTORS’ RESPONSIBILITY STATEMENT

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

(H) DIRECTORS’ RECOMMENDATION

The Directors of the Company are of the opinion that the renewal of the proposed Shares Purchase Mandate is in the best interests of the Company. Accordingly, the Directors of the Company recommend that shareholders vote in favour of Ordinary Resolution No. 8.

(I) TAXATION

Shareholders who are in doubt as to their respective tax positions or any tax implications, or who may be subject to tax in a jurisdiction outside Singapore, should consult their own professional tax advisers.

(J) DOCUMENTS FOR INSPECTION

Copies of the following documents may be inspected at the registered offi ce of the Company at 50 Raffl es Place, #32-01 Singapore Land Tower, Singapore 048623 during normal business hours from the date of this Circular up to and including the date of the Annual General Meeting:

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

(b) the audited fi nancial statements of the Company for the fi nancial year ended 31 December 2010.

Appendix IIGUIDANCE ON SHARES PURCHASES

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1. SHAREHOLDERS’ APPROVAL

(a) Purchases of Shares by the Company must be approved in advance by the Shareholders at a general meeting of the Company, by way of a general mandate.

(b) A general mandate authorising the purchase of Shares by the Company representing up to ten per cent. (10%) of the Company’s issued ordinary share capital (excluding any Shares held as Treasury Shares) will expire on the earlier of:

(i) the conclusion of the next annual general meeting of the Company;

(ii) the expiration of the period within which the next annual general meeting of the Company is required by law to be held; or

(iii) the time when such mandate is revoked or varied by an ordinary resolution of the Shareholders of the Company in general meeting.

(c) The authority conferred on the Directors by the Shares Purchase Mandate to purchase Shares shall be renewed at the next annual general meeting of the Company.

(d) When seeking Shareholders’ approval for the renewal of the Shares Purchase Mandate, the Company shall disclose details pertaining to the purchases of Shares made during the previous 12 months, including the total number of Shares purchased, the purchase price per Share or the highest and lowest price for such purchases of Shares, where relevant, and the total consideration paid for such purchases.

2. MODE OF PURCHASE

Shares Purchases can be effected by the Company in either one (1) of the following two (2) ways or both:

(a) by way of market purchases of Shares on the SGX-ST, which means a purchase transacted through the ready market; or

(b) by way of off-market acquisitions on an equal access scheme in accordance with section 76C of the Act.

3. FUNDING OF SHARES PURCHASES

(a) In purchasing the Shares, the Company may only apply funds legally permitted for such purchase in accordance with its Articles of Association, and the relevant laws and regulations enacted or prescribed by the relevant competent authorities in Singapore.

(b) Any purchase by the Company may be made out of capital or profi ts that are available for distribution as dividends, so long as the Company is solvent (as defi ned by Section 76F(4) of the Act), but not from amounts standing in the Company’s capital redemption reserve.

(c) The Company may not purchase its Shares on the SGX-ST for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the SGX-ST.

4. TRADING RESTRICTIONS

The number of Shares which can be purchased pursuant to the Shares Purchase Mandate is such number of Shares which represents up to a maximum of ten per cent. (10%) of the issued ordinary share capital of the Company (excluding Treasury Shares) as at date of the last annual general meeting of the Company.


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5. PRICE RESTRICTIONS

Any Shares Purchase undertaken by the Company shall be at the price of up to but not exceeding the Maximum Price.

“Maximum Price” means the maximum price at which the Shares can be purchased pursuant to the Shares Purchase Mandate, which shall not exceed the sum constituting fi ve per cent. (5%) above the average closing price of the Shares over the period of fi ve (5) trading days in which transactions in the Shares on the SGX-ST were recorded, in the case of a Market Purchase, before the day on which such purchase is made and deemed to be adjusted for any corporate action that occurs after the relevant fi ve (5) day period, and, in the case of an Off-Market Purchase, immediately preceding the date of offer by the Company, as the case may be.

6. OFF-MARKET PURCHASES

(a) For purchases of Shares made by way of an Off-Market Purchase, the Company shall issue an offer document to all Shareholders. The offer document shall contain, inter alia, the following information:

(i) the terms and conditions of the offer;

(ii) the period and procedures for acceptances;

(iii) the reasons for the proposed Shares Purchase;

(iv) the consequences, if any, of Shares purchased by the Company that will arise under the Singapore Code on Take-overs and Mergers or any other applicable take-over rules;

(v) whether the purchase of Shares, if made, would have any effect on the listing of the Company’s securities on the SGX-ST; and

(vi) details of any purchase of Shares made by the Company in the previous 12 months whether through Market Purchases or Off-Market Purchases, including the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for such purchases of Shares, where relevant, and the total consideration paid for such purchases.

(b) All Offeree Shareholders shall be given a reasonable opportunity to accept any offer made by the Company to purchase their Shares under the Shares Purchase Mandate.

(c) The Company may offer to purchase Shares from time to time under the Shares Purchase Mandate subject to the requirement that the terms of any offer to purchase Shares by the Company shall be pari passu in respect of all Offeree Shareholders save under the following circumstances:

(i) where there are differences in consideration attributable to the fact that an offer relates to Shares with different dividend entitlements;

(ii) where there are differences in consideration attributable to the fact that an offer relates to Shares with different amounts remaining unpaid; and

(iii) where there are differences in an offer introduced solely to ensure that every Shareholder is left with a whole number of Shares in board lots of 1,000 Shares after the Shares Purchases, in the event there are Offeree Shareholders holding odd numbers of Shares.


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7. STATUS OF PURCHASED SHARES

The purchased Shares may be:

(i) held by the Company; or

(ii) dealt with, at any time, in accordance with Section 76K of the Act, as Treasury Shares.

Section 76K of the Act allows the Company to:

(i) sell the Shares (or any of them) for cash;

(ii) transfer the Shares (or any of them) for the purposes of or pursuant to an employees’ share scheme;

(iii) transfer the Shares (or any of them) as consideration for the acquisition of shares in or assets of another company or assets of a person; or

(iv) cancel the Shares (or any of them).

The aggregate number of Shares held as Treasury Shares shall not at any time exceed ten per cent. (10%) of the total number of Shares at that time. Any Shares in excess of this limit shall be disposed of or cancelled in accordance with Section 76K of the Act within six (6) months.

Any Shares Purchase will:

(i) reduce the amount of the Company’s share capital where the Shares were purchased or acquired out of the capital of the Company;

(ii) reduce the amount of the Company’s profi ts where the Shares were purchased or acquired out of the profi ts of the Company; or

(iii) reduce the amount of the Company’s share capital and profi ts proportionately where the Shares were purchased or acquired out of both the capital and the profi ts of the Company,

by the total amount of the purchase price paid by the Company for the Shares cancelled.

The Company cannot exercise any right in respect of Treasury Shares. In particular, the Company cannot exercise any right to attend or vote at meetings and for the purposes of the Act, the Company shall be treated as having no right to vote and the Treasury Shares will be treated as having no voting rights.

8. NOTIFICATION TO ACCOUNTING AND CORPORATE REGULATORY AUTHORITY (“ACRA”)

(a) Within thirty (30) days of the passing of a Shareholders’ resolution to approve any purchase of Shares, the Company shall lodge a copy of such resolution with ACRA.

(b) The Company shall notify ACRA within thirty (30) days of a purchase of Shares. Such notifi cation shall include details of the date of the purchase, the total number and nominal value of Shares purchased by the Company, the Company’s issued share capital as at the date of the Shareholders’ resolution approving the purchase, the Company’s issued share capital after the purchase and the amount of consideration paid by the Company for the purchase.


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9. NOTIFICATION TO THE SGX-ST

(a) For purchases of Shares made by way of an Off-Market Purchase, the Company shall notify the SGX-ST in respect of any acquisition or purchase of Shares in the relevant form prescribed by the SGX-ST from time to time, not later than 9.00 a.m. on the second trading day after the close of acceptances of an offer, or within such time period that may be prescribed by the SGX-ST from time to time.

(b) For purchases of Shares made by way of a Market Purchase, the Company shall notify the SGX-ST in respect of any acquisition or purchase of Shares in the relevant form prescribed by the SGX-ST from time to time, not later than 9.00 a.m. on the trading day following the date of market acquisition by the Company, or within such time period that may be prescribed by the SGX-ST from time to time.

10. SUSPENSION OF PURCHASE

(a) The Company may not undertake any Shares Purchase prior to the announcement of any price-sensitive information by the Company, until such time as the price sensitive information has been publicly announced or disseminated in accordance with the requirements of the Listing Manual.

(b) The Company may not effect any Shares Purchases on the SGX-ST during the period commencing one (1) month immediately preceding the announcement of the Company’s full-year results and the period of two (2) weeks immediately preceding the announcement of its quarterly results.

This page has been intentionally left blank.

FOOD JUNCTION HOLDINGS LIMITED[Company Registration No. 200003470N](Incorporated in The Republic of Singapore)

PROXY FORM(Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of Food Junction Holdings Limited (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing the person, or either or both of the persons, referred to above , the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held at Capricorn Room, Level 1, Marina Mandarin Singapore, 6 Raffl es Boulevard, Marina Square, Singapore 039594 on 21 April 2011 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specifi c direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [√] within the box provided.)

No. Resolutions relating to: For Against

1 Directors’ Report and Audited Accounts for the year ended 31 December 2010

2 Payment of proposed fi nal dividend

3 Re-election of Mr Tan Kok Hiang as a Director

4 Re-election of Mr Lee Joo Hai as a Director

5 Approval of Directors’ fees amounting to $215,000

6 Re-appointment of Ernst & Young LLP as Auditors

7 Authority to issue new shares

8 Renewal of Share Purchase Mandate

Dated this day of 2011

Signature of Shareholder(s) or, Common Seal of Corporate Shareholder

Total number of Shares in: No. ofShares

(a) CDP Register

(b) Register of Members

IMPORTANT:

1. For investors who have used their CPF monies to buy Food Junction Holdings Limited’s shares, this Report is forwarded to them at the request of the 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 attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.

Notes :

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

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

3. Where a member appoints more than one proxy, the member shall specify the proportion of his shares to be represented by each such proxy, failing which the nomination shall be deemed to be alternative.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from

attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 50 Raffl es Place, #32-01 Singapore Land Tower, Singapore 048623 not less than 48 hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointer or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an offi cer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointer, the letter or power of attorney or a duly certifi ed copy thereof must be lodged with the instrument.

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

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointer are not ascertainable from the instructions of the appointer specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointer, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.

SoEZ Cooking Playground, United Square

Food Junction Holdings Limited(Company Registration No. 200003470N)

91 Tanglin #02-02, The Foodies Hub @ Tanglin Place, Singapore 247918

www.foodjunction.com

Food Junction AR10_lowres

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