Ocean Sky International Limited - Ocean Sky International Ltd ...

PROSPECTUS DATED 12 MARCH 2003 

(Registered with the Monetary Authority of Singapore on 12 MARCH 2003) 

This document is important. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, 

solicitor, accountant, or other professional adviser. 

Application has been made to the Singapore Exchange Securities Trading Limited ("SGX-ST") for permission to deal in and for quotation for all the ordinary 

shares of S$0.05 each (the "Shares") in the capital of Ocean Sky International Limited (the “Company”), comprising both existing issued Shares and those 

new Shares (the “New Shares”) which are the subject of this Invitation as well as the new Shares (the “Option Shares”) to be issued pursuant to the 

Company’s Ocean Sky Share Option Scheme. Such permission will be granted when the Company has been admitted to the Official List of the SGX-ST. 

Acceptance of applications of the New Shares will be conditional upon the SGX-ST granting permission to deal in and for quotation for all of our existing 

issued and fully paid-up Shares and the New Shares as well as Option Shares. Monies paid in respect of any application accepted will, in the event such 

permission is not granted, be returned to you at your own risk without any share of revenue or other benefit arising therefrom, and you will not have any 

claims against the Company or the Manager, SBI E2-Capital Pte Ltd. Quotations of and dealing in the Shares will be in Singapore dollars. 

The SGX-ST assumes no responsibility for the correctness of any of the statements made or reports contained in this Prospectus. Admission to the Official List 

of the SGX-ST is not to be taken as an indication of the merits of the Invitation, the Company, its subsidiaries or the Shares, the New Shares or the Option Shares. 

A copy of this Prospectus, together with copies of the Application Forms (as defined herein), has been lodged with and registered by the Monetary Authority 

of Singapore (the "Authority"). The Authority assumes no responsibility for the contents of the Prospectus. Registration of the Prospectus by the Authority 

does not imply that the Securities and Futures Act 2001 (Act 42 of 2001), or any other legal or regulatory requirements, have been complied with. The 

Authority has not, in any way, considered the merits of the Shares, the New Shares or the Option Shares, as the case may be, being offered or in respect 

of which an invitation is made, for investment. 

No Shares shall be allotted or allocated on the basis of this Prospectus later than six months after the 

date of registration of this Prospectus with the Authority. 

Investing in the Shares involves risks which are described in the “Risk Factors” section 

beginning on page 24 of this Prospectus. 

Ocean Sky International Limited 

(Incorporated in the Republic of Singapore on 8 September 1988) 

Invitation in respect of 92,000,000 New Shares of 

S$0.05 each comprising:- 

(a) 9,200,000 Offer Shares at S$0.23 for each 

Offer Share by way of public offer; and 

(b) 82,800,000 Placement Shares by way of 

placement, comprising:- 

(i) minimum of 79,300,000 Placement Shares 

at S$0.23 for each Placement Share; and 

(ii) up to 3,500,000 Reserved Shares at S$0.21 

for each Reserved Share reserved for 

management and staff, business associates 

and those who have contributed to the 

success of our Group, 

payable in full on application. 

Manager 

A member of Softbank Investment Group 

Joint Lead Placement Agents 

SBI E2-Capital Securities Limited UOB Kay Hian Private Limited 

Sub-Placement Agents 

Kim Eng Ong Asia DMG & Partners 

Securities Pte Ltd Securities Pte Ltd 

Underwriter for Public Offer 

UOB Kay Hian Private Limited

CONTENTS 

CORPORATE INFORMATION .............................................................................................................. 3 

DEFINITIONS ........................................................................................................................................ 5 

GLOSSARY OF TECHNICAL TERMS .................................................................................................. 10 

Page 

DETAILS OF THE INVITATION 

LISTING ON THE STOCK EXCHANGE ................................................................................................ 11 

INDICATIVE TIMETABLE FOR LISTING ................................................................................................ 13 

STRUCTURE OF INVITATION .............................................................................................................. 14 

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS ........................................................ 16 

SELLING RESTRICTIONS .................................................................................................................... 16 

PLAN OF DISTRIBUTION .................................................................................................................... 16 

PROSPECTUS SUMMARY .................................................................................................................. 18 

THE INVITATION .................................................................................................................................... 20 

ISSUE STATISTICS .............................................................................................................................. 22 

RISK FACTORS .................................................................................................................................... 24 

EXCHANGE RATES .............................................................................................................................. 29 

DIVIDEND POLICY ................................................................................................................................ 30 

CAPITALISATION AND INDEBTEDNESS ............................................................................................ 31 

CONTINGENT LIABILITIES .................................................................................................................. 32 

DILUTION .............................................................................................................................................. 33 

SELECTED CONSOLIDATED FINANCIAL INFORMATION ................................................................ 34 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF 

OPERATIONS ........................................................................................................................................ 36 

LIQUIDITY AND CAPITAL RESOURCES ............................................................................................ 40 

PROFIT ESTIMATE ................................................................................................................................ 41 

OUR HISTORY ...................................................................................................................................... 42 

OUR INDUSTRY .................................................................................................................................... 44 

OUR BUSINESS .................................................................................................................................... 45 

COMPETITION AND COMPETITIVE STRENGTHS ............................................................................ 53 

PROSPECTS AND FUTURE PLANS .................................................................................................... 57 

OUR MAJOR CUSTOMERS .................................................................................................................. 59 

OUR MAJOR SUPPLIERS .................................................................................................................... 60 

1

Page 

OUR EMPLOYEES ................................................................................................................................ 61 

CREDIT POLICY .................................................................................................................................... 62 

INTELLECTUAL PROPERTY ................................................................................................................ 62 

PROPERTIES AND FIXED ASSETS .................................................................................................... 63 

DIRECTORS, MANAGEMENT AND STAFF 

DIRECTORS .......................................................................................................................................... 66 

MANAGEMENT ...................................................................................................................................... 68 

STAFF .................................................................................................................................................... 71 

MANAGEMENT REPORTING STRUCTURE ........................................................................................ 72 

SERVICE AGREEMENTS ...................................................................................................................... 73 

DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION .......................................................... 

REMUNERATION OF EMPLOYEES RELATED TO DIRECTORS AND SUBSTANTIAL 

74 

SHAREHOLDERS .................................................................................................................................. 75 

OCEAN SKY SHARE OPTION SCHEME ............................................................................................ 76 

CORPORATE GOVERNANCE .............................................................................................................. 81 

INTERESTED PERSONS TRANSACTIONS ........................................................................................ 84 

POTENTIAL CONFLICT OF INTERESTS ............................................................................................ 88 

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP 

SHARE CAPITAL .................................................................................................................................... 89 

OWNERSHIP STRUCTURE AND PRINCIPAL SHAREHOLDERS ...................................................... 92 

MORATORIUM ...................................................................................................................................... 92 

GROUP STRUCTURE .......................................................................................................................... 93 

COMPANIES WITHIN OUR GROUP .................................................................................................... 94 

LETTER FROM AUDITORS AND REPORTING ACCOUNTANTS IN RELATION 

TO THE PROFIT ESTIMATE OF THE GROUP FOR THE FINANCIAL YEAR 

ENDED 31 DECEMBER 2002 .............................................................................................................. 96 

ACCOUNTANTS’ REPORT .................................................................................................................... 97 

MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS ........................................ 139 

EXCHANGE CONTROLS ...................................................................................................................... 140 

GENERAL AND STATUTORY INFORMATION .................................................................................... 141 

APPENDIX A - TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION .................... A-1 

APPENDIX B - DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES ............ B-1 

APPENDIX C - DESCRIPTION OF SINGAPORE LAW RELATING TO TAXATION ............................ C-1 

APPENDIX D - RULES OF THE OCEAN SKY SHARE OPTION SCHEME ........................................ D-1 

2

CORPORATE INFORMATION 

Board of Directors : Ang Boon Cheow Edward (Executive Chairman) 

Ang Boon Chong (Executive Director) 

Ang Siew Tiong (Executive Director) 

Ng Ya Ken @ Ng Ah Kan (Non-Executive Director) 

Teo Kiang Kok (Independent Director) 

Chua Keng Hiang (Independent Director) 

Company Secretary : Chong Yea Ling (ACIS) 

Registrar and Share Transfer : Lim Associates (Pte) Ltd 

Office 10 Collyer Quay, #19-08 

Ocean Building 

Singapore 049315 

Registered Office : 22 Tampines Street 92 


Manager : SBI E2-Capital Pte Ltd 

5 Shenton Way, 

#09-07 UIC Building 


Underwriter : UOB Kay Hian Private Limited 

80 Raffles Place 

#30-01 UOB Plaza 1 


Joint Lead Placement Agents : SBI E2-Capital Securities Limited 

43/F Jardine House 

One Connaught Place, Central 

Hong Kong 

UOB Kay Hian Private Limited 


#30-01 UOB Plaza 1 


Auditors and Reporting : BDO International 

Accountants Certified Public Accountants 

5 Shenton Way 

#07-00 UIC Building 


Solicitors to the Invitation and : Shook Lin & Bok 

Legal Advisors to our Company 1 Robinson Road 

on Singapore Law #18-00 AIA Tower 


3

Legal Advisors to our Company : Jin Mao Law Firm 

on PRC Law 21st Floor, Universal Mansion 168, 

Yu Yuan Road 

Shanghai 200040, 

PRC 

Principal Bankers : United Overseas Bank Limited 

80 Raffles Place, 

UOB Plaza 1 


The Hongkong and Shanghai Banking Corporation Limited 

21 Collyer Quay, 

HSBC Building 


The Development Bank of Singapore Ltd 

6 Shenton Way, 

DBS Building Tower Two 


Receiving Banker : United Overseas Bank Limited 


UOB Plaza 1 


Contact Details of Our Company : 22 Tampines Street 92 


Telephone : (65) 6789-9988 

Facsimile : (65) 6789-9933 

Website : www.oceanskyintl.com 

(information contained on our website does 

not constitute a part of this Prospectus) 

4

DEFINITIONS 

For the purpose of this Prospectus and the accompanying Application Forms, the following definitions 

have, where appropriate, been used:- 

COMPANIES WITHIN OUR GROUP 

“Ocean Sky Group” or “our Group” : Our Company and its subsidiaries 

Singapore 

“ATSG” : ATS Garments (S) Pte Ltd 

“Bloom Time” : Bloom Time Trading (2002) Pte Ltd 

“Ocean Sky “ or “our Company” : Ocean Sky International Limited 

“Sunglobe” : Sunglobe Pte Ltd 

Malaysia 

“Eng Soon” : Eng Soon Garments Sdn Bhd 

Brunei 

“Milteq” : Milteq Tenthouse Sdn Bhd 

“PDAC” : P.D.A.C Ocean Sky Sdn Bhd 

Hong Kong 

“OGHK” : Ocean Gateway International Company Ltd 

“OSHK” : Ocean Sky Textile (H.K.) Limited 

Cambodia 

“Suntex” : Suntex Pte Ltd 

El Salvador 

“Hoon’s” : Hoon’s Apparel International (SAL) S.A. de C.V. 

“Pacific Sky” : Pacific Sky Apparel (SAL), S.A. de C.V. 

Honduras 

“Blue Ocean” : Blue Ocean Apparel, SA 

“Uniwear” : Uniwear Garments Honduras, SA 

US 

“OS Marketing” : Ocean Star Marketing (USA), Inc. 

“OS Sourcing” : Ocean Star Sourcing (USA), Inc. 

PRC 

“ Sing Cheng” : Sing Cheng (Guangzhou) Apparel & Accessories Pte Ltd 

“OS Apparel” : Ocean Star Apparel (Guangzhou) Pte Ltd 

5

GENERAL 

“Act” : The Companies Act, Chapter 50, of Singapore 

“Application Forms” : The printed application forms for the Invitation Shares which 

are the subject of the Invitation and which form part of this 

Prospectus 

“Application List” : The list for applications and subscription of the Invitation 

Shares 

“Associate” : The immediate family (being spouse, child, sibling and 

parent) of a Director, Substantial Shareholder or Controlling 

Shareholder, and any company in which a Director, 

Substantial Shareholder or controlling Shareholder and his 

immediate family together (directly or indirectly) have an 

interest of 30% or more 

“ATM” : Automated teller machine 

“ATS Holdings (2000)” : ATS Holdings (2000) Pte Ltd 

“Audit Committee” : Our audit committee 

“Authority” : The Monetary Authority of Singapore 

“Capitalisation Exercise” : The capitalisation exercise carried out in connection with the 

Invitation, more fully described on page 31 of this 

Prospectus 

“CDP” : The Central Depository (Pte) Limited 

“CPF” : Central Provident Fund 

“Depository Agent” : An entity registered as a depository agent with the CDP for 

the purpose of maintaining a Securities Account 

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

Prospectus 

“Electronic Applications” : Applications for the offer Shares made through an ATM of 

one of the Participating Banks in accordance with the terms 

and conditions of the Prospectus 

“EPS” : Earnings per Share 

“EU” : European Union 

“Executive Officers” : Our executive officers as at the date of this Prospectus 

“HY” : Half year ended 30 June 

“FY” : Financial year ended 31 December 

“Hong Kong” : The Hong Kong Special Administrative Region of the PRC 

“Independent Director” : Our non-executive independent Directors as at the date of 

this Prospectus 

6

“Invitation” : The invitation to the public in respect of the Invitation 

Shares, subject to and on the terms and conditions of this 

Prospectus 

“Invitation Shares” : 92,000,000 Shares which are the subject of the Invitation, 

comprising 92,000,000 New Shares 

“Issue Price” : S$0.23 for each Invitation Share, except for Reserved 

Shares 

“Joint Lead Placement Agents” : SBI E2-Capital Securities Limited and UOB Kay Hian 

Private Limited, and “Joint Lead Placement Agent’ means 

any of them 

“Latest Practicable Date” : 28 February 2003, being the latest practicable date prior to 

the printing of this Prospectus 

“Manager” : SBI E2-Capital Pte Ltd 

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

“NA” : Not applicable 

“NAV” : Net asset value 

“New Shares” : The 92,000,000 new Shares for which the Company invites 

applications to subscribe, subject to and on the terms of this 

Prospectus 

“NM” : Not meaningful 

“NTA” : Net tangible asset 

“Offer” : The offer by the Company to the public for subscription of 

the Offer Shares at the Issue Price, subject to and on the 

terms and conditions of this Prospectus 

“Offer Shares” : 9,200,000 Invitation Shares which are the subject of the 

Offer 

“Option Shares” : The new Shares that may be issued pursuant to the 

Scheme 

“Participating Banks” : The Development Bank of Singapore Ltd (including its 

POSBank Services division); Overseas-Chinese Banking 

Corporation Limited (“OCBC”) Group (comprising OCBC 

and Bank of Singapore Limited); and the United Overseas 

Bank Limited (“UOB”) Group (comprising UOB and Far 

Eastern Bank Limited) 

“Placement” : The placement by the Placement Agent on behalf of the 

Company of the Placement Shares for subscription at the 

Issue Price, subject to and on the terms and conditions of 

this Prospectus 

“Placement Shares” : The 82,800,000 Invitation Shares which are the subject of 

the Placement 

7

“PRC” : People’s Republic of China, but for the purposes of this 

Prospectus and for geographical reference only (unless 

otherwise indicated) excludes Taiwan, Macau and Hong 

Kong 

“Prospectus” : This amended Preliminary Prospectus issued by our 

Company in respect of the Invitation and lodged with the 

Authority on 17 February 2003 

“Reserved Share Price” : $0.21 for each Reserved Share 

“Reserved Shares” : Up to 3,500,000 of the Placement Shares reserved for 

management and staff, business associates and those who 

have contributed to the success of our Group 

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

“Scheme” : The Ocean Sky Share Option Scheme, particulars of which 

are set out at page 76 of this Prospectus 

“Securities Account” : Securities account maintained by a depositor with CDP 

“SGX-ST” : The Singapore Exchange Securities Trading Limited 

“Shares” : Ordinary shares of S$0.05 each in the capital of the 

Company 

“Substantial Shareholder” : A person who holds directly or indirectly 5%, or more of the 

total issued share capital in our Company 

“Shareholders” : The shareholders of our Company at any point in time 

“Underwriter” : UOB Kay Hian Private Limited 

“US” : United States of America 

“sq ft” : Square feet 

“% or “per cent.” : Percentage 

CURRENCIES 

“B$” : Brunei dollars 

“colones” : El Salvador colones 

“HK$” : Hong Kong dollars 

“HNL” : Honduras lempiras 

“RM” : Malaysian ringgit 

“RMB” : Chinese renminbi 

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

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

8

The expressions “our”, “ourselves”, “us”, “we” or other grammatical variations thereof shall, unless 

otherwise stated, mean our Company and our subsidiaries. 

The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings ascribed to 

them, respectively, in the Act. 

Words importing the singular shall, where applicable, include the plural and vice versa and words 

importing the masculine gender shall, where applicable, include the feminine and neuter genders and 

vice versa. References to persons shall include corporations. 

Any reference in this Prospectus and the Application Forms to any enactment is a reference to that 

enactment as for the time being amended or re-enacted. Any word defined in the Act or any statutory 

modifications thereof and used in this Prospectus and the Application Forms, where applicable, shall 

have the meaning assigned to it under the Act or statutory modification as the case may be. 

Any reference in this Prospectus or the Application Forms to shares being allotted to an applicant 

includes allotment to the CDP for the account of that applicant. 

Any reference to a time of day in this Prospectus will be a reference to Singapore time, unless otherwise 

stated. 

9

GLOSSARY OF TECHNICAL TERMS 

To facilitate a better understanding of our business, the following glossary provides an explanation on 

some of the technical terms and abbreviations used in this Prospectus. 

“SCM” : Supply chain management refers to the integration of internal and external supply 

chain solution services from manufacturing, sourcing and procurement of raw 

materials and accessories prior to the manufacturing process to logistic management 

of our manufactured apparels. It includes services such as providing fashion trends 

advices, designs, product development, sampling and testing, research data to assist 

our customers in their product development process. It also includes handling 

import/export customs documentation, insurance, import duty, shipping and inland 

transport matters for our customers in the process of delivering the manufactured 

apparels to our customers’ warehouses. 

“ERP” : Enterprise Resource Planning is a complete enterprise wide business solution used 

to integrate all departments and functions in a company into a single computer 

system. It consists of software modules for business areas such as marketing and 

sales, field service, product design and development, production and inventory 

control, procurement, distribution, industrial facilities management, process design 

and development, manufacturing, quality, human resources, finance and accounting, 

and information services. 

10

DETAILS OF THE INVITATION 

LISTING ON THE STOCK EXCHANGE 

We have applied to the SGX-ST for permission to deal in and for quotation for all our Shares already 

issued and the New Shares as well as the Option Shares on the SGX-ST. Such permission will be 

granted when we have been admitted to the Official List of the SGX-ST. Our allocation of the Invitation 

Shares will be conditional upon the completion of the Invitation, which is subject to certain conditions, 

including the SGX-ST granting permission to deal in and for quotation for all our issued Shares and the 

New Shares as well as the Option Shares. If the completion of the Invitation does not occur because the 

SGX-ST’s permission is not granted or for any reason, moneys paid in respect of any allocation will be 

returned to you at your own risk, without interest or any share of revenue or other benefit arising 

therefrom and you will not have any claim against us or the Manager. 

The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions 

expressed or reports contained in this Prospectus. Admission to the Official List of the SGX-ST is not to 

be taken as an indication of the merits of the Invitation, our Company, our subsidiaries, our Shares, the 

New Shares or the Option Shares. 

A copy of this Prospectus together with copies of the Application Forms, have been lodged with the 

Monetary Authority of Singapore (the “Authority”), which takes no responsibility for its contents. 

Where the Authority issues a stop order pursuant to Section 242 of the Securities and Futures Act 2001, 

and 

(a) in the case where the Invitation Shares have not been issued to the applicants, the applications of 

the Invitation Shares pursuant to the Invitation shall be deemed to have been withdrawn and 

cancelled and our Company shall, within 14 days from the date of the stop order, pay to the 

applicants all moneys the applicants have paid on account of their application for the Invitation 

Shares; or 

(b) in the case where the Invitation Shares have been issued to the applicants, the issue of the 

Invitation Shares pursuant to the Invitation shall be deemed to be void and our Company shall, 

within 14 days from the date of the stop order, pay to the applicants all moneys paid by them for 

the Invitation Shares. 

We have obtained approvals from our Directors for this Prospectus. Our Directors individually and 

collectively accept full responsibility for the accuracy of the information given in this Prospectus and 

confirm, having made all reasonable enquiries, that, to the best of their knowledge and belief, the facts 

contained in this Prospectus are true and accurate and not misleading; all expressions of opinion, 

intention and expectation contained herein are honestly held and made after due and careful 

consideration; this Prospectus constitutes full and true disclosure of all material facts about this Invitation 

and our Group and our Shares; and there are no other material facts the omission of which would make 

any statement herein misleading. 

The Invitation Shares are offered for subscription or purchase solely on the basis of the information 

contained and the representations made in this Prospectus. 

We have not authorised any person to give any information or to make any representation not contained 

in this Prospectus in connection with the Invitation and, if given or made, such information or 

representation must not be relied upon as having been authorised by our Company, or the Manager. 

Neither the delivery of this Prospectus and the Application Forms or any documents relating to the Offer 

or the Placement nor the Invitation shall, under any circumstances, constitute a continuing representation 

or create any suggestion or implication that there has been no change in the affairs of our Company or 

our Group or any statements of fact or information contained in this Prospectus since the date of this 

Prospectus. Where such changes occur, our Company may make an announcement of the same to the 

SGX-ST. You should take note of any such announcement and, upon release of such announcement, 

11

shall be deemed to have notice of such changes. Save as expressly stated in this Prospectus, nothing 

herein is, or may be relied upon as, a promise or representation as to the future performance or policies 

of our Company or our subsidiaries. 

This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied upon 

by you in connection with your application for the Invitation Shares and may not be relied upon by any 

other person or for any other purpose. 

This Prospectus does not constitute an offer of, or invitation or solicitation to subscribe for and/or to 

purchase, the Invitation Shares in any jurisdiction in which such offer or invitation or solicitation is 

unauthorised or unlawful nor does it constitute an offer or invitation or solicitation to any person to whom 

it is unlawful to make such offer or invitation or solicitation. 

Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, subject 

to availability, from:- 

SBI E2-Capital Pte Ltd UOB Kay Hian Private Limited 

5 Shenton Way, 80 Raffles Place 

#09-07 UIC Building #30-01 UOB Plaza 1 

Singapore 068808 Singapore 048624 

and from members of the Association of Banks in Singapore and members of the Stock Exchange and 

merchant banks in Singapore. 

The Application List will open at 10.00 a.m. on 20 March 2003 and will remain open until 12.00 

noon on the same day or for such further period or periods as our Directors may, in consultation 

with the Manager decide, subject to any limitations under all applicable laws. Where a 

supplementary or replacement prospectus has been lodged with the Authority, the Application 

List shall be kept open for at least 14 days after the lodgement of the supplementary or 

replacement prospectus. Where an applicant has notified our Company within 14 days from the 

date of the lodgement of the supplementary or replacement prospectus of his wish to exercise 

his option under the Securities and Futures Act to withdraw his application made prior to the 

lodgement of the supplementary or replacement prospectus, our Company shall pay to him all 

monies paid by him on account of his application for the Invitation Shares, without interest or any 

share of revenue or other benefit arising therefrom and at the applicant’s risk, within 7 days from 

the receipt of such notification. 

Details for the procedure for application for the Invitation Shares are set out in Appendix A to this 

Prospectus. 

12

INDICATIVE TIMETABLE FOR LISTING 

In accordance with the Stock Exchange’s News Release of 28 May 1993 on the trading of initial public 

offering shares on a “when issued” basis, the indicative timetable is set out below for the reference of 

applicants:- 

Indicative date/time Event 

20 March 2003, 12.00 noon Close of Application List 

21 March 2003 Balloting of applications, or otherwise as may be 

approved by the SGX-ST (in the event of an oversubscription 

for the Offer Shares) 

24 March 2003, 9.00 a.m. Commence trading on a “when issued” basis 

31 March 2003 Last day of trading on a “when issued” basis 

1 April 2003, 9.00 a.m. Commence trading on a “ready” basis 

4 April 2003 Settlement date for all trades done on a “when 

issued” basis and for trades done on a “ready” basis 

on 1 April 2003 

The above timetable is only indicative as it assumes that the date of closing of the Application List will be 

on 20 March 2003, the date of admission of our Shares to the Official List of the SGX-ST will be 24 

March 2003, the Stock Exchange’s shareholding spread requirement will be complied with and the 

Invitation Shares will be issued and fully paid-up prior to 24 March 2003. The actual date on which our 

Shares will commence trading on a “when issued” basis will be announced when it is confirmed by the 

Stock Exchange. 

The above timetable and procedure may be subject to such modification as the Stock Exchange may, in 

its discretion, decide, including the decision to permit trading on a “when issued” basis and the 

commencement date of such trading. The commencement of trading on a “when issued” basis will 

be entirely at the discretion of the Stock Exchange. All persons trading in our Shares on a “when 

issued” basis do so at their own risk. In particular, persons trading in our Shares before their 

Securities Accounts with the CDP are credited with the relevant number of Shares do so at the 

risk of selling Shares which neither they nor their nominees, as the case may be, have been 

allotted or allocated with or are otherwise beneficially entitled to. Such persons are also exposed 

to the risk of having to cover their net sell positions earlier if “when issued” trading ends sooner 

than the indicative date mentioned above. Persons who have a net sell position traded on a 

“when issued” basis should close their position on or before the first day of “ready” basis 

trading. 

In the event of any changes in the closure of the Application List or the time period during which the 

Invitation is open, we will publicly announce the same:- 

(i) through a MASNET announcement to be posted on the Internet at the SGX-ST Web-site 

http://www.sgx.com; and 

(ii) in a local English newspaper, namely, The Straits Times. 

Investors should consult the SGX-ST announcement on “ready” listing date on the Internet (at the SGX- 

ST website http://www.sgx.com), INTV or the newspapers, or check with their brokers on the date on 

which trading on a “ready” basis will commence. 

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

13

STRUCTURE OF INVITATION 

This section should be read in conjunction with, and is qualified in its entirety by reference to, the section 

entitled “Terms and Conditions and Procedures For Application” in Appendix A of this Prospectus. 

The Invitation comprises:- 

(a) 9,200,000 Offer Shares at S$0.23 for each Offer Share by way of public offer; and 

(b) 82,800,000 Placement Shares by way of placement, comprising:- 

(i) minimum of 79,300,000 Placement Shares at S$0.23 for each Placement Share for 

application by way of Placement Shares Application Forms; and 

(ii) up to 3,500,000 Reserved Shares at S$0.21 for each Reserved Share reserved for 

management and staff, business associates and those who have contributed to the success 

of our Group, 


The Invitation is open for application by members of the public in Singapore, subject to and on the terms 

and conditions in this Prospectus (including Appendix A). Applications for the Invitation Shares may be 

made using the following methods:- 

Application for Offer Shares by way of Offer Shares Application Forms or ATM Applications 

Applications for the Offer Shares may only be made by way of the printed Offer Shares Application 

Forms or through ATMs belonging to the Participating Banks. 

An applicant (other than an approved nominee company) who has made an application for Offer Shares 

in his own name may not submit another separate application for Offer Shares whether by way of an 

Application Form or by way of an ATM Application, for any other person. Such separate applications shall 

be deemed to be multiple applications and shall be rejected. 

An applicant who has made an application for Offer Shares by way of an Offer Shares Application 

Form may not make another separate application for Offer Shares by way of an ATM Application 

and vice versa. Such separate applications shall be deemed to be multiple applications and shall 

be rejected. 

An applicant who has made an application for Offer Shares either by way of an Offer Shares 

Application Form or by way of an ATM Application shall not make any separate application for 

Placement Shares by way a Placement Shares Application Form. Such separate application shall 

be deemed to be multiple applications and shall be rejected. 

In the event of an under-subscription for the Offer Shares as at the close of the Application List, that 

number of Offer Shares shall be made available to satisfy applications for the Placement Shares, to the 

extent there are excess applications for the Placement Shares as at the close of the Application List. 

In the event of an over-subscription for the Offer Shares as at the close of the Application List and the 

Placement Shares are fully taken up as at the close of the Application List, the successful applications 

for Offer Shares will be determined by ballot or otherwise as determined by our Directors and approved 

by the SGX-ST. 

Additional terms and conditions for the application of Offer Shares by way of Application Forms and ATM 

Applications are set out on pages A-1 to A-13 in Appendix A of this Prospectus. 

14

Application for Placement Shares by way of Placement Shares Application Forms 

An applicant who applies for the Placement Shares by way of a Placement Shares Application Form shall 

not make any separate application for the Placement Shares (using another Placement Shares 

Application Form) or for the Offer Shares (either using an Offer Share Application Form or by way of an 

ATM Application). Such separate applications will be deemed to be multiple applications and shall be 

rejected. 

In the event that any of the Placement Shares are not taken up, that number of Placement Shares will be 

made available to satisfy applications for the Offer Shares, to the extent there is an over subscription for 

the Offer Shares as at the close of the Application List. 

Additional terms and conditions for the application of the Placement Shares by way of Placement Shares 

Application Forms are set out on pages A-1 to A-13 in Appendix A of this Prospectus. 

15

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS 

All statements contained in this Prospectus, statements made in the press releases and oral statements 

that may be made by our Company or our officers, Directors or employees acting on our behalf, that are 

not statements of historical fact, constitute “forward-looking statements”. Some of these statements can 

be identified by words that have a bias towards, or are, forward-looking such as “anticipate”, “believe”, 

“could”, “estimate”, “expect”, “forecast”, “if”, “intend”, “may”, “plan”, “possible”, “probable”, “project”, 

“should”, “will” and “would” or similar words. However, these words are not the exclusive means of 

identifying forward-looking statements. All statements regarding our Group’s expected financial position, 

business strategy, plans and prospects and future prospects of our Group’s industry are forward-looking 

statements. These forward-looking statements, including statements as to our Group’s revenue and 

profitability, prospects, future plans and other matters discussed in this Prospectus regarding matters that 

are not historic fact, are only predictions. These forward-looking statements involve known and unknown 

risks, uncertainties and other factors that may cause our Group’s actual, future results, performance or 

achievements to be materially different from any future results, performance or achievements expected, 

expressed or implied by such forward-looking statements. 

Given the risks and uncertainties that may cause our Group’s future results, performance or 

achievements to be materially different from that expected, expressed or implied by the forward-looking 

statements in this Prospectus, undue reliance must not be placed on these statements. Neither our 

Company nor any other person represents or warrants that our Group’s actual future results, 

performance or achievements will be as discussed in those statements. Where any update or revision to 

any of those forward-looking statements to reflect material future developments, events or circumstances 

is necessary, we will promptly make an announcement of the same to the SGX-ST and the public. 

SELLING RESTRICTIONS 

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase our 

Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to 

any person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will 

be taken under the requirement of the legislation or regulations of, or of the legal or regulatory authorities 

of, any jurisdiction, except for the filing and/or registration of this Prospectus in Singapore in order to 

permit a public offering of our Shares and the public distribution of this Prospectus in Singapore. The 

distribution of this Prospectus and the offering of our Shares in certain jurisdictions may be restricted by 

the relevant laws in such jurisdiction. Persons who may come into possession of this Prospectus are 

required by us, the Underwriters and the Joint Lead Placement Agents to inform themselves about, and 

to observe and comply with, any such restrictions. 

PLAN OF DISTRIBUTION 

The Issue Price is determined by us in consultation with the Manager, the Underwriter and the Joint 

Lead Placement Agents, based on market conditions and the market demand for our Shares. The Issue 

Price is the same for all Invitation Shares and is payable in full on application. 

Offer Shares 

The Offer Shares are made available to the members of the public in Singapore for subscription at the 

Issue Price. The terms and conditions and procedures for application and acceptance are described in 

Appendix A on pages A-1 to A-13 of this Prospectus. 

Pursuant to the terms and conditions contained in the Management and Underwriting Agreement signed 

between our Company, the Manager and the Underwriter dated 12 March 2003, the Underwriter have 

agreed to underwrite our Offer Shares. 

In the event of an under-subscription for the Offer Shares as at the close of the Application List, that 

number of Offer Shares not subscribed for shall be made available to satisfy excess application for the 

Placement Shares to the extent there is an over-subscription for the Placement Shares as at the close of 

the Application List. 

16

In the event of an over-subscription for the Offer Shares as at the close of the Application List and/or the 

Placement Shares are fully subscribed or over-subscribed as at the close of the Application List, the 

successful applications for the Offer Shares will be determined by ballot or otherwise as determined by 

our Directors and approved by the SGX-ST. 

Placement Shares (Excluding Reserved Shares) 

Application for the Placement Shares may only be made by way of Application Forms. The terms and 

conditions and procedures for application and acceptance are described in Appendix A on pages A-1 to 

A-13 of this Prospectus. 

Pursuant to the terms and conditions in the Placement Agreement signed between our Company and the 

Joint Lead Placement Agents dated 12 March 2003, the Joint Lead Placement Agents have agreed to 

subscribe for or procure subscriptions for the Placement Shares at the Issue Price. 

In the event of an under-subscription for the Placement Shares as at the close of the Application List, 

that number of Placement Shares not subscribed for shall be made available to satisfy excess 

applications for the Offer Shares to the extent that there is an over-subscription for the Offer Shares as at 

the close of the Application List. 

Reserved Shares 

To recognise contributions to our Group, we have reserved up to 3,500,000 Placement Shares for 

subscription by the management and staff, business associates and those who have contributed to the 

success of our Group at the Reserved Share Price. These Reserved Shares are not subject to any 

moratorium and may be disposed of after the admission of our Company to the Official List of the SGX- 

ST. In the event that any of the Reserved Shares are not taken up, they will be made available to satisfy 

excess applications for the Placement Shares to the extent there is an over-subscription for the 

Placement Shares as at the close of the Application List or, in the event of an under-subscription for the 

Placement Shares as at the close of the Application List, to satisfy excess applications made by 

members of the public for the Offer Shares to the extent there is an over-subscription for the Offer 

Shares as at the close of the Application List. 

None of our Directors or Substantial Shareholder intends to subscribe for the Invitation Shares in the 

Invitation. To the best of our knowledge, we are unaware of any person who intends to subscribe for 

more than 5% of the Invitation Shares. However, through a book-building process to assess market 

demand for our Shares, there may be person(s) who may indicate his interest to subscribe for more than 

5% of the Invitation Shares. If such person(s) were to make an application for more than 5% of the 

Invitation Shares pursuant to the Invitation and subsequently allocated or allotted such number of 

Shares, we will make the necessary announcements at an appropriate time. 

Further, no Shares shall be allocated or allotted on the basis of this Prospectus later than six months 

after the date of this Prospectus. 

17

PROSPECTUS SUMMARY 

The following summary is qualified in its entirety by, and is subject to, the more detailed information and 

financial statements (including the notes thereto) appearing elsewhere in this Prospectus. Terms defined 

elsewhere in this Prospectus have the same meanings when used herein. Prospective investors should 

carefully consider all the information presented in this Prospectus, particularly the matters set out under 

“Risk Factors” beginning on page 24 of this Prospectus before making an investment decision. 

References in this Prospectus to “our Group”, “we”, “our”, and “us” refer to Ocean Sky International 

Limited and its subsidiaries. 

OUR GROUP 

Our Company was incorporated in Singapore under the Companies Act (Chapter 50) of Singapore on 8 

September 1988 as a private limited company under the name of Ocean Sky Textile Pte Ltd (Company 

Registration number 198803225E). On 7 February 2003, our Company was converted into a public 

limited company and changed its name to Ocean Sky International Limited. 

We are a global one-stop specialty apparel manufacturer with supply chain management (“SCM”) 

capabilities. With our headquarters in Singapore, our Group reaches out to customers globally through 

twelve strategically located production and sourcing operations around the world in Singapore, Malaysia, 

Cambodia, Brunei, Hong Kong, the PRC, Honduras, El Salvador and the US. For FY2001, we had a total 

production capacity of 2.9 million dozens and turnover of S$180 million. For FY2002, we had a total 

production capacity of 3.6 million dozens and estimated turnover of S$221 million. 

We manufacture a variety of specialty apparel for Men, Ladies, Kids, Babies and Infants in accordance 

with our customers’ requirements. The types of products we manufacture include T-shirts, polo-shirts, 

blouses, shorts, pants, skirts, dresses, jackets, cardigans, robes, undergarments, sleepwear, lounge 

wear, maternity wear, children’s wear, baby wear, baby blanket and bibs. We are equipped to handle a 

wide assortment of fabrics such as interlock, fancy ribs, jacquard and French ferry. 

While concentrating on our core business of specialty apparel manufacturing, we are expanding rapidly 

into related activities, such as providing SCM services ranging from sourcing of raw materials prior to the 

manufacturing process to logistic management of our manufactured goods. We have also set up a 

knitting plant in the US to provide additional SCM services. Developing SCM services and expansion into 

related activities are in line with our plans to provide our customers with better and faster services, since 

we will have better control over the quality and supply of raw materials, as well as timely delivery of 

manufactured goods to our customers. 

Timely delivery is further enhanced by the strategic location of our global operations. Having production 

operations near to the place of delivery of the finished goods means that we are able to make fast and 

timely deliveries at relatively low transport costs. Having global production and sourcing operations also 

mean that we are able to source for good quality raw materials at competitive prices, thus maintaining 

high quality of our finished products at competitive prices. To manage the large scale global operations, 

we have implemented production tracking systems internally to further ensure that we keep track of our 

productions and that our delivery deadlines are met. 

Our global operations also allow us to serve customers throughout the world, thus allowing us to support 

a wide and varied customer base. In addition, our compliance with social and environmental obligations 

(such as to keep our factories pollution-free and ensure that there are no instances of exploitation of 

labour) also attracted and retained customers who are concerned about socio-environmental issues. Our 

Group has a portfolio of client base which includes mainly well-known international companies such as 

Gap Inc., May Department Stores, Sears, Mervyn’s, Target, Foot Locker, Inc., Phillips-Van Heusen and 

Eddie Bauer, Inc. 

In the Year 2002 Enterprise 50 Awards, an annual event organised by Accenture and The Business 

Times with support of the Economic Development Board, we were ranked 4th position amongst the best 

50 local enterprises. 

18

The next phase of our growth will see us expanding the scope of our SCM services and also into other 

domains of the value chain of apparel business, such as fabric manufacturing and processing. We will 

also expand beyond our existing markets. We will continue our commitment to produce high quality 

products and implement internal control and tracking systems that will improve our efficiency and 

productivity. Details of our prospects and future plans are set out on pages 57 to 58 of this Prospectus 

under the heading “Prospects and Future Plans”. 

Our principal and registered office is located at 22 Tampines Street 92, Singapore 528876. Our telephone 

number is (+65) 6789-9988 and our internet website is at http://www.oceanskyintl.com. Information 

contained in our website does not constitute part of this Prospectus. 

19

THE INVITATION 

Issue Size : 92,000,000 Invitation Shares comprising 9,200,000 Offer Shares and 

82,800,000 Placement Shares. The Invitation Shares will, upon issue and 

allotment, rank pari passu in all respects with our existing issued Shares. 

Issue Price : S$0.23 for each Invitation Share (except in the case of the Reserved 

Shares to be offered to the management and staff, business associates 

and those who have contributed to the success of our Group, where the 

price is $0.21 for each such Reserved Share). 

Purpose of Invitation : Our Directors consider that the listing and quotation of our Shares on the 

Official List of the SGX-ST will enhance our public image and enable us 

to tap the capital markets for the expansion of our business operations. 

The Invitation will also provide the members of the public, our Group’s 

management, staff, business associates and those who have contributed 

to the success of our Group with an opportunity to participate in the 

equity of our Company. 

Use of Proceeds : The net proceeds attributable to us from the issue of our New Shares 

(after deducting the estimated expenses in relation to the Invitation) will 

be approximately S$19.3 million. We intend to use the net proceeds for 

the following purposes:- 

(i) approximately S$6.0 million for the setting up and expansion of 

production facilities in locations such as Central America, the 

PRC, Brunei and Cambodia; 

(ii) approximately S$4.0 million for our expansion through potential 

acquisitions, joint ventures and/or strategic alliances in fabric and 

textile manufacturing, where the opportunity arises, failing which 

the funds will be used for our general working capital 

requirements; 

(iii) approximately S$1.5 million for investment in developing 

embroidery and screen printing services; 

(iv) approximately S$2.1 million to finance our knitting plant in the US; 

and 

(v) approximately S$0.5 million for the expansion and improvement of 

our pre-manufacturing supply chain management services in the 

areas of fabric & accessories sourcing, product development, 

design & trend services and technical & sampling; 

(vi) approximately S$3.0 million for the implementation of the new ERP 

and real-time production systems; 

(vii) the balance for use as general working capital for our Group. 

While we have from time to time had preliminary discussions regarding 

potential investments, joint ventures and acquisitions in the ordinary 

course of our business, we do not currently have any agreements or 

understandings to make any such investment, joint venture or acquisition. 

20

Pending the deployment of the net proceeds from the Invitation as 

aforesaid, the net proceeds may be used to invest in short term money 

market instruments, certificates of deposit, time deposits, other shortterm, 

interest-bearing instruments, or to repay short-term bank 

borrowings, as our Directors may deem fit. 

Reserved Shares : Up to 3,500,000 of the Placement Shares will be reserved for our 

management and staff, business associates and those who have 

contributed to our success. In the event that any of the Reserved Shares 

are not taken up, they will be made available to satisfy applications for 

the Placement Shares, or in the event of an under-subscription of the 

Placement Shares, to satisfy excess applications for the Offer Shares. 

Listing Status : Our Shares will be quoted on the SGX-ST, subject to our admission to 

the Official List of the SGX-ST and permission for dealing in and for 

quotation for our Shares being granted by the SGX-ST. 

21

ISSUE PRICE 

ISSUE STATISTICS 

NET TANGIBLE ASSETS (“NTA”) 

NTA per Share, based on the audited balance sheet of our Group as at 30 

June 2002, adjusted for the payment of interim dividend and the Capitalisation 

Exercise referred to on page 31 of this Prospectus:- 

– Before adjusting for the estimated net proceeds from the Invitation and 

based on the pre-Invitation share capital of 293,661,720 Shares 

– After adjusting for the estimated net proceeds from the Invitation and 

based on the post-Invitation share capital of 385,661,720 Shares 

Premium of Issue Price over NTA per Share as at 30 June 2002 

– Before adjusting for the estimated net proceeds from the Invitation and 

based on the pre-Invitation share capital of 293,661,720 Shares 

– After adjusting for the estimated net proceeds from the Invitation and 

based on the post-Invitation share capital of 385,661,720 Shares 

EARNINGS 

Historical net earnings per Share for FY2001 based on the pre-Invitation share 

capital of 293,661,720 Shares 

Adjusted historical net earnings per Share for FY2001 had the service 

agreements been in place from the beginning of FY2001 and based on the 

pre-Invitation share capital of 293,661,720 Shares 

Estimated net earnings per Share for FY2002 based on the pre-Invitation 

share capital of 293,661,720 Shares 

NET OPERATING CASH FLOW (1) 

Historical net operating cash flow per Share for FY2001 based on the pre- 

Invitation share capital of 293,661,720 Shares 

Adjusted historical net operating cash flow per Share for FY2001 had the 

service agreements been in place from the beginning of FY2001 and based on 

the pre-Invitation share capital of 293,661,720 Shares 

PRICE EARNINGS RATIO (2) 

Historical price earnings ratio based on the historical net earnings per Share 

for FY2001 

Adjusted price earnings ratio based on the adjusted historical net earnings per 

Share for FY2001 had the service agreements been in place from the 

beginning of FY2001 

Estimated price earnings ratio based on the unaudited net earnings per Share 

for FY2002 

22 

: S$0.23 

: S$0.07 

: S$0.10 

: 228.8% 

: 122.6% 

: S$0.032 

: S$0.029 

: S$0.047 

: S$0.051 

: S$0.048 

: 7.1 times 

: 8.0 times 

: 4.9 times

PRICE TO CASH FLOW RATIO 

Historical price to net operating cash flow based on the historical net operating 

cash flow per Share for FY2001 

Adjusted price to net operating cash flow based on the adjusted historical net 

operating cash flow per Share for FY2001 had the service agreements been in 

place from the beginning of FY2001 

Notes :- 

(1) Net operating cash flow is defined as profit after taxation attributable to Shareholders after 

adding back amortisation, depreciation and loss on disposal of fixed assets. 

(2) Had the Service Agreements set out on page 73 of this Prospectus been effected at the 

beginning FY2001, the estimated total remuneration for the Directors would have been 

S$2,870,000 instead of S$1,521,000, and profit after tax in respect of FY2001 would have 

been S$8,477,000, instead of S$9,496,000. The adjusted net earnings per Share for 

FY2001 based on the pre-Invitation share capital of 293,661,720 Shares would have been 

S$0.029 instead of S$0.032. The adjusted price earning ratio in FY2001 would have been 

8.0 times instead of 7.1 times. 

23 

: 4.5 times 

: 4.8 times

RISK FACTORS 

You should carefully evaluate each of the following considerations and all of the other information set 

forth in this Prospectus before deciding to invest in the Invitation Shares. Some of the following 

considerations relate principally to the industry in which we operate and our business in general. Other 

considerations relate principally to general economic and political conditions, the securities market and 

ownership of the Invitation Shares, including possible future dilution in value of our Shares. 

If any of the following considerations and uncertainties develop into actual events, our business, financial 

condition or results of operations could be materially adversely affected. In such case, the trading price of 

our Shares could decline due to any of these considerations, and you may lose all or part of your 

investment. 

RISKS RELATING TO OUR INDUSTRY AND OUR BUSINESS 

We operate in a competitive environment 

We operate in a competitive environment. If we are not able to compete effectively with our competitors, 

for example, as regard to quality and services, our profitability and prospects will be severely affected. 

We cannot ensure that we will be able to compete successfully in the future against our existing or 

potential competitors or that our business, financial condition and results of operations will not be 

adversely affected by increased competition. 

We are affected by political, social, economic and regulatory conditions in the countries where we 

operate 

Our Group’s head office is located in Singapore. We have operations in Singapore, Cambodia, Malaysia, 

Brunei, El Salvador, Honduras, the US, Hong Kong and the PRC. Our customers and suppliers are 

located throughout the world, such as the US, Europe and Asia. We are affected by the political, social 

and economic conditions in the countries in which we operate and/or where our customers and suppliers 

are located. Factors such as fluctuations in exchange rates, economic recession, inflation, changes in 

governmental or regulatory policies, labour conditions, implementation of import and export controls and 

in policies on foreign investments can affect our operations and financial results. Our revenue and profits 

will be adversely affected if there is any change in policies and/or other economic and/or political 

developments that have a negative impact on our operations and business. 

We are exposed to risks associated with setting up new operations in new territories 

We have plans to expand our operations into new territories and diversify our operations. These future 

expansion plans may subject us to additional risks in managing such foreign operations. These risks may 

relate to human resource issues like staff recruitment and training, and other operational matters such as 

the development of new markets with customers, consultants and suppliers. We may also incur 

unexpected or additional costs which may affect the results of our operations. Other risks may include 

adoption and/or expansion in government policies, limitations on repatriation of profits and unanticipated 

changes in regulatory requirements. These uncertainties may have an adverse impact on the profitability 

of our Group. 

Our subsidiaries’ abilities to pay out dividends to us is subject to various restrictions 

Our Company’s significant assets are our equity interests in our subsidiaries. The ability of our 

subsidiaries to pay dividends or make other distributions to us may be restricted by, among other things, 

the availability of funds, the terms of various credit arrangements entered into by such subsidiaries, as 

well as statutory and other legal restrictions. In addition, although there are currently no foreign exchange 

control regulation which restrict the ability of our subsidiaries to distribute dividends to us, we cannot 

guarantee that the relevant regulations will not be changed and that the ability of our subsidiaries to 

distribute dividends to us will not be restricted in the future. In such event, there could be an adverse 

impact on our ability to pay out dividends to Shareholders. 

24

Our taxation status may be subject to change 

Our operational subsidiaries in Cambodia, Brunei, Honduras and El Salvador have been granted tax 

exempt status. Our operational subsidiaries in El Salvador and Honduras have been tax exempted since 

their incorporation in 2000 (for a period of 10 years) and 2001 (for a period of 20 years) respectively, 

while our subsidiaries in Cambodia and Brunei have been granted tax exempt status from mid-2001 (for 

a period of 3 years) and beginning of 2002 (for a period of 8 years) respectively. Tax exemption in these 

four countries resulted in tax savings amounting to approximately 6.9% of our Group’s estimated profit 

before tax in 2002. There is no assurance that the aforesaid tax treatments will not change in the future. 

If there are any changes in the tax treatments under the applicable tax laws in the aforementioned 

jurisdictions, our Group’s performance and profitability may be adversely affected. 

We are susceptible to fluctuations in foreign exchange rates which could result in us incurring 

foreign exchange losses 

Our revenue and a significant proportion of our costs are denominated in US$. 

Notwithstanding the fact that we have a natural hedge between our revenue and purchases, any 

significant fluctuations in the US$ against the respective local currencies of our subsidiaries arising from 

timing differences due to credit terms given by our suppliers and by us to our customers, would result in 

us incurring foreign exchange losses. 

In view of the nature of our business which spans several countries, foreign exchange risks will continue 

to be an integral aspect of our risk profile in the future. 

For more information on our foreign exchange gains and losses, please refer to page 131 of our 

Accountants’ Report. 

We may be unable to secure sufficient export quota 

Apparel manufacturers in certain exporting countries (including Cambodia, Singapore and Malaysia) are 

allotted a quota by the local trade departments on the amount of apparel products they can produce for 

export to the US. Therefore, our Group’s ability to export from these countries is dependent on our ability 

to secure the required level of quota. There can be no assurance that we will continue to be allocated the 

level of quota as we currently hold. Such quota requirements are effective up to 31 December 2004. If 

we are unable to secure sufficient export quota, our revenue and profitability may be affected. 

We are reliant on the US market 

For each of the three financial years ended 1999, 2000 and 2001, sales of our Group’s products to the 

US, which is the largest market of our Group, accounted for over 90% of our Group’s turnover. Our 

Group’s sales and profitability will be adversely affected by any economic, political, regulatory or social 

factors, or any domestic security concerns, which may result in a downturn in the US economy or affect 

our ability to export to the US. 

Our operations can be affected by natural disasters in Central America 

Our operations in El Salvador and Honduras in Central America can be affected by the occurrence of 

natural disasters which might destroy the infrastructure and transport systems of the countries and in 

turn affect our operations. Depending on the extent of destruction should it occur, our operations in those 

countries may be disrupted and in turn the profitability of our Group might be affected. While we have 

insurance cover against losses arising from such natural disasters, we cannot ensure that such 

insurance will be sufficient to fully indemnify us against all such losses. 

Product liability 

We are subject to laws and regulations relating to manufacturer’s liability arising out of our goods 

exported to our customers in the US. Where required by our customers, we take up product liability 

insurance against such liability. There is no certainty that such insurance will be sufficient to fully 

indemnify us against all such liabilities. 

We are dependent on foreign labour in Brunei 

Brunei accounts for about 25% of our current manufacturing capacity and a substantial proportion of our 

workforce in Brunei are foreign workers. If there are any changes in the regulations in Brunei with regard 

to foreign labour laws resulting in us being unable to source for sufficient labour, our performance and 

profitability will be affected. 

25

We are dependent on our major customers 

Our Group’s sales to our top major customer, Gap Inc., under its three international brand names are as 

follows:- 

Name Of Brand FY1999 FY2000 FY2001 

% % % 

Old Navy 34.1 32.0 47.2 

Gap 37.6 30.5 18.8 

Banana Republic – – 6.4 

Although these brands have been awarding us contracts for the manufacture of their apparels, they are 

not bound to do so as our Group has not formally entered into any long term sales contracts with them. 

There is no assurance that these brands, for whatever reasons, will not reduce orders or our selling price 

significantly with our Group in the future. As such, our Group’s operations and profitability may be 

adversely affected should any of these brands reduce their orders or our selling price significantly. 

We are exposed to credit risks of our customers 

As at 31 December 2001, our trade receivables of S$13.7 million accounted for approximately 28.3% of 

our current assets. Therefore, our financial position and profitability is dependent on the credit 

worthiness of our customers. Whilst we have not encountered any significant bad debts for the last three 

financial years ended 1999, 2000 and 2001, there is no assurance that risks of default by our customers 

will not increase in the future. 

We are reliant on certain key personnel 

Our Group’s success has been attributable to the vision, expertise and managerial skills of Mr Ang Boon 

Cheow Edward and Mr Ang Boon Chong. The loss of their services without any timely replacements 

could have an adverse effect on our operations and consequently our profitability. 

RISKS RELATING TO OWNERSHIP OF OUR SHARES 

Our Shares have never been traded publicly before and this Invitation may not result in an active 

or liquid market for our Shares. The market prices of, and trading volumes in, our Shares may be 

volatile which could negatively affect an investment in our Shares. 

Prior to this Invitation, there was no public market for our Shares. We have applied to have our Shares 

listed and quoted on the SGX-ST. The SGX-ST listing and quotation does not, however, guarantee that a 

trading market for our Shares will develop or, if a market does develop, the liquidity of that market for our 

Shares. Therefore, we cannot predict whether an active trading market for our Shares will develop or how 

liquid that market might become. The trading prices and trading volume of our Shares may also face 

such volatility after it is listed and quoted on the SGX-ST that it could have a negative effect on the 

investment of our Shares. 

The Invitation Price has been determined through negotiations between us and the Manager based on 

several factors and may not be indicative of the market price for Shares after the Invitation. The market 

price of our Shares may be significantly affected by, among others, the following factors: 

� our Group’s actual or anticipated results of operations; 

� new services or products offered by us or our competitors; 

� announcements by us or our competitors of significant contracts, acquisitions, partnerships, joint 

ventures or capital commitments; 

� the loss of a major client or supplier; 

� additions or departures of key personnel; 

26

� changes in, or our failure to meet, securities analysts’ expectations; 

� changes in market valuations of other similar companies; 

� legislative and regulatory developments affecting the apparel and textile industries; 

� developments in the apparel and textile industries; 

� investor perception of investments relating to Asia; 

� broad share price fluctuations; 

� involvement in litigation; and 

� general market conditions and other factors beyond our control. 

Future sales of our Shares could affect our Share price 

Any future sale or availability of the Shares can have a downward pressure on our share price. 

There will be 385,661,720 Shares immediately following the Invitation. Such Shares, except for those 

under moratorium, may be sold in the public market in Singapore. Please refer to “Moratorium” on page 

92 of this Prospectus for more details on the moratorium. 

The sale of a significant number of Shares, including these Shares which are subject to moratorium, in 

the public market after the Invitation, or the perception that such sales may occur, could materially and 

adversely affect the market price of the Shares. These factors would also affect our ability to raise funds 

in new Share offerings. 

Except otherwise described in the section entitled “Moratorium” in this Prospectus, there will be no 

restrictions on the ability of the substantial Shareholders to sell their Shares either on the SGX-ST or 

otherwise. 

Overseas Shareholders may not be able to participate in rights offerings or certain other equity 

issues 

If we offer or cause to be offered to holders of our Shares rights to subscribe for additional Shares or any 

right of any other nature, we will have discretion or we may be subject to regulations as to the procedure 

to be followed in making such rights available to holders of Shares or in disposing of such rights for the 

benefit of such holders and making the net proceeds available to such holders. We may not offer such 

rights to the holders of Shares having an address in jurisdictions outside Singapore. Accordingly, 

Shareholders having an address outside Singapore may be unable to participate in rights offerings and 

may experience a dilution in their holdings as a result. 

New investors will incur immediate dilution and may experience further dilution 

The Invitation Price of our Shares is substantially higher than the NTA per share of S$0.10 (after the 

payment of interim dividend and adjusted for the net proceeds from the Invitation) as at 30 June 2002. If 

we were liquidated for NTA immediately following this Invitation, each shareholder subscribing to this 

Invitation would receive less than the price they paid for their shares. In addition, we have or intend to 

grant our employees share options to acquire our shares under the scheme adopted by us. To the extent 

such outstanding options are ultimately exercised, there will be further dilution to investors participating in 

this Invitation. 

We may require additional funding for our future growth which might lead to dilution 

Our operating expenses and capital requirements can be affected by (1) the success of our operations; 

(2) the level of resources to attract, maintain and expand our customer base and maintain our 

infrastructure and facilities; and (3) the need to incorporate the latest technologies and enhance our 

operational capabilities. 

27

Accordingly, the timing and the quantum of such operating expenses and capital expenditure cannot be 

accurately predicted. 

If we require additional funding, we may raise capital by issuing equity or debt securities or by borrowing 

funds from banks or other sources. We cannot assure you that any additional financing we may need will 

be available on terms favourable to us. In addition, any additional capital raised through the sale of equity 

may dilute your equity interest in us. An issue of Shares or other securities in the case of a rights issue 

requires additional investment by Shareholders. Further, an issue of Shares below the then prevailing 

market price will also affect the value of the Shares then held by Shareholders. 

It is also possible that our subsidiaries may need to raise capital independently from us, in which case 

we would have to either raise capital to fund our portion of such a capital-raising transaction or suffer a 

dilution of our interest in those subsidiaries. Any additional debt-financing may contain restrictive 

covenants with respect to dividends, future fundraising exercises and other financial and operational 

matters. If we are unable to secure additional funds when required to meet our business requirements, 

we may not be able to, amongst others: 

� fully realise our future plans; 

� create additional market-specific business units; 

� attract, train and retain key professionals; 

� enhance our manufacturing capabilities through adoption of new technologies; and 

� respond to competitive pressures or unanticipated requirements, 

in which case our business results would suffer. 

28

EXCHANGE RATES 

Our revenues and a significant proportion of our costs are in USD but our financial statements are in S$. 

As a result, the USD to S$ exchange rate is important to us and can result in significant exchange gains 

or losses. 

The following table set forth, for the fiscal periods indicated, the exchange rates between S$ and USD 

adopted or used by our Group based on the rates as listed in The Business Times for the relevant period. 

The tables illustrate how many S$ it would take to buy one USD. These transactions should not be 

construed as a representation that those S$ or USD amounts could have been, or could be, converted 

into USD or S$ respectively, as the case may be, at any particular rate, the rate stated below, or at all. 

Currently, there are no exchange control restrictions in Singapore in respect of USD. 

S$ per USD 

Average Period End 

Financial year ended 31 December 1999 1.694 1.667 



6 months period ended 30 June 2002 1.790 1.770 

29

We do not have a fixed dividend policy. 

DIVIDEND POLICY 

Our Company may, by ordinary resolution, declare dividends at a general meeting, but it may not pay 

dividends in excess of the amount recommended by our Directors. Our Directors may declare an interim 

dividend without seeking Shareholders’ approval. On 9 December 2002, we declared an interim dividend 

of $6.0 million, which has been paid to the then registered shareholders of our Company. Our Company 

shall pay all dividends out of our profits or in accordance with Section 69 of the Companies Act. 

Our Directors, intend, subject to the factors stated herein and in the absence of any circumstances which 

might reduce the amount of revenue reserve available to pay dividends, to recommend and distribute not 

less than 25% of our net profit attributable to Shareholders as dividends for the year ending 31 

December 2003 (the “Proposed Dividend”). However, investors should note that all the foregoing 

statements, including the statements on the Proposed Dividend, are merely statements of our present 

intention and shall not constitute legally binding statements in respect of our future dividends which may 

be subject to modification (including reduction or non-declaration thereof) in our Directors’ sole and 

absolute discretion. Investors should not treat the Proposed Dividend as an indication of our Group’s 

future dividend policy. No inference should or can be made from any of the foregoing statements as to 

our actual future profitability or ability to pay dividends in any of the periods discussed. 

In making their recommendation for future cash dividends, our Directors will consider, among other 

things, our future earnings, operations, capital requirements, cash flow and financial conditions, as well 

as maximising shareholders’ value, general business conditions and other factors which they may 

consider appropriate. 

30

CAPITALISATION AND INDEBTEDNESS 

In connection with the Invitation, we carried out the Capitalisation Exercise which involved the following: 

(i) the capitalisation of $12,013,086 out of retained profits, and $636,500 out of share premium 

account for a bonus issue of 12,649,586 ordinary shares of $1 each; and 

(ii) the sub-division of each ordinary share of S$1.00 in the existing authorised and issued and paidup 

share capital into 20 ordinary Shares of S$0.05 each (“Sub-division of Shares”). 

The following table shows our bank and cash balances, capitalisation and indebtedness as at 30 

September 2002:- 

� on an actual basis after the payment of interim dividends; and 

� as adjusted to give effect to the application of net proceeds from the Invitation. 

You should read this table in conjunction with:- 

� our consolidated financial statements and the related notes included in this Prospectus; and 

� the section in this Prospectus entitled “Management’s Discussion and Analysis of Financial 

Condition and Results of Operations.” 

As at 

30 September 2002 As Adjusted for the 

(Unaudited) Proceeds of the Invitation 

$’000 $’000 

Cash and cash equivalents 15,597 34,897 

Borrowings 

Secured : 

Short-term portion of long-term loans 486 486 

Long-term loans 3,696 3,696 

Short-term borrowings 35,064 35,064 

Finance lease creditors 2,737 2,737 

Total borrowings 41,983 41,983 

Shareholders’ equity 

Issued and paid-up capital 2,000 19,283 

Share application account 670 (2) – 

Share premium account – 14,700 

Reserves 26,447 (1) 14,434 

Total shareholders’ equity 29,117 48,417 

Total capitalisation and indebtedness 71,100 90,400 

Note : 

(1) Adjusted for payment of interim dividend of $6 million. 

(2) 33,500 ordinary shares of S$1 each were issued on 10 December 2002 at an average premium of S$19 per share. 

As at 31 January 2003, we have cash and cash equivalents of $15,273,000. We have secured short-term 

loans of $1,214,000, secured long-term loans of $5,096,000, unsecured short-term borrowings of 

$25,082,000 and unsecured finance lease creditors of $3,001,000. 

31

As at 31 January 2003, our Group have capital commitments of $2,335,000 and operating lease 

commitments of $23,414,000. 

The term loans are secured by way of a legal charge over our Company’s leasehold property at 22 

Tampines Street 92, Singapore 528876, a subsidiary’s freehold property at 3043, Yorkshire Way, Rowland 

Heights, California 91748, US and a fixed deposit amounting to $713,000. The remaining facilities are 

being secured by personal guarantees provided by certain of our Executive Directors and we will proceed 

to procure the discharge of these personal guarantees. Should we be unable to procure the discharge of 

these personal guarantees, the respective Executive Directors will continue to give such personal 

guarantees. Our Directors are of the view that it is unlikely that there will be any significant change in the 

interest rates or amounts of such facilities as a result of the discharge of these personal guarantees. 

As at 31 January 2003, the short-term borrowings bear interest rates ranging from 2.8% to 5.5% per 

annum. 

As at 31 January 2003, the secured term loans bear interest rates ranging from 2.65% to 5.86% per 

annum. 

Save as disclosed on page 30 of this Prospectus under the section “Dividend Policy”, we have not paid 

any dividend since 30 September 2002. Except for the changes in reserves due to the Capitalisation 

Exercise, profits earned and foreign currency translation adjustments after 30 September 2002, there are 

no other changes in our total capitalisation and indebtedness. Based on our shareholders’ equity of $29.1 

million as at 30 September 2002, our net gearing ratio, as defined by total indebtedness less cash and 

cash equivalents divided by shareholders’ equity, is 0.9 times. 

CONTINGENT LIABILITIES 

As at the date of lodgement of this Prospectus with the Authority, our Group has no contingent liabilities 

save as disclosed in the Accountants’ Report at page 135 of this Prospectus. 

32

DILUTION 

Dilution is the amount by which the Issue Price paid by the purchasers of our Shares in this Invitation 

exceeds our NTA per Share after the Invitation. The audited NTA per Share of our Group as at 30 June 

2002 after payment of interim dividend and before adjusting for the net proceeds from the Invitation 

based on our issued and paid up share capital of 293,661,720 Shares is approximately S$0.07 per 

Share. NTA per ordinary Share is determined by dividing our net tangible book value (total tangible 

assets less total liabilities) as at 30 June 2002 by the number of issued ordinary Shares at that date. 

Pursuant to the Invitation in respect of 92,000,000 New Shares at the Issue Price of S$0.23 per Share, 

our Group’s NTA per Share after payment of interim dividend and after adjusting for the estimated net 

proceeds from the Invitation and based on the post-Invitation issued and paid-up share capital of 

385,661,720 Shares will be S$0.10. 

This represents an immediate increase in NTA per Share of S$0.03 per Share to our existing 

Shareholders and an immediate dilution in NTA per Share of 0.13 per Share to our new investors. The 

following table illustrates this per Share dilution: 

Per Share ($) 

Offer Price per Share 0.23 

Net tangible book value per Share as of 30 June 2002 after payment of interim dividend 0.07 

Increase in net tangible book value per Share attributable to new investors 0.03 

Net tangible book value per Share after the Invitation 0.10 

Dilution in net tangible book value per Share to new investors 0.13 

The following table summarises as at the date of this Prospectus, the total number of shares issued by 

us, the total consideration paid to us and the average price paid per share by our existing Shareholders 

and to be paid by our new public investors in the Invitation. 

No. of Shares % Consideration % Average 

($’million) Price per Share 

($) 

Existing Shareholders 293,661,720 76.14 20.54 49.34 0.07 

New public investors 92,000,000 23.86 21.09 50.66 0.23 

33

SELECTED CONSOLIDATED FINANCIAL INFORMATION 

The following information should be read in conjunction with the full text of this Prospectus, including the 

Accountants’ Report. Our financial statements are prepared and presented in accordance with Singapore 

Accounting Standards. 

RESULTS OF OPERATIONS OF OUR GROUP 

Audited Unaudited Audited 

6 months 6 months 

period period 

ended 30 ended 30 

FY1999 FY2000 FY2001 June 2001 June 2002 

$’000 $’000 $’000 $’000 $’000 

Revenue 56,705 104,645 179,988 74,606 92,013 

Cost of sales (42,879) (82,289) (143,640) (57,582) (70,349) 

Gross profit 13,826 22,356 36,348 17,024 21,664 

Other operating income (1) 375 174 874 67 142 

Distribution costs 

Administrative and other operating 

(1,644) (3,088) (4,445) (2,021) (2,764) 

expenses (5,963) (11,008) (18,825) (7,417) (8,956) 

Profit from operations 6,594 8,434 13,952 7,653 10,086 

Finance costs (541) (1,494) (1,989) (1,000) (518) 

Share of results of associated company – (7) 18 – – 

Profit before taxation 6,053 6,933 11,981 6,653 9,568 

Taxation (1,649) (1,348) (2,430) (1,353) (1,916) 

Profit after taxation 4,404 5,585 9,551 5,300 7,652 

Minority interests – 25 (55) 48 – 

Profit attributable to the Shareholders 4,404 5,610 9,496 5,348 7,652 

Earnings per Share (cents) (2) 1.50 1.91 3.23 1.82 2.61 

Notes:- 

(1) Other operating income comprises mainly sales of excess apparel quota rights to other apparel manufacturers, interest 

income and other miscellaneous sales. 

(2) For comparative purposes, the net earnings per Share has been calculated based on profit attributable to Shareholders and 

on the pre-Invitation issued share capital of 293,661,720 Shares. 

34

FINANCIAL POSITION OF OUR GROUP 

Audited 

As at 31 December 

1999 2000 2001 

As at 30 

June 2002 

$’000 $’000 $’000 $’000 

Fixed assets 7,350 15,628 22,129 23,915 

Goodwill 20 17 – 1,496 

Associated companies – 43 61 – 

Investments 50 250 250 250 

Deferred expenditure 899 324 – 635 

8,319 16,262 22,440 26,296 

Current assets 17,435 31,208 48,308 77,860 

Current liabilities (18,777) (30,312) (42,117) (69,291) 

Net current (liabilities)/ assets (1,342) 896 6,191 8,569 

Non-current liabilities (1,675) (6,235) (6,986) (6,190) 

5,302 10,923 21,645 28,675 

Share capital 200 200 2,000 2,000 (2) 

Foreign currency translation reserve – (10) 513 (55) 

Share application account – – – 670 (2) 

Retained profits 5,102 10,712 18,408 26,060 

Shareholders’ equity 5,302 10,902 20,921 28,675 

Minority interests – 21 724 – 

5,302 10,923 21,645 28,675 

NTA per Share (cents) (1) 1.49 3.60 7.37 9.04 

Notes:- 

(1) For comparative purposes, the NTA per Share has been calculated based on the pre-Invitation share capital of 293,661,720 

Shares. 

(2) 33,500 ordinary shares of S$1 each were issued on 10 December 2002 at an average premium of S$19 per share. 

35

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 

RESULT OF OPERATIONS 

The following discussion of our financial condition and results of operations should be read in conjunction 

with the Accountants’ Report, the Statement of Adjustments in relation to the Accountants’ Report and 

the related notes included elsewhere in this Prospectus. This discussion contains forward-looking 

statements that involve risks and uncertainties. Our actual results may differ from those projected in the 

forward-looking statements. Factors that might cause future results to differ significantly from those 

projected in the forward-looking statements include, but are not limited to, those discussed below and 

elsewhere in this Prospectus, particularly in “Risk Factors”. 

OVERVIEW 

We are primarily engaged in the business of manufacturers of specialty apparel for adults and children 

such as T-shirts, polo-shirts, blouses, shorts, pants, skirts, dresses, jackets, cardigans, robes, 

undergarments, sleepwear, lounge wear, maternity wear, children’s wear, baby wear, baby blanket and 

bibs. 

Our turnover and profit before taxation are mainly attributable to the manufacture of specialty apparel and 

the provision of related supply chain management (“SCM”) services. Our major market is the US market 

which makes up more than 90% of our total sales. The remaining turnover is derived from Europe, 

Japan and Canada markets. 

REVENUE 

Factors affecting our revenues are as follows: 

Ability to satisfy customers’ requirements 

Generally, our customers’ key requirements are timely delivery and quality. In the event that we are 

unable to satisfy these requirements, our sales will be adversely affected as these customers will reduce 

or minimize their orders to us. 

General economic condition of our market 

General economic conditions in our major market, the US, will affect consumers’ disposable income and 

spending patterns. Fluctuations in economic conditions will affect demand for our products. 

Seasonality factors 

We normally experienced higher sales in the second half of our financial year due to the year-end festive 

and holiday period. Approximately 55% to 60% of our sales are realised in the second half of the year. 

COST OF SALES 

Cost of sales comprises cost of direct materials, cost of direct labour, specialised support services and 

manufacturing overheads. 

Cost of direct materials comprises costs of fabric and accessories, freight inwards and laboratory testing 

expenses. They account for approximately 65% to 70% of our cost of sales. The production of fabric 

requires raw materials such as cotton. The cost of cotton is affected by market demand and supply and 

climatic conditions. Cost of direct labour accounts for approximately 20% to 25% of cost of sales. Direct 

labour comprises salaries and wages, statutory contributions, other staff costs of production and factory 

personnel and sub-contracting services. Direct labour costs are affected by wage levels, labour market 

conditions and government regulations such as pension fund contributions. Sub-contracting services are 

for outsourcing work which supplement our own manufacturing activities. Specialised support services 

comprise embroidery, screen printing and special garment treatment. Such charges account for 

approximately 3% to 8% of our cost of sales. Manufacturing overheads, accounting for approximately 5% 

to 8% of our cost of sales, comprise depreciation, rental, utilities, staff welfare, factory supplies, quota 

entitlements, repairs and maintenance. 

36

OPERATING EXPENSES 

Our operating expenses consist of the following: 

Distribution costs comprise transport and freight charges relating to exports. 

Administrative and other operating expenses comprise expenses from general administration, marketing, 

merchandising, finance, shipping and logistics, management information system, technical, product 

development, purchasing and production planning departments. The expenses also include bank 

charges, courier charges, depreciation, salaries and remuneration and statutory contributions, insurance, 

office supplies, staff welfare, telecommunications, travelling, utilities and exchange differences. 

Finance costs comprise interest payable to banks and finance companies. 

REVIEW OF PERFORMANCE 

FY1999 TO FY2000 

The increase of 84.5% in turnover to $104.6 million in FY2000 as compared to FY1999 was attributed to 

the following factors: 

(a) increased orders from existing customers; and 

(b) the setting up of our own Hong Kong marketing and sourcing subsidiary which help us to secure 

new customers such as Foot Locker, Inc. 

Cost of sales increased in FY2000 as a result of the increase in turnover. Sub-contracting charges as a 

percentage of turnover was higher in FY2000 compared with FY1999 due mainly to utilisation of subcontracting 

services in Brunei to meet customers’ orders while our second factory was still under 

construction. However, this increase in sub-contracting charges was partially offset by savings in labour 

costs. 

Operating expenses were 14.9% of turnover in FY2000 compared with 14.4% in FY1999. The marginal 

increase was due mainly to bank charges and interest expense due to the increase usage of bank 

facilities to support our business growth. The higher bank interest was also the result of a term loan 

taken up to finance the purchase of our Singapore premises at Tampines Street 92 which act as the 

Group headquarters. This was offset by a lower rate of increase in salaries and wages. Distribution 

costs as a percentage of our operating expenses remained unchanged. 

Profit before taxation increased by 14.5% from S$6.1 million to S$6.9 million. The rate of increase was 

lower than the rate of increase in turnover due mainly to lower gross profit margin. Our lower gross profit 

margin arose from the higher sub-contracting charges incurred during the period. 

FY2000 TO FY2001 

Our turnover increased by 72% to $180 million in FY2001 as compared with FY2000. We were able to 

secure additional orders from existing customers such as Old Navy (a label of Gap, Inc.) because of our 

standing as a reliable vendor and our ability to satisfy customers’ requirements. 

Other income increased primarily due to sales of excess quota rights of S$391,000 in FY2001 compared 

with only S$61,000 in FY2000. Such sales of excess quota rights do not contribute significantly to our 

business. 

The increase in cost of sales was in line with the increase in turnover. As our Brunei operations became 

fully operational, we reduced our reliance on sub-contracting services and hence incurred lower subcontracting 

charges. However, our labour costs and other factory overheads, such as factory rental, as 

a percentage of turnover increased because our new plants in El Salvador and Honduras were not 

operating at the optimal level during their start-up phase. 

37

Operating expenses were 14.0% of turnover in FY2001 compared with 14.9% in FY2000. The decrease 

in operating expenses ratio (expressed as a percentage of turnover) was due to decrease in distribution 

costs and bank charges and interest. The decrease in distribution costs was due to our ability to 

negotiate and secure lower transportation rates from the transport companies. Bank charges and 

interest expense registered a lower rate of increase due to lower utilisation of banking facilities because 

of funds generated from operations and lower interest rates. The decrease was partly offset by increase 

in our salaries and wages expenses due to the increase in headcount to support our expansion. 

Our profit before taxation increased to S$12 million in FY2001. Despite the lower gross profit margin, we 

were able to maintain the profit before taxation margin due to savings in operating expenses. 

PERIOD ENDED 30 JUNE 2002 COMPARED WITH PERIOD ENDED 30 JUNE 2001 

Our turnover increased by 23% in HY2002 over the same period in HY2001 due to the factories in El 

Salvador, Honduras and Brunei becoming fully operational and the higher level of productivity in all our 

plants. The higher turnover was also the result of sales contributed by new customers such as Phillips- 

Van Heusen and our added extension of SCM services to our customers. 

Our gross profit margin increased to 23.5% as compared to 22.8% in the previous corresponding period. 

With better production planning, we performed most of the manufacturing in-house and hence incurred 

lower sub-contracting charges. 

Operating expenses were 13.3% of turnover in HY2002 compared with 14.0% in HY2001. The decrease 

in operating expenses ratio was due to lower interest expense arising from lower utilisation of banking 

facilities. The decrease in interest expenses was also due to lower interest rates enjoyed by our Group in 

HY2002 as compared to HY2001. The decrease in interest expenses was partly offset by a marginal 

increase in distribution costs due to some air shipment to meet customers’ delivery schedule. 

Our profit before taxation increased by 43.8% from $6.7 million to $9.6 million. This was due to the 

increase in turnover and gross profit and better control of operating expenses. 

38

REVIEW OF FINANCIAL POSITION 

30 June 2002 vs 31 December 2001 

Non-current assets 

Fixed assets comprise land and buildings, building improvements and electrical fittings, furniture and 

fittings, motor vehicles, plant and machinery, factory and office equipment and motor vehicles. During the 

period, the Group acquired fixed assets amounting to $3.5 million. These additions to fixed assets consist 

mainly of a residential property in US and additional plant, machinery and equipment in our existing 

plants. This was offset by depreciation charge and currency realignment of $1.7 million. Therefore, this 

resulted in a net increase in fixed assets of $1.8 million for the period. 

Investments of $250,000 comprise club membership of $100,000 in a golf club and an investment in a 

unit trust managed by a bank of $150,000. There was no change during the 6 months period ended 30 

June 2002. 

Goodwill represents mainly goodwill on consolidation arising from the acquisition of the remaining 30% 

interest in PDAC in Brunei of approximately $1.6 million less amortisation of approximately $0.1 million. 

This acquisition was made because of PDAC’s importance as a manufacturing facility, performance and 

tax-exempt status. This will also enable us to have full operational and management control of PDAC. 

Deferred expenditure represents the cost of export quota entitlements less amounts charged to the profit 

and loss account upon utilisation. During the period, the Group acquired export quota entitlements which 

can be utilised for the FY2002 to FY2004 period amounting to $0.8 million. This was offset by an 

amortisation charge of $0.2 million. As a result, there was an increase in deferred expenditure of $0.6 

million. 

Current assets 

Current assets consist mainly of inventories, trade debtors, other debtors, deposits and prepayments and 

cash and bank balances. 

Current assets increased by nearly $30 million from $48 million to $78 million. The increase was mainly 

due to the increase in inventories and trade debtors. The inventory balance of $34 million as at 30 June 

2002 comprise mainly raw materials and work-in-progress. This was maintained to meet higher 

production demand in second half of 2002. 

The increase in current assets was also a result of $17 million increase in trade debtors. As our accounts 

receivable collection period is between 30 to 45 days and due to the fact we also recorded higher 

turnover in the month of June 2002, our trade debtors increased. 

Current liabilities 

Current liabilities consist mainly of trade creditors, other creditors and accruals, finance lease creditors, 

amount due to bankers and provision for taxation. 

Current liabilities increased by $27 million from $42 million to $69 million. This was mainly due to 

increase in trade payables (trade creditors plus trust receipts) of $28 million and is consistent with the 

increase in sales volume in FY2002. 

39

Non-current liabilities 

Non-current liabilities consist of finance lease creditors, long-term bank loans and deferred taxation. 

There was a reduction in non-current liabilities of $0.8 million due mainly to repayments of the term loan 

in respect of the Singapore premises of $0.3 million and finance lease obligations of $0.6 million. 

Shareholders’ equity 

Shareholders’ equity comprises share capital, share application account, foreign currency translation 

reserve and retained profits. 

Shareholders’ equity increased from $21.6 million as at 31 December 2001 to $28.7 million as at 30 June 

2002. The share application account is in respect of the issue of 33,500 shares of S$1 each at an 

average premium of $19 per share. Upon issue of the shares in December 2002, the amount of 

$636,500 was transferred to share capital and share premium accounts. The increase in retained profits 

was due to the profit for the period of $7.7 million. At the same time, the Group incurred a foreign 

currency translation loss of $0.6 million. 

LIQUIDITY AND CAPITAL RESOURCES 

6 months period 

FY2000 FY2001 ended 30 June 2002 

$’000 $’000 $’000 

Net cash from / (used in) operating activities 3,426 22,485 (10,762) 

Net cash used in investing activities (9,667) (11,401) (5,750) 

Net cash from /(used in) financing activities 5,121 1,445 (957) 

Net (decrease) / increase in cash and cash equivalents (1,120) 12,529 (17,469) 

In FY2000, we generated cash from operating activities before changes in working capital of S$10.7 

million. Net cash used in working capital amounted to S$4.4 million. This was mainly due to increase in 

stocks and debtors of S$6.1 million and S$1.0 million respectively offset by increase in creditors of S$3 

million. The increase in both stocks and creditors was in line with the increase in turnover from $56.7 

million in FY1999 to $104.6 million in FY2000. After payment of interest and income tax totalling S$2.9 

million, net cash generated from operating activities amounted to S$3.4 million. Net cash used in 

investing activities was mainly for purchase of fixed assets of S$9.1 million. The purchase of fixed assets 

relate mainly to our purchase of a factory building amounting to S$5.8 million in Singapore and additional 

plant, machinery and equipment in our existing plants. There was a net cash inflow from financing 

activities of S$5.1 million due mainly to receipts of bank term loans of S$5.3 million. 

In FY2001, we generated net cash from operating activities before changes in working capital of S$19.6 

million. Net cash generated from working capital amounted to S$6.6 million. The increase in debtors 

and creditors was in line with the increase in turnover from $104.6 million in FY2000 to $180.0 million in 

FY2001. This was mainly due to increase in creditors of S$12.7 million offset by increase in debtors of 

S$5.6 million. The increase in debtors and creditors was in line with the increase in turnover from $104.6 

million in FY2000 to $180.0 million in FY2001. After payment of interest and income tax totalling S$3.7 

million, net cash generated from operating activities amounted to S$22.5 million. Net cash used in 

investing activities was mainly for purchase of fixed assets amounted to S$8.8 million. Fixed assets 

purchased relate mainly to plant, machinery and equipment in our existing plants and new plants in 

Honduras and El Salvador. There was a net cash inflow from financing activities of S$1.4 million due 

mainly to net proceeds from finance lease financing of S$1.8 million offset by repayment of term loans of 

S$0.4 million. 

40

In HY2002, we generated net cash from operating activities before changes in working capital of S$11.5 

million. Net cash used in working capital amounted to S$20.6 million. This was mainly due to increase 

in stocks and debtors of S$19.7 million and S$17.8 million respectively offset by increase in creditors of 

S$17.3 million. After payment of interest and income tax totalling S$1.7 million, net cash used in 

operating activities amounted to S$10.8 million. Net cash used in investing activities was mainly for 

purchase of fixed assets of S$3.5 million, acquisition of minority interests' stakes in subsidiaries of S$1.4 

million and expenditure deferred of S$0.9 million. There was a net cash outflow from financing activities 

of S$1.0 million due mainly to repayment of finance lease financing and term loans. 

We had financed our growth through both internal and external sources. Our internal sources of cash 

comprise cash generated from operations and capital provided by our Shareholders. Our external 

sources of liquidity comprise bank facilities, hire purchase creditors and suppliers’ credit. 

As at the Latest Practicable Date, our material sources of unused liquidity are unutilised banking 

facilities amounting to an aggregate of approximately US$20.0 million. Taking into account the amount of 

unutilised facilities, our cash and cash equivalents on hand and the net proceeds from the issue of the 

Invitation Shares, our Directors are of the opinion that our Group has adequate working capital for our 

present requirements. 

PROFIT ESTIMATE 

Barring any unforeseen circumstances, our Directors estimate that our Group will achieve a profit before 

tax and profit after tax of $16.6 million and $13.8 million respectively, on a turnover of $221.0 million for 

FY2002. 

Our Directors believe that our Group will be able to achieve the profit estimate as most of our revenue is 

based on secured customer orders. Based on the audited results for the six months ended 30 June 

2002, our Group achieved a turnover, profit before taxation and profit after taxation of $92.0 million, $9.6 

million and $7.7 million respectively. 

Our turnover is estimated to increase by 22.8% from $180.0 million in FY2001 to $221.0 million in 

FY2002 due to the full-year contribution of our manufacturing facilities in El Salvador, Honduras and 

Brunei. We have also secured new customers such as Phillips-Van Heusen. 

We enjoyed higher profit margins due to our subsidiaries becoming fully operational, a higher level of 

productivity and better production planning. These had contributed to the increase in our profit before tax 

from $12.0 million in FY2001 to $16.6 million in FY2002. We have also benefited from tax savings 

because of tax-exempt status enjoyed by certain of our subsidiaries granted in FY2001 and FY2002. 

For the nine months ended 30 September 2002, we achieved a Group turnover, profit before tax and 

profit after tax of $171.0 million, $13.7 million and $11.4 million, respectively based on our unaudited 

management accounts. This represented 77.4%, 82.5% and 82.6% of the respective estimates. In the 

second half of the year, we had incurred additional airfreight costs amounting to $3.5 million due to 

unforeseen US port closures. We had also provided for staff bonus and directors’ fee amounting to $3.5 

million in the second half of the year. For the remaining three months of FY2002, we expect to recognise 

additional turnover and profit before tax of $50.0 million and $2.9 million respectively based on secured 

customers’ orders. 

State of order book 

As at 1 January 2003, we have secured confirmed customers’ orders for our products amounting to $53 

million which is scheduled to be fulfilled in the current financial year. 

41

OUR HISTORY 

Our Company was incorporated as Ocean Sky Knitted Garments Factory Pte Ltd in Singapore under the 

Companies Act on 8 September 1988 as a private limited company, and the name was changed to 

Ocean Sky Textile Pte Ltd on 9 October 1989. Our executive Directors Messrs Ang Boon Cheow Edward, 

Ang Boon Chong and Ang Siew Tiong, acquired our Company on 14 August 1995. On 7 February 2003, 

we converted to a public limited company and changed our name to Ocean Sky International Limited. 

The growth and development of our Group can be described in the following three phases:- 

Regionalisation 

Our Group’s total turnover was less than $1.7 million when our Executive Directors acquired the 

company in 1995. Operating out of a single factory in Kallang Basin Industrial Estate, our customers then 

were mainly local exporters. As our business grew and realising the high costs of operations in 

Singapore, we embarked on our regional expansion plans by setting up and acquiring cost-competitive 

production capacities in the region to compete more effectively in the apparel industry. 

In 1997, we set up an operations base in Malaysia to expand our production capacity. We acquired our 

subsidiary, Eng Soon, which operated a factory in Johor, Malaysia. We also established Suntex in 

Cambodia. Through Suntex, we were able to expand our production capacity by almost fourfolds. 

In 1998, in response to increased customer demand, we expanded further into the region by 

incorporating PDAC and setting up factories through it in Brunei. The PDAC factories increased our total 

production capacity by more than 70%. By 1998, through our expansion in Cambodia and Brunei, we 

were well-positioned and have established a strong foundation for the next phase of our globalisation 

plans. 

A sales and marketing subsidiary, OSHK, was set up in Hong Kong in 1999 as Hong Kong is the regional 

hub for the apparel industry. This office plays a vital role in enabling our Group to be in the forefront in 

the region’s biggest apparel buying centre and to secure a good share of the business. 

In 2000, we acquired a S$5.8 million factory building in Singapore, which now houses our management 

headquarters and our production base in Singapore. The acquisition of this factory building boosted our 

image and presence in the Singapore market. We also managed to increase our production efficiency 

through consolidating our operations. 

Globalisation 

In the next phase of development of our business, we expanded to El Salvador and Honduras in order to 

take advantage of the close proximity to the US market (which is our major market). In addition, we are 

able to enjoy the tax-free and quota-free benefits in those two countries. 

In 2000, we established Hoon’s in El Salvador and set up a factory through it. In the following year, we 

established Uniwear in Honduras and established a factory through it. Being close to the US market, 

transport costs is lowered and delivery time shortened, which resulted in shorter lead times and more 

competitive prices. 

In the first half of 2002, we set up OS Sourcing in Los Angeles as a marketing and sourcing office, thus 

further increasing our foothold in the US market. 

With the accession of the PRC into the World Trade Organisation, we initiated the next stage of our 

development beginning in the middle of 2001. In furtherance of our plans to develop our operations in the 

Hong Kong/China region, we began setting up subsidiaries in the PRC and an additional subsidiary in 

Hong Kong. In June 2002, we set up OS Apparel which commenced its manufacturing operations in 

November 2002. In the second half of 2002, we incorporated OGHK in Hong Kong and set up our 

second PRC subsidiary, Sing Cheng, to position ourselves for future business opportunities in Hong 

Kong and the PRC. 

42

The following table shows our growth in turnover from 1995 to 2001:- 

Year Turnover (S$’000) 

1995 1,700 

1996 10,129 

1997 14,359 

1998 27,397 

1999 56,705 

2000 104,645 

2001 179,988 

Development of SCM Services 

We recognise that there is potential in the demand for SCM services by our customers. To this end, our 

three offices in Singapore, Hong Kong and the US have started providing such services since 2000 and 

mainly to our customers served by our Central American operations. In FY2001, one quarter of our sales 

generated from our Central American orders include the provision of SCM services. 

We also recognise that we will be able to have better control over our supply of raw materials if we 

produce them ourselves. To produce raw materials required for our production, in addition to the 

marketing and sourcing functions of OS Sourcing, we expanded its business scope to include the 

manufacture of fabric. In October 2002, we set up a knitting plant in the US to provide knitted fabric to 

our production operations in Central America. As at November 2002, the production capacity of our 

knitting plant is estimated to be 300,000 to 350,000 pounds per month. By operating our own knitting 

plant, we are able to ensure consistent supply of high quality fabric and timely delivery of these fabric to 

meet our production requirements. 

Between June to September 2002, to facilitate the further development of SCM services in Central 

America, we set up three new subsidiaries, namely, Pacific Sky, OS Marketing and Blue Ocean in El 

Salvador, the US and Honduras respectively. OS Marketing is set up to undertake marketing services 

while Pacific Sky and Blue Ocean are set up to provide manufacturing services. Blue Ocean commenced 

production in October 2002 while OS Marketing and Pacific Sky have not commenced operations. 

As at 30 June 2002, we operated in nine countries with twelve production and sourcing operations with 

approximately 6,900 employees. Our turnover has grown from S$1.7 million when we first started in 

1995 to almost S$180 million in FY2001. For the six months ended 30 June 2002, our turnover is S$92.0 

million. 


Times with support of the Economic and Development Board, we were ranked 4th position amongst the 

best 50 local enterprises. 

43

OUR INDUSTRY 

Apparel is one of the oldest and largest export industries in the world. Most nations produce for the 

international textile and apparel market, making this one of the most global of all industries. Apparel is 

the typical “starter” industry for countries engaged in export-oriented industrialisation, and played the 

leading role in East Asia’s early export growth. 

Our Directors believe that Singapore remains an important business hub to the apparel manufacturers for 

business and management efficiencies due to its political stability, advanced business infrastructure and 

the authorities’ efforts in encouraging local manufacturers to develop operations both locally and 

internationally. However, changes in the global trading arena in recent years have made it imperative for 

local apparel manufacturers to change their strategies and emphasis. Frequent seasonal changes, price 

competitiveness and labour-intensive nature of the apparel manufacturing industry have made it essential 

for the industry to diversify and expand globally in order to take advantage of lower labour and operations 

costs, shorter lead time and readily availability of raw materials. Size of production capacity and 

geographical spread of operations of the manufacturers have thus become the key criteria taken into 

consideration by apparel retail companies when assigning orders. 

Besides the need to globalise, manufacturers also need to comply with stringent rules and regulations on 

social, labour, health and environmental standards set by the importing countries. We believe that to be 

successful in the industry, one of the critical success factors is the ability of the manufacturer to introduce 

and implement the required industrial and social standards in the countries where they operate. 

There is an increasing trend for apparel retail companies to out-source manufacturing function as well as 

other functions such as apparel designing, material sourcing, logistic and documentation management, 

etc. In other words, they are looking for a more comprehensive solution for their business in the whole 

apparel supply chain. We observe that most established apparel manufacturers in the global scene are 

capable of offering the supply chain management services in various degrees. 

In setting up of production operations, global apparel manufacturers are being drawn to Asian countries 

for the tapping of production capabilities. Growth of the apparel industry in Asia is expected to be 

accelerated by comparatively cheaper labour and freeing of trade restrictions in Asia. Amongst the Asian 

countries, our Directors believe the PRC will achieve the most significant growth in the apparel industry. 

With its accession to the World Trade Organisation, trade restrictions will be freed and at the same time, 

barriers of entry to the PRC market are expected to be lowered. Because of the abundance of 

comparatively cheaper labour in the PRC, global apparel manufacturers are expected to target the PRC 

as a preferred location for setting up production facilities 

In addition to the PRC, developing countries in Central America are also popular production bases 

because of their geographical advantage for penetrating the US consumer market, which is the world’s 

largest apparel importer. Close proximity to the US market means shorter delivery time and shorter leadtime, 

as well as cheaper transportation costs. Labour is also abundant and comparatively cheaper in 

these countries. In addition, these Central American countries enjoy free quota and duty-free status 

granted by the US. A combination of these factors sets the scene for growth of the apparel industry in 

developing countries in the Central America region. 

Our Directors are of the view that the above-mentioned trends and developments would bring about 

challenges and opportunities for the apparel manufacturing industry. As business rules would become 

more productivity-oriented in the future, manufacturers would have to constantly upgrade their 

management and production skills and technology in order to compete effectively on productivity and 

product and service quality in the highly globalised market. 

44

OUR BUSINESS 

Introduction 

We are a global one-stop specialty apparel manufacturer with SCM capabilities. While concentrating on 

our core business of being a specialty apparel manufacturer, our Group is fast expanding into related 

industries, such as providing SCM solution services ranging from sourcing of raw materials prior to the 

manufacturing process to logistic management of manufactured apparel. With our headquarters located 

in Singapore, our Group reaches out to our global customers through twelve strategically located 

production, sourcing and marketing operations around the world in nine different countries, namely 

Singapore, Malaysia, Cambodia, Brunei, Hong Kong, the PRC, Honduras, El Salvador and the US. Our 

Group has a total annual production capacity of 2.9 million dozens and annual turnover of S$180 million 

for FY2001. 

Our headquarters in Singapore co-ordinates all SCM services and provides administrative, management 

and financial support services to all our subsidiaries. 

China 

Hong Kong 

Cambodia 

Malaysia 

Singapore 

�� 

� 

� � 

� 

Brunei 

� � 

�� 

Although located in different parts of the world, each of our Group’s subsidiaries does not operate in 

isolation but in close and constant consultation with one another to maximise business and cost 

efficiencies. Taking into account all factors, including customers’ preference, costs, transportation and 

capacities, apparels of an order taken in one country may be manufactured in another. All production 

plants and offices are linked centrally to the headquarters in Singapore through the fully integrated 

computerised system to enable our Group to streamline our global operations and integrate our business 

processes for optimal business efficiencies. The geographic expansion of our Group into global strategic 

locations has also enabled our Group to take advantage of lower labour, productions and transportation 

costs. Ability to manufacture apparel close to our Group’s main export market, the US, has drastically 

shortened lead and delivery times. Currently, we have a total of nine production plants around the world. 

We have one production plant in each of Singapore, Malaysia, Cambodia, Brunei, the PRC, the US and 

EI Salvador, and two production plants in Honduras. 

With our core business in apparel manufacturing, our Group has expanded into related activities by 

providing pre-manufacturing SCM services, such as the design of apparel and the sourcing of materials, 

as well as post-manufacturing SCM services, such as logistic management and customs declaration and 

documentation. We have also acquired a knit factory in the US to provide additional SCM services. 

45 

� 

US 

El Salvador 

� � 

Production Plant, Sourcing & Marketing Office 

Production Plant 

Sourcing & Marketing Office 

Honduras

Our Group has a portfolio of client base which includes well-known international companies, such as 

Gap Inc., May Department Stores, Sears, Mervyn’s, Target, Foot Locker, Inc., Phillips-Van Heusen and 

Eddie Bauer, Inc. Our Group’s apparel products are wide-ranging and evolving according to fashion 

trends. 

Our Group is capable of manufacturing apparels from an assortment of fabrics, such as interlock, fancy 

ribs, jacquard and French ferry. The categories of apparels manufactured include Men, Ladies, Kids, 

Babies and Infants. The variety of products we manufacture also includes T-shirts, polo-shirts, blouses, 

shorts, pants, skirts, dresses, jackets, cardigans, robes, undergarments, sleepwear, lounge wear, 

maternity wear, children’s wear, baby wear, baby blanket and bibs. 

BUSINESS PROCESS 

Our Group recognises that in order to stay competitive in this intense business environment, we need to 

constantly deliver top quality products at competitive price and within shortest delivery time, and at the 

same time, provide prompt value-added services in the apparel supply chain. Towards this end, we have 

adopted effective and streamlined business processes in our operations, which can be broadly classified 

into three stages:- 

� Sales, marketing, sourcing and merchandising (collectively known as “pre-manufacturing supply 

chain management services”); 

� Apparel manufacturing; and 

� Logistics management and customs clearance (collectively known as “post-manufacturing supply 

chain management services”). 

The key stages of our business process are summarised in the chart on the following page :- 

46

Sales / Marketing / 

Sourcing / Merchandising 

Apparel Manufacturing 

Logistics Management & 

Custom Clearance 

Fabric Manufacturing 

& Sourcing 

Accessories Sourcing 

Customers’ 

Buying Objectives 

Product Development 

Production Planning 

Purchase of Materials 

Storage of Materials 

Inspection of Materials 

Cutting 

Sewing 

Apparel Inspection 

Pressing / Packing 

Final 

Quality Assurance 

Logistics 

Management 

Shipping 

Documentations 

Custom Clearance 

Warehousing 

Design & Trend 

Buyers Confirmation 

of Orders 

Embroidery/ Screen 

Printing, etc 

Apparel Dyeing / 

Washing 

47 

Technical & Sampling 

Real-Time 

Production 

Management 

System 

ERP 

System 

SUPPLY CHAIN MANAGEMENT INTEGRATED SERVICES

Pre-Manufacturing Supply Chain Management Services 

Understanding Customers’ Buying Objectives 

Our Group is strongly committed to providing best services to all our customers. Our Marketing and 

Merchandising Departments undertake to fully understand each customer’s market positioning, lines of 

products and product styles through regular contacts. During the marketing stage for each potential 

order, our personnel will also try to fully understand the objectives of the order so as to provide the best 

solutions for the customer. 

By attending trade shows, conducting market researches and through our global sourcing network, our 

Group continuously gathers information on latest and upcoming fashion trends and developments. This 

practice has enabled our Group to effectively share constructive information with our customers to assist 

them with their product development process. It has also enabled our Group to promptly respond to 

customers’ requests for samples and quotations and the subsequent delivery of orders. 

Fabric and Accessories Sourcing, Design & Trend Services, Technical & Sampling 

Through our Group’s wide global network, we are able to effectively source for fabric and accessories 

according to our customers’ requirements at competitive prices and from reliable suppliers. At the same 

time, our Group’s Technical Department is able to provide valuable technical advices on fabric selection, 

consumption, cutting and sewing constructions. The Department would also analyse and recommend 

the best production processes and sequence to adopt for each order based on the technical capabilities 

of each production base so as to achieve maximum productivity and cost efficiency. The Department 

also plays an important role in the evaluation, testing and modifying samples to the satisfaction of the 

customers. 

Product Development 

Through keeping abreast with latest and upcoming fashion trends and researches, our Product 

Development Department pro-actively develops new product designs for our customers’ considerations. 

Together with the Marketing and Merchandising Departments, the Product Development Department 

works closely with our customers so as to meet their requirements and assist them in their product 

development process. 

Production Planning 

Upon receipt of confirmation of orders from our customers, the Global Factory Planning Department 

would develop the production schedule taking into consideration clients’ preference of production 

location, factory capacities, manufacturing methods, source of fabric and accessories, delivery 

destination, transportation costs, etc. 

Purchase of Materials 

Once production schedule has been determined, the Purchasing Department would purchase the 

required fabrics and accessories according to customer’s requirements. All fabric and accessories 

purchased are subjected to in-coming quality inspection to ensure that they meet the specifications, 

quality and quantity ordered. 

Storage of Fabrics & Accessories 

Each fabric and accessories delivery is checked against the order. The fabric and accessories are then 

weighted, labelled and recorded before being neatly and systematically stored to enable accurate and 

easy retrieval. 

Apparel Manufacturing 

Our Group adopts fully or semi-automated streamlined production processes in all our global operations 

in order to maximise productivity at minimal cost and to reduce human errors. At the same time, our 

Group has put in place stringent quality control policies and adopts total quality inspection throughout the 

entire production process to ensure strict compliance to customers’ quality, quantity and social 

requirements. 

Our Group has also began our first phase of integration of both the operations and management 

processes through real-time production management and ERP systems. These systems enable both the 

management and customers to effectively monitor real-time production processes at every stage. They 

also enable full flexibility in administering changes to orders at any stage of the production process. 

Through these systems, defects, bottlenecks are quickly and easily detected, addressed and resolved at 

early stages thus drastically reducing wastage and time. 

48

Inspection of Fabrics & Accessories 

Required fabrics and accessories are retrieved from store and are thoroughly checked again for defects 

such as flaws in material, inconsistency in colour tone and printing defects. Any defective fabrics and 

accessories detected are rejected, returned and replaced immediately. At the same time shrinkage and 

twisting tests are conducted. Fabrics are sent for steaming, washing or dyeing, if required. 

Cutting 

Using computer-aided design (CAD) equipment, patterns of various components of the apparel to be 

manufactured are drawn out using the computer. The computer also arranges all the different 

components into a marker layout. The marker layout would be placed to achieve the most efficient 

cutting method so that fabric wastage would be kept to the minimum. 

Before actual cutting is undertaken, the Cutting Department would develop cutting plans using 

information from the fabric testing report, styling, embroidery requirements, patterns and marker layouts 

provided, etc. Fabric to be used is first spread and checked once more for defects. The fabric are then 

cut using the cutting machine and sent to the Sewing Department for assembly. 

Embroidery & Screen Printing 

If required, embroidery are added to the cut fabrics using our in-house embroidery facilities undertaken 

by a team of experienced embroidery staff and closely supervised and monitored by the embroidery 

managers to ensure consistency and accuracy. If necessary, screen-printing works are out-sourced and 

undertaken by our contractors who are selected based on stringent standards and requirements. Quality 

checks are carried out both in-house and at the contractors’ premises to ensure strict compliance to 

customers’ requirements. 

Sewing and Construction 

The Sewing Department plans and develops the best handling and sewing methods for each order. 

Samples, handling and sewing methods are clearly shown and explained to our teams of experienced 

sewers before commencement of the sewing process in a safe, clean, comfortable and systematic 

environment. All required tools, eg. machinery, needles, accessories, etc. for the process are checked 

and assembled before commencement of production to reduce disruption. New recruits will be placed on 

the sewing line only after they have undergone strict on-the-job training and attachment to experienced 

sewers. 

Line supervisors and checkers conduct quality checks throughout the entire sewing process to ensure 

that the sewers adopt the recommended best handling and sewing methods. This is to ensure 

consistency and meeting the required standards at the optimal productivity level. These regular quality 

checks also enable unacceptable construction works to be detected and corrected immediately. 

Completed apparel are checked and tallied daily to ensure that production is on schedule for timely 

delivery. 

Apparel Dyeing / Washing 

The completed apparel are then washed using our in-house washing facilities. Sample washing will be 

conducted and sent for size, specification, appearance and quality checks before bulk washing is 

undertaken. Water quality and temperature are monitored closely throughout the entire washing process. 

If required, special dying works are undertaken by our appointed contractors with strict quality control 

and 100% quality checks at the contractors’ premises. 

Apparel Quality Inspection 

Each and every completed apparel is subjected to 100% thorough quality check before it can be sent for 

pressing and packing. For example, a T-shirt is subject to 15 or more measurement checks in addition to 

sewing quality, colour tone, printing and stain checks, etc. 

Pressing, Packing & Final Quality Assurance 

The outline of the apparel is drawn on the pressing board, which would enable another measurement 

check to be conducted during the pressing stage. The apparels are then tagged, folded and packed 

according to customers’ handling and shipping requirements. All apparels are subjected to one final 

inspection and recording before being put into cartons. Each carton will be checked and tallied before 

being sealed and loaded onto containers for shipment. 

49

Post-Manufacturing Supply Chain Management 

By working closely with our various agencies, our Global Logistics Department would determine the 

most efficient and cost effective shipping and transportation routes for timely delivery of the goods to our 

customers. 

We also offer post-manufacturing services beyond the usual free on board (F.O.B.) mode. For some 

customers using our manufacturing bases in El Salvador and Honduras, we offer handling of shipping 

documentation, customs documentation and clearance, insurance coverage arrangement, import duty 

payment on behalf of customers, and inland transport of manufactured apparels to customers’ 

warehouses from port of disembarkation, etc. We intend to expand these SCM services beyond El 

Salvador and Honduras in the near future. 

These post-manufacturing SCM services add value to the apparel supply chain, help customers reduce 

delivery time and save cost, and at the same time give our Group a greater control over the whole supply 

and delivery processes to enhance our competitiveness in the market. 

OUR MANUFACTURING CAPACITY 

Our manufacturing capacity for the past 3 financial years and for the 6 months period ended 30 June 

2002 is as follows:- 

Location Number of Sewers Annual Annual Percentage of 

Manufacturing Manufacturing Utilisation 

Capacity Utilisation % 

(in sewing man- (in sewing manhours) 

hours) 

’000 ’000 

FY1999 

Singapore 80 194 175 90 

Malaysia 50 120 102 85 

Cambodia 1,000 2,336 1,986 85 

Brunei 450 1,098 988 90 

Honduras – – – – 

El Salvador – – – – 

Total 1,580 3,748 3,251 87 

FY2000 

Singapore 120 291 268 92 

Malaysia 70 169 148 88 

Cambodia 1,200 2,803 2,523 90 

Brunei 700 1,708 1,571 92 

Honduras 220 532 468 88 

El Salvador 250 606 515 85 

Total 2,560 6,109 5,493 90 

FY2001 

Singapore 150 364 349 96 

Malaysia 120 289 260 90 

Cambodia 1,228 2,869 2,668 93 

Brunei 1,100 2,684 2,577 96 

Honduras 250 604 544 90 

El Salvador 300 727 654 90 

Total 3,148 7,537 7,052 94 

6 month period 

ended 30 June 2002 

Singapore 190 230 221 96 

Malaysia 130 157 141 90 

Cambodia 1,440 1,682 1,598 95 

Brunei 1,100 1,342 1,288 96 

Honduras 300 362 344 95 

El Salvador 576 698 663 95 

Total 3,736 4,471 4,255 95 

50

SOCIAL COMPLIANCE 

We believe in maintaining our Group as an ethical and responsible corporation. To this end, we have in 

place an in-house committee chaired by our Executive Chairman, which ensures that our operations 

comply with social issues such as the protection of human rights and non-exploitation of labour. Our inhouse 

committee also ensures that we provide adequate staff benefits and maintain good relations with 

our employees. As part of our compliance with environmental and social requirements, we ensure that all 

manufacturing plants are non-polluting and environment-friendly. 

Most of our major customers, especially the US customers, are concerned with social and environmental 

issues such as the protection of human rights, labour union, anti-pollution and social health 

requirements. We are able to gain the confidence and support of these major US customers because we 

have put in place an effective in-house compliance mechanism to ensure that we consistently comply 

with such environmental and social requirements. 

QUALITY ASSURANCE 

Our Group places considerable emphasis on quality assurance in our operations as well as timely 

delivery of our goods. We ensure that every staff is aware of their responsibility to ensure that our goods 

are of high quality. 

Most of our customers sell our products under internationally renowned brand names. Understandably, 

they place great emphasis on the quality of their products. To ensure that our staff are well trained and 

aware of the procedures which they have to follow to ensure quality of our goods, we compile handbooks 

incorporating guidelines on all our functions and operations. Our quality assurance team monitors the 

adherence of our Group’s production guidelines by implementing a policy of 100% checks on all goods at 

each step of the production process. Stringent quality control procedures are set in place at each stage 

of our production process. We also exercise quality control during the purchase of raw materials and 

accessories. Raw materials and accessories are purchased only from approved suppliers who meet our 

standards. All materials and accessories are inspected before they are used for production to ensure that 

they are of the required specifications and free from defects. All finished products are subject to a final 

inspection before delivery. 

As the manufacture of apparels remains a labour-intensive process, staff in all departments are trained to 

pro-actively look out for potential human errors in the various stages of production. In our in-house 

training progress, our staff is exposed to each and every step of the production process so that they 

could understand how their work would affect the rest of the process and vice versa. Such training helps 

our staff to appreciate the importance of their individual roles and understand the concept of total quality 

management. 

We also encourage communication amongst staff concerning work process and quality assurance. Daily 

production meetings and the weekly inter-department meetings are held for our staff to meet and discuss 

measures which can be taken to ensure smooth flow of work process and to reduce wastage and human 

errors to the minimum. 

MARKETING 

Our Group’s overall marketing activities are headed by our Executive Director and Chief Operating 

Officer, Mr Ang Boon Chong. He establishes and maintains relationships with our customers in the 

apparel industry. This is done by keeping in close contact with our customers’ buying offices and 

appointed agents. 

Our Executive Chairman, Mr Ang Boon Cheow Edward, markets our services and products during his 

frequent overseas visits to our customers. Through such visits, we are able to understand the plans and 

development of our customers and are able to package our sales proposals tailored to their development 

plans. 

We have a total of 80 staff in our marketing team, with 50 of them based in Singapore, 25 in Hong Kong, 

and 5 in the US. 

51

Our marketing team is not only well-versed in the latest trends and tastes in fashion, but also have good 

working knowledge on fabric, styling, production process and costing. Our team is able to give advice to 

help our customers make better decisions as they understand the background and requirements of our 

customers, such as their financial status, product line, buying power and product trends. 

We develop new businesses mainly through direct marketing. Our Marketing Department not only keeps 

abreast of upcoming fashion trends, but also industry developments through regular participation in local 

and overseas trade shows. Our Marketing Department approaches potential customers through direct 

contacts and presentations after in-depth analysis and exchanging information on the potential 

customers’ product styles and requirements within our global network. 

In order to be on the forefront of fashion trends, our Marketing Department also source for the latest 

designs through trade directories such as the World Global Style Network, which is an online network 

used by designers to exchange their views on current fashion trends, with highlights of their own designs. 

AWARDS AND ACCREDITATION 


Times with support of the Economic Development Board, our Company’s good business performance 

had enabled US to earn 19th position amongst the best 50 local enterprises. 

In 2001, we were ranked 13th in the Enterprise 50 Awards and were also given the prestigious ‘Shining 

Star Award’, given in recognition of our Group’s contributions to the apparel industry. 

In 2002, we were ranked 4th in the Enterprise 50 Awards. 

We also received awards from our buyers overseas in recognition of the high standard of our service, 

which include, Outstanding Performance Award from May Department Stores International and 

Outstanding Award from the Associated Merchandising Corporation of USA. 

In January 2003, Suntex, our Cambodian subsidiary, was awarded the Certificate of High Dignitary 

Sovathara from the Royal Government of Cambodia for its good performance. 

52

COMPETITION AND COMPETITIVE STRENGTHS 

COMPETITION 

As an export-oriented enterprise, our overall competition environment and our market competition are 

subject largely to global developments. We identify the following three developments as the main factors 

that would affect the competition in our business: 

Increasing Demand for Manufacturers with Global Capability 

As a growing trend, US and EU apparel retail companies are concentrating on developing marketable 

brand names internationally in order to increase their business. In order to reach out to customers in 

various countries worldwide in short lead time, these apparel retail companies are outsourcing to 

manufacturers who are not just cost competitive but also have a wide spread of operation capability near 

to their markets. These apparel retail companies are likely to look for manufacturers with global operation 

capability and the size and flexibility to respond to their specific requirements within short notices. 

We expect that more apparel manufacturers would globalise their operations. Operating in nine 

countries, our Group is well positioned in this regard and would continue to explore new avenues to 

further expand and strengthen our global operations to meet future challenges. 

Increasing Demand for Reliable and Responsible Manufacturers 

Apparel retail companies are more cautious nowadays in the selection of manufacturers. The apparel 

business is subject to fast changes in fashion trends and keen competition in the retailing market. 

Besides cost competitiveness, short lead time and timely delivery have become the most crucial factors 

to apparel retail companies when selecting manufacturers. Also, with the global market becoming more 

and more transparent, they would like to make sure that the manufacturers who undertake their jobs 

must comply with stipulated social, labour, health and environmental standards. 

The US and EU apparel retail companies are more likely to appoint manufacturers who have proven 

track records as reliable and responsible enterprises. In this regard, we envisage that our competition will 

be from manufacturers with equally established track records. 

Impacts of Trade Liberalisation 

Our Directors are of the opinion that the abolition of the textile and apparel quota system in 2005, via 

agreements entered into under the auspices of the World Trade Organisation, would generally result in 

increased competition. Manufacturers, including ourselves, can take advantage of the liberalisation to set 

up more apparel manufacturing operations without being restricted by quotas on export. Hence, we may 

face new players who may be established players in other markets to compete in our existing markets. 

Trade liberalisation would also bring about new opportunities for venturing into new businesses related to 

the industry, such as trading and retailing of apparels, in the once protected markets such as the PRC. 

We envisage that the industry would become more integrated in the future. Companies with bigger 

resources and larger network are more likely to be able to take full advantage of this industry integration. 

The apparel business is one of the world’s largest and most globalised businesses. Opportunities for 

growth and for integration are abundant. To the best of our knowledge, some of our main competitors are 

Sing Lun Holdings Limited in Singapore, PCCS Group Berhad in Malaysia and Carry Wealth Holdings 

Ltd in Hong Kong. 

53

COMPETITIVE STRENGTHS 

Over the years, through continuous reviewing, management upgrading, process streamlining and 

improvement and investments on globalisation of operations and business integration, our Directors 

believe that we had established the following competitive strengths: 

Commitment on Quality and Timely Delivery 

Since the inception of the Group by our Directors, we had set a high standard on quality assurance and 

timely delivery and staged a strong commitment to achieve the standard. The Group’s whole operational 

process is subjected to continuous and frequent reviews and improvements to reflect new requirements 

in the marketplace. Detailed operational and manufacturing procedures and quality assurance 

procedures are documented. Staff are in turn trained and instructed to follow and comply strictly with the 

procedures. We also inculcate a working culture within the Group for close consultation and coordination 

among various operational bases, and among the various departments and levels of staff involved in the 

various stages of the operational process. Work progress for each and every order at various stages are 

recorded and monitored and through the integrated management information system (“MIS”) shared 

among staff involved. Informal and formal meetings are frequently held to inform and discuss work 

progress and issues to proactively ensure that good quality and timely delivery are achieved all the times. 

Our Directors also continuously seek new ways to achieve better quality and shortening of lead time. 

Where possible and viable, automation and semi-automation processes are introduced to achieve better 

quality and faster and more efficient work. In our globalisation plan, our investments in establishing 

factories in Honduras and El Salvador had created strategic advantage in geographical proximity with our 

main market, the US. This geographical proximity leads to faster delivery time as well as saving in 

transportation cost for our customers. 

Sizeable, Strategically Located and Cost-Competitive Global Operational Capability 

As the apparel industry is becoming more and more globalised, there is a growing trend for established 

apparel retail companies to select manufacturers who have sizeable capability which are strategically 

located worldwide to offer cost-competitive solutions. 

Size of operations is an important consideration factor as, to a great extent, it reflects the manufacturers’ 

readiness and flexibility to respond to customers’ specific requirements and ensure timely delivery. 

Having a global annual production capacity of 3.6 million dozens (as at end of FY2002), our various 

operational bases worldwide, working closely together as a team, has the size, range and flexibility to 

meet the challenging requirements of the industry. 

With a global operational network, we are in a better position to offer more attractive solutions in 

materials sourcing and production locations to the customers. Our sourcing and manufacturing bases in 

the three regions, namely, Southeast Asia, Hong Kong/China and Central America/US, complement one 

another in terms of competitive strengths. Our Brunei factories are not subjected to quota restriction; our 

Cambodia operations, besides being cost-competitive, has secured sufficient quota for the next two 

years; our Hong Kong subsidiary plays a strategic role in Hong Kong’s apparel trading hub, in trends and 

market information gathering, in keeping in close touch with decision-makers of our customers, in 

sourcing good and cost-competitive materials from the PRC and in securing additional business for our 

Group; our factories in the PRC (one of which has been operational since November 2002) provide 

additional cost-competitiveness advantage to our overall global operations as labour there is cheap and 

abundant; our factories in Honduras and El Salvador, besides providing quota-free and import duty-free 

advantages, are close to our US customers and help them cut down lead time and transportation cost; 

our subsidiaries in the US create competitive advantage in marketing, in providing material sourcing and 

other SCM service, and in fabric manufacturing to support our Central American operations and 

contribute additional competitive strength to our Group in general; and our Singapore and Malaysia 

factories have the capability to design and manufacture more high-end and complex products. 

In short, each of our Group’s operational bases has its own unique competitive strength. The 

combination of these strengths provides the necessary synergy crucial in securing large orders from big 

apparel retail companies in the global market. 

54

Good Social Compliance Records 

We are able to gain the confidence and respect from major customers, in particular, customers in the US, 

through our excellent records in compliance with social and environmental policies, such as the 

protection of human rights, labour union requirements, anti-pollution requirements and social health 

requirements (the “environmental and social requirements”). As part of our compliance with 

environmental and social requirements, we ensure that all manufacturing plants are non-polluting and 

environment-friendly. We also maintain cordial relationships with labour unions and offer our workers 

essential employee benefits and ensure that they are not subject to exploitation. 

We believe in maintaining our Group as an ethical and responsible corporation. To this end, we have in 

place an in-house committee (chaired by our Executive Chairman Mr Ang Boon Cheow Edward) to 

ensure that such environmental and social requirements are being complied with. Our major international 

customers place great emphasis on environmental and social compliance requirements, and as a 

general policy, they select only manufacturers who produce their goods in compliance with such 

requirements. 

SCM Capability 

The integration into the SCM gives us a greater control over the timely delivery of our goods to our 

customers and at the same time helps customers save cost and time. Equally importantly, it strengthens 

our working relations with our customers and thereby enhances our long-term competitiveness. As part 

of our SCM services, we offer sales on Delivery Duty Paid (“DDP”) terms, i.e. goods are delivered to the 

customers’ warehouse and in connection therewith, we make payment for all applicable customs import 

duties. 

For our buyers, the availability of SCM services would enable them to focus their resources on their core 

business of product design and development and the marketing of their brands and products. At the 

same time these buyers could also enjoy savings in operating costs, improved quality of goods and faster 

delivery time and hence enhance their competitiveness. 

For us, the provision of SCM services to our buyers would result in tangible benefits in terms of better 

margins, as well as intangible benefits in terms establishing closer working relationships with our 

customers. We will have better understanding of our customers’ needs and more control over their logistic 

arrangement, all of which would in turn lead to improvement in delivery time and productivity. The SCM 

arrangement also strengthens the relations and mutual trust between our customers and us and 

enhances our competitive edge in the apparel industry. 

Professional and Experienced Management Team and Staff 

Our management team, comprising the Executive Directors and Executive Officers, has been 

instrumental in spearheading our growth over the past few years. Each management team member has 

an average of more than 10 years of industry experience. The team works closely to formulate and 

ensure the implementation of growth strategies of our Group. 

Under their leadership, our Group has successfully identified and will continue to identify new business 

opportunities for expansion. The management team is able to guide and motivate staff of all levels to 

perform to the best of their ability in an open and participative working environment. The senior 

management exercises a very hands-on approach in carrying out their work. 

We adopt an open working environment where feedback and ideas from staff are sought and evaluated 

constantly. Our staff also maintains close contact and rapport with our customers in order to understand 

their needs in order to serve them better. Where applicable, we adopt their suggestions and implement 

changes. Such changes not only let our staff and customers feel that they are being valued by us, but 

also enable us to serve the needs of our customers better. 

55

Our global operations provide our management team and staff valuable opportunities to gain knowledge 

and experience from their exposure in these countries. We are well positioned to draw on these 

experiences and utilise our skills and knowledge in the event that we seek to operate in other countries 

in the future. 

Efficient MIS and Production Tracking and Management Systems 

Customers increasingly expect the manufacturers to have an advanced and efficient management 

system in place so as to provide quick and accurate responses to the queries and needs of the 

customers. We achieve high level of efficiency and competitiveness through the intensive use of 

advanced information technology through our management information system and operations 

management systems. We have in place an online computer system for all general and financial 

management functions of our Group. We started the initial phase of our real-time production tracking and 

management system in Singapore. The full system will be implemented in phases and will eventually link 

up all the factories and sourcing bases under our Group. These information and operations management 

systems allow us to plan and manage our operations better, pinpoint and forecast possible problems, and 

enhance the speed and increase flexibility, options and solutions for both our customers and our 

management. 

We set our production standards and procedures with inputs from managers from all our production 

bases. Manuals on various operational functions are compiled from these inputs and feedback and 

distributed to all factories for compliance. Our Directors believe that this gives us a competitive edge and 

enables us to maintain our high standards of production and to reduce costs which will in turn generate 

profits for our Group. 

56

PROSPECTS AND FUTURE PLANS 

PROSPECTS 

Our Directors are of the view that we have now laid a foundation and infrastructure in the apparel 

manufacturing business and established a network of customers and suppliers in the industry to enable 

us to further advance the business and explore new opportunities in the future. 

Our Directors believe that prospects for future apparel business for our Group should be promising and 

challenging based on the following observations :- 

Liberalisation of the Global Market 

Our Directors have observed that the apparel industry is gradually evolving into a scenario whereby 

major apparel manufacturers will operate on a global scale. Liberalisation of the global market would 

enhance the transparency and operational efficiency of the market and open up new market 

opportunities in the world. As more members of the World Trade Organisation around the world are 

required to lift their import restrictions of apparel into their domestic markets, we believe that more 

opportunities will be created for us to penetrate these markets. 

Increase in Demand for Apparel Manufacturers with Integrated Services 

There is a growing trend for customers to farm out part or all of the supply chain tasks to the 

manufacturers outside of their region. There is thus increasing demand for apparel manufacturers who 

can provide additional value-added services to customers. In addition, major customers in the US and 

other markets would continue to rely mainly on sizeable and reputable manufacturers with production 

facilities and management methods that measure up to their stringent requirements. 

We believe that with our global operations and provision of SCM services we are positioned to meet this 

demand. Furthermore, our reputation and track record, as well as our large-scaled operations therefore 

give us an advantage over our competitors. 

FUTURE PLANS 

Our plans for the next five years are as set out below: 

a. We will be expanding the range and profile of our customers beyond our current main market in 

the US. In this respect, we would explore new markets in Europe, Japan and the emerging PRC. 

b. We will continue to expand and upgrade our production capacity and capability worldwide. The 

PRC and Central America are locations in which we would invest substantially in the next few 

years. Subsequently, we will be looking at investments in Vietnam. In the long term, we would also 

be exploring investment opportunities in some Sub-Sahara African countries with the intention of 

creating strategic advantages to enter the European market. 

c. We will continue to improve our efficiency and productivity through production management and 

process refinement. We will also continue to invest in more efficient ways of production and in 

management tools. We will set aside a budget to automate part of our production process to cater 

for more complicated styling jobs. We expect to integrate the real-time production and 

management control systems for all our global operations by end 2003. 

57

d. We will expand the scope of our SCM services and offer it to more customers outside the Central 

American region. We target to provide SCM services to all of our customers in the Central 

American region and to one quarter of our orders worldwide within the next five years. With the 

anticipated completion of the integration of our real-time production and management control 

system globally by the end of 2003, the quality, scope and efficiency of our SCM services would 

be greatly enhanced. We believe that a well-developed SCM capability could emerge as a very 

unique competitive edge, and possibly a critical success factor in our competition in the global 

market in the long term. 

e. We will continue to explore and integrate into other domains of the value chain of the apparel 

business such as fabric manufacturing and processing, and screen printing. Where opportunities 

arise, we will expand our capabilities and business by acquiring or forming strategic partnerships 

or joint ventures with other manufacturers in these domains, who can add value to our business by 

allowing us to have greater involvement in businesses on which our present business is reliant. 

We may effect this by way of strategic acquisitions or forming alliances or joint ventures with 

upstream service providers such as fabric mills. We believe that this will give us additional 

competitive edge over our competitors. 

58

OUR MAJOR CUSTOMERS 

Our customers range from specialty brand retailers, retail chains, wholesalers to department stores, 

discount stores and mail-order houses. They include the following renowned companies:- 

– Gap Inc.; 

– Foot Locker, Inc.; 

– May Department Stores; 

– Sears; 

– Mervyn’s; 

– Target Corporation; 

– Phillips-Van Heusen; and 

– Eddie Bauer, Inc. 

Famous brand names owned by our customers include the following:- 

– Gap, Banana Republic and Old Navy (owned by Gap Inc); 

– Lady Foot Locker, Foot Locker, Champs, East Bay, Everlast and Team Edition (owned by Foot 

Locker, Inc); 

– John Ashford, Christie Brooks, Just Friends, Lord & Taylor and Spotted Frogs (owned by May 

Department Stores); 

– CRB and TKS (owned by Sears); 

– High Sierra, Sprockets and Private Luxuries (owned by Mervyn’s); 

– Circo and Cherokee (owned by Target’s) 

– IZOD, Geoffrey Beene, Phillips-Van Heusen and Arrow (owned by Phillips-Van Heusen); and 

– Eddie Bauer (owned by Eddie Bauer, Inc.) 

The table below sets forth the respective portion of revenue for the applicable period attributable to our 

customers who accounted for more than 5% of our Group revenue in any of the last 3 financial years 

ended 31 December 1999, 2000 and 2001:- 

Name Of Customer FY1999 FY2000 FY2001 

% % % 

Gap Inc. 

Old Navy 34.1 32.0 47.2 

Gap 37.6 30.5 18.8 

Banana Republic – – 6.4 

Total for Gap Inc. 71.7 62.5 72.4 

Foot Locker, Inc. – 7.7 7.2 

May Department Stores 6.6 4.7 3.9 

None of our Directors or substantial Shareholders has any interest, direct or indirect, in any of the major 

customers mentioned above. 

We have signed non-binding master agreements with certain of our customers including Gap Inc., which 

sets out the broad terms concerning future purchase orders to be issued by these customers to us. Such 

arrangement is a common industry practice as it facilitates the frequent orders which we receive from 

these customers from time to time. 

59

OUR MAJOR SUPPLIERS 

With our globalised and strategically located sourcing and manufacturing bases, we are able to source 

for a wide assortment of good quality fabrics and accessories, as well as support services at competitive 

prices. We source and purchase materials for our customers both regionally and globally. 

In our selection of suppliers (whether from our customers’ pre-approved list or from our source of 

suppliers) and the making of our order allocations amongst the suppliers, we take into consideration the 

quality of service, quality of components, reliability, delivery time and credit terms provided by the 

suppliers. 

We have a varied and steady source of fabric supply from countries such as China, Taiwan, Korea, Hong 

Kong, the US, Malaysia and Singapore. 

The table below sets forth the respective portion of purchases for the applicable period attributable to our 

suppliers who accounted for more than 5% of our Group purchases in any of the past three financial 

years ended 31 December 1999, 2000 and 2001:- 

Name Of Supplier Products supplied FY1999 FY2000 FY2001 

% % % 

Nice Dyeing Factory Limited Fabric 3.6 6.3 15.2 

Kam Hing Piece Works Limited Fabric 8.5 13.1 18.2 

Oceanic Textiles Pte Ltd Fabric 2.6 3.4 6.4 

South Asia Textile Industries Pte Ltd Fabric 4.5 3.6 6.8 

To the best of our Directors’ knowledge at the date of this Prospectus, we are not aware of any 

information or arrangements which would lead to a cessation or termination of our current relationship 

with any of our major suppliers. 

None of our Directors or substantial Shareholders has any interest, direct or indirect, in any of our 

Group’s major suppliers mentioned above. 

60

OUR EMPLOYEES 

Staff Strength 

Our full-time staff strength as at 30 June 2002 is 6,900, comprising 6,489 production staff and 411 office 

staff. 

Staff Training 

Due to the nature of our business, the constant training and retraining of our staff is necessary to ensure 

that we are able to service our customers and keep in touch with the latest designs and developments in 

the industry. Accordingly, we have always placed strong emphasis on staff training and professional 

development. 

Designers and production managers are constantly updated with the latest trends in the industry. They 

are sent to attend seminars on apparel design and materials at local institutions. Conscious efforts are 

made to train supervisors and managers on production techniques, material waste control, quality 

assurance and compliance to work schedule. 

Other than training on sales and procedures, our Group also emphases on imparting and orientation of 

our staff on the working culture of our Group. This enables us to inculcate the spirit of teamwork among 

the staff and prepare them for meeting new challenges in the future. 

Production and Quality Assurance Staff 

Our Group practises intensive on-the-job training for our staff in order to uphold a high standard of 

production and customer service. Our in-house training programmes also play an important part in 

preparing supervisors and managers to take up higher postings needed for our fast expansion of 

business overseas. Further, to ensure that we have sufficient managers and supervisors in the course of 

our business expansion, as well as for the personal improvement of our staffs, we have an in-house proactive 

training scheme to train and prepare our staff to take up higher postings in new factories and 

offices overseas. 

We develop and update handbooks and manuals on all the functions of the operations, which are well 

documented in both electronic and hard copies. These handbooks and manuals are the main references 

used for training our workers on work standards and procedures across the various locations. 

We train our managerial and supervisory staff to understand the various production techniques and 

procedures, waste control, quality assurance measures and other matters related to their work. Besides 

providing training on the specific skills and procedures required for the job, we also emphases on the 

need to develop a healthy work culture amongst staffs. For example, to enhance better teamwork and 

understanding of work difficulties of other staffs and departments, we expose our staff to the job nature 

and problems faced by others. 

Our staff in Singapore also frequently attend training courses conducted by the local polytechnics, 

Singapore Textile and Fashion Federation, regional trade and fashion shows, seminars and talks on the 

fashion industry and investment opportunities relating to the industry. 

Sales, Marketing and Support Staff 

Our sales, marketing and support staffs are kept informed on the latest business developments and 

market trends from trade magazines and journals, through participation in fashion fairs and trade 

conventions and regular meetings with our customers. The purpose of these meetings is to explore ways 

to improve customers’ preference for our services, over our competitors. 

61

CREDIT POLICY 

Generally, the terms of our sales are mainly under letters of credit at sight. However, the average 

collection period normally ranged between 30 to 45 days due mainly to the processing time required to 

check the export documents and to effect remittance by our customers. We monitor closely all 

outstanding debts and review our debtors’ collectability continuously. We have not experienced any 

material bad debts in the past three financial years. 

INTELLECTUAL PROPERTY 

We are not dependent on any trademark or patent and we have not paid or received any royalties for any 

licenses or use of any intellectual property. 

62

PROPERTIES AND FIXED ASSETS 

The following are details of the properties leased by our Company or our subsidiaries:- 

Location/Use Approximate Approximate 

Land Area Lessee Term Annual rental 

(Sq. ft.) 

Singapore 

22 Tampines Street 92 71,250 Our 30 years from 1 August 1990 S$199,813 

Singapore 528876 Company (lease transferred to our 

Company on 30 December 

/ Office cum production 

Brunei 

1999), with an option to renew 

for a further term of 30 years 

Block A, Units 1 to 12, 

Simpang 607 Lot No.39178 

EDR No. BD33728 Kg Beribi 

Mukim Gadong BE1118 

54,250 PDAC 5 years from 1 March 2001 B$300,000 


Block B, Units 13 to 24, 54,250 PDAC 5 years from 1 March 2001 B$477,600 

Simpang 607 Lot No.39178 

EDR No. BD33728 Kg Beribi 

Mukim Gadong BE1118 


Wisma Jasa, Kg PDAC 

Serambangun Daerah 

Tutong, TA2541 

- units 1 to 5 11,500 2 years from 1 August 2001 B$90,000 

- unit 6 2,300 3 years from 1 August 2002 B$18,000 

- unit 7 2,300 5 years from 1 October 1999 B$18,000 

- unit 8 2,300 3 years from 1 October 2002 B$18,000 

- unit 9 2,300 7 years from 1 November 1999 B$28,055 

- units 10 & 11 4,600 3 years from 1 September 2002 B$30,000 

- unit 12 2,300 3 years from 1 September 2002 B$18,000 

- unit 13 2,300 5 years from 1 July 2000 B$18,000 

- unit 14 2,300 5 years from 1 July 2000 B$18,000 

- unit 15 2,300 5 years from 1 August 2000 B$18,000 

- units 16 to 18 6,900 5 years from 1 May 2000 B$54,000 


EDR BD 10747 Lot No. 41,208 Milteq 3 years from 1 January 2003, B$180,000 

11763, District of Brunei with an option to renew for a 

Muara and EDR BD 12681 further term of 3 years 

Lot No. 13823, Brunei/ Muara 

District 


Cambodia 

No.8 Veng Sreng St Sangkat 441,740 Suntex 70 years from 1 January 2003, Between 

Choam Chao, Khan Dangkor, with an option to renew for a US$24,000 to 

Phnom Penh (1) 

further term of 70 years US$79,800 


Note:- 

(1) Please refer to pages 86 to 87 of this Prospectus for more details on the terms of this lease. 

63

Location/Use Approximate Approximate 

Land Area Lessee Term Annual rental 

(Sq. ft.) 

El Salvador 

Zona Franca Internacional 66,575 Hoon’s 5 years from 1 December 2001 US$259,775 

Edificio, No.2 KM 28 ½ 

Carretera A Camalapa, La 

Paz 


Honduras 

10, Zip Rio Blanco, 35,150 Uniwear 3 years from 1 May 2001 US$108,977 

San Pedro Sula 


35, Zip Bufalo Villanueva, 26,363 Blue Ocean renewed monthly US$135,160 

Cortes 


Hong Kong 

Unit 1202-3 No. 476 Castle 3,291 OSHK 16 October 2000 to 30 HK$560,786 

Peak Road September 2003 

/ Office 

Unit 1204 No. 476 Castle 1,505 OSHK 8 May 2002 to 30 HK$211,302 

Peak Road September 2003 

/ Office 

Malaysia 

No. 3, 5 & 7, Jalan 18,000 Eng Soon 2 years from 1 April 2002 RM100,800 

Perdagangan 12, 

Taman University, Skudai, 

81300 Johor Bahru, Johor 


No. 26, Jalan 6,000 Eng Soon 2 years from 16 June 2002 RM22,800 

Perdagangan 12, 

Taman University, Skudai, 

81300 Johor Bahru, Johor 

/ Production 

PRC 

No. 84 Shi Nan Road, Dong 73,905 OS Apparel 6 years from 1 July 2002 Between 

Chong, Panyu, Guangzhou RMB508,716 to 

RMB549,432 


US 

586 N. Gilbert Street, 35,833 OS Sourcing 3 years from 1 October 2002 Between 

Fullerton, California 92833 US$247,678 to 

US$267,888 


64

The following are details of the property owned by our subsidiary:- 

Location/Use Approximate Owned by Net Book Value as at 

Land Area 30 June 2002 

(Sq. ft.) 

US 

3043 Yorkshire Way, 17,270 OS Sourcing US$550,000 

Rowland Heights, 

California 91748 

/ Accommodation 

65

DIRECTORS, MANAGEMENT AND STAFF 

DIRECTORS 

The Board of Directors is entrusted with the responsibility for the overall management of our Group. The 

names, ages, addresses and principal occupations of our Directors are listed below:- 

Name Age Residential Country of Position 

Address Principal 

Residence 

Ang Boon Cheow Edward 46 17B Leedon Park Singapore Executive Chairman; 

Singapore 267895 Chief Executive 

Officer 

Ang Boon Chong 40 17C Leedon Park Singapore Executive Director; 

Singapore 267896 Chief Operating 

Officer 

Ang Siew Tiong 41 781 Upper Changi Singapore Executive Director; 

Road East Vice President, 

Sunhaven #08-35 Production 


Ng Ya Ken @ Ng Ah Kan 55 57 Sunbird Circle Singapore Non-Executive 

Singapore 487293 Director 

Teo Kiang Kok 47 11 Hillview Way Singapore Independent 

Singapore 669182 Director 

Chua Keng Hiang 47 942 Tampines Ave 5 Singapore Independent 

#10-237 Director 


Information on the area of responsibility and working experience of our Directors are set out below:- 

Ang Boon Cheow Edward 

Mr Ang Boon Cheow Edward is the Executive Chairman and Chief Executive Officer of our Group and 

has been a Director since 1995. Mr Ang has been instrumental in charting the strategic development of 

our Group since its inception in 1995. In his current role, Mr Ang focuses on formulating, implementing 

and leading our Group’s operations towards further global expansions and diversification into related 

industries for optimum business efficiencies. Prior to joining our Company, Mr Ang was the Managing 

Director of Ang Tong Seng Brothers Enterprises Pte Ltd, which was involved in the business of building 

and civil engineering contractors, since 1992. 

Mr Ang graduated with a Business Degree from the University of Oklahoma, the US, and has achieved a 

career in the apparel industry, spanning seven years. His knowledge and expertise of the apparel 

industry has been recognised by his peers in the industry. Having served two years as Vice-President, 

Group III Committee of the Textile & Fashion Federation between 30 June 2000 to 18 July 2002, Mr Ang 

was elected by his peers to the position of President of the Federation in July 2002. 

Mr Ang is the brother of our Director Mr Ang Boon Chong, and is also the uncle of our Director, Mr Ang 

Siew Tiong. Mr Ang is also the husband of our Vice President, Global Administration and Human 

Resource, Ms Hoon Pang Heng Joanna. 

Ang Boon Chong 

Mr Ang Boon Chong, Executive Director and Chief Operating Officer, is the co-founder of our Company 

and has been a Director since 1995. Mr Ang is responsible for formulating and implementing our 

Group’s business policies and expansion plans, particularly in the areas of marketing, merchandising and 

66

production. He has been instrumental for our Group’s fully integrated business operations and has 

successfully introduced and managed total quality programmes for our Group’s global operations. 

Besides playing a vital role in providing overall direction in the day-to-day management of our Group, Mr 

Ang is committed to building the customers base and in maintaining and developing good business 

relationship with our global customers. Before his directorship in our Company, Mr Ang was the Executive 

Director of Ghim Li Fashion Co. Pte Ltd from 1991 to 1995. Prior to joining Ghim Li Fashion Co. Pte Ltd, 

he was the Managing Director of Polly Garments Pte Ltd from 1987 to 1990. 

Having been directly involved in the apparel industry for the last fifteen years, Mr Ang has accumulated 

comprehensive knowledge and understanding of the industry and its related industries. Mr Ang will 

continue to play a leading role in guiding future business expansions and growth of our Group. 

Mr Ang Boon Chong is the brother of our Director, Mr Ang Boon Cheow Edward and is also the uncle of 

our Director, Mr Ang Siew Tiong. He is the husband of Ms Lim Li Kian, our Senior Manager, Bills. 

Ang Siew Tiong 

Mr Ang Siew Tiong joined our Company as an Executive Director since our Group’s inception in 1995. 

Mr Ang focuses on the core of our Group’s business by managing and supervising all aspect of our 

Group’s production processes. Mr. Ang works closely with the management to ensure seamless 

production flow in all of our Group’s production bases. Bearing in mind our Group’s overall goals, vision 

and mission, Mr. Ang has successfully introduced fully integrated, centrally controlled production systems 

for our Group’s global production bases. Mr Ang is credited for ensuring customers’ satisfaction in our 

Group’s ability to meet with their quality, quantity and compliance requirements and expectations. Prior to 

joining us in 1995, Mr Ang was working with Ghim Li Fashion Co. Pte Ltd from 1989 to 1995 and held the 

position of General Manager of the Fiji factory of Ghim Li Fashion Co. Pte Ltd between 1993 to 1995. 

Having thirteen years of extensive experience in the apparel industry, Mr Ang constantly keeps abreast of 

production developments, adapting effective advanced production processes to our Group’s operations 

whenever applicable to ensure maximum production and business efficiencies. 

Mr Ang Siew Tiong is the nephew of our Directors, Mr Ang Boon Cheow Edward and Mr Ang Boon 

Chong. He is also the husband of our Senior Manager, Global Factory Planning, Ms Chu Siew Hwa. 

Ng Ya Ken @ Ng Ah Kan 

Mr Ng Ya Ken @ Ng Ah Kan was appointed as our Non-Executive Director on 7 February 2003. He was 

trained as an economist with a Masters degree (M. Soc. Sc.) from University of Waikato, New Zealand. 

He currently runs his own consulting firm, Multinet Management Consultants, a firm which he had set up 

in 1995. Between 1992 and 1995, he practised market research and management consulting, first at the 

Marketing Institute of Singapore and later at the Enterprise Promotion Centres as its Senior Consulting 

Manager. In his consulting career, Mr Ng has served companies from a wide spectrum of industries, 

including banking, telecommunications, statutory bodies, manufacturing and service industries. 

Mr Ng is the brother-in-law of Mr Ang Boon Cheow Edward and Ms Hoon Pang Heng Joanna. 

Teo Kiang Kok 

Mr Teo Kiang Kok was appointed as our Independent Director on 7 February 2003. He is a senior partner 

of Shook Lin & Bok, a firm of advocates and solicitors. Mr Teo has more than 18 years of experience in 

legal practice and is currently the head of corporate finance and China practice groups in Shook Lin & 

Bok. His main areas of practice are corporate finance, international finance and securities. 

Chua Keng Hiang 

Mr Chua Keng Hiang was appointed as our Independent Director on 7 February 2003. He is a practising 

public accountant with KK Chua & Co. Prior to becoming a partner of the firm in 1999, Mr Chua had 

worked in various fields ranging from public accounting, merchant banking and the manufacturing 

industry. He holds an honours degree in Accountancy from the then University of Singapore and he is a 

member of the Institute of Certified Public Accountants of Singapore and the Chartered Association of 

Certified Accountants of the United Kingdom. 

67

MANAGEMENT 

Our day-to-day operations are entrusted to our Executive Directors who are assisted by a management 

team of experienced key Executive Officers. The names, ages, addresses and positions of the Executive 

Officers are set out below:- 

Name Age Residential Country of Position 

Address Principal 

Residence 

Chong Chiak Yee 31 Flat A 22/Floor Tower 1, Hong Kong General Manager 

The Waterfront, (Hong Kong) 

No.1 Austin Road West, 

Kowloon 

Chu Siew Hwa 36 781 Upper Changi Rd East Singapore Senior Manager, 

Sunhaven #08-35 Global Factory 

Singapore 486069 Planning 

Go Kim Huay 35 443 Tampines Street 43 Singapore Senior Marketing 

#02-55 Manager 


Hoon Pang Heng Joanna 40 17B Leedon Park Singapore Vice President, 

Singapore 267695 Global Administration 

and Human 

Resource 

Kuok Wai Peng 33 192 Joo Chiat Terrace Singapore Manager, Global 

Singapore 427337 Logistics 

Lee Ching Lian Bernadette 34 15 Lorong M Singapore Manager, 

Telok Kurau #01-03 Product 

Hong Yun Court Development 


Lim Li Kian 37 17C Leedon Park Singapore Senior Manager, 

Singapore 267895 Bills 

Lo Siu So 55 186, Bukit Batok West Singapore Senior 

Avenue 6 Technical Manager 


Tan Kim Teck Albert 43 No. 8 Veng Sreng St Cambodia General Manager 

Sangkat Choam Chao, (Cambodia) 

Khan Dangkor, Phnom 

Penh, Cambodia 

Woo Ah Toong 39 27 Moulmein Rise Singapore Finance Controller 

#09-27 


Yeh Wu Ping 52 3043 Yorkshire Way, US General Manager 

Rowland Heights, (US) 

California 91748 

68

Information on the area of responsibility and working experience of our Executive Officers are set out 

below:- 

Chong Chiak Yee 

Ms Chong Chiak Yee, General Manager, Hong Kong is responsible for our Group’s overall business 

operations in Hong Kong. Ms Chong plans and implement marketing strategies in identifying and 

developing new businesses and client base globally. She is also responsible for sourcing of raw 

materials and fabric supplies from the North Asia region. She has been in the apparel industry for more 

than 10 years and is vastly experienced. Ms Chong was a Merchandiser with Sung Garment Sdn Bhd 

between 1990 to 1995 prior to joining the Ocean Sky Group in 1995. 

Chu Siew Hwa 

Ms Chu Siew Hwa, Senior Manager, Global Factory Planning, is responsible for our Group’s entire 

Factory Planning Department. She allocates production schedules according to each of our Group’s 

production bases’ quota, capacity and abilities. Ms Chu formulates, implements and monitors our 

Group’s productions, capacities, processes and budget planning through analyzing production 

requirements and schedules. She also implement revenue-maximising procurement and inventory 

strategies, which reduce inventory exposure and enable flexibility in inventory management and product 

planning. Ms Chu was working at Ghim Li Fashion Co Pte Ltd from 1987 to 1999 and last held the 

position of Factory Planning Manager prior to joining the Ocean Sky Group in 2000. Ms Chu is the wife 

of our Director, Mr Ang Siew Tiong. 

Go Kim Huay 

Ms Go Kim Huay, Senior Manager, Marketing, is responsible for the overall management of the 

Marketing Department. Through market research and analysis, Ms Go plans, implements and lead her 

team in identifying and developing new business opportunities and expanding existing customers base. 

She is also responsible for keeping abreast of latest development in the apparel and fashion industries. 

Ms Go holds a Bachelor of Arts (Honors) from the National University of Malaysia. Prior to joining us in 

1997, she has many years of relevant experience as a merchandiser in various companies, including Soi 

Yong (between April to December 1996), Ghim Li Fashion Co. Pte Ltd (between 1995 and 1996) and F Y 

Singapore Garment Pte Ltd (between 1992 to 1995). 

Hoon Pang Heng Joanna 

Ms Hoon Pang Heng Joanna, Vice President, Global Administration and Human Resource is responsible 

for developing, formulating and implementing human resources strategies that support the operational 

and strategic requirements of our Group. She pays particular attention in ensuring flexibility in 

accommodating diverse HR issues arising out of each of our Group’s production and operational bases. 

She oversees and guides the development of effective recruitment strategies, competitive remuneration 

and incentive policies and staff retention and training programmes. She is also responsible for 

formulating our Group’s administrative functions. Ms Hoon holds a Bachelor of Business Administration 

degree from the University of Oklahoma, US. She was the Assistant Vice President, Corporate Banking, 

Keppel Bank for five years from 1992 to 1997. She was the Human Resource and Finance Manager in 

Ang Tong Seng Brothers Enterprises Pte Ltd from 1998 to 1999 prior to joining us in May 1999. Ms Hoon 

is the wife of our Director, Mr Ang Boon Cheow Edward. 

Kuok Wai Peng 

Ms Kuok Wai Peng, Manager, Global Logistics, is responsible for our Group’s entire Shipping and 

Logistics Department. She oversees our Group’s seamless shipping activities for both import of raw 

materials and apparel exports. Ms Kuok keeps abreast of shipping practices, bilateral trade programs, 

port analysis, cargo prospects, and agencies management in order to achieve cost effective shipping and 

delivery management. Ms Kuok graduated with a Diploma in Business Administration (Finance) from the 

Singapore Polytechnic. She was the Operations Executive with Kuok Oils & Grains Pte Ltd for nine years 

prior to joining the Ocean Sky Group in 2000. 

69

Lee Ching Lian Bernadette 

Ms Lee Ching Lian Bernadette, Manager, Product Development is responsible for our Group’s Creative 

and Product Development Department. She leads and implements brand, product and promotional 

developments through understanding the various brands and products concepts. She keeps abreast of 

customers’ requirements through in-depth study and analyzing fashion trends and developments. She is 

also responsible for our Group’s product sales, advertising and pricing strategies. Ms Lee obtained a 

Bachelor of Science, Economics from the University of London and was a merchandiser with FILA 

Marketing (Singapore) Pte Ltd between 1999 and 2001 prior to joining us in 2001. Between 1995 to 

1999, she was a Vice President, Marketing, in Ossia International Pte Ltd and in the years 1994 and 

1995, she was a merchandiser in Esquel Enterprise Pte Ltd. Prior to these, Ms Lee was an Assistant 

Field Executive in Forbes Management Consultants between 1992 to 1993. 

Lim Li Kian 

Ms Lim Li Kian, Senior Manager, Bills is responsible for our Group’s entire Bills and Credit Management 

Department. She develops and monitors our Group’s import and export bills activities through strict 

credit evaluations, administration and risk management. Ms Lim maintains a close working relationships 

with our Group’s bankers in securing banking and credit facilities. Ms Lim has gained in-depth 

experience and expertise having spent the last fifteen years in the shipping and bills fields. She was the 

Shipping/Bills Manager with Ghim Li Fashion Co Pte Ltd prior to joining the Ocean Sky Group in 1995. 

Ms Lim is the wife of our Director, Mr Ang Boon Chong. 

Lo Siu So 

Mr Lo Siu So, Senior Technical Manager, is responsible for leading and developing efficient and effective 

technical programmes for all our production bases of our Group’s operations. He plays a vital role by 

studying and recommending the best production processes and sequence to adopt based on the 

technical capabilities of each production base to ensure maximum productivity level at the highest cost 

efficiency. Mr Lo is also responsible for facilitating maintenance and conducting regular checks to ensure 

our Group’s technical facilities are at optimal operating capacity at all times. Mr Lo has relevant work 

experience in technical positions in the apparel industry. Prior to joining the Ocean Sky Group in 2000, 

Mr Lo was the Factory Manager in Kim Koon Garment Industries Pte Ltd between 1991 to 1996. 

Tan Kim Teck Albert 

Mr Tan Kim Teck Albert, General Manager of Suntex in Cambodia is responsible for the entire 

management and production facilities in Cambodia. He plays a vital role in recommending, leading and 

implementing our Group’s expansion plans in Cambodia. In compliance with our Group’s overall targets, 

he manages and monitors the entire business and production facilities to ensure optimum operations 

capacity. Mr Tan has been with us since 1998. Back in 1996, Mr Tan joined Forte Insurance Cambodia 

Limited as the Marketing Manager, and was promoted to the position of the General Manager in charge 

of computers, cars and insurance in 1997. Prior to his employment with Forte Trading, he was a sales 

and marketing personnel with Trans Eurocars between 1992 and 1996. 

Woo Ah Toong 

Mr Woo Ah Toong, Finance Controller, joined our Group in February 2001 and is responsible for the 

overall planning and management of our Group’s financial, taxation and corporate governance functions. 

Mr Woo also plays an important advisory role towards the formulation of our Group’s strategic 

development plans based on financial analysis and recommendations to the management. Mr Woo has 

fourteen years of accounting and financial management experience and has spent seven years as the 

Financial Controller of a listed company prior to joining our Group. Between 1987 and 1994, Mr Woo was 

working in an international accounting firm before leaving as an audit manager. Mr Woo graduated with a 

Bachelor of Commerce Degree from the Melbourne University and is a member of the Institute of 

Certified Public Accountants of Singapore. 

70

Yeh Wu Ping 

Mr Yeh Wu Ping, General Manager of OS Sourcing, is responsible for the overall operations of our 

Group’s marketing and sourcing facilities in the US. In close consultation with our Group’s various 

production bases, he is responsible for sourcing of raw materials and fabric supplies from the US to meet 

buyers’ specific requirements. Mr Yeh is also responsible for developing our Group’s marketing, sourcing 

and supply chain management businesses in the US. Mr Yeh graduated from the Overseas Chinese 

Business College and has acquired in-depth experience and expertise of the apparel industry having 

spent the last 29 years in it. Prior to joining us in 2002, Mr Yeh was a Purchasing Manager for fabric in 

Ghim Li Fashion Co. Pte Ltd between 1996 to 2001, and the General Manager of King Sewing Industrial 

Co. Ltd between 1983 to 1995. 

STAFF 

Our Group had a total of 2,045, 2,911 and 6,391 employees as at 31 December 1999, 2000 and 2001 

respectively. Our full-time staff strength as at 30 June 2002 is 6,900, comprising 6,489 production staff 

and 411 office staff. 

71

MANAGEMENT REPORTING STRUCTURE 

Our management reporting structure is as follows: 

ANG BOON CHEOW EDWARD 

Executive Chairman & 

Chief Executive Officer 

72 

ANG BOON CHONG 

Director & Chief Operating 

Officer 

WOO AH TOONG 

Finance 

Controller 

KUOK WAI 

PENG 

Manager, 

Global Logistics 

HOON PANG 

HENG 

JOANNA 

Vice President, 

Global 

Administration 

and Human 

Resource 

YEH WU 

PING 

General 

Manager 

(US) 

TAN KIM 

TECK 

ALBERT 

General 

Manager 

(Cambodia ) 

CHONG 

CHIAK YEE 

General 

Manager 

(Hong Kong) 

LO SIU SO 

Senior 

Technical 

Manager 

LEE CHING 

LIAN 

BERNADETTE 

Manager, 

Product 

Development 

GO KIM 

HUAY 

Senior 

Marketing 

Manager 

CHU SIEW 

HWA 

Senior 

Manager, 

Global 

Factory 

Planning 

ANG SIEW 

TIONG 

Director & Vice 

President, 

Production 

LIM LI KIAN 

Senior Manager, 

Bills

SERVICE AGREEMENTS 

On 5 February 2003, our Company entered into a service agreement with our Executive Chairman , Mr 

Ang Boon Cheow Edward, and our Executive Director, Mr Ang Boon Chong respectively. (the “Service 

Agreements”). The term of the Service Agreements commences on 1 January 2003 and is for a period of 

3 years, renewable for a further term of 3 years at the option of our Company. The Service Agreements 

may be terminated upon either party giving to the other party no less than 6 months’ written notice. 

Pursuant to the terms of their service agreement, Ang Boon Cheow Edward and Ang Boon Chong will 

each receive a monthly gross salary of S$40,000 and be entitled to an annual wage supplement 

equivalent to three (3) months of their monthly salary. 

Upon the listing of the Company, Ang Boon Cheow Edward and Ang Boon Chong will also each be 

entitled to receive an annual incentive bonus (the “Incentive Bonus”) of a sum calculated based on the 

audited aggregate net profit (excluding extraordinary items and before deducting the Incentive Bonus) 

before tax of our Group as a whole (the “PBT”). If the employment under the Service Agreements is for 

less than a full Financial Year of our Group, the Incentive Bonus for that Financial Year shall be 

apportioned in respect of the actual number of days of such employment on the basis of a 365-day 

Financial Year. 

The Incentive Bonus under the Service Agreements is calculated in the manner set out below: 

PBT Incentive Bonus 

PBT < S$5 million 3% of PBT 

S$5 million < PBT < S$10 million 4% of PBT 

S$10 million < PBT < S$15 million 5% of PBT 

PBT > S$15 million 6% of PBT 

Mr Ang Boon Cheow Edward and Mr Ang Boon Chong will each be entitled to the sole use of a motor 

car of such make and model as the Directors shall decide to enable to him to perform his duties. Under 

the Service Agreements, our Company will also acquire one golf club membership for each of Mr Ang 

Boon Cheow Edward and Mr Ang Boon Chong and pay for requisite membership or admission fees. 

Upon the completion of the initial term of 3 years, the golf club membership shall beneficially belong to 

Mr Ang Boon Cheow Edward and Mr Ang Boon Chong. 

73

DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION 

The remuneration paid to our Directors and Executive Officers on a proforma basis and in remuneration 

bands for FY2000 and FY2001 are as follows:- 

(a) Directors in each remuneration band for FY2000 

Directors Up to S$250,000 S$250,001 to S$500,001 to 

S$500,000 S$750,000 

Ang Boon Cheow � 

Edward 

Ang Boon Chong � 

Ang Siew Tiong � 

(b) Executive Officers in each remuneration band for FY2000 

None of the remuneration of our Executive Officers exceed S$250,000 for FY2000. 

(c) Directors in each remuneration band for FY2001 


S$500,000 S$750,000 


Edward 



(d) Executive Officers in each remuneration band for FY2001 


The estimated remuneration paid and to be paid to our Directors and Executive Officers each in 

remuneration bands for FY2002 are as follows:- 

(a) Directors in each remuneration band for FY2002 


S$500,000 S$1,000,000 


Edward 



(b) Executive Officers in each remuneration band for FY2002 


74

REMUNERATION OF EMPLOYEES RELATED TO DIRECTORS AND SUBSTANTIAL 

SHAREHOLDERS 

We have 12 remunerated employees who are related to our Directors and Substantial Shareholders. The 

positions of these related employees and their relationships with our Directors and/or Substantial 

Shareholders are as follows:- 

Name of Related Employee Position in our Group Relationship 

Hoon Pang Heng Joanna Vice President, Global 

Administration and 

Human Resource 

Wife of Ang Boon Cheow Edward 

Lim Li Kian Senior Manager, Bills Wife of Ang Boon Chong 

Chu Siew Hwa Senior Manager, Wife of Ang Siew Tiong 

Global Factory Planning 

Hoon Pang Wan Finance Manager Sister-in-law of 

(Global Control & Audit) Ang Boon Cheow Edward 

Ang Kang Er Manager Father of Ang Boon Cheow Edward 

and Ang Boon Chong 

Foo Ah Kiah Sample Sewer Supervisor Sister-in-law of Ang Boon Cheow 

Edward and Ang Boon Chong 

Jennie Ang Chen Ni Administrative Executive Niece of Ang Boon Cheow Edward 

and Ang Boon Chong 

Pek Sew Leng Store Supervisor (Cambodia) Brother-in-law of Ang Boon Cheow 

Edward and Ang Boon Chong 

Pek Poh San Administrative and Human Nephew of Ang Boon Cheow Edward 

Resource Manager (Cambodia) and Ang Boon Chong 

Ang Kiang Long Factory Manager (Honduras) Cousin-in-law of Ang Boon Chong 

Sevino Augustina Arevalo Accountant (Honduras) Cousin-in-law of Ang Boon Chong 

Ang Kiang Leng Manager, Sunglobe Cousin-in-law of Ang Boon Chong 

The basis of determining the remuneration of these related employees is the same as the basis of 

determining the remuneration of other unrelated employees. In FY2001, the annual remuneration figures 

(including CPF contributions and bonuses) of these related employees is S$809,000. This represented 

approximately 6.7% of our profit before tax. 

The aggregate remuneration (including CPF contributions and bonuses) paid to our Directors and the 

related employees, assuming that the Service Agreements have been in existence during the financial 

year ended 2001, is approximately S$3,679,000, which is approximately 25.7% of our profit before tax 

and before payment to our Directors and related employees in FY2001. 

Adjustments to the remuneration packages for these related employees will be reviewed annually by the 

Remuneration Committee to ensure that they are in line with our staff remuneration policy and 

commensurate with their job scope and level of responsibility. 

ANNUAL REPORT DISCLOSURE 

The total remuneration paid to the Directors as well as Executive Officers and employees who are related 

to the Directors and Substantial Shareholders will be disclosed in our annual report. 

75

OCEAN SKY SHARE OPTION SCHEME 

We have implemented a share option scheme known as the “Ocean Sky Share Option Scheme” (the 

“Scheme”). The Scheme was approved by our Shareholders at an Extraordinary General Meeting held on 

30 January 2003. The rules of the Scheme (the “Rules”) are set out in Appendix D of this Prospectus. 

Terms used herein, unless otherwise defined, have the same meaning as contained in the Rules. 

Purpose of the Scheme 

We believe the Scheme is essential to enhance our competitiveness as an employer to recruit and retain 

suitably qualified staff to meet our business needs. 

We further recognise that the retention of the services of highly qualified and experienced employees is 

integral to the success and to the continued growth of our Group in an industry where experience and 

commitment are valued qualities and may necessarily command a premium. Accordingly, we hope by 

instituting the Scheme we will be able to :- 

(i) motivate employees to achieve and maintain a high level of performance and contribution; 

(ii) make total employee remuneration sufficiently competitive to recruit and retain employees whose 

contributions are important to long term growth and profitability of our Company; and 

(iii) foster an ownership culture within our Company which aligns the interests of employees with the 

interests of our Shareholders. 

Eligibility 

The Scheme allows participation by full-time employees, Executive and Non-Executive Directors of our 

Company as well as our subsidiaries and associated companies which our Group has control, who have 

attained the age of 21 years and above on or before the relevant date of offer of an option provided that 

none of the participants shall be an undischarged bankrupt, and who, in the absolute discretion of the 

committee tasked with the management of the Scheme (the “Committee”), are eligible to participate in 

the Scheme. Participation by an eligible person who, in relation to our Company, has control of our 

Company’s affairs (“Controlling Shareholders”), and their associates, is, however, subject to approval by 

the independent Shareholders of our Company in separate resolutions for each such persons. As at the 

date of this Prospectus, ATS Holdings (2000), Mr Ang Boon Cheow Edward and Mr Ang Boon Chong are 

the Controlling Shareholders. 

The Non-Executive Directors of our Company, although not involved in the day to day running of our 

Group, play an invaluable role in the success of our Company by contributing their wealth of expertise 

and experience to the Board of Directors for the benefit of our Group. Currently, all our Non-Executive 

Directors are members of the Audit Committee. The Audit Committee of our Company undertakes a 

major role in the corporate governance of our Group. It is desirable therefore, that the Non-Executive 

Directors of our Company who form the back-bone of our Company’s Audit Committee be allowed to 

participate in the Scheme as well. 

By allowing so, we give recognition and acknowledgement to the outstanding services made by Non- 

Executive Directors of our Company. Their participation in the Scheme will also attract future Independent 

Directors of great ability and aptitude to sit on the Audit Committee. In the long term, this will help ensure 

the continuity of good corporate governance in our Company. 

We recognise that where our employees and Executive Directors of our subsidiaries and associated 

companies have participated in the Scheme, they would be in a position to contribute to the development 

and success of our Group. Only those who are likely to contribute to the development and success of our 

Group will be selected to participate in the Scheme. 

Where our subsidiaries or associated companies implement their own employees’ share option schemes 

or share ownership schemes, the employees of these subsidiaries or associated companies shall at the 

absolute discretion of the Committee and on a case by case basis, be eligible to participate in the 

Scheme only if selected by the Committee. 

76

Rationale for participation of Mr Ang Boon Cheow Edward 

Mr Ang Boon Cheow Edward, our Executive Chairman and Chief Executive Officer, holds an aggregate 

of approximately 65.53% of our Company’s shareholdings (directly and indirectly) after the Invitation. he 

is one of the co-founders of our Group and has led our Group in our development over the years. He is 

responsible for overseeing the overall management of our Group, and has been pivotal in charting the 

direction and growth of our Group. Two key factors to the success of the Group are his knowledge and 

contacts in the apparel industry, in which he has more than 7 years of experience. 

We believe that Mr Ang will continue to play a key role in the growth and future development of our 

Group and that there are further potential contributions which he can make. As such, it is our intention to 

provide incentives to him under the Scheme in addition to the remuneration package offered to him (as 

described on page 73 of this Prospectus under the section “Service Agreements”). By allowing him to 

participate in the Scheme, Mr Ang will have the opportunity to participate in the future appreciation of our 

Company’s share price through an increase in his shareholdings to a more significant level that 

commensurates with our Company’s future growth. 

Rationale for participation of Mr Ang Boon Chong 

Mr Ang Boon Chong, our Executive Director and Chief Operating Officer, holds an aggregate of 

approximately 63.73% of our Company’s shareholdings (directly and indirectly) after the Invitation. Being 

one of the co-founders of our Group, he has played an important role in our growth since our inception. 

Mr Ang has been instrumental in formulating and implementing the expansion plans of our Group and 

has been the main driving force in the global expansion of our operations. 

With his strong business acumen and extensive knowledge of the apparel industry, we believe he has the 

potential and ability to contribute to the further success of our Group and for that reason, it is our 

intention to provide him with incentives under the Scheme (in addition to the remuneration package 

offered to him as described on page 73 of this Prospectus under the section “Service Agreements”). By 

participating in the Scheme, Mr Ang will thus be able to share in any future appreciation of our 

Company’s share price through an increase in his shareholdings to a more significant level that 

commensurates with our Company’s future growth. 

The participation by Mr Ang Boon Cheow Edward and Mr Ang Boon Chong in the Scheme will take place 

only after the listing of our Company on the Official List of the SGX-ST. Their participation in the 

Scheme, has been approved by shareholders of our Company at the Extraordinary General Meeting held 

on 30 January 2003. Pursuant to the SGX-ST Listing Manual, any specific grant of Options to each of Mr 

Ang Boon Cheow Edward, Mr Ang Boon Chong and any other Controlling Shareholders and/or their 

associates, will have to be by way of separate resolutions approved by independent shareholders of our 

Company in a general meeting. Clear justification or rationale for participation, the specific grants to be 

made and any discount shall be disclosed on the circular seeking such approval. Details of the number of 

Options granted, the number of Options exercised and the subscription price (including any discount) will 

be disclosed in the annual report of our Company. 

Size of the Scheme 

The size of the Scheme (the “Scheme Size”) has been fixed at 15% of our issued share capital from time 

to time. We believe this Scheme Size is reasonable, taking into account the nature of our business in the 

industry, the contributions of our employees and our share capital. 

Exercise Period 

The period for the exercise of an option granted under the Scheme (the “Option”) shall be the period 

commencing on (and including) the first anniversary (for options granted at Market Price, as defined 

below), or the second anniversary (for options granted at a discount to the Market Price) of the relevant 

date of grant of the Option and expiring on (and including) the day immediately preceding the tenth 

anniversary of the date of grant of the Option or such other shorter period as determined by the 

Committee or prescribed under any relevant laws, regulations or rules of the SGX-ST from time to time. 

77

Issue Price 

The Exercise Price (as defined under the Scheme) for each Share in respect of which an Option is 

exercisable shall be determined and fixed by the Committee and shall be either : 

(a) the market value equal to the weighted average share price of the Shares for the last trading day 

immediately preceding the relevant date of grant of the Option (the “Market Price”); or 

(b) the nominal value of the Shares, whichever is greater; or 

(c) a price set at a discount to the Market Price or the nominal value of the Shares, whichever is 

greater. 

Options with discounted Exercise Price will only be granted to deserving executives and employees of 

our Group whose performance have been consistently sterling and/or whose future contributions and 

value-add to our Group would be invaluable. 

The amount of discount in respect of such Options is to be determined during the financial period when 

the Options are granted and the maximum discount shall not exceed 20% of the Market Price (or such 

other percentage or amount as may be prescribed or permitted for the time being by the SGX-ST). 

Our Company believes that the ability to offer discounted Options (“Incentive Options”) will operate as a 

means to compliment good executives and employees for their outstanding performance and a reward for 

their valuable and dedicated service to our Group. Incentive Options will not only motivate good 

executives and employees to continue to excel and become more dedicated and loyal to our Group, it 

also secures our employment of them through the implementation of a longer vesting period before the 

Incentive Options may be fully exercised. 

Further, our Company believes that the grant of Incentive Options to such executives and employees will 

provide an added incentive for them to focus more on improving the profitability and returns of our Group 

and enhance shareholder value, which will benefit all Shareholders when these are eventually reflected 

through share price appreciation. Incentive Options would also be perceived as an added privilege by the 

executives and employees of our Group, thus inspiring them to work hard and produce good results to 

qualify themselves for Incentive Options. 

In this respect, our Group has proposed that the quantum of discount to be given will be determined, at 

the absolute discretion of the Committee, based on the performance of our Group with reference to our 

Group’s earnings per Share growth during the financial period (the “Last Financial Period”) immediately 

preceding the financial period when the Options are granted as compared to the financial period prior to 

the Last Financial Period, in accordance with Rule 8 in the Rules of the Scheme, as set out in Appendix 

D of this Prospectus. 

Our Company has decided that regardless of the level of growth during the financial period when the 

Options are granted, the equivalent discount quantum for its Incentive Options will only be up to a 

maximum of 20%. Our Company feels that if the employees are able to drive the growth of our Group, a 

discount of up to 20% for the Incentive Options should be a reasonable and fair quantum to sufficiently 

reward them for their effort. 

In any case, our Company is of the view that a discount quantum of up to 20% will enable our Group to 

have greater flexibility to use share options as a means of building a variable component into the 

remuneration package of our employees without compromising on their performance standard and 

efficiency. It would enable our Group to introduce a refreshing manner of motivating employees to 

maximise their performance which they would also benefit as Shareholders of our Company thereby 

spurring them to optimise their performance standards and efficiency, which is vital to our Group’s 

success. 

Further, the ability to grant Incentive Options to our employees would help our Group to persuade 

employees to accept necessary caps on their salary growth and enable us to retain good employees who 

have the motivation and attributes to pursue continuous improvement in performance and are able to add 

value to our Company. 

78

The number and proportion of any Incentive Options granted will be disclosed accordingly in our 

Company’s annual reports as provided for in Rule 14 of the Scheme. 

In determining the discount (if any) on such Options to be granted to an eligible employee under the 

Scheme, the Committee will take into consideration the following : 

(a) the performance of our Company and our Group; 

(b) the individual performance of such employee ; and 

(c) the contribution of the Participant to the success and development of our Company and/or our 

Group; and 

(d) the benefits received by such employee under any other employee remuneration plans or scheme 

of our Group, including the Profit Sharing Plan. 

Financial Effects of the Scheme 

The Scheme will increase our issued share capital to the extent of the new Shares that will be issued 

and allotted pursuant to the exercise of Options. 

Any Options granted under the Scheme would have a fair value. The impact from the issue and allotment 

of new Shares upon the exercise of options on our net tangible asset per Share will be accretive if the 

Exercise Price is above the net tangible asset per Share, but dilutive otherwise. This impact however, will 

materialise only upon the actual exercise of the relevant Options. 

In addition, where the Options are granted at a discounted Exercise Price, there will be a cost to our 

Company, as 

a) the exercise of such Option necessarily translates into a reduction of the proceeds from the 

exercise, such reduction being represented by the discount granted; 

b) the monetary cost of granting Options with discounted Exercise Price is borne by us, our earnings 

would effectively be reduced by an amount corresponding to the reduced interest earnings that we 

would have received from the difference in proceeds from Exercise Price with no discount versus 

the discounted Exercise Price, therefore, a dilution of our earnings per Share would necessarily 

result. 

The above costs would only materialise upon the exercise of the relevant Options. 

Vesting Period 

In respect of an Option granted with the Exercise Price pegged at the Market Price, the holder of such 

Option is permitted to exercise all the Shares comprised in the Option on (and including) the first 

anniversary of the relevant date of the grant of the Option and expiring on (and including) the day 

immediately preceding the tenth anniversary of the relevant date of the grant of the Option, or the expiry 

of such other period of time as may from time to time be determined by the Committee or prescribed 

under the relevant laws, regulations and rules of the SGX-ST. 

In respect of an Incentive Option granted after the listing of our Company, the holder of such Incentive 

Option is permitted to exercise all the Shares comprised in the Incentive Option on (and including) the 

second anniversary of the relevant date of grant of Incentive Option and expiring on (and including) the 

day immediately preceding the tenth anniversary of the relevant date of the grant of the Option, or the 

expiry of such other period of time as may from time to time be determined by the Committee or 

prescribed under the relevant laws, regulations and rules of the SGX-ST for such Incentive Options. 

As at the date of this Prospectus, no Options have been granted. Upon the listing of our Company on 

SGX-ST, the relevant laws, regulations and rules of the SGX-ST shall apply and the Scheme shall be 

subject in accordance thereto. 

79

SGX-ST Requirements 

The Company shall disclose the following in its annual report:- 

(a) the names of the members of the Committee administering the Scheme; and 

(b) the information required in the table below for the following participants:- 

(i) Directors of the Company; 

(ii) Participants who are Controlling Shareholders of the Company and their associates; 

and 

(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the total 

number of options available under the Scheme:- 

Name of No. of Options Aggregate Aggregate Aggregate 

Participant granted during Options granted Options Options 

financial year since exercised since outstanding as 

under review commencement commencement at the end of the 

(include Exercise of the Scheme to of the Scheme to financial year 

Price) the end of the the end of the under review 

financial year financial year 

under review under review 

(iv) the number and proportion of options granted at a discount during the financial year 

under review, such information to be disclosed in respect of every 10% discount 

range, up to 20%. 

(c) (i) the names of and number and terms of Options granted to each Employee who 

receives 5% of more of the total number of Options available to Employees under the 

Scheme, during the financial year under review; and 

(ii) the aggregate number of Options granted to the Employees for the financial year 

under review, and since the commencement of the Scheme to the end of the financial 

year under review. 

(d) an appropriate negative statement that directors or employees of the parent company and 

its subsidiaries are not eligible to participate in the Scheme and that all the Options granted 

are not at a discount. 

80

CORPORATE GOVERNANCE 

Corporate governance refers to the processes and structure by which the business and affairs of a 

company are directed and managed, in order to enhance long term shareholder value through enhancing 

corporate performance and accountability, whilst taking into account the interests of other stakeholders. 

Good corporate governance therefore embodies both enterprise (performance) and accountability 

(conformance). 

With a view towards good corporate governance, our Company has adopted the recommendations of the 

Code of Corporate Governance issued on 21 March 2001 and implemented the corporate governance 

model as set out below : 

(A) Executive Committee 

Our Company recognises that in the ordinary course of our operations, there are instances where it 

would not be time or cost efficient to convene a meeting of all Directors to approve general matters that 

are routine or immaterial. 

In this regard, our Company has formed an Executive Committee comprising Executive Directors of our 

Company, namely, Ang Boon Cheow Edward, Ang Boon Chong and Ang Siew Tiong, to whom our Board 

of Directors have delegated recurring operational matters and matters that are not material. 

Recurring operational matters include : 

(a) reviewing our Company’s and our Group’s financial requirements and to approve matters relating 

to: 

� opening and closing of bank accounts; 

� opening and closing of securities trading accounts; 

� change in banking signatories and arrangements; 

(b) approving the incorporation, acquisition and/or disposal of company or companies resulting from 

internal re-structuring and re-organisation within our Group; 

(c) authorising the affixation of the Common Seal of our Company in accordance with its Articles of 

Association to all such documents as are necessary in connection therewith; 

(d) reviewing and approving yearly business plans of all operating companies within our Group 

including amendments thereto; 

(e) reviewing quarterly and monthly reports of all operating companies within our Group; 

(f) reviewing and decide on appropriate actions on major variances in budgets for operating 

companies within our Group; and 

(g) reviewing and approving remuneration packages of all senior appointments (other than Directors), 

of all companies within our Group; 

Matters that are considered immaterial include : 

(a) approving the incorporation and acquisition of companies other than those intended for material 

transactions; and 

(b) approving the disposal/de-registration/application for strike off/liquidation of companies whose 

values are not material. 

Pursuant to the recommendations under the Code of Corporate Governance issued on 21 March 2001, 

and in compliance thereof, we have also formed the following committees : 

81

(B) Audit Committee 

Our business and operations are presently under the management and close supervision of our 

Executive Directors who are assisted by a team of key Executive Officers. The overall management is 

overseen by our Chief Executive Officer, Mr Ang Boon Cheow Edward. 

After the listing, our Executive Directors and Executive Officers will manage the business and operations 

of our Group. The Audit Committee will assist our Board of Directors with regard to discharging its 

responsibility to safeguard our Company’s assets, maintain adequate accounting records, and develop 

and maintain effective systems of internal controls with an overall objective to ensure that our 

management has created and maintained an effective control environment in our Company, and that our 

management demonstrates and stipulates the necessary aspect of our Group’s internal control structure 

among all parties. 

Our Audit Committee comprises our Independent Directors Mr Teo Kiang Kok and Mr Chua Keng Hiang, 

and our Non-Executive Director, Mr Ng Ya Ken @ Ng Ah Kan. Our Audit Committee will be chaired by Mr 

Chua Keng Hiang. 

Our Audit Committee will meet quarterly to discuss and review the following:- 

(a) review with the external auditors the audit plan, their evaluation of the system of internal controls, 

their audit report, their management letter and our management’s response; 

(b) review the quarterly and annual financial statements and balance sheet and profit and loss 

accounts before submission to our Board of Directors for approval, focusing in particular, on 

changes in accounting policies and practices, major risk areas, significant 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; 

(c) review the internal controls and procedures and ensure co-ordination between the external 

auditors and our management, reviewing the assistance given by our management to the auditors, 

and discuss problems and concerns, if any arising from the interim and final audits, and any 

matters which the auditors may wish to discuss (in the absence of our management where 

necessary); 

(d) 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 our Group’s operating results or financial position, and our management’s response; 

(e) consider the appointment or re-appointment of the external auditors and matters relating to 

resignation or dismissal of the auditors; 

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

(g) undertake such other reviews and projects as may be requested by our Board of Directors and will 

report to our Board of Directors its findings from time to time on matters arising and requiring the 

attention of our Audit Committee; and 

(h) generally undertake such other functions and duties as may be required by statute of the Listing 

Manual, and by such amendments made thereto from time to time. 

In addition, all future transactions with related parties shall comply with the requirements of the SGX-ST 

Listing Manual. As required by paragraph 1(9)(e) of Appendix 2.2 of the Listing Manual, our Directors 

shall abstain from voting in any contract or arrangement or proposed contract / arrangement in which he 

has a personal material interest. 

82

(C) Remuneration Committee 

Our Remuneration Committee comprises our Executive Chairman, Mr Ang Boon Cheow Edward and our 

Independent Directors, Mr Teo Kiang Kok and Mr Chua Keng Hiang. Our Remuneration Committee is 

chaired by Mr Chua Keng Hiang. 

Our Remuneration Committee is responsible for the following: 

(a) to recommend to the Board a framework of remuneration for the Board and key executives, and to 

determine specific remuneration packages for each Executive Director and the Chief Executive 

Officer (or executive of equivalent rank), if the Chief Executive Officer is not an Executive Director, 

such recommendations to be made in consultation with the Chairman of the Board and submitted 

for endorsement by the entire Board and should cover all aspects of remuneration, including but 

not limited to director’s fees, salaries, allowances, bonuses, options, and benefits in kind. 

(b) in the case of service contracts, to consider what compensation commitments the directors’ 

contracts of service, if any, would entail in the event of early termination with a view to be fair and 

avoid rewarding poor performance. 

(c) in respect of the Scheme and such other long-term incentive schemes (if any) including share 

schemes as may be implemented, to consider whether Directors should be eligible for benefits 

under the such long-term incentive schemes. 

(D) Nominating Committee 

Our Nominating Committee comprises our Executive Chairman, Mr Ang Boon Cheow Edward, and our 

Independent Directors, Mr Teo Kiang Kok and Mr Chua Keng Hiang. Our Nominating Committee is 

chaired by Mr Teo Kiang Kok. All Directors should be required to submit themselves for re-nomination 

and re-election at regular intervals and at least every three years. 

The Nominating Committee is responsible for the following: 

(a) to make recommendations to the Board on all board appointments, including re-nominations, 

having regard, to the Director’s contribution and performance (e.g. attendance, preparedness, 

participation and candour) including, if applicable, as an Independent Director; 

(b) to determine annually whether or not a Director is independent, bearing in mind the circumstances 

set forth in Code and any other salient factors; 

(c) in respect of a Director who has multiple board representations on various companies, to decide 

whether or not such Director is able to and has been adequately carrying out his/her duties as 

Director, having regard to the competing time commitments that are faced when serving on 

multiple boards; and 

(d) decide how the Board’s performance may be evaluated and propose objective performance 

criteria, as approved by the Board that allows comparison with its industry peers, and address how 

the Board has enhanced long term Shareholders’ value. 

83

INTERESTED PERSONS TRANSACTIONS 

Save as disclosed below, there has been no interested persons transaction as defined under Chapter 9 

of the Listing Manual in the past three financial years: 

PAST INTERESTED PERSONS TRANSACTIONS 

Use of Premises by Ang Tong Seng Brothers Enterprises Pte Ltd (“ATSB”) 

ATSB is 91.25% owned by our Substantial Shareholder, ATS Holdings (2000). The other 8.75% is owned 

by an unrelated third party. Since the commencement of our lease at our premises at 22 Tampines Street 

92, Singapore 528876 on 30 December 1999, we have had an arrangement for ATSB to use 

approximately 1,250 square feet of the premises (the “Shared Premises”). The Shared Premises were 

used by ATSB for their office. Under this arrangement, no rent was paid by ATSB. This arrangement was 

terminated and ATSB moved out of the Shared Premises in end-November 2002. We do not expect such 

transactions with ATSB to recur in the future. 

Renovation Contract with ATSB 

In FY2000 and FY2001, our Company engaged ATSB to carry out renovation works to our premises at 

22 Tampines Street 92, Singapore 528876. The contract amount was S$214,000 for FY2000 and 

S$199,000 for FY2001. The renovation contract was conducted on arms’ length basis and on normal 

commercial terms which ATSB offers to other unrelated third parties. Apart from the said transactions in 

FY2000 and FY2001, we have not entered into any similar contracts with ATSB in the past 3 financial 

years. 

We do not envisage such renovation contract to recur in the future. However, if we do enter into similar 

contracts with ATSB in the future, we shall comply with the requirements of the SGX-ST Listing Manual, 

including (if necessary) the obtaining of approval from the Shareholders. 

Acquisition of ATSG from ATS Holdings (2000) 

With a view of restructuring our Group for the purpose of the public listing of our Company, pursuant to a 

deed of restructuring dated 15 June 2000, ATS Holdings (2000) transferred its shares in ATSG to our 

Company. The consideration for this transfer is S$959,000 being the audited NTA value of ATSG. 

The above transfer was transacted based on NTA of ATSG as at 1 January 1999 and was conducted on 

arms’ length basis. 

Acquisition of Sunglobe 

Ms Hoon Pang Heng, Joanna, Ms Lim Li Kian and Ms Chu Siew Hwa are the wives of Mr Ang Boon 

Cheow Edward, Mr Ang Boon Chong and Mr Ang Siew Tiong respectively. Ms Hoon held 57% of the 

issued and paid up capital of Sunglobe, and Ms Lim and Ms Chu held 38% and 5% respectively. 

Pursuant to a sale and purchase agreement dated 10 December 2002, Ms Hoon, Ms Lim and Ms Chu 

transferred their entire interests in Sunglobe to our Company with effect from 1 January 2002, and the 

consideration for each of the transfers is S$186,151, S$124,100 and S$16,329 respectively. 

The above transfers were transacted based on the NTA value of Sunglobe as at 31 December 2001 and 

were conducted on arms’ length basis. 

84

Amount due from/to our Directors 

There were the following amounts due from/to our Directors, Mr Ang Boon Cheow Edward and Mr Ang 

Boon Chong, as at the end of the last 3 financial years and as at 30 June 2002: 

As at 

As at 31 December 30 June 

1999 2000 2001 2002 

$’000 $’000 $’000 $’000 

Due from Directors 250 250 — — 

Due to Directors — — 290 777 

Provision for directors’ fees 542 527 1,000 — 

The amount due from Directors as at 31 December 1999 and 2000 has been settled subsequently. 

The amount due to Directors was unsecured, interest-free and had no fixed terms of repayment. This 

balance has been fully repaid subsequent to 30 June 2002. 

Save as disclosed above, there are no other outstanding balances with our Directors and no further 

advances will be made to our Directors. 

Management Fees Paid to ATS Holdings (2000) 

The following amounts of management fees were paid to ATS Holdings (2000) by our Company in the 

last 3 financial years and for the 6 months period ended 30 June 2002: 

6 months 

ended 30 June 

FY1999 FY2000 FY2001 2002 

$’000 $’000 $’000 $’000 

Management fees — 350 650 300 

The management fees were charged at a rate of S$50,000 per month. The management fees paid were 

for management services provided by ATS Holdings (2000) in relation to the day-to-day management, 

administration and human resource services to our Company. This arrangement was discontinued with 

effect from October 2002. 

We do not envisage such management services to be provided by ATS Holdings (2000) in the future. 

However, if we do enter into similar contracts with ATS Holdings (2000) in the future, we shall comply 

with the requirements of the SGX-ST Listing Manual, including (if necessary) the obtaining of approval 

from the Shareholders. 

Professional Services 

Our Independent Director, Mr Teo Kiang Kok, is a senior partner of Shook Lin & Bok, a firm of advocates 

and solicitors, which will be receiving a fee from us for legal services rendered by the firm in connection 

with the Invitation. Although Mr Teo Kiang Kok is a partner of Shook Lin & Bok, he was not the partner 

rendering the legal services in connection with the Invitation and does not have any interest in our 

Group. 

It is envisaged that we may continue to engage the services of Shook Lin & Bok in future as and when 

the need arises. As matters involving our Group will be handled by other partners and associates of the 

firm, our Directors are of the view that the provision of such services will not interfere with Mr Teo Kiang 

Kok’s independent judgement in his role as our Independent Director. In the event that Mr Teo Kiang Kok 

is interested in any matter handled by Shook Lin & Bok involving our Group, including and not limited to 

the Invitation, he will adhere to the procedures and guidelines for interested person transactions as set 

out on page 87 of this Prospectus and abstain from reviewing and voting on that particular transaction. 

85

Consultancy Services 

Our Non-Executive Director, Mr Ng Ya Ken @ Ng Ah Kan had provided consultancy services in relation 

to business developments, market research and assessment of investment opportunities on an ad hoc 

basis. In particular, Mr Ng was engaged in 2002 to advise on our Company’s investment plans in the 

PRC. This project had been completed and a fee of S$35,000 was charged to our Company. For the 

period from January 2002 to December 2002, Mr Ng has been engaged to provide such consultancy 

services on a retainer basis at a monthly retainer fee of $3,500. 

The total fees paid to Mr Ng in the past 3 financial years and for the 6 months period ended 30 June 

2002 are as follows :- 

6 months ended 

FY1999 FY2000 FY2001 30 June 2002 

$’000 $’000 $’000 $’000 

Consultancy fees — 3 38 47 

Maintenance of Property Contract with ATSB 

ATSB was awarded a service contract by our Company for the maintenance of our premises at 22 

Tampines Street 92, Singapore 528876 for an annual maintenance fee of up to S$150,000. The amount 

of the maintenance fee payable was based on actual invoiced work done by ATSB. The scope of work 

comprises general maintenance and repair works for various parts of the premises, including the roofs, 

windows, doors, turf, carpet, driveway, drains, tiles, lighting, as well as plumbing and sanitary services. 

The period of this service contract is from 1 January 2002 to 31 December 2002 and similar contracts 

have been entered into in 2001. 

The amount of maintenance fees paid to ATSB in the past 3 financial years and for the 6 months period 

ended 30 June 2002 is as follows: 


FY1999 FY2000 FY2001 30 June 2002 

$’000 $’000 $’000 $’000 

Maintenance fees paid to ATSB — — 87 56 

The above transaction was conducted on arms’ length basis and on normal commercial terms which 

ATSB offers to other unrelated third parties. Our Directors are of the view that the terms of the 

maintenance contract with ATSB are fair and on arms’ length basis. We do not envisage such 

transactions to recur in the future. However, if we do enter into similar transactions with ATSB in the 

future, we shall comply with the requirements of the SGX-ST Listing Manual, including (if necessary) the 

obtaining of approval from the Shareholders. 

CURRENT INTERESTED PERSONS TRANSACTIONS 

Lease by Suntex Investment Co. Ltd (“SI”) to Suntex 

SI is a Cambodian corporation privately owned by our Directors Ang Boon Cheow Edward and Ang Boon 

Chong. Suntex is currently our wholly owned Cambodian subsidiary. 

SI owns the premises at No. 8, Veng Sreng St, Sangkat Choam Chao, Khan Dangkor, Phnom Penh, 

Cambodia, with an area of 441,740 sq ft, and has granted Suntex a lease of the premises. The lease 

commenced on 1 January 2003 and is for a period of 70 years, renewable for a further term of 70 years 

at the option of Suntex. The lease may be terminated at the option of Suntex by serving a notice of not 

less than three months to SI. 

SI had granted a lease of the same premises to Suntex in 1999 at a monthly rent of US$400, and from 1 

January 2000 to 31 December 2002 at a monthly rent of US$2,000. The rent paid by Suntex under the 

above lease in the past 3 financial years and for the 6 months period ended 30 June 2002 is as set out 

below :- 


FY1999 FY2000 FY2001 30 June 2002 

US$’000 US$’000 US$’000 US$’000 

Rent paid by Suntex 5 24 24 12 

86

The annual rent for the subsequent years under the new lease is as follows :- 

Year Rent per year (US$) 

2003 42,000 

2004 46,200 

2005 50,400 

2006 54,600 

2007 58,800 

2008 63,000 

2009 67,200 

2010 71,400 

2011 75,600 

2012 79,800 

2013 onwards 79,800 

The rent to be paid in 2003 is less than 1% of our profit before tax for FY2002. 

The rent paid and to be paid by Suntex on the premises is reflective of the market rental rates in 

Cambodia. Our Directors are of the view that the terms of the lease with SI are fair and on arms’ length 

basis, and we intend to continue with such lease for as long as it is beneficial to our Group or until we 

are able to procure alternative premises at a competitive rental. We are not seeking a shareholders’ 

mandate in relation to the abovementioned interested person transaction with SI as we do not expect the 

value of the transaction to be material. We will, however, comply with the requirements of the SGX-ST 

Listing Manual and (if necessary) obtain the approval from the Shareholders for any future similar 

transactions with SI. 

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSONS TRANSACTIONS 

The Audit Committee, when formed, will review and approve all interested persons transactions to ensure 

that they are on arms’ length basis, that is, the transactions with the interested person are transacted on 

terms and prices not more favourable to the interested person than if they were transacted with a third 

party and that our Company has not been disadvantaged in any other way. Our Company will prepare 

relevant information to assist the Audit Committee in its review. Before any agreement or arrangement 

that is not in the ordinary course of business of our Group is transacted, prior approval must be obtained 

from the Audit Committee. In the event that a member of the Audit Committee is interested in any of the 

interested persons transactions, he will abstain from reviewing that particular transaction. Any decision to 

proceed with such agreement or arrangement would be recorded for review by the Audit Committee. 

Prior to the renewal of the lease agreement between Suntex and SI (as stated in this Prospectus under 

the section “Current Interested Persons Transaction”), we will compare the new rental rates to the then 

prevailing market rental rates to ensure that the new rental rates are reflective of the then prevailing 

market rental rates in Cambodia. In addition, an annual review by the Audit Committee will be carried out 

to ensure that the terms of the renewal are fair and on arms’ length basis. 

Our Company will also comply with the provisions in Chapter 9 of the SGX-ST Listing Manual in respect 

of all future interested persons transactions and if required under the SGX-ST Listing Manual or the Act, 

our Company will seek Shareholders’ approval for such transactions. 

87

POTENTIAL CONFLICT OF INTERESTS 

Ang Suan Hong is the sister of Ang Boon Cheow Edward and Ang Boon Chong, and Ang Tiong is their 

brother. Gan Cheng Chan is the husband of Ang Suan Hong. 

Based on publicly available information, our Directors understand that Ang Suan Hong, Ang Tiong and 

Gan Cheng Chan are shareholders of Jes Fashion Co. Pte Ltd (formerly known as Ghim Li Fashion Co. 

Pte Ltd), a company in the business of apparel manufacturing and trading. Ghim Li Fashion 

Manufacturing Pte Ltd, which is in the business of manufacturing apparel, is a wholly-owned subsidiary 

of Jes Fashion Co. Pte Ltd. 

As disclosed at page 66 of this Prospectus under the section “Directors, Management and Staff - 

Directors”, Ang Boon Chong and Ang Siew Tiong were working in Jes Fashion Co. Pte Ltd (then known 

as Ghim Li Fashion Co. Pte Ltd) prior to their appointment as Directors in our Company in 1995. 

Our Directors do not have any interest, direct or indirect, in either Jes Fashion Co. Pte Ltd or Ghim Li 

Fashion Manufacturing Pte Ltd and are not in any way involved in the business of these two companies. 

Conversely, Ang Suan Hong, Ang Tiong and Gan Cheng Chan do not have any interest, direct or indirect, 

in our Group and are not in any way involved in the business of our Group. As disclosed on page 53 of 

this Prospectus under the section “Competition and Competitive Strengths”, we compete with many other 

apparel manufacturers from all parts of the world. Hence, the possibility of a conflict of interest situation 

arising from direct competition with the aforesaid companies is relatively low. 

Save as disclosed above, none of our Directors, Executive Officers or Substantial Shareholders has any 

interest, direct or indirect, in any company carrying on the same business or dealing in similar products 

as our Group. 

88

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP 

SHARE CAPITAL 

Our Company was incorporated in the Republic of Singapore under the Act as a private limited company 

on 8 September 1988 under the name of Ocean Sky Knitted Garments Factory Pte Ltd. We changed our 

name to Ocean Sky Textile Pte Ltd on 9 October 1989. On 7 February 2003, we were converted into a 

public limited company and changed our name to Ocean Sky International Limited. 

At extraordinary general meetings held on 30 January 2003, and on 15 February 2003, our Shareholders 

approved inter-alia, the following:- 

(a) the capitalisation of $12,013,086 out of retained profits, and $636,500 out of share premium 

account for a bonus issue of 12,649,586 ordinary shares of $1 each; 

(b) the sub-division of each ordinary share of S$1.00 in the existing authorised and issued and paidup 

share capital into 20 ordinary shares of S$0.05 each (“Sub-division of Shares”); 

(c) conversion of our Company into a public limited company and the change of our name to Ocean 

Sky International Limited; 

(d) the adoption of a new set of Articles of Association; 

(e) the adoption of the Scheme, the participation in the Scheme by Mr Ang Boon Cheow Edward, Mr 

Ang Boon Chong and any other Controlling Shareholders and/or their associates, and any specific 

grant of Options to each of these persons will have to be by way of separate resolutions approved 

by independent shareholders of our Company in a general meeting, and that the Directors of our 

Company be authorised to allot and issue Shares upon the exercise of options granted under the 

Scheme; 

(f) the issue of 92,000,000 New Shares pursuant to the Invitation which when fully paid, allotted and 

issued, will rank pari passu in all respects with the existing issued Shares (the “Issue of New 

Shares”); and 

(g) the authorisation of our Directors, pursuant to Section 161 of the Act and subject to the provisions 

of the Articles of Association of our Company and the approval of the SGX-ST, to allot and issue 

(i) shares; (ii) convertible securities; (iii) additional convertible securities issued pursuant to rights, 

bonus or other capitalisation issues (notwithstanding that such authority may have ceased to be in 

force at the time the securities are issued, provided that the adjustment does not give the holder of 

the convertible securities a benefit that a Shareholder does not receive); or (iv) shares arising from 

the conversion of securities in (ii) and additional convertible securities in (iii), notwithstanding that 

such authority may have ceased to be in force at the time the shares are to be issued), in our 

Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and 

conditions and for such purposes and to such persons as our Directors may in their absolute 

discretion deem fit Provided That the aggregate number of such shares and convertible securities 

to be issued shall not exceed 50% of the issued share capital of our Company immediately prior to 

the proposed issue (calculated based on the issued share capital of our Company at the time this 

resolution is passed, after adjusting for new shares arising from the conversion of convertible 

securities or employee share options on issue at the date of this resolution, and after adjusting for 

any subsequent consolidation or sub-division of shares) and Provided That the aggregate number 

of such shares and convertible securities to be issued other than on a pro-rata basis to the then 

existing Shareholders of our Company shall not exceed 20% of the issued share capital of our 

Company immediately prior to the proposed issue and, unless revoked or varied by our Company 

in general meeting, such authority shall continue in force until the conclusion of the next annual 

general meeting of our Company or the date by which the next general meeting of our Company is 

required by law to be held, whichever is the earlier. 

89

Details of the changes in the issued and paid-up share capital of our Company since incorporation are 

set out below :- 

Number of shares $ 

Issued and paid-up ordinary shares of $1.00 each 2,000,000 2,000,000 

as at 30 June 2002 

Issue of ordinary shares to Yeo Yeok Soo 30,000 30,000 

on 10 December 2002 

Issue of ordinary shares to Yeh Wu Ping 3,500 3,500 

on 10 December 2002 

Bonus issue on 30 January 2003 12,649,586 12,649,586 

14,683,086 14,683,086 

After sub-division of each ordinary shares of $1.00 each 

into 20 ordinary shares of $0.05 each on 30 January 2003 

293,661,720 14,683,086 

New Shares to be issued pursuant to the Invitation 92,000,000 4,600,000 

385,661,720 19,283,086 

Our Company’s shareholders’ equity prior to and after the Invitation is set out below. These statements 

should be read in conjunction with the Accountants’ Report of this Prospectus. 

Authorised Share Capital 

Prior to the Invitation After Invitation 

S$‘000 S$‘000 

Ordinary shares of S$0.05 each 100,000 100,000 

Shareholders’ Equity 

Share capital 14,683 19,283 

Share premium — 14,700 

Retained profits (2) 

8,047 8,047 

22,730 42,030 

Note :- 

(1) Based on net issue proceeds of approximately $19.3 million less par value of New Shares based on an Issue Price of S$0.23 

per New Share. 

(2) After adjusting for payment of interim dividend and the Capitalisation Exercise. 

We have only one class of shares. Save for new Shares that may be issued pursuant to the Scheme, 

there are no founder, management, deferred or unissued shares reserved for issue for any purpose. No 

Option has or will be granted under the Scheme prior to the listing of our Company on the SGX-ST. The 

rights and privileges of these Shares are stated in our Articles of Association. 

90

Pursuant to the bonus issue, ATS Holdings (2000) renounced 1,950,000 shares of their entitlements to 

the following persons: 

Names Number of shares of $1 each 

Ang Boon Cheow Edward 1,065,000 

Ang Boon Chong 710,000 

Wong Siew Hui 175,000 

1,950,000 

91

OWNERSHIP STRUCTURE AND PRINCIPAL SHAREHOLDERS 

Our Shareholders and their respective shareholdings immediately before and after the Invitation are 

summarised below:- 

Directors 

Direct Interest 

Before the Invitation After the Invitation 

No. of Shares of No. of Shares of 

S$0.05 each % S$0.05 each % 

Ang Boon Cheow Edward 21,300,000 7.25 21,300,000 5.52 

Ang Boon Chong 14,200,000 4.84 14,200,000 3.68 

Ang Siew Tiong (1) 

Substantial Shareholders 

ATS Holdings (2000) (2) 

Persons holding less than 5% 

14,441,196 4.92 14,441,196 3.75 

235,382,723 80.15 235,382,723 61.03 

Yeo Yeok Soo 4,332,359 1.48 4,332,359 1.12 

Yeh Wu Ping 505,442 0.17 505,442 0.13 

Wong Siew Hui 3,500,000 1.19 3,500,000 0.91 

Public — — 92,000,000 23.86 

TOTAL 293,661,720 100.00 385,661,720 100.00 

Notes :- 

(1) Mr Ang Siew Tiong is the nephew of our Directors, Mr Ang Boon Cheow Edward and Mr Ang Boon Chong. 

(2) ATS Holdings (2000) is 60% owned by our Director, Mr Ang Boon Cheow Edward and 40% owned by our Director, Mr Ang 

Boon Chong. 

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

Shareholders of our Company. 

MORATORIUM 

To demonstrate their commitment to our Group, our Substantial Shareholder, ATS Holdings (2000) which 

has interests in 235,382,723 Shares, representing in aggregate, 61.03% of our Company’s issued and 

paid up share capital after the Invitation, has undertaken not to realise or transfer any part of its 

respective interests in our Company for a period of six (6) months commencing from the date of our 

admission (“Listing Date”) of our Company to the Official List of the SGX-ST. Messrs Ang Boon Cheow 

Edward and Ang Boon Chong have each undertaken not to sell, transfer or otherwise dispose of any part 

of their respective interests in ATS Holdings (2000) for a period of six (6) months from the date of 

admission of our Company to the Official List of the SGX-ST. 

Similarly, our Executive Directors, Messrs Ang Boon Cheow Edward, Ang Boon Chong and Ang Siew 

Tiong, who in aggregate have interests in 49,941,196 Shares representing 12.95% of our Company’s 

issued and paid up share capital after the Invitation respectively, have undertaken not to realise or 

transfer any part of their respective interests in our Company for a period of six (6) months commencing 

from the Listing Date of our Company to the Official List of the SGX-ST. 

92

GROUP STRUCTURE 

Our Group structure is as follows:- 

Our Company 

Singapore Hong Kong US Brunei Cambodia Malaysia PRC El Salvador Honduras 

93 

Blue Ocean 

Hoon’s 

PDAC Suntex Eng Soon OS Apparel 

OS Marketing 

OGHK 

Bloom Time (1) 

Uniwear 

Pacific Sky 

Sing Cheng 

OS Sourcing 

OSHK 

Sunglobe 

ATSG 

Milteq (2) 

Notes :- 

(1) Except for Bloom Time, which is 33% owned by our Company, all our subsidiaries are 100% owned by our Company. 

(2) Milteq is incorporated in Brunei.

COMPANIES WITHIN OUR GROUP 

The details of the companies within our Group as at the date of lodgement of this Prospectus with the 

Authority, none of which are listed on any stock exchange, are set out as follows:- 

Date and Place of Paid-up Capital/ Equity Held 

Name of Company Incorporation Principal Business Contributed Capital by our Group 

Subsidiaries held by our Company 

ATSG 4 January 1995, Investment holding S$500,002 100% 

Singapore 

Blue Ocean (1) 

9 September 2002, Manufacturing of HNL6,250 100% 

Honduras apparels 

Eng Soon 27 October 1997, Manufacturing of RM175,002 100% 

Malaysia apparels 

Hoon’s 19 September 2000, Manufacturing of US$1,050,000 100% 

El Salvador apparels 

OS Marketing 16 September 2002, Inactive US$2 100% 

US 

OS Sourcing 26 December 2001, Manufacturing and US$200,000 100% 

US sourcing of textiles 

and fabrics, distribution 

of apparels and provision 

of related SCM services 

OGHK (2) 

OS Apparel (6) 

OSHK (3) 

Pacific Sky (4) 

PDAC (5) 

Sing Cheng (6) 

31 July 2002, Inactive HK$10,000 100% 

Hong Kong 

12 June 2002, Manufacturing of US$245,711 100% 

PRC apparels 

29 November 1999, Marketing and sourcing HK$10,000 100% 

Hong Kong of textiles and apparels 

and provision of related 

SCM services 

18 June 2002, Inactive 200,000 colones 100% 

El Salvador 

29 May 1997, Manufacturing of B$500,000 100% 

Brunei apparels 

13 September 2002, Inactive HK$150,000 100% 

PRC 

Sunglobe 10 April 1992, Import and export S$310,000 100% 

Singapore and trading of textiles 

and apparels 

Suntex (7) 

Uniwear (8) 

18 October 1996, Manufacturing of US$1,200,000 100% 

Cambodia apparels 

30 April 2001, Manufacturing of HNL5,525,000 100% 

Honduras apparels 

94

Date and Place of Paid-up Capital/ Equity Held 

Name of Company Incorporation Principal Business Contributed Capital by our Group 

Subsidiary held by ATSG 

Milteq (9) 

Associated Companies 

26 June 2001, Manufacturing of B$100,000 100% 

Brunei apparels 

Bloom Time 30 January 2002, Inactive S$3 33% 

Singapore 

Perkasa Ocean Sky 29 March 2000, Under members’ B$50,000 45% 

Industrial Sdn Bhd (10) 

Brunei voluntary winding-up 

Notes:- 

(1) Our Directors Ang Boon Cheow Edward and Ang Boon Chong each holds 1 share out of the total of 250 shares in Blue 

Ocean in trust for our Company. 

(2) Our Director Ang Boon Chong holds 1 share out of the total of 10,000 shares in OGHK in trust for our Company. 

(3) Our Director Ang Boon Chong holds 1 share out of the total of 10,000 shares in OSHK in trust for our Company. 

(4) Our Director Ang Boon Chong holds 1 share out of a total of 2,000 shares in Pacific Sky in trust for our Company. 

(5) PDAC is 70% held by our Company. The remaining 30% is held by an unrelated individual, in trust for our Company. 

(6) Our Company has given an undertaking to the China Securities Regulatory Commission that the interests and assets of OS 

Apparel and Sing Cheng will only be consolidated to the extent of the contributed capital by our Company in these two 

companies. 

(7) Our Directors Ang Boon Cheow Edward and Ang Boon Chong each holds 1 share in Suntex out of a total of 100 shares in 

trust for our Company. 

(8) Our Directors Ang Boon Cheow Edward, Ang Boon Chong and Ang Siew Tiong each holds 1 share out of the total of 55,250 

shares in Uniwear in trust for our Company. 

(9) Milteq is 70% held by ATSG. The remaining 30% is held by an unrelated individual in trust for ATSG. 

(10) Perkasa Ocean Sky Industrial Sdn Bhd was an associated company of our Group, which has been put into members’ 

voluntary liquidation on 27 August 2002. 

All of our subsidiaries are wholly owned by our Company directly or indirectly and save for the holding of 

shares on trust for our Company as disclosed above, none of our Directors or Substantial Shareholders 

has any direct interest in any of our subsidiaries. 

95

LETTER FROM AUDITORS AND REPORTING ACCOUNTANTS IN RELATION TO THE PROFIT 

ESTIMATE OF THE GROUP FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2002 

12 March 2003 

The Board of Directors 


22 Tampines Street 92 


Dear Sirs 

This letter has been prepared for inclusion in the Prospectus of Ocean Sky International Limited (the 

“Company”) to be lodged with the Monetary Authority of Singapore on 12 March 2003 in connection with 

the Invitation to subscribe for 92,000,000 ordinary shares of $0.05 each in the capital of the Company 

(“New Shares”) comprising 9,200,000 Offer Shares at $0.23 for each Offer Share by way of public offer 

and 82,800,000 Placement Shares by way of placement, comprising a minimum of 79,300,000 

Placement Shares at $0.23 for each Placement Share, and up to 3,500,000 Reserved Shares at $0.21 

for each Reserved Share payable in full on application. 

We have reviewed the profit estimate of the Company and its subsidiaries (the “Group”) (the “estimate”) 

for the financial year ended 31 December 2002 set out on page 41 of the Prospectus in accordance with 

Singapore Standards on Auditing applicable to the examination of prospective financial information. The 

Directors are responsible for the estimate including the bases and assumptions on which the estimate is 

based. The estimate includes results shown by the audited financial statements for the six months 

financial period ended 30 June 2002. 

Based on our examination of the evidence supporting the assumptions, nothing has come to our 

attention which cause us to believe that these assumptions do not provide a reasonable basis for the 

estimate. Further, in our opinion, the estimate, so far as the accounting policies and calculations are 

concerned, is properly prepared on the basis of the assumptions, is consistent with the accounting 

policies normally adopted by the Group, and is presented in accordance with Singapore Statements of 

Accounting Standard. 

Yours faithfully 

BDO International 

Certified Public Accountants 

Singapore 

Lee Joo Hai 

Partner-in-charge 

96

12 March 2003 

The Board of Directors 


22 Tampines Street 92 


Dear Sirs 

ACCOUNTANTS’ REPORT 

We have audited the accompanying consolidated financial statements of Ocean Sky International Limited 

(the “Company”) and its subsidiary companies (collectively the “Group”), comprising the Group’s 

consolidated balance sheets as at 31 December 1999, 2000, 2001 and 30 June 2002, the Group’s 

consolidated profit and loss accounts, statements of cash flows and changes in shareholders’ equity for 

each of the financial years ended 31 December 1999, 2000, 2001 and six months financial period ended 

30 June 2002 as set out on pages 98 to 138 of the Prospectus. These consolidated financial statements 

of the Group are the responsibility of the Company’s Directors. Our responsibility is to express an 

opinion on these financial statements based on our audits. We have not audited the Group’s profit and 

loss account and statement of cash flows for the six months financial period ended 30 June 2001 which 

are only shown on pages 99, 101 to 103 and are presented for comparative purpose only. These 

unaudited financial statements are the sole responsibility of the Company’s Directors. 

We conducted our audits in accordance with Singapore Standards on Auditing. Those standards require 

that we plan and perform the audit to obtain reasonable assurance about whether the financial 

statements are free of material misstatement. An audit includes examining, on a test basis, evidence 

supporting the amounts and disclosure in the financial statements. An audit also includes assessing the 

accounting principles used and significant estimates made by the Directors, as well as evaluating the 

overall financial statement presentation. We believe that our audits provide a reasonable basis for our 

opinion. 

In our opinion, the accompanying consolidated financial statements of the Group presents fairly, in all 

material respects, the consolidated financial position of the Group as at 31 December 1999, 2000, 2001 

and 30 June 2002 and of the Group’s consolidated results of operations and its consolidated changes in 

shareholders’ equity and cash flows for each of the financial years ended 31 December 1999, 2000, 

2001 and six months financial period ended 30 June 2002 and are in accordance with Singapore 

Statements of Accounting Standard. 

This report has been prepared for inclusion in the Prospectus dated 12 March 2003 in connection with 

the Invitation to subscribe for 92,000,000 ordinary shares of $0.05 each in the capital of the Company 

(“New Shares”) comprising:- 

(a) 9,200,000 Offer Shares at $0.23 for each Offer Share by way of public offer; and 

(b) 82,800,000 Placement Shares by way of placement, comprising 

(i) minimum of 79,300,000 Placement Shares at $0.23 for each Placement Share; and 

(ii) up to 3,500,000 Reserved Shares at $0.21 for each Reserved Share, 


No audited financial statements of the Group has been prepared for any period subsequent to 30 June 

2002. 


BDO International 

Certified Public Accountants 

Singapore 

Lee Joo Hai 

Partner-in-charge 

97

GROUP BALANCE SHEETS 

Non-current assets 

As at 31 December As at 

1999 2000 2001 30 June 2002 

Note $’000 $’000 $’000 $’000 

Fixed assets 4 7,350 15,628 22,129 23,915 

Goodwill 5 20 17 — 1,496 

Associated companies 6 — 43 61 — 

Investments 7 50 250 250 250 

Deferred expenditure 8 899 324 — 635 

8,319 16,262 22,440 26,296 

Current assets 9 17,435 31,208 48,308 77,860 

Less:- 

Current liabilities 10 18,777 30,312 42,117 69,291 

Net current (liabilities)/assets (1,342) 896 6,191 8,569 

Non-current liabilities 23 (1,675) (6,235) (6,986) (6,190) 

5,302 10,923 21,645 28,675 

Capital and reserves 

Share capital 

Foreign currency 

25 200 200 2,000 2,000 

translation reserve 26 — (10) 513 (55) 

Share application account 27 — — — 670 

Retained profits 28 5,102 10,712 18,408 26,060 

5,302 10,902 20,921 28,675 

Minority interests — 21 724 — 

5,302 10,923 21,645 28,675 

The accompanying notes form an integral part of and should 

be read in conjunction with these financial statements. 

98

GROUP PROFIT AND LOSS ACCOUNTS 

Unaudited 

(Based on 

management 

accounts 

presented for 

comparative 

purpose only) 

Financial year ended Six months Six months 

31 December financial financial 

period ended period ended 

Note 1999 2000 2001 30 June 2002 30 June 2001 

$’000 $’000 $’000 $’000 $’000 

Revenue 29 56,705 104,645 179,988 92,013 74,606 

Cost of sales (42,879) (82,289) (143,640) (70,349) (57,582) 

Gross profit 13,826 22,356 36,348 21,664 17,024 

Other operating income 375 174 874 142 67 

Distribution costs (1,644) (3,088) (4,445) (2,764) (2,021) 

Administrative and other 

operating expenses (5,963) (11,008) (18,825) (8,956) (7,417) 

Profit from operations 30 6,594 8,434 13,952 10,086 7,653 

Finance costs 31 (541) (1,494) (1,989) (518) (1,000) 

Share of results of 

associated company — (7) 18 — — 


Taxation 32 (1,649) (1,348) (2,430) (1,916) (1,353) 

Profit after taxation 4,404 5,585 9,551 7,652 5,300 

Minority interests — 25 (55) — 48 

Profit attributable to 

shareholders 4,404 5,610 9,496 7,652 5,348 

Earnings per share 

(in cents) based on the 

pre-invitation share capital 

of 293,661,720 

ordinary shares of 

$0.05 each 33 1.50 1.91 3.23 2.61 1.82 


be read in conjunction with these financial statements 

99

GROUP STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 

Share capital 

Financial year ended Six months 

31 December financial 

period ended 

1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Balance brought forward 200 200 200 2,000 

Issue of shares — — 1,800 — 

Balance carried forward 200 200 2,000 2,000 

Foreign currency 

translation reserve 

Balance brought forward — — (10) 513 

Currency translation differences — (10) 523 (568) 

Balance carried forward — (10) 513 (55) 

Share application account 

Balance brought forward — — — — 

Share application 

pending allotment — — — 670 

Balance carried forward — — — 670 

Retained profits 

Balance brought forward 698 5,102 10,712 18,408 

Issue of shares — — (1,800) — 

Profit attributable to 

shareholders 4,404 5,610 9,496 7,652 

Balance carried forward 5,102 10,712 18,408 26,060 



100

GROUP STATEMENTS OF CASH FLOWS 


Unaudited 

(Based on 

management 

accounts 

presented for 

comparative 

purpose only) 

Six months 



1999 2000 2001 30 June 2002 30 June 2001 

$’000 $’000 $’000 $’000 $’000 

Cash flows from operating activities 


Adjustments for:- 

Amortisation of purchased goodwill 2 2 18 104 18 

Amortisation of negative goodwill — — — (5) — 

Depreciation of fixed assets 755 1,379 2,335 1,393 967 

Goodwill on consolidation written off 7 8 — — — 

Interest expense 541 1,494 1,989 518 1,000 

Interest Income (2) (4) (112) (37) (66) 

Loss on disposal of fixed assets 5 50 137 9 2 

Amortisation of deferred expenditure 1,922 963 2,991 228 1,395 

Reserves on consolidation credited (129) — — — — 

Share of associated company loss/(gain) — 7 (18) — — 

Unrealised foreign exchange (loss)/gain (31) (150) 292 (264) 41 

Operating profit before working 

capital changes 9,123 10,682 19,613 11,514 10,010 

Working capital changes:- 

Increase in stocks (4,444) (6,129) (234) (19,720) (14,521) 

Increase in debtors (2,102) (1,036) (5,552) (17,778) (12,350) 

(Increase)/ Decrease in amount 

due by ultimate holding company (1,753) 186 169 72 22 

Increase in amount due by 

related company (108) (408) (106) (524) (272) 

(Increase)/ Decrease in amounts 

due by related parties (360) 12 (1,108) 81 (1) 

Increase in creditors 3,507 2,985 12,733 17,317 11,109 

Issue of shares to minority shareholders — 50 647 — — 

Cash generated from/(used in) 

operations 3,863 6,342 26,162 (9,038) (6,003) 

Interest paid (541) (1,494) (1,989) (518) (1,000) 

Tax paid (332) (1,422) (1,688) (1,206) (1,033) 

Net cash from/(used in) 

operating activities 2,990 3,426 22,485 (10,762) (8,036) 

101

GROUP STATEMENTS OF CASH FLOWS (Cont’d) 

Cash flows from investing activities 

Unaudited 

(Based on 

management 

accounts 

presented for 

comparative 

purpose only) 

Financial year ended Six months Six months 



1999 2000 2001 30 June 2002 30 June 2001 

$’000 $’000 $’000 $’000 $’000 

Acquisition of subsidiaries (A) 347 19 — (1,444) — 

Deferred expenditure capitalised (2,694) (370) (2,746) (885) (1,089) 

(Investment)/Divestment in 

associated company — (50) — 61 — 

Purchase of fixed assets (4,747) (9,109) (8,783) (3,534) (5,565) 

Proceeds from disposal of fixed assets 1 43 128 52 — 

Purchase of investment (50) (200) — — — 

Net cash used in investment activities (7,143) (9,667) (11,401) (5,750) (6,654) 

Cash flows from financing activities 

Receipt of term loans — 5,320 — — — 

Receipt/(Repayment) of finance 

lease financing (net) 1,944 112 1,768 (745) 283 

Repayment of term loans — (315) (435) (249) (250) 

Interest income received 2 4 112 37 66 

Net cash from /(used in) 

financing activities 1,946 5,121 1,445 (957) 99 

102

GROUP STATEMENTS OF CASH FLOWS (Cont’d) 


Unaudited 

(Based on 

management 

accounts 

presented for 

comparative 

purpose only) 

Six months 



1999 2000 2001 30 June 2002 30 June 2001 

$’000 $’000 $’000 $’000 $’000 

(Decrease)/Increase in cash and 

cash equivalents 

Cash and cash equivalents 

(2,207) (1,120) 12,529 (17,469) (14,591) 

at beginning of financial year 

Effect of exchange differences on 

200 (1,987) (3,107) 9,422 (3,107) 

cash and cash equivalents 20 — — — — 


at end of financial year (B) (1,987) (3,107) 9,422 (8,047) (17,698) 

A. Acquisition of subsidiary companies 

Fixed assets 2,416 507 — — — 

Goodwill 29 8 — 1,595 — 

Deferred expenditure 126 — — — — 

Current assets 4,520 923 — 520 — 

Cash and bank balances 427 19 — 533 — 

Current liabilities (6,450) (1,461) — (725) — 

Minority interest — 4 — 724 — 

Non-current liabilities (20) — — — — 

Reserve on consolidation (129) — — — — 

Purchase consideration 919 — — 2,647 — 

Less:- 

Cash and bank balances acquired 427 19 — 533 — 

Amount due to holding company 839 — — — — 

Net cash (inflow)/outflow from 

acquisition of subsidiaries (347) (19) — 2,114 — 

Shares application pending allotment — — — (670) — 

B. Cash and cash equivalents 

(347) (19) — 1,444 — 

Unaudited 

(Based on 

management 

accounts 

presented for 

comparative 

purpose only) 

As at 31 December As at As at 

1999 2000 2001 30 June 2002 30 June 2001 

$’000 $’000 $’000 $’000 $’000 

Cash and bank balances 1,949 7,444 18,205 11,092 5,086 

Bank overdraft (72) — — — — 

Trust receipts (3,864) (10,551) (8,783) (19,139) (22,784) 

(1,987) (3,107) 9,422 (8,047) (17,698) 



103

STATEMENTS OF ADJUSTMENTS 

31 December 2000 

Balance sheet 

Adjustments 

Audited arising from Adjusted 

consolidated deconsolidation consolidated 

financial of a subsidiary financial 

statements (Note A) statements 

$’000 $’000 $’000 

Non-current assets 16,750 (488) 16,262 

Current assets 31,237 (29) 31,208 

Current liabilities (30,828) 516 (30,312) 

Non-current liabilities (6,235) — (6,235) 

Total assets 10,924 10,923 

Share capital 200 — 200 

Foreign currency translation reserve (10) — (10) 

Retained profits 10,713 (1) 10,712 

Minority interest 21 — 21 

Profit and loss account 

10,924 10,923 

Revenue 104,645 — 104,645 

Cost of sales (82,289) — (82,289) 

Gross profit 22,356 22,356 

Other operating income 216 (42) 174 

Distribution costs (3,088) — (3,088) 

Administrative and other operating expenses (11,049) 41 (11,008) 

Profit from operations 8,435 8,434 

Finance costs (1,494) — (1,494) 

Share of results of associated company (7) — (7) 

Profit before taxation 6,934 6,933 

Taxation (1,348) — (1,348) 

Profit after taxation 5,586 — 5,585 

Minority interest 25 25 

Profit attributable to shareholders 5,611 (1) 5,610 

104

STATEMENTS OF ADJUSTMENTS (Cont’d) 


Adjustments 





$’000 $’000 $’000 

Non-current assets 22,960 (520) 22,440 

Current assets 47,823 485 48,308 

Current liabilities (42,120) 3 (42,117) 


Total assets 21,677 — 21,645 

Share capital 2,000 — 2,000 

Foreign currency translation reserve 513 — 513 


Minority interest 724 — 724 


21,677 21,645 

Revenue 179,988 —- 179,988 

Cost of sales (143,596) (44) (143,640) 


Other operating income 874 — 874 


Administrative and other operating expenses (18,827) 2 (18,825) 


Finance costs (1,999) 10 (1,989) 

Share of results of associated company 18 — 18 


Taxation (2,430) — (2,430) 

Profit after taxation 9,583 9,551 

Minority interest (55) — (55) 

Profit attributable to shareholders 9,528 (32) 9,496 

105

STATEMENTS OF ADJUSTMENTS (Cont’d) 

30 June 2002 

Balance sheet 

106 

Adjustments 





$’000 $’000 $’000 

Non-current assets 26,296 — 26,296 

Current assets 77,892 (32) 77,860 

Current liabilities (69,291) — (69,291) 


Total assets 28,707 28,675 

Share capital 2,000 — 2,000 

Foreign currency translation reserve (55) — (55) 

Share application account 670 — 670 



28,707 28,675 

Revenue 92,013 — 92,013 

Cost of sales (70,349) — (70,349) 


Other operating income 142 — 142 


Administrative and other operating expenses (8,956) — (8,956) 


Finance costs (518) — (518) 


Taxation (1,916) — (1,916) 

Profit attributable to shareholders 7,652 7,652 

Note A — Elimination of assets and liabilities of a subsidiary which was acquired in the financial year ended 31 December 2000 

and subsequently disposed off in the six months financial period ended 30 June 2002.

NOTES TO THE FINANCIAL STATEMENTS 

1. GENERAL CORPORATE INFORMATION 

Ocean Sky International Pte Ltd (“Company”) is a company domiciled and incorporated in 

Singapore with its registered office and principal place of business at 22 Tampines Street 92, 

Singapore 528876. On 7 February 2003, the Company was converted into a public limited 

company and changed its name to Ocean Sky International Limited. 

The principal activities of the Company are those of manufacturing of specialty apparels and 

provision of related SCM services and investment holding. 

The principal activities of the subsidiary companies are set out in Note 2 to the financial 

statements. 

The number of employees of the Group as at 30 June 2002 was 6,900 (2001: 6,391). 

2. BASIS OF PRESENTATION OF FINANCIAL INFORMATION 

The financial information set out in this report is expressed in Singapore dollars (unless otherwise 

stated) and shows the Balance Sheets, Profit and Loss Accounts, Statement of Cash Flows and 

Movements of Shareholders’ Equity of the Group for each of the three financial years ended 31 

December 1999 to 2001 and six months financial period ended 30 June 2002. 

The financial information is based on the audited financial statements of the Group, after making 

such adjustments considered necessary. Such Group financial information are presented on the 

basis of the accounting policies set out in Note 3 of this report. 

All material inter-group transactions and balances have been eliminated in the preparation of the 

Group’s financial statements. 

BDO International, Certified Public Accountants, Singapore has been appointed the auditor of the 

Company, ATS Garments (S) Pte Ltd and Sunglobe Pte Ltd for the financial years ended 31 

December 1999 to 2001 and six months financial period ended 30 June 2002. 

BDO Binder, Certified Public Accountants, Malaysia has audited the financial statements of Eng 

Soon Garments Sdn Bhd for the financial years ended 31 December 1999 to 2001 and six months 

financial period ended 30 June 2002. 

BDO International, Certified Public Accountants, Hong Kong has audited the financial statements 

of Ocean Sky Textile (H.K.) Limited for the financial years ended 31 December 1999 to 2001 and 

six months financial period ended 30 June 2002. 

Foo, Kon & Tan, Certified Public Accountants, Negara Brunei Darussalam has audited the financial 

statements of P.D.A.C Ocean Sky Sdn Bhd for the financial years ended 31 December 2000 (year 

of acquisition) to 2001 and six months financial period ended 30 June 2002. 

KPMG Peat, Marwick, Mitchell & Co. (Latin America), S.A. has audited the financial statements of 

Hoon’s Apparel International (SAL) S.A. de C.V. for the financial years ended 31 December 2000 to 

2001 and six months financial period ended 30 June 2002. 

107

2. BASIS OF PRESENTATION OF FINANCIAL INFORMATION (Cont’d) 

KPMG, Cambodia has audited the financial statements of Suntex Pte Ltd for the financial years 

ended 31 December 1999 to 2001 and six months financial period ended 30 June 2002. 

Deloitte & Touche C.A., S.A., Honduras has audited the financial statements of Uniwear Garments 

Honduras S.A. for the financial year ended 31 December 2001 and six months financial period 

ended 30 June 2002. 

Widdows Kong and Associates, Certified Public Accountants, Negara Brunei Darussalam has 

audited the financial statements of Milteq Tenthouse Sdn Bhd for the financial period ended 31 

December 2001 and six months financial period ended 30 June 2002. 

The financial statements of Ocean Star Sourcing (USA), Inc, is not audited as an audit is not 

required according to the laws in the country of incorporation. 

The auditors’ reports on the audited financial statements of companies within the Group were not 

subject to any qualification for the past three financial years ended 31 December 1999 to 2001 and 

six months financial period ended 30 June 2002. 

As at 30 June 2002, the particulars of subsidiary companies are as follows:- 

Percentage 

Date and place Issued and of equity 

Name of of incorporation paid-up held by Principal Cost of 

company and operations capital the Group activities Investments 

% $’000 

ATS Garments 4 January 1995 $500,002 100 Investment 958 

(S) Pte Ltd Singapore holding 

Eng Soon 27 October 1997 RM175,002 100 Manufacturing 78 

Garments Malaysia of apparels 

Sdn Bhd 

Hoon’s Apparel 19 September 2000 US$1,050,000 100 Manufacturing 1,937 

International El Salvador of apparels 

(SAL) S.A. de C.V. 

Ocean Sky Textile 29 November 1999 HK$10,000 100 Marketing and 2 

(H.K.) Limited Hong Kong sourcing of 

textiles and 

apparels and 

provision of 

related SCM 

services 

Ocean Star 26 December 2001 US$150,000 100 Manufacturing 285 

Sourcing USA and sourcing of 

(USA), Inc. textiles and 

fabrics, distribution of 

apparels and 

provision of 

related SCM 

services 

P.D.A.C Ocean 29 May 1997 B$500,000 100 Manufacturing 2,050 

Sky Sdn Bhd Brunei of apparels 

108

2. BASIS OF PRESENTATION OF FINANCIAL INFORMATION (Cont’d) 

Percentage 

Date and place Issued and of equity 

Name of of incorporation paid-up held by Principal Cost of 

company and operations capital the Group activities Investments 

% $’000 

Uniwear Garments 30 April 2001 HNL5,525,000 100 Manufacturing 606 

Honduras S.A. Honduras of apparels 

Sunglobe Pte Ltd 10 April 1992 $310,000 100 Import and 326 

Singapore export and 

trading of 

textiles and 

apparels 

Suntex Pte Ltd 18 October 1996 US$1,200,000 100 Manufacturing 1,864 

Cambodia of apparels 

* Pacific Sky 18 June 2002 US$22,857 100 Inactive 

Apparel (SAL), El Salvador 

S.A. de C.V. 

* Ocean Star 12 June 2002 #US$245,711 100 Inactive 

Apparel PRC 

(Guangzhou) 

Pte Ltd 

8,106 

* These subsidiaries were not included in the consolidated financial statements they were only incorporated in June 2002 

and have not commenced operations as at 30 June 2002. No financial statements have been prepared since respective 

dates of incorporation and statutory auditors have not yet been appointed. 

# The registered capital were contributed in two portion of US$100,000 and US$145,711 on 10 September 2002 and 6 

December 2002 respectively. 

Subsidiary of ATS 

Garments (S) 


Milteq Tenthouse 26 June 2001 B$25,000 100 Manufacturing 

Sdn Bhd Brunei of apparels 

Subsequent to 30 June 2002, the Company incorporated certain subsidiary companies as 

disclosed in Note 41 (iii) of the financial statements. 

109

3. SIGNIFICANT ACCOUNTING POLICIES 

Statement of compliance 

The financial statements of the Group have been prepared in accordance with the Statements of 

Accounting Standard (“SAS”) issued by the Institute of Certified Public Accountants of Singapore 

and the applicable disclosure requirements of the Singapore Companies Act, Chapter 50. 

Basis of preparation of financial statements 

The financial statements of the Group, expressed in Singapore dollars, have been prepared in 

accordance with the historical cost convention. 

Basis of consolidation 

The consolidated financial statements include the financial statements of the Group made up to the 

end of the respective financial years. 

The financial statements of the subsidiary companies are included in the consolidated financial 

statements from the dates of acquisitions of the subsidiary companies concerned. All intercompany 

transactions have been eliminated on consolidation and the consolidated financial 

statements reflect external transactions only. 

In the case of the subsidiary, Suntex Investments Co. Ltd (Cambodia), which was acquired in the 

financial year ended 31 December 2000 and subsequently disposed off in the six months financial 

period ended 30 June 2002, Suntex Investments Co. Ltd (Cambodia) was deconsolidated in the 

two financial years ended 31 December 2001 for the purpose of presentation of the consolidated 

financial statements to reflect the companies that are in the Group as at 30 June 2002 and the 

adjustments arising from the deconsolidation are disclosed in the Statements of Adjustments. 

Goodwill arising on acquisition represents the excess of the cost of investment in subsidiaries over 

the fair value of the identifiable net assets acquired. Negative goodwill arising on acquisition 

represents the excess of the fair value of the identifiable net assets acquired over the cost of 

acquisition. With effect from 1 January 2001, the Group has adopted SAS 22 Business 

Combination (2000) and amortise goodwill over a period of up to 20 years. Both negative goodwill 

and goodwill on acquisition arising prior to 1 January 2001 have been credited or charged in full to 

the retained profits brought forward; such goodwill have not been retrospectively capitalised and 

amortised, as allowed under SAS 22 Business Combination (2000). 

Fixed assets and depreciation 

Fixed assets are stated at cost less accumulated depreciation. The cost of an asset comprises its 

purchase price and any direct attributable costs of bringing the asset to working condition for its 

intended use. Expenditure for additions, improvements and renewals are capitalised and 

expenditure for maintenance and repairs are charged to the profit and loss accounts. When fixed 

assets are sold or retired, their cost and accumulated depreciation are removed from the financial 

statements and any gain or loss resulting from their disposal is included in the profit and loss 

accounts. 

110

3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) 

Fixed assets and depreciation (Cont’d) 

Depreciation is calculated on the straight line method so as to write off the cost of fixed assets over 

their estimated useful lives. The annual rates used for this purpose are as follows:- 

Land and buildings 5 — 20 

Furniture and fittings 10 — 33 

Motor vehicles 10 — 20 

Plant and machinery 10 — 33 

Factory equipment 10 — 33 

Office equipment 10 — 20 

Electrical fittings 10 — 33 

Fully depreciated assets are retained in the financial statements until such time when they are no 

longer in use. 

Impairment 

The carrying amounts of the Group’s non-current assets are reviewed at each balance sheet date 

to determine whether there is any indication of impairment. If any such indication exists, the 

asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying 

amount of the asset or its cash generating unit exceeds its recoverable amount. Impairment 

losses are recognised in the profit and loss accounts. 

The recoverable amount is the higher of an asset’s net selling price and value in use. The net 

selling price is the amount obtainable from the sale of an asset in an arm’s length transaction. 

Value in use is the present value of estimated future cash flows expected to arise from the 

continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts 

are estimated for individual assets or, if it is not possible, for the cash generating unit. 

An impairment loss is reversed if there has been a change in the estimates used to determine the 

recoverable amounts. An impairment loss is reversed only to the extent that the asset’s carrying 

amount does not exceed the carrying amount that would have been determined, net of 

depreciation or amortisation, if no impairment loss has been recognised. Reversals of impairment 

are recognised in the profit and loss accounts. 

Foreign currency transactions and translation 

(i) Monetary assets and liabilities maintained in foreign currencies are translated into 

Singapore dollars at the approximate rates of exchange ruling at the balance sheet date. 

Transactions during the financial year have been converted at the rates prevailing on the 

transaction dates. All exchange differences are dealt with in the profit and loss accounts. 

(ii) Translation of financial statements of foreign operations 

Foreign operations are subsidiaries whose activities are based or conducted outside 

Singapore. 

Foreign operations whose activities are not integral to those of the parent 

The financial statements of the foreign subsidiaries are translated into Singapore dollars at 

the approximate rates of exchange ruling at the balance sheet date. The results of foreign 

subsidiaries are translated into Singapore dollars at the average exchange rate for the 

financial year. Exchange differences due to such currency translations are taken directly to 

foreign currency translation reserves. 

111 

%


Foreign currency transactions and translation (Cont’d) 

Foreign operations whose activities are integral to those of the parent 

All monetary items are translated into Singapore dollars at the rates of exchange prevailing at the 

balance sheet date and all non-monetary items are recorded at the rates of exchange when the 

relevant transactions occurred. The results of the foreign subsidiaries are translated into 

Singapore dollars at the annual average exchange rates. All resulting exchange differences are 

taken to the profit and loss accounts. 

Associated companies 

An associated company is defined as a company, not being a subsidiary, in which the Group has 

an interest of at least 20% of equity and in whose financial and operating policy decisions, the 

Group exercises significant influence. 

Associated companies are accounted for under the equity method whereby the Group’s share of 

the profits less losses of associated companies is included in the consolidated profit and loss 

accounts. The Group’s share of the post-acquisition retained profits less accumulated losses and 

reserves is added to the amount of the investment in associated companies in the consolidated 

balance sheet. 

The Group’s share of these results is arrived at based on the latest available audited financial 

statements or unaudited management financial statements of the associated companies. 

Investments 

Investments held on a long-term basis are stated at cost less impairment losses, if any. 

Goodwill 

This represents the excess of purchase consideration over the book value of net assets taken over 

from a sole proprietorship and is amortised over a period of 10 years effective from 1998. The 

Directors decided to write off the balance of purchased goodwill in the six months financial period 

ended 30 June 2002 as they are of the opinion that the goodwill would not generate any further 

future economic benefits. 

Stocks and work-in-progress 

Stocks and work-in-progress are stated at the lower of cost and net realisable value. Cost is 

determined on a “first-in-first-out” basis. Manufactured work-in-progress and finished goods 

include cost of materials, direct labour and an appropriate portion of manufacturing overheads. 

Net realisable value is the price at which stocks can be realised in the normal course of business 

after allowing for the costs of realisation. Provision is made for obsolete, slow-moving and 

defective stocks. 

Related parties 

For the purposes of these financial statements, parties are considered to be related to the Group if 

the Group has the ability, directly or indirectly, to control the party or exercise significant influence 

over the party in making financial and operating decisions, or vice versa, or where the Group and 

the party are subject to common control or common significant influence. Related parties may be 

individuals or other entities. 

Debtors 

Debtors are stated at their cost less provision for doubtful debts. 

Known bad debts are written off and specific provisions are made for those debts considered to be 

doubtful of collection. 

112



Cash and cash equivalents comprise cash balances, bank deposits and short-term highly liquid 

investments which are readily convertible into known amounts of cash and which are subject to an 

insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and 

cash equivalents are presented net of trust receipts and which form an integral part of the Group’s 

cash management. 

Creditors 

Creditors are carried at cost which is the fair value of the consideration to be paid in the future for 

goods and services received, whether or not billed to the Group. 

Employee benefits 

As required by law, the Group make contributions to the state pension scheme. Contributions are 

recognised as compensation expense in the same financial year as the employment that gives rise 

to the contribution. 

Provisions 

A provision is recognised in the balance sheet when there is a legal or constructive obligation as a 

result of a past event, and it is probable that an outflow of economic benefits will be required to 

settle the obligation. 

Taxation 

Taxation for the financial year comprise current and deferred taxes. Taxation is recognised in the 

profit and loss accounts except to the extent that it relates to items recognised directly in equity, in 

which case such taxation is recognised in equity. 

Current tax is the expected tax payable on the taxable income for the financial year, using tax rates 

enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in 

respect of previous financial years. 

Deferred tax is provided using the balance sheet liability method, providing for temporary 

differences between the carrying amounts of assets and liabilities for financial reporting purposes 

and the amounts used for taxation purposes. The amount of deferred tax provided is based on the 

expected manner of realisation or settlement of the carrying amount of assets and liabilities, using 

tax rates enacted or substantially enacted at the balance sheet date. 

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits 

will be available against which the asset can be utilised. Deferred tax assets are reduced to the 

extent that it is no longer probable that the related tax benefit will be realised. 

Deferred expenditure 

Deferred expenditure which consists of quota costs is stated at cost less accumulated amortisation 

and write off. 

Quotas are the rights acquired under apparel quotas paid by a subsidiary company and is stated at 

cost. The rights when utilised or expired are charged to the profit and loss accounts. 

Finance leases 

Where assets are financed by lease agreements, including hire-purchase agreements, that give 

rights approximating to ownership, the assets are capitalised as if they had been purchased 

outright at the values equivalent to the present value of the total rental payable during the period of 

the leases and the corresponding lease commitments are included under liabilities. 

113


Finance leases (Cont’d) 

The excess of the lease payments over the recorded lease obligations is treated as finance 

charges which are charged to the profit and loss accounts in equal instalments over the period of 

lease or hire-purchase. 

Rentals on operating leases are charged to the profit and loss accounts. 

Revenue recognition 

Revenue from sales of goods is recognised upon passage of title to the customers which generally 

coincides with their delivery and acceptance. 

Rental and interest income are recognised on an accrual basis. 

Share capital 

Ordinary share capital is recognised at the fair value of the consideration received by the 

Company. 

Financial instruments 

Financial instruments carried on the balance sheet include cash and cash equivalents, finance 

lease creditors, bank borrowings, trade debtors and creditors, other debtors and creditors, 

balances with related companies and related parties. The particular recognition methods adopted 

are disclosed in the individual policy statements associated with each item. 

Segment reporting 

A segment is a distinguishable component of the Group that is engaged either in providing 

products or services (business segment), or in providing products or services within a particular 

economic environment (geographical segment), which is subject to risks and rewards that are 

different from those of other segments. 

Segment information is presented in respect of the Group’s geographical segments. The 

geographical segments, is based on the Group’s management and internal reporting structure. 

Segment capital expenditure is the total cost incurred during the financial year to acquire segment 

assets that are expected to be used for more than one financial year. 

114

4. FIXED ASSETS 

Group Leasehold Furniture Motor Plant and Factory Office Electrical 

31 December 1999 buildings and fittings vehicles machinery equipment equipment fittings Total 

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.1999 – 114 46 863 87 44 89 1,243 

Additions 459 104 1,334 2,546 101 194 9 4,747 

Acquisition of subsidiaries 939 140 125 1,149 86 115 29 2,583 

Disposals – – (8) – – – – (8) 

Balance as at 31.12.1999 1,398 358 1,497 4,558 274 353 127 8,565 

Accumulated Depreciation 

Balance as at 1.1.1999 – 25 12 194 21 21 22 295 

Charged for the financial 

year 61 33 154 413 26 55 13 755 

Acquisition of subsidiaries 39 11 17 79 6 12 3 167 

Disposals – – (2) – – – – (2) 

115 

Balance as at 31.12.1999 100 69 181 686 53 88 38 1,215 

Net Book Value 

As at 31.12.1999 1,298 289 1,316 3,872 221 265 89 7,350 

As at the balance sheet date, the Group had fixed assets purchased under finance lease contracts with a net book value of $1,914,000. 

A motor vehicle of the Group with a net book value at balance sheet date of $113,000 is registered in the name of a Director who is holding the motor 

vehicle in trust for the Group.

4. FIXED ASSETS (Cont’d) 

Leasehold 

Group land and Furniture Motor Plant and Factory Office Electrical 


$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.2000 1,398 358 1,497 4,558 274 353 127 8,565 

Additions 6,688 273 548 314 324 600 362 9,109 


Currency realignment 59 9 5 63 5 8 2 151 

Disposals – – (52) (2) – (62) – (116) 

Balance as at 31.12.2000 8,443 671 2,037 5,036 612 931 545 18,275 


Balance as at 1.1.2000 100 69 181 686 53 88 38 1,215 


year 404 63 190 498 43 136 45 1,379 



Disposals – – (12) (1) – (12) – (25) 

116 

Balance as at 31.12.2000 521 137 369 1,200 98 216 106 2,647 


As at 31.12.2000 7,922 534 1,668 3,836 514 715 439 15,628 


A motor vehicle of the Group with a net book value at balance sheet date of $101,000 is registered in the name of a Director who is holding the motor 

vehicle in trust for the Group. 

The leasehold building with a net book value at balance sheet date of $5,469,000 has been pledged to a bank for banking facilities granted (Note 22).


Leasehold 

Group land and Furniture Motor Plant and Factory Office Electrical 


$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.2001 8,443 671 2,037 5,036 612 931 545 18,275 

Additions 987 316 764 4,578 1,271 562 305 8,783 

Currency realignment 156 – 23 129 26 52 8 394 

Disposals – (1) (321) (1) – (2) – (325) 

Balance as at 31.12.2001 9,586 986 2,503 9,742 1,909 1,543 858 27,127 


Balance as at 1.1.2001 521 137 369 1,200 98 216 106 2,647 


year 492 88 264 962 205 241 83 2,335 


Disposals – – (58) (1) – (1) – (60) 

117 

Balance as at 31.12.2001 1,026 226 581 2,196 307 466 196 4,998 


As at 31.12.2001 8,560 760 1,922 7,546 1,602 1,077 662 22,129 


Certain motor vehicles of the Group with a net book value at year end of $272,000 are registered in the names of a Director and an employee who are 

holding these motor vehicles in trust for the Group. 



Freehold Leasehold 

Group land and land and Furniture Motor Plant and Factory Office Electrical 

30 June 2002 buildings buildings and fittings vehicles machinery equipment equipment fittings Total 

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.2002 – 9,586 986 2,503 9,742 1,909 1,543 858 27,127 

Additions 991 323 360 473 854 292 184 57 3,534 

Currency realignment (11) (125) (20) (19) (98) (57) (33) (7) (370) 

Disposals – – – (84) – – – – (84) 

Balance as at 30.6.2002 980 9,784 1,326 2,873 10,498 2,144 1,694 908 30,207 


Balance as at 1.1.2002 – 1,026 226 581 2,196 307 466 196 4,998 


period 7 278 53 192 557 122 134 50 1,393 

Currency realignment – (19) (4) (5) (30) (8) (8) (2) (76) 

Disposals – – – (23) – – – – (23) 

118 

Balance as at 30.6.2002 7 1,285 275 745 2,723 421 592 244 6,292 


As at 30.6.2002 973 8,499 1,051 2,128 7,775 1,723 1,102 664 23,915 


Certain motor vehicles of the Group with a net book value at year end of $239,000 are registered in the names of a Director and an employee who are 

holding these motor vehicles in trust for the Group. 


5. GOODWILL 

Negative 

Goodwill goodwill 

Group Purchased arising on arising on 

31 December 1999 goodwill consolidation consolidation Total 

$’000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.1999 25 – – 25 

Currency realignment (3) – – (3) 

Balance as at 31.12.1999 22 – – 22 

Accumulated amortisation 

Balance as at 1.1.1999 – – – – 

Amortisation for the financial year 2 – – 2 

Balance as at 31.12.1999 2 – – 2 

Net book value 20 – – 20 


Cost 

Balance as at 1.1.2000 22 – – 22 

Currency realignment 3 – – 3 

Balance as at 31.12.2000 25 – – 25 


Balance as at 1.1.2000 2 – – 2 



Balance as at 31.12.2000 8 – – 8 

Net book value 17 – – 17 


Cost 

Balance as at 1.1.2001 25 – – 25 


Balance as at 31.12.2001 27 – – 27 


Balance as at 1.1.2001 8 – – 8 



Balance as at 31.12.2001 27 – – 27 

Net book value – – – – 

119

5. GOODWILL (Cont’d) 

Negative 

Goodwill goodwill 

Group Purchased arising on arising on 

30 June 2002 goodwill consolidation consolidation Total 

$’000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.2002 27 – – 27 

Additions – 1,667 (72) 1,595 

Written off (27) – – (27) 

Balance as at 30.6.2002 – 1,667 (72) 1,595 


Balance as at 1.1.2002 27 – – 27 

Amortisation for the financial period – 104 (5) 99 

Amount utilised (27) – – (27) 

Balance as at 30.6.2002 – 104 (5) 99 

Net book value – 1,563 (67) 1,496 

6. ASSOCIATED COMPANIES 

The investment in associated companies are made up as follows:- 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Unquoted equity shares, at cost – 50 50 – 

Share of results in associated company – (7) 11 – 

– 43 61 – 

The following information relates to associated companies:- 

Name of company 

and (Country of Percentage 

incorporation of equity held Cost of 

and place of Principal by the Group investments 

business operations) activities 30 June 2002 30 June 2002 

% $’000 

Perkasa Ocean Sky Inactive – – 

Industrial Sdn Bhd (under members’ 

(Brunei) voluntary 

winding-up)– 

Bloom Time Trading Inactive 33.33 # – 

(2002) Pte Ltd 

(Singapore) 

– 

120

6. ASSOCIATED COMPANIES (Con’d) 

Note :- 

# Cost of investment is $1.00. 

The cost of investment in associated company as at 31 December 2000 and 2001 represent 

investment in Perkasa Ocean Sky Industrial Sdn Bhd, which went into members’ voluntary winding 

up as at 27 August 2002. Bloom Time Trading (2002) Pte Ltd was acquired on 30 January 2002. 

7. INVESTMENTS 

Group 


Note 1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Club membership, at cost (a) 50 100 100 100 

Principal sum of amounts under (b) 

fund management, at cost – 150 150 150 

50 250 250 250 

Principal sum of amounts under 

fund management, at market value – 136 134 135 

(a) The club membership is registered in the name of a Director who is holding it in trust. 

(b) No provision for diminution in value is made as the Directors considered that there is no 

permanent impairment in value. 

8. DEFERRED EXPENDITURE 

Preliminary 

and 

Group pre-operating 

31 December 1999 expenses Quotas Total 

$’000 $’000 $’000 

Cost 

Balance as at 1.1.1999 – – – 

Acquisition of subsidiary 253 – 253 

Additions – 2,694 2,694 

Balance as at 31.12.1999 253 2,694 2,947 


Balance as at 1.1.1999 – – – 

Acquisition of subsidiary 126 – 126 

Amortisation for the financial year 127 1,795 1,922 

Balance as at 31.12.1999 253 1,795 2,048 

Net book value – 899 899 

121

8. DEFERRED EXPENDITURE (Cont’d) 

Preliminary 

and 


expenses Quotas Total 

31 December 2000 $’000 $’000 $’000 

Cost 

Balance as at 1.1.2000 253 2,694 2,947 

Additions – 370 370 

Currency realignment 11 53 64 

Balance as at 31.12.2000 264 3,117 3,381 


Balance as at 1.1.2000 253 1,795 2,048 

Amortisation for the financial year – 963 963 

Currency realignment 11 35 46 

Balance as at 31.12.2000 264 2,793 3,057 



Cost 

Balance as at 1.1.2001 264 3,117 3,381 

Additions – 2,746 2,746 

Written off (264) – (264) 

Currency realignment – 217 217 

Balance as at 31.12.2001 – 6,080^ 6,080 


Balance as at 1.1.2001 264 2,793 3,057 

Amortisation for the financial year – 2,991 2,991 

Amount utilised (264) – (264) 

Currency realignment – 296 296 

Balance as at 31.12.2001 – 6,080^ 6,080 

Net book value – – – 

^ - The cost of quotas was fully amortised as at 31 December 2001 

122

8. DEFERRED EXPENDITURE (Cont’d) 

Preliminary 

and 


expenses Quotas Total 

$’000 $’000 $’000 

30 June 2002 

Cost 

Balance as at 1.1.2002 – – – 

Additions – 885 885 

Currency realignment – (25) (25) 

Balance as at 30.6.2002 – 860 860 


Balance as at 1.1.2002 – – – 

Amortisation for the financial period – 228 228 

Currency realignment – (3) (3) 

Balance as at 30.6.2002 – 225 225 


9. CURRENT ASSETS 

Group 


Note 1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Stocks 11 7,089 13,358 13,592 33,713 

Trade debtors 

Other debtors, deposits and 

5,741 8,471 13,678 30,970 

prepayments 12 1,739 1,081 1,174 1,588 

Amount due by holding company 13 912 726 557 485 

Amounts due by related parties 14 – – 1,097 – 

Amount due by associated company 15 – 123 – – 

Fixed deposit 16 5 5 5 12 

Cash and bank balances 1,949 7,444 18,205 11,092 

17,435 31,208 48,308 77,860 

123

10. CURRENT LIABILITIES 

Group 


Note 1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Trade creditors 8,895 12,910 23,069 40,908 

Other creditors and accruals 17 2,104 2,726 5,039 3,767 

Finance lease creditors 18 672 812 1,774 1,555 

Amounts due to related parties 19 106 12 – 327 

Amount due to related company 20 1,567 1,265 1,158 634 

Amount due to associated company 21 – 185 71 – 

Amount due to bankers 22 3,936 11,048 9,269 19,625 

Taxation 1,497 1,354 1,737 2,475 

18,777 30,312 42,117 69,291 

11. STOCKS 

At cost 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Raw materials 5,256 7,231 5,778 18,191 

Work-in-progress 786 4,982 6,581 13,183 

Finished goods 1,047 1,145 1,233 2,339 

7,089 13,358 13,592 33,713 

12. OTHER DEBTORS, DEPOSITS AND PREPAYMENTS 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Amount due by Directors 250 250 – – 

Sundry debtors 414 53 51 303 

Deposit for fixed assets purchased 789 – 67 460 

Other deposits 286 571 669 658 

Prepayments – 106 387 167 

Tax recoverable – 101 – – 

1,739 1,081 1,174 1,588 

124

12. OTHER DEBTORS, DEPOSITS AND PREPAYMENTS (Cont’d) 

The amount due by Directors are non-trade in nature, unsecured, interest-free and had no fixed 

terms of repayment. 

13. AMOUNT DUE BY HOLDING COMPANY 

The immediate and ultimate holding company is ATS Holdings (2000) Pte Ltd, a company 

incorporated in Singapore. 

The amount due is non-trade in nature, unsecured, interest-free and has no fixed terms of 

repayment. 

14. AMOUNTS DUE BY RELATED PARTIES 

The amounts due by related parties, which are companies in which there is a common Director/ 

shareholder and where shareholders are spouses of certain Directors of the Company, are trade in 

nature, unsecured, interest-free and have no fixed terms of repayment. 

15. AMOUNT DUE BY ASSOCIATED COMPANY 


repayment. 

16. FIXED DEPOSIT 

The fixed deposit is pledged to a licensed bank as security for bankers’ guarantees issued in favour 

of third parties. 

17. OTHER CREDITORS AND ACCRUALS 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Accrued operating expenses 1,562 2,148 3,700 2,890 

Provision for Directors’ fees 542 527 1,000 – 

Amounts due to Directors – – 290 777 

Other creditors – 51 49 100 

2,104 2,726 5,039 3,767 

The amounts due to Directors are non-trade in nature, unsecured, interest-free and have no fixed 

terms of repayment. 

125

18. FINANCE LEASE CREDITORS 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Minimum finance lease instalments 

- payable within one year 886 945 2,035 1,778 

- payable within two to five years 1,604 1,710 2,620 2,035 

2,490 2,655 4,655 3,813 

Finance charges allocated to future periods (337) (390) (622) (525) 

2,153 2,265 4,033 3,288 

Payable within one year 672 812 1,774 1,555 

Payable after one year 1,481 1,453 2,259 1,733 

2,153 2,265 4,033 3,288 

19. AMOUNTS DUE TO RELATED PARTIES 

The amounts due as at 31 December 1999 and 2000 were relating to trade transactions and were 

unsecured, interest-free and have no fixed terms of repayment. 

The amounts due as at 30 June 2002 arose from purchase of unquoted investment in a 

corporation and is unsecured, interest free and have no fixed terms of repayment. 

20. AMOUNT DUE TO RELATED COMPANY 


repayment. 

21. AMOUNT DUE TO ASSOCIATED COMPANY 


repayment. 

126

22. AMOUNTS DUE TO BANKERS 

Current 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Trust receipts - unsecured 3,864 10,551 8,783 19,139 

Bank overdraft - unsecured 72 – – – 

Term loans - secured – 497 486 486 

Non-current 

3,936 11,048 9,269 19,625 

Term loans - secured – 4,508 4,084 3,835 

The bank term loans are repayable over 120 and 60 monthly instalments commencing January 

2000 and November 2000 respectively. 

Interest charged on the bank loans ranged from 4.75% to 6.25% (2001: 4.75% to 5.75%, 

2000: 6.25% to 6.75%) per annum. 

The term loans are secured by way of an open mortgage on the Group’s leasehold building (Note 

4). 

The unsecured banking facilities are granted by personal guarantees of certain Directors of the 

Company jointly and severally. 

23. NON-CURRENT LIABILITIES 

Group 


1999 2000 2001 30 June 2002 

Note $’000 $’000 $’000 $’000 

Finance lease creditors 18 1,481 1,453 2,259 1,733 

Amounts due to bankers 22 – 4,508 4,084 3,835 

Deferred taxation 24 194 274 643 622 

1,675 6,235 6,986 6,190 

127

24. DEFERRED TAXATION 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Balance at beginning of financial year 94 194 274 643 

Acquisition of subsidiaries 5 – – – 

Foreign exchange differences – 1 2 (2) 

Transfer from/(to) profit and loss account 95 79 367 (19) 

Balance at end of financial year 194 274 643 622 

Deferred taxation at balance sheet date represents timing differences between the tax written down 

value and the net book value of the fixed assets computed at statutory income tax rate. 

128

25. SHARE CAPITAL 

Authorised:- 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Ordinary shares of $1 

each at beginning 

of financial year/period 

(1999, 2000, 2001: 250,000, 

2002: 2,000,000) 

Increase in authorised 

share capital by the 

creation of an 

additional Nil 

(2001: 1,750,000) 

ordinary shares of $1 

250 250 250 2,000 

each 

Ordinary shares 

of $1 each at end 


(1999, 2000: 250,000, 

2001 and 

– – 1,750 – 

30.6.2002 : 2,000,000) 250 250 2,000 2,000 

Issued and fully paid:- 


each at beginning 


(1999, 2000, 2001: 200,001, 

2002: 2,000,000) 200 200 200 2,000 

1,799,999 ordinary shares 

of $1 each allotted by 

way of bonus issue of 

approximately 9 bonus 

shares for every 1 

ordinary share held 

through the capitalisation 

of $1,799,999 from the 

retained profits – – 1,800 – 


each at end 


(1999, 2000: 200,001, 

2001 and 

30.6.2002: 2,000,000) 200 200 2,000 2,000 

These newly issued shares rank pari passu in all respects with the existing shares already in issue. 

129

26. FOREIGN CURRENCY TRANSLATION RESERVE 

The foreign currency translation reserve comprise all foreign exchange differences arising from the 

translation of the financial statements of foreign subsidiaries and associated company that are not 

integral to the operations of the Company and is non-distributable. Movement in this reserve is set 

out in the consolidated statement of changes in shareholders’ equity. 

27. SHARE APPLICATION ACCOUNT 

The above represents outstanding share application as at 30 June 2002 of which 33,500 ordinary 

shares of $1 each were issued on 10 December 2002 at an average premium of $19 per share. 

Movement in the share application account is set out in the consolidated statement of changes in 

shareholders’ equity. 

28. RETAINED PROFITS 

Retained profits are analysed as follows:- 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

The Company 2,543 5,427 8,983 18,013 

Subsidiary companies 2,559 5,292 9,414 8,047 

Associated company – (7) 11 – 

5,102 10,712 18,408 26,060 

29. REVENUE 

Revenue of the Group represents invoiced value of goods sold less return inwards and discounts 

allowed net of goods and service tax. 

130

30. PROFIT FROM OPERATIONS 

The above is arrived at:- 

After charging:- 

Group 

Financial year ended Six months financial 

31 December period ended 

1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Amortisation of deferred expenditure 1,922 963 2,991 228 

Amortisation of goodwill 2 2 18 104 

Auditors’ remuneration 

- of the Company 

- current year 19 20 21 21 

- prior year – 7 6 – 

- other auditors of the subsidiary companies 11 28 30 26 

Bad trade debts written off – 4 – – 

Depreciation of fixed assets 755 1,379 2,335 1,393 

Directors’ fee 

- Directors of the Company 544 526 1,130 – 

- over provision in previous year – (109) – – 

Directors’ remuneration 

- Directors of the Company 390 603 391 257 

Foreign exchange losses – 24 – – 

Goodwill written off 7 8 – – 

Loss on disposal of fixed assets 5 50 137 9 

Operating leases 

- rental expense 205 800 2,438 1,325 

Pre-operating expenses – 7 – – 

Staff costs 5,273 11,268 27,579 18,075 

and crediting:- 

Amortisation of negative goodwill – – – 5 

Foreign exchange gain 38 – 511 158 

Interest income 

- bank interest 2 4 112 37 

Rental income 

- associated company – 670 – – 

- third parties – – 19 – 

Reserves on consolidation credited 129 – – – 

131

31. FINANCE COSTS 

Group 



1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Interest expense 

- bank interest 235 404 496 22 

- finance lease 59 143 232 124 

- trust receipts 247 676 905 262 

- term loan – 271 356 110 

541 1,494 1,989 518 

32. TAXATION 

Group 



1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Current financial year/ period 1,554 1,269 2,059 1,935 

Under provision of income tax – – 4 – 

Deferred taxation 95 79 367 (19) 

1,649 1,348 2,430 1,916 

Reconciliation of 

effective tax rate 

Profit before taxation 6,053 6,933 11,981 9,568 

Taxation using statutory 

tax rate of 22% 

(2001: 24.5%) 

(2000: 25.5%) 

(1999: 26%) 1,574 1,768 2,935 2,105 

Expenses not deductible for tax 

Effect of different tax rates in 

75 13 179 167 

other countries – (433) (684) (356) 

1,649 1,348 2,430 1,916 

33. EARNINGS PER SHARE 

Earnings per share is calculated by dividing the profit attributable to shareholders by the preinvitation 

share capital of 293,661,720 ordinary shares of $0.05 each. 

132

34. FINANCIAL RISK MANAGEMENT 

The Group is exposed to interest rate and other market risks arising from the normal course of 

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

to hedge against fluctuation, if any, in interest rates and foreign exchange rates. 

(a) Credit risk 

The Group has a credit policy in place and the exposure to credit risk is monitored on an 

ongoing basis. Credit evaluations are performed on all customers. 

The maximum exposure to credit risk is represented by the carrying amount of each financial 

asset in the balance sheet. 

(b) Interest rate risk 

The Group’s exposure to market risk for changes in interest rates relate primarily to interestbearing 

fixed deposits and debt obligations with financial institutions. 

(c) Foreign currency risk 

The Group incurs foreign currency risk on transactions and balances that are denominated in 

a currency other than Singapore dollars. The currency giving rise to this risk is primarily US 

dollars. Those exposures are managed using natural hedges that arise from offsetting assets 

and liabilities that are denominated in foreign currency. 

(d) Fair values 

The carrying amounts of the financial assets and liabilities in the financial statements 

represent their respective net fair values. 

35. SIGNIFICANT RELATED PARTIES TRANSACTIONS 

In addition to the related party information disclosed elsewhere in the financial statements, the 

following are related parties transactions during the financial year/period at terms and rates agreed 

between the parties:- 

Group 

Associated company 



1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Purchases – 5,183 1,828 – 

Rental income – 670 – – 

Holding company 

Management fees expense – 350 650 300 

Related company 

Renovation work expenses – 214 199 – 

Maintenance services expenses – – 87 56 

133

35. SIGNIFICANT RELATED PARTIES TRANSACTIONS (Cont’d) 

Related parties 

Group 



1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Company in which there is a 

common Director/shareholder 

- rental expenses 8 42 42 21 

Company in which the 

shareholders are spouses 

of the Directors 

- sales – – 549 – 

Spouses of the Directors 

- acquisition of subsidiary Company – – – 327 

36. OPERATING LEASE COMMITMENTS 

As at balance sheet date, there were operating lease commitments for rental payable in 

subsequent accounting periods as follows:- 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Within one year 460 1,968 2,297 3,047 

Within two to five years 1,232 5,907 5,872 6,263 

After five years 5,015 5,143 4,075 6,847 

The rent payable under the lease is subject to yearly revision. The above commitments were 

based on prevailing rental rate for the respective financial year. 

37. CAPITAL COMMITMENTS 

As at the balance sheet date, the Group had the following capital commitments contracted but not 

provided for in the financial statements:- 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Purchase of property 4,023 – – – 

Purchase of machinery – – – 151 

Purchase of motor vehicles – – 232 185 

Expansion of factory building 243 – – 708 

134

38. CONTINGENT LIABILITIES - Secured 

Group 


1999 2000 2001 30 June 2002 

$’000 $’000 $’000 $’000 

Fixed deposit pledged to a 

licensed bank as security 

for bankers’ guarantees 

issued in favour of 

third parties 5 5 5 12 

In the opinion of the Directors, no loss is anticipated. 

39. SEGMENT REPORTING 

Business segments 

The Group’s only principal business segment is manufacturing of specialty apparels and provision 

of related SCM services. Therefore, no business segment information is presented. 

Geographical segments 

The Group’s business segments operate in three main geographical areas. Sales revenue is 

based on country in which the customer is located. Segment assets consist primarily of fixed 

assets, receivables, and cash and bank balances. Capital expenditure comprises additions to fixed 

assets. Segment assets and capital expenditure are shown by the geographical area in which the 

assets are located. 

South East North and 

and Central 

Singapore North Asia America Consolidated 

$’000 $’000 $’000 $’000 

30 June 2002 

Segment assets 80,161 16,117 7,878 104,156 

Capital expenditure 382 1,472 1,680 3,534 


Segment assets 50,301 16,265 4,183 70,749 

Capital expenditure 1,355 3,937 3,491 8,783 


Segment assets 37,967 8,983 520 47,470 

Capital expenditure 7,046 1,834 229 9,109 


Segment assets 19,227 6,527 – 25,754 

Capital expenditure 1,585 3,162 – 4,747 

135

39. SEGMENT REPORTING (Cont’d) 

Geographical segments (Cont’d) 

30 June 2002 

United States 

of America Others Consolidated 

$’000 $’000 $’000 

Total revenue by geographical markets 84,615 7,398 92,013 







40. DIVIDENDS 

The Company has not paid or proposed any dividend for the three financial years ended 31 

December 1999, 2000 and 2001 and six months financial period ended 30 June 2002 except as 

disclosed in Note 41 (v) to the financial statements. 

41. SUBSEQUENT EVENTS 

(i) At an Extraordinary General Meetings held on 10 December 2002 the shareholders of the 

Company approved, inter alia, the following:- 

(a) the increase in the authorised share capital of the Company from $2,000,000 to 

$100,000,000 by the creation of an additional 98,000,000 ordinary shares of $1.00 

each; and 

(b) the issue of 33,500 ordinary shares of $1.00 each as consideration for the acquisition 

of additional interests in the subsidiaries at an average premium of $19 per share. 

(ii) At Extraordinary General Meetings held on 30 January 2003 and on 15 February 2003 the 

shareholders approved inter alia, the following:- 

(a) the capitalisation of $12,013,086 out of retained profits, and $636,500 out of share 

premium account for a bonus issue of 12,649,586 ordinary shares of $1 each; 

(b) the sub-division of each ordinary share of $1.00 in the existing authorised and issued 

and paid up share capital into 20 ordinary shares of $0.05 each (“Sub-division of 

shares”) ; 

(c) conversion of the Company into a public limited company and the change of the 

Company name to Ocean Sky International Limited; 

136

41. SUBSEQUENT EVENTS (Cont’d) 

(d) the adoption of a new set of Articles of Assocation; 

(e) the adoption of the Scheme, the participation in the Scheme by Mr Ang Boon Cheow 

Edward, Mr Ang Boon Chong and any other Controlling Shareholders and/or their 

associates, and any specific grant of Options to each of these persons will have to be 

by way of separate resolutions approved by independent shareholders of our Company 

in a general meeting, and that the Directors of the Company be authorised to allot and 

issue Shares upon the exercise of options granted under the Scheme; 

(f) the issue of 92,000,000 New Shares pursuant to the Invitation which when fully paid, 

allotted and issued, will rank pari passu in all respects with the existing issued shares 

(the “Issued of New Shares”); and 

(g) the authorisation of our Directors, pursuant to Section 161 of the Act and subject to the 

provisions of the Articles of Association of our Company and the approval of the SGX- 

ST, to allot and issue (i) shares; (ii) convertible securities; (iii) additional convertible 

securities issued pursuant to rights, bonus or other capitalisation issues 

(notwithstanding that such authority may have ceased to be in force at the time the 

securities are issued, provided that the adjustment does not give the holder of the 

convertible securities a benefit that a Shareholder does not receive); or (iv) shares 

arising from the conversion of securities in (ii) and additional convertible securities in 

(iii), notwithstanding that such authority may have ceased to be in force at the time the 

shares are to be issued), in our Company (whether by way of rights, bonus or 

otherwise) at any time and upon such terms and conditions and for such purposes and 

to such persons as our Directors may in their absolute discretion deem fit provided that 

the aggregate number of such shares and convertible securities to be issued shall not 

exceed 50% of the issued share capital of our Company immediately prior to the 

proposed issue (calculated based on the issued share capital of our Company at the 

time this resolution is passed, after adjusting for new shares arising from the 

conversion of convertible securities or employee share options on issue at the date of 

this resolution, and after adjusting for any subsequent consolidation or sub-division of 

shares) and provided that the aggregate number of such shares and convertible 

securities to be issued other than on a pro-rata basis to the then existing Shareholders 

of our Company shall not exceed 20% of the issued share capital of our Company 

immediately prior to the proposed issue and, unless revoked or varied by our Company 

in general meeting, such authority shall continue in force until the conclusion of the next 

annual general meeting of our Company or the date by which the next general meeting 

of our Company is required by law to be held, whichever is the earlier. 

(iii) The Company incorporated the following subsidiary companies:- 

Percentage 

Date and place of equity 

of incorporation Issued and held by the 

Name of company and operations paid-up capital Group Principal activities 

% 

Blue Ocean Apparel, 9 September 2002 

SA Honduras HNL6,250 100 Inactive 

Ocean Star Marketing 16 September 2002 

(USA), Inc. USA US$2 100 Inactive 

Ocean Gateway 31 July 2002 

International Hong Kong HK$10,000 100 Inactive 

Company Ltd 

Sing Cheng 2 September 2002 

(Guangzhou) PRC HK$149,529 100 Inactive 

Apparel & Accessories 


137

(iv) Subsequent to the balance sheet date, shares were issued by the subsidiaries and capital 

contribution made into a subsidiary as follows:- 

Name of subsidiary Shares issued / Purpose 

(Country of Incorporation) capital contribution 

Ocean Star Sourcing 50,000 shares of To provide additional 

(USA), Inc US$1 each working capital 

(USA) 

Milteq Tenthouse Sdn Bhd 75,000 ordinary shares of To provide additional 

(Brunei) B$1 each working capital 

Ocean Star Apparel Cash portion of US$100,000 To provide for 

(Guangzhou) Machinery and equipment of working capital 

Pte Ltd US$145,711 

(v) Dividend 

An interim dividend declared payable by the Board of Directors on 9 December 2002 and 

subsequently paid to the shareholders is set out below:- 

Net dividend declared 

$’000 

An interim dividend of approximately $3.85 per share less tax of 

22% for the financial year ended 31 December 2002 6,000 

138

MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS 

Pursuant to the Management and Underwriting Agreement dated 12 March 2003 (the “Management and 

Underwriting Agreement”) entered into between our Company, the Manager and the Underwriter, our 

Company appointed the Manager to manage the Invitation. The Manager will receive a management fee 

from our Company for its services rendered in connection with the Invitation. 

Pursuant to the Management and Underwriting Agreement, the Underwriter has agreed to underwrite the 

Offer Shares for a commission of 1.5% of the Issue Price for each Offer Share payable by our Company 

pursuant to the Invitation. 

Pursuant to the Placement Agreement dated 12 March 2003 (the “Placement Agreement”), entered into 

between our Company and the Joint Lead Placement Agents, the Joint Lead Placement Agents has 

agreed to subscribe for and/or purchase or procure subscriptions and/or purchasers for the Placement 

Shares for a placement commission of 2.5% of the Issue Price for each Placement Share, to be paid by 

our Company. The number of Placement Shares each Joint Lead Placement Agents has agreed to 

subscribe or procure subscriptions for is as follows:- 

SBI E2-Capital Securities Limited 4,000,000 Placement Shares 

UOB Kay Hian Private Limited 78,800,000 Placement Shares (including up to 3,500,000 

Reserved Shares) 

Brokerage will be paid by our Company on the Invitation Shares at the rate of 1.0% of the Issue Price for 

each Offer Share. For the Offer Shares, the brokerage will be paid to members of the Association of 

Banks in Singapore, members of the SGX-ST and merchant banks in respect of successful applications 

made on Application Forms bearing their respective stamps, or to the Participating Banks in respect of 

successful applications made through Electronic Applications at their respective ATMs. 

Save as aforesaid, no commission, discount or brokerage has been paid or other special terms granted 

within the two years preceding the date of this Prospectus or is payable to any Directors, promoter, 

expert, proposed Director or any other person for subscribing or agreeing to subscribe, or procuring or 

agreeing to procure subscription for any shares in, or debentures of, our Company or any of its 

subsidiaries. 

The Management and Underwriting Agreement may be terminated by the Manager on behalf of the 

Underwriter at any time on or before the close of the Application List on the occurrence of certain events. 

These events include any changes in national or international monetary, financial, political or economic 

conditions which result or are likely to result in, inter alia, the conditions in the Singapore stock market 

being materially and adversely affected or the success of the Invitation being materially prejudiced. 

In the event the Management and Underwriting Agreement is terminated, our Company reserves the 

right, at the absolute discretion of the Directors, to cancel the Invitation. 

The Placement Agreement is conditional upon the Management and Underwriting Agreement not being 

terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement. 

139

EXCHANGE CONTROLS 

MALAYSIA 

Based on the exchange control regulations in Malaysia issued by Bank Negara Malaysia, foreign funds 

brought into Malaysia and the profits made therefrom are subject to the following rules:- 

(a) The principal amount of the foreign funds brought into Malaysia when repatriated will not attract 

any levy; and 

(b) Prior to 2 May 2001, all profits realised in the utilisation of such foreign funds in portfolio 

investments, when repatriated within 12 months starting from the month the profits are realised, 

attracted a standard 10% levy. With effect from 2 May 2001, the 10% levy is abolished. No such 

levy is imposed on the repatriation of profits made from the sale of other types of assets, including 

real property. 

The criteria set by Bank Negara Malaysia in determining whether an investment is considered a portfolio 

investment include:- 

(i) whether it is a short-term investment with concern on safety of capital, returns and likelihood of 

appreciation; 

(ii) whether the investor has significant influence over the operations of the investee company; and 

(iii) whether the investor holds less than 10% of the equity or voting rights in the investee group of 

companies. 

Whilst there is currently no restriction on the repatriation of non-levyable profits from Malaysia, including 

dividends, Bank Negara Malaysia requires documentary evidence to be furnished to the remitting banks 

to show that the funds to be remitted are not subject to levy. 

Currently, there is no restriction on the ability of our Malaysian subsidiary to transfer funds to our 

Company in the form of cash dividends. 

THE PRC 

The present position under PRC law relating to foreign exchange control, taking into account the 

promulgation of the recent new regulations and the extent the existing provisions stipulated in previous 

regulations do not contradict these new regulations, are as follows:- 

1. Foreign investment enterprises may have their own foreign currency account and are permitted to 

retain a certain percentage of their recurrent foreign exchange earnings. 

2. Foreign investment enterprises may require foreign exchange for their ordinary trading activities 

such as trade services and payment of interest on foreign debts may purchase foreign exchange 

from designated foreign exchange banks if the application is supported by proper payment notices 

or supporting documents. 

3. Foreign investment enterprises may require foreign exchange for the payment of dividends that are 

payable in foreign currencies under applicable regulations, such as distributing profits to their 

foreign investors. They can withdraw funds in their foreign exchange bank accounts kept with 

designated foreign exchange banks, subject to the due payment of tax on such dividends. Where 

the amount of the funds in foreign exchange is insufficient, the enterprise may, upon the 

presentation of the resolutions of the Directors on the profit distribution plan of the particular 

enterprise, purchase foreign exchange from designated foreign exchange banks. 

4. Foreign investment enterprises may apply to the Bank of China or other designated foreign 

exchange banks to remit the profits out of the PRC to the foreign parties to equity or co-operative 

joint ventures or the foreign investors in wholly foreign-owned enterprises if the requirements 

provided by the PRC laws, rules and regulations are met. 

140

GENERAL AND STATUTORY INFORMATION 

1. SHARE CAPITAL 

(a) As at the date of this Prospectus, there is only one class of shares in the capital of our 

Company. There are no founder, management or deferred shares. The rights of and 

privileges attached to the Shares are stated in the Articles of Association of our Company. 

(b) Our Company was incorporated on 8 September 1988. It presently has an authorised share 

capital of S$100,000,000 divided into 2,000,000,000 Shares of S$0.05 each. 

(c) Upon completion of the Invitation, the issued and paid-up share capital of our Company will 

be increased to S$19,283,086 divided into 385,661,720 Shares. 

(d) Save as disclosed below, there were no changes in the issued share capital of our Company 

or its subsidiaries within the three years preceding the date of this Prospectus:- 

Resultant 

Number of Issued 

shares issued/ Consideration/ Share capital/ 

Date of Contributed Issue Purpose of Contributed 

Issue Capital Price Issue Capital 

Our Company 

15 May 2001 1,799,999 S$1 Bonus issue S$2,000,000 

ordinary shares 

of S$1 each 

per share 

10 December 2002 33,500 ordinary S$20 Share swap for S$2,033,500 

shares of S$1 per share minority interests’ 

each stake in subsidiaries 

30 January 2003 12,649,586 S$1 Bonus issue S$14,683,086 

ordinary shares per share 

of S$1 each 

Blue Ocean 

28 October 2002 250 shares of HNL100 Cash HNL25,000 

HNL100 each per share On incorporation 

Hoon’s 

2 April 2001 1,000 ordinary US$11.43 Cash US$11,429 

shares of 100 

colones each 

per share On incorporation 

17 December 2001 90,875 ordinary US$11.43 Capitalisation of debt US$1,050,000 

shares of 100 per share To provide for 

colones each working capital 

OGHK 

2 August 2002 10,000 shares HK$1 Cash HK$10,000 

of HK$1 each per share On incorporation 

141

Resultant 

Number of Issued 

shares issued/ Consideration/ Share capital/ 

Date of Contributed Issue Purpose of Contributed 

Issue Capital Price Issue Capital 

OS Apparel 

10 September 2002 US$100,000 — Cash 

To provide for 

working capital and 

capital contribution 

US$100,000 

6 December 2002 US$145,711 — Machinery and US$245,711 

equipment 




OS Marketing 

8 November 2002 2 shares of US$2 Cash US$2 

US$1 each On incorporation 

OS Sourcing 

2 January 2002 200,000 US$1 Cash US$200,000 

shares of per share To provide for 

US$1 each working capital 

Pacific Sky 

27 May 2002 2,000 shares of 100 colones Cash 200,000 

100 colones each per share On incorporation colones 

PDAC 

25 August 2000 500,000 shares B$1 Cash B$500,000 

of B$1 each per share To provide for 

working capital 

Sing Cheng 

5 December 2002 HK$149,529 — Cash 




HK$149,529 

Uniwear 

3 April 2002 55,250 shares HNL100 Capitalisation of debt HNL5,525,000 

of HNL100 each per share To provide for 

working capital 

Subsidiary held 

by ASTG 

Milteq 

14 July 2001 25,000 ordinary B$1 Cash B$25,000 

shares of per share On incorporation 

B$1 each 

23 August 2002 75,000 ordinary B$1 Cash B$100,000 

shares of per share To provide for 

B$1 each working capital 

142

(e) Save as disclosed in paragraph (d) above, no shares in or debentures of our Company or 

any of its subsidiaries have been issued, or is proposed to be issued, as fully or partly paidup 

for cash, or for a consideration other than cash, within the three years preceding the date 

of this Prospectus. 

(f) Save as provided under the Scheme, no person has been granted or is entitled to be 

granted an option to subscribe for shares in, or debentures of, our Company or any of its 

subsidiaries. 

2. INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS 

(a) The names, addresses, ages, principal occupations and business and working experience of 

all the Directors and Executive Officers of our Group are set out in the section entitled 

“Directors, Management and Staff” at pages 66 to 71 of this Prospectus. 

(b) The list of present directorships and past directorships of each Director (other than our 

Company) as at the date of this Prospectus and over the five years preceding the date of 

this Prospectus is set out as follows:- 

Name Present Directorships Past Directorships 

Group Companies Group Companies 

Ang Boon Cheow Edward ATS Garments (S) Pte Ltd 

Blue Ocean Apparel, SA 

Eng Soon Garments Sdn Bhd 

Ocean Gateway International 


Ocean Sky Textile (H.K.) Limited 

Ocean Star Apparel 

(Guangzhou) Pte Ltd 

Ocean Star Marketing (USA), Inc. 

Ocean Star Sourcing (USA), Inc. 

Sing Cheng (Guangzhou) 

Apparel & Accessories Pte Ltd 

Suntex Pte Ltd 

Uniwear Garments Honduras, SA 

Sunglobe Pte Ltd 

Other Companies Other Companies 

Ang Tong Seng Brothers Suntex Construction & 

Enterprises Pte Ltd Development Co Ltd 

ATS Holdings (2000) Pte Ltd 

Bloom Time Trading (2002) Pte Ltd 

Lenco Holdings Pte Ltd 

Naga Mutiara Construction & 

Development Sdn Bhd 

Nicon Development Pte Ltd 

Suntex Investment Co Ltd 

Uniem Trading (2002) Sdn Bhd 

Uniwear Embroidery Honduras 

(2002) SA 

143


Ang Boon Chong Group Companies Group Companies 

ATS Garments (S) Pte Ltd Sunglobe Pte Ltd 

Blue Ocean Apparel, SA 

Eng Soon Garments Sdn Bhd 

Hoon’s Apparel International 

(SAL) S.A. de C.V. 

Milteq Tenthouse Sdn Bhd 

Ocean Gateway International 


Ocean Sky Textile 

(H.K.) Limited 



Ocean Star Marketing (USA), Inc. 

Ocean Star Sourcing (USA), Inc. 

Sing Cheng (Guangzhou) 

Apparel & Accessories Pte Ltd 

Suntex Pte Ltd 

Uniwear Garments Honduras, SA 


ATS Holdings (2000) Pte Ltd Suntex Construction & 

Ang Tong Seng Brothers Development Co Ltd 

Enterprises Pte Ltd 


Suntex Investment Co Ltd 

Ang Siew Tiong Group Companies Group Companies 

Eng Soon Garments Sdn Bhd Sunglobe Pte Ltd 




– – 

Ng Ya Ken @ Ng Ah Kan Group Companies Group Companies 

– – 


– – 

144


Teo Kiang Kok (1) Group Companies Group Companies 

– – 


Asean Emerging Companies GRP Limited 

Growth Fund Ltd IPC Corporation Ltd 

Circuits Plus Holdings Ltd Kingboard Copper Foil 

Food Junction Holdings Ltd Holdings Limited 

Giant Wireless Technology Malaysian Emerging 

Limited Companies Growth 

HG Metal Manufacturing Fund Ltd 

Limited Solid Resources 

Hyflux Ltd Investment Ltd 

Jadason Enterprises Ltd Mayfran 

Miyoshi Precision Limited International Ltd 

New Wave Technologies Ltd 

Praxair Surface Technologies 


SLAB Services Pte Ltd 

SM Summit Holdings Limited 

Swing Media Technology Group Limited 

Tat Seng Packaging Group Ltd 

Teamsphere Limited 

The Vittoria Fund Ltd 

The Vittoria One Ltd 

Unisteel Technology Ltd 

Chua Keng Hiang Group Companies Group Companies 

– – 


CF Consulting Pte Ltd Dong Da Enterprises 

First Engineering Ltd (Hong Kong) Limited 

Jadason Enterprises Ltd Futek Incorporated 

Provisions Suppliers Corporation Futek Malaysia Sdn Bhd 

Limited Futek Electonics 

Tat Seng Packaging Group Ltd (Shenzhen) Co Ltd 

IPC Capital Pte Ltd 

Mintwell Co Pte Ltd 

Mintwell Industry Pte Ltd 

Panton International Ltd 

Torita Corporation Ltd 

Torita Property Co. 

Note : 

(1) Companies in which Mr Teo Kiang Kok was appointed as director for purpose of incorporation or as nominee 

director only and in the course of his professional practice have not been included. 

(c) The list of present directorships and past directorships of each Executive Officer as at the 

date of this Prospectus and over the five years preceding the date of this Prospectus is set 

out as follows:- 

145


Chong Chiak Yee Alison – – 

Chu Siew Hwa Sunglobe Pte Ltd – 

Go Kim Huay – – 

Hoon Pang Heng Joanna ATS Holdings (2000) Pte Ltd – 



Kuok Wai Peng – – 

Lee Ching Lian Bernadette – – 

Lim Li Kian ATS Holdings (2000) Pte Ltd – 



Lo Siu So – – 

Tan Kim Teck Albert – – 

Woo Ah Toong – Electrimec Asia Pacific 


Terasaki Electric Company 

(Far East) Pte Ltd 

Yeh Wu Ping – – 

(d) Save as disclosed in this Prospectus, none of the Directors and Executive Officers is related 

to one another or to any Substantial Shareholder of our Company. 

(e) The interests of the Directors and Substantial Shareholders in the Shares as at the date of 

this Prospectus and as recorded in the Register of Shareholdings maintained under the 

provisions of the Act are as follows:- 

Shares registered in the 

Shares in which the 

Directors and Substantial 

names of Directors and Shareholders are deemed 

Substantial Shareholders to have an interest 

No. of Shares of No. of Shares of 

S$0.05 each % S$0.05 each % 

Directors 

Ang Boon Cheow Edward (1) 21,300,000 7.25 235,382,723 80.15 

Ang Boon Chong (1) 14,200,000 4.84 235,382,723 80.15 

Ang Siew Tiong 14,441,196 4.92 – – 

Substantial Shareholders 

ATS Holdings (2000) 235,382,723 80.15 – – 

Note: 

(1) Ang Boon Cheow Edward and Ang Boon Chong are deemed to be Shareholders of our Company by virtue of 

their shareholding in ATS Holdings (2000). 

146

(f) There is no shareholding qualification for Directors in the Articles of Association of our 

Company. 

(g) Save as disclosed below, none of our Directors or Executive Officers or controlling 

shareholders is or was involved in any of the following events:- 

(i) a petition under any bankruptcy laws filed in the last 10 years in any jurisdiction 

against him or any partnership in which he was a partner; 

(ii) a petition under any law of any jurisdiction filed in the last 10 years against a 

corporation of which he was a director or key executive for the winding up of that 

corporation on the ground of insolvency; 

(iii) unsatisfied judgments against him; 

(iv) a conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty 

which is punishable with imprisonment for 3 months or more, or has been the subject 

of any criminal proceedings (including any pending criminal proceedings which he is 

aware of) for such purpose; 

(v) a conviction of any offence in Singapore or elsewhere, involving a breach of any law 

or regulatory requirement that relates to the securities or futures industry in Singapore 

or elsewhere, or been the subject of any criminal proceedings (including any criminal 

proceedings which he is aware of) for such breach; 

(vi) judgement has been entered against him, during the last 10 years, in any civil 

proceedings in Singapore or elsewhere involving a breach of any law or regulatory 

requirement that relates to the securities or futures industry in Singapore or 

elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or the 

subject of any civil proceedings (including any pending civil proceedings which is 

aware of) involving an allegation of fraud, misrepresentation or dishonesty on his part; 

(vii) a conviction in Singapore or elsewhere of any offence in connection with the formation 

or management of any corporation; 

(viii) disqualification from acting as a director of any company, or from taking part in any 

way directly or indirectly in the management of any company; 

(ix) the subject of any order, judgement or ruling of any court, tribunal or governmental 

body permanently or temporarily enjoining him from engaging in any type of business 

practice or activity; and 

(x) to his knowledge, been concerned with the management or conduct, in Singapore or 

elsewhere, of the affairs of (i) any corporation which has been investigated for a 

breach of any law or regulatory requirement governing corporations in Singapore or 

elsewhere; or (ii) any corporation or partnership which has been investigated for a 

breach of any law or regulatory requirement that relates to the securities or futures 

industry in Singapore or elsewhere, in connection with any matter occurring or arising 

during the period when he was so concerned with the corporation or partnership. 

From 1994 to 1997, Mr Chua Keng Hiang was involved in the management of a company 

incorporated in China when the company was on two occasions interviewed by the Chinese 

authorities for non-compliance with certain customs regulations. In one of the occasions, the 

company’s bonded warehouse staff abused the facilities for personal gain and absconded. In 

another occasion, the company’s local agent engaged to handle the company’s imports 

misrepresented to the company and breached certain customs regulations. No charges 

were brought against the company in both instances. 

147

(h) Save as disclosed at page 73 of this Prospectus at the section entitled Service Agreements, 

there are no existing or proposed service contracts between the Directors and our Company 

or any of its subsidiaries. 

(i) The aggregate emoluments (including CPF thereon) paid or distributed by our Group to the 

Directors for services rendered in all capacities to our Company and its subsidiaries for 

FY2001 amounted to S$1,520,960. For FY2002, the unaudited aggregate emoluments 

payable to the Directors under the arrangements with our Group in force as at the date of 

this Prospectus was estimated to be approximately S$2,068,800 (including CPF thereon). 

(j) Save as disclosed at pages 76 to 80 of this Prospectus at the section entitled Ocean Sky 

Share Option Scheme, no option to subscribe for securities of our Company or any of its 

subsidiaries has been granted to, or was exercised by, any Director or Executive Officer 

within the two years preceding the date of this Prospectus. 

(k) Save as disclosed at pages 84 to 87 of this Prospectus under the section entitled “Interested 

Persons Transactions”, none of the Directors or substantial Shareholders of our Company is 

interested, directly or indirectly, in the promotion of, or in any assets acquired or disposed of 

by, or leased to, our Company or any of its subsidiaries within the two years preceding the 

date of this Prospectus, or in any proposal for such acquisition or disposal or lease as 

aforesaid. 

(l) Save as disclosed at page 88 of this Prospectus under the section entitled “Potential Conflict 

of Interests”, none of the Directors, Executive Officers or substantial Shareholders or any of 

their Associates has any interest, direct or indirect, in any company carrying on the same 

trade as our Company or any of its subsidiaries taken as a whole. 

(m) None of the Directors is materially interested in any existing contract or arrangement 

subsisting at the date of this Prospectus which is significant in relation to the business of our 

Company and its subsidiaries. 

(n) No sum or benefit has been paid or has been agreed to be paid to any Director or to any 

firm in which a Director is a partner or corporation in which such Director holds shares or 

debentures in cash or in shares or otherwise by any person to induce him to become, or to 

qualify him as, a Director or otherwise for services rendered by him or such firm or 

corporation in connection with the promotion or formation of our Company. 

3. ARTICLES OF ASSOCIATION 

The provisions in the Articles of Association of our Company relating to transfers of shares, the 

voting rights of Shareholders of our Company, restrictions on the voting rights of the Directors, 

class rights and the variation thereof, the borrowing powers of the Directors and the remuneration 

of the Directors are as follows:- 

Memorandum of Association 

The Memorandum of Association of our Company states, among others, that the liability of 

members of our Company is limited, and that the objects for which our Company is established 

include those of an investment holding company. 

The objects of our Company are set out in full in clause 3 of the Memorandum of Association 

which is available for inspection at our registered office as stated in the section titled “Documents 

for Inspection”. 

The complete listing of our objects and purposes can be found at page 1 to 3 of our Company’s 

Memorandum of Association. 

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Articles of Association 

Provisions relating to Directors 

The provisions in the Articles of Association of our Company relating to (a) a Director’s power to 

vote on a proposal, arrangement or contract in which the Director is materially interested; (b) the 

Director’s power, in the absence of an independent quorum, to vote compensation to themselves 

or any members of their body; (c) borrowing powers exercisable by the Directors and how such 

borrowing powers can be varied; (d) retirement or non-retirement of Directors under an age limit 

requirement; and (e) number of shares, if any, required for Director’s qualification, are as follows: 

Article 76 

A Director shall not be required to hold any shares of the Company by way of qualification. A 

Director who is not a member of the Company shall nevertheless be entitled to receive notice of 

and to attend and speak at General Meetings. 

Article 77 

The ordinary remuneration (directors’ fees) of the Directors, which shall from time to time be 

determined by an Ordinary Resolution of the Company, shall not be increased except pursuant to 

an Ordinary Resolution passed at a General Meeting where notice of the proposed increase shall 

have been given in the notice convening the General Meeting and shall (unless such resolution 

otherwise provides) be divisible among the Directors as they may agree, or failing agreement, 

equally, except that any Director who shall hold office for part only of the period in respect of which 

such remuneration or fees are payable shall be entitled only to rank in such division for a 

proportion of remuneration or fees related to the period during which he has held office. The 

ordinary remuneration (fees) of an executive Director may not include a commission on or a 

percentage of turnover and the ordinary remuneration or fees of a non-executive Director shall be 

a fixed sum, and not by a commission on or a percentage of profits or turnover. 

Article 78 

Any Director who holds any executive office, or who serves on any committee of the Directors, or 

who otherwise performs services which in the opinion of the Directors are outside the scope of the 

ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or 

otherwise as the Directors may determine, other than by a commission on or percentage of 

commission or turnover, Provided that such extra remuneration in case of an executive Director 

shall not by way of commission on or a percentage of turnover and in the case of a non-executive 

Director shall be by a fixed sum, and not by a commission on or a percentage of profits or 

turnover. 

Article 90 

The Directors to retire by rotation shall include (so far as necessary to obtain the number required) 

any Director who is due to retire at the meeting by reason of age or who wishes to retire and not to 

offer himself for re-election. Any further Directors so to retire shall be those of the other Directors 

subject to retirement by rotation who have been longest in office since their last re-election or 

appointment and so that as between persons who became or were last re-election Directors on the 

same day, those to retire shall (unless they otherwise agree among themselves) be determined by 

ballot. A retiring Director shall be eligible for re-election. 

Article 91 

The Company at the meeting at which a Director retires under any provision of these presents may 

by Ordinary Resolution fill the office being vacated by electing thereto the retiring Director or some 

other person eligible for appointment. In default, the retiring Director shall be deemed to have 

been reelected except in any of the following cases : 

(a) where at such meeting it is expressly resolved not to fill such office or a resolution for the 

reelection of such Director is put to the meeting and lost; or 

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(b) Where such Director has given notice in writing to the Company that he is unwilling to be 

reelected; or 

(c) where the default is due to the moving of a resolution in contravention of the next following 

Article; or 

(d) where such Director has attained any retiring age applicable to him as Director. 

The retirement shall not have effect until the conclusion of the meeting except where a resolution 

is passed to elect some other person in the place of the retiring Director or a resolution for his 

re-election is put to the meeting and lost and accordingly a retiring Director who is re-election or 

deemed to have been reelected will continue in office without a break. 

Article 100 

A Director shall not vote in respect of any contract or arrangement or any other proposal 

whatsoever in which he has any interest, directly or indirectly. A Director shall not be counted in 

the quorum at a meeting in relation to any resolution on which he is debarred from voting. 

Article 108 

Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exercise all 

the powers of the Company to borrow money, to mortgage or charge its undertaking, property and 

uncalled capital and to issue debentures and other securities, whether outright or as collateral 

security for any debt, liability or obligation of the Company or of any third party. 

Provisions relating to rights, preferences and restrictions attaching to Shares 

The provisions in the Articles of Association of our Company relating to the rights, preferences and 

restrictions attaching to each class of the shares, including: (a) dividend rights, including the time 

limit after which dividend entitlement lapses and an indication of the party in whose favour this 

entitlement operates; (b) voting rights, including whether Directors stand for re-election at 

staggered intervals and the impact of that arrangement where cumulative voting is permitted or 

required; (c) rights to share in our Company’s profits; (d) rights to share in any surplus in the event 

of liquidation; (e) redemption provisions; (f) sinking fund provisions; (g) liability to further capital 

calls by our Company, are as follows: 

Article 4(A) 

Subject to these presents, no shares may be issued by the Directors without the prior approval of 

the Company in General Meeting pursuant to Section 161 of the Act, but subject thereto and the 

terms of such approval, and to Article 5, and to any special rights attached to any shares for the 

time being issued, the Directors may allot (with or without conferring a right of renunciation) or 

grant options over or otherwise dispose of the same to such persons on such terms and conditions 

and for such consideration and at such time and whether or not subject to the payment of any part 

of the amount thereof in cash or otherwise as the Directors may think fit, and any shares may, 

subject to compliance with Sections 70 and 75 of the Act, be issued with such preferential, 

deferred, qualified or special rights, privileges, conditions or restrictions, whether as regards 

dividend, return of capital, participation in surplus, voting, conversion or otherwise, as the Directors 

may think fit, and preference shares may be issued which are or at the option of the Company are 

liable to be redeemed, the terms and manner of redemption being determined by the Directors in 

accordance with the Act, Provided Always that: 

(a) no shares shall be issued to transfer a controlling interest in the Company without the 

specific prior approval of the Company in General Meeting; and 

(b) no shares shall be issued at a discount or options granted over unissued shares except in 

accordance with the Act. 

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Article 18 

The Directors may from time to time make calls upon the members in respect of any moneys 

unpaid on their shares (whether on account of the nominal value of the shares or, when permitted, 

by way of premium) but subject always to the terms of issue of such shares. A call shall be 

deemed to have been made at the time when the resolution of the Directors authorising the call 

was passed and may be made payable by instalments. 

Article 19 

Each member shall (subject to receiving at least fourteen days’ notice specifying the time or times 

and place of payment) pay to the Company at the time or times and place so specified the amount 

called on his shares. The joint holders of a share shall be jointly and severally liable to pay all calls 

in respect thereof. A call may be revoked or postponed as the Directors may determine. 

Article 21 

Any sum (whether on account of the nominal value of the share or by way of premium) which by 

the terms of issue of a share becomes payable upon allotment or at any fixed date shall for all the 

purposes of these presents be deemed to be a call duly made and payable on the date on which 

by the terms of issue the same becomes payable. In the case of non-payment, all the relevant 

provisions of these presents as to payment of interest and expenses, forfeiture or otherwise shall 

apply as if such sum had become payable by virtue of a call duly made and notified. 

Article 23 

The Directors may if they think fit receive from any member willing to advance the same all or any 

part of the moneys (whether on account of the nominal value of the shares or by way of premium) 

uncalled and unpaid upon the shares held by him and such payment in advance of calls shall 

extinguish pro tanto the liability upon the shares in respect of which it is made and upon the 

moneys so received (until and to the extent that the same would but for such advance become 

payable) the Company may pay interest at such rate (not exceeding eight per cent. per annum) as 

the member paying such sum and the Directors may agree. Capital paid on shares in advance of 

calls shall not, whilst bearing interest, confer a right to participate in profits. 

Article 63 

Subject to any special rights or restrictions as to voting attached by or in accordance with these 

presents to any class of shares, on a show of hands every member who is present in person or by 

proxy shall have one vote, the chairman of the meeting to determine which proxy shall be entitled 

to vote where a member is represented by two proxies, and on a poll every member who is 

present in person or by proxy shall have one vote for every share of which he is the holder. A 

member who is bankrupt shall not, while his bankruptcy continues, be entitled to exercise his rights 

as a member, or attend, vote or act at any meeting of the Company. 

Article 89 

At each Annual General Meeting, one-third of the Directors for the time being (or, if their number is 

not a multiple of three, the number nearest to but not less than one-third) shall retire from office by 

rotation, Provided that no Director holding office as Managing Director shall be subject to 

retirement by rotation or be taken into account in determining the number of Directors to retire. For 

the avoidance of doubt, each Director (other than a Director holding office as Managing Director) 

shall retire at least once every three years. 

Article 90 

The Directors to retire by rotation shall include (so far as necessary to obtain the number required) 

any Director who is due to retire at the meeting by reason of age or who wishes to retire and not to 

offer himself for re-election. Any further Directors so to retire shall be those of the other Directors 

subject to retirement by rotation who have been longest in office since their last re-election or 

appointment and so that as between persons who became or were last re-elected Directors on the 

same day, those to retire shall (unless they otherwise agree among themselves) be determined by 

ballot. A retiring Director shall be eligible for reelection. 

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Article 122 

The Directors may from time to time set aside out of the profits of the Company and carry to 

reserve such sums as they think proper which, at the discretion of the Directors, shall be 

applicable for any purpose to which the profits of the Company may properly be applied and 

pending such application may either be employed in the business of the Company or be invested. 

The Directors may divide the reserve into such special funds as they think fit and may consolidate 

into one fund any special funds or any parts of any special funds into which the reserve may have 

been divided. The Directors may also, without placing the same to reserve, carry forward any 

profits. In carrying sums to reserve and in applying the same, the Directors shall comply with the 

provisions of the Statutes. 

Article 124 

If and so far as in the opinion of the Directors, the profits of the Company justify such payments, 

the Directors may declare and pay the fixed dividends on any class of shares carrying a fixed 

dividend expressed to be payable on fixed dates on the half-yearly or other dates prescribed for 

the payment thereof and may also from time to time declare and pay interim dividends on shares 

of any class of such amounts and on such dates and in respect of such periods as they think fit. 

Article 125 

Unless and to the extent that the rights attached to any shares or the terms of issue thereof 

otherwise provide, all dividends shall (as regards any shares not fully paid throughout the period in 

respect of which the dividend is paid) be apportioned and paid pro rata according to the amounts 

paid on the shares during any portion or portions of the period in respect of which the dividend is 

paid. For the purposes of this Article, no amount paid on a share in advance of calls shall be 

treated as paid on the share. 

Article 126 

No dividend shall be paid otherwise than out of profits available for distribution under the 

provisions of the Statutes or, pursuant to Section 69 of the Act and in the form of stock dividends, 

out of the share premium account. Any dividend unclaimed after six (6) years from the date of 

declaration shall be made forfeit and revert to the Company. 

Article 134 

The Directors may, with the sanction of an Ordinary Resolution of the Company, capitalise any 

sum standing to the credit of any of the Company’s reserve accounts as representing profits 

available for distribution under the provisions of the Statutes or, pursuant to Sections 69 or 70 of 

the Act, the Company’s share premium account or capital redemption reserve, by appropriating 

such sum to the persons registered as the holders of shares in the Register of Members or (as the 

case may be) the Depository Register at the close of business on the date of the resolution (or 

such other date as may be specified therein or determined as therein provided) in proportion to 

their then holdings of shares and applying such sum on their behalf in paying up in full unissued 

shares or (subject to any special rights previously conferred on any shares or class of shares for 

the time being issued) unissued shares of any other class not being redeemable shares, for 

allotment and distribution credited as fully paid up to and amongst them as bonus shares in the 

proportion aforesaid. The Directors may do all acts and things considered necessary or expedient 

to give effect to any such capitalisation, with full power to the Directors to make such provisions as 

they think fit for any fractional entitlements which would arise on the basis aforesaid (including 

provisions whereby fractional entitlements are disregarded or the benefit thereof accrues to the 

Company rather than to the members concerned). The Directors may authorise any person to 

enter on behalf of all the members interested into an agreement with the Company providing for 

any such capitalisation and matters incidental thereto and any agreement made under such 

authority shall be effective and binding on all concerned. 

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Article 146 

If the Company shall be wound up (whether the liquidation is voluntary, under supervision, or by 

the court) the Liquidator may, with the authority of a Special Resolution, divide among the 

members in specie or in kind the whole or any part of the assets of the Company and whether or 

not the assets shall consist of property of one kind or shall consist of properties of different kinds, 

and may for such purpose set such value as he deems fair upon any one or more class or classes 

of property and may determine how such division shall be carried out as between the members of 

different classes of members. The Liquidator may, with the like authority, vest any part of the 

assets in trustees upon such trusts for the benefit of members as the Liquidator with the like 

authority shall think fit, and the liquidation of the Company may be closed and the Company 

dissolved, but so that no contributory shall be compelled to accept any shares or other property in 

respect of which there is a liability. 

Provisions relating to variation of rights of Shareholders 

The provisions of our Articles of Association relating to the actions necessary to change the rights 

of our Shareholders are as follows: 

Article 9 

(A) Whenever the share capital of the Company is divided into different classes of shares, the 

variation or abrogation of the special rights attached to any class may, subject to the 

provisions of the Act, be made either with the consent in writing of the holders of threequarters 

in nominal value of the issued shares of the class or with the sanction of a Special 

Resolution passed at a separate General Meeting of the holders of the shares of the class 

(but not otherwise) and may be so made either whilst the Company is a going concern or 

during or in contemplation of a winding-up. To every such separate General Meeting all the 

provisions of these presents relating to General Meetings of the Company and to the 

proceedings thereat shall mutatis mutandis apply, except that the necessary quorum shall 

be two or more persons holding at least one-third in nominal value of the issued shares of 

the class present in person or by proxy or attorney and that any holder of shares of the 

class present in person or by proxy or attorney may demand a poll and that every such 

holder shall on a poll have one vote for every share of the class held by him where the class 

is a class of equity shares within the meaning of Section 64(1) of the Act or at least one vote 

for every share of the class where the class is a class of preference shares within the 

meaning of Section 180(2) of the Act, Provided Always that where the necessary majority for 

such a Special Resolution is not obtained at such General Meeting, the consent in writing, if 

obtained from the holders of three-quarters in nominal value of the issued shares of the 

class concerned within two months of such General Meeting, shall be as valid and effectual 

as a Special Resolution carried at such General Meeting. 

(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference 

capital (other than redeemable preference capital) and any variation or abrogation of the 

rights attached to preference shares or any class thereof. 

(C) The special rights attached to any class of shares having preferential rights shall not unless 

otherwise expressly provided by the terms of issue thereof be deemed to be varied by the 

creation or issue of further shares ranking as regards participation in the profits or assets of 

the Company in some or all respects pari passu therewith but in no respect in priority 

thereto. 

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Article 42 

A reference to a member shall be a reference to a registered holder of shares in the Company, or 

where such registered holder is CDP, the Depositors on behalf of whom CDP holds the shares, 

provided that:- 

(A) a Depositor shall only be entitled to attend any General Meeting and to speak and vote 

thereat if his name appears on the Depository Register maintained by CDP forty-eight (48) 

hours before the General Meeting as a Depositor on whose behalf CDP holds shares in the 

Company, the Company being entitled to deem each such Depositor, or each proxy of a 

Depositor who is to represent the entire balance standing to the Securities Account of the 

Depositor, to represent such number of shares as is actually credited to the Securities 

Account of the Depositor as at such time, according to the records of CDP as supplied by 

CDP to the Company, and where a Depositor has apportioned the balance standing to his 

Securities Account between two proxies, to apportion the said number of shares between 

the two proxies in the same proportion as previously specified by the Depositor in appointing 

the proxies; and accordingly no instrument appointing a proxy of a Depositor shall be 

rendered invalid merely by reason of any discrepancy between the proportion of Depositor’s 

shareholding specified in the instrument of proxy, or where the balance standing to a 

Depositor’s Securities Account has been apportioned between two proxies the aggregate of 

the proportions of the Depositor’s shareholding they are specified to represent, and the true 

balance standing to the Securities Account of a Depositor as at the time of the General 

Meeting, if the instrument is dealt with in such manner as is provided above; 

(B) the payment by the Company to CDP of any dividend payable to a Depositor shall to the 

extent of the payment discharge the Company from any further liability in respect of the 

payment; 

(C) the delivery by the Company to CDP of provisional allotments or share certificates in respect 

of the aggregate entitlements of Depositors to new shares offered by way of rights issue or 

other preferential offering or bonus issue shall to the extent of the delivery discharge the 

Company from any further liability to each such Depositor in respect of his individual 

entitlement; and 

(D) the provisions in these presents relating to the transfers, transmissions or certification of 

shares shall not apply to the transfer of book-entry securities (as defined in the Statutes). 

Provisions relating to Annual General Meetings and Extraordinary General Meetings 

An Annual General Meeting shall be held once in every year, at such time (within a period of not 

more than fifteen months after the holding of the last preceding Annual General Meeting) and 

place as may be determined by the Directors. All other General Meetings shall be called 

Extraordinary General Meetings. 

Article 48 

The Directors may whenever they think fit, and shall on requisition in accordance with the Statutes, 

proceed with proper expedition to convene an Extraordinary General Meeting. 

Article 49 

Any Extraordinary General Meeting at which it is proposed to pass a Special Resolution or (save 

as provided by the Statutes) a resolution of which special notice has been given to the Company, 

shall be called by twenty-one days’ notice in writing at the least and an Annual General Meeting or 

any other Extraordinary General Meeting, by fourteen days’ notice in writing at the least. The 

period of notice shall in each case be exclusive of the day on which it is served or deemed to be 

served and of the day on which the meeting is to be held and shall be given in manner hereinafter 

mentioned to all members other than such as are not under the provisions of these presents 

entitled to receive such notices from the Company, Provided that a General Meeting 

notwithstanding that it has been called by a shorter notice than that specified above shall be 

deemed to have been duly called if it is so agreed: 

154

(A) in the case of an Annual General Meeting by all the members entitled to attend and vote 

thereat; and 

(B) in the case of an Extraordinary General Meeting by a majority in number of the members 

having a right to attend and vote thereat, being a majority together holding not less than 95 

per cent. in nominal value of the shares giving that right; 

Provided also that the accidental omission to give notice to or the non-receipt of notice by any 

person entitled thereto shall not invalidate the proceedings at any General Meeting. At least 

fourteen days’ notice of any General Meeting shall be given by advertisement in the daily press 

and in writing to any stock exchange upon which the shares in the Company may be listed. 

Article 50 

(A) Every notice calling a General Meeting shall specify the place and the day and hour of the 

meeting, and there shall appear with reasonable prominence in every such notice a 

statement that a member entitled to attend and vote is entitled to appoint a proxy to attend 

and vote instead of him and that a proxy need not be a member of the Company. 

(B) In the case of an Annual General Meeting, the notice shall also specify the meeting as such. 

(C) In the case of any General Meeting at which business other than routine business (“special 

business”) is to be transacted, the notice shall specify the general nature of such business, 

and if any resolution is to be proposed as a Special Resolution, the notice shall contain a 

statement to that effect. 

Provisions relating to rights of non-resident or foreign Shareholders 

The provisions of our Articles of Association relating to the rights to own Shares, including the 

rights of non-resident or foreign Shareholders to hold or exercise voting rights on their Shares, are 

as follows: 

Article 5 

(A) Subject to any direction to the contrary that may be given by the Company in General 

Meeting and as permitted by the rules of the Designated Stock Exchange, all new shares 

shall before issue be offered to such persons who as at the date (as determined by the 

Directors) of the offer are entitled to receive notices from the Company of General Meetings 

in proportion, as nearly as the circumstances admit, to the amount of the existing shares to 

which they are entitled. The offer shall be made by notice specifying the number of shares 

offered, and limiting a time within which the offer, if not accepted, will be deemed to be 

declined, and, after the expiration of that time, or on the receipt of an intimation from the 

person to whom the offer is made that he declines to accept the shares offered, the 

Directors may dispose of those shares in such manner as they think most beneficial to the 

Company. The Directors may likewise so dispose of any new shares which (by reason of 

the ratio which the new shares bear to shares held by persons entitled to an offer of new 

shares) cannot, in the opinion of the Directors, be conveniently offered under this Article 

5(A). 

(B) The Company may, notwithstanding Article 5(A) above, authorise the Directors not to offer 

new shares to members to whom by reason of foreign securities laws, such offers may not 

be made without registration of the shares or a prospectus or other document, but to sell the 

entitlements to the new shares on behalf of such members on such terms and conditions as 

the Company may direct. 

155

Article 35 

(A) There shall be no restriction on the transfer of fully paid up shares (except where required 

by law or by the rules, bye-laws or listing rules of any stock exchange on which the shares in 

the Company may be listed) but the Directors may in their discretion decline to register any 

transfer of shares upon which the Company has a lien, and in the case of shares not fully 

paid up, may refuse to register a transfer to a transferee of whom they do not approve, 

Provided Always that in the event of the Directors refusing to register a transfer of shares, 

the Company shall within ten market days after the date on which the application for a 

transfer of shares was made, serve a notice in writing to the applicant stating the facts which 

are considered to justify the refusal as required by the Statutes. 

(B) The Directors may decline to register any instrument of transfer unless: 

(a) such fee not exceeding S$2.00 as the Directors may from time to time require is paid 

to the Company in respect thereof; 

(b) the instrument of transfer, duly stamped in accordance with any law for the time being 

in force relating to stamp duty, is deposited at the Office or at such other place (if any) 

as the Directors may appoint accompanied by the certificates of the shares to which it 

relates, and such other evidence as the Directors may reasonably require to show the 

right of the transferor to make the transfer and, if the instrument of transfer is 

executed by some other person on his behalf, the authority of the person so to do; 

and 

(c) the instrument of transfer is in respect of only one class of shares. 

Article 43 

Except as required by the Statutes or law, no person shall be recognised by the Company as 

holding any share upon any trust, and the Company shall not be bound by or compelled in any 

way to recognise (even when having notice thereof) any equitable, contingent, future or partial 

interest in any share, or any interest in any fractional part of a share, or (except only as by these 

presents or by the Statutes or law otherwise provided) any other right in respect of any share, 

except an absolute right to the entirety thereof in the registered holder and nothing in these 

presents contained relating to CDP or to Depositors or in any depository agreement made by the 

Company with any common depository for shares shall in any circumstances be deemed to limit, 

restrict or qualify the above. 

Article 4(A) 

(A) Subject to these presents, no shares may be issued by the Directors without the prior 

approval of the Company in General Meeting pursuant to Section 161 of the Act, but subject 

thereto and the terms of such approval, and to Article 5, and to any special rights attached 

to any shares for the time being issued, the Directors may allot (with or without conferring a 

right of renunciation) or grant options over or otherwise dispose of the same to such 

persons on such terms and conditions and for such consideration and at such time and 

whether or not subject to the payment of any part of the amount thereof in cash or otherwise 

as the Directors may think fit, and any shares may, subject to compliance with Sections 70 

and 75 of the Act, be issued with such preferential, deferred, qualified or special rights, 

privileges, conditions or restrictions, whether as regards dividend, return of capital, 

participation in surplus, voting, conversion or otherwise, as the Directors may think fit, and 

preference shares may be issued which are or at the option of the Company are liable to be 

redeemed, the terms and manner of redemption being determined by the Directors in 

accordance with the Act, Provided Always that: 

(a) no shares shall be issued to transfer a controlling interest in the Company without the 

specific prior approval of the Company in General Meeting; and 

(b) no shares shall be issued at a discount or options granted over unissued shares 

except in accordance with the Act. 

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4. MATERIAL CONTRACTS 

The following contracts, not being contracts entered into in the ordinary course of business, have 

been entered into by our Group within the two years preceding the date of this Prospectus and are 

or may be material:- 

(a) Share Swap Agreement dated 10 December 2002 between Yeh Wu Ping and our Company 

in relation to the transfer (with effect from 1 January 2002) of 40,000 shares of US$1.00 

each (representing 20%) in the issued share capital of OS Sourcing by Mr Yeh to our 

Company at a consideration of S$70,000, which is to be satisfied by the allotment of 3,500 

ordinary shares of S$1.00 each in our Company. 

(b) Share Swap Agreement dated 10 December 2002 between Yeo Yeok Soo and our Company 

in relation to the transfer (with effect from 1 January 2002) of 13,812 shares of HNL 100 

each (representing 25%) in the issued share capital of Uniwear by Mr Yeo to our Company 

at a consideration of S$120,000, which is to be satisfied by the allotment of 6,000 ordinary 

shares of S$1.00 each in our Company. 

(c) Share Swap Agreement dated 10 December 2002 between Yeo Yeok Soo and our Company 

in relation to the transfer (with effect from 1 January 2002) of 22,969 shares of 100 colones 

each (representing 25%) in the issued share capital of Hoon’s by Mr Yeo to our Company at 

a consideration of S$480,000, which is to be satisfied by the allotment of 24,000 ordinary 

shares of S$1.00 each in our Company. 

(d) Sale and Purchase Agreement dated 10 December 2002 between Ms Hoon Pang Heng, 

Joanna, Ms Lim Li Kian and Ms Chu Siew Hwa (who are the wives of Mr Ang Boon Cheow 

Edward, Mr Ang Boon Chong and Mr Ang Siew Tiong respectively) and our Company. 

Pursuant to this agreement, Ms Hoon, Ms Lim and Ms Chu transferred their entire interests 

in Sunglobe to our Company, and the consideration for each of the transfers is S$186,151, 

S$124,100 and S$16,329 respectively. 

(e) Joint Venture Agreement dated 17 August 2002 between Ydm Pehin Orang Kaya Pekerma 

Lela Dato Paduka Haji Awang Chuchu bin Penglima Asgar Dato Paduka Awang Abdullah 

and our Company in relation to the operations and management of PDAC. 

(f) Sale and Purchase Agreement dated 17 August 2002 between Yong Foh Kong, Fong Foh 

Chen and our Company in relation to the purchase of 150,000 shares (representing 30%) 

in the issued share capital of PDAC by our Company for a consideration of B$1,700,000. 

(g) Joint Venture Agreement dated 8 October 2002 between ATSG and Mohamed Ali bin Haji 

Awang Enchi and Yong Foh Chen in relation to the operations and management of Milteq. 

(h) Service Agreement dated 5 February 2003 between Mr Ang Boon Cheow Edward and our 

Company. 

(i) Service Agreement dated 5 February 2003 between Mr Ang Boon Chong and our Company. 

(j) Management and Underwriting Agreement dated 12 March 2003 entered into between SBI 

E2-Capital Pte Ltd as the Manager, UOB Kay Hian Private Limited as the Underwriter and 

our Company. 

(k) Placement Agreement dated 12 March 2003 entered into between SBI E2-Capital Securities 

Limited and UOB Kay Hian Private Limited as Joint Lead Placement Agents and our 

Company. 

(l) Depository Agreement dated 12 March 2003 between our Company and the CDP, pursuant 

to which the CDP agreed to act as depository for our Company’s securities for trades in our 

securities through SGX-ST. 

157

5. WORKING CAPITAL 

The Directors are of the opinion that, after taking into account the present banking facilities and 

the net proceeds from the issue of New Shares by our Company, our Group will have adequate 

working capital for its present requirements. 

In the opinion of the Directors, there are no minimum amounts which must be raised by the issue 

of the New Shares in order to provide for the following:- 

(i) the purchase price or any property purchased or to be purchased; 

(ii) estimated preliminary expenses (including underwriting and placement commission) for the 

Invitation payable by our Company; 

(iii) the repayment of any money borrowed by our Company in respect of any of the foregoing 

matters; and 

(iv) working capital. 

Although no minimum amount must be raised by the Invitation in order to provide for the items set 

out above, the estimated amount to be provided for the item set out in (ii) above is approximately 

S$1.7 million. Such amount is proposed to be provided out of the proceeds of the Invitation or, in 

the event the Invitation is cancelled, out of the existing banking facilities or internal funds. 

6. LOAN CAPITAL AND OTHER BORROWINGS 

Save as disclosed on page 31 of this Prospectus and the “Accountants’ Report”, our Group had no 

other borrowings or indebtedness in the nature of borrowings including bank overdrafts and 

liabilities under acceptances (other than normal trading bills) or acceptance credits, mortgages, 

charges, hire purchase commitments, guarantees or other material contingent liabilities as at 30 

June 2002. 

7. FINANCIAL CONDITION AND OPERATIONS OF OUR GROUP 

Save as disclosed in this Prospectus, the Directors are not aware of any material information 

including trading factors or risks which are unlikely to be known or anticipated by the general public 

and which could materially affect the profits of our Company and its subsidiaries. 

Save as disclosed in this Prospectus, the financial condition and operations of our Group are not 

likely to be affected by any of the following:- 

(i) known trends or known demands, commitments, events or uncertainties that will result in or 

are reasonably likely to result in our Group’s liquidity increasing or decreasing in any 

material way; 

(ii) material commitments for capital expenditure; 

(iii) unusual or infrequent events or transactions or any significant economic changes that 

materially affected the amount of reported income from operations; and 

(iv) known trends or uncertainties that have had or that our Group expects to have a material 

favourable or unfavourable impact on revenues or operating income. 

8. LITIGATION 

We are not engaged in any litigation either as plaintiff or defendant, in respect of any claims or 

amounts which is material in the context of the Invitation, and our Directors have no knowledge of 

any proceedings pending or threatened against our Group or any facts likely to give rise to any 

litigation, claims or proceedings which might have a material effect on the financial position or 

business of our Group. 

158

9. GENERAL 

(a) The nature of the business of our Company has been stated earlier in this Prospectus. The 

corporations which, by virtue of Section 6 of the Act, are deemed to be related to our 

Company are set out under the section “Companies Within Our Group” on page 94 of this 

Prospectus. 

(b) No application for Shares will be allotted or issued on the basis of this Prospectus later than 

six (6) months after the date of registration of this Prospectus with the Authority. 

(c) The time of opening of the Application List is stated on page 12 of this Prospectus. 

(d) The amount payable on application and allotment is S$0.23 for each Offer and Placement 

Share, and S$0.21 for each Reserved Share. 

(e) There has been no previous issue of Shares by our Company or offer for sale of its Shares 

to the public within the two years preceding the date of this Prospectus. 

(f) No property has been purchased or acquired or proposed to be purchased or acquired by 

our Company or its subsidiaries which is to be paid for wholly or partly out of the proceeds 

of the issue of New Shares or the purchase or acquisition of which has not been completed 

at the date of this Prospectus other than property the contract for the purchase or 

acquisition whereof was entered into in the ordinary course of business of our Company or 

its subsidiaries, the contract not being made in contemplation of the Invitation nor the 

Invitation in consequence of the contract. 

(g) Save as disclosed on page 139 under the section “Management, Underwriting and 

Placement Arrangements”, no commission, discount or brokerage has been paid or other 

special terms granted within the preceding two years or is payable to any Director, promoter, 

expert, proposed Director or any other person for subscribing or agreeing to subscribe or 

procuring or agreeing to procure subscription for any shares in or debentures of our 

Company or its subsidiaries. 

(h) No sums have been paid or are agreed to be paid to any Director or any firm in which a 

Director is a partner in cash or in shares or otherwise or to any person to induce him to 

become a Director or in connection with the promotion of our Company. 

(i) The preliminary expenses of this issue and of the application for listing is approximately 

S$10,000 in respect of SGX-ST’s application fee. The expenses payable by our Company in 

connection with the Invitation, including underwriting commission, brokerage, management 

fee and all other incidental expenses in relation to this Invitation, are estimated to amount to 

approximately S$1.7 million which will be borne by our Company. Fees payable to the SGX- 

ST for the listing are payable by our Company. The breakdown of these estimated expenses 

is as follows :- 

S$’000 

Listing fees 10 

Professional fees 800 

Underwriting commission, placement commission and brokerage 527 

Miscellaneous expenses 342 

Total estimated expenses of the Invitation 1,679 

(j) No amount of cash or securities or benefit has been or is intended to be paid or given to any 

promoter within the two years preceding the date of this Prospectus or is proposed or 

intended to be paid or given to any promoter at any time in respect of this Invitation. 

159

(k) Application monies received by our Company in respect of successful applications (including 

successfully balloted applications which are subsequently rejected) will be placed in a 

separate non-interest bearing account with United Overseas Bank Limited (the “Receiving 

Bank”). In the ordinary course of its business, the Receiving Bank will deploy these monies 

in the interbank money market. All profits derived from the deployment of such moneys will 

accrute to the Receiving Bank. Any refund of all or part of the application monies to 

unsuccessful or partially successful applicants will be made without any interest or any 

share of such net revenue. 

(l) We intend to continue to recommend BDO International for appointment as Auditors of our 

Company in the foreseeable future. 

10. CONSENTS 

(a) The Auditors and Reporting Accountants have given and have not withdrawn their written 

consent to the issue of this Prospectus with the inclusion herein of the Accountants’ Report 

and the letter on the profit estimate of the Group for the financial year ended 31 December 

2002 in the form and context in which they appear in this Prospectus and references to its 

name in the form and context in which it appears in this Prospectus and to act in such 

capacity in relation to this Prospectus. 

(b) The Manager, the Registrar and Share Transfer Office, the Underwriter, the Joint Lead 

Placement Agents, the Receiving Banker, the Principal Bankers, the Solicitors to the 

Invitation and the Legal Advisers to our Company on PRC law, have each given and have 

not withdrawn their respective written consents to the issue of this Prospectus with the 

inclusion herein of their respective names and references to their respective names in the 

forms and context in which they respectively appear in this Prospectus and to act in such 

respective capacities in relation to this Prospectus. 

11. STATEMENT BY THE MANAGER 

The Manager acknowledges that, to the best of its knowledge and belief based on the information 

made available to it by our Company, this Prospectus constitutes full and true disclosure of all 

material facts about the Invitation and our Company and its subsidiaries and it is not aware of any 

other facts the omission of which would make any statements herein misleading. The Manager is 

also satisfied that the profit estimate for the financial year ended 31 December 2002 has been 

stated by the Directors after due and careful enquiry. 

12. STATEMENT BY THE DIRECTORS OF OUR COMPANY 

The Prospectus has been seen and approved by the Directors of our Company and they 

collectively and individually accept full responsibility for the truth and accuracy of the information 

given herein and confirm, having made all reasonable enquiries, that to the best of their knowledge 

and belief, there are no other facts the omission of which would make any statement herein 

misleading, and that this Prospectus constitutes full and true disclosure of all material facts about 

the Invitation and our Company and its subsidiaries. The Directors confirm that the profit estimate 

of our Group for the financial year ended 31 December 2002 set out on page 41 of the Prospectus 

has been stated by them after due and careful enquiry. 

160

13. DOCUMENTS FOR INSPECTION 

The following documents may be inspected at the Registered Office of our Company during 

normal business hours for a period of six months from the date of this Prospectus:- 

(a) the Memorandum and Articles of Association of our Company; 

(b) the letter from the Auditors and Reporting Accountants in relation to the profit estimate of 

the Group for the financial year ended 31 December 2002 as set out on page 96 of this 

Prospectus; 

(c) the Accountants’ Report referred to on pages 97 to 138 of this Prospectus, together with the 

Statements of Adjustments; 

(d) the audited financial statements of our Company and of its subsidiaries for FY1999, 

FY2000, FY2001 and the 6 months ended 30 June 2002; 

(e) the material contracts referred to on page 157 of this Prospectus; 

(f) the letters of consent referred to on page 160 of this Prospectus; and 

(g) the Service Agreements referred to on page 73 of this Prospectus. 

161

APPENDIX A - TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION 

You are invited to apply for the New Shares at the Issue Price subject to the following terms and 

conditions:- 

1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES AND HIGHER 

INTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF 

NEW SHARES WILL BE REJECTED. 

2. Your application for Offer Shares may be made by way of printed Offer Shares Application Forms 

or by way of Electronic Applications through ATMs of the Participating Banks (“ATM Electronic 

Applications”) or through Internet Banking (“IB”) websites of the relevant Participating Banks 

(“Internet Electronic Applications” which, together with ATM Electronic Applications, shall be 

referred to as “Electronic Applications”). Your application for the Placement Shares may only be 

made by way of Placement Shares Application Forms. YOU MAY NOT USE CPF FUNDS TO 

APPLY FOR THE NEW SHARES. 

3. You are allowed to submit only one application in your own name for the Offer Shares. If 

you submit an application for Offer Shares by way of an Application Form, you MAY NOT 

submit another application for Offer Shares by way of an Electronic Application and vice 

versa. Such separate applications shall be deemed to be multiple applications and shall be 

rejected. 

If you submit an application for Offer Shares by way of Internet Electronic Application, you 

MAY NOT submit another application for Offer Shares by way of ATM Electronic Application 

and vice versa. Such separate applications shall be deemed to be multiple applications and 

shall be rejected. 

If you (being other than an approved nominee company) have submitted an application for Offer 

Shares in your own name, you should not submit any other application for Offer Shares, whether 

by way of an Application Form or by way of an Electronic Application, for any other person. Such 

separate applications shall be deemed to be multiple applications and shall be rejected. 

If you have made an application for Placement Shares (other than the Reserved Shares), 

you should not make any application for Offer Shares either by way of an Application Form 

or by way of an Electronic Application and vice versa. Such separate applications shall be 

deemed to be multiple applications and shall be rejected. 

Conversely, if you have made an application for Offer Shares either by way of an Electronic 

Application or by way of an Application Form, you may not make any application for 

Placement Shares. Such separate applications shall be deemed to be multiple applications 

and shall be rejected. 

Joint or multiple applications shall be rejected. If you submit or procure submissions of 

multiple share applications for Offer Shares, Placement Shares or both Offer Shares and 

Placement Shares, you may be deemed to have committed an offence under the Penal 

Code, Chapter 224 of Singapore and the Securities and Futures Act (Act 42 of 2001), 

Chapter 289 of Singapore, and your applications may be referred to the relevant authorities 

for investigation. Multiple applications or those appearing to be or suspected of being 

multiple applications will be liable to be rejected at our discretion. 

4. We will not accept applications from any person under the age of 21 years, undischarged 

bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities 

Account holders of CDP and from applicants whose addresses (furnished in their Application 

Forms or, in the case of Electronic Applications, contained in the records of the relevant 

Participating Banks) bear post office box numbers. 

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5. We will not recognise the existence of a trust. Any application by a trustee or trustees must be 

made in his/their own name(s) and without qualification or, where the application is made by way 

of an Application Form, in the name(s) of an approved nominee company or approved nominee 

companies after complying with paragraph 6 below. 

6. WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BY 

APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are defined as banks, 

merchant banks, finance companies, insurance companies, licensed securities dealers in 

Singapore and nominee companies controlled by them. Applications made by persons acting as 

nominees other than approved nominee companies shall be rejected. 

7. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES 

ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do 

not have an existing Securities Account with CDP in your own name at the time of your 

application, your application will be rejected (if you apply by way of an Application form), or you will 

not be able to complete your Electronic Application (if you apply by way of an Electronic 

Application). If you have an existing Securities Account but fail to provide your Securities Account 

number or provide an incorrect Securities Account number in Section B of the Application Form or 

in your Electronic Application, as the case may be, your application is liable to be rejected. 

Subject to paragraph 8 below, your application shall be rejected if your particulars, such as name, 

NRIC/passport number, nationality and permanent residence status provided in your Application 

Form or in the records of the relevant Participating Bank at the time of your Electronic Application, 

as the case may be, differ from those particulars in your Securities Account as maintained with 

CDP. If you possess more than one individual direct Securities Account with CDP, your application 

shall be rejected. 

8. If your address as stated in the Application Form or, in the case of an Electronic 

Application, contained in the records of the relevant Participating Bank, as the case may be, 

is different from the address registered with CDP, you must inform CDP of your updated 

address promptly, failing which the notification letter on successful allotment and 

or/allocation will be sent to your address last registered with CDP. 

9. We reserve the right to reject any application which does not conform strictly to the 

instructions set out in the Application Form and in this Prospectus or with the terms and 

conditions of this Prospectus, which is illegible, incomplete, incorrectly completed or which 

is accompanied by an improperly drawn up or improper form of remittance. We further 

reserves the right to treat as valid any applications not completed or submitted or effected 

in all respects in accordance with the instructions set out in the Application Forms or the 

instructions for Electronic Applications or the terms and conditions of this Prospectus, and 

also to present for payment or other processes all remittances at any time after receipt and 

to have full access to all information relating to, or deriving from, such remittances or the 

processing thereof. 

10. We reserve the right to reject or to accept, in whole or in part, or to scale down or to ballot any 

application, without assigning any reason therefor, and we will not entertain any enquiry and/or 

correspondence on our decision. This right applies to applications made by way of Application 

Forms and by way of Electronic Applications. In deciding the basis of allotment and or/allocation, 

we will give due consideration to the desirability of allotting and or/allocating the New Shares to a 

reasonable number of applicants with a view to establishing an adequate market for the Shares. 

11. Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It is 

expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the 

Application List, a statement of account stating that your Securities Account has been credited with 

the number of New Shares allotted to you. This will be the only acknowledgement of application 

moneys received and is not an acknowledgement by us. You irrevocably authorise CDP to 

complete and sign on your behalf as transferee or renouncee any instrument of transfer and/or 

other documents required for the issue or transfer of the New Shares allotted to you. This 

authorisation applies to applications made by way of Application Forms and by way of Electronic 

Applications. 

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12. In the event of an under-subscription for Offer Shares as at the close of the Application List, we will 

made available that number of Offer Shares under-subscribed to satisfy applications for Placement 

Shares to the extent that there is an over-subscription for Placement Shares as at the close of the 

Application List. 

In the event of an under-subscription for Placement Shares as at the close of the Application List, 

we will make available that number of Placement Shares under-subscribed to satisfy applications 

for Offer Shares to the extent that there is an over-subscription for Offer Shares as at the close of 

the Application List. 

In the event of an over-subscription for Offer Shares as at the close of the Application List and 

Placement Shares are fully subscribed or over-subscribed as at the close of the Application List, 

the successful applications for Offer Shares will be determined by ballot or otherwise as 

determined by our Directors and approved by the SGX-ST. 

13. You irrevocably authorise CDP to disclose the outcome of your application, including the number of 

New Shares allotted to you pursuant to your application, to authorised operators. 

14. Any reference to the “you” in this section shall include an individual, a corporation, an approved 

nominee and trustee applying for the Offer Shares by way of an Application Form or by way of an 

Electronic Application and a person applying for the Placement Shares through the Joint Lead 

Placement Agents by way of a Placement Shares Application Form. 

15. By completing and delivering an Application Form or by making and completing an Electronic 

Application by (in the case of an ATM Electronic Application) pressing the “Enter” or “OK” or 

“Confirm” or “Yes” key on the ATM (as the case may be) or by (in the case of an Internet Electronic 

Application) clicking “Submit” or “Continue” or “Yes” or “Confirm” on the IB website screen (as the 

case may be) in accordance with the provisions of this Prospectus, you:- 

(a) irrevocably offer to subscribe for the number of Offer Shares specified in your application (or 

such smaller number for which the application is accepted) at the Issue Price and agree that 

you will accept such Offer Shares as may be allotted to you, in each case on the terms of 

this Prospectus and on the terms and subject to the conditions set out in this Prospectus 

and the Memorandum of Association and Bye-laws of our Company; and 

(b) warrant the truth and accuracy of the information provided in your application. 

16. Our acceptance of applications will be conditional upon, inter alia, we being satisfied that:- 

(a) permission has been granted by the SGX-ST to deal in and for quotation for all our existing 

Shares and the New Shares on a “when issued” basis on the SGX-ST; and 

(b) the Management and Underwriting Agreement and the Placement Agreement referred to on 

page 139 of this Prospectus have become unconditional and have not been terminated or 

cancelled prior to such date as our Company may determine. 

17. The Issue Price for each Offer and Placement Share is S$0.23 and S$0.21 for each Reserved 

Share. 

18. We will not hold any applications in reserve. 

19. We will not allot and/or allocate Shares on the basis of this Prospectus later than six months after 

the date of this Prospectus. 

20. Additional terms and conditions for applications by way of Application Forms are set out on pages 

A-4 to A-7 of this Prospectus. 

21. Additional terms and conditions for applications by way of Electronic Applications are set out on 

pages A-7 to A-13 of this Prospectus. 

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ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION 

FORMS 

You shall make an application by way of Application Forms made on and subject to the terms and 

conditions of this Prospectus including but not limited to the terms and conditions appearing below as 

well as those set out under the section on “TERMS AND CONDITIONS AND PROCEDURES FOR 

APPLICATION” on pages A-1 to A-3 of this Prospectus, as well as the Memorandum of Association and 

Bye-laws of our Company. 

1. Your application must be made using the WHITE Application Forms for Offer Shares and the 

BLUE Application Forms for Placement Shares accompanying and forming part of this Prospectus. 

We draw your attention to the detailed instructions contained in the respective Application Forms 

and this Prospectus for the completion of the Application Forms which must be carefully followed. 

We reserve the right to reject applications which do not conform strictly to the instructions 

set out in the Application Forms and this Prospectus or to the terms and conditions of this 

Prospectus or which are illegible, incomplete, incorrectly completed or which are 

accompanied by improperly drawn remittances or improper form of remittances. 

2. Your Application Forms must be completed in English. Please type or write clearly in ink using 

BLOCK LETTERS. 

3. All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY” 

must be completed and the words “NOT APPLICABLE” or “N.A.” should be written in any space 

that is not applicable. 

4. Individuals, corporations, approved nominee companies and trustees must give their names in full. 

You must make your application, in the case of individuals, in your full names appearing in your 

identity cards (if applicants have such identification documents) or in your passports and, in the 

case of corporations, in your full names as registered with a competent authority. If you are a nonindividual 

completing the Application Form under the hand of an official, you must state the name 

and capacity in which that official signs. If you are a corporation completing the Application Form, 

you are required to affix your Common Seal (if any) in accordance with your Memorandum of 

Association and Bye-laws or equivalent constitutive documents. If you are a corporate applicant 

and your application is successful, a copy of your Memorandum of Association and Bye-laws or 

equivalent constitutive documents. If you are a corporate applicant and your application is 

successful, a copy of your Memorandum of Association and Bye-laws or equivalent constitutive 

documents must be lodged with the Share Registrar and Share Transfer office. We reserve the 

right to require you to produce documentary proof of identification for verification purposes. 

5. (a) You must complete Sections A and B and sign page 1 of the Application Form. 

(b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form. 

Where paragraph 7(a) is deleted, you must also complete Section C of the Application Form 

with particulars of the beneficial owner(s). 

(c) If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on 

page 1 of the Application Form, your application is liable to be rejected. 

6. You (whether you are an individual and corporate applicant, whether incorporated or 

unincorporated and wherever incorporated or constituted), will be required to declare whether you 

are a citizen or permanent resident of Singapore or a corporation in which citizens or permanent 

residents of Singapore or any body corporate constituted under any statute of Singapore have an 

interest in the aggregate of more than 50 per cent. of the issued share capital of or interests in 

such corporations. If you are an approved nominee company, you are required to declare whether 

the beneficial owner of the New Shares is a citizen or permanent resident of Singapore or a 

corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in 

which citizens or permanent residents of Singapore or any body corporate whether incorporated or 

unincorporated and wherever incorporated or constituted under any statute of Singapore have an 

interest in the aggregate of more than 50 per cent. of the issued share capital of or interests in 

such corporation. 

A - 4

7. Your application must be accompanied by a remittance in Singapore currency for the full amount 

payable, in respect of the number of New Shares applied for, in the form of a BANKER’S DRAFT 

or CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “OCEAN SKY 

SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY’”, with your name and address written 

clearly on the reverse side. 

We will not accept applications accompanied by ANY OTHER FORM OF PAYMENT. We will reject 

remittances bearing “NOT TRANSFERABLE” or “NON TRANSFERABLE” crossings. No 

acknowledgement or receipt will be issued by us or the Manager for applications and application 

moneys received. 

8. Unsuccessful applications are expected to be returned (without interest or any share of revenue or 

other benefit arising therefrom) to you by ordinary post within 24 hours of the balloting at your own 

risk. Where your application is rejected or accepted in part only, the full amount or the balance of 

the application moneys, as the case may be, will be refunded (without interest or any share of 

revenue or other benefit arising therefrom) to you by ordinary post at your own risk in the shortest 

possible time. 

9. Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the 

meanings assigned to them in this Prospectus. 

10. By completing and delivering the Application Form in accordance with the provisions of this 

Prospectus, you agree that:- 

(a) in consideration of us having distributed the Application Form to you and agreeing to close 

the Application List at 12.00 noon on 20 March 2003 or such other time or date as our 

Directors may, in consultation with the Manager, decide and by completing and delivering 

the Application Form, you agree that:- 

(i) your application is irrevocable; and 

(ii) your remittance will be honoured on first presentation and that any moneys returnable 

may be held pending clearance of your payment without interest or any share of 

revenue or other benefit arising therefrom; 

(b) all applications, acceptances and contracts resulting therefrom under the Invitation shall be 

governed by and construed in accordance with the laws of Singapore and that you 

irrevocably submit to the non-exclusive jurisdiction of the Singapore courts; 

(c) in respect of the New Shares for which your application has been received and not rejected, 

acceptance of your application shall be constituted by written notification and not otherwise, 

notwithstanding any remittance being presented for payment by or on our behalf; 

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at any 

time after acceptance of your application; and 

(e) in making your application, reliance is placed solely on the information contained in this 

Prospectus and none of our Company, the Manager, the Underwriters for the Public Offer, 

our Joint Lead Placement Agents or any other person involved in the Invitation shall have 

any liability for any information not so contained. 

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Applications for Offer Shares 

1. Your applications for Offer Shares MUST be made using the WHITE Offer Shares Application 

Forms and BROWN official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosed 

in each envelope. 

2. You must:- 

(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, together 

with your remittance in the BROWN envelope “A” provided; 

(b) in the appropriate spaces on BROWN envelope “A”:- 

(i) write your name and address; 

(ii) state the number of Offer Shares applied for; 

(iii) tick the relevant box to indicate the form of payment; and 

(iv) affix adequate Singapore postage; 

(c) SEAL BROWN ENVELOPE “A”; and 

(d) write, in the appropriate box provided on the larger BROWN envelope “B” addressed to Lim 

Associates (Pte) Ltd, 10 Collyer Quay #19-08 Ocean Building, Singapore 049315, the 

number of Offer Shares you have applied for; and insert BROWN envelope “A” into BROWN 

envelope “B”, seal BROWN envelope “B” and thereafter DESPATCH BY ORDINARY POST 

OR DELIVER BY HAND at your own risk to Lim Associates (Pte) Ltd, 10 Collyer Quay 

#19-08 Ocean Building, Singapore 049315, so as to arrive by 12.00 noon on 20 March 

2003 or such other time as we may, in consultation with the Manager, decide. Local 

Urgent Mail or Registered Post must NOT be used. No acknowledgement of receipt will 

be issued for any application or remittance received. 

3. Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly 

drawn remittances are liable to be rejected. 

Applications for Placement Shares (Other than for Reserved Shares) 

1. Your application for Placement Shares MUST be made using the BLUE Placement Shares 

Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope. 

2. The completed and signed BLUE Placement Shares Application Form and your remittance, in 

accordance with the terms and conditions of this Prospectus, for the full amount payable in respect 

of the number of Placement Shares applied for, with your name and address written clearly on the 

reverse side, must be enclosed and sealed in an envelope to be provided by you. You must affix 

adequate Singapore postage on the envelope (if despatching by ordinary post) and thereafter the 

sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at 

your own risk to Lim Associates (Pte) Ltd, 10 Collyer Quay #19-08 Ocean Building, Singapore 

049315, to arrive by 12.00 noon on 20 March 2003 or such other time as we may, in 

consultation with the Manager, decide. Local Urgent Mail or Registered Post must NOT be 

used. No acknowledgement of receipt will be issued for any application or remittance received. 

3. Alternatively, you may remit your application moneys by electronic transfer to the account of United 

Overseas Bank, North Bridge Branch, account number 311-300-186-9, in favour of “OCEAN SKY 

SHARE ISSUE ACCOUNT” for the number of Placement Shares applied for by 12.00 noon on 20 

March 2003 or such other time as we may, in consultation with the Manager, decide. If you 

remit your application moneys via electronic transfer, you should fax and send a copy of the 

remittance advice to SBI E2-Capital Pte Ltd at fax number 6227 3936 to arrive by 12.00 noon on 

19 March 2003 or such other time as we may, in consultation with the Manager, decide. 

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Applications for Reserved Shares 

1. Your application for Reserved Shares MUST be made using the PINK Reserved Shares 

Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope. 

2. The completed and signed PINK Reserved Shares Application Form and your remittance, in 

accordance with the terms and conditions of this Prospectus, for the full amount payable in respect 

of the number of Reserved Shares applied for, with your name and address written clearly on the 

reverse side, must be enclosed and sealed in an envelope to be provided by you. You must affix 

adequate Singapore postage on the envelope (if despatching by ordinary post) and thereafter the 

sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at 

your own risk to Lim Associates (Pte) Ltd, 10 Collyer Quay #19-08 Ocean Building, Singapore 

049315, to arrive by 12.00 noon on 20 March 2003 or such other time as we may, in 

consultation with the Manager, decide. Local Urgent Mail or Registered Post must NOT be 

used. No acknowledgement of receipt will be issued for any application or remittance received. 

ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS 

The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case on ATM 

Electronic Applications) and the IB website screens (in the case of Internet Electronic Applications) of the 

relevant Participating Banks. Currently, DBS Bank and the UOB group are the only Participating Banks 

through which Internet Electronic Applications can be made. For illustration purposes, the procedures for 

Electronic Applications through ATMs of DBS Bank and the IB website of DBS Bank are set out 

respectively in the “Steps for Electronic Applications for Offer Shares through ATMs of DBS Bank 

(including its POSBank Services Division)” and the “Steps for Internet Electronic Applications through the 

IB website of DBS Bank” (the “Steps”) appearing on pages A-11 to A-12 of this Prospectus. 

The Steps set out the actions that you must take at an ATM of DBS Bank or the IB website of DBS Bank 

to complete an Electronic Application. Please read carefully the terms of this Prospectus, the Steps and 

the terms and conditions for Electronic Applications set out below before making an Electronic 

Application. Any reference to “you” in the additional terms and conditions for Electronic Applications and 

the Steps shall refer to you making an application for Offer Shares through an ATM or the IB website of a 

relevant Participating Bank. 

You must have an existing bank account with and be an ATM cardholder of one of the Participating 

Banks before you can make an Electronic Application at the ATMs. An ATM card issued by one 

Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to other Participating 

Banks. For an Internet Electronic Application, you must have an existing bank account with and an IB 

User Identification (“User ID”) and a Personal Identification Number/Password given by a relevant 

Participating Bank. The Steps set out the actions that you must take at ATMs of DBS Bank or the IB 

website of DBS Bank to complete an Electronic Application. The actions that you must take at ATMs or 

the IB websites of other Participating Banks are set out on the ATM screens or the IB website screens of 

the relevant Participating Banks. Upon the completion of your Electronic Application transaction, you will 

receive an ATM transaction slip (“Transaction Record”), confirming the details of your Electronic 

Application. Upon completion of your Internet Electronic Application, there will be an on-screen 

confirmation (“Confirmation Screen”) of the application which you can print out for your record. The 

Transaction Record or your printed record of the Confirmation Screen is for your retention and should not 

be submitted with any Application Form. 

You must ensure that you enter your own Securities Account number when using the ATM card 

issued to you in your own name. If you operate a joint bank account with any of the Participating 

Banks, you must ensure that you enter your own Securities Account number when using the ATM 

card issued to you in your own name. Using your own Securities Account number with an ATM 

card which is not issued to you in your own name will render your Electronic Application liable to 

be rejected. 

A - 7

You must ensure, when making an Internet Electronic Application, that your mailing address is in 

Singapore and the application is being made in Singapore and you will be asked to declare accordingly. 

Otherwise, your application is liable to be rejected. You shall make an Electronic Application on the terms 

and subject to the conditions of this Prospectus including but not limited to the terms and conditions 

appearing below and those set out under the section on “TERMS AND CONDITIONS AND 

PROCEDURES FOR APPLICATION” on pages A-1 to A-3 of this Prospectus as well as the 

Memorandum of Association and Bye-laws of our Company. 

1. In connection with your Electronic Application for Offer Shares, you are required to confirm 

statements to the following effect in the course of activating the ATM for your Electronic 

Application:- 

(a) that you have received a copy of this Prospectus and have read, understood and 

agreed to all the terms and conditions of application for Offer Shares and this 

Prospectus prior to effecting the Electronic Application and agree to be bound by the 

same; 

(b) that you consent to the disclosure of your name, NRIC/passport number, address, 

nationality, permanent resident status, CDP Securities Account number, and share 

application amount (the “Relevant Particulars”) from your account with that 

Participating Bank to the Share Registrar, CDP, SCCS, our Company and the Manager 

(the “Relevant Parties”); and 

(c) that this is your only application and it is made in your own name and at your own 

risk. 

Your application will not be successfully completed and cannot be recorded as a completed 

transaction in the ATM unless you press the “Enter” or “OK” or “Confirm” or “Yes” key. By doing so, 

you shall be treated as signifying your confirmation of each of the above three statements. In 

respect of statement 1(b) above, your confirmation, by pressing the “Enter” or “OK” or “Confirm” or 

“Yes” key, shall signify and shall be treated as your written permission, given in accordance with 

the relevant laws of Singapore including Section 47(4) of the Banking Act (Chapter 19) of 

Singapore to the disclosure by that Participating Bank of the Relevant Particulars to the Relevant 

Parties. 

2. BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT APPLYING 

FOR OFFER SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONIC 

APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS BENEFICIAL 

OWNER. 

YOU SHOULD MAKE ONLY ONE ELECTRONIC APPLICATION FOR OFFER SHARES AND 

SHOULD NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES, WHETHER AT THE 

ATM OR THE IB WEBSITES OF ANY PARTICIPATING BANK OR ON THE APPLICATION 

FORMS. IF YOU HAVE MADE AN APPLICATION FOR OFFER SHARES ON AN APPLICATION 

FORM, YOU SHALL NOT MAKE AN ELECTRONIC APPLICATION FOR OFFER SHARES AND 

VICE VERSA. 

3. You must have sufficient funds in your bank account with your Participating Bank at the time you 

make your Electronic Application, failing which your Electronic Application will not be completed. 

Any Electronic Application which does not conform strictly to the instructions set out on 

the screens of the ATM or IB website through which your Electronic Application is being 

made shall be rejected. 

You may make an ATM Electronic Application at the ATM of any Participating Bank or an 

Internet Electronic Application at the IB websites of the relevant Participating Banks for 

Offer Shares, using only cash by authorising such Participating Bank to deduct the full 

amount payable from your account with such Participating Bank. 

A - 8

4. You irrevocably agree and undertake to subscribe for and to accept the number of Offer Shares 

applied for as stated on the Transaction Record or any lesser number of Offer Shares that may be 

allotted to you in respect of your Electronic Application. In the event that we decide to allot and/or 

allocate any lesser number of such Offer Shares or not to allot and or/allocate any Offer Shares to 

you, you agree to accept such decision as final. If your Electronic Application is successful, your 

confirmation (by your action of pressing the “Enter” or “OK” or “Confirm” or “Yes” key on the ATM 

or clicking “Confirm” or “OK” on the IB website screen) of the number of Offer Shares applied for 

shall signify and shall be treated as your acceptance of the number of Offer Shares that may be 

allotted to you and your agreement to be bound by the Memorandum of Association and Bye-laws 

of our Company. 

5. We will not keep any applications in reserve. Where your Electronic Application is unsuccessful, 

the full amount of the application moneys will be refunded (without interest or any share of revenue 

or other benefit arising therefrom) to you by being automatically credited to your account with your 

Participating Bank within 24 hours of the balloting. Trading on a “WHEN ISSUED” basis, if 

applicable, is expected to commence after such refund has been made. 

Where your Electronic Application is rejected or accepted in part only, the full amount or 

the balance of the application moneys, as the case may be, will be refunded (without 

interest or any share of revenue or other benefit arising therefrom) to you by being 

automatically credited to your account with your Participating Bank within the shortest 

possible time. 

Responsibility for timely refund of application moneys arising from unsuccessful or partially 

successful Electronic Applications lies solely with the respective Participating Banks. Therefore, 

you are strongly advised to consult your Participating Bank as to the status of your Electronic 

Application and/or the refund of any moneys to you from unsuccessful or partially successful 

Electronic Application, to determine the exact number of Offer Shares allotted to you before trading 

the Offer Shares on the SGX ST. Neither the SGX-ST, the CDP, the SCCS, the Participating 

Banks, ourselves or the Manager assume any responsibility for any loss that may be incurred as a 

result of you having to cover any net sell positions or from buy-in procedures activated by the 

SGX-ST. 

6. If your Electronic Application made through the ATMs is unsuccessful, no notification will 

be sent by the relevant Participating Bank. 

If your Internet Electronic Application made through the IB website is unsuccessful, no notification 

will be sent by such Participating Bank. 

A - 9

If you make Electronic Applications through the ATMs of the following banks, you may check the 

provisional results of your Electronic Applications as follows:- 

Bank Telephone Available at Operating Hours Service expected from 

DBS Bank 1800 339 6666 Internet Banking 24 hours a day 7p.m. of the balloting 

(for POSB or Internet Kiosk day 

account holders) 

www.dbs.com (1) 

1800 111 1111 

(for DBS 

account holders) 

OCBC 1800 363 3333 ATM ATM/Phone Banking Evening of the balloting 

Group – 24 hours a day day 

UOB 1800 222 2121 ATM (Other ATM/Phone Banking 6 p.m. on the balloting 

Group Transactions – – 24 hours a day day 

“IPO Enquiry”) (2) 

Internet Banking Evening of the balloting 

http://www.uob – 24 hours a day day 

group.com (1)(2) 

Notes :- 

(1) If you make your Internet Electronic Applications through the IB website of DBS Bank or UOB Group, you may check 

the result through the same channels listed in the table above in relation to ATM Electronic Applications made at 

ATMs of DBS Bank or UOB Group. 

(2) If you make your Electronic Application through the ATMs or IB website of UOB Group, you may check the results of 

your application through UOB Personal UniBanking, UOB Group ATMs or UOB PhoneBanking Services. 

7. Electronic Applications shall close at 12.00 noon on 20 March 2003 or such other time as 

we may, in consultation with the Manager, decide. All Internet Electronic Applications must 

be received by 12:00 noon on 20 March 2003 Subject to the paragraph 9 below, an Internet 

Electronic Application is deemed to be received when it enters the designated information system 

of the relevant Participating Bank. 

8. You are deemed to have requested and authorised us to:- 

(a) register the Offer Shares allotted to you in the name of CDP for deposit into your Securities 

Account; 

(b) send the relevant Share certificate(s) to CDP; 

(c) return or refund (without interest or any share of revenue earned or other benefit arising 

therefrom) the application moneys, should your Electronic Application be rejected, by 

automatically crediting your bank account with your Participating Bank with the relevant 

amount within three Market Days after the close of the Application List; and 

(d) return or refund (without interest or any share of revenue or other benefit arising therefrom) 

the balance of the application moneys, should your Electronic Application be accepted in 

part only, by automatically crediting your bank account with your Participating Bank with the 

relevant amount within 14 days after the close of the Application List. 

9. You irrevocably agree and acknowledge that your Electronic Application is subject to risks of 

electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God and 

other events beyond the control of the Participating Banks and if, in any such event, we, the 

Manager and/or the relevant Participating Bank do not receive your Electronic Application, or data 

relating to your Electronic Application is lost, corrupted or not otherwise accessible, whether wholly 

or partially for whatever reason, you shall be deemed not to have made an Electronic Application 

and you shall have no claim whatsoever against us, the Manager and/or the relevant Participating 

Bank for Offer Shares applied for or for any compensation, loss or damage. 

A - 10

10. We do not recognise the existence of a trust. Any Electronic Application by a trustee must be 

made in your own name and without qualification. We will reject any application by any person 

acting as nominee. 

11. All your particulars in the records of your Participating Bank at the time you make your Electronic 

Application shall be deemed to be true and correct and your Participating Bank and the Relevant 

Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your 

particulars after making your Electronic Application, you shall promptly notify your Participating 

Bank. 

12. You should ensure that your personal particulars as recorded by both CDP and the relevant 

Participating Bank are correct and identical, otherwise, your Electronic Application is liable to be 

rejected. You should promptly inform CDP of any change in address, failing which the notification 

letter on successful allotment and or/ allocation will be sent to your address last registered with 

CDP. 

13. By making and completing an Electronic Application, you agreed that:- 

(a) in consideration of us making available the Electronic Application facility, through the 

Participating Banks acting as our agents, at the ATMs and the IB websites (if any):- 

(i) your Electronic Application is irrevocable; and 

(ii) your Electronic Application, our acceptance and the contract resulting therefrom under 

the Invitation shall be governed by and construed in accordance with the laws of 

Singapore and you irrevocably submit to the non-exclusive jurisdiction of the 

Singapore courts; 

(b) none of us, the Manager or the Participating Banks shall be liable for any delays, failures or 

inaccuracies in the recording, storage or in the transmission or delivery of data relating to 

your Electronic Application to us or CDP due to breakdowns or failure of transmission, 

delivery or communication facilities or any risks referred to in paragraph 9 above or to any 

cause beyond their respective controls; 

(c) in respect of Offer Shares for which your Electronic Application has been successfully 

completed and not rejected, acceptance of your Electronic Application shall be constituted 

by written notification by or on our behalf and not otherwise, notwithstanding any payment 

received by or on our behalf; 

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at any 

time after acceptance of your application; and 

(e) reliance is placed solely on information contained in this Prospectus and that none of our 

Company, the Manager, the Underwriters for the Public Offer, the Joint Lead Placement 

Agents nor any other person involved in the Invitation shall have any liability for any 

information not so contained. 

The instructions for Electronic Applications will appear on the ATM screens and the IB website screens. 

For illustration purposes, the steps for making an Electronic Application through an ATM belonging to 

DBS Bank or through the IB website of DBS Bank are shown below. Instructions for Electronic 

Applications on the ATM screens and the IB websites screens (if any) of the Participating Banks, other 

than DBS Bank, may differ from those represented below. 

A - 11

Steps for Electronic Applications for Offer Shares through ATMs of DBS Bank (including its 

POSBank Services Division) 

Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating Bank. 

For illustration purposes, the steps for making an ATM Electronic Application through a DBS Bank or 

POSBank ATM are shown below. Certain words appearing on the screen are in abbreviated form (“A/c”, 

“amt”, “appln”, “&”, “I/C” and “No.” refer to “Account”, “amount”, “application”, “and”, “NRIC” and “Number” 

respectively. Instructions for ATM Electronic Applications on the ATM screens of Participating Banks 

(other than DBS Bank (including its POSBank Services Division)), may differ slightly from those 

represented below. 

Step 1: Insert your personal DBS or POSBank ATM Card 

2: Enter your Personal Identification Number 

3: Select “CASHCARD & MORE SERVICES” 

4: Select “ESA-IPO SHARE/BOND/RIGHTS” 

5: Select “ELECTRONIC SECURITY APPLICATION (IPO-SHARE/BOND)” to “OCEAN SKY” 

6: Press the “ENTER” key to acknowledge :- 

you have read, understood and agreed to all terms of the application & the 

Prospectus. 

you consent to disclose your name, I/C/Passport No., address, nationality, CDP 

Securities A/c No., and share application amount from your Bank Account(s) to 

share registrars, SCCS, CDP, issuer. 

For FIXED price share application, this is your only application and it is made in 

your own name and at your own risk. 

You are not a US Person as referred to in the Prospectus/Document, where 

applicable. 

7: Select your nationality 

8: Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSBank 

account (current/savings) from which to debit your application moneys 

9: Enter the number of securities you wish to apply for using cash 

10: Enter your own 12-digit CDP Securities Account number. (Note: This step will be omitted 

automatically if your CDP Securities Account Number has already been stored in the Bank’s 

records) 

11: Check the details of your share application, your I/C/Passport number and CDP Securities 

Account number and number of securities on the screen and press the “ENTER” key to 

confirm application 

12: Remove the Transaction Record for your reference and retention only 

Steps for an Internet Electronic Application through the IB website of DBS Bank 

For illustrative purposes, the steps for making an Internet Electronic Application through the DBS Bank 

IB website is shown below. Certain words appearing on the screen are in abbreviated form (“A/C”, “&”, 

“I/C” and “No.” refer to “Account”, “NRIC” and “Number” respectively). 

A - 12

Step 1: Click on to DBS Bank website (www.dbs.com) 

Step 2: Login to Internet Banking 

Step 3: Enter your User ID and PIN 

Step 4: Select “Electronic Security Application” 

Step 5: Click “Yes” to proceed and to warrant that you have observed and complied with all 

applicable laws and regulations 

Step 6: Click on “OCEAN SKY” and click the “Submit” button 

Step 7: Click “Confirm” to confirm 

(1) You have read, understood & agreed to all terms of application and the Prospectus 

(2) You consent to disclose your name, I/C/passport No., address, nationality, CDP 

Securities A/C No., CPF Investment A/C No. and share application amount from your 

DBS/POSBank Accounts(s) to share registrars, SCCS, CDP, CPF Board and issuer(s) 

(3) This application is made in your name and at your own risk 

(4) For FIXED price share application, this is your only application. For TENDER price 

securities application, this is your only application at the selected tender price 

(5) You are not a US person as referred to in the Prospectus/Document, where applicable 

Step 8: Fill in details for share application and click “Submit” 

Step 9: Check details of your share application, your IC/passport No. and no. of shares on the 

screen and click “OK” to confirm your application 

Step 10: Print Confirmation Screen (optional) for your reference & retention only 

A - 13

APPENDIX B - DESCRIPTION OF SINGAPORE COMPANY LAW 

RELATING TO SHARES 

The following statements are brief summaries of the rights and privileges of shareholders conferred by 

the laws of Singapore and the Articles of Association (the “Articles”) of our Company. 

These statements summarise the material provisions of the Articles but are qualified in entirety by 

reference to the Articles. 

Ordinary Shares 

All of the ordinary shares are in registered form. The Company may, subject to the provisions of the 

Singapore Companies Act and the rules of the Singapore Exchange Securities Trading Limited, purchase 

its own ordinary shares. However, it may not, except in circumstances permitted by the Singapore 

Companies Act, grant any financial assistance for the acquisition or proposed acquisition of its own 

ordinary shares. 

New Ordinary Shares 

New ordinary shares may only be issued with the prior approval in a general meeting of the 

Shareholders of the Company. The aggregate number of shares to be issued pursuant to such approval 

may not exceed 50% (or such other limit as may be prescribed by the Singapore Exchange Securities 

Trading Limited) of its issued share capital for the time being, of which the aggregate number of shares 

to be issued other than on a pro-rata basis to its Shareholders may not exceed 20% (or such other limit 

as may be prescribed by the Singapore Exchange Securities Trading Limited) of its issued share capital 

for the time being. The approval, if granted, will lapse at the conclusion of the annual general meeting 

following the date on which the approval was granted. Subject to the foregoing, the provisions of the 

Singapore Companies Act and any special rights attached to any class of shares currently issued, all 

new ordinary shares are under the control of the Board of Directors who may allot and issue the same 

with such rights and restrictions as it may think fit. 

Shareholders 

Only persons who are registered in the register of shareholders of the Company and, in cases in which 

the person so registered is CDP, the persons named as the depositors in the depository register 

maintained by CDP for the ordinary shares, are recognised as shareholders of the Company. The 

Company will not, except as required by law, recognise any equitable, contingent, future or partial 

interest in any ordinary share or other rights for any ordinary share other than the absolute right thereto 

of the registered holder of that ordinary share or of the person whose name is entered in the depository 

register for that ordinary share. The Company may close the register of shareholders for any time or 

times if it provides the Singapore Registry of Companies and Businesses at least 14 days’ notice and the 

Singapore Exchange Securities Trading Limited at least 10 clear market days’ notice. However, the 

register may not be closed for more than 30 days in aggregate in any calendar year. The Company 

typically closes the register to determine shareholders’ entitlement to receive dividends and other 

distributions. 

Transfer of Ordinary Shares 

There is no restriction on the transfer of fully paid ordinary shares except where required by law or the 

listing rules or the rules or by-laws of any stock exchange on which the Company is listed. The Board of 

Directors may decline to register any transfer of ordinary shares which are not fully paid shares or 

ordinary shares on which the Company has a lien. Ordinary shares may be transferred by a duly signed 

instrument of transfer in a form approved by any stock exchange on which the Company is listed. The 

Board of Directors may also decline to register any instrument of transfer unless, among other things, it 

has been duly stamped and is presented for registration together with the share certificate and such 

other evidence of title as they may require. The Company will replace lost or destroyed certificates for 

ordinary shares if it is properly notified and if the applicant pays a fee which will not exceed S$2 and 

furnishes any evidence and indemnity that the Board of Directors may require. 

B - 1

General Meetings of Shareholders 

The Company is required to hold an annual general meeting every year. The Board of Directors may 

convene an Extraordinary General Meeting whenever it thinks fit and must do so if Shareholders 

representing not less than 10% of the total voting rights of all shareholders request in writing that such a 

meeting be held. In addition, two or more shareholders holding not less than 10% of the issued share 

capital of the Company may call a meeting. Unless otherwise required by law or by the Articles, voting at 

general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes 

cast at that meeting. An ordinary resolution suffices, for example, for the appointment of directors. A 

special resolution, requiring the affirmative vote of at least 75% of the votes cast at the meeting, is 

necessary for certain matters under Singapore law, including voluntary winding up, amendments to the 

Memorandum of Association and the Articles, a change of the corporate name and a reduction in the 

share capital, share premium account or capital redemption reserve fund. The company must give at 

least 21 days” notice in writing for every general meeting convened for the purpose of passing a special 

resolution. Ordinary resolutions generally require at least 14 days’ notice in writing. The notice must be 

given to every shareholder who has supplied the Company with an address in Singapore for the giving of 

notices and must set forth the place, the day and the hour of the meeting and, in the case of special 

business, the general nature of that business. 

Voting Rights 

A shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. Proxies 

need not be a shareholder. A person who holds ordinary shares through the Singapore Exchange 

Securities Trading Limited book-entry settlement system will only be entitled to vote at a general meeting 

as a shareholder if his name appears on the depository register maintained by CDP 48 hours before the 

general meeting. Except as otherwise provided in the Articles, two or more shareholders must be present 

in person or by proxy to constitute a quorum at any general meeting. Under the Articles, on a show of 

hands, every shareholder present in person and by proxy shall have one vote (provided that in the case 

of a shareholder who is represented by two proxies, only one of the two proxies as determined by that 

shareholder or, failing such determination, by the Chairman of the meeting in his sole discretion shall be 

entitled to vote on a show of hands), and on a poll, every shareholder present in person or by proxy shall 

have one vote for each ordinary share which he holds or represents. A poll may be demanded in certain 

circumstances, including by the chairman of the meeting or by any shareholder present in person or by 

proxy and representing not less than 10% of the total voting rights of all shareholders having the right to 

attend and vote at the meeting or by any two shareholders present in person or by proxy and entitled to 

vote. In the case of a tie vote, whether on a show of hands or a poll, the chairman of the meeting shall 

be entitled to a casting vote. 

Dividends 

The Company may, by ordinary resolution of its shareholders, declare dividends at a general meeting, 

but it may not pay dividends in excess of the amount recommended by the Board of Directors. The 

Company must pay all dividends out of its profits; however, the Company may capitalise its share 

premium account and apply it to pay dividends, if such dividends are satisfied by the issue of shares to 

shareholders of the Company. See “Bonus and Rights Issue”. The Board of Directors may also declare 

an interim dividend without the approval of its shareholders. All dividends are paid pro rata among the 

shareholders in proportion to the amount paid up on each shareholder’s ordinary shares, unless the 

rights attaching to an issue of any ordinary share provides otherwise. Unless otherwise directed, 

dividends are paid by cheque or warrant sent through the post to each shareholder at his registered 

address. Notwithstanding the foregoing, the payment by the Company to CDP of any dividend payable to 

a shareholder whose name is entered in the depository register shall, to the extent of payment made to 

CDP, discharge the Company from any liability to that shareholder in respect of that payment. 

Bonus and Rights Issues 

The Board of Directors may, with approval by the shareholders at a general meeting, capitalise any 

reserves or profits (including profit or moneys carried and standing to any reserve or to the share 

premium account) and distribute the same as bonus shares credited as paid-up to the shareholders in 

proportion to their shareholdings. The Board of Directors may also issue rights to take up additional 

ordinary shares to shareholders in proportion to their shareholdings. Such rights are subject to any 

conditions attached to such issue and the regulations of any stock exchange on which the Company is 

listed. 

B - 2

Takeovers 

The Singapore Companies Act and the Singapore Code on Takeovers and Mergers regulate the 

acquisition of ordinary shares of public companies and contain certain provisions that may delay, deter or 

prevent a future takeover or change in control of the Company. Any person acquiring an interest, either 

on his own or together with parties acting in concert with him, in 30% or more of the voting shares in the 

Company must extend a takeover offer for the remaining voting shares in accordance with the provisions 

of the Singapore Code on Takeovers and Mergers. “Parties acting in concert” include a company and its 

related and associated companies, a company and its directors (including their close relatives), a 

company and its pension funds and employee share schemes, a person and any investment company, 

unit trust or other fund whose investment such person manages on a discretionary basis, and a financial 

advisor and its client in respect of shares held by the financial advisor and shares in the client held by 

funds managed by the financial advisor on a discretionary basis. An offer for consideration other than 

cash must be accompanied by a cash alternative at not less than the highest price paid by the offeror or 

parties acting in concert with the offeror within the preceding six months. A mandatory takeover offer is 

also required to be made if a person who, together with persons acting in concert with him, holds not 

less than 30% but not more than 50% of the voting rights and such person, or any person acting in 

concert with him, acquires in any period of six months additional shares carrying more than 1% of the 

voting rights. 

Liquidation or Other Return of Capital 

If the Company liquidates or in the event of any other return of capital, holders of ordinary shares will be 

entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special 

rights attaching to any other class of shares. 

Indemnity 

As permitted by Singapore law, the Articles provide that, subject to the Singapore Companies Act, the 

Board of Directors and officers shall be entitled to be indemnified by the Company against any liability 

incurred in defending any proceedings, whether civil or criminal, which relate to anything done or omitted 

to have been done as an officer, director or employee and in which judgment is given in their favour or in 

which they are acquitted or in connection with any application under any statute for relief from liability in 

respect thereof in which relief is granted by the court. The Company may not indemnify directors and 

officers against any liability which by law would otherwise attach to them in respect of any negligence, 

default, breach of duty or breach of trust of which they may be guilty in relation to the Company. 

Limitations on Rights to Hold or Vote Shares 

Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed by 

Singapore law or by the Articles on the rights of non-resident shareholders to hold or vote ordinary 

shares. 

Minority Rights 

The rights of minority shareholders of Singapore-incorporated companies are protected under Section 

216 of the Singapore Companies Act, which gives the Singapore courts a general power to make any 

order, upon application by any shareholder of the Company, as they think fit to remedy any of the 

following situations: 

(a) the affairs of the Company are being conducted or the powers of the Board of Directors are being 

exercised in a manner oppressive to, or in disregard of the interests of, one or more of the 

shareholders; or 

(b) the Company takes an action, or threatens to take an action, or the shareholders pass a 

resolution, or propose to pass a resolution, which unfairly discriminates against, or is otherwise 

prejudicial to, one or more of the shareholders, including the applicant. 

B - 3

Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no way 

limited to those listed in the Singapore Companies Act itself. Without prejudice to the foregoing, 

Singapore courts may: 

(a) direct or prohibit any act or cancel or vary any transaction or resolution; 

(b) regulate the conduct of the affairs of the Company in the future; 

(c) authorise civil proceedings to be brought in the name of, or on behalf of, the Company by a person 

or persons and on such terms as the court may direct; 

(d) provide for the purchase of a minority shareholder’s shares by the other shareholders or by the 

Company and, in the case of a purchase of shares by the Company, a corresponding reduction of 

its share capital; 

(e) provide that the Memorandum of Association or the Articles be amended; or 

(f) provide that the Company be wound up. 

B - 4

APPENDIX C - DESCRIPTION OF SINGAPORE LAW RELATING TO TAXATION 

The discussion below is not intended to constitute a complete analysis of all tax consequences relating 

to ownership of our ordinary shares. Prospective purchasers of our ordinary shares should consult their 

own tax advisors concerning the tax consequences of their particular situations. This description is based 

on laws, regulations and interpretations now in effect and available as of the date of this Prospectus. The 

laws, regulations and interpretations, however, may change at any time, and any change could be 

retroactive to the date of issuance of our ordinary shares. These laws and regulations are also subject to 

various interpretations and the relevant tax authorities or the courts could later disagree with the 

explanations or conclusions set out below. 

Singapore Taxation 

The following discussion describes the material Singapore income tax, stamp duty and estate duty 

consequences of the purchase, ownership and disposal of our ordinary shares. 

Income Tax 

General 

Singapore resident taxpayers, which include individuals who are residing in Singapore and companies 

which are controlled or managed in Singapore, are subject to Singapore income tax on: 

(i) income accruing in or derived from Singapore; and 

(ii) foreign income received in Singapore. 

A company will be regarded as being resident in Singapore if the control and management of its 

business is exercised in Singapore (for example, if the company’s board of directors meets and conducts 

the business of the company in Singapore). An individual will be regarded as being resident in Singapore 

in a year of assessment if, in the preceding year, he was physically present in Singapore or exercised 

employment in Singapore (other than as a director of a company) for 183 days or more, or if he resides 

in Singapore. 

Non-Singapore resident corporate taxpayers, subject to certain exceptions, are subject to Singapore 

income tax on: 

(i) income that is accrued in or derived from Singapore; and 

(ii) foreign income received in Singapore. 

Non-Singapore resident individuals, subject to certain exceptions, are subject to Singapore income tax 

only on income accruing in or derived from Singapore. 

The corporate tax rate in Singapore is 22% with effect from the year of assessment 2003. In addition, 

three-quarters of up to the first S$10,000 of a company’s chargeable income, and one-half of up to the 

next S$90,000 will be exempt from corporate tax for the year of assessment 2003. The remaining 

chargeable income will be taxed at 22%. 

Subject to the provisions of any applicable tax treaty, non-Singapore resident taxpayers who derive 

certain types of income from Singapore are subject to a withholding tax currently at 22% or generally 

15% in the case of interest, royalty and rental of movable equipment income. 

Dividend Distributions 

Under Singapore’s imputation corporate tax system, the tax paid by our Company at the prevailing 

corporate tax rate is in effect imputed to, and deemed to be paid on behalf of its shareholders. 

Shareholders receive dividends net of such tax. Shareholders are taxed on the gross amount of 

dividends (that is, on the amount of net dividends plus an amount equal to the gross dividends multiplied 

by the prevailing corporate tax rate). The tax paid by our Company effectively becomes available to its 

shareholders as a tax credit to offset their Singapore income tax liability on the gross amount of 

dividends paid by the Company. 

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Singapore does not impose withholding tax on dividends paid to non-Singapore resident shareholders. 

As the tax paid by our Company at the prevailing corporate tax rate is deemed to be paid by its 

shareholders, no further Singapore income tax liability is imposed on dividends received by such nonresident 

shareholders. Conversely, such non-resident shareholders who do not have deductible expenses 

which are accepted by the Inland Revenue Authority of Singapore (IRAS) as attributable to such dividend 

income will normally not receive any refund from the IRAS. Singapore taxpayers are taxed on dividends 

received from our Company at the income tax rates applicable to each taxpayer. Where their income tax 

liabilities on the dividends are lower (or, as the case may be, higher) than the tax deducted at source 

from such dividends at the prevailing corporate rate, such resident shareholders may receive a refund 

from (or, as the case may be, have to pay further tax to) the IRAS. 

With effect from 1 January 2003, a one-tier corporate taxation system has been introduced to replace the 

imputation corporate tax system. Under the one-tier system, the corporate tax paid is final and the after 

tax profits of the Company can be distributed to shareholders as exempt (one-tier) dividends, which will 

be exempt from tax. This exemption will also apply to non-resident shareholders as withholding tax on 

dividend is not applicable in Singapore. To enable companies to make use of the unutilised dividend 

franking credits as at 31 December 2002, the Minister for Finance introduced a five-year transition period 

from 1 January 2003 to 31 December 2007 for companies to pay franked dividends out of its unutilised 

dividend franking credits. During this period, shareholders will continue to receive these dividends with 

credits attached as mentioned above under the imputation corporate tax system. 

Gains on Disposal of Ordinary Shares 

Singapore does not impose tax on capital gains. However, gains may be construed to be of an income 

nature and subject to tax if: 

(i) they arise from activities which the IRAS regards as the carrying on of a trade in Singapore; or 

(ii) they are short-term gains from the sale of real property and shares in unlisted companies with 

substantial real property or real property related assets in Singapore. 

Any profits from the disposal of ordinary shares are not taxable in Singapore unless the seller is 

regarded as having derived gains of an income nature, in which case, the disposal profits would be 

taxable. 

Stamp Duties 

No stamp duty is payable on the issue of new ordinary shares of the Company. 

Stamp duty is payable on the instrument of transfer of ordinary shares of the Company at the rate of 

S$2.00 for every S$1,000 market value of such ordinary shares. The purchaser is liable for stamp duty, 

unless otherwise agreed. No stamp duty is payable if no instrument of transfer is executed or if the 

instrument of transfer is executed outside Singapore. However, stamp duty may be payable if the 

instrument of transfer which is executed outside Singapore is received in Singapore. The above stamp 

duty is not applicable to scripless transfers of the ordinary shares through CDP system. 

Estate Duties 

Singapore estate duty is imposed on the value of most immovable property situated in Singapore owned 

by individuals who are not domiciled in Singapore, subject to specific exemption limits. Singapore estate 

duty is imposed on the value of most immovable property situated in Singapore and on most movable 

property, wherever it may be, owned by individuals who are domiciled in Singapore, subject to specific 

exemption limits. The Company’s ordinary shares are considered to be movable property situated in 

Singapore as the Company is a company incorporated in Singapore and the share register is maintained 

in Singapore. 

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Accordingly, the Company’s ordinary shares held by an individual are subject to Singapore estate duty 

upon such individual’s death, where such individual is domiciled in Singapore. Singapore estate duty is 

payable to the extent that the value of the ordinary shares aggregated with any other assets subject to 

Singapore estate duty exceeds S$600,000. Unless other exemptions apply to other assets, for example, 

the separate exemption limit for residential properties, any excess beyond S$600,000 will be taxed at 5% 

on the first S$12,000,000 of the individual’s Singapore chargeable assets and thereafter at 10%. 

Individuals should consult their own tax advisors regarding the Singapore estate duty consequences of 

their ownership of the Company’s ordinary shares. 

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APPENDIX D - RULES OF THE OCEAN SKY SHARE OPTION SCHEME 

1. Name of the ESOS 

The ESOS shall be called the “Ocean Sky Share Option Scheme”. 

2. Definitions 

2.1 Unless the context otherwise requires, the following words and expressions shall have the 

following meanings:- 

“Acceptance Period” The period within which an Option may be accepted, as 

described in Rule 7 

“Act” The Companies Act, Chapter 50 of Singapore as amended or 

modified from time to time 

“Adoption Date” The date on which the ESOS is adopted by the Company in 

an extraordinary general meeting 

“Aggregate Subscription Cost” The total amount payable for the Shares to be subscribed for 

on the exercise of an Option 

“Associated Company” A company in which at least 20% but not more than 50% of 

its shares are held by the Company or our Group and over 

which the Company has control 

“Associated Company Employee” An executive or non-executive director of an Associated 

Company or a full time employee of an Associated Company 

selected by the Committee to participate in the ESOS in 

accordance with Rule 4 

“Auditors” The auditors for the time being of the Company 

“Board” The board of directors for the time being of the Company 

“CDP” The Central Depository (Pte) Limited 

“CPF” Central Provident Fund 

“Committee” A committee comprising directors of the Company, duly 

authorised and appointed by the Board to administer the 

ESOS 

“Company” Ocean Sky International Limited, a company incorporated in 

Singapore 

“Controlling Shareholder” A group Employee or an Associated Company Employee 

who, in Relation to the Company, has control of the 

Company’s affairs 

“Depository Agent” An entity registered as a depository agent with the CDP for 

the purpose of maintaining securities sub-accounts for its own 

account and for the account of others 

“Executive Director” A director who is a full-time employee of the Company and 

who performs an executive function 

D - 1

“Exercise Price” The price at which a Participant shall subscribe for each 

Share upon the exercise of an Option, as determined in 

accordance with Rule 8.1(a), or such adjusted price as may 

be applicable pursuant to Rule 8.1(b). 

“Employee” An executive or non-executive director of any member of our 

Group or Associated Company, or a full-time employee of any 

member of our Group or Associated Company, who is 

selected by the Committee to participate in the ESOS in 


“Grantee” A person to whom an offer of an Option is made 

“Group” The Company and its subsidiaries 

“Incentive Option” The right to subscribe for Shares granted or to be granted 

Pursuant to the ESOS and for the time being subsisting, and 

in respect of which the Exercise Price is determined in 

accordance with Rule 8.1(b) 

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

“Market Price Option” The right to subscribe for Shares granted or to be granted 



accordance with Rule 8.1(a) 

“Offering Date” The date on which an Option is granted pursuant to Rule 6 

“Option” The right to subscribe for Shares granted or to be granted 




“Option Period” The period for the exercise of an Option 

“Participant” The holder of an Option 

(i) in relation to a Market Price Option, the period 

commencing on (and including) the first anniversary of 

the Offering Date and expiring on (and including) the 

day immediately preceding the tenth anniversary of the 

Offering Date or such other period determined by the 

Committee or prescribed under any relevant law, 

regulation or rule of the SGX-ST from time to time; 

(ii) in relation to an Incentive Option, the period 

commencing on (and including) the second anniversary 

of the relevant Offering Date and expiring on (and 

including) the day immediately preceding the tenth 

anniversary of the Offering Date or such other period 

determined by the Committee or prescribed under any 

relevant law, regulation or rule of the SGX-ST from time 

to time; 

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“Rules” The rules of the ESOS, as the same may be amended from 

time to time 

“Scheme” or “ESOS” The Ocean Sky Share Option Scheme, as modified or altered 

from time to time 

“SGX-ST” The Singapore Exchange Securities Trading Limited 

“Shareholders” The registered holders of the Shares or in the case of 

Depositors, Depositors who have Shares entered against 

their names in the Depository Register 

“Shares” Fully-paid ordinary shares of S$0.05 each in the capital of the 

Company 

“Exercise Price” The price at which a participant shall subscribe for each 

Share upon the exercise of an Option as determined in 

accordance with Rule 8.1(a) in relation to a Market Price 

Option, and Rule 8.1(b) in relation to an Incentive Option 

“$” Singapore dollars 

“%” Per centum 

2.2 For the purposes of the ESOS:- 

(a) in relation to a company (including, where the context requires, the Company), “control” 

means the capacity to dominate decision-making directly or indirectly, in relation to the 

financial and operating policies of that company; 

(b) unless rebutted, a person who holds directly or indirectly, a shareholding of 15% or more of 

the Company’s issued share capital shall be presumed to be a Controlling Shareholder; and 

(c) in relation to a Controlling Shareholder, its “associate” has the meaning assigned to it in the 

Listing Manual. 

2.3 Any reference in the ESOS to any enactment is a reference to that enactment as for the time being 

amended or re-enacted. Any word defined under the Act and used in these Rules shall have the 

meaning assigned to it under the Act. 

2.4 Words importing the singular number shall include the plural number where the context admits and 

vice versa. Words importing the masculine gender shall include the feminine gender where the 

context admits. 

2.5 Any reference to a time of day shall be a reference to Singapore time. 

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3. Objectives 

The ESOS is a share incentive scheme. The purpose of the ESOS is to provide an opportunity for 

executive directors and employees of our Group to participate in the equity of the Company so as 

to motivate them to greater dedication, loyalty and higher standards of performance, and to give 

recognition to non-executive directors of our Group and Associated Company Employees who 

have contributed to the success and development of the Company and/or Group. The ESOS is 

proposed on the basis that it is important to acknowledge the contribution, which is essential to the 

well-being and prosperity of our Group, made respectively by these categories of persons. The 

Company, by adopting the ESOS, will give these categories of persons a real and meaningful 

stake in the Company at no direct cost to its profitability and will help to achieve the following 

objectives:- 

(a) the motivation of Participants to optimise performance standards and efficiency and to 

maintain a high level of contribution; 

(b) the retention of key employees whose contributions are important to the long term growth 

and prosperity of our Group; 

(c) the attainment of harmonious employer/staff relations, as well as the strengthening of 

working relationships with our Group’s close business associates; and 

(d) the development of a participatory style of management which promotes greater 

commitment and dedication amongst the employees and instils loyalty and a stronger sense 

of identification with the long term prosperity of our Group. 

4 Eligibility 

4.1 The following persons (provided that such persons are not undischarged bankrupts at the relevant 

time) shall be eligible to participate in the ESOS at the absolute discretion of the Committee:- 

(a) Group Employees 

(i) confirmed full-time employees of the Company and/or its subsidiaries who have 

attained the age of 21 years on or before the Offering Date; 

(ii) directors of the Company and/or its subsidiaries who perform an executive function; 

(iii) non-executive directors of the Company; and 

(iv) employees who qualify under sub-paragraph (i) above and are seconded to an 

Associated Company or any other company outside our Group in which the Company 

and/or Group has an equity interest, and who, in the absolute discretion of the 

Committee is selected to participate in the ESOS. 

(b) Associated Company Employees 

(i) confirmed full-time employees of an Associated Company who have attained the age 

of 21 years and above on or before the Offering Date; 

(ii) directors of an Associated Company who perform an executive function; and 

(iii) non-executive directors of an Associated Company. 

For the purposes of paragraph (a)(i) above, the secondment of an employee to another company 

shall not be regarded as a break in his employment or his having ceased employment as a fulltime 

employee of our Group by reason only of such secondment. 

D - 4

4.2 Employees who are either Controlling Shareholders or their associates are eligible to participate in 

the Scheme provided that such participation by each of such Controlling Shareholder or its 

associate, and each grant of Options to any one of them, shall be effected only with the specific 

prior approval of independent Shareholders by way of separate resolutions for each Controlling 

Shareholder and its associate at a general meeting. The Company will at such time provide the 

rationale and justification for any proposal to grant any Options to an Employee who is a 

Controlling Shareholder or its associate. 

4.3 There shall be no restriction on the eligibility of any Participant to participate in any other share 

option or share incentive schemes implemented by any other companies within our Group, or by 

any Associated Company or otherwise. 

4.4 Subject to the Act and any requirement of the SGX-ST or any other stock exchange on which the 

Shares may be listed or quoted, the terms of eligibility for participation in the ESOS may be 

amended from time to time at the absolute discretion of the Committee. 

5. Limitations under the ESOS 

5.1 The aggregate number of Shares over which the Committee may grant Options on any date, when 

added to the number of Shares issued and issuable in respect of all Options granted under the 

ESOS, shall not exceed 15% of the issued Shares of the Company on the day preceding that date. 

5.2 The number of Shares comprised in the Market Price Option or, as the case may be, in the 

Incentive Option, to be offered to any Group Employee or Associated Company Employee in 

accordance with the ESOS shall be determined at the absolute discretion of the Committee, who 

shall take into account, in respect of a Group Employee, criteria such as rank, past performance, 

years of service and potential for future development of that employee and, in respect of an 

Associated Group Employee, his contribution to the success and development of our Group. 

5.3 Subject to Rule 4, the aggregate number of Shares in respect of which Options may be offered to 

an Employee for subscription in accordance with the Scheme shall be determined at the discretion 

of the Committee who shall take into account criteria such as the rank and responsibilities within 

our Group, performance, years of service and potential for future development of the Employee, 

and the general performance of our Group provided that:- 

(i) the aggregate number of Shares in respect of which Options may be offered to the 

Controlling Shareholder and their associates must not exceed 25% of the Shares available 

under the Scheme; 

(ii) the number of Shares in respect of which Options may be offered to each Controlling 

Shareholder or his associate must not exceed 10% of the Shares available under the 

Scheme; and 

(iii) any grant of Options to any one Employee together with Options already granted to such 

Employee under the Scheme, represents 5% or more of the total number of Options 

available to the Employees must be approved by independent Shareholders. A separate 

resolution must be passed for each such Employee and to approve the aggregate number of 

Options to be made available for grant to all Employees. 

6. Date of Grant 

6.1 The Committee may, subject as provided in Rule 12, grant Options at any time, provided that in the 

event that an announcement on any matter of an exceptional nature involving unpublished price 

sensitive information is imminent, Options may only be granted on or after the second Market Day 

from the date on which the aforesaid announcement is released. 

6.2 The Letter of Offer to grant the Option shall be in, or substantially be in, the form set out in 

Schedule D-1, subject to such modification including but not limited to, imposing restrictions on the 

number of Options that may be exercised within particular sections of the relevant Option Period 

as set out in Rule 9.1, or as the Committee may from time to time determine. 

D - 5

7. Acceptance of Options 

7.1 An Option shall be personal to the Participant to whom it is granted and shall not be transferred, 

assigned (other than to a Participant’s personal representative on the death of that Participant), 

charged, pledged or otherwise disposed of, in whole or in part, unless with the prior approval of 

the Committee. 

7.2 The closing date for the acceptance for the grant of any Option under this Rule 7 shall be within 

thirty (30) days from the Offering Date of that Option, and not later than 5pm on the thirtieth (30th) 

day of the Offering Date. The grant of an Option must be accepted by completing, signing and 

returning the Acceptance Form in, or substantially in, the form set out in Schedule D-2 and 

accompanied by payment of S$1.00 as consideration, subject to such modification as the 

Committee may from time to time determine. 

7.3 If a grant of an Option is not accepted in the manner as provided in Rule 7.2, such offer shall, 

upon the expiry of the Acceptance Period, automatically lapse and become null and void and of no 

effect. 

8. Exercise Price 

8.1 Subject to any adjustment pursuant to Rule 12, the Exercise Price for each Share in respect of 

which an Option is exercisable shall be determined by the Committee at its absolute discretion, 

and fixed by the Committee as follows:- 

(a) a price equal to the average of the last dealt price(s) for a Share, as determined by 

reference to the Financial News published by the SGX-ST, for the last Market Day 

immediately preceding the Offering Date of that Option (the “Market Price Option)”; 

(b) in respect of a Grantee whose performance has been consistently sterling or whose future 

contributions and value-add to our Group would be invaluable in the opinion of the 

Committee, a price which is set at a discount to the Market Price, provided that the 

maximum discount shall not exceed 20% of the Market Price (or such other percentage or 

amount as may be prescribed or permitted for the time being by the SGX-ST) (the “Incentive 

Option”). In determining the quantum of such discount, the Committee shall take into 

consideration such criteria as the Committee may, in its absolute discretion, deem 

appropriate including but not limited to:- 

(i) the performance of the Company and our Group; 

(ii) the individual performance of the Participant; 

(iii) the contribution of the Participant to the success and development of the Company 

and/or our Group; and 

(iv) the benefits received by such employee under any other employee remuneration 

plans or scheme of our Group, including the Profit Sharing Plan. 

Prior approval of the Shareholders of the Company in general meeting shall have been 

obtained for the making of offers and grants of Options under the ESOS at a discount not 

exceeding the maximum discount as aforesaid. 

8.2 In no event shall the Exercise Price be less than the nominal value of a Share. Where the Exercise 

Price (as determined under Rule 8.1) is less than the nominal value of a Share, the Exercise Price 

shall then be the nominal value, whichever the higher. 

D - 6

9. Rights to Exercise Options 

9.1 Subject as provided in this Rule 9 and Rule 10 and any other conditions as may be introduced by 

the Committee from time to time, each Option shall be exercisable, in whole or in part, during the 

relevant option period as follows:- 

(a) in the case of a Market Price Option, a period commencing on (and including) the first 

anniversary of the Offering Date and expiring on (and including) the day immediately 

preceding the tenth anniversary of the Offering Date, or such other period determined by the 

Committee or prescribed under any relevant law, regulation or rule of the Stock Exchange 

from time to time; and 

(b) in the case of an Incentive Option, a period commencing on (and including) the second 

anniversary of the Offering Date and expiring on (and including) the day immediately 

preceding the tenth anniversary of the Offering Date, or such other period determined by the 

Committee or prescribed under any relevant law, regulation or rule of the Stock Exchange 

from time to time. 

9.2 In the event of an Option being exercised in part only, the balance of the Option not thereby 

exercised shall continue to be exercisable in accordance with the ESOS until such time as it shall 

lapse in accordance with the ESOS. 

9.3 An Option shall, to the extent unexercised, immediately lapse without any claim against the 

Company:- 

(a) subject to Rules 9.4 and 9.5, upon the Participant ceasing to be in the full-time employment 

of the Group or an Associated Company, as the case may be, for any reason whatsoever; or 

(b) upon the bankruptcy of the Participant or the happening of any other event which results in 

his being deprived of the legal or beneficial ownership of such Option; or 

(c) in the event of any misconduct on the part of the Participant as determined in the 

Committee’s discretion; or 

(d) in the event that the Committee shall, at its discretion, deem it appropriate that such Option 

granted to a Participant shall so lapse on the grounds that any of the objectives of the 

ESOS (as set out in Rule 3) have not been met. 

For the purpose of Rule 9.3(a), the Participant shall be deemed to have ceased to be so employed 

as of the date of his notice of resignation of employment or the cessation of his 

employment/appointment, whichever is earlier, with our Group or an Associated Company as the 

case may be. 

9.4 If a Participant ceases to be employed by our Group or, as the case may be, an Associated 

Company, by reason of his:- 

(a) ill health, injury or disability (in each case, evidenced to the satisfaction of the Committee); 

(b) redundancy; 

(c) retirement before the legal retirement age with the consent of the Committee; 

(d) retirement before the legal retirement age with the consent of the Committee, or any other 

reason approved in writing by the Committee; 

he may exercise any unexercised Options within the relevant Option Period. 

D - 7

9.5 If a Participant dies and at the date of his death holds any unexercised Option, such Option may, 

at the discretion of the Committee, be exercised by the duly appointed personal representatives of 

the Participant within such period after his death as may be determined by the Committee in its 

absolute discretion (but before the expiration of the Option Period in respect of that Option), and 

upon the expiration of such period, the Option shall lapse. Such exercise shall, at the discretion of 

the Committee, either be in full or only in respect of such Shares comprised in that Option for 

which the Participant would have been entitled to exercise. The Committee may, in exercising such 

discretion, allow the Option to be exercised at any time, notwithstanding that the date of exercise 

of such Option falls on a date prior to the first day of the Option Period in respect of such Option. 

9.6 If for any reason whatsoever, a Participant, being a Group Employee or an Associated Company 

Employee by virtue of his being a non-executive director of our Group or, as the case may be, the 

Associated Company, ceases to be a director of our Group or, as the case may be, the Associated 

Company, on the Offering Date, any Option then held by him shall, to the extent unexercised, 

immediately lapse without any claim against the Company. 

10. Take-over and Winding Up of the Company 

10.1 Notwithstanding Rule 9 but subject to Rule 10.5, in the event of a take-over being made for the 

Shares, a Participant as and/or including those set out under Rule 9.1, shall be entitled to exercise 

in full or in part any Option held by him and as yet unexercised, in the period commencing on the 

date on which such offer is made or, if such offer is conditional, the date on which such offer 

becomes or is declared unconditional, as the case may be, and ending on the earlier of:- 

(a) the expiry of six months thereafter, unless prior to the expiry of such six-month period, at the 

recommendation of the offeror and with the approvals of the Committee and the SGX-ST, 

such expiry date is extended to a later date (in either case, being a date falling not later than 

the expiry of the Option Period relating thereto); or 

(b) the date of expiry of the Option Period relating thereto, 

whereupon the Option then remaining unexercised shall lapse and become null and void. 

Provided that if during such period, the offeror becomes entitled or bound to exercise rights of 

compulsory acquisition under the provisions of the Act and, being entitled to do so, gives notice to 

the Participants that it intends to exercise such rights on a specified date, the Option shall remain 

exercisable by the Participant until the expiry of such specified date or the expiry of the Option 

Period relating thereto, whichever is earlier. Any Option not so exercised shall lapse provided that 

the rights of acquisition or obligations to acquire shall have been exercised or performed, as the 

case may be. If such rights or obligations have not been exercised or performed, the Option shall, 

notwithstanding Rule 9, remain exercisable until the expiry of the Option Period relating thereto. 

10.2 If under the Act, the court sanctions a compromise or arrangement proposed for the purposes of, 

or in connection with, a scheme for the reconstruction of the Company or its amalgamation with 

another company or companies, each Participant (including Participants holding Options which are 

not yet exercisable pursuant to provisions under Rule 9.1) shall be entitled, notwithstanding Rule 9 

but subject to Rule 10.5, to exercise any Option then held by him during the period commencing 

on the date upon which the compromise or arrangement is sanctioned by the court and ending 

either on the expiry of sixty (60) days thereafter or the date upon which the compromise or 

arrangement becomes effective, whichever is later (but not after the expiry of the Option Period 

relating thereto), whereupon the Option shall lapse and become null and void. 

10.3 If an order is made for the winding-up of the Company on the basis of its insolvency, all Options, to 

the extent unexercised, shall lapse and become null and void. 

10.4 In the event of a members’ voluntary winding-up (other than for amalgamation or reconstruction), 

the Participants (including Participants holding Options which are not yet exercisable pursuant to 

provisions under Rule 9.1) shall be entitled, within thirty (30) days of the passing of the resolution 

of such winding-up (but not after the expiry of the Option Period relating thereto), to exercise any 

unexercised Option, after which such unexercised Option shall lapse and become null and void. 

D - 8

10.5 If in connection with the making of a general offer referred to in Rule 10.1 or the scheme referred 

to in Rule 10.2 or the winding-up referred to in Rule 10.4, arrangements are made (which are 

confirmed in writing by the Auditors, acting only as experts and not as arbitrators, in assessment of 

what is fair and reasonable) for the compensation of Participants, whether by the continuation of 

their Options or the payment of cash or the grant of other options or otherwise, a Participant 

holding an Option, as yet not exercised, may not, at the discretion of the Committee, be permitted 

to exercise that Option as provided for in this Rule 10. 

10.6 To the extent that an Option is not exercised within the periods referred to in this Rule 10, it shall 

lapse and become null and void. 

11. Exercise of Options 

11.1 An Option may be exercised, in whole or in part, by a Participant giving notice in writing to the 

Company in, or substantially in, the form set out in Schedule D-3, subject in each case to such 

modification as the Committee may from time to time determine. Such notice must be 

accompanied by a remittance for the Aggregate Subscription Cost in respect of the Shares for 

which that Option is exercised and any other documentation the Committee may require. An 

Option shall be deemed to be exercised upon receipt by the Company of the said notice, duly 

completed, the relevant documentation required by the Committee and the Aggregate Subscription 

Cost. 

11.2 All payments made shall be made by cheque, cashiers’ order, banker’s draft or postal order made 

out in favour of the Company or such other mode of payment as may be acceptable to the 

Company. 

11.3 Subject to such consents or other required action of any competent authority under any 

regulations or enactments for the time being in force as may be necessary and subject to the 

compliance with the terms of the ESOS and the Memorandum and Articles of Association of the 

Company, the Company shall, within ten (10) Market Days after the exercise of an Option, allot the 

relevant Shares and within five (5) Market Days from the date of the allotment of the relevant 

Shares, despatch to CDP the relevant share certificates by ordinary post or such other mode as 

the Committee may deem fit. 

11.4 The Company shall, as soon as practicable after such allotment, apply to the SGX-ST (and any 

other stock exchange on which the Shares are quoted or listed) for permission to deal in and for 

quotation of such Shares. 

11.5 Shares which are allotted on the exercise of an Option by a Participant shall be issued in the name 

of CDP to the credit of the securities account of that particular Participant which is maintained with 

CDP, the securities sub-account maintained with a Depository Agent or the CPF investment 

account maintained with a CPF agent bank accordingly. 

11.6 Shares allotted and issued on exercise of an Option shall be subject to all the provisions of the 

Memorandum and Articles of Association of the Company, and shall rank in full for all entitlements, 

excluding dividends or other distributions declared or recommended in respect of the then existing 

Shares, on the Record Date for which falls on or before the relevant exercise date of the Option, 

and shall in all other respects rank in pari passu with other existing Shares then in issue. “Record 

Date” means the date fixed by the Company for purposes of determining entitlements to dividends 

or other distributions to or rights of holders of Shares. 

11.7 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of all 

Options for the time being remaining capable of being exercised. 

D - 9

12. Variation of Capital 

12.1 If a variation in the issued ordinary share capital of the Company (whether by way of a 

capitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation or 

distribution) shall take place :- 

(a) the Exercise Price for the Shares, the nominal amount, class and/or number of Shares 

comprised in an Option to the extent unexercised; and/or 

(b) the nominal amount, class and/or number of Shares over which Options may be granted 

under the ESOS, shall be adjusted by the Committee to give each Participant the same 

proportion of the equity capital of the Company as that to which he was previously entitled 

and, in doing so, the Committee shall determine at its own discretion the manner in which 

such adjustment shall be made. 

12.2 Unless the Committee considers an adjustment to be appropriate:- 

(a) the issue of securities as consideration for an acquisition or a private placement of 

securities; or 

(b) the cancellation of issued Shares purchased or acquired by the Company by way of a 

market purchase of such Shares undertaken by the Company on the SGX-ST during the 

period when a share purchase mandate granted by Shareholders of the Company (including 

any renewal of such mandate) is in force, shall not normally be regarded as a circumstance 

requiring adjustment. 

12.3 Notwithstanding the provisions of Rule 12.1:- 

(a) no such adjustment shall be made if as a result, the Exercise Price shall fall below the 

nominal amount of a Share and if such adjustment would, but for this paragraph (a), result in 

the Exercise Price being less than the nominal amount of a Share, the Exercise Price 

payable shall be the nominal amount of a Share; 

(b) the adjustment must be made in such a way that a Participant will not receive a benefit that 

a Shareholder does not receive; and 

(c) any determination by the Committee as to whether to make any adjustment and if so, the 

manner in which such adjustment should be made, must (except in relation to a 

capitalisation issue) be confirmed in writing by the Auditors (acting only as experts and not 

as arbitrators) to be in their opinion, fair and reasonable. 

12.4 Upon any adjustment required to be made pursuant to this Rule 12, the Company shall notify the 

Participant (or his duly appointed personal representatives where applicable) in writing and deliver 

to him (or his duly appointed personal representatives where applicable) a statement setting forth 

the Exercise Price thereafter in effect and the nominal value, class and/or number of Shares 

thereafter to be issued on the exercise of the Option. Any adjustment shall take effect upon such 

written notification being given. 

13. Administration of the ESOS 

13.1 The ESOS shall be administered by the Committee in its absolute discretion with such powers and 

duties as are conferred on it by the Board, provided that no member of the Committee shall 

participate in any deliberation or decision in respect of Options granted or to be granted to him. 

13.2 The Committee shall have the power, from time to time, to make and vary such regulations (not 

being inconsistent with the ESOS) for the implementation and administration of the ESOS as they 

think fit, including but not limited to imposing restrictions on the number of Options that may be 

exercised within particular sections of the relevant Option Period as set out in provisions under 

Rule 9.1. 

D - 10

13.3 Any decision of the Committee made pursuant to any provision of the ESOS (other than a matter 

to be certified by the Auditors) shall be final and binding (including any decisions pertaining to the 

quantum of discount applicable to an Option pursuant to Rule 8.2 or to disputes as to the 

interpretation of the ESOS or any rule, regulation, procedure thereunder or as to any rights under 

the ESOS). 

14. Notices and Annual Report 

14.1 Any notice required to be given by a Participant to the Company shall be sent or made to the 

registered office of the Company or such other addresses as may be notified by the Company to 

him in writing. 

14.2 Any notices or documents required to be given to a Participant or any correspondence to be made 

between the Company and the Participant shall be given or made by the Committee (or such 

person(s) as it may from time to time direct) on behalf of the Company and shall be delivered to 

him by hand or sent to him at his home address according to the records of the Company or the 

last known address of the Participant and if sent by post, shall be deemed to have been given on 

the day following the date of posting. 

14.3 The company shall disclose the following in its annual report:- 

(a) the names of the members of the Committee administering the scheme; and 

(b) the information required in the table below for the following participants:- 

(i) Directors of the Company; 

(ii) Participants who are Controlling Shareholders of the Company and their associates; 

and 

(iii) Participants, other than those in (i) and (ii) above, who receive 5% or more of the total 

number of options available under the ESOS:- 

Name of No. of Aggregate Aggregate Aggregate 

Participant Options Options Options Options 

granted during granted since exercised since outstanding 

financial year commencement commencement as at the end of 

under review of the ESOS to of the ESOS to the financial 

(include Exercise the end of the the end of the year under review 

Price) financial year financial year 

under review under review 

(iv) the number and proportion of options granted at a discount during the financial year 

under review, such information to be disclosed in respect of every 10% discount 

range, up to 20%. 

(c) (i) the names of and number and terms of Options granted to each Employee who 

receives 5% of more of the total number of Options available to Employees under the 

Scheme, during the financial year under review; and 

(ii) the aggregate number of Options granted to the Employees for the financial year 

under review, and since the commencement of the Scheme to the end of the financial 

year under review. 

(d) an appropriate negative statement that the directors or employees of the parent company 

and its subsidiaries are not eligible to participate in the Scheme and that all the Options 

granted are not at a discount. 

D - 11

15. Modifications to the ESOS 

15.1 Any or all the provisions of the ESOS may be modified and/or altered at any time and from time to 

time by resolution of the Committee, except that:- 

(a) no modification or alteration shall alter adversely the rights attaching to any Option granted 

prior to such modification or alteration except with the consent in writing of such number of 

Participants who, if they exercised their Options in full, would thereby become entitled to not 

less than three quarters in nominal amount of all the Shares which would fall to be allotted 

upon exercise in full of all outstanding Options; and 

(b) the definitions of “Group”, “Group Employee”, “Associated Company”, “Associated Company 

Employee”, “Controlling Shareholder”, “Participant”, “Committee”, “Option Period” and 

“Exercise Price” and the provisions of Rules 4, 5, 6, 7, 8, 10, 11.1, 11.6, 12, 13 and this 

Rule 15 shall not be altered to the advantage of Participants except with the prior approval 

of the Company’s Shareholders in general meeting; and 

(c) no listing or quotation of new shares issued pursuant to any modification or alteration shall 

be made without the prior approval of the SGX-ST, or any other stock exchange on which 

the Shares are quoted or listed, and such other regulatory authorities as may be necessary. 

15.2 Notwithstanding anything to the contrary contained in Rule 15.1, the Committee may at any time 

by resolution (and without other formality) amend or alter the ESOS in any way to the extent 

necessary to cause the ESOS to comply with any statutory provision or the provision or the 

regulations of any regulatory or other relevant authority or body (including the SGX-ST). 

15.3 Written notice of any modification or alteration made in accordance with this Rule 15 shall be given 

to all Participants. 

15.4 Shareholders who are eligible to participate in the Scheme must abstain from voting on any 

resolution relating to the Scheme (other than a resolution relating to the participation of, or grant 

of, Options to the Employees). 

15.5 Employees who are also Shareholders and are eligible to participate in the Scheme must abstain 

from voting on any resolution relating to the participation of, or grant of Options to the Employees. 

16. Terms of Employment Unaffected 

The terms of employment of a Participant (who is a Group Employee) shall not be affected by his 

participation in the ESOS, which shall neither form part of such terms nor entitle him to take into 

account such participation in calculating any compensation or damages on the termination of his 

employment for any reason. 

17. Duration of the ESOS 

17.1 The ESOS shall continue to be in force at the discretion of the Committee, subject to a maximum 

period of ten (10) years commencing on the Adoption Date, provided always that the ESOS may 

continue beyond the above stipulated period with the approval of the Company’s Shareholders by 

ordinary resolution in general meeting and of any relevant authorities which may then be required. 

17.2 The ESOS may be terminated at any time by the Committee or by resolution of the Company in 

general meeting subject to all relevant approvals which may be required and if the ESOS is so 

terminated, no further Options shall be offered by the Company hereunder. 

17.3 The termination of the ESOS shall not affect Options which have been granted and ESOS 

accepted as provided in Rule 7.2, whether such Options have been exercised (whether fully or 

partially) or not. 

D - 12

18. Taxes 

All taxes (including income tax) arising from the exercise of any Option granted to any Participant 

under the ESOS shall be borne by that Participant. 

19. Costs and Expenses 

19.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue 

and allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit of 

share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s 

securities sub-account with a CDP Depository Agent, or CPF investment account with a CPF 

agent bank (collectively, the “CDP Charges”). 

19.2 Save for the taxes referred to in Rule 18 and such other costs and expenses expressly provided in 

the ESOS to be payable by the Participants, all fees, costs and expenses incurred by the 

Company in relation to the ESOS including but not limited to the fees, costs and expenses relating 

to the allotment and issue of Shares pursuant to the exercise of any Option shall be borne by the 

Company. 

20. Disclaimer of Liability 

Notwithstanding any provisions herein contained, the Board, the Committee and the Company 

shall not under any circumstances be held liable for any costs, losses, expenses and damages 

whatsoever and howsoever arising in any event, including but not limited to the Company’s delay in 

issuing the Shares or applying for or procuring the listing of the Shares on the SGX-ST in 

accordance with Rule 11.4 (and any other stock exchange on which the Shares are quoted or 

listed). 

21. Disputes 

Any disputes or differences of any nature arising hereunder shall be referred to the Committee and 

its decision shall be final and binding in all respects. 

22. Condition of Option 

Every Option shall be subject to the condition that no Shares shall be issued pursuant to the 

exercise of an Option if such issue would be contrary to any law or enactment, or any rules or 

regulations of any legislative or non-legislative governing body for the time being in force in 

Singapore or any other relevant country having jurisdiction in relation to the issue of Shares 

hereto. 

23. Governing Law 

The ESOS shall be governed by, and construed in accordance with, the laws of the Republic of 

Singapore. The Participants, by accepting Options in accordance with the ESOS, and the 

Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore. 

D - 13


LETTER OF OFFER 

Date: Serial No: 

To: Name 

Designation 

Address 

Dear Sir/Madam 

SCHEDULE D-1 

PRIVATE AND CONFIDENTIAL 

We are pleased to inform you that you have been nominated by the Committee of the Board of Directors 

of Ocean Sky International Limited (the “Company”) to participate in the Ocean Sky Share Option 

Scheme (the “ESOS”). 

Accordingly, an offer is hereby made to grant you an Option (as defined in the ESOS), in consideration of 

the payment of a sum of S$ , to subscribe for and be allotted ordinary shares of S$0.05 

each in the capital of the Company at the price of S$ per ordinary share. The Option shall 

be subject to the terms of this Letter of Offer and the ESOS (as the same may be amended from time to 

time pursuant to the terms and conditions of the ESOS), a copy of which is enclosed herewith. 

The Option is personal to you and may not be sold, mortgaged, transferred, charged, assigned, pledged 

or otherwise disposed of or encumbered in whole or in part or in any way whatsoever. 

If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum of 

S$ not later than 5 p.m. on the day of failing which this 

offer will forthwith lapse. 


For and on behalf of 


D - 14

Serial No: 

To: The Committee 

Ocean Sky Share Option Scheme, 


22 Tampines Street 92, 


Closing Time and Date for Acceptance of Option : 

No. of Shares in respect of which Option is offered : 

Exercise Price per Share : S$ 

Total Amount Payable on Acceptance of Option : S$ 

(exclusive of the relevant CDP charges) 


ACCEPTANCE FORM 

SCHEDULE D-2 

I have read your Letter of Offer dated (“Offer Date”) and agree to be bound by 

the terms thereof and of the Ocean Sky Share Option Scheme stated therein. 

I hereby accept the Option to subscribe for ordinary shares of S$0.05 each in 

the capital of Ocean Sky International Limited (the “Shares”) at S$ per Share and enclose 

*cash/banker’s draft/cashiers’/postal order for S$ being payment for the purchase of the 

Option. 

I understand that I am not obliged to exercise the Option. 

I also understand that I shall be responsible for all the fees of CDP relating to or in connection with the 

issue and allotment of any Shares in CDP’s name, the deposit of share certificates with CDP, my 

securities account with CDP or my securities sub-account with a CDP Depository Agent (as the case 

may be) (collectively, the “CDP charges”). 

I hereby acknowledge that you have not made any representation or warranty or given me any 

expectation of employment or continued employment to induce me to accept the offer and that the terms 

of the Letter of Offer and this Acceptance Form constitute the entire agreement between us relating to 

the offer. 

D - 15

PLEASE PRINT IN BLOCK LETTER 

Name in full : 

Designation : 

Address : 

Nationality : 

*NRIC/Passport No. 

Signature : 

Date : 

* Delete as appropriate 

Notes :- 

1. Option must be accepted in full or in multiples of 1,000 Shares. 

2. The Acceptance Form must be forwarded to the Committee in an envelope marked “Private and Confidential”. 

3. The Participant shall be informed by the Committee of the relevant CDP charges payable at the time of the exercise of an 

Option. 

D - 16

To: The Committee 

Ocean Sky Share Option Scheme, 


22 Tampines Street 92, 



EXERCISE NOTICE 

Total number of ordinary Shares of S$0.05 each 

(the “Share”) at S$ per Share under an Option 

granted on (the “Offer Date”) : 

Number of Shares previously allotted and issued thereunder : 

Outstanding balance of Shares which may be allotted : 

and issued thereunder 

Number of Shares now to be subscribed : 

SCHEDULE D-3 

1. Pursuant to your Letter of Offer dated (the “Offer Date”) and my acceptance thereof, I hereby 

exercise the Option to subscribe for Shares in Ocean Sky International Limited (the “Company”) at 

S$ per Share. 

2. I hereby request the Company to allot and issue to me the number of Shares specified in 

paragraph 1 in the name of The Central Depository (Pte) Limited (“CDP”) to the credit of my 

*Securities Account with CDP/* Securities Sub-Account with a CDP Depository Agent specified 

below and to deliver the share certificates relating thereto to CDP at my own risk. I further agree to 

bear such fees or other charges as may be imposed by CDP (the “CDP charges”) in respect 

thereof:- 

*(a) Direct Securities Account Number : 

*(b) Securities Sub-Account Number: 

Name of CDP Depository Agent : 

I enclose a *cheque/cashier’s order/bank draft/postal order no. for S$ 

in payment for the subscription of S$ for the total 

number of the said Shares and the CDP charges of S$ . 

I agree to subscribe for the Shares subject to the terms of the Letter of Offer, the Ocean Sky 

Share Option Scheme and the Memorandum and Articles of Association of the Company. 

3. I declare that I am subscribing for the Shares for myself and not as a nominee for any other 

person. 

D - 17

PLEASE PRINT IN BLOCK LETTER 

Name in full : 

Designation : 

Address : 

Nationality : 

*NRIC/Passport No. 

Signature : 

Date : 

* Delete as appropriate 

Notes :- 

1. An Option may be exercised in whole or in part provided that an Option may be exercised in part only in respect of 1,000 

Shares or any multiple thereof. 

2. The form entitled “Exercise Notice” must be forwarded to the Committee in an envelope marked “Private and Confidential”. 

D-18

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