ipo.pdf - KSH Holdings Ltd

349
PROSPECTUS DATED 30 JANUARY 2007 (Registered by the Monetary Authority of Singapore on 30 January 2007) (Company Registration Number: 200603337G) (Incorporated in the Republic of Singapore on 9 March 2006) THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE AC THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULD TION YOU SHOULD TAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONAL ADVISER. We have made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of KSH Holdings Limited (our “Company”) already issued and the new Shares (the “New Shares”) which are the subject of this Invitation (as defined herein). Such permission will be granted when we have been admitted to the Official List of the SGX-ST. Acceptance of applications will be conditional upon, inter alia, permission being granted by the SGX-ST to deal in, and for quotation of, all of the existing issued Shares and the New 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 interest or any share of revenue or other benefit arising therefrom, and you will not have any claim whatsoever against us, the Manager (as defined herein), the Underwriter (as defined herein) or the Placement Agent (as defined herein). 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, the Shares or the New Shares. A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the “Authority”). The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act (Chapter 289) of Singapore, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of the Shares or the New Shares, as the case may be, being offered for investment. No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months after the date of registration of this Prospectus by the Authority. Investing in our Shares involves risks which are described in the section entitled “Risk Factors” of this Prospectus. In the event that the Placement Agent does not receive valid subscriptions and payments for at least 80 per cent. of the Placement Shares by 6.00 p.m. on 5 February 2007 (or such other date as may be decided by the Manager), the Manager or the Underwriter may terminate the Management and Underwriting Agreement and the Placement Agent shall be entitled to terminate the Placement Agreement. In that event, our Company reserves the right, in our absolute discretion, to cancel the Invitation, upon which all application monies 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 claims whatsoever against us, the Manager, the Underwriter or the Placement Agent. Please refer to the section entitled “Plan of Distribution” of this Prospectus for more details. Manager WESTCOMB CAPITAL PTE LTD Underwriter and Placement Agent Westcomb Securities Pte Ltd Invitation in respect of 25,000,000 New Shares comprising:- (1) 1,000,000 Offer Shares at S$0.36 for each Offer Share by way of public offer; and (2) 24,000,000 Placement Shares by way of placement, comprising:- (a) 22,850,000 Placement Shares at S$0.36 for each Placement Share by way of Placement Shares Application Forms; (b) 150,000 Internet Placement Shares at S$0.36 for each Internet Placement Share for applications made through the IPO Website www.ePublicOffer.com ; and (c) 1,000,000 Reserved Shares at S$0.36 each reserved for our Independent Directors, management, employees, business associates and others who have contributed to the success of our Group, payable in full on application. KSH HOLDINGS LIMITED

Transcript of ipo.pdf - KSH Holdings Ltd

PROSPECTUS DATED 30 JANUARY 2007(Registered by the Monetary Authority of Singaporeon 30 January 2007)

A Well EstablishedConstruction, Property

Development andProperty ManagementGroup whose Principal

Activities areConstruction in

Singapore and Malaysia,and Property

Development andProperty Management

in the PRC

(Company Registration Number: 200603337G)(Incorporated in the Republic of Singapore on 9 March 2006)

Our Business

� Established in 1979, we have over 27 years of experience in theconstruction industry

� We act as main contractors in construction projects for privateand public sector customers in Singapore and for private sector customersin Malaysia

� We are registered with the Building and Construction Authority (“BCA”)with a BCA grading of A1 under the category CW01 for general building.Such A1 grading is currently the highest grade for contractors’ registrationin such category and enables us to tender for public sector constructionprojects of unlimited value

� We have developed two properties in the PRC:-– Tianxing Riverfront Square in Tianjin, developed by our subsidiary,

TTX Real Estate and managed by our property management arm,TTX Property Management; and

– Liang Jing Ming Ju in Beijing, developed by our associated company,JHTD

Private Sector Portfolio*

...Our Design and Build Projects…• The Coast at Sentosa Cove• The Berth By The Cove• The Berthside• The Spectrum• Montview

...and Other Notable Projects…• Suntec City Convention and

Exhibition Centre andTower Five of Suntec City

• Restoration of Far East Square• Oneo15 Marina Club• Mustafa Shopping Centre extension

* Not exhaustive

Public Sector Portfolio*

• The Frontier Community Place(Design and Build)

• Choa Chu Kang Sports Complex• Nanyang Polytechnic• Tanah Merah Ferry Terminal

Our Construction Projects in SingaporeK

SH H

OLD

ING

S LIMIT

ED

KSH HOLDINGS LIMITED

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULDTION YOU SHOULDTAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONALADVISER.

We have made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) forpermission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of KSHHoldings Limited (our “Company”) already issued and the new Shares (the “New Shares”) which are thesubject of this Invitation (as defined herein). Such permission will be granted when we have been admittedto the Official List of the SGX-ST. Acceptance of applications will be conditional upon, inter alia, permissionbeing granted by the SGX-ST to deal in, and for quotation of, all of the existing issued Shares and theNew Shares. Monies paid in respect of any application accepted will, in the event such permission is notgranted, be returned to you at your own risk, without interest or any share of revenue or other benefitarising therefrom, and you will not have any claim whatsoever against us, the Manager (as defined herein),the Underwriter (as defined herein) or the Placement Agent (as defined herein).

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

A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore(the “Authority”). The Authority assumes no responsibility for the contents of this Prospectus. Registrationof this Prospectus by the Authority does not imply that the Securities and Futures Act(Chapter 289) of Singapore, or any other legal or regulatory requirements, have been complied with. TheAuthority has not, in any way, considered the merits of the Shares or the New Shares, as the case maybe, being offered for investment.

No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months afterthe date of registration of this Prospectus by the Authority.

Investing in our Shares involves risks which are described in the section entitled “Risk Factors” of thisProspectus.

In the event that the Placement Agent does not receive valid subscriptions and payments for at least 80per cent. of the Placement Shares by 6.00 p.m. on 5 February 2007 (or such other date as may be decidedby the Manager), the Manager or the Underwriter may terminate the Management and UnderwritingAgreement and the Placement Agent shall be entitled to terminate the Placement Agreement. In that event,our Company reserves the right, in our absolute discretion, to cancel the Invitation, upon which allapplication monies will be returned to you at your own risk, without interest or any share of revenue orother benefit arising therefrom and you will not have any claims whatsoever against us, the Manager, theUnderwriter or the Placement Agent. Please refer to the section entitled “Plan of Distribution” of thisProspectus for more details.

(Company Registration Number: 200603337G)(Incorporated in the Republic of Singapore on 9 March 2006)

36 Senoko Road, Singapore 758108Tel : 6758 2266 Fax : 6758 2532

Manager

WESTCOMB CAPITAL PTE LTD

Underwriter and Placement Agent

Westcomb Securities Pte Ltd

Invitation in respect of 25,000,000 New Shares comprising:-

(1) 1,000,000 Offer Shares at S$0.36 for each Offer Share by way of public offer;and

(2) 24,000,000 Placement Shares by way of placement, comprising:-

(a) 22,850,000 Placement Shares at S$0.36 for each Placement Share by way ofPlacement Shares Application Forms;

(b) 150,000 Internet Placement Shares at S$0.36 for each InternetPlacement Share for applications made through the IPO Websitewww.ePublicOffer.com ; and

(c) 1,000,000 Reserved Shares at S$0.36 each reserved for our Independent Directors,management, employees, business associates and others who have contributedto the success of our Group,

payable in full on application.

KSH HOLDINGS LIMITED

PROSPECTUS DATED 30 JANUARY 2007(Registered by the Monetary Authority of Singaporeon 30 January 2007)

A Well EstablishedConstruction, Property

Development andProperty ManagementGroup whose Principal

Activities areConstruction in

Singapore and Malaysia,and Property

Development andProperty Management

in the PRC

(Company Registration Number: 200603337G)(Incorporated in the Republic of Singapore on 9 March 2006)

Our Business

� Established in 1979, we have over 27 years of experience in theconstruction industry

� We act as main contractors in construction projects for privateand public sector customers in Singapore and for private sector customersin Malaysia

� We are registered with the Building and Construction Authority (“BCA”)with a BCA grading of A1 under the category CW01 for general building.Such A1 grading is currently the highest grade for contractors’ registrationin such category and enables us to tender for public sector constructionprojects of unlimited value

� We have developed two properties in the PRC:-– Tianxing Riverfront Square in Tianjin, developed by our subsidiary,

TTX Real Estate and managed by our property management arm,TTX Property Management; and

– Liang Jing Ming Ju in Beijing, developed by our associated company,JHTD

Private Sector Portfolio*

...Our Design and Build Projects…• The Coast at Sentosa Cove• The Berth By The Cove• The Berthside• The Spectrum• Montview

...and Other Notable Projects…• Suntec City Convention and

Exhibition Centre andTower Five of Suntec City

• Restoration of Far East Square• Oneo15 Marina Club• Mustafa Shopping Centre extension

* Not exhaustive

Public Sector Portfolio*

• The Frontier Community Place(Design and Build)

• Choa Chu Kang Sports Complex• Nanyang Polytechnic• Tanah Merah Ferry Terminal

Our Construction Projects in Singapore

KSH

HO

LDIN

GS LIM

ITED

KSH HOLDINGS LIMITED

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULDTION YOU SHOULDTAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONALADVISER.

We have made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) forpermission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of KSHHoldings Limited (our “Company”) already issued and the new Shares (the “New Shares”) which are thesubject of this Invitation (as defined herein). Such permission will be granted when we have been admittedto the Official List of the SGX-ST. Acceptance of applications will be conditional upon, inter alia, permissionbeing granted by the SGX-ST to deal in, and for quotation of, all of the existing issued Shares and theNew Shares. Monies paid in respect of any application accepted will, in the event such permission is notgranted, be returned to you at your own risk, without interest or any share of revenue or other benefitarising therefrom, and you will not have any claim whatsoever against us, the Manager (as defined herein),the Underwriter (as defined herein) or the Placement Agent (as defined herein).

The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressedor 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 theInvitation, our Company, our subsidiaries, the Shares or the New Shares.

A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore(the “Authority”). The Authority assumes no responsibility for the contents of this Prospectus. Registrationof this Prospectus by the Authority does not imply that the Securities and Futures Act(Chapter 289) of Singapore, or any other legal or regulatory requirements, have been complied with. TheAuthority has not, in any way, considered the merits of the Shares or the New Shares, as the case maybe, being offered for investment.

No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months afterthe date of registration of this Prospectus by the Authority.

Investing in our Shares involves risks which are described in the section entitled “Risk Factors” of thisProspectus.

In the event that the Placement Agent does not receive valid subscriptions and payments for at least 80per cent. of the Placement Shares by 6.00 p.m. on 5 February 2007 (or such other date as may be decidedby the Manager), the Manager or the Underwriter may terminate the Management and UnderwritingAgreement and the Placement Agent shall be entitled to terminate the Placement Agreement. In that event,our Company reserves the right, in our absolute discretion, to cancel the Invitation, upon which allapplication monies will be returned to you at your own risk, without interest or any share of revenue orother benefit arising therefrom and you will not have any claims whatsoever against us, the Manager, theUnderwriter or the Placement Agent. Please refer to the section entitled “Plan of Distribution” of thisProspectus for more details.

(Company Registration Number: 200603337G)(Incorporated in the Republic of Singapore on 9 March 2006)

36 Senoko Road, Singapore 758108Tel : 6758 2266 Fax : 6758 2532

Manager

WESTCOMB CAPITAL PTE LTD

Underwriter and Placement Agent

Westcomb Securities Pte Ltd

Invitation in respect of 25,000,000 New Shares comprising:-

(1) 1,000,000 Offer Shares at S$0.36 for each Offer Share by way of public offer;and

(2) 24,000,000 Placement Shares by way of placement, comprising:-

(a) 22,850,000 Placement Shares at S$0.36 for each Placement Share by way ofPlacement Shares Application Forms;

(b) 150,000 Internet Placement Shares at S$0.36 for each InternetPlacement Share for applications made through the IPO Websitewww.ePublicOffer.com; and

(c) 1,000,000 Reserved Shares at S$0.36 each reserved for our Independent Directors,management, employees, business associates and others who have contributedto the success of our Group,

payable in full on application.

KSH HOLDINGS LIMITED

52.6

91.6

118.0

25.719.7

FY2004 FY2005 FY2006 1Q2006 1Q20070

20

40

60

80

100

120

Prospects

- Construction business in Singaporeo Our Directors believe that the demand for

construction services will increase in the next fewyears, in view of the upcoming major developmentssuch as the construction of the Business FinancialCentre, integrated resorts and the Kallang SportsHub, and the rejuvenation of Orchard Road

o Increasing demand for upgrading and retrofittingworks as well as A&A works. With ourconsiderable experience in such works, we will bein a better position to tap on this trend

o Continued growth in design and build projects.With our considerable experience in design andbuild projects, we are in a good position to capitaliseon such growth

o No significant increase in the number of industryplayers. Existing players with lower BCA gradingsor new players will take considerable time andrequire considerable capital to meet the criteriafor the BCA grading of B1 and above. We believethis will increase our opportunities to secureconstruction projects of higher value

- Construction business in Malaysiao In September 2006, the Malaysian government

announced plans to allocate RM27.5 billion forthe construction of roads, quarters and otherinfrastructure facilities. We believe this will alsobring about private sector expenditure in theMalaysian construction industry

- Property development business in the PRCo With continued economic growth and rising

disposable income in the PRC, we believe that theincrease in demand for residential properties willlead to an increase in property prices in the PRC,in particular, the major PRC cities such as Beijing

o Growing demand for private housing in the areaslying in and near the outskirts of Beijing, such asTongzhou and Zhuozhou

Business Strategies and Future Plans

- Focus on projects with higher contract value for ourconstruction businesso We intend to target larger-scale construction projects

with a contract value of up to S$75 million eachas we believe such projects will generate higherprofits and further raise our business profile in theindustry

- Acquisition of machinery and equipmento Increase our production capacity for structural

steel used in our construction projects to meet thedemands of larger-scale projects that we have securedand are targeting to secure

o Acquire construction machinery and equipment tobe used at our construction sites such as cranes,air compressors and generators. This will reduceour costs of leasing construction machinery andequipment from third parties, which would equateto cost savings for our Group

- Expand our property development business in the PRCo Tap into the expertise and market knowledge of

our PRC joint venture partners to participate inresidential property development projects

o Explore business opportunities in Zhuozhou, HebeiProvince, through an equity joint venture toundertake new rural residential development projects

- Expand our construction business into other areas inMalaysiao We entered the construction industry in Malaysia

in June 2006 and secured a project in Selangor inthe same month with a contract value of morethan S$30 million

o We are hopeful that with the completion of thisproject, we will have a favourable track recordupon which we can develop and expand ourconstruction business in Malaysia

Our Competitive Strengths

Financial Highlights

Award/Certificate Year Project

Architectural Heritage Award 1999 Restoration of Far East Square

Safety Performance Award 2001 Choa Chu Kang Sports Complex(Certificate of Merit)

Construction Excellence Award (Merit) 2003 Choa Chu Kang Sports Complex(Institutional Buildings Category)

Safety Performance Award 2005 The Berth(Certificate of Merit)

Construction Excellence Award (Merit) 2005 Mustafa Shopping Centre extension(Commercial/Mixed DevelopmentBuildings Category)

Safety Performance Award 2005 The Chancery Residence(Certificate of Merit)

Safety Performance Award 2005 SAFRA Mount Faber(Certificate of Merit)

Some of our Awards and Certificates

4.6

5.55.7

0.60.9

FY2004 FY2005 FY2006 1Q2006 1Q20070

1

2

3

4

5

6

REVENUE (S$’MILLION) PROFIT FOR THE YEAR/PERIOD (S$’MILLION)

Our order books for our construction business stood at S$233.8 million as at the Latest Practicable Date*

*The value of our order books is not indicative of our revenue for FY2007.

- A committed and experienced management team and support staff

- Each of our Executive Directors has at least 30 years of experience in the construction industry

- We have an established and proven track record and reputation

- We are cost competitive

- We are able to leverage on our construction experience to enhance ourproperty development business

- We have considerable experience in the property development industryin the PRC and strong working relationships with our joint venture partnersand other business contacts in the PRC

52.6

91.6

118.0

25.719.7

FY2004 FY2005 FY2006 1Q2006 1Q20070

20

40

60

80

100

120

Prospects

- Construction business in Singaporeo Our Directors believe that the demand for

construction services will increase in the next fewyears, in view of the upcoming major developmentssuch as the construction of the Business FinancialCentre, integrated resorts and the Sports Hub atKallang, and the rejuvenation of Orchard Road

o Increasing demand for upgrading and retrofittingworks as well as A&A works. With ourconsiderable experience in such works, we will bein a better position to tap on this trend

o Continued growth in design and build projects.With our considerable experience in design andbuild projects, we are in a good position to capitaliseon such growth

o No significant increase in the number of industryplayers. Existing players with lower BCA gradingsor new players will take considerable time andrequire considerable capital to meet the criteriafor the BCA grading of B1 and above. We believethis will increase our opportunities to secureconstruction projects of higher value

- Construction business in Malaysiao In September 2006, the Malaysian government

announced plans to allocate RM27.5 billion forthe construction of roads, quarters and otherinfrastructure facilities. We believe this will alsobring about private sector expenditure in theMalaysian construction industry

- Property development business in the PRCo With continued economic growth and rising

disposable income in the PRC, we believe that theincrease in demand for residential properties willlead to an increase in property prices in the PRC,in particular, the major PRC cities such as Beijing

o Growing demand for private housing in the areaslying in and near the outskirts of Beijing, such asTongzhou and Zhuozhou

Business Strategies and Future Plans

- Focus on projects with higher contract value for ourconstruction businesso We intend to target larger-scale construction projects

with a contract value of up to S$75 million eachas we believe such projects will generate higherprofits and further raise our business profile in theindustry

- Acquisition of machinery and equipmento Increase our production capacity for structural

steel used in our construction projects to meet thedemands of larger-scale projects that we have securedand are targeting to secure

o Acquire construction machinery and equipment tobe used at our construction sites such as cranes,air compressors and generators. This will reduceour costs of leasing construction machinery andequipment from third parties, which would equateto cost savings for our Group

- Expand our property development business in the PRCo Tap into the expertise and market knowledge of

our PRC joint venture partners to participate inresidential property development projects

o Explore business opportunities in Zhuozhou, HebeiProvince, through an equity joint venture toundertake new rural residential development projects

- Expand our construction business into other areas inMalaysiao We entered the construction industry in Malaysia

in June 2006 and secured a project in Selangor inthe same month with a contract value of morethan S$30 million

o We are hopeful that with the completion of thisproject, we will have a favourable track recordupon which we can develop and expand ourconstruction business in Malaysia

Our Competitive Strengths

Financial Highlights

Award/Certificate Year Project

Architectural Heritage Award 1999 Restoration of Far East Square

Safety Performance Award 2001 Choa Chu Kang Sports Complex(Certificate of Merit)

Construction Excellence Award (Merit) 2003 Choa Chu Kang Sports Complex(Institutional Buildings Category)

Safety Performance Award 2005 The Berth(Certificate of Merit)

Construction Excellence Award (Merit) 2005 Mustafa Shopping Centre extension(Commercial/Mixed DevelopmentBuildings Category)

Safety Performance Award 2005 The Chancery Residence(Certificate of Merit)

Safety Performance Award 2005 SAFRA Mount Faber(Certificate of Merit)

Some of our Awards and Certificates

4.6

5.5 5.7

0.60.9

FY2004 FY2005 FY2006 1Q2006 1Q20070

1

2

3

4

5

6

REVENUE (S$’MILLION) PROFIT FOR THE YEAR/PERIOD (S$’MILLION)

Our order books for our construction business stood at S$233.8 million as at the Latest Practicable Date*

*The value of our order books is not indicative of our revenue for FY2007.

- A committed and experienced management team and support staff

- Each of our Executive Directors has at least 30 years of experience in the construction industry

- We have an established and proven track record and reputation

- We are cost competitive

- We are able to leverage on our construction experience to enhance ourproperty development business

- We have considerable experience in the property development industryin the PRC and strong working relationships with our joint venture partnersand other business contacts in the PRC

CONTENTS

Page

CORPORATE INFORMATION ............................................................................................................ 4

DEFINITIONS ...................................................................................................................................... 6

GLOSSARY OF TECHNICAL TERMS ................................................................................................ 14

DETAILS OF THE INVITATIONListing on the SGX-ST .................................................................................................................. 15

Indicative Timetable for Listing ...................................................................................................... 19

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

USE OF PROCEEDS FROM THE INVITATION AND EXPENSES INCURRED ................................ 21

MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS .................................... 22

EXCHANGE CONTROLS .................................................................................................................. 24

CLEARANCE AND SETTLEMENT .................................................................................................... 26

PLAN OF DISTRIBUTION .................................................................................................................. 27

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS .................................................... 30

SELLING RESTRICTIONS ................................................................................................................ 31

PROSPECTUS SUMMARYOverview of our Group .................................................................................................................. 32

Our Competitive Strengths ............................................................................................................ 32

Our Business Strategies and Future Plans .................................................................................... 33

Our Contact Details ........................................................................................................................ 34

INVITATION STATISTICS .................................................................................................................. 35

RISK FACTORSRisks relating to our Businesses .................................................................................................... 36

Risks relating to our Construction Business in General ................................................................ 37

Risks relating to our Property Development Business in the PRC in General .............................. 43

Risks relating to our Group ............................................................................................................ 46

Risks relating to our Operations in the PRC .................................................................................. 47

Risks relating to our Operations in Malaysia .................................................................................. 48

Risks relating to Ownership of our Shares .................................................................................... 49

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Combined Profit and Loss Accounts .............................................................................................. 51

Combined Balance Sheet .............................................................................................................. 52

Overview ........................................................................................................................................ 53

Foreign Exchange Management .................................................................................................... 57

Review of Past Performance .......................................................................................................... 58

Review of Financial Position .......................................................................................................... 64

Liquidity and Capital Resources .................................................................................................... 67

Material Capital Expenditure, Divestment or Commitments .......................................................... 69

1

CONTENTS

Page

DIVIDEND POLICY ............................................................................................................................ 71

CAPITALISATION AND INDEBTEDNESS ........................................................................................ 72

DILUTION ............................................................................................................................................ 74

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUPShare Capital .................................................................................................................................. 75

Significant Changes in Percentage Of Ownership ........................................................................ 76

Changes in Issued and Paid-Up Share Capital of our Company and our Subsidiaries ................ 77

Shareholders .................................................................................................................................. 78

Moratorium .................................................................................................................................... 79

RESTRUCTURING EXERCISE .......................................................................................................... 80

GROUP STRUCTURE ........................................................................................................................ 82

OUR SUBSIDIARIES AND ASSOCIATED COMPANY .................................................................... 84

OUR HISTORY .................................................................................................................................... 85

OUR BUSINESSIntroduction .................................................................................................................................... 88

Construction .................................................................................................................................. 88

Production Facilities and Capacity ................................................................................................ 93

Property Development and Property Management ........................................................................ 93

Seasonality .................................................................................................................................... 98

Marketing Activities ........................................................................................................................ 98

Research and Development .......................................................................................................... 98

Insurance ........................................................................................................................................ 98

Intellectual Property ...................................................................................................................... 99

Properties and Fixed Assets .......................................................................................................... 99

Quality Management ...................................................................................................................... 100

Awards and Certificates ................................................................................................................ 101

Our Major Customers .................................................................................................................... 102

Our Major Sub-Contractors and Suppliers .................................................................................... 104

Completed Properties Held For Sale ............................................................................................ 105

Government Regulations ................................................................................................................ 106

Permits and Licences .................................................................................................................... 112

Competition .................................................................................................................................... 114

Our Competitive Strengths ............................................................................................................ 114

PROSPECTS AND FUTURE PLANS

Prospects ...................................................................................................................................... 116

Business Strategies and Future Plans .......................................................................................... 117

DIRECTORS, MANAGEMENT AND STAFF

Directors ........................................................................................................................................ 120

Management .................................................................................................................................. 123

2

CONTENTS

Page

Management Reporting Structure .................................................................................................. 124

Directors’ and Executive Officers’ Remuneration .......................................................................... 124

Service Agreement ........................................................................................................................ 125

Our Employees .............................................................................................................................. 126

Board Practices .............................................................................................................................. 127

CORPORATE GOVERNANCE

Overview ........................................................................................................................................ 128

Nominating Committee .................................................................................................................. 128

Audit Committee ............................................................................................................................ 129

Remuneration Committee .............................................................................................................. 130

INTERESTED PERSON TRANSACTIONS

Past Interested Person Transactions .............................................................................................. 131

Present and Ongoing Interested Person Transactions .................................................................. 133

Review Procedures for Future Interested Person Transactions .................................................... 134

CONFLICTS OF INTERESTS ............................................................................................................ 136

GENERAL AND STATUTORY INFORMATION .................................................................................. 138

APPENDIX AReport from the Auditors in relation to the Audited Combined Financial Statements of KSH Holdings Limited and its Subsidiaries for the Financial Years Ended 31 March 2004, 2005 and 2006 .............................................................................................................................. A-1

APPENDIX BReport from the Auditors in relation to the Unaudited Review of the Interim Combined Financial Statements of KSH Holdings Limited and its Subsidiaries for the Financial Period from 1 April 2006 to 30 June 2006 ................................................................................................ B-1

APPENDIX CExtracts of our Articles of Association .......................................................................................... C-1

APPENDIX DDescription of Singapore Company Law relating to Shares .......................................................... D-1

APPENDIX ESummary of Relevant PRC Laws and Regulations ...................................................................... E-1

APPENDIX FSummary of Relevant Malaysian Laws and Regulations .............................................................. F-1

APPENDIX GTaxation .......................................................................................................................................... G-1

APPENDIX HTerms, Conditions and Procedures for Application and Acceptance ............................................ H-1

APPENDIX IValuer’s Report .............................................................................................................................. I-1

3

CORPORATE INFORMATION

BOARD OF DIRECTORS : Choo Chee Onn (Executive Chairman and Managing Director)Tok Cheng Hoe (Executive Director)Lim Kee Seng (Executive Director)Kwok Ngat Khow (Executive Director)Lim Yeow Hua @ Lim You Qin (Lead Independent Director)Lai Meng Seng (Independent Director)Khua Kian Kheng Ivan (Independent Director)

JOINT COMPANY : Tang Hay Ming (CPA)SECRETARIES Stella Chan Ah Chit (ACIS)

REGISTERED OFFICE : 36 Senoko RoadSingapore 758108

SHARE REGISTRAR AND : Lim Associates (Pte) LtdSHARE TRANSFER AGENT 3 Church Street

#08-01 Samsung HubSingapore 049483

MANAGER : Westcomb Capital Pte Ltd5 Shenton Way #09-07 UIC BuildingSingapore 068808

UNDERWRITER AND : Westcomb Securities Pte LtdPLACEMENT AGENT 5 Shenton Way

#09-08 UIC BuildingSingapore 068808

SOLICITORS TO THE : Shook Lin & BokINVITATION AND LEGAL 1 Robinson RoadADVISERS TO OUR COMPANY #18-00 AIA TowerON SINGAPORE LAW Singapore 048542

LEGAL ADVISERS TO OUR : Jingtian & GongchengCOMPANY ON PRC LAW Floor 15 Union Plaza

20 Chaoyangmenwai DajieBeijing 100020PRC

LEGAL ADVISERS TO OUR : Charles Yeung Clement Lam Liu & YipCOMPANY ON HONG KONG 13th Floor Grand BuildingLAW 18 Connaught Road

Central Hong Kong

LEGAL ADVISERS TO OUR : SKRINECOMPANY ON MALAYSIAN LAW Unit No. 50-8-1, 8th Floor

Wisma UOA Damansara50 Jalan DungunDamansara Heights50490 Kuala LumpurMalaysia

4

CORPORATE INFORMATION

AUDITORS AND REPORTING : Ernst & YoungACCOUNTANTS Certified Public Accountants

One Raffles QuayNorth Tower Level 18Singapore 048583Partner-in-charge: Mr Tan Swee Ho (a member of the Instituteof Certified Public Accountants of Singapore)

RECEIVING BANKER : Standard Chartered Bank6 Battery RoadSingapore 049909

PRINCIPAL BANKERS : DBS Bank Ltd6 Shenton Way DBS Building Tower OneSingapore 068809

Malayan Banking Berhad2 Battery Road Maybank TowerSingapore 049907

Oversea-Chinese Banking Corporation Limited65 Chulia StreetSingapore 049513

Standard Chartered Bank6 Battery RoadSingapore 049909

United Overseas Bank Limited80 Raffles Place UOB Plaza 1Singapore 049513

VALUER : DTZ Debenham Tie Leung Limited10th Floor Jardine House1 Connaught PlaceCentralHong Kong

5

DEFINITIONS

In this Prospectus, the accompanying Application Forms and, in relation to the Electronic Applications,the instructions appearing on the screens of the ATMs of Participating Banks, the IB websites of therelevant Participating Banks or the IPO Website, unless the context otherwise requires, the followingdefinitions apply throughout where the context so admits:-

Companies within our Group

“Company” or “KSH Holdings” : KSH Holdings Limited

“Duford” : Duford Investment (Hong Kong) Limited

“Group” : Our Company and its subsidiaries following the completion ofthe Restructuring Exercise

“KSHEC” : Kim Seng Heng Engineering Construction (Pte) Ltd

“KSH Overseas” : KSH Overseas Pte. Ltd.

“KSH Realty” : Kim Seng Heng Realty Pte Ltd

“Techpath” : Techpath Construction Sdn Bhd

“TTX Property Management” : Tianjin Tianxing Property Management Co., Ltd.

“TTX Real Estate” : Tianjin Tianxing Real Estate Development Co., Ltd.

Other Companies, Organisations and Agencies

“Authority” : The Monetary Authority of Singapore

“BCA” : Building and Construction Authority

“Beijing Jia Hua Hong Yuan” : Beijing Jia Hua Hong Yuan Investment Co. Ltd.

“Beijing Jia Hua Xu Xing” : Beijing Jia Hua Xu Xing Technology & Trade Co., Ltd.

“CDP” or “Depository” : The Central Depository (Pte) Limited

“CIDB” : Construction Industry Development Board of Malaysia

“FIC” : Foreign Investment Committee, under the Malaysian PrimeMinister’s department, which regulates, inter alia, theacquisition of assets, mergers and takeovers by local andforeign interests

“HDB” : Housing & Development Board

“ISO” : International Organization for Standardization

“JHTD” : Beijing Jin Hua Tong Da Real Estate Development Co., Ltd.

“KSH Tech” : KSH Technologies Pte. Ltd.

“MOM” : Ministry of Manpower

6

DEFINITIONS

“PUB” : Public Utilities Board

“Premier Facade” : Premier Facade Pte Ltd

“SAFRA” : SAFRA National Service Association

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

“SGX-ST” : Singapore Exchange Securities Trading Limited

“Star Elite” : Star Elite Pte. Ltd.

“TCH Holding” : TCH Holding Pte Ltd

“Tianjin Commercial Construction : Tianjin Commercial Construction Development Co., Ltd.Development”

“Tianjin Xiang Ning” : Tianjin Xiang Ning Investment Co. Ltd.

“Tianjin Yishang Group” : Tianjin Yishang Group Co., Ltd.

“URA” : Urban Redevelopment Authority

“Vite Trading” : Vite Trading Pte. Ltd.

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

General

“1Q2006” : Three-month period ended 30 June 2005

“1Q2007” : Three-month period ended 30 June 2006

“ATM” : Automated teller machine of a Participating Bank

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

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

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

“Articles of Association” : The articles of association of our Company

“Associate” : (a) in relation to an entity, means:-

(i) in a case where the entity is a SubstantialShareholder, Controlling Shareholder, substantialinterest-holder or controlling interest-holder, itsrelated corporation, related entity, associatedcompany or associated entity; or

7

DEFINITIONS

(ii) in any other case:-

(aa) a director or an equivalent person;

(bb) where the entity is a corporation, aControlling Shareholder of the entity;

(cc) where the entity is not a corporation, acontrolling interest-holder of the entity;

(dd) a subsidiary, a subsidiary entity, anassociated company, or an associatedentity; or

(ee) a subsidiary, a subsidiary entity, anassociated company, or an associatedentity, of the Controlling Shareholder orcontrolling interest-holder, as the casemay be,

of the entity; and

(b) in relation to an individual, means:-

(i) his immediate family;

(ii) a trustee of any trust of which the individual orany member of the individual’s immediate familyis,

(aa) a beneficiary; or

(bb) where the trust is a discretionary trust, adiscretionary object,

when the trustee acts in that capacity; or

(iii) any corporation in which he and his immediatefamily (whether directly or indirectly) haveinterests in voting shares of an aggregate of notless than 30% of the total votes attached to allvoting shares

“associated company” : in relation to an entity, means:-

(a) any corporation, other than a subsidiary of the entity, inwhich:-

(i) the entity or one or more of its subsidiaries orsubsidiary entities has;

(ii) the entity, one or more of its subsidiaries andone or more of its subsidiary entities togetherhave;

(iii) the entity and one or more of its subsidiariestogether have;

8

DEFINITIONS

(iv) the entity and one or more of its subsidiaryentities together have; or

(v) one or more of the subsidiaries of the entity andone or more of the subsidiary entities of theentity together have,

a direct interest in voting shares of not less than 20%but not more than 50% of the total votes attached to allvoting shares in the corporation; or

(b) any corporation, other than a subsidiary of the entity ora corporation which is an associated company of theentity by virtue of paragraph (a), the policies of which:-

(i) the entity or one or more of its subsidiaries orsubsidiary entities;

(ii) the entity together with one or more of itssubsidiaries and one or more of its subsidiaryentities;

(iii) the entity together with one or more of itssubsidiaries;

(iv) the entity together with one or more of itssubsidiary entities; or

(v) one or more of the subsidiaries of the entitytogether with one or more of the subsidiaryentities of the entity,

is or are able to control or influence materially

“Audit Committee” : The audit committee of our Company as at the date of thisProspectus

“Board” : The board of Directors of our Company

“CPF” : The Central Provident Fund

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

“Controlling Shareholder” : In relation to a corporation, means a person who:-

(a) holds directly or indirectly interest in the voting sharesof the corporation and where the total votes attached tosuch shares are 15% or more of the aggregate of thevotes attached to all the voting shares in thecorporation; or

(b) in fact exercises control over the corporation

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

“EPS” : Earnings per Share

9

DEFINITIONS

“Electronic Application” : An ATM Application, an IB Application or an InternetPlacement Application

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

“Executive Officers” : The executive officers of our Group as at the date of thisProspectus, who are also key executives as defined under theSecurities and Futures (Offers of Investments) (Shares andDebentures) Regulations 2005

“FIE” : Foreign investment enterprise

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

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

“IB” : Internet banking

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

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

“Internet Placement” or “Internet : The offer of the Internet Placement Shares at the Issue Price Placement Tranche” for applications through the IPO Website pursuant to the

Placement

“Internet Placement Application” : An application for the Internet Placement Shares madethrough the IPO Website, subject to and on the terms andconditions of this Prospectus

“Internet Placement Shares” : The 150,000 Placement Shares which are the subject of theInternet Placement

“Invitation” : The invitation by our Company to the public to subscribe forthe New Shares, subject to and on the terms and conditionsof this Prospectus

“IPO” : Initial public offering

“IPO Website” : The Internet website of of the IPOWebsite Operator

“IPO Website Operator” : Westcomb Securities Pte Ltd

“Issue Price” : S$0.36 for each New Share

“Latest Practicable Date” : 18 December 2006, being the latest practicable date prior tothe lodgment of this Prospectus with the Authority

“Liang Jing Ming Ju” : Liang Jing Ming Ju condominium

“Listing Manual” : Listing manual of the SGX-ST, as amended, supplemented ormodified from time to time

www.ePublicOffer.com

10

DEFINITIONS

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

“NAV” : Net asset value

“New Shares” : The 25,000,000 new Shares for which our Company invitesapplications to subscribe pursuant to the Invitation, subject toand on the terms and conditions of this Prospectus

“Nominating Committee” : The nominating committee of our Company as at the date ofthis Prospectus

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

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

“PRC” : People’s Republic of China, excluding Hong Kong, Taiwanand the Macau Special Administrative Region of the PRC forthe purposes of this Prospectus and for geographicalreference only

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

“Placement” or “Placement Tranche” : The placement by the Placement Agent of the PlacementShares on behalf of our Company for subscription at theIssue Price, subject to and on the terms and conditions of thisProspectus

“Placement Shares” : The 24,000,000 New Shares which are the subject of thePlacement (including the Internet Placement Shares andReserved Shares)

“Prospectus” : This Prospectus dated 30 January 2007 issued by ourCompany in respect of the Invitation

“Qualifying Internet Applicant” : Any member of the public (being an individual) in Singaporewho registered for and holds a valid membership accountwith the IPO Website Operator, subject to and on the termsand conditions for the membership and use of the IPOWebsite

“Receiving Banker” : Standard Chartered Bank

“Remuneration Committee” : The remuneration committee of our Company as at the dateof this Prospectus

“Reserved Shares” : The 1,000,000 Placement Shares reserved for ourIndependent Directors, management, employees, businessassociates and others who have contributed to the success ofour Group

“Restructuring Exercise” : The restructuring exercise undertaken by our Group asdescribed in the section entitled “Restructuring Exercise” ofthis Prospectus

11

DEFINITIONS

“Securities Account” : Securities account maintained by a Depositor with CDP butdoes not include a securities sub-account

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

“Service Agreement” : The service agreement entered into between our Companyand our Executive Chairman and Managing Director, Mr ChooChee Onn, as described in the section entitled “ServiceAgreement” of this Prospectus

“Share Registrar” : Lim Associates (Pte) Ltd

“Shareholders” : Registered holders of Shares, except where the registeredholder is CDP, the term “Shareholders” shall, in relation tosuch Shares, mean the Depositors whose SecuritiesAccounts are credited with Shares

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

“Sub-division of Shares” : The sub-division of each Share into four Shares as describedin the section entitled “Share Capital” of this Prospectus

“Substantial Shareholder” : A person who has an interest in voting shares of acorporation, and where the total votes attached to suchshares are not less than 5% of the total votes attached to allthe voting shares of the corporation

“Tianxing Riverfront Square” : Tianxing Riverfront Square

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

“Valuer” : DTZ Debenham Tie Leung Limited

“Valuer’s Report” : The valuation report dated 21 December 2006 prepared bythe Valuer with respect to the valuation of the unsold units inTianxing Riverfront Square as at 30 June 2006, which isincluded in Appendix I of this Prospectus

Currencies, Units and Others

“HK$” : Hong Kong dollars

“RM” : Malaysian Ringgit

“RMB” : PRC Renminbi

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

“US$” or “USD” : United States dollars

“sq m” : Square metres

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

12

DEFINITIONS

Any reference to “our”, “ourselves”, “us”, “we” or other grammatical variations thereof in this Prospectus isa reference to our Company, our Group or any member of our Group as the context requires.

The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings ascribed tothem respectively in Section 130A of the Companies Act.

The term “entity” shall have the same meaning ascribed to it in Section 2 of the Securities and FuturesAct, while the terms “associated entity”, “controlling interest-holder”, “related corporation”, “related entity”,“subsidiary”, “subsidiary entity” and “substantial interest-holder” shall have the same meanings ascribedto them respectively in Paragraph 1 of the Fourth Schedule of the Securities and Futures (Offers ofInvestments) (Shares and Debentures) Regulations 2005.

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

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

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

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

Certain names with Chinese characters have been translated into English names. Such translationswhich are provided solely for the convenience of investors, may not have been registered with therelevant PRC authorities and should not be construed as representations that the English names actuallyrepresent the Chinese characters. In case of any inconsistency between the English names and theirrespective official Chinese names, the Chinese names shall prevail.

Any discrepancies in the tables included in this Prospectus between the listed amounts and the totalsthereof are due to rounding. Accordingly, figures shown in totals in certain tables may not be anarithmetic aggregation of the figures which precede them.

13

GLOSSARY OF TECHNICAL TERMS

This glossary contains an explanation of certain terms used in this Prospectus in connection with ourGroup and our business. The terms and their assigned meanings may not correspond to standardindustry or common meanings, as the case may be, or usage of these terms.

“A&A” : Additions and alterations

“design and build” : A project where one firm takes responsibility for the design andconstruction

“metal works” : The fabrication of all types of metal structures and articles

“quantity survey” : The preparation of cost estimates, quantities, pricing and quotation forthe project

“structural steel” : Steel construction material formed with a specific shape and certainstandards of strength

14

DETAILS OF THE INVITATION

LISTING ON THE SGX-ST

We have made an application to the SGX-ST for permission to deal in, and for quotation of, all ourShares already issued and the New Shares. Such permission will be granted when we have beenadmitted to the Official List of the SGX-ST.

Our acceptance of applications for the New Shares will be conditional upon, inter alia, permission beinggranted by the SGX-ST to deal in, and for quotation of, all of our existing issued Shares and the NewShares. If such permission is not granted for any reason, monies paid in respect of any applicationaccepted will be returned to you, without interest or any share of revenue or other benefit arisingtherefrom and at your own risk, and you will not have any claim whatsoever against us, the Manager, theUnderwriter or the Placement Agent.

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

A copy of this Prospectus has been lodged with and registered by the Authority. The Authority assumesno responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority doesnot imply that the Securities and Futures Act, or any other legal or regulatory requirements, have beencomplied with. The Authority has not, in any way, considered the merits of our Shares or the New Shares,as the case may be, being offered for investment.

No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months after thedate of registration of this Prospectus by the Authority.

We are subject to the provisions of the Securities and Futures Act and the Listing Manual regardingcorporate disclosure. In particular, if after this Prospectus is registered but before the close of theInvitation, we become aware of:-

(a) a false or misleading statement or matter in this Prospectus;

(b) an omission from this Prospectus of any information that should have been included in it underSection 243 of the Securities and Futures Act; or

(c) a new circumstance that has arisen since this Prospectus was lodged with the Authority whichwould have been required by Section 243 of the Securities and Futures Act to be included in thisProspectus, if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor, we may lodge a supplementary orreplacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act.

Where prior to the lodgment of the supplementary or replacement prospectus, applications have beenmade under this Prospectus to subscribe for the New Shares and:-

(a) where the New Shares have not been issued to you, our Company shall either:-

(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date oflodgment of the supplementary or replacement prospectus, give you notice in writing of howto obtain, or arrange to receive, a copy of the supplementary or replacement prospectus, asthe case may be, and provide you with an option to withdraw your application, and take allreasonable steps to make available within a reasonable period the supplementary orreplacement prospectus, as the case may be, to you who have indicated that you wish toobtain, or who have arranged to receive, a copy of the supplementary or replacementprospectus; or

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DETAILS OF THE INVITATION

(ii) within seven (7) days from the date of lodgment of the supplementary or replacementprospectus give you the supplementary or replacement prospectus, as the case may be,and provide you with an option to withdraw your application; or

(iii) treat the applications as withdrawn and cancelled, in which case your application shall bedeemed to have been withdrawn and cancelled and our Company shall, within seven (7)days from the date of lodgment of the supplementary or replacement prospectus, return toyou all monies which you have paid on account of your application for the New Shares,without interest or any share of revenue or other benefit arising therefrom and at your ownrisk; or

(b) where the New Shares have been issued to you, our Company shall either:-

(i) within two (2) days (excluding any Saturday, Sunday or public holiday) from the date oflodgment of the supplementary or replacement prospectus, give you notice in writing of howto obtain, or arrange to receive, a copy of the supplementary or replacement prospectus, asthe case may be, and provide you with an option to return to our Company the New Shareswhich you do not wish to retain title in, and take all reasonable steps to make availablewithin a reasonable period the supplementary or replacement prospectus, as the case maybe, to you who have indicated that you wish to obtain, or who have arranged to receive, acopy of the supplementary or replacement prospectus; or

(ii) within seven (7) days from the date of lodgment of the supplementary or replacementprospectus give you the supplementary or replacement prospectus, as the case may be,and provide you with an option to return to our Company the New Shares which you do notwish to retain title in; or

(iii) treat the issue of the New Shares as void, in which case the issue shall be deemed void andour Company shall, within seven (7) days from the date of lodgment of the supplementary orreplacement prospectus, return to you all monies which you have paid on account of yourapplication for the New Shares, without interest or any share of revenue or other benefitarising therefrom and at your own risk.

If you wish to exercise your option under paragraph (a)(i) or (a)(ii) above to withdraw yourapplication in respect of the New Shares, you shall, within 14 days from the date of lodgment ofthe supplementary or replacement prospectus, notify our Company of this, whereupon ourCompany shall, within seven (7) days from the receipt of such notification, pay to you all moniespaid by you on account of your application for such New Shares, without interest or any share ofrevenue or other benefit arising therefrom and at your own risk.

If you wish to exercise your option under paragraph (b)(i) or (b)(ii) above to return the New Sharesissued to you, you shall, within 14 days from the date of lodgment of the supplementary orreplacement prospectus, notify our Company of this and return all documents, if any, purportingto be evidence of title to those Shares, to our Company, whereupon our Company shall, withinseven (7) days from the receipt of such notification and documents, if any, pay to you all moniespaid by you on account of your application for those New Shares, without interest or any share ofrevenue or other benefit arising therefrom and at your own risk and the issue of those NewShares shall be deemed to be void.

Under the Securities and Futures Act, the Authority may, in certain circumstances issue a stop orderpursuant to Section 242 of the Securities and Futures Act (the “Stop Order”) to our Company, directingthat no New Share or no further Share to which this Prospectus relates, be allotted or issued. Suchcircumstances will include a situation where this Prospectus (i) contains a statement or matter, which inthe opinion of the Authority, is false or misleading; (ii) omits any information that should be included inaccordance with the Securities and Futures Act; or (iii) does not, in the opinion of the Authority, complywith the requirements of the Securities and Futures Act.

16

DETAILS OF THE INVITATION

In the event that the Authority issues a Stop Order and applications to subscribe for the New Shareshave been made prior to the Stop Order, then:-

(a) where the New Shares have not been issued to you, your application for the New Shares shall bedeemed to have been withdrawn and cancelled, and our Company shall, within 14 days from thedate of the Stop Order, pay to you all monies which you have paid on account of your applicationfor the New Shares, without interest or any share of revenue or other benefit arising therefrom andat your own risk; or

(b) where the New Shares have been issued to you, the Securities and Futures Act provides that theissue of the New Shares shall be deemed to be void, and our Company is required, within 14 daysfrom the date of the Stop Order, to pay to you all monies which you have paid on account of yourapplication for the New Shares, without interest or any share of revenue or other benefit arisingtherefrom and at your own risk.

In each of the above instances where monies are refunded to you, it shall be paid to you without interestor any share of revenue or other benefit arising therefrom and at your own risk, and you will not have anyclaims against our Company, the Manager, the Underwriter or the Placement Agent.

This Prospectus has been reviewed and approved by our Directors and they individually and collectivelyaccept full responsibility for the accuracy of the information given in this Prospectus and confirm, havingmade all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and theopinions expressed in this Prospectus are fair and accurate in all material respects as at the date of thisProspectus and that there are no material facts the omission of which would make any statements in thisProspectus misleading, and that this Prospectus constitutes full and true disclosure of all material factsabout the Invitation and our Group.

Neither our Company, the Manager, the Underwriter, the Placement Agent nor any other parties involvedin the Invitation is making any representation to any person regarding the legality of an investment in ourShares by such person under any investment or other laws or regulations. No information in thisProspectus should be considered to be business, legal or tax advice regarding an investment in ourShares. You should consult your own legal, financial, tax or other professional adviser regarding aninvestment in our Shares.

No person has been or is authorised to give any information or to make any representation not containedin this Prospectus in connection with the Invitation and, if given or made, such information orrepresentation must not be relied upon as having been authorised by us, the Manager, the Underwriteror the Placement Agent. Neither the delivery of this Prospectus and the Application Forms nor theInvitation shall, under any circumstances, constitute a continuing representation or create any suggestionor implication that there has been no change in the affairs of our Company or our Group or in anystatement of fact or information contained in this Prospectus since the date of this Prospectus. Wheresuch changes occur, we may make an announcement of the same to the SGX-ST and the public, and ifrequired, lodge a supplementary document or replacement document pursuant to Section 241 of theSecurities and Futures Act and take immediate steps to comply with Section 241 of the Securities andFutures Act. You should take note of any such announcement and/or documents issued by us incompliance with the Securities and Futures Act and, upon release of such announcement and/ordocuments, 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 orrepresentation as to our future performance or policies. This Prospectus has been prepared solely for thepurpose of the Invitation and may not be relied upon by any persons other than yourself in connectionwith your application for the New Shares or for any other purpose. This Prospectus does notconstitute an offer or invitation or solicitation to subscribe for the New Shares in any jurisdictionin which such offer, invitation or solicitation is unauthorised or unlawful nor does it constitute anoffer or invitation or solicitation to any person to whom it is unlawful to make such an offer orinvitation or solicitation.

17

DETAILS OF THE INVITATION

18

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

Westcomb Securities Pte Ltd5 Shenton Way

#09-08 UIC BuildingSingapore 068808

and from members of the Association of Banks in Singapore, members of the SGX-ST and merchantbanks in Singapore. A copy of this Prospectus is also available on the SGX-ST websitehttp://www.sgx.com and the Authority’s OPERA website at http://masnet.mas.gov.sg/opera/sdrprosp.nsf.

The Application List will open at 10.00 a.m. on 6 February 2007 and will remain open until 12.00noon on the same day or such other period or periods as our Company may, in consultation withthe Manager, in our absolute discretion decide, subject to any limitations under all applicablelaws. In the event a supplementary or replacement prospectus is lodged with the Authority, theApplication List will remain open for at least 14 days after the lodgment of the supplementary orreplacement prospectus.

Details of the procedures for application for the New Shares are set out in Appendix H of thisProspectus.

DETAILS OF THE INVITATION

INDICATIVE TIMETABLE FOR LISTING

The indicative timetable is set out below for your reference:-

Indicative date/time Event

31 January 2007, 9.00 a.m. Opening of Invitation

6 February 2007, 12.00 noon Close of Application List

7 February 2007 Balloting of applications, if necessary (in the event of an over-subscription for the Offer Shares)

8 February 2007, 9.00 a.m. Commence trading on a “ready” basis

13 February 2007 Settlement date for all trades done on a “ready” basis on 8 February2007

The above timetable is only indicative as it assumes that the closing of the Application List takes placeon 6 February 2007, the date of admission of our Company to the Official List of the SGX-ST will be 8February 2007, the SGX-ST’s shareholding spread requirement will be complied with and the NewShares will be issued and fully paid-up prior to 8 February 2007. The actual date on which our Shareswill commence trading on a “ready” basis will be announced when it is confirmed by the SGX-ST.

The above timetable and procedure may be subject to such modifications as the SGX-ST may, in itsdiscretion, decide, including the decision to permit trading on a “ready” basis and the commencementdate of such trading. The commencement of trading on a “ready” basis will be entirely at thediscretion of the SGX-ST. All persons trading in our Shares before their Securities Accounts withCDP are credited with the relevant number of Shares do so at the risk of selling Shares whichneither they nor their nominees, as the case may be, have been allotted or are otherwisebeneficially entitled to.

In the event of any changes in the closure of the Application List or the time period during which theInvitation is open, we will publicly announce the same:-

(i) through a SGXNET announcement to be posted on the Internet at the SGX-ST websitehttp://www.sgx.com; and

(ii) in a local English newspaper.

Results of the Invitation including the allotment of the New Shares and balloting (in the event of an over-subscription for the Offer Shares) will be provided through the channels in (i) and (ii) above.

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

19

THE INVITATION

Invitation Size : 25,000,000 New Shares which will, upon allotment and issue, rankpari passu in all respects with our existing issued Shares.

Issue Price : S$0.36 for each New Share.

Purpose of the Invitation : The purpose of the Invitation is to secure admission of ourCompany to the Official List of the SGX-ST. Our Directors considerthat the listing of our Company and the quotation of our Shares andthe New Shares on the Official List of the SGX-ST will enhance thepublic image of our Group locally and overseas and enable us totap the capital markets to fund the expansion of our operations andenlarge our capital base for the continued expansion of ourbusiness. The Invitation will also provide members of the public, ourIndependent Directors, management, employees and businessassociates as well as others who have contributed to our successwith an opportunity to participate in the equity of our Company.

The Offer : The Offer comprises an invitation by our Company to the public inSingapore to subscribe for 1,000,000 Offer Shares at the IssuePrice, subject to and on the terms and conditions of thisProspectus.

The Placement : The Placement comprises a placement of 22,850,000 PlacementShares by way of Placement Shares Application Forms, 150,000Internet Placement Shares by way of Internet PlacementApplications and 1,000,000 Reserved Shares by way of ReservedShares Application Forms, subject to and on the terms andconditions of this Prospectus.

Reserved Shares : 1,000,000 Reserved Shares (which form part of the PlacementShares) will be reserved for our Independent Directors,management, employees, business associates and others who havecontributed to the success of our Group. In the event that any of theReserved Shares are not taken up, they will be made available tosatisfy applications for the Placement Shares, or in the event of anunder-subscription for the Placement Shares, to satisfy applicationsmade by members of the public for the Offer Shares.

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

Risk factors : Investing in our Shares involves risks which are described in thesection entitled “Risk Factors” of this Prospectus.

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USE OF PROCEEDS FROM THE INVITATION AND EXPENSES INCURRED

Net proceeds from the issue of the New Shares

The net proceeds raised by our Company from the issue of the New Shares (after deducting theestimated expenses in relation to the issue of the New Shares of approximately S$2.25 million to beborne by our Company) will be approximately S$6.75 million.

The allocation of each principal intended use of proceeds and the major expenses is set out below:-

Amount allocated for eachdollar of the proceeds raised

Estimated amount by our Company from the InvitationPurpose (S$’000) (as a % of the gross proceeds/cents)

Use of proceeds

(i) Acquisition of the following machinery and 1,500 16.7 equipment for construction business:-

(a) steel fabrication machinery and equipment; and

(b) other construction machinery and equipment to be used at construction sites

(ii) Expansion of property development business 2,000 22.2 in the PRC

(iii) Expansion of construction business in Malaysia 500 5.6

(iv) Working capital purposes 2,750 30.6

Invitation expenses

(i) Listing fees 50 0.5

(ii) Professional fees 1,600 17.8

(iii) Underwriting commission, placement commission 270 3.0 and brokerage (1)

(iv) Miscellaneous expenses 330 3.6

TOTAL 9,000 100.0

Note:-(1) Please refer to the section entitled “Management, Underwriting and Placement Arrangements” of this Prospectus for more

details.

Please refer to the section entitled “Prospects and Future Plans” of this Prospectus for more information.

In the opinion of our Directors, no minimum amount must be raised from the issue of the New Shares.Pending deployment of the net proceeds from the issue of the New Shares as aforesaid, the netproceeds may be added to our Group’s working capital, placed as deposits with banks or financialinstitutions, or used for investment in short-term deposits, money market instruments or debt instruments,as our Directors may deem fit in their absolute discretion.

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MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

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Pursuant to a management and underwriting agreement dated 30 January 2007 (the “Management andUnderwriting Agreement”), our Company appointed the Manager, and the Manager has agreed, tomanage the Invitation. The Manager will receive a management fee from our Company for its servicesrendered in connection with the Invitation as the Manager.

Pursuant to the Management and Underwriting Agreement, the Underwriter agreed to underwrite thesubscription of the Offer Shares on the terms and conditions therein, and our Company agreed to paythe Underwriter, an underwriting commission of 2.75% of the aggregate Issue Price for the total numberof Offer Shares successfully subscribed and the total number of Placement Shares successfully appliedto satisfy excess applications for Offer Shares. Payment of the underwriting commission shall be madewhether or not any issue or allotment of the Offer Shares is made to the Underwriter or its nominees,including any portion of the Placement Shares which have been applied to satisfy excess applications forOffer Shares.

Pursuant to a placement agreement dated 30 January 2007 (the “Placement Agreement”), thePlacement Agent agreed to subscribe for and/or procure subscribers for the Placement Shares at theIssue Price on the terms and conditions therein. In consideration of the agreement of the PlacementAgent to subscribe for and/or procure subscribers for the Placement Shares, our Company agreed to payto the Placement Agent a placement commission of 3.0% of the aggregate Issue Price for the totalnumber of Placement Shares successfully subscribed and the total number of Offer Shares applied tosatisfy excess applications for Placement Shares. Payment of the placement commission shall be madewhether or not any issue or allotment of the Placement Shares is made to the Placement Agent or itsnominees, including any portion of the Offer Shares which have been applied to satisfy excessapplications for Placement Shares.

Brokerage will be paid by our Company to the members of the SGX-ST, banks and merchant banks inSingapore in respect of accepted applications made on Application Forms bearing their respectivestamps, or to Participating Banks in respect of successful applications made through ATM Applications orIB Applications, at the rate of 0.25% of the Issue Price for each Offer Share. In addition, DBS Bank leviesa minimum brokerage fee of S$5,000 that will be paid by our Company.

Subscribers of the Placement Shares may be required to pay a brokerage of up to 1.0% of the aggregateIssue Price for the number of Placement Shares subscribed as well as applicable stamp duties andgoods and services tax to the Placement Agent.

If there shall have been, since the date of the Management and Underwriting Agreement and prior to oron the close of the Application List:-

(a) any breach of the warranties or undertakings in the Management and Underwriting Agreement; or

(b) any occurrence of certain specified events which comes to the knowledge of the Manager or theUnderwriter; or

(c) any adverse change, or any development involving a prospective adverse change, in the condition(financial or otherwise) of our Company or of our Group as a whole; or

(d) any introduction or prospective introduction of or any change or prospective change in anylegislation, regulation, order, notice, policy, rule, guideline or directive (whether or not having theforce of law and including, without limitation, any directive, notice or request issued by theAuthority, the Securities Industry Council of Singapore or the SGX-ST or any other authority inSingapore) or in the interpretation or application thereof by any court, government body, regulatoryauthority or other competent authority in Singapore; or

(e) any change, or any development involving a prospective change, or any crisis in local, national orinternational financial (including stock market, foreign exchange market, inter-bank market orinterest rates or money market), political, industrial, economic, legal or monetary conditions,taxation or exchange controls; or

MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

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(f) any occurrence or any local, national or international outbreak or escalation of hostilities,insurrection or armed conflict (whether or not involving financial markets and including but notlimited to any act of terrorism); or

(g) any regional or local outbreak of disease that may have an adverse effect on the financial markets;or

(h) any other occurrence of any nature whatsoever,

which shall in the reasonable opinion of the Manager, inter alia, result or be likely to result in a materialadverse fluctuation or adverse conditions in the stock markets in Singapore or elsewhere; or be likely toprejudice the success of the Invitation; or make it uncommercial, inadvisable, inexpedient, impracticableor otherwise contrary to or outside the usual commercial practices in Singapore for the Manager or theUnderwriter to observe or perform or be obliged to observe or perform the terms of the Management andUnderwriting Agreement; or be likely to have an adverse effect on the business, trading position,operations or prospects of our Group, the Manager (for itself and for and on behalf of the Underwriter)may at any time prior to the close of the Application List by notice in writing to our Company rescind orterminate the Management and Underwriting Agreement.

The Manager or the Underwriter may by notice in writing to our Company terminate the Managementand Underwriting Agreement if:-

(a) at any time up to the commencement of trading of our Shares on the SGX-ST, a stop order shallhave been issued by the Authority in accordance with Section 242 of the Securities and FuturesAct; or

(b) at any time after the registration of this Prospectus by the Authority but before the close of theApplication List, our Company fails and/or neglects to lodge a supplementary or replacementprospectus (as the case may be) if it becomes aware of:-

(i) a false or misleading statement or matter in this Prospectus;

(ii) an omission from this Prospectus of any information that should have been included in itunder Section 243 of the Securities and Futures Act; or

(iii) a new circumstance that has arisen since this Prospectus was lodged with and registered bythe Authority and would have been required by Section 243 of the Securities and Future Actto be included in the Prospectus if it had arisen before this Prospectus was lodged,

that is materially adverse from the point of view of an investor; or

(c) the Shares have not been admitted to the Official List of the SGX-ST on or before 8 February 2007(or such other date as our Company and the Manager may agree); or

(d) the Placement Agent fails to receive valid subscriptions and payments for at least 80% of thePlacement Shares, by 6.00 p.m. on 5 February 2007 (or such other date as may be decided by theManager).

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

Save as disclosed herein, there is no material relationship between our Company and the Manager, theUnderwriter or the Placement Agent.

EXCHANGE CONTROLS

Singapore

There are currently no Singapore exchange control or similar laws, decrees, regulations or otherlegislation that may affect the following:-

(a) the import or export of capital, including the availability of cash and cash equivalents for our use;and

(b) the remittance of dividends, interest or other payments to non-resident holders of our Company’ssecurities.

PRC

Major reforms have been introduced to the foreign exchange control system of the PRC since 1993.

On 1 October 1993, the State Council of the PRC issued the Notice on Further Reform of the ForeignExchange Control System and on 28 December 1993, the People’s Bank of China (“PBOC”), issued theNotice of the PBOC on Further Reform of the Foreign Exchange Control System which came into effecton 1 January 1994. Other new regulations and implementation measures include the Regulations on theForeign Exchange Settlement, Sale and Payment which took effect on 1 July 1996 and which containdetailed provisions regulating the settlement, sale and payment of foreign exchange by enterprises,individuals, foreign organisations and visitors in the PRC and the Regulations of the People’s Republic ofChina on Foreign Exchange Control which took effect on 1 April 1996 and which contain detailedprovisions in relation to foreign exchange control.

On 21 July 2005, the PBOC issued the Public Announcement of the PBOC on Improving the Reform ofthe RMB Exchange Rate Regime, which states that from 21 July 2005, the PRC will reform the exchangerate regime by moving into a managed floating exchange rate regime based on market supply anddemand with reference to a basket of currencies. RMB will no longer be pegged to the US$ and the RMBexchange rate regime will be improved with greater flexibility.

Under these new regulations which contained detailed provisions regulating the holding, sale andpurchase of foreign exchange by individuals, enterprises, economic bodies and social organisations inthe PRC, the previous dual exchange rate system for RMB was abolished and a unified floatingexchange rate system based largely on supply and demand was introduced. The PBOC publishes theRMB exchange rate against the US$ and other major foreign currencies daily. The medial price of oneforeign currency against RMB is to be set by reference to the US$/RMB and other major foreigncurrencies’ trading price on the inter-bank foreign exchange market announced by PBOC upon closing ofbusiness on the previous working day.

In general, all organisations within the PRC, including FIEs, are required to repatriate their foreignexchange earnings to the PRC. In relation to the PRC enterprises other than FIEs, unless specificallyapproved otherwise or specifically exempted under the relevant regulations, their foreign exchangeearnings are to be sold to the designated foreign exchange banks. In relation to FIEs (including sino-foreign equity joint ventures and sino-foreign co-operative enterprises as well as wholly foreign ownedenterprises (WFOEs)), they may maintain their recurrent foreign exchange earnings within the highestsum determined by the State Administration for Foreign Exchange (“SAFE”) or its local branch and thepart beyond the sum abovementioned shall be sold to the designated foreign exchange banks or be soldthrough the foreign exchange swap transaction center. Under the Notice Concerning the ForeignExchange Administration in the Financing and Round-trip Investment Conducted by the PRC Residentsvia Special Purpose Vehicle Companies promulgated by the State Administration for Foreign Exchange ofthe PRC (the “SAFE Notice No. 75”) dated 21 October 2005, the PRC residents are required to repatriate theirforeign exchange earnings derived from overseas special purpose vehicle companies (“SPV”) (that is, theoverseas enterprises which are directly established or indirectly controlled by the PRC residents forforeign equity capital financing with their domestic enterprises’ assets and interests) to the PRC.

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EXCHANGE CONTROLS

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At present, control of the purchase of foreign exchange is relaxed. The enterprises within the PRC whichrequire foreign exchange for their ordinary trading and non-trading activities (such as payment of staffremuneration), import activities and repayment of foreign debts may purchase foreign exchange fromdesignated banks if the application is supported by the relevant documents without the need for any priorapprovals of the SAFE or its local branch. Furthermore, FIEs may (subject to due payment of tax on suchdividends) distribute profit to their foreign investors with funds in their foreign exchange bank accountskept with designated banks. Should the amount of funds in such foreign exchange bank accounts beinsufficient, the enterprises may purchase additional foreign exchange from designated foreign exchangebanks upon the presentation of the resolutions of the directors on the profit distribution plan of thatparticular enterprise.

On 14 January 1997, the Regulations of the People’s Republic of China on Foreign Exchange Controlwere amended such that the payment in and transfer of foreign exchange for current internationaltransactions will no longer be subject to the PRC government control or restrictions. Under theRegulations, FIEs may buy, sell and/or remit foreign currencies at those banks authorised to conductforeign exchange business only upon providing valid commercial documents and, in the case of capitalaccount item transactions, upon obtaining approval from the SAFE as well. Capital investments by FIEsoutside of the PRC are also subject to limitations, which include approvals by the Ministry of Commerce,the SAFE, the National Development and Reform Commission or their respective branches.

Despite the aforementioned relaxation of foreign exchange control over current account transactions, theapproval of the SAFE or its local branch is still required before a PRC enterprise may provide any foreignexchange guarantee or make any investment outside of the PRC or enter into any other capital accounttransaction involving the purchase of foreign exchange, except as otherwise provided by the PRCregulations. As for foreign exchange loans, the PRC enterprises other than FIEs are required to obtainthe approval of the SAFE or its local branch before taking up a foreign loan and to effect and completethe foreign exchange loan registration with the SAFE or its local branch while FIEs are required only toeffect and complete the foreign exchange loan registration with the SAFE or its local branch and to putthe foreign loan concerned on records. In addition, under certain notices promulgated by the PBOC in1998, all the PRC borrowers of foreign exchange loans are not permitted to purchase foreign currencieswith RMB to prepay such borrowings. However, according to a notice published by the PBOC and theSAFE on 19 September 2001, in certain situations, a PRC borrower is allowed to purchase foreigncurrencies with RMB to prepay onshore foreign exchange loans subject to the approval of the SAFE.According to a notice issued by SAFE on 22 April 2002, all the restrictions on the purchase of foreigncurrencies with RMB to prepay onshore foreign exchange loans or foreign exchange debts have beenabolished, subject to the approval of SAFE.

In addition, under the SAFE Notice No. 75, the PRC residents have to register their foreign investmentswith the local SAFE prior to the incorporation or taking control of the SPVs and prior to the alterationregistration through which such SPVs acquire the PRC residents’ assets for the financing of the foreigninvestments, and the profits, dividends and foreign exchange relating to capital changes received by thePRC residents from the SPVs shall be repatriated to the PRC within 180 days of receiving suchamounts.

According to the Law of the PRC on Sino-Foreign Equity Joint Ventures, the net profit that the foreigninvestors obtain from the FIEs which they are entitled to remit abroad may be (i) remitted abroad inaccordance with the foreign exchange regulations and in the currency or currencies specified in thecontracts concerning the joint ventures or (ii) deposited in the Bank of China.

Malaysia

There are no restrictions on the repatriation of capital, profits, dividends, interest, fees or rental by foreigndirect investors or portfolio investors.

Hong Kong

There are no exchange controls in Hong Kong on the repatriation of capital and the remittance into or outof Hong Kong or to our subsidiary in Hong Kong.

CLEARANCE AND SETTLEMENT

Upon listing and quotation on the SGX-ST, our Shares will be traded under the book-entry settlementsystem of the CDP, and all dealings in and transactions of our Shares through the SGX-ST will beeffected in accordance with the terms and conditions for the operation of Securities Accounts with theCDP, as amended from time to time. Our Shares will be registered in the name of CDP or its nomineeand held by CDP for and on behalf of persons who maintain, either directly or through DepositoryAgents, Securities Accounts with CDP. Persons named as direct securities account holders andDepository Agents in the Depository Register maintained by the CDP, rather than CDP itself, will betreated, under our Articles of Association and the Companies Act, as members of our Company inrespect of the number of Shares credited to their respective Securities Accounts.

Persons holding our Shares in Securities Accounts with CDP may withdraw the number of Shares theyown from the book-entry settlement system in the form of physical share certificates. Such sharecertificates will, however, not be valid for delivery pursuant to trades transacted on the SGX-ST, althoughthey will be prima facie evidence of title and may be transferred in accordance with our Articles ofAssociation. A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for eachwithdrawal of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entrysettlement system and obtaining physical share certificates. In addition, a fee of S$2.00 or such otheramount as our Directors may decide, is payable to the Share Registrar for each share certificate issuedand a stamp duty of S$10.00 is also payable where our Shares are withdrawn in the name of the personwithdrawing our Shares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it iswithdrawn in the name of a third party. Persons holding physical share certificates who wish to trade onthe SGX-ST must deposit with CDP their share certificates together with the duly executed and stampedinstruments of transfer in favour of CDP, and have their respective Securities Accounts credited with thenumber of Shares deposited before they can effect the desired trades. A fee of S$20.00 is payable uponthe deposit of each instrument of transfer with CDP. The above fees may be subject to such changes asmay be in accordance with CDP’s prevailing policies or the current tax policies that may be in force inSingapore from time to time.

Transactions in the Shares under the book-entry settlement system will be reflected by the seller’sSecurities Account being debited with the number of Shares sold and the buyer’s Securities Accountbeing credited with the number of Shares acquired. No stamp duty is currently payable for the Sharesthat are settled on a book-entry basis. A Singapore clearing fee for trades in our Shares on the SGX-STis payable at the rate of 0.05% of the transaction value subject to a maximum of S$200.00 pertransaction. The clearing fee, instrument of transfer deposit fee and share withdrawal fee may be subjectto Singapore goods and services tax. Dealings of our Shares will be carried out in Singapore dollars andwill be effected for settlement on CDP on a scripless basis. Settlement of trades on a normal “ready”basis on the SGX-ST generally takes place on the third Market Day following the transaction date, andpayment for the securities is generally settled on the following business day. CDP holds securities onbehalf of investors in Securities Accounts. An investor may open a direct account with CDP or a sub-account with a CDP agent. The CDP agent may be a member company of the SGX-ST, bank, merchantbank or trust company.

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PLAN OF DISTRIBUTION

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The Issue Price was determined by us in consultation with the Manager, the Underwriter and thePlacement Agent, after taking into consideration, inter alia, prevailing market conditions and theestimated market demand for our Shares through a book building process. The Issue Price is the samefor all New Shares and is payable in full on application.

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

Applications for the New Shares may be made using the following methods:-

(1) Application for Offer Shares

The Offer Shares are made available to the members of the public in Singapore for subscription atthe Issue Price. The terms and conditions and procedures for application are described inAppendix H of this Prospectus.

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

In the event of an over-subscription for the Offer Shares at the close of the Application List and thePlacement 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 asdetermined by our Directors and approved by the SGX-ST.

Pursuant to the terms and conditions contained in the Management and Underwriting Agreementsigned between our Company, the Manager and the Underwriter dated 30 January 2007, theUnderwriter has agreed to underwrite the Offer Shares.

In the event that the Placement Agent does not receive valid subscriptions and payments for atleast 80% of the Placement Shares by 6.00 p.m. on 5 February 2007 (or such other date as maybe decided by the Manager), the Manager or the Underwriter may terminate the Management andUnderwriting Agreement.

(2) Application for Placement Shares (excluding Reserved Shares)

Pursuant to the terms and conditions in the Placement Agreement signed between our Company,the Manager and the Placement Agent dated 30 January 2007, the Placement Agent agreed tosubscribe for and/or procure subscribers for the Placement Shares for a placement commission of3.0% of the Issue Price for each Placement Share, payable by our Company pursuant to theInvitation. The Placement Agent may, at its absolute discretion, appoint one or more sub-placement agents for the Placement Shares.

Subscribers of the Placement Shares may be required to pay a brokerage of up to 1.0% of theaggregate Issue Price for the number of Placement Shares subscribed as well as applicable stampduties and goods and services tax to the Placement Agent.

In the event that any of the Internet Placement Shares are not taken up, they will be madeavailable to satisfy applications for the Placement Shares (excluding the Internet PlacementShares) to the extent that there is an over-subscription for the Placement Shares (excluding theInternet Placement Shares) as at the close of the Application List.

In the event that the Placement Agent does not receive valid subscriptions and payments for atleast 80% of the Placement Shares by 6.00 p.m. on 5 February 2007 (or such other date as maybe decided by the Manager), the Placement Agent shall be entitled to terminate the PlacementAgreement.

PLAN OF DISTRIBUTION

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

(a) Application for Placement Shares (other than Internet Placement Shares andReserved Shares)

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

Application for the Placement Shares (other than the Internet Placement Shares andReserved Shares) under the Placement Tranche may only be made by way of PlacementShares Application Forms.

An applicant who applies for the Placement Shares (other than Reserved Shares)shall not make any separate application for the Placement Shares using anotherPlacement Shares Application Form or by way of an Internet Placement Application orfor the Offer Shares (either using an Offer Shares Application Form or by way of anATM Application or IB Application). Such separate applications will be deemed to bemultiple applications and all applications shall be rejected.

(b) Application for Internet Placement Shares

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

Qualifying Internet Applicants may apply for the Internet Placement Shares through the IPOWebsite.

The offer of the Internet Placement Shares through the IPO Website will be on a first-comefirst-served cum balloting basis where:-

(i) each valid application (“Valid Applications”) received for Internet Placement Sharesshall first be deemed to be made for 75,000 Internet Placement Shares on a first-come first-served basis (“FCFS Internet Placement Shares”), and is subject toavailability at the time of application; and

(ii) each excess Valid Application (“Excess Valid Applications”) for the FCFS InternetPlacement Shares shall then be deemed to be made for the remaining 75,000Internet Placement Shares (“Ballot Internet Placement Shares”).

In the event of an over-subscription for Ballot Internet Placement Shares, successful ExcessValid Applications for Ballot Internet Placement Shares shall be determined by ballotconducted by the IPO Website Operator. If you have applied for Internet Placement Sharesvia (i) above, you will be prohibited from applying for additional Internet Placement Sharesvia (ii) above.

A Qualifying Internet Applicant who has made an application for Internet PlacementShares through the IPO Website shall not make any separate application forPlacement Shares by way of a Placement Shares Application Form or by way ofanother application through the IPO Website, or for the Offer Shares (either using anOffer Shares Application Form or by way of an IB Application or ATM Application).Such separate applications will be deemed to be multiple applications and allapplications shall be rejected.

PLAN OF DISTRIBUTION

A Qualifying Internet Applicant whose application for Internet Placement Shares is rejectedbecause of multiple applications will be levied an administrative fee amounting to 20.0% ofthe Qualifying Internet Applicant’s application subscription monies (Singapore goods andservices tax included).

(3) Reserved Shares

To recognise their contributions to our Group, we have reserved 1,000,000 Placement Shares forsubscription by our Independent Directors, management, employees, business associates andothers who have contributed to the success of our Group at the Issue Price. Except as describedin the section entitled “Moratorium” of this Prospectus, these Reserved Shares are not subject toany moratorium and may be disposed of after the admission of our Company to the Official List ofthe SGX-ST. In the event that any of the Reserved Shares are not subscribed for, they will bemade available to satisfy applications for the Placement Shares to the extent that there is an over-subscription for the Placement Shares as at the close of the Application List, or in the event of anunder-subscription of the Placement Shares as at the close of the Application List, to satisfyapplications made by members of the public for the Offer Shares to the extent that there is anover-subscription for the Offer Shares as at the close of the Application List.

None of our Directors (other than our Independent Directors) or Substantial Shareholders intend tosubscribe for the New Shares. In the event that any of our Directors or Substantial Shareholderssubscribe for any New Shares, we will announce details of such subscription.

To the best of our knowledge, we are not aware of any person who intends to subscribe for more than5.0% of the New Shares. However, through a book-building process to assess market demand for ourShares, there may be person(s) who may indicate interest to subscribe for more than 5.0% of the NewShares. The final allotment of the New Shares will be in accordance with the shareholding spread anddistribution guidelines as set out in Rule 210 of the Listing Manual.

No Shares shall be allotted or allocated on the basis of this Prospectus later than six months after thedate of registration of this Prospectus by the Authority.

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CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus, statements made in the press releases and oral statementsthat may be made by our Company or our Directors, Executive Officers or employees acting on ourbehalf, that are not statements of historical fact, constitute “forward-looking statements”. Some of thesestatements can be identified by forward-looking terms such as “anticipate”, “believe”, “could”, “estimate”,“expect”, “if”, “intend”, “may”, “plan”, “possible”, “probable”, “project”, “should”, “will” and “would” or similarwords. However, these words are not the exclusive means of identifying forward-looking statements. Allstatements regarding our Group’s expected financial position, business strategies, plans and prospectsand the future prospects of our Group’s industry are forward-looking statements. These forward-lookingstatements, including but not limited to statements as to our Group’s revenue and profitability, prospects,future plans, other expected industry trends and other matters discussed in this Prospectus regardingmatters that are not historic facts, are only predictions.

These forward-looking statements involve known and unknown risks, uncertainties and other factors thatmay cause our Group’s actual future results, performance or achievements to be materially different fromany future results, performance or achievements expected, expressed or implied by such forward-lookingstatements. These factors include, amongst others, changes in the political, social and economicconditions and regulatory environment in Singapore, Malaysia, the PRC and other countries where wemay conduct our business, changes in competitive conditions and other factors beyond our control. Someof these factors are discussed in more detail in the section entitled “Risk Factors” of this Prospectus.

All forward-looking statements made by or attributable to us, or persons acting on our behalf, containedin this Prospectus are expressly qualified in their entirety by such factors. Given the risks anduncertainties that may cause our Group’s actual future results, performance or achievements to bematerially different from that expected, expressed or implied by the forward-looking statements in thisProspectus, undue reliance must not be placed on these statements. Our actual results may differmaterially from those anticipated in these forward-looking statements.

Neither our Company, the Manager, the Underwriter, the Placement Agent, their respective advisers norany other person represents or warrants that our Group’s actual future results, performance orachievements will be as discussed in those forward-looking statements.

Further, our Company, the Manager, the Underwriter and the Placement Agent disclaim anyresponsibility to update any of those forward-looking statements or publicly announce any revisions tothose forward-looking statements to reflect future developments, events or circumstances, even if newinformation becomes available or other events occur in the future. We are, however, subject to theprovisions of the Securities and Futures Act and the Listing Manual regarding corporate disclosure. Inparticular, pursuant to Section 241 of the Securities and Futures Act, if after this Prospectus is registeredbut before the close of this Invitation, our Company becomes aware of: (a) a false or misleadingstatement or matter in this Prospectus; (b) an omission from this Prospectus of any information thatshould have been included in it under Section 243 of the Securities and Futures Act; or (c) a newcircumstance that has arisen since this Prospectus was lodged with the Authority and would have beenrequired by Section 243 of the Securities and Futures Act to be included in this Prospectus, if it hadarisen before this Prospectus was lodged and that is materially adverse from the point of view of aninvestor, we may lodge a supplementary or replacement prospectus with the Authority.

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SELLING RESTRICTIONS

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for our Shares in anyjurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any person towhom it is unlawful to make such offer, solicitation or invitation. No action has been or will be taken underthe requirements of the legislation or regulations of, or of the legal or regulatory authorities of, anyjurisdiction, except for the lodgment and/or registration of this Prospectus in Singapore in order to permita public offering of our Shares and the public distribution of this Prospectus in Singapore. The distributionof this Prospectus and the offering of our Shares in certain jurisdictions may be restricted by the relevantlaws in such jurisdictions. Persons who may come into possession of this Prospectus are required by ourCompany, the Manager, the Underwriter and the Placement Agent to inform themselves about, and toobserve and comply with, any such restrictions.

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PROSPECTUS SUMMARY

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The following summary is qualified in its entirety by, and is subject to, the more detailed information andfinancial statements (including the notes thereto) appearing elsewhere in this Prospectus. Terms definedelsewhere in this Prospectus have the same meanings when used herein. Prospective investors shouldcarefully consider all the information presented in this Prospectus, particularly the matters set out in thesection entitled “Risk Factors” of this Prospectus before making an investment decision.

OVERVIEW OF OUR GROUP

Our Company was incorporated under the Companies Act on 9 March 2006 as a private limited companyunder the name of “SuperKSH Pte. Ltd.” and changed its name to KSH Holdings Pte. Ltd. on 22November 2006. In preparation for our listing, we undertook the Restructuring Exercise, pursuant towhich our Company became the holding company of our Group. Further details of the RestructuringExercise are set out in the section entitled “Restructuring Exercise” of this Prospectus. Our Company wasconverted into a public limited company on 19 December 2006 and changed its name to “KSH HoldingsLimited”.

We are a well established construction, property development and property management group withoperations in Singapore, Malaysia and the PRC.

Our Group’s principal activities are as follows:-

(a) construction in Singapore and Malaysia; and

(b) property development and property management in the PRC.

We act as main contractors in construction projects for private and public sector customers in Singaporeand for private sector customers in Malaysia. Our construction businesses in Singapore and Malaysia arecarried on by our wholly-owned subsidiary, KSHEC, and our wholly-owned Malaysian subsidiary,Techpath, respectively. Our clients typically include property developers, land owners and governmentalbodies.

Our Group has two property developments in the PRC, one being Tianxing Riverfront Square in Tianjin,which was developed by our subsidiary, TTX Real Estate, and the other being Liang Jing Ming Ju inBeijing, which was developed by our associated company, JHTD. Our Group also has a propertymanagement arm that manages Tianxing Riverfront Square. Our property management business in thePRC is undertaken by our subsidiary, TTX Property Management.

A detailed discussion of our business is set out in the section entitled “Our Business” of this Prospectus.

OUR COMPETITIVE STRENGTHS

We believe that our competitive strengths are as follows:-

(i) We have a committed and experienced management team and support staff

Our success is supported by our experienced and committed management team, led by ourExecutive Directors. Their extensive experience in the construction industry enables our Group toidentify new opportunities and grow our business. Each of our Executive Directors has at least 30years of experience in the construction industry. Our management team is supported by a pool oflong serving and committed staff including engineers, quantity surveyors and site coordinators. Wealso encourage continuous professional development of our employees. We regularly train ouremployees on technical skills, product knowledge and management techniques and instil in themthe importance of corporate culture. We also place strong emphasis on training programmes toensure that our employees are updated on the latest safety regulations and technologicaldevelopments in the industry.

PROSPECTUS SUMMARY

33

(ii) We have an established and proven track record and reputation

Each of our Executive Directors has at least 30 years of experience in the construction businessand we believe we have an established and proven track record and reputation in the constructionindustry. We have established good business relationships with the professionals we work with andwe believe that our credibility, together with the strength of our delivery track record, makes us acontractor of choice for most of our business associates. We have also achieved high qualitystandards for our construction projects and in this regard, we have received several awards andcertifications including ISO certifications, which we believe bear testimony to the quality of ourprojects.

(iii) We are cost competitive

We have a reliable pool of sub-contractors and suppliers who are cost competitive and capable.We are able to obtain competitive rates from our pool of sub-contractors and suppliers as wemaintain continuing relationships with these sub-contractors and suppliers by constantly referringnew jobs to them. Additionally, our payments to our sub-contractors and suppliers have alwaysbeen prompt and we do not pose a credit risk to them. This, together with our continuingrelationships with them, enables us to attain better credit terms which allow us to keep our costslow.

(iv) We are able to leverage on our construction experience to enhance our propertydevelopment business

We have recognised the synergistic effects of our property development business and ourconstruction business and we believe that this enables us to better offer a comprehensive packageof services ranging from site procurement, design and build services, project management to themarketing of the completed development. We believe that our track record and extensiveexperience in the construction business in Singapore enable us to enhance our propertydevelopment business in the PRC as we are able to offer value-added services when carrying onour property development work based on our construction experience.

(v) We have considerable experience in the property development industry in the PRC andstrong working relationships with our joint venture partners and other business contacts inthe PRC

Due to our long presence in the PRC since 1997, we have established a wide network of contactsin the PRC and have maintained good and strong working relationships with our joint venturepartners and other industry-related or government-linked organisations. In the process ofundertaking our property development projects in the PRC, we have gained considerableexperience in the property development industry in the PRC and have acquired a betterunderstanding of the PRC property development market. We believe that our wide network ofcontacts and experience in the property development industry in the PRC will enable us to identifyand capitalise on significant development opportunities in the PRC for our Group.

A detailed discussion of our competitive strengths is set out in the section entitled “Our CompetitiveStrengths” of this Prospectus.

OUR BUSINESS STRATEGIES AND FUTURE PLANS

Our business strategies and future plans are as follows:-

(1) Focus on projects with higher contract value for our construction business

The contract value of our construction projects has increased steadily over the years. The majorityof our completed construction projects are less than S$30 million each in terms of contract value.However, as at 30 June 2006, we had four projects each exceeding S$30 million in terms ofcontract value and we intend to step up our efforts to target larger-scale construction projects witha contract value of up to S$75 million each as we believe that such larger-scale projects willgenerate higher profits and further raise our business profile in the industry.

PROSPECTUS SUMMARY

(2) Acquisition of machinery and equipment

Currently, the structural steel that is used in our construction projects is fabricated by us. Ourstructural steel production facility is presently not running at full capacity as we only produce whatwe need for our construction projects. However, we intend to increase our annual productioncapacity for structural steel from the current production capacity of 1,500 tonnes to 3,000 tonnesover the next two years commencing from the date of our listing through the acquisition of steelfabrication machinery and equipment. With the increased production capacity, we will be able tomeet the demands of the larger-scale construction projects that we have secured and are targetingto secure. Please refer to the sections entitled “Production Facilities and Capacity” and “BusinessStrategies and Future Plans – Acquisition of machinery and equipment” of this Prospectus formore details.

We also intend to acquire other construction machinery and equipment to be used at ourconstruction sites in Singapore, including but not limited to cranes, air compressors andgenerators. Currently, our Group leases most of the construction machinery and equipment usedat our construction sites from third parties. With the acquisition of such construction machinery andequipment, this will reduce our costs of leasing construction machinery and equipment from thirdparties, which would equate to cost savings for our Group.

(3) Expansion of our property development business in the PRC

We intend to continue to expand our property development business in the PRC as we believe thatthere is growth potential in the industry. In line with our plans to expand our property developmentbusiness in the PRC, our Group, through our subsidiary, Duford, has signed a non-binding letter ofintent on 18 August 2006 with Beijing Jia Hua Hong Yuan and Tianjin Xiang Ning to explorebusiness opportunities through an equity joint venture to undertake new rural residentialdevelopment projects in Zhuozhou, Hebei Province, the PRC.

We will continue to focus on areas in the PRC which are undergoing increasing urbanisation suchas the areas lying in and near the outskirts of Beijing, where we believe there is a growing demandfor private housing, to capitalise on the growth potential of the property markets in these areas. Wewill continue to tap our PRC joint venture partners’ expertise and market knowledge of the propertydevelopment market in the PRC to participate in residential property development projects.

(4) Expansion of our construction business into other areas in Malaysia

With our experience in the construction industry, we are confident of our ability to pursue astrategy of expansion into Malaysia. We believe that there is potential for construction business inthe region and will be looking at Malaysia for new business opportunities. We entered theconstruction industry in Malaysia in June 2006 and have secured a project in Selangor with acontract value of more than S$30 million in the same month. We are hopeful that with thecompletion of this project, we will have a favourable track record upon which we can develop andexpand our construction business in Malaysia.

For more details, please refer to the section entitled “Business Strategies and Future Plans” of thisProspectus.

OUR CONTACT DETAILS

Our registered address and principal place of business is 36 Senoko Road, Singapore 758108. Ourtelephone and fax numbers are (65) 6758 2266 and (65) 6758 2532 respectively. Our companyregistration number is 200603337G. Our website address is http://www.kimsengheng.com. Informationcontained in our website does not constitute part of this Prospectus.

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INVITATION STATISTICS

ISSUE PRICE

NET ASSET VALUE (“NAV”)

NAV per Share, based on the unaudited balance sheet of our Group as at30 June 2006:-

– Before adjusting for the estimated net proceeds from the Invitationand based on the pre-Invitation share capital of 63,122,500 Shares

– After adjusting for the estimated net proceeds from the Invitation andbased on the post-Invitation share capital of 88,122,500 Shares

Discount of Issue Price over NAV per Share:-

– Before adjusting for the estimated net proceeds from the Invitationand based on the pre-Invitation share capital of 63,122,500 Shares

– After adjusting for the estimated net proceeds from the Invitation andbased on the post-Invitation share capital of 88,122,500 Shares

EARNINGS

Historical net earnings per Share for FY2006 based on the pre-Invitationshare capital of 63,122,500 Shares

PRICE EARNINGS RATIO

Historical price earnings ratio based on the historical net earnings perShare for FY2006

NET OPERATING CASH FLOW

Historical net operating cash flow per Share for FY2006 based on the pre-Invitation share capital of 63,122,500 Shares

PRICE TO CASH FLOW RATIO

Historical price to net operating cash flow based on the historical netoperating cash flow per Share for FY2006

MARKET CAPITALISATION

Our market capitalisation based on our post-Invitation share capital of88,122,500 Shares and the Issue Price

: S$0.36

: 53.9 cents

: 46.3 cents

: 33.2%

: 22.2%

: 8.4 cents

: 4.3 times

: 9.0 cents

: 4.0 times

: S$31.7 million

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RISK FACTORS

36

You should evaluate carefully each of the following considerations and all other information set forth inthis Prospectus before deciding to invest in the New Shares. Some of the following considerations relateprincipally to the industry in which we operate and our business in general. Other considerations relateprincipally to general social, economic, political and regulatory conditions, the securities market andownership of the New Shares, including possible future dilution in the value of our Shares.

If any of the following considerations and uncertainties develop into actual events, our business, financialcondition or results of operations could be materially and adversely affected. In such a case, the tradingprice of our Shares could decline due to any of these considerations, and you may lose all or part of yourinvestment.

This Prospectus also contains forward-looking statements that involve risks and uncertainties. Our actualresults could differ materially from those anticipated in these forward-looking statements as a result ofcertain factors, including the risks faced by us described below and elsewhere in this Prospectus.

RISKS RELATING TO OUR BUSINESSES

Our property development units may be illiquid and such illiquidity will limit our ability to realisecash from unsold units on short notice

Units in a property development project are relatively illiquid and such illiquidity will limit our ability torealise cash from unsold units on short notice. For example, for Tianxing Riverfront Square, our propertydevelopment in the PRC which was completed in June 1998 and which has a total sellable floor area ofapproximately 55,193 sq m, only approximately 9,693 sq m have been sold and recognised as revenueas at 30 June 2006. Please see the section entitled “Property Development and Property Management –Tianxing Riverfront Square” of this Prospectus for more details on Tianxing Riverfront Square. In theevent that the property units in our property development project remain unsold or if we have to reducethe selling prices of the property units in order to sell them, this may have an adverse effect on our cashflow, financial performance and financial condition. Due to the illiquidity of the units in Tianxing RiverfrontSquare, our Group has been and is leasing unsold units in Tianxing Riverfront Square to tenants pendingthe sale of such units. There is however no assurance that we will be able to continue leasing suchunsold units and that the rental yield of the leased units will be higher than the effective interest rate ofthe USD term loan taken up by our Group to finance the development of Tianxing Riverfront Square.Please refer to the section entitled “Property Development and Property Management – TianxingRiverfront Square” of this Prospectus for more information on the rental yield of the leased office units inTianxing Riverfront Square and the section entitled “Foreign Exchange Management” of this Prospectusfor more information on the USD term loan taken up by our Group to finance the development ofTianxing Riverfront Square. In the event that the rental yield of the leased units in Tianxing RiverfrontSquare is lower than the effective interest rate of such term loan, this could adversely affect our cashflow,profitability and financial performance.

The actual selling prices that may be achieved by our Group from future sales of our unsold unitsin Tianxing Riverfront Square may materially differ from the valuation set out in the Valuer’sReport

The Valuer’s Report in respect of the unsold units in Tianxing Riverfront Square, in which we have aninterest through TTX Real Estate, our 69.0% PRC subsidiary, is included in Appendix I of thisProspectus. Please see the section entitled “Property Development and Property Management –Tianxing Riverfront Square” of this Prospectus for more details on Tianxing Riverfront Square. Thevaluation of these unsold units is based on certain assumptions that are subjective. Unanticipatedchanges in relation to these unsold units, changes in general or local economic or regulatory conditionsor other relevant factors could affect such valuation and the returns that we can realise from the sale ofthese unsold units. The actual selling prices that may be achieved by our Group from future sales ofthese unsold units may materially differ from the value attributed to them in the Valuer’s Report. Youshould also note that such valuation does not take into account the effective interest which our Grouphas in Tianxing Riverfront Square.

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We have no board control and have limited voting power in our associated company

Our associated company, JHTD, contributed approximately 22.0% and 53.9% of our Group’s profit beforetaxation for FY2006 and 1Q2007 respectively. However, we do not have any board control in respect ofJHTD. In addition, as our Group only has an effective interest of 19.1% in JHTD as at 30 June 2006, ourvoting power in JHTD is restricted and therefore, to a certain extent, we are subject to the wishes of ourtwo other joint venture partners who hold the majority stake and are not able to exercise any control overdecisions to be made by the board of directors or shareholders of JHTD.

The financial performance of our construction business is subject to the continuity of our orderbook for new projects

As our construction business is undertaken on a project basis and such projects are non-recurring, it iscritical that we must be able to continuously and consistently secure new projects of similar value andvolume. There is no assurance that we will be able to do so. In the event that we are not able tocontinually and consistently secure new projects, this would have an adverse impact on our financialperformance. In addition, there may be a lapse of time between the completion of our projects and thecommencement of subsequent projects. As such, our earnings and financial performance during suchperiods may be adversely affected.

Any cost overruns will adversely affect the financial performance of our construction business

In preparation for tenders for construction projects, we will carry out internal costing and budgetingestimates of labour and material costs which are based on the quotations given by our suppliers andsub-contractors, as well as our own estimate of costs. Thereafter, the contract value quoted in the tendersubmission to the developer for a construction project is determined after having evaluated all relatedcosts including the indicative pricing of our suppliers and sub-contractors. However, owing to unforeseencircumstances such as adverse weather conditions, unanticipated construction constraints at the worksitewhich may arise during the course of construction, or fluctuations in the costs of labour, raw materials,equipment, rental and sub-contracting services, costs not previously factored into the contract value maybe incurred. As our contracts with the developers typically do not allow for any adjustments to thecontract value consequent to the occurrence of such circumstances, such costs which are not previouslyfactored into the contract value will lead to cost overruns and would have to be absorbed by us. Undersuch circumstances, our profit margin for the project will be reduced or eroded and accordingly, ourprofitability and financial performance will be adversely affected.

Fluctuations in raw material prices may affect our earnings from our construction business

Raw materials comprised approximately 27.7%, 38.8%, 22.0% and 18.5% of our cost of construction inFY2004, FY2005, FY2006 and 1Q2007 respectively. Such raw materials include mainly ready mixedconcrete, steel, sand and cement. The prices of these raw materials may fluctuate due to changes in thesupply and demand conditions in respect of these materials. We do not have a long term supply contractwith any of our suppliers. Any sudden shortage of supply or reduction of allocation of raw materials to usfrom our suppliers for any reason may adversely affect our operations or result in us having to pay ahigher cost for these raw materials. For example, the Indonesian government has recently announced aban on sand exports and this may lead to a shortage of sand supply and result in an increase in our costof raw materials. Furthermore, a typical construction project generally spans a period of between oneand two years. As a result, our costs may increase beyond our initial projections and this may result in areduction in our previously estimated profit margins or may cause us to incur a loss. In the event of anysignificant increase in the costs of such raw materials and we are unable to pass on such increase incosts to our customers on a timely basis or find a cheaper source of supply, our results of operations andfinancial performance will be adversely affected.

RISKS RELATING TO OUR CONSTRUCTION BUSINESS IN GENERAL

We are dependent on the construction industry in Singapore and Malaysia, which is in turndependent on the health of the local property market and general economy

We derived more than 85% of our revenue in FY2004, FY2005 and FY2006 from our constructionbusiness in Singapore. In June 2006, we entered the construction industry in Malaysia. We are exposedto the cyclical fluctuations of the economies in Singapore and Malaysia as our construction business is

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dependent on the health of the property markets in Singapore and Malaysia which in turn are dependenton the general health of the Singapore and Malaysian economies respectively. A downturn in theSingapore and Malaysian economies will dampen general sentiments in the property markets inSingapore and Malaysia respectively and reduce construction demand, which will invariably have amaterial adverse effect on our business and financial performance.

Changes in government legislation, regulations or policies which affect the construction industryor the property market in Singapore and Malaysia may adversely affect our business operationsand financial performance

As we derive the bulk of our revenue from our construction business in Singapore and have also recentlyentered the construction industry in Malaysia, any changes in government legislation, regulations orpolicies affecting the construction industry or the property markets in Singapore and Malaysia couldadversely affect our business operations and/or have a negative effect on the demand for ourconstruction services. The compliance with such new government legislation, regulations or policies mayalso increase our costs and any significant increase in compliance costs arising from such newgovernment legislation, regulations or policies may adversely affect our results of operations. There is noassurance that any changes in government legislation, regulations and policies will not have an adverseeffect on our financial performance.

For instance, we are now subject to the provisions of a new legislation, the Building and ConstructionIndustry Security of Payment Act, Chapter 30B, of Singapore (the “BCISPA”) which came into effect on 1April 2005. With the introduction of the BCISPA, we are exposed to greater liability as our liability as maincontractor to pay monies owing to our sub-contractors is no longer contingent or conditional on paymentof the whole or part of such monies to us by our customers. Further, our sub-contractors, suppliers andservice providers are now entitled to submit their payment claims against us for adjudication. As such, wemay be liable to pay our sub-contractors, suppliers and service providers even when we are not paid atall by our customers. As the BCISPA also confers a right on these sub-contractors, suppliers and serviceproviders to suspend work or exercise a lien over unfixed materials which have been supplied if they arenot paid after adjudication, this could have an adverse impact on our operations. Such provisions wouldgenerally expose us to greater liability, which could adversely affect our results of operations andfinancial performance.

Please refer to the section entitled “Government Regulations” of this Prospectus for further details.

Loss of our BCA A1 grading will adversely affect our business and our financial performance

KSHEC is currently registered with the BCA with a BCA grading of A1 under the category CW01 forgeneral building. Such A1 grading is currently the highest grade for contractors’ registration in suchcategory and enables KSHEC to tender for public sector construction projects of unlimited value. Tomaintain KSHEC’s existing A1 grading, there are certain requirements to be complied with, including butnot limited to the following:-

To secure, over a three-year period, projects with an aggregate contract value of at least S$150million, of which inter alia S$75 million worth of the projects executed must be projects executedfor public sector agencies in Singapore;

To have a minimum paid-up share capital and a minimum net worth of S$15 million; and

To employ at least 24 professional and technical personnel with approved qualifications. Suchapproved qualifications refer to (a) professional qualifications with a recognised degree inArchitecture, Building, Civil/Structural Engineering or the equivalent and (b) technical qualificationsin any of the following: (i) a recognised polytechnic diploma in Architecture, Building andCivil/Structural Engineering; (ii) a National Certificate in Construction Supervision (NCCS); (iii) aCertificate/Specialist Diploma in Mechanical and Electrical Coordination; or (iv) other equivalentqualifications approved by the BCA.

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We could therefore lose our A1 grading if, as a result of a downturn in the construction industry or for anyother reason, we are unable to comply with any of the requirements imposed by the BCA in respectthereof, for instance, (i) if the aggregate contract value of projects that we secure through KSHEC overthe latest three years is less than the stipulated minimum of S$150 million of which at least S$75 millionis to be undertaken for the public sector or (ii) if KSHEC’s net worth falls below S$15 million or (iii) ifKSHEC fails to employ at least 24 professional and technical personnel with approved qualifications.Alternatively, we could also lose our A1 grading if, as a result of substantial losses incurred or arestructuring exercise undertaken involving a capital reduction, the paid-up share capital or net worth ofKSHEC falls below the minimum of S$15 million.

There is no assurance that we can maintain our A1 grading. In the event that we cannot maintain our A1grading because we fail to comply with any of the requirements laid down by the BCA in respect thereofor for any other reason, our BCA registration status would accordingly be downgraded. This would notonly adversely affect our market reputation but would also imply that we would lose our ability to tenderfor public sector construction projects of an unlimited contract value, thereby reducing our tenderingcapacity in the public sector drastically. As private sector projects may sometimes adopt the sameminimum grading requirements for their tenders, any downgrade in our BCA grading could also affect ourtendering capacity in the private sector. In the event that our BCA grading is downgraded, our businessand financial performance will be adversely affected.

We are dependent on certain key personnel for our continued success

Our Group’s success to date is attributable to the contributions and expertise of our Executive Directorsand Executive Officers who have built the business of our Group under the guidance and leadership ofour Executive Chairman and Managing Director, Mr Choo Chee Onn, and our other Executive Directors,Mr Tok Cheng Hoe, Mr Lim Kee Seng and Mr Kwok Ngat Khow. Our continued success and growth willdepend, to a large extent, on our ability to retain the services of our Executive Directors and ExecutiveOfficers. The loss of the services of our Executive Chairman and Managing Director or any of the otherExecutive Directors and the Executive Officers without suitable and timely replacement, or the inability toattract and retain other qualified personnel, would have an adverse effect on our operations and financialperformance.

Any shortage in the supply of foreign workers or increase in levy for foreign workers, or anyrestriction on the number of foreign workers that we can employ for a project, will adverselyaffect our operations and financial performance

The construction industry is highly labour intensive. As the pool of local workers employed in theconstruction industry in Singapore is scarce and the cost of local labour is high, we and our sub-contractors have to rely heavily on foreign labour for all our construction projects. Most of ourconstruction workers are foreign workers who come mainly from India, Bangladesh and the PRC, andwho are subject to foreign workers’ levy. On this basis, our operations and financial performance arevulnerable to any shortage in the supply of foreign workers and any increase in the cost of foreign labour.Any changes in the policies of the foreign workers’ countries of origin may affect the supply of foreignlabour and cause disruptions to our operations which may result in a delay in the completion of ourprojects. The supply of foreign labour and the number of foreign workers that we and our sub-contractorsare allowed to employ are further subject to the policies and regulations imposed by the MOM. Forexample, the MOM imposes a quota on the number of foreign workers that we and our sub-contractorscan employ in respect of each of our construction projects. Depending on the requirements of ourprojects, such quota on the number of foreign workers could affect our operations and accordingly ourbusiness and financial performance could be adversely affected. If the foreign workers’ levy were toincrease, our construction costs will increase correspondingly and such additional costs will affect theprofitability of our Group. In addition, if there are any changes in the foreign labour policies imposed bythe MOM which result in restrictions on the supply of foreign labour, we may have to seek alternative andmore costly sources of labour for our projects. In such event, our overall construction costs will increaseand our financial performance may be materially and adversely affected.

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We rely on external financing

Our Group relies mainly on trust receipts, bank loans and bank overdrafts to finance our operations. Inaddition, we rely on long-term banking facilities to finance the acquisition of our properties in Singapore.As at 30 June 2006, the aggregate amount of banking facilities (excluding performance guarantees)which we utilised amounted to approximately S$21.2 million. If all or a substantial portion of our bankingfacilities are withdrawn, the working capital required to finance our operations will be adversely affected.In addition, the interest charged for these facilities amounted to approximately 24.6% of our profit beforeinterest and taxation in 1Q2007. The majority of these facilities have variable interest rates andaccordingly, any increase in such interest rates will have an adverse effect on our profitability andfinancial performance.

We may also obtain additional debt financing to fund our activities in the future. Additional debt financingmay restrict our freedom to operate our business as it may have conditions that (i) increase ourvulnerability to general adverse economic and industry conditions, (ii) limit our ability to pay dividends orrequire us to seek consents for the payment of dividends, (iii) require us to dedicate a portion of our cashflow from operations to payments of our debts, which would consequently reduce the availability of ourcash flow to fund capital expenditures, working capital requirements and other general corporatepurposes, and (iv) limit our flexibility in planning for, or reacting to, changes in our business and ourindustry.

We cannot assure you that additional financing will be available when needed or that, if available, suchfinancing will be obtained on terms that are acceptable to us or at interest rates which are as favourableas those previously obtained. In the event that we are unable to obtain acceptable financing, we may notbe able to undertake certain new projects and our business, financial condition and results of operationsmay be adversely affected.

Our Executive Directors, Mr Choo Chee Onn, Mr Tok Cheng Hoe, Mr Lim Kee Seng and Mr Kwok NgatKhow, have extended personal guarantees to financial institutions/finance companies in consideration ofthese financial institutions/finance companies extending facilities to our Group. They have indicated thatupon the successful listing and quotation of our Shares on the SGX-ST, they would seek the approval ofthe relevant financial institutions/finance companies to discharge their personal guarantees. Withoutthese personal guarantees, we cannot assure you that replacement financing will be available or that, ifavailable, such replacement financing will be obtained on terms that are acceptable to us.

Our business is dependent on the services of our sub-contractors

We engage sub-contractors to provide various services for our construction projects, including piling andfoundation works, engineering, landscaping, installation of air-conditioning units and elevators,mechanical and electrical installation, utilities installation, interior decoration and any other specialistwork. These sub-contractors are selected based on, among other things, our past working experiencewith them, their competitiveness in terms of their pricing and their past performance. We cannot assureyou that the services rendered by these sub-contractors will be satisfactory or that they will meet ourrequirements for quality. In the event of any loss or damage which arises from the default of the sub-contractors engaged by us, we, being the main contractor, will nevertheless be liable for our sub-contractors’ default. Furthermore, these sub-contractors may experience financial or other difficulties thatmay affect their ability to carry out the work for which they were contracted, thus delaying the completionof or failing to complete our construction projects or resulting in additional costs for us. Any of thesefactors could have a material adverse effect on our business, financial condition and results ofoperations.

We are liable for delays in the completion of projects, and any liquidated damages and additionaloverheads arising from such delays could adversely affect our financial performance

The construction contract between a developer and its main contractor would normally include aprovision for the payment of liquidated damages by the latter to the former in the event the project iscompleted after the stipulated date of completion stated in the contract. Delays in the completion of aproject could occur from time to time due to several factors including but not limited to adverse weatherconditions, shortages of labour, equipment and construction materials, the occurrence of naturaldisasters, labour disputes, disputes with suppliers and sub-contractors, industrial accidents, work

RISK FACTORS

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stoppages arising from accidents or mishaps at the worksite or delays in the delivery of buildingmaterials by the suppliers. In the event of any delay in the completion of the project, we could be liable topay liquidated damages under the construction contract and incur additional overheads, and this willadversely affect our earnings and erode our profit margin for the project. In such event, our financialperformance and financial condition would be adversely affected. There is no assurance that there willnot be any delays in the existing and future construction projects which we undertake resulting in thepayment of liquidated damages and additional overheads which could have a material impact on ourfinancial performance and financial condition.

Our ability to secure our projects depends on our ability to secure performance bonds

As all of our construction projects require a performance bond to be furnished by a bank or anacceptable financial institution to guarantee our contractual performance in the project, our ability tosecure such performance bond is very crucial as it would determine our ability to secure such projects. Inthe event that we are unable to secure the requisite performance bonds for any reason, we may beunable to secure such projects and this would materially and adversely affect our revenue andprofitability.

Any suspension or cancellation of Techpath’s CIDB registration will adversely affect our business,results of operations and financial performance

Techpath, which commenced business operations in June 2006, is currently registered with the CIDBwith a G7 grading, which enables it to tender for construction projects of unlimited contract value inMalaysia. In connection with its application for a G7 grading registration, Techpath was required tocomply with CIDB’s registration requirement for local contractors which provides that the applicant shallhave a minimum of 70% local equity (the “Equity Requirement”). Techpath is presently a wholly-ownedsubsidiary of KSHEC. Our Company was advised by its legal advisers on Malaysian law, SKRINE, on 21December 2006 that the Equity Requirement is not provided for in the Lembaga Pembangunan IndustriPembinaan Malaysia (Malaysian Construction Industry Development Board) Act 1994 of Malaysiaalthough it is set out in the Registration Requirements and Procedures Book issued by the CIDB. Thisstatement was prepared by SKRINE for the purpose of incorporation in this Prospectus. In the event thatCIDB enforces compliance with the Equity Requirement, the failure of Techpath to maintain the EquityRequirement may result in the suspension or cancellation of Techpath’s CIDB registration. This wouldadversely affect Techpath’s operations in Malaysia, thereby adversely affecting our business, results ofoperations and financial performance.

We may be affected by accidents at our construction sites and our factories

Due to the nature of our construction business, accidents or mishaps may occur at the construction sitesfor our projects or at our factories even though we have put in place certain safety measures. Suchaccidents or mishaps may severely disrupt our operations and lead to a delay in the completion of aproject, and in the event of such delay, we could be liable to pay liquidated damages under theconstruction contract with the developer. In such event, our business, results of operations and financialperformance may be materially and adversely affected. Further, such accidents or mishaps may subjectus to claims from workers or other persons involved in such accidents or mishaps for damages sufferedby them, and any significant claims which are not covered by our insurance policies may materially andadversely affect our results of operations and financial performance. In addition, any accidents ormishaps resulting in significant damage to our factories, machinery or equipment may also have asignificant adverse effect on our business, financial condition and results of operations.

Furthermore, under the Debarment Scheme for contractors with bad safety record introduced by theMOM, if we are found to have violated safety requirements at our worksites, we will be given demeritpoints. KSHEC has accumulated 27 demerit points during the period from 24 August 2005 to 23 August2006. In the event that KSHEC accumulates more than 24 demerit points within the next 12 monthscommencing from 27 September 2006, it will be debarred from employing Non Traditional Source (NTS)foreign workers. Once debarred, MOM will freeze the man-year entitlement that has been issued toKSHEC for a period of 12 months, and MOM will also make a recommendation to the StandingCommittee on Debarment, Ministry of Finance, to bar KSHEC from tendering for public projects. Inaddition, in the event that our worksites contravene the requisite safety standards imposed by theregulatory authorities, we could be issued stop-work orders. KSHEC had in the past been issued stop-

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work orders for contravening the requisite safety standards. The issuance of such stop-work orders mayseverely disrupt our operations and lead to a delay in the completion of a project. Please see the sectionentitled “Government Regulations” of this Prospectus for more information. These circumstances wouldnot only generate negative publicity and adversely affect our market reputation but would also have amaterial adverse impact on our business, results of operations and financial performance.

We face competition from existing and new industry players

The construction industry is highly competitive and such competition may increase in the near future dueto the entry of new players in the construction industry. In the event that our competitors are able toprovide comparable construction services at lower prices or respond to changes in market conditionsmore swiftly or effectively than we do, our business, results of operations and financial performance willbe adversely affected. There is no assurance that we will be able to compete effectively with our existingand future competitors and adapt quickly to changing market conditions and trends. Any failure by us toremain competitive will adversely affect the demand for our business, our results of operations andfinancial performance.

For design and build projects that we undertake as main contractor, we are liable for any defector failure in the architectural or engineering design of the building even though the fault mayhave laid with the consultants

Design and build projects contributed 30.0% and 55.8% of our project revenue in FY2005 and FY2006respectively. For design and build projects, a single contract is awarded by the developer to the maincontractor who shall be responsible for the architectural and engineering designs and construction worksof the entire project. For such projects, consultants such as architects and engineers will be engaged towork on such projects. In the event of any defect or failure in the architectural or engineering design ofthe building which arises from the default of the consultants and through no fault on our part, we, beingthe main contractor, will, nevertheless, be liable to the developer under the contract.

Under the general terms of a typical design and build contract, even if we can demonstrate that we haveexercised a reasonable degree of skill and care within our capacity as main contractor and, accordingly,is not negligent for the design defect or failure, we, as the main contractor, would nevertheless be liableto the developer if the construction works failed to achieve its intended purpose. There is no assurancethat such liability will not arise in the future. If a developer were to succeed in obtaining a court judgmentor an arbitration award against us for claims on the grounds of design defect or failure, such claims mayhave a material adverse effect on our financial performance and financial condition.

In the event of any disputes with our customers or our sub-contractors, our financial performancemay be adversely affected

Disputes may arise between us and our customers for various reasons, such as differences in theinterpretation of acceptable quality standards of workmanship and materials used, disagreements overthe value of work done and disputes over contract specifications. Consequently, it is an industry practicefor our customers to withhold an agreed percentage of the contract sum, typically 5%, as retentionmonies to defray the costs of instituting any work of repair, reconstruction or rectification of anyimperfection or other fault or defects which may surface or be identified only during the defects liabilityperiod of typically 12 months after the official hand-over of a construction project. We may thereforeencounter difficulties in collecting the full sum or any part of the retention monies due and may run therisk of incurring additional costs to make good the repair, rectification or reconstruction works underdispute to the extent that our profit margin is eroded or losses are incurred for the construction project. Insuch event, our results of operations and financial performance will be adversely affected.

Disputes may also arise from disagreements over the cost of variation orders requested by ourcustomers. This is because the variation orders are normally carried out, in accordance with industrypractice, before the additional charges are agreed upon in order that the construction project may becompleted on schedule. However, as the cost of variation orders is not determined beforehand, theirbasis of valuation may become a source of dispute after the construction project has been completed. Insuch event, we would be required to bear the costs of rejected variation orders, thereby adverselyaffecting our results of operations and financial performance.

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In the course of our construction business, disputes may also arise between us and our sub-contractorsfor various reasons including defective works, delays in the completion of a project and disputes overcontract specifications and the final amount payable for work done on a project.

It is not uncommon in connection with our construction business for claims to be made against us fromtime to time by our sub-contractors and customers arising from such disputes. In the event that any ofsuch claims are successfully made against us, our results of operations and financial performance maybe materially and adversely affected. Any legal proceedings relating to such claims may also have anadverse effect on our market reputation.

RISKS RELATING TO OUR PROPERTY DEVELOPMENT BUSINESS IN THE PRC IN GENERAL

Our business is dependent on the PRC property sector

Our property development business is dependent on the continuing growth of the PRC economygenerally and the property sector in the PRC specifically. The property development market may beadversely affected by political, economic, regulatory, social or diplomatic developments in or affecting thePRC property sector generally. Changes in inflation, interest rates, taxation or other regulatory, economic,social or political factors affecting the cities where our property developments are located or any adversedevelopments in the supply and demand or housing prices in the property sector, may have an adverseeffect on our business. Our business is also subject to the cyclical nature of the property industry and assuch, any downturn in the residential or commercial property development market in the PRC willmaterially and adversely affect our financial condition and results of operations.

We are heavily dependent on our network of contacts in the PRC for suitable land sites

We work with PRC joint venture partners in our property development projects in the PRC. As these PRCjoint venture partners have knowledge of suitable land sites in the PRC, we depend heavily on thesePRC joint venture partners to identify and secure suitable land sites for our property developmentbusiness. As such, it is crucial for us to establish and maintain good relationships with these PRC jointventure partners, so that we can tap their expertise and knowledge in identifying, sourcing for andsecuring suitable land sites for our property development business. In the event that there is anydeterioration in our relationships with these PRC joint venture partners, this could materially andadversely affect our business, results of operations and financial condition.

We face significant risks before we realise any benefits from our property developments

Our primary business is the development of residential and commercial properties. Propertydevelopments typically require substantial capital outlay during the land use rights acquisition andconstruction phases and may take one or more years before positive cashflows may be generatedthrough pre-completion sales or sales of a completed property development. Depending on the size ofthe development, the time span for completing a property development usually lasts for more than a year.Consequently, changes in the business environment during the length of the project may affect therevenue and cost of the development, which in turn has a direct impact on the profitability of the project.Factors that may affect the profitability of a project include the risk that the receipt of governmentapprovals may take more time than expected, the failure to complete construction according to theoriginal specifications, schedule or budget, and lacklustre sales or leasing of the properties. The salesand the value of a property development project may be adversely affected by a number of factors,including but not limited to the international, regional and local economic climate, local real estateconditions, perceptions of property buyers, businesses, retailers or shoppers in terms of the location andattractiveness of the property development, competition from other available properties, changes inmarket rates for comparable sales and increased business and operating costs. If any of the propertydevelopment risks described above materialises, our returns on investments may be lower than originallyexpected and our financial performance and financial condition will be materially and adversely affected.

RISK FACTORS

Inability to identify and source for new land sites in the PRC for property development willadversely affect our business and financial performance

We believe that in order to maintain and grow our property development business, we need to continueto identify and source for new land sites in the PRC which are suitable for property development. We donot generally accumulate a land bank but acquire our land sites as and when the capacity to undertake aproperty development project arises. In sourcing for such new land sites, we have to compete with otherproperty developers in the PRC. We cannot assure you that we will be able to identify and acquiresuitable land sites in the future at commercially acceptable prices, or at all. In the PRC, the supply of landuse rights is controlled by government authorities and our ability to acquire land sites will be affected bygovernment policies relating to land supply, development and pricing. In the event that we are unable toidentify and secure suitable and sizeable plots of land in the PRC for property development, this couldimpair our ability to compete with other property developers and accordingly, our business and financialperformance will be materially and adversely affected.

We have to bear the resettlement costs associated with our property developments

When we obtain land use rights for our property development projects from the PRC government, a landpremium is payable and resettlement costs are usually included in such land premium. Pursuant to theCity Housing Resettlement Administration Regulations and the applicable localregulations, a property developer in the PRC is required to enter into written agreements with the ownersor residents of existing buildings to be demolished for development to provide compensation for theirrelocation and resettlement. The amount of such compensation is calculated by applying the prescribedcompensation formulae provided by the relevant provincial authorities. When we purchase land use rightsin respect of any land that is occupied, any delay or difficulty in the resettlement process may cause adelay in the delivery of the land use rights to us in whole or in part and may require an increase in thefees payable in connection with the resettlement process. In addition, there is no assurance that therelevant provincial authorities will not change their compensation formulae. In the event of any change tothe compensation formulae, construction costs may be subject to substantial increases which couldadversely affect our results of operations and financial condition. Furthermore, if we fail to reachagreements with the owners or residents on the amount of compensation payable, any party may applyto the relevant housing resettlement authorities for a ruling on the amount of compensation, which maydelay the completion schedule of our projects and increase our operating costs. Please refer to“Appendix E – Summary of Relevant PRC Laws and Regulations” of this Prospectus for more details ofthe abovementioned PRC laws and regulations.

PRC government policies, regulations and measures intended to discourage speculation in thePRC property market may adversely affect us

Due to increasing speculation and investment in the property market, the PRC government has recentlyimplemented a series of measures in a bid to discourage property speculation in the property market andto ensure the availability of affordable housing. For instance, in May 2006, the PRC State Councilapproved the “Opinions on The Adjustment of Housing Supply Structure and Stabilisation of HousingPrice” (the “Housing Opinions”) which set out measuresincluding, inter alia, an increase in the minimum downpayment from 20% to 30% of the purchase pricepayable by purchasers of properties for individual residential mortgage loans and the placing ofrestrictions on the credit that the real estate enterprises may take up from the banks. These measuresmay affect the purchasing ability of potential buyers of residential properties and the financing to betaken up by our Group for our property development projects, and in such event would adversely affectour business and financial results.

The Housing Opinions further provide that at least 70% of the residential units (including economicalhouses) in residential housing projects approved or commenced after 1 June 2006 must be no largerthan 90 sq m. Such restrictions may lead to an increase in the supply or an oversupply of units which areno larger than 90 sq m in the PRC property market, which could result in a decrease in the propertyprices of such units. As our residential property development projects are expected to comprise unitswhich are no larger than 90 sq m, any decrease in the property prices of such units could have amaterial adverse effect on our financial performance.

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We cannot assure you that these measures introduced by the PRC government will not adversely affectsales of property units. There is also no assurance that the PRC government will not introduce furthermeasures to regulate the growth of the PRC property market. Such existing measures and theintroduction of any new measures may have a material adverse effect on our business, results ofoperations and financial performance. Further, the compliance with such new measures or other policiesand regulations may increase our costs and any significant increase in such compliance costs mayadversely affect our results of operations. Please see “Appendix E - Summary of Relevant PRC Lawsand Regulations” of this Prospectus for more details.

We operate in a competitive environment

The property development market in the PRC is a highly competitive industry and we face strongcompetition from the existing property developers in the PRC. As the PRC’s property developmentmarket has relatively low barriers to entry, we are faced with increasing competition in our propertydevelopment business with the entry of new players in the property development market in the PRC. Ourmain competitors are the local property developers in the PRC. To compete successfully, we would needto differentiate ourselves by developing and adopting more innovative property designs and morecreative marketing strategies, and offer more competitive pricing to attract buyers for our propertydevelopment projects. There is no assurance that we will continue to remain competitive. In the event thatwe are unable to compete with our competitors effectively to market our property development projects,our business and results of operations will be adversely affected. Further, intense competition in theproperty development market may result in, among other things, increased cost of the acquisition of landuse rights for development, oversupply of properties and an increase in construction costs. Suchconsequences may adversely affect our business, results of operations and financial condition. As theproperty market in the PRC is rapidly changing, our revenue, results of operations and financial conditionwill be adversely affected if we are unable to respond to changes in market conditions more swiftly oreffectively than our competitors. Failure to secure buyers or a significant reduction in property priceswould have a negative effect on our revenue and profitability.

We are affected by uninsured loss to our property developments

Our Group maintains insurance polices against natural disasters such as thunder and lightning,typhoons, storms, floods, subsidence of ground, volcanic explosion, landslides, and accidents such asfire and explosion, and third party physical damage in respect of our property development projects.Certain types of losses, however, such as acts of God, acts of terrorism, war and civil disorder, strike,expropriation and pollution are generally very costly to insure and it may not be cost effective for us toobtain such insurance coverage for our property development projects. In addition, it may be difficult andmay take time to recover the losses arising out of any damage to our property developments from theinsurers. Further, we may not be able to recover the full amount of such losses from the insurers. In theevent of any losses arising out of the damage to our property developments which are not covered byour insurance policies or should such damage be in excess of the amount for which we are insured, ourresults of operations and financial condition will be adversely affected.

We may be involved in legal and other proceedings arising out of our operations from time totime and may face significant liabilities as a result

We may be involved in disputes with various parties involved in the development and the sale of ourproperties, including contractors, suppliers, construction workers, partners and purchasers. Thesedisputes may lead to legal or other proceedings and may result in substantial costs and diversion ofresources and management’s attention. As our property development projects comprise of multiplephases, purchasers of our properties in earlier phases may file legal actions against us if our subsequentplanning and development of the projects are perceived to be inconsistent with our representations andwarranties made to such earlier purchasers. In addition, we may have disagreements with regulatorybodies in the course of our operations, which may subject us to administrative proceedings andunfavorable decrees that result in pecuniary liabilities and cause delays to our property developments.Judgments and decrees awarded that are unfavourable to us would have a negative effect on ourreputation. Consequently, an affected reputation, the aforementioned pecuniary liabilities and possibledelays would have a material adverse effect on our financial performance.

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We guarantee the mortgage payments of the purchasers of our property units and consequentlyare liable to the mortgagee banks if these purchasers default on their mortgage payments untilthe completion of our development properties

We have entered into arrangements with various domestic banks in the PRC to provide loans andmortgage facilities to the purchasers of our property units. In line with consumer banking practices in thePRC, these banks require us to provide guarantees in respect of these facilities offered to thesepurchasers if the relevant property ownership certificates for these units have not been received. Ourguarantees are released and discharged after the relevant individual property ownership certificates andcertificates of other interests in the property are issued and given to the mortgagee banks on behalf ofthe purchasers. During the period of guarantee, if a purchaser defaults on a loan, we would have to paythe entire outstanding principal amount of the loan, together with all accrued interest thereon, owing bythe purchaser to the relevant mortgagee bank. In line with industry practice, we do not conductindependent credit checks on the purchasers of our property units but rely on the credit checksconducted by the mortgagee banks. In the event that our guarantees are called upon due to substantialdefaults on the loans during the period of the guarantee, our financial condition and results of operationsmay be materially and adversely affected. Furthermore, in the event that we fail to complete our propertydevelopment projects for any reason, we would be required to return to the mortgagee banks the fullamount which have been paid to us by such banks pursuant to the loan facilities which have beenprovided to the purchasers of our property units, and this could adversely affect our cashflow and resultsof operations.

We are exposed to the risk of being unable to collect rent from our tenants

Some of our unsold property development units are leased to tenants pending the sale of such units. Wemay experience delays in the collection of rent or even non-payment of rent due to various reasonsincluding but not limited to the bankruptcy or insolvency of a tenant, which would impede our ability tocollect rent. We may also not be able to collect rent from properties which are under renovation or repairwhere such renovation or repair causes the properties to be untenantable or unfit for occupation. Theinability to collect rent in such circumstances as aforesaid could adversely affect our financialperformance.

RISKS RELATING TO OUR GROUP

We may be affected by any changes in the general economic, regulatory, political and socialconditions in the countries in which we have operations

We currently have operations in Singapore, Malaysia and the PRC. As a result, our businesses andfuture growth are dependent on the economic, regulatory, political and social conditions of thesecountries. Any unfavourable changes in the political, economic, regulatory and social conditions in thesecountries or in the government policies of these countries may have a negative impact on our operationswhich could materially and adversely affect our results of operations, financial performance and futuregrowth.

We are susceptible to fluctuations in foreign exchange rates that could result in us incurringforeign exchange losses

Our revenue is denominated in S$, RM and RMB. To the extent that our sales and purchases are notmade in the same currency, we may be exposed to significant fluctuations in exchange rates. We mayalso face foreign exchange risk if there are significant fluctuations in currency exchange rates betweenthe time of our purchases and payment in foreign currencies and the time of our sales and receipts inforeign currencies. In addition, we are exposed to adverse fluctuations in the exchange rate of the RMBagainst the USD, as the term loan which we have taken up to finance the development of TianxingRiverfront Square was drawn and serviced in USD. Please refer to the section entitled “Foreign ExchangeManagement” of this Prospectus for more details.

We are also subject to translation risks as our consolidated financial statements are denominated in S$while the financial statements of our foreign subsidiaries are prepared in RM, RMB and HK$. For thepurposes of consolidating the results of our foreign subsidiaries, the balance sheets of our foreignsubsidiaries are translated from the respective currencies in which their financial statements are

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prepared based on the prevailing exchange rates on the balance sheet date. The income statements ofour foreign subsidiaries are translated using the average exchange rates for the relevant financial year orperiod. Any significant fluctuation of the S$ against the respective foreign currencies may adversely affectour Group’s results of operations. We presently do not have any formal policy for hedging against foreignexchange exposure.

Terrorist attacks and other acts of violence or wars may adversely affect the markets in which weoperate and our profitability

Since the occurrence of terrorist attacks such as those that occurred in Bali on 1 October 2005 and inLondon on 7 July 2005, or armed conflicts such as the war in Iraq, there has been an escalation of ageneral fear of expansion of terrorist activities around the world, which could have an adverse effect onthe world economy.

Given the general fear of economic fall-out around the world, the economic outlook of our markets maybecome uncertain and there is no assurance that such markets will not be affected by the worldwideeconomic downturn, or that recovery would appear in the near future. As this could have a negativeimpact on the demand for our goods and services and our sales, our business, future growth andprofitability may be adversely affected.

We may be affected by an outbreak of diseases

An outbreak of infectious diseases such as severe acute respiratory syndrome (SARS) and bird flu in thecountries in which we operate may adversely affect our operations and financial performance. If anoutbreak of such infectious diseases occurs in any of the countries in which we have operations in thefuture, consumer sentiment and spending could be affected and this may adversely affect our businessand financial performance. Our staff and employees in these countries may also be affected by anyoutbreak of such infectious diseases and this may adversely affect our day-to-day operations, therebyadversely affecting our business and financial performance.

RISKS RELATING TO OUR OPERATIONS IN THE PRC

Economic conditions of the PRC are subject to uncertainties that may arise from changes ingovernment policies and social conditions

Since 1978, the PRC government has promulgated various reforms of its economic systems. Suchreforms have resulted in economic growth for the PRC in the last two decades. However, the PRCgovernment may continue to modify or reform its economic and political systems from time to time. Thesechanges in the social, political and economic policies of the PRC government may lead to changes in thelaws and regulations or the interpretation of the same, as well as changes in the foreign exchangeregulations, taxation and import and export restrictions, which may in turn adversely affect our financialperformance. Our results and financial performance may be adversely affected by changes in the PRC’spolitical, economic and social conditions and by changes in the policies of the PRC government orchanges in laws, regulations or the interpretation or implementation thereof.

Introduction of new laws or changes to existing laws by the PRC government may adverselyaffect our business

Our property development business and operations in the PRC are governed by the legal system of thePRC. The PRC legal system is a codified system with written laws, regulations, rules and otherregulatory documents. The PRC government is still in the process of developing its legal system, so as tomeet the needs of investors and to encourage foreign investment. As the PRC economy is undergoingdevelopment generally at a faster pace than its legal system, some degree of uncertainty exists inconnection with whether and how existing laws and regulations will apply to certain events orcircumstances. Some of the laws and regulations, and the interpretation, implementation andenforcement thereof, are still at an experimental stage and are therefore subject to policy changes.Further, there are no precedents on the interpretation, implementation and enforcement of the PRC lawsand regulations and the higher court decisions in the PRC do not have any binding effect on lowercourts. Accordingly, the outcome of any dispute resolution may be uncertain or unpredictable and it maybe difficult to obtain swift and equitable enforcement of the laws in the PRC, or to obtain enforcement of

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a judgment by a court in the PRC in another jurisdictions. Any introduction of new laws or amendmentsto existing laws by the PRC which is detrimental to the business environment in which we operate willadversely affect our profitability.

PRC foreign exchange control may limit our ability to utilise our revenue effectively in the PRC

Our PRC subsidiaries are subject to the PRC rules and regulations on currency conversion. In the PRC,the State Administration for Foreign Exchange (“SAFE”) regulates the conversion of the RMB into foreigncurrencies. Currently, the applicable regulation in respect of conversion of RMB into other currencies isthe Regulations of the People’s Republic of China on Foreign Exchange Control (“Regulations”) whichcame into effect on 1 April 1996 and were amended on 14 January 1997. Under the Regulations:-

(i) FIEs may freely buy, sell and/or remit foreign currencies at the banks authorized to conduct foreignexchange business in the PRC only upon providing valid commercial documents and in the case ofcapital account item transactions, upon obtaining approval from the SAFE as well; and

(ii) capital investments by FIEs outside of the PRC are also subject to certain limitations, of whichsome examples would be the need to obtain approvals from the Ministry of Commerce, the SAFEand the National Development and Reform Commission.

We cannot provide any assurance that the PRC regulatory authorities will not impose further restrictionson the purchase, sale and/or remittance of foreign currencies by/to our PRC subsidiaries. As therevenues of our PRC subsidiaries are denominated in RMB, any future restrictions on currencyexchanges may limit our ability to repatriate such revenues for the distribution of dividends to our Groupor for funding our other business activities outside the PRC. Please refer to the section entitled“Exchange Controls” of this Prospectus for more information.

RISKS RELATING TO OUR OPERATIONS IN MALAYSIA

We are subject to foreign investment guidelines in Malaysia

The FIC regulates and prescribes guidelines (the “FIC Guidelines”) for the acquisition of assets orinterests, mergers and take-overs of companies and businesses in Malaysia. Where the FIC Guidelinesare applicable, FIC approval is required. The FIC is a committee of the Economic Planning Unit of theMalaysian Prime Minister’s Department. Strictly speaking, the FIC Guidelines do not have the force oflaw (in the sense that they have not been enacted as legislation or promulgated as regulations under anyexisting laws). However, non-compliance has practical consequences as the FIC liaises closely with otherregulatory agencies in Malaysia, and compliance with conditions imposed by the FIC, if any, may berequired before other approvals from the other regulatory authorities are given.

For example, if a foreign investor needs to apply for a governmental licence, permit or approval such asan employment work pass for expatriate personnel, or if a foreign investor wishes to participate ingovernment contracts or attempts to register any land purchases at the relevant land office or registry inMalaysia, FIC approval and compliance with the FIC Guidelines may be required. The FIC Guidelinesinclude requirements as to the shareholding spread of Malaysian and foreign interests in Malaysianincorporated companies, whereby the only equity condition imposed now will be Bumiputera equity of atleast 30%. The remaining 70% equity can be held either by a foreigner, a Malaysian or jointly by aforeigner and Malaysian.

Our Malaysian subsidiary, Techpath, which commenced business operations in June 2006, has notobtained the approval of the FIC in relation to KSHEC’s shareholding in Techpath. Under the FICGuidelines, any proposed acquisition or acquisition of 15% or more of the voting rights in a Malaysiancompany by any one foreign interest would require FIC approval, which is granted at the discretion of theFIC. In the event that we are required to comply with the FIC Guidelines, we may have to, inter alia, diluteour shareholding in Techpath and divest at least 30% of Techpath’s total issued and paid-up share capitalto Bumiputera interest(s) within the time stipulated by the FIC. In such an event, any profit contribution ofTechpath to our Group will be reduced and our results of operations and financial performance will beadversely affected.

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We are subject to foreign exchange controls in Malaysia

On 21 July 2005, the RM peg to the US$ was removed and the RM switched to a managed float system.We have a subsidiary in Malaysia, namely Techpath. Currently, there are no restrictions on therepatriation of capital, profits, dividends, interest, fees or rental by foreign direct investors or portfolioinvestors and accordingly, the construction business conducted by our Malaysian subsidiary is transactedin RM. However, if the Malaysian government were to tighten or otherwise change the relevantregulations, such exchange controls may affect our repatriation of profits from our Malaysian subsidiary.Please refer to the section entitled “Exchange Controls” for further details.

RISKS RELATING TO OWNERSHIP OF OUR SHARES

There has been no prior public market for the Shares; liquidity may be low and the market pricemay be volatile

The Issue Price was determined by us in consultation with the Manager, the Underwriter and thePlacement Agent, after taking into consideration, inter alia, prevailing market conditions and theestimated market demand for our Shares through a book building process. The Issue Price may thereforenot be indicative of the market price for our Shares after the completion of the Invitation. Prior to theInvitation, there has not been a public market for our Shares. Although we have applied to the SGX-STfor the listing and quotation of our Shares on the SGX-ST, there is no assurance that an active tradingmarket for our Shares will develop or, if it develops, will be sustained after the Invitation.

There is also no assurance that the market price of our Shares will not decline below the Issue Priceafter the Invitation. The market price of our Shares may fluctuate significantly as a result of variousfactors, some of which are beyond our control. These factors include:-

variation of our operating results;

liquidity of our Shares in the market;

changes in securities analysts’ estimates of our financial performance;

changes in conditions affecting the construction and property industries in Singapore, Malaysiaand the PRC generally;

announcements by us of significant contracts, acquisitions, partnerships, joint ventures or capitalcommitments;

additions or departures of key personnel;

fluctuations in stock market prices and volume;

changes in market valuations of similar companies;

involvement in litigation; and

general economic and market conditions.

RISK FACTORS

Control by our Executive Directors could influence the outcome of actions which require theapproval of Shareholders

Upon the completion of the Invitation, our Executive Directors, Mr Choo Chee Onn, Mr Tok Cheng Hoe,Mr Lim Kee Seng and Mr Kwok Ngat Khow will own in aggregate approximately 71.6% of our post-Invitation share capital. Should these parties act together, they will be able to exercise significantinfluence over all matters requiring our shareholders’ approval, including the election of directors and theapproval of significant corporate transactions. They will also have veto power with respect to anyshareholder action or approval requiring a majority vote. Such concentration of ownership could have theeffect of delaying or preventing a change in control of our Company or otherwise discouraging a potentialacquirer from attempting to obtain control of us through corporate actions such as merger or takeoverattempts notwithstanding that the same may be synergistic or beneficial to our Group in a manner thatcould conflict with the interests of our public Shareholders.

Future sales of Shares could adversely affect our share price

Any future sales or availability of Shares can have a downward pressure on our share price. The sale ofa significant amount of Shares in the public market after the Invitation, or the perception that such salesmay occur, could materially affect the market price of our Shares. These factors may also affect ourability to sell additional equity securities in the future. Except as described in the section entitled“Moratorium” of this Prospectus, there are no restrictions on the ability of our Shareholders to sell theirShares.

Negative publicity which includes those relating to any of our Directors, Executive Officers orSubstantial Shareholders may adversely affect our share price

Any negative publicity or announcements relating to our Group or any of our Directors, Executive Officersor Substantial Shareholders may adversely affect the market perception or the stock performance of ourCompany, whether or not it is justified and whether or not the allegations are true. Examples of theseinclude involvement in legal and/or insolvency proceedings and reports of unsuccessful attempts at jointventures and acquisitions.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

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The following information should be read in conjunction with the full text of this Prospectus, in particular,Appendix A and Appendix B of this Prospectus.

COMBINED PROFIT AND LOSS ACCOUNTS

Audited Unaudited S$’000 FY2004 FY2005 FY2006 1Q2006 1Q2007

RevenuesProject revenue 49,074 78,947 113,216 24,608 18,858Rental income 3,197 3,099 3,564 792 837Revenue from sales of development 364 9,602 1,181 270 –

properties

52,635 91,648 117,961 25,670 19,695Other operating income 901 854 1,594 206 157

Cost of construction (41,745) (71,091) (106,405) (23,149) (17,349)Cost of sales of development properties (301) (7,966) (833) (194) –Personnel expenses (2,534) (2,173) (3,591) (1,067) (1,004)Depreciation of property, plant and (391) (486) (380) (94) (106)equipment

Other operating expenses (3,152) (2,858) (1,599) (629) (544)Finance costs (879) (1,053) (1,310) (290) (352)

(49,002) (85,627) (114,118) (25,423) (19,355)

Profit from operations before share of results 4,534 6,875 5,437 453 497of associated companies

Share of results of associated companies – 323 1,531 245 580

Profit before taxation 4,534 7,198 6,968 698 1,077Tax benefit / (expense) 82 (1,655) (1,256) (145) (130)

Profit for the year / period 4,616 5,543 5,712 553 947

Attributable to:Equity holders of the Company 4,543 4,951 5,308 513 662Minority interests 73 592 404 40 285

4,616 5,543 5,712 553 947

EPS in cents (pre-Invitation) (1) 7.2 7.8 8.4 0.8 1.1EPS in cents (post-Invitation) (2) 5.2 5.6 6.0 0.6 0.8

Notes:-(1) For comparative purposes, EPS in cents (pre-Invitation) for the years/periods under review is computed based on profit

attributable to equity holders of the Company and the pre-Invitation share capital of 63,122,500 Shares.

(2) For comparative purposes, EPS in cents (post-Invitation) for the years/periods under review is computed based on profitattributable to equity holders of the Company and the post-Invitation share capital of 88,122,500 Shares.

COMBINED BALANCE SHEET

Audited UnauditedS$’000 31 March 2006 30 June 2006

Non-current assetsProperty, plant and equipment 4,179 4,162Investment in associated companies 6,924 7,602Other investments 1 1Investment properties 4,420 4,420Due from a minority shareholder of a subsidiary (non-trade) 1,967 1,942

17,491 18,127

Current assetsCompleted properties held for sale 50,697 50,058Consumable stock 13 10Trade receivables 11,451 10,110Other receivables and deposits 1,636 1,670Prepayments 493 747Due from related parties (non-trade) n.m (1) n.m (1)

Construction work-in-progress in excess of progress billings 3,402 2,136Security bonds 2,000 2,000Fixed deposits (pledged) 3,735 3,741Cash and bank balances 6,785 3,677

80,212 74,149

Current liabilitiesTrade payables 11,871 8,976Other payables and accruals 15,749 14,491Due to a related party (non-trade) 927 942Finance lease obligations (current portion) 292 237Provision for income tax 1,225 1,004Progress billings in excess of construction work-in-progress 849 1,894Bank term loans, secured 2,424 2,696Bank overdrafts, secured 1,359 1,367Bills payable to banks, secured 5,031 2,907

39,727 34,514

Net current assets 40,485 39,635

Non-current liabilitiesOther payables 48 68Finance lease obligations (non-current portion) 264 235Bank term loans, secured 14,403 13,735Deferred tax liabilities 1,487 1,525

16,202 15,563

Net assets 41,774 42,199

Equity attributable to equity holders of the CompanyShare capital 15,781 15,781Translation reserve 487 81Accumulated profits 17,517 18,179

33,785 34,041Minority interests 7,989 8,158

Total equity 41,774 42,199

Note:-(1) Denotes not meaningful.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

This information should be read in conjunction with the full text of this Prospectus, in particular, AppendixA and Appendix B of this Prospectus. This discussion may contain forward-looking statements thatinvolve risks and uncertainties. Our actual results may differ significantly from those projected in theforward-looking statements. Factors that might cause future results to differ significantly from thoseprojected in the forward-looking statements include, but are not limited to, those discussed below andelsewhere in this Prospectus, particularly in the section entitled “Risk Factors” of this Prospectus.

OVERVIEW

Our Group’s principal activities are as follows:-

(a) construction in Singapore and Malaysia; and

(b) property development and property management in the PRC.

In respect of our construction business, we act as main contractors in construction projects for privateand public sector customers in Singapore and for private sector customers in Malaysia, and our servicesare provided mainly to property developers, land owners and governmental bodies. In June 2006, weacquired our wholly-owned Malaysian subsidiary, Techpath, which was incorporated in May 2006 andhave commenced work on a project in Malaysia in June 2006.

In respect of our property development and property management businesses, our focus is currently onthe commercial and residential property market of the PRC. As at 30 June 2006, we have developed acommercial property through our 69.0%-owned subsidiary, TTX Real Estate, in Tianjin, the PRC and aresidential property through JHTD (a sino-foreign equity joint venture company in the PRC in whichDuford, our 58.3%-owned subsidiary, has 32.7% interest) in Tongzhou, Beijing, the PRC. Subsequent tothe completion of the development of the commercial property in Tianjin, the PRC, TTX PropertyManagement (our 69.0%-owned subsidiary) was set up to provide property management services for thecommercial property.

Please refer to the section entitled “Our Business” of this Prospectus for further details.

Revenue

We have segmented our revenue in accordance with our two principal business activities.

(a) Project revenue

Project revenue refers to revenue derived from our construction business carried out in Singapore.This segment contributed 93.2%, 86.1%, 96.0% and 95.8% of our revenue for FY2004, FY2005,FY2006 and 1Q2007 respectively.

We undertake construction business on a project basis as main contractor in both the private andpublic sectors. Since 1979, we have undertaken a wide range of projects involving residential,commercial and industrial properties, power plant, hospital, hotel, clubhouse, school campus,education institute, training centre and many others.

Recognition of project revenue is based on the percentage-of-completion method. The stage ofcompletion is determined by reference to the value of work done certified by external professionalconsultants (such as the quantity surveyor and architect) of the project as a percentage of thelatest estimated total revenue of the contract value on completion.

(b) Property development and property management revenue

This refers to revenue derived from our property development and property managementbusinesses in the PRC, which includes revenue from the sale of our development properties andrental income from the lease of our unsold development properties.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

For the past three financial years ended 31 March 2006 and 1Q2007, revenue from the sale ofproperties has been derived solely from the sale of units (office and retail) in Tianxing RiverfrontSquare (a 36-storey commercial building with two basement floors in Tianjin). We completed thedevelopment of Tianxing Riverfront Square in 1998. Due to the state of the Asian economy afterthe Asian financial crisis in 1997, our efforts to sell the units at Tianxing Riverfront Square have notbeen fruitful. As at 30 June 2006, the sale of 9,693 sq m (out of the total sellable floor area of55,193 sq m of Tianxing Riverfront Square) has been recognised as revenue. Please see thesection entitled “Property Development and Property Management – Tianxing Riverfront Square”for more details on Tianxing Riverfront Square.

The revenue contribution from the sale of development properties for FY2004, FY2005 andFY2006 was 0.7%, 10.5% and 1.0% respectively. We did not register any sale of developmentproperties in 1Q2007. The higher revenue contribution in FY2005 was attributed mainly to therecognition of the sale of 5,756 sq m of office units to the main contractor of Tianxing RiverfrontSquare. The sale was effected in FY1999 (upon the completion of the development of TianxingRiverfront Square) but the revenue was not recognised then due to a legal dispute with the maincontractor which was settled by the court on 31 March 2004, whose judgement became effectiveon 15 April 2004. Please refer to the section entitled “Litigation and Arbitration Proceedings” of thisProspectus for more details of such dispute.

Revenue from the sale of development property is recognised only when there is a finalised saleand purchase agreement and when the receipt of the full amount of the sales proceeds is assured.

We also registered rental income from the lease of unsold retail units and office units in TianxingRiverfront Square in the PRC.

Tianxing Riverfront Square has 31 storeys of office units, five storeys of retail units and twobasement floors. All units in Tianxing Riverfront Square are developed with the intention to sellupon completion. Nevertheless, we do lease out the unsold units pending the sale of such units.

Rental income consists of both the rental and maintenance fee (which are fixed in the respectivetenancy agreements) and is recognised on an accrual basis. The usual tenancy terms (for bothoffice and retail units) range from two to ten years.

Rental income contributed 6.1%, 3.4%, 3.0% and 4.2% of our revenue for FY2004, FY2005,FY2006 and 1Q2007 respectively. The percentage contribution of this income is dependent on theoverall revenue contribution from our construction as well as our property development andproperty management businesses.

Our revenue may be affected by, inter alia, the following factors:-

(a) changes in the economic conditions of Singapore and the PRC which may directly or indirectlyaffect the property market and construction industry in Singapore and the PRC. We havecommenced construction business in Malaysia in June 2006. Accordingly, our revenue may alsobe affected by changes in the economic conditions of Malaysia;

(b) changes in the government legislation, regulations or policies, budget and expenditure which maydirectly or indirectly affect the property market and construction industry in Singapore, Malaysiaand the PRC;

(c) our ability to compete successfully with other main contractors in Singapore and Malaysia in termsof pricing, quality and timely project delivery in the most cost-efficient manner;

(d) our ability to acquire suitable land sites in a timely manner and at attractive prices for our propertydevelopment business; and

(e) our ability to market our development properties for sale and for lease.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Other Operating Income

Other operating income comprises mainly rental income from our two investment properties in Singapore(which we currently lease to third parties), interest income from fixed deposits, gain on sale of plant andequipment and other miscellaneous income such as car park and services charges from our tenanteddevelopment properties in the PRC. In FY2006, other operating income also included the recognition of aone-off negative goodwill of approximately S$557,000 from the acquisition of additional interest (from41.7% to 58.3% in March 2006) in Duford.

Other operating income represented approximately 1.7%, 0.9%, 1.4% and 0.8% of our revenue forFY2004, FY2005, FY2006 and 1Q2007 respectively.

Cost of Construction

Cost of construction refers to direct costs incurred in the process of carrying out our constructionbusiness and comprises mainly sub-contracting costs, raw material costs, labour costs as well asoverheads. Cost of construction is recognised on the percentage-of-completion method. Cost ofconstruction accounted for 85.2%, 83.0%, 93.2% and 89.6% of our total costs and expenses for FY2004,FY2005, FY2006 and 1Q2007 respectively.

Sub-contracting costs form the bulk of our cost of construction and accounted for 59.7%, 49.6%, 68.0%and 73.7% of our cost of construction for FY2004, FY2005, FY2006 and 1Q2007 respectively. Weoutsourced most of the architectural and engineering work in construction projects such as plastering,brick-laying and specialised engineering work to sub-contractors and specialists. The majority of the sub-contracting work happens in the later stage of construction projects. As most of our projects were in thefinal stages of construction in FY2006 and 1Q2007, our sub-contracting costs increased in FY2006 and1Q2007.

Our raw material costs accounted for 27.7%, 38.8%, 22.0% and 18.5% of our cost of construction inFY2004, FY2005, FY2006 and 1Q2007 respectively. The cost of raw materials including sand, cement,ready-mixed concrete and steel (including structural steel for fabrication in our structural steel productionfacility) may be affected by the supply and demand situation in Singapore and the region as well as thedelivery and payment terms of the purchase.

Our raw material costs for each project are dependent on the size, design and material specifications ofthe project and the price levels of the raw materials. In general, raw material costs have been increasingover the last few financial years due to increases in prices of three major raw materials namely, steel,sand and concrete. In FY2004 and FY2005, prices of steel-related building materials and concreteincreased substantially as a result of supply shortages in the region caused by the rapid economicdevelopment in the PRC and prohibitions on the export of sand by the Indonesian government in January2003. In FY2006, we implemented several measures to manage cost escalations and to ensureadequacy of supply. Such measures include obtaining better pricing via centralised procurement and theentering into pre-tender strategic alliances with sub-contractors and suppliers to lock in the prices andterms of major raw materials for our construction projects.

Our construction labour force comprises mainly foreign workers at our construction sites and ourstructural steel production facility. Our labour costs accounted for 10.5%, 9.5%, 7.8% and 6.7% of ourcost of construction for FY2004, FY2005, FY2006 and 1Q2007 respectively.

Overheads comprise mainly utilities and expenses, plant and machinery rental and deployment costs andenvironmental control costs for our construction sites and our structural steel production facility, as wellas finance costs on performance bonds or bankers’ guarantees. Our overheads accounted for 2.1%,2.1%, 2.2% and 1.1% of our cost of construction for FY2004, FY2005, FY2006 and 1Q2007 respectively.

Cost of Sales of Development Properties

Cost of sales of development properties comprises mainly development costs, land acquisition costs andinterest costs. Unsold units are capitalised as completed properties held for sale under current assets,and are stated at the lower of cost and estimated net realisable value.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Cost of sales of development properties accounted for 0.6%, 9.3% and 0.7% of our total cost andexpenses for FY2004, FY2005 and FY2006 respectively. There was no cost of sales of developmentproperties incurred in 1Q2007 as there was no sale of development properties in 1Q2007.

Personnel Expenses

Personnel expenses comprise salaries and bonuses of staff and workers, CPF contributions, directors’remuneration and other personnel costs.

Personnel expenses accounted for 5.2%, 2.5%, 3.1% and 5.2% of our total costs and expenses forFY2004, FY2005, FY2006 and 1Q2007 respectively.

The lower personnel expenses in FY2005, as a percentage of our total costs and expenses, were mainlyattributed to a concession between management and staff on salaries and wages reduction during thatfinancial year as part of our measures to contain costs. Since FY2006, the higher percentage inpersonnel cost was due to the increase in the number of staff and workers needed for the growth of ourconstruction business. The salaries of management, staff and workers were also adjusted upwards toreinstate the concession made in FY2005.

Depreciation of Property, Plant and Equipment

Depreciation of our property, plant and equipment accounted for 0.8%, 0.6%, 0.3% and 0.5% of our totalcosts and expenses for FY2004, FY2005, FY2006 and 1Q2007 respectively.

Other Operating Expenses

Other operating expenses include mainly utilities charges, repair and maintenance expenses, propertytax paid on our properties in the PRC and Singapore, business taxes on revenue from our propertydevelopment and property management businesses in the PRC and other general administrativeexpenses.

Other operating expenses accounted for 6.4%, 3.3%, 1.4% and 2.8% of our total costs and expenses inFY2004, FY2005, FY2006 and 1Q2007 respectively. The higher operating expenses in FY2004 were duemainly to provision made for compensation to foreign buyers of some units in Tianxing Riverfront Squareof S$561,000. Such provision was made in view of the legal disputes disclosed in paragraph (c) in thesection entitled “Litigation and Arbitration Proceedings” of this Prospectus. The lower other operatingexpenses in FY2006 were mainly attributable to a foreign exchange gain of S$698,000 and thecapitalisation of certain operating expenses of about S$820,000 to construction work-in-progress.

Finance Costs

Finance costs comprise mainly interest incurred on loans and overdraft facilities from banks and financialinstitutions and finance lease interest.

Finance costs accounted for 1.8%, 1.2%, 1.1% and 1.8% of our total costs and expenses for FY2004,FY2005, FY2006 and 1Q2007 respectively.

Share of Results of our Associated Companies

This refers to the share of results, net of tax, from Duford, before we increased our interest in Dufordfrom 41.7% to 58.3% in March 2006. With effect from 1 April 2006, our share of results of associatedcompanies relates only to share of results from JHTD.

As at 31 March 2006, Duford has a 30.0% interest in JHTD, which is engaged in the development ofLiang Jing Ming Ju, a residential property development project in Tongzhou, Beijing, the PRC. The projectbegan in FY2002 and comprises four phases of development. Phase I has an area of 57,607 sq m,Phase II has an area of 112,748 sq m and Phase III has an area of 18,948 sq m. Phase I was completedin FY2005 and Phase II was completed in FY2006. As at 31 March 2006, 95.6% of the completedphases have been sold. During 1Q2007, Duford’s equity interest in JHTD was increased slightly to 32.7%

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

following an acquisition of shares from one of the shareholders in JHTD. As at 30 June 2006, Phase IIIhas also been completed and 95.9% of all the completed phases have been sold. Please refer to thesection entitled “Property Development and Property Management” of this Prospectus for further details.

As at 30 June 2006, our cost of investment in JHTD (invested through Duford) was S$2.7 million (or7.9% of our NAV of S$34.0 million as at 30 June 2006).

We will provide updates on the performance of our associated companies (in particular, our associatedcompanies engaged in property development in the PRC) in our periodic financial resultsannouncements.

Tax Expense

For the past three financial years and 1Q2007, our Singapore operations were subject to a corporate taxrate of 20% whereas our PRC operations were subject to a corporate tax rate of 33%. Our effective taxrates based on the profit from operations before share of results of associated companies for FY2004,FY2005, FY2006 and 1Q2007 were (1.8%), 24.1%, 23.1% and 26.2% respectively.

The negative effective tax rate in FY2004 was due to overprovision of taxes in prior years. The highereffective tax rate in 1Q2007 was due mainly to the increase in losses of certain subsidiaries of ourCompany.

FOREIGN EXCHANGE MANAGEMENT

Our Group has a presence in Singapore, Hong Kong, Malaysia and the PRC.

We enjoy, to a certain extent, natural hedging in our foreign currency exposure as our revenue, costs andexpenses are generally transacted at the various local currencies where our operations are located.However, we are exposed to adverse fluctuations in the exchange rate of the RMB against the USD asour term loan taken up to finance the development of Tianxing Riverfront Square was drawn andserviced in USD.

The total term loan taken up to finance the development of Tianxing Riverfront Square was US$10million. As at 30 June 2006, the outstanding term loan for Tianxing Riverfront Square was US$7.5 million.This term loan is payable on a quarterly basis and will expire in December 2008. The current interestrate for such term loan is at 0.25% over the prevailing USD prime rate which may be determined by thebank at its sole discretion. We intend to reduce the outstanding principal amount of such term loan asand when we effect sales of units in Tianxing Riverfront Square. Our Directors are of the view that ourGroup is able to repay the outstanding term loan by December 2008 or obtain refinancing of such loan,based on the independent valuation of the unsold units (as set out in the section entitled “CompletedProperties Held For Sale” of this Prospectus) and the encouraging prospects for Tianxing RiverfrontSquare as disclosed in the section entitled “Property Development and Property Management – TianxingRiverfront Square” of this Prospectus.

Our Group’s exposure to foreign exchange fluctuations arising from movements of the RMB against theUSD was insignificant in FY2004 and FY2005 as the RMB was pegged to the USD.

However, on 21 July 2005, the People’s Bank of China announced that the PRC will move to a managedfloating exchange rate regime based on market supply and demand with reference to a basket ofcurrencies. The RMB would no longer be pegged to the USD. As a result, we registered a foreignexchange gain of S$698,000 in FY2006 mainly because the RMB appreciated against the USD from anexchange rate of USD1.00 to RMB8.277 as at 31 March 2005 to USD1.00 to RMB8.017 as at 31 March2006 which reduced the value of our USD term loan when translated to RMB at balance sheet date.Nevertheless, we will continue to be exposed to adverse fluctuations in the exchange rate of the RMBagainst the USD in the future.

We are also exposed to foreign exchange translation risks arising from foreign exchange movements onour net investment in our overseas subsidiaries and associated companies.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Foreign currency translation reserve recorded in our balance sheets is as follows:-

As at As at As at As at31 March 31 March 31 March 30 June

S$’000 2004 2005 2006 2006

Foreign currency translation reserve 1,046 468 487 81

We currently do not have any formal hedging policy. We will continue to monitor our foreign exchangeexposure and will consider hedging any material foreign exchange transactions should the need arises.

REVIEW OF PAST PERFORMANCE

Breakdown of Past Performance by Activities

A breakdown of our revenue and gross profit by activities for the years/periods under review issummarised as follows:-

Revenue

Audited Unaudited FY2004 FY2005 FY2006 1Q2006 1Q2007

S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %

Construction (in Singapore) 49,074 93.2 78,947 86.1 113,216 96.0 24,608 95.9 18,858 95.8Property development and 3,561 6.8 12,701 13.9 4,745 4.0 1,062 4.1 837 (1) 4.2

property management (in the PRC)

52,635 100.0 91,648 100.0 117,961 100.0 25,670 100.0 19,695 100.0

Gross Profit

Audited Unaudited FY2004 FY2005 FY2006 1Q2006 1Q2007

S$’000 % S$’000 % S$’000 % S$’000 % S$’000 %

Construction (in Singapore) 7,329 69.2 7,856 62.4 6,811 63.5 1,459 62.7 1,509 64.3Property development and property 3,260 30.8 4,735 37.6 3,912 36.5 868 37.3 837 (1) 35.7

management (in the PRC)

Overall 10,589 100.0 12,591 100.0 10,723 100.0 2,327 100.0 2,346 100.0

Gross Profit Margin

Audited Unaudited FY2004 FY2005 FY2006 1Q2006 1Q2007

Construction (in Singapore) 14.9% 10.0% 6.0% 5.9% 8.0%Property development and property 91.5% 37.3% 82.4% 81.7% 100.0% (1)

management (in the PRC)Overall 20.1% 13.7% 9.1% 9.1% 11.9%

Note:-(1) We did not register any sale of development properties in 1Q2007. This refers to revenue from our property management

business only. No cost of sales was incurred for our property management business.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

FY2004 vs FY2005

Revenue

Our revenue increased by S$39.0 million or 74.1%, from S$52.6 million in FY2004 to S$91.6 million inFY2005.

Revenue from our construction business increased by S$29.8 million (or 60.7%) from S$49.1 million inFY2004 to S$78.9 million in FY2005. The increase was due to six new major projects secured inFY2004 and for which we commenced work in FY2005. Together, they contributed S$38.0 million or48.2% of FY2005’s construction revenue. These projects include (i) The Spectrum; (ii) A&A works toDalvey Road apartments; (iii) Mustafa Shopping Centre extension; (iv) The Frontier Community Place; (v)Tradelink Place; and (vi) The Berth.

Projects from previous years contributed net revenue of S$39.5 million or 50.1% of FY2005’sconstruction revenue. These projects include mainly the Basic Rescue Training Centre at Jalan Baharand The Chancery Residence which collectively contributed a revenue of S$10.0 million and S$30.7million to our construction revenue in FY2004 and FY2005 respectively. The increase in revenuecontributed by the abovementioned projects was offset by the decrease in revenue from The Ansleyproject, Robinson Road project, Sheares Ville at No. 9 Holt Road and other minor jobs completed inFY2004 which contributed revenue of S$25.4 million in FY2004 and nil revenue in FY2005. In addition,we also registered a decrease in revenue from the SAFRA Mount Faber which contributed a revenue ofS$13.6 million and S$10.1 million in FY2004 and FY2005 respectively.

Revenue from our property development and property management businesses more than tripled fromS$3.6 million in FY2004 to S$12.7 million in FY2005. The increase was due mainly to the recognition ofrevenue of S$8.2 million from the main contractor of Tianxing Riverfront Square in FY2005. DuringFY2005, a total of 6,844 sq m of Tianxing Riverfront Square was recognised as revenue, as compared to191 sq m in FY2004. This included an area of 5,756 sq m sold to the main contractor of TianxingRiverfront Square in FY1999. However, due to a dispute with the main contractor, the revenue was notrecognised until FY2005 when the sale was ascertained by a court judgment. We also registered revenueof S$1.4 million from the completion of the sale of an entire floor of an aggregate area of 1,088 sq m to atenant whose lease expired in FY2005. The average selling price per sq m of Tianxing Riverfront Squarein FY2005 was RMB6,946 as compared to RMB9,120 in FY2004. The higher average selling price forFY2004 was mainly because the revenue recognised in FY2004 (upon receipt of the full amount of thesales proceeds) was from the sale of two units which was contracted in 1996 (before the Asian financialcrisis) and the units were located on higher floors.

There was no material change in the rental income from the lease of unsold units in Tianxing RiverfrontSquare at S$3.2 million and S$3.1 million for FY2004 and FY2005 respectively. The daily rental rates ofthe office units increased slightly from RMB2.00 per sq m in FY2004 to RMB2.10 per sq m in FY2005while the daily rental rates of the retail units decreased slightly from RMB1.80 per sq m in FY2004 toRMB1.70 per sq m in FY2005.

Cost of Construction

Cost of construction increased by S$29.4 million (or 70.5%) from S$41.7 million in FY2004 to S$71.1million in FY2005. The percentage increase in cost of construction was higher than the percentageincrease in revenue from our construction business mainly because we had incurred higher materialcosts, in particular for steel, sand and concrete, in FY2005. As a result, the gross profit margin for ourconstruction business decreased by 4.9 percentage points from 14.9% in FY2004 to 10.0% in FY2005.Nevertheless, despite the lower margin, gross profit for our construction business increased by S$0.6million from S$7.3 million in FY2004 to S$7.9 million in FY2005 with the substantial increase in revenueas detailed above.

Cost of sales of development properties

Cost of sales of development properties increased by S$7.7 million from S$0.3 million in FY2004 toS$8.0 million in FY2005. The increase in development costs was mainly due to the increase in revenuerecognised on development properties sold. However, as mentioned above, we registered a higheraverage selling price for development properties sold in FY2004. Accordingly, the gross profit margin forthe development properties sold in FY2005 decreased slightly by 0.3 percentage point from 17.3% inFY2004 to 17.0% in FY2005.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Overall gross margin for property development and property management decreased by 54.2 percentagepoints, from 91.5% in FY2004 to 37.3% in FY2005 despite the S$1.5 million increase in absolute value.This was mainly because the higher revenue of S$12.7 million in FY2005 comprised mainly revenue fromthe sale of development properties whereas the revenue of S$3.6 million in FY2004 comprised mainlyrental income from the lease of unsold units in Tianxing Riverfront Square.

Other operating income

Other operating income reduced by S$47,000 from S$901,000 in FY2004 to S$854,000 in FY2005. Thiswas due mainly to a gain of S$39,000 from fair value adjustment of our investment properties in FY2004as compared to a loss of S$30,000 from fair value adjustment of our investment properties in FY2005.

Personnel expenses

In FY2005, as a measure to counter the increase in raw material prices in Singapore (which reduced ourgross margin for construction from 14.9% in FY2004 to 10.0% in FY2005), we had a concessionbetween management and staff on salaries and wages reduction during that financial year. This measurereduced our personnel expenses from S$2.5 million in FY2004 to S$2.2 million in FY2005.

Depreciation of property, plant and equipment

With an increase in projects secured and the commencement of works in FY2005, we expanded ourexisting factory and office premises by acquiring additional premises at 36 Senoko Road. This increasedour depreciation charges for FY2005 to S$0.5 million as compared to S$0.4 million in FY2004.

Other operating expenses

Other operating expenses reduced from S$3.2 million in FY2004 to S$2.9 million in FY2005. This wasmainly because we had made provision for compensation to foreign buyers of some units in TianxingRiverfront Square of S$561,000 in FY2004.

Finance costs

Overall finance costs increased by S$0.2 million from S$0.9 million in FY2004 to S$1.1 million in FY2005due mainly to increased total borrowings as we took a new term loan for the acquisition of our additionalpremises at 36 Senoko Road and higher interest rates (of between 4.25% and 5.75%) imposed on ourUSD term loan (taken up to finance the development of Tianxing Riverfront Square) in FY2005 ascompared to interest rates of between 4.25% and 4.50% in FY2004.

Profit from operations before share of results of associated companies

Profit from operations before share of results of our associated companies increased by S$2.4 million,from S$4.5 million in FY2004 to S$6.9 million in FY2005.

The increase was due to the increase in gross profit of S$0.6 million from our construction business andS$1.5 million from our property development and property management businesses. In addition, we alsoregistered a decrease of S$0.3 million in our personnel expenses and a decrease of S$0.3 million in ourother operating expenses. These were offset by an increase in finance costs and depreciation charges ofS$0.2 million and S$0.1 million respectively.

Share of results of associated companies

Share of results of associated companies amounted to S$0.3 million in FY2005. This relates to profitarising from Duford’s investment in Liang Jing Ming Ju (through JHTD). We had not recognised anyshare of results from our associated companies in FY2004.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Profit before taxation

With the higher profit from operations before share of results of associated companies and therecognition of S$0.3 million from profit arising from Duford’s investment in Liang Jing Ming Ju in FY2005as explained above, our profit before taxation increased by S$2.7 million, from S$4.5 million in FY2004 toS$7.2 million in FY2005.

FY2005 vs FY2006

Revenue

Our revenue increased by S$26.4 million (or 28.8%) from S$91.6 million in FY2005 to S$118.0 million inFY2006.

The increase was due mainly to the increase in revenue from our construction business. Revenue fromour construction business increased by S$34.3 million (or 43.5%) from S$78.9 million in FY2005 toS$113.2 million in FY2006. Our three new projects, namely Singapore Air Traffic Control Centre, One°15Marina Club and Montview collectively contributed S$8.5 million or 7.5% of the revenue from ourconstruction business in FY2006.

Other project revenue from our construction business for FY2006 amounted to S$104.7 million or 92.5%of our construction revenue. This included revenue from on-going projects, namely The Berth and TheFrontier Community Place, which collectively contributed revenue of S$55.1 million in FY2006, as well ascompleted projects, namely A&A works to Dalvey Road apartments, Basic Rescue Training Centre atJalan Bahar, The Chancery Residence, The Spectrum, Mustafa Shopping Centre extension and TradelinkPlace, which contributed revenue of S$49.6 million in FY2006.

However, the increase in revenue from our construction business was offset by a decrease in revenuefrom the sale of development properties. Revenue from the sale of development properties decreased byS$8.4 million from S$9.6 million in FY2005 to S$1.2 million in FY2006. This was mainly due to therecognition of revenue of S$8.2 million from the main contractor of Tianxing Riverfront Square in FY2005as explained previously. A total of 728 sq m was sold at an average selling price of RMB7,944 per sq min FY2006 as compared to 6,844 sq m that was sold at an average selling price of RMB6,946 per sq min FY2005.

Rental income registered an increase of S$0.5 million from S$3.1 million in FY2005 to S$3.6 million inFY2006. The increase was attributed to an increase in leased area of Tianxing Riverfront Square inFY2006 from 28,072 sq m as at 31 March 2005 to 29,958 sq m as at 31 March 2006. The daily rentalrates of the office units increased slightly by RMB0.10 per sq m from RMB2.10 per sq m in FY2005 toRMB2.20 per sq m in FY2006. The daily rental rates of the retail units increased slightly by RMB0.10 persq m from RMB1.70 per sq m in FY2005 to RMB1.80 per sq m in FY2006.

Cost of construction

Cost of construction increased by S$35.3 million (or 49.6%) from S$71.1 million in FY2005 to S$106.4million in FY2006. The increase in cost of construction was due to the higher volume of construction workdone in FY2006 as reflected in the increase in our revenue. The increase in cost of construction wasslightly higher than the increase in revenue from our construction business as the construction projectscarried out in FY2006 were of a larger scale and had a lower gross margin. Consequently, gross profitmargin for our construction business decreased by 4.0 percentage points from 10.0% in FY2005 to 6.0%in FY2006.

Cost of sales of development properties

Cost of sales of development properties decreased by S$7.2 million from S$8.0 million in FY2005 toS$0.8 million in FY2006. This was because we had registered lower revenue from the sale ofdevelopment properties in FY2006 as explained above. As the average selling price of developmentproperties sold in FY2006 was much higher than those sold in FY2005 as mentioned above, the grossprofit margin for development properties sold in FY2006 increased by 12.5 percentage points from 17.0%in FY2005 to 29.5% in FY2006.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Overall gross profit margin for our property development and property management businessesincreased by 45.1 percentage points, from 37.3% in FY2005 to 82.4% in FY2006. This was mainlybecause the higher revenue of S$12.7 million in FY2005 comprised mainly revenue from the sale ofdevelopment properties whereas the revenue of S$4.7 million in FY2006 comprised mainly rental incomefrom the lease of unsold units in Tianxing Riverfront Square. In addition, we also registered an increasein rental income of approximately S$0.5 million in FY2006.

Other operating income

Other operating income increased by S$0.7 million (or 77.8%) from S$0.9 million in FY2005 to S$1.6million in FY2006, mainly due to the negative goodwill of S$557,000 from the acquisition of additionalinterest (from 41.7% to 58.3% in March 2006) in Duford recognised as income in FY2006.

Besides the above, we also registered an increase in gain on sale of plant and equipment from S$16,000to S$110,000.

Personnel expenses

Our personnel expenses increased by S$1.4 million (or 63.6%) from S$2.2 million in FY2005 to S$3.6million in FY2006. The increase was mainly due to the increase in salaries, wages and payroll relatedexpenses for our construction business as we re-adjusted the salaries and wages of our staff andincreased our staff strength from 530 as at 31 March 2005 to 552 as at 31 March 2006.

Depreciation of property, plant and equipment

Depreciation of property, plant and equipment decreased by S$0.1 million from S$0.5 million in FY2005to S$0.4 million in FY2006. This was mainly due to a S$49,000 reduction in depreciation charges as werevised the estimated useful life of our computers from one year to three years to better reflect theeconomic value of our fixed assets.

Other operating expenses

Other operating expenses reduced substantially by S$1.3 million from S$2.9 million in FY2005 to S$1.6million in FY2006. This was largely attributable to reduced business tax of S$0.4 million as we registeredlower revenue from the sale of our development properties in FY2006 as compared to FY2005. We alsohad a higher exchange gain of S$698,000 in FY2006 as compared to S$1,000 in FY2005.

Finance costs

We incurred finance costs of S$1.3 million in FY2006, an increase of S$0.2 million (or 18.2%) from S$1.1million in FY2005. This was mainly due to higher interest rates (of between 6.00% and 7.75%) imposedon our USD term loan (taken up to finance the development of Tianxing Riverfront Square) in FY2006 ascompared to interest rates of between 4.25% and 5.75% in FY2005.

Profit from operations before share of results of associated companies

Our profit from operations before share of results of associated companies reduced by S$1.5 million (or21.7%) from S$6.9 million in FY2005 to S$5.4 million in FY2006. The decrease was mainly due to thereduction in gross profit of S$1.0 million from our construction business as explained above.

Share of results of associated companies

Profits registered from share of results of associated companies increased to S$1.5 million in FY2006 ascompared to S$0.3 million in FY2005 due to revenue recognised from the increased sale of units inLiang Jing Ming Ju following the completion of Phase II in FY2006.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Profit before taxation

The lower profit from operations before share of results of associated companies in FY2006 was partiallyoffset by higher recognition of profit from JHTD with the increased sale of units in Liang Jing Ming Ju asmentioned above. As a result, our profit before taxation decreased slightly by S$0.2 million (2.8%), fromS$7.2 million in FY2005 to S$7.0 million in FY2006.

1Q2006 vs 1Q2007

Revenue

Our revenue decreased by S$6.0 million (or 23.3%) from S$25.7 million in 1Q2006 to S$19.7 million in1Q2007.

The decrease was mainly due to the decrease in revenue from our construction business. Revenue fromour construction business decreased by S$5.7 million (or 23.2%) from S$24.6 million in 1Q2006 toS$18.9 million in 1Q2007.

In 1Q2007, revenue from our construction business was mainly contributed by The Berth whichcontributed S$12.1 million or 64.0% of our construction revenue. Other major projects namely One°15Marina Club, Montview and Singapore Air Traffic Control Centre contributed S$5.8 million or 30.7% of ourconstruction revenue in 1Q2007.

The higher construction revenue of S$24.6 million in 1Q2006 was mainly contributed by the BasicRescue Training Centre at Jalan Bahar, Mustafa Shopping Centre extension, The Spectrum, TradelinkPlace, The Chancery Residence and A&A works to Dalvey Road apartments which on aggregatecontributed S$20.7 million or 84.1% of our construction revenue in 1Q2006. These projects werecompleted in FY2006 and therefore did not contribute to the construction revenue in 1Q2007.

We did not register any sale of development properties in 1Q2007 as compared to revenue of S$0.3million registered from sale of development properties in 1Q2006.

Rental income from the lease of unsold units in Tianxing Riverfront Square remained relatively stable atS$792,000 and S$837,000 for 1Q2006 and 1Q2007 respectively.

Cost of construction

With the decrease in revenue from our construction business, our cost of construction decreased byS$5.8 million (or 25.1%) from S$23.1 million in 1Q2006 to S$17.3 million in 1Q2007. Despite thedecrease in our construction revenue, we registered a slight increase of S$50,000 in the gross profit fromour construction business in 1Q2007. This was mainly due to cost overruns in two projects in 1Q2006which did not occur in 1Q2007. Consequently, gross profit margin for our construction business improvedby 2.1 percentage points from 5.9% in 1Q2006 to 8.0% in 1Q2007.

Cost of sales of development properties

We did not register any cost of sales of development properties in 1Q2007 as no revenue from sale ofdevelopment properties was recognised during 1Q2007. Cost of sales of properties was S$0.2 million in1Q2006, with a gross profit margin of 28.1%.

Other operating income

Other operating income amounted to S$157,000 in 1Q2007 as compared to S$206,000 in 1Q2006. Themain difference was due to a gain on sale of plant and equipment in 1Q2006 which did not occur in1Q2007.

Personnel expenses

Our personnel expenses remained relatively stable at S$1.0 million for both 1Q2006 and 1Q2007.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Depreciation of property, plant and equipment

Depreciation of property, plant and equipment amounted to S$94,000 and S$106,000 in 1Q2006 and1Q2007 respectively. The increase was mainly due to renovations made to our premises at 36 SenokoRoad.

Other operating expenses

Other operating expenses decreased by S$85,000 from S$629,000 in 1Q2006 to S$544,000 in 1Q2007,mainly due to exchange gain of S$40,000 in 1Q2007 as compared to the exchange loss of S$1,000 in1Q2006.

Finance costs

We incurred finance costs of S$352,000 in 1Q2007, an increase of S$62,000 (or 21.4%) from S$290,000in 1Q2006. This was mainly due to higher interest rates on financing facilities utilised.

Profit from operations before share of results of associated companies

Our profit from operations before share of results of associated companies amounted to S$453,000 andS$497,000 in 1Q2006 and 1Q2007 respectively. This was mainly due to the higher gross profit registeredfor our construction business in 1Q2007 as explained above.

Share of results of associated companies

Profits registered from share of results of associated companies increased to S$580,000 in 1Q2007 ascompared to S$245,000 in 1Q2006. The increase was due to the recognition of revenue from theincreased sale of units in Liang Jing Ming Ju following the completion of Phase III during 1Q2007.

Profit before taxation

As a result of the higher profit from operations before share of results of associated companies andhigher share of results of associated companies in 1Q2007, we registered a higher profit before taxationof S$1.1 million in 1Q2007 as compared to S$698,000 in 1Q2006.

REVIEW OF FINANCIAL POSITION

Non-current assets

Non-current assets comprise of investment in associated companies, property, plant and equipment,investment properties, other investments and an amount due from a minority shareholder of a subsidiary.

Our non-current assets totalled S$17.5 million and represented 17.9% of our total assets as at 31 March2006. These comprised investments in associated companies of S$6.9 million, investment properties ofS$4.4 million, property, plant and equipment of S$4.2 million and an amount due from the minorityshareholder of TTX Real Estate, namely Tianjin Commercial Construction Development, of S$2.0 million.Our non-current assets increased to S$18.1 million and represented 19.6% of our total assets as at 30June 2006. The increase was mainly due to the increase in our equity interest of 2.7% in JHTD in1Q2007.

Investment in associated companies relates to our cost of investment and share of results in JHTD whichamounted to S$6.9 million and S$7.6 million as at 31 March 2006 and 30 June 2006 respectively.Investment properties relate to a penthouse and a condominium unit in Singapore of which their total fairvalue remained unchanged at S$4.4 million as at 31 March 2006 and 30 June 2006. The total net bookvalue of our properties, plant and equipment (including our structural steel production facility and loosetools such as scaffolds and moulds used in our construction business) also remained relatively stable atS$4.2 million as at 31 March 2006 and 30 June 2006. Please refer to the section entitled “Properties andFixed Assets” of this Prospectus for further details on our investment and leasehold properties.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

The amount due from the minority shareholder of a subsidiary arises from an advance of RMB9.8 milliongranted to Tianjin Commercial Construction Development in 1993. The amount is unsecured, non-interestbearing, has no fixed terms of repayment and is repayable only when the cash flows of such minorityshareholder permit. This advance arose from the repayment of a loan granted by Tianjin Yishang Groupto TTX Real Estate in 1993, which repayment was made in 1993 to Tianjin Yishang Group’s wholly-owned subsidiary, Tianjin Commercial Construction Development instead. These transactions took placein 1993 before our Group invested in TTX Real Estate. The repayment of such advance can be effectedby setting off from Tianjin Commercial Construction Development’s minority interest in TTX Real Estate(by way of future dividends declared by TTX Real Estate), if necessary.

Current assets

Current assets comprise completed properties held for sale, trade receivables, cash and bank balances,pledged fixed deposits, security bonds, construction work-in-progress in excess of progress billings aswell as other receivables, deposits and prepayments.

Current assets amounted to S$80.2 million and represented 82.1% of our total assets as at 31 March2006. Current assets decreased to S$74.1 million and represented 80.4% of our total assets as at 30June 2006.

As at 31 March 2006, we had completed properties held for sale amounting to S$50.7 million or 63.2% ofour total current assets. Completed properties held for sale comprised cost of unsold units in TianxingRiverfront Square which was made up of land acquisition costs, development costs and interestcapitalised. Although there was no sale of development properties in 1Q2007, our completed propertiesheld for sale decreased to S$50.1 million as a result of translation difference.

Our trade receivables decreased from S$11.5 million as at 31 March 2006 to S$10.1 million as at 30June 2006. Trade receivables comprised trade receivables, retention monies relating to constructioncontracts and unbilled receivables. The decrease in trade receivables was due to collection of tradereceivables and lower revenue recognised in 1Q2007 as projects have not attained their stipulatedstages in the contracts.

Other receivables, deposits and prepayments amounted to S$2.1 million as at 31 March 2006 and S$2.4million as at 30 June 2006. The increase was due to prepayments for expenses incurred in relation to theInvitation.

Construction work-in-progress in excess of progress billings amounted to S$3.4 million as at 31 March2006 and S$2.1 million as at 30 June 2006. Construction work-in-progress in excess of progress billingsincludes cost incurred in the construction projects, including cost of staff and workers, raw materials andpayments to sub-contractors capitalised, and the amounts herein are stated net of progress billings. Weinvoice our construction clients upon attainment of stipulated stages in the contracts. However, suchinvoicing is usually dependent on certification of work completed issued by external professionalconsultants (such as the quantity surveyor and architect) of the construction projects.

We had investments of S$2.0 million in security bonds issued by a bank in Singapore as at 31 March2006 and 30 June 2006. The security bonds have been pledged against general banking facilities fromthe bank. We also had S$3.7 million of pledged fixed deposits as at 31 March 2006 and 30 June 2006.Our cash and bank balances were reduced from S$6.8 million as at 31 March 2006 to S$3.7 million as at30 June 2006 as we had utilised them for working capital purposes.

Current liabilities

Our current liabilities comprise mainly other payables and accruals, trade payables, progress billings inexcess of construction work-in-progress, borrowings from banks and financial institutions, a non-tradeamount due to a related party and provision for income tax.

As at 31 March 2006, total current liabilities amounted to S$39.7 million and represented 71.0% of ourtotal liabilities. Total current liabilities decreased to S$34.5 million and represented 68.9% of our totalliabilities as at 30 June 2006.

Other payables and accruals amount to S$15.7 million and S$14.5 million as at 31 March 2006 and 30June 2006 respectively. It comprised accrued operating expenses, advance payment, other payables, aloan from a previous shareholder and amount payable to directors. Accrued operating expenses relate

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

mainly to amounts payable to sub-contractors which will be converted to trade payables upon receipt ofinvoices from sub-contractors. It decreased from S$8.3 million as at 31 March 2006 to S$7.6 million as at30 June 2006.

Trade payables amounted to S$11.9 million and S$9.0 million as at 31 March 2006 and 30 June 2006respectively. It comprised mainly amounts due to our sub-contractors and suppliers for our constructionbusiness.

We had progress billings in excess of construction work-in-progress of S$0.8 million and S$1.9 million asat 31 March 2006 and 30 June 2006 respectively. This relates to the excess amount invoiced to ourcustomers as compared to work completed as certified by external professional consultants (such as thequantity surveyor and architect) of the construction projects upon the attainment of stipulated stages.Please also see construction work-in-progress in excess of progress billings under “Current Assets”above.

Non-trade amount due to a related party, namely Vite Trading, remained relatively unchanged at S$0.9million as at 31 March 2006 and 30 June 2006. Please refer to the section entitled “Interested PersonTransactions” of this Prospectus for further details.

Total borrowings from banks and financial institutions amounted to S$9.1 million and S$7.2 million as at31 March 2006 and 30 June 2006 respectively. This included bills payables, term loans, overdrafts andfinance lease obligations (current portion). The decrease was mainly due to repayment of bills payable tobanks in 1Q2007.

We also had provision for income tax of S$1.2 million and S$1.0 million as at 31 March 2006 and 30June 2006 respectively.

Non-current liabilities

Our non-current liabilities comprised mainly secured bank term loans, deferred tax liabilities and financelease obligations. We had non-current liabilities of S$16.2 million and S$15.6 million as at 31 March 2006and 30 June 2006 respectively. This decrease was mainly due to the repayment of our secured bankterm loans.

The secured bank term loans (both current and non-current) as at 31 March 2006 comprised (i) US$7.6million (S$12.3 million) mortgage term loan for financing our development property in the PRC (TianxingRiverfront Square); (ii) S$3.0 million term loan for the financing of our investment properties in Singapore(the penthouse and a condominium unit in Sheares Ville at No. 9 Holt Road); and (iii) S$1.5 million termloan for our premises at 36 Senoko Road. The amount reduced to S$16.4 million as at 30 June 2006.

Total equity

Total equity comprised share capital, accumulated profits, minority interests and translation reserve. Totalequity amounted to S$41.8 million and S$42.2 million as at 31 March 2006 and 30 June 2006respectively. The increase was mainly due to the increase in accumulated profits from S$17.5 million asat 31 March 2006 to S$18.2 million as at 30 June 2006.

Minority interests in respect of the shareholding of Tianjin Commercial Construction Development in oursubsidiaries, TTX Property Management and TTX Real Estate, and the shareholding of Duford (HongKong) Private Limited in our subsidiary, Duford, amounted to S$8.0 million and S$8.2 million as at 31March 2006 and 30 June 2006 respectively.

Working capital analysis

We had net current assets of S$38.5 million, S$40.6 million, S$40.5 million and S$39.6 million as at 31March 2004, 31 March 2005, 31 March 2006 and 30 June 2006 respectively. Our cash and cashequivalents amounted to S$3.1 million, S$0.9 million, S$5.4 million and S$2.3 million as at 31 March2004, 31 March 2005, 31 March 2006 and 30 June 2006 respectively.

We believe that our positive working capital position is sufficient to meet our anticipated cash needs,including our cash needs for working capital and capital expenditures for at least the next 12 months.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

We may, however, require additional cash due to changing business conditions or other futuredevelopments, including any investments or acquisitions which we may decide to pursue. If our existingworking capital is insufficient to meet our requirements, we may seek to sell additional equity securities,debt securities or borrow from lending institutions. The incurrence of debt will increase our interestpayments required to service our debt obligations and could result in operating and financial covenantsthat restrict our operations and our ability to pay dividends to our Shareholders.

LIQUIDITY AND CAPITAL RESOURCES

Our growth and operations have been funded through a combination of shareholders’ equity, internalfunds generated from operations, bank borrowings and other credit facilities.

Please refer to the section entitled “Capitalisation and Indebtedness” of this Prospectus for further detailsof our available facilities and our level of borrowings as at 30 June 2006 and the Latest Practicable Date.To the best of our Directors’ knowledge, we are not in breach of any of the terms and conditions orcovenants associated with any credit arrangement or bank loan which could materially affect our financialposition and results or business operations, or the investments of our Shareholders.

Our principal uses of cash have mainly been for capital expenditures, working capital as well asrepayment of bank borrowings and financial expenses.

In the reasonable opinion of our Directors, the working capital available to our Group, as at the date oflodgment of this Prospectus, is sufficient for our present requirements.

The following table sets out a summary of our Group’s cash flow statements for the years/periods underreview:-

S$’000 FY2004 FY2005 FY2006 1Q2007

Net cash inflow/(outflow) from operating activities 6,656 4,923 7,033 (54)Net cash outflow from investing activities (3,890) (3,262) (1,720) (101)Net cash inflow/(outflow) from financing activities 1,382 (3,811) (801) (2,961)

Net increase/(decrease) in cash and cash equivalents 4,148 (2,150) 4,512 (3,116)Cash and cash equivalents at the beginning of the financial year/period (1,084) 3,064 914 5,426

Cash and cash equivalents at the end of the financial year/period 3,064 914 5,426 2,310

FY2004

In FY2004, we recorded a net cash inflow from operating activities of S$6.7 million which comprisedcash generated from operating activities before working capital changes of S$5.7 million, net workingcapital inflow of S$1.4 million and exchange differences of S$1.0 million. These cash inflows were offsetby an income tax payment of S$1.4 million.

We had working capital inflows arising from:-(a) an increase in trade and other payables of S$8.4 million, due mainly to accrual of property

development costs for completed properties held for sale in FY2004 following the finalisation ofcosts of developing Tianxing Riverfront Square; and

(b) a decrease in net work-in-progress of S$4.6 million, due mainly to an increase in progress billingsin excess of costs for ongoing construction projects.

The above working capital inflows were offset by cash outflows arising from:-(a) an increase in completed properties held for sale of S$8.3 million, due mainly to accrual of

property development costs of Tianxing Riverfront Square as mentioned above; and(b) an increase in trade and other receivables and prepayments of S$3.3 million, due mainly to the

increase in unbilled receivables accrued for completed construction projects as at 31 March 2004.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

We recorded a net cash outflow from investing activities of S$3.9 million in FY2004 mainly due to thepurchase of plant and equipment of S$0.2 million, purchase of an investment property of S$3.2 millionand additional investment in an associated company of S$0.6 million during FY2004.

We recorded a net cash inflow from financing activities of S$1.4 million in FY2004. This was mainly dueto cash inflows from the issue of ordinary shares in the capital of a subsidiary, KSHEC, of S$0.8 million,an increase in bank loans of S$2.0 million, an increase in bills payables of S$0.9 million and a decreasein pledged fixed deposits of S$0.3 million. These were offset by cash outflows arising from dividendsdeclared and paid of approximately S$0.8 million, repayment of bank loans and finance lease obligationof S$0.9 million and interest paid of S$0.9 million.

FY2005

In FY2005, we recorded a net cash inflow from operating activities of S$4.9 million. These comprisedcash generated from operating activities before working capital changes of S$8.3 million and exchangedifference of S$0.2 million offset by a net working capital outflow of S$2.4 million and income tax paid ofS$1.2 million.

The net working capital outflow was the result of a cash inflow from a decrease in completed propertiesheld for sale of S$7.7 million, offset by cash outflows arising from:-

(a) a decrease in trade and other payables of S$9.3 million, due mainly to the settlement of theamount due to the main contractor of Tianxing Riverfront Square following the court judgmentreferred to in the section entitled “Management’s Discussion and Analysis of Financial Conditionand Results of Operations – Overview – Revenue” of this Prospectus;

(b) an increase in trade and other receivables and prepayment of S$0.5 million; and(c) an increase in net work-in-progress of S$0.3 million.

We recorded a net cash outflow from investing activities of S$3.3 million in FY2005 mainly due to thepurchase of plant and equipment of S$2.7 million, an increase in amount due from an associatedcompany, Duford, of S$0.2 million and an increase in long-term receivable of S$0.4 million relating to aconvertible loan provided to an unrelated third party by KSH Tech, which was subsequently disposed inMarch 2006.

We recorded a net cash outflow from financing activities of S$3.8 million in FY2005. We registered acash inflow of S$2.6 million from an increase in bank loans (including short-term bank loans). The cashinflow was offset by cash outflows arising from an increase in pledged fixed deposits of S$2.7 million,repayments of bank loans, bills payables and lease obligations of S$2.2 million, interest paid of S$1.0million and dividends paid of approximately S$0.5 million.

FY2006

In FY2006, we recorded a net cash inflow from operating activities of S$7.0 million which comprisedcash generated from operating activities before working capital changes of S$6.2 million, net workingcapital inflow of S$1.6 million and interest income of S$0.1 million, offset by cash outflows arising fromincome tax paid of S$0.6 million and exchange difference of S$0.3 million.

The net working capital inflow was the result of cash inflows from an increase in trade and otherpayables of S$7.0 million, due to the increase in construction costs as a result of increased constructionactivities, a decrease in trade and other receivables and prepayments of S$1.5 million and a decrease incompleted properties held for sale of S$0.8 million, offset by cash outflows arising from an increase innet work-in-progress of S$7.7 million in line with the increase in construction activities pendingcertification of work completed issued by external professional consultants.

We recorded a net cash outflow from investing activities of S$1.7 million in FY2006, mainly due to cashoutflows of S$1.1 million for the purchase of an investment property and S$0.8 million for the purchase ofplant and equipment, offset by a cash inflow of S$0.1 million from the net proceeds on the sale of plantand equipment and S$0.1 million from a decrease in long-term receivable relating to the convertible loanmentioned above.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

We recorded a net cash outflow from financing activities of S$0.8 million in FY2005. We registered acash inflow of S$6.7 million (comprising an increase in bank loans of S$3.0 million and bills payables ofS$3.7 million) which were offset by cash outflows arising from repayments of bank loans (including short-term bank loans), bills payables and lease obligations of S$4.6 million, an increase in pledged fixeddeposits of S$0.8 million, interest paid of S$1.3 million and dividends paid of approximately S$0.8 million.

1Q2007

In 1Q2007, we recorded a net cash outflow from operating activities of S$54,000 which comprised cashgenerated from operating activities before working capital changes of S$923,000 and exchangedifference of S$58,000 and interest received of S$40,000 offset by a net working capital outflow ofS$725,000 and cash outflow arising from income tax paid of S$350,000.

The net working capital outflow was the result of a cash outflow from a decrease in trade and otherpayables of S$4.1 million, due mainly to payment made to our sub-contractors following the completion ofour projects, offset by cash inflows from an decrease in trade and other receivables, deposits andprepayments of S$1.1 million and a decrease in net work-in-progress of S$2.3 million as we invoiced ourconstruction clients such work-in-progress upon certification of work completed issued by externalprofessional consultants.

We recorded a net cash used in investing activities of S$101,000 in 1Q2007, mainly due to the purchaseof plant and equipment.

We recorded a net cash used in financing activities of S$3.0 million in 1Q2007, mainly due to therepayment of bills payables of S$2.1 million, bank loans of S$0.4 million, finance lease obligations ofS$0.1 million and interest paid of S$0.4 million.

MATERIAL CAPITAL EXPENDITURE, DIVESTMENT OR COMMITMENTS

The material capital expenditure and divestment of our Group for FY2004, FY2005, FY2006, 1Q2007and for the period from 1 July 2006 to the Latest Practicable Date were as follows:-

1 July 2006to the Latest

S$’000 FY2004 FY2005 FY2006 1Q2007 Practicable Date

Acquisition (1)

Investment properties 3,161(2) – 1,152(3) – –Leasehold properties and – 2,367(4) 593 – n.m.(5)

construction-in-progressPlant and machinery 14 149 70 – 16Motor vehicles 139 214 185 – 136Renovations, furniture and fittings and 70 245 310 103 65air-conditioners, office equipment andcomputers, loose tools

Total 3,384 2,975 2,310 103 217

1 July 2006to the Latest

S$’000 FY2004 FY2005 FY2006 1Q2007 Practicable Date

Divestment (1)

Leasehold properties and – – – – –construction-in-progress

Plant and machinery 254 – 391 – –Motor vehicles 187 106 29 70 –Renovations, furniture and fittings and – – 3 – –air-conditioners, office equipment andcomputers, loose tools

Total 441 106 423 70 –

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Notes:-(1) This relates to the cost of property, plant and equipment acquired/disposed of during the respective financial years/periods.

(2) This relates to our investment property at 9 Holt Road #12-05 Sheares Ville Singapore 249446 (as set out in the sectionentitled “Properties and Fixed Assets” of this Prospectus).

(3) This relates to our investment property at 9 Holt Road #05-02 Sheares Ville Singapore 249446 (as set out in the sectionentitled “Properties and Fixed Assets” of this Prospectus).

(4) This relates to our leasehold property at 36 Senoko Road Singapore 758108 (as set out in the section entitled “Propertiesand Fixed Assets” of this Prospectus).

(5) Denotes not meaningful.

Our Group also had the following acquisition and/or divestment of capital investments in the last threefinancial years ended 31 March 2006 and up to the Latest Practicable Date:-

(a) November 2004 – Acquisition of 69.0% interest in TTX Property Management for US$69,000(equivalent to approximately S$114,000);

(b) March 2005 – Divestment of all interest (61.7%) held by KSHEC in Premier Facade to Star Elite forS$1.00 (please refer to the section entitled “Interested Person Transactions” of this Prospectus forfurther details);

(c) March 2006 – Acquisition of additional interest (from 41.7% to 58.3%) in Duford by KSH Overseasfor approximately HK$2.2 million (equivalent to approximately S$454,000);

(d) June 2006 – Acquisition of all interest (100%) in Techpath by KSHEC for RM2.00; and

(e) June 2006 – Acquisition of additional interest (from 30.0% to 32.7%) in JHTD by Duford forapproximately RMB1.1 million (equivalent to approximately S$225,000).

Save as disclosed above and in the section entitled “Restructuring Exercise” of this Prospectus, we donot have any other material expenditure or divestment of capital investment (including any interest inanother corporation) in the last three financial years ended 31 March 2006 and up to the LatestPracticable Date.

As at the Latest Practicable Date, we had the following material capital commitments which will befinanced from cash generated from our operations, finance leases and term loans:-

(a) S$0.9 million for the purchase of an investment property (We have placed a downpayment ofS$0.2 million for this investment property. Please see the section entitled “Properties and FixedAssets” of this Prospectus for more information); and

(b) S$73,000 for the purchase of an additional elevator for Tianxing Riverfront Square.

As at the Latest Practicable Date, our operating lease commitments were as follows:-

S$’000

Within one year 206After one year but not more than five years 762After five years 5,610

70

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

DIVIDEND POLICY

Our Company has not declared or paid any dividends since our incorporation. One of our subsidiaries,KSHEC, declared and paid interim dividends totalling S$842,400, S$496,240 and S$781,500 in FY2004,FY2005 and FY2006 respectively. Save as disclosed above, neither our Company nor any of oursubsidiaries have declared or paid any dividends in the last three financial years ended 31 March 2006.

We currently do not have a fixed dividend policy. The form, frequency and amount of future dividends onour Shares will depend on our earnings, general financial condition, results of operations, capitalrequirements, cash flow, general business condition and other factors as our Directors may deemappropriate.

We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we maynot pay dividends in excess of the amount recommended by our Directors. The declaration and paymentof dividends will be determined at the sole discretion of our Directors, subject to the approval of ourShareholders. Our Directors may also declare an interim dividend without the approval of ourShareholders. In making their recommendations, our Directors will consider, inter alia, our retainedearnings and expected future earnings, operations, cash flow, capital requirements and general financingcondition, as well as general business conditions and other factors which our Directors may determineappropriate. Future dividends will be paid by us as and when approved by our Shareholders andDirectors.

All dividends are paid pro-rata among the Shareholders in proportion to the amount paid up on eachShareholder’s Shares, unless the rights attaching to an issue of any Share provides otherwise. Unlessotherwise directed, dividends are paid by cheque or by warrant sent through the post to eachShareholder at his registered address. Notwithstanding the foregoing, the payment by our Company toCDP 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 our Company from any liability to that Shareholder inrespect of that payment.

For information relating to taxes payable on dividends, please refer to Appendix G of this Prospectusentitled “Taxation”.

The amount of dividends declared and paid by us should not be taken as an indication of the dividendspayable in the future. No inference should or can be made from any of the foregoing statements as to ouractual future profitability or our ability to pay dividends in any of the periods discussed.

71

CAPITALISATION AND INDEBTEDNESS

The following table summarises our cash and bank balances as well as capitalisation and indebtedness:-

(a) based on our unaudited interim combined balance sheet as at 30 June 2006;

(b) as at the Latest Practicable Date; and

(c) as adjusted to give effect to the issue of the New Shares pursuant to the Invitation and theapplication of the net proceeds from the Invitation.

As adjusted forAs at the the net proceeds

As at Latest from the issue ofS$’000 30 June 2006 Practicable Date the New Shares

Cash and bank balances 3,677 3,555 10,305

IndebtednessShort-term debt - Secured and guaranteed 7,207 15,600 15,600Long-term debt - Secured and guaranteed 13,970 11,000 11,000

Total indebtedness 21,177 26,600 26,600

CapitalisationEquity attributable to equity holders of the Company 34,041 36,079 42,829

Total capitalisation and indebtedness 55,218 62,679 69,429

As at 30 June 2006, our total facilities (utilised and unutilised) were as follows:-

Facilities Maturitygranted Utilised Unutilised Interest rates profileS$’000 S$’000 S$’000

Term loan – project 11,954 11,954 – 0.25% over prevailing USD prime Quarterly expiringrate which may be determined by in December 2008the bank at its sole discretion

Term loans – non-project 5,397 4,477 920 0.5% below enterprise financing rate / Monthly instalments1.51% below prevailing business commercial expiring inrate / 2.75% to 3.07% below special home rate 15 to 25 years

Bank overdrafts 13,467 1,367 12,100 0.25% to 1.0% above bank prime rate / 2.0% No maturity dateabove the bank’s base lending rate

Letters of credit, trust 25,119 9,754 15,365 0.5% to 0.75% above bank prime rate Between one monthreceipts, performance / 2.25% above cost of fund and six monthsguarantees and foreignexchange

Finance lease liabilities 472 472 – Between 2.7% and 5.0% per annum Monthly instalmentsover periods of 12to 84 months

Total 56,409 28,024 28,385

As at the Latest Practicable Date, we had total facilities of S$60.3 million, comprising utilised facilities ofS$34.0 million and unutilised facilities of S$26.3 million.

72

CAPITALISATION AND INDEBTEDNESS

All our borrowings are secured by mortgages over our Group’s freehold, leasehold and developmentproperties and joint and several personal guarantees of our Executive Directors. Please refer to thesection entitled “Interested Person Transactions” of this Prospectus for further details of the joint andseveral guarantees provided by our Executive Directors. The finance lease liabilities are secured bycertain fixed assets of a subsidiary and the joint and several personal guarantees of the directors of thatsubsidiary.

Contingent Liabilities

As at the Latest Practicable Date, our contingent liabilities were as follows:-

(i) our Company had issued corporate guarantees amounting to S$10.2 million for credit facilitiesgranted to KSHEC;

(ii) KSHEC had issued a corporate guarantee of the Singapore dollar equivalent of RM23,720,000 forcredit facilities granted to Techpath;

(iii) KSHEC had issued a corporate guarantee of US$9.4 million (equivalent to approximately S$14.9million) for credit facilities granted to TTX Real Estate. As at the Latest Practicable Date, theoutstanding amount of the credit facilities utilised was US$6.7 million; and

(iv) our Group had issued guarantees of S$17.9 million relating to the performance bonds furnished bybanks and other financial institutions to our customers to guarantee our contractual performance inthe construction projects.

Save as disclosed above, since 1 July 2006 to the Latest Practicable Date, there were no materialchanges in our total capitalisation and indebtedness.

Save as disclosed above, our Group has no other indebtedness (direct and indirect), capitalisation andliabilities (including contingent liabilities) as at the Latest Practicable Date.

73

DILUTION

Dilution results because the Issue Price per Share is higher than our NAV per Share attributable to theexisting holders of our outstanding Shares.

Our NAV (which is the amount of our total assets, minus the amount of our total liabilities and minorityinterests) as at 30 June 2006 was S$34.0 million, or S$0.54 per Share (based on the pre-Invitation sharecapital of 63,122,500 Shares).

Our NAV, as adjusted for the net proceeds from the Invitation as well as any disposal or acquisition whichoccurred between 30 June 2006 and the date of the registration of this Prospectus by the Authority, willbe S$40.8 million or S$0.46 per Share (based on the post-Invitation share capital of 88,122,500 Shares).

This represents an immediate decrease in NAV per Share of S$0.08 to our existing Shareholders. Therewill be no immediate dilution in NAV per Share to you, as a new investor subscribing for the New Sharesin the Invitation. The following table illustrates this per Share dilution:-

Cents

Issue Price per New Share 36.0

NAV per Share based on the pre-Invitation share capital of 63,122,500 Shares 53.9

Decrease in NAV per Share attributable to existing Shareholders 7.6

NAV per Share adjusted for the effects of the Invitation as well as any disposal or acquisition (46.3)which occurred between 30 June 2006 and the date of the registration of this Prospectus by theAuthority based on the post-Invitation share capital of 88,122,500 Shares

Increase in NAV per Share to new investors 10.3

Increase in NAV per Share to new investors (as a percentage of the Issue Price) 28.6

The following table compares the effective cash cost per Share (after adjusting for the RestructuringExercise and the Sub-division of Shares) paid by our Directors and our Substantial Shareholders at anytime during the period of three years before the date of lodgment of this Prospectus and the Issue Priceper New Share to be paid by you, as a new investor subscribing for the New Shares in the Invitation:-

Effective cash costper Share / Issue

Price per NewNumber of Shares Consideration Share

(S$’000) (cents)

Directors and Substantial Shareholders

Choo Chee Onn 19,080,628 4,770 25.0Tok Cheng Hoe 14,680,624 3,670 25.0Lim Kee Seng 14,680,624 3,670 25.0Kwok Ngat Khow 14,680,624 3,670 25.0

New investors 25,000,000 9,000 36.0

74

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP

SHARE CAPITAL

Our Company was incorporated in Singapore on 9 March 2006 under the Companies Act as a privatecompany limited by shares under the name of “SuperKSH Pte. Ltd.” and changed its name to “KSHHoldings Pte. Ltd.” on 22 November 2006. On 19 December 2006, our Company changed its name to“KSH Holdings Limited” in connection with its conversion into a public company limited by shares.

As at the date of incorporation, our issued and paid-up capital was S$1.00, comprising one ordinaryshare. On 30 March 2006, our Company issued an aggregate of 15,780,624 new Shares at an issueprice of S$1.00 each to Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khowin consideration for the transfer by Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and KwokNgat Khow of the entire issued share capital of KSHEC, comprising an aggregate of 15,780,624 ordinaryshares, to our Company (the “KSHEC Restructuring”). Please refer to the section entitled “RestructuringExercise” of this Prospectus for more details.

At the extraordinary general meetings held on 9 December 2006 and 25 January 2007, the shareholdersof our Company approved, inter alia, the following:-

(a) the sub-division of each Share in the existing issued and paid-up share capital of our Companyinto four Shares (the “Sub-division of Shares”);

(b) the adoption of a new set of Articles of Association of our Company;

(c) the allotment and issue of the New Shares pursuant to the Invitation, which when issued and fullypaid-up, will rank pari passu in all respects with the existing issued Shares; and

(d) that authority be given to our Directors, pursuant to Section 161 of the Companies Act, to (i) allotand issue Shares in our Company; and (ii) issue convertible securities and any Shares in ourCompany pursuant to the convertible securities (whether by way of rights, bonus or otherwise), atany time and upon such terms and conditions and for such purposes and to such persons as ourDirectors shall in their absolute discretion deem fit, provided that the aggregate number of Sharesto be issued pursuant to such authority shall not exceed 50 per cent. (50%) of the post-Invitationissued share capital of our Company and that the aggregate number of Shares to be issued otherthan on a pro-rata basis to the then existing Shareholders of our Company shall not exceed 20 percent. (20%) of the post-Invitation issued share capital of our Company. Unless revoked or varied byour Company in general meeting, such authority shall continue in full force until the conclusion ofthe next annual general meeting of our Company or the date by which the next annual generalmeeting is required by law or by our Articles of Association to be held, whichever is earlier, exceptthat the Directors shall be authorised to allot and issue new Shares pursuant to the convertiblesecurities notwithstanding that such authority has ceased.

For the purposes of this resolution and pursuant to Rules 806(3) and 806(4) of the Listing Manual,“post-Invitation issued share capital” shall mean the enlarged issued and paid-up share capital ofour Company after the Invitation after adjusting for (i) new Shares arising from the conversion orexercise of any convertible securities; (ii) new shares arising from exercising share options orvesting of share awards outstanding or subsisting at the time such authority is given, provided thatthe options or awards were granted in compliance with the Listing Manual; and (iii) any subsequentconsolidation or sub-division of shares.

As at the Latest Practicable Date, our Company has only one class of shares, being our Shares whichare in registered form. The rights and privileges of our Shares are stated in the Articles of Association ofour Company, an extract of which is set out in Appendix C of this Prospectus entitled “Extracts of ourArticles of Association”. Save for the New Shares, there are no founder, management, deferred orunissued shares reserved for issuance for any purpose. The New Shares shall have the same interestand voting rights as our existing issued Shares that were issued prior to the Invitation.

75

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP

No person has, or has the right to be given, an option to subscribe for or purchase any securities of ourCompany or any of our subsidiaries. No option to subscribe for Shares in our Company has been grantedto, or was exercised by, any of our Directors or Executive Officers.

The Companies (Amendment) Act 2005 came into effect on 30 January 2006. Among other things, theCompanies Act was amended to abolish the concepts of par value, authorised share capital, sharepremium, capital redemption reserve and issuing shares at a discount to par value. As at the LatestPracticable Date, the issued share capital of our Company was S$15,780,625 comprising 15,780,625issued and fully-paid Shares. Following the Sub-division of Shares on 19 December 2006, the issuedshare capital of our Company was S$15,780,625 comprising 63,122,500 issued and fully-paid Shares.Upon the allotment and issue of the New Shares pursuant to the Invitation, the resultant issued sharecapital of our Company will be increased to S$24,780,625 comprising 88,122,500 Shares.

A summary of the changes in the issued and paid-up share capital of our Company since incorporation,as at 31 March 2006 and the resultant issued and paid-up share capital of our Company immediatelyafter the Invitation is set out below:-

Resultant issuedand paid-up

Resultant number share capitalof issued Shares (S$)

Issued and paid-up share capital as at 9 March 2006, 1 1being the date of incorporation

Issue of 15,780,624 new Shares on 30 March 2006 pursuant 15,780,625 15,780,625to the KSHEC Restructuring

Issued and paid-up share capital as at 31 March 2006 15,780,625 15,780,625

Sub-division of each Share into four Shares pursuant to the 63,122,500 15,780,625Sub-division of Shares

New Shares to be issued pursuant to the Invitation 88,122,500 24,780,625

Issued and paid-up share capital after the Invitation 88,122,500 24,780,625

SIGNIFICANT CHANGES IN PERCENTAGE OF OWNERSHIP

The changes in the percentage of ownership of Shares in our Company from the date of ourincorporation up to the Latest Practicable Date are as follows:-

Percentage of ownership of our Shares

After theName of Shareholder As at incorporation KSHEC Restructuring

Choo Chee Onn 100.00% 30.23%Tok Cheng Hoe – 23.26%Lim Kee Seng – 23.26%Kwok Ngat Khow – 23.26%

Total 100.00% 100.00% (1)

Note:-(1) Any discrepancies between the listed amounts and the total thereof are due to rounding. Accordingly, the total figure shown

may not be an arithmetic aggregation of the figures which precede them.

76

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP

Please refer to the section entitled “Restructuring Exercise” of this Prospectus for more details.

Save as disclosed above, there were no changes in the percentage of ownership of Shares in ourCompany since the date of incorporation up to the Latest Practicable Date.

The Shares held by our Directors and Substantial Shareholders do not carry different voting rights fromthe New Shares which are the subject of the Invitation.

CHANGES IN ISSUED AND PAID-UP SHARE CAPITAL OF OUR COMPANY AND OURSUBSIDIARIES

Save as disclosed below, there were no changes in the issued and paid-up share capital of our Companyand our subsidiaries within the three years preceding the Latest Practicable Date:-

Our Company

Resultant ResultantNumber of Issue price number of issued

Date Event Shares issued per Share Shares share capital

9 March 2006 Incorporation 1 S$1.00 1 S$1.00

30 March 2006 15,780,624 S$1.00 15,780,625 S$15,780,625

19 December 2006 Sub-division of Shares N.A. N.A. 63,122,500 S$15,780,625

KSHEC

Number of Issue price Resultant Resultantordinary shares per ordinary number of issued ordinary

Date Event issued share ordinary shares share capital

31 December 2003 780,624 S$1.00 15,780,624 S$15,780,624

Techpath

Number of Issue price Resultant Resultantordinary shares per ordinary number of issued ordinary

Date Event issued share ordinary shares share capital

19 May 2006 Incorporation 2 RM1.00 2 RM2

6 June 2006 749,998 RM1.00 750,000 RM750,000

Save for the KSHEC Restructuring (as described in the section entitled “Restructuring Exercise” of thisProspectus), there have not been any situations where more than 10% of our Company’s capital hadbeen paid for with assets other than in cash within the period of three years preceding the date oflodgment of this Prospectus.

Allotment and issue of ordinaryshares to KSHEC

Allotment and issue of ordinaryshares pursuant to a renounceablerights issue

Allotment and issue of Shares toChoo Chee Onn, Tok Cheng Hoe,Lim Kee Seng and Kwok Ngat Khow,credited as fully paid, asconsideration for the acquisition ofthe entire issued share capital ofKSHEC pursuant to the KSHECRestructuring

77

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP

SHAREHOLDERS

Our Shareholders as well as their respective direct shareholdings as at the Latest Practicable Date,immediately before the Invitation (after the Sub-division of Shares) and immediately after the Invitationare set out below:-

After the Sub-divisionAs at the of Shares and

Latest Practicable Date before the Invitation After the Invitation

Number Number Numberof Shares % of Shares % of Shares %

Directors

Choo Chee Onn 4,770,157 30.23 19,080,628 30.23 19,080,628 21.65Tok Cheng Hoe 3,670,156 23.26 14,680,624 23.26 14,680,624 16.66Lim Kee Seng 3,670,156 23.26 14,680,624 23.26 14,680,624 16.66Kwok Ngat Khow 3,670,156 23.26 14,680,624 23.26 14,680,624 16.66Lim Yeow Hua @ Lim You Qin (1) – – – – – –Lai Meng Seng (1) – – – – – –Khua Kian Kheng Ivan (1) – – – – – –

Public (including Reserved Shares) (2) – – – – 25,000,000 28.37

Total 15,780,625 100.00 (3) 63,122,500 100.00 (3) 88,122,500 100.00

Notes:-(1) Our Independent Directors, Messrs Lim Yeow Hua @ Lim You Qin, Lai Meng Seng and Khua Kian Kheng Ivan, will be offered

50,000, 100,000 and 50,000 Reserved Shares respectively. Messrs Lim Yeow Hua @ Lim You Qin, Lai Meng Seng and KhuaKian Kheng Ivan have each undertaken not to sell, realise, dispose of or transfer any of the Reserved Shares that areallotted and issued to him for a period of one month from the date of admission of our Company to the Official List of theSGX-ST.

(2) We intend to offer 1,000,000 Reserved Shares to our Independent Directors, management, employees, business associatesand others who have contributed to the success of our Group. Should they (other than our Independent Directors) accept theReserved Shares, they may hold, dispose of or transfer all or part of their respective shareholdings in our Company after theShares are listed on the SGX-ST.

(3) Any discrepancies between the listed amounts and the total thereof are due to rounding. Accordingly, the total figure shownmay not be an arithmetic aggregation of the figures which precede them.

None of our Shareholders have any deemed interest in the Shares.

As at the Latest Practicable Date, to the best of our Directors’ knowledge, there is no known arrangementthe operation of which may, at a subsequent date, result in a change in control of our Company.

There are no Shares that are held by or on behalf of our Company or by our subsidiaries.

Save as disclosed above, our Company is not directly or indirectly owned or controlled, whether severallyor jointly, by any person or government.

There has not been any public take-over offer by a third party in respect of our Shares or by ourCompany in respect of the shares of another corporation or the units of a business trust, which hasoccurred between the beginning of the most recent completed financial year (that is, 1 April 2005) andthe Latest Practicable Date.

78

GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP

MORATORIUM

To demonstrate their commitment to our Group, our Executive Directors, Messrs Choo Chee Onn, TokCheng Hoe, Lim Kee Seng and Kwok Ngat Khow, who will in aggregate hold 63,122,500 Shares,representing approximately 71.6% of our Company’s enlarged issued share capital immediately after theInvitation, have each undertaken not to sell, realise, dispose of or transfer any part of their respectiveshareholdings in our Company for a period of six months from the date of admission of our Company tothe Official List of the SGX-ST.

Our Independent Directors, Messrs Lim Yeow Hua @ Lim You Qin, Lai Meng Seng and Khua Kian KhengIvan, will be offered 50,000, 100,000 and 50,000 Reserved Shares respectively. Messrs Lim Yeow Hua @Lim You Qin, Lai Meng Seng and Khua Kian Kheng Ivan have each undertaken not to sell, realise,dispose of or transfer any of the Reserved Shares that are allotted and issued to him for a period of onemonth from the date of admission of our Company to the Official List of the SGX-ST.

79

RESTRUCTURING EXERCISE

In preparation for the Invitation, we undertook a restructuring exercise (the “Restructuring Exercise”) torationalise the corporate structure of our Group, resulting in our Company becoming the holdingcompany of our Group. The Restructuring Exercise involved the incorporation of our Company inSingapore on 9 March 2006 as the listing vehicle and holding company of our Group and the following:-

1. Divestment of KSH Tech by KSHEC

Prior to the Restructuring Exercise, KSHEC held 100% interest in KSH Tech, which was set up asan investment holding company with the intention to invest in a radiator manufacturing plant in thePRC. In order to streamline our business and focus on our Group’s core business operations,KSHEC transferred its 100% interest in KSH Tech, comprising four (4) ordinary shares, to StarElite on 22 March 2006 for an aggregate cash consideration of S$4.00. The purchaseconsideration was determined on a willing buyer-willing seller basis and was calculated based onthe issued and paid-up share capital of KSH Tech as at 21 March 2006. Star Elite is wholly-ownedby our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and KwokNgat Khow in equal proportions. Please also refer to the section entitled “Conflicts of Interests” ofthis Prospectus for further details.

2. Acquisition of KSHEC (“KSHEC Restructuring”)

On 30 March 2006, our Company acquired 100% of the issued share capital of KSHEC,comprising 15,780,624 ordinary shares, from our Executive Directors, Messrs Choo Chee Onn,Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow in the following proportions for an aggregatepurchase consideration of S$15,780,624:-

Number of shares Purchase considerationin KSHEC transferred by payable to

Name of vendor the vendor the vendor

Choo Chee Onn 4,770,156 S$4,770,156Tok Cheng Hoe 3,670,156 S$3,670,156Lim Kee Seng 3,670,156 S$3,670,156Kwok Ngat Khow 3,670,156 S$3,670,156

Total 15,780,624 S$15,780,624

The purchase consideration was satisfied by the allotment and issuance of 4,770,156, 3,670,156,3,670,156 and 3,670,156 new Shares credited as fully paid to Messrs Choo Chee Onn, Tok ChengHoe, Lim Kee Seng and Kwok Ngat Khow respectively. The purchase consideration wasdetermined on a willing buyer-willing seller basis and was calculated based on the issued andpaid-up share capital of KSHEC as at 29 March 2006. Prior to the KSHEC Restructuring, KSHECwas the holding company of our Group. Following the said acquisition, KSHEC became our wholly-owned subsidiary.

3. Divestment of TCH Holding by KSH Realty

Prior to the Restructuring Exercise, KSH Realty held 24.2% of the issued share capital of TCHHolding, which is engaged in the hotel business. In order to streamline our business and focus onour Group’s core business operations, KSH Realty transferred its 24.2% shareholding interest inTCH Holding, which has a nil carrying value, to Star Elite on 4 October 2006 for an aggregateconsideration of S$1.00. The purchase consideration was determined on a willing buyer-willingseller basis. Star Elite is wholly-owned by our Executive Directors, Messrs Choo Chee Onn, TokCheng Hoe, Lim Kee Seng and Kwok Ngat Khow in equal proportions. Please also refer to thesection entitled “Conflicts of Interests” of this Prospectus for further details.

80

RESTRUCTURING EXERCISE

4. Acquisition of KSH Overseas from KSH Realty

On 11 December 2006, our Company acquired 100% of the issued share capital of KSHOverseas, comprising 23,010,000 ordinary shares, from KSH Realty for an aggregate cashconsideration of S$23,010,000. The purchase consideration was determined on a willing buyer-willing seller basis and was calculated based on the issued and paid-up share capital of KSHOverseas as at 11 December 2006.

5. Acquisition of KSH Realty from KSHEC

On 12 December 2006, our Company acquired 100% of the issued share capital of KSH Realty,comprising 18,725,000 ordinary shares, from KSHEC for an aggregate cash consideration ofS$18,725,000. The purchase consideration was determined on a willing buyer-willing seller basisand was calculated based on the issued and paid-up share capital of KSH Realty as at 12December 2006.

81

GROUP STRUCTURE

Our Group structure before the Restructuring Exercise was as follows:-

Notes:-(1) The balance 31.0% interest in TTX Real Estate and 31.0% interest in TTX Property Management are held by our PRC joint

venture partner, Tianjin Commercial Construction Development, which is a wholly-owned subsidiary of Tianjin Yishang Group.Tianjin Yishang Group is not related to any of our Directors. For further details on Tianjin Yishang Group and TianjinCommercial Construction Development, please refer to the section entitled “Property Development and PropertyManagement” of this Prospectus.

(2) The balance 58.3% interest in Duford was held by Duford (Hong Kong) Private Limited (41.7%) and Ideal Sino InvestmentsLimited (16.6%), the shareholders of which are not related to any of our Directors.

(3) JHTD is our associated company. The balance 70.0% equity interest in JHTD was held by Beijing Jia Hua Hong Yuan (40%)and Tianjin Commercial Construction Development (30%), the shareholders of which are not related to any of our Directors.For further details on Beijing Jia Hua Hong Yuan and Tianjin Commercial Construction Development, please refer to thesection entitled “Property Development and Property Management” of this Prospectus.

KSHEC

KSH Tech KSH Realty

KSH Overseas TCH Holding

TTX Property Management DufordTTX Real Estate

JHTD

100% 100%

100% 24.2%

69.0%(1)69.0%(1)

41.7%(2)

30%(3)

82

GROUP STRUCTURE

Our Group structure following the Restructuring Exercise but before the Invitation is as follows:-

Notes:-(1) The balance 31.0% interest in TTX Real Estate and 31.0% interest in TTX Property Management are held by our PRC joint

venture partner, Tianjin Commercial Construction Development, which is a wholly-owned subsidiary of Tianjin Yishang Group.Tianjin Yishang Group is not related to any of our Directors. For further details on Tianjin Yishang Group and TianjinCommercial Construction Development, please refer to the section entitled “Property Development and PropertyManagement” of this Prospectus.

(2) Our shareholding interest in Duford was increased from 41.7% to 58.3% in March 2006 through the acquisition of anadditional 16.6% shareholding interest in Duford from an unrelated third party shareholder of Duford, Ideal Sino InvestmentsLimited. The balance 41.7% interest in Duford is held by Duford (Hong Kong) Private Limited, which is owned by Messrs LimChoo Sin and Ooi Soon Gee, who are not related to any of our Directors. Messrs Lim Choo Sin and Ooi Soon Gee areshareholders and directors of East Elevators Private Limited, a Singapore company engaged in the business of designing,supplying, installing and maintaining elevators and escalators in Singapore and the PRC. Each of Messrs Lim Choo Sin andOoi Soon Gee has more than 20 years of experience in the elevator business. As confirmed by the legal advisers to ourCompany on Hong Kong law, Charles Yeung Clement Lam Liu & Yip, on 21 December 2006, the terms of the joint venture inrespect of Duford are set out in and governed by the Articles of Association of Duford, which set out general provisionsrelating to, inter alia, the number of directors, the quorum for board meetings and shareholders’ meetings, the powers ofdirectors, votes of members and divisions of profits. This statement was prepared by Charles Yeung Clement Lam Liu & Yipfor the purpose of incorporation in this Prospectus.

(3) JHTD is our associated company. Duford’s equity interest in JHTD was increased from 30.0% to 32.7% in June 2006 throughthe acquisition of an additional 2.7% equity interest in JHTD from an unrelated third party shareholder of JHTD. The balance67.3% equity interest in JHTD is held by Beijing Jia Hua Hong Yuan (43.6%) and Tianjin Commercial ConstructionDevelopment (23.7%), the shareholders of which are not related to any of our Directors. For further details on Beijing Jia HuaHong Yuan and Tianjin Commercial Construction Development, please refer to the section entitled “Property Developmentand Property Management” of this Prospectus. The directors of JHTD are Messrs Zhao Wenquan, Zhao Xia, Wang Guoli,Wang Keren, Yang Ke, Lim Choo Sin and Choo Chee Onn. The general manager, deputy manager and financial controller ofJHTD are Messrs Zhao Wenquan, Wang Keren and Zhao Xia respectively.

KSH Holdings

KSHEC

100% 100%

100%

Techpath

KSH Overseas

69.0%(1)

69.0%(1)

58.3%(2)

TTXReal Estate

TTXProperty

ManagementDuford

KSH Realty

100%

32.7%(3)

JHTD

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OUR SUBSIDIARIES AND ASSOCIATED COMPANY

The details of our subsidiaries and associated company as at the date of registration of this Prospectusby the Authority, none of which are listed on any stock exchange, are as follows:-

Principal businessactivities / Registered capital/ Effective equity

Date of incorporation / Principal place of Issued and interest held Proportion ofName of company Country of incorporation business paid-up capital by our Group voting power

Our subsidiaries

KSHEC 10 November 1979 / Building construction / S$15,780,624 100% 100%Singapore Singapore

KSH Overseas 26 June 1993 / Investment holding S$23,010,000 100% 100%Singapore company / Singapore

KSH Realty 12 January 1990 / Real estate developer / S$18,725,000 100% 100%Singapore Singapore

Techpath 19 May 2006 / General construction / RM750,000 100% 100%Malaysia Malaysia

TTX Property 15 December 2004 / Property management US$100,000 69.0% 69.0%Management PRC services / PRC

TTX Real Estate 29 November 1993 / Construction, rental and RMB69,200,000 69.0% 69.0%PRC sale of properties / PRC

Duford 6 August 2001 / Investment holding HK$7,800,000 58.3% 58.3%Hong Kong company / Hong Kong

Our associated company

JHTD 4 April 2001 / Residential property RMB41,500,000 19.1% 32.7%PRC developer / PRC

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OUR HISTORY

Our Company was incorporated under the Companies Act on 9 March 2006 as a private limited companyunder the name of “SuperKSH Pte. Ltd.” and changed its name to “KSH Holdings Pte. Ltd.” on 22November 2006. In preparation for our listing, we undertook the Restructuring Exercise, pursuant towhich our Company became the holding company of our Group. Further details of the RestructuringExercise are set out in the section entitled “Restructuring Exercise” of this Prospectus. Our Company wasconverted into a public limited company on 19 December 2006 and changed its name to “KSH HoldingsLimited”.

In 1974, a group of entrepreneurs with prior experience in the construction business, led by ourExecutive Chairman and Managing Director, Mr Choo Chee Onn, founded a construction business andstarted a workshop at Sembawang to provide basic structural steel fabrication works as sub-contractorsfor various private sector construction projects.

As the business grew, our Executive Directors, Mr Choo Chee Onn, Mr Tok Cheng Hoe and Mr Lim KeeSeng and two other entrepreneurs incorporated KSHEC in 1979 to provide basic structural steelfabrication works as sub-contractors for private sector construction projects as well as to act as maincontractors for larger private sector construction projects. In 1983, KSHEC shifted to its own factory andoffice premises at 39 Senoko Road. With these premises, our Group’s capabilities further expanded toinclude in-house scaffolding and metal works. In 1984, we ventured into the market for public sectorworks which typically require higher financial resources and technical expertise compared to works forsmaller private sector construction projects.

In 1985, we began acting as main contractors for more complex projects involving the construction ofpower plants and sub-stations within the public sector market. Since then, we secured several publicsector construction contracts in Singapore, including contracts for the construction of sub-stations,switchhouses and a training centre for PUB. In 1989, we were awarded a contract to carry out the civiland structural works for PUB’s Senoko Gas Turbine Power Station, the first gas turbine power stationconstructed in Singapore.

Since the 1990s, we have secured several major projects. For example, we were one of the keycontractors for the structural works in the construction of the Suntec City Convention and ExhibitionCentre and Tower Five of Suntec City. We also acted as the main contractor for several projects such asthe construction of a building for a research centre for Glaxo Pharmaceutical Pte Ltd, which wascompleted in 1991; the construction of a polystyrene plant for Elf Atochem South East Asia Pte Ltd, acompany within the Elf-Atochem Group, which was completed in 1993; and the construction of the TanahMerah Ferry Terminal, which was completed in 1995. We also entered into a joint venture with aJapanese corporation for the construction of Nanyang Polytechnic, a project with a project value ofapproximately S$285 million, which was successfully completed in 1998. With the Nanyang Polytechnicproject, we were able to qualify for the BCA grading status of G8 (the then equivalent of the current A1grading) under the category CW01 for general building, which was the then highest grade for BCAcontractors’ registration. With the G8 grading, we were able to bid for public sector projects of unlimitedvalue. Other notable projects which we were involved in as main contractors include (i) the restoration ofFar East Square, which was completed in 1998, (ii) the construction of the Choa Chu Kang SportsComplex, which was completed in 2000, (iii) the construction of the 30-storey Thomson Euro-AsiaCondominium, which was completed in 2002, (iv) the construction of 622 dwelling units in Hougang forHDB which was completed in 2002, and (v) the construction of the 4-storey Mustafa Shopping Centreextension, with an overhead pedestrian bridge and underground link, which was completed in 2003.Please refer to the section entitled “Construction – Completed Projects and Projects Currently inProgress” of this Prospectus for details of the significant construction projects which have beencompleted by our Group in the last three years and our major projects currently in progress.

As part of our strategy to reduce our reliance on the construction industry, we decided to diversify ourbusiness by venturing into property development in Singapore in 1990. For this purpose, we acquired ourwholly-owned subsidiary, KSH Realty, in 1990 to develop small scale residential projects in Singaporesuch as townhouses, terrace houses and semi-detached houses.

In 1997, recognising the growth potential in the property development business in the PRC, our Groupdecided to explore the business opportunities in this area and expanded geographically into the PRC byleveraging on the experience we garnered from our property development business in Singapore.

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OUR HISTORY

Through KSH Overseas, which was incorporated in 1993, we invested in a joint venture company, TTXReal Estate, in Tianjin, the PRC, in 1997 with Tianjin Commercial Construction Development, a wholly-owned subsidiary of Tianjin Yishang Group, for the purpose of developing and managing TianxingRiverfront Square, a 36-storey commercial building situated in the business district of Tianjin, the PRC,which was completed in 1998. Please refer to the section entitled “Property Development and PropertyManagement” of this Prospectus for further details.

In 2001, we invested in a joint venture company in Hong Kong, Duford, which was formed for thepurpose of investing in property development work in the PRC, with our joint venture partner, Duford(Asia) Private Limited, a Singapore company which is wholly-owned by Messrs Lim Choo Sin and OoiSoon Gee and which was set up to undertake, inter alia, investment holding activities. Further details ofMessrs Lim Choo Sin and Ooi Soon Gee are set out in the section entitled “Group Structure” of thisProspectus.

In 2002, Duford acquired a 30% equity interest in JHTD, a sino-foreign equity joint venture companyincorporated in Beijing, the PRC, which was set up to develop Liang Jing Ming Ju, a residential propertydevelopment project in Beijing, the PRC. Please refer to the section entitled “Property Development andProperty Management” of this Prospectus for further details.

In December 2003, we and Duford (Asia) Private Limited each transferred part of our respectiveshareholding interests in Duford to a third joint venture partner, Ideal Sino Investments Limited. Followingsuch transfer, we, Duford (Asia) Private Limited and Ideal Sino Investments Limited held 41.7%, 41.7%and 16.6% of the issued share capital of Duford respectively. Duford (Asia) Private Limited’s entireshareholding in Duford was subsequently transferred to Duford (Hong Kong) Private Limited inSeptember 2005.

In July 2004, in order to accommodate our expanding operations in Singapore, we expanded our existingfactory and office premises by acquiring additional premises at 36 Senoko Road. Following the relocationof all our business operations (other than our structural steel fabrication operations) from our factory at39 Senoko Road to these additional premises, we allocated the entire space at our factory at 39 SenokoRoad for our structural steel fabrication works, thereby increasing our production capabilities in respect ofstructural steel fabrication works.

In 2004, pursuant to certain PRC regulations which require property management businesses in the PRCto be separated from real estate development businesses in the PRC, our subsidiary, TTX PropertyManagement, was set up to carry on our property management business in the PRC, which waspreviously undertaken by TTX Real Estate.

In order to increase our investment in the property development business in the PRC, we increased ourshareholding in Duford from 41.7% to 58.3% in March 2006 by acquiring an additional 16.6%shareholding interest from one of the existing shareholders of Duford, Ideal Sino Investments Limited.Following such increase in our shareholding in Duford, Duford became our subsidiary.

In June 2006, Duford acquired an additional 2.7% equity interest in JHTD from one of the existingshareholders of JHTD. Following such acquisition, Duford’s equity interest in JHTD increased from 30%to 32.7%.

Recognising the growth potential in the construction industry in Malaysia, we acquired our wholly-ownedsubsidiary, Techpath, in Malaysia in June 2006, to carry out construction work in Malaysia. In the samemonth, Techpath commenced work for the construction of an assembly plant in Selangor, Malaysia forTan Chong & Sons Motor Co Sdn Bhd. Techpath is currently registered with the CIDB with a G7 gradingunder the categories of general building and maintenance and general civil engineering, which allows itto tender for projects of unlimited project value.

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OUR HISTORY

In line with our plans to expand our property development business in the PRC, our Group, through itssubsidiary, Duford, has signed a non-binding letter of intent on 18 August 2006 with Beijing Jia Hua HongYuan and Tianjin Xiang Ning to explore business opportunities through an equity joint venture toundertake new rural residential development projects in Zhuozhou, Hebei Province, the PRC. Pleaserefer to the section entitled “Property Development and Property Management” of this Prospectus formore details.

In the last few years, our Group has received various awards in recognition of the quality and safetystandards in respect of the construction projects that we have undertaken. Such awards include the URAArchitectural Heritage Award in 1999 for our participation in the restoration of Far East Square, the BCAConstruction Excellence Award (Merit) in 2003 for acting as the main contractor for the Choa Chu KangSports Complex and the BCA Construction Excellence Award (Merit) in 2005 for acting as the maincontractor for the 4-storey Mustafa Shopping Centre extension. We have also been awarded severalsafety awards in respect of the projects that we undertook. Please refer to the sections entitled “QualityManagement” and “Awards and Certificates” of this Prospectus for further details.

Since our establishment in 1979, we have grown from a small scaled sub-contractor to a group whichoffers integrated construction services in Singapore and Malaysia, and which is capable of undertakingsizeable construction projects. Our Group also has significant interests in two property developmentprojects in the PRC. For more information, please refer to the section entitled “Our Business” of thisProspectus.

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OUR BUSINESS

INTRODUCTION

We are a well established construction, property development and property management group withoperations in Singapore, Malaysia and the PRC.

Our Group’s principal activities are as follows:-

(a) construction in Singapore and Malaysia; and

(b) property development and property management in the PRC.

CONSTRUCTION

We act as main contractors in construction projects for private and public sector customers in Singaporeand for private sector customers in Malaysia.

Our construction business in Singapore is carried on by our wholly-owned subsidiary, KSHEC. KSHEC isinvolved in general construction and is currently registered with the BCA with a BCA grading of A1 underthe category CW01 for general building. Such A1 grading is currently the highest grade for contractors’registration in such category and enables KSHEC to tender for public sector construction projects ofunlimited project value.

Our construction business in Malaysia is carried on by our wholly-owned Malaysian subsidiary, Techpath.Techpath is currently registered with the CIDB with a G7 grading under the categories of general buildingand maintenance and general civil engineering, which allows it to tender for projects of unlimited projectvalue.

Our clients typically include property developers, land owners and governmental bodies.

The following events in chronological order represent a typical construction cycle:-

(a) sourcing for business opportunities;(b) contract review, evaluation, tender preparation and submission of tenders;(c) award of contracts;(d) assembling of project team;(e) formulation of project execution plan;(f) appointment of sub-contractors and suppliers;(g) construction process management;(h) completion and handover; and(i) maintenance after handover.

(a) sourcing for business opportunities:-

We would typically source for business opportunities by leveraging on the wide network ofbusiness contacts that our Executive Directors have developed over the past 30 years in theindustry. Members of our staff are also encouraged to actively promote the services of our Group.Construction projects and business opportunities may be sourced through the following means:-

(i) public tenders based on advertisements in the mass media such as publications,newspapers and internet notices;

(ii) private tenders based on invitations to tender; or

(iii) recommendations or referrals from clients and consultants from existing and past projects.

Based on our construction projects secured in the past three financial years, 20% were securedthrough public tenders, 55% were secured through private tenders and the remaining 25% werefrom recommendations or referrals from clients and consultants from existing and past projects.

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(b) contract review, evaluation, tender preparation and submission of tenders:-

In preparing for a tender, we would first evaluate our current project commitments and availableresources. Once a decision has been made to proceed with the tender submission, we wouldtypically undertake the following steps:-

(i) review the relevant tender documents, drawings and specifications and consider thecomplexity of the project;

(ii) clarify ambiguities by submitting queries to the consultant;

(iii) request for quotations from sub-contractors that we would work with based on the requiredscope of works;

(iv) quantity survey and cost estimation;

(v) finalise tender price;

(vi) if applicable, enter into pre-tender memorandum of understanding with sub-contractors inorder to lock in prices and terms; and

(vii) submit documents required in the tender which may include sketches, drawings andprogrammes.

The entire process for the above would typically take between one to three months.

(c) award of contracts:-

If our submitted tender price is amongst the lowest, we may then be required to attend tenderinterviews to clarify issues such as pricing and materials offered, and to respond to any otherqueries relating to the tender, such as methods of construction. There may be negotiations tofinalise the terms of the contract before the contract is awarded. Notification of a successful tenderwould typically take place within three to six months after the close of the tender.

(d) assembling of project team:-

Once we are awarded the contract, we would assemble the project team. The composition of theproject team depends largely on the size, complexity and requirements of the awarded project. Theproject team normally comprises a project director, a project manager, project engineers, siteforemen, co-ordinators, a site secretary and safety personnel. The project team may have moremembers if the project size is larger and more complex and this would typically be factored induring the tender submission stage.

The project team’s responsibilities include, inter alia, planning and monitoring the progress of theproject, co-ordinating with various sub-contractors, supervising the works and ensuring that theworks are carried out in accordance with the drawings and specifications. Contract administration,quality control and safety matters are also part of the project team’s responsibilities.

(e) formulation of project execution plan:-

The project team is responsible for the formulation of the project execution plan. The projectexecution plan would specify the functions and responsibilities of all parties involved (including thesub-contractors to be appointed by us), construction schedules, plant and equipment utilisationrequirements, manpower projection plan, approvals from authorities to be obtained, specifictechnical and quality requirements imposed by clients, schedules for the mobilisation of resourcesfor the construction site and the financial budget of the project. With proper planning, we aim tocomplete and deliver projects with high standards of quality within the budgeted cost and timing. Inthe past three financial years, we have been able to complete all of our construction projectswithout any substantial delay or material cost overruns.

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(f) appointment of sub-contractors and suppliers:-

Typically, most general building contractors would tender for the full contract and sub-contractspecific parts of the project to other sub-contractors and specialists. KSHEC would normally carryout the works through sub-contractors. We maintain a list of sub-contractors and suppliers so thatwe would have a ready pool of sub-contractors and suppliers who would meet the requisiteperformance and quality standards. We review this list through periodic assessment and additionsare made when new suppliers and sub-contractors are found to be suitable upon evaluation. Sub-contractors and suppliers are selected based on, among other things, our past working experiencewith them, their competitiveness in terms of their pricing and their past performance.

(g) construction process management:-

The construction processes and activities undertaken by our Group can be grouped into thefollowing components: foundation works, structural works, architectural works, external works,mechanical and electrical works and landscaping.

In-house process control activities are also carried out by the project team throughout theconstruction process to ensure optimum results. In-house process control activities includeplanning, supervising, inspecting, directing, recording and reporting as appropriate. All outsourcedactivities and works are subject to process control activities. In order to establish that the requisitecriteria and standards are met, as part of our in-house process control, the sub-contractors will berequired to provide a mock-up or trade demonstration of their work standards for our clients’approval.

We are sometimes also awarded design and build contracts and for such projects, the projectmanager would establish a project quality plan, which would include the planning, co-ordinationand control of the performance of the relevant professionals involved. The performances of theprofessionals are regulated by various governing authorities and professional codes of conduct.

(h) completion and handover:-

The criteria and standards for acceptance of a project are established based on the technicalspecifications of the project during the stage of formulation of the project execution plan. Duringthe construction process, we may also seek clarifications from the client as to the acceptedspecifications or standards.

Upon satisfactory completion of all in-house process controls by the project team and inspectionby the client, the completed project will be officially handed over to the client.

(i) maintenance after handover:-

Construction contracts would typically include a defects liability period during which we will beresponsible for making good any defects found in the completed building. During the defectsliability period, our clients will continue to retain the performance bond that was provided to themat the commencement of the construction project. For our private sector construction projects, ourclients will additionally retain a retention sum during the defects liability period.

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OUR BUSINESS

The significant projects which have been completed by our Group in the last three years and our majorprojects currently in progress are set out below:-

Completed Projects

Contract Commencement CompletionDescription of works Name of owner value (S$) date date

Design & build for proposed residential Ho Bee (Sentosa) Pte. Ltd. 68.7 million July 2004 October 2006development at Sentosa Cove comprising:

(1) 15 blocks of 6-storey (with attic)condominium development, comprising 200 units, with basement carpark andswimming pool- The Berth By The Cove

(2) 8 units of 2-storey terrace houses with attic and basement- The Berthside

Design & build for proposed community People’s Association 24.6 million April 2004 October 2006building at Jurong West Street 64 & Jurong West Central 3- The Frontier Community Place

Erection of 19 units of 2-storey Tuas Hi-Tech Park Pte Ltd 14.6 million November 2004 February 2006detached factories at Tuas View Link - Tradelink Place

Cluster housing development Warees Land Pte. Ltd. 20.3 million December 2003 December 2005comprising 34 units of 2-storey building with basementcarpark at Chancery Lane - The Chancery Residence

Basic Rescue Training Centre at Ministry of Home Affairs 47.1 million October 2003 December 2005Jalan Bahar

Design & build for condominium CPL Homes Pte Ltd 14.5 million May 2004 November 2005development comprising 72 units at Pasir Panjang Road - The Spectrum

Erection of a 3-storey SAFRA Club SAFRA 23.5 million May 2003 August 2004with a basement carpark at Telok Blangah Way/Henderson Road - SAFRA Mount Faber

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Projects Currently In Progress

Contract Commencement EstimatedDescription of works Name of owner value (S$) (1) date completion date (2)

Proposed erection of condominium at Ho Bee Cove Pte. Ltd. 121.0 million January 2007 Category II (4)

Sentosa Cove, comprising a 6-storey block and an 8-storey block with attic residential flats (with a total of 249 units), with basement carpark, swimming pool & communal facility- The Coast At Sentosa Cove

Proposed primary school development at: Ministry of Education 32.3 million July 2006 Category I (3)

(1) Sengkang - Anchorvale Road/Drive(2) Sengkang Site 15 - Compassvale Link

Proposed erection of a 3-storey private SUTL Marina 27.1 million November 2005 Category I (3)

Marina Clubhouse with a basement Development Pte. Ltd.carpark, swimming pool and tennis annexe at Cove Drive, Sentosa Cove - One°15 Marina Club

Proposed redevelopment of Singapore Civil Aviation 40.9 million September 2005 Category I (3)

Air Traffic Control Centre at Biggin Hill Road Authority of Singapore

Proposed erection of 1 block of 24-storey HBO Investments Pte Ltd 30.4 million March 2005 Category II (4)

condominium, comprising 115 units, atNo. 63 Mount Sinai Drive (inclusive of showflat)- Montview

Proposed construction of assembly plant at Tan Chong & Sons 32.0 million June 2006 Category I (3)

Lot P.T. 15014 (P.T. 10451), Mukim Serendah, Motor Co Sdn BhdDaerah Hulu Selangor, Selangor Darul Ehsan, Malaysia

Notes:-(1) The contract values stated above are not indicative of the revenue for each of our future financial years.

(2) These are only estimated completion dates, which may be subject to changes due to, inter alia, changes in the scope ofworks requested by the owners, adverse weather conditions and other factors which are beyond the control of our Group.Please also refer to the section entitled “Risk Factors” of this Prospectus for other factors which may affect our constructionprojects.

(3) Category I means that the estimated completion date falls within the period of two (2) years from the commencement date.

(4) Category II means that the estimated completion date falls between two (2) to four (4) years from the commencement date.

In June 2006, Techpath commenced work for the construction of an assembly plant at Selangor, Malaysiafor Tan Chong & Sons Motor Co Sdn Bhd. For the purposes of such project, Techpath entered into a jointventure arrangement with Natara Corporation Sdn. Bhd., a local Malaysian construction company whichhas the relevant experience as well as a network of contacts in the Malaysian construction industry, tojointly undertake the construction work in order to draw on their expertise. Under such joint venturearrangement, it was agreed, inter alia, that Techpath would bear 55%, and such local Malaysianconstruction company would bear 45%, of all costs and expenses, losses, obligations and liabilitiesarising out of or in connection with the construction work and all rights, benefits and gains arising out ofor in connection with the construction work will be shared in the same proportion.

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PRODUCTION FACILITIES AND CAPACITY

We fabricate structural steel which is used for our construction projects at our factory at 39 SenokoRoad, based on the requirements of our projects. The extent of utilisation based on our annualproduction capacity for structural steel for each of FY2004, FY2005, FY2006 and 1Q2007, is as follows:-

Production capacity (tonnes) (1) Utilisation rate (%) (2)

FY2004 1,500 26.7FY2005 1,500 40.0FY2006 1,500 46.71Q2007 (3) 375 53.3

Notes:-(1) The production capacity is computed based on 300 operating days per annum and the estimated achievable fabrication

output of our machinery of five tonnes per day.

(2) Utilisation rate is derived by dividing the actual amount of structural steel fabricated by the production capacity.

(3) Pro-rated.

Currently, our structural steel production facility is not running at full capacity as we only produce whatwe need for our construction projects. However, we intend to increase our annual production capacity forstructural steel as we have seen an increase in the size of our construction projects since 2004, from oneproject with a contract value of more than S$30 million as at 31 March 2004 to four projects with acontract value of more than S$30 million each as at 30 June 2006. As set out in the table above, theutilisation rate of our structural steel production facility for 1Q2007 has increased to 53.3%, and hasexceeded the utilisation rates for each of FY2004, FY2005 and FY2006. We intend to increase ourannual production capacity for structural steel from the current production capacity of 1,500 tonnes to3,000 tonnes over the next two years commencing from the date of our listing through the acquisition ofsteel fabrication machinery and equipment. With the increased production capacity, we will be able tomeet the demands of the larger-scale construction projects that we have secured and are targeting tosecure (as mentioned in the section entitled “Business Strategies and Future Plans” of this Prospectus).

The acquisition of steel fabrication machinery and equipment will be partially financed from the proceedsfrom the Invitation. For more information on our use of proceeds, please refer to the sections entitled“Use of Proceeds from the Invitation and Expenses Incurred” and “Business Strategies and Future Plans”of this Prospectus.

PROPERTY DEVELOPMENT AND PROPERTY MANAGEMENT

Our Group has two property developments in the PRC, one being Tianxing Riverfront Square in Tianjin,which was developed by our subsidiary, TTX Real Estate, and the other being Liang Jing Ming Ju inBeijing, which was developed by our associated company, JHTD. Our Group also has a propertymanagement arm that manages Tianxing Riverfront Square. Further details of Tianxing Riverfront Squareand Liang Jing Ming Ju are set out below in this section of this Prospectus.

Our property development work includes identifying viable and suitable opportunities for investment andsourcing for potential land use rights for acquisition and development. To this end, as part of our strategy,we leverage on the knowledge and expertise of the locals in the PRC by entering into joint ventures withour PRC partners to undertake our property development projects in the PRC. In 1997, we invested inTTX Real Estate, a joint venture company with Tianjin Commercial Construction Development, to developTianxing Riverfront Square. Tianjin Commercial Construction Development is a wholly-owned subsidiaryof Tianjin Yishang Group and was incorporated by Tianjin Yishang Group to, inter alia, invest in realestate businesses, including the development of Tianxing Riverfront Square. Tianjin Yishang Group is aPRC state-owned enterprise engaged in general merchandise retail trade and wholesale trade. TianjinYishang Group has an operating history of more than 50 years and operates several department stores,household electrical appliance chain stores and supermarkets in the PRC.

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The material terms of the joint venture agreement in respect of TTX Real Estate provide that (i) TTX RealEstate shall be a limited liability company and shall have a total investment and registered capital ofRMB155,000,000 and RMB69,200,000 respectively, (ii) the joint venture partners are KSH Overseas andTianjin Commercial Construction Development, (iii) the scope of business of TTX Real Estate is thedevelopment, management, lease and sale of real estate and the provision of after-sales service, (iv) theproportion of capital contribution/equity interest in TTX Real Estate of KSH Overseas and TianjinCommercial Construction Development is 69% and 31% respectively, (v) Tianjin CommercialConstruction Development’s capital contribution shall consist of the provision of the land use rights forthe development of Tianxing Riverfront Square while KSH Oversea’s capital contribution shall be made incash, (vi) the profits from and risks of the investment in the joint venture in respect of TTX Real Estateshall be shared between the joint venture partners in proportion to their respective capitalcontribution/equity interest in TTX Real Estate, and (vii) any joint venture partner who wishes to transferits equity interest in TTX Real Estate shall obtain the prior consent of the other joint venture partner forsuch transfer of equity interest and such other joint venture partner shall have the right of first refusal inrespect of such equity interest, and any transfer of such equity interest to any third party other than anexisting joint venture partner shall be on terms which are not more favourable than the terms offered tothe other joint venture partner.

Our subsidiary, Duford, also entered into a joint venture with Tianjin Commercial ConstructionDevelopment and Beijing Jia Hua Xu Xing in 2001 to set up JHTD to develop Liang Jing Ming Ju. Theentire equity interest of Beijing Jia Hua Xu Xing in JHTD was subsequently transferred in October 2005to Beijing Jia Hua Hong Yuan, which was incorporated in 2005 solely for the purpose of taking overBeijing Jia Hua Xu Xing’s equity interest in JHTD. Beijing Jia Hua Xu Xing and Beijing Jia Hua HongYuan are both managed and substantially owned by Mr Zhao Wenquan, who has more than 30 years ofexperience in the construction and property development businesses in the PRC and who has beeninvolved in projects involving the refurbishment/restoration of old buildings in Tianjin as well as other high,mid and low range housing developments in the PRC (mainly Beijing, Tianjin and Hebei) since 1986.

The material terms of the joint venture agreement in respect of JHTD provide that (i) JHTD shall be alimited liability company and shall have a total investment and registered capital of RMB85,950,000 andRMB41,500,000 respectively, (ii) the joint venture partners are Beijing Jia Hua Hong Yuan, TianjinCommercial Construction Development and Duford, (iii) the scope of business of JHTD is theconstruction, lease and sale of real estate and the management of property within the land scopeplanned and determined by the Li Yuan Town, Tongzhou District, the PRC, (iv) the proportion of capitalcontribution/equity interest in JHTD of Beijing Jia Hua Hong Yuan, Tianjin Commercial ConstructionDevelopment and Duford is 43.6%, 23.7% and 32.7% respectively, (v) the capital contributions of the jointventure partners shall be made in cash, (vi) the profits from and risks of the investment in the jointventure in respect of JHTD shall be shared between the joint venture partners in proportion to theirrespective capital contribution/equity interest in JHTD, and (vii) any joint venture partner who wishes totransfer its equity interest in JHTD shall obtain the prior consent of the other joint venture partners forsuch transfer of equity interest and such other joint venture partners shall have the right of first refusal inrespect of such equity interest, and any transfer of such equity interest to any third party other than anexisting joint venture partner shall be on terms which are not more favourable than the terms offered tothe other joint venture partners.

Together with our joint venture partners, we adopt a systematic approach in the identification of suitablesites and the development of the sites. The key stages of our property development process in the PRCare as follows:-

(a) site identification phase;

(b) feasibility study and financial analysis phase;

(c) land use right acquisition phase;

(d) design and project planning phase;

(e) construction phase; and

(f) marketing phase.

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Our property management business in the PRC is undertaken by our subsidiary, TTX PropertyManagement, which was set up through a joint venture with Tianjin Commercial ConstructionDevelopment. Our property management business involves the provision of services such as the repairand maintenance of the common areas and security systems and the provision of amenities and utilitiesto the occupants of Tianxing Riverfront Square. The material terms of the joint venture agreement inrespect of TTX Property Management provide that (i) TTX Property Management shall be a limitedliability company and shall have a total investment of USD100,000 and a registered capital ofUSD100,000, (ii) the joint venture partners are KSH Overseas and Tianjin Commercial ConstructionDevelopment, (iii) the scope of business of TTX Property Management is the provision of propertymanagement and other related services, (iv) the proportion of capital contribution/equity interest in TTXProperty Management of KSH Overseas and Tianjin Commercial Construction Development is 69% and31% respectively, (v) the capital contributions of the joint venture partners shall be made in cash, (vi) theprofits from and risks of the investment in the joint venture in respect of TTX Property Management shallbe shared between the joint venture partners in proportion to their respective capital contribution/equityinterest in TTX Property Management, and (vii) any joint venture partner who wishes to transfer its equityinterest in TTX Property Management shall obtain the prior consent of the other joint venture partner forsuch transfer of equity interest, and such other joint venture partner shall have the right of first refusal inrespect of such equity interest.

Details of our property developments in the PRC are as follows:-

Tianxing Riverfront Square:-

We invested in the development of Tianxing Riverfront Square through our acquisition of 69.0% equityinterest in TTX Real Estate, the developer of Tianxing Riverfront Square, in 1997.

Tianxing Riverfront Square is a commercial complex located at No. 81, Shi Yi Jing Road, Hedong District,Tianjin, 300171, in the heart of the business district of Tianjin, the PRC. It comprises a 36-storey towerblock with two basement floors and has a total sellable floor area of approximately 55,193 sq m. The 1st

to 5th floors of the building consist of a shopping podium (which occupies an aggregate sellable area ofapproximately 18,767 sq m) and the 6th to 36th floors consist of offices (which occupy an aggregatesellable area of approximately 32,614 sq m). The tenure of the land use right for this development is 50years and expires on 17 September 2043. The construction of Tianxing Riverfront Square commenced inSeptember 1994 and was completed in June 1998.

As at 30 June 2006, office units occupying an aggregate sellable area of approximately 9,693 sq m havebeen sold and recognised as revenue and office units occupying an aggregate sellable area ofapproximately 14,149 sq m were leased to tenants for periods ranging from two to three years.Approximately 90% of the office units are owned or leased by companies operating in the shipping and

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logistics industry. The owners and tenants of the office units include Mediterranean Shipping Company(Hong Kong) Limited , DHL Global Forwarding

and T.H.I Group Ltd . As at the Latest Practicable Date, anaggregate sellable area of 13,760 sq m of office units were leased to tenants, of which (i) the leases inrespect of an aggregate sellable area of 3,610 sq m will expire in 2006 and are currently in the processof being renewed, (ii) the leases in respect of an aggregate sellable area of 6,302 sq m will expire in2007, (iii) the leases in respect of an aggregate sellable area of 3,003 sq m will expire in 2008 and (iv)the leases in respect of an aggregate sellable area of 845 sq m will expire in 2009.

As at 30 June 2006, retail units occupying an aggregate sellable area of approximately 14,572 sq m wereleased to tenants for periods ranging from two to ten years. Approximately 94% of the retail units areleased to operators of restaurants and entertainment outlets. The tenants of the retail units includeTianjin Dong Fang Zhi Zhu Company Ltd and Chan Ku Theme Restaurant

. As at the Latest Practicable Date, an aggregate sellable area of 14,690 sq m of the retailunits were leased to tenants, of which (i) the leases in respect of an aggregate sellable area of 680 sq mwill expire in 2006 and are currently in the process of being renewed, (ii) the leases in respect of anaggregate sellable area of 28 sq m will expire in 2007, (iii) the leases in respect of an aggregate sellablearea of 1,871 sq m will expire in 2008 and (iv) the leases in respect of an aggregate sellable area of12,111 sq m will expire in or after 2009. The car park lots in the basement floor, occupying an aggregatesellable area of approximately 3,812 sq m, are leased out on a monthly basis.

Based on the last transacted selling price of the office units in Tianxing Riverfront Square of RMB7,821per sq m in November 2006 and the average rental rate (including maintenance fees) of our leased officeunits in Tianxing Riverfront Square for FY2006 of RMB2.20 per sq m per day, the rental yield of theleased office units in Tianxing Riverfront Square is 10.3% per annum, which is higher than the effectiveinterest rate for the USD term loan taken up by our Group to finance the development of TianxingRiverfront Square of between 7.75% and 8.25% per annum in 1Q2007.

Please refer to the section entitled “Completed Properties Held For Sale” of this Prospectus for thevaluation of the unsold units in Tianxing Riverfront Square as at 30 June 2006.

To the best of our knowledge and belief, the Tianjin Government is in the process of improving Tianjin’sinfrastructure in anticipation of the 2008 Olympics where Tianjin will be hosting the soccer event. Theproposed infrastructural improvements in the vicinity of Tianxing Riverfront Square include the expansionof roads in front of Tianxing Riverfront Square, the demolition of old markets and shop houses nearTianxing Riverfront Square, the construction of a light rail transit station near Tianxing Riverfront Squareand the construction of new bridges. The rental rates for the office and retail units in Tianxing RiverfrontSquare have not been affected by such infrastructural improvements.

Liang Jing Ming Ju:-

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Liang Jing Ming Ju is a residential condominium located in Tongzhou, Beijing, the PRC and is a mid-range rural development targeted at small working-class families. The condominium is locatedapproximately 800 metres from the Guo Yuan Light Rail Transit Station in Tongzhou and it takesabout 30 minutes to travel by train from the condominium to the city of Beijing, the PRC.

The development of Liang Jing Ming Ju, which is carried out in four phases, began in FY2002. The first,second and third phases of the development involve a total sellable area of approximately 57,607 sq m,112,748 sq m and 18,948 sq m respectively. The first three phases of the development which involve atotal of 1,860 units and which has a total sellable area of approximately 189,303 sq m have beencompleted as at 30 June 2006, with the first phase being completed in FY2005, the second phase beingcompleted in FY2006 and the third phase being completed in 1Q2007. As at 30 June 2006, 95.9% of allthe completed phases have been sold. These three phases of the development also house a number ofretail shops occupying an aggregate sellable area of approximately 3,639 sq m. The condominium hastwo clubhouses and a kindergarten for the use of its residents. As at 31 October 2006, all residentialunits in the first three phases of the development have been fully sold. The fourth phase of thedevelopment, which has an estimated total sellable area of approximately 19,800 sq m, will commenceupon obtaining the requisite approvals from the relevant authorities.

The tenure of the land use right for the residential units is 70 years and expires on 14 January 2073 andthe tenure of the land use right for the underground garages is 50 years and expires on 14 January2053. The tenure of the land use right for the landscape areas of the development is 40 years andexpires on 14 January 2043.

Our interest in Liang Jing Ming Ju is held through Duford (our 58.3%-owned subsidiary), which holds32.7% equity interest in JHTD, the developer of Liang Jing Ming Ju.

Proposed project in Zhuozhou, Hebei Province, PRC

Zhuozhou is situated about 60 kilometres south of the city of Beijingand is accessible by the Jingguang Railway and JingshengExpressway. It has played an important role in supporting andsustaining the development of Beijing with its convenienttransportation links combined with abundant underground water,geothermal energy and gravel resources.

In line with our plans to expand our property development businessin the PRC, our Group, through our subsidiary, Duford, has signed anon-binding letter of intent on 18 August 2006 with Beijing Jia HuaHong Yuan and Tianjin Xiang Ning to explore business opportunitiesthrough an equity joint venture to undertake new rural residentialdevelopment projects in Zhuozhou, Hebei Province, the PRC (the“Proposed Zhuozhou Project”). Tianjin Xiang Ning wasincorporated in the PRC in April 2003 and its principal businessactivities since its incorporation are software development as well asinvestments in the PRC’s capital markets. The shareholders ofTianjin Xiang Ning are Messrs Liang Ranning (73%), Liu Wenxiang(20%), Yu Lian (5%) and Wei Xiaomei (2%). More information onBeijing Jia Hua Hong Yuan is set out above in this section of thisProspectus.

Our Group proposes to hold not more than 20% equity interest in the Proposed Zhuozhou Project. OurGroup is presently at a preliminary stage of discussions and business explorations with our proposedpartners in respect of this venture. No specific piece of land has been identified for the ProposedZhuozhou Project as at 30 June 2006. Our Group will only commit its participation in the ProposedZhuozhou Project subject to and only if the following conditions precedent in respect of the ProposedZhuozhou Project are duly fulfilled:- (i) the due execution of all relevant definitive binding agreements andinstruments by all the relevant parties and entities, (ii) the due compliance with all relevant and applicable

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PRC laws, regulations and policies by all the relevant parties and entities, and (iii) the obtainment of allrelevant approvals, authorizations and licences from all relevant competent authorities and governingbodies of the PRC for the Proposed Zhuozhou Project. The residential development projects to beundertaken pursuant to the Proposed Zhuozhou Project will be similar to the Liang Jing Ming Ju propertydevelopment, being mid-range rural developments targeted at small working-class families.

SEASONALITY

We do not experience any significant seasonality in the course of our business.

MARKETING ACTIVITIES

Our Executive Chairman and Managing Director, Mr Choo Chee Onn, and our General Manager, Mr GohYong Hock are in charge of formulating and planning marketing strategies and activities for our Group.Our marketing strategies are based on our ability to establish and maintain business relationships withprofessionals such as quantity surveyors and architects who would be in a position to refer projects to us.

For our construction business, we also target to grow our business by sourcing for new projects throughpublic and private tenders, as well as through referrals and recommendations from our clients andconsultants from existing and past projects.

For our property development business, we have a sales team in the PRC to formulate marketingstrategies in respect of our property developments in the PRC. The sales team would be responsible forthe sale of units in our developments, which would be marketed (i) through advertisements in the massmedia, (ii) through contacts with existing tenants of the units who may be interested in buying over theunits instead of renting them and (iii) through property agents in the PRC.

RESEARCH AND DEVELOPMENT

We do not undertake research and development activities and have not incurred any research anddevelopment expenses as the nature of our business does not require us to do so.

INSURANCE

Our Group has taken up, inter alia, the following insurance policies:-

Contractor’s all risk, workmen's compensation, public liability and fire insurances for ourconstruction business in Singapore;

Contractor’s all risk and workmen's compensation insurances for our construction business inMalaysia;

Property all risks insurance for our property development business in Tianjin, the PRC;

Public liability insurance for our property management business in the PRC;

Group personal accident and hospitalisation and surgical insurances for certain of ouremployees; and

Death and permanent and temporary disability insurances for our Executive Directors.

Our Directors believe that the insurance policies taken up by our Group are adequate for our businessoperations.

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INTELLECTUAL PROPERTY

Our Group has registered the following trademark:-

Trademark Place of application Class Trademark number Effective period

Singapore Class 37(1) T05/05386G 8 April 2005 to 7 April 2015

Note:-(1) The products and/or services covered under Class 37 include construction, building construction supervision, demolition of

buildings, bricklaying, building insulating, building sealing, rental of construction equipment, elevator installation and repair,factory construction and machinery installation.

Save as disclosed above, we do not use or own any other trademarks, patents or intellectual propertyrights which are material to our business.

Our business or profitability is not materially dependent on any license, trademark, patent or any otherintellectual property rights.

PROPERTIES AND FIXED ASSETS

As at the Latest Practicable Date, our Group (through KSHEC, our wholly-owned Singapore subsidiary)owns the following leasehold and investment properties:-

Leasehold Properties

Approximateland/floor area

Location Use of property (sq m) Tenure Encumbrances

36 Senoko Road Factory and office 7,060 Leasehold for 30 years up Legal mortgage inSingapore 758108 to 15 October 2024, favour of DBS Bank Ltd

with an option to renew for another 30 years

39 Senoko Road Factory 3,361 Leasehold for 30 years, First legal (all monies)Singapore 758111 up to 15 May 2011(1) mortgage in favour of

United Overseas Bank Limited

Note:(1) KSHEC has on 15 June 2006 accepted an offer by JTC Corporation for the renewal of the lease in respect of 39 Senoko

Road, Singapore 758111 for a further term of 10 years from 16 May 2011.

Investment Properties

Approximateland/floor area

Location Use of property (sq m) Tenure Encumbrances

9 Holt Road #05-02 Residential 137 Freehold First legal (all monies)Sheares Ville (Leased to third party) mortgage in favour ofSingapore 249446 Hong Leong Finance Limited

9 Holt Road #12-05 Residential 443 Freehold First legal (all monies)Sheares Ville (Leased to third party) mortgage in favour ofSingapore 249446 Standard Chartered Bank

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We have on 23 September 2005 entered into a sale and purchase agreement and placed a down-payment of S$230,308 for the purchase of a residential property in Montview, a freehold condominiumdevelopment at 63 Mount Sinai Drive which is currently under construction. A first legal (all monies)mortgage in favour of Hong Leong Finance Limited has been created over the property to secure theloan which we obtained from Hong Leong Finance Limited to finance the purchase of such property.

Our Group has no intention of holding the abovementioned two investment properties in Sheares Villeand the property in Montview in the long term, and will consider disposing of these properties at anappropriate time and price.

As at 30 June 2006, we had fixed assets (excluding our leasehold properties set out above) with a netbook value of approximately S$1.1 million, comprising plant and machinery, furniture and fittings and air-conditioners, office equipment and computers, motor vehicles and loose tools.

To the best of our Directors’ knowledge, save as disclosed in the section entitled “GovernmentRegulations” of this Prospectus, there are no regulatory requirements or environmental issues that maymaterially affect our utilisation of our fixed assets as at the Latest Practicable Date.

QUALITY MANAGEMENT

Our Group places strong emphasis on quality control to ensure that the quality of our projects complywith relevant regulations and to maintain our reputation and market standing.

We have implemented a quality management system which our General Manager, Mr Goh Yong Hock,oversees. To ensure the quality of our projects, our Group ensures that our sub-contractors, architectsand other building professionals have the relevant experience and proven track records. At each stage ofthe construction up to the handing over of the finished building, we conduct regular inspections to ensurethat each stage is constructed according to the building specifications and the prescribed proceduresand methods.

In order to ensure that we maintain high standards of quality and as part of our efforts to monitor qualityand service levels, we have established and aim to achieve the following quality objectives:-

To focus on satisfying and exceeding clients’ expectations and to continuously achieve andmaintain good feedback and repeat business from our clients;

To achieve and maintain a good working environment for everyone in our Group;

To achieve profitable growth with the commitment to provide internationally recognised qualityservice standards;

To improve the quality of the work so as to reduce wastage;

To deliver all projects on time and to operate within the given budget; and

To achieve continual improvement of resources through training and work processes via workimprovement activities.

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As a testament to our quality commitment, we have been awarded the ISO 9001:2000 certification. TheBCA launched the BCA ISO 9000 Certification Scheme in 1991. The objective of this scheme is topromote the adoption of an international quality management system standards in Singapore’sconstruction industry. The BCA ISO 9000 Certification Scheme provides certification for the SingaporeStandards (SS) ISO 9001:2000 standard, which specifies requirements for a quality management systemfor any firm that needs to demonstrate its ability to consistently provide products that meet customer andapplicable regulatory requirements and aims to enhance customer satisfaction. The BCA ISO 9000certification is awarded to companies in the architectural, engineering, contractor, property, buildingmaterials and related fields. It recognises companies that have demonstrated continuous and effectiveoperation of a quality management system which meets the ISO 9000 standards and the terms andconditions of the certification scheme. Please refer to the section entitled “Awards and Certificates” of thisProspectus for more information and details of our other certifications.

AWARDS AND CERTIFICATES

Over the years, we have received a number of awards and certificates, which are set out below:-

Recipient Award/Certificate Year Awarded by of award

Architectural Heritage Award – for the restoration of Far East Square 1999 URA KSHEC

Safety Performance Award (Certificate of Merit) – for Choa Chu Kang 2001 MOM KSHECSports Complex

Construction Excellence Award (Merit) (Institutional Buildings Category) – 2003 BCA KSHECas the main contractor for Choa Chu Kang Sports Complex

Safety Performance Award (Certificate of Merit) – for The Berth 2005 MOM KSHEC

Construction Excellence Award (Merit) (Commercial/Mixed 2005 BCA KSHECDevelopment Buildings Category) – as the main contractor for the4-storey Mustafa Shopping Centre extension

Safety Performance Award (Certificate of Merit) – for The Chancery 2005 MOM KSHECResidence

Safety Performance Award (Certificate of Merit) – for SAFRA Mount Faber 2005 MOM KSHEC

ISO 9001:2000 and SS ISO 9001:2000 Certificate of Registration 2006 BCA KSHEC(Quality Management System) – for building and civil engineeringconstruction services

ISO 14001:2004 and SS ISO 14001:2004 Certificate of Registration 2006 BCA KSHEC(Environmental Management System) – for building and civilengineering construction services

OHSAS 18001:1999 Certificate of Registration (Occupational Health 2006 BCA KSHECand Safety Management System) – for building and civil engineeringconstruction services

Certificate of Accreditation (Accredited Structural Steel Fabricator for 2006 Singapore KSHECCategory S3 (for firms that have the infrastructure, resources and Structuralcapabilities to fabricate and erect structural steel structures of building, Steelindustrial plant or portal structures of up to 10 metres in height and short Societyspan portal, bridges or trusswork of up to 10 metres))

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OUR MAJOR CUSTOMERS

The customers contributing five per cent. (5%) or more of our revenue in the years/periods under revieware set out below:-

As a percentage of our revenue

Customers Project FY2004 FY2005 FY2006 1Q2007

Ho Bee Group (1) (i) Ho Bee Development – 16.9 15.8 35.2 74.1Robinson Road;

(ii) The Berth; and(iii) Montview

SUTL Marina Development One°15 Marina Club – – 3.2 13.4Pte. Ltd.

Civil Aviation Authority of Singapore Air – – 1.9 7.5Singapore Traffic Control Centre

People’s Association The Frontier Community – 5.1 15.8 0.5Place

Ministry of Home Affairs Basic Rescue Training 18.7 30.3 10.8 –Centre at Jalan Bahar

Tuas Hi-Tech Park Pte Ltd Tradelink Place – 2.5 8.9 –

Warees Land Pte. Ltd. The Chancery Residence 1.6 8.5 8.5 –

CPL Homes Pte Ltd The Spectrum – 9.1 6.9 –

Mohamed Mustafa & Mustafa Shopping 0.4 8.5 4.0 –Samsuddin Co. Pte Ltd Centre extension

SAFRA SAFRA Mount Faber 27.8 12.8 – –

Daventon Pte Ltd The Ansley 25.8 – – –

Note:-(1) Ho Bee Group refers to Ho Bee (Sentosa) Pte. Ltd., Ho Bee Developments Pte Ltd and HBO Investments Pte Ltd, all of

which are subsidiaries of Ho Bee Investment Ltd, a company listed on the SGX-ST.

Revenue contribution from our customers varies from year to year due to the nature of our project-basedbusiness.

Save as disclosed above, there is no other customer whose revenue contribution to us accounted formore than five per cent. (5%) of our revenue in the years/periods under review.

None of our Directors or Substantial Shareholders has any interest (direct or indirect) in the above-mentioned customers.

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Credit Terms

For our construction business, credit terms extended to our customers vary depending on the size of thetransaction or contract. Typical credit terms for our construction business range from 21 days to 30 daysand the trade receivables’ turnover (in days) for our construction business for the years/periods underreview are as follows:-

FY2004 FY2005 FY2006 1Q2007

Trade receivables’ turnover (in days) (1) 104 63 39 52

Notes:-(1) Trade receivables’ turnover (in days) = (Total gross trade receivables(2) / revenue from construction business) X 365 days (pro-

rated for 1Q2007).

(2) Total receivables include retention monies that were withheld by our customers for completed construction projects (typicallyfor 12 months) and unbilled receivables which relate to construction works which have been completed but are pendingarchitect’s certification. Should these amounts be excluded, our trade receivables’ turnover (in days) for our constructionbusiness would be as follows:-

FY2004 FY2005 FY2006 1Q2007

Trade receivables’ turnover (in days) 35 39 17 17

Our trade receivables as at 30 June 2006 amounted to approximately S$10.1 million, including retentionmonies of S$6.2 million and unbilled receivables of S$1.1 million. The aging schedule of the balance ofour trade receivables (net of allowances) as at 30 June 2006 is as follows:-

Period S$’000

Less than 30 days 2,249Between 31 and 60 days 232Between 61 and 90 days 21More than 90 days 356

2,858

As at the Latest Practicable Date,

(i) approximately 90.9% of the trade receivables (net of allowances) as at 30 June 2006 has beencollected;

(ii) S$257,000 of the retention monies as at 30 June 2006 had become due and has been collected.The remaining amount of retention monies is not due for collection and will be collectable withinthe next 12 months from 30 June 2006; and

(iii) approximately 78.1% of the unbilled receivables as at 30 June 2006 has been billed and collected.

For our property development and property management businesses, we do not grant any credit to ourcustomers. Revenue from the sale of development properties is recognised only when there is a finalisedsale and purchase agreement and when the receipt of the full amount of the sales proceeds is assured.Revenue for our property management business is recognised on an accrual basis.

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We do not have significant allowance for doubtful trade debts for the years/periods under review as wehave not experienced significant difficulties in collecting our trade receivables. The amount of allowancefor doubtful trade debts for the years/periods under review are as follows:-

FY2004 FY2005 FY2006 1Q2007

Allowance for doubtful trade debts (S$’000) 239 19 3 –

We do not have any material bad debts written off for the years/periods under review.

OUR MAJOR SUB-CONTRACTORS AND SUPPLIERS

The sub-contractors and suppliers accounting for five per cent. (5%) or more of our purchases for theyears/periods under review are set out below:-

As a percentage of our purchases

Sub-contractors/Suppliers Materials/Services supplied FY2004 FY2005 FY2006 1Q2007

Burwill Trading Pte Ltd Supplier of steel 7.2 16.5 7.1 22.2

Powen Electrical Engineering Mechanical and electrical 12.0 8.3 13.9 10.6Pte Ltd sub-contractor

Island Concrete (Private) Limited Supplier of concrete 18.3 6.1 3.1 10.5

Johnson Suisse (Singapore) Supplier of sanitary ware – – 0.6 9.3Pte Ltd

Gin Chia Co Pte Ltd Tiling sub-contractor – – 1.0 6.6

IBP Building Material Pte. Ltd. Supplier of tiles and stones – – 1.5 6.0

Builder 90 Pte Ltd General sub-contractor 0.2 – 1.3 5.6

Supermix Concrete Pte Ltd Supplier of concrete – 6.0 7.7 5.0

Eastern Pretech Pte Ltd Supplier of plasters and mortars 0.1 8.2 4.1 2.0

Positive Engineering Pte Ltd Sub-contractor for aluminium and 4.2 5.3 3.0 1.3glazing works

Sintonhai (S) Construction & Labour sub-contractor 7.8 8.9 3.3 1.2Development Pte Ltd

Kurihara Kogyo Co. Ltd. Mechanical and electrical 2.4 1.5 7.6 0.1sub-contractor

Concrete Reinforcement Steel Supplier of steel – 5.0 11.4 –Pte Ltd

Lee Welded Mesh Singapore Supplier of wire mesh 5.2 3.5 – –Pte Ltd

Listeel Singapore Pte Ltd Supplier of steel 13.9 0.3 – –

Bintai Kindenko Private Limited Mechanical and electrical 6.6 0.1 – –sub-contractor

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Our purchases vary from year to year due to the nature of our project based business. We wouldpurchase and/or engage the services of suppliers and/or sub-contractors who consistently providefavourable terms with regard to price, quality and the ability to meet our delivery schedules. We havemore than five suppliers for each category of the major materials and services that we require. Thisapproach has accounted for the changes in the percentage of purchases reflected in the table above.

Save as disclosed above, there is no other sub-contractor or supplier whose sales to us accounted formore than five per cent. (5%) of our purchases in the years/periods under review.

None of our Directors or Substantial Shareholders has any interest (direct or indirect) in the above-mentioned sub-contractors or suppliers.

Payment Terms

Payment terms granted by our sub-contractors and suppliers vary depending on, inter alia, ourrelationship with the sub-contractors and suppliers as well as the size of the transactions. Typical creditterms granted by suppliers range from 30 days to 60 days whereas typical credit terms granted by oursub-contractors are 14 days. Our trade payables’ turnover (in days) for the years/periods under revieware as follows:-

FY2004 FY2005 FY2006 1Q2007

Trade payables’ turnover (in days)(1) 21 20 25 14

Note:-(1) Trade payables’ turnover (in days) = (Total trade payables / total purchases) X 365 days (pro-rated for 1Q2007).

Our business or profitability is not materially dependent on any industrial, commercial or financialcontract (including a contract with a customer or supplier) or any new manufacturing process.

COMPLETED PROPERTIES HELD FOR SALE

As at 30 June 2006, we had completed properties held for sale of S$50.1 million which comprised thecost of unsold units (of approximately 45,500 sq m) in Tianxing Riverfront Square. The cost of unsoldunits in Tianxing Riverfront Square comprised mainly land acquisition costs, development costs andinterest capitalised. Tianxing Riverfront Square has 31 storeys of office units, five storeys of retail unitsand two basement floors. Please see the section entitled “Property Development and PropertyManagement – Tianxing Riverfront Square” of this Prospectus for more details on Tianxing RiverfrontSquare. All units in Tianxing Riverfront Square are developed with the intention to sell them uponcompletion of the development. We lease out unsold units pending the sale of such units.

For the past three financial years ended 31 March 2006, our completed properties held for sale wererevalued on a yearly basis by DTZ Debenham Tie Leung International Property Advisers (Tianjin)Company Limited. Based on the Valuer’s Report, the unsold units in Tianxing Riverfront Square (ofapproximately 41,894 sq m) had a market value of approximately RMB364.2 million as at 30 June 2006,comprising approximately RMB208.5 million for the unsold retail units, approximately RMB145.0 millionfor the unsold office units and approximately RMB10.7 million for the carpark. The difference between theunsold area recorded in our books and that valued by the Valuer arises mainly from our revenuerecognition policy regarding the sale of our development properties as disclosed in the section entitled“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of thisProspectus. Units in respect of which sale and purchase agreements have been entered into but whichreceipt of the full amount of the sales proceeds is not assured as at the balance sheet date will continueto be recorded as unsold units in our books, the cost of which will be apportioned as cost of sales ofdevelopment properties when the revenue is recognised. For the past three financial years ended 31March 2006, there has been no write down of the carrying costs of our completed properties held forsale as the market value has been higher than the carrying costs.

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Our completed properties held for sale have been mortgaged to secure our USD term loan that wastaken up to finance the development of Tianxing Riverfront Square. Please refer to the section entitled“Foreign Exchange Management” of this Prospectus for details of such term loan.

GOVERNMENT REGULATIONS

Singapore

The following is a summary of the main laws and regulations of Singapore that are relevant to ourbusiness as at the Latest Practicable Date.

Contractors Registry

The construction industry in Singapore is regulated by the BCA, whose primary role is to develop andregulate Singapore’s building and construction industry. Currently, companies which carry on businessactivities in the construction industry are not required to register with the BCA. However, registration inthe Contractors Registry maintained by the BCA is a pre-requisite to tendering for projects in the publicsector. Presently, there are six major categories of registration, some of which are further sub-classifedinto six to seven grades, depending on the category of registration. Registration of a contractor with theBCA is dependent on the contractor fulfilling certain requirements relating to, inter alia, the value ofpreviously completed projects and personnel resources. The grade assigned to each contractor isdependent on its minimum net worth and paid-up capital.

KSHEC is currently registered with the BCA with a BCA grading of A1 under the category CW01 forgeneral building. Such A1 grading is currently the highest grade for contractors’ registration in suchcategory and enables KSHEC to tender for public sector construction projects of unlimited value. Tomaintain KSHEC’s existing A1 grading, there are certain requirements to be complied with, including butnot limited to the following:-

To secure, over a three-year period, projects with an aggregate contract value of at least S$150million, of which, inter alia, S$75 million worth of the projects executed must be projects executedfor public sector agencies in Singapore;

To have a minimum paid-up share capital and a minimum net worth of S$15 million; and

To employ at least 24 professional and technical personnel with approved qualifications. Suchapproved qualifications refer to (a) professional qualifications with a recognised degree inArchitecture, Building, Civil/Structural Engineering or the equivalent and (b) technical qualificationsin any of the following: (i) a recognised polytechnic diploma in Architecture, Building andCivil/Structural Engineering; (ii) a National Certificate in Construction Supervision (NCCS); (iii) aCertificate/Specialist Diploma in Mechanical and Electrical Coordination; or (iv) other equivalentqualifications approved by the BCA.

Factory registration/Factory permit

For premises that are carrying out building operations and works of engineering construction, theoccupiers are required by the MOM to register the premises (or worksite) as a “factory” with theCommissioner for Workplace Safety and Health (“CWSH”) pursuant to the Workplace Safety and Health(Registration of Factories) Regulations 2006 (“WSH Factories Regulations”). Under the WSH FactoriesRegulations, occupiers of premises or worksites in which building operations and works of engineeringconstruction are intended to be carried out (save for any premises or worksites in which buildingoperations (other than excavation or piling works) or works of engineering construction are being carriedout for a period not exceeding two months) must apply to the CWSH to register the worksites as a“factory” one month before the work begins. A certificate of registration issued by the CWSH is valid for aperiod of one year and may be renewed subsequently upon the payment of a renewal fee. The CWSHmay, instead of registering any premises as a “factory”, issue a factory permit, with or without conditions,authorising the applicant to occupy the premises as a factory. A factory permit is valid for such period notexceeding six months as may be specified in the permit and may be extended subsequently for suchperiod not exceeding 6 months as the CWSH may determine upon the payment of an extension fee.

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Workplace and Health Safety Measures

Under the MOM’s Workplace Safety and Health Act 2006 (“WSHA”), every employer has the duty to take,so far as is reasonably practicable, such measures as are necessary to ensure the safety and health ofhis employees at work. These measures include providing and maintaining for the employees a workenvironment which is safe, without risk to health, and adequate as regards facilities and arrangements fortheir welfare at work, ensuring that adequate safety measures are taken in respect of any machinery,equipment, plant, article or process used by the employees, ensuring that the employees are notexposed to hazards arising out of the arrangement, disposal, manipulation, organisation, processing,storage, transport, working or use of things in their workplace or near their workplace and under thecontrol of the employer, developing and implementing procedures for dealing with emergencies that mayarise while those persons are at work and ensuring that the person at work has adequate instruction,information, training and supervision as is necessary for that person to perform his work. More specificduties imposed by the MOM on employers are laid out in the Workplace Safety and Health (GeneralProvisions) Regulations 2006 (“WSHR”). Some of these duties include taking effective measures toprotect persons at work from the harmful effects of any exposure to any biohazardous material whichmay constitute a risk to their health.

Pursuant to the WSHR, the following equipment, amongst others, are required to be tested andexamined by an examiner (“Authorised Examiner”), who is authorised by the CWSH, before they canbe used in a factory and thereafter, at specified intervals:-

hoist or liftlifting gearslifting appliances and lifting machines

Upon examination, the Authorised Examiner will issue and sign a certificate of test and examination,specifying the safe working load of the equipment. Such certificate of test and examination shall be keptavailable for inspection. Under the WSHR, it is the duty of the owner of the equipment / occupier of thefactory to ensure that the equipment complies with the provisions of the WSHR and to keep a registercontaining the requisite particulars with respect to the lifting gears, lifting appliances and lifting machines.

In addition to the above, under the WSHA, inspectors appointed by the CWSH may, inter alia, enter,inspect and examine any workplace and any machinery, equipment, plant, installation or article at anyworkplace, to make such examination and inquiry as may be necessary to ascertain whether theprovisions of the WSHA are complied with, to take samples of any material or substance found in aworkplace or being discharged from any workplace for the purpose of analysis or test, to assess thelevels of noise, illumination, heat or harmful or hazardous substances in any workplace and the exposurelevels of persons at work therein and to take into custody any article in the workplace which is requiredfor the purpose of an investigation or inquiry under the WSHA.

Under the WSHA, the CWSH may serve a stop-work order in respect of a workplace if he is satisfied that(i) the workplace is in such condition, or is so located, or any part of the machinery, equipment, plant orarticle in the workplace is so used, that any process or work carried on in the workplace cannot becarried on with due regard to the safety, health and welfare of persons at work; (ii) any person hascontravened any duty imposed by the WSHA; or (iii) any person has done any act, or has refrained fromdoing any act which, in the opinion of the CWSH, poses or is likely to pose a risk to the safety, healthand welfare of persons at work. The stop-work order shall direct the person served with the order toimmediately cease to carry on any work indefinitely or until such measures as are required by the CWSHhave been taken to remedy any danger so as to enable the work in the workplace to be carried on withdue regard to the safety, health and welfare of the persons at work.

The MOM has also introduced a Debarment Scheme for contractors with bad safety record. The purposeof the Debarment Scheme is to improve the safety situation in the construction industry. Under thisscheme, contractors who are found to have violated safety requirements at worksites will be givendemerit points. A contractor who accumulates more than 24 demerit points within a 12-month period willbe issued a warning. Further accumulation of more than 24 demerit points within a 12-month periodfollowing the warning, will result in the contractor being debarred from employing Non Traditional Source(NTS) foreign workers, who include those from Bangladesh, Pakistan and Thailand.

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Environmental laws and regulations

The Environmental Public Health Act (Chapter 95) (“EPHA”) requires, inter alia, a person, during theerection, alteration, construction or demolition of any building or at any time, to take reasonableprecautions to prevent danger to the life, health or well-being of persons using any public places fromflying dust or falling fragments or from any other material, thing or substance. The EPHA also regulates,inter alia, the disposal and treatment of industrial waste and public nuisances. Under the EPHA, theMinistry of Environment has empowered the Director-General of Public Health to serve a nuisance orderon the owner or occupier of the premises on which the nuisance arises. Some of the nuisances whichare liable to be dealt with by the Ministry of Environment and/or its statutory board, the NationalEnvironmental Agency, summarily under the EPHA include any factory or workplace which is not kept ina clean state and any place where there exists or is likely to exist any condition giving rise, or capable ofgiving rise to the breeding of flies or mosquitoes, any place where there occurs, or from which thereemanates noise or vibration as to amount to a nuisance and any machinery, plant or any method orprocess used in any premises which causes a nuisance or is dangerous to public health and safety. TheEPHA also requires the occupier of any construction site to employ a competent person to act as anEnvironmental Control Officer in the construction site for the purpose of exercising general supervisionwithin the construction site of the observance of the provisions of, inter alia, the EPHA.

The Environmental Pollution Control Act (Chapter 94A) seeks to control the levels of pollution inSingapore by regulating the activities of various industries and regulates, inter alia, air pollution, waterpollution, land pollution and noise control. Under the Environmental Pollution Control (Control of Noise atConstruction Sites) Regulations, the owner or occupier of any construction site shall ensure that the levelof noise emitted from his construction site shall not exceed the maximum permissible noise levelsprescribed in such Regulations.

Approval and execution of plans of building works

Under the BCA’s Building Control Act (Chapter 29), no person shall commence or carry out, or permit orauthorise the commencement or carrying out of, any building works unless the plans of the buildingworks have been approved by the Commissioner of Building Control (“CBC”) and in the case of structuralworks, there is in force a permit granted by the CBC to carry out the structural works. Before anapplication to the CBC for the approval of the plans of the building works is made, every person forwhom any relevant building works are or are to be carried out, or the builder of such building works, shallappoint either a registered architect or professional engineer (“Qualified Person”) to prepare the saidplans in accordance with the Building Control Regulations 2003, and to supervise the building works. Thecarrying out of structural elements and concreting, piling, pre-stressing, tightening of high-friction gripbolts or other critical structural works of a prescribed class of building works would also require thesupervision of a Qualified Person or a site supervisor appointed by him. Under the Building Control Act, abuilder undertaking any building works shall, inter alia, (i) ensure that the building works are carried outin accordance with the plans of the building works supplied to it by the Qualified Person and with anyterms or conditions imposed by the CBC in accordance with the Building Control Act and the BuildingControl Regulations 2003, (ii) notify the CBC of any contravention of the provisions of the BuildingControl Act or the building regulations in connection with those building works and (iii) within seven daysfrom the completion of the building works, certify that the new building has been erected or the buildingworks have been carried out in accordance with the Building Control Act and the building regulations anddeliver such certificate to the CBC.

The Building Control Regulations 2003 sets out certain requirements of the BCA relating to, inter alia,design and construction and the installation of exterior features. For example, no person shall, withoutthe permission of the CBC, install any lift in any building, in installing an air-conditioning unit on theexterior of any building or which projects outwards from any building, a trained air-conditioning unitinstaller would have to be engaged to carry out the installation works relating to the air-conditioning unit,and whenever soil investigation and determination of the depth of the water table are to be carried out inrespect of any building works, the Qualified Person shall submit the soil investigation reports to the CBC.

If the CBC is of the opinion that any building works, other than structural works, have been or are carriedout in such a manner as (i) will cause, or will be likely to cause, a risk of injury to any person or damageto any property, (ii) will cause, or will be likely to cause, a total or partial collapse of any adjoining or

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other building or street or land; or (iii) will render, or will be likely to render, any adjoining or other buildingor street or land so dangerous that it will collapse or be likely to collapse either totally or partially, he may,by order, direct the person for whom those building works have been or are being carried out toimmediately stop the building works and to take such remedial or other measures as he may specify toprevent the abovementioned situations from happening.

Under the Fire Safety Act (Chapter 109A), the person for whom any proposed fire safety works are to becommenced or carried out in any building shall apply to the Commissioner of Civil Defence (“CCD”) forapproval of the plans of the fire safety works in accordance with the Fire Safety (Building Fire Safety)Regulations and such person shall appoint an appropriate qualified person to prepare those plans. Noperson shall commence or carry out or permit or authorise the commencement or carrying out of any firesafety works in any building unless the CCD has approved all the plans of the fire safety works. Uponcompletion of any fire safety works, the person for whom the fire safety works had been carried out shallapply for a fire safety certificate from the CCD in respect of the completed fire safety works.

Where, in the opinion of the CCD, any fire safety works are carried out or have been carried out incontravention of the Fire Code, the Fire Safety Act or any regulations made thereunder, he may by orderin writing require (i) the cessation of the unauthorised fire safety works until such order is withdrawn, (ii)such work or alteration to be carried out to the unauthorised fire safety works or the building or partthereof to which the unauthorised fire safety works relate as may be necessary to comply with the FireCode, Fire Safety Act or any regulations made thereunder, or (iii) the demolition of the building or partthereof to which the unauthorised fire safety works relate.

Under the Fire Safety Act, no person shall store or keep, or caused to be stored or kept, any petroleumor flammable material except, inter alia, under the authority of and in accordance with the provisions of alicence from the CCD and every condition specified therein, and such licence shall be applied for inaccordance with the Fire Safety (Petroleum and Flammable Materials) Regulations 2005.

Public Sector Standard Conditions of Contract for Construction Works

The Public Sector Standard Conditions of Contract for Construction Works (“PSSCOC”) was developedby the BCA to enable a common contract form to be used in all public sector construction projects. ThePSSCOC contains terms relating to, inter alia, the general obligations of the contractor, programme forthe works, quality in construction, commencement of works, suspension of works, time for completion,liquidated damages, defects, variations to the works, valuation of variations, procedures for claims,indemnity provisions, insurance, progress payments and final account and settlement of disputes.

Employment of Foreign Workers

The availability and the employment cost of skilled and unskilled foreign workers are affected by theGovernment’s policies and regulations on the immigration and employment of foreign workers inSingapore. The policies and regulations are set out in, inter alia, the Employment of Foreign Workers Act,Chapter 91A, of Singapore and the relevant Government Gazettes.

The availability of the foreign workers to the construction industry is regulated by the MOM through thefollowing policy instruments:

(a) approved source countries;

(b) issuance of work permits;

(c) the imposition of security bonds and levies;

(d) dependency ceilings based on the ratio of local to foreign workers; and

(e) quotas based on Man-Year Entitlements (“MYE”) in respect of workers from Non-TraditionalSources (“NTS”) and the PRC.

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The approved source countries for construction workers are Malaysia, the PRC, NTS and North AsianSources (“NAS”). NTS include countries such as India, Sri Lanka, Thailand, Bangladesh, Myanmar, thePhilippines and Pakistan. NAS countries include Hong Kong, Macau, South Korea and Republic of China.Before we are allowed to employ construction workers from the approved source countries, In-PrincipleApprovals (“IPAs”) have to be sought for each individual’s work permit. The foreign construction worker isrequired to undergo a medical examination by a registered Singapore doctor and must pass suchmedical examination before a work permit can be issued to him.

For each NAS, NTS or PRC construction worker whom we have successfully obtained a work permit, asecurity bond of S$5,000 in the form of a banker’s guarantee or insurance guarantee is required to befurnished to the Controller of Immigration. The employment of foreign workers is also subject to thepayment of levies. The amount of foreign worker levy payable on each unskilled foreign worker is S$470per month and with effect from 1 January 2007, the amount of foreign worker levy payable on eachskilled foreign worker is S$150 per month.

The dependency ceiling for the construction industry is currently set at a ratio of one full-time localworker to four foreign workers. This means that for every full-time Singapore Citizen or SingaporePermanent Resident employed by a company in the construction sector with regular full month CPFcontributions made by the employer, the company can employ four foreign workers.

The MYE allocation system is a work permit allocation system pertaining to the employment ofconstruction workers from NTS and the PRC. MYEs represent the total number of foreign workers thateach main contractor is entitled to employ based on the value of the projects or contracts awarded by thedevelopers or owners. At the time of the MYE application, the balance duration of the project must be atleast one month and the total remaining contract value of the project must be at least S$500,000. Toemploy NTS and PRC construction workers, the employer must make an application for MYE, “PriorApproval” and IPAs for individual work permits. The allocation of MYE is in the form of the number of“man-years” required to complete a project and only main contractors may apply for MYE. All levels ofsub-contractors are required to obtain their MYE allocation from their main contractors. A maincontractor’s MYE will expire on the completion date of the relevant project. With effect from 1 January2007, MYE allocations for all projects (except for projects above S$100 million) have been reduced by5%.

Under the work permit conditions, employers are required to provide acceptable accommodation for theirforeign workers. Such accommodation must meet the statutory requirements set by various governmentagencies, including the National Environment Agency, the PUB, the Singapore Civil Defence Force andthe BCA. A list of approved off-site housing is provided by the relevant approving agencies, namely theURA, Singapore Land Authority, Jurong Town Corporation and the HDB.

An employer of foreign workers is also subject to, inter alia, the provisions set out in the Employment Act(Chapter 91), the Employment of Foreign Workers Act (Chapter 91A), the Immigration Act (Chapter 133)and the Immigration Regulations.

Workmen’s Compensation

The Workmen’s Compensation Act (Chapter 354) (“WCA”), which is regulated by the MOM, applies toworkmen in all industries in respect of injury suffered by them in the course of their employment and setsout, inter alia, the amount of compensation they are entitled to and the method(s) of calculating suchcompensation. The WCA provides that if in any employment, personal injury by accident arising out ofand in the course of the employment is caused to a workman, the employer shall be liable to paycompensation in accordance with the provisions of the WCA.

The WCA provides, inter alia, that, where any person (referred to as the principal) in the course of itsbusiness or for the purpose of his trade or business contracts with any other person (referred to as thecontractor) for the execution by the contractor of the whole or any part of any work undertaken by theprincipal, the principal shall be liable to pay to any workman employed in the execution of the work anycompensation which he would have been liable to pay if that workman had been immediately employedby the principal.

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Building and Construction Industry Security of Payment Act

Prior to the introduction of the Building and Construction Industry Security of Payment Act (Chapter 30B)(“BCISPA”), a construction contract between a main contractor and a sub-contractor would typicallycontain a “pay when paid” provision. Such provision would provide that the liability of the main contractorto pay money owing to the sub-contractor is contingent or conditional on payment to the main contractorby a third party of the whole or part of that money, or make the due date for payment of money owing bythe main contractor to the sub-contractor contingent or conditional on the date on which payment of thewhole or any part of that money is made to the main contractor by the third party. With the introduction ofthe BCISPA by the Ministry of National Development, such “pay when paid” provisions in construction orsupply contracts are now rendered unenforceable and have no effect in relation to any payment forconstruction work carried out or undertaken to be carried out, or for goods or services supplied orundertaken to be supplied, under the contract.

The BCISPA, regulated by the BCA, confers a statutory entitlement to progress payments on any personwho has carried out any construction work or supplied any goods or services under a contract. TheBCISPA also contains provisions relating to, inter alia, the amount of the progress payment to which aperson who has carried out any construction work is entitled under a contract, the valuation of theconstruction work carried out and the date on which a progress payment becomes due and payable(even where a construction contract does not provide for such date). In addition, the BCISPA, inter alia,endorses the following rights:-

(i) the right of a claimant (being the person who is or claims to be entitled to a progress payment)who, in relation to a construction contract, fails to receive payment by the due date of an amountthat is proposed to be paid by the respondent (being the person who is or may be liable to make aprogress payment under a contract to a claimant) and accepted by the claimant, to make anadjudication application in relation to the payment claim. The BCISPA has established anadjudication process by which a person may claim payments due under a contract and enforcepayment of the adjudicated amount;

(ii) the right of a claimant to suspend the carrying out of construction work or supply of goods orservices, and to exercise a lien over goods supplied by the claimant to the respondent that areunfixed and which have not been paid for, or to enforce the adjudication as if it were a judgmentdebt, if such claimant is not paid after it obtains judgment against the respondent pursuant to anadjudication; and

(iii) where the respondent fails to pay the whole or any part of the adjudicated amount to a claimant,the right of a principal of the respondent (being the person who is liable to make payment to therespondent for or in relation to the whole or part of the construction work that is the subject of thecontract between the respondent and the claimant) to make direct payment of the outstandingamount of the adjudicated amount to the claimant, together with the right for such principal torecover such payment from the respondent.

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PRC and Malaysia

A summary of the relevant PRC and Malaysian laws and regulations which are relevant to our businessis set out in Appendix E of this Prospectus entitled “Summary of Relevant PRC Laws and Regulations”and Appendix F of this Prospectus entitled “Summary of Relevant Malaysian Laws and Regulations”respectively.

PERMITS AND LICENCES

The following major permits and licences have been obtained by our Group for the purposes of ourbusiness and operations:-

Type of permit / Issuing body / Expiry of permit /licence Issued to Purpose Licensing body licence

Singapore

CW01 General Building KSHEC To certify that KSHEC BCA 1 October 2008A1 status has an unlimited tendering limit

Factory Permit issued KSHEC To certify that the premises at MOM 30 April 2007pursuant to the 36 Senoko Road is dulyWorkplace Safety and registered as a factoryHealth (Registration of Factories) Regulations

Factory Permit issued KSHEC To certify that the premises at MOM 31 March 2007pursuant to the 39 Senoko Road isWorkplace Safety and duly registered as a factoryHealth (Registration of Factories) Regulations

Malaysia

Certificate of Techpath To certify that Techpath has a CIDB 22 June 2009Registration issued G7 grading with an unlimitedpursuant to the tendering capacity underLembaga Pembangunan the following specialisations:-Industri Pembinaan (i) B04 (General BuildingMalaysia (Malaysian and Maintenance)Construction Industry (ii) CE21 (General CivilDevelopment Board) Engineering)Act 1994

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PRC

Our Group has obtained all necessary approvals and permits and the relevant land use rights in respectof our two property developments, Tianxing Riverfront Square and Liang Jing Ming Ju, in the PRC andhas obtained the Certificates of State-owned Land Use Right in respect of both property developments.

We have also obtained all the relevant approvals relating to foreign exchange with respect to our PRCoperations, which are set out below:-

Issued to Type of approval Validity period

TTX Real Estate Foreign Exchange Certificate No. 120000010583 Valid from 11 April 2001issued by Tianjin Municipal Branch of State to 29 November 2043Administration of Foreign Exchange, for registeringthe sale and settlement of foreign exchange

TTX Property Foreign Exchange Certificate No.120000044254 Valid from 24 DecemberManagement issued by Tianjin Municipal Branch of State 2004 to 14 December 2054

Administration of Foreign Exchange, for registeringthe sale and settlement of foreign exchange

JHTD Foreign Exchange Certificate No. 110000020105 Valid from 5 April 2001 tillissued by Beijing Branch of State Administration of the date on which the companyForeign Exchange, for registering the sale and is wound upsettlement of foreign exchange

Based on our Directors’ belief and knowledge, other than the Equity Requirement (as defined in thesection entitled “Risks relating to our construction business in general – Any suspension or cancellationof Techpath’s CIDB registration will adversely affect our business, results of operations and financialperformance” of this Prospectus) set out in the Registration Requirements and Procedures Book issuedby the CIDB, we have obtained all necessary licences, permits and approvals for our business operationsin Singapore, Malaysia and the PRC, and have complied with all relevant laws and regulations, thatwould materially affect our business operations in Singapore, Malaysia and the PRC.

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COMPETITION

For our construction business in Singapore and Malaysia, we face competition mainly from domestic andforeign construction companies. To the best of our knowledge, we consider the following to be our maincompetitors:-

China Construction (South Pacific) Development Co. Pte. Ltd.

Greatearth Construction Pte Ltd

Tiong Seng Contractors (Private) Limited

Hexacon Construction Pte Ltd

Sato Kogyo (S) Pte. Ltd.

Sanchoon Builders Pte Ltd

Wee Hur Construction Pte Ltd

Poh Lian Construction (Pte.) Ltd

For our property development and property management business in the PRC, we face competitionmainly from the local property developers in the PRC.

To the best of our Directors’ knowledge, there are no published statistics that can be used to accuratelymeasure our market share of our construction business in Singapore and Malaysia and our propertydevelopment and property management business in the PRC.

OUR COMPETITIVE STRENGTHS

Our Directors believe that our competitive strengths are as follows:-

(i) We have a committed and experienced management team and support staff

Our success is supported by our experienced and committed management team, led by ourExecutive Directors. Their extensive experience in the construction industry enables our Group toidentify new opportunities and grow our business. Each of our Executive Directors has at least 30years of experience in the construction industry. Please refer to the section entitled “Management,Directors and Staff” of this Prospectus for further information on their experience.

Our management team is supported by a pool of long serving and committed staff includingengineers, quantity surveyors and site coordinators. As at 30 June 2006, approximately 30% ofthese staff have been with our Group for more than 10 years. We also encourage continuousprofessional development of our employees. We regularly train our employees on technical skills,product knowledge and management techniques and instil in them the importance of corporateculture. We also place strong emphasis on training programmes to ensure that our employees areupdated on the latest safety regulations and technological developments in the industry.

(ii) We have an established and proven track record and reputation

Each of our Executive Directors has at least 30 years of experience in the construction businessand we believe we have an established and proven track record and reputation in the constructionindustry. We have established good business relationships with the professionals we work with andwe believe that our credibility, together with the strength of our delivery track record, makes us acontractor of choice for most of our business associates. We have also achieved high qualitystandards for our construction projects and in this regard, we have been awarded several awardsand certifications including ISO certifications, which we believe bear testimony to the quality of ourprojects. Please refer to the sections entitled “Construction” and “Awards and Certificates” of thisProspectus for further information on our completed projects and projects currently in progress, aswell as our awards and certifications.

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(iii) We are cost competitive

We have a reliable pool of sub-contractors and suppliers who are cost competitive and capable.We are able to obtain competitive rates from our pool of sub-contractors and suppliers as wemaintain continuing relationships with these sub-contractors and suppliers by constantly referringnew jobs to them. Additionally, our payments to our sub-contractors and suppliers have alwaysbeen prompt and we do not pose a credit risk to them. This, together with our continuingrelationships with them, enables us to attain better credit terms which allow us to keep our costslow.

(iv) We are able to leverage on our construction experience to enhance our propertydevelopment business

We have recognised the synergistic effects of our property development business and ourconstruction business and we believe that this enables us to better offer a comprehensive packageof services ranging from site procurement, design and build services, project management to themarketing of the completed development. We believe that our track record and extensiveexperience in the construction business in Singapore enable us to enhance our propertydevelopment business in the PRC as we are able to offer value-added services when carrying onour property development work based on our construction experience. We are able to optimise theconstruction of the developments that we undertake and ensure that quality standards are met, ascompared to our competitor developers in the PRC. In this way, we are able to conduct ourproperty development business in a cost effective manner.

(v) We have considerable experience in the property development industry in the PRC andstrong working relationships with our joint venture partners and other business contacts inthe PRC

Due to our long presence in the PRC since 1997, we have established a wide network of contactsin the PRC and have maintained good and strong working relationships with our joint venturepartners and other industry-related or government-linked organisations such as Tianjin YishangGroup.

In the process of undertaking our property development projects in the PRC, we have gainedconsiderable experience in the property development industry in the PRC and have acquired abetter understanding of the PRC property development market. We believe that our wide networkof contacts and experience in the property development industry in the PRC will enable us toidentify and capitalise on significant development opportunities in the PRC for our Group.

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PROSPECTS

Construction business in Singapore

In view of the upcoming major developments such as the construction of the Business Financial Centre,integrated resorts (IR) and the Sports Hub at Kallang, and the rejuvenation of Orchard Road, ourDirectors believe that the demand for construction services will increase in the next few years.

Our Directors believe that barring any unforeseen circumstances, the overall outlook for our constructionbusiness is favourable as we have identified the following trends in Singapore which we are able tocapitalise on:-

(i) Increasing demand for upgrading and retrofitting works as well as A&A works

We have identified a trend for increased demand for upgrading and retrofitting works as well asA&A works. We believe that there is an increased propensity for upgrading and retrofitting ofexisting buildings in the private sector as businesses upgrade so as to be able to compete in theirrespective industries. In line with governmental policies, businesses are also upgrading so as todevelop as a modernised business hub. Over the years, we have completed many upgrading andretrofitting works as well as A&A works, including the recent upgrading and retrofitting of theMustafa Shopping Centre, and we have acquired considerable experience from such projects. Webelieve that with such experience and track record in upgrading, retrofitting and A&A works, we willbe in a better position to tap on this trend.

(ii) Continued growth in design and build projects

We have observed a steady growth in the number of design and build projects in the localconstruction industry over the last few years. The design and build projects undertaken by usinclude The Spectrum, The Berth, The Frontier Community Place and Montview. We believe thatsuch growth is in part due to the shorter time taken to complete a design and build propertydevelopment. With our considerable experience in design and build projects, we are in a goodposition to capitalise on such growth.

(iii) There has been no significant increase in the number of industry players

We have observed that the number of key players in the construction industry with a BCA gradingof B1 to A1 have decreased over the past five years. We do not expect that there will be asignificant increase in the number of such players in the next few years as we believe that theexisting players with lower BCA gradings or new players in the industry may take considerable timeand require considerable capital to meet the criteria for the BCA grading of B1 and above. Againstthis backdrop, we believe that this will increase our opportunities to secure construction projects ofhigher value.

Construction business in Malaysia

The Malaysian government has, in September 2006, announced several plans to improve the country’seconomy. In particular, it was noted that the Malaysian government, in its plans under “Budget 2007”,has allocated RM27.5 billion for the construction of roads, quarters and other infrastructure facilities inMalaysia. We believe that such public sector expenditure would also bring about private sectorexpenditure in the Malaysian construction industry and accordingly, the prospects of the constructionindustry in Malaysia will be favourable. We entered the construction industry in Malaysia in June 2006and have secured a project in Selangor with a contract value of more than S$30 million in the samemonth. We are hopeful that with the completion of this project, we will have a favourable track recordupon which we can develop and expand our construction business in Malaysia.

Property development business in the PRC

The PRC is currently one of the fastest growing economies in the world. As the growth of the PRCeconomy is expected to continue in the coming years, we believe that the demand for residentialproperties in the PRC will increase due to rising disposable income. We believe that the increase indemand for residential properties will invariably lead to an increase in the property prices in the PRC, inparticular, the major PRC cities such as Beijing. We have observed that due to the higher costs of living

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as well as the escalating property prices in Beijing, there has recently been a growing demand for privatehousing in the areas lying in and near the outskirts of Beijing, such as Tongzhou and Zhuozhou. Ourobservation of such growing demand for private housing is based on the increase in the selling prices ofour property units in Liang Jing Ming Ju which is located in Tongzhou, from RMB2,800 per sq m in July2003 to RMB5,600 per sq m in September 2006, which we believe reflects the growing demand forprivate housing in the areas lying in and near the outskirts of Beijing, such as Tongzhou and Zhuozhou.

Due to the rapid urbanisation and development of these areas, we are optimistic about the potentialeconomic growth that may result from such urbanisation and the resulting positive impact on the propertymarkets in these areas and we anticipate a growing demand for residential properties in these areas.

Trend Information

Our Directors observed that there has been an increase in our cost of construction due mainly toincreases in the raw material prices (in particular, for sand, cement, steel and concrete) and higherlabour cost brought about by the continued shortage in skilled labour in the Singapore constructionindustry for FY2007.

We expect that the average selling prices of commercial properties in Tianjin are likely to be maintainedfor the current financial year. We also expect our rental rates in respect of our unsold units in TianxingRiverfront Square to be maintained for the current financial year as our rental rates have beencontractually agreed upon in the respective tenancy agreements. Please see the section entitled“Property Development and Property Management – Tianxing Riverfront Square” of this Prospectus formore details on Tianxing Riverfront Square.

Our Group, through our subsidiary, Duford, has signed a non-binding letter of intent on 18 August 2006with Beijing Jia Hua Hong Yuan and Tianjin Xiang Ning to explore business opportunities through anequity joint venture to undertake new rural residential development projects in Zhuozhou, HebeiProvince, the PRC (the “Proposed Zhuozhou Project”). Please refer to the section entitled “PropertyDevelopment and Property Management” of this Prospectus for more details. Should the ProposedZhuozhou Project materialise, we would incur substantial capital outlay for such project.

Save as disclosed above and in the section entitled “Risk Factors” of this Prospectus, and barring anyunforeseen circumstances, our Directors are not aware of any trends, uncertainties, demands,commitments or events that are reasonably likely to have a material effect on our net sales or revenue,profitability, liquidity or capital resources, or that would cause financial information disclosed in thisProspectus to be not necessarily indicative of our future operating results or financial condition.

Our Order Books

We intend to remain cautious in tendering for new projects for our construction business. As at the LatestPracticable Date, our order books for our construction business stood at S$233.8 million, including fourcontracts with an unfulfilled contract value of more than S$20.0 million each. As our revenue from ourconstruction business is recognised based on the percentage-of-completion method, our order booksexclude the contract value of completed works which have been recognised as revenue. The value of ourorder books is not indicative of our revenue for FY2007 as the revenue derived from our order books willbe recognised over a number of years.

Due to the nature of our property development and property management businesses, we do not haveany order books for our property development and property management businesses.

BUSINESS STRATEGIES AND FUTURE PLANS

We intend to implement the following strategies and future plans:-

(1) Focus on projects with higher contract value for our construction business

The contract value of our construction projects has increased steadily over the years. The majorityof our completed construction projects are less than S$30 million each in terms of contract value.However, as at 30 June 2006, we had four projects each exceeding S$30 million in terms ofcontract value and we intend to step up our efforts to target larger-scale construction projects with

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a contract value of up to S$75 million each as we believe that such larger-scale projects willgenerate higher profits and further raise our business profile in the industry. We plan to leverageon our established and proven track record and reputation in the construction industry andenhanced image from our listing on the SGX-ST to secure such larger-scale projects.

(2) Acquisition of machinery and equipment

Currently, the structural steel that is used in our construction projects is fabricated by us at ourfactory at 39 Senoko Road. The details of our production capacity for structural steel are set out inthe section entitled “Production Facilities and Capacity” of this Prospectus.

Our structural steel production facility is presently not running at full capacity as we only producewhat we need for our construction projects. However, we intend to increase our annual productioncapacity for structural steel as we have seen an increase in the size of our construction projectssince 2004, from one project with a contract value of more than S$30 million as at 31 March 2004to four projects with a contract value of more than S$30 million each as at 30 June 2006. As setout in the section entitled “Production Facilities and Capacity” of this Prospectus, the utilisation rateof our structural steel production facility for 1Q2007 has increased to 53.3%, and has exceededthe utilisation rates for each of FY2004, FY2005 and FY2006. We intend to increase our annualproduction capacity for structural steel from the current production capacity of 1,500 tonnes to3,000 tonnes over the next two years commencing from the date of our listing through theacquisition of steel fabrication machinery and equipment. With the increased production capacity,we will be able to meet the demands of the larger-scale construction projects that we havesecured and are targeting to secure.

We also intend to acquire other construction machinery and equipment to be used at ourconstruction sites in Singapore, including but not limited to cranes, air compressors andgenerators. Currently, our Group leases most of the construction machinery and equipment usedat our construction sites from third parties. We have observed that the rental rates for the lease ofsuch construction machinery and equipment have been increasing over the past few years. Forexample, the rental rate for a 65/70-ton crawler crane was between S$8,000 and S$9,000 permonth for the period from January 2004 to January 2006 but such rental rate has increased tobetween S$10,000 and S$11,000 per month after January 2006. Our Group expects that the rentalrates for the lease of such construction machinery and equipment will continue to increase overthe next few years due to the increase in the demand for construction services in Singapore inview of the upcoming major developments such as the construction of the Business FinancialCentre, integrated resorts (IR) and the Sports Hub at Kallang, and the rejuvenation of OrchardRoad. With the acquisition of such construction machinery and equipment, this will reduce ourcosts of leasing construction machinery and equipment from third parties, which would equate tocost savings for our Group.

The acquisition of steel fabrication machinery and equipment and other construction machineryand equipment will amount to approximately S$2.0 million, of which approximately S$1.5 millionwill be financed from the proceeds from the Invitation and the balance amount of approximatelyS$0.5 million will be financed by way of finance leases. For more information on our use ofproceeds, please refer to the section entitled “Use of Proceeds from the Invitation and ExpensesIncurred” of this Prospectus.

(3) Expansion of our property development business in the PRC

Encouraged by the success of our Liang Jing Ming Ju property development project, we intend tocontinue to expand our property development business in the PRC as we believe that there isgrowth potential in the industry. We intend to expand our property development business in thePRC by investing, through inter alia the subscription and/or acquisition of equity interests, in jointventures with our PRC partners to undertake property development projects in the PRC, and suchinvestments will be partially funded from the proceeds from the Invitation. In line with our plans toexpand our property development business in the PRC, our Group, through our subsidiary, Duford,has signed a non-binding letter of intent on 18 August 2006 with Beijing Jia Hua Hong Yuan andTianjin Xiang Ning to explore business opportunities through an equity joint venture to undertake

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new rural residential development projects in Zhuozhou, Hebei Province, the PRC (the “ProposedZhuozhou Project”). Our Group proposes to hold not more than 20% equity interest in theProposed Zhuozhou Project. Our Group is presently at a preliminary stage of discussions andbusiness explorations with our proposed partners in respect of this venture. No specific piece ofland has been identified for the Proposed Zhuozhou Project as at 30 June 2006. Our Group willonly commit its participation in the Proposed Zhuozhou Project subject to and only if the followingconditions precedent in respect of the Proposed Zhuozhou Project are duly fulfilled:- (i) the dueexecution of all relevant definitive binding agreements and instruments by all the relevant partiesand entities, (ii) the due compliance with all relevant and applicable PRC laws, regulations andpolicies by all the relevant parties and entities, and (iii) the obtainment of all relevant approvals,authorizations and licences from all relevant competent authorities and governing bodies of thePRC for the Proposed Zhuozhou Project. The Proposed Zhuozhou Project will be funded throughour Group’s internal source of funds and, where necessary, from the proceeds from the Invitation.For more information on our use of proceeds, please refer to the section entitled “Use of Proceedsfrom the Invitation and Expenses Incurred” of this Prospectus.

We will continue to focus on areas in the PRC which are undergoing increasing urbanisation suchas the areas lying in and near the outskirts of Beijing, where we believe there is a growing demandfor private housing, to capitalise on the growth potential of the property markets in these areas. Wewill continue to tap our PRC joint venture partners’ expertise and market knowledge of the propertydevelopment market in the PRC to participate in residential property development projects.

(4) Expansion of our construction business into other areas in Malaysia

With our experience in the construction industry, we are confident of our ability to pursue astrategy of expansion into Malaysia. We believe that there is potential for construction business inthe region and will be looking at Malaysia for new business opportunities. We entered theconstruction industry in Malaysia in June 2006 and have secured a project in Selangor with acontract value of more than S$30 million in the same month. We are hopeful that with thecompletion of this project, we will have a favourable track record upon which we can develop andexpand our construction business in Malaysia. We intend to use the proceeds from the Invitation tobuild up our Group’s capabilities and resources to tender for and undertake more constructionprojects in Malaysia, including, inter alia, the hiring of professionals such as quantity surveyors,engineers and project managers, the purchase of office equipment, the provision of depositsrequired in connection with project tenders, the provision of collaterals for obtaining performancebonds for our projects and the purchase of insurances for our projects. Please refer to the sectionentitled “Use of Proceeds from the Invitation and Expenses Incurred” of this Prospectus for moreinformation on our use of proceeds.

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DIRECTORS, MANAGEMENT AND STAFF

DIRECTORS

The Board of Directors is entrusted with the responsibility for the overall management of our Group. Thenames, ages, addresses and principal occupations of our Directors are set out below:-

Country of PrincipalName Age Residential address principal residence occupation

Choo Chee Onn 56 43 Tagore Avenue Singapore Executive ChairmanSingapore 787664 and Managing Director

Tok Cheng Hoe 56 Block 847 Woodlands Street Singapore Executive Director82 #09-281 and Project DirectorSingapore 730847

Lim Kee Seng 55 Block 219 Lorong 8 Toa Payoh Singapore Executive Director and#04-637 Project and ProcurementSingapore 310219 Director

Kwok Ngat Khow 58 Block 6 Petir Road #12-06 Singapore Executive DirectorSingapore 678267 and Project Director

Lim Yeow Hua @ 44 64 Waterloo Street #08-02 Singapore Director, Asia PacificLim You Qin Singapore 187959 Business Consultants

Pte. Ltd.

Lai Meng Seng 58 109 Holland Grove View Singapore Retired quantitySingapore 276266 surveyor

Khua Kian Kheng Ivan 31 57 Jalan Tambur Singapore General Manager,Singapore 576821 Hock Leong Enterprises

Pte. Ltd.

Information on the area of responsibility and working experience of our Directors is set out below:-

Mr Choo Chee Onn, our Executive Chairman and Managing Director, is one of the founders of ourGroup. Mr Choo was appointed to the Board on 9 March 2006. As Executive Chairman and ManagingDirector, he plays a vital role in charting the corporate direction of the entire Group and is responsible forthe overall management, strategic planning and business development of our Group. Mr Choo overseesall key aspects of our Group’s operations, including the tendering process of our construction projects,and is responsible for identifying and securing new projects for our Group. In addition, Mr Choo alsooversees our Group’s overseas investments and operations, particularly our Group’s propertydevelopment business in the PRC. Mr Choo has more than 30 years of experience in the constructionand property development businesses. After completing his secondary education in 1968 and nationalservice in 1971, Mr Choo worked as a draughtsman in three consulting engineering firms from 1971 to1977. From 1974 to 1977, Mr Choo was involved on a part-time basis in a construction business whichhe founded in 1974 together with, inter alia, our Executive Directors, Mr Tok Cheng Hoe and Mr Lim KeeSeng and from 1978 to 1979, he was involved in such construction business on a full time basis. Sincethe incorporation of KSHEC in 1979, Mr Choo has been serving as the Managing Director of KSHECand has been responsible for the overall management of our Group. As one of our Group’s founders, MrChoo contributed significantly to the early stages of our Group’s development and has been instrumentalin the development of our Group and its expansion into the PRC.

Mr Tok Cheng Hoe, our Executive Director and Project Director, is one of the founders of our Group.Mr Tok was appointed to the Board on 22 March 2006. As our Project Director, Mr Tok is responsible forthe management of our construction projects and oversees the entire execution of our constructionprojects. His responsibilities include liaising with suppliers, sub-contractors and consultants in relation toproject matters, attending site meetings, liaising with the relevant authorities in relation to ourconstruction projects, ensuring that each project is completed within the specified time and that projectcosts are kept within budget. Mr Tok also oversees the procurement of sub-contractors and suppliers forour Group’s various projects and developments. In line with his responsibilities of overseeing the entire

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project execution process, he also ensures that our Group’s good relationships with its clients aremaintained. Since founding a construction business in 1974 together with, inter alia, our ExecutiveDirectors, Mr Choo Chee Onn and Mr Lim Kee Seng, Mr Tok has accumulated more than 30 years ofexperience in the construction and construction-related businesses, including property development, andhas been instrumental in the development and growth of our Group. After graduating from DunearnVocational Institution in 1967 and completion of his national service in 1970, Mr Tok worked in the salesline from 1971 to 1979. Since the incorporation of KSHEC in 1979, Mr Tok has been serving as theProject Director of KSHEC and has been responsible for the management of our Group’s constructionprojects.

Mr Lim Kee Seng, our Executive Director and Project and Procurement Director, is one of the foundersof our Group with over 30 years of experience in the construction and construction-related businesses,including property development. Mr Lim was appointed to the Board on 22 March 2006. Since theincorporation of KSHEC in 1979, Mr Lim has been extensively involved in our Group’s business.Currently, he oversees the operations of our Procurement Department which include approving thepurchase of all project work materials and services, conducting periodic evaluations of and selectingcompetent suppliers and sub-contractors for our projects, approving the procurement of all requiredconstruction plant, machinery and equipment and overseeing the maintenance of our plant andequipment. As the head of the Procurement Department, he also liaises with our sub-contractors andsuppliers for our Group’s various projects and developments. After completing his secondary education in1968, Mr Lim started his career as an administrative officer in a trading company from 1969 to 1973.From 1974 to 1979, Mr Lim was involved in a construction business which he founded in 1974 togetherwith, inter alia, our Executive Directors, Mr Choo Chee Onn and Mr Tok Cheng Hoe.

Mr Kwok Ngat Khow is our Executive Director and Project Director. Mr Kwok was appointed to theBoard on 22 March 2006. As our Project Director, Mr Kwok is extensively involved in the projectmanagement aspect of our Group’s business. He oversees the entire execution of our constructionprojects and his responsibilities include liaising with suppliers, consultants and sub-contractors in relationto project matters, attending site meetings, liaising with relevant authorities in relation to our constructionprojects, ensuring that each project is completed within the specified time and that project costs are keptwithin budget. Mr Kwok also oversees the procurement of sub-contractors and suppliers for our Group’svarious projects and developments. Mr Kwok has more than 35 years of experience in construction andconstruction-related businesses, including property development. After attaining his Higher Schooleducational qualification in 1969 and prior to joining our Group as an executive director in 1982, heworked as a draughtsman in five consulting engineering firms for 12 years since 1970. Between 1982and 1990, he took charge of our Group’s structural steel fabrication section and was instrumental insecuring several sub-contracts for structural steel works for our Group. Since 1990, he assumed the roleof Project Director.

Mr Lim Yeow Hua @ Lim You Qin is our Lead Independent Director. He was appointed on 18 December2006. He is the founder and a director of Asia Pacific Business Consultants Pte. Ltd., a companyengaged in the provision of corporate and individual tax consultancy and advisory services. Mr Limjoined Ernst & Whinney (now known as Ernst & Young) as an auditor in 1986. Thereafter, he joined theInland Revenue Authority of Singapore and subsequently rose to the position of Deputy Director beforeleaving to join the private sector. Since then, he has held several senior tax management positions inorganisations such as PricewaterhouseCoopers, KPMG, Macquarie Investment Pte Ltd and UOB AsiaLtd. Prior to founding Asia Pacific Business Consultants Pte. Ltd. in 2006, he was a Senior Regional TaxManager with British Petroleum, where he was responsible for overseeing the British Petroleum Group’stax function in a number of countries in the Asia-Pacific region. Mr Lim has more than 20 years ofexperience in the tax, financial services and investment banking industries. Mr Lim holds a Bachelor’sDegree in Accountancy and a Master’s Degree in Business Administration from the National University ofSingapore. He is a Fellow of the Institute of Certified Public Accountants of Singapore.

Mr Lai Meng Seng is our Independent Director. He was appointed on 18 December 2006. Mr Lai startedhis career as an Apprentice Surveyor in Contract Services Group from 1967 to 1969. From 1970 to 1974,he was with WT Partnership where he initially held the position of Junior Surveyor and assisted in, interalia, on-site measurements. He was subsequently promoted to the position of Surveyor in WTPartnership, where his responsibilities included acting as the project leader in the preparation of tender

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documents and the preparation of cost estimates and cost planning for projects. In 1974, Mr Lai joinedRider Hunt Levett & Bailey, a firm that provides cost consultancy services to the constructiondevelopment industry, where he remained until his retirement in 2004. He began his career at Rider HuntLevett & Bailey as a Quantity Surveyor and was promoted to the position of Associate Partner in 1977.Thereafter, he was promoted to the position of Joint Managing Partner in 1980 and he assumed theposition of Managing Partner since April 1992. From 1980 to 2004, he was responsible for the dailyadministration and management of Rider Hunt Levett & Bailey’s business as well as its businessdevelopment and the setting up of new offices in other South-east Asian countries such as Indonesia andMalaysia and the PRC. Mr Lai was also the partner-in-charge on several major projects, such as theRaffles City Commercial Complex, the Marina Square Complex and Bugis Junction. Mr Lai has morethan 36 years of experience in the quantity surveying field. Mr Lai has a Diploma in Building from theSingapore Polytechnic and a Diploma in Quantity Surveying from the Royal Melbourne Institute ofTechnology. He is a member of the Singapore Institute of Surveyors and Valuers and a Fellow of theAustralian Institute of Quantity Surveyors.

Mr Khua Kian Kheng Ivan is our Independent Director. He was appointed on 18 December 2006. He isthe General Manager of Hock Leong Enterprises Pte Ltd, an oil and gas related servicing companywhere his responsibilities include overseeing the company’s financial, administrative, human resourceand business development aspects. Mr Khua started his career in 2000 as a Research Officer in RiderHunt Levett & Bailey, a firm engaged in the provision of cost consultancy services to the constructionindustry, where he was involved in the research of various aspects of quantity surveying and the costmanagement of the company’s quantity surveying services. In 2001, he was transferred to RHLBTerotech Pte Ltd, which provides property and infrastructure asset management consultancy services,where he remained till 2004. As a Manager of RHLB Terotech Pte Ltd, his responsibilities includedundertaking market research, technical due diligence, studies on capital and tax allowances, facilitiesmanagement and asset disposal assessment. He was also responsible for the business development ofthe services under his charge, including marketing and liaising with clients. Mr Khua holds a Diploma inBuilding (with Merit) from the Singapore Polytechnic and a Bachelor’s degree in Building ConstructionManagement (First Class Honours) from the University of New South Wales, Australia. He is a memberof the Singapore Institute of Arbitrators and an associate of the Singapore Institute of Building.

We believe that our Directors possess the relevant experience and expertise to act as directors of ourCompany, as evidenced by their business and working experience set out above. Our Executive Directorswere admitted as full members of the Singapore Institute of Directors on 22 February 2005. In addition,our Executive Directors have attended a seminar, namely “Key Essentials for Directors”, conducted bythe Singapore Institute of Directors, to familiarise themselves with the roles and responsibilities of adirector of a public listed company in Singapore. Our Lead Independent Director, Mr Lim Yeow Hua @Lim You Qin, is an independent director of Advanced Integrated Manufacturing Corp. Ltd, a companylisted on the Main Board of the SGX-ST and is currently the chairman of its remuneration and nominatingcommittees. Mr Lai Meng Seng and Mr Khua Kian Kheng Ivan have attended a seminar, namely “SGXListed Companies Development Programme – Understanding the Regulatory Environment in Singapore”,co-organised by the SGX-ST and the Singapore Institute of Directors, to familiarise themselves withdirectors’ duties and responsibilities, internal control and risk management, corporate governance andthe SGX-ST’s regulations.

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MANAGEMENT

Our day-to-day operations are entrusted to our Executive Directors who are assisted by a managementteam of experienced key Executive Officers. The names, ages, addresses and principal occupations ofour Executive Officers are set out below:-

Country of PrincipalName Age Residential address principal residence occupation

Tang Hay Ming 37 Block 666A Jurong West Singapore Chief Financial OfficerStreet 65 #10-193 Singapore 641666

Goh Yong Hock 52 Block 522 Hougang Avenue 6 Singapore General Manager#10-23Singapore 530522

Information on the area of responsibility and working experience of our Executive Officers is set outbelow:-

Mr Tang Hay Ming, our Chief Financial Officer, is responsible for our Group’s finance, accounting andreporting functions and oversees the overall financial risk management of our Group. Mr Tang has morethan 10 years of experience in auditing, accounting, taxation and financial management. Prior to joiningour Group in 1999, Mr Tang was an auditor with KPMG Peat Marwick from December 1993 to November1995. Mr Tang subsequently joined Pidemco Land Limited as an accountant in December 1995. He waspromoted to the position of Senior Accountant in Pidemco Land Limited in July 1997 and thereafterpromoted to the position of Assistant Manager in October 1998, where his duties included providingfinance-related support and accounts and management reporting for overseas projects and investments.In August 1999, Mr Tang joined our Group as Finance and Administration Manager where he was incharge of overseeing the operations of our finance and administration department. In December 2006, hewas promoted to his current post of Chief Financial Officer. Mr Tang holds a Bachelor of Accountancydegree from the Nanyang Technological University, a Graduate Diploma in Business Administration fromthe Singapore Institute of Management and a Master of Business Administration degree from theUniversity of Adelaide, Australia. Mr Tang is a member of the Institute of Certified Public Accountants ofSingapore.

Mr Goh Yong Hock, our General Manager, is primarily responsible for the business development of ourconstruction business. He is also responsible for the general management of our construction projectsand operations. Prior to joining our Group in 1989, Mr Goh was a technical officer at the Ministry ofEnvironment from 1977 to 1979 where he was involved in its flood alleviation schemes. From 1981 to1985, Mr Goh was a project engineer/manager at Yat Lye Engineering Pte Ltd, where his duties includedproject management and overseeing the business administration aspect of the projects. In 1985, hejoined Dragages Sembawang Construction Pte Ltd as a contracts administrator and was promoted toproduction manager in 1987, where he was in charge of the construction of the Newton Mass RapidTransit Station. Thereafter, from 1988 to 1989, Mr Goh worked as a senior site engineer at ExpresswayConstruction Pte Ltd and was responsible for the planning and site supervision for the construction ofThe Central Expressway Tunnel at the Havelock interchange. Mr Goh holds a Technician Diploma in CivilEngineering from the Singapore Polytechnic and a Bachelor of Science degree in Civil Engineering fromthe University of Strathclyde, United Kingdom.

None of our Directors and Executive Officers are related to one another nor are they so related to anySubstantial Shareholder of our Company.

None of our Directors and Executive Officers have been appointed pursuant to any arrangement orunderstanding with a Substantial Shareholder, customer or supplier of our Company, or other person.

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MANAGEMENT REPORTING STRUCTURE

Our management reporting structure is as follows:-

DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION

The compensation (which includes salary, bonus, benefits-in-kind, CPF contributions and directors’ fees)paid or payable to our Directors and Executive Officers for services rendered to us in all capacities forFY2005, FY2006 and FY2007 (estimated), in bands of S$250,000 per annum, were or are as follows:-

FY2005 FY2006 FY2007 (estimated)

Directors

Choo Chee Onn Band I(1) Band I Band I(3)

Tok Cheng Hoe Band I Band I Band I

Lim Kee Seng Band I Band I Band I

Kwok Ngat Khow Band I Band I Band I

Lim Yeow Hua @ Lim You Qin(2) – – Band I

Lai Meng Seng(2) – – Band I

Khua Kian Kheng Ivan(2) – – Band I

Executive Officers

Tang Hay Ming Band I Band I Band I

Goh Yong Hock Band I Band I Band I

Notes:-(1) Band I means up to S$250,000 per annum.

(2) Messrs Lim Yeow Hua @ Lim You Qin, Lai Meng Seng and Khua Kian Kheng Ivan were only appointed as Directors inFY2007.

(3) The estimated compensation amount for FY2007 excludes any bonus payment that our Executive Chairman and ManagingDirector, Mr Choo Chee Onn, is entitled to under his Service Agreement, the details of which are set out in the sectionentitled “Service Agreement” below.

We have not set aside or accrued any amounts for our Directors, Executive Officers and our employeesto provide for pension, retirement or similar benefits.

Board of Directors

Executive Chairmanand Managing Director

Choo Chee Onn

Project Director

Kwok Ngat Khow

Project Director

Tok Cheng Hoe

General Manager

Goh Yong Hock

Project andProcurement Director

Lim Kee Seng

Chief Financial Officer

Tang Hay Ming

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SERVICE AGREEMENT

On 20 December 2006, we entered into a service agreement (the “Service Agreement”) with ourExecutive Chairman and Managing Director, Mr Choo Chee Onn (“Mr Choo”) for an initial term of twoyears (the “Initial Term”) commencing from the date of our admission to the Official List of the SGX-ST(or such date as may be agreed in writing between us and Mr Choo). Upon the expiry of the Initial Term,the employment of Mr Choo may, at our option, be extended for such further period on terms andconditions to be agreed between us and Mr Choo. We shall, at least three (3) months before the end ofthe Initial Term, give Mr Choo written notice of whether we intend to exercise our option to extend theterm of his employment beyond the Initial Term and the terms on which such term is extended. Duringthe Initial Term, the Service Agreement may be terminated by either party giving not less than sixmonths’ written notice to the other party. We may terminate the Service Agreement forthwith by givingnotice to Mr Choo if he is convicted or otherwise found guilty of any offence involving fraud or dishonestyor serious misdemeanour, becomes bankrupt or otherwise acts to our prejudice and we will not berequired to compensate Mr Choo for the termination of his employment under such circumstances. TheService Agreement covers the terms of employment, specifically Mr Choo’s salary, bonus and benefits.Directors’ fees do not form part of the terms of the Service Agreement, as these require the approval ofShareholders in the Company’s annual general meeting.

Pursuant to the terms of the Service Agreement, Mr Choo is entitled to a monthly basic salary ofS$15,000 and an annual wage supplement equivalent to one month’s salary.

In addition, Mr Choo is entitled to an annual incentive bonus (the “Incentive Bonus”) in respect of eachfinancial year of our Company, which shall be calculated based on our audited consolidated net profitbefore tax less minority interests but before deducting the Incentive Bonus (“Group PBT”) for thatfinancial year of our Company. The Incentive Bonus for the relevant financial year will be calculatedbased on our Group PBT as set out in the table below and shall be payable in one lump sum no laterthan one (1) month from the date of approval of the consolidated financial statements of our Group forthat financial year.

Percentage of Group PBT constituting theGroup PBT Incentive Bonus

Group PBT < S$1,000,000 Nil

S$1,000,000 < Group PBT < S$3,000,000 1%

S$3,000,000 < Group PBT < S$5,000,000 2.5%

S$5,000,000 < Group PBT < S$7,000,000 3.5%

Group PBT > S$7,000,000 4%

Under the Service Agreement, Mr Choo is also entitled to a monthly transport allowance of S$2,000 andsuch medical and dental benefits and insurance coverage in accordance with our prevailing policies. Allreasonable entertainment, travelling, hotel and other out-of-pocket expenses incurred by Mr Choo in theprocess of discharging his duties on behalf of our Group will be borne by our Company.

Pursuant to the Service Agreement, Mr Choo shall not, during his employment under the ServiceAgreement, directly or indirectly be engaged or interested in any other business, trade or occupation,without the prior written consent of our Company. Furthermore, during the period of six months after thetermination of his employment under the Service Agreement, Mr Choo shall not, inter alia, (a) beconnected in any manner, directly or indirectly, with any business which is in competition with thatconducted by our Group; (b) cause any of our potential customers not to deal with us; (c) solicit forhimself or any person other than our Group the business of any of our suppliers or customers; or (d)persuade any of our employees to leave our employment. The restrictions do not prevent Mr Choo fromholding equity interest in any public company the shares of which are listed on a stock exchange to theextent that his shareholding does not exceed 5.0% of the total issued share capital of such company. Heis also bound under the Service Agreement not to disclose any confidential information concerning thebusiness or affairs of our Group.

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Had the Service Agreement been effected on 1 April 2005, the aggregate remuneration (includingcontributions, bonus and benefits-in-kind) payable to Mr Choo for FY2006 would have beenapproximately S$355,000 instead of approximately S$205,000, and the profit before taxation of ourGroup would have been approximately S$6.8 million instead of approximately S$7.0 million.

Save as disclosed above, there are no other existing or proposed service agreements between ourCompany or our subsidiaries and any of our Directors or Executive Officers.

There is no existing or proposed service contract entered or to be entered into by our Directors with ourCompany or any of our subsidiaries which provides for benefits upon termination of employment.

OUR EMPLOYEES

As at the Latest Practicable Date, our Group had 538 full-time employees. We do not employ a significantnumber of temporary staff.

The geographical distribution of our full-time employees as at the end of FY2004, FY2005 and FY2006and as at 30 June 2006 were as follows:-

Number of employees As at As at As at As at

31 March 31 March 31 March 30 JuneGeographical Location 2004 2005 2006 2006

Singapore 267 386 421 404Malaysia – – – 12PRC 127 144 131 126

Total 394 530 552 542

The functional distribution of our full-time employees as at the end of FY2004, FY2005 and FY2006 andas at 30 June 2006 were as follows:-

Number of employees Functions As at As at As at As at

31 March 31 March 31 March 30 June2004 2005 2006 2006

Management 7 6 6 6Construction – Operations 47 77 80 88Construction – Business development 7 5 6 8Property management 110 127 114 109Property development – Sales and leases 4 4 4 4Finance and administration 19 20 21 22Production/Construction workers 200 291 321 305

Total 394 530 552 542

None of our employees in Singapore, the PRC and Malaysia are unionised. The relationship and co-operation between our management and our employees have been good and this is expected to continuein the future. There has not been any incidence of work stoppage or labour dispute which affected ouroperations.

Staff Training

We recognise that our employees are an invaluable asset to our Group and are the key contributors toour growth. To assist our employees in achieving better quality work and higher safety standards, weconstantly carry out on-the-job internal training and enrol our employees in external training courses.

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Various types of training are targeted at different employees according to their job scopes and functions.Our aim is for our employees to be trained in basic product knowledge and technical skills, as well as tobe aware of the relevant statutory requirements and building regulations and the latest industrydevelopments. We also place emphasis on training programmes which ensure that our employees areupdated on the latest safety regulations and other industry developments relating to our operations. Weengage a majority of skilled workers with the relevant levels of experience. All workers are required toattend the Safety Orientation Course conducted by the MOM. Thereafter, workers are provided on-the-jobtraining according to their specific responsibilities and areas of work such as, inter alia, structural steelfitting and scaffolding erection.

We continuously upgrade the skills of our employees in order to increase their efficiency and enrol ouremployees for external training courses and seminars on operations supervision, managementdevelopment and various external courses such as machinery training courses, construction safety andworkplace safety courses, construction project planning and scheduling courses and risk managementcourses.

Our expenditure on staff training was less than 1.0% of our total costs and expenses in the last threefinancial years ended 31 March 2006.

BOARD PRACTICES

Term of office

Each of our Directors has served in office in our Company since the following dates:

Name Date

Choo Chee Onn 9 March 2006

Tok Cheng Hoe 22 March 2006

Lim Kee Seng 22 March 2006

Kwok Ngat Khow 22 March 2006

Lim Yeow Hua @ Lim You Qin 18 December 2006

Lai Meng Seng 18 December 2006

Khua Kian Kheng Ivan 18 December 2006

Our Directors do not currently have a fixed term of office. At each annual general meeting, one-third ofthe Directors for the time being (or, if their number is not a multiple of three, the number nearest to butnot less than one-third) shall retire from office by rotation. A retiring Director shall be eligible for re-election. The Directors to retire in every year shall be those who have been longest in office since theirlast re-election or appointment. All Directors (other than a Director holding office as Managing Director)shall retire from office at least once every three years.

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CORPORATE GOVERNANCE

OVERVIEW

Corporate governance refers to the processes and structure by which the business and affairs of acompany are directed and managed, in order to enhance long term shareholder value through enhancingcorporate performance and accountability. Good corporate governance therefore embodies bothenterprise (performance) and accountability (conformance).

With a view towards good corporate governance, our Company has implemented the corporategovernance model as set out below:-

Messrs Lim Yeow Hua @ Lim You Qin, Lai Meng Seng and Khua Kian Kheng Ivan have been appointedas our Independent Directors. Our Directors consider Messrs Lim Yeow Hua @ Lim You Qin, Lai MengSeng and Khua Kian Kheng Ivan to be independent as they do not have any past or ongoing businessrelationship with our Group and our Directors or Substantial Shareholders. Messrs Lim Yeow Hua @ LimYou Qin, Lai Meng Seng and Khua Kian Kheng Ivan are also not related to each other nor any of ourExecutive Directors or Substantial Shareholders. Prior to his retirement in 2004, Mr Lai Meng Seng, asthe managing partner of Rider Hunt Levett & Bailey, was the partner-in-charge for the quantity surveyingof The Ansley (one of our major projects completed in FY2004). Rider Hunt Levett & Bailey was engagedas the quantity surveyor to provide construction cost advice and quantity surveying services for TheAnsley by its developer, Daventon Pte Ltd. Our Group is not involved in the appointment of such externalprofessional quantity surveyor. Our Group also did not make any compensation to Rider Hunt Levett &Bailey or Mr Lai Meng Seng for the professional services rendered.

In view of Mr Choo Chee Onn’s concurrent appointment as our Executive Chairman and ManagingDirector, we have appointed Mr Lim Yeow Hua @ Lim You Qin as our Lead Independent Director,pursuant to the recommendations in Commentary 3.3 of the Code of Corporate Governance 2005. Inaccordance with the recommendations in the said Commentary 3.3, the Lead Independent Director willbe available to Shareholders where they have concerns which contact through the normal channels ofour Executive Chairman and Managing Director or Chief Financial Officer has failed to resolve or forwhich such contact is inappropriate.

NOMINATING COMMITTEE

Our Nominating Committee comprises Mr Lim Yeow Hua @ Lim You Qin, Mr Lai Meng Seng and MrKhua Kian Kheng Ivan. Our Nominating Committee is chaired by Mr Khua Kian Kheng Ivan.

Board of Directors

Nominating Committee Audit Committee Remuneration Committee

ChairmanMr Khua Kian Kheng Ivan

MembersMr Lim Yeow Hua @ Lim

You QinMr Lai Meng Seng

ChairmanMr Lim Yeow Hua @ Lim

You Qin

MembersMr Lai Meng Seng

Mr Khua Kian Kheng Ivan

ChairmanMr Lai Meng Seng

MembersMr Lim Yeow Hua @ Lim

You QinMr Khua Kian Kheng Ivan

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CORPORATE GOVERNANCE

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 (such as attendance, preparedness,participation and candour) including, if applicable, as an independent Director.

All Directors should be required to submit themselves for re-nomination and re-election at regularintervals and at least every three years;

(b) to determine annually whether or not a Director is independent;

(c) in respect of a Director who has multiple board representations on various companies, to decidewhether or not such Director is able to and has been adequately carrying out his/her duties asDirector, having regard to the competing time commitments that are faced when serving onmultiple boards; and

(d) to decide how the Board’s performance may be evaluated and propose objective performancecriteria, as approved by the Board, that allows comparison with its industry peers, and addresshow the Board has enhanced long term shareholders’ value.

AUDIT COMMITTEE

Our business and operations are presently under the management and close supervision of ourExecutive Directors who are assisted by a team of key Executive Officers. The overall management isoverseen by our Executive Chairman and Managing Director, Mr Choo Chee Onn.

After the listing, our Executive Directors and Executive Officers will continue to manage the business andoperations of our Group. The Audit Committee will assist our Board with regard to discharging itsresponsibility to safeguard our Company’s assets, maintain adequate accounting records and developand maintain effective systems of internal controls with an overall objective of ensuring that ourmanagement has created and maintained an effective control environment in our Company, and that ourmanagement demonstrates and stimulates the necessary aspect of our Group’s internal control structureamong all parties.

Our Audit Committee comprises Mr Lim Yeow Hua @ Lim You Qin, Mr Lai Meng Seng and Mr Khua KianKheng Ivan. Our Audit Committee is chaired by Mr Lim Yeow Hua @ Lim You Qin.

Our Audit Committee will meet at least quarterly to discuss and carry out the following where applicable:-

(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 before submission to the Board for approval,focusing in particular, on changes in accounting policies and practices, major risk areas, significantadjustments resulting from the audit, the going concern statement, compliance with accountingstandards 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 externalauditors 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 anymatters which the auditors may wish to discuss (in the absence of our management wherenecessary);

(d) consider the appointment or re-appointment of the external auditors and matters relating to theresignation or dismissal of the auditors;

(e) review transactions falling within the scope of Chapter 9 and Rule 1010 of the Listing Manual;

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(f) undertake such other reviews and projects as may be requested by the Board and to report to theBoard its findings from time to time on matters arising and requiring the attention of our AuditCommittee; and

(g) generally undertake such other functions and duties as may be required by law or the ListingManual, 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 ListingManual. As required by paragraph 1(9)(e) of Appendix 2.2 of the Listing Manual, our Directors shallabstain from voting in respect of any contract or arrangement or proposed contract or arrangement inwhich he has directly or indirectly a personal material interest.

Apart from the duties listed above, our Audit Committee shall commission and review the findings ofinternal investigations into matters where there is any suspected fraud or irregularity, or failure of internalcontrols or infringement of any Singapore and other applicable law, rule or regulation which has or islikely to have a material impact on our Company’s operating results and/or financial position.

REMUNERATION COMMITTEE

Our Remuneration Committee comprises Mr Lim Yeow Hua @ Lim You Qin, Mr Lai Meng Seng and MrKhua Kian Kheng Ivan. Our Remuneration Committee is chaired by Mr Lai Meng Seng.

Our Remuneration Committee will recommend to the Board a framework of remuneration for theDirectors and key executives, and determine specific remuneration packages for each Executive Director.The recommendations of our Remuneration Committee should be submitted for endorsement by theentire Board. All aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances,bonuses, options and benefits in kind shall be covered by our Remuneration Committee. Each memberof the Remuneration Committee shall abstain from voting on any resolutions and making anyrecommendations and/or participating in any deliberations of the Remuneration Committee in respect ofhis remuneration package.

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INTERESTED PERSON TRANSACTIONS

In general, transactions between our Group and any interested persons (namely, our Directors or any ofour Controlling Shareholders of our Company or the Associates of such persons) are known asinterested person transactions.

Save as disclosed under this section and under the section entitled “Restructuring Exercise” of thisProspectus, there are no material interested person transactions undertaken by our Group within the lastthree financial years ended 31 March 2006 and up to the Latest Practicable Date.

PAST INTERESTED PERSON TRANSACTIONS

Advances made to our Executive Director, Mr Tok Cheng Hoe

In May 2001, KSHEC made an advance of S$8,000 to our Executive Director, Mr Tok Cheng Hoe. Thisadvance was interest-free, unsecured and had no fixed terms of repayment and therefore would notordinarily be considered as a transaction that has been entered into on an arm’s length basis. During thelast three financial years ended 31 March 2006 and from 1 April 2006 up to the Latest Practicable Date,the largest outstanding amount owing by Mr Tok Cheng Hoe was S$3,000.

In October 2003, this advance was fully repaid by Mr Tok Cheng Hoe. We do not expect to enter intosimilar transactions in the future following our admission to the Official List of the SGX-ST.

Disposal of Premier Facade to Star Elite

Premier Facade was a 61.7%-owned subsidiary of KSHEC. It has been dormant since April 2003, priorto which its principal business was that of general contractor and trader in construction materials. InMarch 2005, KSHEC disposed of its entire shareholding in Premier Facade to Star Elite for a totalconsideration of S$1.00. Star Elite is wholly-owned by our Executive Directors, Messrs Choo Chee Onn,Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow, in equal proportions. We believe that the disposalhad been carried out on an arm’s length basis as Premier Facade had net liabilities of S$28,000 at thetime of the disposal.

Amount due to Vite Trading

On 23 October 2006, pursuant to the terms of a sale and purchase agreement entered into on 8 June1999 (the “SPA 1999”) in relation to, inter alia, the acquisition by KSH Realty of all the issued shares ofKSH Overseas, KSH Realty paid a sum of S$942,465.85 to Vite Trading. Vite Trading is a wholly-ownedsubsidiary of Star Elite, which is wholly-owned by Messrs Choo Chee Onn, Tok Cheng Hoe, Lim KeeSeng and Kwok Ngat Khow, who are our Executive Directors. This transaction was entered into on anarm’s length basis and was part of the terms of the SPA 1999.

Advances made by our Executive Directors to KSH Realty

In January 2006, our Executive Directors had, in the essence of time, paid an aggregate amount ofS$245,616, on behalf of KSH Realty, to a purchaser of a unit (the “Unit”) in Tianxing Riverfront Squarefor the return of the Unit which was requested by the purchaser. Such advances made by our ExecutiveDirectors to KSH Realty were interest-free, unsecured and had no fixed terms of repayment andtherefore would not ordinarily be considered as transactions that have been entered into on an arm’slength basis. During the last three financial years ended 31 March 2006 and from 1 April 2006 up to theLatest Practicable Date, the largest outstanding amount owing by KSH Realty to our Executive Directorswas S$245,616. The advances were fully repaid in March 2006 and there were no outstanding amountsdue to our Executive Directors as at the Latest Practicable Date. We do not expect to enter into similartransactions in the future following our admission to the Official List of the SGX-ST.

Transactions with Kim Seng Heng Pte. Ltd. and Star Elite

Kim Seng Heng Pte. Ltd. and Star Elite are companies wholly-owned by our Executive Directors, MessrsChoo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow in equal proportions. MessrsChoo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow are directors of Kim Seng HengPte. Ltd. while Messrs Choo Chee Onn and Lim Kee Seng are directors of Star Elite.

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INTERESTED PERSON TRANSACTIONS

In FY2005, KSHEC has paid on behalf of Kim Seng Heng Pte. Ltd. an aggregate amount of S$2,200,being the aggregate amount payable by Kim Seng Heng Pte. Ltd. to a corporate secretarial firm forgeneral corporate secretarial services rendered to it. Such one-off advance made by KSHEC to KimSeng Heng Pte. Ltd. was interest-free, unsecured and had no fixed terms of repayment and thereforewould not ordinarily be considered as a transaction that has been entered into on an arm’s length basis.Such amount has been expensed off by KSHEC in FY2006. We did not have any similar transactionswith Kim Seng Heng Pte. Ltd. thereafter and do not expect to enter into similar transactions in the futurefollowing our admission to the Official List of the SGX-ST. Our Executive Directors are currently in theprocess of striking off Kim Seng Heng Pte. Ltd. from the Register of Companies.

In May 2006, KSHEC has paid on behalf of Star Elite an aggregate amount of S$600, being theaggregate amount payable by Star Elite to a corporate secretarial firm for general corporate secretarialservices rendered to it. Such one-off advance made by KSHEC to Star Elite was interest-free, unsecuredand had no fixed terms of repayment and therefore would not ordinarily be considered as a transactionthat has been entered into on an arm’s length basis. Such amount was fully paid by Star Elite to KSHECin October 2006. We do not expect to enter into similar transactions in the future following our admissionto the Official List of the SGX-ST.

Transactions with Elite Enterprises Sdn. Bhd. (“Elite Enterprises”)

Elite Enterprises is a Malaysian company which is wholly-owned by our Executive Directors, MessrsChoo Chee Onn, Tok Cheng Hoe and Lim Kee Seng and which has been dormant since 1992. Manyyears back, KSHEC had trade and non-trade transactions with Elite Enterprises, none of which occurredwithin the last three financial years ended 31 March 2006 and up to the Latest Practicable Date. Suchtransactions were carried out on an arm’s length basis and on normal commercial terms. A substantialportion of the amounts due to and from Elite Enterprises were settled while an amount of S$230 duefrom Elite Enterprises remained in our books until October 2006. Such amount was fully paid by EliteEnterprises to KSHEC in October 2006.

Messrs Choo Chee Onn, Tok Cheng Hoe and Lim Kee Seng have on 18 December 2006 entered into anagreement with an unrelated third party, pursuant to which they have agreed to sell their entire interest inElite Enterprises to such third party. Upon completion of such sale, Messrs Choo Chee Onn, Tok ChengHoe and Lim Kee Seng will resign as directors of Elite Enterprises.

Personal Guarantees given by our Executive Directors

On 18 November 2002, our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Sengand Kwok Ngat Khow, had provided personal guarantees in favour of Tokyo Leasing (Singapore) Pte Ltdto secure a hire purchase facility of S$70,236 (the “Hire Purchase Loan”) granted to KSHEC. Suchtransactions were carried out on an arm’s length basis and on normal commercial terms. No amount waspayable to our Executive Directors for providing their guarantees. The largest outstanding amount of theHire Purchase Loan during the last three financial years ended 31 March 2006 and from 1 April 2006 upto the Latest Practicable Date, based on the amount as at the end of each calendar month wasS$37,069. The Hire Purchase Loan was fully settled on 18 October 2005 and our Executive Directors’personal guarantees to Tokyo Leasing (Singapore) Pte Ltd were discharged accordingly.

On 13 November 2003, our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Sengand Kwok Ngat Khow, had provided personal guarantees in favour of Hong Leong Finance Limited tosecure a mortgage loan of S$2,480,000 (the “Mortgage Loan”) granted to KSHEC. Such transactionswere carried out on an arm’s length basis and on normal commercial terms. No amount was payable toour Executive Directors for providing their guarantees. The largest outstanding amount of the MortgageLoan during the last three financial years ended 31 March 2006 and from 1 April 2006 up to the LatestPracticable Date, based on the amount as at the end of each calendar month, was S$2,354,814. TheMortgage Loan was fully settled on 9 January 2006 and our Executive Directors’ personal guarantees toHong Leong Finance Limited were discharged accordingly.

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On 27 February 2004, our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Sengand Kwok Ngat Khow, had provided personal guarantees in favour of The Bank of East Asia Limited tosecure an overdraft and short-term loan facility of S$1,700,000 (the “BEA Loan”) granted to KSHEC.Such transactions were carried out on an arm’s length basis and on normal commercial terms. Noamount was payable to our Executive Directors for providing their guarantees. The largest outstandingamount of the BEA Loan during the last three financial years ended 31 March 2006 and from 1 April2006 up to the Latest Practicable Date, based on the amount as at the end of each calendar month, wasS$412,340. The BEA Loan was fully settled on 7 June 2005 and our Executive Directors’ personalguarantees to The Bank of East Asia Limited were discharged accordingly.

PRESENT AND ONGOING INTERESTED PERSON TRANSACTIONS

Personal Guarantees given by our Executive Directors

Our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow,have provided personal guarantees to secure credit facilities and hire purchase facilities granted to ourGroup. Details of such facilities and personal guarantees provided in the last three most recentcompleted financial years up to the Latest Practicable Date are as follows:-

Financial institution / Amount of Facility for Personal guaranteesFinance company Type of facility facilities granted use by provided by

United Overseas Bank Credit facility RM 23,720,000.00 Techpath Choo Chee Onn,(Malaysia) Berhad Tok Cheng Hoe,

Lim Kee Seng, Kwok Ngat Khow

Hong Leong Finance Housing loan S$1,919,000.00 KSHEC Choo Chee Onn,Limited Term loan Tok Cheng Hoe,

Lim Kee Seng, Kwok Ngat Khow

Oversea-Chinese Project financing S$10,240,000.00 KSHEC Choo Chee Onn,Banking Corporation Tok Cheng Hoe,Limited Lim Kee Seng,

Kwok Ngat Khow

Standard Chartered Bank Term loan S$6,000,000.00 KSHEC Choo Chee Onn,Overdraft facility Tok Cheng Hoe,Letters of credit Lim Kee Seng,

Kwok Ngat Khow

DBS Bank Ltd Overdraft facility S$8,180,000.00 KSHEC Choo Chee Onn,Import line facility Tok Cheng Hoe,Letters of guarantee Lim Kee Seng,Term loan Kwok Ngat KhowForeign exchange line

Malayan Banking Berhad Overdraft facility S$7,800,000.00 KSHEC Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng, Kwok Ngat Khow

United Overseas Bank Overdraft facility S$13,500,000.00 KSHEC Choo Chee Onn,Limited Letter of credit Tok Cheng Hoe,

Money market line Lim Kee Seng,Performance Kwok Ngat Khowguarantee facility

ECICS-Coface Guarantee Guarantee facility S$20,000,000.00 KSHEC Choo Chee Onn,Company (Singapore) Ltd Tok Cheng Hoe,

Lim Kee Seng, Kwok Ngat Khow

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Financial institution / Amount of Facility for Personal guaranteesFinance company Type of facility facilities granted use by provided by

United Overseas Bank Term loan USD9,362,500 KSHEC Choo Chee OnnLimited, Shenzhen Branch

Malayan Banking Berhad Hire purchase S$78,495.75 KSHEC Lim Kee Seng

ORIX Leasing Singapore Hire purchase S$389,841.72 KSHEC Lim Kee Seng,Limited Choo Chee Onn

OCL Limited Hire purchase S$71,398.00 KSHEC Lim Kee Seng

Hong Leong Finance Limited Hire purchase S$39,052.13 KSHEC Lim Kee Seng

The above transactions are carried out on an arm’s length basis and on normal commercial terms. Noamounts are payable to the Executive Directors for providing their guarantees.

KSHEC has obtained banking facilities of S$13,013,600 comprising an overdraft facility and banker’sguarantees, from Malayan Banking Berhad in January 2007 for its construction project at The Coast AtSentosa Cove (details of which are set out in the section entitled “Construction – Projects Currently InProgress” of this Prospectus). Our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, LimKee Seng and Kwok Ngat Khow, have provided personal guarantees to secure such facilities. Thesetransactions are carried out on an arm’s length basis and on normal commercial terms. No amounts arepayable to the Executive Directors for providing their guarantees. KSHEC is currently in the process ofobtaining additional facilities of between S$9 million to S$11 million from a financial institution for suchconstruction project. It is expected that the Executive Directors will also be required to provide theirpersonal guarantees to secure such additional facilities.

As at the Latest Practicable Date, the total amount outstanding guaranteed by our Executive Directorswas approximately S$44.3 million. The largest aggregate outstanding amount guaranteed by ourExecutive Directors during the last three financial years ended 31 March 2006 and from 1 April 2006 upto the Latest Practicable Date, based on the amount as at the end of each calendar month, wasapproximately S$43.5 million.

Our Executive Directors have indicated that they intend to procure the release and discharge of theabove guarantees from the relevant financial institutions/finance companies after our admission to theOfficial List of the SGX-ST by substituting the same with other security acceptable to the financialinstitutions/finance companies. In the event that the financial institutions/finance companies do notrelease our Executive Directors from their obligations under the guarantees, they will continue to providethe relevant guarantees until such time when we are able to secure suitable alternative facilities at noless favourable terms from other financial institutions similar to those applicable to the current facilities.

Indemnity given by our Executive Directors and Star Elite to our Group

The Executive Directors and Star Elite have given an indemnity to our Group to cover all and any legalaction or claims instituted or made against our Group as a result of, or in connection with or in any otherway directly or indirectly pertaining to any of the past interested person transactions set out in the sectionentitled “Past Interested Person Transactions” of this Prospectus or in any way connected with anycircumstances or events related or linked to any matter or event occurring before or after any of suchpast interested person transactions, or the subject of any of such past interested person transactions.

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS

All future interested person transactions will be properly documented and submitted to our AuditCommittee for periodic review to ensure that they are carried out on an arm’s length basis, on normalcommercial terms and will not be prejudicial to the interests of our Shareholders. Our Audit Committeewill adopt the following procedures when reviewing interested person transactions:

(a) when purchasing items from or engaging the services of an interested person, two otherquotations from non-interested persons will be obtained for comparison to ensure that the interestsof minority Shareholders are not disadvantaged, where applicable. The purchase price or fees forservices shall not be higher than the most competitive price or fee of the two other quotations fromnon-interested persons. In determining the most competitive price or fee, all pertinent factors,including but not limited to quality, delivery time and track record will be taken into consideration;

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(b) when selling items or supplying services to an interested person, the price or the fee and terms oftwo other successful transactions of a similar nature with non-interested persons will be used ascomparison to ensure that the interests of minority Shareholders are not disadvantaged. The saleprice or fee for the supply of services shall not be lower than the lowest sale price or fee of the twoother successful transactions with non-interested persons;

(c) when renting properties from or to an interested person, appropriate steps will be taken to ensurethat such rent is commensurate with prevailing market rates, including adopting measures such asmaking relevant enquiries with landlords of similar properties and obtaining suitable reports orreviews published by property agents (where necessary). The rent payable shall be based on themost competitive market rental rates of similar properties in terms of size and location, based onthe results of the relevant enquiries; and

(d) when selling properties to an interested person, our Directors shall take appropriate steps toensure that such sale price is commensurate with the prevailing market rates for similar properties,including obtaining necessary reports or reviews published by property agents (including anindependent valuation report by a property valuer, when considered appropriate).

Our Audit Committee will review all interested person transactions, if any, at least quarterly to ensure thatthey are carried out on an arm’s length basis and in accordance with the procedures outlined above. Itwill take into account all relevant non-quantitative factors. In the event that a member of our AuditCommittee is interested in any such transaction, he will abstain from reviewing that particular transaction.Furthermore, if during these periodic reviews, our Audit Committee believes that the guidelines andprocedures as stated above are not sufficient to ensure that the interests of minority Shareholders arenot prejudiced, our Audit Committee will adopt new guidelines and procedures.

In addition, our Audit Committee will include the review of interested person transactions as part of itsstandard procedures while examining the adequacy of our internal controls. Our Board will also ensurethat all disclosure, approval and other requirements on interested person transactions, including thoserequired by prevailing legislation, the Listing Manual and accounting standards, are complied with. Inaddition, such transactions will also be subject to Shareholders’ approval if required by the ListingManual.

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CONFLICTS OF INTERESTS

Save as disclosed below and the section entitled “Interested Person Transactions” of this Prospectus,none of our Directors, Controlling Shareholders or their Associates have any interest, direct or indirect,in:-

(i) any company carrying on the same business or dealing in similar products as us;

(ii) any company that is our Group’s customer, supplier or sub-contractor; and

(iii) any material transactions to which our Group was or is a party.

Our Executive Directors’ interests in Star Elite

Our Executive Directors, Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow,each hold 25% of the issued share capital of Star Elite, an investment holding company, which in turnholds:-

(i) 24.2% of the issued share capital of TCH Holding;

(ii) 61.7% of the issued share capital of Premier Facade;

(iii) 100% of the issued share capital of Vite Trading; and

(iv) 100% of the issued share capital of KSH Tech.

Consequently, our Executive Directors have indirect interests in KSH Tech, TCH Holding, Premier Facadeand Vite Trading.

Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow are directors of KSH Techand Mr Choo Chee Onn and Mr Lim Kee Seng are directors of Star Elite and Premier Facade.

TCH Holding is currently engaged in the hotel business, which does not compete with the business ofour Group. KSH Tech is currently dormant and is in the process of making an application to theAccounting and Corporate Regulatory Authority for the striking off of the name of KSH Tech from theRegister of Companies. Premier Facade has been dormant since April 2003, prior to which its principalbusiness activities were that of general contractor and trader in construction materials. Premier Facadehas in September 2006 amended its objects to general wholesale trade and as such, it will not becarrying on any business which is similar to ours.

Vite Trading has been dormant since 1999 and its current principal activity is general wholesale trade. Asthe current principal activity of Vite Trading is not similar to our businesses, our Directors are of the viewthat there is no potential conflict of interests between our Group and Vite Trading.

Based on the above, it is our Directors’ belief and opinion that at present, there does not exist anyconflicts of interests between our Group and Star Elite, KSH Tech, TCH Holding, Premier Facade andVite Trading. Nevertheless, the following additional safeguards have been put in place to address anypotential conflicts of interests:-

(a) Star Elite has given an undertaking to our Company that for as long as any of its directors,Substantial Shareholders or the Associates of such directors or Substantial Shareholders is adirector of our Company or has any interest, direct or indirect, in the share capital of our Company,it will not and shall procure that each of KSH Tech, TCH Holding, Premier Facade and Vite Tradingwill not, directly or indirectly engage in any business, including but not limited to the construction,property development and property management businesses, which competes directly or indirectlywith the business of our Group.

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(b) Each of Messrs Choo Chee Onn, Lim Kee Seng, Tok Cheng Hoe and Kwok Ngat Khow has alsogiven an undertaking to our Company that for as long as he is a Director and/or SubstantialShareholder of our Company, he and/or (where relevant) his Associates shall:-

(i) observe his fiduciary duties as a Director of our Company and act in the best interests ofour Group;

(ii) not be involved in any decision making in Star Elite, TCH Holding, Premier Facade, ViteTrading and KSH Tech or any of their related companies that will put him in a conflict ofinterests position with respect to his duties and responsibilities in our Group;

(iii) procure that Star Elite, TCH Holding, Premier Facade, Vite Trading and KSH Tech and any ofits related companies will not, directly or indirectly, engage in any business, including but notlimited to the construction, property development and property management businesses,which will compete directly or indirectly with the business of our Group;

(iv) not have any interest, directly or indirectly, in any entity whose business competes directly orindirectly with the business of our Group, except that he and/or his Associates shall bepermitted to have interest not exceeding 5% in any securities of any corporation listed orquoted on any stock exchange notwithstanding that such corporation may be engaging in abusiness which may compete directly or indirectly with the business of our Group;

(v) confirm to our Company, on a quarterly basis, that he has not, directly or indirectly, carriedon or engaged or been interested in any capacity in any other business, trade or occupationwhatsoever, except in a business, trade or occupation which does not compete directly orindirectly with any business carried on or proposed to be carried on by our Group;

(vi) in the event that any resolution is proposed which could result in a potential conflict ofinterests arising between (a) our Group and (b) Star Elite, TCH Holding, Premier Facade,Vite Trading or KSH Tech, he and/or his Associates will, subject to applicable laws, exercisehis/their voting rights (if any) in the relevant companies to vote against such resolution andtake such steps as may be in his/their power so as to give full effect to the mattersdescribed under (ii) and (iii) above; and

(vii) endeavour to take steps to eliminate any potential conflicts of interests, including but notlimited to (a) divesting his entire shareholding interest in Star Elite and (b) resigning as adirector of Star Elite, Premier Facade and/or KSH Tech (as the case may be).

In addition to the above undertakings, our Directors are regarded as fiduciaries both at common law andunder the Companies Act and have a duty to act bona fide in the interests of our Company. They mustnot place themselves in positions where their duty to our Company and their own interests may conflict.

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GENERAL AND STATUTORY INFORMATION

1. INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS

(a) The name, address, age, principal occupation and business and working experience of eachof our Directors and Executive Officers are set out in the section entitled “Directors,Management and Staff” of this Prospectus.

(b) The list of present directorships and past directorships (held in the five years preceding thedate of this Prospectus) of each of our Directors, other than directorships in our Company, isas follows:-

Name Present directorships Past directorships

Choo Chee Onn Group companies Group companies

Duford Investment (Hong Kong) Limited NilKSHECKSH OverseasKSH RealtyTechpathTTX Property ManagementTTX Real Estate

Other companies Other companies

Elite Enterprises Sdn. Bhd. Ecospec Global Technology Pte Ltd JHTD TCH HoldingKim Seng Heng Pte. Ltd.KSH TechPremier FacadeStar Elite

Tok Cheng Hoe Group companies Group companies

KSHEC NilKSH OverseasKSH RealtyTechpath

Other companies Other companies

Elite Enterprises Sdn. Bhd. NilKim Seng Heng Pte. Ltd.KSH Tech

Lim Kee Seng Group companies Group companies

KSHEC NilKSH OverseasKSH RealtyTechpathTTX Property ManagementTTX Real Estate

Other companies Other companies

Elite Enterprises Sdn. Bhd. NilKim Seng Heng Pte. Ltd.KSH TechPremier FacadeStar Elite

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GENERAL AND STATUTORY INFORMATION

Name Present directorships Past directorships

Kwok Ngat Khow Group companies Group companies

KSHEC NilKSH OverseasKSH RealtyTechpath

Other companies Other companies

Kim Seng Heng Pte. Ltd. NilKSH Tech

Lim Yeow Hua @ Group companies Group companiesLim You Qin Nil Nil

Other companies Other companies

Advanced Integrated Manufacturing JDK International Pte. Ltd.Corp. Ltd

Asia Pacific Business ConsultantsPte. Ltd.

JCY Holdings Pte. Ltd.JLL International Pte. Ltd.

Lai Meng Seng Group companies Group companies

Nil Nil

Other companies Other companies

LMS Holding Australia Pty Ltd RHLB Terotech Pte. Ltd.Stormwater (Asia) Pte. Ltd.

Khua Kian Group companies Group companiesKheng Ivan Nil Nil

Other companies Other companies

Centennial Harvest Ltd NilPetrolSingapore Pte. Ltd.Rider Hunt Levett & Bailey(Middle East) Pte. Ltd.

Synetcom International Pte LtdTemasek Investment LtdTuanle Corporation Pte. Ltd.Tuanle Capital Pte. Ltd.

(c) The list of present directorships and past directorships (held in the five years preceding thedate of this Prospectus) of each of our Executive Officers is as follows:-

Name Present directorships Past directorships

Tang Hay Ming Group companies Group companies

TTX Property Management NilTTX Real Estate

Other companies Other companies

Hub1 Solutions Pte. Ltd. NilVenture Vision Software (Suzhou)

Co., Ltd

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GENERAL AND STATUTORY INFORMATION

Name Present directorships Past directorships

Goh Yong Hock Group companies Other companies

Nil Nil

Group companies Other companies

Nil City State Engineers & ContractorsPte Ltd

(d) There is no shareholding qualification for Directors in the Articles of Association of ourCompany.

(e) Save as disclosed below, none of our Directors, Executive Officers or ControllingShareholders:-

(i) has, at any time during the last 10 years, had an application or a petition under anybankruptcy laws of any jurisdiction filed against him or against a partnership of whichhe was a partner at the time when he was a partner or at any time within 2 years fromthe date he ceased to be a partner;

(ii) has, at any time during the last 10 years, had an application or a petition under anylaw of any jurisdiction filed against an entity (not being a partnership) of which he wasa director or an equivalent person or a key executive, at the time when he was adirector or an equivalent person or a key executive of that entity or at any time within2 years from the date he ceased to be a director or an equivalent person or a keyexecutive of that entity, for the winding-up or dissolution of that entity or, where thatentity is the trustee of a business trust, that business trust, on the ground ofinsolvency;

(iii) has any unsatisfied judgment against him;

(iv) has ever been convicted of any offence, in Singapore or elsewhere, involving fraud ordishonesty which is punishable with imprisonment, or has been the subject of anycriminal proceedings (including any pending criminal proceedings of which he isaware) for such purpose;

(v) has ever been convicted of any offence, in Singapore or elsewhere, involving a breachof any law or regulatory requirement that relates to the securities or futures industry inSingapore or elsewhere, or has been the subject of any criminal proceedings(including any pending criminal proceedings of which he is aware) for such breach;

(vi) has, at any time during the last 10 years, had judgment entered against him in anycivil proceedings in Singapore or elsewhere involving a breach of any law orregulatory requirement that relates to the securities or futures industry in Singapore orelsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, nor hashe been the subject of any civil proceedings (including any pending civil proceedingsof which he is aware) involving an allegation of fraud, misrepresentation or dishonestyon his part;

(vii) has ever been convicted in Singapore or elsewhere of any offence in connection withthe formation or management of any entity or business trust;

(viii) has ever been disqualified from acting as a director or an equivalent person of anyentity (including the trustee of a business trust), or from taking part directly orindirectly in the management of any entity or business trust;

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(ix) has ever been the subject of any order, judgment or ruling of any court, tribunal orgovernmental body permanently or temporarily enjoining him from engaging in anytype of business practice or activity;

(x) has ever, to his knowledge, been concerned with the management or conduct, inSingapore or elsewhere, of the affairs of:-

(aa) any corporation which has been investigated for a breach of any law orregulatory requirement governing corporations in Singapore or elsewhere;

(bb) any entity (not being a corporation) which has been investigated for a breach ofany law or regulatory requirement governing such entities in Singapore orelsewhere;

(cc) any business trust which has been investigated for a breach of any law orregulatory requirement governing business trusts in Singapore or elsewhere; or

(dd) any entity or business trust which has been investigated for a breach of any lawor regulatory requirement that relates to the securities or futures industry inSingapore or elsewhere,

in connection with any matter occurring or arising during the period when he was soconcerned with the entity or business trust; and

(xi) has been the subject of any current or past investigation or disciplinary proceedings,or has been reprimanded or issued any warning, by the Authority or any otherregulatory authority, exchange, professional body or government agency, whether inSingapore or elsewhere.

Notes:-

(i) Disclosures relating to KSHEC

Subordinate Courts

In October 1996, the Subordinate Courts imposed a fine of S$25,000 on KSHEC as apenalty for failing to provide guardrails of adequate strength to prevent as far as possible thefall of one of its workers which resulted in the death of the said worker.

In January 2005, the Subordinate Courts imposed a fine of S$45,000 on KSHEC as apenalty for failing to prevent the collapse of a bundle of scaffold frames placed on top of ametal platform which resulted in the death of one worker in 2004.

To minimise such future accidents and to increase the level of safety at our constructionsites and factories, we have instructed our external safety consultants and our own projectand site managers to conduct more frequent checks and put in place a higher level ofsupervision on our construction sites and to report to our corporate headquartersimmediately in respect of any such potential breaches or observations of any possibledangerous situations. We have also put in place a system whereby internal penalties can beimposed so as to instil stronger safety awareness amongst our supervisors and sub-contractors.

In May 2003, the Subordinate Courts imposed a fine of S$6,000 on KSHEC as a penalty forfailing to ensure that the level of noise at its worksite at Mandalay/Bassein Road during thecourse of KSHEC’s construction of a 29-storey residential development did not exceed thepermissible levels set by the National Enviromental Agency.

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Fines imposed by regulatory authorities such as the MOM, Ministry of Environmentand Water Resources, Land Transport Authority and PUB

KSHEC has, from time to time in the ordinary course of its construction business, incurredfines imposed by these regulatory authorities in relation to breaches of certainenvironmental, safety and other regulations. These fines are typically between S$500 toS$4,000 and the aggregate of such fines imposed by these regulatory authorities and paidby KSHEC for FY2004, FY2005, FY2006 and from 1 April 2006 to the Latest PracticableDate were S$31,800, S$39,800, S$17,500, and S$27,750 respectively.

To minimise such breaches, our Group has (i) engaged internal and external EHS(Environmental Health Safety) officers and safety officers to manage the safety andenvironmental aspects of our construction projects; (ii) instructed our project and sitemanagers to conduct more frequent checks and to put in place a higher level of supervisionon our construction sites and to report to our corporate headquarters immediately in respectof any such potential breaches or observations of any possible dangerous situations; (iii)instructed our project and site managers to impose penalties on our sub-contractors for anybreaches by such sub-contractors; and (iv) increased the number of our staff trainingcourses to instil a stronger awareness of safety amongst our workers, supervisors and sub-contractors.

Claims by sub-contractors and developers

From time to time in the ordinary course of its business, KSHEC has faced and will faceclaims from its sub-contractors and developers arising from disputes between KSHEC andsuch sub-contractors or developers in connection with KSHEC’s construction projects.Disputes between us and our sub-contractors may arise for various reasons includingdefective works, delays in the completion of a project and disputes over contractspecifications and the final amount payable for work done on the project. Disputes may alsoarise between us and the developers for various reasons, such as differences in theinterpretation of acceptable quality standards of workmanship and materials used,disagreements over the value of work done and disputes over contract specifications. Someof these disputes and claims have resulted or may result in litigation or arbitrationproceedings. Please see the section entitled “Litigation and Arbitration Proceedings” of thisProspectus for information on the current litigation and arbitration proceedings involvingKSHEC and its sub-contractors and the developers.

Claims arising from industrial accidents

From time to time in the ordinary course of its business, KSHEC has faced and will faceclaims for damages from its workers, the workers of its sub-contractors as well as otherpersons arising from accidents or mishaps at the construction sites for its projects or atKSHEC’s factories. Some of these claims have resulted or may result in legal proceedingsbeing instituted against KSHEC. All of these claims are covered under the workmen’scompensation and public liability insurance policies taken up by KSHEC.

(ii) Disclosures relating to Mr Choo Chee Onn

In 2001, Mr Choo Chee Onn was fined S$2,000, and had his driving license suspended for12 months by the Subordinate Courts in relation to an offence under the Road Traffic Act.

In 2001, Mr Choo was fined S$500 by the Registrar of Companies and Businesses, in hiscapacity as a director of West Park Development (S) Pte Ltd (“WPD”), for WPD’s failure tohold its annual general meeting on 30 September 2000 as required under Section 175 ofthe Companies Act. Mr Choo is currently no longer a director of WPD.

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(iii) Disclosures relating to Mr Choo Chee Onn and Mr Goh Yong Hock

In 1999, Mr Choo Chee Onn and Mr Goh Yong Hock were interviewed by the CorruptPractices Investigation Bureau (“CPIB”) in connection with their investigations relating to anofficer of a government agency which had awarded a project to KSHEC pursuant to an opentender.

Both Mr Choo Chee Onn and Mr Goh Yong Hock were not the subject of the CPIBinvestigations and they have not been contacted thereafter by the CPIB to assist in anyfurther investigations.

(iv) Disclosures relating to Mr Kwok Ngat Khow

A writ of summons was filed by Mr Kwok Ngat Khow’s motor insurers in the SubordinateCourts on 10 September 2002 against another party in relation to a motor accident. Noinjuries were sustained by any of the parties involved in the accident. A notice ofdiscontinuance in respect of this legal suit was filed by Mr Kwok Ngat Khow’s motor insurerson 14 January 2003.

A writ of summons was filed against Mr Kwok Ngat Khow on 11 February 2003 in relation toa motor accident involving the plaintiffs who filed the writ of summons, another driver and MrKwok Ngat Khow. No injuries were sustained by any of the parties involved in the accident.To the best of Mr Kwok Ngat Khow’s knowledge and belief, the motor insurers for the carrental company from whom Mr Kwok Ngat Khow rented the relevant vehicle that wasinvolved in the said motor accident took over the conduct of the legal suit. To-date, no furtherclaims have been made against Mr Kwok Ngat Khow and neither has he been involved inany court proceedings related to this.

(v) Disclosures relating to Mr Lai Meng Seng

In 1992 or 1993, a firm (the “Firm”) of which Mr Lai Meng Seng was the managing partner,was requested by the Commercial Affairs Department (“CAD”) to provide them with its filesrelating to a project in which the Firm was engaged as the consultant quantity surveyor bythe developer of that project.

Thereafter, the Firm’s files relating to the said project were returned to them by the CAD andthe Firm was not further contacted by the CAD. The Firm and Mr Lai Meng Seng were notthe subject of the CAD investigations.

2. MEMORANDUM AND ARTICLES OF ASSOCIATION

(a) Memorandum of Association

The Memorandum of Association of our Company states, among others, that the liability ofmembers of our Company is limited.

(b) Articles of Association

An extract of the relevant provisions of the Articles of Association of our Company,providing, inter alia, for (a) a Director’s power to vote on a proposal, arrangement or contractin which the Director is interested; (b) the Director’s power to vote on remuneration forhimself or for any other director; (c) the borrowing powers exercisable by the Directors andthe variation thereof; (d) the retirement or non-retirement of Directors under an age limitrequirement; (e) the number of shares, if any, required for a Director’s qualification; (f) therights, preferences and restrictions attaching to each class of shares; (g) any change incapital; (h) any change in the respective rights of the various classes of shares; (i) any timelimit after which a dividend entitlement will lapse; and (j) any limitation on the right to ownShares, are set out in Appendix C of this Prospectus.

The complete Articles of Association of our Company are available for inspection byShareholders.

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3. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business, havebeen entered into by our Company and our subsidiaries within the two years preceding the date oflodgment of this Prospectus and are or may be material:-

(a) Amended Joint Venture Agreement dated 2 March 2005 between KSH Overseas and TianjinCommercial Construction Development, in relation to their investment in TTX Real Estate;

(b) Amendment Agreement dated 28 July 2005 between Beijing Jia Hua Hong Yuan, TianjinCommercial Construction Development and Duford, for the amendment of the Joint VentureAgreement in respect of JHTD dated 26 December 2001 entered into between the saidparties;

(c) Amendment Agreement dated 9 September 2005 between Beijing Jia Hua Hong Yuan,Tianjin Commercial Construction Development and Duford, for the amendment of the JointVenture Agreement in respect of JHTD entered into between the said parties;

(d) Equity Transfer Agreement dated 9 September 2005 between Duford and TianjinCommercial Construction Development pursuant to which Duford acquired a 2.72% equityinterest in JHTD from Tianjin Commercial Construction Development for a cashconsideration of RMB1,128,800;

(e) Agreement dated 14 September 2005 and Letter Agreement dated 30 August 2006between KSHEC and SAFRA in relation to the settlement of the incident disclosed inparagraph (a) under the section entitled “Litigation and Arbitration Proceedings” of thisProspectus;

(f) Compromise Agreement dated 15 March 2006 between TTX Real Estate and SakinaTrading Pte. Ltd., pursuant to which it was agreed that TTX Real Estate will refund 90% ofthe aggregate purchase monies for seven property units in Tianxing Riverfront Square to theSingapore purchaser and the Singapore purchaser will transfer to TTX Real Estate suchseven property units;

(g) Sale and Purchase Agreement dated 21 March 2006 between KSHEC and Star Elite,pursuant to which KSHEC sold 100% of the issued share capital of KSH Tech, comprising 4ordinary shares, to Star Elite for a cash consideration of S$4.00, as part of the RestructuringExercise;

(h) Sale and Purchase Agreement dated 23 March 2006 between KSH Overseas and IdealSino Investments Limited (“Ideal Sino”) pursuant to which KSH Overseas acquired 16.6% ofthe issued share capital of Duford, comprising 1,299,480 ordinary shares, from Ideal Sinofor a cash consideration of HK$2,174,228;

(i) Sale and Purchase Agreement dated 29 March 2006 between our Company and MessrsChoo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and Kwok Ngat Khow, pursuant to whichour Company acquired 100% of the issued share capital of KSHEC comprising 15,780,624ordinary shares, from Messrs Choo Chee Onn, Tok Cheng Hoe, Lim Kee Seng and KwokNgat Khow for an aggregate consideration of S$15,780,624 to be satisfied by the allotmentand issuance of an aggregate of 15,780,624 new Shares, as part of the RestructuringExercise;

(j) Sale and Purchase Agreement dated 11 December 2006 between our Company and KSHRealty, pursuant to which our Company acquired 100% of the issued share capital of KSHOverseas, comprising 23,010,000 ordinary shares, from KSH Realty for a cashconsideration of S$23,010,000, as part of the Restructuring Exercise;

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(k) Sale and Purchase Agreement dated 12 December 2006 between our Company andKSHEC, pursuant to which our Company acquired 100% of the issued share capital of KSHRealty, comprising 18,725,000 ordinary shares, from KSHEC for a cash consideration ofS$18,725,000, as part of the Restructuring Exercise; and

(l) Service Agreement dated 20 December 2006 between our Company and our ExecutiveChairman and Managing Director, Mr Choo Chee Onn, details of which are set out underthe section entitled “Service Agreement” of this Prospectus.

4. LITIGATION AND ARBITRATION PROCEEDINGS

Save as disclosed below, to the best of our knowledge and belief, having made all reasonableenquiries, neither our Company nor any of our subsidiaries is engaged in any litigation orarbitration proceedings either as plaintiff or defendant including those which are pending or knownto be contemplated, which may have or have had in the last 12 months preceding the date oflodgment of this Prospectus, a material effect on our Group’s profitability or financial position:-

(a) In July 2005, the supplier of a sub-contractor of KSHEC accidentally created a chlorine gasleak in the premises of a clubhouse at Mount Faber in the course of carrying out certainmaintenance works at the clubhouse’s swimming pool. As KSHEC was the main contractorfor the construction of the clubhouse and was responsible for its maintenance works, theowner of the clubhouse required KSHEC to attend to various claims resulting from theincident. KSHEC has since attended to all relevant claims amounting to approximatelyS$307,000 brought to its attention by the owner of the clubhouse in accordance with a set ofmutually agreed terms arrived at between the owner of the clubhouse and KSHEC (the“Agreed Resolution”) and KSHEC is seeking full indemnification of such claims from itsinsurers. As at 3 October 2006, KSHEC’s insurers have indicated that they are prepared toconsider an indemnity to KSHEC of approximately S$256,500 of such claims. KSHEC hasbeen advised by its legal counsel for this matter, WongPartnership, on 21 December 2006that the Agreed Resolution would be in full and final settlement of all relevant claims relatingto the incident which have so far been brought to the attention of KSHEC by the owner ofthe clubhouse, save for any claims by the vendors (“Vendors”) operating at the clubhouse(“Vendors’ Claims”). The preceding statement was prepared by WongPartnership for thepurpose of incorporation in this Prospectus. The insurers of KSHEC will assess the Vendors’Claims and any future claims that may be made in connection with the incident. On 13November 2006, a writ of summons was filed against KSHEC by one of the Vendorsclaiming, inter alia, the sum of S$81,129.07, being the loss and damage allegedly sufferedby the said Vendor as a result of the aforesaid incident. The insurers of KSHEC haveappointed their lawyers to take over the conduct of the matter and an appearance wasentered on behalf of KSHEC on 20 November 2006. Save as disclosed above, KSHEC hasnot been involved in any litigation in connection with the incident.

(b) On 31 December 1997, TTX Real Estate entered into a compromise agreement (the“Compromise Agreement”) with a construction firm (the “Construction Firm”), who wasthe main contractor for Tianxing Riverfront Square. Under the Compromise Agreement, itwas agreed between the parties that TTX Real Estate will transfer the property units on the10th to 14th floors of Tianxing Riverfront Square (the “Property Units”) to the ConstructionFirm to set off against the construction costs payable by TTX Real Estate to theConstruction Firm (the “Construction Costs”) in respect of the construction worksperformed by the Construction Firm for Tianxing Riverfront Square. In December 1998, asdirected by the Construction Firm, the property units on the 12th floor were handed over to athird party. In 2003, notwithstanding the Compromise Agreement, the Construction Firmbrought a legal suit against TTX Real Estate to claim for, inter alia, the payment of theoutstanding amount of approximately RMB40.7 million of the Construction Costs in cash.The matter was litigated before the Tianjin High People’s Court. According to the judgmentrendered by the court on 31 March 2004, the parties shall, inter alia, abide by and observeand fulfil the terms of the Compromise Agreement which provides that TTX Real Estate shalltransfer the Property Units to the Construction Firm to set off against the ConstructionCosts. In October 2005, the property units on the 14th floor were transferred in accordance

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with the Compromise Agreement. TTX Real Estate is presently awaiting notification from theConstruction Firm with regard to the transfer of the remaining Property Units which have yetto be transferred, in accordance with the Compromise Agreement. Our Company has beenadvised by its legal advisers on PRC law, Jingtian & Gongcheng, on 21 December 2006 that(i) in any event, the Construction Firm will not be entitled to bring any civil lawsuit againstTTX Real Estate in relation to the same dispute to which the above-mentioned judgmentrelates and (ii) the possibility of a retrial of this case is very small and consequently will nothave any adverse effect on TTX Real Estate. This statement was prepared by Jingtian &Gongcheng for the purpose of incorporation in this Prospectus. Based on the advice ofJingtian & Gongcheng, the Directors do not expect the dispute between TTX Real Estateand the Construction Firm to have a material effect on the financial position or profitability ofour Group.

(c) In 2004, TTX Real Estate and a Singapore purchaser of seven units in Tianxing RiverfrontSquare had a legal dispute pertaining to the delayed delivery of a property unit in TianxingRiverfront Square on the part of TTX Real Estate, and the late payment of that unit’spurchase monies on the part of the purchaser. The matter was litigated in the courts andfollowing the judgment rendered by Tianjin No. 2 Middle People’s Court in August 2005, theparties, presided over by the court, entered into a compromise agreement wherein it wasagreed that against the transfer to TTX Real Estate of the seven units purchased by theSingapore purchaser, TTX Real Estate will refund 90% of the aggregate purchase moniesfor the seven units, which amounts to an aggregate of approximately US$245,159 (orapproximately S$397,000), to the Singapore purchaser. The amount to be refunded inrespect of one of the property units, being approximately US$25,518 (or approximatelyS$41,570), was paid to the Singapore purchaser in April 2006. TTX Real Estate is in theprocess of paying the amount to be refunded in respect of the other six property units in 12instalments, of which the last instalment is to be paid before 25 May 2007. Our Companyhas been advised by its legal advisers on PRC law, Jingtian & Gongcheng, on 21 December2006 that as the parties are performing the agreed terms of the compromise agreement, theSingapore purchaser will not be entitled to re-litigate this case while the compromiseagreement is being performed by the parties. This statement was prepared by Jingtian &Gongcheng for the purpose of incorporation in this Prospectus.

(d) TTX Real Estate and two Singapore purchasers of two units in Tianxing Riverfront Squareare presently in dispute over the delayed delivery of the units on the part of TTX RealEstate, and the late payment of the units’ purchase monies on the part of these purchasers.The disputes at present have not resulted in any litigation. Our Company has been advisedby its legal advisers on PRC law, Jingtian & Gongcheng, on 21 December 2006 thatcurrently the total amount involved in the present disputes with these two purchasers isestimated to be approximately RMB50,000. This statement was prepared by Jingtian &Gongcheng for the purpose of incorporation in this Prospectus. Based on the advice fromJingtian & Gongcheng, the Directors do not believe any litigation pertaining to the disputesto be material.

(e) Since 1998, there have been disputes between TTX Real Estate and the Singaporepurchasers of twenty-five units in Tianxing Riverfront Square pertaining to the delayeddelivery of the twenty-five units in Tianxing Riverfront Square on the part of TTX RealEstate, and the late payment of those units’ purchase monies on the part of the purchasers.TTX Real Estate and these Singapore buyers had not made any claims against each othersince 1998 and the disputes at present have not resulted in any litigation. Our Company hasbeen advised by its legal advisers on PRC law, Jingtian & Gongcheng, on 21 December2006 that although the parties can still apply to the court for the protection of their civilrights, TTX Real Estate and these Singapore buyers have lost their rights to win anylawsuits against each other with regard to any claims which the parties may have in relationto such disputes, as the statutory 2-year limitation of action period (which refers to theperiod of 2 years from the time the person who is entitled to bring a legal suit knows orought to have known that his/her rights have been infringed upon) in respect of thesedisputes has expired. This statement was prepared by Jingtian & Gongcheng for thepurpose of incorporation in this Prospectus.

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(f) Our subsidiary, KSHEC, is currently involved in arbitration proceedings with one of its sub-contractors (the “Subcontractor”) in respect of a dispute pertaining to work done by theSubcontractor for a condominium project and certain counter-claims by KSHEC. The Subcontractor’s claims amount to S$155,500.25. KSHEC has been advised by its legalcounsel for this matter, Tan Kok Quan Partnership, on 21 December 2006 that it has adefence to the Subcontractor’s claims and a reasonable basis for its counter-claims againstthe Subcontractor. This statement was prepared by Tan Kok Quan Partnership for thepurpose of incorporation in this Prospectus. KSHEC has served its defence and counter-claims on 26 January 2007. Based on the advice of Tan Kok Quan Partnership, the Directorsdo not expect the Subcontractor’s claims and KSHEC’s counter-claims to have a materialeffect on the financial position or profitability of our Group.

(g) Our subsidiary, KSHEC, is currently involved in arbitration proceedings with a propertydeveloper (the “Developer”) in relation to its claims made against the Developer for A&Aworks in a development project and counter-claims by the Developer. KSHEC has beenadvised by its legal counsel for this matter, Tan Kok Quan Partnership, on 21 December2006 that it has a good basis to pursue its claims against the Developer for the value ofworks (including variations) carried out, amounting to approximately S$743,000.00. Thisstatement was prepared by Tan Kok Quan Partnership for the purpose of incorporation inthis Prospectus. KSHEC is further claiming for damages for delay caused by the Developer,amounting to approximately S$220,000.00, alternatively for prolongation damages to beassessed, as well as finance/interest charges to be assessed, for the delay in makingpayment of monies due to KSHEC. KSHEC has also been advised by Tan Kok QuanPartnership on 21 December 2006 that a number of the counter-claims that were formallymade on 19 December 2006 by the Developer appear to be dubious and are in any event,lacking in particularity. This statement was prepared by Tan Kok Quan Partnership for thepurpose of incorporation in this Prospectus. Based on the advice of Tan Kok QuanPartnership, the Directors do not expect KSHEC’s claims and the Developer’s counter-claims to have a material effect on the financial position or profitability of our Group.

5. MISCELLANEOUS

(a) Application monies received by our Company in respect of successful applications (includingsuccessful applications which are subsequently rejected) will be placed in a separate non-interest bearing account with the Receiving Banker. In the ordinary course of business, theReceiving Banker will deploy these monies in the interbank monies market. All profitsderived from the deployment of such monies will accrue to the Receiving Banker. Any refundof all or part of the application monies to unsuccessful or partially successful applicants willbe made without interest or any share of revenue or any other benefit arising therefrom.

(b) We intend to continue with the appointment of Ernst & Young as our auditors after ouradmission to the Official List of the SGX-ST.

(c) No expert named in this Prospectus:-

(i) is employed on a contingent basis by our Company or our subsidiaries;

(ii) has a material interest, whether direct or indirect, in our Shares or in the shares of oursubsidiaries; or

(iii) has a material economic interest, whether direct or indirect, in our Company, includingan interest in the success of the offer.

(d) As at the Latest Practicable Date, our Directors are not aware of any event which hasoccurred since 30 June 2006 which may have a material effect on the financial position andresults of our Group that is not already disclosed in the sections entitled “Management’sDiscussion and Analysis of Financial Condition and Results of Operations”, “Capitalisationand Indebtedness” and “Trend Information” of this Prospectus.

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6. CONSENTS

(a) Ernst & Young has given and has not withdrawn its written consent to the issue of thisProspectus with the inclusion herein of the Report from the Auditors in relation to theAudited Combined Financial Statements of KSH Holdings Limited and its Subsidiaries forthe Financial Years Ended 31 March 2004, 2005 and 2006 and the Report from the Auditorsin relation to the Unaudited Review of the Interim Combined Financial Statements of KSHHoldings Limited and its Subsidiaries for the Financial Period from 1 April 2006 to 30 June2006, in the form and context in which they are included in this Prospectus and referencesto its name in the form and context in which they appear in this Prospectus and to act insuch capacity in relation to this Prospectus.

(b) The Manager, the Underwriter and the Placement Agent have each given and have notwithdrawn their respective written consents to the issue of this Prospectus with the inclusionherein of their respective names and references to their respective names in the form andcontext in which they respectively appear in this Prospectus and to act in such respectivecapacities in relation to this Prospectus.

(c) The legal advisers to our Company on PRC law, Jingtian & Gongcheng, has given and hasnot withdrawn its written consent to the issue of this Prospectus with the inclusion herein of:-

(a) its name and all references to its name; and

(b) the statements prepared by them set out in paragraphs (b), (c), (d) and (e) under“Litigation and Arbitration Proceedings” in the section entitled “General and StatutoryInformation” of this Prospectus,

in the form and context in which they appear in this Prospectus, and to act in such capacityin relation to this Prospectus.

(d) The legal advisers to our Company on Hong Kong law, Charles Yeung Clement Lam Liu &Yip, has given and has not withdrawn its written consent to the issue of this Prospectus withthe inclusion herein of:-

(a) its name and all references to its name; and

(b) the statement prepared by them set out in the section entitled “Group Structure” ofthis Prospectus,

in the form and context in which they appear in this Prospectus, and to act in such capacityin relation to this Prospectus.

(e) The legal advisers to our Company on Malaysian law, SKRINE, has given and has notwithdrawn its written consent to the issue of this Prospectus with the inclusion herein of:-

(a) its name and all references to its name; and

(b) the statement prepared by them set out under “Any suspension or cancellation ofTechpath’s CIDB registration will adversely affect our business, results of operationsand financial performance” in the section entitled “Risk Factors - Risks relating to ourconstruction business in general” of this Prospectus,

in the form and context in which they appear in this Prospectus, and to act in such capacityin relation to this Prospectus.

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(f) WongPartnership of One George Street, #20-01, Singapore 049145, who is the legalcounsel of KSHEC for the matter described in paragraph (a) under “Litigation and ArbitrationProceedings” in the section entitled “General and Statutory Information” of this Prospectus,has given and has not withdrawn its written consent to the issue of this Prospectus with theinclusion herein of:-

(a) its name and all references to its name; and

(b) the statement prepared by them set out in paragraph (a) under “Litigation andArbitration Proceedings” in the section entitled “General and Statutory Information” ofthis Prospectus,

in the form and context in which they appear in this Prospectus, and to act in such capacityin relation to this Prospectus.

(g) Tan Kok Quan Partnership of 5 Shenton Way, #29-00, UIC Building, Singapore 068808, whois the legal counsel of KSHEC for the matters described in paragraphs (f) and (g) under“Litigation and Arbitration Proceedings” in the section entitled “General and StatutoryInformation” of this Prospectus, has given and has not withdrawn its written consent to theissue of this Prospectus with the inclusion herein of:-

(a) its name and all references to its name; and

(b) the statements prepared by them set out in paragraphs (f) and (g) under “Litigationand Arbitration Proceedings” in the section entitled “General and StatutoryInformation” of this Prospectus,

in the form and context in which they appear in this Prospectus, and to act in such capacityin relation to this Prospectus.

(h) Save for the statements referred to in paragraphs (c), (d) and (e) above, each of theManager, the Underwriter, the Placement Agent, the Solicitors to the Invitation, the legaladvisers to our Company on PRC Law, the legal advisers to our Company on MalaysianLaw, the legal advisers to our Company on Hong Kong Law, the Share Registrar and ShareTransfer Agent, the Receiving Banker and the Principal Bankers does not make or purport tomake any statement in this Prospectus or any statement upon which a statement in thisProspectus is based and, to the maximum extent permitted by law, expressly disclaims andtakes no responsibility for any liability to any person which is based on, or arises out of, thestatements, information or opinions in this Prospectus.

(i) The Valuer has given and has not withdrawn its written consent to the issue of thisProspectus with the inclusion herein of:-

(a) its name and all references to its name;

(b) the Valuer’s Report; and

(c) the statement in relation to the market value of the unsold units in Tianxing RiverfrontSquare as at 30 June 2006 based on the Valuer’s Report, set out in the secondparagraph in the section entitled “Completed Properties Held For Sale” of thisProspectus,

in the form and context in which they appear in this Prospectus, and to act in such capacityin relation to this Prospectus.

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7. RESPONSIBILITY STATEMENT BY OUR DIRECTORS

This Prospectus has been reviewed and approved by our Directors and they individually andcollectively accept full responsibility for the accuracy of the information given in this Prospectusand confirm, having made all reasonable enquiries, that to the best of their knowledge and belief,the facts stated and the opinions expressed in this Prospectus are fair and accurate in all materialrespects as at the date of this Prospectus and that there are no material facts the omission ofwhich would make any statements in this Prospectus misleading, and that this Prospectusconstitutes full and true disclosure of all material facts about the Invitation and our Group.

8. RESPONSIBILITY STATEMENT BY THE MANAGER

The Manager acknowledges that, having made due and careful enquiries and to the best of itsknowledge and belief, based on information furnished to it by our Group, this Prospectusconstitutes full and true disclosure of all material facts about the Invitation and our Group and it isnot aware of any other facts, the omission of which would make any statements herein misleading.

9. DOCUMENTS AVAILABLE FOR INSPECTION

The following documents or copies thereof may be inspected at our registered office at 36 SenokoRoad, Singapore 758108, during normal business hours for a period of six months from the date ofregistration of this Prospectus:-

(a) the Memorandum and Articles of Association of our Company;

(b) Report from the Auditors in relation to the Audited Combined Financial Statements of KSHHoldings Limited and its Subsidiaries for the Financial Years Ended 31 March 2004, 2005and 2006, as set out in Appendix A of this Prospectus;

(c) Report from the Auditors in relation to the Unaudited Review of the Interim CombinedFinancial Statements of KSH Holdings Limited and its Subsidiaries for the Financial Periodfrom 1 April 2006 to 30 June 2006, as set out in Appendix B of this Prospectus;

(d) the audited financial statements of KSH Realty, KSHEC, KSH Overseas and TTX RealEstate for the financial years ended 31 March 2004, 31 March 2005 and 31 March 2006;

(e) the audited financial statements of TTX Property Management for the financial year ended31 March 2006;

(f) the audited financial statements of Duford for the financial period from 1 January 2005 to 31March 2006;

(g) the audited financial statements of our Company for the financial period from 9 March 2006to 31 March 2006;

(h) the material contracts referred to in paragraph 3 of the section entitled “General andStatutory Information” of this Prospectus;

(i) the letters of consent referred to in paragraph 6 of the section entitled “General andStatutory Information” of this Prospectus; and

(j) the Valuer’s Report.

150

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Audited Combined Financial Statements for the Financial Years Ended 31 March 2004, 2005

and 2006 Index Page

Statement by Directors A-2

Auditors' Report A-3

Combined Balance Sheets A-5

Combined Profit and Loss Accounts A-7

Combined Statements of Changes in Equity A-8

Combined Cash Flow Statements A-11

Notes to the Combined Financial Statements A-13

A-1

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

A-2

KSH Holdings Limited and its subsidiaries

Statement by Directors We, Choo Chee Onn and Lim Kee Seng, being two of the directors of KSH Holdings Limited (the “Company”), do hereby state that, in the opinion of the directors,

(i) the accompanying combined financial statements together with notes thereto, are drawn up so

as to present fairly, the state of affairs of the Group as at 31 March 2004, 2005 and 2006 and of the results, changes in equity and cash flows of the Group for the financial years ended on those dates; and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be

able to pay its debts as and when they fall due. On behalf of the Board of Directors, Choo Chee Onn Managing Director Lim Kee Seng Executive Director Singapore 30 January 2007

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

A-3

Report from the Auditors in relation to the Audited Combined Financial Statements of KSH

Holdings Limited and its Subsidiaries for the Financial Years Ended 31 March 2004, 2005 and

2006

30 January 2007 The Board of Directors KSH Holdings Limited 36 Senoko Road Singapore 758108 Dear Sirs We have audited the accompanying combined financial statements of KSH Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) set out on pages A-5 to A-67, for the financial years ended 31 March 2004, 2005 and 2006. Directors’ Responsibility for the Financial Statements The Company’s directors are responsible for the preparation and fair presentation of these combined financial statements in accordance with Singapore Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility

Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

Report from the Auditors in relation to the Audited Combined Financial Statements of KSH

Holdings Limited and its Subsidiaries for the Financial Years Ended 31 March 2004, 2005 and

2006

Opinion

In our opinion, the accompanying combined financial statements of the Group present fairly, in all material respects, the state of affairs of the Group as at 31 March 2004, 2005 and 2006 and the results, changes in equity and cash flows of the Group for the financial years ended on those dates in accordance with Singapore Financial Reporting Standards. This report has been prepared for inclusion in the Prospectus in connection with the Invitation by the Company in respect of the issue of 25,000,000 new ordinary shares in the share capital of the Company. ERNST & YOUNG Certified Public Accountants Singapore Partner in charge: Tan Swee Ho

A-4

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Combined Balance Sheets as at 31 March 2004, 2005 and 2006

Note 2006 2005 2004 S$ S$ S$ Non-current assets Property, plant and equipment 3 4,178,934 3,398,947 919,658 Investment in associated companies 5 6,923,747 1,398,683 871,473 Other investments 6 770 770 770 Long-term receivable 7 – 376,211 – Investment properties 8 4,420,000 3,170,000 3,200,000 Due from a minority shareholder of a subsidiary (non-trade) 9 1,966,725 1,941,166 1,935,373

17,490,176 10,285,777 6,927,274

Current assets

Completed properties held for sale 10 50,696,706 50,910,593 59,859,298 Consumable stock 13,488 – – Trade receivables 11 11,450,955 13,032,128 13,116,167 Other receivables and deposits 12 1,635,695 1,917,916 1,537,752 Prepayments 492,894 146,510 8,415 Due from related parties (non-trade) 13 230 2,430 230 Construction work-in-progress in excess of progress billings 14 3,402,168 2,409,894 566,376

Security bonds 15 2,000,000 2,000,000 2,000,000 Fixed deposits (pledged) 16 3,735,399 2,891,920 210,825 Cash and bank balances 34 6,784,976 1,798,565 3,063,722

80,212,511 75,109,956 80,362,785

Current liabilities

Trade payables 17 11,871,114 6,007,225 3,495,933 Other payables and accruals 18 15,748,168 14,590,893 26,547,526 Due to a related party (non-trade) 13 927,466 – – Finance lease obligations (current portion) 19 291,966 80,950 29,509

Provision for income tax 1,224,646 1,219,146 1,561,096 Progress billings in excess of construction work-in-progress 14 848,929 7,598,287 6,082,832

Short-term bank loan, secured 20 – 412,340 – Bank term loans, secured 21 2,424,434 2,318,686 2,605,318 Bank overdrafts, secured 22, 34 1,359,114 884,882 – Bills payable to banks, secured 23 5,030,528 1,349,806 1,495,493

39,726,365 34,462,215 41,817,707

Net current assets 40,486,146 40,647,741 38,545,078

A-5

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Combined Balance Sheets as at 31 March 2004, 2005 and 2006 (cont’d)

Note 2006 2005 2004 S$ S$ S$ Non-current liabilities Other payables 18 48,215 60,698 465,000 Finance lease obligations (non-current

portion) 19 263,539 226,791 65,796 Bank term loans, secured 21 14,403,185 15,528,228 15,047,766 Loan from a previous shareholder 24 – 61,776 61,776 Deferred tax liabilities 31 1,487,437 823,651 24,605

16,202,376 16,701,144 15,664,943

Net assets 41,773,946 34,232,374 29,807,409

Equity attributable to equity holders of the Company

Share capital 25 15,780,625 15,780,624 15,780,624 Translation reserve 26 487,104 468,053 1,046,399 Accumulated profits 17,516,882 12,989,947 8,534,728

33,784,611 29,238,624 25,361,751Minority interests 7,989,335 4,993,750 4,445,658

Total equity 41,773,946 34,232,374 29,807,409

The accompanying accounting policies and explanatory notes form an integral part of the combined financial statements.

A-6

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Combined Profit and Loss Accounts for the financial years ended 31 March 2004, 2005 and 2006 Note 2006 2005 2004

S$ S$ S$

Revenues

Project revenue 113,215,587 78,946,696 49,074,000

Rental income 3,563,806 3,098,852 3,196,789

Revenue from sales of development

properties 1,181,191 9,602,236 364,275

117,960,584 91,647,784 52,635,064

Other operating income 27 1,594,083 854,159 901,467

Cost of construction (106,404,517) (71,090,599) (41,745,235)

Cost of sales of development properties (832,640) (7,965,512) (300,966)

Personnel expenses 28 (3,591,119) (2,172,722) (2,534,284)

Depreciation of property, plant and

equipment 3 (380,512) (485,966) (390,821)

Other operating expenses 29 (1,599,689) (2,858,372) (3,152,117)

Finance costs 30 (1,309,604) (1,053,531) (878,622)

(114,118,081) (85,626,702) (49,002,045)

Profit from operations before share of

results of associated companies 5,436,586 6,875,241 4,534,486

Share of results of associated companies 4a 1,531,237 323,535 –

Profit before taxation 6,967,823 7,198,776 4,534,486

Tax (expense) benefit 31 (1,256,124) (1,655,468) 81,583

Profit for the year 5,711,699 5,543,308 4,616,069

Attributable to :

Equity holders of the Company 5,308,435 4,951,459 4,543,368

Minority interests 403,264 591,849 72,701

5,711,699 5,543,308 4,616,069

Earnings per share (cents)

- Basic and diluted 32 8.41 7.84 7.20

The accompanying accounting policies and explanatory notes form an integral part of the combined financial statements.

A-7

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

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A-8

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

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A-9

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

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A-1

0

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Combined Cash Flow Statements for the financial years ended 31 March 2004, 2005 and 2006 Note 2006 2005 2004 S$ S$ S$ Cash flows from operating activities Profit before taxation 6,967,823 7,198,776 4,534,486 Adjustments: Depreciation of property, plant and

equipment 380,512 485,966 390,821 Gain on sale of plant and equipment (109,872) (16,076) (9,685) Gain on disposal of subsidiary 4b, 4c (11,085) (28,409) – Negative goodwill arising on acquisition of a

subsidiary written off 4a (556,975) – – (Gain) loss on fair value adjustment of

investment properties 8 (98,289) 30,000 (38,680) Interest expense 30 1,279,449 1,027,128 864,713 Interest income (131,569) (50,797) (27,479) Share of results of associated companies (1,531,237) (323,535) –

Operating profit before working capital changes 6,188,757 8,323,053 5,714,176

Decrease (increase) in: Completed properties held for sale 832,631 7,747,738 (8,307,484)Consumable stock (13,488) – – Trade and other receivables and deposits and prepayments 1,493,652 (494,732) (3,323,129)Work-in-progress, net (7,741,632) (328,063) 4,577,702

Increase (decrease) in: Trade and other payables 7,068,020 (9,376,216) 8,412,401

Cash flows generated from operations 7,827,940 5,871,780 7,073,666 Income taxes paid (589,500) (1,198,374) (1,455,224)Interest income received 131,569 50,797 27,479 Exchange differences (336,541) 198,697 1,010,187

Net cash flows generated from operating activities 7,033,468 4,922,900 6,656,108

Cash flows from investing activities Purchases of property, plant and equipment 3 (764,684) (2,695,552) (157,716)Purchase of an investment property (1,151,711) – (3,161,320)Net proceeds on sale of plant and equipment 110,194 24,985 35,024 Investment in associated companies – – (606,052)Increase in amount due from an associated

company – (203,675) – Decrease (increase) in long-term receivable 78,724 (376,211) – Cash outflow on disposal of a subsidiary, net of

cash disposed 4c – (11,103) – Cash inflow on acquisition of a subsidiary, net

of cash acquired 4a 7,183 – –

Net cash flows used in investing activities (1,720,294) (3,261,556) (3,890,064)

A-11

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Combined Cash Flow Statements for the financial years ended 31 March 2004, 2005 and 2006 (cont’d) Note 2006 2005 2004 S$ S$ S$ Cash flows from financing activities Issuance of one ordinary share upon

incorporation of the Company 1 – – Proceeds from issuance of ordinary shares of a

subsidiary – – 780,624 Dividends paid (781,500) (496,240) (842,400)Proceeds from bank loans 2,999,000 2,145,000 2,015,000 Repayment of bank loans (4,018,295) (1,951,169) (821,285)Proceeds from short-term bank loan – 412,340 – Repayment of short-term bank loan (412,340) – – Proceeds from (repayment of) bills payable to

banks 3,680,722 (145,687) 914,026 Interest paid (1,279,449) (1,027,128) (864,713)Repayment of lease obligations (145,655) (67,404) (52,539)(Increase) decreased in fixed deposits (pledged) (843,479) (2,681,095) 253,189

Net cash flows (used in) generated from financing activities (800,995) (3,811,383) 1,381,902

Net increase (decrease) in cash and cash

equivalents 4,512,179 (2,150,039) 4,147,946 Cash and cash equivalents at beginning of

financial year 913,683 3,063,722 (1,084,224)

Cash and cash equivalents at end of financial year 34 5,425,862 913,683 3,063,722

The accompanying accounting policies and explanatory notes form an integral part of the combined financial statements.

A-12

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 1. Corporation information 1.1 The Company

The Company was incorporated in the Republic of Singapore on 9 March 2006 as a private company limited by shares under the name of “SuperKSH Pte. Ltd.” and changed its name to “KSH Holdings Pte. Ltd.” on 22 November 2006. On 19 December 2006, the Company changed its name to “KSH Holdings Limited” in connection with its conversion into a public company limited by shares. The Company was incorporated for the purpose of acquiring the existing companies of the Group pursuant to the Group Restructuring Exercise.

The registered office and principal place of business of the Company is located at 36 Senoko Road, Singapore 758108.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are shown in Note 4 to the combined financial statements.

1.2 The Restructuring Exercise

In preparation for the listing of the Company on the Singapore Exchange, the Group carried out a Restructuring Exercise as a result of which the Company became the holding company of the Group. The Restructuring Exercise involved the incorporation of the Company in Singapore on 9 March 2006 as the holding company of the Group and the following:-

(a) Divestment of KSH Technologies Pte. Ltd. (“KSHT”) by Kim Seng Heng Engineering

Construction (Pte) Ltd (“KSHEC”)

Prior to the Restructuring Exercise, KSHEC held a 100% interest in KSHT, which was set up as an investment holding company with the intention to invest in a radiator manufacturing plant in the PRC. In order to streamline the business and focus on the Group’s core business operations, KSHEC transferred its 100% interest in KSHT, comprising four (4) ordinary shares, to Star Elite Pte. Ltd. (“Star Elite”) on 22 March 2006 for an aggregate cash consideration of S$4.00. The purchase consideration was determined on a willing buyer-willing seller basis and calculated based on the issued and paid-up share capital of KSHT as at 21 March 2006.

(b) Acquisition of KSHEC (“KSHEC Restructuring”)

On 30 March 2006, the Company acquired 100% of the issued share capital of KSHEC, comprising 15,780,624 ordinary shares, from the Executive Directors, Messrs Choo Chee Onn, Kwok Ngat Khow, Tok Cheng Hoe and Lim Kee Seng in the following proportions for an aggregate purchase consideration of S$15,780,624:-

Name of vendor

Number of shares in KSHEC transferred by the vendor

Purchase consideration paid to the vendor

Choo Chee Onn 4,770,156 S$4,770,156 Kwok Ngat Khow 3,670,156 S$3,670,156 Tok Cheng Hoe 3,670,156 S$3,670,156 Lim Kee Seng 3,670,156 S$3,670,156 Total

15,780,624

S$15,780,624

A-13

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 1. Corporation information (cont’d) 1.2 The Restructuring Exercise (cont’d)

(b) Acquisition of KSHEC (“KSHEC Restructuring”) (cont’d) The purchase consideration was satisfied by the allotment and issuance of 4,770,156,

3,670,156, 3,670,156 and 3,670,156 new shares credited as fully paid to Messrs Choo Chee Onn, Kwok Ngat Khow, Tok Cheng Hoe and Lim Kee Seng respectively. The purchase consideration was determined on a willing buyer-willing seller basis and calculated based on the issued and paid-up share capital of KSHEC as at 29 March 2006. Prior to the KSHEC Restructuring, KSHEC was the holding company of the Group. Following the said acquisition, KSHEC became the wholly-owned subsidiary of the Company.

(c) Divestment of TCH Holding Pte. Ltd. (“TCH Holding”) by Kim Seng Heng Realty Pte

Ltd (“KSHR”) Prior to the Restructuring Exercise, KSHR held 24.2% of the issued share capital of TCH Holding, which is engaged in the hotel business. In order to streamline the business and focus on the Group’s core business operations, KSHR transferred its 24.2% interest in TCH Holding, which has a nil carrying value, to Star Elite on 4 October 2006 for an aggregate consideration of S$1.00. The purchase consideration was determined on a willing buyer-willing seller basis.

(d) Acquisition of KSH Overseas Pte. Ltd. (“KSHO”) from KSHR

On 11 December 2006, the Company acquired 100% of the issued share capital of KSHO, comprising 23,010,000 ordinary shares, from KSHR for an aggregate cash consideration of S$23,010,000. The purchase consideration was determined on a willing buyer-willing seller basis and was calculated based on the issued and paid-up capital of KSHO as at 11 December 2006.

(e) Acquisition of KSHR from KSHEC

On 12 December 2006, the Company acquired 100% of the issued share capital of KSHR, comprising 18,725,000 ordinary shares, from KSHEC for an aggregate cash consideration of S$18,725,000. The purchase consideration was determined on a willing buyer-willing seller basis and was calculated based on the issued and paid-up share capital of KSHR as at 12 December 2006.

2. Significant accounting policies 2.1 Basis of preparation

The combined financial statements of the Group have been prepared in accordance with Singapore Financial Reporting Standards ("FRS").

The combined financial statements have been prepared on a historical cost basis, except for one leasehold factory building revalued in 1986, investment properties and available-for-sale financial assets that are carried at their fair values.

The combined financial statements are presented in Singapore Dollars (“S$” or “SGD”).

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APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.2 Changes in accounting policies

The accounting policies have been consistently applied by the Group during the financial years ended 31 March 2004, 2005 and 2006, except for the changes in accounting policies discussed below.

(a) Adoption of new FRS

On 1 April 2005, the Group adopted the following financial reporting standards mandatory for annual financial periods beginning on or after 1 January 2005. FRS 39 – Financial instruments: Recognition and Measurement FRS 103 – Business Combinations, including amendments to FRS 36

(revised), Impairment of Assets and FRS 38 (revised), Intangible Assets

(i) FRS 39 – Financial Instruments: Recognition and Measurement

The Group adopted FRS 39 prospectively on 1 April 2005. At that date, financial assets within the scope of FRS 39 were classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. Financial assets that were classified as financial assets at fair value through profit or loss and available-for-sale financial assets were measured at fair value while loans and receivables and held-to-maturity investments were measured at amortised cost using the effective interest rate method. At 1 April 2005, financial liabilities within the scope of FRS 39, were measured at amortised cost using the effective interest rate method. The adoption of FRS 39 did not result in any adjustments to the combined financial statements as at 1 April 2005 and for the year ended 31 March 2006.

(ii) FRS 103, Business Combinations, FRS 36 (revised), Impairment of Assets

and FRS 38 (revised), Intangible Assets FRS 103 has been applied for business combinations on or after 1 April 2005. The adoption of FRS 103 and revised FRS 36 has resulted in the Group ceasing annual goodwill amortisation and commencing testing for impairment at the cash-generating unit level annually (unless an event occurs during the year which requires the goodwill to be tested more frequently) from 1 April 2005. Negative goodwill will be recognised immediately in the profit and loss account. The adoption of FRS 103 resulted in an increase of S$556,975 in the Group’s results for the year ended 31 March 2006 as negative goodwill on acquisition of a subsidiary during the year was recognised immediately in the profit and loss account.

(b) Adoption of revised FRS

(i) FRS 27 (Revised), Consolidated and Separate Financial Statements

Previously, there was no requirement for the presentation of minority interests within equity. With the adoption of FRS 27 (Revised), minority interests have been presented within equity of the Group retrospectively.

A-15

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.2 Changes in accounting policies (cont’d)

(b) Adoption of revised FRS (cont’d)

(ii) Other revised FRSs adopted

In addition the Group adopted the following revised financial reporting standards, relevant to the Group, mandatory for annual financial periods beginning on or after 1 January 2005 which did not result in any significant change in accounting policies:

FRS 1 (revised) – Presentation of Financial Statements FRS 2 (revised) – Inventories FRS 8 (revised) – Accounting Policies, Changes in

Accounting Estimates and Errors FRS 10 (revised) – Events after the Balance Sheet Date FRS 16 (revised) – Property, Plant and Equipment FRS 17 (revised) – Leases FRS 21 (revised) – The Effects of Changes in Foreign

Exchange Rates FRS 24 (revised) – Related Party Disclosures FRS 28 (revised) – Investments in Associates FRS 32 (revised) – Financial Instruments: Disclosure and

Presentation FRS 33 (revised) – Earnings Per Share

(c) Early adoption of new and revised FRS

FRS 40 – Investment Property On 1 April 2005, the Group adopted FRS 40 in advance of its effective date of 1

January 2007. As a result of adopting FRS 40, investment properties are measured at fair value and

gains or losses arising from changes in the fair value of investment properties are included in the profit and loss account in the financial year in which they arise. Under the transitional provision of FRS 40, the change in accounting policy has been applied retrospectively and the comparative figures are restated accordingly. The effects of the adoption of FRS 40 is summarised in the statement of changes in equity.

For the financial year ended 31 March 2004, 2005 and 2006, the effect of adoption of FRS 40 has resulted in:

- the recognition of a gain on revaluation of S$38,680, loss on revaluation of S$30,000 and gain on revaluation of $98,289 in the profit and loss account of the Group respectively;

- an increase in the Group’s basic and diluted earnings per share by 0.06 cents, decrease by 0.05 cents and increase by 0.16 cents respectively.

A-16

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.2 Changes in accounting policies (cont’d)

(d) New and revised FRS / FRS and INT FRS not yet effective

The Group has not applied the following FRS that has been issued but is only effective for annual financial periods beginning on or after 1 January 2007:

(i) FRS 107 – Financial Instruments: Disclosure

This standard requires quantitative disclosures of nature and extent of risks arising from financial instruments in addition to the disclosures currently required under FRS 32. Adoption of this standard will result in additional disclosures in the financial statements.

Other new FRS, revised FRS and INT FRS that have been issued but are only effective for annual financial periods beginning on or after 1 January 2006, unless otherwise stated, include:

(i) FRS 19 (revised) – Employees Benefits

This revised standard requires additional disclosures to be made by providing information about trends in the assets and liabilities in the defined benefit plans and the assumptions underlying the components of the defined benefit cost.

(ii) FRS 106 – Exploration for and Evaluation of Mineral Resources

This standard does not apply to the Group.

(iii) INT FRS 104 – Determining Whether an Arrangement Contains a Lease

This interpretation requires the determination of whether an arrangement is, or contains a lease to be based on the substance of the arrangement and requires an assessment of whether the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

(iv) INT FRS 105 – Rights to Interests Arising from Decommissioning,

Restoration and Environmental Rehabilitation Funds

This interpretation is not expected to be relevant to the Group.

(v) INT FRS 106 – Liabilities Arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment

This interpretation, effective for annual financial periods beginning on or after 1 December 2005, does not apply to the Group.

(vi) INT FRS 107 – Applying the Restatement Approach under FRS 29, Financial Reporting in Hyperinflationary Economies

This interpretation, effective for annual financial periods beginning on or after 1 March 2006, does not apply to the Group.

The Group expects that the adoption of the pronouncements listed above will have no impact on the financial statements in the period of initial application.

A-17

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.3 Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the combined financial statements. They affect the application of the Group's accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Depreciation of plant and equipment

The cost of plant and equipment is depreciated on a straight-line basis over their useful lives. Management estimates the useful lives of these plant and equipment to be within 1 to 15 years. These are common life expectancies applied in the construction industry.

The carrying amount of the Group's plant and equipment at 31 March 2006, 2005 and 2004 was S$1,060,642, S$770,358 and S$568,493 respectively. Changes in the expected level of usage and technological developments could impact the economic useful lives of these assets, therefore future depreciation charges could be revised.

(b) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the financial period in which such determination is made. The carrying amount of the Group’s income tax payables at 31 March 2006, 2005 and 2004 was S$1,224,646, S$1,219,146 and S$1,561,096 respectively.

Critical judgement made in applying accounting policies The following are the judgements made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the combined financial statements. (a) Construction contracts and revenue recognition

The Group recognises contract revenue to the extent of contract costs incurred where it is probable those costs will be recoverable or based on the stage of completion method depending on whether the outcome of the contract can be measured reliably. The stage of completion is measured by reference to professional surveys of work performed. Significant judgement is required in determining the stage of completion, the estimated total contract revenue and estimated total contract cost, as well as the recoverability of the contract cost incurred. Estimation of total contract revenue also includes an estimation of the variation works that are recoverable from the customers. In making the judgement, the Group relies on past experience and/or the work of relevant professionals.

A-18

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.3 Significant accounting estimates and judgements (cont’d)

Critical judgement made in applying accounting policies (cont’d)

(a) Construction contracts and revenue recognition (cont’d)

Estimated total contract cost for construction contract comprises direct costs attributable to the construction of each property. In estimating the total budgeted costs for construction contracts, management makes reference to information such as current offers from contractors and suppliers, recent offers agreed with contractors and suppliers, and professional estimation on construction and material costs as well as its past experience.

(b) Operating Lease Commitments – As Lessor

The Group has entered into commercial property leases on its investment properties portfolio. The Group has determined that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases and has accounted for its investment properties as lessor.

(c) Assessment of Allowance for Doubtful Receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for doubtful receivables. In assessing the allowance for receivables, the Group takes into account the duration of the settlement agreement, whether any subsequent payments were in default as well as past payment history of the customers, where relevant.

There are no other significant judgements or accounting estimates made in the preparation of the combined financial statements.

2.4 Functional and foreign currency

(a) Functional currency

The management has determined the currency of the primary economic environment in which the Group operates i.e. functional currency, to be S$. Sales prices, major costs of providing goods and services and major sources of financing are primarily influenced by fluctuations in S$.

(b) Foreign currency transactions

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

A-19

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.4 Functional and foreign currency (cont’d)

(b) Foreign currency transactions (cont’d)

Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the profit and loss account except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign subsidiaries, which are recognised initially in a separate component of equity as foreign currency translation reserve in the combined balance sheet and recognised in the combined profit and loss account on disposal of the subsidiary.

(c) Foreign currency translation

The results and financial position of foreign operations are translated into SGD using the following procedures:

• Assets and liabilities for each balance sheet presented are translated at

the closing rate ruling at that balance sheet date; and

• Income and expenses for each profit and loss account are translated at average exchange rates for the financial year, which approximates the exchange rates at the dates of the transactions.

All resulting exchange differences are recognised in a separate component of equity as foreign currency translation reserve. Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 April 2005 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the balance sheet date. Goodwill and fair value adjustments which arose on acquisitions of foreign subsidiaries before 1 April 2005 are deemed to be assets and liabilities of the parent company and are recorded in SGD at the rates prevailing at the date of acquisition. On disposal of a foreign operation, the cumulative amount of exchange differences deferred in equity relating to that foreign operation is recognised in the profit and loss account as a component of the gain or loss on disposal.

2.5 Subsidiaries and combined financial statements

(a) Subsidiaries

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

A-20

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.5 Subsidiaries and combined financial statements (cont’d)

(b) Combined financial statements

The combined financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the parent company. Consistent accounting policies are applied for like transactions and events in similar circumstances. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets, are eliminated in full.

The combined financial statements of the Group for the financial years ended 31 March 2004, 2005 and 2006 were prepared in accordance to the principles of merger accounting for the acquisition of a subsidiary, KSHEC, pursuant to the Restructuring Exercise as described in Note 1.2(b). Under this method, the Company has been treated as the holding company of KSHEC and its subsidiaries for the financial years presented. Such manner of presentation reflects the economic substance of the combining entities throughout the relevant period, as a single economic enterprise. Under this method, the financial statement items of the combining entities for the financial years presented are included in the combined financial statements as if they have been combined from 1 April 2003. Accordingly, the combined results of the Group for the years ended 31 March 2004, 2005 and 2006 include the results of the Company and these subsidiaries with effect from 1 April 2003 or since their respective dates of incorporation, if later. Pursuant to this:

- Assets and liabilities are combined at their existing carrying amounts; - No amount is recognised for goodwill; and - Any difference between the amount recorded as share capital issued and the

amount recorded for the share capital acquired will be adjusted against equity as restructuring reserve.

Apart from the above, the results of other subsidiaries acquired or disposed of during the periods are consolidated from or to their effective dates of acquisition or disposal, respectively. These other subsidiaries acquired are accounted for using the purchase method. Under this method, the cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and continent liabilities over the cost of business combination is recognised in the profit and loss account on the date of acquisition. Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. They are presented in the combined balance sheet within equity, separately from the equity of the shareholders of the Company, and are separately disclosed in the combined profit and loss account. Consolidation of the subsidiaries in the PRC is based on the subsidiaries’ financial statements prepared in accordance with the FRS. Profits reflected in the financial statements prepared in accordance with FRS may differ from those reflected in the PRC statutory financial statements of the subsidiaries, prepared for PRC reporting purposes. In accordance with the relevant laws and regulations, profits available for distribution by the PRC subsidiaries are based on the amounts stated in the PRC statutory financial statements.

A-21

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d)

2.6 Associated companies

An associated company is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. This generally coincides with the Group having 20% or more of the voting power, or has representation on the board of directors.

The Group's investment in associated companies are accounted for using the equity method. Under the equity method, the investment in associated company is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of net assets of the associated company. The Group's share of the profit or loss of the associated company is recognised in the combined profit and loss account. Where there has been a change recognised directly in the equity of the associated company, the Group recognises its share of such changes. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group's net investment in the associated company. The associated company is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associated company. Goodwill relating to an associated company is included in the carrying amount of the investment.

Any excess of the Group's share of the net fair value of the associated company's identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group's share of the associated company's profit or loss in the period in which the investment is acquired. When the Group's share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company.

The most recent available audited financial statements of the associated companies are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is arrived at from the last audited financial statements available and un-audited management financial statements to the end of the accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances.

2.7 Related parties

An entity or individual is considered to be a related party of the Group for the purposes of the combined financial statements if:

(a) it possesses ability (directly or indirectly) to control or exercise significant influence

over the operating and financial decisions of the Group or vice versa; or

(b) it is subjected to common control or common significant influence.

A-22

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.8 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses. Leasehold building stated at valuation was revalued prior to 1 January 1997. Accordingly, it does not need to be revalued in accordance with paragraph 81 of the FRS 16 (revised) – Property, Plant and Equipment.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset, is transferred directly to accumulated profits on retirement or disposal of the asset.

Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the estimated useful life of the asset as follows:

Leasehold factory buildings 25 - 50 years Furniture and fittings and air-conditioners 5 - 15 years Office equipment 5 - 8 years Computers 3 years Motor vehicles 5 years Loose tools 5 years Plant and machinery 6 years Renovations 5 years

During the financial year ended 31 March 2006, the Group revised the estimated useful life of its computers from 1 year to 3 years. The effect of the revision of the useful life was to decrease the depreciation charge for the current period by approximately S$49,000 and to increase the carrying value of property, plant and equipment by the corresponding amount.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable.

The useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit and loss account in the financial year the asset is derecognised.

2.9 Construction-in-progress

Construction-in-progress represents fixed assets during the acquisition period and is stated at cost. The acquisition period of an asset includes the period when the asset is under construction, installation and testing. Cost comprises direct costs of acquisition or construction, installation and testing during the period of construction, installation and testing.

Construction-in-progress is transferred to the appropriate category of fixed assets when it

is completed and ready for its intended use. No depreciation is provided on construction in progress until the asset is completed and is ready for its intended use.

A-23

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.10 Other investments

Other investments are classified as available-for-sale financial assets.

The accounting policy for the aforementioned category of financial assets is stated in Note 2.13.

2.11 Investment properties

Investment properties are properties that are not occupied substantially for use by or in the operations of the Group. They are held either to earn rental income or for capital appreciation or both. Subsequent to initial recognition, investment properties are stated at fair value, which reflects the market conditions at the balance sheet date. Gains or losses arising from changes in the fair values of the investment properties are included in the profit and loss account in the year in which they arise. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the profit and loss account in the year of retirement or disposal.

2.12 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the Group makes an estimate of the asset's recoverable amount.

An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognised in the profit and loss account as "impairment losses".

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses recognised for an asset may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior financial years. Reversal of an impairment loss is recognised in the profit and loss account. After such a reversal, the depreciation charge is adjusted in future financial periods to allocate the asset's revised carrying amount on a systematic basis over its remaining useful life.

A-24

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.13 Financial assets

Financial assets within the scope of FRS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. (a) Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivative financial instruments are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in the profit and loss account. The Group does not designate any financial assets not held for trading as financial assets at fair value through profit and loss.

(b) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are initially recognised at fair value, plus directly attributable transaction costs. Subsequent to initial recognition, such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the profit and loss account when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(c) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the assets to maturity. Investments intended to be held for an undefined period are not included in this classification. Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount and minus any reduction for impairment or uncollectibility. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in the profit and loss account when the investments are derecognised or impaired, as well as through the amortisation process.

A-25

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.13 Financial assets (cont’d)

(d) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit and loss, held-to-maturity investments or loans and receivables. After initial recognition, available-for sale financial assets are measured at fair value with gains or losses being recognised in the fair value adjustment reserve until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the profit and loss account.

The fair value of investments that are actively traded in organised financial markets is determined by reference to the relevant exchange's quoted market bid prices at the close of business on the balance sheet date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

2.14 Construction contracts

Contract revenue and contract costs are recognised as revenue and expenses, respectively, by reference to the stage of completion of the contract activity at the balance sheet date, when the outcome of a construction contract can be estimated reliably. An expected loss on the construction contract is recognised as an expense immediately when is it probable that total contract costs will exceed total contract revenue.

Revenue is recognised in accordance with the percentage of completion method. The stage of completion is measured by reference to professional surveys of work performed.

Only costs that reflect services performed are included in the estimated total costs of the contract. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Retention monies are recognised in the profit and loss account as and when revenue is recognised for work done based on the percentage of completion method.

2.15 Completed properties held for sale

Completed properties held for sale are held with the intention of sale in the ordinary course of business, and are classified as current assets.

Completed properties held for sale are stated at the lower of cost and estimated net realisable value. Land acquisition costs, borrowing costs and other related development expenditure are capitalised as part of the cost of the completed properties held for sale. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.

A-26

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.16 Trade and other receivables

Trade and other receivables, including amounts due from related parties and a minority shareholder of a subsidiary, are classified and accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets is stated in Note 2.13.

An allowance is made for uncollectible amounts when there is objective evidence that the Group will not be able to collect the debt. Bad debts are written-off when identified. Further details on the accounting policy for impairment of financial assets are stated in Note 2.17. Unbilled receivables are carried at anticipated realisable values as determined by the Group based on the total estimated contractual sum and variation orders less any omissions.

2.17 Impairment of financial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired.

(a) Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in the profit and loss account.

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

(b) Assets carried at cost

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

A-27

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.17 Impairment of financial assets (cont’d)

(c) Available-for-sale financial assets

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the profit and loss account, is transferred from equity to the profit and loss account. Reversals in respect of equity instruments classified as available-for-sale are not recognised in the profit and loss account. Reversals of impairment losses on debt instruments are reversed through the profit and loss account, if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognised in the profit and loss account.

2.18 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

Cash and short term deposits carried in the combined balance sheets are classified and accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets is stated in Note 2.13.

2.19 Construction work-in-progress

Construction work-in-progress is carried at the net amount of cost plus attributable profits less recognised losses, net of progress billings and allowance for foreseeable losses. It is presented in the balance sheet as a current asset under “construction work-in-progress in excess of progress billings” or as a current liability under “progress billings in excess of construction work-in-progress”, as applicable.

Cost of projects includes raw materials, direct labour and other project-related expenses incurred during the project period. The project is considered complete when all significant identifiable costs attributable to the project have been incurred. Provision for anticipated losses on uncompleted contracts is made in the period in which such losses are determined.

2.20 Trade and other payables

Liabilities for trade and other amounts payable, which are normally settled on 30-90 day terms, and payables to a related party, subsidiary and a shareholder are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.

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

A-28

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 2. Significant accounting policies (cont’d) 2.21 Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

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

2.22 Borrowing costs

Borrowing costs are generally expensed as incurred. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are being incurred. Borrowing costs are capitalised until the assets are ready for their intended use. If the resulting carrying amount of the asset exceeds its recoverable amount, an impairment loss is recorded.

2.23 Derecognition of financial assets and liabilities

(a) Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:

• the contractual rights to receive cash flows from the asset have expired;

• the Group retains the contractual rights to receive cash flows from the asset,

but has assumed an obligation to pay them in full without material delay to a third party under a 'pass-through' arrangement; or

• the Group has transferred its rights to receive cash flows from the asset and

either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of (a) the consideration received (including any new asset obtained less any new liability assumed) and (b) any cumulative gain or loss that has been recognised directly in equity is recognised in the profit and loss account.

(b) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit and loss account.

A-29

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006

A 30

2. Significant accounting policies (cont’d) 2.24 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit and loss account net of any reimbursement.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

2.25 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. Singapore The Group make contributions to the Central Provident Fund (“CPF”) scheme in Singapore, a defined contribution pension scheme. Contributions to national CPF scheme are recognised as an expense in the financial period in which the related service is performed. People’s Republic of China (“PRC”) Subsidiaries incorporated and operating in the PRC are required to provide certain staff pension benefits to its employees under existing PRC legislations and pension contributions are provided at rates stipulated by PRC legislations are contributed to a pension fund managed by the government agencies, which are responsible for administering these amounts for the subsidiaries’ employees. Contributions to the national pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to balance sheet date.

A-30

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006

A 31

2. Significant accounting policies (cont’d) 2.26 Leases

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the profit and loss account. Contingent rents, if any, are charged as expenses in the financial periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income (Note 2.27).

2.27 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.

(a) Project revenue

Accounting policy for recognising project revenue is stated in Note 2.14.

(b) Rental income

Rental income is accounted for on a straight-line basis over the lease terms on ongoing leases. The aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line basis.

(c) Revenue from sale of development properties

Revenue from the sale of development properties is recognised when there is a finalised sales agreement and all risks and rewards of ownership have been transferred to the buyer, and that it is probable that the economic benefits associated with the sales agreements will flow to the Group.

(d) Interest income

Interest income is recognised as interest accrues (using the effective interest method) unless collectibility is in doubt.

A-31

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006

A 32

2. Significant accounting policies (cont’d)

2.28 Income taxes

(a) Current tax

Current tax assets and liabilities for the current and prior financial periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

(b) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences.

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

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the financial year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liability and the deferred taxes relate to the same taxable entity and the sale taxation authority.

(c) Sales tax

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

• Where the sales tax incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the sale tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of sales tax

included.

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

A-32

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

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A-3

3

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KS

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A-3

4

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

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4

A-3

5

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 3. Property, plant and equipment (cont’d)

Cash outflows on purchase of property, plant and equipment During the financial years ended 31 March 2006, 2005 and 2004, the Group acquired property, plant and equipment with an aggregate cost of S$1,158,103, S$2,975,392 and S$222,716, of which S$393,419, S$279,840 and S$65,000 was acquired by means of finance lease arrangements respectively. Cash payments of S$764,684, S$2,695,552 and S$157,716 were made to purchase the property, plant and equipment during the financial years ended 31 March 2006, 2005 and 2004 respectively. Assets held under finance lease

The net carrying amounts of plant and equipment acquired under finance leases at the end of the financial years are as follow:

2006 2005 2004 S$ S$ S$ Motor vehicles 305,717 245,358 104,000 Plant and machinery 114,507 91,500 – Furniture and fittings and air conditioners 131,956 – –

552,180 336,858 104,000

Assets pledged as security As at 31 March 2006, 2005 and 2004, leasehold factory buildings of a subsidiary with an aggregate net carrying amount of approximately S$3,118,000, S$2,419,000 and S$351,000 respectively, have been pledged as securities for the banking facilities granted by the banks (see Notes 21, 22 and 23).

Revaluation of leasehold factory building

One of the leasehold factory buildings was valued at S$1,100,000 on the basis of present market value by a firm of professional valuers, Associated Property Consultants Pte Ltd on 11 August 1986. Had it been stated at cost less accumulated depreciation, the net carrying amount of that leasehold factory building as at 31 March 2006, 2005 and 2004 would have been approximately S$78,000, S$95,000 and S$112,000 respectively.

A-36

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 4. Investment in subsidiaries The Company had the following subsidiaries as at 31 March:

Name of company

Principal activities

Country of

incorporation and place of

business

Effective equity interest held by the

Group 2006 2005 2004 % % % Held by the Company Kim Seng Heng

Engineering Construction (Pte) Ltd (“KSHEC”) #

Carry on business as builders and contractors

Singapore 100 100 100

Held by subsidiaries Kim Seng Heng Realty

Pte Ltd (“KSHR”)# Property developers,

deriving rental income from investment properties and investment holding

Singapore 100 100 100

KSH Overseas Pte. Ltd.

(“KSHO”)# (1) Investment holding Singapore 100 100 100

Tianjin Tian Xing Real

Estate Development Co., Ltd. *

Construction, rental, sale of property

People’s Republic of

China

69.0 69.0 69.0

Tianjin Tian Xing

Property Management Co., Ltd * (2)

Property management People’s Republic of

China

69.0 69.0 –

Premier Façade Pte Ltd**(3)

General contractors and traders

Singapore – – 61.7

KSH Technologies Pte.

Ltd. # (4) Investment holding Singapore – 100 –

Duford Investment (Hong

Kong) Limited (“Duford”)@

Investment holding Hong Kong 58.3 – –

# Audited by Ernst & Young, Singapore. * Audited by Beijing Wan Long Song De Certified Public Accountants, The People’s

Republic of China. ** Audited by T.S.Tay & Associates. @ Audited by CK Yau & Company, Certified Public Accountants, Hong Kong.

(1) The entire issued and paid-up share capital, including all rights attached thereto, of

KSH Overseas Pte. Ltd. held by a subsidiary, Kim Seng Heng Realty Pte Ltd, has been mortgaged as security for a term loan granted to another subsidiary, Tianjin Tian Xing Real Estate Development Co., Ltd (see Note 21(e)).

(2) On 15 November 2004, a subsidiary Tianjin Tian Xing Property Management Co., Ltd., was incorporated in The People’s Republic of China and KSHEC acquired an effective equity interest of 69.0% for a consideration of S$114,108.

A-37

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 4. Investment in subsidiaries (cont’d)

(3) On 10 March 2005, KSHEC disposed of its entire 61.7% interest in its subsidiary,

Premier Façade Pte Ltd, for a consideration of S$1 (see Note 4c). (4) On 22 September 2004, a subsidiary, KSH Technologies Pte. Ltd. was incorporated in

Singapore by KSHEC for a consideration of S$4. Subsequently on 21 March 2006, KSHEC disposed of the wholly-owned subsidiary, for a consideration of $4. The disposal consideration was fully settled in cash (see Note 4b).

(a) Acquisition of a subsidiary - Duford Investment (Hong Kong) Limited (“Duford”)

On 17 June 2005, KSHO acquired 3,250,260 shares of HK$1 each, representing 41.67% of the issued share capital of Duford from KSHR, for a consideration of HK$3,250,260 (S$871,473).

On 23 March 2006, KSHO further acquired 1,299,480 shares of HK$1 each, representing 16.66% of the issued share capital of Duford, from a third party for a consideration of approximately HK$2,174,000 (S$453,615). The purchase consideration remains payable as at 31 March 2006.

Consequently, the effective equity interest held by the Group in Duford increased from 41.67% to 58.33% in financial year ended 31 March 2006 and Duford became a subsidiary of the Group.

The fair values of the identifiable assets and liabilities of Duford as at the date of

acquisition were as follows:

Recognised on

acquisition

Carrying amount before combination

S$ S$

Investment in associated company 6,923,747 6,923,747 Cash at bank 7,183 7,183

6,930,930 6,930,930 Other payables and accruals (864,983) (864,983)

Net identifiable assets 6,065,947 6,065,947

Minority interests (2,527,680)

3,538,267 Share of post-acquisition reserves of

associated company, net of tax, prior to Duford becoming a subsidiary of the Group

(1,854,771)

Translation reserve 198,567

1,882,063 Negative goodwill arising on acquisition

(556,975)

Total purchase consideration 1,325,088

A-38

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 4. Investment in subsidiaries (cont’d)

(a) Acquisition of a subsidiary - Duford Investment (Hong Kong) Limited (“Duford”) (cont’d)

The total cost of the acquisition was S$1,325,088 and comprised costs directly attributable to the acquisition and transfer of shares from KSHR to KSHO.

S$

Costs of the acquisition: Deferred cash settlement (Note 18) 453,615 Cost of investment by KSHR (transfer of shares held by

KSHR to KSHO)

871,473

Total purchase consideration 1,325,088

Net cash inflow on acquisition: Net cash acquired with subsidiary, representing net cash inflow on the acquisition

7,183

As Duford was acquired at the end of the financial year ended 31 March 2006, the

contribution to the net profit of the Group relates to the share of results of associated companies, net of tax of S$1,531,237. If the combination had taken place at the beginning of the year, the net profit for the Group would have been increased by approximately S$612,000.

(b) Disposal of subsidiary - KSH Technologies Pte. Ltd. (“KSHT”)

The Group disposed of KSH Technologies Pte. Ltd., a wholly owned subsidiary, on 22 March 2006 at its carrying value, for a consideration of S$4. The disposal consideration was fully settled in cash. The value of assets and liabilities of KSH Technologies Pte. Ltd. recorded in the combined financial statements as at 22 March 2006, and the cash flow effect of the disposal were: S$ Long-term receivable 297,487 Cash 4

297,491 Other payables and accruals (308,572)

Carrying value of net liabilities (11,081) Less: Gain on disposal of a subsidiary 11,085

Total consideration 4

Net cash inflow on disposal of a subsidiary: Cash proceeds from disposal 4 Less: Cash and cash equivalents of the subsidiary (4)

A-39

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 4. Investment in subsidiaries (cont’d)

(c) Disposal of subsidiary - Premier Façade Pte Ltd

The Group disposed of its entire 61.7% interest in its subsidiary, Premier Façade Pte Ltd, on 10 March 2005, for a consideration of S$1. The value of assets and liabilities of Premier Façade Pte Ltd recorded in the combined financial statements as at 10 March 2005, and the cash flow effect of the disposal were: S$ Trade receivables 52,519 Cash 11,104

63,623 Other payables and accruals (108,065) Trade payables (1,600)

Carrying value of net liabilities (46,402) Less: Minority interest 17,634

Net liabilities disposed (28,408) Less: Gain on disposal of a subsidiary 28,409

Total consideration 1

Net cash outflow on disposal of a subsidiary: Cash proceeds from disposal 1 Less: Cash and cash equivalents of the subsidiary (11,104)

(11,103)

A-40

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 5. Investment in associated companies

2006 2005 2004 S$ S$ S$ At beginning of the year 3,948,737 3,948,737 3,342,685 Additional investment during the year – – 606,052 Investment in Duford reclassified to investment in subsidiaries (Note 4a)(1) (871,473) –

Addition arising from acquisition of a subsidiary (Note 4a) 6,923,747 –

10,001,011 3,948,737 3,948,737 Impairment losses (3,077,264) (3,077,264) (3,077,264)

6,923,747 871,473 871,473 Share of post-acquisition reserves – 323,535 –

6,923,747 1,195,008 871,473

Due from an associated company (non-trade) – 203,675

Carrying amount of investment 6,923,747 1,398,683 871,473

Details of the associated companies are as follows:

Name of company Principal activities

Country of incorporation and place of

business Effective equity interest

held by the Group 2006 2005 2004 % % % Held by subsidiaries TCH Holding Pte. Ltd. # Investment

holding Singapore 24.2 24.2 24.2

Duford Investment (Hong Kong) Limited (“Duford”)*(1)

Investment holding

Hong Kong – 41.7 41.7

Beijing Jin Hua Tong Da Real Estate Development Co., Ltd @

Residential property

developer

People’s Republic of

China

17.5 – –

# Audited by KPMG, Singapore. * Audited by C K Yau & Company, Certified Public Accountants, Hong Kong. @ Audited by Beijing Jin Du Certified Public Accountants, The People’s Republic of China.

(1) Pursuant to the acquisition of additional 16.66% of the issued share capital of Duford from a third party on 23 March 2006, Duford became a subsidiary of the Group.

A-41

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 5. Investment in associated companies (cont’d)

The Group had discontinued the recognition of its share of losses of the associated company, TCH Holding Pte. Ltd., as its share of losses exceeds the carrying amount of the investment. Based on the latest available management accounts of TCH Holding Pte. Ltd., which is for the year ended 31 December 2004, the amount of the Group’s unrecognised share of losses of the associated company during the financial year and cumulatively for the financial year ended 31 March 2006, 2005 and 2004 are approximately S$Nil and S$3,077,264, S$Nil and S$3,077,264 and S$428,000 and S$1,367,000 respectively. The summarised financial information of the associated companies, excluding TCH Holding Pte. Ltd. are as follows: 2006 2005 2004 S$ S$ S$ Assets and liabilities: Current assets 41,636,344 13,181 13,467 Non-current assets 283,756 3,257,829 2,523,851

Total assets 41,920,100 3,271,010 2,537,318

Current liabilities, representing total

liabilities (18,617,095) (864,938)

(873,918)

Net assets 23,303,005 2,406,072 1,663,400

Results: Revenue 59,282,133 – –

Profit (loss) for the year 3,674,675 776,422 (3,758)

6. Other investments

Other investments as at 1 April 2005 have been classified as ‘available-for-sale financial assets’ so as to conform to the presentation adopted in 2006. Available-for-sale financial assets are measured in accordance with the accounting policy as set out in Note 2.13.

2006 2005 2004 S$ S$ S$ Quoted equity shares (1) 770 770 770

(1) In 2005 and 2004, quoted equity shares were carried at the lower of cost and market value.

A-42

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 7. Long-term receivable

The long-term receivable represents a convertible loan given to a third party in accordance with an agreement entered into on 15 October 2004 between KSH Technologies Pte. Ltd. (“KSHT”) and the third party.

The term of the agreement stipulated that KSHT is to provide a loan of RMB 2,500,000 to the third party to fund a business venture in China. As at 31 March 2005, the loan disbursed to the third party amounted to RMB 1,860,000. The balance of RMB 640,000 is payable upon request by the third party.

In accordance with the above agreement, the loan shall be converted to ordinary shares in the third party upon the issuance of the conversion notice. If the notice is issued on or before 30 September 2006, the loan shall not bear any interest. If the notice is not issued by 30 September 2006, the loan shall bear an interest of 7.5% per annum, starting from the drawdown date of the loan. Pursuant to the disposal of KSHT, the amount was nil as at 31 March 2006 (see Note 4b).

8. Investment properties

2006 2005 2004 S$ S$ S$ At beginning of the year 3,170,000 3,200,000 – Addition during the year 1,151,711 – 3,161,320 Gain (loss) from fair value adjustment 98,289 (30,000) 38,680

At end of the year 4,420,000 3,170,000 3,200,000

The property rental income earned by the Group for the financial year ended 31 March 2006, 2005 and 2004 from its investment properties, all of which are leased out under operating leases, amounted to S$138,514, S$73,310 and S$Nil respectively.

The investment properties held by the Group as at 31 March are as follows:

Name of property

Description 2006 2005 2004

S$ S$ S$ Sheares Ville(1)

Freehold residential property at 9 Holt Road #12-05 Singapore 249446, comprising an estimated floor area of 443 square metres

3,170,000 3,170,000 3,200,000

Sheares Ville(1)

Freehold residential property at 9 Holt Road #05-02 Singapore 249446, comprising an estimated floor area of 137 square metres

1,250,000 – –

4,420,000 3,170,000 3,200,000

(1) The fair value has been determined based on the open market desktop valuations

performed by Colliers International Consultancy & Valuation (Singapore) Pte Ltd, an independent professional valuer, carried out in June 2006.

A-43

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 9. Due from a minority shareholder of a subsidiary (non-trade)

This amount is unsecured, non-interest bearing, has no fixed terms of repayment and is repayable only when the cash flows of the minority shareholder permit. Accordingly, the fair values of the amount due from the minority shareholder are not determinable as the timing of the future cash flows cannot be estimated reliably.

10. Completed properties held for sale

2006 2005 2004 S$ S$ S$ At cost Land acquisition costs 750,559 763,067 882,728 Development costs 44,808,122 45,554,853 52,480,808 Interest costs 4,403,971 4,477,363 5,179,485 Translation difference 734,054 115,310 1,316,277

50,696,706 50,910,593 59,859,298

11. Trade receivables

2006 2005 2004 S$ S$ S$ Trade receivables 5,226,259 8,440,820 4,769,488 Retention monies relating to construction

contracts 5,697,755 2,215,879

2,850,286 Unbilled receivables 1,124,969 3,016,715 6,319,981

12,048,983 13,673,414 13,939,755 Less: allowance for doubtful receivables (598,028) (641,286) (823,588)

11,450,955 13,032,128 13,116,167

Movements in allowance for doubtful trade receivables during the year are as follows:

At beginning of year 641,286 823,588 770,756 Allowance for the year 3,150 18,963 238,989 Write back of allowance (46,408) (200,325) (151,272)Write off against allowance – (940) (34,885)

At end of year 598,028 641,286 823,588

Trade receivables are non-interest bearing and are generally on 21 to 30 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition. Included in trade receivables of the Group is an amount of S$1,234,396, S$575,182, and S$531,749, as of 31 March 2006, 2005 and 2004 respectively, which have been assigned to the banks for banking facilities granted to the Group as disclosed in Notes 20 and 22.

A-44

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 11. Trade receivables (cont’d)

Trade receivables are denominated in the following currencies: 2006 2005 2004 S$ S$ S$ Singapore dollars 12,048,983 13,664,016 13,817,612 Renminbi (“RMB”) – 9,398 122,143

12,048,983 13,673,414 13,939,755

12. Other receivables and deposits

2006 2005 2004 S$ S$ S$ Other receivables (1) 931,040 1,016,333 1,016,333 Sundry debtors 121,223 106,377 136,642 Deposits 585,706 840,863 448,948 Advances to suppliers 3,489 – – Advance to employees (2) 8,702 8,750 11,971 Interest receivables 46,402 5,608 – Less: allowance for doubtful non-trade

receivables (60,867) (60,015)

(76,142)

1,635,695 1,917,916 1,537,752

(1) Other receivables relate to cash collaterals placed with insurers and have a weighted average effective interest rate of 2.35 %, Nil% and Nil% per annum in the financial year ended 31 March 2006, 2005 and 2004.

(2) Advances to employees are non-interest bearing and are repayable within the next

12 months. Included in other receivables of the Group is an amount of S$8,408, S$238,366 and S$260,392 denominated in Renminbi as of 31 March 2006, 2005 and 2004 respectively.

13. Due from related parties / to a related party (non-trade)

The amounts are non-interest bearing and are repayable within the next 12 months. The amounts are unsecured and are to be settled in cash.

A-45

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 14. Construction work-in-progress

2006 2005 2004 S$ S$ S$ Project costs incurred to date 64,358,283 53,089,267 14,635,713 Recognised profits less recognised losses to

date 7,067,626 6,488,934

1,404,259

71,425,909 59,578,201 16,039,972 Less: progress billings received and

receivable (68,872,670) (64,766,594) (21,556,428)

Amount due from (to) customers for contract work, net 2,553,239 (5,188,393)

(5,516,456)

Represented by: Construction work-in-progress in excess of

progress billings 3,402,168 2,409,894

566,376 Progress billings in excess of construction

work-in-progress (848,929) (7,598,287)

(6,082,832)

2,553,239 (5,188,393) (5,516,456)

15. Security bonds

Security bonds as at 1 April 2005 have been reclassified into ‘held-to-maturity financial assets’ so as to conform to the presentation adopted in financial year ended 31 March 2006. Held-to-maturity financial assets are measured in accordance with the accounting policy as set out in Note 2.13. Security bonds were previously carried at cost less permanent diminution in value. Security bonds have an average maturity of 3 months and effective interest rates ranging from 1.65% to 3.48%, 1% to 1.55% and 1.13% to 1.23% per annum in the financial year ended 31 March 2006, 2005 and 2004 respectively. These security bonds have been pledged to a bank for banking facilities granted to the Company as disclosed in Notes 22 and 23.

16. Fixed deposits (pledged)

Fixed deposits as of 31 March 2006, 2005 and 2004 have maturities ranging from 30 days to 1 year, 30 days to 1 year and 30 days respectively and bear effective interest rates ranging from 0.9375% to 4.24%, 0.5% to 2.05% and 0.69% to 0.91% per annum respectively.

Fixed deposits of the Group amounting to S$3,735,399, S$2,891,920 and S$210,825 as of 31 March 2006, 2005 and 2004 respectively have been pledged to the banks for banking facilities granted to the Group as disclosed in Notes 21, 22 and 23 and for security over a term loan granted by a bank to a subsidiary.

As at 31 March 2006, 2005 and 2004, S$204,702, $213,595 and S$210,825 of the fixed deposits is denominated in US dollars respectively.

A-46

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 17. Trade payables

Trade payables are non-interest bearing and are normally settled on 14 to 60 days’ terms.

18. Other payables and accruals

2006 2005 2004 S$ S$ S$ Other payables and accruals (current): Amount payable to the previous

shareholders of KSH Overseas Pte. Ltd. arising from the assumption of shareholders’ loans – 1,188,082 1,731,870

Accrued operating expenses 8,312,759 6,928,640 18,203,813 Advance payment 1,162,601 1,970,533 2,273,666 Amount payable to directors 334,073 – 45,005 Loan from a previous shareholder 61,776 – – Other payables (1) 5,876,959 4,503,638 4,293,172

15,748,168 14,590,893 26,547,526

Other payables are non-interest bearing and are normally settled on 30 days’ term. Note:

(1) Included in other payables is an amount owing to a third party, which relates to the

consideration for the acquisition of a subsidiary (Note 4). The amount is non-interest bearing and is repayable within the next 12 months.

2006 2005 2004 S$ S$ S$ Other payables (non-current):

Deposits received 48,215 60,698 465,000

These amounts relate to deposits and funds received from the property owners of the development property held for sale.

Other payables and accruals include amounts denominated in foreign currencies as follows: 2006 2005 2004 S$ S$ S$ Renminbi 6,815,489 6,932,177 17,876,344United States dollar (“US$”) 1,224,663 1,304,457 – Hong Kong dollar 992,498 – –

A-47

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

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A-4

8

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 20. Short-term bank loan, secured

The short-term bank loan was obtained by the Group to finance a construction project in December 2004. The term loan bears an effective interest of 6.75% per annum in the financial year ended 31 March 2005 and is repayable by 21 April 2005.

The term loan was secured by the following:

(i) pledge on all goods, bills of lading, delivery orders, any documents of title or bills of

exchange or any negotiable instruments or other securities in respect of the construction project;

(ii) assignment of progress payments from the developer for the on-going construction

project (see Note 11); and

(iii) joint and several personal guarantee of the directors of the Group.

The loan has been fully repaid in the current financial year. 21. Bank term loans, secured

Note 2006 2005 2004 S$ S$ S$ SGD Term loan - investment property (a) – 2,315,803 1,974,982 SGD Term loan - leasehold factory buildings (b) 1,537,045 1,625,899

SGD Term loan - investment property (c) 1,988,745 – – SGD Term loan - investment property (d) 999,000 – – USD Term loan - completed properties held for sale (e) 12,302,829 13,905,212

15,678,102

16,827,619 17,846,914 17,653,084

Due within 12 months 2,424,434 2,318,686 2,605,318 Due after 12 months 14,403,185 15,528,228 15,047,766

16,827,619 17,846,914 17,653,084

(a) This bank loan was obtained by a subsidiary to finance the purchase of an investment

property in December 2003. The bank loan bears an effective interest ranging from 4.75% to 5.00% and 4.75% per annum in the financial year ended 31 March 2005 and 2004 respectively. The term loan is repayable by monthly instalments over 15 years, commencing on 13 December 2003.

The term loan is secured by the following:

(i) first legal mortgage on the investment property; and

(ii) joint and several personal guarantee of the directors of the subsidiary.

This loan has been redeemed during the financial year ended 31 March 2006 and refinanced with another bank in January 2006 (See Note 21c).

A-49

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 21. Bank term loans, secured (cont’d)

(b) This represents a bank loan obtained by a subsidiary to finance the purchase of a leasehold factory building in July 2004. The bank loan bears an effective interest ranging from 2.65% to 4.25% and 2.65% per annum in the financial year ended 31 March 2006 and 2005 respectively. The term loan is repayable by monthly instalments over 15 years, commencing on September 2005.

The term loan is secured by the following:

(i) first legal mortgage on the leasehold factory building (see Note 3);

(ii) charge on fixed deposits amounting to S$2,018,750 and S$2,011,456 as of 31

March 2006 and 2005 respectively; and

(iii) joint and several personal guarantee of the directors of the subsidiary.

(c) This represents a bank loan obtained by a subsidiary to re-finance the purchase of an investment property in December 2005 (see Note 21a). The bank loan bears an effective interest ranging from 3.29% to 4.61% per annum in the financial year ended 31 March 2006. The term loan is repayable by monthly instalments over 25 years, commencing on 20 January 2006.

The term loan is secured by the following:

(i) first legal mortgage on the investment property; (ii) charge on fixed deposits amounting to S$1,000,000 as of 31 March 2006; and

(iii) joint and several personal guarantee of the directors of the subsidiary.

(d) This represents a bank loan obtained by a subsidiary to finance the purchase of an investment property in March 2006. The term loan will bear an interest of 2.75% and 2% per annum below the bank’s Special Home Rate for the first and second year respectively. For subsequent years, the term loan bears an interest of 1.5% per annum below the bank’s Special Home Rate. The term loan is repayable by monthly instalments over 15 years, commencing on April 2006.

The term loan is secured by the following:

(i) first legal mortgage on the investment property; and

(ii) joint and several guarantee of the directors of the subsidiary.

A-50

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 21. Bank term loans, secured (cont’d)

(e) This bank loan was obtained by a subsidiary to finance the development of a property located in Tianjin (the “Property”), People’s Republic of China.

The bank loan is denominated in United States dollar and bears an effective interest of 6.00% to 7.75%, 4.25% to 5.75%, and 4.25% to 4.50% per annum in the financial year ended 31 March 2006, 2005 and 2004 respectively. The term loan is repayable by fourteen successive instalments commencing on 31 December 2003. In January 2006, the subsidiary signed a restructured loan repayment contract with the bank. The term loan will be repayable by 12 successive instalments commencing March 2006.

The term loan is secured by the following:

(i) a first legal charge over the Property;

(ii) a charge over the assets of the subsidiary;

(iii) an assignment of all income from the Property into a Charge Account

maintained with the bank;

(iv) a joint and several guarantee of certain shareholders and directors of the subsidiary;

(v) corporate guarantee of US$9,362,500 issued by KSHEC;

(vi) a pledge of Group's fixed deposits amounting to S$204,702, S$213,595 and

S$210,825 as of 31 March 2006, 2005 and 2004 respectively; and

(vii) the entire issued and paid-up share capital, including all rights attached thereto, of KSH Overseas Pte. Ltd. held by a subsidiary, Kim Seng Heng Realty Pte Ltd (see Note 4).

22. Bank overdrafts, secured

Bank overdrafts bear interest at rates ranging from 5.00% to 6.00%, 5.25% to 7.25% and 5.25% to 6.00% per annum in the financial year ended 31 March 2006, 2005 and 2004 respectively.

Bank overdrafts of the Group are secured by:

(i) legal mortgage over the leasehold factory buildings (see Note 3);

(ii) first legal mortgage on an investment property; (iii) pledge of a subsidiary’s fixed deposits amounting to S$3,530,697, S$502,373 and

S$Nil and security bonds amounting to S$2,000,000, S$2,000,000 and S$2,000,000 as of 31 March 2006, 2005 and 2004 respectively;

(iv) first charge over the contract proceeds/project account arising from a construction

project financed (see Note 11); (v) letter of assignment of all progress payments and retention monies due to the subsidiary

under three other construction projects financed (see Note 11); (vi) joint and several personal guarantee of the directors of the Company; and (vii) corporate guarantee of S$6,500,000 issued by the Company in the financial year ended

31 March 2006.

A-51

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 23. Bills payable to banks, secured

Bills payable to banks bear interest at rates ranging from 5.00% to 5.75%, 5.00% to 6.00% and 5.00% to 6.00% per annum in the financial year ended 31 March 2006, 2005 and 2004 respectively. These bills payable will mature within 1 to 3 months from year-end. Bills payable to banks are secured by the followings:

(i) legal mortgages over the leasehold buildings of a subsidiary (see Note 3);

(ii) pledges of a subsidiary’s fixed deposits amounting to S$3,018,750, S$2,513,829 and

S$Nil and security bonds amounting to S$2,000,000, S$2,000,000 and S$2,000,000 as of 31 March 2006, 2005 and 2004 respectively; and

(iii) joint and several personal guarantee of the directors of the Company.

24. Loan from a previous shareholder

As at 31 March 2005 and 2004, loan from a previous shareholder was non-interest bearing and was not expected to be repayable within the next 12 months. This amount has been reclassified to current liability as at 31 March 2006 (Note 18).

25. Share capital

The Company was incorporated on 9 March 2006. The share capital as at 31 March 2005 and 2004 comprises the share capital of the Company’s subsidiary, KSHEC. Prior to the KSHEC Restructuring (see Note 1.2 (b)), KSHEC was the holding company of the Group. Following the KSHEC Restructuring, KSHEC became the wholly-owned subsidiary of the Company. For the purpose of preparing the combined financial statements for the financial years ended 30 March 2005 and 2004, the share capital of KSHEC has been used for the financial years reported on. Consequent to the KSHEC Restructuring, the share capital for the financial year ended 31 March 2006 is as follow: The Company Number of shares S$ Issued and fully paid: At date of incorporation - Issuance of one ordinary share 1 1 Issuance of 15,780,624 new ordinary shares pursuant

to the Restructuring Exercise (Note 1.2(b)) 15,780,624 15,780,624

At 31 March 2006 15,780,625 ordinary shares 15,780,625 15,780,625

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

A-52

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 26. Translation reserve

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

27. Other operating income

2006 2005 2004 S$ S$ S$ Gain on sale of plant and equipment 109,872 16,076 9,685 Interest income 131,569 50,797 27,479 Other income 547,779 715,567 825,623 Gain (loss) on fair value adjustment of

investment properties (Note 8) 98,289 (30,000)

38,680 Gain on disposal of a subsidiary 11,085 28,409 – Rental income from investment properties 138,514 73,310 – Negative goodwill arising on acquisition of a

subsidiary written off (see Note 4a) 556,975 –

1,594,083 854,159 901,467

28. Personnel expenses

2006 2005 2004 S$ S$ S$ Salaries, wages and bonuses 2,968,343 1,767,889 2,037,715Central Provident Fund and other pension

costs 272,666 204,859

199,062Other personnel expenses 350,110 199,974 297,507

3,591,119 2,172,722 2,534,284

Compensation of key management personnel Salaries, wages and bonuses 1,015,827 582,642 543,800Central Provident Fund and other pension

costs 72,549 64,779

71,179Other personnel expenses – – 40,000

Total compensation paid to key management personnel 1,088,376 647,421

654,979

Comprise amounts paid to: - Directors of the Company 786,777 373,834 392,680 - Other key management personnel 301,599 273,587 262,299

1,088,376 647,421 654,979

A-53

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 29. Other operating expenses

The following items have been included in other operating expenses:

2006 2005 2004 S$ S$ S$ Allowance for doubtful trade receivables 3,150 18,963 238,989Exchange gain, net (698,083) (1,039) – Operating lease expenses 203,111 167,899 87,131Write-back of allowance for doubtful trade

receivables (46,408) (200,325)

(151,272)

30. Finance costs

2006 2005 2004 S$ S$ S$ Interest expense - bank overdrafts 117,416 51,381 37,647- finance leases 16,494 9,434 6,694- bank term loans 1,016,907 863,326 737,721- bills payables 128,632 102,987 82,651

1,279,449 1,027,128 864,713Others - bank charges 30,155 26,403 13,909

1,309,604 1,053,531 878,622

31. Tax expense (benefit)

Major components of income tax expense (benefit) for the years ended 31 March are:

2006 2005 2004 S$ S$ S$ Current tax - current year 595,000 900,000 901,647 - overprovision in respect of prior years – (56,489) (686,835) Deferred tax - current year 661,124 811,957 (489)- overprovision in respect of prior years – – (295,906)

1,256,124 1,655,468 (81,583)

A-54

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 31. Tax expense (benefit) (cont’d)

A reconciliation between income tax expense (benefit) and the product of accounting profit multiplied by the applicable corporate tax rate is as follows:

2006 2005 2004 S$ S$ S$ Profit before share of results of associated

companies and taxation 5,436,586 6,875,241 4,534,486

Tax at the domestic rates applicable to profit

in the countries concerned(1) 1,202,496 1,734,797 929,649 Tax effect of: - Expenses not deductible for tax purposes 32,113 20,475 62,417 - Utilisation of deferred tax assets not

recognised previously (11,915) (86,649) (77,392)- Deferred tax asset not recognised 61,517 29,532 10,725 - Tax rebates and exemption (10,500) (10,500) (10,500)- Overprovision in respect of prior years – (56,489) (982,741)- Non-taxable income (24,222) – – - Others 6,635 24,302 (13,741)

Tax expense (benefit) 1,256,124 1,655,468 (81,583)

(1) This is prepared by aggregating separate reconciliations for each national jurisdiction.

Deferred tax liabilities

Deferred tax liabilities: Differences in depreciation 71,815 54,704 71,963 Income from a subsidiary 1,451,437 799,046 – Other deferred tax liabilities 445 1,312 –

1,523,697 855,062 71,963 Deferred tax assets: Employee benefits (36,260) (31,411) (24,168) Other provision – – (23,190)

1,487,437 823,651 24,605

As at 31 March 2006, 2005 and 2004, the Group has unutilised tax losses of approximately S$13,000, S$Nil and S$2,016,000 respectively. The use of these balances is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the Group operates.

A-55

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 32. Earnings per share

Basic earnings per share is calculated by dividing the Group’s profit attributable to equity holders of the Company by the pre-Invitation share capital of 63,122,500 ordinary shares outstanding. Diluted earnings per share are not presented as there are no potential dilutive shares during the respective years.

33. Dividends

2006 2005 2004 S$ S$ S$ Interim dividends: First tranche: 0.55 (2005: Nil and 2004: Nil)

cents per ordinary share less tax 70,000 – – Second tranche: 1.9478 (2005: Nil and 2004:

Nil) cents per ordinary share less tax 245,900 – – Third tranche: 3.688 (2005: 3.9308 and 2004:

6.6727) cents per ordinary share less tax 465,600 496,240 842,400

781,500 496,240 842,400

34. Cash and cash equivalents

For the purpose of the combined cashflow statement, cash and cash equivalents comprise the following as at 31 March:

2006 2005 2004 S$ S$ S$ Cash and bank balances 6,784,976 1,798,565 3,063,722 Bank overdraft, secured (Note 22) (1,359,114) (884,882) –

Cash and cash equivalents 5,425,862 913,683 3,063,722

Cash and bank balances held by the subsidiaries in the People’s Republic of China earn interest at floating rates based on daily bank deposit rates ranging from 0.72% to 1.44%, 0.72% and 0.72% per annum for the financial years ended 31 March 2006, 2005 and 2004 respectively. Bank overdrafts are included in the determination of cash and cash equivalents because they form an integral part of the Group's cash management.

Cash and bank balances include amounts denominated in foreign currencies as follows: 2006 2005 2004 S$ S$ S$ Renminbi 547,927 479,529 110,443 United States dollar 125,594 227,164 214,483 Hong Kong dollar 7,183 – –

A-56

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 35. Related party transactions

There were no related party transactions during the financial year except for remuneration paid to key management personnel as disclosed in Note 28.

36. Segment information

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

(i) Construction

Relates to acting as main contractors in construction projects in Singapore and provision of services mainly to property developers in both the private and public sectors.

(ii) Property development and management

Involved in the development and sales of properties and the provision of property management services.

(iii) Others

Relates to general corporate activities.

Geographical segmemts The Group’s geographical segments are based on the location of the Group’s assets. Revenue disclosed in geographical segments is based on the geographical location of operations. Allocation basis

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise tax assets and liabilities and corporate revenue, assets, expenses and liabilities.

Segment accounting policies are the same as the policies described in Note 2.

A-57

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 36. Segment information (cont’d)

(a) Business segments

The following table present revenue and results information regarding the Group’s business segments for the years ended 31 March 2006, 2005 and 2004.

There are no inter-segment sales within the Group.

2006 Construction

Property development

and management Others Eliminations Total

S$ S$ S$ S$ S$ Revenue - external sales 113,215,587 4,744,997 – – 117,960,584

Segment results 3,423,851 2,810,589 511,750 – 6,746,190Share of results of

associated companies – 1,531,237 – – 1,531,237

Finance costs (1,309,604)

Profit before taxation 6,967,823Tax expense (1,256,124)Minority interests (403,264)

Profit for the year 5,308,435

Segment assets 37,190,443 53,784,805 17,358,267 (17,554,575) 90,778,940Investment in

associated companies – 6,923,747 – – 6,923,747

Total assets 97,702,687

Segment liabilities 19,203,823 22,471,353 5,246,350 (17,477,634) 29,443,892Unallocated liabilities 26,484,849

Total liabilities 55,928,741

Other segment information: Capital expenditures 1,083,898 74,205 – – 1,158,103Depreciation of

property, plant and equipment 313,768 66,744 – – 380,512

A-58

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 36. Segment information (cont’d)

(a) Business segments (cont’d)

2005 Construction

Property development

and management Others Eliminations Total

S$ S$ S$ S$ S$ Revenue - external sales 78,946,696 12,701,088 – – 91,647,784

Segment results 4,602,447 3,439,088 (112,763) – 7,928,772Share of results of

associated companies – 323,535 – – 323,535

Finance costs (1,053,531)

Profit before taxation 7,198,776Tax expense (1,655,468)Minority interests (591,849)

Profit for the year 4,951,459

Segment assets 32,745,269 53,955,289 14,981,275 (17,684,783) 83,997,050Investment in

associated companies – 1,398,683 – – 1,398,683

Total assets 85,395,733

Segment liabilities 18,031,371 23,203,176 4,496,877 (17,412,545) 28,318,879Unallocated liabilities 22,844,480

51,163,359

Other segment information: Capital expenditures 2,811,877 163,515 – – 2,975,392Depreciation of

property, plant and equipment 426,320 59,646 – – 485,966

A-59

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 36. Segment information (cont’d)

(a) Business segments (cont’d)

2004 Construction

Property development

and management Others Eliminations Total

S$ S$ S$ S$ S$ Revenue - external sales 49,074,000 3,561,064 – – 52,635,064

Segment results 4,532,698 933,994 (53,584) – 5,413,108Finance costs (878,622)

Profit before taxation 4,534,486Tax benefit 81,583Minority interests (72,701)

Profit for the year 4,543,368

Segment assets 25,859,520 61,817,516 15,311,347 (16,569,797) 86,418,586Investment in

associated companies – 871,473 – – 871,473

Total assets 87,290,059

Segment liabilities 17,111,322 14,357,487 21,589,979 (16,405,721) 36,653,067Unallocated liabilities 20,829,583

57,482,650

Other segment information: Capital expenditures 149,822 72,894 – – 222,716Depreciation of

property, plant and equipment 369,679 21,142 – – 390,821

A-60

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 36. Segment information (cont’d)

(b) Geographical segments

The following table presents revenue, capital expenditures and certain asset information regarding the Group’s geographical segments for the years ended 31 March 2006, 2005 and 2004. 2006 2005 2004 S$ S$ S$ Revenue Singapore 113,215,587 78,946,696 49,074,000 People’s Republic of China 4,744,997 12,701,088 3,561,064

117,960,584 91,647,784 52,635,064

Total assets Singapore 36,986,956 30,041,761 24,601,070 People’s Republic of China 60,715,731 55,353,972 62,688,989

97,702,687 85,395,733 87,290,059

Capital expenditures Singapore 1,083,898 2,811,877 149,822 People’s Republic of China 74,205 163,515 72,894

1,158,103 2,975,392 222,716

37. Contingent liabilities and commitments

(a) Contingent liabilities

Legal claim

In the ordinary course of business, the Group is the defendant in various litigations and claims from its subcontractors and customers in respect of the construction projects. Although there can be no assurances, the Group believes, based on information currently available, that the ultimate resolution of these legal proceedings would not likely have a material adverse effect on the results of operations, financial positions or liquidity of the Group.

Guarantees The Company has issued corporate guarantees of S$14.6 million in favour of several banks in relation to banking facilities granted to a subsidiary in the financial year ended 31 March 2006.

A-61

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 37. Contingent liabilities and commitments (cont’d)

(b) Operating lease commitments

The Group has operating lease commitments for its rental of office and factory premises. Most leases contain renewable options. Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing. These non-cancellable operating leases have remaining lease terms of 5 to 48 years.

Future minimum lease payments payable under non-cancellable operating leases as at 31 March are as follows: 2006 2005 2004 S$ S$ S$ Future minimum lease payments - not later than 1 year 188,000 183,000 79,000 - 1 year through 5 years 718,000 716,000 448,000 - more than 5 years 5,674,000 5,791,000 113,000

6,580,000 6,690,000 640,000

Subsequent to financial year ended 31 March 2006, a subsidiary has exercised its option in respect of the rental of a leasehold factory building to extend the lease for a further 10 years expiring in 2021. Rental will be based on the market rent prevailing on or about the commencement of the extended term as determined by the lessor and the rate shall be subject to a yearly revision to market rent but the increase, if any, shall not be more than 5.5% of the rental for each immediate preceding year. The Group entered into two and one commercial property leases on its investment properties in the financial year ended 31 March 2006 and 2005 respectively and leases out its development properties held for sale under non-cancellable operating leases. The leases have remaining non-cancellable lease terms of up to 7 years. Future minimum lease payments receivable under the non-cancellable operating lease are as follows as of 31 March:

2006 2005 2004 S$ S$ S$ Not later than one year 3,558,000 2,991,000 2,561,000 Later than one year but not later than

five years 6,308,000 5,197,000 3,647,000 Later than five years 1,093,000 517,000 1,164,000

10,959,000 8,705,000 7,372,000

(c) Capital expenditure commitments

2006 2005 2004 S$ S$ S$ Capital expenditure in respect of

contracts placed for the purchase of an investment property, but not provided for in the combined financial statements 921,232 – –

A-62

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 37. Contingent liabilities and commitments (cont’d)

(d) Investment commitment

As at 31 March 2005, the Group is committed to contribute US$8,051 (approximately S$13,687) to an unquoted equity investment and to disburse the balance of a convertible loan of RMB 640,000 (approximately S$127,211) as mentioned in Note 7. As at 31 March 2004, the Group is committed to contribute US$475,000 (approximately S$827,000) to an unquoted equity investment.

38. Financial risk management objectives and policies The Group’s principal financial instruments comprise bank loans and overdraft, finance leases, and cash and short term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables, trade payables and bills payable to banks, which arise directly from its operations. The main risks arising from the Group’s financial instruments are interest rate risk (both fair value and cash flow), liquidity risk, foreign currency risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below. Interest rate risk The Group’s exposure to market risk for changes in interest rates relates primarily to its long term debt obligations. The Group does not use derivative financial instruments to hedge its interest rate risk. The Group obtains additional financing through leasing arrangements and borrowings, including bank borrowings. The Group’s policy is to obtain the most favourable interest rates available. Surplus funds are placed with reputable banks to generate interest income. Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings. Liquidity risk The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, bills payable and leasing arrangement. The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. Short-term funding is obtained from overdraft and short-term bank loan facilities. Foreign currency risk The Group operates in two countries and, as a result, is exposed to foreign exchange risks arising from various currency exposures. In addition to transactional exposures, the Group is also exposed to foreign exchange movements on its net investment in the foreign subsidiary. It is not the Group’s policy to enter into derivative forward foreign exchange contracts for hedging and speculative purposes.

A-63

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 38. Financial risk management objectives and policies (cont’d)

Credit risk Credit risk or the risk of counterparties defaulting, is managed through the application of credit approvals, credit limits and debt monitoring procedures. Financial instruments which potentially expose the Group to credit risk consist primarily of cash and cash equivalents and trade and other receivables. The cash and cash equivalents are placed with various reputable financial institutions. The maximum exposure to credit risk is represented by the carrying amount of the financial assets as stated in the combined balance sheet. The Group has no significant concentrations of credit risk.

39. Financial instruments

Fair values

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.

Financial instruments whose carrying amount approximate fair value

Management has determined that the carrying amounts of cash and bank balances, fixed deposits, security bonds, current trade and other receivables, bank overdrafts, current trade and other payables and bank-term loans, based on their notional amounts, reasonably approximate their fair values because these are mostly short term in nature or are re-priced frequently.

Financial instruments carried at other than fair value

Set out below is a comparison by category of carrying amounts and fair values of the Group’s financial instruments that are carried in the combined financial statements at other than fair values as at 31 March.

Carrying amount Fair value

2006 2005 2004 2006 2005 2004

S$ S$ S$ S$ S$ S$ Financial liabilities: Finance

lease obligations 555,505 307,741 95,305 593,775 321,153 104,282

Methods and assumptions used to determine fair values

The fair value of quoted shares has been determined by reference to published market prices or

broker quotes at the balance sheet date without factoring in transaction costs.

Fair values of finance lease obligations and bank term loans have been determined using discounted estimated cash flows. The discount rates used are the current market incremental lending rates for similar types of lending, borrowing and leasing arrangements.

A-64

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 39. Financial instruments (cont’d)

Methods and assumptions used to determine fair values (cont’d) During the financial year, no amount (2005: S$Nil and S$Nil) has been recognised in the profit and loss account in relation to the change in fair value of financial assets or financial liabilities estimated using a valuation technique. Interest rate risk

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

2006

Within

1 year

1 – 2

years

2 – 3

years

3 – 4

years

4 – 5

years

More than

5

Years Total

S$ S$ S$ S$ S$ S$ S$

Fixed rate

Security bonds 2,000,000 – – – – – 2,000,000

Finance

lease obligations 291,966 75,066 55,988 54,945 37,523 40,017 555,505

Floating rate

Fixed deposits 3,735,399 – – – – – 3,735,399

Cash assets 6,765,502 – – – – – 6,765,502

Bank term loans 2,424,434 2,108,266 8,271,143 174,532 183,397 3,665,847 16,827,619

Bills payable to

banks 5,030,528 – – – – – 5,030,528

Bank overdrafts 1,359,114 – – – – – 1,359,114 2005

Fixed rate

Security bonds 2,000,000 – – – – – 2,000,000

Finance

lease obligations 80,950 71,670 54,873 38,824 27,193 34,231 307,741

Floating rate

Fixed deposits 2,891,920 – – – – – 2,891,920

Cash assets 1,780,552 – – – – – 1,780,552

Short-term bank

loan 412,340

– 412,340

Bank term loans 2,318,686 12,019,936 228,609 239,585 250,674 2,789,424 17,846,914

Bills payable to

banks 1,349,806 – – – – – 1,349,806

Bank overdrafts 884,882 – – – – – 884,882

A-65

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 39. Financial instruments (cont’d)

2004

Within

1 year

1 – 2

years

2 – 3

years

3 – 4

years

4 – 5

years

More than

5

Years Total

S$ S$ S$ S$ S$ S$ S$

Fixed rate

Security bonds 2,000,000 – – – – – 2,000,000

Finance

lease obligations 29,509 21,619 8,800 9,383 10,005 15,989 95,305

Floating rate

Fixed deposits 210,825 – – – – – 210,825

Cash assets 3,060,921 – – – – – 3,060,921

Bank term loans 2,605,318 1,282,717 12,229,531 162,271 171,200 1,202,047 17,653,084

Bills payable to

banks 1,495,493 – – – – – 1,495,493 Interest on financial instruments subject to floating interest rates is contractually repriced at intervals of less than 6 months. Interest on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the Group are not subjected to interest rate risks.

40. Events after the balance sheet date Subsequent to financial year ended 31 March 2006, (i) The Company changed its name to “KSH Holdings Pte. Ltd.” on 22 November 2006.

On 19 December 2006, the Company changed its name to “KSH Holdings Limited” in connection with its conversion into a public company limited by shares.

(ii) On 2 June 2006, a subsidiary, KSHEC, acquired 2 ordinary shares of RM1.00 each in

the share capital of Techpath Construction Sdn. Bhd. (“Techpath”) for a consideration of RM2.00. Techpath has been dormant since incorporation. Subsequent to the acquisition, KSHEC subscribed for 749,998 ordinary shares of RM1.00 each at a subscription price of RM1.00 each. Pursuant to the above, Techpath became a wholly-owned subsidiary of the Group.

(iii) On 8 June 2006, a subsidiary, Duford, acquired an additional 2.72% of equity interest

in Beijing Jin Hua Tong Da Real Estate Development Co., Ltd for a consideration of RMB1.13 million (approximately S$225,000). Pursuant to the acquisition, the effective interest held by Duford and the Group will increase from 30% to 32.7% and 17.5% to 19.1% respectively.

(iv) KSHR transferred its 24.2% interest in TCH Holding, which has a nil carrying value,

to Star Elite on 4 October 2006 for an aggregate consideration of S$1.00. (v) On 11 December 2006, the Company acquired 100% of the issued share capital of

KSHO, comprising 23,010,000 ordinary shares, from KSHR for an aggregate cash consideration of S$23,010,000.

(vi) On 12 December 2006, the Company acquired 100% of the issued share capital of

KSHR, comprising 18,725,000 ordinary shares, from KSHEC for an aggregate cash consideration of S$18,725,000.

A-66

APPENDIX A – REPORT FROM THE AUDITORS IN RELATION TO THE AUDITEDCOMBINED FINANCIAL STATEMENTS OF KSH HOLDINGS LIMITED AND ITS

SUBSIDIARIES FOR THE FINANCIAL YEARS ENDED 31 MARCH 2004,2005 AND 2006

KSH Holdings Limited and its subsidiaries

Notes to the Combined Financial Statements – 31 March 2004, 2005 and 2006 40. Events after the balance sheet date (cont’d)

(vi) At an Extraordinary General Meetings held on 9 December 2006 and 25 January 2007,

the shareholders of the Company approved, inter alia, the following:-

(a) the sub-division of each Share in the existing issued share capital of the Company into four Shares (the “Sub-division of Shares”);

(b) the adoption of a new set of Articles of Association of the Company;

(c) the allotment and issue of the New Shares pursuant to the Invitation, which

when issued and fully paid-up, will rank pari passu in all respects with the existing issued Shares; and

(d) that authority be given to the Directors, pursuant to Section 161 of the

Companies Act, to (i) allot and issue Shares in the Company; and (ii) issue convertible securities and any Shares in the Company pursuant to the convertible securities, (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 the Directors shall in their absolute discretion deem fit, provided that the aggregate number of Shares to be issued pursuant to such authority shall not exceed 50 per cent. (50%) of the post-Invitation issued share capital of the Company and that the aggregate number of Shares to be issued other than on a pro-rata basis to the then existing Shareholders of the Company shall not exceed 20 per cent. (20%) of the post-Invitation issued share capital of the Company. Unless revoked or varied by the Company in general meeting, such authority shall continue in full force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting is required by law or by the Articles of Association to be held, whichever is earlier, except that the Directors shall be authorised to allot and issue new Shares pursuant to the convertible securities notwithstanding that such authority has ceased.

For the purposes of this resolution and pursuant to Rules 806(3) and 806(4) of the Listing Manual, “post-Invitation issued share capital” shall mean the enlarged issued and paid-up share capital of the Company after the Invitation after adjusting for (i) new Shares arising from the conversion or exercise of any convertible securities; (ii) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time such authority is given, provided that the options or awards were granted in compliance with the Listing Manual; and (iii) any subsequent consolidation or sub-division of shares.

41. Authorisation of combined financial statements

The combined financial statements were authorised for issue in accordance with a resolution of the directors on 30 January 2007.

A-67

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-1

KSH Holdings Limited and its subsidiaries

Unaudited Review of the Interim Combined Financial Statements of KSH Holdings Limited

and its Subsidiaries for the Financial Period from 1 April 2006 to 30 June 2006 Index Page

Statement by Directors B-2

Auditors' Report B-3

Interim Combined Balance Sheet B-4

Interim Combined Profit and Loss Account B-6

Interim Combined Statement of Changes in Equity B-7

Interim Combined Cash Flow Statement B-9

Notes to the Interim Combined Financial Statements B-11

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-2

KSH Holdings Limited and its subsidiaries

Statement by Directors We, Choo Chee Onn and Lim Kee Seng, being two of the directors of KSH Holdings Limited (the “Company”), do hereby state that, in the opinion of the directors,

(i) the accompanying interim combined financial statements together with notes thereto, are

drawn up so as to present fairly, the state of affairs of the Group as at 30 June 2006 and of the results, changes in equity and cash flows of the Group for the financial period from 1 April 2006 to 30 June 2006; and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be

able to pay its debts as and when they fall due. On behalf of the Board of Directors, Choo Chee Onn Managing Director Lim Kee Seng Executive Director Singapore 30 January 2007

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-3

Report from the Auditors in relation to the Unaudited Review of the Interim Combined

Financial Statements of KSH Holdings Limited and its Subsidiaries for the Financial Period

from 1 April 2006 to 30 June 2006

30 January 2007 The Board of Directors KSH Holdings Limited 36 Senoko Road Singapore 758108 Dear Sirs Introduction

We have reviewed the accompanying interim combined financial statements of KSH Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”), set out on pages B-4 to B-56, as at 30 June 2006 and for the financial period then ended. Management is responsible for the preparation and fair presentation of these interim combined financial statements in accordance with Singapore Financial Reporting Standard FRS 34 Interim Financial Reporting (“FRS 34”). Our responsibility is to express a conclusion on these interim financial statements based on our review. Scope of Review

We conducted our review in accordance with Singapore Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity.” A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Singapore Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim combined financial statements do not present fairly, in all material respects, the financial position of the Group as at 30 June 2006 and of its financial performance, changes in equity and cash flows for the three-month period then ended in accordance with FRS 34. This report has been prepared for inclusion in the Prospectus in connection with the Invitation by the Company in respect of the issue of 25,000,000 new ordinary shares in the share capital of the Company. ERNST & YOUNG Certified Public Accountants Singapore Partner in charge: Tan Swee Ho

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-4

KSH Holdings Limited and its subsidiaries

Interim Combined Balance Sheet as at 30 June 2006

Unaudited Audited Note 30 June 2006 31 March 2006 S$ S$ Non-current assets Property, plant and equipment 3 4,162,336 4,178,934 Investment in associated companies 5 7,601,957 6,923,747 Other investments 770 770 Investment properties 6 4,420,000 4,420,000 Due from a minority shareholder of a subsidiary (non-trade) 7

1,941,668 1,966,725

18,126,731 17,490,176

Current assets

Completed properties held for sale 8 50,058,188 50,696,706 Consumable stock 10,171 13,488 Trade receivables 9 10,109,841 11,450,955 Other receivables and deposits 10 1,669,512 1,635,695 Prepayments 747,024 492,894 Due from related parties (non-trade) 11 830 230 Construction work-in-progress in excess of progress billings 12

2,136,151 3,402,168

Security bonds 13 2,000,000 2,000,000 Fixed deposits (pledged) 14 3,741,417 3,735,399 Cash and bank balances 29 3,676,808 6,784,976

74,149,942 80,212,511

Current liabilities

Trade payables 15 8,975,928 11,871,114 Other payables and accruals 16 14,491,263 15,748,168 Due to a related party (non-trade) 11 942,466 927,466 Finance lease obligations (current portion) 17 237,048 291,966 Provision for income tax 1,003,832 1,224,646 Progress billings in excess of construction work-in-progress 12

1,894,472 848,929

Bank term loans, secured 18 2,695,680 2,424,434 Bank overdrafts, secured 19, 29 1,366,533 1,359,114 Bills payable to banks, secured 20 2,906,609 5,030,528

34,513,831 39,726,365

Net current assets

39,636,111 40,486,146

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-5

KSH Holdings Limited and its subsidiaries

Interim Combined Balance Sheet as at 30 June 2006 (cont’d)

Unaudited Audited Note 30 June 2006 31 March 2006 S$ S$ Non-current liabilities Other payables 16 68,330 48,215 Finance lease obligations (non-current portion) 17 234,973 263,539 Bank term loans, secured 18 13,735,062 14,403,185 Deferred tax liabilities 27 1,524,984 1,487,437

15,563,349 16,202,376

Net assets 42,199,493 41,773,946

Equity attributable to equity holders of the Company

Share capital 21 15,780,625 15,780,625 Translation reserve 22 81,292 487,104 Accumulated profits 18,179,079 17,516,882

34,040,996 33,784,611Minority interests 8,158,497 7,989,335

Total equity 42,199,493 41,773,946

The accompanying accounting policies and explanatory notes form an integral part of the interim combined financial statements.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-6

KSH Holdings Limited and its subsidiaries

Interim Combined Profit and Loss Account for the financial period from 1 April 2006 to 30 June 2006 Unaudited Unaudited

Note

1 April 2006

to

30 June 2006

1 April 2005

to

30 June 2005

S$ S$

Revenues

Project revenue 18,857,908 24,607,625

Rental income 837,303 792,311

Revenue from sales of development properties – 269,619

19,695,211 25,669,555

Other operating income 23 157,117 206,122

Cost of construction (17,348,793) (23,149,362)

Cost of sales of development properties – (193,573)

Personnel expenses 24 (1,004,471) (1,067,086)

Depreciation of property, plant and equipment 3 (106,375) (94,354)

Other operating expenses 25 (543,734) (628,673)

Finance costs 26 (351,880) (289,846)

(19,355,253) (25,422,894)

Profit from operations before share of results

of associated companies 497,075 452,783

Share of results of associated companies 5 579,642 245,627

Profit before taxation 1,076,717 698,410

Tax expense 27 (129,646) (144,950)

Profit for the period 947,071 553,460

Attributable to :

Equity holders of the Company 662,197 512,776

Minority interests 284,874 40,684

947,071 553,460

Earnings per share (cents)

- Basic and diluted 28 1.05 0.81

The accompanying accounting policies and explanatory notes form an integral part of the interim combined financial statements.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-7

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APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-8

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APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-9

KSH Holdings Limited and its subsidiaries

Interim Combined Cash Flow Statement for the financial period from 1 April 2006 to 30 June 2006 Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 Note S$ S$

Cash flows from operating activities

Profit before taxation 1,076,717 698,410

Adjustments: Depreciation of property, plant and

equipment 106,375

94,354

Loss/(gain) on sale of plant and equipment 8,144 (90,000)

Interest expense 26 350,932 282,883

Interest income 23 (39,723) (47,053)

Share of results of associated companies (579,642) (245,627)

Operating profit before working capital changes 922,803

692,967

Decrease (increase) in:

Completed properties held for sale – 42,682

Consumable stock 3,317 (12,152) Trade and other receivables, deposits and

prepayments 1,077,624

(1,987,446)

Work-in-progress, net 2,311,560 4,072,956

Increase (decrease) in:

Trade and other payables (4,116,976) (791,283)

Cash flows generated from operations 198,328 2,017,724

Income taxes paid (350,460) (251,800)

Interest income received 39,723 47,053

Exchange differences 58,398 117,807

Net cash flows (used in) generated from operating activities (54,011)

1,930,784

Cash flows from investing activities

Purchases of property, plant and equipment (102,755) (145,572)

Net proceeds on sale of plant and equipment 2,409 90,000

Net cash flows used in investing activities (100,346) (55,572)

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-10

KSH Holdings Limited and its subsidiaries

Interim Combined Cash Flow Statement for the financial period from 1 April 2006 to 30 June 2006 (cont’d) Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 Note S$ S$

Cash flows from financing activities

Repayment of bank loans (396,877) (395,627)

Repayment of short-term bank loan – (412,340) (Repayment of) proceeds from bills payables to

banks (2,123,919)

618,996

Interest paid (350,932) (282,883)

Repayment of lease obligations (83,484) (25,899)

(Increase) decrease in fixed deposits (pledged) (6,018) 161,869

Net cash flows used in financing activities (2,961,230) (335,884)

Net (decrease) increase in cash and cash

equivalents (3,115,587)

1,539,328 Cash and cash equivalents at beginning of

financial period 5,425,862

913,683

Cash and cash equivalents at end of financial period 29 2,310,275

2,453,011

The accompanying accounting policies and explanatory notes form an integral part of the combined financial statements.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-11

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 1. Corporation information 1.1 The Company

The Company was incorporated in the Republic of Singapore on 9 March 2006 as a private company limited by shares under the name of “SuperKSH Pte. Ltd.” and changed its name to “KSH Holdings Pte. Ltd.” on 22 November 2006. On 19 December 2006, the Company changed its name to “KSH Holdings Limited” in connection with its conversion into a public company limited by shares. The Company was incorporated for the purpose of acquiring the existing companies of the Group pursuant to the Group Restructuring Exercise.

The registered office and principal place of business of the Company is located at 36 Senoko Road, Singapore 758108.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are shown in Note 4 to the interim combined financial statements.

1.2 The Restructuring Exercise

In preparation for the listing of the Company on the Singapore Exchange, the Group carried out a Restructuring Exercise as a result of which the Company became the holding company of the Group. The Restructuring Exercise involved the incorporation of the Company in Singapore on 9 March 2006 as the holding company of the Group and the following:-

(a) Divestment of KSH Technologies Pte. Ltd. (“KSHT”) by Kim Seng Heng Engineering

Construction (Pte) Ltd (“KSHEC”)

Prior to the Restructuring Exercise, KSHEC held a 100% interest in KSHT, which was set up as an investment holding company with the intention to invest in a radiator manufacturing plant in the PRC. In order to streamline the business and focus on the Group’s core business operations, KSHEC transferred its 100% interest in KSHT, comprising four (4) ordinary shares, to Star Elite Pte. Ltd. (“Star Elite”) on 22 March 2006 for an aggregate cash consideration of S$4.00. The purchase consideration was determined on a willing buyer-willing seller basis and calculated based on the issued and paid-up share capital of KSHT as at 21 March 2006.

(b) Acquisition of KSHEC (“KSHEC Restructuring”)

On 30 March 2006, the Company acquired 100% of the issued share capital of KSHEC, comprising 15,780,624 ordinary shares, from the Executive Directors, Messrs Choo Chee Onn, Kwok Ngat Khow, Tok Cheng Hoe and Lim Kee Seng in the following proportions for an aggregate purchase consideration of S$15,780,624:-

Name of vendor

Number of shares in KSHEC transferred by the vendor

Purchase consideration paid to the vendor

Choo Chee Onn 4,770,156 S$4,770,156 Kwok Ngat Khow 3,670,156 S$3,670,156 Tok Cheng Hoe 3,670,156 S$3,670,156 Lim Kee Seng 3,670,156 S$3,670,156 Total

15,780,624

S$15,780,624

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-12

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 1. Corporation information (cont’d) 1.2 The Restructuring Exercise (cont’d)

(b) Acquisition of KSHEC (“KSHEC Restructuring”) (cont’d) The purchase consideration was satisfied by the allotment and issuance of 4,770,156,

3,670,156, 3,670,156 and 3,670,156 new shares credited as fully paid to Messrs Choo Chee Onn, Kwok Ngat Khow, Tok Cheng Hoe and Lim Kee Seng respectively. The purchase consideration was determined on a willing buyer-willing seller basis and calculated based on the issued and paid-up share capital of KSHEC as at 29 March 2006. Prior to the KSHEC Restructuring, KSHEC was the holding company of the Group. Following the said acquisition, KSHEC became the wholly-owned subsidiary of the Company.

(c) Divestment of TCH Holding Pte Ltd (“TCH Holding”) by Kim Seng Heng Realty Pte

Ltd (“KSHR”) Prior to the Restructuring Exercise, KSHR held 24.2% of the issued share capital of TCH Holding, which is engaged in the hotel business. In order to streamline the business and focus on the Group’s core business operations, KSHR transferred its 24.2% interest in TCH Holding, which has a nil carrying value, to Star Elite on 4 October 2006 for an aggregate consideration of S$1.00. The purchase consideration was determined on a willing buyer-willing seller basis.

(d) Acquisition of KSH Overseas Pte. Ltd. (“KSHO”) from KSHR

On 11 December 2006, the Company acquired 100% of the issued share capital of KSHO, comprising 23,010,000 ordinary shares, from KSHR for an aggregate cash consideration of S$23,010,000. The purchase consideration was determined on a willing buyer-willing seller basis and was calculated based on the issued and paid-up capital of KSHO as at 11 December 2006.

(e) Acquisition of KSHR from KSHEC

On 12 December 2006, the Company acquired 100% of the issued share capital of KSHR, comprising 18,725,000 ordinary shares, from KSHEC for an aggregate cash consideration of S$18,725,000. The purchase consideration was determined on a willing buyer-willing seller basis and was calculated based on the issued and paid-up share capital of KSHR as at 12 December 2006.

2. Basis of preparation and significant accounting policies 2.1 Basis of preparation

The interim combined financial statements of the Group have been prepared in accordance with FRS 34 Interim Financial Reporting.

The interim combined financial statements have been prepared on a historical cost basis, except for one leasehold factory building revalued in 1986, investment properties and available-for-sale financial assets that are carried at their fair values.

The interim combined financial statements is presented in Singapore Dollars (“S$” or “SGD”).

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-13

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.2 Changes in accounting policies

The accounting policies have been consistently applied by the Group and are consistent with those used in the previous financial year.

FRS and INT FRS not yet effective

The Group has not applied FRS 107, Financial Instruments: Disclosure (effective for annual financial periods beginning on or after 1 January 2007).

This standard requires quantitative disclosures of nature and extent of risks arising from financial instruments in addition to the disclosures currently required under FRS 32. Adoption of this standard will result in additional disclosures in the interim combined financial statements.

2.3 Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the interim combined financial statements. They affect the application of the Group's accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Depreciation of plant and equipment

The cost of plant and equipment is depreciated on a straight-line basis over their useful lives. Management estimates the useful lives of these plant and equipment to be within 1 to 15 years. These are common life expectancies applied in the construction industry.

The carrying amount of the Group's plant and equipment at 30 June 2006 and 31 March 2006 was S$1,071,894 and S$1,060,642 respectively. Changes in the expected level of usage and technological developments could impact the economic useful lives of these assets, therefore future depreciation charges could be revised.

(b) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the financial period in which such determination is made. The carrying amount of the Group’s income tax payables at 30 June 2006 and 31 March 2006 was S$1,003,832 and S$1,224,646 respectively.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-14

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.3 Significant accounting estimates and judgements (cont’d)

Critical judgement made in applying accounting policies The following are the judgements made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the interim combined financial statements. (a) Construction contracts and revenue recognition

The Group recognises contract revenue to the extent of contract costs incurred where it is probable those costs will be recoverable or based on the stage of completion method depending on whether the outcome of the contract can be measured reliably. The stage of completion is measured by reference to professional surveys of work performed. Significant judgement is required in determining the stage of completion, the estimated total contract revenue and estimated total contract cost, as well as the recoverability of the contract cost incurred. Estimation of total contract revenue also includes an estimation of the variation works that are recoverable from the customers. In making the judgement, the Group relies on past experience and/or the work of relevant professionals. Estimated total contract cost for construction contract comprises direct costs attributable to the construction of each property. In estimating the total budgeted costs for construction contracts, management makes reference to information such as current offers from contractors and suppliers, recent offers agreed with contractors and suppliers, and professional estimation on construction and material costs as well as its past experience.

(b) Operating Lease Commitments – As Lessor

The Group has entered into commercial property leases on its investment properties portfolio. The Group has determined that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases and has accounted for its investment properties as lessor.

(c) Assessment of Allowance for Doubtful Receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for doubtful receivables. In assessing the allowance for receivables, the Group takes into account the duration of the settlement agreement, whether any subsequent payments were in default as well as past payment history of the customers, where relevant.

There are no other significant judgements or accounting estimates made in the preparation of the interim combined financial statements.

2.4 Functional and foreign currency

(a) Functional currency

The management has determined the currency of the primary economic environment in which the Group operates i.e. functional currency, to be S$. Sales prices, major costs of providing goods and services and major sources of financing are primarily influenced by fluctuations in S$.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-15

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.4 Functional and foreign currency (cont’d)

(b) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rates of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the profit and loss account except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign subsidiaries, which are recognised initially in a separate component of equity as foreign currency translation reserve in the combined balance sheet and recognised in the combined profit and loss account on disposal of the subsidiary.

(c) Foreign currency translation

The results and financial position of foreign operations are translated into SGD using the following procedures:

• Assets and liabilities for each balance sheet presented are translated at

the closing rate ruling at that balance sheet date; and

• Income and expenses for each profit and loss account are translated at average exchange rates for the financial year, which approximates the exchange rates at the dates of the transactions.

All resulting exchange differences are recognised in a separate component of equity as foreign currency translation reserve. Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 April 2005 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the balance sheet date. Goodwill and fair value adjustments which arose on acquisitions of foreign subsidiaries before 1 April 2005 are deemed to be assets and liabilities of the parent company and are recorded in SGD at the rates prevailing at the date of acquisition. On disposal of a foreign operation, the cumulative amount of exchange differences deferred in equity relating to that foreign operation is recognised in the profit and loss account as a component of the gain or loss on disposal.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-16

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d)

2.5 Subsidiaries and combined financial statements

(a) Subsidiaries

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

(b) Combined financial statements

The combined financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the parent company. Consistent accounting policies are applied for like transactions and events in similar circumstances. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets, are eliminated in full.

The combined financial statements of the Group for the financial periods have been prepared in accordance to the principles of merger accounting for the acquisition of a subsidiary, KSHEC, pursuant to the Restructuring Exercise as described in Note 1.2(b). Such manner of presentation reflects the economic substance of the combining entities throughout the relevant period, as a single economic enterprise. Under this method, the Company has been treated as the holding company of KSHEC and its subsidiaries for the financial periods presented. Such manner of presentation reflects the economic substance of the combining entities throughout the relevant periods, as a single entity. Accordingly, the combined results of the Group for the respective periods include the results of the subsidiaries for the entire periods under review. Pursuant to this:

- Assets and liabilities are combined at their existing carrying amounts; - No amount is recognised for goodwill; and - Any difference between the amount recorded as share capital issued and the

amount recorded for the share capital acquired will be adjusted against equity as restructuring reserve.

Apart from the above, the results of other subsidiaries acquired or disposed of during the periods are consolidated from or to their effective dates of acquisition or disposal, respectively. These other subsidiaries acquired are accounted for using the purchase method. Under this method, the cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and continent liabilities over the cost of business combination is recognised in the profit and loss account on the date of acquisition. Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. They are presented in the combined balance sheet within equity, separately from the equity of the shareholders of the Company, and are separately disclosed in the combined profit and loss account.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-17

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d)

2.5 Subsidiaries and combined financial statements (cont’d)

(b) Combined financial statements (cont’d)

Consolidation of the subsidiaries in the PRC is based on the subsidiaries’ financial statements prepared in accordance with the FRS. Profits reflected in the financial statements prepared in accordance with FRS may differ from those reflected in the PRC statutory financial statements of the subsidiaries, prepared for PRC reporting purposes. In accordance with the relevant laws and regulations, profits available for distribution by the PRC subsidiaries are based on the amounts stated in the PRC statutory financial statements.

2.6 Associated companies

An associated company is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. This generally coincides with the Group having 20% or more of the voting power, or has representation on the board of directors.

The Group's investment in associated companies are accounted for using the equity method. Under the equity method, the investment in associated company is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of net assets of the associated company. The Group's share of the profit or loss of the associated company is recognised in the combined profit and loss account. Where there has been a change recognised directly in the equity of the associated company, the Group recognises its share of such changes. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group's net investment in the associated company. The associated company is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associated company. Goodwill relating to an associated company is included in the carrying amount of the investment.

Any excess of the Group's share of the net fair value of the associated company's identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group's share of the associated company's profit or loss in the period in which the investment is acquired. When the Group's share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company.

The most recent available audited financial statements of the associated companies are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is arrived at from the last audited financial statements available and un-audited management financial statements to the end of the accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-18

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.7 Related parties

An entity or individual is considered to be a related party of the Group for the purposes of the financial statements if:

(a) it possesses ability (directly or indirectly) to control or exercise significant influence

over the operating and financial decisions of the Group or vice versa; or

(b) it is subjected to common control or common significant influence. 2.8 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition, property, plant and equipment are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses. Leasehold building stated at valuation was revalued prior to 1 January 1997. Accordingly, it does not need to be revalued in accordance with paragraph 81 of the FRS 16 (revised) – Property, Plant and Equipment.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset, is transferred directly to accumulated profits on retirement or disposal of the asset.

Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the estimated useful life of the asset as follows:

Leasehold factory buildings 25 - 50 years Furniture and fittings and air-conditioners 5 - 15 years Office equipment 5 - 8 years Computers 3 years Motor vehicles 5 years Loose tools 5 years Plant and machinery 6 years Renovations 5 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable.

The useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit and loss account in the financial year the asset is derecognised.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-19

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.9 Construction-in-progress

Construction-in-progress represents fixed assets during the acquisition period and is stated at cost. The acquisition period of an asset includes the period when the asset is under construction, installation and testing. Cost comprises direct costs of acquisition or construction, installation and testing during the period of construction, installation and testing.

Construction-in-progress is transferred to the appropriate category of fixed assets when it

is completed and ready for its intended use. No depreciation is provided on construction in progress until the asset is completed and is ready for its intended use.

2.10 Other investments

Other investments are classified as available-for-sale financial assets.

The accounting policy for the aforementioned category of financial assets is stated in Note 2.13.

2.11 Investment properties

Investment properties are properties that are not occupied substantially for use by or in the operations of the Group. They are held either to earn rental income or for capital appreciation or both. Subsequent to initial recognition, investment properties are stated at fair value, which reflects the market conditions at the balance sheet date. Gains or losses arising from changes in the fair values of the investment properties are included in the profit and loss account in the year in which they arise. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the profit and loss account in the year of retirement or disposal.

2.12 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the Group makes an estimate of the asset's recoverable amount.

An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognised in the profit and loss account as "impairment losses".

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-20

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.12 Impairment of non-financial assets (cont’d)

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses recognised for an asset may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior financial years. Reversal of an impairment loss is recognised in the profit and loss account. After such a reversal, the depreciation charge is adjusted in future financial periods to allocate the asset's revised carrying amount on a systematic basis over its remaining useful life.

2.13 Financial assets

Financial assets within the scope of FRS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. (a) Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivative financial instruments are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in the profit and loss account. The Group does not designate any financial assets not held for trading as financial assets at fair value through profit and loss.

(b) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are initially recognised at fair value, plus directly attributable transaction costs. Subsequent to initial recognition, such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the profit and loss account when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-21

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.13 Financial assets (cont’d)

(c) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the assets to maturity. Investments intended to be held for an undefined period are not included in this classification. Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount and minus any reduction for impairment or uncollectibility. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in the profit and loss account when the investments are derecognised or impaired, as well as through the amortisation process.

(d) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit and loss, held-to-maturity investments or loans and receivables. After initial recognition, available-for sale financial assets are measured at fair value with gains or losses being recognised in the fair value adjustment reserve until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in equity is included in the profit and loss account.

The fair value of investments that are actively traded in organised financial markets is determined by reference to the relevant exchange's quoted market bid prices at the close of business on the balance sheet date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

2.14 Construction contracts

Contract revenue and contract costs are recognised as revenue and expenses, respectively, by reference to the stage of completion of the contract activity at the balance sheet date, when the outcome of a construction contract can be estimated reliably. An expected loss on the construction contract is recognised as an expense immediately when is it probable that total contract costs will exceed total contract revenue.

Revenue is recognised in accordance with the percentage of completion method. The stage of completion is measured by reference to professional surveys of work performed.

Only costs that reflect services performed are included in the estimated total costs of the contract. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Retention monies are recognised in the profit and loss account as and when revenue is recognised for work done based on the percentage of completion method.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-22

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.15 Completed properties held for sale

Completed properties held for sale are held with the intention of sale in the ordinary course of business, and are classified as current assets.

Completed properties held for sale are stated at the lower of cost and estimated net realisable value. Land acquisition costs, borrowing costs and other related development expenditure are capitalised as part of the cost of the completed properties held for sale. Net realisable value represents the estimated selling price less costs to be incurred in selling the property.

2.16 Trade and other receivables

Trade and other receivables, including amounts due from related parties and minority shareholders of a subsidiary, are classified and accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets is stated in Note 2.13.

An allowance is made for uncollectible amounts when there is objective evidence that the Group will not be able to collect the debt. Bad debts are written-off when identified. Further details on the accounting policy for impairment of financial assets are stated in Note 2.17. Unbilled receivables are carried at anticipated realisable values as determined by the Group based on the total estimated contractual sum and variation orders less any omissions.

2.17 Impairment of financial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired.

(a) Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in the profit and loss account.

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

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-23

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.17 Impairment of financial assets (cont’d)

(b) Assets carried at cost

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(c) Available-for-sale financial assets

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the profit and loss account, is transferred from equity to the profit and loss account. Reversals in respect of equity instruments classified as available-for-sale are not recognised in the profit and loss account. Reversals of impairment losses on debt instruments are reversed through the profit and loss account, if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognised in the profit and loss account.

2.18 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

Cash and short term deposits carried in the balance sheets are classified and accounted for as loans and receivables under FRS 39. The accounting policy for this category of financial assets is stated in Note 2.13.

2.19 Construction work-in-progress

Construction work-in-progress is carried at the net amount of cost plus attributable profits less recognised losses, net of progress billings and allowance for foreseeable losses. It is presented in the balance sheet as a current asset under “construction work-in-progress in excess of progress billings” or as a current liability under “progress billings in excess of construction work-in-progress”, as applicable.

Cost of projects includes raw materials, direct labour and other project-related expenses incurred during the project period. The project is considered complete when all significant identifiable costs attributable to the project have been incurred. Provision for anticipated losses on uncompleted contracts is made in the period in which such losses are determined.

2.20 Trade and other payables

Liabilities for trade and other amounts payable, which are normally settled on 30-90 day terms, and payables to a related party, subsidiary and a shareholder are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.

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

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-24

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.21 Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

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

2.22 Borrowing costs

Borrowing costs are generally expensed as incurred. Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are being incurred. Borrowing costs are capitalised until the assets are ready for their intended use. If the resulting carrying amount of the asset exceeds its recoverable amount, an impairment loss is recorded.

2.23 Derecognition of financial assets and liabilities

(a) Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:

• the contractual rights to receive cash flows from the asset have expired;

• the Group retains the contractual rights to receive cash flows from the asset,

but has assumed an obligation to pay them in full without material delay to a third party under a 'pass-through' arrangement; or

• the Group has transferred its rights to receive cash flows from the asset and

either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of (a) the consideration received (including any new asset obtained less any new liability assumed) and (b) any cumulative gain or loss that has been recognised directly in equity is recognised in the profit and loss account.

(b) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit and loss account.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-25

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.24 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit and loss account net of any reimbursement.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

2.25 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. Singapore The Group make contributions to the Central Provident Fund (“CPF”) scheme in Singapore, a defined contribution pension scheme. Contributions to national CPF scheme are recognised as an expense in the financial period in which the related service is performed. People’s Republic of China (“PRC”) Subsidiaries incorporated and operating in the PRC are required to provide certain staff pension benefits to its employees under existing PRC legislations and pension contributions are provided at rates stipulated by PRC legislations are contributed to a pension fund managed by the government agencies, which are responsible for administering these amounts for the subsidiaries’ employees. Contributions to the national pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to balance sheet date.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-26

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d) 2.26 Leases

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the profit and loss account. Contingent rents, if any, are charged as expenses in the financial periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income (Note 2.27).

2.27 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.

(a) Project revenue

Accounting policy for recognising project revenue is stated in Note 2.14.

(b) Rental income

Rental income is accounted for on a straight-line basis over the lease terms on ongoing leases. The aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line basis.

(c) Revenue from sale of development properties

Revenue from the sale of development properties is recognised when there is a finalised sales agreement and all risks and rewards of ownership have been transferred to the buyer, and that it is probable that the economic benefits associated with the sales agreements will flow to the Group.

(d) Interest income

Interest income is recognised as interest accrues (using the effective interest method) unless collectibility is in doubt.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-27

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 2. Significant accounting policies (cont’d)

2.28 Income taxes

(a) Current tax

Current tax assets and liabilities for the current and prior financial periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

(b) Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences.

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

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the financial year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liability and the deferred taxes relate to the same taxable entity and the sale taxation authority.

(c) Sales tax

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

• Where the sales tax incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the sale tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of sales tax

included.

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

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-2

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APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-2

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36

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-30

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 3. Property, plant and equipment (cont’d)

Cash outflows on purchase of property, plant and equipment During the financial period ended 30 June 2006, the Group acquired property, plant and equipment with an aggregate cost of S$102,755 (30 June 2005: S$225,192), of which S$Nil (30 June 2005: S$79,620) was acquired by means of finance lease arrangements respectively. Cash payments of S$102,755 (30 June 2005: S$145,572) were made to purchase the property, plant and equipment during the financial period ended 30 June 2006. Assets held under finance lease

The net carrying amounts of plant and equipment acquired under finance leases at the end of the financial periods are as follow:

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Motor vehicles 269,674 305,717

Plant and machinery 108,258 114,507 Furniture and fittings and air conditioners 128,573 131,956

506,505 552,180

Assets pledged as security As at 30 June 2006, leasehold factory buildings of a subsidiary with an aggregate net carrying amount of approximately S$3,090,000 (31 March 2006: S$3,118,000) have been pledged as securities for the banking facilities granted by the banks (see Notes 18, 19 and 20).

Revaluation of leasehold factory building

One of the leasehold factory buildings was valued at S$1,100,000 on the basis of present market value by a firm of professional valuers, Associated Property Consultants Pte Ltd on 11 August 1986. Had it been stated at cost less accumulated depreciation, the net carrying amount of that leasehold factory building as at 30 June 2006 and 31 March 2006 would have been approximately S$74,000 and S$78,000 respectively.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-31

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 4. Investment in subsidiaries The Company had the following subsidiaries as at 30 June 2006 and 31 March 2006:

Name of company

Principal activities

Country of incorporation and place of

business

Effective equity

interest held by the Group

Unaudited Audited 30 June

2006 31 March

2006 % % Held by the Company Kim Seng Heng

Engineering Construction (Pte) Ltd (“KSHEC”)

Carry on business as builders and contractors

Singapore 100 100

Held by subsidiaries Kim Seng Heng Realty

Pte Ltd (“KSHR”) Property developers,

deriving rental income from investment properties and investment holding

Singapore 100 100

KSH Overseas Pte. Ltd.

(“KSHO”) (1) Investment holding Singapore 100 100

Tianjin Tianxing Real

Estate Development Co., Ltd.

Construction, rental, sale of property

People’s Republic of

China

69.0 69.0

Tianjin Tianxing Property

Management Co., Ltd Property management People’s

Republic of China

69.0 69.0

Duford Investment (Hong

Kong) Limited (“Duford”)

Investment holding Hong Kong 58.3 58.3

Techpath Construction

Sdn Bhd (“Techpath”) (2)

Building construction Malaysia 100 –

(1) The entire issued and paid-up share capital, including all rights attached thereto, of KSH Overseas Pte. Ltd. held by a subsidiary, Kim Seng Heng Realty Pte Ltd, has been mortgaged as security for a term loan granted to another subsidiary, Tianjin Tianxing Real Estate Development Co., Ltd (see Note 18(d)).

(2) On 2 June 2006, KSHEC acquired 2 ordinary shares of RM1.00 each in the share capital of Techpath for a consideration of RM2.00. Subsequent to the acquisition, KSHEC subscribed for 749,998 ordinary shares of RM1.00 each at a subscription price of RM1.00 each. Pursuant to the above, Techpath became a wholly-owned subsidiary of the Group.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-32

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 5. Investment in associated companies

Unaudited Audited 30 June 2006 31 March 2006 S$ S$ At beginning of the period/ year 10,001,011 3,948,737 Investment in Duford reclassified to investment in

subsidiaries –

(871,473)

Addition arising from acquisition of a subsidiary – 6,923,747

Addition during the period 224,701 –

10,225,712 10,001,011Impairment losses (3,077,264) (3,077,264)

7,148,448 6,923,747Share of post-acquisition reserves 579,642 – Translation difference (126,133) –

Carrying amount of investment 7,601,957 6,923,747

Details of the associated companies are as follows:

Name of company Principal activities

Country of incorporation and place of

business Effective equity interest

held by the Group Unaudited Audited 30 June

2006 31 March

2006 % % Held by subsidiaries TCH Holding Pte. Ltd. (1) Investment

holding Singapore 24.2 24.2

Beijing Jin Hua Tong Da Real Estate Development Co., Ltd (“BJHT”) (2)

Residential property

developer

People’s Republic of

China

19.1 17.5

(1) The Group had discontinued the recognition of its share of losses of the associated

company, TCH Holding Pte. Ltd., as its share of losses exceeds the carrying amount of the investment. Based on the latest available management accounts of TCH Holding Pte. Ltd., which is for the year ended 31 December 2004, the amount of the Group’s unrecognised share of losses of the associated company during the financial period and cumulatively for the financial period ended 30 June 2006 is approximately S$Nil and S$3,077,264 (31 March 2006: S$Nil and S$3,077,264).

(2) On 8 June 2006, Duford acquired an additional 2.72% of equity interest in BJHT for a

consideration of RMB 1.13 million (approximately S$225,000). Pursuant to the acquisition, the effective interest held by Duford and the Group increased from 30% to 32.72% and 17.5% to 19.1% respectively.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-33

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 5. Investment in associated companies (cont’d)

The summarised financial information of the associated companies, excluding TCH Holding Pte. Ltd. are as follows: Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Assets and liabilities:

Current assets 31,579,560 41,636,344

Non-current assets 261,465 283,756

Total assets 31,841,025 41,920,100

Current liabilities, representing total liabilities (6,789,610) (18,617,095)

Net assets 25,051,415 23,303,005

Results:

Revenue 12,781,933 59,282,133

Profit for the period/ year 1,920,154 3,674,675

6. Investment properties

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

At beginning of the period/ year 4,420,000 3,170,000

Addition during the period/ year – 1,151,711

Gain from fair value adjustment – 98,289

At end of the period/ year 4,420,000 4,420,000

The property rental income earned by the Group for the financial period ended 30 June 2006 from its investment properties, all of which are leased out under operating leases, amounted to S$42,286 (2005: S$30,071).

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-34

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 6. Investment properties (cont’d)

The investment properties held by the Group are as follows:

Unaudited Audited Name of property Description 30 June 2006 31 March 2006 S$ S$ Sheares Ville(1)

Freehold residential property at 9 Holt Road #12-05 Singapore 249446, comprising an estimated floor area of 443 square metres

3,170,000 3,170,000

Sheares Ville(1)

Freehold residential property at 9 Holt Road #05-02 Singapore 249446, comprising an estimated floor area of 137 square metres

1,250,000 1,250,000

4,420,000 4,420,000

(1) The fair value has been determined based on the open market desktop valuations

performed by Colliers International Consultancy & Valuation (Singapore) Pte Ltd, an independent professional valuer, carried out in June 2006.

7. Due from a minority shareholder of a subsidiary (non-trade)

This amount is unsecured, non-interest bearing, has no fixed terms of repayment and is repayable only when the cash flows of the minority shareholders permit. Accordingly, the fair values of the amount due from the minority shareholder are not determinable as the timing of the future cash flows cannot be estimated reliably.

8. Completed properties held for sale

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

At cost

Land acquisition costs 750,559 750,559

Development costs 44,808,122 44,808,122

Interest costs 4,403,971 4,403,971

Translation difference 95,536 734,054

50,058,188 50,696,706

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-35

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 9. Trade receivables

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Trade receivables 3,456,204 5,226,259

Retention monies relating to construction contracts 6,160,331 5,697,755

Unbilled receivables 1,091,334 1,124,969

10,707,869 12,048,983

Less: allowance for doubtful receivables (598,028) (598,028)

10,109,841 11,450,955

Movements in allowance for doubtful trade receivables during the period/ year are as follows:

At beginning of period/ year 598,028 641,286

Allowance for the period/year – 3,150

Write back of allowance – (46,408)

At end of period/ year 598,028 598,028

Trade receivables are non-interest bearing and are generally on 21 to 30 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition. Included in trade receivables of the Group is an amount of S$2,003,729 (31 March 2006: S$1,234,396) which have been assigned to the banks for banking facilities granted to the Group as disclosed in Notes 18 and 19.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-36

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 10. Other receivables and deposits

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Other receivables (1) 927,308 931,040

Sundry debtors 237,859 121,223

Deposits 497,923 585,706

Advances to suppliers 3,445 3,489

Advance to employees (2) 199 8,702

Interest receivables 62,878 46,402

Less: allowance for doubtful non-trade receivables (60,100) (60,867)

1,669,512 1,635,695

(1) Other receivables relate to cash collaterals placed with insurers and have a weighted average effective interest rate of 2.35% (31 March 2006: 2.35 %) per annum.

(2) Advances to employees are non-interest bearing and are repayable within the next 12

months. Other receivables include amounts denominated in foreign currencies as follows: Unaudited Audited 30 June 2006 31 March 2006

Renminbi 215,363 8,408

Ringgit (“RM”) 86,730 –

11. Due from related parties / to a related party (non-trade)

The amounts are non-interest bearing and are repayable within the next 12 months. The amounts are unsecured and are to be settled in cash.

12. Construction work-in-progress

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Project costs incurred to date 84,389,090 64,358,283

Recognised profits less recognised losses to date 8,578,918 7,067,626

92,968,008 71,425,909

Less: progress billings received and receivable (92,726,329) (68,872,670)

Amount due from customers for contract work, net 241,679 2,553,239

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-37

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 12. Construction work-in-progress (cont’d)

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Represented by: Construction work-in-progress in excess of progress

billings 2,136,151 3,402,168 Progress billings in excess of construction work-in-

progress (1,894,472) (848,929)

241,679 2,553,239

13. Security bonds

Security bonds have an average maturity of 3 months and effective interest rates ranging from 3.42% to 3.55% (31 March 2006: 1.65% to 3.48%) per annum. These security bonds have been pledged to a bank for banking facilities granted to the Company as disclosed in Notes 19 and 20.

14. Fixed deposits (pledged)

Fixed deposits have maturities ranging from 30 days to 1 year (31 March 2006: 30 days to 1 year) and bear effective interest rates ranging from 0.9375% to 5.0271% (31 March 2006: 0.9375% to 4.24%) per annum.

Fixed deposits of the Group amounting to S$3,741,417 (31 March 2006: S$3,735,399) have been pledged to the banks for banking facilities granted to the Group as disclosed in Notes 18, 19 and 20 and for security over a term loan granted by a bank to a subsidiary.

As at 30 June 2006, S$206,906 (31 March 2006: S$204,702) of the fixed deposits is denominated in US dollars respectively.

15. Trade payables Trade payables are non-interest bearing and are normally settled on 14 to 60 days’ terms.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-38

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 16. Other payables and accruals

Unaudited Audited 30 June 2006 31 March 2006 S$ S$ Other payables and accruals (current):

Accrued operating expenses 7,514,312 8,312,759

Advance payment 1,147,958 1,162,601

Amount payable to directors 327,987 334,073

Loan from a previous shareholder 61,776 61,776

Other payables (1) 5,439,230 5,876,959

14,491,263 15,748,168

Note:

(1) Included in other payables is an amount owing to a third party amounting to

approximately S$224,000, which relates to the consideration for the acquisition of an additional 2.72% equity interest in a associated company (Note 5). The amount is non-interest bearing and is repayable within the next 12 months.

Other payables are non-interest bearing and are normally settled on 30 days’ term. Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Other payables (non-current):

Deposits received 68,330 48,215

These amounts relate to deposits and funds received from the property owners of the development property held for sale.

Other payables and accruals include amounts denominated in foreign currencies as follows: Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Renminbi 4,927,083 6,815,489

United States dollar (“US$”) 3,408,938 1,224,663

Hong Kong dollar 574,053 992,498

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-39

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 17. Finance lease obligations

Unaudited Audited 30 June 2006 31 March 2006

Total minimum lease payments

Present value of payments

Total minimum lease payments

Present value of payments

S$ S$ S$ S$

Within one year 259,690 237,048 319,632 291,966 After one year but not more than five years 252,893 204,073 272,914 223,522 After five years 32,217 30,900 41,921 40,017

Total minimum lease payments 544,800 472,021 634,467 555,505

Less amounts representing finance charges (72,779) – (78,962) –

Present value of minimum lease payments 472,021 472,021 555,505 555,505

The Group has finance leases for certain motor vehicles, plant and machinery and furniture and fittings and air-conditioners. The finance lease obligations are pledged by these plant and equipment with a net carrying amount of approximately S$507,000 (31 March 2006: S$552,000). In addition, certain of the finance lease obligations are secured by a joint and several guarantee from the directors of the Company of approximately S$322,000 (31 March 2006: S$395,000). Lease terms range from 3 years to 7 years. Lease terms do not contain restrictions concerning dividends, additional debt or further leasing.

The discount rate implicit in the lease obligations approximate 6.27% (31 March 2006: 6.27%) per annum.

18. Bank term loans, secured

Note Unaudited Audited 30 June 2006 31 March 2006 S$ S$

SGD Term loan - leasehold factory buildings (a) 1,509,045 1,537,045 SGD Term loan - investment property (b) 1,979,892 1,988,745 SGD Term loan - investment property (c) 987,900 999,000 USD Term loan - completed properties held for sale (d) 11,953,905

12,302,829

16,430,742 16,827,619

Due within 12 months 2,695,680 2,424,434

Due after 12 months 13,735,062 14,403,185

16,430,742 16,827,619

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-40

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 18. Bank term loans, secured (cont’d)

(a) This represents a bank loan obtained by a subsidiary to finance the purchase of a leasehold factory building in July 2004. The bank loan bears an effective interest of 4.75% (31 March 2006: 2.65% to 4.25%) per annum. The term loan is repayable by monthly instalments over 15 years, commencing on September 2005.

The term loan is secured by the following:

(i) first legal mortgage on the leasehold factory building (see Note 3);

(ii) charge on fixed deposits amounting to S$2,018,750 (31 March 2006:

S$2,018,750); and

(iii) joint and several personal guarantee of the directors of the subsidiary.

(b) This represents a bank loan obtained by a subsidiary to re-finance the purchase of an investment property in December 2005. The bank loan bears an effective interest of 5.24% (31 March 2006: 3.29% to 4.61%) per annum. The term loan is repayable by monthly instalments over 25 years, commencing on 20 January 2006.

The term loan is secured by the following:

(i) first legal mortgage on the investment property; (ii) charge on fixed deposits amounting to S$1,000,000 (31 March 2006:

S$1,000,000); and

(iii) joint and several personal guarantee of the directors of the subsidiary.

(c) This represents a bank loan obtained by a subsidiary to finance the purchase of an investment property in March 2006. The bank loan bears an effective interest of 3.75% (31 March 2006: Nil ) per annum. The term loan is repayable by monthly instalments over 15 years, commencing on April 2006.

The term loan is secured by the following:

(i) first legal mortgage on the investment property; and

(ii) joint and several guarantee of the directors of the subsidiary.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-41

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 18. Bank term loans, secured (cont’d)

(d) This bank loan was obtained by a subsidiary to finance the development of a property located in Tianjin (the “Property”), People’s Republic of China.

The bank loan is denominated in United States dollar and bears an effective interest of 7.75% to 8.25% (31 March 2006: 6.00% to 7.75%) per annum. The term loan is repayable by fourteen successive instalments commencing on 31 December 2003. In January 2006, the subsidiary signed a restructured loan repayment contract with the bank. The term loan will be repayable by 12 successive instalments commencing March 2006.

The term loan is secured by the following:

(i) a first legal charge over the Property;

(ii) a charge over the assets of the subsidiary;

(iii) an assignment of all income from the Property into a Charge Account

maintained with the bank;

(iv) a joint and several guarantee of certain shareholders and directors of the subsidiary;

(v) corporate guarantee of US$9,362,500 issued by KSHEC;

(vi) a pledge of Group's fixed deposits amounting to S$206,906 (31 March 2006:

S$204,702); and

(vii) the entire issued and paid-up share capital, including all rights attached thereto, of KSH Overseas Pte. Ltd. held by a subsidiary, Kim Seng Heng Realty Pte Ltd (see Note 4).

19. Bank overdrafts, secured

Bank overdrafts bear interest at rates ranging from 5.25% to 6.00% (31 March 2006: 5.00% to 6.00%) per annum.

Bank overdrafts of the Group are secured by:

(i) legal mortgage over the leasehold factory buildings (see Note 3);

(ii) first legal mortgage on an investment property; (iii) pledge of a subsidiary’s fixed deposits amounting to S$3,534,511 (31 March 2006:

S$3,530,697) and security bonds amounting to S$2,000,000 (31 March 2006: S$2,000,000);

(iv) first charge over the contract proceeds/project account arising from a construction

project financed (see Note 9); (v) letter of assignment of all progress payments and retention monies due to the subsidiary

under three other construction projects financed (see Note 9); (vi) joint and several personal guarantee of the directors of the Company; and (vii) corporate guarantee of S$Nil (31 March 2006: S$6,500,000) issued by the Company.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-42

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 20. Bills payable to banks, secured

Bills payable to banks bear interest at rates ranging from 5.00% to 5.99% (31 March 2006: 5.00% to 5.75%) per annum. These bills payable will mature within 1 to 3 months from year-end. Bills payable to banks are secured by the followings:

(i) legal mortgages over the leasehold buildings of a subsidiary (see Note 3);

(ii) pledges of a subsidiary’s fixed deposits amounting to S$3,018,750 (31 March 2006:

S$3,018,750) and security bonds amounting to S$2,000,000 (31 March 2006: S$2,000,000); and

(iii) joint and several personal guarantee of the directors of the Company.

21. Share capital

The Company Number of shares S$ Issued and fully paid: At date of incorporation - Issuance of one ordinary share 1 1 Issuance of 15,780,624 new ordinary shares pursuant

to the Restructuring Exercise (Note 1.2(b)) 15,780,624 15,780,624

At 31 March 2006 and 30 June 2006 15,780,625 ordinary shares 15,780,625 15,780,625

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

22. Translation reserve

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

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-43

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 23. Other operating income

Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 S$ S$

Gain on sale of plant and equipment – 90,000

Interest income 39,723 47,053

Other income 75,108 38,998

Rental income from investment properties 42,286 30,071

157,117 206,122

24. Personnel expenses

Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 S$ S$

Salaries, wages and bonuses 830,482 911,232

Central Provident Fund and other pension costs 90,799 46,698

Other personnel expenses 83,190 109,156

1,004,471 1,067,086

Compensation of key management personnel

Salaries, wages and bonuses 196,500 304,925

Central Provident Fund and other pension costs 9,990 25,574

Total compensation paid to key management personnel 206,490

330,499

Comprise amounts paid to:

- Directors of the Company 155,520 262,972

- Other key management personnel 50,970 67,527

206,490 330,499

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-44

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 25. Other operating expenses

The following items have been included in other operating expenses:

Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 S$ S$

Exchange (gain)/loss, net (40,208) 654

Operating lease expenses 42,542 41,357

Loss on sale of plant and equipment 8,144 –

26. Finance costs

Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 S$ S$ Interest expense

- bank overdrafts 18,747 9,821

- finance leases 6,184 3,698

- bank term loans 267,722 258,550

- bills payables 58,279 10,814

350,932 282,883

Others

- bank charges 948 6,963

351,880 289,846

27. Tax expense

Major components of income tax expense are:

Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 S$ S$ Current tax - current period 74,000 70,000 Deferred tax - current period 55,646 74,950

129,646 144,950

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-45

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 27. Tax expense (cont’d)

A reconciliation between income tax expense and the product of accounting profit multiplied by the applicable corporate tax rate is as follows:

Unaudited Unaudited

1 April 2006 to

30 June 2006

1 April 2005 to

30 June 2005 S$ S$

Profit before share of results of associated

companies and taxation 497,075 452,783

Tax at the domestic rates applicable to profit in the

countries concerned(1) 93,084 117,417

Tax effect of:

- Expenses not deductible for tax purposes 46,032 3,772 - Utilisation of deferred tax assets not recognised

previously (9,470) –

- Deferred tax asset not recognised – 7,734

- Others – 16,027

Tax expense 129,646 144,950

(1) This is prepared by aggregating separate reconciliations for each national jurisdiction.

Deferred tax liabilities

Unaudited Audited 30 June 2006 31 March 2006 S$ S$ Deferred tax liabilities: Differences in depreciation 65,936 71,815 Income from a subsidiary 1,488,984 1,451,437 Other deferred tax liabilities 6,324 445

1,561,244 1,523,697 Deferred tax assets: Employee benefits (36,260) (36,260) Other provision – –

1,524,984 1,487,437

As at 30 June 2006, the Group has unutilised tax losses of approximately S$3,100 (31 March 2006: S$13,000). The use of these balances is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the Group operates.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-46

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 28. Earnings per share

Basic earnings per share is calculated by dividing the Group’s profit attributable to equity holders of the Company by the pre-Invitation share capital of 63,122,500 ordinary shares outstanding.

Diluted earnings per share are not presented as there are no potential dilutive shares during the respective periods.

29. Cash and cash equivalents

For the purpose of the interim combined cashflow statement, cash and cash equivalents comprise the following:

Unaudited Unaudited 30 June 2006 30 June 2005 S$ S$ Cash and bank balances 3,676,808 3,727,725 Bank overdraft, secured (Note 19) (1,366,533) (1,274,714)

Cash and cash equivalents 2,310,275 2,453,011

Cash and bank balances held by the subsidiaries in the People’s Republic of China earn interest at floating rates based on daily bank deposit rates 0.72% to 1.44% (30 March 2006: 0.72% to 1.44%) per annum. Bank overdrafts are included in the determination of cash and cash equivalents because they form an integral part of the Group's cash management. Cash and bank balances include amounts denominated in foreign currencies as follows: Unaudited Audited 30 June 2006 31 March 2006 S$ S$ Renminbi 1,812,195 547,927 United States dollar 26,906 125,594 Hong Kong dollar 7,052 7,183

30. Related party transactions

There were no related party transactions during the financial period except for remuneration paid to key management personnel as disclosed in Note 24.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-47

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 31. Segment information

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

(i) Construction

Relates to acting as main contractors in construction projects in Singapore and provision of services mainly to property developers in both the private and public sectors.

(ii) Property development and management Involved in the development and sales of properties and the provision of property management services.

(iii) Others

Relates to general corporate activities.

Geographical segmemts The Group’s geographical segments are based on the location of the Group’s assets. Revenue disclosed in geographical segments is based on the geographical location of operations. Allocation basis

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise tax assets and liabilities and corporate revenue, assets, expenses and liabilities.

Segment accounting policies are the same as the policies described in Note 2.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-48

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 31. Segment information (cont’d)

(a) Business segments

The following table present revenue and results information regarding the Group’s business segments for the financial period from 1 April 2006 to 30 June 2006 and 1 April 2005 to 30 June 2005.

There are no inter-segment sales within the Group.

Construction

Property development

and management Others Eliminations Total

S$ S$ S$ S$ S$ Unaudited 1 April 2006 to 30

June 2006 Revenue - external sales 18,857,908 837,303 – – 19,695,211

Segment results 442,785 429,453 (23,283) – 848,955Share of results of

associated companies – 579,642 – – 579,642

Finance costs (351,880)

Profit before taxation 1,076,717Tax expense (129,646)Minority interests (284,874)

Profit for the period 662,197

Other segment information: Depreciation 86,972 19,403 – – 106,375

Unaudited 1 April 2005 to 30

June 2005 Revenue - external sales 24,607,625 1,061,930 – – 25,669,555

Segment results 416,420 346,601 (20,392) – 742,629Share of results of

associated companies – 245,627 – – 245,627

Finance costs (289,846)

Profit before taxation 698,410Tax expense (144,950)Minority interests (40,684)

Profit for the period 512,776

Other segment information: Depreciation 79,085 15,268 – – 94,354

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-49

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 31. Segment information (cont’d)

(a) Business segments (cont’d)

The following table presents certain assets, liabilities, and other information regarding the Group’s business segments as at 30 June 2006 and 31 March 2006:

Construction

Property development

and management Others Eliminations Total

S$ S$ S$ S$ S$ Unaudited 30 June 2006 Segment assets 32,545,086 53,328,733 17,080,672 (18,279,775) 84,674,716Investment in

associated company 7,601,957

Total assets 92,276,673

Segment liabilities 16,656,291 22,403,498 5,471,372 (18,158,702) 26,372,459Unallocated liabilities 23,704,721

Total liabilities 50,077,180

Other segment information: Capital expenditures 23,728 79,027 – – 102,755

Audited 31 March 2006 Segment assets 37,190,443 53,784,805 17,358,267 (17,554,575) 90,778,940Investment in

associated company – 6,923,747 – – 6,923,747

Total assets 97,702,687

Segment liabilities 19,203,823 22,471,353 5,246,350 (17,477,634) 29,443,892Unallocated liabilities 26,484,849

Total liabilities 55,928,741

Other segment information: Capital expenditures 1,083,898 74,205 – – 1,158,103

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-50

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 31. Segment information (cont’d)

(b) Geographical segments

The following table presents revenue information regarding the Group’s geographical segments for the financial periods from 1 April 2006 to 30 June 2006 and 1 April 2005 to 30 June 2005: Unaudited Unaudited 1 April 2006

to 30 June 2006

1 April 2005 to

30 June 2005 S$ S$

Revenue

Singapore 18,857,908 24,607,625

People’s Republic of China 837,303 1,061,930

19,695,211 25,669,555

The following table presents certain asset information and capital expenditures regarding the Group’s geographical segments as at 30 June 2006 and 31 March 2006: Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Total assets

Singapore 30,245,663 36,986,956

People’s Republic of China 60,937,741 60,715,731

Malaysia 1,093,269 –

92,276,673 97,702,687

Capital expenditures

Singapore 23,728 1,083,898

People’s Republic of China 79,027 74,205

102,755 1,158,103

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-51

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 32. Contingent liabilities and commitments

(a) Contingent liabilities

Legal claim

In the ordinary course of business, the Group is the defendant in various litigations and claims from its subcontractors and customers in respect of the construction projects. Although there can be no assurances, the Group believes, based on information currently available, that the ultimate resolution of these legal proceedings would not likely have a material adverse effect on the results of operations, financial positions or liquidity of the Group.

Guarantees The Company has issued corporate guarantees of S$14.6 million in favour of several banks in relation to banking facilities granted to a subsidiary in the financial period ended 30 June 2006.

(b) Operating lease commitments

The Group has operating lease commitments for its rental of office and factory premises. Most leases contain renewable options. Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing. These non-cancellable operating leases have remaining lease terms of 5 to 48 years.

Future minimum lease payments payable under non-cancellable operating leases are as follows:

Unaudited Audited 30 June 2006 31 March 2006 S$ S$

Future minimum lease payments

- not later than 1 year 208,000 188,000

- 1 year through 5 years 776,000 718,000

- more than 5 years 5,683,000 5,674,000

6,667,000 6,580,000

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-52

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 32. Contingent liabilities and commitments (cont’d)

(b) Operating lease commitments (cont’d)

The Group entered into two (31 March 2006: two) commercial property leases on its investment properties in the financial period ended 30 June 2006 and leases out its development properties held for sale under non-cancellable operating leases. The leases have remaining non-cancellable lease terms of up to 7 years. Future minimum lease payments receivable under the non-cancellable operating lease are as follows:

Unaudited Audited 30 June 2006 31 March 2006 S$ S$ Not later than one year 3,165,000 3,558,000 Later than one year but not later than five years 5,743,000 6,308,000 Later than five years 942,000 1,093,000

9,850,000 10,959,000

(c) Capital expenditure commitments

Capital expenditure contracted for as at the balance sheet date but not recognised in the financial statements is as follows: Unaudited Audited 30 June 2006 31 March 2006 S$ S$ Capital commitments in respect of contracts

placed for the purchase of an investment property 921,232

921,232 Capital commitments in respect of contracts

placed for the purchase of motor vehicles 216,826

1,138,058 921,232

33. Financial risk management objectives and policies

The Group’s principal financial instruments comprise bank loans and overdraft, finance leases, and cash and short term deposits. The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables, trade payables and bills payable to banks, which arise directly from its operations. The main risks arising from the Group’s financial instruments are interest rate risk (both fair value and cash flow), liquidity risk, foreign currency risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below. Interest rate risk The Group’s exposure to market risk for changes in interest rates relates primarily to its long term debt obligations. The Group does not use derivative financial instruments to hedge its interest rate risk.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-53

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 33. Financial risk management objectives and policies (cont’d)

Interest rate risk (cont’d) The Group obtains additional financing through leasing arrangements and borrowings, including bank borrowings. The Group’s policy is to obtain the most favourable interest rates available. Surplus funds are placed with reputable banks to generate interest income. Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings. Liquidity risk The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, bills payable and leasing arrangement. The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. Short-term funding is obtained from overdraft and short-term bank loan facilities. Foreign currency risk The Group operates in two countries and, as a result, is exposed to foreign exchange risks arising from various currency exposures. In addition to transactional exposures, the Group is also exposed to foreign exchange movements on its net investment in the foreign subsidiary. It is not the Group’s policy to enter into derivative forward foreign exchange contracts for hedging and speculative purposes. Credit risk Credit risk or the risk of counterparties defaulting, is managed through the application of credit approvals, credit limits and debt monitoring procedures. Financial instruments which potentially expose the Group to credit risk consist primarily of cash and cash equivalents and trade and other receivables. The cash and cash equivalents are placed with various reputable financial institutions. The maximum exposure to credit risk is represented by the carrying amount of the financial assets as stated in the balance sheet. The Group has no significant concentrations of credit risk.

34. Financial instruments

Fair values

The fair value of a financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.

Financial instruments whose carrying amount approximate fair value

Management has determined that the carrying amounts of cash and bank balances, fixed deposits, security bonds, current trade and other receivables, bank overdrafts, current trade and other payables and bank-term loans, based on their notional amounts, reasonably approximate their fair values because these are mostly short term in nature or are re-priced frequently.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-54

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 34. Financial instruments (cont’d)

Financial instruments carried at other than fair value

Set out below is a comparison by category of carrying amounts and fair values of the Group’s financial instruments that are carried in the financial statements at other than fair values.

Carrying amount Fair value

Unaudited Audited Unaudited Audited

30 June 2006 31 March 2006 30 June 2006 31 March 2006

S$ S$ S$ S$

Financial liabilities:

Finance lease obligations 472,021 555,505 509,412 593,775

Methods and assumptions used to determine fair values

The fair value of quoted shares has been determined by reference to published market prices or

broker quotes at the balance sheet date without factoring in transaction costs.

Fair values of finance lease obligations and bank term loans have been determined using discounted estimated cash flows. The discount rates used are the current market incremental lending rates for similar types of lending, borrowing and leasing arrangements.

During the financial period ended 30 June 2006, no amount (31 March 2006: S$Nil) has been recognised in the profit and loss account in relation to the change in fair value of financial assets or financial liabilities estimated using a valuation technique. Interest rate risk

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

Within

1 year

1 – 2

years

2 – 3

years

3 – 4

years

4 – 5

years

More than

5

Years Total

S$ S$ S$ S$ S$ S$ S$

Unaudited

30 June 2006

Fixed rate

Security bonds 2,000,000 – – – – – 2,000,000

Finance

lease obligations 237,048 48,242 56,861 53,529 45,441 30,900 472,021

Floating rate

Fixed deposits 3,741,417 – – – – – 3,741,417

Cash assets 3,629,253 – – – – – 3,629,253

Bank term loans 2,695,680 2,078,128 7,669,615 176,874 185,861 3,624,584 16,430,742

Bills payable to

banks 2,906,609 – – – – – 2,906,609

Bank overdrafts 1,366,533 – – – – – 1,366,533

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-55

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 35. Financial instruments (cont’d)

Within

1 year

1 – 2

years

2 – 3

years

3 – 4

years

4 – 5

years

More than

5

Years Total

S$ S$ S$ S$ S$ S$ S$

Audited

31 March 2006

Fixed rate

Security bonds 2,000,000 – – – – – 2,000,000

Finance

lease obligations 291,966 75,066 55,988 54,945 37,523 40,017 555,505

Floating rate

Fixed deposits 3,735,399 – – – – – 3,735,399

Cash assets 6,765,502 – – – – – 6,765,502

Bank term loans 2,424,434 2,108,266 8,271,143 174,532 183,397 3,665,847 16,827,619

Bills payable to

banks 5,030,528 – – – – – 5,030,528

Bank overdrafts 1,359,114 – – – – – 1,359,114 Interest on financial instruments subject to floating interest rates is contractually repriced at intervals of less than 6 months. Interest on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the Group are not subjected to interest rate risks.

35. Events after the balance sheet date

Subsequent to the financial period ended 30 June 2006,

(i) The Company changed its name to “KSH Holdings Pte. Ltd.” on 22 November 2006. On 19 December 2006, the Company changed its name to “KSH Holdings Limited” in connection with its conversion into a public company limited by shares.

(ii) KSHR transferred its 24.2% interest in TCH Holding, which has a nil carrying value,

to Star Elite on 4 October 2006 for an aggregate consideration of S$1.00. (iii) On 11 December 2006, the Company acquired 100% of the issued share capital of

KSHO, comprising 23,010,000 ordinary shares, from KSHR for an aggregate cash consideration of S$23,010,000.

(iv) On 12 December 2006, the Company acquired 100% of the issued share capital of

KSHR, comprising 18,725,000 ordinary shares, from KSHEC for an aggregate cash consideration of S$18,725,000.

APPENDIX B - REPORT FROM THE AUDITORS IN RELATION TO THE UNAUDITEDREVIEW OF THE INTERIM COMBINED FINANCIAL STATEMENTS OF KSH

HOLDINGS LIMITED AND ITS SUBSIDIARIES FOR THE FINANCIAL PERIODFROM 1 APRIL 2006 TO 30 JUNE 2006

B-56

KSH Holdings Limited and its subsidiaries

Notes to the Interim Combined Financial Statements – 30 June 2006 35. Events after the balance sheet date (cont’d)

(v) At an Extraordinary General Meetings held on 9 December 2006 and 25 January 2007,

the shareholders of the Company approved, inter alia, the following:-

(a) the sub-division of each Share in the existing issued share capital of the Company into four Shares (the “Sub-division of Shares”);

(b) the adoption of a new set of Articles of Association of the Company;

(c) the allotment and issue of the New Shares pursuant to the Invitation, which when

issued and fully paid-up, will rank pari passu in all respects with the existing issued Shares; and

(d) that authority be given to the Directors, pursuant to Section 161 of the

Companies Act, to (i) allot and issue Shares in the Company; and (ii) issue convertible securities and any Shares in the Company pursuant to the convertible securities, (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 the Directors shall in their absolute discretion deem fit, provided that the aggregate number of Shares to be issued pursuant to such authority shall not exceed 50 per cent. (50%) of the post-Invitation issued share capital of the Company and that the aggregate number of Shares to be issued other than on a pro-rata basis to the then existing Shareholders of the Company shall not exceed 20 per cent. (20%) of the post-Invitation issued share capital of the Company. Unless revoked or varied by the Company in general meeting, such authority shall continue in full force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting is required by law or by the Articles of Association to be held, whichever is earlier, except that the Directors shall be authorised to allot and issue new Shares pursuant to the convertible securities notwithstanding that such authority has ceased.

For the purposes of this resolution and pursuant to Rules 806(3) and 806(4) of the Listing Manual, “post-Invitation issued share capital” shall mean the enlarged issued and paid-up share capital of the Company after the Invitation after adjusting for (i) new Shares arising from the conversion or exercise of any convertible securities; (ii) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time such authority is given, provided that the options or awards were granted in compliance with the Listing Manual; and (iii) any subsequent consolidation or sub-division of shares.

36. Prior year comparatives

Prior period comparatives figures for the profit and loss account which relate to the period from 1 April 2005 to 30 June 2005 have not been reviewed or audited.

37. Authorisation of interim combined financial statements

The interim combined financial statements for the financial period from 1 April 2006 to 30 June 2006 was authorised for issue in accordance with a resolution of the directors on 30 January 2007.

APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

The discussion below provides information about certain provisions of our Memorandum and Articles ofAssociation and the laws of Singapore. This description is only a summary and is qualified by referenceto Singapore law and our Articles.

The instruments that constitute and define our Company are the Memorandum and Articles ofAssociation of the Company.

Memorandum of Association

The registration number of our Company is 200603337G.

Our Memorandum of Association states that the liability of our Shareholders is limited.

Articles of Association

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 isinterested

Article 100

A Director shall not vote in respect of any contract or arrangement or any other proposalwhatsoever in which he has any personal material interest, directly or indirectly. A Director shall notbe counted in the quorum at a meeting in relation to any resolution on which he is debarred fromvoting.

(b) the Director’s power to vote on remuneration (including pension or other benefits) for himself or forany other director, and whether the quorum at a meeting of the board of Directors to vote onDirectors’ remuneration may include the director whose remuneration is the subject of the vote

Article 77

The ordinary remuneration of the Directors, which shall from time to time be determined by anOrdinary Resolution of the Company, shall not be increased except pursuant to an OrdinaryResolution passed at a General Meeting where notice of the proposed increase shall have beengiven in the notice convening the General Meeting and shall (unless such resolution otherwiseprovides) be divisible among the Directors as they may agree, or failing agreement, equally, exceptthat any Director who shall hold office for part only of the period in respect of which suchremuneration is payable shall be entitled only to rank in such division for a proportion ofremuneration related to the period during which he has held office. The ordinary remuneration ofan executive Director may not include a commission on or a percentage of turnover and theordinary remuneration of a non-executive Director shall be a fixed sum, and not by a commissionon 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, orwho otherwise performs services which in the opinion of the Directors are outside the scope of theordinary duties of a Director, may be paid such extra remuneration by way of salary, commission orotherwise as the Directors may determine, Provided that such extra remuneration (in case of anexecutive Director) shall not be by way of commission on or a percentage of turnover.

Article 79

The Directors may repay to any Director all such reasonable expenses as he may incur inattending and returning from meetings of the Directors or of any committee of the Directors orGeneral Meetings or otherwise in or about the business of the Company.

C-1

APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

Article 80

The Directors shall have power to pay and agree to pay pensions or other retirement,superannuation, death or disability benefits to (or to any person in respect of) any Director for thetime being holding any executive office and for the purpose of providing any such pensions orother benefits to contribute to any scheme or fund or to pay premiums.

(c) borrowing powers exercisable by the Directors and how such borrowing powers can be varied

Article 108

Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exercise allthe powers of the Company to borrow money, to mortgage or charge its undertaking, property anduncalled capital and to issue debentures and other securities, whether outright or as collateralsecurity for any debt, liability or obligation of the Company or of any third party.

(d) retirement or non-retirement of Directors under an age limit requirement

There is no retirement age limit for Directors under our Articles of Association. Section 153(1) ofthe Companies Act, however, provides that no person of or over the age of 70 years shall beappointed a director of a public company, unless he is appointed or reappointed as a director ofthe company or authorised to continue in office as a director of the company by way of an ordinaryresolution passed at an annual general meeting of the company.

Article 89

At each Annual General Meeting, one-third of the Directors for the time being (or, if their number isnot a multiple of three, the number nearest to but not less than one-third) shall retire from office byrotation, Provided that no Director holding office as Managing Director shall be subject toretirement by rotation or be taken into account in determining the number of Directors to retire. Forthe 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 a General Meeting by reason of age or who wishes to retireand not to offer himself for re-election. Any further Directors so to retire shall be those of the otherDirectors 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-electedDirectors 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 a General Meeting at which a Director retires under any provision of theseArticles may by Ordinary Resolution fill the office being vacated by electing thereto the retiringDirector or some other person eligible for appointment. In default, the retiring Director shall bedeemed to have been re-elected 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 re-election of such Director is put to the meeting and lost; or

(b) where such Director has given notice in writing to the Company that he is unwilling to be re-elected; or

(c) where the default is due to the moving of a resolution in contravention of the next followingArticle; or

(d) where such Director has attained any retiring age applicable to him as Director.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

The retirement shall not have effect until the conclusion of the meeting except where a resolutionis 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-elected ordeemed to have been re-elected will continue in office without a break.

(e) the number of shares, if any, required for the qualification of a Director

Article 76

A Director shall not be required to hold any shares of the Company by way of qualification. ADirector who is not a Member of the Company shall nevertheless be entitled to receive notice ofand to attend and speak at General Meetings.

(f) rights, preferences and restrictions attaching to each class of shares

Article 3

(A) Subject to the Act and to these Articles, no shares may be issued by the Directors withoutthe 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 specialrights attached to any shares for the time being issued, the Directors may allot and issueshares or grant options over or otherwise dispose of the same to such persons on suchterms and conditions and for such consideration and at such time and whether or notsubject to the payment of any part of the amount thereof in cash or otherwise as theDirectors may think fit, and any shares may, subject to compliance with Sections 70 and 75of the Act, be issued with such preferential, deferred, qualified or special rights, privileges,conditions or restrictions, whether as regards Dividend, return of capital, participation insurplus assets and profits, 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 liableto be redeemed, the terms and manner of redemption being determined by the Directors inaccordance with the Act, Provided Always that no options shall be granted over unissuedshares except in accordance with the Act and the Designated Stock Exchange’s listing rules.

(B) The Directors may, at any time after the allotment of any share but before any person hasbeen entered in the Register of Members as the holder, recognize a renunciation thereof bythe allottee in favour of some other person and may accord to any allottee of a share a rightto effect such renunciation upon and subject to such terms and conditions as the Directorsmay think fit to impose.

(C) Except so far as otherwise provided by the conditions of issue or by these Articles, all newshares shall be issued subject to the provisions of the Statutes and of these Articles withreference to allotment, payment of calls, lien, transfer, transmission, forfeiture or otherwise.

Article 8

(A) Preference shares may be issued subject to such limitation thereof as may be prescribedby the Designated Stock Exchange. Preference shareholders shall have the same rights asordinary shareholders as regards receiving of notices, reports and balance-sheets andattending General Meetings of the Company, and preference shareholders shall also havethe right to vote at any General Meeting convened for the purpose of reducing capital orwinding-up or sanctioning a sale of the undertaking of the Company or where the proposalto be submitted to the General Meeting directly affects their rights and privileges or whenthe Dividend on the preference shares is more than six months in arrear.

(B) The Company has power to issue further preference capital ranking equally with, or inpriority to, preference shares already issued.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

Article 9

(A) Whenever the share capital of the Company is divided into different classes of shares, thevariation or abrogation of the special rights attached to any class may, subject to theprovisions of the Act, be made either with the consent in writing of the holders of three-quarters of the total number of the issued shares of the class or with the sanction of aSpecial Resolution passed at a separate General Meeting of the holders of the shares of theclass (but not otherwise) and may be so made either whilst the Company is a going concernor during or in contemplation of a winding-up. To every such separate General Meeting allthe provisions of these Articles relating to General Meetings of the Company and to theproceedings thereat shall mutatis mutandis apply, except that the necessary quorum shallbe two or more persons holding at least one-third of the total number of the issued shares ofthe class present in person or by proxy or attorney and that any holder of shares of theclass present in person or by proxy or attorney may demand a poll and that every suchholder shall on a poll have one vote for every share of the class held by him where the classis a class of equity shares within the meaning of Section 64(1) of the Act or at least one votefor every share of the class where the class is a class of preference shares within themeaning of Section 180(2) of the Act, Provided Always that where the necessary majority forsuch a Special Resolution is not obtained at such General Meeting, the consent in writing, ifobtained from the holders of three-quarters of the total number of the issued shares of theclass concerned within two months of such General Meeting, shall be as valid and effectualas a Special Resolution carried at such General Meeting.

(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preferencecapital (other than redeemable preference capital) and any variation or abrogation of therights attached to preference shares or any class thereof.

(C) The special rights attached to any class of shares having preferential rights shall not unlessotherwise expressly provided by the terms of issue thereof be deemed to be varied by thecreation or issue of further shares ranking as regards participation in the profits or assets ofthe Company in some or all respects pari passu therewith but in no respect in prioritythereto.

Article 14

Every person whose name is entered as a Member in the Register of Members shall be entitled,within ten market days (or such period as the Directors may determine having regard to anylimitation thereof as may be prescribed by the Designated Stock Exchange from time to time) afterthe closing date of any application for shares or (as the case may be) the date of lodgement of aregistrable transfer, to one certificate for all his shares of any one class or to several certificates inreasonable denominations each for a part of the shares so allotted or transferred.

Article 34

(A) There shall be no restriction on the transfer of fully paid up shares (except where requiredby law or by the rules, bye-laws or listing rules of the Designated Stock Exchange) but theDirectors may in their discretion decline to register any transfer of shares upon which theCompany has a lien, and in the case of shares not fully paid up, may refuse to register atransfer to a transferee of whom they do not approve, Provided Always that in the event ofthe Directors refusing to register a transfer of shares, the Company shall within ten marketdays (or such period as the Directors may determine having regard to any limitation thereofas may be prescribed by the Designated Stock Exchange from time to time) after the dateon which the application for a transfer of shares was made, serve a notice in writing to theapplicant stating the facts which are considered to justify the refusal as required by theStatutes.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

(B) The Directors may decline to register any instrument of transfer unless:-

(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determinehaving regard to any limitation thereof as may be prescribed by the Designated StockExchange from time to time) as the Directors may from time to time require is paid tothe Company in respect thereof;

(b) the amount of proper duty (if any) with which each instrument of transfer ischargeable under any law for the time being in force relating to stamps is paid;

(c) the instrument of transfer is deposited at the Office or at such other place (if any) asthe Directors may appoint accompanied by a certificate of payment of stamp duty (ifstamp duty is payable on such instrument of transfer in accordance with any law forthe time being in force relating to stamp duty,), the certificates of the shares to whichit relates, and such other evidence as the Directors may reasonably require to showthe right of the transferor to make the transfer and, if the instrument of transfer isexecuted by some other person on his behalf, the authority of the person so to do;and

(d) the instrument of transfer is in respect of only one class of shares.

Article 41

A reference to a Member shall be a reference to a registered holder of shares in the Company, orwhere 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 votethereat 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 theCompany, the Company being entitled to deem each such Depositor, or each proxy of aDepositor who is to represent the entire balance standing to the Securities Account of theDepositor, to represent such number of shares as is actually credited to the SecuritiesAccount of the Depositor as at such time, according to the records of CDP as supplied byCDP to the Company, and where a Depositor has apportioned the balance standing to hisSecurities Account between two proxies, to apportion the said number of shares betweenthe two proxies in the same proportion as previously specified by the Depositor in appointingthe proxies; and accordingly no instrument appointing a proxy of a Depositor shall berendered invalid merely by reason of any discrepancy between the proportion of Depositor’sshareholding specified in the instrument of proxy, or where the balance standing to aDepositor’s Securities Account has been apportioned between two proxies the aggregate ofthe proportions of the Depositor’s shareholding they are specified to represent, and the truebalance standing to the Securities Account of a Depositor as at the time of the GeneralMeeting, 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 theextent of the payment discharge the Company from any further liability in respect of thepayment;

(c) the delivery by the Company to CDP of provisional allotments or share certificates in respectof the aggregate entitlements of Depositors to new shares offered by way of rights issue orother preferential offering or bonus issue shall to the extent of the delivery discharge theCompany from any further liability to each such Depositor in respect of his individualentitlement; and

(d) the provisions in these Articles relating to the transfers, transmissions or certification ofshares shall not apply to the transfer of book-entry securities (as defined in the Statutes).

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

Article 42

Except as required by the Statutes or law, no person shall be recognized by the Company asholding any share upon any trust, and the Company shall not be bound by or compelled in anyway to recognize (even when having notice thereof) any equitable, contingent, future or partialinterest in any share, or any interest in any fractional part of a share, or (except only as by theseArticles 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 theseArticles contained relating to CDP or to Depositors or in any depository agreement made by theCompany with any common depository for shares shall in any circumstances be deemed to limit,restrict or qualify the above.

Article 63

In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in personor by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for thispurpose seniority shall be determined by the order in which the names stand in the Register ofMembers or, as the case may be, the order in which the names appear in the Depository Registerin respect of the joint holding.

Article 64

Where in Singapore or elsewhere a receiver or other person (by whatever name called) has beenappointed by any court claiming jurisdiction in that behalf to exercise powers with respect to theproperty or affairs of any Member on the ground (however formulated) of mental disorder, theDirectors may in their absolute discretion, upon or subject to production of such evidence of theappointment as the Directors may require, permit such receiver or other person on behalf of suchMember, to vote in person or by proxy at any General Meeting, or to exercise any other rightconferred by membership in relation to General Meetings.

Article 65

No Member shall be entitled in respect of shares held by him to vote at a General Meeting eitherpersonally or by proxy or to exercise any other right conferred by membership in relation toGeneral Meetings if any call or other sum payable by him to the Company in respect of suchshares remains unpaid.

(g) any change in capital

Article 10

The Company may by Ordinary Resolution:-

(a) consolidate and divide all or any of its share capital;

(b) sub-divide its shares, or any of them, provided always that in such subdivision the proportionbetween the amount paid and the amount (if any) unpaid on each reduced share shall besame as it was in the case of the share from which the reduced share is derived;

(c) convert or exchange any class of shares into or for any other class of shares; and/or

(d) cancel the number of shares which at the date of the passing of the resolution in that behalfhave not been taken or agreed to be taken by any person or which have been forfeited anddiminish the amount of its share capital by the number of the shares so cancelled.

Article 11

(A) The Company may reduce its share capital or any other undistributable reserve in anymanner permitted, and with, and subject to, any incident authorized, and consent orconfirmation required, by law.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

(B) The Company may purchase or otherwise acquire its issued shares subject to and inaccordance with the provisions of the Statutes and any applicable rules of the DesignatedStock Exchange hereafter, the “Relevant Laws”), on such terms and subject to suchconditions as the Company may in General Meeting prescribe in accordance with theRelevant Laws. Any shares purchased or acquired by the Company as aforesaid shall,unless held in treasury in accordance with the Act, be deemed to be cancelled immediatelyon purchase or acquisition by the Company. On the cancellation of any share as aforesaid,the rights and privileges attached to that share shall expire. In any other instance, theCompany may hold or deal with any such share which is so purchased or acquired by it insuch manner as may be permitted by, and in accordance with the Relevant Laws. Withoutprejudice to the generality of the foregoing, upon cancellation of any share purchased orotherwise acquired by the Company pursuant to these Articles and the Statutes, the numberof issued shares of the Company shall be diminished by the number of shares so cancelled,and, where any such cancelled share was purchased or acquired out of the capital of theCompany, the amount of share capital of the Company shall be reduced accordingly.

(h) any change in the respective rights of the various classes of shares including the action necessaryto change the rights

Article 9

(A) Whenever the share capital of the Company is divided into different classes of shares, thevariation or abrogation of the special rights attached to any class may, subject to theprovisions of the Act, be made either with the consent in writing of the holders of three-quarters of the total number of the issued shares of the class or with the sanction of aSpecial Resolution passed at a separate General Meeting of the holders of the shares of theclass (but not otherwise) and may be so made either whilst the Company is a going concernor during or in contemplation of a winding-up. To every such separate General Meeting allthe provisions of these Articles relating to General Meetings of the Company and to theproceedings thereat shall mutatis mutandis apply, except that the necessary quorum shallbe two or more persons holding at least one-third of the total number of the issued shares ofthe class present in person or by proxy or attorney and that any holder of shares of theclass present in person or by proxy or attorney may demand a poll and that every suchholder shall on a poll have one vote for every share of the class held by him where the classis a class of equity shares within the meaning of Section 64(1) of the Act or at least one votefor every share of the class where the class is a class of preference shares within themeaning of Section 180(2) of the Act, Provided Always that where the necessary majority forsuch a Special Resolution is not obtained at such General Meeting, the consent in writing, ifobtained from the holders of three-quarters of the total number of the issued shares of theclass concerned within two months of such General Meeting, shall be as valid and effectualas a Special Resolution carried at such General Meeting.

(B) The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preferencecapital (other than redeemable preference capital) and any variation or abrogation of therights attached to preference shares or any class thereof.

(C) The special rights attached to any class of shares having preferential rights shall not unlessotherwise expressly provided by the terms of issue thereof be deemed to be varied by thecreation or issue of further shares ranking as regards participation in the profits or assets ofthe Company in some or all respects pari passu therewith but in no respect in prioritythereto.

(i) any time limit after which a dividend entitlement will lapse and an indication of the party in whosefavour this entitlement then operates

Article 123

The Company may by Ordinary Resolution declare Dividends but no such Dividend shall exceedthe amount recommended by the Directors.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

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 fixedDividend expressed to be payable on fixed dates on the half-yearly or other dates prescribed forthe payment thereof and may also from time to time declare and pay interim Dividends on sharesof any class of such amounts and on such dates and in respect of such periods as they think fit.

Article 125

Subject to any rights or restrictions attached to any shares or class of shares and except asotherwise permitted under the Act:-

(a) all Dividends in respect of shares must be paid in proportion to the number of shares heldby a Member, but where shares are partly paid, all Dividends must be apportioned and paidproportionately to the amounts paid or credited as paid on the partly paid shares; and

(b) all Dividends must be apportioned and paid proportionately to the amounts so paid orcredited as paid during any portion or portions of the period in respect of which the Dividendis paid.

For the purposes of this Article, an amount paid or credited as paid on a share in advance of a callis to be ignored.

Article 126

(A) No Dividend shall be paid otherwise than out of profits available for distribution under theprovisions of the Statutes. The payment by the Directors of any unclaimed dividends or othermoneys payable on or in respect of a share into a separate account shall not constitute theCompany a trustee in respect thereof. All Dividends remaining unclaimed after one yearfrom having been first payable may be invested or otherwise made use of by the Directorsfor the benefit of the Company, and any Dividend or any such moneys unclaimed after six(6) years from having been first payable shall be forfeited and shall revert to the Companyprovided always that the Directors may at any time thereafter at their absolute discretionannul any such forfeiture and pay the Dividend so forfeited to the person entitled theretoprior to the forfeiture. If CDP returns any such Dividend or moneys to the Company, therelevant Depositor shall not have any right or claim in respect of such Dividend or moneysagainst the Company if a period of six years has elapsed from the date of the declaration ofsuch Dividend or the date on which such other moneys are first payable.

(B) A payment by the Company to CDP of any Dividend or other moneys payable to a Depositorshall, to the extent of the payment made, discharge the Company from any liability to theDepositor in respect of that payment.

Article 127

No Dividend or other monies payable on or in respect of a share shall bear interest as against theCompany.

Article 128

(A) The Directors may retain any Dividend or other monies payable on or in respect of a shareon which the Company has a lien and may apply the same in or towards satisfaction of thedebts, liabilities or engagements in respect of which the lien exists.

(B) The Directors may retain the Dividends payable upon shares in respect of which any personis under the provisions as to the transmission of shares hereinbefore contained entitled tobecome a Member, or which any person is under those provisions entitled to transfer, untilsuch person shall become a Member in respect of such shares or shall transfer the same.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

Article 129

The waiver in whole or in part of any Dividend on any share by any document (whether or notunder seal) shall be effective only if such document is signed by the Member (or the personentitled to the share in consequence of the death or bankruptcy of the holder) and delivered to theCompany and if or to the extent that the same is accepted as such or acted upon by the Company.

Article 130

The Company may upon the recommendation of the Directors by Ordinary Resolution directpayment of a Dividend in whole or in part by the distribution of specific assets (and in particular ofpaid-up shares or debentures of any other company) and the Directors shall give effect to suchresolution. Where any difficulty arises with regard to such distribution, the Directors may settle thesame as they think expedient and in particular, may issue fractional certificates, may fix the valuefor distribution of such specific assets or any part thereof, may determine that cash payments shallbe made to any Member upon the footing of the value so fixed in order to adjust the rights of allparties and may vest any such specific assets in trustees as may seem expedient to the Directors.

Article 131

Any Dividend or other moneys payable in cash on or in respect of a share may be paid by chequeor warrant sent through the post to the registered address appearing in the Register of Membersor (as the case may be) the Depository Register of the Member or person entitled thereto (or, iftwo or more persons are registered in the Register of Members or (as the case may be) entered inthe Depository Register as joint holders of the share or are entitled thereto in consequence of thedeath or bankruptcy of the holder, to any one of such persons) or to such person and suchaddress as such Member or person or persons may by writing direct. Every such cheque orwarrant shall be made payable to the order of the person to whom it is sent or to such person asthe holder or joint holders or person or persons entitled to the share in consequence of the deathor bankruptcy of the holder may direct and payment of the cheque or warrant by the banker uponwhom it is drawn shall be a good discharge to the Company. Every such cheque or warrant shallbe sent at the risk of the person entitled to the money represented thereby.

Article 132

If two or more persons are registered in the Register of Members or (as the case may be) theDepository Register as joint holders of any share, or are entitled jointly to a share in consequenceof the death or bankruptcy of the holder, any one of them may give effectual receipts for anyDividend or other moneys payable or property distributable on or in respect of the share.

Article 133

Any resolution declaring a Dividend on shares of any class, whether a resolution of the Companyin General Meeting or a resolution of the Directors, may specify that the same shall be payable tothe persons registered as the holders of such shares in the Register of Members or (as the casemay be) the Depository Register at the close of business on a particular date and thereupon theDividend shall be payable to them in accordance with their respective holdings so registered, butwithout prejudice to the rights inter se in respect of such Dividend of transferors and transferees ofany such shares.

(j) any limitation on the right to own Shares, including limitations on the right of non-resident orforeign Shareholders to hold or exercise voting rights on their Shares

Article 5

(A) Subject to any direction to the contrary that may be given by the Company in GeneralMeeting or except as permitted by the rules of the Designated Stock Exchange, all newshares shall before issue be offered to such persons who as at the date (as determined bythe Directors) of the offer are entitled to receive notices from the Company of GeneralMeetings in proportion, as far as the circumstances admit, to the number of the existingshares to which they are entitled. The offer shall be made by notice specifying the number ofshares offered, and limiting a time within which the offer, if not accepted, will be deemed to

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

be declined, and, after the expiration of that time, or on the receipt of an intimation from theperson to whom the offer is made that he declines to accept the shares offered, theDirectors may dispose of those shares in such manner as they think most beneficial to theCompany. The Directors may likewise so dispose of any new shares which (by reason of theratio which the new shares bear to shares held by persons entitled to an offer of newshares) cannot, in the opinion of the Directors, be conveniently offered under this Article5(A).

(B) Notwithstanding Article 5(A) above, the Company may by Ordinary Resolution in GeneralMeeting give to the Directors a general authority, either unconditionally or subject to suchconditions as may be specified in the Ordinary Resolution, to:–

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

(ii) make or grant offers, agreements or options (collectively, “Instruments”) thatmight or would require shares to be issued, including but not limited to thecreation and issue of (as well as adjustments to) warrants, debentures or otherinstruments convertible into shares; and

(b) (notwithstanding the authority conferred by the Ordinary Resolution may have ceasedto be in force) issue shares in pursuance of any Instrument made or granted by theDirectors while the Ordinary Resolution was in force,

Provided that:–

(1) the aggregate number of shares to be issued pursuant to the Ordinary Resolution(including shares to be issued in pursuance of Instruments made or granted pursuantto the Ordinary Resolution) shall be subject to such limits and manner of calculationas may be prescribed by the Designated Stock Exchange;

(2) in exercising the authority conferred by the Ordinary Resolution, the Company shallcomply with the provisions of the listing rules of the Designated Stock Exchange forthe time being in force (unless such compliance is waived by the Designated StockExchange) and these Articles; and

(3) (unless revoked or varied by the Company in General Meeting) the authority conferredby the Ordinary Resolution shall not continue in force beyond the conclusion of theAnnual General Meeting of the Company next following the passing of the OrdinaryResolution, or the date by which such Annual General Meeting of the Company isrequired by law to be held, or the expiration of such other period as may beprescribed by the Act (whichever is the earliest).

(C) The Company may, notwithstanding Articles 5(A) and 5(B) above, authorize the Directorsnot to offer new shares to Members to whom by reason of foreign securities laws, suchoffers may not be made without registration of the shares or a prospectus or otherdocument, but to sell the entitlements to the new shares on behalf of such Members onsuch terms and conditions as the Company may direct.

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APPENDIX C - EXTRACTS OF OUR ARTICLES OF ASSOCIATION

Article 34

(A) There shall be no restriction on the transfer of fully paid up shares (except where requiredby law or by the rules, bye-laws or listing rules of the Designated Stock Exchange) but theDirectors may in their discretion decline to register any transfer of shares upon which theCompany has a lien, and in the case of shares not fully paid up, may refuse to register atransfer to a transferee of whom they do not approve, Provided Always that in the event ofthe Directors refusing to register a transfer of shares, the Company shall within ten marketdays (or such period as the Directors may determine having regard to any limitation thereofas may be prescribed by the Designated Stock Exchange from time to time) after the dateon which the application for a transfer of shares was made, serve a notice in writing to theapplicant stating the facts which are considered to justify the refusal as required by theStatutes.

(B) The Directors may decline to register any instrument of transfer unless:-

(a) such fee not exceeding S$2.00 (or such other fee as the Directors may determinehaving regard to any limitation thereof as may be prescribed by the Designated StockExchange from time to time) as the Directors may from time to time require is paid tothe Company in respect thereof;

(b) the amount of proper duty (if any) with which each instrument of transfer ischargeable under any law for the time being in force relating to stamps is paid;

(c) the instrument of transfer is deposited at the Office or at such other place (if any) asthe Directors may appoint accompanied by a certificate of payment of stamp duty (ifstamp duty is payable on such instrument of transfer in accordance with any law forthe time being in force relating to stamp duty,), the certificates of the shares to whichit relates, and such other evidence as the Directors may reasonably require to showthe right of the transferor to make the transfer and, if the instrument of transfer isexecuted by some other person on his behalf, the authority of the person so to do;and

(d) the instrument of transfer is in respect of only one class of shares.

Article 42

Except as required by the Statutes or law, no person shall be recognized by the Company asholding any share upon any trust, and the Company shall not be bound by or compelled in anyway to recognize (even when having notice thereof) any equitable, contingent, future or partialinterest in any share, or any interest in any fractional part of a share, or (except only as by theseArticles 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 theseArticles contained relating to CDP or to Depositors or in any depository agreement made by theCompany with any common depository for shares shall in any circumstances be deemed to limit,restrict or qualify the above.

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APPENDIX D - DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES

The following statements are brief summaries of the rights and privileges of shareholders conferred bythe 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 byreference to the Articles.

Ordinary Shares

Save for the New Shares, there are no founder, management, deferred or unissued shares reserved forissue for any purpose. We have only one class of shares, namely, our ordinary shares which haveidentical rights in all respects and rank equally with one another. All of the ordinary shares are inregistered form. The Company may, subject to the provisions of the Companies Act and the rules of theSGX-ST, purchase its own ordinary shares. However, it may not, except in circumstances permitted bythe Companies Act, grant any financial assistance for the acquisition or proposed acquisition of its ownordinary shares.

New Ordinary Shares

New ordinary shares may only be issued with the prior approval in a general meeting of the shareholdersof the Company. The aggregate number of shares to be issued pursuant to such approval may notexceed 50% (or such other limit as may be prescribed by the SGX-ST) of its issued share capital for thetime being, of which the aggregate number of shares to be issued other than on a pro-rata basis to itsShareholders may not exceed 20% (or such other limit as may be prescribed by the SGX-ST) of itsissued share capital for the time being (the percentage of issued share capital being based on its issuedshares at the time such authority is given after adjusting for new shares arising from the conversion ofconvertible securities or employee share options on issue at the time such authority is given and anysubsequent consolidation or sub-division of its shares). The approval, if granted, will lapse at theconclusion of the annual general meeting following the date on which the approval was granted or thedate by which the annual general meeting is required by law to be held, whichever is the earlier. Subjectto the foregoing, the provisions of the Companies Act and any special rights attached to any class ofshares currently issued, all new ordinary shares are under the control of the board of Directors of theCompany (the “Board of Directors”) who may allot and issue the same with such rights and restrictionsas it may think fit.

Shareholders

Only persons who are registered in the register of shareholders of the Company and, in cases in whichthe person so registered is CDP, the persons named as the depositors in the depository registermaintained by CDP for the ordinary shares, are recognised as shareholders of the Company. TheCompany will not, except as required by law, recognise any equitable, contingent, future or partialinterest in any ordinary share or other rights for any ordinary share other than the absolute right theretoof the registered holder of that ordinary share or of the person whose name is entered in the depositoryregister for that ordinary share. The Company may close the register of shareholders for any time ortimes if it provides the Accounting and Corporate Regulatory Authority of Singapore at least 14 days’notice and the SGX-ST at least 10 clear market days’ notice. However, the register may not be closed formore than 30 days in aggregate in any calendar year. The Company typically closes the register todetermine 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 thelisting rules or the rules or by-laws of any stock exchange on which the Company is listed. The Board ofDirectors may decline to register any transfer of ordinary shares which are not fully paid shares, orordinary shares on which the Company has a lien. Ordinary shares may be transferred by a duly signedinstrument of transfer in a form approved by any stock exchange on which the Company is listed. TheBoard of Directors may also decline to register any instrument of transfer unless, among other things, ithas been duly stamped and is presented for registration together with the share certificate and suchother evidence of title as they may require. The Company will replace lost or destroyed certificates forordinary shares if it is properly notified and if the applicant pays a fee which will not exceed S$2 andfurnishes any evidence and indemnity that the Board of Directors may require.

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APPENDIX D - DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES

General Meetings of Shareholders

The Company is required to hold an annual general meeting every year. The Board of Directors mayconvene an Extraordinary General Meeting whenever it thinks fit and must do so if shareholdersrepresenting not less than 10% of the total voting rights of all shareholders request in writing that such ameeting be held. In addition, two or more shareholders holding not less than 10% of the total number ofissued shares of the Company (excluding treasury shares) may call a meeting. Unless otherwise requiredby law or by the Articles, voting at general meetings is by ordinary resolution, requiring an affirmativevote 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 thevotes cast at the meeting, is necessary for certain matters under Singapore law, including voluntarywinding up, amendments to the Memorandum of Association and the Articles, a change of the corporatename and a reduction in the share capital. The Company must give at least 21 days’ notice in writing forevery general meeting convened for the purpose of passing a special resolution. Ordinary resolutionsgenerally require at least 14 days’ notice in writing. The notice must be given to every shareholder whohas supplied the Company with an address in Singapore for the giving of notices and must set forth theplace, the day and the hour of the meeting and, in the case of special business, the general nature ofthat business.

Voting Rights

A shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. Proxiesneed not be a shareholder. A person who holds ordinary shares through the CDP book-entry settlementsystem will only be entitled to vote at a general meeting as a shareholder if his name appears on thedepository register maintained by CDP 48 hours before the general meeting. Except as otherwiseprovided in the Articles, two or more shareholders must be present in person or by proxy to constitute aquorum at any general meeting. Under the Articles, on a show of hands, every shareholder present inperson and by proxy shall have one vote (provided that in the case of a shareholder who is representedby two proxies, only one of the two proxies as determined by that shareholder or, failing suchdetermination, by the Chairman of the meeting in his sole discretion shall be entitled to vote on a show ofhands), and on a poll, every shareholder present in person or by proxy shall have one vote for eachordinary 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 andrepresenting not less than 10% of the total voting rights of all shareholders having the right to attend andvote at the meeting or by any two shareholders present in person or by proxy and entitled to vote. In thecase of a tie vote, whether on a show of hands or a poll, the chairman of the meeting shall be entitled toa 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. TheCompany must pay all dividends out of its profits. The Board of Directors may also declare an interimdividend without the approval of its shareholders. All dividends are paid pro rata among the shareholdersin proportion to the amount paid up on each shareholder’s ordinary shares, unless the rights attaching toan issue of any ordinary share provides otherwise. Unless otherwise directed, dividends are paid bycheque or warrant sent through the post to each shareholder at his registered address. Notwithstandingthe foregoing, the payment by the Company to CDP of any dividend payable to a shareholder whosename is entered in the depository register shall, to the extent of payment made to CDP, discharge theCompany 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 anyreserves or profits (including profit or moneys carried and standing to any reserve or other undistributablereserve) and distribute the same as bonus shares credited as paid-up to the shareholders in proportionto their shareholdings. The Board of Directors may also issue rights to take up additional ordinary sharesto shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached tosuch issue and the regulations of any stock exchange on which the Company is listed.

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APPENDIX D - DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES

Takeovers

The Securities and Futures Act and the Singapore Code on Takeovers and Mergers regulate theacquisition of ordinary shares of public companies and contain certain provisions that may delay, deter orprevent a future takeover or change in control of the Company. Any person acquiring an interest, eitheron his own or together with parties acting in concert with him, in 30% or more of the voting shares in theCompany must extend a takeover offer for the remaining voting shares in accordance with the provisionsof the Singapore Code on Takeovers and Mergers. “Parties acting in concert” include a company and itsrelated and associated companies, a company and its directors (including their close relatives), acompany 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 financialadvisor and its client in respect of shares held by the financial advisor and shares in the client held byfunds managed by the financial advisor on a discretionary basis. An offer for consideration other thancash must be accompanied by a cash alternative at not less than the highest price paid by the offeror orparties acting in concert with the offeror within the preceding six months. A mandatory takeover offer isalso required to be made if a person holding, either on his own or together with parties acting in concertwith him, between 30% and 50% of the voting shares acquires, or any party acting in concert with himacquires, additional voting shares representing more than 1% of the voting shares in any six monthperiod.

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 beentitled to participate in any surplus assets in proportion to their shareholdings, subject to any specialrights attaching to any other class of shares.

Indemnity

As permitted by Singapore law, the Articles provide that, subject to the Companies Act, the Board ofDirectors and officers shall be entitled to be indemnified by the Company against any liability incurred indefending any proceedings, whether civil or criminal, which relate to anything done or omitted to havebeen done as an officer, director or employee and in which judgment is given in their favour or in whichthey are acquitted or in connection with any application under any statute for relief from liability in respectthereof in which relief is granted by the court. The Company may not indemnify directors and officersagainst 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 on Shares

Except as described in “Voting Rights” and “Takeovers” above, there are no limitations imposed bySingapore law or by the Articles on the rights of non-resident shareholders to hold or vote on ordinaryshares.

Minority Rights

The rights of minority shareholders of Singapore-incorporated companies are protected under Section216 of the Companies Act, which gives the Singapore courts a general power to make any order, uponapplication by any shareholder of the Company, as they think fit to remedy any of the followingsituations:-

(a) the affairs of the Company are being conducted or the powers of the Board of Directors are beingexercised in a manner oppressive to, or in disregard of the interests of, one or more of theshareholders; or

(b) the Company takes an action, or threatens to take an action, or the shareholders pass aresolution, or propose to pass a resolution, which unfairly discriminates against, or is otherwiseprejudicial to, one or more of the shareholders, including the applicant.

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APPENDIX D - DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES

Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no waylimited to those listed in the Companies Act itself. Without prejudice to the foregoing, Singapore courtsmay:-

(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 personor 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 theCompany and, in the case of a purchase of shares by the Company, a corresponding reduction ofits share capital; or

(e) provide that the Company be wound up.

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APPENDIX E - SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

The PRC legal system

The PRC legal system is based on the PRC Constitution and is made up ofwritten laws, regulations, rules and other regulatory documents. Decided court cases do not constitutebinding precedents.

The National People’s Congress of the PRC (“NPC”) and the Standing Committee of the NPC areempowered by the PRC Constitution to exercise the legislative power of the state. The NPC has thepower to amend the PRC Constitution and to enact and amend primary laws governing the state organs,civil affairs, criminal offences and other matters. The Standing Committee of the NPC is empowered tointerpret, enact and amend laws other than those required to be enacted by the NPC.

The State Council of the PRC is the highest organ of state administration and has the power to enactadministrative regulations. Ministries and commissions under the State Council of the PRC are alsovested with the power to issue orders, rules and directives within the jurisdiction of their respectivedepartments. Administrative rules, regulations, directives and orders promulgated by the State Counciland its ministries and commissions must not be in conflict with the PRC Constitution or the national lawsand, in the event that any conflict arises, the Standing Committee of the NPC has the power to annulsuch administrative rules and regulations enacted by the State Council and the State Council has thepower to annul such directives, orders and rules issued by its ministries and commissions.

At the regional level, the people’s congresses of provinces, municipalities and autonomous regions andtheir standing committees may enact local rules and directives and the people’s government maypromulgate administrative rules and directives applicable to their own administrative area. These localrules and directives may not be in conflict with the PRC Constitution, any national laws or anyadministrative regulations promulgated by the State Council except as otherwise provided by theConstitution or laws.

Rules, regulations or directives may be enacted or issued at the provincial or municipal level or by theState Council of the PRC or its ministries and commissions in the first instance for experimentalpurposes. After sufficient experience has been gained, the State Council may submit legislativeproposals to be considered by the NPC or the Standing Committee of the NPC for enactment at thenational level.

The power to interpret laws is vested by the PRC Constitution in the Standing Committee of the NPC.According to the Decision of the Standing Committee of the NPC Regarding the Strengthening ofInterpretation of Laws passed on 10 June 1981, theSupreme People’s Court has the power to give general interpretation on the application of laws in judicialproceedings apart from its power to issue specific interpretation in specific cases. The State Council, itsministries and commissions are also vested with the power to give interpretation of the rules andregulations which they promulgated. At the regional level, the power to give interpretation of regionalregulations is vested in the regional legislative and administration organs which promulgate such regionalregulations. All such interpretations carry legal effect.

Judicial system

The People’s Courts are the judicial organs of the PRC. Under the PRC Constitution and the Law of theOrganisation of the People’s Courts of the People’s Republic of China ,the People’s Courts comprise the Supreme People’s Court, the local people’s courts, military courts andother special courts. The local people’s courts are divided into three levels, namely, the basic people’scourts, intermediate people’s courts and higher people’s courts. The basic people’s courts are dividedinto civil, criminal, administrative and other divisions. The intermediate people’s courts have divisionssimilar to those of the basic people’s courts and, where the circumstances so warrant, may have otherspecial divisions (such as intellectual property divisions). The judicial functions of the people’s courts atlower levels are subject to supervision of people’s courts at higher levels. The people’s procuratorates

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also have the right to exercise legal supervision over the proceedings of the people’s courts of the sameand lower levels. The Supreme People’s Court is the highest judicial organ of the PRC. It supervises theadministration of justice by the people’s courts of all levels.

The People’s Courts adopt a system of two instances. A party may before the taking effect of a judgmentor order appeal against the judgment or order of the first instance of a local people’s court to the people’scourt at the next higher level. Judgments or orders of the second instance at the next higher level arefinal and binding. Judgments or orders of the first instance of the Supreme People’s Court are also finaland binding. If, however, the Supreme People’s Court or a people’s court at a higher level finds any errorin a final and binding judgment which has taken effect in any people’s court at a lower level, it maydecide to retry the case, or if the president of a people’s court at any level finds definite error in a legallyeffective judgment or written order of his court, and deems it necessary to have the case retried, he/sheshall refer it to the judicial committee of the said court for discussion and decision of the retrial.

The PRC civil procedures are governed by the Civil Procedure Law of the PRC (the “Civil Procedure Law”) adopted on 9 April 1991. The Civil Procedure Law contains

regulations on the institution of a civil action, the jurisdiction of the People’s Courts, the procedures inconducting a civil action, trial procedures and procedures for the enforcement of a civil judgment ororder. All parties to a civil action conducted within the territory of the PRC must comply with the CivilProcedure Law. A civil case is generally heard by a court located in the defendant’s place of domicile.The jurisdiction may also be selected by express agreement of the parties to a contract provided that thejurisdiction of the people’s court selected has some actual connection with the dispute, that is to say, theplaintiff or the defendant is located or domiciled, or the contract was executed or implemented in thejurisdiction selected, or the subject-matter of the proceedings is located in the jurisdiction selected. Aforeign national or foreign enterprise is accorded the same litigation rights and obligations as a citizen orlegal person of the PRC. If any party to a civil action refuses to comply with a judgment or order made bya people’s court or an award made by an arbitration body in the PRC, the aggrieved party may apply tothe People’s Courts to enforce the judgment, order or award. There are time limits on the right to applyfor such enforcement. Where at least one of the parties to the dispute is an individual, the time limit isone year. If both parties to the dispute are legal persons or other entities, the time limit is six months.

A party seeking to enforce a judgment or order of a people’s court against a party who or whoseproperty is not within the PRC may apply to a foreign court with jurisdiction over the case for recognitionand enforcement of such judgment or order. A foreign judgment or ruling may also be recognised andenforced according to the PRC enforcement procedures by the People’s Courts in accordance with theprinciple of reciprocity or if there exists an international or bilateral treaty with or acceded to by theforeign country that provides for such recognition and enforcement, unless the People’s Courts considersthat the recognition or enforcement of the judgment or ruling will violate fundamental legal principles ofthe PRC or its sovereignty, security or social or public interest.

Arbitration and enforcement of arbitral awards

The Arbitration Law of the PRC (the “Arbitration Law”) was promulgated by theStanding Committee of the NPC on 31 August 1994 and came into effect on 1 September 1995. It isapplicable to, among other matters, trade disputes involving foreign parties where the parties haveentered into a written agreement to refer the matter to arbitration before an arbitration committeeconstituted in accordance with the Arbitration Law. Under the Arbitration Law, an arbitration committeemay, before the promulgation by the PRC Arbitration Association of arbitration regulations, formulateinterim arbitration rules in accordance with the Arbitration Law and the PRC Civil Procedure Law. Wherethe parties have by a written agreement provided arbitration as a method for dispute resolution, theparties are not permitted to institute legal proceedings in a people’s court.

Under the Arbitration Law, an arbitral award is final and binding on the parties and if a party fails tocomply with an award, the other party to the award may apply to the people’s court for enforcement. Apeople’s court may refuse to enforce an arbitral award made by an arbitration committee if there weremistakes, an absence of material evidence or irregularities over the arbitration proceedings or thejurisdiction or constitution of the arbitration committee and in other circumstances as provided in the CivilProcedure Law.

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A party seeking to enforce an arbitral award of a foreign affairs arbitration body of the PRC against aparty who or whose property is not within the PRC may apply to a foreign court with jurisdiction over thecase for enforcement. Similarly, an arbitral award made by a foreign arbitration body may be recognisedand enforced by the PRC courts in accordance with the principles of reciprocity or any internationaltreaty concluded or acceded to by the PRC.

In respect of contractual and non-contractual commercial-law-related disputes which are recognised assuch for the purposes of the PRC law, the PRC has acceded to the Convention on the Recognition andEnforcement of Foreign Arbitral Award (“New York Convention”) adopted on 10 June, 1958 pursuant toa resolution of the Standing Committee of the NPC passed on 2 December 1986. The New YorkConvention provides that all arbitral awards made by a state which is a party to the New York Conventionshall be recognised and enforced by other parties to the New York Convention subject to their right torefuse enforcement under certain circumstances including where the enforcement of the arbitral award isagainst the public policy of the state. It was declared by the Standing Committee of the NPC at the timeof accession of the PRC that (1) the PRC would only recognise and enforce foreign arbitral awards onthe principle of reciprocity and (2) the PRC would only apply the New York Convention in disputesconsidered under the PRC laws to be arising from contractual and non-contractual mercantile legalrelations.

Taxation

The applicable income tax laws, regulations, rules, notices and decisions related to foreign investmententerprises and their investors (collectively referred to as “Applicable Foreign Enterprises Tax Law”)include the following:-

(1) Income Tax Law of the PRC on Foreign Investment Enterprises and Foreign Enterprisesadopted by the NPC on 9 April 1991, which

came into effect on 1 July 1991;

(2) Implementing Rules of the Income Tax Law of the PRC on Foreign Investment Enterprises andForeign Enterprises promulgated bythe State Council, which came into effect on 1 July 1991;

(3) Notice Relating to Taxes Applicable to Foreign Investment Enterprises and Foreign Enterprisesand Foreign Nationals in Dividends and Gains obtained from Holding and Transferring of Shares promulgated by the State Administration of Taxation on 21 July 1993;

(4) Income Tax Law Applicable to Individuals of the PRC (amended in 2005) adopted by the NPC on 10 September 1980 and amended twice by the

Standing Committee of the NPC;

(5) Implementing Rules of the Income Tax Law Applicable to Individuals of the PRC(amended in 2005)promulgated by the State Council, which

took effect on 1 January 2006; and

(6) Notice on Relevant Policies Concerning Individual Income Tax issued by the Ministry of Finance and State Administration of Taxation on 13 May 1994.

(a) Income tax on foreign investment enterprises

According to the Applicable Foreign Enterprises Tax Law, foreign investment enterprises(including sino-foreign equity joint ventures, sino-foreign co-operative joint ventures andwholly foreign-owned enterprises established in the territory of the PRC) is required to pay anational income tax at a rate of 30% of their taxable income and a local income tax at a rateof 3% of their taxable income.

APPENDIX E - SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

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A foreign investment enterprise engaged in production having a period of operation of notless than ten years shall be exempted from income tax for the first two profit-making yearsand a 50% reduction in the income tax payable for the next three years.

Foreign investment enterprises established in Special Economic Zones, foreign enterpriseshaving an establishment or a place in Special Economic Zones engaged in production orbusiness operations and the foreign investment enterprises engaged in productionestablished in Economic and Technological Zones may pay income tax at a reduced rate of15%. Foreign investment enterprises engaged in production established in coastal economicopen zones or in the old urban districts of cities where the Special Economic Zones or theEconomic and Technological Development Zones are located may pay income taxes at areduced rate of 24%.

Losses incurred in a tax year by any enterprise with foreign investment and by anestablishment or a place set up in the PRC by a foreign enterprise engaged in production orbusiness operations may be made up by the income of the following tax year and this maybe carried forward for not more than five years.

The people’s governments of the provinces, autonomous regions and municipalities directlyunder the central government may grant exemptions from or reduce local income tax for aforeign investment enterprise engaged in an industry or a project encouraged by the State.

(b) Tax on dividends from the PRC enterprises with foreign investment

According to the Applicable Foreign Enterprises Tax Law, income such as dividends, profits,rental, royalty and other income from sources in the PRC derived from a foreign enterprisewhich has no establishment in the PRC is subject to a 20% withholding tax, subject toreduction as provided by any applicable double taxation treaty, unless the relevant income isspecifically exempted from tax under the Applicable Foreign Enterprises Tax Law. The profitderived by a foreign investor from a PRC enterprise with foreign investment is exemptedfrom the PRC income tax according to the Applicable Foreign Enterprises Tax Law.

(c) Major Taxes applicable to Real Estate Developers

Business Tax

Pursuant to the “Interim Regulations of the PRC on Business Tax”promulgated by the State Council in December 1993, the tax rate of the

transfer of immovable properties, their superstructures and attachments is 5%.

Land Value-added Tax

Pursuant to the “Interim Regulations of the PRC on Land Value-added Tax”promulgated by the State Council in December 1993,

land value-added tax is calculated based on a 4-band excess progressive tax rate: for theportion with value-added tax not exceeding 50% of the deductible amount, the applicable taxrate is 30%; for value-added tax exceeding 50% of the deductible amount, the applicable taxrate for the portion not exceeding 100% of the deductible amount is 40%; for value-addedtax exceeding 100% of the deductible amount, the applicable tax rate for the portion notexceeding 200% of the deductible amount is 50%; and for the portion with value-added taxexceeding 200% of the deductible amount, the applicable tax rate is 60%.

According to the “Circular on Several Issues of the Levy and Administration of LandAppreciation Tax” promulgated jointly by the StateAdministration of Taxation and the State Land Administration Bureau in January 1996 andthe “Circular on Issues related to the Administration and Levy of the Land Appreciation Tax”

promulgated by the State Administration ofTaxation and the Ministry of Construction in April 1996, the taxation authorities all over thecountry should establish a whole system of the levy and administration of the landappreciation tax in accordance with the related regulations and the above two circulars and

APPENDIX E - SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

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the taxpayer who transfers the real estate shall effect and complete the tax registration anddeclaration procedure with the relevant taxation authority within the statutory period inaccordance with the relevant provisions.

The Circular on Administration of Real Estate Enterprises’ Settlement of Land Value-addedTaxes issued by the State Administration of Taxation on 28 December 2006 (the “Circularon Land Value-added Taxes”) will take effect from 1 February 2007.

The Circular on Land Value-added Taxes provides, inter alia, that land value-added tax isimposed on real estate development projects approved by the relevant authority, and inrespect of real estate development projects that are developed in stages, land value-addedtax is imposed at each stage of such development project.

The taxpayer is required to settle the payment of the land value-added tax in any of thefollowing circumstances:

(a) The real estate project has been completed and sold;

(b) The real estate development project is not yet completed and is transferred as awhole, or the accounts in respect of the real estate development project are notcompleted and the real estate development project is transferred as a whole; or

(c) The land use right is transferred directly.

The tax authority may also require the taxpayer to settle the payment of the land value-added tax in any of the following additional circumstances:

(a) in respect of real estate development projects that are completed and have passedthe inspection and acceptance process, where the architectural area that has beentransferred accounts for 85% or more of the aggregate architectural area of theproject, or where the architectural area that has been transferred accounts for lessthan 85% of the aggregate architectural area of the project and the remaining sellablearchitectural area has been rented out or is self-used;

(b) the sale of the relevant real estate development project is not completed within theperiod of three years from the time the sale permission or pre-sale permission wasobtained;

(c) the taxpayer has applied for the writing off of taxation registration and has not settledthe payment of the land value-added tax; or

(d) in such other circumstances as may be decided by the relevant provincial taxauthority.

Deed Tax

Pursuant to the “Interim Regulations of the PRC on Deed Tax”promulgated by the State Council in July 1997, the transferee, whether an individual orotherwise, of the title to a land site or building in the PRC shall be the obliged taxpayer fordeed tax. The rate of deed tax is 3%-5%. The people’s governments of provinces,autonomous regions and municipalities directly under the central government may, within theaforesaid range, determine and report their effective tax rates to the Ministry of Finance(“MOF”) and State Administration of Taxation for record.

Land Use Tax

Pursuant to the “Interim Regulations of the PRC on Land Use Tax in respect of Urban Land”promulgated by the State Council in September

1988, the land use tax in respect of urban land is levied according to the area of relevantland.

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Buildings Tax

Under the “Interim Regulations of the PRC on Buildings Tax”promulgated by the State Council in September 1986, buildings tax shall be 1.2% if it iscalculated on the basis of the residual value of a building and 12% if it is calculated on thebasis of the rental of the building.

Stamp Duty

Under the “Interim Regulations of the PRC on Stamp Duty”promulgated by the State Council in August 1988, for building property transfer instruments,including those in respect of property ownership transfer, the duty rate shall be 0.05% of theamount stated therein; for permits and certificates relating to rights, including real estate titlecertificates and land use rights certificates, stamp duty shall be levied on an item basis at anannual rate of RMB5 per item.

Municipal Maintenance Tax

Under the “Interim Regulations of the People’s Republic of China on Municipal MaintenanceTax” promulgated by the State Council in 1985,any taxpayer, whether an individual or otherwise, of product tax, value-added tax orbusiness tax shall be required to pay municipal maintenance tax. The tax rate shall be 7%for a taxpayer whose domicile is in an urban area, 5% for a taxpayer whose domicile is in acounty or a town, and 2% for a taxpayer whose domicile is not in any urban area or countyor town.

Education Surcharge

Under the “Interim Regulations of the PRC on Education Surcharge”promulgated by the State Council in April 1986, any taxpayer, whether an

individual or otherwise, of product tax, value-added tax or business tax shall pay aneducation surcharge, unless such obliged taxpayer is instead required to pay a rural areaeducation surcharge as provided by the “Notice of the State Council on Raising Funds forSchools in Rural Areas” . Education surchargeshall be calculated and levied at a rate of 1% on the actual amount of product tax, value-added tax and business tax paid by the taxpayer.

Environmental Protection Regulations

In accordance with the Environmental Protection Law of the PRC adopted by the NPC on 26 December1989, the Administration Supervisory Department of Environmental Protection of the State Council setsthe national guidelines for the discharge of pollutants and other environmental pollutants. The people’sgovernments of provinces, autonomous regions and municipalities may also set their own guidelines forthe discharge of pollutants within their own provinces or districts in the event that the national guidelinesare inadequate.

A company or enterprise which causes environmental pollution and discharges other polluting materialswhich endanger the public shall implement environmental protection methods and procedures into theirbusiness operations. This may be achieved by setting up a system of accountability within the company’sbusiness structure for environmental protection; adopting effective procedures to prevent environmentalhazards such as waste gases, water and residues, dust powder, radioactive materials and noise arisingfrom production, construction and other activities from polluting and endangering the environment. Theenvironmental protection system and procedures should be implemented simultaneously with thecommencement of and during the operation of construction, production and other activities undertakenby the company. Any company or enterprise which discharges environmental pollutants should reportand register such discharge with the Administration Supervisory Department of EnvironmentalProtection. Any company or enterprise discharging pollutants in excess of the prescribed national or localdischarge standards shall pay a fee for excessive discharge according to state provisions and shallassume responsibility for eliminating and controlling the pollution. Companies which have caused severepollution to the environment are required to restore the environment or remedy the effects of the pollutionwithin a prescribed time limit.

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If a company fails to report and/or register the environmental pollution caused by it, it will receive awarning or be penalised. Companies which fail to restore the environment or remedy the effects of thepollution within the prescribed time will be penalised or have their business licences terminated.Companies or enterprises which have polluted and endangered the environment must bear theresponsibility for remedying the danger and effects of the pollution, as well as to compensate any loss ordamage suffered as a result of such environmental pollution.

Any company or enterprise shall submit the Environmental Impact Report or fill up the relevantEnvironmental Impact Form to be handed in to the competent department of environmental protectionadministration before the commencement of a construction project. If the construction project wouldcause a great environmental impact, the company or the enterprise should draw up an EnvironmentalImpact Report and conduct a more comprehensive environmental appraisal for the report. If theenvironmental impact is minor or small, the company or enterprise should fill up the EnvironmentalImpact Forms instead of drawing up the Environmental Impact Report. The facilities in a constructionproject for the prevention and control of pollution must be designed, built and commissioned togetherwith the principal parts of the construction project, and must be inspected and accepted by thecompetent department of environmental protection administration that reviewed and approved theEnvironmental Impact Report or Environmental Impact Form.

Property Laws

Establishment of Real Estate Development Enterprise

According to the “Law of the PRC on Administration of Urban Real Estate”(“Urban Real Estate Law”) promulgated by the Standing Committee of the NPC in July 1995, a

real estate developer is defined as an enterprise which engages in the development and sale of realestate for the purpose of making profits. Under the “Regulations on Administration of Development andOperation of Urban Real Estate” (the “Development Regulations”)promulgated by the State Council on 20 July 1998, in addition to the requirements on establishingenterprises, an enterprise which is to engage in the development of real estate shall satisfy the followingrequirements: 1) its registered capital shall be RMB 1 million or more and 2) have four or more full-timeprofessional real estate/construction technicians and two or more full-time accounting officers, each ofwhom shall hold the relevant qualification certificate. The local government of a province, autonomousregion or municipality directly under the central government may, based on local circumstances, imposemore stringent requirements in respect of the registered capital and the professional personnel of a realestate developer.

To establish a real estate development enterprise, the developer should apply for registration with theAdministration for Industry and Commerce. The real estate developer must also report its establishmentto the real estate development authority in the location of the registration authority within 30 days of thereceipt of its Business License.

Under the “Foreign Investment Industry Guidance Catalogue” promulgated bythe State Development and Reform Commission and the Ministry of Commerce on 30 November 2004,the development and construction of ordinary residential units falls within the category of industries inwhich foreign investment is encouraged, whereas the development of a whole land lot and theconstruction and operation of high end hotels, villas, premium office buildings, international conferencecentres and hyper-theme parks fall within the category of industries in which foreign investment is subjectto restrictions, while other real estate development falls within the category of industry in which foreigninvestment is permitted. A foreign investor intending to engage in the development and sale of realestate may establish a joint venture or cooperative venture or wholly foreign-owned enterprise inaccordance with the “Law of the PRC on Sino-Foreign Joint Ventures”

or the “Law of the PRC on Sino-Foreign Coorperative Ventures”or the “Law of the PRC on Wholly Foreign-Owned Enterprise” respectively.Prior to its registration, the parties to the joint venture or cooperative venture shall sign a jointventure/cooperative venture contract and articles of association and the investors of the wholly foreignowned enterprise shall sign the articles of association, which must be approved by the commerceauthorities, upon which approval an Approval Certificate for a Foreign-Invested Enterprise will be issuedand record to the Ministry of Commerce will be made.

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Under the Notice on Adjusting the Portion of Capital Fund for Fixed Assets Investment of CertainIndustries issued by the State Council on 26 April2004, the portion of capital fund of real estate projects (excluding economical housing projects) has beenincreased from 20% or above to 35% or above.

Qualifications of a Real Estate Developer

Under the Development Regulations, the real estate development authorities shall examine applicationsfor registration of qualifications of a real estate developer when it reports its establishment, byconsidering its assets, professional personnel and business results. A real estate developer shall onlyundertake real estate development projects in compliance with the approved qualification registration.

In accordance with the “Provisions on Administration of Qualifications of Real Estate Developers”(“Provisions on Administration of Qualifications”) promulgated by the

Ministry of Construction on 29 March 2000, a real estate developer shall apply for registration of itsqualifications according to such provisions. An enterprise may not engage in development and sale ofreal estate without a qualification classification certificate for real estate development. The constructionauthority under the State Council oversees the qualifications of real estate developers throughout thecountry, and the real estate development authority under a local government on or above the county levelshall oversee the qualifications of local real estate developers.

In accordance with the Provisions on Administration of Qualifications, real estate developers areclassified into four classes. The approval system is tiered, such that confirmation of class 1 qualificationsshall be subject to preliminary examination by the construction authority under the people’s governmentof the relevant province, autonomous region or municipality directly under the central government andthen final approval of the construction authority under the State Council. Procedures for approval ofdevelopers of class 2 or lower qualifications shall be formulated by the construction authority under thepeople’s government of the relevant province, autonomous region or municipality directly under thecentral government. A developer that passes the qualification examination will be issued a qualificationcertificate of the relevant class by the qualification examination authority.

After a newly established real estate developer reports its establishment to the real estate developmentauthority, the latter shall issue a Provisional Qualification Certificate to the eligibledeveloper within 30 days of its receipt of the above report. The real estate developer shall apply for thequalification classification with the real estate development authority within one month after expiry of theProvisional Qualification Certificate.

A developer of a particular qualification classification may only engage in the development and sale ofreal estate within its approved scope of business and may not engage in business which is limited toanother classification. A class 1 real estate developer is not restricted as to the scale of real estateprojects to be developed and may undertake a real estate development project anywhere in the country.A real estate developer of class 2 or lower may undertake a project with a gross area of less than250,000 sq m and the specific scope of business shall be as confirmed by the construction authorityunder the people’s government of the relevant province, autonomous region or municipality.

Development of a Real Estate Project

The Development Regulations provide that real estate development projects may be carried out havingregard to the overall land use plan, annual construction land schedule, applicable municipal zoning planand the annual property development scheme. Those projects which should be approved by theplanning control authorities in accordance with the relevant rules should also be reported and approvedby the planning control authorities and be brought into the annual planning of the investment in fixedassets. Under the “State Council’s Notice on Stringent Control Over High Class Real EstateDevelopment Projects” issued by the State Council inMay 1995, for a high class real estate project with a gross area of more than 100,000 sq m or totalinvestment of more than RMB200 million or foreign investment of US$30 million or more, the projectproposal and commencement of works shall be subject to the approval of the National Development andReform Commission (formerly known as the State Development Planning Commission). For a high classreal estate project with a gross area of more than 20,000 sq m but less than 100,000 sq m or total

APPENDIX E - SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

investment of more than RMB30 million but less than RMB200 million, the project proposal andcommencement of works shall be subject to the approval of the development and reform departments ofthe relevant province, autonomous region, municipality or separate planning city and report from theaforesaid departments to the National Development and Reform Commission. A high class real estateproject with foreign investment of more than US$100 million is subject to the approval of the StateCouncil based on the recommendation of the National Development and Reform Commission.

Under the “Interim Regulations of the PRC on Assignment and Transfer of the Right to Use State-ownedUrban Land” (“Interim Regulations onAssignment and Transfer”) promulgated by the State Council in May 1990, a system of assignment andtransfer of the right to use State-owned land (“State-owned land use rights”) was adopted. A land usershall pay an assignment price to the State as consideration for the assignment of the right to use a landsite within a certain term, and the land user may transfer, lease out, mortgage or otherwise commerciallyexploit the land use rights within the term of use. Under the Interim Regulations on Assignment andTransfer and the Urban Real Estate Law, the land administration authority under the local government ofthe relevant city or county shall enter into an assignment contract with the land user to provide for theassignment of the land use rights. After payment in full of the assignment price, the land user shallregister with the land administration authority and obtain a Land Use Rights Certificate which evidencesthe acquisition of land use rights.

The Urban Real Estate Law and the Development Regulations provide that land use rights for a siteintended for real estate development shall be obtained through assignment, except for land use rightswhich may be obtained through appropriation pursuant to the PRC laws or the stipulations of the StateCouncil.

When carrying out the feasibility study for a construction project, a construction entity shall make apreliminary application for construction on the relevant site to the land administration authority of thesame level as the project approval authority, in accordance with the “Measures for Administration ofExamination and Approval for Construction Sites” and the “Measuresfor Administration of Preliminary Examination of Construction Project Sites”promulgated by the Ministry of Land and Resources in March 1999 and in July 2001 (amended in Oct2004) respectively. After receiving the preliminary application, the land administration authority shallcarry out preliminary approval of various matters relating to the construction project in compliance withthe overall zoning plans and land supply policy of the State, and shall then issue a preliminary approvalreport in respect of the project site. The preliminary approval report is the requisite document of theapproval of the construction project. In the event that the State-owned land use rights are provided to aland user in consideration for the payment of land use fees, the land administration authority under thepeople’s government of the relevant city or county shall sign a land use rights assignment contract

with the land user and issue an Approval for Construction Site tothe construction entity. After the land user has made full payment of the land use fees, the landregistration shall be effected and completed in accordance with the relevant provisions.

The Development Regulations also provide that a real estate developer shall record any major eventswhich occur in the course of construction in the “Real Estate Development Project Manual”

and periodically submit the same to the real estate development authority for itsrecords.

Under the “Measures for Control and Administration of Assignment and Transfer of Rights to Use UrbanState-owned Land” promulgated by the Ministry ofConstruction in December 1992, the assignee to an assignment contract, i.e. a real estate developer,shall legally apply for a Certificate for Construction Land Planning from themunicipal planning authority with the assignment contract.

After obtaining a Permit for Construction Site Planning, a real estate developer shall organize thenecessary survey, planning and design work having regard to planning and design requirements. For theplanning and design proposal in respect of a real estate development project, the relevant report andapproval procedures required by the “Law of the People’s Republic of China on Municipal Planning”

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, promulgated by the Standing Committee of the NPC in December 1989,and local statutes on municipal planning must be followed and a Certificate for Construction EngineeringPlanning must be obtained from the municipal planning authority.

In accordance with the “Procedures for the Administration of Demolition and Removal in Urban Areas”, which were promulgated by the State Council on 13 June 2001, after obtaining

the approval document on the construction project, the permit for planning the use of land inconstruction, the approval document on the right to use the state-owned land, a dismantlement plan anddismantlement scheme and establishing a dismantlement compensation and resettlement fundcertification issued by the financial institution taking in deposits, a real estate development organizationmay apply to the municipal, district or county people’s government of the place where the real estate islocated (i.e. the administration bureau of State-owned land resources and housing of the relevant citydistrict or county) for a Permit for Housing Demolition and Removal . Such bureau shallissue to the applicant a housing demolition and removal permit after examination within 30 days ofreceipt of the application documents. Upon granting an approval and issuing a housing demolition andremoval permit, the real estate administration department shall issue a demolition and removal notice tothe inhabitants of the area to be demolished. The demolition and removal party shall implement thedemolition and removal within the area and period specified in the housing demolition and removalpermit.

During the demolition and removal period announced by the department in charge of demolition andremoval, the demolition and removal party, the parties subject to demolition and removal and anyhousing lessee shall enter into an agreement for compensation and resettlement in respect of thedemolition and removal. If the demolition and removal party, the parties subject to demolition andremoval and the housing lessee cannot reach an agreement, any party concerned may apply to theoriginal approval department in charge of demolition and removal for a ruling. Such ruling shall berendered within 30 days of the application. If any party disagrees with the ruling, it may initiateproceedings in the people’s court within 90 days after receiving the ruling of the relevant department.Pursuant to the law, if the demolition and removal party has provided housing to the party subject todemolition and removal or the party subject to demolition and removal has provided housing to a lessee,the demolition and removal shall not be stopped during the period of legal proceedings.

Pursuant to the “Procedures for the Administration of Demolition and Removal in Urban Areas”,compensation for housing demolition and removal may be effected by way of monetary compensation orexchange of property rights. If the monetary compensation method is used, the amount of compensationshall be assessed on the basis of the real property market price determined by the location, uses andthe gross area of the housing to be demolished. The demolition and removal party shall entrust aqualified real estate assessment agency to conduct an assessment on the housing to be demolished. Ifproperty right exchange is used, the demolition and removal party and the party subject to demolitionand removal shall, on the basis of the real property market price and the location, uses and the grossarea of the housing to be demolished, calculate the amount of compensation which shall be made for thehousing to be demolished, the real property market price of the housing to be exchanged for the housingto be demolished, and work out the difference between the two.

In addition to paying the demolition and removal compensation, the demolition and removal party shallpay removal allowance to the party subject to demolition and removal. During the interim period, whenthe party subject to demolition and removal arranges accommodation himself, the demolition andremoval party shall pay temporary allocation allowance. On the other hand, when the demolition andremoval party provides accommodation to the party subject to demolition and removal during the interimperiod, the demolition and removal party need not pay the temporary allocation allowance.

After a real estate developer has carried out the above work, the builder enterprise has been determined,the building blueprint and technical materials have been prepared and examined as required, the specificmeasures for the guarantee of building quality and safety have been complied with, the project has beentrusted for supervision according to law, the building capital has been ready and the capital in handgenerally shall not be less than 30% of the construction contract price if the building period is more than

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one year and other conditions as required by law and administrative regulations are satisfied, as the casemay be, the real estate developer shall apply for a Certificate for Building Construction

from the construction authority under the local people’s government above thecounty level according to the “Measures for Administration of Granting Permission for Commencement ofConstruction Works” promulgated by the Ministry of Construction in October1999 (amended in July 2001).

Pursuant to the Development Regulations and the “Interim Measures for the Administration of theRegistration of the Inspection and Acceptance of the Completed Building Construction Works and theMunicipal Infrastructure Facilities”promulgated by the Ministry of Construction in April 2000, after the completion of the real estatedevelopment project, the real estate developer should apply for the project completion inspection andacceptance to the local real estate administration authorities of the county level or higher. The realestate developer should register the project completion inspection and acceptance within 15 days frompassing of the inspection and acceptance. The project should not be delivered for use without thepassing of the project completion inspection and acceptance. Projects like residential house quartersshould pass the entire completion inspection and acceptance. Projects developed by stages can also beinspected and accepted by stages.

Pursuant to the Development Regulations and the “Circular of the State Council on Adjusting the CapitalRatios of Fixed Asset Investment Projects in Some Industries”, the capital ratio of real estate developmentprojects (excluding projects of economical housing) has been increased from 20% to 35%. The realestate development should be in accordance with the provisions of the land use rights assignmentcontract on the usage of the land and the commencement date of the project. When a project is notcommenced within 1 year from the date of commencement stipulated in the land use rights assignmentcontract, additional fees may be imposed on the real estate developer of an amount not more than 20%of the land use rights assignment price. If the delay is more than 2 years, the land use rights may beappropriated by the government without any refund.

Land for Property Development

According to the “Law of the Land Administration of the PRC” updated inAugust 2004 by the Standing Committee of the NPC, and the “Regulations for the Implementation of theLaw of the Land Administration” promulgated by the State Councilin December 1998, the state is carrying on the control system on the usage of the land, the land registerand record system and the land certificate issuing system. When approved construction projectsrequired the use of state-owned construction land, the construction entity should first apply to thosecounty level or higher land administration authorities who are able to issue the authorization for theconstruction land use approval and submit the documents as prescribed by law and regulations. Afterthe examination by the land administration authorities, the application must be reported to and approvedby the same level government. Where occupation of land for construction purposes involves theconversion of agricultural land into land for construction purposes, the examination and approvalprocedures in this regard shall be required.

The “Urban Real Estate Law” expressly provides: “Assignment of land use rights may be by publicauction or competitive bidding or by mutual agreement between both parties. The Land use rights forcommercial use, tourism, entertainment and construction of luxury flats shall be sold by public auctionwhenever it is feasible, and may be sold by mutual agreement if sale by public auction or competitivebidding is not feasible”. On 30 April 2001, the State Council promulgated the “Notice on Strengtheningthe Administration of State-owned Land” (“Notice”), which stipulatesthat State-owned land use rights shall, as far as possible, be sold by public auction or competitivebidding. The Notice further stipulates as follows: “The supply of State-owned land shall be made knownto the public unless state security or confidentiality requirements are involved. If, after a supply scheduleof land for commercial development and other uses is announced, there are two or more prospectiveinvestors who intend to develop the same land parcel, the relevant land parcel shall be sold by way ofbidding or public auction. The competitive bidding and public auction of State-owned land use rightsshall be conducted openly.”

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On 9 May 2002, the State Bureau of Land and Resources of the PRC promulgated the “Regulations onthe Grant of State-owned Land Use Rights through Competitive Bidding, Public Auction and PublicAnnouncements” (the “New Regulations”).The New Regulationsstipulate the legal basis, principles, scope, procedures and legal liability arising from and in connectionwith assignment of State-owned land use rights by competitive bidding and public auction. Pursuant tothe New Regulations, the land use rights of land for commercial use, tourism, entertainment andcommodity housing development shall be assigned by competitive bidding, public auction or publictrading and, in the event that the land use rights of a land parcel for uses other than commerce, tourism,entertainment and commercial housing development has two or more prospective purchasers after thepromulgation of the relevant land supply schedule, the assignment of the land use rights of the landparcel shall be performed by competitive bidding, public auction or public trading.

Sale of Commercial Houses

Under the “Measures for Administration of Sale of Commercial Houses”promulgated by the Ministry of Construction in April 2001, sales of commercial houses may include bothpost-completion and pre-completion sales. Commercial houses may be put to post-completion sale onlywhen the pre-conditions for such sale have been satisfied. Before the post-completion sale of acommercial house, the real estate developer shall submit the Real Estate Development Project Manualand other documents evidencing the satisfaction of pre-conditions for post-completion sale to the realestate development authority for record.

Any pre-completion sale of commercial houses shall be conducted in accordance with the “Measures forAdministration of Pre-completion Sale of Urban Commercial Houses” (“Pre-completion Sale Measures”) promulgated by the Ministry of Construction in July 2004 and theDevelopment Regulations. The Pre-completion Sale Measures provide that pre-completion sale ofcommercial houses is subject to certain procedures. According to the Development Regulations and thePre-completion Sale Measures, a permit shall be obtained before a commercial house may be put to pre-completion sale. A developer intending to sell a commercial house before its completion shall make thenecessary pre-completion sale registration with the real estate development authority of the relevant cityor county to obtain a Permit for Pre-completion Sale of Commercial Houses . Acommercial house may only be sold before completion provided that: 1) the assignment price has beenpaid in full for the assignment of the land use rights involved and a Land Use Rights Certificate has beenobtained; 2) a Certificate for Construction Engineering Planning and a Certificate for BuildingConstruction have been obtained; and 3) the funds invested in the development of the commercialhouses put to pre-completion sale represent 25% or more of the total investment in the project and theprogress of works and the completion and delivery dates have been ascertained. Pre-completion sale ofcommercial houses can only be carried out after the Permit for Pre-completion Sale of Commercialhouses has been obtained.

Transfer of Real Estate

According to the Urban Real Estate Law and the “Provisions on Administration of Transfer of Urban RealEstate” promulgated by the Ministry of Construction in August 1995 (amendedin August 2001), a real estate owner may sell, bequeath or otherwise legally transfer real estate toanother person or legal entity. When transferring a building, the ownership of the building and the landuse rights to the site on which the building is situated are transferred. The parties to a transfer shallenter into a real estate transfer contract in writing and register the transfer with the real estateadministration authority having jurisdiction over the location of the real estate within 90 days of theexecution of the transfer contract.

Where the land use rights were originally obtained by assignment, the real property may only betransferred on the condition that: 1) the assignment price has been paid in full for the assignment of theland use rights as provided by the assignment contract and a Land Use Rights Certificate has beenobtained; 2) development has been carried out according to the assignment contract; and in the case ofa project in which buildings are developed, development representing more than 25% of the totalinvestment has been completed, or in case of a whole land lot development project, construction work

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has been carried out as planned, water supply, sewerage, electricity supply, heat supply, access roads,telecommunications and other infrastructure or utilities have been made available, and the site has beenleveled and made ready for industrial or other construction purposes.

If the land use rights were originally obtained by assignment, the term of the land use rights after transferof the real estate shall be the remaining portion of the original term provided by the land use rightsassignment contract after deducting the time that has been used by the former land user(s). In the eventthat the transferee intends to change the usage of the land provided in the original assignment contract,consent shall first be obtained from the original assignor and the planning administration authority underthe local government of the relevant city or county and an agreement to amend the land use rightsassignment contract or a new land use rights assignment contract shall be signed in order to, inter alia,adjust the land use rights assignment price accordingly.

If the land use rights were originally obtained by allocation, transfer of the real property shall be subjectto the approval of the government vested with the necessary approval power as required by the StateCouncil. After the people’s government vested with the necessary approval power approves such atransfer, the transferee shall complete the formalities for transfer of the land use rights, unless therelevant statutes require no transfer formalities, and pay the transfer price according to the relevant laws.

Leases of Buildings

Under the Urban Real Estate Law and the “Measures for Administration of Leases of Buildings in UrbanAreas” promulgated by the Ministry of Construction in May 1995, the parties to alease of a building shall enter into a lease contract in writing. A system has been adopted to register theleases of buildings. When a lease contract is signed, amended or terminated, the parties shall registerthe details with the real estate administration authority under the local government of the city or county inwhich the building is situated.

Mortgages of Real Estate

Under the Urban Real Estate Law and the “Measures for Administration of Mortgages of Urban RealEstate promulgated by the Ministry of Construction in May 1997 (amended inAugust 2001), when a mortgage is created on the ownership of a building legally obtained, a mortgageshall be simultaneously created on the land use rights of the land on which the building is situated. Themortgager and the mortgagee shall sign a mortgage contract in writing. A system has been adopted toregister the mortgages of real estate. After a real estate mortgage contract has been signed, the partiesto the mortgage shall register the mortgage with the real estate administration authority where the realestate is situated. A real estate mortgage contract shall become effective on the date of registration ofthe mortgage. If a mortgage is created on the real estate in respect of which a Building OwnershipCertificate has been obtained legally, the registration authority shall make an entry underthe “third party rights” item on the original Building Ownership Certificate and then issue a Certificate ofThird Party Rights to a Building to the Mortgagee. If a mortgage is created over acommercial house that is subject to pre-completion sale or if a mortgage is created over works inprogress, the registration authority shall record the details in the mortgage contract. If construction of areal property is completed during the term of a mortgage, the parties involved shall re-register themortgage of such real property after issuance of the certificates evidencing the rights and ownership ofthe real estate.

Real Estate Management

Pursuant to the Regulations on Property Management” promulgated by the State Councilin July 2003 and the “Qualification Management Measures of Property Management Enterprises”

promulgated by the Ministry of Construction in March 2004, the enterprisesengaged in real estate management shall be independent legal persons and the State has divided thequalifications of property management enterprises into three levels and implemented the annual checksystem.

APPENDIX E - SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

Insurance

There is no mandatory provision in the PRC laws, regulations and government rules which requires aproperty developer to take out insurance policies for its real estate developments.

Regulations on Energy-saving Quality

Pursuant to the Regulations on Energy-Saving in Civil Construction and theMeasures on Supervision and Administration of Energy-Saving Quality in Civil Construction Projects

promulgated by the Ministry of Construction on 31 July 2006, theproperty development unit, design unit, the building unit and other relevant units in the alteration andenlargement of the civil buildings (including residual buildings and public buildings) shall comply with therelevant construction energy-saving laws and regulations and technology standards and be responsiblefor the energy-saving quality of civil buildings in accordance with such laws and regulations.

Measures on Stabilising Property Prices and Adjusting the Housing Structure

The General Office of the State Council promulgated the “Circular on Stabilising Housing Price”in March 2005, requiring measures to be taken to restrain the property

prices from increasing too fast and to promote the healthy development of the real estate market. The”Opinions on Work of Stabilising Housing Price” jointly issued by theMinistry of Construction, National Development and Reform Commission, the Ministry of Finance, theMinistry of Land and Resources, People’s Bank of China, the State Administration of Taxation and theChina Banking Regulatory Commission in April 2005 provide that:

1. Where the housing price grows too fast, and the supply of ordinary commercial houses withmedium or low price and economical houses is insufficient, the housing construction should mainlyinvolve projects of ordinary commercial houses with medium or low prices and economical houses.The construction of low density and high quality houses shall be strictly controlled. With respect tothe construction projects of medium or low priced ordinary commercial houses, before supplyingland, the municipal planning authority shall, according to the controlling detailed planning, set forthconditions for planning and design such as height, plot ratio and green space, while the real estateauthority, together with other relevant authorities, shall set forth controlling requirements as saleprice, type and area. Such conditions and requirements will be set up as pre-conditions of landassignment to ensure the supply of houses of medium or low prices and houses with medium orsmall area. The local government must strengthen the supervision of planning permit for realestate development projects. Housing projects that have not been commenced within two yearsmust be examined again, and those that are not in compliance with the planning requirements willhave its planning permit revoked.

2. Where the price of land for residential use and residential house grows too fast, the proportion ofland for residential use to the total land supply should be appropriately raised, and the land supplyfor the construction of ordinary commercial houses with medium or low prices and economicalhouses should be especially increased. Land supply for villa construction shall continue to besuspended, and land supply for high-end housing property construction shall be strictly restricted.

3. Land idle fee shall be imposed on land that has not been developed for one year from thecontractual construction commencement date. Land use rights of the land that has not beendeveloped for two years will be withdrawn without compensation.

4. Commencing from 1 June 2005, upon the transfer of a residential house by an individual withintwo years from purchase, business tax will be levied on the basis of the full amount of the incometherefrom. For an individual who has transferred an ordinary residential house after two years ormore from the purchase, the business tax will be exempted. For an individual who has transferreda house other than an ordinary residential house after two years or more from the purchase,business tax will be levied on the basis of the difference between the income from selling thehouse and the purchase price.

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5. Ordinary residential houses with medium or small area and medium or low prices may enjoypreferential policies such as that pertaining to planning permit, land supply, credit and taxation.Houses enjoying such preferential policies must satisfy all the following conditions in principle: theplot ratio of the residential district is above 1.0, the floor area of one single unit is less than 120 sqm and the actual transfer price is lower than 1.2 times the average transfer price of houses locatedon the land of the same level. The local government of a province, autonomous region ormunicipality directly under the central government may decide the standards of preferential policiesapplicable within its own jurisdiction based on the actual situation within its own jurisdiction.

6. The transfer of uncompleted commercial properties by any pre-sale purchaser shall be forbidden.A system shall be adopted to require purchasers to buy properties in their own names. Any pre-sale contract in respect of commercial property shall be filed through the Internet immediately afterits execution.

In order to adjust the housing structure and stabilise the housing prices, the General Office of the StateCouncil promulgated the “Opinions on The Adjustment of Housing Supply Structure and Stablisation ofHousing Price” on 24 May 2006 to adjust certain existingpolicies according to the latest trends of the real estate market. The opinion, which was jointlypromulgated by the Ministry of Construction, National Development and Reform Commission, theMinistry of Supervision, the Ministry of Finance, the Ministry of Land and Resources, People’s Bank ofChina, State Administration of Taxation, National Bureau of Statistics and China Banking RegulatoryCommission, stipulates, inter alia, that:

1. From 1 June 2006, at least 70% of the residential units in newly approved and developedcommercial residential houses (including economical houses) must be no larger than 90 sq m. Ifthere are special situations, the municipality directly under the Central Government, the citydirectly under State planning and the provincial capital city shall apply to the Ministry ofConstruction to seek approval for any adjustment on the abovementioned ratio. For the projectswhose developer has already obtained the approval without the Certificate for BuildingConstruction, if the proportion of the aforesaid residential units with a built up area of no largerthan 90 sq m has not reached the abovementioned 70% ratio, the developer should adjust theproportion of the aforesaid residential units to satisfy the new requirement.

2. To further discourage speculation in the real estate market, with effect from 1 June 2006, if thepurchaser transfers the common residential house within 5 years from the date of the purchase,business tax will be levied on the basis of the sales income on the residential house; if thepurchaser transfers the common residential house after 5 years including the last date of such 5-year period from the date of purchase, no business tax will be levied; and if the purchaser transfersthe house other than common residential house after 5 years including the last date of such 5-yearperiod from the date of purchase, the business tax will be levied on the margin between the salesincome on the residential house and the original purchase price.

3. To restrain the property prices from increasing too fast, with effect from 1 June 2006, the initialpayment for the personal housing mortgage loan shall not be less than 30% of the total purchaseprice of the house. However, if the purchaser purchases the house with a built-up area of nolarger than 90 sq m for his/her own residence, the initial payment shall not be less than 20% of thetotal purchase price of the house.

The Ministry of Construction subsequently clarified in its “Some Opinions on Meeting the RatioRequirements on Newly-constructed Housing Structure” ,otherwise known as the “165 Notice”, issued on 6 July 2006, that (i) in relation to the stipulation that atleast 70% of the residential units in newly approved and developed commercial residential houses(including economical houses) must be no larger than 90 sq m, such 70% ratio applies to the newlyapproved and commenced projects of the entire city on an annual basis (from 6 July 2006), as opposedto a particular project; and (ii) in relation to the stipulation of a house with a built-up area of no more than90 sq m, that such area refers to the construction area of a single unit as listed on its housing ownershipcertificate. The “Some Opinions on Meeting the Ratio Requirements on Newly-constructed HousingStructure” also set out other regulations governing, inter alia, real estate advertisements, sale andpurchase contracts and broker management.

APPENDIX E - SUMMARY OF RELEVANT PRC LAWS AND REGULATIONS

Another regulation promulgated on 6 July 2006 by the PRC Ministry of Construction, the NationalDevelopment and Reform Commission and the State Administration for Industry and Commerce, is the“Notice to Further Rationalize and Standardize Transactions in the Real Estate Market”, otherwise knownas the “166 Notice”. According to the 166 Notice, a real estate developer shall commence the sale ofproperties within 10 days of receipt of the pre-sale permit for the project.

Administration of Foreign Investment in Real Estate

The Ministry of Commerce, together with 5 other ministries and commissions, promulgated the “Opinionson Regulation Entry and Administration of Foreign Investment in Real Estate Market”

(the “Opinions”) on 11 July 2006. The Opinions set out new requirements andrestrictions on foreign investment in the real estate market and the purchase of real estate properties inthe PRC by foreign institutions or individuals. The Opinions stipulate, inter alia, that:

1. Overseas institutions and individuals who intend to make investment in the PRC and purchasereal estate that is not for their own use, shall apply to establish Foreign Investment Enterprises inaccordance with the relevant provisions regarding the foreign investment in real estate (the “RealEstate FIE”) and may engage in the relevant business within its scope of business only afterhaving obtained the approval and the registration of the relevant PRC authorities.

2. The registered capital of the Real Estate FIE shall not be less than 50% of its total investmentamount if the total investment amount is equal to or more than US$10 million.

3. The establishment of the Real Estate FIE shall be approved by and registered with the relevantcommerce authority and administration authority of industry and commerce and be issued theCertificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC(“Certificate of Approval”) and a Business License, both of which are valid for one year. Upon fullpayment of the funds for the assignment of the land use rights, the Real Estate FIE shall apply tothe land administration authority for the State-owned Land Use Rights Certificate with all thecertificates of approval mentioned above. With the State-owned Land Use Rights Certificate, theReal Estate FIE shall apply to the commerce authority for the formal Certificate of Approval andthen apply to the administration authority of industry and commerce for the Business License andthen effect and complete taxation registration.

4. Transfer of shares and projects of a Real Estate FIE, and the acquisition of domestic real estateenterprises by foreign investors shall be examined and approved by the Ministry of Commerce andother authorities in accordance with the relevant laws, regulations and policies. The foreigninvestors shall produce, inter alia, (i) letters guaranteeing the performance of the land use rightsassignment contract, the Certificate for Construction Land Planning, Certificate for ConstructionEngineering Planning and Certificate for Building Construction.; (ii) land use rights certificate; (iii)documents evidencing the filing of the changes with construction (real estate) authorities; and (iv)documents issued by the tax authorities evidencing payment of taxes.

5. When acquiring a domestic real estate enterprise through a share transfer and other methods orwhen acquiring the shares of the Chinese party in an equity joint venture enterprise, the foreigninvestor must properly settle the employees, deal with the bank facilities and make a lump sumpayment of the transfer price using its own capital.

6. Foreign investors that have invested in real estate properties without receipt of an approvalcertificate and a business licence shall not carry out activities of real estate development andoperation.

7. A Real Estate FIE (such as TTX Real Estate) whose registered capital has not been paid up in fulland has not obtained the Land Use Rights certificate or whose project development capital has notreached 35% of the total project investment shall not be permitted to process domestic and foreignloans, and the foreign exchange authorities shall not be permitted to process such Real EstateFIE’s domestic and foreign loans nor approve conversion of foreign borrowings of such Real EstateFIE.

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The foreign exchange authorities shall examine and approve in accordance with the requirements of therelevant regulations, the inflow and conversion of the capital to be used for the purchase of properties byReal Estate FIEs and foreign institutions or individuals. Foreign capital that satisfies such requirementswill be allowed to be remitted into the PRC and be converted into RMB. The RMB received from thetransfer of the relevant properties will be allowed to be converted through the purchase of foreigncurrency and be remitted out of the PRC after confirmation of compliance with the relevant laws andregulations and payment of taxes.

On 22 July 2006, the China Banking Regulatory Commission issued the “Notice on FurtherStrengthening the Administration of Real Estate Credit”

. This notice provides, inter alia, that the banks shall strengthen their due diligenceinvestigations on real estate companies/businesses which intend to take up loans from the banks (the“real estate borrowers”) and shall not provide any loans to such real estate borrowers whose projectcapital funds are less than 35% of the total project investment (with the exclusion of projects involvingeconomical houses) or who do not obtain the certificates required by law (such as the Land Use RightsCertificate) for the development of real estate projects.

On 1 September 2006, the SAFE and the Ministry of Construction jointly issued the Notice on Regulatingof Administration of Foreign Exchange in Real Estate Market

(“the Notice 47”) to explain and implement the 11 July 2006 Opinionsmentioned above. The Notice 47 sets out, inter alia, the specific procedures for the purchase of self-usehouses by branches and representative offices established in the PRC by foreign institutions, foreignindividuals who work or study in the PRC for more than one year, and the residents of Hong Kong,Macao and Taiwan and foreigners of Chinese origin, as well as the specific procedures for themanagement of foreign currency exchanges in respect of loans taken up by the Real Estate FIEs.

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APPENDIX F - SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS

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Set out below is a summary of certain material provisions of Malaysian law in effect as of the date hereofthat may apply to Techpath. This summary does not purport to be a complete review of all laws inMalaysia that are applicable to Techpath.

1. Foreign Investment Committee

The Foreign Investment Committee (“FIC”) is part of the Economic Planning Unit of the PrimeMinister’s Department. The FIC was set up to regulate the acquisition of interests, mergers andtake-overs by local and foreign interests.

The FIC issues guidelines periodically and the latest guidelines were issued on 1 August 2004effective on 21 May 2003 (the “FIC Guidelines”). Certain government bodies such as theSecurities Commission (established under section 3 of the Securities Commission Act 1993), BankNegara Malaysia and the land offices take a very strict view of the FIC Guidelines and failure tocomply will usually mean that approvals are withheld or are made conditional upon compliancewith the relevant FIC Guidelines.

The FIC Guidelines require that, approval of the FIC be obtained in respect of the followingtransactions:–

(i) Any proposed acquisition of interest in a local company or business in Malaysia which isRM10 million or more in value, by local or foreign interests;

(ii) Any proposed acquisition of interest of a local company or business in Malaysia by anymeans, which results in the transfer of ownership or control to foreign interests;

(iii) Any proposed acquisition of interest by: –

(a) any foreign interest of 15% or more of the voting right of any local company orbusiness in Malaysia; or

(b) any associated or non-associated group of foreign interests, in aggregate of 30% ormore of the voting rights of any local company or business in Malaysia;

regardless of whether the value is less than RM10 million with the exception of open marketacquisitions on Bursa Malaysia meant for short term holdings;

(iv) Any proposed acquisition of interest as in paragraph (iii) by:-

(a) foreign interest, which will result in an increase of the voting rights to 15% or more, inany local company or business in Malaysia; or

(b) associated or non-associated group of foreign interests, which in aggregate will resultin an increase in the voting rights to 30% or more, in any local company or businessin Malaysia;

regardless of whether the value is less than RM10 million with the exception of open marketacquisitions on Bursa Malaysia meant for short term holdings;

(v) Any proposed acquisition of interest and control of more than 50% of the voting rights in anylocal company or business in Malaysia by local interest, regardless of whether the value isless than RM10 million;

(vi) Any proposed merger or take-over of any local company or business in Malaysia by local orforeign interests;

(vii) Any proposed joint venture involving two (2) or more parties in a local company;

APPENDIX F - SUMMARY OF RELEVANT MALAYSIAN LAWS AND REGULATIONS

(viii) Any control of a local company or business in Malaysia through any form of managementagreement, technical assistance agreement or other arrangements;

(ix) Any transaction by statutory bodies, companies and their subsidiaries owned by the Federalor State Governments; and

(x) Any charging of shares in a local company to any foreign interest where the value of loan orthe market value of the shares is RM10 million or more. Charging of such shares is allowedif all of the loan taken would be utilized for operation of business in Malaysia only.

Under the FIC Guidelines, there are however exemptions for acquisition of interests, mergers andtake-overs by local and foreign interests and these include but is not limited to the acquisition ofinterest in Multimedia Super Corridor (“MSC”) status companies, any acquisition of interest inmanufacturing companies licensed by the Ministry of International Trade and Industry and anyacquisition of interests in companies granted the status of operational headquarters.

2. Construction Industry Development Board (“CIDB”)

The CIDB was established under the Lembaga Pembangunan Industri Pembinaan Malaysia(Malaysian Construction Industry Development Board) Act 1994 of Malaysia. CIDB is a bodyestablished to promote and stimulate the development, improvement and expansion of theconstruction industry in Malaysia. Techpath has registered with the CIDB as it will be carrying outconstruction business activities in Malaysia, whether as main contractors or sub-contractors.

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APPENDIX G - TAXATION

TAXATION

The following is a discussion of certain tax matters arising under the current tax laws in Singapore and isnot intended to be and does not constitute legal or tax advice. While this discussion is considered to be acorrect interpretation of existing laws in force, no assurance can be given that courts or fiscal authoritiesresponsible for the administration of such laws will agree with this interpretation or that changes in suchlaws will not occur. The discussion is limited to a general description of certain tax consequences inSingapore with respect to ownership of our Shares by Singapore investors, and does not purport to be acomprehensive nor exhaustive description of all of the tax considerations that may be relevant to adecision to purchase our Shares. Prospective investors should consult their tax advisors regardingSingapore tax and other tax consequences of owning and disposing our Shares. It is emphasised thatneither our Company, our Directors nor any other persons involved in the Invitation accepts responsibilityfor any tax effects or liabilities resulting from the subscription for, purchase, holding or disposal of ourShares.

SINGAPORE INCOME TAX

General

Singapore tax residents are subject to Singapore income tax on income that is accrued in or derivedfrom Singapore and on foreign income received in Singapore, subject to certain exceptions.

Non-resident corporate taxpayers are subject to income tax on income that is accrued in or derived fromSingapore, and on foreign income received in Singapore, subject to certain exceptions. All individualsresident and non-resident, subject to certain exceptions, are subject to income tax on the incomeaccrued in or derived from Singapore. With effect from year of assessment 2005 (i.e. for financial/calendar year ending in 2004), all foreign-source income received in Singapore by all individuals will beexempt from Singapore tax. The latter exemption will not apply to such income received from apartnership in Singapore.

A company is tax resident in Singapore if the control and management of its business is exercised inSingapore. An individual is tax resident in Singapore in a year of assessment if, in the preceding year, hewas physically present in Singapore or exercised an employment in Singapore (other than as a directorof a company) for 183 days or more, or if he resides in Singapore.

The corporate tax rate in Singapore is 20% with effect from the year of assessment 2005 i.e. the financialyear ending in 2004. In addition, three-quarters of up to the first $10,000 of a company’s chargeableincome, and one-half of up to the next $90,000 will be exempt from corporate tax. The remainingchargeable income (after the tax exemption) will be taxed at 20%. The above tax exemption will not applyto Singapore dividends received by companies.

For a Singapore tax resident individual, the rate of tax will vary according to the individual’scircumstances but is subject to a current maximum rate of 20% with effect from the year of assessment2007 i.e. calendar year 2006.

Dividend Distributions

Singapore moved to the one-tier corporate tax system with effect from 1 January 2003. Under thissystem, the tax collected from corporate profits is final and all Singapore dividends paid by Singapore taxresident companies to their shareholders are exempt from tax (referred hereinafter as “one-tier taxexempt dividends”)

We are in the one-tier corporate tax system. Under this system, when we distribute dividends, we will payone-tier tax exempt dividends to our shareholders. One-tier tax exempt dividends on our Shares are taxexempt in the hands of our shareholders.

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APPENDIX G - TAXATION

Gains on Disposal of our Shares

Singapore does not impose tax on capital gains. However, there are no specific laws or regulations whichdeal with the characterisation of capital gains, and hence, gains may be construed to be of an incomenature and subject to tax especially if they arise from activities which the Inland Revenue Authority ofSingapore (“IRAS”) regards as the carrying on of a trade in Singapore.

Any profits from the disposal of our Shares are not taxable in Singapore unless the seller is regarded ashaving derived gains of an income nature, in which case, the disposal profit would be taxable.

Stamp Duty

There is no stamp duty payable on the subscription of our Shares.

Stamp duty is payable on the instrument of transfer of our Shares at the rate of $2.00 for every $1,000market value of our Shares registered in Singapore.

The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty ispayable if no instrument of transfer is executed or the instrument of transfer is executed outsideSingapore. However, stamp duty may be payable if the instrument of transfer which is executed outsideSingapore is received in Singapore.

The above stamp duty is not applicable to electronic transfers of our shares through the CDP.

Estate Duty

Singapore estate duty is imposed on the value of immovable property situated in Singapore owned byindividuals who are not domiciled in Singapore, subject to specific exemption limits. Movable assets ofnon-domiciles will be exempt from estate duty with respect to deaths occurring on or after 1 January2002. Singapore estate duty is imposed on the value of most immovable property situated in Singaporeand on most movable property, wherever it may be, owned by individuals who are domiciled inSingapore, subject to specific exemption limits. Our Shares are considered to be movable propertysituated in Singapore as we are a company incorporated in Singapore.

Accordingly, our Shares held by an individual domiciled in Singapore are subject to Singapore estateduty upon such individual’s death. Singapore estate duty is payable to the extent that the value of ourShares aggregated with any other assets subject to Singapore estate duty exceeds $600,000. Unlessother exemptions apply to the other assets, for example, the separate exemption limit for residentialproperties, any excess beyond $600,000 will be taxed at 5% of the first $12,000,000 of the individual’sSingapore chargeable assets and thereafter at 10%. For death from 1 January 2006, the government willallow the estate duty paid on the earlier death to be deducted from the estate duty payable on the sameassets assessed in the beneficiaries’ subsequent deaths. The relief will start at 100% if the deaths occurwithin 6 months of each other, graduating to the full estate duty payable if the deaths are more than 2years apart. Individuals should consult their own tax advisors regarding the Singapore estate dutyconsequences of their ownership of our Shares.

Goods and Services Tax (“GST”)

The sale of our Shares by an investor belonging in Singapore to another person belonging in Singaporeis an exempt supply not subject to GST. Any GST directly or indirectly incurred by the investor in respectof this exempt supply is a cost to the investor.

Where our Shares are sold by a GST-registered investor to a person belonging outside Singapore, thesale is a taxable sale subject to GST at zero-rate. Any GST incurred by the investor in the making of thissale, if the same is a supply in the course of furtherance of a business, is claimable as a refund from theComptroller of GST.

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APPENDIX G - TAXATION

Services such as brokerage, handling and clearing services rendered by a GST-registered person to aninvestor belonging in Singapore in connection with the investor’s purchase, sale or holding of our Shareswill be subject to GST. Similar services rendered to an investor belonging outside Singapore are subjectto GST at zero-rate.

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You are invited to apply and subscribe for the New Shares at the Issue Price for each New Share subjectto the following terms and conditions:-

1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES AND HIGHERINTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF NEWSHARES WILL BE REJECTED.

2. Your application for Offer Shares may be made by way of printed Offer Shares Application Formsor by way of ATM Application or IB Applications.

Your application for Internet Placement Shares may only be made by way of an Internet PlacementApplication through the IPO Website at “ ” if you have a valid membershipaccount with the IPO Website Operator.

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

YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE NEW SHARES.

3. You (not being an approved nominee company in this paragraph) are allowed to submitONLY ONE application in your own name for:-

(a) the Offer Shares by any one of the following:-

(i) Offer Shares Application Form; or

(ii) ATM Application; or

(iii) IB Application,

OR

(b) the Placement Shares (other than Reserved Shares) by any one of the following:-

(i) Placement Shares Application Form; or

(ii) Internet Placement Application.

If you have made an application for Reserved Shares, you may submit ONE application forOffer Shares OR ONE application for Placement Shares (other than Reserved Shares)provided that you adhere to the terms and conditions of this Prospectus. Such applicationsshall not be treated as multiple applications.

If you submit or procure submissions of multiple share applications for Offer Shares,Placement Shares (other than Reserved Shares) or both Offer Shares and PlacementShares (other than Reserved Shares), all your applications shall be deemed to be multipleapplications and shall be rejected.

JOINT OR MULTIPLE APPLICATIONS SHALL BE REJECTED. If you submit or procuresubmissions of multiple share applications for Offer Shares, Placement Shares or bothOffer Shares and Placement Shares, you may be deemed to have committed an offenceunder the Penal Code, Chapter 224 of Singapore and the Securities and Futures Act,Chapter 289 of Singapore, and your applications may be referred to the relevant authoritiesfor investigation. Multiple applications or those appearing to be or suspected of beingmultiple applications will be liable to be rejected at our discretion.

www.ePublicOffer.com

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APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

A Qualifying Internet Applicant whose application for Internet Placement Shares is rejectedbecause of multiple share applications will be levied an administrative fee amounting to20% of the Qualifying Internet Applicant’s application monies (subject to Singapore goodsand services tax).

4. Our Company will not accept applications from any person under the age of 21 years,undischarged bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, jointSecurities Account holders of CDP and from applicants whose addresses (furnished in theirApplication Forms or, in the case of Electronic Applications, contained in the records of therelevant Participating Banks or the IPO Website Operator, as the case may be) bear post officebox numbers.

In addition, if you wish to subscribe for the Internet Placement Shares through the IPO Website,you, (a) must not be corporations, sole proprietorships, partnerships or any other business entities;(b) must be over the age of 21 years; (c) must not be undischarged bankrupts; (d) must apply forthe Internet Placement Shares in Singapore; (e) must have a mailing address in Singapore; and (f)must be customers who maintain valid membership accounts with the IPO Website Operator.

5. Our Company will not recognise the existence of a trust. Any application by a trustee or trusteesmust be made in his/their own name(s) and without qualification or, where the application is madeby way of an Application Form, in the name(s) of an approved nominee company or approvednominee companies after complying with paragraph 6 below.

6. OUR COMPANY WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSEMADE BY APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies aredefined as banks, merchant banks, finance companies, insurance companies, licensed securitiesdealers in Singapore and nominee companies controlled by them. Applications made by personsacting as nominees other than approved nominee companies shall be rejected.

7. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIESACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you donot have an existing Securities Account with CDP in your own name at the time of yourapplication, your application will be rejected (if you apply by way of an Application form), or you willnot be able to complete your Electronic Application (if you apply by way of an ElectronicApplication). If you have an existing Securities Account but fail to provide your Securities Accountnumber or provide an incorrect Securities Account number in Section B of the Application Form orin your Electronic Application, as the case may be, your application is liable to be rejected. Subjectto 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 ApplicationForm or in the records of the relevant Participating Bank or the IPO Website Operator at the timeof your Electronic Application, as the case may be, differ from those particulars in your SecuritiesAccount as maintained with CDP. If you possess more than one individual direct SecuritiesAccount with CDP, your application shall be rejected.

8. If your address as stated in the Application Form or, in the case of an Electronic Application,contained in the records of the relevant Participating Bank or the IPO Website Operator, as thecase may be, is different from the address registered with CDP, you must inform CDP of yourupdated address promptly, failing which the notification letter on successful allotment will be sentto your address last registered with CDP.

9. Our Company reserves the right to reject any application which does not conform strictly tothe instructions set out in the Application Form and in this Prospectus or with the termsand conditions of this Prospectus, which is illegible, incomplete, incorrectly completed orwhich is accompanied by an improperly drawn up or improper form of remittance. OurCompany further reserves the right to treat as valid any applications not completed or

H-2

submitted or effected in all respects in accordance with the instructions set out in theApplication Forms or the instructions for Electronic Applications or the terms andconditions of this Prospectus, and also to present for payment or other processes allremittances at any time after receipt and to have full access to all information relating to, orderiving from, such remittances or the processing thereof.

10. Our Company reserves the right to reject or to accept, in whole or in part, or to scale down or toballot any application, without assigning any reason therefor, and our Company will not entertainany enquiry and/or correspondence on our decision. This right applies to applications made by wayof Application Forms and by way of Electronic Applications. In deciding the basis of allotment, ourCompany will give due consideration to the desirability of allotting the New Shares to a reasonablenumber 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 isexpected that CDP will send to you, at your own risk, within 15 Market Days after the close of theApplication List, a statement of account stating that your Securities Account has been credited withthe number of New Shares allotted to you. This will be the only acknowledgement of applicationmonies received and is not an acknowledgement by us. You irrevocably authorise CDP to completeand sign on your behalf as transferee or renouncee any instrument of transfer and/or otherdocuments required for the issue of the New Shares allotted to you. This authorisation applies toapplications made by way of Application Forms and by way of Electronic Applications.

12. In the event of an over-subscription for Offer Shares as at the close of the Application List and/orPlacement Shares (including the Internet Placement Shares and the Reserved Shares) are fullysubscribed or over-subscribed as at the close of the Application List, the successful applicationsfor Offer Shares will be determined by ballot or otherwise as determined by our Directors andapproved by the SGX-ST.

13. You irrevocably authorise CDP to disclose the outcome of your application, including the number ofNew Shares allotted to you pursuant to your application, to our Company, the Manager, theUnderwriter, the Placement Agent and any other parties so authorised as the foregoing persons.

14. Any reference to the “you” in this section shall include an individual, a corporation, an approvednominee and trustee applying for the Offer Shares by way of an Offer Shares Application Form orby way of an ATM Application or IB Application; an individual, a corporation, an approved nomineeand trustee applying for the Placement Shares (other than Reserved Shares) through thePlacement Agent by way of a Placement Shares Application Form or by way of an InternetPlacement Application; and an individual, a corporation, an approved nominee and trusteeapplying for the Reserved Shares by way of a Reserved Shares Application Form.

15. By completing and delivering an Application Form or by making and completing an ElectronicApplication by (in the case of an ATM Application) pressing the “Enter” or “OK” or “Confirm” or“Yes” key on the ATM (as the case may be) or by (in the case of an Internet Electronic Application)clicking “Submit” or “Continue” or “Yes” or “Confirm” on the IB website screen or the IPO Website(as the case may be) in accordance with the provisions of this Prospectus, you:-

(a) irrevocably offer to subscribe for the number of New Shares specified in your application (orsuch smaller number for which the application is accepted) at the Issue Price and agree thatyou will accept such New Shares as may be allotted to you, in each case, on the terms ofthis Prospectus and on the terms of the conditions set out in this Prospectus and theMemorandum and Articles of Association of our Company;

(b) agree that in the event of any inconsistency between the terms and conditions forapplication set out in this Prospectus and those set out in the IPO Website, or the IBwebsites or ATMs of the Participating Banks, the terms and conditions set out in thisProspectus shall prevail;

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APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

(c) agree that the aggregate Issue Price for the New Shares applied for is due and payable toour Company forthwith;

(d) warrant the truth and accuracy of the information contained, and representations anddeclarations made, in your application, and acknowledge and agree that such information,representations and declarations will be relied on by our Company in determining whether toaccept your application and/or whether to allot any New Shares to you; and

(e) agree and warrant that if the laws of any jurisdictions outside Singapore are applicable toyour application, you have complied with all such laws and none of our Company, theManager, the Underwriter and/or the Placement Agent will infringe any such laws as a resultof the acceptance of your application.

16. Our acceptance of applications will be conditional upon, inter alia, our Company being satisfiedthat:-

(a) permission has been granted by the SGX-ST to deal in and for quotation for all our existingShares and the New Shares on a “when issued” basis on the SGX-ST;

(b) the Management and Underwriting Agreement and the Placement Agreement referred to inthe section entitled “Management, Underwriting and Placement Arrangements” of thisProspectus have become unconditional and have not been terminated or cancelled prior tosuch date as our Company may determine; and

(c) the Authority has not served a stop order which directs that no further shares to which thisProspectus relates be allotted.

17. Our Company will not hold any applications in reserve.

18. Our Company will not allot and/or allocate Shares on the basis of this Prospectus later than sixmonths after the date of registration of this Prospectus by the Authority.

19. Additional terms and conditions for applications by way of Application Forms are set out on pagesH-4 to H-7 of this Prospectus.

20. Additional terms and conditions for applications by way of Electronic Applications are set out onpages H-8 to H-13 of this Prospectus.

ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATIONFORMS

Your application by way of Application Forms shall be made on the terms and subject to the conditions ofthis Prospectus including but not limited to the terms and conditions appearing below and those set outon pages H-1 to H-4 of this Prospectus, as well as the Memorandum and Articles of Association of ourCompany.

1. Your application must be made using the WHITE Application Forms for Offer Shares and theBLUE Application Forms for Placement Shares (other than Internet Placement Shares andReserved Shares) or PINK Reserved Shares Application Forms accompanying and forming part ofthis Prospectus. Our Company draws your attention to the detailed instructions contained in therespective Application Forms and this Prospectus for the completion of the Application Formswhich must be carefully followed. Our Company reserves the right to reject applications whichdo not conform strictly to the instructions set out in the Application Forms and thisProspectus or to the terms and conditions of this Prospectus, or which are illegible,incomplete, incorrectly completed or which are accompanied by improperly drawnremittances or improper form of remittances.

H-4

2. Your Application Forms must be completed in English. Please type or write clearly in ink usingBLOCK 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 spacethat 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 youridentity cards (if applicants have such identification documents) or in your passports and, in thecase of corporations, in your full names as registered with a competent authority. If you are a non-individual completing the Application Form under the hand of an official, you must state the nameand 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 andArticles of Association or equivalent constitutive documents. If you are a corporate applicant andyour application is successful, a copy of your Memorandum and Articles of Association orequivalent constitutive documents must be lodged with the Share Registrar and Share Transferoffice. Our Company reserves the right to require you to produce documentary proof ofidentification 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 Formwith 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, onpage 1 of the Application Form, your application is liable to be rejected.

6. You (whether you are an individual and corporate applicant, whether incorporated orunincorporated and wherever incorporated or constituted), will be required to declare whether youare a citizen or permanent resident of Singapore or a corporation in which citizens or permanentresidents of Singapore or any body corporate constituted under any statute of Singapore have aninterest in the aggregate of more than 50 per cent of the issued share capital of or interests insuch corporation. If you are an approved nominee company, you are required to declare whetherthe beneficial owner of the New Shares is a citizen or permanent resident of Singapore or acorporation, whether incorporated or unincorporated and wherever incorporated or constituted, inwhich citizens or permanent residents of Singapore or any body corporate whether incorporated orunincorporated and wherever incorporated or constituted under any statute of Singapore have aninterest in the aggregate of more than 50 per cent of the issued share capital of or interests insuch corporation.

7. Your application must be accompanied by a remittance in Singapore currency for the full amountpayable, in respect of the number of New Shares applied for, in the form of a BANKER’S DRAFTor CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “KSH SHAREISSUE ACCOUNT” crossed “A/C PAYEE ONLY’”, with your name and address written clearly onthe reverse side. Our Company will not accept applications accompanied by ANY OTHERFORM OF PAYMENT. Our Company will reject remittances bearing “NOT TRANSFERABLE” or“NON TRANSFERABLE” crossings. No acknowledgement or receipt will be issued by us orthe Manager for applications and application monies received.

8. Unsuccessful applications are expected to be returned (without interest or any share of revenue orother benefit arising therefrom) to you by ordinary post within 24 hours of the balloting after theclose of the Application List at your own risk. Where your application is accepted in part only, thebalance of the application monies will be refunded (without interest or any share of revenue orother benefit arising therefrom) to you by ordinary post at your own risk in the shortest possibletime.

H-5

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

9. Capitalised terms used in the Application Forms and defined in this Prospectus shall bear themeanings assigned to them in this Prospectus.

10. By completing and delivering the Application Form in accordance with the provisions of thisProspectus, you agree that:-

(a) in consideration of us having distributed the Application Form to you and agreeing to closethe Application List at 12.00 noon on 6 February 2007 or such other time or date as ourCompany may, in consultation with the Manager, in our absolute discretion decide,subject to any limitations under all applicable laws and by completing and delivering theApplication Form, you agree that:-

(i) your application is irrevocable; and

(ii) your remittance will be honoured on first presentation and that any monies returnablemay be held pending clearance of your payment without interest or any share ofrevenue or other benefit arising therefrom;

(b) all applications, acceptances and contracts resulting therefrom under the Invitation shall begoverned by and construed in accordance with the laws of Singapore and that youirrevocably 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 anytime after acceptance of your application; and

(e) in making your application, reliance is placed solely on the information contained in thisProspectus and none of our Company, the Manager, the Underwriter for the Public Offer, thePlacement Agent or any other person involved in the Invitation shall have any liability for anyinformation not so contained.

Applications for Offer Shares

1. Your applications for Offer Shares MUST be made using the WHITE Offer Shares ApplicationForms and WHITE official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosedin each envelope.

2. You must:-

(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, togetherwith your remittance in the WHITE envelope “A” provided;

(b) in the appropriate spaces on WHITE envelope “A”:-

(i) write your name and address;

(ii) state the number of Offer Shares applied for; and

(iii) affix adequate Singapore postage;

(c) seal WHITE envelope “A”; and

H-6

(d) write, in the appropriate box provided on the larger WHITE envelope “B”, the number ofOffer Shares you have applied for; and insert WHITE envelope “A” into WHITE envelope “B”,seal WHITE envelope “B” and thereafter DESPATCH BY ORDINARY POST OR DELIVERBY HAND at your own risk to Lim Associates (Pte) Ltd, 3 Church Street, #08-01Samsung Hub, Singapore 049483, so as to arrive by 12.00 noon on 6 February 2007 orsuch other time as our Company may, in consultation with the Manager, in itsabsolute discretion decide, subject to any limitations under all applicable laws. LocalUrgent Mail or Registered Post must NOT be used. No acknowledgement of receipt willbe issued for any application or remittance received.

3. Applications that are illegible, incomplete or incorrectly completed or accompanied by improperlydrawn remittances are liable to be rejected.

Applications for Placement Shares (other than Internet Placement Shares and Reserved Shares)

1. Your application for Placement Shares (other than Internet Placement Shares and ReservedShares) MUST be made using the BLUE Placement Shares Application Forms. ONLY ONEAPPLICATION should be enclosed in each envelope.

2. The completed and signed BLUE Placement Shares Application Form and your remittance, inaccordance with the terms and conditions of this Prospectus, for the full amount payable in respectof the number of Placement Shares applied for, with your name and address written clearly on thereverse side, must be enclosed and sealed in an envelope to be provided by you. You must affixadequate Singapore postage on the envelope (if despatching by ordinary post) and thereafter thesealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND atyour own risk to Lim Associates (Pte) Ltd, 3 Church Street, #08-01 Samsung Hub, Singapore049483, to arrive by 12.00 noon on 6 February 2007 or such other time as our Company may,in consultation with the Manager, in its absolute discretion decide, subject to anylimitations under all applicable laws. Local Urgent Mail or Registered Post must NOT beused. No acknowledgement of receipt will be issued for any application or remittance received.

3. Alternatively, you may remit your application monies by electronic transfer to the account ofStandard Chartered Bank account number 0102127824, in favour of “KSH SHARE ISSUEACCOUNT” for the number of Placement Shares applied for by 12.00 noon on 6 February 2007or such other time as our Company may, in consultation with the Manager, in its absolutediscretion decide, subject to any limitations under all applicable laws. If you remit yourapplication monies via electronic transfer, you should fax and send a copy of the remittance adviceto Westcomb Securities Pte Ltd at fax number 6220 6632 to arrive by 12.00 noon on 6 February2007 or such other time as our Company may, in consultation with the Manager, in itsabsolute discretion decide, subject to any limitations under all applicable laws.

Applications For Reserved Shares

1. Your application for Reserved Shares MUST be made using the PINK Reserved SharesApplication Forms. ONLY ONE APPLICATION should be enclosed in each envelope.

2. The completed PINK Reserved Shares Application Form and the correct remittance (inaccordance with the terms and conditions of this Prospectus) with your name and address writtenclearly on the reverse side, must be enclosed and sealed in an envelope to be provided by you.The sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HANDat your own risk to Lim Associates (Pte) Ltd, 3 Church Street, #08-01 Samsung Hub,Singapore 049483, to arrive by 12.00 noon on 6 February 2007 or such other time as ourCompany may, in consultation with the Manager, in its absolute discretion decide, subjectto any limitations under all applicable laws. Local Urgent Mail or Registered Post must NOTbe 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 improperlydrawn remittances or improper form of remittances which are not honoured upon their firstpresentation are liable to be rejected

H-7

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS

The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case of ATMApplications), the IB website screens (in the case of IB Applications) of the relevant Participating Banksand the IPO Website (in the case of Internet Placement Shares applications).

Currently, DBS Bank and the UOB Group are the only Participating Banks through which an IBApplication can be made on the respective IB websites of DBS Bank and the UOB Group.

For illustration purposes, the procedures for Electronic Applications through ATMs and the IB website ofDBS Bank as well as through the IPO Website are set out respectively in the “Steps for ATM Applicationsthrough ATMs of DBS Bank”, the “Steps for IB Applications through the IB website of DBS Bank” and the“Steps for Internet Placement Applications” (the “Steps”) appearing on pages H-13 to H-16 of thisProspectus.

The Steps set out the actions that you must take at an ATM, the IB website of DBS Bank or the IPOWebsite to complete an Electronic Application. Please read carefully the terms of this Prospectus, theSteps and the terms and conditions for Electronic Applications set out below before making an ElectronicApplication.

Any reference to “you” in the additional terms and conditions for Electronic Applications and the Stepsshall refer to you making an application for:-

(a) Offer Shares through an ATM or the IB website of a relevant Participating Bank; or

(b) Internet Placement Shares through the IPO Website.

To make an ATM Application:-

(a) You must have an existing bank account with and be an ATM cardholder of one of the ParticipatingBanks before you can make an Electronic Application at the ATMs. An ATM card issued by oneParticipating Bank cannot be used to apply for Offer Shares at an ATM belonging to otherParticipating Banks. Upon the completion of your ATM Application transaction, you will receive anATM transaction slip (“Transaction Record”), confirming the details of your ATM Application. TheTransaction Record is for your retention and should not be submitted with any Application Form.

(b) You must ensure that you enter your own Securities Account number when using the ATM cardissued to you in your own name. If you operate a joint bank account with any of the ParticipatingBanks, you must ensure that you enter your own Securities Account number when using the ATMcard issued to you in your own name. Using your own Securities Account number with an ATMcard which is not issued to you in your own name will render your Electronic Application liable tobe rejected.

To make an IB Application, you must have an existing bank account with and an IB User Identification(“User ID”) and a Personal Identification Number/Password given by the relevant Participating Bank.Upon completion of your IB Application, there will be an on-screen confirmation (“Confirmation Screen”)of the application which you can print out for your record. This printed record of the Confirmation Screenis for your retention and should not be submitted with any Application Form.

To make an Internet Placement Application, you must be registered as a user of the IPO Website andhave a User Name (“User Name”) and a Password given by the IPO Website Operator. Upon completionof your Internet Placement Application, there will be an on-screen confirmation (“Provisional AllocationScreen”) of the application which you can print out for your record. This printed record of theConfirmation Screen is for your retention and is to accompany your payment for the Internet PlacementShares, and should not be submitted with any Application Form. An electronic mail (email) containing theinformation in the Provisional Allocation Screen will also be sent to your email account registered withthe IPO Website.

H-8

Further, you must ensure, when making an IB Application or Internet Placement Application that:-

(a) you are currently in Singapore at the time of making of such application;

(b) your mailing address for IB with the relevant Participating Bank and the IPO Website is inSingapore;

(c) you are not a US person(1) (as such term is defined in Regulation S under the United StatesSecurities Act of 1933, as amended from time to time),

and you will be asked to declare the above accordingly. Otherwise, your application is liable to berejected.

Note:-(1) For details, please refer to definition of “US person” on the IB websites or the IPO Website.

Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectusincluding but not limited to the terms and conditions appearing below and those set out on pages H-8 toH-13 of this Prospectus as well as the Memorandum and Articles of Association of our Company.

1. In connection with your Electronic Application for New Shares, you may be required to confirmstatements to the following effect in the course of activating the Electronic Application:-

(a) that you have received a copy of this Prospectus and have read, understood andagreed to all the terms and conditions of application for New Shares and thisProspectus prior to effecting the Electronic Application and agreed to be bound bythe same;

(b) that you consent to the disclosure of your name, NRIC/passport number, address,nationality, permanent resident status, CDP Securities Account number, and shareapplication amount (the “Relevant Particulars”) from your account with thatParticipating Bank to the Share Registrar, CDP, SCCS, our Company, the Manager, theUnderwriter for the Public Offer and the Placement Agent (the “Relevant Parties”);and

(c) that this is your only application and it is made in your own name and at your ownrisk.

Your application will not be successfully completed and cannot be recorded as a completedtransaction 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. Inrespect 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 withthe relevant laws of Singapore including Section 47(2) of the Banking Act, Chapter 19 ofSingapore to the disclosure by that Participating Bank or the IPO Website Operator of yourRelevant Particulars to the Relevant Parties.

2. BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT APPLYINGFOR NEW SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONICAPPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS BENEFICIALOWNER.

YOU SHOULD MAKE ONLY ONE ELECTRONIC APPLICATION FOR NEW SHARES ANDSHOULD NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES OR PLACEMENTSHARES (EXCLUDING INTERNET PLACEMENT SHARES), WHETHER AT THE ATM OR THEIB WEBSITES OF ANY PARTICIPATING BANK OR ON THE APPLICATION FORMS OR

H-9

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

THROUGH THE IPO WEBSITE. IF YOU HAVE MADE AN APPLICATION FOR NEW SHARESON AN APPLICATION FORM, YOU SHALL NOT MAKE AN ELECTRONIC APPLICATION FORNEW SHARES AND VICE VERSA.

3. For an ATM Application or IB Application, you must have sufficient funds in your bank account withyour Participating Bank at the time you make your ATM Application or IB Application, failing whichyour ATM Application or IB Application will not be completed. Any ATM Application or IBApplication which does not conform strictly to the instructions set out on the screens ofthe ATM or IB website through which your ATM Application or IB Application is being madeshall be rejected.

An applicant who makes an application for New Shares through the IPO Website will be advisedthrough the IPO Website on the amount payable and the method(s) of payment.

4. You irrevocably agree and undertake to subscribe for and to accept the number of New Sharesapplied for as stated on the Transaction Record or Confirmation Screen. You also irrevocably agreeand undertake to subscribe for and to accept any lesser number of New Shares that may beallotted to you in respect of your Electronic Application. In the event that our Company decides toallot any lesser number of such New Shares or not to allot any New Shares to you, you agree toaccept such decision as final.

If your Electronic Application is successful, your confirmation (by your action of pressing the“Enter” or “OK” or “Confirm” or “Yes” key on the ATM, clicking “Confirm” or “OK” on the IB websitescreen or “Confirm” on the IPO Website screen) of the number of New Shares applied for shallsignify and shall be treated as your acceptance of the number of New Shares that may be allottedto you and your agreement to be bound by the Memorandum and Articles of Association of ourCompany.

5. Our Company will not keep any applications in reserve. Where your Electronic Application isunsuccessful, the full amount of the application monies will be refunded (without interest or anyshare of revenue or other benefit arising therefrom) to you by being automatically credited to youraccount with your Participating Bank within twenty-four hours after the close of the Application List.Trading on a “WHEN ISSUED” basis, if applicable, is expected to commence after suchrefund has been made.

Where your Electronic Application is rejected or accepted in part only, the full amount or thebalance of the application monies, as the case may be, will be refunded (without interest or anyshare of revenue or other benefit arising therefrom) to you by being automatically credited to youraccount with your Participating Bank or if you have applied for the Internet Placement Sharesthrough the IPO Website, by ordinary post or such other means as the IPO Website Operator mayagree with you, at your own risk, within 14 Market Days after the close of the Application Listprovided that the remittance in respect of such application which has been presented for paymentor other processes has been honoured and the application monies received in the designatedshare issue account.

Responsibility for timely refund of application monies arising from unsuccessful or partiallysuccessful Electronic Applications lies solely with the respective Participating Banks and with theIPO Website Operator as the case may be. Therefore, you are strongly advised to consult yourParticipating Bank or the IPO Website Operator as to the status of your Electronic Applicationand/or the refund of any monies to you from unsuccessful or partially successful ElectronicApplication, to determine the exact number of New Shares allotted to you before trading the NewShares on the SGX-ST. Neither the SGX-ST, CDP, the SCCS, the Participating Banks, the IPOWebsite Operator, our Company, the Manager, the Underwriter or the Placement Agent assumeany responsibility for any loss that may be incurred as a result of you having to cover any net sellpositions or from buy-in procedures activated by the SGX-ST.

H-10

6. If your ATM Application or IB Application is unsuccessful, no notification will be sent by theParticipating Bank.

You may check the results of your ATM Application as follows:-

Bank Telephone Available at Operating Hours Service expected from

DBS 1800 339 6666 Internet Banking 24 hours Evening of the ballotingBank (for POSB account day

holders)www.dbs.com(1)

1800 111 1111(for DBS accountholders)

OCBC 1800 363 3333 ATM/Internet Banking/ 24 hours Evening of the ballotingPhonebanking(2) day

UOB 1800 222 2121 ATM (Other Transactions – ATM/Phone Banking - Evening of the ballotingGroup “IPO Enquiry”) 24 hours day

Internet Banking - Evening of the ballotingwww.uobgroup.com(1)(3) 24 hours day

Notes:-

(1) If you have made your Electronic Application through the IB websites of DBS Bank or UOB Group, you may checkthe results through the same channels listed in the table above in relation to ATM Applications made at the ATMs ofDBS Bank or UOB Group.

(2) If you have made your Electronic Application through the ATMs of OCBC, you may check the results of yourapplication through the same channels listed in the table above.

(3) You may also check the results of your application through UOB Personal Internet Banking, UOB Group ATMs orUOB PhoneBanking Services.

If you make your Electronic Application through the IPO Website, you can check the result of yourapplication through the IPO Website. You will be notified of the results of your Internet PlacementApplication via an email sent to the email address registered with the IPO Website whether or notyour application is successful.

7. Electronic Applications shall close at 12.00 noon on 6 February 2007 or such other time as ourCompany may, in consultation with the Manager, in its absolute discretion decide, subject to anylimitations under all applicable laws.

8. You are deemed to have requested and authorised us to:-

(a) register the Offer Shares or Placement Shares, as the case may be, allotted to you in thename of CDP for deposit into your Securities Account;

(b) send the relevant Share certificate(s) to CDP;

(c) (for ATM Applications or IB Applications) return or refund (without interest or any share ofrevenue or other benefit arising therefrom) the application monies, should your ElectronicApplication be rejected, by automatically crediting your bank account with your ParticipatingBank with the relevant amount within twenty-four hours after the close of the ApplicationList;

(d) (for ATM Applications or IB Applications) return or refund (without interest or any share ofrevenue or other benefit arising therefrom) the balance of the application monies, shouldyour Electronic Application be accepted in part only, by automatically crediting your bank

H-11

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

account with your Participating Bank with the relevant amount within the shortest possibletime after the close of the Application List; and

(e) (for Internet Placement Applications) return or refund (without interest or any share ofrevenue or other benefit arising therefrom) of the full application monies, should yourInternet Placement Application be rejected, is expected to be effected to you by ordinarypost at your own risk within 14 days after the close of the Application List.).

9. You irrevocably agree and acknowledge that your Electronic Application is subject to risks ofelectrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God andother events beyond the control of the Participating Banks and/or the IPO Website Operator and if,in any such event, our Company, the Manager, the relevant Participating Bank and/or the IPOWebsite Operator do not receive your Electronic Application, or data relating to your ElectronicApplication is lost, corrupted or not otherwise accessible, whether wholly or partially for whateverreason, you shall be deemed not to have made an Electronic Application and you shall have noclaim whatsoever against our Company, the Manager, the relevant Participating Bank and/or theIPO Website Operator for New Shares applied for or for any compensation, loss or damage.

10. Our Company does not recognise the existence of a trust. Any Electronic Application by a trusteemust be made in your own name and without qualification. Our Company will reject any applicationby any person acting as nominee.

11. All your particulars in the records of your Participating Bank or the IPO Website Operator at thetime you make your Electronic Application shall be deemed to be true and correct and yourParticipating Bank, the IPO Website Operator and the Relevant Parties shall be entitled to rely onthe accuracy thereof. If there has been any change in your particulars after making your ElectronicApplication, you shall promptly notify your Participating Bank or the IPO Website Operator, as thecase may be.

12. You should ensure that your personal particulars as recorded by both CDP, the relevantParticipating Bank or the IPO Website Operator are correct and identical, otherwise, yourElectronic Application is liable to be rejected. You should promptly inform CDP of any changein address, failing which the notification letter on successful allotment will be sent to your addresslast registered with CDP.

13. By making and completing an Electronic Application, you are deemed to have agreed that:-

(a) in consideration of our Company making available the Electronic Application facility, throughthe Participating Banks or the IPO Website Operator acting as agents of our Company, atthe ATMs, the IB websites and the IPO Website:-

(i) your Electronic Application is irrevocable; and

(ii) your Electronic Application, the acceptance of our Company and the contract resultingtherefrom under the Invitation shall be governed by and construed in accordance withthe laws of Singapore and you irrevocably submit to the non-exclusive jurisdiction ofthe Singapore courts;

(b) none of our Company, the Manager, the Participating Banks or the IPO Website Operatorshall be liable for any delays, failures or inaccuracies in the recording, storage or in thetransmission or delivery of data relating to your Electronic Application to us or CDP due tobreakdowns or failure of transmission, delivery or communication facilities or any risksreferred to in paragraph 9 above or to any cause beyond their respective controls;

H-12

(c) in respect of Offer Shares for which your Electronic Application has been successfullycompleted and not rejected, acceptance of your Electronic Application shall be constitutedby written notification by or on behalf of our Company and not otherwise, notwithstandingany payment received by or on behalf of our Company;

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at anytime after acceptance of your application; and

(e) reliance is placed solely on information contained in this Prospectus and that none of ourCompany, the Manager, the Placement Agent and the Underwriter for the Public Offer norany other person involved in the Invitation shall have any liability for any information not socontained.

Steps for ATM Applications through ATMs of DBS Bank

Instructions for ATM Applications will appear on the ATM screens of the Participating Banks. Forillustration purposes, the steps for making an ATM Application through an ATM of DBS Bank are shownbelow. Certain words appearing on the screen are in abbreviated form (“A/c”, “amt”, “appln”, “&”, “I/C”,“SGX”, “No.” and “Max” refer to “Account”, “amount”, “application”, “and”, “NRIC”, “SGX-ST”, “Number”and “Maximum”, respectively. Instructions for ATM Applications on the ATM screens of ParticipatingBanks (other than DBS Bank) may differ slightly from those represented below.

Step 1 : Insert your personal DBS Bank ATM Card.

2 : Enter your Personal Identification Number.

3 : Select “CASHCARD & MORE SERVICES”.

4 : Select “ESA – IPO SHARE/INVESTMENTS”.

5 : Select “ELECTRONIC SECURITY APPLN (IPOS/BONDS/ST-NOTES)” to “KSH”.

6 : Read and understand the following statements which will appear on the screen:-

THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN, ORACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR PROFILESTATEMENT (AND IF APPLICABLE, A COPY OF THE REPLACEMENT ORSUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT) WHICH CANBE OBTAINED FROM ANY DBS/POSB BRANCH IN SINGAPORE AND, WHEREAPPLICABLE, THE VARIOUS PARTICIPATING BANKS DURING BANKING HOURS,SUBJECT TO AVAILABILITY.

ANYONE WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES)SHOULD READ THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (ASSUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING HISAPPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET OUT IN THEPROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS SUPPLEMENTED ORREPLACED, IF APPLICABLE). A COPY OF THE PROSPECTUS/DOCUMENT ORPROFILE STATEMENT, AND IF APPLICABLE, A COPY OF THE REPLACEMENT ORSUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEENLODGED WITH AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPOREWHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.

Press the “Enter” key to confirm that you have read and understood.

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APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

7 : Press the “ENTER” key to acknowledge:-

You have read, understood and agreed to all terms of the application andProspectus/Document or Profile Statement, and if applicable, the Replacement orSupplementary Prospectus/Document or Profile Statement.

You consent to disclose your name, NRIC/Passport No., address, nationality, CDPSecurities A/c No., CPF Investment A/c No. and securities application amount fromyour Bank Account(s) to share registrars, SGX, SCCS, CDP, CPF and theissuer/vendor(s).

For FIXED and MAX price security application, this is your only application and it ismade in your own name and at your own risk.

The maximum price for each Share is payable in full on application and subject torefund if the final price is lower.

For TENDER securities applications, this is your only application at the selectedtender price and it is made in your own name and at your own risk.

You are not a US Person as referred to in the Prospectus/Document or Profile Statement and if applicable, the Replacement or SupplementaryProspectus/Document or Profile Statement.

8 : Select your nationality.

9 : Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSBaccount (current/savings) from which to debit your application monies.

10 : Enter the number of securities you wish to apply for using cash.

11 : Enter your own 12-digit CDP Securities Account number. (Note:- This step will be omittedautomatically if your CDP Securities Account number has already been stored in DBSBank’s records).

12 : Check the details of your securities application, your NRIC or passport number and CDPSecurities Account number and number of securities on the screen and press the “ENTER”key to confirm your application.

13 : Remove the Transaction Record for your reference and retention only.

Steps for IB Applications through the IB website of DBS Bank

For illustrative purposes, the steps for making an IB Application through the DBS Bank IB website areshown below. Certain words appearing on the screen are in abbreviated form (“A/C”, “amt”, “&”, “I/C”,“SGX” and “No.” refer to “Account”, “Amount”, “and”, “NRIC”, “SGX-ST”, and “Number” respectively).

Step 1 : Click on to DBS Bank website (www.dbs.com).

2 : Login to Internet Banking.

3 : Enter your User ID and PIN.

4 : Select “Electronic Security Application (ESA)”.

5 : Click “Yes” to proceed and to warrant that you have observed and complied with allapplicable laws and regulations.

H-14

6 : Select your country of residence.

7 : Click on “KSH” and click the “Submit” button.

8 : Click “Confirm” to confirm:-

(a) You have read, understood and agreed to all terms of application and the Prospectusor Profile Statement and if applicable, the Supplementary or ReplacementProspectus/Document or Profile Statement.

(b) You consent to disclose your name, I/C or Passport No., address, nationality, CDPSecurities Account number, CPF Investment Account number (if applicable) andsecurities application amount from your DBS/POSB Account(s) to registrars ofsecurities, SGX, SCCS, CDP, CPF Board and issuer/vendor(s).

(c) You are not a US Person (as such term is defined in Regulation S under the UnitedStates Securities Act of 1933, as amended).

(d) This application is made in your name and at your own risk.

(e) For FIXED/MAX price securities application, this is your only application. For TENDERprice securities application, this is your only application at the selected tender price.

9 : Fill in details for share application and click “Submit”.

10 : Check the details of your share application, your NRIC or passport number and click “OK” toconfirm your application.

11 : Print Confirmation Screen (optional) for your reference & retention only.

Steps for Internet Placement Applications

The steps for making an Internet Placement Application are shown below. Certain words appearing onthe screen are in abbreviated form (“A/C”, “&”, “I/C” and “No.” refer to “Account”, “NRIC” and “Number”respectively).

Step 1 : Click on to the IPO Website ( )

Step 2 : Login by entering your User Name and Password

Step 3 : Select the counter “KSH” from the list of current counters offered

Step 4 : Click “I Agree” to proceed and to warrant that you have observed and complied with allapplicable laws and regulations and agree to the terms and conditions stated on the IPOWebsite

Step 5 : View and/or download a copy of the Prospectus

Step 6 : Click “Confirm” to confirm the following statements:-

(1) I have read, understood & agreed to these terms and conditions, and theProspectus/Document or Profile Statement and if applicable, the Replacementor Supplementary Prospectus/Document or Profile Statement in relation to theIPO Shares;

www.ePublicOffer.com

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APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

APPENDIX H - TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE

(2) I consent to the disclosure of my name, I/C or passport number, address,nationality, CDP Securities Account number, and securities application amountto share registrars of the securities, the SGX-ST, SCCS, CDP, theissuer/vendor(s) of the IPO Shares;

(3) I am currently resident in Singapore;

(4) I am not a US Person (as such term is defined in Regulation S under the UnitedStates Securities Act of 1933, as amended) and not currently resident in UnitedStates;

(5) I understand that the IPO shares have not been and will not be registered underthe United States securities law and, subject to certain exception, may not beoffered or sold within the United States, that there will be no public offer of theIPO shares in the United States, and any failure to comply with this restrictionmay constitute a violation of United States securities laws;

(6) This application for the IPO shares is made in my own name and at my ownrisk; and

(7) I am not an associate (as defined in the Listing Manual of the SGX-ST) or adirector or substantial shareholder (as defined in the Companies Act (Chapter50) of Singapore) of the Issuer.

Step 7 : Click “Confirm” when you have completed the above steps.

Step 8 : Check details of your application (including information on your name, your CDP number,your NRIC number, your email address, the amount payable) on the screen and click“CONFIRM” to confirm your application.

Step 9 : Print email confirmation and proceed to make payment as described in the emailconfirmation.

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APPENDIX I - VALUER’S REPORT

The following is the valuation report prepared for the purpose of incorporation in this Prospectus receivedfrom DTZ Debenham Tie Leung Limited, an independent property valuer, in connection with its valuationof the unsold units in Tianxing Riverfront Square as at 30 June 2006.

I-1

DTZ Debenham Tie Leung Limited 10th Floor Jardine House Central Hong Kong Licence No. C-000630 10 C-000630

Telephone (852) 2507 0507 Fax (852) 2530 1441 Website www.DTZ.com/cn

Over 9,000 staff operating from 194 offices in 39 countries 39 194 9,000

21 December 2006

The Board of Directors KSH Holdings Limited 36 Senoko Road Singapore 758108

Dear Sirs,

Re: The unsold units of Tianxing Riverfront Square, No. 81, Shi Yi Jing Road, Hedong District, Tianjin, 300171, the People’s Republic of China

Instructions, Purpose & Date of Valuation

In accordance with your instructions for us to value the captioned property of Tianjin Tianxing Real Estate Development Co., Ltd. ( ) (“TTX Real Estate”) in the People’s Republic of China (the ‘‘PRC’’), we confirm that we have inspected the property, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the value of the property as at 30 June 2006.

Definition of Market Value

Our valuation of the property represents its Market Value which in accordance with the Valuation Standards on Properties of the Hong Kong Institute of Surveyors is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

Valuation Basis And Assumption

Our valuation excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangement, special considerations or concessions granted by anyone associated with the sale, or any element of special value.

APPENDIX I - VALUER’S REPORT

I-2

In the course of our valuation of the property in the PRC, we have assumed that transferable land use rights in respect of the property for its specific term at nominal annual land use fee have been granted and that any land grant premium payable has already been fully paid. We have relied on the information and advice given by KSH Holdings Limited and its subsidiaries (collectively, the “Group”) regarding the title to the property and the interest of the Group in the property. In valuing the property, we have assumed that TTX Real Estate has an enforceable title to the property and has free and uninterrupted right to use, occupy or assign the property for the whole of the unexpired term as granted.

In valuing the property, we have complied with the requirements set out in the Valuation Standards (First Edition 2005) on Valuation of Properties published by The Hong Kong Institute of Surveyors.

Method of Valuation

In valuing the property which is held for sale or investment in the PRC, we have valued the property by the direct comparison approach assuming sale of the property in its existing state by making reference to comparable sales transactions as available in the relevant market and where appropriate, by capitalizing the net rental income derived from the existing tenancies with due allowance for reversionary income potential of the property.

Source of Information

We have been provided with extracts of documents in relation to the title to the property. However, we have not inspected the original documents to ascertain any amendments, which may not appear on the copies handed to us.

In the course of our valuation, we have relied to a considerable extent on the information given by the Group in respect of the property in the PRC and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, completion date of building, identification of buildings, number of car parking spaces, particulars of occupancy, site and gross floor areas and all other relevant matters.

APPENDIX I - VALUER’S REPORT

I-3

Dimensions, measurements and areas included in the valuation certificate are based on information provided to us and are therefore only approximations. We have no reason to doubt the truth and accuracy of the information provided to us by the Group which is material to the valuation. We were also advised by the Group that no material facts have been omitted from the information provided.

Site Inspection

We have inspected the exterior and, where possible, the interior of the property. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report whether the property is free of rot, infestation or any other structural defects. No tests were carried out to any of the services. Unless otherwise stated, we have not been able to carry out detailed on-site measurement to verify the site and gross floor areas of the property and we have assumed that the areas shown on the documents handed to us are correct.

No allowance has been made in our valuations for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

Currency

Unless otherwise stated, all sums stated in our valuations are in Renminbi, the official currency of the PRC.

We enclose herewith our valuation report of the property.

Yours faithfully, for and on behalf of

DTZ Debenham Tie Leung Limited

Andrew K. F. Chan Registered Professional Surveyor (GP)

China Real Estate Appraiser MSc., M.H.K.I.S., M.R.I.C.S

Director

Note : Mr. Andrew K. F. Chan is a Registered Professional Surveyor who has over 18 years of experience in the valuation of properties in the PRC and Hong Kong.

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Valuation Report

The unsold units of Tianxing Riverfront Square,

No.81, Shi Yi Jing Road,

Hedong District, Tianjin, 300171,

The People’s Republic of China

Report Reference No. : F06-001074

Date of Valuation : 30 June 2006

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VALUER’S DECLARATION

We hereby declare that:

I. The facts stated in the report are true and accurate.

II. The analysis, opinions and conclusions in the report are impartial and professional, and subject to the assumptions and restrictive terms of the valuation.

III. We have no conflict of interest with the property and we have no personal benefits or prejudice with the involved parties.

IV. We have analyzed the information, formed our opinion of value and prepared the valuation report according to the requirements set out in the Valuation Standards (First Edition 2005) on Valuation of Properties published by The Hong Kong Institute of Surveyors.

V. We confirm that we have carried out on-site inspection of the property.

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VALUATION REPORT

1. Instructing party : KSH Holdings Limited Address : 36 Senoko Road, Singapore 758108

2. Valuer : DTZ Debenham Tie Leung Limited Address : 10th Floor, Jardine House, 1 Connaught Place, Central,

Hong Kong

I. The Regional Factors of Tianjin, The PRC

1. Location of Tianjin

Tianjin is situated in the northeast part of the North PRC Plain, at the lower portion of Haihe River. The city abuts Bohai Bay to the east and Mount Yan to the west. The total area of the city is about 11,900 sq.km., of which the six urban districts account for 1.4%, covering 167.76 sq.km. About 120 km. away from Beijing, Tianjin is deemed to be the gateway of Beijing. It is one of the four central administered municipalities as well as the biggest industrial and commercial city and economic Centre in North PRC.

2. Administrative Districts and Population

Tianjin comprises 18 districts and counties:

Urban districts: Heping, Hedong, Hexi, Nankai, Hebei and Hongqiao districts;

Binhai New Area: Tanggu, Hangu and Dagang Districts;

Suburb: Dongli, Xiqing, Beichen, Jinnan, Wuqing and Baodi Districts;

Counties: Ninghe, Jinghai and Ji Counties.

The registered population of Tianjin in 2005 was approximately 10.43 million, increased by 1.89% as compared to that of 2004.

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3. Brief Introduction of Hedong District

Hedong District lies in the east of Tianjin. Its east boundary abuts Wanxincun Shaoliu Road North, Shuangdong Road and Yueyahe River and adjoining with Dongli District; the west and south parts of the district are divided by Haihe River and abuts to Heping District and Hexi District respectively; its north is bounded by the Jingshan Railway and abuts Hebei District. Hedong District is 10 km. from west to east and 6 km. from north to south, with a total area of approximately 40 sq. km.. The total population of Hedong District is about 730,000. There are 12 street offices under the administration of Hedong District, such as Erhaoqiao street office, Zhongshanmen street office, Dazhigu street office, etc. Hedong District is 38.4 km. away from Tanggu New Port, 7.1 km. from the Tianjin Airport and 120 km. from Beijing.

4. Accessibility of Tianjin

Tianjin Harbor is the largest comprehensive and commercial port in North PRC with 108 berths, including 55 berths of 100,000 tons. It connects trades with over 300 harbours and 160 countries and regions all over the world. Tianjin Binhai International Airport has dozens of domestic and international flight routes with its main focus on cargo transportation and secondary focus on passenger transportation. Tianjin is targeted to be the logistics centre in North PRC. The city is also one of the railway hubs in North PRC. Currently, a new express railway is under construction and the traveling time between Beijing and Tianjin will be shortened to 30 minutes when the railway is completed in 2007. In addition, an expressway that links Beijing and Tianjin is also under construction. The traffic network of Tianjin is organized by three rings, namely the outer ring, middle ring and the inner ring, as well as 14 major arteries.

The road system of Hedong District extends in all directions. It reaches every district of Tianjin by the middle ring, inner ring and several other streets and roads. Jintang Road of Hedong District can reach the Tianjin Airport, Tanggu New Port and Tianjin Economic and Technology Development Zone directly.

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SurroundingEnvironment

The property is located beneath the Daguangming Bridge at Shi Yi Jing Road, near to Haihe River. The property abuts Liuwei Road to the north-east, Shi Yi Jing Road to the north-west and Haihe River to the south-west. Tianjin Government has planned that the Nanzhan Area will be the future CBD of Tianjin, which is very near to the property. Moreover, Xiaobailou Station of Metro Line One, which has been in operation since June 2006, is also situated close to the property. The commercial atmosphere in the surrounding area of the property is strong, and various office buildings such as Wanlong Pacific Building, Golden Emperor and ICTC, etc. are situated nearby. Luxury apartments found in the locality include Bailoushijia apartments. High class hotels include Hyatt Hotel, Golden Emperor Hotel, etc.; middle and high class shopping centres such as Donghai Department Store, Binjiang Shopping Centre, etc.; also restaurants such as Holiland, UBC Coffee, etc. are situated in the vicinity of the property. Moreover there are various entertainment facilities, such as Daguangming Cinema, Kaili Cinema etc. The Tianjin Music College is situated at the north-east of the property.

Accessibility The property is located in the central part of Tianjin, which enjoys a good network of roads and is very convenient. The area is served by bus routes Nos. 840, 902, 803, 673, 866, 862 and 600 and many main roads, such as Shi Yi Jing Road, Nanjing Road and Jiefangnan Road nearby. It is fairly convenient from the property to every corner of the city. It takes only several minutes to walk to the Xiaobailou business centre and to drive to the biggest business centre of Tianjin, Bingjian Road. Moreover, it takes only 15 minutes to drive to the Tianjin Railway Station and 30 minutes to the Tianjin Airport. It takes only 15 minutes from the property to the entrance of the Jingjintang Highway.

Brief Description of the Property

Tianxing Riverfront Square is designed for commercial use comprising retail and office portions. The property comprises the unsold units of Tianxing Riverfront Square which is a 38-storey building, with 36 storeys above the ground and 2 storeys below the ground. The total height of the building is 138 metres. The first to fifth floors are for retail use with a total gross floor area of approximately 18,766.98 sq.m. which is currently leased in a satisfactory occupancy condition. The retail

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portion of the building is equipped with eight escalators and one cargo lift, central warm-cool air conditioning and central security alarm system and monitor system. The exterior of the building is finished with grey stone material. The interior common areas of the building are decorated with ceramic tiles and suspended ceiling. The shop areas are renovated by shop tenants.

The 6th to 36th floors are the office portion. The gross floor area per floor is approximately 1,100 square metres. The total gross floor area of the office portion is 32,614.04 square metres, of which a gross floor area of approximately 15,986.63 sq.m. has been sold. At present, the office portion is in good leasing condition. The office portion is equipped with 4 high-speed passenger elevators and 1 service lift. All the 5 elevators are imported from America. It is also equipped with American central air conditioning system and American integrated network piling system. The external walls are sprayed with grey paint whilst the inner common corridors are carpeted and the interior walls are sprayed with white paint. The ground before the elevators is paved with ceramic tiles and the walls are paved with stone material. The floors and walls of the toilets are paved with ceramic tiles. The B1 Level is used for car parking purpose with about 80 spaces. The B2 Level is a plant and machinery floor. The floor area breakdown of the building is as follows:

Location Floor GFA (sq.m.)B1 1 3,811.78

B2 2 1,874.77

1 3,831.62

2 3,389.35

3 3799.82

4 3,799.82

Retail portion (18,766.98 sq.m.)

5 3,946.37

6 1,137.55 7 35 15,986.63 unsold

36 315.95

Office portion (32,614.04 sq.m.)

sold 15,173.91

Total: 57,067.57

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3. Purpose of Valuation

This Valuation Report is prepared for the purpose of incorporation in the prospectus to be issued by KSH Holdings Limited in respect of its initial public offering.

4. Date of Valuation

30 June 2006.

5. Basis of Valuation

The valuation is based on the requirements set out in the Valuation Standards (First Edition 2005) on Valuation of Properties published by The Hong Kong Institute of Surveyors. It is also based on the national and local laws and regulations of the PRC, State-owned Land Use Right Certificate, business licence of the firm and other relevant materials available to us.

6. Principle of Valuation

Legitimate principle, the highest and best use principle and valuation time principle are adopted in our valuation.

7. Method of Valuation

In valuing the market value of the property, we have valued it by the Direct Comparison Approach by making reference to comparable sales evidence as available in the relevant market, taking into account the permitted use of the property.

We have also adopted the Direct Capitalization Approach, whereby we arrive at the valuation by capitalizing the net rental incomes derived from the tenancies with due provision for any reversionary income potential.

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8. Valuation

The property, which comprises the unsold units of Tianxing Riverfront Square,is located at No.81, Shi Yi Jing Road, Hedong District, Tianjin, 300171, the PRC, with a total unsold gross floor area of approximately 41,893.66 sq.m..

In view of the above, we are of the opinion that the Market Value of the property, which comprises the unsold units of Tianxing Riverfront Square, in its existing state subject to various tenancies, as at 30 June 2006, was in the sum of RMB 364,225,000 (RENMINBI THREE HUNDRED SIXTY FOUR MILLION TWO HUNDRED AND TWENTY FIVE THOUSAND), of which the Market Values of its unsold retail units, office units and car park were RMB208,538,000, RMB 145,015,000 and RMB 10,672,000 respectively.

9. Validity Period of this Valuation Report

This report is valid for 12 months, from 5 July 2006 to 4 July 2007.

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Appendices

*****************

Location of subject property

Photos of subject property

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Location of Subject Property

The Property

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Photos of the subject property

External elevation

Entrance of office

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Lift Room of office

Internal Condition (Office)

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External of the retail podium

Road (Shi Yi Jing Road)

52.6

91.6

118.0

25.719.7

FY2004 FY2005 FY2006 1Q2006 1Q20070

20

40

60

80

100

120

Prospects

- Construction business in Singaporeo Our Directors believe that the demand for

construction services will increase in the next fewyears, in view of the upcoming major developmentssuch as the construction of the Business FinancialCentre, integrated resorts and the Kallang SportsHub, and the rejuvenation of Orchard Road

o Increasing demand for upgrading and retrofittingworks as well as A&A works. With ourconsiderable experience in such works, we will bein a better position to tap on this trend

o Continued growth in design and build projects.With our considerable experience in design andbuild projects, we are in a good position to capitaliseon such growth

o No significant increase in the number of industryplayers. Existing players with lower BCA gradingsor new players will take considerable time andrequire considerable capital to meet the criteriafor the BCA grading of B1 and above. We believethis will increase our opportunities to secureconstruction projects of higher value

- Construction business in Malaysiao In September 2006, the Malaysian government

announced plans to allocate RM27.5 billion forthe construction of roads, quarters and otherinfrastructure facilities. We believe this will alsobring about private sector expenditure in theMalaysian construction industry

- Property development business in the PRCo With continued economic growth and rising

disposable income in the PRC, we believe that theincrease in demand for residential properties willlead to an increase in property prices in the PRC,in particular, the major PRC cities such as Beijing

o Growing demand for private housing in the areaslying in and near the outskirts of Beijing, such asTongzhou and Zhuozhou

Business Strategies and Future Plans

- Focus on projects with higher contract value for ourconstruction businesso We intend to target larger-scale construction projects

with a contract value of up to S$75 million eachas we believe such projects will generate higherprofits and further raise our business profile in theindustry

- Acquisition of machinery and equipmento Increase our production capacity for structural

steel used in our construction projects to meet thedemands of larger-scale projects that we have securedand are targeting to secure

o Acquire construction machinery and equipment tobe used at our construction sites such as cranes,air compressors and generators. This will reduceour costs of leasing construction machinery andequipment from third parties, which would equateto cost savings for our Group

- Expand our property development business in the PRCo Tap into the expertise and market knowledge of

our PRC joint venture partners to participate inresidential property development projects

o Explore business opportunities in Zhuozhou, HebeiProvince, through an equity joint venture toundertake new rural residential development projects

- Expand our construction business into other areas inMalaysiao We entered the construction industry in Malaysia

in June 2006 and secured a project in Selangor inthe same month with a contract value of morethan S$30 million

o We are hopeful that with the completion of thisproject, we will have a favourable track recordupon which we can develop and expand ourconstruction business in Malaysia

Our Competitive Strengths

Financial Highlights

Award/Certificate Year Project

Architectural Heritage Award 1999 Restoration of Far East Square

Safety Performance Award 2001 Choa Chu Kang Sports Complex(Certificate of Merit)

Construction Excellence Award (Merit) 2003 Choa Chu Kang Sports Complex(Institutional Buildings Category)

Safety Performance Award 2005 The Berth(Certificate of Merit)

Construction Excellence Award (Merit) 2005 Mustafa Shopping Centre extension(Commercial/Mixed DevelopmentBuildings Category)

Safety Performance Award 2005 The Chancery Residence(Certificate of Merit)

Safety Performance Award 2005 SAFRA Mount Faber(Certificate of Merit)

Some of our Awards and Certificates

4.6

5.55.7

0.60.9

FY2004 FY2005 FY2006 1Q2006 1Q20070

1

2

3

4

5

6

REVENUE (S$’MILLION) PROFIT FOR THE YEAR/PERIOD (S$’MILLION)

Our order books for our construction business stood at S$233.8 million as at the Latest Practicable Date*

*The value of our order books is not indicative of our revenue for FY2007.

- A committed and experienced management team and support staff

- Each of our Executive Directors has at least 30 years of experience in the construction industry

- We have an established and proven track record and reputation

- We are cost competitive

- We are able to leverage on our construction experience to enhance ourproperty development business

- We have considerable experience in the property development industryin the PRC and strong working relationships with our joint venture partnersand other business contacts in the PRC

PROSPECTUS DATED 30 JANUARY 2007(Registered by the Monetary Authority of Singaporeon 30 January 2007)

A Well EstablishedConstruction, Property

Development andProperty ManagementGroup whose Principal

Activities areConstruction in

Singapore and Malaysia,and Property

Development andProperty Management

in the PRC

(Company Registration Number: 200603337G)(Incorporated in the Republic of Singapore on 9 March 2006)

Our Business

� Established in 1979, we have over 27 years of experience in theconstruction industry

� We act as main contractors in construction projects for privateand public sector customers in Singapore and for private sector customersin Malaysia

� We are registered with the Building and Construction Authority (“BCA”)with a BCA grading of A1 under the category CW01 for general building.Such A1 grading is currently the highest grade for contractors’ registrationin such category and enables us to tender for public sector constructionprojects of unlimited value

� We have developed two properties in the PRC:-– Tianxing Riverfront Square in Tianjin, developed by our subsidiary,

TTX Real Estate and managed by our property management arm,TTX Property Management; and

– Liang Jing Ming Ju in Beijing, developed by our associated company,JHTD

Private Sector Portfolio*

...Our Design and Build Projects…• The Coast at Sentosa Cove• The Berth By The Cove• The Berthside• The Spectrum• Montview

...and Other Notable Projects…• Suntec City Convention and

Exhibition Centre andTower Five of Suntec City

• Restoration of Far East Square• Oneo15 Marina Club• Mustafa Shopping Centre extension

* Not exhaustive

Public Sector Portfolio*

• The Frontier Community Place(Design and Build)

• Choa Chu Kang Sports Complex• Nanyang Polytechnic• Tanah Merah Ferry Terminal

Our Construction Projects in Singapore

KSH

HO

LDIN

GS LIM

ITED

KSH HOLDINGS LIMITED

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN ANY DOUBT AS TO THE ACTION YOU SHOULDTION YOU SHOULDTAKE, YOU SHOULD CONSULT YOUR LEGAL, FINANCIAL, TAX OR OTHER PROFESSIONALADVISER.

We have made an application to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) forpermission to deal in, and for quotation of, all the ordinary shares (the “Shares”) in the capital of KSHHoldings Limited (our “Company”) already issued and the new Shares (the “New Shares”) which are thesubject of this Invitation (as defined herein). Such permission will be granted when we have been admittedto the Official List of the SGX-ST. Acceptance of applications will be conditional upon, inter alia, permissionbeing granted by the SGX-ST to deal in, and for quotation of, all of the existing issued Shares and theNew Shares. Monies paid in respect of any application accepted will, in the event such permission is notgranted, be returned to you at your own risk, without interest or any share of revenue or other benefitarising therefrom, and you will not have any claim whatsoever against us, the Manager (as defined herein),the Underwriter (as defined herein) or the Placement Agent (as defined herein).

The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressedor 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 theInvitation, our Company, our subsidiaries, the Shares or the New Shares.

A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore(the “Authority”). The Authority assumes no responsibility for the contents of this Prospectus. Registrationof this Prospectus by the Authority does not imply that the Securities and Futures Act(Chapter 289) of Singapore, or any other legal or regulatory requirements, have been complied with. TheAuthority has not, in any way, considered the merits of the Shares or the New Shares, as the case maybe, being offered for investment.

No Shares shall be allotted or allocated on the basis of this Prospectus later than six (6) months afterthe date of registration of this Prospectus by the Authority.

Investing in our Shares involves risks which are described in the section entitled “Risk Factors” of thisProspectus.

In the event that the Placement Agent does not receive valid subscriptions and payments for at least 80per cent. of the Placement Shares by 6.00 p.m. on 5 February 2007 (or such other date as may be decidedby the Manager), the Manager or the Underwriter may terminate the Management and UnderwritingAgreement and the Placement Agent shall be entitled to terminate the Placement Agreement. In that event,our Company reserves the right, in our absolute discretion, to cancel the Invitation, upon which allapplication monies will be returned to you at your own risk, without interest or any share of revenue orother benefit arising therefrom and you will not have any claims whatsoever against us, the Manager, theUnderwriter or the Placement Agent. Please refer to the section entitled “Plan of Distribution” of thisProspectus for more details.

(Company Registration Number: 200603337G)(Incorporated in the Republic of Singapore on 9 March 2006)

36 Senoko Road, Singapore 758108Tel : 6758 2266 Fax : 6758 2532

Manager

WESTCOMB CAPITAL PTE LTD

Underwriter and Placement Agent

Westcomb Securities Pte Ltd

Invitation in respect of 25,000,000 New Shares comprising:-

(1) 1,000,000 Offer Shares at S$0.36 for each Offer Share by way of public offer;and

(2) 24,000,000 Placement Shares by way of placement, comprising:-

(a) 22,850,000 Placement Shares at S$0.36 for each Placement Share by way ofPlacement Shares Application Forms;

(b) 150,000 Internet Placement Shares at S$0.36 for each InternetPlacement Share for applications made through the IPO Websitewww.ePublicOffer.com; and

(c) 1,000,000 Reserved Shares at S$0.36 each reserved for our Independent Directors,management, employees, business associates and others who have contributedto the success of our Group,

payable in full on application.

KSH HOLDINGS LIMITED