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The amounts recognised as rental expenses due to Samling Singapore in relation to the office unit during
the Period under Review are set out below:
FY2005 FY2006 FY2007
Five Months
Ended
31 May 2008
Period from
1 January
2008 Up to
the Latest
Practicable
Date
(S$’000) (S$’000) (S$’000) (S$’000) (S$’000)
Rent expenses for the office unit ....... 120 120 305 182 255
An independent valuation report issued by DTZ Debenham Tie Leung (SEA) Pte. Ltd. on 27 March 2007
accorded a valuation of S$9.50 per square foot for the open market rental value of the office unit. Accordingly,
the monthly rental of S$8.00 per square foot paid by us for the office unit is below the market valuation and,
hence, this transaction is not on an arm’s length basis.
We are currently in negotiation with Samling Singapore Private Limited for lease of additional floor
space.
Our Audit Committee will also review the terms of any subsequent renewals of the lease in accordance
with the requirements of Chapter 9 of the Listing Manual, to ensure that they are transacted on normal
commercial terms and are not prejudicial to our interests or those of our minority Shareholders.
Pledge of Certain Shares by Victon to Bangkok Bank
In October 2006, Victon pledged certain shares it holds in favour of Bangkok Bank as security for
banking facilities granted by Bangkok Bank to our Company. These facilities included: (i) a refund guarantee
facility of up to US$110.0 million; (ii) a revolving short-term loan of US$2.5 million; (iii) trade finance
facilities of up to US$60.0 million; and (iv) a term loan of US$14.4 million.
Our Directors believe that the pledge of shares by Victon to secure the banking facilities from Bangkok
Bank was not carried out on an arm’s length basis as Victon received no benefit from this transaction.
Subsequent to completion of the Offering, we intend to negotiate for the discharge of the Victon pledge.
In the event that Bangkok Bank does not release the Victon pledge, Victon will continue to pledge the
referenced shares to secure the relevant facilities.
Other Transactions
Present and Ongoing Other Transactions
(a) Purchases by our Company from LSH Group
As at the Latest Practicable Date, our former Director Yaw Teck Seng has an indirect minority interest of
23.1% in the issued share capital of LSH, which is principally engaged in the trading of motor vehicles, heavy
equipment and spare parts, the provision of after-sales and product support services, property development and
investment, general trading and financial services.
Yaw Teck Seng is not a director of LSH or LSH Group and is not involved in the management or day-today
operations of LSH or the LSH Group.
According to the Composite Document, our former Director Taikichi Ito has an interest of approximately
0.8% in the issued share capital of LSH.
On 17 March 2008, LSH was withdrawn from listing on the Hong Kong Stock Exchange pursuant to a
scheme of arrangement sanctioned by the High Court of Hong Kong. On 23 May 2008, it was converted into a
private company. The reasons offered for its privatisation as stated in the Composite Document were:
(i) low liquidity of the shares of LSH traded on the Hong Kong Stock Exchange;
(ii) insufficient public float on the Hong Kong Stock Exchange; and
(iii) a high concentration of shareholding in LSH.
Yaw Teck Seng’s interest in LSH is held through (a) Victon and Starways Nominees Inc., which are
entities that are beneficially owned and controlled by him, and (b) Yetime Nominees Limited, which holds
shares on his behalf.
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