invitation in respect of 20,000,000 new ordinary shares of...

(SC)Job:03-34170 Title:Tung Lok (IPO)

(#175) Dtp 65 Page:InsideFrontCover

the employees and business associates of the Group,

payable in full on application.

Invitation in respect of 20,000,000 new ordinary sharesof $0.025 each as follows:-

(Incorporated in the Republic of Singapore on 29 June 2000)

Manager, Underwriter and Placement Agent


(#175) Dtp 65 Page:InsideBackCover

Singapore’s Best Restaurants List by Singapore Tatlersince 1985 (except for 1988, 1989 and 1992)

Wine & Dine’s Singapore’s Top Restaurants List since 1996

Singapore’s Best Restaurants List by Singapore Tatler since 1999Wine & Dine's Singapore’s Top Restaurants List since 1998Host of the World Gourmet Summit in 1998, 1999 and 2000“Best Wine List” award in the Asian category by Wine & Dine in 2000

Singapore's Best Restaurants List by Singapore Tatler since 1992 (except for 1997)Wine & Dine's Singapore's Top Restaurants List since 1996Best Service Award by Wine & Dine in 2000

“Most Popular Chinese Restaurant” in RCS Gourmet Hunt 1998Singapore’s Best Restaurants List by Singapore Tatler since 1997Wine & Dine's Singapore's Top Restaurants List since 1996

Singapore’s Best Restaurants List by Singapore Tatler since 1998Wine & Dine's Singapore’s Top Restaurants List since 1997

“Best Dish Award” in RCS Gourmet Hunt 1998Singapore’s Best Restaurants List by Singapore Tatler since 1995Wine & Dine's Singapore's Top Restaurants List since 1996

Singapore’s Best Restaurants List by Singapore Tatler since 1993Wine & Dine’s Singapore’s Top Restaurants List since 1996

Singapore’s Best Restaurants List by Singapore Tatler in 2000


“Most Popular Chinese Restaurant” in RCS Gourmet Hunt 1997 and 2000“Best Dish Award” in RCS Gourmet Hunt 1997Singapore's Best Restaurants List by Singapore Tatler since 1985(except for 1987 to 1989)Wine & Dine’s Singapore’s Top Restaurants List since 1996Inducted into Restaurants Asia “Fine Dining Hall of Fame” in April 2000

“Best Dish Award” in RCS Gourmet Hunt 2000Singapore's Best Restaurants List by Singapore Tatler in 2000

Opened December 2000 at The Fullerton Hotel

Opened March 2001 at Novena Square

Page

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

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

DETAILS OF THE LISTING

LISTING ON SGX SESDAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

OVERVIEW OF OUR ACTIVITIES AND FUTURE PLANS . . . . . . . . . . . . . . . . . 11

THE INVITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

INVITATION STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SUMMARY OF OUR GROUP FINANCIAL INFORMATION . . . . . . . . . . . . . . . . 19

CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . 21

DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

SHARE CAPITAL

SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

MORATORIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

GROUP STRUCTURE

RESTRUCTURING EXERCISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

GENERAL INFORMATION ON OUR GROUP

HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

QUALITY CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

STAFF TRAINING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

GOVERNMENT REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

1

TABLE OF CONTENTS

Page

COMPETITIVE STRENGTHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

FINANCIAL REVIEW

TURNOVER AND PROFITABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

REVIEW OF PAST EARNINGS PERFORMANCE . . . . . . . . . . . . . . . . . . . . . 47

DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . 50

REVIEW OF OUR FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . 53

FOREIGN EXCHANGE EXPOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

PROSPECTS AND FUTURE PLANS

F&B INDUSTRY OUTLOOK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

FUTURE PLANS AND GROWTH STRATEGY . . . . . . . . . . . . . . . . . . . . . . . 58

DIRECTORS, MANAGEMENT AND STAFF

DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

SERVICE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 68

SHAREHOLDERS' MANDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

POTENTIAL CONFLICT OF INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . 75

CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

DIRECTORS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

ACCOUNTANTS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 99

2

TABLE OF CONTENTS

ANNEX A

DESCRIPTION OF ORDINARY SHARES

ANNEX B

EXTRACTS OF ARTICLES OF ASSOCIATION OF THE COMPANY

ANNEX C

TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATIONS

3

TABLE OF CONTENTS

BOARD OF DIRECTORS : Zhou Yingnan Non-Executive ChairmanTjioe Ka Men Managing DirectorTjioe Ka In Executive DirectorBan Song Long Independent DirectorKer Sin Tze (Dr) Independent DirectorTan Eng Liang (Dr) Independent Director

COMPANY SECRETARY : Michael Tay Kwang How, ACIS

REGISTERED OFFICE : 1 Sophia Road #05-03Peace CentreSingapore 228149

BUSINESS OFFICE : 298 Tiong Bahru Road#14-02/04 Central PlazaSingapore 168730Tel: 270 7998Fax: 272 7120

Website address: http://www.tunglok.com

Information contained in our website does notconstitute part of this Prospectus

SHARE REGISTRAR : M & C Services Private Limited138 Robinson Road #17-00Hong Leong CentreSingapore 068906

MANAGER, UNDERWRITER ANDPLACEMENT AGENT

: Oversea-Chinese Banking Corporation Limited65 Chulia Street #29-02/04OCBC CentreSingapore 049513

AUDITORS AND REPORTINGACCOUNTANTS

: Deloitte & ToucheCerti®ed Public Accountants95 South Bridge Road #09-00Pidemco CentreSingapore 058717

SOLICITORS TO THE INVITATION : Wong Partnership80 Raf¯es Place #58-01UOB Plaza 1Singapore 048624

PRINCIPAL BANKERS : Oversea-Chinese Banking Corporation Limited65 Chulia Street #29-02/04OCBC CentreSingapore 049513

United Overseas Bank Limited80 Raf¯es PlaceUOB Plaza 1Singapore 048624

4

CORPORATE INFORMATION

In this Prospectus, the accompanying Application Forms and, in relation to the ElectronicApplications, the instructions appearing on the screens of the ATMs of Participating Banks, thefollowing de®nitions apply throughout where the context so admits:±

Our Companies

``Company'' or ``TLR'' : Tung Lok Restaurants (2000) Ltd

``CCPL'' : Club Chinois Pte Ltd

``LBDH'' : Lao Beijing Dining Hall Pte Ltd

``Tung Lok Millennium'' : Tung Lok Millennium Pte Ltd

Our Restaurants

``Grand Pavilion'' : Grand Pavilion Restaurant

``Jade'' : Jade Fullerton Restaurant

``Kippo Pavilion'' : Kippo Pavilion Restaurant

``Lao Beijing'' : Lao Beijing Dining Hall

``Lingzhi Vegetarian'' : Lingzhi Vegetarian Restaurant (1991)

``Noble House'' : Noble House Millennium

``The Paramount'' : The Paramount Restaurant

``Tung Lok'' : Tung Lok Restaurant

Antecedent Companies

``CGPL'' : Charming Garden Restaurant Pte Ltd

``FCPL'' : Foodmaster Corporation Pte Ltd

``GIE'' : Golden Island Enterprises Pte Ltd

``LZPL'' : Lingzhi Vegetarian Restaurant Pte Ltd

``NHPL'' : Noble House Restaurant Pte Ltd

``TLDH'' : Tung Lok Diaoyutai Holdings Pte Ltd

``TLGH'' : Tung Lok Group Holdings Pte Ltd

``TLI'' : Tung Lok Investments Pte Ltd

``TLRM'' : Tung Lok Restaurants Management Company Pte Ltd

5

DEFINITIONS

General

`Àct'' : The Companies Act, Chapter 50, of Singapore

`Àndrew Tjioe'' or ``TKM'' : Tjioe Ka Men

`Àpplication Forms'' : Of®cial printed application forms to be used for thepurpose of the Invitation and which form part of thisProspectus

`Àpplication List'' : The list of applications to subscribe for the InvitationShares

`ÀTM'' : Automated teller machine of a Participating Bank

`Àudit Committee'' : The audit committee of our Company

``CDP'' : The Central Depository (Pte) Limited

``CPF'' : The Central Provident Fund

``Directors'' : Our directors as at the date of this Prospectus

`Èlectronic Applications'' : Applications for the Offer Shares made through an ATM ofone of the Participating Banks in accordance with theterms and conditions of this Prospectus

`ÈPS'' : Earnings per Share

`Èxecutive Of®cers'' : Our executive of®cers as at the date of this Prospectus

``F&B'' : Food and beverage

``FY'' : Financial year ended or ending 31 December

``Group'' or ``Proforma Group'' : Our Company and our subsidiaries as at the date of thisProspectus treated as if our group structure had been inexistence throughout the last ®ve (5) ®nancial years sinceFY1996, or since the respective dates of incorporation/acquisition of companies in our group, as the case may be

`Ìndependent Directors'' : Our independent Directors as at the date of thisProspectus

`Ìnvitation'' : The invitation by our Company in respect of the InvitationShares, subject to and on the terms and conditions of thisProspectus

`Ìnvitation Shares'' : 20,000,000 new Shares which are the subject of theInvitation

`ÌPO'' : Initial public offering

`ÌSO'' : International Organisation for Standardisation, a world-wide federation of national standards bodies

6

DEFINITIONS

`Ìssue Price'' : $0.23 for each Invitation Share

``Manager'', ``PlacementAgent'', `Ùnderwriter'' or`ÒCBC Bank''

: Oversea-Chinese Banking Corporation Limited

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

``NTA'' : Net tangible assets

`Òffer'' : Invitation in respect of the Offer Shares to the public at theIssue Price, subject to and on the terms and conditions ofthis Prospectus

`Òffer Shares'' : 2,000,000 Invitation Shares which are the subject of theOffer

``Participating Banks'' : OCBC Bank, The Development Bank of Singapore Ltd(``DBS'') including its POSBank Services Division, KeppelTatLee Bank Limited (``KTB''), Overseas Union BankLimited (`ÒUB'') and United Overseas Bank Limited(`ÙOB'') group (comprising UOB, Far Eastern Bank Ltdand Industrial & Commercial Bank Limited)

``Placement'' : Placement of the Placement Shares by the PlacementAgent at the Issue Price, subject to and on the terms andconditions of this Prospectus

``Placement Shares'' : 18,000,000 Invitation Shares (including the ReservedShares), which are the subject of the Placement

``Related Managers'' : Tjioe Ka Lie and Zhou Jia Ping, who occupy managerialpositions and are the daughters of our non-executiveChairman, Zhou Yingnan, and sisters of our Directors,Andrew Tjioe and Tjioe Ka In

``Reserved Shares'' : 3,000,000 of the Placement Shares reserved for theemployees and business associates of our Group

``Restructuring Exercise'' : The restructuring exercise as described on pages 27 to 31of this Prospectus

``SCCS'' : Securities Clearing & Computer Services (Pte) Ltd

``Securities Account'' : Securities account maintained by a depositor with CDP

``SGX-ST'' : Singapore Exchange Securities Trading Limited

``SGX SESDAQ'' : Singapore Exchange Dealing and Automated QuotationSystem

``Shareholders'' : Shareholders of our Company

``Shareholders' Mandate'' : The shareholders' mandate of our Company as describedon pages 73 and 74 of this Prospectus

7

DEFINITIONS

``Shares'' : Ordinary shares of $0.025 each in the capital of ourCompany

``sq ft'' : Square feet

``%'' : Per centum or percentage

Currencies

``HK$'' : Hong Kong dollars

``RP'' : Indonesian Rupiah

``$'' or ``S$'' and ``cents'' : Singapore dollars and cents respectively

The terms ``Depositor'', ``Depository agent'' and ``Depository Register'' shall have the same meaningsascribed to them respectively in Section 130A of the Act.

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 and the Application Forms to any statute or enactment is a referenceto that statute or enactment for the time being amended or re-enacted. Any word de®ned under theAct or any statutory modi®cation thereof and used in this Prospectus and the Application Forms shall,where applicable, have the meaning assigned to it under the Act or such statutory modi®cation.

Any reference in this Prospectus or the Application Forms to Shares being allotted to an applicantincludes allotment to CDP for the account of that applicant.

Any reference to a time of day in this Prospectus or the Application Forms shall be a reference toSingapore time unless otherwise stated.

Any reference to ``we'', ``us'' and ``our'' in this Prospectus is a reference to our Company, our Groupor any member of our Group as the context requires.

8

DEFINITIONS

LISTING ON SGX SESDAQ

We have applied to the SGX-ST for permission to deal in and for quotation of all our Shares alreadyissued and the Invitation Shares on SGX SESDAQ. Such permission will be granted when ourCompany has been admitted to the Of®cial List of SGX SESDAQ. Acceptance of applications will beconditional upon permission being granted to deal in and for quotation of all our issued Shares as wellas our Invitation Shares. Monies paid in respect of any application accepted will be returned, withoutinterest or any share of revenue or other bene®t arising therefrom and at the applicant's risk, if the saidpermission is not granted.

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 Of®cial List of SGX SESDAQ isnot to be taken as an indication of the merits of the Invitation, our Company, our subsidiaries or ourShares.

Our Directors individually and collectively accept full responsibility for the accuracy of the informationgiven in this Prospectus and con®rm, having made all reasonable enquiries, that to the best of theirknowledge and belief, the facts stated and the opinions expressed in this Prospectus are fair andaccurate in all material respects as at the date of this Prospectus and there are no other materialfacts the omission of which would make any statement in this Prospectus misleading.

No person has been or is authorised to give any information or to make any representation notcontained in this Prospectus in connection with the Invitation and, if given or made, such informationor representation must not be relied upon as having been authorised by us or the Manager. Neitherthe delivery of this Prospectus and the Application Forms nor the Invitation shall, under anycircumstances, constitute a continuing representation or create any implication that there has beenno change in our affairs or in the statements of fact contained in this Prospectus since the date ofthis Prospectus. Where such changes occur, we may make an announcement of the same to SGX-ST and will comply with the requirements of the Act. All applicants should take note of any suchannouncements and, upon the release of such an announcement, shall be deemed to have notice ofsuch 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 forthe purpose of the Invitation and may not be relied upon by any other person other than the applicantsin connection with their applications for the Invitation Shares or for any other purpose. ThisProspectus does not constitute an offer of or an invitation to subscribe for the Invitation Shares inany jurisdiction in which such an offer or invitation is unauthorised or unlawful nor does it constitutean offer or an invitation to any person to whom it is unlawful to make such an offer or invitation.

Copies of this Prospectus and the Application Forms and envelopes may be obtained on request,subject to availability, from:±

Oversea-Chinese Banking Corporation Limited65 Chulia Street

OCBC CentreSingapore 049513

and from selected branches of OCBC Bank, members of the Association of Banks in Singapore,members of the SGX-ST, merchant banks in Singapore and our 13 restaurants in Singapore.

The Application List will open at 10.00 a.m. on 19 March 2001 and will remain open until 12.00noon on the same day or for such further period or periods as we may, in consultation with theManager, decide, subject to any limitations under all applicable laws.

9


INDICATIVE TIMETABLE FOR LISTING

In accordance with the SGX-ST's News Release of 28 May 1993 on the trading of initial public offeringshares on a ``when issued'' basis, an indicative timetable is set out below for the reference ofapplicants:±

Indicative Date/Time Event

19 March 2001, 12.00 noon Close of Application List.

20 March 2001 Balloting of applications, if necessary (in the event of over-subscription for the Invitation Shares).

21 March 2001, 9.00 a.m. Commence trading on a ``when issued'' basis.

30 March 2001 Last day of trading on a ``when issued'' basis.

2 April 2001, 9.00 a.m. Commence trading on a ``ready'' basis.

5 April 2001 Settlement date for all trades done on a ``when issued'' basisand for all trades done on a ``ready'' basis on 2 April 2001.

The above timetable is only indicative as it assumes that the closing date for the Application List is19 March 2001, the date of admission of our Company to the Of®cial List of SGX SESDAQ will be21 March 2001, the SGX-ST's shareholding spread requirement will be complied with and theInvitation Shares will be issued and fully paid-up prior to 21 March 2001. The actual date on whichthe Shares will commence trading on a ``when issued'' basis will be announced when it is con®rmedby the SGX-ST.

The above timetable and procedure may be subject to such modi®cations as the SGX-ST may in itsdiscretion decide, including the decision to permit trading on a ``when issued'' basis, thecommencement date of such trading. All persons trading in the Shares on a ``when issued'' basis doso at their own risk. In particular, persons trading in the Shares before their Securities Accountswith CDP are credited with the relevant number of Shares do so at the risk of selling Shareswhich neither they nor their nominees, as the case may be, have been allotted or areotherwise bene®cially entitled to. Such persons are also exposed to the risk of having to covertheir net sell positions earlier if ``when issued'' trading ends sooner than the indicative datementioned above. Persons who have a net sell position traded on a ``when issued'' basisshould close their position on or before the ®rst day of ``ready'' basis trading.

Investors should consult the SGX-ST announcement on ``ready'' trading date on the Internet (atSGX-ST website http://www.sgx.com), INTV or the newspapers or check with their brokers on thedate on which trading on a ``ready'' basis will commence.

10


The information contained in this summary is derived from and should be read in conjunction with thefull text of this Prospectus. Terms de®ned elsewhere in this Prospectus have the same meanings whenused herein. Prospective investors should carefully consider the information presented in thisProspectus, particularly the matters set out under ``Risk Factors'' before buying our Shares.

OVERVIEW OF OUR ACTIVITIES AND FUTURE PLANS

Our Company was incorporated on 29 June 2000 under the Act as a private limited company underthe name of Dello Investments Pte Ltd. On 30 October 2000, we changed our name to ``Tung LokRestaurants (2000) Pte Ltd''. On 7 March 2001, pursuant to our conversion into a public limitedcompany, we changed our name to ``Tung Lok Restaurants (2000) Ltd''. Pursuant to a RestructuringExercise as set out on pages 27 to 31 of this Prospectus, our Company acquired the entire issuedshare capital of Tung Lok Millennium Pte Ltd which holds the assets, business and undertakings ofthe restaurant businesses previously held by TLGH and various of its subsidiaries, 75% of the issuedshare capital of CCPL and 60% of the issued share capital of LBDH.

We are principally engaged in the operation of restaurants. At present, we operate 13 restaurants andprovide management services to 2 other restaurants in Singapore, and effective from 1 January 2001,we also provide management services to 2 restaurants in Jakarta, Indonesia. We seek to differentiateourselves and continue to market the Tung Lok brand name through our efforts of serving qualitycuisines and providing our customers with an ef®cient and friendly service.

Since the opening of our ®rst restaurant 20 years ago, we have grown to provide a diverse range ofhigh quality cuisines, ranging from Beijing, Cantonese, Hunan, Japanese, Sichuan, modern Chineseand seafood to vegetarian and East-West fusion cuisines featuring interesting menu items andcatering to a wide variety of tastes. Our restaurants offer a variety of concepts targeted at differentmarket segments of discerning consumers, from budget conscious individuals to high-incomeearners.

For operational ef®ciency, cost savings and to better control the quality of our ingredients, we operatea food processing facility at Jalan Boon Lay to produce dianxin (bite-sized Cantonese-style snacksnormally served during early afternoon) and dianxin ingredients and festive items (e.g. mooncake andprocessed barbecued pork). This facility and our present corporate of®ce at Central Plaza, TiongBahru Road will be relocated to our new premises at Bukit Batok Techpark 21 by December 2001.

Our founder and non-executive Chairman, Zhou Yingnan, started our ®rst restaurant, CharmingGarden, in 1980. Our Managing Director, Andrew Tjioe, joined us in 1982 and has since beeninstrumental in the creation and development of the Tung Lok brand name and our operations forthe last 18 years. He will continue to spearhead the expansion of our business. He is assisted by oursenior management, most of whom have more than 9 years of experience in the F&B industry.

Given our existing operational set up, we believe that we are well-positioned to grow through new jointventures, central in-house food production, outside catering and franchising. Other than organicgrowth of new owner-operated restaurants, we are in preliminary discussions with potential partnersfor new joint ventures and partnerships. We have plans to venture into the manufacture of food relatedproducts which include various sauces and savouries, cookies and cakes. We also intend to set upnoodle houses with potential joint venture partners as well as to expand our portfolio of themerestaurants. We believe that selective franchising of our theme restaurants starting with Lao Beijingin suburban malls will be an important direction for us to grow in the future. In addition, arising fromour experience in managing restaurants in hotels and recreational clubs, such as Club Chinois, TheParamount and Kippo Pavilion, we were approached by The Fullerton Hotel to operate a Chineserestaurant, Jade, at their premises. Jade commenced operation in December 2000. We aim to alsobecome a signi®cant player as a restaurant operator for hotels and recreational clubs.

11

PROSPECTUS SUMMARY

THE INVITATION

Size : 20,000,000 Invitation Shares which, upon issue andallotment, will rank pari pasu in all respects with theexisting issued Shares.

Issue Price : $0.23 for each Invitation Share.

The Offer : The Offer comprises an offering of 2,000,000 Offer Sharesto members of the public.

The Placement : The Placement comprises an offering of 15,000,000Placement Shares by way of placement and 3,000,000Reserved Shares reserved for employees and businessassociates of our Group.

Purpose of the Invitation : Our Directors believe the listing of our Company and thequotation of our Shares on SGX SESDAQ will enhance ourpublic image and enable us to tap the capital markets forfunding the expansion of our operations. It will alsoprovide members of the public, our employees andbusiness associates with an opportunity to participate inthe equity of our Company.

Use of Proceeds : The net proceeds from the Invitation (after deducting theestimated issue expenses of approximately $1.1 million) ofapproximately $3.5 million will be used as follows:±

(a) approximately $0.4 million to ®nance the renovationcosts for our new corporate of®ce cum foodprocessing facility at Bukit Batok Techpark 21;

(b) approximately $0.5 million for capital expenditure onour two new Lao Beijing restaurant outlets; and

(c) the balance of approximately $2.6 million for generalworking capital.

Details of (a) to (b) above are set out under the heading``Prospects and Future Plans'' on pages 58 and 59 of thisProspectus.

Pending the above speci®c deployment of net proceeds,the funds may be added to our Group's working capital,placed on ®xed deposit with banks or ®nancial institutionsor invested in short-term money markets or debtinstruments as our Directors may, in their absolutediscretion, deem ®t.

Reserved Shares : Of the 18,000,000 Placement Shares, 3,000,000 ReservedShares will be reserved for the employees and businessassociates of our Group. In the event that any of theReserved Shares are not taken up, they will be madeavailable to satisfy the applications for the PlacementShares or, in the event of an under-subscription for thePlacement Shares, to satisfy applications made bymembers of the public for the Offer Shares.

12

PROSPECTUS SUMMARY

Listing Status : Our Shares will be quoted on SGX SESDAQ, subject toadmission of our Company to the Of®cial list of SGXSESDAQ and permission for the dealing in and quotationof our Shares being granted by SGX-ST.

13

PROSPECTUS SUMMARY

Prospective investors should carefully consider and evaluate the following considerations and all otherinformation contained in this Prospectus before deciding to invest in our Shares. To the best of ourDirectors' knowledge and belief, all risk factors that are material to investors in making an informedjudgement have been set out below. If any of the following considerations and uncertainties developinto actual events, our business, results of operations and ®nancial conditions could be materiallyadversely affected. In such cases, the trading price of our Shares could decline and you may lose allor part your investment in our Shares.

Changes in economic and political conditions, consumer preferences or discretionary consumerspending could negatively impact our results

Our business is subject to prevailing economic conditions in Singapore, where all our restaurants arelocated. Any changes in market and economic conditions may affect consumers' disposable income,consumer con®dence and hence discretionary consumer spending. In the event of an economicdownturn, consumers will tend to become more budget conscious and price sensitive to the amountthey are willing to spend on food. Amongst the many food choices in Singapore, we believe ourrestaurants cater to the middle to high-end price range of the market segments. As such, anyadverse changes in discretionary consumer spending will have a negative impact on our sales andour pro®tability will be affected. Our performances are also subject to social instability, developmentsin government policies with respect to taxation, regulations or other policies and other economicdevelopments such as in¯ation and interest rates in Singapore. In the event of any adverseeconomic or political changes or shifts in consumer preferences away from what our restaurants canoffer, our future pro®tability could be materially and adversely affected. Changes in consumer taste,political and economic conditions are unpredictable and beyond our control. Therefore, we cannotprovide any assurance that such changes in the above conditions and developments will not occur.

Changes in labour laws could affect our operations and pro®ts. In addition, we are subject to labourlaws which govern the employment of our local and foreign employees. These requirements amongstothers include foreign worker levies, minimum wage requirements and overtime pay. Foreign workersemployed by us constitute approximately 38.8% of our total workforce as at 31 December 2000 andshould there be any tightening of foreign employee content or laws, our operations will be affected.Other changes in labour laws, such as imposition of minimum wages, increases in overtime pay,paid leave of absence and mandated health bene®ts and issues concerning the employment offoreign workers will increase our labour costs and adversely affect our pro®ts.

Our nature of business is highly competitive

Competition in the F&B industry is intense. We compete on the basis of taste, quality, price of foodoffered, customer service, ambience and the overall dining experience. While we attempt todifferentiate our restaurants in terms of concepts, themes and designs, we are aware that there areother restaurants that operate on similar concepts. Our competitors include a large and diversegroup of restaurant chains and individual restaurants such as independent operators (both local andforeign) that have opened restaurants in Singapore. In addition, we compete with other restaurants forsite locations and employees. Many of our competitors are well-established in the casual diningmarket segment and some of our competitors have substantially greater ®nancial, marketing andother resources than us. The entrance of new competitors into our markets or into the immediateareas surrounding our existing restaurants could affect our restaurants' turnover and pro®ts.

Our business will be adversely affected by complaints from customers and bad publicity

Like other restaurant chains, we can be adversely affected by negative publicity concerning foodquality, illness, injury, publication of government or industry ®ndings concerning food productsserved by us, or other health concerns or operating issues arising from one restaurant or a limitednumber of restaurants. At any instance, our restaurants can be subject to negative allegations fromour customers, complaints of illnesses and injuries incurred on our premises, food quality andoperational inef®ciency. Such bad publicity will materially affect our restaurant businesses regardless

14

RISK FACTORS

of whether these allegations are genuine. If there are incidences of poor hygiene with regards to foodpreparation or lack of cleanliness of the restaurants, the bad publicity arising from such incidences willdamage our image, and thus, have an adverse impact on our turnover and pro®ts.

News on food related diseases will adversely affect our businesses

In recent years, several meat products such as those of pigs, cows and chickens, were severelyaffected with diseases and viruses such as the foot and mouth disease (FMD), bovine spongiformencephalopathy (BSE), or commonly known as ``mad cow disease'', and ``bird ¯u''. This could affectthe general public consumption of these meat products. Even though the diseases are relatively undercontrol, we would not be able to predict further occurrences of such diseases, or when there will bean outbreak of new diseases on not only meats, but vegetables or other ingredients used in our foodrecipes. If an outbreak of diseases occurs or recurs, the government could impose a ban on importingthe affected meats or vegetables or other ingredients and cause a shift in consumers' foodconsumption patterns away from menus which contain the affected meat products or vegetables.This will result in lower or no demand for the affected food items in our restaurants, thereby affectingour Group's turnover and pro®ts.

Our business is largely service oriented and our employees are important to us

Our continued success depends in part upon our ability to attract, motivate and retain a suf®cientnumber of quali®ed and skilled employees for our restaurant operations, including restaurantmanagers, master chefs, kitchen staff and servers. Quali®ed individuals of the requisite calibre are inshort supply in these areas of restaurant operations. In particular, experienced and highly skilledmaster chefs are scarce and more dif®cult to attract. Any failure to recruit skilled personnel and toretain the key staff, might adversely impact our operations and expansion plans. Any materialincreases in employee turnover rates in existing restaurants could have a material adverse effect onour business operations, ®nancial condition, operating results or cash ¯ows. Additionally,competition for quali®ed employees would require us to pay higher wages to attract and retainsuf®cient employees, which could result in higher labour costs and lower pro®ts.

Changes in government regulations might adversely affect our businesses

The restaurant business is subject to government rules and regulations, including those relating to thesale of food and alcoholic beverages, sanitation, building and zoning requirements. Any changes insuch government regulations might have a negative impact on our business. The failure to maintainor renew governmental licences, permits and approvals, including food and liquor licences, couldhave a material adverse effect on our operating results. Dif®culties or failure in obtaining the requiredlicences and approvals could delay, or result in our decision to cancel the opening of new restaurants.Local authorities may suspend or deny renewal of our food and liquor licences if they determine thatour conduct does not meet applicable standards. Although we have satis®ed restaurant and liquorlicensing requirements for our existing restaurants, we cannot predict whether we will be able tomaintain these approvals or obtain these approvals at future locations. We are also subject to localhealth code requirements, including regulations relating to food safety and food handling andstorage. Details of licences held by us are set out on page 42 of this Prospectus.

Our operations are susceptible to changes in food and supply costs which could adverselyaffect our margins

Our pro®tability depends, in part, on our ability to anticipate and react to changes in food and supplycosts. The prices of these raw materials are subject to price ¯uctuations due to various factors beyondour control, including severe climatic conditions and governmental regulations, which might reducesupply, leading to increases in food and supply costs. We cannot predict whether we will be able toanticipate and react to changing food and supply costs by adjusting our purchasing practices. Wecannot assure you that any increase in such costs can be passed on to our customers throughincreases in menu prices. In particular, banquet sales which are typically at pre-agreed prices with a

15

RISK FACTORS

lead order time of 6 to 12 months would adversely affect our margins if there are any signi®cant priceincreases in raw materials.

Our operations are dependent on our intellectual property

We believe that our trademarks have signi®cant value and are important to our brand-building effortsand the marketing of our restaurant concepts. We have ®led an application in November 2000 for theregistration of our ``Tung Lok Group'' trademark with the Intellectual Property Of®ce of Singapore. Ourapplication is currently pending and may be subject to objections raised by the Intellectual PropertyOf®ce of Singapore or the promoter of a competing trademark. To date, we have not received anyexamination reports and can give no assurance that our trademark will be registered. In the eventthat our application is not successful, we will not be able to build up brand equity to continue tomaintain our growth. We believe that name recognition is important in order to promote newrestaurants and concepts (Refer to ``Competitive Strengths'' on pages 42 and 43 of this Prospectus).Even if we should manage to register our trademarks, we cannot ensure that our trademarks will notbe infringed upon. Unauthorised use of our trademarks may harm our reputation and consequently ouroperations would be adversely affected.

We may not be able to effectively manage growth

We expect our business to grow either through our franchise business locally and regionally orthrough organic growth through the opening of new restaurants with differentiated themes andconcepts. We may not be equipped to successfully manage any future periods of rapid growth orexpansion, which could place a signi®cant strain on our management, operating, ®nancial and otherresources. We may require implementation of additional management information systems to furtherdevelop our operating, administrative, ®nancial and accounting systems and controls, and to maintainclose coordination among accounting, ®nance, marketing, sales, distribution and restaurantoperations. Moreover, we may need to hire and train additional personnel. Our failure to develop andmaintain the infrastructure necessary to run our operations could materially harm our business.

There may be uncertainties associated with the expansion of our business

In order to grow our business, we intend to explore joint venture, acquisition or investmentopportunities for restaurants that are complementary to ours. Participation in joint ventures oracquisitions or investments involve numerous risks, including but not limited, to dif®culties in theassimilation of the management of operations, services, products and personnel of the acquiredcompany and the possible diversion of management's attention from other business concerns. Thesuccessful implementation of this strategy depends on our ability to identify suitable candidates,acquire companies on acceptable terms, integrate their operations successfully with ours andmaintain the goodwill of the acquired business. Customer satisfaction of an acquired restaurantcould affect our reputation. In addition, the performance of any acquired restaurant could be lowerthan our expectation.

Rent hikes in our restaurant premises or our inability to renew existing leases may affect ourpro®ts

All of our restaurants are housed under leased premises. Upon expiry of such leased tenure, thelandlords have the rights to review and alter the terms and conditions of the lease agreements. Weface the possibility of an increase in the rental prices by the landlords or not being able to renew theleases on terms and conditions which are favourable to us. Any increase in the rentals wouldinevitably increase our operating costs, thereby affecting our pro®ts.

16

RISK FACTORS

Pilferage and theft by our employees and outsiders will harm our operating results, pro®ts,reputation and branding

In the F&B industry, the cash sales and food items are handled by our employees and lapses ininternal controls are likely to occur. Should we fail to impose strict monitoring on our staff forpossible practices of pilferage and theft of raw materials by employees and outsiders, we will not beable to prevent such misdeeds from happening. These wrong-doings will not only harm our operatingresults and pro®ts, but also our reputation and branding.

We cannot give assurance that our proposed franchise business will be successful

We intend to embark on a franchise business model for certain of our more successful themerestaurants in the future. More details on our franchise business model are set out in the section on``Future Plans and Growth Strategy'' on page 59 of this Prospectus. We cannot give any assurancethat our franchise business model will work according to plan and expectations. We may not be ableto attract suitable non-related companies as our franchisees or that such franchisees will continuewith our franchise. The loss of any franchisee will result in a decrease in our revenues while we seekan alternative franchisee or undertake to carry on the business ourselves if the domestic regulationspermit. The loss of any pro®table franchise agreement may affect our pro®tability and also present anopportunity to competitors to increase their market share.

Economic, social and political situations in other countries where we may locate our restaurantsmay affect our businesses adversely

At present, all our restaurants are operating in Singapore. However, we have plans to franchise ourtheme restaurant, Lao Beijing, in Singapore in the ®rst half of 2002 and in certain other countries inAsia by end of 2002. If we adopt the franchise business model, or expand organically into theregion, our business will be further subject to economic, social and political conditions in markets orcountries in which our restaurants are intended to be located. Our business, earnings, asset valuesand prospects may be materially and adversely affected by developments with respect to in¯ation,interest rates, government policies, price and wage controls, exchange control regulations, taxation,expropriation, social instability and other political, economic or diplomatic developments in oraffecting the countries in which we intend to operate. We have no control over such conditions anddevelopments and can provide no assurance that such conditions and developments will notadversely affect our operations or the price of or market for our Shares.

17

RISK FACTORS

ISSUE PRICE 23 cents

NET TANGIBLE ASSETS

NTA per Share based on the audited balance sheet of our Proforma Group as at31 December 2000 and after adjusting for the Restructuring Exercise (including the RightsIssue of $413,284 described on page 31 of this Prospectus) and the Sub-Division of Sharesreferred to on page 23 of this Prospectus (the ``Adjusted NTA''):±

(a) before adjusting for the estimated net proceeds from the Invitation and based on thepre-Invitation share capital of 80,000,000 Shares

4.23 cents

(b) after adjusting for the estimated net proceeds from the Invitation and based on thepost-Invitation share capital of 100,000,000 Shares

6.86 cents

Premium of the Issue Price over the Adjusted NTA per Share as at 31 December 2000:±

(a) before adjusting for the estimated net proceeds from the Invitation and based on thepre-Invitation share capital 80,000,000 Shares

444%

(b) after adjusting for the estimated net proceeds from the Invitation and based on thepost-Invitation share capital of 100,000,000 Shares

235%

EARNINGS

Historical net EPS based on our audited results for FY2000 and the pre-Invitation sharecapital of 80,000,000 Shares

3.88 cents

PRICE EARNINGS RATIO

Historical price earnings ratio based on our audited net EPS for FY2000 5.93 times

NET OPERATING CASH FLOW(1)

Historical net operating cash ¯ow per Share based on our audited results for FY2000 andthe pre-Invitation share capital of 80,000,000 Shares

5.22 cents

PRICE TO NET OPERATING CASH FLOW RATIO

Ratio of Issue Price to historical net operating cash ¯ow per Share for FY2000 4.41 times

DIVIDENDS

No dividend will be declared in respect of FY2001

MARKET CAPITALISATION

Market capitalisation based on the post-Invitation share capital of 100,000,000 Shares atthe Issue Price of $0.23 per Share

$23 million

Note:±

(1) Net operating cash ¯ow is de®ned as pro®t after taxation with provision for depreciation, goodwill and doubtful debts addedback.

18

INVITATION STATISTICS

The following selected ®nancial information should be read in conjunction with the full text of thisProspectus, including the Accountants' Report set out on pages 80 to 98 of this Prospectus:±

Operating results of our Proforma Group

----------- Financial year ended 31 December -----------

($'000) 1997 1998 1999 2000

Turnover 37,536 37,134 41,016 49,706

Operating pro®t before interest, depreciation, other incomeand taxation 949 (1,220) 4,788 5,594

Interest expense (47) (47) (22) (21)

Depreciation (613) (824) (796) (1,066)

Income from associates 4 Ð Ð Ð

Pro®t/(Loss) before taxation 293 (2,091) 3,970 4,507

Taxation (296) (9) (740) (1,227)

Pro®t/(Loss) after taxation (3) (2,100) 3,230 3,280

Minority interests (82) 435 (291) (176)

Pro®t/(Loss) attributable to our Proforma Group (85) (1,665) 2,939 3,104

EPS/(Loss per Share) (cents)(1) (0.11) (2.08) 3.67 3.88

Notes:±

(1) For comparative purposes, EPS for the period under review have been computed based on the pro®t or loss attributable toour Proforma Group and the pre-Invitation share capital of 80,000,000 Shares.

(2) For FY1999 and FY2000, the aggregate remuneration (including CPF contributions and bene®ts) of our Directors,substantial Shareholders and employees who are related to our Directors and substantial Shareholders amounted toapproximately $364,172 and $529,855, respectively. These represent approximately 8.4% and 10.5% of our pro®t beforetaxation (before deduction of such remuneration) for FY1999 and FY2000, respectively.

19

SUMMARY OF OUR GROUP FINANCIAL INFORMATION

Financial position of our Proforma Group

----------------------------------------------------- As at 31 December ----------------------------------------------------

($'000) 1997 1998 1999 2000

Property, plant and equipment 2,079 2,211 1,497 3,620

Goodwill on consolidation 652 283 Ð Ð

Investments in deconsolidated companies 802 100 100 Ð

Current assets

Inventories 1,076 711 695 989

Trade receivables 932 1,399 1,383 1,526

Other receivables and prepayments(1) 862 1,419 1,153 1,691

Cash and bank balances 938 601 3,448 4,882

3,808 4,130 6,679 9,088

Current liabilities

Trade payables 3,930 5,041 4,190 3,978

Other payables and accrued charges(2) 2,664 4,605 3,754 3,838

Current obligations under ®nance leases 96 168 34 189

Provision for taxation 235 48 733 424

Bank borrowings 571 165 37 126

7,496 10,027 8,748 8,555

Net current liabilities (3,688) (5,897) (2,069) 533

Non-current liabilities

Bank borrowings (140) Ð Ð (354)

Obligations under ®nance leases (50) (32) Ð (352)

Deferred taxation (110) (46) (162) (191)

(455) (3,381) (634) 3,256

Shareholders' equity (720) (3,672) (1,198) 2,968

Minority interests 265 291 564 288

(455) (3,381) (634) 3,256

(Net liabilities)/NTA(3) (1,372) (3,955) (1,198) 2,968

(Net liabilities)/NTA per Share(4) (cents) (1.72) (4.94) (1.50) 3.71

Notes:±

(1) Included in ``Other receivables and prepayments'' are amounts (net of provisions) owing by related parties of $61,000,$372,000, nil and $344,573 as at 31 December 1997, 31 December 1998, 31 December 1999 and 31 December 2000,respectively. The amount outstanding of $344,573 was repaid prior to the Invitation.

(2) Included in ``Other payables and accrued charges'' are amounts owing to related parties of $783,000, $1,379,000, $896,000and nil as at 31 December 1997, 31 December 1998, 31 December 1999 and 31 December 2000, respectively.

(3) The net liabilities/NTA are arrived at after adjusting for intangible assets. Further details on the net liabilities are set out onpages 54 and 55 of this Prospectus. The NTA as at 31 December 2000 has not been adjusted for the Rights Issue referredto on page 31 of this Prospectus.

(4) For comparative purposes, (net liabilities)/NTA per Share for the period under review have been computed based on thepre-Invitation share capital of 80,000,000 Shares.

20

SUMMARY OF OUR GROUP FINANCIAL INFORMATION

Our Proforma Group's capitalisation as at 31 December 2000 are set out as below:±

Our Proforma Groupas adjusted for the

Restructuring Exercise butbefore adjusting for the

proceeds from the Invitation

Our ProformaGroup as adjusted

for the netproceeds fromthe Invitation

$'000 $'000

Cash and cash equivalent 5,295 8,775

Indebtedness

Current

Obligations under ®nance leases 189 189

Bank borrowings 126 126

315 315Non-current

Obligations under ®nance leases 352 352

Bank borrowings 354 354

706 706

Total indebtedness 1,021 1,021

Shareholders' equity

Issued and fully paid-up capital 2,000 2,500

Share premium Ð 2,980

Accumulated pro®ts 1,381 1,381

3,381 6,861

Total capitalisation and indebtedness 4,402 7,882

Our cash and cash equivalents are denominated in Singapore dollars.

As at 31 December 2000, our Group had operating lease commitments in respect of future operatinglease rentals aggregating approximately $17.9 million. Details of the leased premises for our restaurantoperations are shown on pages 44 and 45 of this Prospectus. Our Group also has capitalcommitments in respect of capital expenditure pertaining to acquisition of plant and machineryamounting to approximately $2.7 million.

Details of the banking facilities are set out under the heading ``Liquidity and Capital Resources'' onpage 52 and the Accountants' Report on page 94 of this Prospectus.

Save for the foregoing, our Group has no other borrowings or indebtedness and liabilities underacceptances (other than normal trading bills) or acceptance credits, mortgages, charges, obligationsunder ®nance leases, guarantees or other material contingent liabilities.

Of the net proceeds from the Invitation, $0.4 million will be used to ®nance the renovation costs of ournew corporate of®ce cum food processing facility at Bukit Batok Techpark 21, $0.5 million for capitalexpenditure on our two new Lao Beijing restaurant outlets and $2.6 million for general working capitalas disclosed on pages 58 and 59 of this Prospectus.

21

CAPITALISATION AND INDEBTEDNESS

DILUTION

Dilution is the amount by which the Issue Price to be paid by the applicants for our Invitation Shares inthe Invitation exceeds the net tangible book value per Share after the Invitation. Net tangible bookvalue per Share is determined by subtracting our total liabilities from the total book value of ourtangible assets and dividing the difference by the number of Shares deemed to be outstanding onthe date on which the book value is determined. The adjusted net tangible book value of our Groupas at 31 December 2000 was 4.2 cents per Share.

Based on the issuance by us of 20,000,000 Invitation Shares at the Issue Price of $0.23 per Share,after deducting the estimated issue expenses, the net tangible book value of our Group as at 31December 2000 would have been 6.9 cents per Share. This represents an immediate increase in nettangible book value of 2.7 cents per Share to our Shareholders and an immediate dilution in nettangible book value of 16.1 cents per Share to new investors. The following table illustrates this perShare dilution:±

Per Share

$

Issue Price per Share 0.230

Adjusted net tangible book value per Share as at 31 December 2000 0.042

Increase in net tangible book value per Share attributable to Shareholders 0.027

Adjusted net tangible book value per Share after the Invitation 0.069

Dilution in net tangible book value per Share to new public investors 0.161

The following table summarises the total number of Shares subscribed, the total consideration(inclusive of the Rights Issue) paid by our existing Shareholders and the average price per Sharepaid by our existing Shareholders since our incorporation and by the new investors in the Invitation:±

Number ofShares

Considerationamount

Weightedaverage price

per Share

% $'000 % $

Existing Shares 80,000,000 80.0 2,000 30.3 0.025

New Shares 20,000,000 20.0 4,600 69.7 0.230

Total 100,000,000 100.0 6,600 100.0 0.168

22

DILUTION

SHARE CAPITAL

Our Company was incorporated in Singapore on 29 June 2000 under the Act, as a private limitedcompany under the name of Dello Investments Pte Ltd. On 30 October 2000, we changed our nameto ``Tung Lok Restaurants (2000) Pte Ltd''. Pursuant to the Restructuring Exercise, our Companyacquired the entire issued share capital of Tung Lok Millennium, which holds the assets, businessand undertakings of the restaurant businesses previously held by TLGH and various of itssubsidiaries and associated companies as well as 75% of the issued share capital of CCPL and60% of the issued share capital of LBDH and in connection with our IPO, we renamed our Company``Tung Lok Restaurants (2000) Ltd'' on 7 March 2001.

There is only one class of shares in our Company. A description of our ordinary shares relating to themore important rights and privileges of our Shareholders as conferred by the laws of Singapore andour Articles of Association is set out in Annex A of this Prospectus. As at 31 December 2000, ourCompany had an authorised share capital of $10,000,000 comprising 10,000,000 ordinary shares of$1.00 each, and an issued and paid-up share capital of $2.00 comprising 2 ordinary shares of $1.00each.

At an Extraordinary General Meeting held on 7 February 2001, the Shareholders of our Companyapproved, inter alia, the following:±

(a) the Restructuring Exercise; and

(b) the issuance of 1,999,998 new ordinary shares of $1.00 each, (including the rights issue of413,284 new ordinary shares of $1.00 each in our Company at par for cash on the basis of 6new ordinary shares of $1.00 each for every 23 existing ordinary shares of $1.00 each).

At an Extraordinary General Meeting held on 5 March 2001, the Shareholders of our Companyapproved, inter alia, the following:±

(a) the sub-division of each of the ordinary share of $1.00 each in the authorised and issued andpaid-up share capital of our Company into 40 ordinary shares of $0.025 each (``Sub-Division ofShares'');

(b) the conversion of our Company into a public limited company and the change of our name to``Tung Lok Restaurants (2000) Ltd'';

(c) the adoption of the new Articles of Association of our Company;

(d) the issuance of 20,000,000 new Shares pursuant to the Invitation. The Invitation Shares, whenissued and fully paid, will rank pari passu in all respects with the existing issued and fully paid-up Shares;

(e) the authorisation for our Directors, pursuant to Section 161 of the Act and the Articles ofAssociation, to allot and issue Shares from time to time (whether by way of rights, bonus orotherwise) and upon such terms and conditions and for such purposes and to such person asour Directors may in their absolute discretion deem ®t, provided that the aggregate number ofShares issued pursuant to such authority shall not exceed 50% of the issued and paid-upshare capital of our Company for the time being, of which the aggregate number of Sharesissued other than on a pro-rata basis to the existing shareholders of our Company shall notexceed 20% of the issued share capital of our Company for the time being and, unlessrevoked or varied by our Company in general meeting, such authority shall continue in forceuntil the conclusion of the next Annual General Meeting (``AGM'') of our Company or on thedate by which the next AGM is required by law to be held, whichever is earlier; and

23

SHARE CAPITAL

(f) the approval for our Company and our subsidiaries or any of them to enter into futuretransactions, in the ordinary course of business, with our Directors, our substantialShareholders and their associates in accordance with Shareholders' Mandate more particularlydescribed on pages 73 and 74 of this Prospectus.

Details of the changes to the issued and paid-up share capital of our Company from the date ofincorporation and our issued and paid-up share capital immediately preceding the Invitation are asfollows:±

Number ofShares $

Issued and fully paid-up ordinary shares of $1.00 each as at date ofincorporation 2 2

Issue of Shares pursuant to the Restructuring Exercise* 1,999,998 1,999,998

Pre-Invitation share capital 2,000,000 2,000,000

Pre-Invitation share capital after Sub-Division of Shares 80,000,000 2,000,000

New Shares to be issued pursuant to the Invitation 20,000,000 500,000

Post-Invitation share capital 100,000,000 2,500,000

Note:±

*This includes the Rights Issue of 413,284 new ordinary shares of $1.00 each in our Company.

The authorised share capital and the shareholders' funds of our Company as at the date ofincorporation, before and after adjustments to re¯ect the increase in the authorised share capital, theRestructuring Exercise, the Sub-Division of Shares and the Invitation are set forth below. Thesestatements should be read in conjunction with the Accountants' Report set out on pages 80 to 98 ofthis Prospectus.

As at date ofincorporation

After adjusting forthe increase in the

authorised share capital,the Restructuring Exercise,and Sub-Division of Shares

AfterInvitation

$ $ $Authorised Share Capital

Ordinary shares of $1.00 each 100,000 Ð Ð

Ordinary shares of $0.025 each Ð 10,000,000 10,000,000

Shareholders' Funds

Issued and paid-up capital 2 2,000,000 2,500,000

Share premium Ð Ð 2,980,000

Accumulated pro®ts Ð (15,000) (15,000)

Total shareholders' funds 2 1,985,000 5,465,000

24

SHARE CAPITAL

SHAREHOLDERS

The Shareholders and their respective direct shareholdings in our Company immediately before andafter the Invitation are set out below:±

---------- Before the Invitation --------- -------------- After the Invitation --------------

No. of SharesHeld Directly %

No. of SharesHeld Directly %

Directors

Zhou Yingnan(1) Ð Ð Ð Ð

Andrew Tjioe(1) Ð Ð Ð Ð

Tjioe Ka In(1) Ð Ð Ð Ð

Ban Song Long(2) Ð Ð Ð Ð

Ker Sin Tze (Dr)(3) Ð Ð Ð Ð

Tan Eng Liang (Dr)(4) Ð Ð Ð Ð

Substantial Shareholders

Zhou Holdings Pte Ltd(1) 53,200,000 66.50 53,200,000 53.20

Goh Cheng Liang 9,348,000 11.69 9,348,000 9.35

Holders of less than 5% who are related to theDirectors or substantial Shareholders

NIL

Others

Sim Lai Hee(5) 4,104,000 5.13 4,104,000 4.10

Sim Seng Kiang(5), (6), (7) 4,816,000 6.02 4,816,000 4.82

Sim Seng Jin(5), (7) 3,516,000 4.39 3,516,000 3.51

Tay Kwang Thiam 3,116,000 3.90 3,116,000 3.12

Arthur Tan Keng Hock(6), (7) 1,700,000 2.12 1,700,000 1.70

Toh Chui Ling(6), (7) 70,000 0.09 70,000 0.07

Gerald Cheong Chin Joo(6), (7) 130,000 0.16 130,000 0.13

Public (including Reserved Shares)(8) Ð Ð 20,000,000 20.00

Total 80,000,000 100.00 100,000,000 100.00

Notes:±

(1) Zhou Holdings Pte Ltd (``ZH'') is an investment holding company incorporated in Singapore on 8 September 2000. Theissued and paid-up share capital of ZH is $100 comprising 100 ordinary shares of $1.00 each. The shareholders anddirectors of the company are Zhou Yingnan, Andrew Tjioe and Tjioe Ka In, who respectively own 30%, 20%, 10% and theremaining 40% is held equally by Tjioe Ka Lie, Zhou Jia Ping, Tjioe Ka Sin and Zhou An Lai, held on his behalf by AndrewTjioe. Zhou Yingnan is the father of Andrew Tjioe, Tjioe Ka In, Tjioe Ka Lie, Zhou Jia Ping and Tjioe Ka Sin, who are siblings.Zhou An Lai is the son of Andrew Tjioe.

(2) Ban Song Long is our Independent Director and the Chairman of our Audit Committee.

(3) Dr Ker Sin Tze is our Independent Director. He is the non-executive Chairman of IRE Corporation Limited and ManagingDirector of Yenom Holdings Pte Ltd, both of which are controlled by Goh Cheng Liang, a substantial shareholder of ourCompany, and is a business associate of Goh Cheng Liang and Sim Lai Hee (a minority Shareholder of our Company)through their respective shareholdings in Yenomland Pte Ltd. Dr Ker Sin Tze is also a director of certain companiescontrolled by Goh Cheng Liang and his family. Further details are set out on page 62 of this Prospectus.

(4) Dr Tan Eng Liang is our Independent Director. He is a director of several companies. Some of these companies arecontrolled by Goh Cheng Liang and his family. Further details are set out on page 62 of this Prospectus.

(5) Sim Lai Hee is the father of Sim Seng Kiang and Sim Seng Jin who are siblings.

25

SHARE CAPITAL

(6) Sim Seng Kiang and Arthur Tan Keng Hock are both Managing Directors of Advance Investment Management Capital PteLtd (``AIM Capital'') which received a restructuring fee for its involvement in the restructuring of TLGH. Toh Chui Ling andGerald Cheong Chin Joo are both executives in AIM Capital.

(7) On 28 February 2001, certain shareholders of our Company sold an aggregate of 100,000 ordinary shares of $1.00 each toSim Seng Kiang, Sim Seng Jin, Arthur Tan Keng Hock, Toh Chui Ling and Gerald Cheong Chin Joo for a consideration of$100,000 based on the audited NTA of our Proforma Group as at 31 July 2000.

(8) This includes Reserved Shares offered to the following persons:±

NameNumber of

Reserved Shares offered Relationship

Chua Phak Mong 20,000 Financial Controller

Lilian Rae Hiw Chiew Shen 30,000 Vice President, Operations

Vincent Phang Chwee Kin 100,000 Vice President, Catering Sales

Rena Leong 100,000 Senior Manager, Corporate Affairs

Dawn Ranji David 5,000 Manager, Corporate Affairs & Communications

Chua Phak Mong, Lilian Rae Hiw Chiew Shen, Vincent Phang Chwee Kin, Rena Leong and Dawn Ranji David are ourExecutive Of®cers. The Reserved Shares are offered in recognition of their contributions to our Group.

MORATORIUM

To demonstrate their commitment to our Group, our substantial Shareholders, Zhou Holdings Pte Ltdand Goh Cheng Liang who own in aggregate, 62,548,000 Shares, representing 62.55% of ourCompany's share capital after the Invitation, have each undertaken not to sell, transfer or otherwisedispose of any part of their respective interests in our Company for a period of 12 monthscommencing from the date of our Company's admission to the Of®cial List of SGX SESDAQ, and forthe subsequent 12 months thereafter, sell, transfer or otherwise dispose of more than 50.0% of eachof their respective interests held in our Company immediately after the Invitation.

In addition, Zhou Yingnan, Andrew Tjioe (for himself and on behalf of his infant son, Zhou An Lai), TjioeKa In, Tjioe Ka Lie, Zhou Jia Ping and Tjioe Ka Sin have each undertaken not to realise or transfer anypart of their respective shareholdings in Zhou Holdings Pte Ltd for a period of 24 months commencingfrom the date of our Company's admission to the Of®cial List of SGX SESDAQ.

26

SHARE CAPITAL

RESTRUCTURING EXERCISE

To streamline our Group's structure, we implemented a restructuring exercise in preparation for ourlisting on SGX SESDAQ. On 29 June 2000, our Company was incorporated in Singapore under thename of ``Dello Investments Pte Ltd''. We subsequently changed our name to ``Tung LokRestaurants (2000) Pte Ltd'' on 30 October 2000. The various fully-owned restaurant businesses,which were majority owned by the Zhou family, to be operated within our Group following theRestructuring Exercise are held under our wholly-owned subsidiary, Tung Lok Millennium. Tung LokMillennium was incorporated in Singapore under the name of Vactrend Trading Pte Ltd on 29 July2000. Its name was subsequently changed to ``Tung Lok Millennium Pte Ltd'' on 30 October 2000.

As a preliminary step in the Restructuring Exercise, we increased our authorised share capital from$100,000 divided into 100,000 ordinary shares of $1.00 each to $10,000,000 divided into 10,000,000ordinary shares of $1.00 each.

A diagram showing our Group structure after the Restructuring Exercise as at the date of thisProspectus is set out on page 32 of this Prospectus. The Restructuring Exercise involved thefollowing:±

1. Acquisition of shares in CCPL

On 9 December 2000, Wang Changzheng (``Wang'') entered into a sale and purchase agreementwith Andrew Tjioe and Sim Seng Jin (``SSJ'') pursuant to which Wang agreed to transfer toAndrew Tjioe and SSJ an aggregate of 160,000 ordinary shares of $1.00 each representing20% of the issued and paid-up share capital of CCPL, together with all rights and bene®tsattached to such shares from 31 July 2000 in consideration for the payment of the aggregatesum of $240,800 to Wang. The consideration was based on the Singapore dollar equivalent ofthe US dollar amount initially contributed by Wang, adjusted for the exchange rate differential.

Our Company subsequently entered into a sale and purchase agreement on 8 February 2001pursuant to which our Company acquired from TLGH, Andrew Tjioe and SSJ an aggregate of600,000 ordinary shares of $1.00 each in the capital of CCPL, representing 75.0% of theissued and paid-up share capital of CCPL, together with all rights and bene®ts attached tosuch shares from 31 July 2000.

The consideration for the said acquisition was satis®ed by the allotment and issue, at thedirection of TLGH, Andrew Tjioe and SSJ of an aggregate of 27,394 ordinary shares of $1.00each in the capital of our Company, to Zhou Holdings Pte Ltd (``ZH''), Goh Cheng Liang(``GCL''), Tay Kwang Thiam (``TKT''), Sim Lai Hee (``SLH''), Sim Seng Kiang (``SSK'') and SimSeng Jin (``SSJ'') based on the audited NTA of $37,558 for CCPL as at 31 July 2000.

2. Acquisition of shares in LBDH

On 8 December 2000, Fok Wing Tin (``FOK'') entered into a sale and purchase agreement withAndrew Tjioe and SSJ, pursuant to which FOK agreed to transfer to Andrew Tjioe and SSJ anaggregate of 23,000 ordinary shares at $1.00 each representing approximately 9.58% of theissued and paid-up capital of LZPL, together with all rights and bene®ts attached to suchshares from 31 July 2000 in consideration for the payment of the aggregate sum of $69,000 toFOK. Our Company subsequently entered into a sale and purchase agreement on 8 February2001 pursuant to which our Company acquired from LZPL and Andrew Tjioe an aggregate of150,000 ordinary shares of $1.00 each in the capital of LBDH, representing 60.0% of theissued and paid-up share capital of LBDH together with all rights and bene®ts attached to suchshares from 31 July 2000.

27

GROUP STRUCTURE

The consideration for the said acquisition was satis®ed by the allotment and issue, at thedirection of LZPL and Andrew Tjioe, of an aggregate of 191,100 ordinary shares of $1.00 eachin the capital of our Company to ZH, GCL, TKT, SLH, SSK and SSJ based on the audited NTA of$318,500 for LBDH as at 31 July 2000.

3. Acquisition of the undertakings of various restaurant-operating companies (the``Undertakings'') by our Company

Subsequently, we entered into a series of reconstruction agreements to purchase, inter alia, theassets, business and undertakings of the restaurant businesses held by various subsidiaries ofTLGH as follows:±

(a) Acquisition of Tung Lok and Grand Pavilion

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of TLGH in relation to Tung Lok andGrand Pavilion (the ``TLGH Undertakings'') with effect from 1 August 2000 but excludingnon-operating assets and liabilities of TLGH which comprise mainly amounts due from ordue to antecedent companies and related parties and the provision for taxation in relationto the antecedent companies.

The consideration for the said acquisition was the sum of $252,032 which was satis®ed bythe allotment and issue, at the direction of TLGH, of 252,032 ordinary shares of $1.00 eachin our capital to ZH, GCL, TKT, SLH, SSK and SSJ being equivalent in value to the bookvalue of the TLGH Undertakings based on the audited ®nancial statements as at 31 July2000.

(b) Acquisition of Noble House, Tung Lok Noble Gifts, Tung Lok Seafood Gallery and TheRed Book

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of NHPL in relation to Noble House,Tung Lok Noble Gifts, Tung Lok Seafood Gallery and The Red Book (the ``NHPLUndertakings'') with effect from 1 August 2000 but excluding non-operating assets andliabilities of NHPL which comprise mainly amounts due from or due to antecedentcompanies and related parties and the provision for taxation in relation to the antecedentcompanies.

The consideration for the said acquisition was the sum of $875,861 which was satis®ed bythe allotment and issue, at the direction of NHPL, of 875,861 ordinary shares of $1.00 eachin our capital (the ``NHPL Subscription Shares'') to ZH, GCL, TKT, SLH, SSK and SSJ beingequivalent in value to the book value of the NHPL Undertakings based on the audited®nancial statements as at 31 July 2000.

(c) Acquisition of The Paramount

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of TLDH in relation to TheParamount (the ``TLDH Undertakings'') with effect from 1 August 2000 but excluding non-operating assets and liabilities of TLDH which comprise mainly amounts due from or due toantecedent companies and related parties and the provision for taxation in relation to theantecedent companies.

The consideration for the said acquisition was the sum of $50,505 which was satis®ed bythe allotment and issue, at the direction of TLDH, of 50,505 ordinary shares of $1.00 eachin our capital (the ``TLDH Subscription Shares''), to ZH, GCL, TKT, SLH, SSK and SSJ

28

GROUP STRUCTURE

being equivalent in value to the book value of the TLDH Undertakings based on the audited®nancial statements as at 31 July 2000.

(d) Acquisition of Lingzhi Vegetarian

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of LZPL in relation to LingzhiVegetarian (the ``LZPL Undertakings'') with effect from 1 August 2000 but excluding non-operating assets and liabilities of LZPL which comprise mainly amounts due from or dueto antecedent companies and related parties and the provision for taxation in relation tothe antecedent companies.

The consideration for the said acquisition was the sum of $69,777 which was satis®ed bythe allotment and issue, at the direction of LZPL, of 69,777 ordinary shares of $1.00 each inour capital (the ``LZPL Subscription Shares'') to ZH, GCL, TKT, SLH, SSK and SSJ beingequivalent in value to the book value of the LZPL Undertakings based on the audited®nancial statements as at 31 July 2000.

(e) Acquisition of Kippo Pavilion

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of FCPL (the ``FCPL Undertakings'')in relation to Kippo Pavilion with effect from 1 August 2000 but excluding non-operatingassets and liabilities of FCPL which comprise mainly amounts due from or due toantecedent companies and related parties and the provision for taxation in relation to theantecedent companies.

Based on the audited book value of the FCPL Undertakings as at 31 July 2000, theconsideration for the said acquisition was the sum of $266,332 which was satis®ed by theallotment and issue, at the direction of FCPL of 120,045 ordinary shares of $1.00 each inour capital (the ``FCPL Subscription Shares'') to ZH, GCL, TKT, SLH, SSK and SSJ and theissue to FCPL of promissory notes for the aggregate sum of $146,287 payable to or to theorder of FCPL (the ``FCPL Notes'').

FCPL transferred the FCPL Notes to ZH, GCL, TKT, SLH, SSK and SSJ in the amount of$102,401, $17,992, $5,998, $7,900, $5,998, and $5,998, respectively. The FCPL Notes willbe utilised as credit offsets against the respective amounts due from TLRM and CGPLunder the TLRM Note and the CGPL Note (each de®ned below).

(f) Acquisition of the assets, business and undertakings of TLRM

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of TLRM (the ``TLRM Undertakings'')with effect from 1 August 2000 but excluding non-operating assets and liabilities of TLRM.In connection with the said agreement, TLRM delivered to our Company promissory notes(the ``TLRM Notes'') for the aggregate sum of $30,478 payable to us or to our order basedon the audited book value of the net liabilities of the TLRM Undertakings as at 31 July2000. The consideration for the acquisition of the TLRM Undertakings and the TLRM Notewas satis®ed by the payment of the sum of $1.00 in cash to TLRM.

(g) Acquisition of the assets, business and undertakings of Charming Garden

Pursuant to a reconstruction agreement dated 8 February 2001, we completed theacquisition of the assets, business and undertakings of CGPL (the ``CGPL Undertakings'')in relation to Charming Garden with effect from 1 August 2000 but excluding non-operatingassets and liabilities of CGPL which comprise mainly amounts due from or due to

29

GROUP STRUCTURE

antecedent companies and related parties and the provision for taxation in relation to theantecedent companies. In connection with the said agreement, CGPL delivered to ourCompany promissory notes (the ``CGPL Notes'') for the aggregate sum of $115,811payable to us or to our order based on the audited book value of the net liabilities of theCCPL Undertakings as at 31 July 2000. The consideration for the acquisition of the CGPLUndertakings and CGPL Note was satis®ed by the payment of the sum of $1.00 in cash toCGPL.

(h) By various deeds of assignment dated 8 February 2001, our Company assigned to ZH,GCL, TKT, SLH, SSK and SSJ (the ``Assignees'') all rights, bene®ts and title in respect ofthe TLRM Notes and CGPL Notes pursuant to which the aggregate sum of $146,289 ispayable to us in consideration of the payment of the aggregate sum of $146,287 in theform of the transfer of the FCPL Notes from the Assignees to our Company and $2.00 incash.

The result of the assignments was that:±

(i) Our Company allotted and issued 120,045 ordinary Shares of $1.00 each in ourcapital to the Assignees, in aggregate, to acquire the assets, business andundertakings of FCPL, TLRM and CGPL but excluding certain assets and liabilitiespursuant to the Restructuring Exercise;

(ii) The FCPL Notes were cancelled; and

(iii) The TLRM Notes and the CGPL Notes were assigned to the Assignees.

4. Transfer of LBDH's equity interest in the House of Mao Restaurant Pte Ltd (``House ofMao'')

On 8 February 2001, LBDH entered into a sale and purchase agreement pursuant to which LBDHtransferred to LZPL, Andrew Tjioe and Poping Lou Restaurant Pte Ltd 100,000 ordinary shares of$1.00 each in the capital of the House of Mao, representing approximately 15.1% of the issuedand paid-up share capital of the House of Mao, together with all rights and bene®ts attached tosuch shares from 31 July 2000.

The consideration for the said transfer was $1.00 satis®ed in cash by each purchaser.

Immediately following the above transactions, our shareholdings are set out in the table below:±

Name of ShareholderNumber of Sharesof $1.00 each Held

Percentage of our Issuedand Paid-up Share Capital

Zhou Holdings Pte Ltd (``ZH'') 1,110,702 70.0%

Goh Cheng Liang (``GCL'') 195,168 12.3%

Tay Kwang Thiam (``TKT'') 65,055 4.1%

Sim Lai Hee (``SLH'') 85,681 5.4%

Sim Seng Jin (``SSJ'') 65,055 4.1%

Sim Seng Kiang (``SSK'') 65,055 4.1%

1,586,716 100.0%

30

GROUP STRUCTURE

5. Rights issue of Shares

On 7 February 2001, our shareholders, inter alia, approved the Rights Issue of 413,284 ordinaryshares of $1.00 each, representing 20.7% of our enlarged issued and paid-up share capital afterthe Restructuring Exercise, for a cash consideration of $413,284 as part of the RestructuringExercise. The Rights Issue was subscribed for in full on 5 March 2001. The Rights Issue wasintended to bring our Company to a more appropriate post-Restructuring equity capital level of$2.0 million.

6. Sale of the Undertakings acquired by us to Tung Lok Millennium

Following the completion of the acquisition of the various restaurant businesses as set outabove, we entered into a sale and purchase of assets agreement on 8 February 2001 withTung Lok Millennium pursuant to which we transferred to Tung Lok Millennium the assets,businesses and undertakings which we had acquired as described in paragraphs 3(a) to 3(h)pursuant to the reconstruction agreements set out above.

Based on the NTA of the Undertakings, the consideration for the said acquisition was the sum of$1,368,220 which was satis®ed by the allotment and issue by Tung Lok Millennium to us of1,368,220 ordinary shares of $1.00 each in the capital of Tung Lok Millennium. This is inaddition to the 2 ordinary shares of $1.00 each in Tung Lok Millennium which were transferredto our Company from Zhou Yingnan and Andrew Tjioe on 12 December 2000 for a cashconsideration of $1.00 each.

Following the completion of the Restructuring Exercise, Tung Lok Millennium is now our wholly-ownedsubsidiary. We also own 75.0% and 60.0% of the issued and paid-up share capital of CCPL andLBDH respectively.

Each of CGPL, FCPL, LZPL, NHPL, TLDH, TLGH, FCPL and TLRM have undertaken not to engage inany business which is in competition with the core business of our Group (save for Spice Garden heldby CGPL and House of Mao in which LZPL has an interest) and to change their respective corporatenames so that there will be no confusion with the restaurants operated by our Company. Furtherdetails of Spice Garden and House of Mao are set out on pages 68, 69, 75 and 76 of this Prospectus.

31

GROUP STRUCTURE

GROUP STRUCTURE

Zhou Holdings Pte Ltd Goh Cheng Liang Other minorityShareholders

Public

TUNG LOK RESTAURANTS (2000) LTD

Tung LokMillennium

Pte Ltd

Club ChinoisPte Ltd

Lao BeijingDiningHallPte Ltd

Tung LokNobleGifts

Food Processing Division Restaurant Divisions

Charming Garden Jade

KippoPavilion

LingzhiVegetarian

NobleHouse

The Red Book

TheParamount Tung Lok

Tung LokSeafoodGallery

GrandPavilion

53.20% 9.35% 17.45% 20.00%

100% 75% 60%

(1)(2)

Notes:±

(1) The remaining 25% is held by VEF Technology (S) Pte Ltd, an unrelated party.

(2) The remaining 40% is held by Poping Lou Restaurant Pte Ltd, an unrelated party.

32

GR

OU

PS

TR

UC

TU

RE

HISTORY

Our Company was incorporated on 29 June 2000 under the Act as a private limited company underthe name of Dello Investments Pte Ltd. On 30 October 2000, we changed our name to ``Tung LokRestaurants (2000) Pte Ltd''. On 7 March 2001, pursuant to our conversion into a public limitedcompany, we changed our name to ``Tung Lok Restaurants (2000) Ltd''. Pursuant to a RestructuringExercise as set out on pages 27 to 31 of this Prospectus, our Company acquired the entire issuedshare capital of Tung Lok Millennium which holds the assets, business and undertakings of therestaurant businesses previously held by TLGH and various of its subsidiaries, 75% of the issuedshare capital of CCPL and 60% of the issued share capital of LBDH on 1 August 2000.

Our ®rst restaurant, Charming Garden was opened in October 1980 at the Orchid Inn (now known asCopthorne Orchid Singapore). Charming Garden specialises in Hunan cuisine. The Hunan cuisine waschosen by Zhou Yingnan, our founder and non-executive Chairman who recognised Singaporeans'liking for the spicy ¯avours of Hunan cuisine. After 20 years, the restaurant is still operating at itsoriginal premises.

Following the success of our ®rst restaurant, we introduced other types of cuisine to cater to thevaried tastebuds of our customers. The early 1980s saw the introduction of many upscale HongKong-style Cantonese restaurants specialising in shark's ®n and other seafood delicacies. Inspiredby the success of these restaurants, we opened Tung Lok Shark's Fin Restaurant in January 1984 atLiang Court. The restaurant specialises in shark's ®n, Cantonese cuisine, dianxin and other seafooddelicacies. The restaurant concept proved popular with our customers which helped us survive therecession from 1985 to 1987. In fact, Tung Lok Shark's Fin Restaurant has emerged as the ¯agshiprestaurant of our Group. In April 1998, we changed the restaurant name to Tung Lok Restaurant todifferentiate ourselves from the other shark's ®n restaurants and to expand our target market. Wealso renovated the restaurant in an effort to portray a friendlier image to cater to customers with awider taste for Cantonese cuisine. With an established reputation for serving quality shark's ®ndishes, we believe that the change of the restaurant's name helped to promote our non-shark's ®nmenu and attract a wider range of customers.

Encouraged by the performance of Tung Lok, we commenced operation of Grand Pavilion in May1988. The restaurant which operates at the Chinese Swimming Club in the Katong area, was one ofthe ®rst few up-market Chinese restaurants to offer quality Cantonese cuisine on the east coast ofSingapore. The restaurant is well patronised by the members of the club, residents of the nearbyaf¯uent Katong area and gourmets from other parts of the island.

In July 1990, we opened another Cantonese cuisine restaurant, The Paramount, at the ParamountHotel. We differentiated this restaurant from our other Cantonese cuisine restaurants by installingKTV facilities on the premises to capitalise on the popularity of karaoke then. It offers our customersthe combination of ®ne dining with entertainment.

The nationwide campaign to promote a healthy lifestyle amongst Singaporeans in the early 1990ssparked a trend towards healthier living and created a demand for more nutritious cuisine. Weopened our ®rst vegetarian restaurant, Lingzhi Vegetarian, in January 1991, to cater to vegetariansand health conscious individuals. The menu of vegetarian dish has proven to be popular not only tovegetarians but also non-vegetarians who seek healthy meals.

We started our ®rst restaurant in the central business district, Noble House, in Shenton Way in May1991. Noble House is also equipped with KTV facilities. We enjoyed the patronage from executivesworking in the area during lunch hours. Specialising in Cantonese cuisine, Noble House waspositioned to take on Chinese banquets. With our emphasis on quality food, we offeredcompetitively priced wedding packages to compete with local hotels. Noble House holds 180 to 200wedding functions a year. Revenue generated from wedding packages by Noble House accounted for7.9% and 5.9% of our Group's revenue in 1999 and 2000, respectively.

33


At the invitation of the management of the Keppel Club, we opened the Kippo Pavilion in September1994, which serves spicy Hunan, Sichuan and Japanese cuisines. The attraction of Kippo Pavilion isthe opportunity for our customers to enjoy a combination of Chinese and Japanese cuisines at thesame restaurant.

In October 1996, we started our ®rst Chinese theme restaurant, Lao Beijing. Situated at OrchardTowers along Orchard Road, the restaurant re-created the look and feel of a typical Beijing-styleeatery such as greetings from all waiting staff upon arrival of customers. Old photos and antiquepictures hang on the walls of the restaurant, and wooden furniture which resemble those used in theolden days in China are used to decorate the restaurant. The restaurant serves light fare such asspecialty noodles and northern Chinese dianxin as part of a menu comprising a typical Beijing fare.The restaurant's ambience and the food served are strikingly similar to eateries in Beijing. The LaoBeijing theme is our ®rst major milestone in replicating the ambience and food served of anotherculture. On 28 November 1997, following NHPL's acquisition of 46.67% shareholdings in LZPL,LBDH became a subsidiary of TLGH. Consequently, with effect from 28 November 1997, the resultsof LBDH are consolidated as part of our Proforma Group.

Club Chinois was set up in November 1997 at the Orchard Parade Hotel, specialising in what we term`modern Chinese' food, namely, traditional Chinese cuisine using western ingredients and westernstyle presentation. This was done in conjunction with the Singapore Tourism Board's call onrestaurants and hotels to promote and develop Singapore as the perfect example of new Asia Ð acombination of east and west, old and new living. The interior decoration resembles an up-marketrestaurant in Shanghai in the 1930s. We have an internationally renowned celebrity chef in theposition of culinary consultant to work together with our team of master chefs to create a menuusing western ingredients and cooking methods for Chinese dishes we serve. The menu features aharmonious blend of Chinese and western cuisine positioning it in the style of a ®ne-dining westernrestaurant. The unique combination of the food, the dining ambience and the service distinguishesClub Chinois apart from other dining establishments.

We consider the opening of Club Chinois to be another major milestone in the history of our Group.Since its inception, Club Chinois has been selected as one of the hosting venues for the prestigiousWorld Gourmet Summit. The summit, which took place in July 1998, July 1999 and April 2000 featuredfamous master chefs such as Wang Hongfa of the world-famous Diaoyutai State Guesthouse, Beijing,Jean-Georges Vongerichten of the renowned Vong group of restaurants, New York and AnthonyWalsh from Canoe Restaurant, Toronto, respectively.

In January 2000, we acquired the operations of The Red Book from House of Mao. Changes involvingstaf®ng, menus and ambience were implemented. Funding was required in this regard to repositionthe restaurant. We believe that The Red Book is a viable concept.

Our Managing Director, Andrew Tjioe, saw the potential of introducing new concepts to seafooddining in the form of an upscale seafood restaurant. Thus, Tung Lok Seafood Gallery was opened inApril 2000 amidst the stretch of seafood restaurants along East Coast Parkway. The restaurant offersan extensive menu of local style and seafood delicacies set in the comfort of an air-conditionedenvironment. There is a `raw bar' displaying fresh seafood items like oyster and sashimi. Therestaurant has a consistent vibrant colour and modern paintings, which is complimented by thefurniture and settings to create a memorable dining experience for our customers.

In December 2000, we opened our 12th restaurant, Jade which serves Cantonese cuisine. Jade is atThe Fullerton Hotel, strategically located right in the heart of the central business district.

Our latest restaurant, Lao Beijing branch at Novena Square was recently opened on 8 March 2001.

34


BUSINESS

We own and operate 13 restaurants in Singapore. We derive our revenue from restaurant sales whichcomprise F&B sales, service charges and management fees. To complement our restaurant business,we operate a food processing facility to distribute dianxin and dianxin ingredients, festive food itemsand pastries to our restaurants for sale. We also derive management fees for the provision ofrestaurant management services as detailed on pages 68 to 70 of this Prospectus.

During our 20 years of operating history, we believe that we have established strong brand awarenessfor the `Tung Lok' brand name through our efforts of serving quality cuisines, providing our customerswith ef®cient and friendly service and active marketing. We believe that our focus to deliver highquality food to customers with superior service in clean and friendly environments has been centralto our success at improving customer perceptions and customer loyalty. The key elements of ourmanagement's focus include:±

. High quality cuisines: We seek to differentiate ourselves from our competitors by serving avariety of quality cuisines that cater to the varied tastebuds of our customers. Most of ourrestaurants have gained recognition for quality food as evidenced by the list set out on pages37 and 38 of this Prospectus.

. Ef®cient and friendly service: Our restaurants' staff are well-trained and we strive to maintain ahigh level of customer satisfaction.

. Clean and friendly environment: We strive to offer a pleasant, customer friendly environment atour restaurants by providing attractive, interior decorations and by emphasising cleanliness in allareas of our operations. Further, through regular maintenance, we seek to enhance ourcustomers' dining experience by keeping our restaurants clean and pleasant.

Our restaurants have bene®ted from a consistent application of this operating strategy as manifestedby the recognitions most of them have received.

F&B sales

Our restaurants feature a variety of cuisines ranging from Beijing, Cantonese, Hunan, Japanese,Sichuan, modern Chinese and seafood to vegetarian and East-West fusion cuisines featuringinteresting menu items and catering to a wide variety of tastes.

Our restaurants' menu feature interesting creations that showcase varieties which capture the tastesand ¯avours that our customers can identify with. While we offer both traditional and contemporarymenu items, we believe the success of our concept is due to our ability to interpret food trends, tooffer items that appeal to a variety of tastes of our customers and to continuously improvise orintroduce new items.

Amongst our 13 restaurants, we have 4 theme restaurants, namely, Club Chinois, Lao Beijing and LaoBeijing branch, and The Red Book. The interior decorations, the uniform of our service staff, and thefood served are coordinated to re¯ect the respective themes.

All our service staff are trained with the necessary skills and menu knowledge to provide a consistentlevel of customer service and to assist the customers in food selection when being called upon to doso. In our theme restaurants like Club Chinois, Lao Beijing and The Red Book, our service staff areappropriately dressed to complement the ambience which we endeavour to create.

Our restaurants are located at leased premises. We have been actively involved as a restaurantoperator to hotels and recreational clubs. Of the 13 operating restaurants, 2 are situated atrecreational clubs and 6 at hotels or their adjoining shopping arcades and the remaining arestrategically located at shopping centres or commercial buildings. By locating our restaurants atrecreational clubs, we seek to attract customers with more affordably priced menus and offermembers of clubs who enjoy discounts off the list price of food items. We have also bene®ted by

35


locating our restaurants in hotels or within proximity to hotels as hotels are often the landmarks wherepeople gather to dine in Singapore.

Although our restaurants are distinctively different in the cuisine they each specialise, they sharecommon traits like high quality food, ef®cient and friendly service and clean and friendly environmentas a result of consistent application of our operating strategy.

In addition to our restaurant businesses, we cater for wedding banquets. In many instances, wemanage the wedding banquets held in our restaurants. Several of our restaurants offer weddingpackages at competitive prices, as compared with hotels. However, in the case of Jade, we onlyprovide the food for wedding banquets and the hotel's banquet operations staff provide the service.Where we only provide the food, we charge for the cost of raw materials and a pro®t margin. Our¯agship restaurant for wedding banquets is Noble House which manages between 180 and 200banquets a year. Wedding banquets are normally booked 6 to 12 months in advance and the pricesof wedding banquets are ®xed at the time of such booking. In year 2000, we had total bookings for188 banquets in Noble House. As at 31 December 2000, Noble House has already secured 115bookings for banquets in year 2001.

Central food processing plant

We rent factory premises in Jalan Boon Lay to house our food processing facility. The site area isapproximately 8,227 sq ft. On a daily basis, our chefs prepare dianxin and dianxin ingredients fordistribution to our restaurants. Most of the dianxin and dianxin ingredients are prepared early in themorning and despatched to our restaurants before our restaurants commence business for the day.The quantity of dianxin and dianxin ingredients supplied to each restaurant is based on demandfrom each restaurant to ensure that they are fresh for daily consumption.

We also produce cakes and pastries for special occasions such as weddings, newborn arrivals orbirthdays based on orders received. These food items are also distributed through our restaurants.

During the festive occasions such as the Chinese New Year and Mid-Autumn festival, we producemooncakes and processed barbecued pork under the `Tung Lok' brandname, for exclusive salethrough our restaurants. We import most of the relevant ingredients such as lotus seed paste andraw barbecued pork from Hong Kong and China. These ingredients are processed and our productsare packed at our food processing plant. The sale of these festive items (especially mooncakes) hasbeen popular. Our mooncake sales for FY2000 amounted to $1.3 million.

On a day-to-day basis, the food processing activities are normally manual and handled by 6 staff.During festive seasons when volume increases, we mechanise our production. We have a machinethat can mould the prepared ingredients and dough into desired forms.

Currently, our production is distributed exclusively to restaurants within our Group and Spice Gardenand House of Mao, which are outside our Group. We may distribute to third parties in the future whenwe have surplus to our Group's demand or when our production capacity allows us to do so.

We have plans to move to our new factory premises in Bukit Batok Techpark 21. The new factorypremises will serve as both our corporate of®ce as well as our food processing plant. The newpremises will provide room for further expansion of our production capacity for the supply of ouroriginal ingredients to third parties and, when our franchising business commences, to ourfranchisees. We purchased our new factory premises in July 2000 for approximately $3.3 million. Thesite area is approximately 14,424 sq ft. We expect our new factory premises to be operationally readyby December 2001.

36


Restaurant management services

We provide restaurant management services to restaurants in which our Managing Director, AndrewTjioe, has interests. These restaurants include the House of Mao and Spice Garden in Singapore andTaipan Restaurant and Ming Seafood Restaurant in Indonesia. The management fees differ accordingto the sales volume generated by the restaurants and range from $2,000 to $8,000 per month. Theamount charged is in line with the quantum set out for management fees our Company charges toall our existing restaurant outlets. Total management fees received from restaurants outside ourGroup amounted to less than 1% of our turnover in the past three ®nancial years. Further details ofthe management agreements are set out on pages 68 to 70 of this Prospectus.

Purchasing and sourcing

Our restaurants source the bulk of the ingredients for our F&B operations locally. We have anapproved list of suppliers from which our restaurants are required to source their raw materials.These suppliers are assessed based on such factors as their quality of product, pricing and servicerate and ability to meet delivery schedules. The restaurants are, however, permitted to source fromother suppliers with prior approval from our Managing Director.

Our restaurants and their recognition

Our restaurants are recognised by food enthusiasts and gourmets for their excellent menus andcustomer services. The following are the recognition received in respect of our 11 restaurants exceptfor Jade and Lao Beijing branch which only opened recently in December 2000 and March 2001,respectively:±

Restaurant Concept/Cuisine Recognition

Charming Garden First Hunan cuisine restaurant inSingapore.

Voted in the Singapore's Best RestaurantsList by the Singapore Tatler since 1985(except for 1988, 1989 and 1992). OnWine & Dine's Singapore's TopRestaurants List since 1996.

Club Chinois Singapore's ®rst contemporaryChinese restaurant. It is well-known for its East-West fusionspecialties.

Voted in Singapore Tatler's BestRestaurants List since 1999. On Wine &Dine's Singapore's Top Restaurants Listsince 1998. One of the venues where theWorld Gourmet Summit was hosted in1998, 1999 and 2000. Received ``BestWine List'' award in the Asian category byWine & Dine in year 2000.

Grand Pavilion Cantonese seafood restaurant. Voted in the Singapore's Best RestaurantsList by the Singapore Tatler since 1992(except for 1997). On Wine & Dine'sSingapore's Top Restaurants List since1996. Received Best Service Award byWine & Dine in year 2000.

Kippo Pavilion Specialises in Sichuan, Hunanand Cantonese cuisine, with awide variety of Japanesespecialties. It is the ®rst Sino-Japanese restaurant inSingapore.

Voted the ``Most Popular ChineseRestaurant'' in RCS Gourmet Hunt 1998.Voted in the Singapore's Best RestaurantsList by the Singapore Tatler since 1997.On Wine & Dine's Singapore's TopRestaurants List since 1996.

37


Restaurant Concept/Cuisine Recognition

Lao Beijing Models the old Beijing teahouseconcept specialising in Beijingfood such as specialty noodlesand northern Chinese Dianxin.

Voted in the Singapore's Best RestaurantsList by the Singapore Tatler since 1998.On Wine & Dine's Singapore's TopRestaurants List since 1997.

Lingzhi Vegetarian Specialises in vegetarian food. Received the ``Best Dish Award'' in RCSGourmet Hunt 1998. Voted in theSingapore's Best Restaurants List by theSingapore Tatler since 1995. On Wine &Dine's Singapore's Top Restaurants Listsince 1996.

Noble House Banquet restaurant. Voted in the Singapore's Best RestaurantsList by the Singapore Tatler since 1993.On Wine & Dine's Singapore's TopRestaurants List since 1996.

The Red Book New Asia concept. Voted in the Singapore's Best RestaurantsList by the Singapore Tatler in year 2000.

The Paramount Specialises in Cantonese,seafood steamboat and a rangeof Japanese sushi and sashimi.

Voted in the Singapore's Best RestaurantsList by the Singapore Tatler since 1992.On Wine & Dine's Singapore's TopRestaurants List since 1996.

Tung Lok Chinese restaurant. Specialisesin Cantonese cuisine andseafood.

Voted the ``Most Popular ChineseRestaurant'' in Radio Corporation ofSingapore (``RCS'') Gourmet Hunt 1997and RCS Gourmet Hunt 2000. Receivedthe ``Best Dish Award'' in RCS GourmetHunt 1997. Voted in the Singapore's BestRestaurants List by the Singapore Tatlersince 1985 (except for 1987 to 1989). OnWine & Dine's Singapore's TopRestaurants List since 1996. Inducted intothe Restaurants Asia `Fine Dining Hall ofFame', April 2000.

Tung Lok SeafoodGallery

One of the few restaurants tohave an exclusive Chef's Table-style Private Dining Roomlocated within the massivekitchen. Paintings by famousartists grace the walls.Specialises in seafood and awide variety of Japanesecuisines.

Received the ``Best Dish Award'' in RCSGourmet Hunt 2000. Voted in SingaporeTatler's Best Restaurants List in year 2000.

38


QUALITY CONTROL

As we strive to attract more customers to our restaurants and grow our business, we are aware of theimportance of quality in food and service, as well as maintenance of the hygiene and cleanliness ofthe restaurants in accordance to the standards set by the relevant government authorities. In each ofthe restaurants, we ensure that we use fresh ingredients and food items are hygienically prepared, andserved in a presentable manner to our customers. Besides quality, standard of service is important toattract repeat customer visits. Customers expect attentive, prompt, ef®cient and friendly service, andwe constantly make conscious efforts to satisfy their needs. Our stringent selection criteria of ourservice staff, and strict monitoring of their performance, will ensure that ef®cient and friendly serviceto our customers is delivered at all times.

Our restaurants are recognised for having clean and hygienic premises. All of our restaurants haveeither an `À'' or a ``B'' grading by the Ministry of the Environment based on housekeeping, foodhygiene and personal hygiene. Other factors such as quality control, food transportation and trainingof food handlers are also taken into consideration. The grades correspond to an `èxcellent'' and``good'' grade respectively for our restaurants.

In addition, as testimony of our commitment to quality, 5 of our restaurants have been ISO 9002certi®ed. These restaurants are:±

Restaurant Certification Originalregistration date

Certificationorganisation

Charming Garden ISO 9002 for quality managementsystem for restaurant food andbeverage operations

22 September 2000 Bureau VeritasQuality International

Club Chinois ISO 9002 for quality managementsystem for restaurant food andbeverage operations

16 October 2000 Bureau VeritasQuality International

Noble House ISO 9002 for quality managementsystems for ®ne dining restaurant,food, beverage and karaokeservices

8 August 1997 SGS YarsleyInternationalCerti®cationServices

The Paramount ISO 9002 for quality managementsystem for restaurant, food andbeverage operations

7 November 2000 Bureau VeritasQuality International

Tung Lok ISO 9002 for quality managementsystem for restaurant, food andbeverage operations

2 November 2000 Bureau VeritasQuality International

MARKETING

Our marketing campaigns are aimed at promoting awareness of our group of restaurants.

To increase awareness of our Group, we advertise mainly through lifestyle magazines like ``Peak'',``Prestige'', `Èast'' and ``Tatler'' on a regular basis. These advertisements are mainly restaurantspeci®c but bear the slogan ``Member of Tung Lok Group'' as a form of association to the Tung Lokbrand name.

Also, our Group publishes an in-house magazine, ``Taste'', which is distributed to all customers whopatronise the restaurants and sent to VIP cardmembers. Our in-house magazine helps to publicise ourrestaurants.

39


We market intensively during festive occasions like Chinese New Year and Mid-Autumn festival. Fooditems like mooncake and barbecued pork are marketed (under the `Tung Lok' brand) and soldexclusively through our restaurants. We also utilise marketing channels like radio, television,newspapers and the Internet for the promotion of these festive items. Such promotions effectivelyco-promote our restaurants as these products can be purchased at our restaurants. We alsopromote our mooncakes through selected agents.

In the case of opening of new restaurants, we will advertise the opening in lifestyle magazines,newspapers, pamphlets and our own `Taste' magazine to promote awareness and interest, and toinform our customers and the media of the new restaurants through our public relations consultantsby organising press parties and media luncheons.

We also have arrangements with certain credit card issuers to co-promote each other's products. Forexample, we give discounts to customers who use certain credit cards to settle their bill at any of ourrestaurants. We have tied up with UOB to issue an af®nity (co-branding) credit card.

As part of our customer loyalty programme, we issue exclusive privilege cards to regular customerswhich entitle them to a 10% to 15% discount for food and/or beverages they consume on ala cartedining. There are basically two types of exclusive privilege cards, namely, `Happy' card and `TaipanGold' card, and the cards offer different privileges. For `Happy' cardholders, discounts are given forfood only, whereas `Taipan Gold' cardholders are given discounts on food and beverage. To date,we have approximately 8,000 `Taipan Gold', and 40,000 `Happy' cardholders. We believe theexclusive privilege cards act as a good source of publicity and retain customer loyalty.

We will continue to seek advertising avenues that may improve the public awareness of ourrestaurants. In the last three ®nancial years, our advertising and promotion expenses accounted for4.7% for FY1998 and 3.4% each for FY1999 and FY2000 of our total expenses.

TRADEMARKS

We believe that our trademarks have signi®cant value and are important to our brand-building effortsand marketing of our restaurant concepts. We ®led an application on 14 November 2000 for theregistration of our trademark (as shown below) with the Intellectual Property Of®ce of Singapore(``IPOS'') for classes 30 and 42, which relate to inter alia, cater, catering services and confectionery.Our application is currently pending.

To further promote our ``Tung Lok Group'' brand awareness, we appointed an advertising agency,Pace Advertising Private Limited (``Pace Advertising''), to set up our website, which was of®ciallylaunched on the Internet in 1998. Accordingly, the ownership of our Internet domain name,www.tunglok.com was registered under Pace Advertising. In order to better protect our brand,arrangements are currently being made for the transfer of ownership of the domain name from PaceAdvertising to our Company.

RESEARCH AND DEVELOPMENT

We currently do not engage in any form of research and development. However, we have a creativepanel consisting of executives from the senior management that screens and tastes from time to time,the dishes developed by our chefs. The purpose of the panel is to monitor the quality of the cuisinedeveloped by our in-house chefs and to encourage creation of novel recipes to be incorporated intoour menus.

40


STAFF TRAINING

As our business is largely service oriented, staff training is essential and we place heavy emphasis inenhancing our quality of service. We strive to maintain quality and consistency in each of ourrestaurants through the careful training and supervision of personnel and the establishment of, andadherence to, high standards relating to personal performance, food and beverage preparation andmaintenance facilities. We provide all new employees with complete orientation and training,including kitchen and bar management, food and beverage preparation and other administrativeprocedures for their positions to ensure they are able to meet our high standards. Newly hired chefsare assessed by the chief chef in terms of their abilities and are subsequently put on three monthsprobation training. Similarly, for newly hired or trainee managers, they will be assessed by themanager upon recruitment and assigned to their respective restaurants where they undergo threemonths of training with their respective managers. With the coaching of employees by directsupervisors or managers at the workplace through hands-on training, the trainees will be able to pickup the requisite skills quickly and effectively. To ensure the quality of the senior management team,they will be personally interviewed and selected by our Managing Director. The stringent training thatwe provide is also necessary to ensure that our restaurant operations run smoothly and ef®ciently.

The amount of external training expenditure incurred in staff training has been minimal for FY1998 toFY2000 as our training was mainly conducted in-house.

MAJOR SUPPLIERS

The supplier accounting for 5% or more of our purchases during each of the past three ®nancial yearsis listed below:±

Percentage of total purchases (%)

Supplier For purchases of FY1998 FY1999 FY2000

Yeow Seng (Shark's Fin) Pte Ltd Non-processeddried andprocessed shark's®n, other seafooddelicacies anddried foodstuff

11.3 12.2 11.4

Yeow Seng (Shark's Fin) Pte Ltd is the only major supplier of our Group in respect of non-processeddried and processed shark's ®n in the past three ®nancial years. For other ingredients or raw materials,procurement is decentralised and each restaurant sources from our approved list. We purchase oursupplies from various suppliers based on factors such as the quality of the food item to bepurchased, availability, competitive pricing and delivery time. The stated credit term from oursuppliers is 30 to 60 days.

None of our Directors or substantial Shareholders has an interest (direct or indirect) in theabovementioned major supplier.

MAJOR CUSTOMERS

No customer accounts for 5% or more of our turnover during each of the past three ®nancial years.Our customers are walk-in customers and regular patrons, whose individual annual expenditure at ourvarious restaurants do not constitute a signi®cant percentage of our annual turnover.

As such, we are not dependent on any single customer to the extent of 20% or more of our operatingpro®t in FY2000.

41


GOVERNMENT REGULATIONS

We are principally engaged in the business of operating restaurants and providing restaurant services.

All our restaurants are located in Singapore. The following licences are required for our businessoperations in Singapore:±

Type of Licence Authority

Public Entertainment Licence Public Entertainment Licensing Unit

Liquor Licence Liquors Licensing Board

Food Shop Licence Ministry of Environment

Licence for the Public Performance of FeaturedRecordings (Karaoke)

Recording Industry Performance

Music Copyright Licence Composers and Authors Society of Singapore

TV & Radio Licence Singapore Broadcasting Authority

Signboard Licence Building and Construction Authority

Electrical Licence Public Utilities Board

Each of the licences is valid for a period of one year and is renewable annually at the discretion of therelevant authorities. The relevant authorities also have the right to terminate any of the licences at anytime. To date, we have not experienced any inability to obtain or maintain any of the above licences,permits or approvals.

COMPETITION

The restaurant industry is intensely competitive. Our direct competitors include restaurants servingChinese ®ne dining cuisines catering to the medium to high-end consumer markets. Competition isbased on, inter alia, taste, quality and price of food offered, customer service, ambience, locationand overall dining experience. We believe that our branding and concepts, attractive price-valuerelationship i.e. quality food offered at competitive prices, and quality of food and service enable usto differentiate ourselves from our competitors and to continuously attract and retain customers.Although we believe we compete favourably against our competitors, many of our direct and indirectcompetitors are well-established international or local restaurant chains and some have substantiallygreater ®nancial, marketing, and other resources than we do. We also compete with other restaurantsfor site locations and employees. Some examples of our direct competitors include:±

. Crystal Jade Group of Restaurants;

. Lei Garden Group of Restaurants; and

. Chinese restaurants of major hotels.

COMPETITIVE STRENGTHS

We believe our competitive strengths lie in the following success factors:±

Brand name

Over the years, we have established a brand name built on taste, quality and price of food offered,customer service and overall ambience of our restaurants. Our Group has also been consistentlymarketing our restaurants in newspapers, magazines and broadcast media to increase our brandawareness. We also offer new culinary creations regularly to keep our menus fresh and offer loyaltyprogrammes to encourage repeat patronage from our regular customers and attract new customers.

42


Since 1985, we have received many favourable commentaries from various gourmet magazines, suchas Wine & Dine and Singapore Tatler regarding our menus, customer service and overall diningexperience. This coupled with our customer loyalty programmes, we believe that we will be able toattract new and repeat customers and continue to enhance the ``Tung Lok'' brand name. With ourestablished brand name, we believe we are also able to attract experienced international chefs in theF&B industry to join us.

Management experience and expertise

Our Managing Director, Andrew Tjioe, is assisted by our senior management, most of whom havemore than 9 years of experience in the F&B industry. In all of our restaurants, except for Lao Beijingand The Red Book, we have a restaurant manager who has at least 9 years of experience in the F&Bindustry.

Quality chefs

The chief chefs in our restaurants are specially selected by our Managing Director and they have anaverage of at least 9 years of experience in the F&B industry. Although our chefs are mainly fromMalaysia, Hong Kong, Taiwan and China, they understand and are able to prepare dishes that canappeal to the tastebuds of the Singapore customers. As at 31 December 2000, our Group employeda total of 133 chefs. Turnover of our chefs has been in the region of between 3.1% and 5.0% of ourtotal employees in the past 3 ®nancial years.

Limited ``cannibalism''

As our restaurants offer different concepts, we are able to target a broad base of customers rangingfrom budget conscious individuals to high-income groups. In addition, even though our restaurants'main focus is on Chinese cuisines, we offer a variety of delicacies and food concepts ranging fromBeijing, Cantonese, Hunan and Sichuan cuisines to Japanese and seafood. As each restauranttargets at different segments of discerning customers, inter-restaurant customer cannibalism islimited.

Strategic locations

Our restaurants in Singapore are located at accessible locations. We have 7 restaurants convenientlylocated in city areas and these include 4 restaurants located along Orchard Road, within the highhuman traf®c shopping belt. In the business district area, we have 3 restaurants. In the eastern partof Singapore, we have 1 restaurant each in Paramount Hotel, the East Coast Recreation Centre andChinese Swimming Club. Apart from being strategically located in hotels and commercial buildings,we also have restaurants in recreational clubs, namely Chinese Swimming Club and Keppel Club.These strategic locations are chosen after taking into account mainly the human traf®c, rental ratesand the availability of parking space.

Consideration is also given to the possibility of leveraging on each of the restaurants located withinthe locality so as to enjoy cost savings in terms of delivery of in-house production of someingredients. We are able to produce certain ingredients centrally at a restaurant and deliver to nearbyrestaurants due to the close proximity of some of our restaurants. This would provide cost savingsopportunities in terms of materials and labour.

43


PROPERTIES AND FIXED ASSETS

Our corporate of®ce is located at Central Plaza, Singapore. We occupy this facility under a lease termwhich expires in August 2001. All our restaurant facilities are on lease terms. Our Group currently rentsthe following premises:±

Location Site Area(sq ft)

Tenure/Unexpired Term Lessor

Head Of®ce298 Tiong Bahru Road #14-02/04Central PlazaSingapore 168730

3,209 3 years from 20 August1998 to 19 August 2001

UOL Tiong Bahru Plaza Pte Ltd

Charming GardenCopthorne Orchid Singapore214 Dunearn RoadSingapore 299526

4,370 5 years from 1 October2000 to 30 September 2005

Copthorne Orchid SingaporePte Ltd

Club Chinois1 Tanglin Road #02-18Orchard Parade HotelSingapore 247905

9,278 6 years from 1 December1997 to 30 November 2003

Orchard Parade Holdings Ltd

Grand Pavilion21 Amber RoadChinese Swimming ClubSingapore 439870

7,000 3 years from 1 September1999 to 31 August 2002

Chinese Swimming Club

Jade1 Fullerton Square #01-02The Fullerton HotelSingapore 049178

4,815 3 years from 1 January 2001to 31 December 2003

Precious Treasure Pte Ltd

Kippo PavilionKeppel ClubBukit CherminSingapore 109918

4,000 3 years from 1 October2000 to 30 September 2003

Keppel Club

Lao Beijing400 Orchard Road #03-45Orchard TowersSingapore 238875

3,014 2 years from 1 August 2000to 31 July 2002

Golden Bay Realty (Pte) Ltd

Of®ce400 Orchard Road #03-44AOrchard TowersSingapore 238875

372 19 months from 1 January2001 to 31 July 2002


Lao Beijing branch238 Thomson Road #02-11/12Novena SquareSingapore 307683

3,815 3 years from 1 January 2001to 31 December 2003

Novena Square InvestmentsLtd and Novena SquareDevelopment Ltd

Lingzhi Vegetarian400 Orchard Road #B1-17/18Orchard TowersSingapore 238875

2,648 3 years from 1 February2000 to 31 January 2003


Noble House5 Shenton Way #06-13UIC BuildingSingapore 068808

15,909 4 years and 4 months from1 May 2000 to 30September 2004

UIC Development (Pte) Limited

44


Location Site Area(sq ft)

Tenure/Unexpired Term Lessor

The Red Book442 Orchard Road #01-09/10Orchard Hotel Shopping ArcadeSingapore 238879

2,185 3 years from 16 August1998 to 15 August 2001

City Hotels Pte Ltd

The Paramount30 East Coast Road#01-01/02/02A/03Paramount Shopping CentreSingapore 428751

13,843 3 years from 1 August 1999to 31 July 2002

YTC Hotels Ltd

Tung Lok177 River Valley Road#04-07/09Liang Court ComplexSingapore 179030

7,664 3 years from 1 July 1998 to30 June 2001*

Somerset Holdings Ltd

Tung Lok Seafood GalleryBlk B 1000 East Coast Parkway,2nd FloorEast Coast Recreation CentreSingapore 449876

12,800 6 years from 1 April 2000 to30 March 2006

East Coast Recreation CentrePte Ltd

Central food processing facility348 Jalan Boon LaySingapore 619529

8,227 1.5 years from 1 June 2000to 31 December 2001

Provision SuppliersCorporation Ltd

* We have entered into an extension of our lease for a further period of 3 years from 1 July 2001 to 30 June 2004.

The rental expenses for the above premises are ®xed, save for 4 leases which vary with sales. Theaggregate annual rental expenses (including the variable rental component) for FY1998, FY1999 andFY2000 were $4.1 million, $3.8 million and $4.5 million respectively. These rental expenses exclude 2leases, namely, Jade and Lao Beijing branch which commenced operations in December 2000 andMarch 2001, respectively.

In anticipation of a rise in the of®ce rent after the expiry of our lease in August 2001, we purchased afactory cum of®ce facilities at Bukit Batok Techpark 21 to house our corporate of®ce and our centralfood processing facility. Our new facility is expected to be operationally ready in December 2001. Weintend to negotiate for an extension of our corporate of®ce at Central Plaza from September 2001 toDecember 2001 prior to moving to the new premises. The details of our new facility are set outbelow:±

Location DescriptionSiteArea

Tenure/UnexpiredTerm Cost

Net Book Valueas at

31 December 2000(sq ft) ($m) ($m)

20 Bukit BatokCrescent#11-05/06/07/08/09Enterprise CentreSingapore 658080

Of®ce cumfactory building

14,424 60 years commencing13 March 1997/57 years

3.3 1.1*

* This represents the progress payment paid up to 31 December 2000 in respect of the property.

The net book value of our ®xed assets as at 31 December 2000 amounted to $3.6 million.

45


TURNOVER AND PROFITABILITY

$'000 FY1997 FY1998 FY1999 FY2000

Turnover 37,536 37,134 41,016 49,706

Cost of sales (13,885) (13,264) (13,541) (16,287)

Gross pro®t 23,651 23,870 27,475 33,419

Other operating income 110 94 23 90

Administrative expenses (12,293) (14,215) (12,814) (15,838)

Other operating expenses (11,132) (11,793) (10,692) (13,143)

Pro®t/(Loss) from operations 336 (2,044) 3,992 4,528

Finance costs (47) (47) (22) (21)

Income from associates 4 Ð Ð

Pro®t/(Loss) before taxation 293 (2,091) 3,970 4,507

Taxation (296) (9) (740) (1,227)

Pro®t/(Loss) after taxation but before minorityinterests (3) (2,100) 3,230 3,280

Pro®t attributable to our Proforma Group (85) (1,665) 2,939 3,104

OVERVIEW

Our Group's main business is the operation of a chain of restaurants that cater to a wide selection ofclientele ranging from individuals to corporate clients. We are primarily engaged in a single activity ofoperating restaurants. We currently operate 13 restaurants in Singapore, up from 8 at the beginning ofFY1997. Our revenue is mainly F&B sales, service charges and management fees. Service charges atour restaurants account for 10% of our F&B sales. Our management fees are based on the size andsales performance of the restaurants to which we provide these management services. In the last four®nancial years, such fees, which were in respect of services we provided to Spice Garden and Houseof Mao, accounted for less than 1% of our revenue.

The factors that might affect our revenue include:±

(i) economic conditions and consumer tastes or preferences. Fluctuations in economic conditionsindirectly affect consumers' disposable income and consequently their discretionary spendingpriorities. Consumer tastes and preferences are also subject to changes which occur frequentlyand follow certain ``fashion'' trends of society. Consumers may switch their patronage of ourGroup's outlets to newer or other fashionable cuisines and this may affect our Group's revenue.

(ii) competition posed by new entrants. The establishment of new restaurants by new entrants ofsimilar cuisines with close proximity to our Group's restaurants, will affect our Group'sbusiness. With access to a variety of other similar restaurants, consumers may choose topatronise other restaurants instead of ours and therefore our revenue might be affected.

(iii) continued good image. Our revenue can be materially affected by negative publicity resultingfrom reports (whether true or otherwise) in the press, magazines, industry reports orgovernment publications concerning food quality served by us, hygiene, illness, other healthconcerns relating to certain food products, or other operating issues stemming from therestaurants.

46

FINANCIAL REVIEW

Our monthly restaurant sales vary from month to month. These are normally high for certain monthssuch as Chinese New Year, ``Mid-Autumn'' and Christmas, and low for periods immediately afterthese peak periods and during the ``Hungry Ghosts'' month.

Currently we derive 100% of our revenue in Singapore. Commencing January 2001, we will alsoreceive revenue from the provision of restaurant management services to two restaurants inIndonesia. The management fees to be charged to the restaurants will be ®xed and paid on amonthly basis. The management fees are not signi®cant in relation to our revenue.

Our cost of sales comprise direct (food and beverage) material purchases. Prices of the direct materialpurchases have been relatively stable over the last four ®nancial years. With the exception of banquetsales, which are ®xed and normally booked in advance, sometimes between 6 to 12 months, anysigni®cant increases in direct material and other costs would be passed on to our customers in theform of higher menu prices. Our gross margin has ranged from 63.0% in FY1997 to 67.2% inFY2000 and the average over the same period was 65.4%. Gross margin varies amongst the outletsdepending on the types of cuisines offered. Higher margins are noted for dianxin, East-Westcontemporary and vegetarian cuisines compared to other cuisines such as Cantonese, Sichuan,Hunan and seafood. Normally, a restaurant outlet newly opened by our Group may experience costoverruns in material consumption owing to the initial running-in period. Overall, new restaurants take6 months to 18 months to become pro®table.

In FY2000, our labour costs, rental expenses and utilities comprised 54.7%, 15.6% and 6.1%respectively of our total operating expenses. The remaining 23.6% of our operating expensesconsists of other incidentals such as depreciation, credit card commission, laundry, cleaning,advertising and promotion. The main factors affecting our net pro®t margin are the F&B sales whichare dependent on continued customer patronage, cost of direct material purchases, direct labourcosts and rental expenses. Opening of any new restaurant would also have a short-term impact onour net pro®ts during the start-up period, as in the case of Club Chinois, The Red Book, Tung LokSeafood Gallery and Jade in November 1997, January 2000, April 2000 and December 2000respectively.

REVIEW OF PAST EARNINGS PERFORMANCE

A review of the year-to-year earnings performance of our Group for the past four ®nancial years forFY1997 to FY2000 is set out below.

FY1997 vs FY1998

Our Group's turnover decreased by $0.4 million or 1.1% from $37.5 million in FY1997 to $37.1 millionin FY1998. Heading into this period, our Group opened a new upmarket outlet called Club Chinois, inNovember 1997. The latter contributed $5.9 million to our Group's turnover in FY1998. FromDecember 1997, the results of LBDH were consolidated into our Proforma Group. Its contribution toour turnover increased from $0.1 million in FY1997 to $1.7 million in FY1998 re¯ecting the full yearcontribution in FY1998 as compared with one month contribution in FY1997. Excluding these, ourGroup's turnover would have been $29.5 million. The poor performance of the restaurants was dueto the regional economic crisis which started in the third quarter of FY1997 and deepened in FY1998.

With the gross pro®t contribution by the newly opened Club Chinois of $4.0 million and by Lao Beijingof $1.3 million (versus $0.1 million in FY1997), our Group's gross pro®t improved marginally by $0.2million, or 0.9% from $23.7 million in FY1997 to $23.9 million in FY1998. Club Chinois, serving East-West contemporary cuisine, was able to record a relatively higher gross margin of 67.1% during itsinitial running-in period and together with Lao Beijing's gross pro®t margin of 77.4%, helped toimprove the overall gross margins for our Group by 1.3 percentage points from 63.0% in FY1997 to64.3% in FY1998.

47

FINANCIAL REVIEW

Our operating expenses increased by $2.6 million or 11.0% from $23.4 million in FY1997 to $26.0million in FY1998. The contributing factor to this increase in total operating expenses was due toClub Chinois and Lao Beijing, which incurred operating expenses of $5.4 million and $1.2 million,respectively. Excluding the operating expenses from Club Chinois and Lao Beijing, our Group'soperating expenses actually fell $4.0 million or 17.1% from $23.4 million in FY1997 to $19.4 millionin FY1998. The decrease in the operating expenses (excluding Club Chinois and Lao Beijing) helpedoffset partially the decrease in our Group's gross pro®t contribution (excluding Club Chinois and LaoBeijing) of $5.1 million. This reduction in operating expenses was in accordance with our Group'spolicy to reduce costs, namely, labour (including the 10% reduction in CPF contribution), whichdecreased from $12.2 million in FY1997 to $11.0 million (excluding Club Chinois and Lao Beijing) inFY1998. Other expense reductions (excluding Club Chinois and Lao Beijing) came mainly from rental($0.3 million, in the form of rental reductions from landlords), advertising and promotion ($0.7 million),upkeep and cleaning ($0.2 million) and utensil replacements ($0.1 million). These cost savingmeasures were implemented to help our Group remain competitive during the economic crisis. Inaddition, a provision of $1.3 million made by certain entities in our Proforma Group in theirrespective results on the diminution in values of the investments in and receivables due from entitieswhich were excluded from our Proforma Group were taken to the shareholders' equity of our ProformaGroup to re¯ect the proforma results of the restructured Group.

However, despite a signi®cant reduction in operating expenses by our Group (excluding Club Chinoisand Lao Beijing), our pro®tability was adversely affected by the economic crisis and reversed from apro®t before taxation of $0.3 million in FY1997 to a loss of $2.1 million in FY1998. Our Group's losswas due largely to the poor performance of the restaurants as a result of the economic slowdown inSingapore arising from the regional economic crisis which started in the third quarter of FY1997 anddeepened in FY1998. This was exacerbated by the $5.4 million start-up expenses of Club Chinoiswhich was in its ®rst year of operations. In FY1998, Club Chinois' losses amounted to $1.0 millionafter minority interests. Provision for taxation was reduced from $0.3 million in FY1997 to only$9,000 in FY1998 due mainly to the loss-making operations for that ®nancial year.

FY1998 vs FY1999

With the improved economic sentiment in FY1999 after the regional economic crisis in FY1998, ourGroup's turnover increased by $3.9 million or 10.5% from $37.1 million in FY1998 to $41.0 million inFY1999. The improvement in turnover was largely attributable to the economic recovery in Singaporeand consequent higher discretionary F&B spending.

Our Group's gross pro®t increased from $23.9 million in FY1998 to $27.5 million in FY1999. Thisrepresented an improvement of $3.6 million or 15.1% mainly attributable to an increase in our grosspro®t margin which rose from 64.3% in FY1998 to 67.0% in FY1999. Club Chinois improved on itsgross margin by 3.6 percentage points from 67.1% in FY1998 to 70.7% in FY1999. Club Chinoiscontributed $4.5 million gross pro®t to our Group's total gross pro®t.

Due to the successful cost cutting measures implemented by our Group, all the outlets managed toreduce the total operating expenses by $2.5 million or 9.6% from $26.0 million in FY1998 to $23.5million in FY1999. This is largely attributable to a $1.4 million reduction in labour costs from $14.2million in FY1998 to $12.8 million in FY1999. Advertising and promotion expenses were reduced by$0.4 million and other savings were achieved through lower utilities costs of $0.1 million,maintenance costs of $0.2 million, miscellaneous expenses of $0.1 million and reduction in rentalrates for Noble House and The Paramount amounting to $0.3 million. The reduction in rental ratesrelates to concessions granted by the landlords of Noble House from October 1998 to April 2000and The Paramount from August 1998 to July 1999.

With the dual bene®ts of lower operating costs and higher sales from all restaurants, our Groupachieved a turnaround with an overall pro®t before taxation of $4.0 million in FY1999 compared withthe FY1998 loss of $2.1 million. Club Chinois, in the second year of operations, turned pro®table andcontributed a pro®t before taxation of $0.5 million to our Group's performance.

48

FINANCIAL REVIEW

FY1999 vs FY2000

In FY2000, our Group's restaurant operations continued to perform better as our turnover increasedfrom $41.0 million in FY1999 to $49.7 million in FY2000, representing a 21.2% increase. This wascontributed mainly by improved performances of the existing restaurants and the opening of threenew restaurants in FY2000, namely The Red Book (which took over the business of House of Mao atOrchard Hotel Shopping Arcade in January 2000), Tung Lok Seafood Gallery (which commencedbusiness in April 2000) and Jade (which commenced business in December 2000). Excluding thethree new outlets, our Group continued to record higher growth as turnover improved 11.5% from$41.0 million in FY1999 to $45.7 million in FY2000. The three new outlets contributed $4.0 million, or8.0% of our Group's revenue for FY2000.

In conjunction with the improvement in the turnover and opening of new outlets, the overall grosspro®t also improved from $27.5 million in FY1999 to $33.4 million in FY2000, representing a 21.5%increase. Gross margin increased by 0.2 percentage points from 67.0% to 67.2% in the sameperiod. The reason for this marginal improvement was due primarily to increases in menu priceseffected throughout our restaurants. Gross pro®t margin would have improved by more than the 0.2percentage points if not for the lower margin of 60.1% achieved during April to December 2000 byTung Lok Seafood Gallery and 53.2% achieved by Jade since its opening in December 2000. Thiscompares with the average of 67.7% recorded by the more established outlets (excluding Tung LokSeafood Gallery, The Red Book and Jade) during FY2000.

Our total operating expenses increased 23.4% from $23.5 million for FY1999 to $29.0 million forFY2000. This was due largely to higher labour costs (excluding Tung Lok Seafood Gallery, The RedBook and Jade) of $1.3 million as pay cuts effected in FY1998 were reinstated in the latter part ofFY1999 and we hired more labour to manage the existing restaurants. Also contributing to theincrease of the operating expenses was the establishment of the three new restaurants. The RedBook's, Tung Lok Seafood Gallery's and Jade's operating expenses were $0.8 million, $2.4 millionand $0.3 million respectively, giving a total of $3.5 million in additional operating expenses to ourGroup. The remaining $0.7 million was mainly attributable to increases in professional fee of $0.2million, rental of $0.2 million and utilities of $0.2 million.

The pro®t before taxation for our Group improved $0.5 million from $4.0 million in FY1999 to $4.5million in FY2000, representing an increase of 13.5%. As the three new startup restaurants were notexpected to be pro®table in the ®rst year of operations, their total losses of approximately $1.1 milliontherefore reduced our Group's pro®t before taxation by the said amount. Without the inclusion of TheRed Book, Tung Lok Seafood Gallery and Jade, our Group's pro®t before taxation would have been$5.6 million.

DIVIDENDS

LBDH paid net dividends in FY1999 of $14,800 (gross dividend per share of $0.20 or 20% per $1.00share). No other dividends had been paid by our Company or our subsidiaries since their respectivedates of incorporation.

We currently do not have a dividend policy. We do not intend to declare any dividends in respect ofFY2001. Any payment of dividends in the future will be at the discretion of our Directors and willdepend on our earnings and ®nancial position, our capital needs for, inter alia, plans for expansionand such other factors as our Directors may deem appropriate.

49

FINANCIAL REVIEW

LIQUIDITY AND CAPITAL RESOURCES

Our growth has been ®nanced mainly through a combination of share capital and shareholders loans,retained earnings as well as suppliers' credit. Our Directors are of the opinion that, after taking intoaccount the amount available under existing bank facilities and the net proceeds from the Invitation,our Group has adequate working capital to ®nance our present operations.

During the period FY1995 to FY1999 and the 7 months ended 31 July 2000, the audited ®nancialstatements of the following companies as previously constituted were quali®ed:±

Going concern:Negative NTA

Form 24:Filing Error(1)

SAS 27:Non-equityaccounting

SAS 26: Non-preparation ofconsolidated

accounts

Receivable:> 6 or 12 months

old(2)

TLGH 1995-9 Ð Ð 7/00 1998

CGPL 1995-9 Ð 1995-9 7/00 Ð

CCPL 1998-9 Ð Ð Ð Ð

FCPL 1995-6 Ð Ð Ð 1998-9 (3)

LZPL 1999 Ð Ð 7/00 1998-9

NHPL Ð Ð 7/00 Ð Ð

TLDH 1998-9 Ð Ð Ð Ð

TLRM 1995-9 1995-9 Ð Ð Ð

Notes:±

1. Error in ROC ®ling has been recti®ed on 8 January 2001.

2. In respect of amounts owing between related restaurant companies. In turn this formed a basis for the quali®cation of therespective immediate holding company.

3. The auditors did not express an opinion on the ®nancial statements of FCPL in FY1998 and quali®ed the ®nancialstatements of FCPL in FY1999 on the grounds that they were not able to satisfy themselves that the debt owing by TLGHwas recoverable and the amount involved was signi®cant. The no-opinion in FY1998 and quali®cation in FY1999 have noimpact on the Proforma ®nancial statement of our Group as the intercompany debt is eliminated on consolidation.

Further details of the abovementioned quali®cations are set out in the Accountants' Report on pages81 to 84.

The audit quali®cations relate to ®nancial statements of companies which are not part of our Grouppursuant to the Restructuring Exercise, save for the operations, business undertakings and assetswhich were transferred to Tung Lok Millennium, a subsidiary of our Company with effect from 1August 2000, CCPL and LBDH which became subsidiaries of our Company.

The controlling shareholder of the respective companies has now given an undertaking that he willprovide these companies with the required ®nancial resources to enable them to discharge theliabilities as and when they fall due. In respect of the erroneous ®ling with the Registry of Companiesand Businesses, this has been recti®ed by TLRM on 8 January 2001. A controlling shareholder hasundertaken to reimburse CCPL, LBDH, CGPL, LZPL, NHPL and TLRM for any non-recovery of debtsdue from related parties that are outstanding and not provided in the accounts. The quali®cations onthe non-compliance with SAS 26 and SAS 27 and the erroneous ®ling of Form 24 have no impact onour Proforma Group's ®nancial statements. The quali®cations on the non-compliance on SAS 26 andSAS 27 will not impact the proforma statements of our Proforma Group as these proforma statementswere prepared based on the individual company's results, incorporating that of the subsidiaries andthe associates, respectively.

Except for quali®cations relating to the recovery of receivables, the other quali®cations are primarilytechnical in nature, relating to compliance with requirements of accounting standards and assurancethat the relevant entities would be able to continue as a going concern.

50

FINANCIAL REVIEW

Our Group has since received a con®rmation from TS Tay & Associates, the then auditors of theantecedent companies, stating that, had satisfactory evidence in the form of support letters from the®nancial providers been furnished at the appropriate time, there would not have been anyquali®cations in that regard. In respect of the receivables due from related parties the amountsinvolved in the ®nancial statements of the following antecedent companies are as follows:±

FY1998$'000

FY1999$'000

TLGH 173 Ð

LZPL 13 107

Total receivables 186 107

Total assets 6,724 8,276

% of total assets 2.8 1.3

Deloitte & Touche, the auditors and reporting Accountants, has expressed that all of theabovementioned quali®cations do not have a material impact on the Proforma ®nancial statementstaking into consideration the nature of the quali®cations and the letter of undertaking and ®nancialsupport from the controlling shareholder. The audited consolidated ®nancial statements of our Groupfor the ®nancial period from the date of incorporation of our Company on 29 June 2000 to 31December 2000 were not quali®ed.

During the period under review, notwithstanding our negative shareholders' equity, our turnoverincreased by 10.5% in FY1999 and we achieved a pro®t after taxation and minority interest of $2.9million in the same year. Consequently, our cash ¯ow improved and new outlets were opened. As at31 December 2000, our shareholders' equity has turned positive on the back of the improvement inthe performance of our restaurants and the capitalisation of outstanding amounts pursuant to therestructuring exercise.

By way of background, the nature of the restaurant business and our Group's previous constitution/structure re¯ected what we believe is a typical private business group using minimum equity to®nance operations by managing cash¯ow. We effectively leveraged on suppliers' credit (i.e. tradepayables) to ®nance our operations and utilised inter-company advances to channel surplus fundswithin our Group to meet other obligations. Our capital structure (under the previous group structureunder TLGH) compared to normal capitalisation ratios, was undercapitalised.

However, that was in the past. As at 31 December 2000, our Proforma Group NTA was a positive $3.0million. This ®gure was derived after the capitalisation of $1.3 million related parties non-tradepayables including tax liabilities. The reason for this recapitalisation was to restore the workingcapital credit used to ®nance operations effectively as equity.

For the ®nancial year ended 31 December 2000, we generated net cash from our operating activitiesof $4.2 million. Of this, we invested a total of $3.2 million in ®xed assets of which $1.3 million was forthe new Tung Lok Seafood Gallery, $1.5 million for Noble House and $0.1 million on ®xed assetsacquired by Tung Lok. As at 31 December 2000, we had cash and bank balances, of $4.9 millionand improvement of $1.4 million over that of 31 December 1999. Our net current assets as at 31December 2000 stood at $0.5 million, compared to net current liabilities of $2.1 million as at 31December 1999.

51

FINANCIAL REVIEW

As at 31 December 2000, the total facilities secured, utilised and unutilised by our Group (through theantecedent companies) were as follows:±

($'000) OverdraftBanker's guarantee/

performance guarantee Term loan Total

Facilities granted 1,360 1,156 2,060 4,576

Facilities utilised Ð 1,076 497 1,573

Facilities unutilised 1,360 80 1,563 3,003

As at 31 December 2000, we (through the antecedent companies) have secured separate bankingfacilities from OCBC Bank and UOB to ®nance the purchase of our new factory cum of®ce premisesat Bukit Batok Techpark 21. The facility approved by OCBC Bank comprises a 20-year term loan of$1.5 million, banker's guarantee facility of $150,000 and $760,000 overdraft facility. The facility offeredby UOB comprises a 20-year loan of $560,000. Besides the mortgage security of the property, bothbanking facilities are secured with the joint and several guarantees of our Directors, Zhou Yingnan andAndrew Tjioe for $2.41 million in favour of OCBC Bank and $560,000 in favour of UOB. As at 31December 2000, we had drawn down $497,000 from the term loans ®nanced by the two banks forthe abovementioned property. We have also paid an additional $500,000 from our internal funds forthe property. The total cost of the property is $3.32 million. The balance of approximately $2.32million will be payable in FY2001.

As at 31 December 2000, we have additional total banking facilities from OCBC Bank of $300,000,UOB of $860,000 and OUB of $446,000. The OCBC Bank facilities comprised $200,000 overdraftfacility and performance and banker's guarantees of $100,000 (all secured by joint and severalguarantees of Tjioe Ka Men and Zhou Yingnan). The UOB facilities comprised $100,000 overdraftfacility (secured by the joint and several guarantees of Zhou Yingnan and Andrew Tjioe, and Tjioe KaLie, our employee and sister of Andrew Tjioe), $250,000 overdraft facility (secured by the joint andseveral guarantees of Zhou Yingnan and Andrew Tjioe) and performance and banker's guarantees of$510,000 (secured by the joint and several guarantees of Zhou Yingnan and Andrew Tjioe). The OUBfacilities comprise $50,000 overdraft facility (secured by the joint and several guarantees of ZhouYingnan and Andrew Tjioe) and banker's and performance guarantees of $396,000 (secured by thejoint and several guarantees of Zhou Yingnan and Andrew Tjioe).

In addition, our Company intends to request the relevant banks to discharge the remaining guaranteesof Zhou Yingnan, Andrew Tjioe and Tjioe Ka Lie after our listing. Our Directors are of the view that thewithdrawal of the guarantees should not affect our existing facilities and interest cost. Should ourexisting facilities be affected by the withdrawal of the guarantees, our Directors are con®dent thatwith our listing status and strengthened ®nancial position from the expected net proceeds from theInvitation, we should be able to secure alternative sources of banking facilities at the existing interestrates without the credit support of our Directors or substantial Shareholders.

52

FINANCIAL REVIEW

REVIEW OF OUR FINANCIAL POSITION

Property, Plant and Equipment

Property, plant and equipment comprise property, machinery and equipment, tools, of®ce equipment,kitchen equipment, furniture and ®ttings and computers.

We purchased $0.9 million of ®xed assets in FY1998. This was largely for the new Club Chinois ($0.5million) and Tung Lok ($0.3 million). The increase was offset by depreciation of $0.8 million, leaving net®xed assets marginally higher by $0.1 million from $2.1 million as at 31 December 1997 to $2.2 millionas at 31 December 1998. Our ®xed assets declined signi®cantly by 32.3% or $0.7 million from $2.2million as at 31 December 1998 to $1.5 million as at 31 December 1999. Depreciation charges of$0.8 million was offset partially by a $0.1 million increase in gross ®xed assets for FY1999.

As at 31 December 2000, the net book value of our ®xed assets was $3.6 million. New ®xed assets of$3.2 million were added, offset by depreciation of $1.1 million. This increase in the ®xed assets wasdue largely to the $1.3 million ®xed assets acquired for the new Tung Lok Seafood Gallery, $1.5 million®xed assets acquired by Noble House and $0.1 million ®xed assets acquired by Tung Lok.

Goodwill on Consolidation

This relates to goodwill which arose from the acquisitions of additional equity interests in FCPL andNHPL. The goodwill was amortised over three years from the repetitive dates of acquisition.

Investment in Deconsolidated Companies

As at 31 December 1997, this comprised $0.6 million investment in House of Mao by NHPL and LZPLand $0.2 million in TLI by CGPL after provisions for diminution in value. The investments were fullyprovided for in FY1998 following losses made by these companies.

Current Assets

Current assets comprise mainly inventories, trade receivables, other receivables and prepayments,®xed deposits and cash and bank balances.

Current assets increased slightly from $3.8 million as at 31 December 1997 to $4.1 million as at 31December 1998. Our trade receivables increased by approximately $0.5 million arising mainly fromour new restaurant operation, Club Chinois. Other receivables and prepayments rose $0.6 milliondue to increase in funding to our related parties for working capital. As at 31 December 1998,inventories were reduced by $0.4 million due to the lower turnover of the restaurants and stepstaken to reduce holding costs. In FY1998, we purchased ®xed assets for our new outlet, ClubChinois. The purchase was partially ®nanced with cash. This resulted in a decrease in our cash andbank balances by $0.3 million.

Our current assets increased substantially from $4.1 million as at 31 December 1998 to $6.7 million asat 31 December 1999 due mainly to the signi®cant improvements in the restaurant businesses,generating additional cash balances of $2.8 million. On the other hand, other receivables andprepayments decreased by $0.3 million. This decrease was due mainly to provision for receivablesdue from related parties made in FY1999. The provision was adjusted against shareholders' equitywhich had a negative effect on our shareholders' equity in FY1999.

53

FINANCIAL REVIEW

As at 31 December 2000, our current assets balance was approximately $9.1 million. This was anincrease of $2.4 million from 31 December 1999, made up partly by an increase in cash and bankbalances of $1.4 million due to better restaurant performance. Stocks also increased by $0.3 milliondue to opening of new outlets (The Red Book, Tung Lok Seafood Gallery and Jade) and the buildingup of inventories at Tung Lok in anticipation of the Lunar New Year season. A further $0.4 million ofthe increase was accounted for by other receivables and prepayments, namely, income tax paid onbehalf of the antecedent companies of $0.2 million and IPO related costs of $0.2 million.

Current Liabilities

Current liabilities comprise mainly trade payables, other payables and accrued charges and currentobligations under ®nance leases.

Current liabilities increased by $2.5 million from $7.5 million as at 31 December 1997 to $10.0 millionas at 31 December 1998 due mainly to increase in trade creditors of $1.1 million, and other creditorsand accruals of $1.9 million. This arose due mainly to slower settlement of our creditors in the light ofthe economic situation in FY1998.

Current liabilities decreased as at 31 December 1999 by $1.3 million from $10.0 million as at 31December 1998 to $8.7 million as at 31 December 1999. This was despite a $0.7 million increase inprovision for taxation, which was offset by decreases in trade creditors, other creditors and accruals,hire purchase creditors and bank borrowings of $0.9 million, $0.9 million, $0.1 million and $0.1 million,respectively. Due to the improving market sentiment, our restaurant businesses generated cash ¯owswhich essentially allowed us to pay off our creditors and bankers. The provision for taxation increasewas related to the improved performance of our Group.

As at 31 December 2000, our current liabilities were approximately $8.6 million. This improvement of$0.2 million over 31 December 1999 came mainly from income tax provision of $0.3 million and tradeand non-trade payables and accruals of $0.1 million, which was offset by an increase in bankborrowing and obligations under ®nance leases of $0.2 million due to ®xed assets acquired through®nance leases and term loan drawn down to ®nance the purchase of the new facility plant at BukitBatok Techpark 21.

Non-Current Liabilities

Non-current liabilities comprise mainly bank borrowings, obligations under ®nance leases and deferredtaxation. As at 31 December 2000, our non-current liabilities were approximately $0.9 million,representing an increase of $0.7 million from FY1999, due mainly to the ®xed assets acquiredthrough ®nance leases and increase in amounts owing to bankers due to term loan drawn down to®nance the purchase of the new facility plant at Bukit Batok Techpark 21.

Shareholders' Equity

Our shareholders' equity as at 31 December 1997 to 31 December 1999 was negative but has turnedpositive as at 31 December 2000. As at 31 December 1998, our shareholders' equity decreased by$3.0 million from a de®cit of $0.7 million as at 31 December 1997 due mainly to (a) the lossesincurred as a result of the poor performance of our restaurants due to the regional economic crisis inFY1998; and (b) provisions made by certain entities in our Proforma Group in their books on thediminution in values of the investments in and receivables due from entities which are excluded fromour Proforma Group. These provisions totalled $1.3 million after due consideration for the effect of therestructuring.

54

FINANCIAL REVIEW

Our shareholders' equity improved by $2.5 million due mainly to the turnaround in the economy andthe resultant return to pro®tability of our Group in FY1999. Despite the better ®nancial performance inFY1999, our shareholders' equity balance as at 31 December 1999 remained negative due to theaccumulated losses from the previous years and an additional provision of $0.5 million made bysome of the entities in our Proforma Group on the diminution in values of the investments in andreceivables due from entities excluded from our Proforma Group.

Our shareholders' equity as at 31 December 2000 continued to improve due to the pro®t achievedduring the period. This pro®t contribution together with the capitalisation of approximately $1.3million balance as a result of the restructuring turned our shareholders' equity from a negativebalance as at 31 December 1999 to a positive balance of approximately $3.0 million as at 31December 2000 before the Rights Issue.

FOREIGN EXCHANGE EXPOSURE

Our Company's restaurant operations are all in Singapore. As a result, all of our sales and purchaseshad been denominated in Singapore dollars. During the yearly festive occasions, our Company wouldimport raw materials from Malaysia, China and Hong Kong for the production of the festive items suchas mooncakes and barbecued pork. In FY2000, we purchased packing materials for the festive itemsfrom China. Purchases in foreign currencies (mainly US$ and HK$) were recorded in the accountsbased on actual conversion rates. Therefore, we do not record any exchange difference in ouraccounts. Purchases in foreign currencies over the last 3 years are as follows:±

S$'000 FY1998 FY1999 FY2000

Purchases in foreign currencies 202 123 313

We currently do not have a formal policy with respect to our foreign exchange transactions and havenot undertaken any hedging activities since inception as such exposure has been insigni®cant to date.Nonetheless, we will continue to monitor closely our exposure to the relevant currency ¯uctuationsand where appropriate, will enter into hedging contracts to manage any potential future losses.

Currently, there are no exchange control restrictions in Singapore.

TAXATION

The discussion below is not intended to constitute a complete analysis of all tax consequencesrelating to ownership of our ordinary shares. Prospective purchasers of our ordinary shares shouldconsult their own tax advisors concerning the tax consequences of their particular situations. Thisdescription is based on laws, regulations and interpretations now in effect and available as of thedate of this Prospectus. The laws, regulations and interpretations, however, may change at any time,and any change could be retroactive to the date of issuance of our ordinary shares. These laws andregulations are also subject to various interpretations and the relevant tax authorities or the courtscould later disagree with the explanations or conclusions set out below.

Singapore Taxation

The following discussion describes the material Singapore income tax, capital gains tax, stamp dutyand estate duty consequences of the purchase, ownership and disposal of our ordinary shares. Thisdiscussion, insofar as it relates to matters of Singapore tax law, is based on tax advice sought by us.

55

FINANCIAL REVIEW

Income Tax

General: Singapore resident taxpayers, which include individuals who are residing in Singapore andcompanies which are controlled or managed in Singapore, are subject to Singapore income tax on:±

. income accruing in or derived from Singapore; and

. foreign income received in Singapore.

A corporate taxpayer is regarded as resident in Singapore if the company's business is controlled andmanaged in Singapore (for example, if the board of directors meets and conducts the company'sbusiness in Singapore). An individual is regarded as resident in Singapore if the individual isphysically present in Singapore or exercises an employment in Singapore (other than as a director ofa company) for 183 days or more in a calendar year, or if the individual resides in Singapore.

Non-Singapore resident corporate taxpayers, subject to certain exceptions, are subject to Singaporeincome tax on:±

. income that is accrued in or derived from Singapore; and

. foreign income received in Singapore.

Non-Singapore resident individuals, subject to certain exceptions, are subject to Singapore incometax only on income accruing in or derived from Singapore.

The corporate tax rate in Singapore is 25.5% for the year of assessment 2001. For the year ofassessment 2002, the applicable rate will be 24.5%.

Subject to any applicable tax treaty, non-Singapore resident taxpayers are subject to a withholding taxat the Singapore corporate tax rate on certain types of income derived from Singapore or generally15% in the case of interest, royalty and rental of movable equipment income.

Dividend distributions: Under Singapore's taxation system, the tax we pay at the prevailing corporatetax rate is deemed to be paid by our shareholders. Our shareholders receive dividends net of such tax.Our shareholders are taxed on the gross amount of dividends (that is, on the amount of net dividendsplus an amount equal to the amount of gross dividends multiplied by the prevailing corporate tax rate).The tax we pay effectively becomes available to our shareholders as a tax credit to offset theirSingapore income tax liability on the gross amount of dividends paid by us.

Dividends on our ordinary shares received by a Singapore resident individual will be liable to tax inSingapore. The rate of tax will vary according to the individual's circumstances but is subject to amaximum rate of 28% for the year of assessment 2001. For the year of assessment 2002, theapplicable rate will be 26%. The tax we pay can be set off as a tax credit against the individual'sincome tax liability. Any excess tax credit will be refunded to the individual.

Dividends on our ordinary shares received by a Singapore resident company will be liable to tax inSingapore at the corporate income tax rate. In the absence of any expenses which may bedeductible against the dividends, the Singapore resident company will not receive any tax refundfrom the Inland Revenue Authority of Singapore, and vice versa.

A non-resident shareholder is effectively taxed on dividends on ordinary shares of the company at thecorporate income tax rate. Thus, no further Singapore income tax will be imposed on the net dividendreceived by a non-resident holder of our ordinary shares. Further, the non-resident shareholder whichdoes not have a permanent establishment in Singapore and deductible expenses attributable to suchdividend income will normally not receive any tax refund from the Inland Revenue Authority ofSingapore.

56

FINANCIAL REVIEW

Gains on disposal of the ordinary shares

Singapore does not impose tax on capital gains. However, gains may be construed to be of anincome nature and subject to tax if:±

. they arise from activities which the Inland Revenue Authority of Singapore regards as thecarrying on of a trade in Singapore; or

. they are short-term gains from the sale of real property and shares in unlisted companies withsubstantial real property or real property related assets in Singapore.

Any pro®ts from the disposal of ordinary shares are not taxable in Singapore unless the seller isregarded as having derived gains of an income nature, in which case, the disposal pro®ts would betaxable.

Stamp duty

No stamp duty is payable on the issue of new ordinary shares. Where existing ordinary shares areacquired in Singapore, stamp duty is payable on the instrument of transfer of the ordinary shares atthe rate of $2.00 for every $1,000 market value of the ordinary shares. The purchaser is liable forstamp duty, unless otherwise agreed. No stamp duty is payable if no instrument of transfer isexecuted or the instrument of transfer is executed outside Singapore. However, stamp duty may bepayable if the instrument of transfer which is executed outside Singapore is received in Singapore.The above stamp duty is not applicable to electronic transfers of the ordinary shares through TheCentral Depository system.

Estate duty

Singapore estate duty is imposed on the value of most movable and immovable property situated inSingapore owned by individuals who are not domiciled in Singapore, subject to speci®c exemptionlimits. Singapore estate duty is imposed on the value of most immovable property situated inSingapore and on most movable property, wherever it may be, owned by individuals who aredomiciled in Singapore, subject to speci®c exemption limits. Our ordinary shares are considered tobe movable property situated in Singapore as we are a company incorporated in Singapore.

Accordingly, our ordinary shares held by an individual are subject to Singapore estate duty upon suchindividual's death, whether or not such individual is domiciled in Singapore. Singapore estate duty ispayable to the extent that the value of the ordinary shares aggregated with any other assets subject toSingapore estate duty exceeds $600,000. Unless other exemptions apply to the other assets, forexample, the separate exemption limit for residential properties, any excess beyond $600,000 will betaxed at 5% on the ®rst $12,000,000 of the individual's Singapore chargeable assets and thereafter at10% Individuals should consult their own tax advisors regarding the Singapore estate dutyconsequences of their ownership of our ordinary shares.

57

FINANCIAL REVIEW

F&B INDUSTRY OUTLOOK

The F&B industry is highly competitive and is vulnerable to economic conditions. The Singaporeeconomy has recovered since the impact of the regional economic crisis which was felt in 1998, andthis has spurred F&B spending in year 2000 compared to year 1998. The F&B industry's performancewas further boosted by the Millennium celebrations. The F&B industry is competitive, highlyfragmented with relatively low barriers to entry. Restaurants are continuously reinventing menus,recreating dining experiences, improving service quality, competing for choice locations andimproving price-value relationship to stay in business.

It was reported that bolstered by strong visitor arrivals and robust economic growth, the hotels andrestaurants sector grew by 8.2% in year 2000, higher than the 4.0% rise in year 19991. It was alsostated in the same survey that companies engaged in ®nancial services, hotel and catering trade aregenerally optimistic of growth in year 2001.

FUTURE PLANS AND GROWTH STRATEGY

Restaurant revenues of our Group currently average about $4 million per month. We have attained arelatively sizeable critical mass and are well-positioned to grow our Tung Lok brand name throughseveral channels simultaneously, including growth of full service restaurants, joint ventures andpartnerships, operating of recreational club restaurants and franchising.

Growth of full service restaurants

Our full service restaurants have been our core revenue source. We expect these restaurants tocontinue to play an integral part in our revenue and pro®ts generation. We have adopted amanageable growth strategy depending on availability of cash ¯ow and human resources. We intendto increase the number of new restaurants in existing markets to further reduce operational costs andfurther increase our brand awareness. Our site selection criteria for new full service restaurants are¯exible and allow us to adapt to a variety of locations, including regional shopping malls, retail andentertainment centres, shopping centres, commercial and of®ce buildings. Our plan for growthincorporates cluster strategy which we believe enhances management and cost ef®ciency. OurGroup has opened a new Lao Beijing on 8 March 2001 and an additional Lao Beijing outlet isexpected to be opened in the second half of 2001. We intend to use $0.5 million of the net proceedsfrom the Invitation to fund the capital expenditure for the two new Lao Beijing outlets.

New joint ventures and partnerships with local partners and foreign restaurant chains

As part of our expansion plans to both the local and regional markets, we will enter into joint ventureswith suitable companies to establish new restaurants. In addition, we are in discussions with potentialpartners to set up noodle houses. The discussions and proposals are still in the preliminary stage.Announcements will be made once the terms are ®nalised.

Growth in the operation of restaurants in recreational clubs and hotels

Given our experience in managing restaurants in hotels and recreational clubs, such as Club Chinois,The Paramount and Kippo Pavilion, we were approached by The Fullerton Hotel to operate a Chineserestaurant at their premises. We believe the demand for our restaurant operating services will continueto grow and will further strengthen our brand name. This growth of services will prove to be asigni®cant avenue to expand and grow our Group in the future. We aim to become a signi®cantplayer as a restaurant operator for hotels and recreational clubs.

1 Economic Survey of Singapore 2000, published by Ministry of Trade and Industry in February 2001.

58


New franchise business model

Although our main focus will be on company-owned domestic expansion, we believe that selectivefranchise development will complement our growth strategy. We believe that Lao Beijing has thepotential of scalability and therefore the potential to expand to regional markets through franchising.In FY2001, we have just opened a new Lao Beijing outlet in March and will be opening another newLao Beijing outlet in the second half of 2001. We have plans to franchise Lao Beijing in Singapore inthe ®rst half of 2002 and in certain other countries in Asia by end of 2002. Meanwhile, we willconcurrently ®nalise our franchising agreements, after which, new Lao Beijing restaurants will beoperated by franchisees under our guidance.

Expansion of production facility

Currently, we have a production facility located at Jalan Boon Lay for the production of some of ourin-house ingredients, and primarily for the production of mooncakes and barbecued pork duringfestive seasons. However, with the commencement of our franchising business model, theproduction facility can be expanded to supply the franchisees with our original ingredients. Thisensures consistency in the quality of the ingredients throughout the franchise restaurants. Dependingon the demand for our in-house ingredients, we have plans to sell our in-house ingredients to outsideparties. To accommodate the expansion of our production facility, we have entered into a sale andpurchase agreement to purchase our new corporate of®ce cum food processing facility in BukitBatok Techpark 21. The production facility is expected to be operational by December 2001. Wealso intend to venture into the manufacture of various sauces and savouries, cakes and cookies aswell as outside catering business at our new food processing plant. These are intended fordistribution to our restaurants. We intend to use $0.4 million of our net proceeds from the Invitationto ®nance the renovation cost for our new premises.

59


DIRECTORS

Our Board of Directors is entrusted with the responsibility for the overall management of our Group.The particulars of our Directors are as follows:±

Name Age Address Current Occupation

Zhou Yingnan 72 58 Watten Estate RoadSingapore 287533

Non-executive Chairman

Andrew Tjioe 42 60 Watten Estate RoadSingapore 287535

Managing Director

Tjioe Ka In 36 58 Watten Estate RoadSingapore 287533

Executive Director and Vice President(Operations)

Ban Song Long 57 12 Cuscaden WalkFour Seasons Park #15-01Singapore 249694

Managing DirectorExcel®n Pte Ltd

Ker Sin Tze (Dr) 56 31 Merryn RoadSingapore 298480

Non-executive Chairman ofIRE Corporation Limited andManaging Director of Yenom Holdings Pte Ltd

Tan Eng Liang (Dr) 63 58 Swiss ViewLa Suisse I #03-07Singapore 288061

Managing DirectorThe New Otani Singapore Pte Ltd

Zhou Yingnan is the father of Andrew Tjioe and Tjioe Ka In, who are siblings. Save as disclosed hereinand on page 25 of this Prospectus, none of our Directors is related to one another or to oursubstantial Shareholders.

Information on the business and working experience of our Directors is set out below:±

Zhou Yingnan is the non-executive Chairman of our Company and founder of our Group. Due to hiswealth of knowledge in the restaurant business, he also serves as our Group's Consultant. He ishighly respected in both business and academic circles. Mr Zhou holds honorary professorships atinstitutions such as Yangzhou University and Xiamen University, China, and serves as Advisor to theInternational Confucian Association and the World Association of Chinese Cuisine. He is also theChairman and founder of Oceanic Textiles Pte Ltd, which he founded in 1976, and serves asChairman to the Wuhan New Minzhong Leyuan Co Ltd since 1993 and concurrently is a Director ofthe Shanghai Overseas Chinese Commercial Centre Co Ltd. Mr Zhou is also an accomplishedcalligrapher and noted a®cionado of classical Chinese art, and is the Vice President and ExecutiveAdviser of the China Social Welfare, Education, Science & Culture Centre Ð Institute of ChinesePaintings. He graduated from Xianyou Teachers' School (Fujian province, China) in 1948.

Andrew Tjioe is the Managing Director of our Group. He oversees the daily operations and is alsoresponsible for the overall direction of our Group. He started his career as a Corporate Planner in alisted company in 1981 for 2 years and subsequently moved to Oceanic Textiles Pte Ltd where hewas appointed Deputy Managing Director from 1983 to 1986. He has been involved in ouroperations in 1982, becoming Managing Director in 1984. Throughout his appointment as theManaging Director, he had established a chain of reputable restaurants in Singapore and in 1997, inrecognition of his success, he was awarded the Singapore Restauranteur of the Year by Wine & Dine.He was the President for the Lions Club of Singapore Mandarin from 1987 to 1988, and since 1995,he is a Member of Confrerie de la Chaine Des Rotisseurs, a worldwide association for food and wineconnoisseurs. In November 2000, he was presented the ``2000 International Management ActionAward'' (IMAA) by Institute of Management and PSB jointly for Excellence in Management Action forhis outstanding management of the Tung Lok Group. Mr Tjioe holds a Bachelor of Science Degree inBusiness Administration from Oklahoma State University, USA.

60


Tjioe Ka In currently holds the appointment of an Executive Director and Vice President (Operations)of our Group. She had been part of our Group since 1987 where she worked as a ManagementTrainee at Charming Garden for her internship. After graduating from her studies in 1988, she joinedCharming Garden as a Manager. In 1989, she joined Tung Lok as a General Manager. She worked atTung Lok for 2 years before joining Noble House, and subsequently Taipan Restaurant and MingSeafood Restaurant in Jakarta. In 1997, she was of®cially appointed the Vice President of our Group.She is also an active member of the Lions Club of Singapore Oriental, and served as President of theClub for the term year 2000/2001. Ms Tjioe holds a Bachelor of Science Degree in Hotel andRestaurant Management from Oklahoma State University, USA.

Ban Song Long was appointed as an Independent Director of our Company on 1 March 2001. He isthe Managing Director of Excel®n Pte Ltd, a Director of Kuo Investments Limited and a Director ofGenki Sushi Singapore Pte Ltd. He joined J Ballas & Company Private Limited as an ExecutiveDirector from March 1987 to May 1992. In the same period, he also held the position of anExecutive Director at J Ballas Holdings Private Limited from June 1988 to December 1993, beforejoining Vickers Ballas Holdings Limited in January 1994. He left Vickers Ballas Holdings Limited inApril 1999. He graduated as an Associate of the Institute of Bankers, London.

Dr Ker Sin Tze was appointed as an Independent Director of our Company on 1 March 2001. He isthe non-executive Chairman of IRE Corporation Limited and the Managing Director of YenomHoldings Pte Ltd. He lectured at the then University of Singapore from 1974 to 1980. He joinedLiang Court Pte Ltd as Managing Director in 1980 until September 1991. In September 1990, he wasappointed as the Executive Chairman of Superior Metal Printing Limited, a public listed company. InAugust 1991, Dr Ker was elected to Parliament. He resigned from Liang Court Pte Ltd and SuperiorMetal Printing Limited at the end of 1991 to take up his appointment as Minister of State forInformation and the Arts and Minister of State for Education in January 1992. He resigned from hisgovernment posts and returned to the private sector as the Managing Director of Yenom HoldingsPte Ltd in September 1994.

Dr Tan Eng Liang was appointed as an Independent Director of our Company on 1 March 2001. DrTan is presently the Managing Director of The New Otani Singapore Pte Ltd. He was a Member ofParliament from 1972 to 1980, the Senior Minister of State for National Development from 1975 to1978 and Senior Minister of State for Finance from 1978 to 1979. He also served as the Chairman ofthe Urban Redevelopment Authority, Singapore Quality & Reliability Association and the SingaporeSports Council. Dr Tan has a Doctorate from Oxford University, England. Dr Tan has been awardedthe Public Service Star (BBM), Public Service Star (BAR) and the Meritorious Service Medal by theSingapore Government.

Board Practices

At each annual general meeting, one-third of the Directors for the time being (or, if their number is nota multiple of three, the number nearest to but not less than one-third) shall retire from of®ce byrotation, provided that no Director holding of®ce as Managing or Joint Managing Director shall besubject to retirement by rotation or be taken into account in determining the number of Directors toretire. A retiring Director shall be eligible for re-election.

61


Audit Committee

Our independent Directors are Ban Song Long, Dr Ker Sin Tze and Dr Tan Eng Liang. Our auditcommittee (the ``Audit Committee'') comprises Ban Song Long, Dr Ker Sin Tze, Dr Tan Eng Liangand Andrew Tjioe. The Chairman of our Audit Committee is Ban Song Long.

Dr Ker Sin Tze is a non-executive Chairman of IRE Corporation Limited and Managing Director ofYenom Holdings Pte Ltd, both of which are controlled by Goh Cheng Liang, a substantialShareholder of our Company, and is a business associate of Goh Cheng Liang and Sim Lai Hee (aminority Shareholder of our Company) through their respective shareholdings in Yenomland Pte Ltd.Dr Ker Sin Tze is also a director of 11 other companies controlled by Goh Cheng Liang and his family.Of these companies controlled by Goh Cheng Liang and his family, he holds executive positions in 8companies, including Yenomland Pte Ltd.

Dr Tan Eng Liang has a professional relationship with entities controlled by Goh Cheng Liang and hisfamily, being a director of 13 companies controlled by Goh Cheng Liang and his family including TheNew Otani Singapore Pte Ltd, Wuthelam Holdings Pte Ltd, Daimaru Singapore Pte Ltd, Nippon Paint(Singapore) Pte Ltd and Goh Foundation Limited. Save for The New Otani Singapore Pte Ltd, Dr TanEng Liang is a non-executive director in companies controlled by Goh Cheng Liang and his family.

Our Directors are of the view that Dr Ker Sin Tze and Dr Tan Eng Liang are able to perform their rolesas Independent Directors in the interests of our minority Shareholders. Both are reputable individualswho are on the boards of many companies (including listed companies) and have a wealth ofexperience to contribute to our Group. Our Directors are of the view that their relationship with oursubstantial Shareholder, Goh Cheng Liang, will not interfere with their exercise of independentjudgement as Independent Directors. Further, Goh Cheng Liang is not our principal Shareholder andhis participation as a Shareholder is passive as he is not involved in the management of our Group.

Dr Ker Sin Tze and Dr Tan Eng Liang were not appointed to represent the interests of Goh ChengLiang in our Company and each of them is of the view that he is able to discharge his duties as anIndependent Director. Our other Independent Director, Ban Song Long, is also of the same opinion.

Details of the duties of our Audit Committee are set out in the section under the heading ``CorporateGovernance'' on page 78 of this Prospectus.

MANAGEMENT

The day-to-day operations of our Group are entrusted to our dedicated team of Executive Of®cers.The particulars of our Executive Of®cers are set out below:±


Chua Phak Mong 45 Blk 17 Tiong Bahru Road #02-83Singapore 163017

Financial Controller

Lilian Rae Hiw Chiew Shen 37 Blk 9 Jalan Rumah Tinggi #08-451Singapore 150009

Vice President, Operations

Vincent Phang Chwee Kin 34 Blk 66 Bedok South Avenue 3 #11-512Singapore 460066

Vice President, CateringSales

Rena Leong 32 Blk 278 Tampines Street 22 #07-198Singapore 520278

Senior ManagerCorporate Affairs

62



Dawn Ranji David 24 Blk 111, Clementi Street 13 #10-28Sunset WaySingapore 120111

Manager, CorporateAffairs & Communications

None of our Executive Of®cers is related to our Directors, our substantial Shareholders or to eachother.

Information on the business and working experience of our Executive Of®cers is set out below:±

Chua Phak Mong is our Financial Controller and is responsible for managing our accounts and®nance department. Mr Chua started his career as an accountant with the Oceanic Group ofCompanies (now known as Oceanic Textiles Pte Ltd) in 1982. He then left in 1989 to join SingaporeEngineering Software Pte Ltd (a Member of the Singapore Technologies Group) as the SeniorAccountant/Administrator where he was responsible for all the aspects of ®nancial and accountingmatters. He left in 1996 to join Citycab Pte Ltd as the Finance & Operation Manager. He wasseconded to Cabcharge Asia Pte Ltd (a subsidiary of Citycab Pte Ltd) to handle the company's®nance and accounting functions. Mr Chua joined us in September 1998 as Financial Controller. Heholds a Bachelor of Accounting Degree from University of Singapore (now known as NationalUniversity of Singapore).

Lilian Rae Hiw Chiew Shen was appointed the Vice President of Operations in March 1998. She isresponsible for the pro®tability and performance of the restaurant outlets, including training and qualitycontrol, recruitment and staff welfare, advertising and promotion, and development of ISO 9002 forcerti®cation. She was involved in the opening of restaurant outlets for our Group, including Tung LokSeafood Gallery and The Red Book. Her ®rst ®eld experience started as far back as 1980 where sheworked on a Special Apprenticeship Scheme for Vocational Institute Training Board (``VITB'') andHotel and Catering Training School (``HCTS''). In 1981, she left VITB and HCTS to join OberoiImperial Hotel as Commis Cook and later joined Le Meridien Singapore in 1983 as First Cook whereshe was one of the pioneer members who started Main Kitchen and `Garde Manger' after the hotel'sconstruction. In 1984, she left her job for further study at Singapore Hotel Association Training andEducation Centre (``SHATEC''). Thereafter she continued to work as a Training Of®cer in SHATEC till1991 and joined Raf¯es Hotel as Catering Sales Manager. In 1992, she joined United B&B Italia asAssistant Sales Manager and left in 1993 to become a Lecturer in Suffolk Country Council, England,till 1996 where she taught on F&B service operation, Food Provision, Service Theory, Tourism Studiesand Oriental Cookery. Prior to joining our Group, she worked as a freelance food stylist, trainer forsocial etiquette workshops and consultant on culinary curriculum development. She holds a HigherDiploma in Hotel Management from SHATEC, in conjunction with Ecole Hoteliere Lausanne,Switzerland.

Vincent Phang Chwee Kin is the Vice President, Catering Sales of our Group. In the two years thatMr Phang has been with our Group, he was responsible for overseeing the entire banquet and cateringoperations for all our restaurants. Prior to joining our Group, he worked as a Room ReservationSupervisor at Glass Hotel (now known as Concorde Hotel) from 1988 to 1990 before joining GoldenLandmark Hotel as Sales Executive Ð Room Sales. Within the year as the Sales Executive, he waspromoted to Banquet Sales Manager. In 1991, he left Golden Landmark Hotel and worked forBoulevard Hotel, where he was appointed the Banquet Sales Manager and was responsible forselling banquet rooms and meeting packages. He also assisted in food and beverage promotions. In1994, Mr Phang worked as a Banquet Manager for Le Meridian Hotel before joining our Group in1998. He obtained the American Hotel & Motel Association certi®cates in supervisory housekeeping,front of®ce procedures, hotel sales promotion and convention management services.

63


Rena Leong is our Senior Manager and is responsible for all corporate affairs, namely theadministrative and human resource functions of our Group. Ms Leong commenced her workingcareer as early as 1988 during her degree studies at the Southeast Asia Union College, Singapore.From 1988 to 1990, she worked as an Assistant Accountant and Computer Lab Assistant at theSoutheast Asia Union College, Singapore. During the year of 1992, she worked on several jobs suchas Librarian, Human Resource Assistant and Lecturer at the Seventh-Day Adventist School(Singapore), Youngberg Adventist Hospital (Singapore) and King's Business Institute (Malaysia)respectively. In 1992, she went on to pursue her further studies at Andrews University in USA, whereshe also worked as an Of®ce Secretary and Research Assistant/Reader in the Business Department.In 1994, she joined Systematic Commercial Training Centre as an Education Consultant. She joinedour Group in 1996 as the Administrative Manager and was appointed Senior Manager for CorporateAfffairs in 1999. She holds a Bachelor of Science in Business Administration from Southeast AsiaUnion College, Singapore/Walla Walla College, College Place, USA and a Masters of BusinessAdministration from Andrews University, USA.

Dawn Ranji David is our Manager for Corporate Affairs and Communications and is responsible forcorporate communications and advertising and promotions for our Group. She also oversees ourGroup's marketing efforts. Before joining our Group in July 1999, she was a student at the NationalUniversity of Singapore. She holds a Bachelor of Arts & Social Sciences Degree (BA with Merit) inEnglish Literature and European Studies from National University of Singapore.

The particulars of our Related Managers are set out below:±


Tjioe Ka Lie 43 17 Watten DriveSingapore 287652

Personal Assistant to Managing Director

Zhou Jia Ping 48 151F King's Road#06-21 Farrer CourtSingapore 268163

Purchasing and General Affairs Manager ofTung Lok Seafood Gallery

Tjioe Ka Lie is the Personal Assistant to our Managing Director, and has been with our Group since1984. As the Personal Assistant to our Managing Director, she is responsible for co-ordinating andcommunicating the instructions of our Managing Director. In addition, she handles administrativeduties. Prior to joining our Group, she was the Assistant Sales Manager of a garment manufacturingcompany, You Hong Lee (Pte) Ltd from 1978 to 1984. At You Hong Lee (Pte) Ltd, her duties includeddealing with customers, sales and co-ordination with the production department. She has a Diplomain Business Studies from Ngee Ann Polytechnic.

Zhou Jia Ping is the Purchasing and General Affairs Manager of Tung Lok Seafood Gallery. Shemanages the restaurant's overall purchases of food and beverage. She also makesrecommendations on the supplies for the other restaurants in our Group. From 1980 to 1989, sheworked as a Club House Keeper for Prima Ceylon Ltd, Trincomalee and Colombo, Sri Lanka. In1990, she joined Charming Garden Restaurant Pte Ltd as the Purchasing Manager, and later joinedThe Paramount in 1996 as the Purchasing Manager. In April 2000, she joined Tung Lok SeafoodGallery. She graduated from Xianyou Second High School, Fujian, China.

64


Our management reporting structure is as follows:±

BOARD OF DIRECTORS

Andrew TjioeManagingDirector

Tjioe Ka In Vice President

Operations

Lilian Rae Hiw Chiew Shen

Vice President Operations

Vincent Phang Chwee KinVice PresidentCatering Sales

Chua Phak Mong Financial Controller

Rena LeongSenior ManagerCorporate Affairs

Dawn Ranji DavidManager

Corporate Affairs andCommunications

65

DIR

EC

TO

RS

,M

AN

AG

EM

EN

TA

ND

ST

AF

F

Staff

As at 31 December 2000, we have a total of 539 full-time employees in our Group. Of these, thenumber of service, kitchen and administrative staff is 256, 247 and 36 respectively. We have notencountered any major problems in hiring suitable candidates, and retaining our key personnel. Ourcooking staff which comprises master chefs and ordinary chefs, has grown from 92 as at 31December 1997 to 133 as at 31 December 2000. Chef turnover as a percentage of total headcountwas 3.1% in FY1999 and 5.0% in FY2000. We believe this is in line with industry norms. Ouremployees are not unionised save for 15 employees, who are employees at Charming Garden, whoare members of the Food, Drinks and Allied Workers' Union. The relationship between managementand employees is good and there has been no industrial dispute with our employees since ouroperations commenced.

Directors' Remuneration

The remuneration of our Directors, namely Zhou Yingnan, Andrew Tjioe and Tjioe Ka In on anaggregate basis and in remuneration bands for each of the last two ®nancial years, FY1999 andFY2000, are as follows:±

(a) Aggregate remuneration

($'000) FY1999 FY2000

Directors 263 412

(b) Remuneration in each remuneration bands

---------------------------------------------------------- FY1999 --------------------------------------------------------- ---------------------------------------------------------- FY2000 ---------------------------------------------------------

ExecutiveDirectors

Non-executiveDirectors Total

ExecutiveDirectors

Non-executiveDirectors Total

$500,000 and above Ð Ð Ð Ð Ð Ð

$250,000 to $499,999 Ð Ð Ð Ð Ð Ð

Below $250,000 3 Ð 3 3 Ð 3

Total 3 Ð 3 3 Ð 3

With effect from 1 March 2001, Zhou Yingnan has stepped down as our executive Director but willcontinue to be our Consultant. A monthly consultancy fee of $8,900 is payable to him.

SERVICE AGREEMENTS

There are no service agreements entered between our Company and our Directors. However, we havepreviously entered into various letters of employment with all of our Executive Of®cers. Such letterstypically provide for the salary payable to our Executive Of®cers, their working hours, annual leave,medical bene®ts, grounds of termination and certain restrictive covenants.

66


Remuneration of employees related to our Directors and substantial Shareholders

For FY1999 and FY2000, the aggregate remuneration (including CPF contributions and bene®ts) of ourDirectors, substantial Shareholders and employees who are related to our Directors and substantialShareholders amounted to approximately $364,172 and $529,855, respectively. These representapproximately 8.4% and 10.5% of our pro®t before taxation (before deduction of such remuneration)for FY1999 and FY2000 respectively. Of the 539 (as at 31 December 2000) employees in our Group,two of them, Zhou Jia Ping and Tjioe Ka Lie (excluding our executive Directors and substantialShareholders) are related to our Directors and substantial Shareholders.

The remuneration of employees who are related to our Directors and substantial Shareholders will bereviewed annually by our Audit Committee to ensure that their remuneration packages are in line withour staff remuneration guidelines and commensurate with their respective job scope and level ofresponsibility. In the event that a member of our Audit Committee is related to the employee underreview, he will abstain from the review.

The total remuneration paid to our Directors and substantial Shareholders and employees who arerelated to our Directors and substantial Shareholders will be disclosed in our annual report in theevent that such remuneration exceeds 15% of pro®t before taxation of our Group for that ®nancialyear.

67


INTERESTED PERSON TRANSACTIONS

Save as disclosed on pages 27 to 31 of this Prospectus under ``Restructuring Exercise'' and below,no Director, substantial Shareholder or Executive Of®cer was or is interested in any materialtransactions undertaken by our Group within the last three ®nancial years.

(a) Provision of restaurant management services

We have entered into separate management agreements with each of House of Mao RestaurantPte Ltd (``House of Mao''), Spice Garden Restaurant Pte Ltd (``Spice Garden''), PT NagaPancarasa (``PT Naga'') and PT Nobel Pancarasa (``PT Nobel'') pursuant to which we agreed, toprovide certain management services to the respective parties, which are all in the business ofoperating restaurants, in consideration for the payment of a management fee. Further details onthese companies are set out in the section under ``Potential Con¯ict of Interests''.

The details of the interests of our substantial Shareholders and Directors in House of Mao, SpiceGarden, PT Naga and PT Nobel and details of each management agreement are set out below:±

(i) House of Mao

Zhou Yingnan and Andrew Tjioe together own an aggregate of at least 25% of the equityinterests in and are also the directors of NHPL and LZPL which are the shareholders ofHouse of Mao. Zhou Yingnan and Andrew Tjioe are also directors of House of Mao.

Pursuant to the terms of our management agreement with House of Mao, we agreed toprovide various management services to House of Mao including:±

(a) the recruitment of chefs;

(b) the appointment of all senior executives of House of Mao;

(c) the secondment of appropriate personnel of our Group (``House of Mao DesignatedPersonnel'') to House of Mao for the purpose of carrying out the said services; and

(d) the provision of consultancy on restaurant management.

Under the terms of the said agreement, House of Mao is not permitted to offer House ofMao Designated Personnel permanent employment without our prior written consent. Wemay terminate the agreement if House of Mao breaches any of its obligations under theagreement.

In consideration for the provision of the said services, House of Mao agreed to pay to us amanagement fee of $2,000 a month commencing on 1 August 2000. All out-of-pocketexpenses incurred by our Company in the discharge of our duties will be reimbursed.

(ii) Spice Garden

Spice Garden is the wholly-owned subsidiary of CGPL. Zhou Yingnan and Tjioe Ka In, whoare our Directors, and Tjioe Ka Lie, who is a daughter of Zhou Yingnan and a sister of TjioeKa In, own in aggregate the entire issued and paid-up share capital of CGPL. Zhou Yingnanand Andrew Tjioe are also directors of Spice Garden.

Pursuant to the terms of our management agreement with Spice Garden, we agreed toprovide various management services to Spice Garden including:±


(b) the appointment of all senior executives of Spice Garden;

68


(c) the secondment of appropriate personnel of our Group (``Spice Garden DesignatedPersonnel'') to Spice Garden for the purpose of carrying out the said services; and

(d) provision of consultancy on restaurant management.

Under the terms of the said agreement, Spice Garden is not permitted to offer the SpiceGarden Designated Personnel permanent employment without our prior written consent.We may terminate the agreement if Spice Garden breaches any of its obligations underthe agreement.

In consideration for the provision of the said services, Spice Garden agreed to pay to us amanagement fee of $8,000 per month commencing on 1 August 2000. All out-of-pocketexpenses incurred by our Company in the discharge of our duties will be reimbursed.

(iii) PT Naga

Linda Anggraini Widjaja @ Ang Tjia Leng, the wife of Andrew Tjioe (our substantialShareholder and Director), holds 35% of the equity interest in PT Naga, which owns andoperates a Chinese restaurant, Taipan Restaurant in Jakarta, Indonesia. Andrew Tjioe is adirector and Ang Tjia Leng is a commissioner of PT Naga. Our management agreementwith PT Naga commenced on 1 January 2001.

Pursuant to the terms of our management agreement with PT Naga, we agreed to, so longas Ang Tjia Leng holds or has a bene®cial interest in not less than 35% of the issued andpaid-up share capital of PT Naga (the ``Relevant Percentage''), provide variousmanagement services to PT Naga including:±


(b) the appointment of all senior executives of PT Naga;

(c) the secondment of appropriate personnel of our Group (``PT Naga DesignatedPersonnel'') to PT Naga for the purpose of carrying out the said services; and

(d) consultancy on restaurant management.

Under the terms of the said agreement, PT Naga is not permitted to offer the PT NagaDesignated Personnel permanent employment without our prior written consent. We mayterminate the agreement if PT Naga breaches any of its obligations under the agreement.PT Naga, on the other hand, may terminate the agreement in the event Ang Tjia Leng'sshareholding in the company is reduced to a level below the Relevant Percentage, ongiving us at least three months' notice.

In consideration for the provision of the said services, PT Naga agreed to pay to us amonthly management fee of $4,000. All out-of-pocket expenses incurred by our Companyin the discharge of our duties will be reimbursed.

69


(iv) PT Nobel

Andrew Tjioe, our substantial Shareholder and Director, holds 35% of the equity interest inPT Nobel which owns and operates a Chinese restaurant, Ming Seafood Restaurant inJakarta, Indonesia. Andrew Tjioe is also a director of PT Nobel. Our managementagreement with PT Nobel commenced only on 1 January 2001.

Pursuant to the terms of our management agreement with PT Nobel, we agreed to, so longas Andrew Tjioe holds or has a bene®cial interest in not less than 35% of the issued andpaid-up share capital of PT Nobel (the ``Relevant Percentage''), provide variousmanagement services to PT Nobel including:±


(b) the appointment of all senior executives of PT Nobel;

(c) the secondment of appropriate personnel of our Group (``PT Nobel DesignatedPersonnel'') to PT Nobel for the purpose of carrying out the said services; and

(d) consultancy on restaurant management.

Under the terms of the said agreement, PT Nobel is not permitted to offer the PT NobelDesignated Personnel permanent employment without our prior written consent. We mayterminate the agreement if PT Nobel breaches any of its obligations under the agreement.PT Nobel, on the other hand, may terminate the agreement in the event Andrew Tjioe'sshareholding in the company is reduced to a level below the Relevant Percentage, ongiving us at least three months' notice.

In consideration for the provision of the said services, PT Nobel agreed to pay to us amonthly management fee of $4,000. All out-of-pocket expenses incurred by our Companyin the discharge of our duties will be reimbursed.

The amount of management fees we have received in the past three ®nancial years which arosefrom the provision of the above management services to House of Mao and Spice Garden are:±

$'000 FY1998 FY1999 FY2000

Management fees 127 106 130

Although management fees in the past varied from year to year as shown above, after 1 January2000, management fees are ®xed as per quantums set out above in accordance to therespective management agreements.

(b) Transactions in the ordinary course of business

In the ordinary course of business, we enter into the following transactions with House of Maoand Spice Garden:±

Supply of products from central food processing plant

Through our central food processing plant, we supply the food products we manufacture suchas mooncakes and pastries to House of Mao and Spice Garden. The prices we charge House ofMao and Spice Garden for food products that we sell to them are similar to those we chargeother restaurants in our Group. Such transactions have been conducted at arm's length basis.

70


Sale and purchase of raw materials and processed food

At times when any of our restaurants run short of raw materials, that restaurant may purchasesuch raw materials from the other restaurants in our Group or from House of Mao and SpiceGarden. Conversely, House of Mao and Spice Garden may also purchase raw materials fromour restaurants which are surplus to our requirements on an arm's length basis. Suchtransactions have been conducted based on the cost of the raw materials and at arm's lengthbasis.

In June 2000, the management of the Fort Canning Country Club informed Spice Garden that themarquee would have to be demolished by January 2001, following instructions from theSingapore Fire Safety Bureau. The marquee was a temporary structure, and as such, was notmeant for holding frequent large-scale banquets. Hence, Spice Garden took steps to downsizetheir banquet operations, in particular, that of manpower.

Following the departure of the executive chef of Spice Garden in October 2000, and faced withnumerous banquet commitments throughout the months of November and December, SpiceGarden decided to transfer all banquet sales for existing banquet commitments to CharmingGarden. This was done at arms length and existing banquet commitments from Spice Gardenwere contracted out to Charming Garden on an independent contractor basis. Spice Gardenthen received commissions for all sales undertaken by Charming Garden. Charming Gardenbore the cost of raw materials and manpower for the banquet commitments.

It is envisaged that transactions involving purchases by our Group from House of Mao and SpiceGarden will not continue in the future.

The aggregate value of the above transactions between our Group and House of Mao and SpiceGarden for FY1998 to FY2000 were as follows:±

$'000 FY1998 FY1999 FY2000

Sales 262 213 883

Purchases 31 4 572

(c) Loan advances to antecedent companies and interested persons

In the past, antecedent companies in our Group and certain interested persons provide ®nancialsupport to one another as and when required in the form of non-interest bearing loan advanceswith no ®xed terms of repayment. The antecedent companies which had received loan advancesfrom our Group are Paramount Chinese Cuisine Restaurant Pte Ltd (``PCCR''), GIE and TLI andthe interested persons in this regard are Spice Garden and House of Mao.

71


The shareholders and directors of these companies as at the date of this Prospectus are:±

Company Shareholders % Shareholdings Directors

PCCR TLGH 100.0% Zhou Yingnan

Andrew Tjioe

Spice Garden CGPL 100.0% Zhou Yingnan

Andrew Tjioe

Tjioe Ka Lie

House of Mao Zhou Yingnan Insigni®cant Zhou Yingnan

Andrew Tjioe 1.8% Andrew Tjioe

NHPL 30.3% Chuang Nai Teng

LZPL 61.8%

Poping Lou Restaurant Pte Ltd 6.1%

GIE Tjioe Ka In 8.3% Andrew Tjioe

Andrew Tjioe 21.7% Zhou Yingnan

TLGH 70.0%

TLI Zhou Yingnan 14.8% Zhou Yingnan

Andrew Tjioe 33.4% Andrew Tjioe

CGPL 22.2% Tjitra Hadiwidjaja@ Tsiang Wen Hua

Tjitra Hadiwidjaja @ Tsiang WenHua

22.2% Tsiang Weng Hua

Ang Tjia Leng @ Linda AnggrainiWidjaja

7.4% Ang Tjia Leng@ Linda AnggrainiWidjaja

Zhou Yingnan, Andrew Tjioe and Tjioe Ka In are our Directors and substantial Shareholders andare therefore interested in the above transactions.

The aggregate amount of loan advances provided by our Group in each of the past three®nancial years were:±

$'000 FY1998 FY1999 FY2000

Advances to these companies 667 849 345

As at 31 December 2000, the total amount outstanding from the antecedent companies(including the ®ve companies listed above) was $711,930 comprising $344,573 of non-tradeadvances and $367,357 of trade-related receivables. The non-trade advances have been fullyrepaid. Our Group does not intend to extend any loans to these companies in the future.

72


SHAREHOLDERS' MANDATE

It is likely that, in the ordinary course of business, we may from time to time enter into interestedperson transactions with some degree of frequency. Chapter 9A of the SGX-ST Listing Manualallows a listed company to obtain a mandate from its shareholders for recurrent interested persontransactions which are of a revenue or trading nature or for those necessary for its day-to-dayoperations. These transactions may not include the purchase or sale of assets, undertakings orbusinesses.

In view of the time-sensitive nature of commercial transactions, it would be advantageous to us toobtain a mandate to enter into interested person transactions, provided that all such transactions aremade at arm's length and on normal commercial terms. The mandate will eliminate, among others, theneed for us to convene separate general meetings on each occasion to seek our Shareholders'approval as and when potential transactions with interested persons arise. This will reducesubstantially the administrative time, inconvenience and expenses associated with the convening ofsuch meetings, without compromising our corporate objectives and adversely affecting our businessopportunities. On 5 March 2001, our shareholders approved a mandate (the ``Shareholders'Mandate'') for us to enter into the following categories of interested person transactions with thefollowing categories of interested persons.

Categories of interested person transactions

. provision of management services to House of Mao, Spice Garden, PT Naga and PT Nobel;

. supply of products manufactured by our central food processing plant to House of Mao and SpiceGarden; and

. sale of raw materials to House of Mao and Spice Garden.

Categories of interested persons

The Shareholders' Mandate will apply to the Interested Person Transactions which are carried out withour Directors, substantial Shareholders and any of their associates (the ``Interested Persons'' andeach an ``Interested Person'').

Scope of Shareholders' Mandate

The Shareholders' Mandate does not cover an interested person transaction which has a value belowthe threshold and aggregation requirements contained in Chapter 9A of the SGX-ST Listing Manual.Transactions with interested persons which do not fall within the ambit of the mandate will be subjectto the relevant provisions of Chapter 9A of the SGX-ST Listing Manual. The mandate will continue inforce until our next Annual General Meeting. We will thereafter seek the approval of our shareholdersfor the renewal of the mandate at each Annual General Meeting, subject to satisfactory review by ourAudit Committee.

73


Review procedures for interested person transactions

To ensure that interested person transactions are undertaken at arm's length and on commercialterms, and will not be prejudicial to our Shareholders, the mandate incorporates the following reviewprocedures:±

(i) in reviewing the terms of the management agreements, our Audit Committee will satisfy itselfthat the terms therein shall be on an arm's length and normal commercial basis (taking intoconsideration, the scope of the services to be provided, the range of fees determined as thebenchmark for similar services charged to unrelated parties, where possible, or to our group ofrestaurants);

(ii) when selling products or raw materials to an interested person, the price and terms of 2 othersuccessful sales of similar products to third parties, or other restaurants in our Group if thereare no sales to third parties, will be used as comparison. Our Audit Committee will review thesecomparables, taking into account all pertinent factors including, but not limited to price, quality,delivery time and track record, to ensure that the interests of minority Shareholders are notdisadvantaged; and

(iii) in situations where time is of the essence, for example when a particular product is requiredurgently, and we may not have suf®cient time to follow the above procedures, and only if thevalue of that transaction does not exceed 5% of our last audited NTA or $50,000, whichever islower, we will proceed with the transaction and document all the relevant facts for review by ourAudit Committee at its next meeting. Our Audit Committee can then recommend any changes tothe above procedures to cater for such situations in the future, if necessary.

Our Audit Committee will review all interested person transactions with a value in excess of $50,000 orsuch other amount as they may prescribe, if any, at least quarterly to ensure that they are carried outat arm's length and in accordance with the procedures outlined above. It will take into account allrelevant non-quantitative factors. In the event that a member of our Audit Committee is interested inany interested person 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 suf®cient to ensure that interests of minority Shareholders arenot prejudiced, we will revert to our Shareholders for a fresh mandate based on new guidelines andprocedures.

Our Audit Committee has reviewed the terms of the mandate and is satis®ed that the reviewprocedures are suf®cient to ensure that interested person transactions will be made in accordancewith our normal commercial terms, and hence, will not be prejudicial to our Shareholders, nor bedisadvantageous to us.

In addition, our Audit Committee will include the review of interested person transactions as part of itsstandard procedures while examining the adequacy of its internal controls. The Board of Directors willalso ensure that all disclosure, approval and other requirements on interested person transactions,including those required by prevailing legislation, SGX-ST listing rules and accounting standards, arecomplied with.

74


POTENTIAL CONFLICT OF INTERESTS

House of Mao

House of Mao is principally engaged in the business of operating a Chinese restaurant. The details ofthe interest of our substantial Shareholders and Directors are set out in the section ``Interested PersonTransactions''.

House of Mao has not been pro®table since the commencement of its operations in March 1998. Thefounding shareholders of the House of Mao are currently rethinking the theme of the restaurant andreviewing its location.

At present, we have no intention to acquire the assets, business and undertakings of the House ofMao (the ``House of Mao Undertakings''). We are of the view that there is minimal con¯ict of interestbetween House of Mao and the Tung Lok Group restaurants as House of Mao is a theme restaurantwhich serves different cuisines and attracts different pro®le of customers, save for The Red Bookwhich is quite close to House of Mao in terms of the ``Mao'' theme. However, the cuisine served byThe Red Book is different from that served by House of Mao and therefore attracts a different set ofcustomers. The Red Book serves New Asia cuisine, which combines western ingredients and Chinesecooking method, while House of Mao serves Hunan cuisine. House of Mao caters mainly to of®ceworkers within the Central Business District.

We will consider incorporating the House of Mao as one of the divisions within our Group at such timethat the restaurant has achieved operating pro®tability and is in our interests to do so. To resolve anypotential con¯ict of interests, we have on 8 February 2001, entered into a call option agreement withZhou Yingnan, Andrew Tjioe, NHPL, LZPL and Poping Lou Restaurant Pte Ltd of House of Mao (the``Grantors'') pursuant to which the Grantors granted to our Company the right to require the Grantorsto sell to our Company, their entire shareholding interests, presently consisting of an aggregate of660,000 ordinary shares of $1.00 each in the capital of the House of Mao (the ``First House of MaoCall Option Shares''), representing the entire issued and paid-up share capital of the House of Mao(the ``House of Mao Call Option''). The ®rst House of Mao Call Option is exercisable for a period ofabout three years up to and including 31 March 2004. The consideration for the purchase of theHouse of Mao Call Option Shares will be ®xed based on the value equivalent to the most recentaudited book value NTA prior to the date of the exercise of the ®rst House of Mao Call Option.

As a corollary to the First House of Mao Call Option, we have also entered into a call optionagreement with House of Mao pursuant to which House of Mao granted to our Company the right torequire the House of Mao to sell, transfer, assign and convey to our Company the assets, businessand undertakings (the ``House of Mao Undertakings'') but excluding certain non-operating assetsand liabilities of House of Mao (the ``Second House of Mao Call Option''). The Second House ofMao Call Option is exercisable for a period of about three years up to and including 31 March 2004.The consideration for the purchase of the House of Mao Undertakings will be ®xed based on the mostrecent audited book value NTA of the House of Mao Undertakings prior to the date of exercise of theSecond House of Mao Call Option.

75


Spice Garden

Spice Garden is principally engaged in the business of operating a Chinese restaurant specialising inSichuan and Hunan cuisines. The details of the interest of our substantial Shareholders and Directorsare set out in the section ``Interested Person Transactions''.

Spice Garden is currently operating at Fort Canning Country Club on a 1-year lease which expires on27 February 2002. In year 2000, Spice Garden derived 41% of its total revenue from banquet sales.Since January 2001, the banqueting operations at the Spice Garden have ceased. We were informedby the shareholders of Spice Garden that they will review the viability of operating the restaurant andthe terms of renewal of the present lease when a new permanent banquet hall is built by the club atthe present site. Spice Garden will extend its lease on a year to year basis until the new banquet hall iscompleted. In the meantime, Spice Garden will continue with the restaurant operations but thebanquet operation will be temporarily suspended. Accordingly we have decided, for the time being,not to acquire the assets, business and undertakings of Spice Garden (the ``Spice GardenUndertakings''). For the last three ®nancial years, Spice Garden (including Wok and Roll and The FigTree Cafe, which are sole proprietorships held by Spice Garden) recorded a (loss)/pro®t of $(781,183),$131,640 and ($97,242) for FY1998, FY1999 and FY2000, respectively.

However, we will consider incorporating Spice Garden as one of the divisions within our Group atsuch time as our management is satis®ed of the viability of operating the restaurant at the newbanquet hall and the terms of renewal of the present lease.

To resolve any potential con¯ict of interests, we have on 8 February 2001 entered into a call optionagreement with CGPL pursuant to which CGPL granted to our Company the right to require CGPL tosell to our Company, its entire shareholding interest, presently consisting of 600,000 ordinary sharesof $1.00 each in the capital of Spice Garden (the ``Spice Garden Call Option Shares''), representingthe entire issued and paid-up share capital of Spice Garden (the ``First Spice Garden Call Option'').The First Spice Garden Call Option is exercisable for a period of more than three years up to andincluding 31 March 2004. The consideration for the purchase of the Spice Garden Undertakings willbe ®xed based on the most recent audited book value NTA of the Spice Garden Undertakings prior tothe date of exercise of the First Spice Garden Call Option subject to the maximum consideration of$600,000.

As a corollary to the ®rst Spice Garden Call Option, we have also entered into a call option agreementwith the Spice Garden pursuant to which Spice Garden granted to our Company the right to requireSpice Garden to sell, transfer, assign and convey to our Company the assets, business andundertakings (the ``Spice Garden Undertakings'') but excluding certain non operating assets liabilitiesof Spice Garden (the ``Second Spice Garden Call Option''). The Second Spice Garden Call Option isexercisable for a period of more than three years up to and including 31 March 2004. Theconsideration for the purchase of the Spice Garden Undertakings will be ®xed based on the mostrecent audited book value NTA of the Spice Garden Undertakings prior to the date of exercise of theSecond Spice Garden Call Option subject to the maximum of $600,000.

76


PT Naga

PT Naga is a company incorporated in Indonesia and which owns and operates a Chinese restaurant,Taipan Restaurant. Currently, PT Naga's operations are restricted only in Jakarta, Indonesia where wedo not have a presence. PT Naga therefore does not directly compete with us. Accordingly, webelieve that the possibility of a con¯ict of interests situation arising is relatively low.

We have entered into a management agreement as detailed under the section ``Interested PersonTransactions''. There is currently no plan for our Company to commence restaurant business inIndonesia. However, if there is any intention in this regard, we will evaluate the feasibility of acquiringAng Tjia Leng's interest in PT Naga. Hence, we entered into a call option agreement with Ang TjiaLeng pursuant to which Ang Tjia Leng granted to our Company the right to require her to sell to ourCompany, her entire shareholding interest, presently consisting of 140 ordinary shares of RP1,000,000each in the capital of PT Naga (the ``PT Naga Call Option Shares''), representing 35% of the entireissued and paid up share capital of PT Naga (the ``PT Naga Call Option'') subject to any approvalwhich may be required by, inter alia, Indonesia law and the other shareholders of PT Naga. Theconsideration for the purchase of the PT Naga Call Option Shares will be determined by Ang TjiaLeng and us, and failing such agreement, by an international accounting ®rm appointed by us, andapproved by our Audit Committee in accordance with the requirements of Chapter 9A of the ListingManual of the SGX-ST.

PT Nobel

PT Nobel is a company incorporated in Indonesia and which owns and operates a Chinese restaurant,Ming Seafood Restaurant, which specialises in seafood. Currently, PT Nobel's operations arerestricted only in Jakarta, Indonesia where we do not have a presence. PT Nobel therefore does notdirectly compete with us. Accordingly, we believe that the possibility of a con¯ict of interest situationarising is relatively low.

We have entered into a management agreement with PT Nobel as detailed under the section``Interested Person Transactions''. There is currently no plan for our Company to commencerestaurant business in Indonesia. However, if there is any intention in this regard, we will evaluate thefeasibility of acquiring Andrew Tjioe's interest in PT Nobel. Hence, we entered into a call optionagreement with Andrew Tjioe pursuant to which Andrew Tjioe granted to our Company the right torequire him to sell to our Company, his entire shareholding interest, presently consisting of 175ordinary shares of RP500,000 each in the capital of PT Nobel (the ``PT Nobel Call Option Shares''),representing 35% of the entire issued and paid up share capital of PT Nobel (the ``PT Nobel CallOption'') subject to any approval which may be required by, inter alia, Indonesia law and the othershareholders of PT Nobel. The consideration for the purchase of the PT Nobel Call Option Shareswill be determined by Andrew Tjioe and us, and failing such agreement, by an internationalaccounting ®rm appointed by us, and approved by our Audit Committee in accordance with therequirements of Chapter 9A of the Listing Manual of the SGX-ST.

77


Interest of a substantial Shareholder and Directors in similar business

Our substantial Shareholder, Goh Cheng Liang is a director of The New Otani Singapore Pte Ltd(``New Otani'') which operates a restaurant, Taikan-En Chinese Restaurant, in the premises of HotelNew Otani in the ordinary course of its hotel business. Goh Cheng Liang and his family haveinterests in New Otani. However, we do not view Taikan-En Chinese Restaurant as our competitor.

Ban Song Long is an executive director of Genki Sushi Singapore Pte Ltd (``Genki Sushi''), whichoperates a chain of restaurants, serving Japanese cuisines in a sushi bar style. He owns 50%shareholding interest in Genki Sushi and is involved in the operation of the restaurants. We do notview Genki Sushi as our direct competitor as they serve a different cuisine with different restaurantconcept and dining experience from us.

Save as disclosed above and on page 62 of this Prospectus in respect of the directorship of Dr TanEng Liang in New Otani, none of our Directors, substantial Shareholders or Executive Of®cers has anyinterest, direct or indirect, in any business or company carrying on the same business as us.

CORPORATE GOVERNANCE

Recognising the importance of good corporate governance and the offering of high standards ofaccountability to its shareholders, our Audit Committee shall meet periodically to perform thefollowing functions:±

(a) review the audit plans of our Group's external auditors;

(b) review the external auditors' reports;

(c) review the co-operation given by our Group's of®cers to the external auditors;

(d) review the ®nancial statements of our Group before submission to our Board of Directors;

(e) nominate external auditors for re-appointment;

(f) review interested person transactions; and

(g) review the remuneration packages of our Directors, Executive Of®cers and employees who arerelated to our Directors and substantial Shareholders.

Apart from the duties listed above, our Audit Committee shall commission and review the ®ndings ofinternal investigations into matters where there is any suspected fraud or irregularity, or failure ofinternal controls or infringement of any Singapore law, rule or regulation which has or is likely tohave a material impact on our Group's operating results and/or ®nancial position.

78


10 March 2001

The ShareholdersTung Lok Restaurants (2000) Ltd1 Sophia Road #05-03Peace CentreSingapore 228149

Dear Sirs

This report has been prepared for inclusion in the Prospectus dated 10 March 2001 (``Prospectus'') inconnection with the Invitation by Tung Lok Restaurants (2000) Ltd (the ``Company'') in respect of20,000,000 new ordinary shares of $0.025 each in the capital of the Company.

On behalf of the Directors of the Company, I report that, having made due inquiry in relation to theinterval between 31 December 2000, the date to which the last audited accounts of the subsidiarieswere made up, and the date hereof (being a date not earlier than 14 days before the issue of thisProspectus):±

(a) the businesses of the Company and its subsidiaries have, in the opinion of the Directors, beensatisfactorily maintained;

(b) no circumstances have, in the opinion of the Directors, arisen since the date of incorporation ofthe Company which would adversely affect the trading or the value of the assets of the Companyor its subsidiaries;

(c) the current assets of the Company and its subsidiaries appear in the books at values which arebelieved to be realisable in the ordinary course of business;

(d) no contingent liabilities have arisen by reason of any guarantees given by the Company or itssubsidiaries; and

(e) save as disclosed on page 24 of the Prospectus, there has been no change in the publishedreserves or any unusual factors affecting the pro®ts of the Company and its subsidiaries sincethe last audited accounts for the ®nancial year ended 31 December 2000.

Yours faithfullyfor and on behalf of theBoard of Directors

Tjioe Ka MenManaging DirectorTung Lok Restaurants (2000) Ltd

79

DIRECTORS' REPORT

10 March 2001

The Board of DirectorsTung Lok Restaurants (2000) Ltd1 Sophia Road #05-03Peace CentreSingapore 228149

Dear Sirs,

A. INTRODUCTION

This report has been prepared for inclusion in the Prospectus of Tung Lok Restaurants (2000)Ltd (the ``Company'') dated 10 March 2001 in connection with the invitation (the ``Invitation'')by the Company to subscribe for 20,000,000 ordinary shares of $0.025 each (the ``NewShares'') in the capital of the Company.

The New Shares will be offered to the public at a ®xed price of $0.23 per share, payable in full onapplication, through the following methods:

1. 2,000,000 offer shares at $0.23 for each offer share by way of public offer; and

2. 18,000,000 placement shares by way of placement, comprising:

(i) 15,000,000 Placement Shares at $0.23 for each Placement Share; and

(ii) 3,000,000 Reserved Shares at $0.23 for each Reserved Share reserved for theemployees and business associates of the Group.

B. THE COMPANY

The Company was incorporated in Singapore on 29 June 2000 under the Companies Act ofSingapore as a private limited company under the name of Dello Investments Pte Ltd.

On 30 October 2000, the Company changed its name to Tung Lok Restaurants (2000) Pte Ltd.

The principal activities of the Company are to act as an investment holding company while thoseof the subsidiaries in the Group relate to the operations of restaurants.

The Company was incorporated with an initial authorised share capital of $100,000 divided into100,000 ordinary shares of $1.00 each. The issued share capital of the Company on the date ofincorporation was two ordinary shares of $1.00 each issued at par.

At the date of this report, the authorised share capital of the Company is $10,000,000 dividedinto 400,000,000 ordinary shares of $0.025 each and the issued and fully paid-up share capitalof the Company is $2,000,000 divided into 80,000,000 ordinary shares of $0.025 each.

At an Extraordinary General Meeting held on 7 February 2001, the shareholders of the Companyapproved, among other things:±


(b) the issuance of 1,999,998 new ordinary shares of $1.00 each, including the rights issue of413,284 new ordinary shares of $1.00 each in the Company at par for cash on the basis of6 shares for every 23 ordinary shares held.

At an Extraordinary General Meeting held on 5 March 2001, the shareholders of the Companyapproved, among other things, the following:±

80

ACCOUNTANTS' REPORT

(a) the sub-division of each of the ordinary shares of $1.00 each in the authorised and issuedand paid-up share capital of the Company into 40 ordinary shares of $0.025 each (``Sub-Division of Shares'');

(b) the conversion of the Company into a public limited company and the change of the nameto ``Tung Lok Restaurants (2000) Ltd'';

(c) the adoption of the new Articles of Association of the Company;

(d) the issuance of 20,000,000 new Shares pursuant to the Invitation. The Invitation Shares,when issued and fully paid, will rank pari passu in all respects with the existing issued andfully paid-up Shares;

(e) the authorisation for the Directors, pursuant to Section 161 of the Act and the Articles ofAssociation, to allot and issue Shares from time to time (whether by way of rights, bonusor otherwise) and upon such terms and conditions and for such purposes and to suchperson as the Directors may in their absolute discretion deem ®t, provided that theaggregate number of Shares issued pursuant to such authority shall not exceed 50% ofthe issued and paid-up share capital of the Company for the time being, of which theaggregate number of Shares issued other than on a pro-rata basis to the existingshareholders of the Company shall not exceed 20% of the issued share capital of theCompany for the time being and, unless revoked or varied by the Company in generalmeeting, such authority shall continue in force until the conclusion of the next AnnualGeneral Meeting (``AGM'') of the Company or on the date by which the next AGM isrequired by law to be held, whichever is earlier; and

(f) the approval for the Company and the subsidiaries or any of them to enter into futuretransactions, in the ordinary course of business, with the Directors, the substantialShareholders and their associates in accordance with the Shareholders' mandate.

C. THE RESTRUCTURING EXERCISE

In connection with the Invitation, a Restructuring Exercise was undertaken pursuant to which theCompany became the holding company of the Group. The Restructuring Exercise involved theCompany acquiring the operations, business undertakings, relevant operating assets andliabilities of the following subsidiaries, associates and related parties of Tung Lok GroupHoldings Pte Ltd at their net book values with effect from 1 August 2000. Except for the twoentities, namely Lao Beijing Dining Hall Pte Ltd (``LBDH'') and Club Chinois Pte Ltd (``CCPL'')which became subsidiaries of the Company pursuant to the Restructuring Exercise, theoperations acquired from the other entities operate as divisions of a wholly owned subsidiary ofthe Company, Tung Lok Millennium Pte Ltd, incorporated in Singapore on 29 July 2000. Tofacilitate the restructuring so that the operations acquired from the relevant entities operate asdivisions of Tung Lok Millennium Pte Ltd, the controlling shareholders bought over theremaining shares in these entities from the other minority shareholders effective on 31 July 2000.

The subsidiaries and associates of Tung Lok Group Holdings Pte Ltd (TL Group) and theCompany related to the controlling shareholders, whose operations, business undertakings,operating assets and liabilities were taken over by Tung Lok Millennium Pte Ltd are as follows:

(a) Tung Lok Group Holdings Pte Ltd (``TLGH'');

(b) Charming Garden Restaurant Pte Ltd (``CGPL'') ;

(c) Tung Lok Restaurants Management Company Pte Ltd (``TLRM'');

(d) Noble House Restaurant Pte Ltd (``NHPL'')

(e) Lingzhi Vegetarian Restaurant Pte Ltd (``LZPL'');

81

B. THE COMPANY (cont'd)

ACCOUNTANTS' REPORT

(f) Foodmaster Corporation Pte Ltd (``FCPL''); and

(g) Tung Lok Diaoyutai Holdings Pte Ltd (``TLDH'').

The relevant transactions have been accounted for as a reorganisation of companies undercommon control. As a result, the operations of the acquired business undertakings andcompanies have been included in the Proforma ®nancial statements from the date thecontrolling shareholders have assumed control or ownership over these business undertakingsand companies. In addition, in the preparation of this set of Proforma ®nancial statements, theresults, the assets and liabilities of those entities which are part of the TL Group but are notpart of the Proforma Group are excluded. In the opinion of the management, the resultantProforma ®nancial statements represent the results and ®nancial position of the Company andthe Proforma Group.

The particulars of the subsidiaries in the Group which have been included in the preparation ofthe Proforma Statement of Group Results and Proforma Statement of Group Balance Sheets foreach of the ®nancial years ended 31 December 1996 to 31 December 2000 and the ProformaStatement of Net Assets as at 31 December 2000 are as follows:

Name of company

Place ofincorporation/

operationDate of

incorporation

Issued andpaid-upcapital

Effective equityinterest held by

the Company as at31 December 2000

Principalactivities

Tung Lok MillenniumPte Ltd

Singapore 29 July 2000 $1,368,222 100% Restauranteur

Lao Beijing Dining HallPte Ltd

Singapore 28 November 1983 $250,000 60% Restauranteur

Club Chinois Pte Ltd Singapore 15 August 1997 $800,000 75% Restauranteur

The ®nancial information set out in this report is expressed in Singapore dollars and shows theProforma Statement of Group Results and Proforma Statement of Group Balance Sheets foreach of the ®nancial years ended 31 December 1996 to 31 December 2000 and the ProformaStatement of Net Assets as at 31 December 2000. The Proforma Statement of Group Results,Proforma Statement of Group Balance Sheets and Proforma Statement of Net Assets havebeen prepared on the assumption that the current group structure as outlined above had beenin existence throughout the period under review, or since the dates of incorporation orregistration of the companies in the Group, if later. The ®nancial information is based on thefollowing documents and has been prepared on the basis of accounting policies set out inSection G, after making such adjustments which we considered appropriate:

(a) audited consolidated ®nancial statements of TLGH and CGPL for the ®nancial years ended31 December 1996 to 31 December 1999;

(b) audited ®nancial statements of TLGH, CGPL, TLRM, NHPL, LZPL, FCPL, TLDH, LBDH andCCPL for the ®nancial period from 1 January 2000 to 31 July 2000;

(c) audited consolidated ®nancial statements of Tung Lok Restaurants (2000) Ltd for the®nancial period from the date of incorporation on 29 June 2000 to 31 December 2000;

82

ACCOUNTANTS' REPORT

C. THE RESTRUCTURING EXERCISE (cont'd)

Deloitte & Touche were appointed auditors of the Company, its subsidiaries and the abovementioned entities related to TL Group with effect for the ®nancial period ended 31 December2000. Prior to Deloitte & Touche being appointed as auditors, the following Companies wereaudited by the respective ®rms of accountants:

Name of Company Auditors Years

TLGH T.S Tay & Assoc. 1983±1999

CGPL T.S Tay & Assoc. 1980±1999

TLRM T.S Tay & Assoc. 1978±1999

NHPL C.S.Choong & Co. 1984±1999

LZPL T.S Tay & Assoc. 1990±1999

FCPL T.S Tay & Assoc. 1994±1999

TLDH T.S Tay & Assoc. 1996±1999

LBDH Law Piang Woon & Co. 1999

LBDH Chee Kong & Co. 1983±1998

CCPL T.S Tay & Assoc. 1997±1999

The auditors' reports for the ®nancial years ended 31 December 1996 to 31 December 2000 ofthe above companies were unquali®ed except for the following:

1) TLGH, CGPL and TLRM whose ®nancial statements were quali®ed on the ground of goingconcern due to the negative net tangible assets during 1995 to 1999; CCPL during 1998and 1999; LZPL during 1999; FCPL during 1995 and 1996; and TLDH during 1998 and1999;

2) TLGH whose ®nancial statements were quali®ed on the ground that the auditors were notable to satisfy themselves that the debts owing by related companies and related partieswere recoverable in 1998 and LZPL during 1998 and 1999 respectively. The auditors didnot express an opinion on the ®nancial statements of FCPL in 1998 on the ground thatthey were not able to satisfy themselves that the debt owing by the holding company,TLGH was recoverable and the amount involved was signi®cant. The auditors, however,issued a quali®ed opinion on the ®nancial statements of FCPL in 1999 on the same issue;

3) CGPL whose ®nancial statements were quali®ed on the ground of departure from theStatement of Accounting Standard No. 27 on ``Accounting for Investments in Associates''(``SAS 27'') in 1995 to 1999; and

4) TLRM whose ®nancial statements were quali®ed on the ground of erroneous ®ling of Form24 with the Registry of Companies and Businesses during 1995 to 1999.

The controlling shareholder of the respective companies has now given an undertaking that hewill provide these companies with the required ®nancial resources to enable them to dischargethe liabilities as and when they fall due. In respect of the erroneous ®ling with the Registry ofCompanies and Businesses, relevant action has been taken by TLRM to rectify the erroneous®ling. The auditors' quali®ed opinion on the ®nancial statements of FCPL in 1998 and 1999have no impact on the Proforma ®nancial statements of the Proforma Group as theintercompany debt was eliminated on consolidation. The controlling shareholder hasundertaken to reimburse the relevant companies for any non-recovery of debts due fromrelated parties that are not provided for in the ®nancial statements. The quali®cation on thenon-compliance with SAS 27 and the erroneous ®ling of Form 24 have no impact on theProforma ®nancial statements of the Proforma Group.

83

ACCOUNTANTS' REPORT


Our audit reports on the ®nancial statements of TLGH, CGPL, LZPL for the seven months endedJuly 31, 2000 were quali®ed on the ground of the non-preparation of one set of consolidated®nancial statements incorporating the subsidiaries of these companies. In respect of NHPL, ouraudit report for the same period was quali®ed on the ground of non-compliance with SAS 27.One set of consolidated ®nancial statements for these companies have not been prepared andthe requirement of SAS 27 has not been complied, as some of the subsidiaries and associates ofthese companies were excluded from the Proforma Group and hence their ®nancial statementsfor the seven months not audited. The non-preparation of one set of consolidated ®nancialstatements and the non-compliance with SAS 27 have no impact on the Proforma ®nancialstatements of the Proforma Group.

The abovementioned quali®cations do not have a material impact on the Proforma ®nancialstatements taking into consideration the nature of the quali®cations and the letter ofundertaking and ®nancial support from the controlling shareholder.

The audit quali®cations relate to ®nancial statements of companies which are not part of theGroup pursuant to the Restructuring Exercise save for the operations, business undertakingsand assets which were transferred to a subsidiary of the Company with effect from 1 August2000 and for LBDH and CCPL which became subsidiaries of the Company.

All material inter-company transactions and balances have been eliminated in the preparation ofthe Proforma Statement of Group Results, Proforma Statement of Group Balance Sheets andProforma Statement of Net Assets.

D. PROFORMA STATEMENT OF GROUP RESULTS

--------------------------------------------------------------------------------------- Proforma Group --------------------------------------------------------------------------------------Year ended 31 December

1996 1997 1998 1999 2000

$'000 $'000 $'000 $'000 $'000

Revenue (Note 1) 30,394 37,536 37,134 41,016 49,706

Cost of sales (12,516) (13,885) (13,264) (13,541) (16,287)

Gross pro®ts 17,878 23,651 23,870 27,475 33,419

Other operating income 48 110 94 23 90

Administrative expenses (9,550) (12,293) (14,215) (12,814) (15,838)

Other operating expenses (7,865) (11,132) (11,793) (10,692) (13,143)

Pro®t/(Loss) from operations 511 336 (2,044) 3,992 4,528

Finance costs (23) (47) (47) (22) (21)

Income from associates 79 4 Ð Ð Ð

Pro®t/(Loss) before income tax (Note 2) 567 293 (2,091) 3,970 4,507

Income tax (Note 3) (294) (296) (9) (740) (1,227)

Pro®t/(Loss) after income tax 273 (3) (2,100) 3,230 3,280

Minority interests (210) (82) 435 (291) (176)

Pro®t attributable to the Proforma Group 63 (85) (1,665) 2,939 3,104

84

ACCOUNTANTS' REPORT


Notes:

1. Revenue

--------------------------------------------------------------------------------------- Proforma Group --------------------------------------------------------------------------------------

Sale of food and beverages 27,433 34,030 33,647 37,253 45,407

Service charges 2,797 3,445 3,360 3,657 4,169

Management fee 164 61 127 106 130

Total 30,394 37,536 37,134 41,016 49,706

2. Pro®t before income tax

Pro®t/(loss) before income tax has been arrived at after charging (crediting):

---------------------------------------------------------------- Proforma Group ----------------------------------------------------------------Year ended 31 December

1996 1997 1998 1999 2000

$'000 $'000 $'000 $'000 $'000

This is determined after charging/(crediting) thefollowing:

Depreciation of property, plant and equipment 637 613 824 796 1,066

Directors' remuneration:

Directors of the Company Ð Ð Ð Ð Ð

Directors of subsidiaries 235 201 267 263 412

Amortisation of goodwill 86 369 369 283 Ð

Auditors' remuneration:

Auditors of the Company Ð Ð Ð Ð 100

Auditors of the subsidiaries

Current year 24 34 40 40 Ð

Prior year under provision 1 2 2 1 Ð

Interest expense to non-related parties:

Short term bank loans and overdrafts 15 2 22 4 5

Finance leases and hire purchase contracts 16 15 25 18 16

Other borrowings Ð 30 Ð Ð Ð

Expenditure written off Ð Ð 8 Ð Ð

Interest on ®xed deposits (11) (15) (2) (4) (5)

Bad debts written off

Trade Ð 5 23 1 9

Non-trade Ð 8 31 Ð Ð

85

ACCOUNTANTS' REPORT

D. PROFORMA STATEMENT OF GROUP RESULTS (cont'd)

3. Income Tax


1996 1997 1998 1999 2000

$'000 $'000 $'000 $'000 $'000

The charge comprises:

Current taxation 248 235 43 740 1,205

Deferred taxation 46 58 (64) (114) 22

Underprovision in prior year Ð 3 30 114 Ð

Total 294 296 9 740 1,227

The taxation charge for the Group is computed after taking into consideration:

(i) Certain expenses which are not deductible for tax purposes; and

(ii) Losses of subsidiaries which cannot be offset against pro®ts of the other companiesin the Group.

4. Related party transactions

Related parties are entities with common direct or indirect shareholders and/or directorsand close members of the families of such individuals. Parties are considered to berelated if one party has the ability to control the other party or exercise signi®cantin¯uence over the other party in making ®nancial and operating decision.

Signi®cant transactions with related parties are as follows:


1996 1997 1998 1999 2000

$'000 $'000 $'000 $'000 $'000

Sales of food and beverages (133) (81) (262) (213) (883)

Management fees income (164) (61) (127) (106) (130)

Purchases of food and beverages 13 1 31 4 572

On 31 July 2000, a subsidiary transferred its investments in a company to certain relatedparties for a consideration of $1.00 in view of the net liabilities position of the investeecompany.

86

ACCOUNTANTS' REPORT

D. PROFORMA STATEMENT OF GROUP RESULTS (cont'd)

E. PROFORMA STATEMENT OF GROUP BALANCE SHEETS

The Proforma Balance Sheets of the Group for each of the ®ve ®nancial years up to 31December 2000 based on the basis set out in Paragraph C above, after making suchadjustments we considered appropriate are as follows.

------------------------------------------------------------------------ Proforma Group -----------------------------------------------------------------------Year ended 31 December

1996 1997 1998 1999 2000

$'000 $'000 $'000 $'000 $'000

Current assets 4,257 3,808 4,130 6,679 9,088

Non-current assets:

Goodwill on consolidation 171 652 283 Ð Ð

Associates 146 Ð Ð Ð Ð

Investment in deconsolidated companies 271 802 100 100 Ð

Property, plant and equipment 2,012 2,079 2,211 1,497 3,620

Total non-current assets 2,600 3,533 2,594 1,597 3,620

Total assets 6,857 7,341 6,724 8,276 12,708

Current liabilities 6,649 7,496 10,027 8,748 8,555

Non-current liabilities:

Finance leases 96 50 32 Ð 352

Long term borrowings 333 140 Ð Ð 354

Deferred taxation 53 110 46 162 191

Total non-current liabilities 482 300 78 162 897

Minority interests 285 265 291 564 288

Shareholders' equity (559) (720) (3,672) (1,198) 2,968

Total liabilities and shareholders' equity 6,857 7,341 6,724 8,276 12,708

The movements in the Proforma Shareholders' Equity of the Group for each of the ®ve ®nancialyears ended 31 December 2000 are as follows:

------------------------------------------------------------------------ Proforma Group -----------------------------------------------------------------------Year ended 31 December

1996 1997 1998 1999 2000

$'000 $'000 $'000 $'000 $'000

Balance as at beginning of year (648) (559) (720) (3,672) (1,198)

Add (deduct):

Pro®t/(loss) attributable to Proforma Group 63 (85) (1,665) 2,939 3,104

Capitalisation of net balances due to related parties Ð Ð Ð Ð 1,280

Change in group structure (100) Ð Ð Ð Ð

Dividend paid Ð Ð Ð (15) Ð

(Provision)/write back of provision for diminution invalue of investment and receivables fromdeconsolidated companies 126 (76) (1,287) (450) (218)

Balance as at end of year (559) (720) (3,672) (1,198) 2,968

87

ACCOUNTANTS' REPORT

STATEMENT OF ADJUSTMENTS

--------------------------------------------------------------------------------------------------- Proforma Group --------------------------------------------------------------------------------------------------Year ended 31 December

1996 1997 1998 1999 2000 (Note 3)

$'000 $'000 $'000 $'000 $'000

Revenue per aggregation of ®nancialstatements of the Proforma Group 30,534 32,136 28,318 34,201 49,706

Proforma adjustments:

Sales from acquired companies (Note 1) 4,620 8,165 12,857 12,093 Ð

Sales from deconsolidated companies(Note 2) (2,809) Ð (2,667) (2,890) Ð

Elimination of intercompany sales (1,951) (2,765) (1,374) (2,388) Ð

Revenue per Proforma Statement ofGroup Results 30,394 37,536 37,134 41,016 49,706

Pro®t before income tax per aggregationof ®nancial statements of the ProformaGroup 646 498 (1,813) 2,724 4,507


Net share of pro®ts/(losses) in acquiredcompanies 63 (220) (1,403) 1,027 Ð

Net share of (pro®ts)/losses indeconsolidated companies (142) 15 1,125 219 Ð

Pro®t before income tax per ProformaStatement of Group Results 567 293 (2,091) 3,970 4,507

Income tax per aggregation of ®nancialstatements of the Proforma Group (279) (287) (20) (700) (1,227)


Income tax of acquired companies (15) (9) 11 (62) Ð

Income tax of deconsolidatedcompanies written back Ð Ð Ð 22 Ð

Income tax per Performa Statement ofGroup Results (294) (296) (9) (740) (1,227)

Minority interest per aggregation of®nancial statements of the ProformaGroup (210) (82) 141 (221) (176)

Proforma adjustment:

Minority interests of acquiredcompanies Ð Ð 294 (70) Ð

Minority interests per Proforma Statementof Group Results (210) (82) 435 (291) (176)

Notes:

1. These were the operations of the acquired businesses and companies from the date the controlling shareholdershave assumed control or ownership over these businesses or companies.

2. These were operations of entities which are part of the TL Group but are not part of the Proforma Group. Hence theseentities are excluded from the Proforma Group.

3. As the results of the reorganisation of the companies under common control had taken placed during the year, thesebusinesses and companies were combined and included in the resultant structure of the Proforma Group subsequentto that date.

88

ACCOUNTANTS' REPORT

F. PROFORMA STATEMENT OF NET ASSETS

The Proforma Statement of Net Assets of the Proforma Group and of the Company as at 31December 2000 based on the basis set out in Paragraph C above are as follows:

NotesGROUP

$'000COMPANY

$'000

ASSETS

Current assets

Cash and bank balances 2 4,882 Ð

Trade receivables 3 1,526 Ð

Other receivables and prepayments 4 1,691 238

Inventories 5 989 Ð

Total current assets 9,088 238

Non-current assets

Property, plant and equipment 6 3,620 Ð

Subsidiaries 7 Ð 1,587

Total non-current assets 3,620 1,587

Total assets 12,708 1,825

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Trade payables 8 3,978 Ð

Other payables 9 3,838 253

Current portion of ®nance leases 10 189 Ð

Bank borrowings 11 126 Ð

Income tax payable 424 Ð

Total current liabilities 8,555 253

Non-current liabilities

Finance leases 10 352 Ð

Long term borrowings 11 354 Ð

Deferred taxation 12 191 Ð

Total non-current liabilities 897 Ð

Minority interests 288 Ð

Shareholders' equity

Share capital 13 1,587 1,587

Accumulated pro®ts (losses) 1,381 (15)

2,968 1,572

Total liabilities and shareholders' equity 12,708 1,825

89

ACCOUNTANTS' REPORT

G. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies which have been adopted in arriving at the ®nancial information set outin this report and which conform with accounting principles generally accepted in Singapore areas follows:

BASIS OF ACCOUNTING Ð The Proforma ®nancial statements are expressed in Singaporedollars and are prepared under the historical cost convention. They are drawn up inaccordance with the provisions of the Singapore Companies Act and Singapore Statements ofAccounting Standard.

BASIS OF CONSOLIDATION Ð The Proforma ®nancial statements of the Group incorporate the®nancial statements of the Company and its subsidiaries made up to the respective period endsand have been prepared on the assumption that the current group structure had been inexistence throughout the period under review.

All signi®cant intercompany transactions and balances within the Proforma Group are eliminatedon consolidation. Minority interests represent their share in the net pro®ts and net assets of therespective subsidiaries.

Any excess or de®cit of the purchase consideration over the net assets of subsidiaries at thedate of acquisition is accounted for as goodwill on consolidation. Goodwill on consolidation isamortised over its estimated useful life of 3 years.

INVESTMENTS Ð Investments in subsidiaries are stated at cost in the Company's ®nancialstatements less any permanent impairment in value of investment.

Investments in and receivables from deconsolidated companies are stated in the Proforma®nancial statements at cost less provision for diminution in value of investments and doubtfuldebts respectively.

DEPRECIATION Ð Depreciation is provided on gross carrying amounts in equal annualinstalments over the estimated useful lives of the assets. The annual rates of depreciation areas follows:

Kitchen equipment Ð 5 years

Furniture, ®xtures and equipment Ð 3 to 5 years

Motor vehicles Ð 4 to 5 years

No depreciation is provided on construction-in-progress.

Fully depreciated assets still in use are retained in the ®nancial statements.

REVENUE RECOGNITION Ð Sales of food and beverages are recognised when food andbeverages are delivered.

INVENTORIES Ð Inventories, comprising mainly foodstuff are stated at the lower of cost (®rst-in,®rst-out method) and net realisable value. Cost includes all costs of purchase and other costsincurred in bringing the inventories to their present location and condition.

OBLIGATION UNDER FINANCE LEASES Ð Amounts held under ®nance leases are recognisedas assets of the Proforma Group at their fair value at the date of acquisition. The correspondingliability to the lessor is included in the balance sheet as a ®nance lease obligation. Finance cost,which represents the difference between the total leasing commitments, and the fair value of theamounts acquired, is charged to the proforma pro®t and loss over the term of the relevant leaseso as to produce a constant periodic rate of change on the remaining balance of the obligationsfor each accounting period.

90

ACCOUNTANTS' REPORT

INCOME TAX Ð Tax expense is determined on the basis of tax effect accounting, using theliability method, and is applied to all signi®cant timing differences. Deferred tax bene®t is notrecognised unless there is a reasonable expectation of its realisation.

FOREIGN CURRENCY TRANSACTIONS Ð Transactions in foreign currencies are recorded inSingapore dollars at the rates ruling at the dates of the transactions. At each balance sheetdate, recorded monetary balances and balances carried at fair value that are denominated inforeign currencies are reported at the rates ruling at the balance sheet date. All realised andunrealised exchange adjustment gains and losses are dealt with in the pro®t and loss statement.

H. NOTES TO PROFORMA STATEMENT OF NET ASSETS AS AT 31 DECEMBER 2000

1. General

The Company is incorporated in the Republic of Singapore. The principal activities of theCompany are that of investment holding while those of the subsidiaries relate to theoperations of restaurants.

2. Cash and Bank Balances

GROUP$'000

COMPANY$'000

Cash 4,807 Ð

Fixed Deposits 75 Ð

Total 4,882 Ð

3. Trade Receivables

GROUP$'000

COMPANY$'000

Outside parties 1,159 Ð

Related parties 383 Ð

1,542 Ð

Less provision for doubtful debts (16) Ð

Net 1,526 Ð

The balances due from related parties are unsecured and non-interest bearing. Thecontrolling shareholder has undertaken to reimburse the Group for any amount which isnot recoverable from the related parties.

91

ACCOUNTANTS' REPORT

G. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

4. Other Receivables and Prepayments

GROUP$'000

COMPANY$'000


Security deposits 1,078 Ð

Prepayments 256 238

Others 12 Ð

Total 1,691 238

The balances due from related parties are unsecured, non interest-bearing and are statedafter provision for doubtful debts of $24,000. The controlling shareholder has undertaken toreimburse the Group for any amount which is not recoverable from the related parties.

5. Inventories

GROUP$'000

COMPANY$'000

Food and beverages, at cost 989 Ð

6. Property, Plant and Equipment

Kitchenequipment

$'000

Furniture,fixtures andequipment

$'000

Motorvehicles

$'000

Constructionin-progress

$'000Total$'000

GROUP

Cost:

Acquisition of subsidiaries 2,399 7,532 523 133 10,587

Additions 83 92 66 973 1,214

Disposals (85) (121) Ð Ð (206)

At end of ®nancial period 2,397 7,503 589 1,106 11,595

Accumulated depreciation:

Acquisition of subsidiaries 1,970 5,530 102 Ð 7,602

Depreciation for the ®nancialperiod 110 383 52 Ð 545

Disposals (85) (87) Ð Ð (172)

At end of ®nancial period 1,995 5,826 154 Ð 7,975

Net book value:

At end of period 402 1,677 435 1,106 3,620

At date of acquisition ofsubsidiaries pursuant to theRestructuring Exercise 429 2,002 421 133 2,985

Plant and equipment with a total cost of approximately $851,000 are acquired under®nance leases.

92

ACCOUNTANTS' REPORT

H. NOTES TO PROFORMA STATEMENT OF NET ASSETS AS AT 31 DECEMBER 2000 (cont'd)

7. Subsidiaries

COMPANY$'000

Unquoted equity shares, at cost 1,587

Details of the subsidiaries at 31 December 2000 are as follows:

Name of company

Place ofincorporation/

operationDate of

incorporationCost$'000

Effectiveequity interest

held by theCompany

as at31 December

2000Principalactivities

Tung Lok Millennium Pte Ltd Singapore 29 July 2000 1,368 100% Restauranteur

Lao Beijing Dining Hall Pte Ltd Singapore 28 November 1983 191 60% Restauranteur

Club Chinois Pte Ltd Singapore 15 August 1997 28 75% Restauranteur

Total 1,587

8. Trade Payables

GROUP$'000

COMPANY$'000

Outside parties 3,931 Ð


Total 3,978 Ð

9. Other Payables

GROUP$'000

COMPANY$'000

Subsidiary Ð 170

Accrued expenses 2,307 83

Security deposits refundable 308 Ð

Others 1,223 Ð

Total 3,838 253

93

ACCOUNTANTS' REPORT


10. Obligations under Finance Leases

GROUP$'000

MinimumLease

Payment

Present Valueof Minimum

LeasePayment

The maturity of the principal portion of the obligations under®nance leases is analysed as follows:

Within one year 212 198

More than one year but not exceeding ®ve years 400 343

612 541

Finance charges allocated to future years (71) Ð

541 541

Current portion (189) (189)

Non-current portion 352 352

The rate of interest ranges from 4.25% to 18.00% per annum.

11. Long term borrowings

GROUP$'000

COMPANY$'000

Bank borrowings 480 Ð

Current portion (126) Ð

Non-current portion 354 Ð

The borrowings are secured by properties under construction, plant and equipment of asubsidiary and are guaranteed by certain directors of the Company. The borrowings arerepayable in 240 monthly instalments commencing from the current year. The borrowingsbear interest at 5.25% per annum.

12. Deferred Taxation

This represents mainly the tax effect of the excess of tax over book depreciation of plantand equipment.

94

ACCOUNTANTS' REPORT


13. Share Capital

GROUP ANDCOMPANY

$'000

Authorised

10,000,000 ordinary shares of $1.00 each 10,000

Proforma issued and fully paid-up1,586,716 ordinary shares of $1.00 each 1,587

The issued and fully paid-up share capital includes $1,586,714 consideration for the purchase ofthe business, undertakings and operating assets from the controlling shareholders pursuant tothe Restructuring Exercise as described in Section C.

14. Capital Commitments

GROUP ANDCOMPANY

$'000

Capital expenditure in respect of acquisition of plant and machinerycontracted but not provided for in the ®nancial statements 2,324

Capital expenditure in respect of the acquisition of plant and machineryauthorised but not contracted for 391

15. Operating Lease Commitments

At 31 December 2000, the amount of commitments in respect of future operating leaserentals which have not been provided for in the Proforma Statement of Net Assets is asfollows:

GROUP ANDCOMPANY

$'000

Within one year 5,700

In the second to ®fth year inclusive 12,213

After ®ve years 77

16. Segmental Information

The Group currently operates in the Republic of Singapore and in one main line ofbusiness, being that of restaurant business. Therefore the requirement on the disclosureof the information relating to the industrial and geographical segments of the operations isnot applicable.

95

ACCOUNTANTS' REPORT


17. Subsequent Events

(i) Subsequent to the end of the ®nancial year, the Company was given options by thecontrolling shareholders to either acquire the shares of two restaurant companies,House of Mao and Spice Garden, owned by them or acquire the businessundertaking of these two companies at a value to be agreed between the Companyand the controlling shareholders. The option may be exercised any time during the 3years up to and including 31 March 2004. In addition, the Company was given optionsby the controlling shareholder to purchase the controlling shareholder's shares in twoof the restaurant companies, PT Naga and PT Nobel, in Indonesia when the laws inIndonesia permit foreign shareholders to participate in share ownership.

(ii) At an Extraordinary General Meeting held on 7 February 2001, the shareholders of theCompany approved, among other things:±


(b) the issuance of 1,999,998 new ordinary shares of $1.00 each, including therights issue of 413,284 new ordinary shares of $1.00 each in the Company atpar for cash on the basis of 6 shares for every 23 ordinary shares held.

At an Extraordinary General Meeting held on 5 March 2001, the shareholders of theCompany approved, among other things, the following:±

(a) the sub-division of each of the ordinary shares of $1.00 each in the authorisedand issued and paid-up share capital of the Company into 40 ordinary shares of$0.025 each (``Sub-Division of Shares'');

(b) the conversion of the Company into a public limited company and the change ofthe name to ``Tung Lok Restaurants (2000) Ltd'';

(c) the adoption of the new Articles of Association of the Company;

(d) the issuance of 20,000,000 new Shares pursuant to the Invitation. The InvitationShares, when issued and fully paid, will rank pari passu in all respects with theexisting issued and fully paid-up Shares;

(e) the authorisation for the Directors, pursuant to Section 161 of the Act and theArticles of Association, to allot and issue Shares from time to time (whether byway of rights, bonus or otherwise) and upon such terms and conditions and forsuch purposes and to such person as the Directors may in their absolutediscretion deem ®t, provided that the aggregate number of Shares issuedpursuant to such authority shall not exceed 50% of the issued and paid-upshare capital of the Company for the time being, of which the aggregatenumber of Shares issued other than on a pro-rata basis to the existingshareholders of the Company shall not exceed 20% of the issued share capitalof the Company for the time being and, unless revoked or varied by theCompany in general meeting, such authority shall continue in force until theconclusion of the next Annual General Meeting (``AGM'') of the Company or onthe date by which the next AGM is required by law to be held, whichever isearlier; and

(f) the approval for the Company and the subsidiaries or any of them to enter intofuture transactions, in the ordinary course of business, with the Directors, thesubstantial Shareholders and their associates in accordance with theShareholders' mandate.

96

ACCOUNTANTS' REPORT


I. NET TANGIBLE ASSETS BACKING

The net tangible assets backing of the Group for each ordinary share of $0.025 is based on theProforma Statement of Net Assets of the Group as at 31 December 2000 and after taking intothe consideration the subsequent share issues and the issue of 20,000,000 New Shares of$0.025 each (which is the subject of the Invitation), the proceeds and estimated expenses inconnection therewith.

NET TANGIBLE ASSETS $'000

Net Tangible Assets as at 31 December 2000 2,968

Proceeds from the rights issue of 413,284 new ordinary shares of $1.00 each 413

Pre-invitation net tangible assets 3,381

Proceeds from the issue of 20,000,000 new ordinary shares of $0.025 each at$0.23 each which form the subject of this Invitation 4,600

Less: Estimated issue expenses (1,120)

Post-invitation net tangible assets 6,861

No. of Shares

2 ordinary shares of $1.00 each issued on incorporation 2

Issue of 1,586,714 new ordinary shares of $1.00 each as consideration for thepurchase of the businesses, undertakings and operating assets from thecontrolling shareholders 1,586,714

Rights issue of 413,284 ordinary shares of $1.00 each 413,284

Pre-invitation issued capital 2,000,000

Sub-division of each ordinary share of $1.00 each into 40 ordinary shares of$0.025 each 80,000,000

Issue of 20,000,000 new ordinary shares of $0.025 each which form the subjectof the Invitation 20,000,000

Post-invitation issued capital 100,000,000

J. NET TANGIBLE ASSETS BACKING PER ISSUED AND FULLY PAID SHARES OF $0.025EACH

Pre-invitation of 80,000,000 shares of $0.025 each 4.23 cents

Post-invitation 100,000,000 shares of $0.025 each 6.86 cents

K. DIVIDENDS

The Company has not paid or proposed any dividend since its incorporation. The subsidiariesdid not declare any dividend during the period under review except for Lao Beijing Dining HallPte Ltd which paid a net dividend of 20% less income tax of 26% amounting to $14,800 forthe year ended December 31, 1999 to the shareholders after adjusting for dividends paid to thecompanies in the Proforma Group.

97

ACCOUNTANTS' REPORT

L. AUDITED FINANCIAL STATEMENTS

No audited ®nancial statements have been prepared by the Company and its subsidiaries, inrespect of any period subsequent to 31 December 2000.

Yours faithfully

Deloitte & ToucheCerti®ed Public AccountantsSingapore

Cheng Ai PhingPartner

98

ACCOUNTANTS' REPORT

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS

1. The names, ages, addresses and current occupations of our Directors and our Executive Of®cersare set out on pages 60, 62 and 63 of this Prospectus.

2. The business and working experience of each of our Directors and our Executive Of®cers are setout on pages 60, 61, 63 and 64 of this Prospectus.

3. The present and past directorships (held in the last 5 years preceding the date of thisProspectus) of each of our Directors, excluding that held in our Company, are set out below:±

Name Present Directorship Past Directorship

Zhou Yingnan Group Companies Other Companies

Club Chinois Pte LtdLao Beijing Dining Hall Pte LtdTung Lok Millennium Pte Ltd

Other Companies

Charming Garden RestaurantPte Ltd

Estella Investments Pte LtdFoodmaster Corporation Pte LtdGolden Island Enterprises Pte LtdHouse of Mao Restaurant Pte LtdLingzhi Vegetarian Restaurant

Pte LtdNoble House Restaurant Pte LtdOceanic Textiles Pte LtdParamount Chinese CuisineRestaurant Pte LtdShanghai Overseas Chinese

Commercial Center Co LtdSpice Garden Restaurant Pte LtdTung Lok Diaoyutai Holdings

Pte LtdTung Lok Group Holdings Pte LtdTung Lok Investments Pte LtdTung Lok Restaurants

Management Company Pte LtdWuhan New Minzhong Leyuan

Co LtdZhou Holdings Pte Ltd

Farleigh Co (Pte) LtdJade Spring Holdings Pte LtdInternational Spinning Mills

(Pte) LtdOceanic Development Pte LtdOceanic Knitting (Pte) LtdSafety Trading Co. Pte LtdWuhan Tung Lok Food and

Beverages Co LtdYou Hong Lee (Pte) Ltd

99

GENERAL AND STATUTORY INFORMATION


Andrew Tjioe Group Companies Other Companies

Club Chinois Pte LtdLao Beijing Dining Hall Pte LtdTung Lok Millennium Pte Ltd

Other Companies

Charming Garden RestaurantPte Ltd

Foodmaster Corporation Pte LtdGolden Island Enterprises Pte LtdHouse of Mao Restaurant Pte LtdLingzhi Vegetarian Restaurant

Pte LtdNoble House Restaurant Pte LtdOceanic Textiles Pte LtdParamount Chinese Cuisine

Restaurant Pte LtdP.T. Naga PacarasaP.T. Nobel PancarasaSomerset (Wuhan) Investments

Pte LtdSpice Garden Restaurant Pte LtdTung Lok Diaoyutai Holdings Pte

LtdTung Lok Group Holdings Pte LtdTung Lok Investments Pte LtdTung Lok Restaurants

Management Company Pte LtdWuhan New Minzhong Leyuan

Co LtdZhou Holdings Pte Ltd

Jade Spring Holdings Pte LtdOceanic Knitting (Pte) LtdSafety Trading Co. Pte LtdWuhan Tung Lok Food and

Beverages Co LtdYou Hong Lee (Pte) Ltd

Tjioe Ka In Group Companies

Tung Lok Millenium Pte LtdClub Chinois Pte Ltd

Other Companies

Tung Lok Diayutai HoldingsPte Ltd

Zhou Holdings Pte Ltd

100



Ban Song Long Group Companies Other Companies

Nil

Other Companies

8 Capital LimitedA H M Services Pte LtdAinsford NVAsia Access Telecom IncAsia Access Telecom Pte LtdAugsburg Investment LtdAvant Development Company LtdAvant Hotels International LtdB&B Sushi IncB&B Sushi WFC IncBar Belle Productions Ltd NYBioveda Capital Pte LtdBioveda Fund Pte LtdCatalla Investments Pte LtdCharney Enterprises NVColdharbour LtdComojo (Gibraltar) LtdComojo Investments (Gibraltar) LtdComojo USA IncExcel®n Pte LtdFlamport Corp NVGenki Sushi Hong Kong LtdGenki Sushi Singapore Pte LtdHeath Investments LtdHealth Management International

LtdInstitute of Molecular AgrobiologyKuo Enterprises Canada IncKuo Enterprises LtdKuo Holdings BVKuo Hotel CorporationKuo Hotel Investments BVKuo Hotels Canada IncKuo International OilKuo International Oil (UK) LtdKuo International Oil LtdKuo Investment CompanyKuo Investments LtdKuo Oil (Bermuda) LtdKuo Oil LtdKuo Properties IncLondon & Paci®c Trust PLCMing Investments LtdOakheath Investments LtdOakville NYScorpa Pranedya Transoil IncSeapac Finance LtdSextant Investments Ltd

Ashoka Capital LtdAubaine Investments Pte LtdAvant Apartments Pte LtdAvant Hotels (Singapore) Pte LtdAvant Properties Pte LtdCamellia Investments Pte LtdCatalla Investments Pte LtdChina North Industries Invt LtdDandelion Investments Pte LtdEdenvalley IncFour Seasons (Inn on the Park) LtdFour Seasons Holdings (UK) LtdHarrowgate IncInn on the Park (London) LtdJ Ballas (Hong Kong) Company

LtdKuo Holdings IncLapsent LtdLudine IncMogems (UK) LtdMogems Pte LtdNava Vickers Ballas Securities

Co LtdOakshade LtdPT Vickers Ballas TamaraPT Wymncor BaliRich Dale Investments Pte LtdScorpa Shipping Holdings SASeproc Navigation International SASomerset Holdings LimitedSouthern Africa Investment

Management Pte LtdSouthern Africa Investments

Pte LtdST Capital LtdThe Ashoka Fund LtdValue Entertainments (Gibraltar)

LtdVickers Ballas (B.V.I.) Holdings LtdVickers Ballas (UK) PlcVickers Ballas (USA) IncVickers Ballas Asset Management

Pte LtdVickers Ballas Capital LtdVickers Ballas Finance LtdVickers Ballas Futures (Pte) LtdVickers Ballas Holdings LimitedVickers Ballas Hong Kong Futures

Ltd

101



Unioil International LtdValue Investments Ltd

Vickers Ballas Hong KongHoldings Ltd

Vickers Ballas Hong Kong LtdVickers Ballas Hong Kong

Securities LtdVickers Ballas Investment

Mgt LtdVickers Ballas Philippines Fund LtdVickers Ballas Securities (Phils) IncVickers Ballas Securities India

Pvt LtdVickers Capital LimitedVidasia Nominees LtdVihong Nominees LtdWynncor Development Corp IncYukon Holdings Ltd

Dr Ker Sin Tze Group Companies Other Companies

Nil

Other Companies

IRE Corporation LimitedIRE Trading Pte LtdEastside Development Pte LtdEduworld Pte LtdGreen Pharma Pte LtdLindell Investments Pte LtdNorthland Industries Pte LtdQingdao Yenom Hotel Co. LtdQingdao Xinyi Hotel Management

Co LtdRed Star Development LtdRobust Development Pte LtdSMP Investments (S) Pte LtdWushen Holdings Pte LtdWushen Development Sdn BhdYenom Holdings Pte LtdYenomland Pte LtdYounger (Singapore) Pte Ltd

Bishop Merchandise Pte LtdCamberly Corner Restaurant

Pte LtdEquimed Private LimitedGrace Technologies Pte LtdNipsea Holdings Pte LtdPT Mitra Sinthe IndoSuperior Metal Printing LimitedSuperior Multi-Packaging LimitedSuperior Metal Printing (M)

Sdn Bhd

Dr Tan Eng Liang Group Companies Other Companies

Nil

Other CompaniesAIS Trading Pte LtdAmatil Investments (Singapore)

(Pte) LtdBellaire-Synott (Houston)Development, IncDaimaru Singapore Pte LtdD.B. Progen Servicing Pte LtdFlextech Holdings Limited

Beverage World (S) Pte LtdBishop Merchandise Pte LtdCastle Inter Grace (Singapore)

Pte LtdCentral Park Development Private

LimitedDKH Capital Pte LtdDyno Industries (Singapore)Private LimitedEpex Industrial Pte LtdEquimed Private Limited

102



GNS Management Pte LtdGoh Foundation LimitedGold Coin (M) Sdn BhdGold Coin Investments Pte LtdGold Coin Singapore (1991)

Pte LtdHB Media Holdings Pte LtdHitachi Zosen (Asia) Holdings

Pte LtdKedaung & Wuthelam (FE) LtdKolapis Pte LtdKulak Pte LtdKureoka Enterprise Pte LtdLinks Island Holdings LimitedMatsuya Singapore Pte LtdMunich Management Pte LtdNippon Paint (Singapore)Company Private LimitedNipsea Holdings International LtdPaci®c Link Pte LtdPokka Corporation (Singapore)

LimitedPolacel Manufacturing (S.E. Asia)

Pte LtdProgen Engineering Pte LtdProgen Holdings LtdProgen Pte LtdRISIS Private LimitedShinmen Development Pte LtdShinsei Marine Pte LtdSynthese (M) Sdn BhdTaisei Investment Pte LtdTaisei Money-Changer Pte LtdTaisei Stamps & Coins (S) Pte LtdThe New Otani Singapore Pte LtdTTLM Pte LtdTung Lok Group Holdings Pte LtdUE Ville Developments Pte LtdUnited Engineers LimitedWizsolutions.com Pte LtdWizvision.com Pte LtdWuthelam Holdings Pte LtdYenom Holdings Pte LtdZuellig Insurance Brokers Pte Ltd

F.E. Zuellig (Singapore) Pte LtdHBM Print LtdKeebler Co (M) Sdn BhdLei Cee Pte LtdL'Etoile Co Pte LtdL&M Group Investments LimitedLiang Court Clinic Pte LtdLiang Court Pte LtdMatila Investments Pte LtdNipsea Holdings Pte LtdNipsea Paint Research Pte LtdResurgent Holdings Pte LtdRHB Bank Nominees Pte LtdRHB Finance LtdRiverside Health Centre Pte LtdSanwa (Singapore) Foods

Industries Private LimitedSekisui Plastics S.E.A. Private

LimitedShinsei Marine Pte LtdSomerset Holdings LimitedSomerset Investments Pte LtdSingapore Offset Printing (Private)

LimitedTaisei Jewellery & Goldsmith

Pte LtdTatsumura Silk (S) Pte LtdWOG International Co Pte LtdZuellig Holdings Singapore Pte Ltd

103


4. The present and past directorships (held in the last ®ve years preceding the date of thisProspectus) of each of our Executive Of®cers are set out below:±


Chua Phak Mong Nil Nil

Lilian Rae Hiw Chiew Shen Nil Nil

Phang Chwee Kin, Vincent Nil Nil

Rena Leong Nil Nil

Dawn Ranji David Nil Nil

5. None of our Executive Of®cers has any shareholdings in our Company or our subsidiaries as atthe date of this Prospectus.

6 Save as disclosed below, none of our Directors or Executive Of®cers:±

(a) was, in the last 10 years, involved in a petition under any bankruptcy laws in any jurisdiction®led against him;

(b) was, in the last 10 years, a partner of any partnership involved in a petition under anybankruptcy laws in any jurisdiction ®led against it while he was such a partner;

(c) was, in the last 10 years, a director or an executive director of any corporation involved in apetition under any bankruptcy laws in any jurisdiction ®led against it while he was such adirector or executive of®cer;

(d) has any unsatis®ed judgements outstanding against him;

(e) has been convicted of any offence, in Singapore or elsewhere, involving fraud ordishonesty punishable with imprisonment of 3 months or more, or charged for violation ofany securities laws or is the subject of any pending criminal proceeding;

(f) has at any time been convicted of any offence, in Singapore or elsewhere, involving abreach of any securities or ®nancial market laws, rules or regulations;

(g) has received judgement against him in any civil proceeding in Singapore or elsewhere inthe last 10 years involving fraud, misrepresentation or dishonesty or is the subject of anysuch pending civil proceeding;

(h) has been convicted in Singapore or elsewhere of any offence in connection with theformation or management of any corporation;

(i) has ever been disquali®ed from acting as a director of any company, or from taking part inany way directly or indirectly in the management of any company;

(j) has been subject of any order, judgement or ruling of any court of competent jurisdiction,tribunal or governmental body permanently or temporarily enjoining him from engaging inany type of business practice or activity; and

(k) has to his knowledge, in Singapore or elsewhere, been concerned with the management orconduct of affairs of any company or partnership which has been investigated by aninspector appointed under the provisions of the Companies Act, or other securitiesenactments or by any other regulatory body in connection with any matter involving ourCompany or partnership occurring or arising during the period when he was so concernedwith the company or partnership.

Zhou Yingnan and Andrew Tjioe were major shareholders of Oceanic Dyeing and Furnishings PteLtd (``Oceanic''), a company with a majority shareholding in You Hong Lee (Pte) Ltd (``YHL'').Zhou Yingnan and Andrew Tjioe were appointed as directors in YHL on 9 September 1977 and1 February 1983, respectively, pursuant to the shareholding of Oceanic in YHL.

104


Oceanic was a major creditor of YHL as a result of trade related receivables. Due to the poorperformance of YHL, it was unable to repay the amount owing to Oceanic, who is also themajor supplier. On the view that YHL had no ability to repay its debts, it was an accountingdecision for Oceanic to terminate the business of YHL. In 1992, Oceanic decided to terminatethe business of YHL and petitioned for YHL's winding up, and YHL underwent compulsoryliquidation pursuant to an order of court dated 31 July 1992. Subsequently, YHL was dissolvedpursuant to an order of court dated 15 July 1996. Although Zhou Yingnan and Andrew Tjioe weredirectors of YHL until 1996 when it was ®nally liquidated, they were not involved in the day-to-day management of YHL.

7. The aggregate remuneration and emoluments (including CPF contributions thereon anddirectors' fees) paid to the then existing directors for services rendered in all capacities to ourCompany and our subsidiaries in FY1999 and FY2000 amounted to approximately $0.3 millionand $0.4 million respectively. The aggregate emoluments payable to our present Directors inFY2001 under the arrangements in force at the date of this Prospectus is estimated to be $0.5million.

8. There are no existing or proposed service contracts between our Directors and our Company orour subsidiaries.

9. Save as disclosed on page 25 of this Prospectus, none of our Directors and Executive Of®cers isrelated by blood or marriage to one another or to any substantial Shareholder.

10. No option to subscribe for shares in, or debentures of, our Company or our subsidiaries hasbeen granted to, or was exercised by, any Director or Executive Of®cer within the two ®nancialyears preceding the date of this Prospectus.

11. No person has been, or is entitled to be, given an option to subscribe for any shares in ordebentures of our Company or our subsidiaries.

12. Save as disclosed on pages 27 to 31 of this Prospectus, no Director or expert is interested,directly or indirectly, in the promotion of, or in any property or assets which have, within thetwo years preceding the date of this Prospectus, been acquired by or disposed of by, or leasedto, our Company or our subsidiaries, or are proposed to be acquired or disposed of by or leasedto our Companies or our subsidiaries.

13. Save as disclosed on pages 68 to 72 of this Prospectus, no Director has any interest in anyexisting contract or arrangement, which is signi®cant in relation to the business of our Grouptaken as a whole.

14. Save as disclosed on pages 75 to 78 of this Prospectus, no Director, substantial Shareholder orExecutive Of®cer has any interest, direct or indirect, in any business carrying on a similar tradeas our Group.

15. There is no shareholding quali®cation for Directors in the Articles of Association of the Company.

105


16. The interests of our Directors and substantial Shareholders in the Shares at the date of thisProspectus and as recorded in the Register of Directors' Shareholdings and the Register ofsubstantial Shareholders maintained under the provisions of the Act are as follows:±

Number of Sharesregistered in the names

of Directors andsubstantial Shareholders %

Number of Shares inwhich our Directors andsubstantial Shareholdersare deemed to have an

interest %

Directors

Zhou Yingnan Ð Ð 53,200,000 66.50

Andrew Tjioe Ð Ð 53,200,000 66.50

Tjioe Ka In Ð Ð 53,200,000 66.50

Ban Song Long Ð Ð Ð Ð

Tan Eng Liang (Dr) Ð Ð Ð Ð

Ker Sin Tze (Dr) Ð Ð Ð Ð

Substantial Shareholders

Zhou Holdings Pte Ltd 53,200,000 66.50 Ð Ð

Goh Cheng Liang 9,348,000 11.69 Ð Ð

Sim Lai Hee 4,104,000 5.13 Ð Ð

Sim Seng Kiang 4,816,000 6.02 Ð Ð

Save as disclosed above and on page 25 of this Prospectus, no Director has any interest in theShares, including the Invitation Shares which are the subject of the Invitation.

17. Save as disclosed on pages 27 to 31 of this Prospectus, no sum or bene®t has been paid or hasbeen agreed to be paid to any Director or expert, or to any ®rm in which such Director or expertis a partner or any corporation in which such Director or expert holds shares or debentures, incash or in shares or otherwise, by any person to induce him to become, or to qualify him as, aDirector, or otherwise for services rendered by him or by such ®rm or corporation in connectionwith the promotion or formation of our Company.

SHARE CAPITAL

18. As at the date of this Prospectus, there is only one class of shares in the capital of our Company.The rights and privileges attached to the Shares are stated in the Articles of Association of ourCompany. There are no founder, management or deferred shares.

19. Save as disclosed on page 24 of this Prospectus and below, there were no changes in theissued share capital of our Company and our subsidiaries within the three years preceding thedate of this Prospectus.

Company/Subsidiary Date of Issue

No. of SharesIssued

Issue Priceper Share

Purpose of Issue/Consideration

ResultantIssued Share

Capital

Company 29 June 2000 2 $1 Incorporation $ 2

28 February 2001 1,586,714 $1 Purchase of businessundertakings, operatingassets and liabilitiespursuant to theRestructuring Exercise

$1,586,716

106


Company/Subsidiary Date of Issue

No. of SharesIssued

Issue Priceper Share

Purpose of Issue/Consideration

ResultantIssued Share

Capital

5 March 2001 413,284 $1 Rights issue of newshares to shareholdersfor cash consideration,pursuant to theRestructuring Exercise

$2,000,000

Subsidiary

Tung Lok MillenniumPte Ltd

29 July 2000 2 $1 Incorporation $ 2

28 February 2001 $1,368,220 $1 Purchase of businessundertakings, operatingassets and liabilities ofour Company

$1,368,222

20. Save as disclosed above and on pages 23 and 24 of this Prospectus and above, no Shares in ordebentures of, our Company or our subsidiaries have been issued or are proposed to be issued,as fully or partly paid up for cash or for a consideration other than cash, within the three yearspreceding the date of this Prospectus.

MEMORANDUM AND ARTICLES OF ASSOCIATION

21. The main object of our Company is to carry on the business of an investment holding company.The objects of our Company can be found in the Memorandum of Association of our Companywhich is available for inspection at the registered of®ce of our Company in accordance with theparagraph under the heading ``Documents Available for Inspection'' on page 113 of thisProspectus.

22. An extract of the Articles of Association of our Company, providing for, inter-alia, transferabilityof shares, directors' remuneration, voting rights on proposals arrangement or contracts in whichDirectors are interested and borrowing powers of directors and dividend rights are set out inAnnex B of this Prospectus. The complete Articles of Association of our Company is availablefor inspection at the registered of®ce of our Company in accordance with the paragraph underthe heading ``Documents Available for Inspection'' on page 113 of this Prospectus.

BANK BORROWINGS AND WORKING CAPITAL

23. Save as disclosed on page 21 of this Prospectus, as at 31 December 2000, our Group has noother borrowings or indebtedness in the nature of borrowings including bank overdrafts andliabilities under acceptances (other than normal trading bills) or acceptance credits, mortgages,charges, hire purchase commitments, guarantees or other material contingent liabilities.

24. In the opinion of our Directors, there are no minimum amounts which must be raised by the issueof the Invitation Shares in order to provide for the following items:±

(a) the purchase price of any property purchased or to be purchased which is to be defrayed inwhole or in part out of the proceeds from the Invitation;

(b) estimated preliminary and issue expenses (including underwriting commission andbrokerage) for this Invitation payable by our Company;

(c) the repayment of any money borrowed by our Company in respect of any of the foregoingmatters; and

(d) working capital.

No amount is required to be provided in respect of the matters aforesaid otherwise than out ofthe proceeds from the Invitation.

107


25. Our Directors are of the opinion that, after taking into account the amount available underexisting bank facilities and the net proceeds from the Invitation, our Group has adequate fundsto meet our present working capital requirements.

MATERIAL CONTRACTS

26. The following contracts, not being contracts entered into in the ordinary course of business ofour Company or our subsidiaries (as the case may be), have been entered into by ourCompany or our subsidiaries (as the case may be) within the two years preceding the date ofthis Prospectus and are or may be material:±

(a) sale and purchase agreement dated 8 February 2001 entered into between (1) ourCompany, (2) TLGH, (3) TKM and (4) SSJ pursuant to which we agreed to purchase, andTLGH, TKM and SSJ agreed to sell to us an aggregate of 600,000 ordinary shares of$1.00 each in the capital of CCPL together with all rights and bene®ts attached to suchshares from 31 July 2000;

(b) sale and purchase agreement dated 8 February 2001 entered into between (1) ourCompany, (2) LZPL and (3) TKM pursuant to which we agreed to purchase, and LZPL andTKM agreed to sell to us an aggregate of 150,000 ordinary shares of $1.00 each in thecapital of LBDH together with all rights and bene®ts attached to such shares from 31 July2000;

(c) reconstruction agreement dated 8 February 2001 entered into between our Company andTLGH pursuant to which we agreed to purchase, and TLGH agreed to sell, transfer, assignand convey to us the TLGH Undertakings but excluding non-operating assets and liabilitiesof TLGH with effect from 1 August 2000;

(d) reconstruction agreement dated 8 February 2001 entered into between our Company andNHPL pursuant to which we agreed to purchase, and NHPL agreed to sell, transfer, assignand convey to us the NHPL Undertakings but excluding non-operating assets and liabilitiesof NHPL with effect from 1 August 2000;

(e) reconstruction agreement dated 8 February 2001 entered into between our Company andTLDH pursuant to which we agreed to purchase, and TLDH agreed to sell, transfer, assignand convey to us the TLDH Undertakings but excluding non-operating assets and liabilitiesof TLDH with effect from 1 August 2000;

(f) reconstruction agreement dated 8 February 2001 entered into between our Company andLZPL pursuant to which we agreed to purchase, and LZPL agreed to sell, transfer, assignand convey to us the LZPL Undertakings but excluding non-operating assets and liabilitiesof LZPL with effect from 1 August 2000;

(g) reconstruction agreement dated 8 February 2001 entered into between our Company andFCPL pursuant to which we agreed to purchase, and FCPL agreed to sell, transfer, assignand convey to us the FCPL Undertakings but excluding non-operating assets and liabilitiesof FCPL with effect from 1 August 2000;

(h) reconstruction agreement dated 8 February 2001 entered into between our Company andTLRM pursuant to which we agreed to purchase, and TLRM agreed to sell, transfer, assignand convey to us the TLRM Undertakings but excluding non-operating assets and liabilitiesof TLRM with effect from 1 August 2000;

(i) reconstruction agreement dated 8 February 2001 entered into between our Company andCGPL pursuant to which we agreed to purchase, and CGPL agreed to sell, transfer, assignand convey to us the CGPL Undertakings but excluding non-operating assets and liabilitiesof CGPL with effect from 1 August 2000;

108


(j) sale and purchase of assets agreement dated 8 February 2001 entered into between ourCompany and Tung Lok Millennium pursuant to which we agreed to transfer to, and TungLok Millennium agreed to purchase, the various restaurant businesses and undertakingswhich we had acquired pursuant to the reconstruction agreements set out in paragraphs(c) to (i) above;

(k) management agreement dated 8 February 2001 entered into between our Company andthe House of Mao Restaurant Pte Ltd (``House of Mao'') pursuant to which we agreed toprovide management services to the House of Mao;

(l) management agreement dated 8 February 2001 entered into between our Company andSpice Garden Restaurant Pte Ltd (``Spice Garden'') pursuant to which we agreed toprovide management services to Spice Garden;

(m) management agreement dated 8 February 2001 entered into between our Company and PTNaga pursuant to which we agreed, for so long as Linda Anggraini Widjaja @ Ang Tjia Lengholds or has a bene®cial interest in not less than 35% of the issued and paid-up capital ofPT Naga, to provide management services to the PT Naga;

(n) management agreement dated 8 February 2001 entered into between our Company and PTNobel pursuant to which we agreed, for so long as Tjioe Ka Men holds or has a bene®cialinterest in not less than 35% of the issued and paid-up capital of PT Naga, to providemanagement services to PT Nobel;

(o) call option agreement dated 8 February 2001 entered into between our Company and theGrantors pursuant to which the Grantors granted to us the right to require the Grantors tosell to us the House of Mao Call Option Shares;

(p) call option agreement dated 8 February 2001 entered into between our Company andCGPL pursuant to which CGPL granted to us the right to require CGPL to sell to us theSpice Garden Call Option Shares;

(q) call option agreement dated 8 February 2001 entered into between our Company and theHouse of Mao pursuant to which the House of Mao granted to us the right to require theHouse of Mao to sell to us the House of Mao Undertakings;

(r) call option agreement dated 8 February 2001 entered into between our Company and theSpice Garden pursuant to which the Spice Garden granted to us the right to require theSpice Garden to sell to us the Spice Garden Undertakings;

(s) call option agreement dated 8 February 2001 between our Company and Ang Tjia Lengpursuant to which Ang Tjia Leng granted to us the right to acquire the PT Naga CallOption Shares;

(t) call option agreement dated 8 February 2001 between our Company and Andrew Tjioepursuant to which Andrew Tjioe granted to us the right to acquire the PT Nobel CallOption Shares;

(u) the Depository Agreement dated 9 March 2001 between our Company and CDP pursuantto which CDP agreed to act as depository for our Company's securities for trades in thesecurities of our Company through the SGX-ST;

(v) the Management and Underwriting Agreement dated 10 March 2001 made between ourCompany and OCBC Bank referred to in paragraph 28 on page 110 of this Prospectus; and

(w) the Placement Agreement dated 10 March 2001 made between our Company and OCBCBank referred to in paragraph 28 on page 110 of this Prospectus.

109


LITIGATION

27. Neither our Company nor any of our subsidiaries is engaged in any legal or arbitrationproceedings as plaintiff or defendant in respect of any claims or amounts which are material inthe context of the Invitation and our Directors have no knowledge of any legal or arbitrationproceedings pending or threatened against our Company or our subsidiaries or of any factslikely to give rise to any legal or arbitration proceedings which might materially affect the®nancial position or business of our Company or any of our subsidiaries.

MANAGEMENT AND UNDERWRITING AGREEMENTS

28. (a) Pursuant to the management and underwriting agreement dated 10 March 2001 (the``Management and Underwriting Agreement''), our Company appointed OCBC Bank tomanage this Invitation and underwrite the Offer Shares. OCBC Bank will receive amanagement fee from our Company for its services rendered in connection with thisInvitation.

(b) Pursuant to the Management and Underwriting Agreement, OCBC Bank agreed tounderwrite the Offer Shares for a commission of 1.5% of the Issue Price for each OfferShare. Such commission is payable by our Company.

(c) Pursuant to the placement agreement (the ``Placement Agreement'') dated 10 March 2001,OCBC Bank agreed to subscribe or procure subscriptions for the Placement Shares for aplacement commission of 1.5% of the Issue Price for each Placement Share. Suchcommission is payable by our Company.

(d) Brokerage will be paid by our Company to members of the SGX-ST, merchant banks andmembers of the Association of Banks in Singapore in respect of successful applicationsmade on Application Forms bearing their respective stamps, or to Participating Banks inrespect of successful applications made through Electronic Applications at the ATMs ofthe relevant Participating Banks, at the rate of 1.0% of the Issue Price for each InvitationShare.

(e) Save as aforesaid, no commission, discount or brokerage, has been paid or other specialterms granted within the two years preceding the date of this Prospectus or is payable toany Director, promoter, expert, proposed Director or any other person for subscribing oragreeing to subscribe or procuring or agreeing to procure subscriptions for any shares inor debentures of our Company.

(f) The Management and Underwriting Agreement may be terminated by OCBC Bank at anytime on or before the close of the Application List on the occurrence of certain eventswhich event or events in the opinion of OCBC Bank (exercised in good faith) would (i)result or be likely to result in a material adverse ¯uctuation or adverse conditions in thestock market in Singapore or (ii) be likely to prejudice the success or the subscription oroffer of the Invitation Shares (whether in the primary market or in respect of dealings inthe secondary market) or (iii) make it impracticable, inadvisable, inexpedient oruncommercial to proceed with any of the transactions contemplated in the Managementand Underwriting Agreement or (iv) be likely to have an adverse effect on the business,trading position, operations or prospects of our Company or of our Group as a whole or(v) be such that no reasonable underwriter would have entered into the Management andUnderwriting Agreement or (vi) make it uncommercial or otherwise contrary to or outsidethe usual commercial practices of underwriters in Singapore for OCBC Bank to observe orperform or be obliged to observe or perform the terms of this Agreement.

(g) The Placement Agreement is conditional upon the Management and UnderwritingAgreement not having been terminated or rescinded pursuant to the provisions of theManagement and Underwriting Agreement.

(h) In the event that the Management and Underwriting Agreement is terminated, our Companyreserves the right, at our absolute discretion, to cancel the Invitation.

110


MISCELLANEOUS

29. The nature of the business of our Company and our subsidiaries is stated on pages 35 to 38 ofthis Prospectus. At the date of this Prospectus, all the corporations listed in the section underthe heading ``Group Structure'' on page 32 of this Prospectus and in the Accountants' Reporton page 82 are by virtue of Section 6 of the Act deemed to be related to the Company.

30. The time of opening of the Application List is set out on page 9 of this Prospectus.

31. The amount payable on application is $0.23 for each Invitation Share. Save as disclosed in theSection under the heading ``Share Capital'' on page 23 of this Prospectus, there has been noprevious issue of Shares by our Company or offer for subscription of our Shares to the publicwithin the two years preceding the date of this Prospectus.

32. Application monies received by our Company in respect of successful applications (includingsuccessfully balloted applications which are subsequently rejected) will be placed in a separatenon-interest bearing account with OCBC Bank (the ``Receiving Bank''). There is no sharingarrangement between the Receiving Bank and our Company in respect of any interest orrevenue or any other bene®t arising from the deployment of the application monies in the inter-bank monies market. Any refund of all or part of the application monies to unsuccessful orpartially successful applications will be made without any interest or any share or such revenueor any other bene®ts.

33. No property has been purchased or acquired or proposed to be purchased or acquired by ourCompany or any of our subsidiaries which is to be paid for wholly or partly out of the proceedsfrom the Invitation or the purchase or acquisition of which has not been completed at the date ofthe issue of this Prospectus, other than property the contract for the purchase or acquisitionwhereof was entered into in the ordinary course of business of our Company or any of oursubsidiaries, the contract not being made in contemplation of the Invitation nor the Invitation inconsequence of the contract.

34. The estimated amount of the expenses of the Invitation of approximately $1.1 million, includingunderwriting commission, placement commission, brokerage, management fee, professionalfees to reporting accountants and solicitors to the Invitation and all other incidental expenses inrelation to the Invitation, will be borne by our Company. A breakdown of these estimatedexpenses is as follows:±

$'000

Listing and perusal fee 2

Professional fees 728

Underwriting and Placement commission and brokerage 125

Miscellaneous expenses 265

Total estimated expenses of the Invitation 1,120

35. Save as disclosed in the section under the heading ``Restructuring Exercise'' on pages 27 to 31of this Prospectus and in the section under the heading ``Interested Person Transactions'' onpages 68 to 72 of this Prospectus, no amount of cash or securities or bene®t has been paid orgiven to any promoter within the two years preceding the date of this Prospectus or is proposedor intended to be paid or given to any promoter at any time.

36. Save as disclosed in this Prospectus, our Directors are not aware of any relevant materialinformation, including trading factors or risks, which are not mentioned elsewhere in thisProspectus, which is unlikely to be known or anticipated by the general public and which couldmaterially affect the pro®ts of our Company and our subsidiaries.

111


37. Save as disclosed in this Prospectus, the ®nancial condition and operations of our Group are notlikely to be affected by any of the following:±

(a) known trends or known demands, commitments, events or uncertainties that will result inor are reasonably likely to result in our Group's liquidity increasing or decreasing in anymaterial way;

(b) material commitments for capital expenditure;

(c) unusual or infrequent events or transactions or any signi®cant economic charges thatmaterially affected the amount of reported income from operations; and

(d) known trends or uncertainties that have had or that our Group reasonably expects to havea material favourable or unfavourable impact on revenues or operating income.

38. Our Directors currently have no intention of changing our Group's present Auditors after theadmission of our Company to the Of®cial List of SGX SESDAQ.

39. This Prospectus is dated 10 March 2001. No Shares will be allotted on the basis of thisProspectus later than 6 months after the date of issue of this Prospectus.

CONSENTS

40. The Auditors and Reporting Accountants have given and have not withdrawn their writtenconsent to the issue of this Prospectus with the inclusion herein of their Accountants' Reportand references to their name in the form and context in which it appears in this Prospectus andto act in such capacity in relation to this Prospectus.

41. The Manager, Underwriter and Placement Agent, the Solicitors to the Invitation, the PrincipalBankers and the Share Registrar have given and have not withdrawn their consents to theissue of this Prospectus with the inclusion herein of their names in the form and context inwhich they appear in this Prospectus and to act in those capacities in relation to this Prospectus.

STATEMENT BY OUR DIRECTORS

42. This Prospectus has been seen and approved by our Directors and they collectively andindividually accept full responsibility for the accuracy of the information given in this Prospectusand con®rm, 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 allmaterial respects as at the date of this Prospectus, and that there are no material facts theomission of which would make any statements herein misleading, and that this Prospectusconstitutes full and true disclosure of all material facts about this Invitation and our Group.

STATEMENT BY OCBC BANK

43. OCBC Bank con®rms that, having made due and careful enquiry and to the best of itsknowledge and belief, based on information furnished to it by the Group, this Prospectusconstitutes full and true disclosure of all the material facts about the Invitation and the Groupand it is not aware of any other facts the omission of which would make any statements hereinmisleading.

112


DOCUMENTS AVAILABLE FOR INSPECTION

44. Copies of the following documents may be inspected at the registered of®ce of our Company at1 Sophia Road #05-03, Peace Centre, Singapore 228149, during normal business hours for aperiod of 6 months from the date of this Prospectus:±

(a) the Memorandum and Articles of Association of our Company;

(b) the Directors' Report;

(c) the Accountants' Report;

(d) the material contracts referred to on pages 108 and 109 of this Prospectus;

(e) the letters of consent referred to on page 112 of this Prospectus; and

(f) the audited accounts of our Company and our subsidiaries for the last two ®nancial yearsended 31 December 1999 and 31 December 2000, wherever applicable.

113


DESCRIPTION OF ORDINARY SHARES

The following statements are brief summaries of our capital structure and of the more important rightsand privileges of our shareholders as conferred by the laws of Singapore and our Articles ofAssociation (``Articles''). These statements summarise the material provisions of our Articles but arequali®ed in entirety by reference to our Articles, a copy of which will be available for inspection atour of®ces during normal business hours for a period of six months from the date of this Prospectus.

Ordinary Shares

There are no founder, management, deferred or unissued shares reserved for issue for any purpose.The rights and privileges of these shares are stated in our Articles.

Our authorised capital is $10,000,000 consisting of 400,000,000 ordinary shares of par value $0.025each. We have only one class of shares, namely, our ordinary shares, which have identical rights in allrespects and rank equally with one another. Our Articles provide that we may issue shares of adifferent class with preferential, deferred, quali®ed or special rights, privileges or conditions as ourBoard of Directors may think ®t and may issue preference shares which are, or at our option are,redeemable, subject to certain limitations. Our Board of Directors may issue shares at a premium. Ifshares are issued at a premium, a sum equal to the aggregate amount or value of the premium will,subject to certain exceptions, be transferred to a share premium account.

As at 10 March 2001, 80,000,000 ordinary shares have been issued and fully paid. All of the ordinaryshares are in registered form. We may, subject to the provisions of the Act and the rules of the SGX-ST, purchase our own ordinary shares. However, we may not, except in circumstances permitted bythe Act, grant any ®nancial assistance for the acquisition or proposed acquisition of our own ordinaryshares.

New Ordinary Shares

New ordinary shares may only be issued with the prior approval of our shareholders in a generalmeeting. The aggregate number of shares to be issued pursuant to such approval may not exceed50% (or such other limit as may be prescribed by the SGX-ST) of our issued share capital for thetime being, of which the aggregate number of shares to be issued other than on a pro-rata basis toour shareholders may not exceed 20% (or such other limit as may be prescribed by the SGX-ST) ofour issued share capital for the time being. The approval, if granted, will lapse at the conclusion of ourannual general meeting following the date on which the approval was granted. Subject to theforegoing, the provisions of the Act and any special rights attached to any class of shares currentlyissued, all new ordinary shares are under the control of our Board of Directors who may allot andissue the same with such rights and restrictions as they may think ®t.

Shareholders

Only persons who are registered on our register of shareholders and, in cases in which the person soregistered is CDP, the persons named as the depositors in the depository register maintained by CDPfor the ordinary shares, are recognised as our shareholders. We will not, except as required by law,recognise any equitable, contingent, future or partial interest in any ordinary share or other rights forany ordinary share other than the absolute right thereto of the registered holder of that ordinary shareor of the person whose name is entered in the depository register for that ordinary share. We mayclose our register of shareholders for any time or times if we provide the ROC with at least 14 days'notice and the SGX-ST at least 10 clear market days' notice. However, the register may not be closedfor more than 30 days in aggregate in any calendar year. We typically close the register to determineour shareholders' entitlement to receive dividends and other distributions.

A-1

ANNEX A

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 SGX-ST. Our Board of Directors may decline to register anytransfer of ordinary shares which are not fully paid shares or ordinary shares on which we have alien. Ordinary shares may be transferred by a duly signed instrument of transfer in a form approvedby SGX-ST. Our Board of Directors may also decline to register any instrument of transfer unless,among other things, it has been duly stamped and is presented for registration together with theshare certi®cate and such other evidence of title as they may require. We will replace lost ordestroyed certi®cates for ordinary shares if we are properly noti®ed and the applicant pays a feewhich will not exceed $2 and furnishes any evidence and indemnity that our Board of Directors mayrequire.

General Meetings of Shareholders

We are required to hold an annual general meeting every year. Our Board of Directors may convene anextraordinary general meeting whenever it thinks ®t and must do so if our shareholders representingnot less than 10% of the total voting rights of all our shareholders request in writing that such ameeting be held. In addition, two or more of our shareholders holding not less than 10% of ourissued share capital may call a meeting. Unless otherwise required by law or by our Articles, votingat general meetings is by ordinary resolution, requiring an af®rmative vote of a simple majority of thevotes cast at that meeting. An ordinary resolution suf®ces, for example, for the appointment ofdirectors. A special resolution, requiring the af®rmative vote of at least 75% of the votes cast at themeeting, is necessary for certain matters under Singapore law, including voluntary winding up,amendments to our Memorandum of Association and our Articles, a change of our corporate nameand a reduction in our share capital, share premium account or capital redemption reserve fund. Wemust give at least 21 days' notice in writing for every general meeting convened for the purpose ofpassing a special resolution. Ordinary resolutions generally require at least 14 days' notice in writing.The notice must be given to each of our shareholders who have supplied us with an address inSingapore for the giving of notices and must set forth the place, the day and the hour of the meetingand, in the case of special business, the general nature of that business.

Voting Rights

A holder of our ordinary shares is entitled to attend, speak and vote at any general meeting, in personor by proxy. Proxies need not be a shareholder. A person who holds ordinary shares through the SGX-ST book-entry settlement system will only be entitled to vote at a general meeting as a shareholder ifhis name appears on the depository register maintained by CDP 48 hours before the general meeting.Except as otherwise provided in our Articles, two or more shareholders must be present in person orby proxy to constitute a quorum at any general meeting. Under our Articles, on a show of hands, everyshareholder present in person and by proxy shall have one vote (provided that in the case of ashareholder who is represented by two proxies, only one of the two proxies as determined by thatshareholder or, failing such determination, by the Chairman of the meeting in his sole discretion shallbe entitled to vote on a show of hands), and on a poll, every shareholder present in person or by proxyshall have one vote for each ordinary share which he holds or represents. A poll may be demanded incertain circumstances, including by the Chairman of the meeting or by any shareholder present inperson or by proxy and representing not less than 10% of the total voting rights of all shareholdershaving the right to attend and vote at the meeting or by any two shareholders present in person or byproxy and entitled to vote. In the case of a tie vote, whether on a show of hands or a poll, theChairman of the meeting shall be entitled to a casting vote.

A-2

ANNEX A

Dividends

We may, by ordinary resolution of our shareholders, declare dividends at a general meeting, but wemay not pay dividends in excess of the amount recommended by our Board of Directors. We mustpay all dividends out of our pro®ts; however, we may capitalise our share premium account andapply it to pay dividends, if such dividends are satis®ed by the issue of shares to our shareholders.See ``Bonus and Rights Issue'' below. All dividends are paid pro-rata amongst our shareholders inproportion to the amount paid up on each shareholder's ordinary shares, unless the rights attachingto an issue of any ordinary share provide otherwise. Unless otherwise directed, dividends are paid bycheque or warrant sent through the post to each shareholder at his registered address.Notwithstanding the foregoing, the payment by us to CDP of any dividend payable to a shareholderwhose name is entered in the depository register shall, to the extent of payment made to CDP,discharge us from any liability to that shareholder in respect of that payment.

Bonus and Rights Issue

Our Board of Directors may, with the approval of our shareholders at a general meeting, capitalise anyreserves or pro®ts (including pro®ts or moneys carried and standing to any reserve or to the sharepremium account) and distribute the same as bonus shares credited as paid-up to our shareholdersin proportion to their shareholdings. Our Board of Directors may also issue rights to take up additionalordinary shares to other shareholders in proportion to their shareholdings. Such rights are subject toany conditions attached to such issue and the regulations of any stock exchange on which we arelisted.

Takeovers

The Companies Act and the Singapore Code on Take-overs and Mergers (``Singapore Take-overCode'') regulate the acquisition of ordinary shares of public companies and contain certainprovisions that may delay, deter or prevent a future takeover or change in control of our Company.Any person acquiring an interest, either on his own or together with parties acting in concert withhim, in 25% or more of our voting shares must extend a takeover offer for the remaining votingshares in accordance with the provisions of the Singapore Take-over Code. ``Parties acting inconcert'' includes a company and its related and associated companies, a company and itsdirectors (including their relatives), a company and its pension funds, a person and any investmentcompany, unit trust or other fund whose investment such person manages on a discretionary basis,and a ®nancial advisor and its client in respect of shares held by the ®nancial advisor and shares in theclient held by funds managed by the ®nancial advisor on a discretionary basis. An offer forconsideration other than cash must be accompanied by a cash alternative at not less than thehighest price paid by the offeror or parties acting in concert with the offeror within the preceding 12months. A mandatory takeover offer is also required to be made if a person holding, either on his ownor together with parties acting in concert with him, between 25% and 50% of the voting sharesacquires additional voting shares representing more than 3% of the voting shares in any 12-monthperiod.

Liquidation or Other Return of Capital

If we liquidate or in the event of any other return of capital, holders of our ordinary shares will beentitled to participate in any surplus assets in proportion to their shareholdings, subject to anyspecial rights attaching to any other class of shares.

A-3

ANNEX A

Indemnity

As permitted by Singapore law, our Articles provide that, subject to the Companies Act, our Board ofDirectors and of®cers shall be entitled to be indemni®ed by us against any liability incurred indefending any proceedings, whether civil or criminal, which relate to anything done or omitted tohave been done as an of®cer, director or employee and in which judgment is given in their favour orin which they are acquitted or in connection with any application under any statute for relief fromliability in respect thereof in which relief is granted by the court. We may not indemnify our Directorsand of®cers against any liability which by law would otherwise attach to them in respect of anynegligence, default, breach of duty or breach of trust of which they may be guilty in relation to us.

Limitations on Rights to Hold or Vote Shares

Except as described in ``Voting Rights'' and ``Takeovers'' above, there are no limitations imposed bySingapore law or by our Articles on the rights of non-resident shareholders to hold or vote 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,upon application by any of our shareholders, as they think ®t to remedy any of the following situations:

. our affairs are being conducted or the powers of our Board of Directors are being exercised in amanner oppressive to, or in disregard of the interests of, one or more of the shareholders; or

. we take an action, or threaten to take an action, or our shareholders pass a resolution, orpropose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to,one or more of our shareholders, including the applicant.

Singapore courts have a wide discretion as to the reliefs they may grant and those reliefs are in noway limited to those listed in the Companies Act itself. Without prejudice to the foregoing, Singaporecourts may:

. direct or prohibit any act or cancel or vary any transaction or resolution;

. regulate the conduct of our affairs in the future;

. authorise civil proceedings to be brought in our name, or on our behalf, by a person or personsand on such terms as the court may direct;

. provide for the purchase of a minority shareholder's shares by our other shareholders or by usand, in the case of a purchase of shares by us, a corresponding reduction of our share capital;

. in the case of a purchase of shares by the company, provide for a reduction accordingly of thecompany's capital; or

. provide that we be wound up.

A-4

ANNEX A

EXTRACTS OF ARTICLES OF ASSOCIATION OF THE COMPANY

(1) The following provisions of the Articles of Association of our Company relate to restrictions onthe transferability of shares and the voting rights of members of the Company:±

Article 38

(A) There shall be no restriction on the transfer of fully paid up shares (except where requiredby law, the listing rules of any Stock Exchange upon which the shares of the Company maybe listed or the rules and/or bye-laws governing any Stock Exchange upon which theshares of the Company may be listed) but the Directors may in their discretion decline toregister any transfer of shares upon which the Company has a lien and in the case ofshares not fully paid up, may refuse to register a transfer to a transferee of whom they donot approve Provided always that in the event of the Directors refusing to register a transferof shares, they shall within one month beginning with the day on which the application for atransfer of shares was made, serve a notice in writing to the applicant stating the factswhich are considered to justify the refusal as required by the Statutes.

(B) The Directors may in their sole discretion refuse to register any instrument of transfer ofshares unless:±

(a) all or any part of the stamp duty (if any) payable on each share certi®cate and suchfee not exceeding $2 as the Directors may from time to time require pursuant toArticle 41, is paid to the Company in respect thereof;

(b) the instrument of transfer is deposited at the Of®ce or at such other place (if any) asthe Directors may appoint accompanied by the certi®cates of the shares to which itrelates, 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;

(c) the instrument of transfer is in respect of only one class of shares; and

(d) the amount of the proper duty with which each share certi®cate to be issued inconsequence of the registration of such transfer is chargeable under any law for thetime being in force relating to stamps is tendered.

Article 61

At any General Meeting, a resolution put to the vote of the meeting shall be decided on a showof hands unless a poll is (before or on the declaration of the result of the show of hands)demanded by:

(a) the chairman of the meeting; or

(b) not less than two members present in person or by proxy and entitled to vote; or

(c) a member present in person or by proxy and representing not less than one-tenth of thetotal voting rights of all the members having the right to vote at the meeting; or

(d) a member present in person or by proxy and holding shares in the Company conferring aright to vote at the meeting and being shares on which an aggregate sum has been paid upequal to not less than one-tenth of the total sum paid on all the shares conferring that right,

Provided always that no poll shall be demanded on the choice of a chairman or on a question ofadjournment.

B-1

ANNEX B

Article 63

In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of themeeting at which the show of hands takes place or at which the poll is demanded shall beentitled to a casting vote.

Article 65

Subject and without prejudice to any special privileges or restrictions as to voting for the timebeing attached to any special class of shares for the time being forming part of the capital ofthe company, each member entitled to vote may vote in person or by proxy. On a show ofhands, every member who is present in person or by proxy shall have one vote and on a poll,every member who is present in person or by proxy shall have one vote for every share which heholds or represents. For the purpose of determining the number of votes which a member, beinga Depositor, or his proxy may cast at any General Meeting on a poll, the reference to shares heldor represented shall, in relation to shares of that Depositor, be the number of shares enteredagainst his name in the Depository Register as at forty-eight hours before the time of therelevant General Meeting as certi®ed by the Depository to the Company.

Article 66

In the case of joint holders of a share, the vote of the senior who tenders a vote, whether inperson or by proxy, shall be accepted to the exclusion of the votes of the other joint holdersand for this purpose, seniority shall be determined by the order in which the names stand inthe Register of Members or (as the case may be) the Depository Register in respect of the share.

Article 67

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 ofthe appointment as the Directors may require, permit such receiver or other person on behalf ofsuch member to vote in person or by proxy at any General Meeting or to exercise any other rightconferred by membership in relation to meetings of the Company.

Article 68

No member shall, unless the Directors otherwise determine, be entitled in respect of shares heldby him to vote at a General Meeting either personally or by proxy or to exercise any other rightconferred by membership in relation to meetings of the Company if any call or other sumpresently payable by him to the Company in respect of such shares remains unpaid.

Article 69

No objection shall be raised as to the admissibility of any vote except at the meeting oradjourned meeting at which the vote objected to is or may be given or tendered and every votenot disallowed at such meeting shall be valid for all purposes. Any such objection shall bereferred to the chairman of the meeting whose decision shall be ®nal and conclusive.

Article 70

On a poll, votes may be given personally or by proxy and a person entitled to more than onevote need not use all his votes or cast all the votes he uses in the same way.

B-2

ANNEX B

Article 71

(A) A member may appoint not more than two proxies to attend and vote at the same GeneralMeeting Provided that if the member is a Depositor, the Company shall be entitled andbound:

(a) to reject any instrument of proxy lodged if the Depositor is not shown to have anyshares entered against his name in the Depository Register as at forty-eight hoursbefore the time of the relevant General Meeting as certi®ed by the Depository to theCompany; and

(b) to accept as the maximum number of votes which in aggregate the proxy or proxiesappointed by the Depositor is or are able to cast on a poll a number which is thenumber of shares entered against the name of that Depositor in the DepositoryRegister as at forty-eight hours before the time of the relevant General Meeting ascerti®ed by the Depository to the Company, whether that number is greater orsmaller than the number speci®ed in any instrument of proxy executed by or onbehalf of that Depositor.

(B) The Company shall be entitled and bound, in determining rights to vote and other mattersin respect of a completed instrument of proxy submitted to it, to have regard to theinstructions (if any) given by and the notes (if any) set out in the instrument of proxy.

(C) In any case where a form of proxy appoints more than one proxy, the proportion of theshareholding concerned to be represented by each proxy shall be speci®ed in the form ofproxy.

(D) A proxy need not be a member of the Company.

Article 72

(A) An instrument appointing a proxy shall be in writing in any usual or common form or in anyother form which the Directors may approve and:

(a) in the case of an individual, shall be signed by the appointor or his attorney; and

(b) in the case of a corporation, shall be either given under its common seal or signed onits behalf by an attorney or a duly authorised of®cer of the corporation.

(B) The signature on such instrument need not be witnessed. Where an instrument appointinga proxy is signed on behalf of the appointor by an attorney, the letter or power of attorneyor a duly certi®ed copy thereof must (failing previous registration with the Company) belodged with the instrument of proxy pursuant to Article 73, failing which the instrumentmay be treated as invalid.

Article 73

An instrument appointing a proxy must be left at such place or one of such places (if any) as maybe speci®ed for that purpose in or by way of note to or in any document accompanying thenotice convening the meeting (or, if no place is so speci®ed, at the Of®ce) not less than forty-eight hours before the time appointed for the holding of the meeting or adjourned meeting or(in the case of a poll taken otherwise than at or on the same day as the meeting or adjournedmeeting) for the taking of the poll at which it is to be used, and in default shall not be treated asvalid. The instrument shall, unless the contrary is stated thereon, be valid as well for anyadjournment of the meeting as for the meeting to which it relates; Provided that an instrumentof proxy relating to more than one meeting (including any adjournment thereof) having oncebeen so delivered for the purposes of any meeting shall not be required again to be deliveredfor the purposes of any subsequent meeting to which it relates.

B-3

ANNEX B

Article 74

An instrument appointing a proxy shall be deemed to include the right to demand or join indemanding a poll, to move any resolution or amendment thereto and to speak at the meeting.

Article 75

A vote cast by proxy shall not be invalidated by the previous death or insanity of the principal orby the revocation of the appointment of the proxy or of the authority under which theappointment was made Provided that no intimation in writing of such death, insanity orrevocation shall have been received by the Company at the Of®ce at least one hour before thecommencement of the meeting or adjourned meeting or (in the case of a poll taken otherwisethan at or on the same day as the meeting or adjourned meeting) the time appointed for thetaking of the poll at which the vote is cast.

Article 76

Any corporation which is a member of the Company may by resolution of its directors or othergoverning body authorise such person as it thinks ®t to act as its representative at any meetingof the Company or of any class of members of the Company. The person so authorised shall beentitled to exercise the same powers on behalf of such corporation as the corporation couldexercise if it were an individual member of the Company and such corporation shall for thepurposes of these presents be deemed to be present in person at any such meeting if a personso authorised is present thereat.

(2) The following provisions in the Articles of Association of the Company relate to the remuneration,voting rights on proposals, arrangements or contracts in which Directors are interested and theborrowing powers of Directors:±

Article 79

The ordinary fees of the Directors shall from time to time be determined by an OrdinaryResolution of the Company and 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,except that any Director who shall hold of®ce for part only of the period in respect of whichsuch fees is payable shall be entitled only to rank in such division for a proportion of feesrelated to the period during which he has held of®ce.

Article 80

(A) Any Director who holds any executive of®ce, or who serves on any committee of theDirectors, or who otherwise performs services which in the opinion of the Directors areoutside the scope of ordinary duties of a Director, may be paid such extra remunerationby way of salary, commission or otherwise as the Directors may determine.

(B) The fees (including any remuneration under Article 80(A) above) in the case of a Directorother than an Executive Director shall be payable by a ®xed sum and shall not at any timebe by commission on or percentage of the pro®ts or turnover, and no Director whether anExecutive Director or otherwise shall be remunerated by a commission on or percentage ofturnover.

B-4

ANNEX B

Article 81

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.

Article 82

The Directors shall have power to pay and agree to pay pensions or other retirement,superannuation, death or disability bene®ts to (or to any person in respect of) any Director forthe time being holding any executive of®ce and for the purpose of providing any such pensionsor other bene®ts to contribute to any scheme or fund or to pay premiums.

Article 83

A Director may be party to or in any way interested in any contract or arrangement or transactionto which the Company is a party or in which the Company is in any way interested and he mayhold and be remunerated in respect of any of®ce or place of pro®t other than the of®ce of Auditorof the Company or any subsidiary thereof under the Company or any other company in whichthe Company is in any way interested and he (or any ®rm of which he is a member) may act ina professional capacity for the Company or any such other company and be remuneratedtherefor and in any such case as aforesaid (save as otherwise agreed) he may retain for hisown absolute use and bene®t all pro®ts and advantages accruing to him thereunder or inconsequence thereof.

Article 88

The remuneration of a Managing Director shall from time to time be ®xed by the Directors andmay, subject to these presents, be by way of salary or commission or participation in pro®ts orby any or all these modes but he shall not under any circumstances be remunerated by acommission on or a percentage of turnover.

Article 98

(A) Any Director may at any time by writing under his hand and deposited at the Of®ce, ordelivered at a meeting of the Directors, appoint any person approved by a majority of hisco-Directors (other than another Director) to be his alternate Director and may in likemanner at any time terminate such appointment. Such appointment, unless previouslyapproved by the majority of the Directors, shall have effect only upon and subject tobeing so approved. A person shall not act as alternate Director to more than one Directorat the same time.

(B) The appointment of an alternate Director shall determine on the happening of any eventwhich if he were a Director would cause him to vacate such of®ce or if the Directorconcerned (below called ``his principal'') ceases to be a Director.

B-5

ANNEX B

(C) An alternate Director shall (except when absent from Singapore) be entitled to receivenotices of meetings of the Directors and shall be entitled to attend and vote as a Directorat any such meeting at which his principal is not personally present and generally at suchmeeting to perform all functions of his principal as a Director and for the purposes of theproceedings at such meeting the provisions of these presents shall apply as if he (insteadof his principal) were a Director. If his principal is for the time being absent from Singaporeor temporarily unable to act through ill health or disability, his signature to any resolution inwriting of the Directors shall be as effective as the signature of his principal. To such extentas the Directors may from time to time determine in relation to any committees of theDirectors, the foregoing provisions of this paragraph shall also apply mutatis mutandis toany meeting of any such committee of which his principal is a member. An alternateDirector shall not (save as aforesaid) have power to act as a Director nor shall he bedeemed to be a Director for the purposes of these presents.

(D) An alternate Director shall be entitled to contract and be interested in and bene®t fromcontracts or arrangements or transactions and to be repaid expenses and to beindemni®ed to the same extent mutatis mutandis as if he were a Director but he shall notbe entitled to receive from the Company in respect of his appointment as alternate Directorany fees except only such part (if any) of the fees otherwise payable to his principal as suchprincipal may by notice in writing to the Company from time to time direct.

Article 102

A Director shall not vote in respect of any contract or proposed contract or arrangement or anyother proposal whatsoever in which he has any personal material interest, directly or indirectly. ADirector shall not be counted in the quorum at a meeting in relation to any resolution on which heis debarred from voting.

Article 109

Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exerciseall the powers of the Company to borrow money, to mortgage or charge its undertaking,property and uncalled capital and to issue debentures and other securities, whether outright oras collateral security for any debt, liability or obligation of the Company or of any third party.

B-6

ANNEX B

TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

Applications are invited for the subscription and/or purchase of Invitation Shares at the Issue Pricesubject to the following terms and conditions:±

1. APPLICATIONS FOR THE INVITATION SHARES MUST BE MADE IN LOTS OF 1,000SHARES AND HIGHER INTEGRAL MULTIPLES THEREOF. APPLICATIONS FOR ANYOTHER NUMBER OF SHARES WILL BE REJECTED.

2. Applications for Offer Shares may be made by way of Offer Shares Application Forms or by wayof Electronic Applications through ATMs of the Participating Banks (``ATM ElectronicApplications''). Applications for the Placement Shares (other than Reserved Shares) may onlybe made by way of Placement Shares Application Forms. Applications for Reserved Sharesmay only be made by way of Reserved Shares Application Forms. APPLICANTS MAY NOTUSE CENTRAL PROVIDENT FUND (``CPF'') TO APPLY FOR THE INVITATION SHARES.

3. Only one application for either the Offer Shares or the Placement Shares may be made forthe bene®t of one person (other than in respect of Reserved Shares). A person submittingan application for Offer Shares by way of an Application Form MAY NOT submit anotherapplication for Offer Shares by way of an Electronic Application and vice versa. Suchseparate applications shall be deemed to be multiple applications and shall be rejected.

A person, other than an approved nominee company, who is submitting an application in hisown name should not submit any other application (other than for Reserved Shares), whetherby way of an Application Form or by way of an Electronic Application, for any other person.Such separate applications shall be deemed to be multiple applications and shall be rejected.

An applicant who has been procured by a Placement Agent to subscribe for Placement Shares(other than Reserved Shares) shall not make any application for Offer Shares either through anElectronic Application or by way of an Application Form and vice versa. Such separateapplications shall be deemed to be multiple applications and shall be rejected.

An applicant for Reserved Shares using the Reserved Shares Application Form may submit oneseparate application for the Offer Shares in his own name either by way of an Application Formor by way of an Electronic Application or submit one separate application for the PlacementShares (other than Reserved Shares) provided he adheres to the terms and conditions of thisProspectus. Such separate applications shall not be treated as multiple applications.

Joint or multiple applications shall be rejected. Persons submitting or procuring submissions ofmultiple share applications (whether for Offer Shares, Placement Shares or both Offer Sharesand Placement Shares) may be deemed to have committed an offence under the Penal Code(Chapter 224) of Singapore and the Securities Industry Act (Chapter 289) of Singapore, andsuch applications may be referred to the relevant authorities for investigation. Applicationsappearing to be or suspected of being multiple applications will be liable to be rejected at thediscretion of the Company.

4. Applications will not be accepted from any person under the age of 21 years, undischargedbankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint SecuritiesAccount holders of CDP and applicants whose addresses (furnished in their Application Formsor, in the case of Electronic Applications, contained in the records of the relevant ParticipatingBanks) bear post of®ce box numbers.

5. The existence of a trust will not be recognised. Any application by a trustee or trustees must bemade in his/her/their own name(s) and without quali®cation. Applications made by way of anApplication Form in the name(s) of an approved nominee company or approved nomineecompanies must comply with paragraph 6 below.

C-1

ANNEX C

6. NOMINEE APPLICATIONS MAY BE MADE BY APPROVED NOMINEE COMPANIES ONLY.Approved nominee companies are de®ned as banks, merchant banks, ®nance companies,insurance companies, licensed securities dealers in Singapore and nominee companiescontrolled by them. Applications made by persons acting as nominees other than approvednominee companies shall be rejected.

7. FOR NON-NOMINEE APPLICATIONS, EACH APPLICANT MUST MAINTAIN A SECURITIESACCOUNT WITH CDP IN HIS OWN NAME AT THE TIME OF HIS APPLICATION. An applicantwithout an existing Securities Account with CDP in his own name at the time of his applicationwill have his application rejected, in the case of an application by way of an Application Form, orwill not be able to complete his Electronic Application, in the case of an Electronic Application.An applicant with an existing Securities Account who fails to provide his Securities Accountnumber or who provides an incorrect Securities Account number in section B of the ApplicationForm or in his Electronic Application, as the case may be, is liable to have his applicationrejected. Subject to paragraph 8 below, an application shall be rejected if the applicant'sparticulars such as name, NRIC/passport number, nationality and permanent residence statusprovided in his Application Form or in the records of the relevant Participating Bank at the timeof his Electronic Application, as the case may be, differ from those particulars in his SecuritiesAccount as maintained with CDP. If the applicant possesses more than one individual directSecurities Account with CDP, his application shall be rejected.

8. If the address of an applicant stated in the Application Form or, in the case of an ElectronicApplication, in the records of the relevant Participating Bank, as the case may be, isdifferent from the address registered with CDP, the applicant must inform CDP of hisupdated address promptly, failing which the noti®cation letter on successful allotmentand other correspondence from the CDP will be sent to his address last registered withCDP.

9. The Company reserves the right to reject any application which does not conform strictlyto the instructions set out in the Application Form and this Prospectus or which does notcomply with the instructions for Electronic Applications or with the terms and conditions ofthis Prospectus or, in the case of an application by way of an Application Form, which isillegible, incomplete, incorrectly completed or which is accompanied by an improperlydrawn or improper form of remittance. The Company further reserves the right to treat asvalid any applications not completed or submitted or effected in all respects in accordancewith the terms and conditions of this Prospectus, the instructions set out in the ApplicationForms or the instructions for the Electronic Applications and also to present for paymentor other processes all remittances at any time after receipt and to have full access to allinformation relating to, or deriving from, such remittances or the processing thereof.

10. The Company reserves the right to reject or accept any application or to accept any applicationin part, or to scale down or ballot any application, without assigning any reason thereof, and noenquiry and/or correspondence on the decision of the Company will be entertained. This rightapplies to applications made by way of Application Forms and by way of ElectronicApplications. In deciding the basis of acceptance, due consideration will be given to thedesirability of allotting the Shares to a reasonable number of applicants with a view toestablishing an adequate market for the Shares.

11. Share certi®cates will be registered in the name of CDP and will be forwarded only to CDP. It isexpected that CDP will send to each successful applicant, at his own risk, within 15 Market Daysafter the close of the Application List, a statement of account stating that his Securities Accounthas been credited with the number of Invitation Shares allotted and/or allocated to him. This willbe the only acknowledgement of application monies received and is not an acknowledgement bythe Company. Each applicant irrevocably authorises CDP to complete and sign on his behalf astransferee or renouncee any instrument of transfer and/or other documents required for the issue

C-2

ANNEX C

or transfer of the Invitation Shares allotted and/or allocated to the applicant. This authorisationapplies to applications made by way of Application Forms and by way of Electronic Applications.

12. By completing and delivering an Application Form and, in the case of an ATM ElectronicApplication, by pressing the ``Enter'' or ``OK'' or ``Con®rm'' or ``Yes'' key on the ATM inaccordance with the provisions herein, each applicant:±

(a) irrevocably offers to subscribe for the number of Invitation Shares speci®ed in hisapplication (or such smaller number for which the application is accepted) at the OfferPrice or the Placement Price (as the case may be) and agrees that he will accept suchShares as may be allocated to him, in each case on the terms of, and subject to theconditions set out in, the Prospectus and the Memorandum and Articles of Association ofthe Company; and

(b) warrants the truth and accuracy of the information provided in his application.

13. In the event of an under-subscription for Offer Shares as at the close of the Application List, thenumber of Offer Shares under-subscribed shall be made available to satisfy applications forPlacement Shares to the extent that there is an over-subscription for Placement Shares as atthe close of the Application List. Any Reserved Shares not taken up will be made available ®rstto satisfy other applications for the Placement Shares to the extent that there is an over-subscription for the Placement Shares and then to satisfy applications for Offer Shares to theextent that there is an over-subscription for Offer Shares.

In the event of an under-subscription for Placement Shares (including the Reserved Shares) as atthe close of the Application List, that number of Placement Shares under-subscribed shall bemade available to satisfy applications for Offer Shares to the extent that there is an over-subscription for Offer Shares as at the close of the Application List.

In the event of an over-subscription of the Offer Shares as at the close of the Application Listand the number of Placement Shares are fully subscribed or over-subscribed as at the close ofthe Application List, the successful applications for the Offer Shares will be determined by ballotor otherwise as determined by the Directors, and approved by the SGX-ST.

14. Each applicant irrevocably authorises CDP to disclose the outcome of his application, includingthe number of Invitation Shares allotted or allocated to the applicant pursuant to his application,to authorised operators.

15. Acceptance of applications will be conditional upon, inter alia, the Company being satis®edthat:±

(a) permission has been granted by the SGX-ST to deal in and for quotation for all the existingShares and the Invitation Shares on the Of®cial List of SGX SESDAQ; and

(b) the Management and Underwriting Agreement and the Placement Agreement referred to onpage 110 of this Prospectus have become unconditional and have not been terminated.

16. No application will be held in reserve.

17. This Prospectus is dated 10 March 2001. No Shares will be allotted on the basis of thisProspectus later than six months after the date of issue of this Prospectus.

18. Additional terms and conditions for applications by way of Application Forms are set out onpages C-4 to C-7 of this Prospectus.

19. Additional terms and conditions for applications by way of Electronic Applications are set out onpages C-7 to C-12 of this Prospectus.

C-3

ANNEX C

20. Any reference to the ``applicant'' in this section shall include a person applying for the OfferShares by way of an Application Form or by way of an Electronic Application, a personapplying for the Placement Shares through the Placement Agent, or a person applying forReserved Shares by way of a Reserved Shares Application Form.

ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING APPLICATION FORMS

Applications by way of Application Forms shall be made on and subject to the terms and conditions ofthis Prospectus including but not limited to the terms and conditions appearing below as well as thoseset out under the section on ``TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATIONS''on pages C-1 to C-4 of this Prospectus, as well as the Memorandum and Articles of Association ofthe Company.

1. Applications must be made using the WHITE Application Forms and of®cial envelopes ``A'' and``B'' for Offer Shares and the BLUE Application Forms for Placement Shares (other thanReserved Shares) accompanying and forming part of this Prospectus. Applications forReserved Shares must be made using the PINK Application Forms for Reserved Sharesforming part of this Prospectus. Attention is drawn to the detailed instructions contained in therespective Application Forms and this Prospectus for the completion of the Application Formswhich must be carefully followed. The Company reserves the right to reject applicationswhich do 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.

2. The 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 USEONLY'' must be completed and the words ``NOT APPLICABLE'' or ``N.A.'' should be written inany space that is not applicable.

4. Individuals, corporations, approved nominee companies and trustees must give their names infull. Applications must be made, in the case of individuals, in their full names appearing in theiridentity cards (if applicants have such identi®cation documents) or in their passports and, in thecase of corporations, in their full names as registered with a competent authority. An applicant,other than an individual, completing the Application Form under the hand of an of®cial must statethe name and capacity in which that of®cial signs. A corporation completing the ApplicationForm is required to af®x its Common Seal (if any) in accordance with its Memorandum andArticles of Association or equivalent constitutive documents of the corporation. If an applicationby a corporate applicant is successful, a copy of its Memorandum and Articles of Association orequivalent constitutive documents must be lodged with the Company's Share Registrar andShare Transfer Of®ce. The Company reserves the right to require any applicant to producedocumentary proof of identi®cation for veri®cation purposes.

5. (a) All applicants must complete page 1 and Sections A and B of the Application Form.

(b) All applicants are required to delete either paragraph 7(a) or 7(b) on page 1 of theApplication Form. Where paragraph 7(a) is deleted, the applicants must also completeSection C of the Application Form with particulars of the bene®cial owner(s).

(c) Applicants who fail to make the required declaration in paragraph 7(a) or 7(b), as the casemay be, on page 1 of the Application Form are liable to have their applications rejected.

6. Individual and corporate applicants, whether incorporated or unincorporated and whereverincorporated or constituted, will be required to declare whether they are citizens or permanentresidents of Singapore or corporations in which citizens or permanent residents of Singapore or

C-4

ANNEX C

any body corporate constituted under any statute of Singapore have an interest in the aggregateof more than 50% of the issued share capital of or interests in such corporations. Approvednominee companies are required to declare whether the bene®cial owner of the InvitationShares is a citizen or permanent resident of Singapore or a corporation, whether incorporatedor unincorporated and wherever incorporated or constituted, in which citizens or permanentresidents of Singapore or any body corporate whether incorporated or unincorporated andwherever incorporated or constituted under any statute of Singapore have an interest in theaggregate of more than 50% of the issued share capital of or interests in such corporation.

7. Each application must be accompanied by a remittance in Singapore currency for the fullamount payable, in respect of the number of Invitation Shares applied for, in the form of aBANKER'S DRAFT or CASHIER'S ORDER drawn on a bank in Singapore, made out in favour of``TUNG LOK SHARE ISSUE ACCOUNT'' crossed ``A/C PAYEE ONLY'', with the name andaddress of the applicant written clearly on the reverse side. Applications not accompanied byany payment or accompanied by ANY OTHER FORM OF PAYMENT WILL NOT BEACCEPTED. Remittances bearing ``NOT TRANSFERABLE'' or ``NON TRANSFERABLE''crossings shall be rejected. No acknowledgement of receipt will be issued by the Company orOCBC Bank for applications and application monies received.

8. It is expected that unsuccessful applications will be returned to the applicants by ordinary post(without interest or any share of revenue or other bene®t arising therefrom) within three MarketDays after the close of the Application List at the applicants' own risk. Where an application isrejected or accepted in part only, the full amount or the balance of the application monies, as thecase may be, will be refunded (without interest or any share of revenue or other bene®t arisingtherefrom) to the applicant by ordinary post at the applicant's own risk within 14 days after theclose of the Application List.

9. Capitalised terms used in the Application Forms and de®ned in this Prospectus shall bear themeanings assigned to them in this Prospectus.

10. In consideration of the Company having distributed the Application Form to the applicant andagreeing to close the Application List at 12.00 noon on 19 March 2001 or such later time ordate as the Company may, in their absolute discretion, decide and by completing anddelivering the Application Form, the applicant agrees that:±

(a) his application is irrevocable;

(b) his remittance will be honoured on ®rst presentation and that any application moniesreturnable may be held pending clearance of his payment without interest or any share ofrevenue or other bene®t arising therefrom;

(c) all applications, acceptances and contracts resulting therefrom under the Invitation shall begoverned by and construed in accordance with the laws of Singapore and that heirrevocably submits to the non-exclusive jurisdiction of the Singapore courts;

(d) in respect of the Invitation Shares for which his application has been received and notrejected, acceptance of his application shall be constituted by written noti®cation by or onbehalf of the Company and not otherwise, notwithstanding any remittance being presentedfor payment by or on behalf of the Company;

(e) he will not be entitled to exercise any remedy of rescission for misrepresentation at anytime after acceptance of his application; and

(f) in making his application, reliance is placed solely on the information contained in thisProspectus and that none of the Company, the Manager, the Underwriter, the PlacementAgent or any other person involved in the Invitation shall have any liability for anyinformation not so contained.

C-5

ANNEX C

Applications for Offer Shares

1. Applications for Offer Shares (other than Reserved Shares) MUST be made using the WHITEOffer Shares Application Forms and WHITE of®cial envelopes `À'' and ``B''. ONLY ONEAPPLICATION should be enclosed in each envelope.

2. The applicant must:±

(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, togetherwith the correct remittance in accordance with the terms and conditions of thisProspectus his remittance in the WHITE envelope `À'' provided;

(b) in the appropriate spaces on WHITE envelope `À'':±

(i) write his name and address;

(ii) state the number of Offer Shares applied for; and

(iii) af®x adequate Singapore postage;

(c) SEAL WHITE envelope `À'';

(d) write, in the special box provided on the larger WHITE envelope ``B'' addressed to OCBCBANK, 18 CHURCH STREET #02-00, OCBC CENTRE SOUTH, SINGAPORE 049479, thenumber of Offer Shares for which the application is made; and

(e) insert WHITE envelope `À'' into WHITE envelope ``B'', seal WHITE envelope ``B'', af®xadequate Singapore postage on WHITE envelope ``B'' (if dispatching by ordinary post)and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY HAND at his ownrisk to OCBC BANK, 18 CHURCH STREET #02-00, OCBC CENTRE SOUTH,SINGAPORE 049479, so as to arrive by 12.00 noon on 19 March 2001 or such laterdate and time as the Company may, in their absolute discretion, decide. LocalUrgent Mail or Registered Post must NOT be used.

3. No acknowledgement of receipt will be issued for any application or remittance received.

4. Applications that are illegible, incomplete or incorrectly completed or accompanied byimproperly drawn remittances are liable to be rejected.

Applications for Placement Shares (other than Reserved Shares)

1. Applications for Placement Shares must be made using the BLUE Placement Shares ApplicationForms. ONLY ONE APPLICATION should be enclosed in each envelope.

2. The completed BLUE Placement Shares Application Form and the applicant's remittance, inaccordance with the terms and conditions of this Prospectus for the full amount payable inrespect of the number of Placement Shares applied for, with the name and address of theapplicant written clearly on the reverse side, must be enclosed and sealed in an envelope to beprovided by the applicant. The applicant must af®x adequate Singapore postage (if despatchingby ordinary post) and thereafter, the sealed envelope must be DESPATCHED BY ORDINARYPOST OR DELIVERED BY HAND at the applicant's own risk to OCBC BANK, 18 CHURCHSTREET #02-00, OCBC CENTRE SOUTH, SINGAPORE 049479, to arrive by 12.00 noon on19 March 2001 or such later date and time as the Company may, in their absolutediscretion, decide. Local Urgent Mail or Registered Post must NOT be used.


C-6

ANNEX C

Applications for Reserved Shares

1. Applications for Reserved Shares must be made using the PINK Reserved Shares ApplicationForms. ONLY ONE APPLICATION should be enclosed in each envelope.

2. The completed PINK Reserved Shares Application Form and the applicant's remittance with thename and address of the applicant written clearly on the reverse side, in accordance with theterms of this Prospectus, must be enclosed and sealed in an envelope to be provided by theapplicant. The sealed envelope must be DESPATCHED BY ORDINARY POST ORDELIVERED BY HAND at the applicant's own risk to the Company at 298 TIONG BAHRUROAD #14-02/04, CENTRAL PLAZA, SINGAPORE 168730, so as to arrive by 12.00 noon on19 March 2001 or such later date and time as the Company may, in their absolutediscretion, decide. Local Urgent Mail or Registered Post must NOT be used.


ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS

The procedures for Electronic Applications at ATMs of the Participating Banks are set out on the ATMscreens (in the case of ATM Electronic Applications) of the relevant Participating Banks (the ``Steps'').For illustration purposes, the procedures for Electronic Applications at ATMs of OCBC Bank are setout in the ``Steps for ATM Electronic Applications'' appearing on pages C-11 and C-12 of thisProspectus. Please read carefully the terms of this Prospectus, the Steps and the terms andconditions for Electronic Applications set out below before making an Electronic Application. Anyreference to the ``applicant'' in the terms and conditions for Electronic Applications and the Stepsshall mean the applicant who applies for Offer Shares through an ATM of a Participating Bank.

An applicant must have an existing bank account with and be an ATM cardholder of one of theParticipating Banks before he can make an Electronic Application at the ATMs of that ParticipatingBank. An ATM card issued by one Participating Bank cannot be used to apply for Offer Shares at anATM belonging to other Participating Banks. The Steps set out the actions that the Applicant musttake at ATMs of the OCBC Bank to complete an Electronic Application. The actions that anapplicant must take at ATMs of other Participating Banks are set out on the ATM screens of therelevant Participating Banks. Upon the completion of his Electronic Application transaction, theapplicant will receive an ATM transaction slip (``Transaction Record''), con®rming the details of hisElectronic Application. The Transaction Record is for retention by the applicant and should not besubmitted with any printed Application Form.

An applicant, including one who has a joint bank account with any of the Participating Banks,must ensure that he enters his own Securities Account number when using the ATM cardissued to him in his own name. Using his own Securities Account number with an ATM cardwhich is not issued to him in his own name will render his Electronic Application liable to berejected.

An Electronic Application shall be made on and subject to the terms and conditions of this Prospectusincluding but not limited to the terms and conditions appearing below and those set out under thesection on ``TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATIONS'' on pages C-1 toC-4 of this Prospectus as well as the Memorandum and Articles of Association of the Company.

1. In connection with his Electronic Application for Offer Shares, the applicant is required to con®rmstatements to the following effect in the course of activating his Electronic Application:±

(a) that he has received a copy of this Prospectus and has read, understood and agreed to allthe terms and conditions of application for Offer Shares in this Prospectus prior to effectingthe Electronic Application and agrees to be bound by the same;

C-7

ANNEX C

(b) that he consents to the disclosure of his name, NRIC/passport number, address,nationality, permanent resident status, CDP Securities Account number, CPF investmentaccount number (if applicable) and share application amount (the ``Relevant Particulars'')from his account with that Participating Bank to the Share Registrar, CDP, CPF, SCCS,the Company and the Manager (the ``Relevant Parties''); and

(c) that the Electronic Application made is his only application for Offer Shares and it is madein his own name and at his own risk.

His application will not be successfully completed and cannot be recorded as a completedtransaction unless he presses the `Ènter'' or `ÒK'' or ``Con®rm'' or ``Yes'' key or any otherrelevant key in the ATM. By doing so, the applicant shall be treated as signifying hiscon®rmation of each of the three statements. In respect of statement 1(b) above, hiscon®rmation, by pressing the `Ènter'' or `ÒK'' or ``Con®rm'' or ``Yes'' key, shall signify andshall be treated as his written permission, given in accordance with the relevant laws ofSingapore including Section 47(4) of the Banking Act, Chapter 19 of Singapore to thedisclosure by that Participating Bank of the Relevant Particulars to the Relevant Parties.

2. By making an Electronic Application, the applicant con®rms that he is not applying forOffer Shares as nominee of any other person and that any Electronic Application that hemakes is the only application made by him as bene®cial owner. The applicant shall makeonly one Electronic Application for Offer Shares and shall not make any other applicationfor Invitation Shares (other than Reserved Shares), whether at the ATMs of anyParticipating Bank or on the application forms. Where a person has made an applicationfor Offer Shares or Placement Shares (other than Reserved Shares) on an applicationform, he shall not make an Electronic Application for Offer Shares.

3. The applicant must have suf®cient funds in his bank account with his Participating Bank at thetime he makes his Electronic Application, failing which his Electronic Application will not becompleted. Any Electronic Application which does not conform strictly to the instructionsset out on the screens of the ATM through which the Electronic Application is beingmade shall be rejected.

4. The applicant irrevocably agrees and undertakes to subscribe for and to accept the number ofOffer Shares applied for as stated on the Transaction Record or any lesser number of OfferShares that may be allotted to him in respect of his Electronic Application. In the event that theCompany decides to allot any lesser number of such Offer Shares or not to allot any OfferShares to the applicant, the applicant agrees to accept such decision as ®nal. If the applicant'sElectronic Application is successful, his con®rmation (by his action of pressing the `Ènter'' or`ÒK'' or ``Con®rm'' or ``Yes'' key on the ATM) of the number of Offer Shares applied for shallsignify and shall be treated as his acceptance of the number of Offer Shares that may beallotted to him and his agreement to be bound by the Memorandum and Articles of Associationof the Company.

5. No applications will be kept in reserve. Where an Electronic Application is unsuccessful, thefull amount of the application monies will be refunded in Singapore dollars (without interest orany share of revenue or other bene®t arising therefrom) to the applicant by being automaticallycredited to the applicant's account with his Participating Bank within three Market Days after theclose of the Application List. Trading on a ``WHEN ISSUED'' basis, if applicable, is expectedto commence after such refund has been made.

Where an 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 bene®t arising therefrom) to the applicant by being automaticallycredited to the applicant's account with his Participating Bank within 14 days after the close ofthe Application List.

C-8

ANNEX C

Responsibility for timely refund of application monies from unsuccessful or partially successfulElectronic Applications lies solely with the respective Participating Banks. Therefore, theapplicant is strongly advised to consult his Participating Bank as to the status of his ElectronicApplication and/or the refund of any monies to him from an unsuccessful or partially successfulElectronic Application, to determine the exact number of Offer Shares allotted to him beforetrading the Offer Shares on SGX-ST. Neither SGX-ST, the CDP, the SCCS, the ParticipatingBanks, the Company nor the Manager assume any responsibility for any loss that may beincurred as a result of the applicant having to cover any net sell positions or from buy-inprocedures activated by the SGX-ST.

6. If the applicant's Electronic Application is made through the ATMs of OCBC Bank, KTB, OUB,DBS (including those of its POSBank Services division) or UOB Group (comprising UOB, FarEastern Bank Limited and Industrial and Commercial Bank Limited) and is unsuccessful, nonoti®cation will be sent by these Participating Banks.

Applicants who make Electronic Applications through the ATMs of the following banks maycheck the provisional results of their Electronic Applications as follows:±

Bank Telephone/Web-site Available atATM/Internet

Operating Hours Serviceexpected from

OCBCBank

1 800 363 3333 ATM Phone Banking/ATM Ð24 hours a day

Evening of the ballotingday

DBS 1 800 222 2222327 4767www.dbs.com

Internet Banking orInternet Kiosk

24 hours a day 7.00 p.m. on theballoting day

KTB 222 8228 ATM ATM Ð 24 hours a day

Phone BankingMon-Fri 0800-2200Sat 0800-1500

ATM Ð Evening of theballoting day

Phone Banking 8.00a.m. on the day afterthe balloting day

OUB 1 800 224 2000www.oub2000.com.sg

OUB Personal InternetBankingwww.oub2000.com.sg

OUB Mobile Buzz

Phone Banking/InternetBanking24 hours a day

OUB Mobile Buzz*:24 hours a day

Evening of the ballotingday

UOB 1 800 533 55331 800 222 2121www.uobcyberbank.com.sg**

ATM (OtherTransactions Ð ``IPOEnquiry'')

Phone Banking**/ATMÐ 24 hours a day

6.00 p.m. on theballoting day

* Applicants who make Electronic Applications through the ATMs of OUB and who have activated their OUB MobileBuzz service will be noti®ed of the results of their Electronic Applications via their mobile tele-phones.

** Applicants who make Electronic Applications through the ATMs of UOB Group may check the results of theirElectronic Applications through UOB Cyberbank, UOB Group ATMs or UOB Phone Banking Services.

7. Electronic Applications shall close at 12.00 noon on 19 March 2001 or such later date and timeas the Company may, in consultation with the Manager, decide.

8. The applicant is deemed to have requested and authorised the Company to:±

(a) register the Offer Shares allotted or allocated to the applicant in the name of CDP fordeposit into his Securities Account;

(b) send the relevant Share certi®cate(s) to CDP;

(c) return or refund (without interest or any share of revenue or other bene®t arising therefrom)the application monies in Singapore currency, should his Electronic Application be rejected,by automatically crediting the applicant's bank account with his Participating Bank with therelevant amount within three Market Days after the close of the Application List; and

C-9

ANNEX C

(d) return or refund (without interest or any share of revenue or other bene®t arising therefrom)the balance of the application monies in Singapore currency, should his ElectronicApplication be accepted in part only, by automatically crediting the applicant's bankaccount with his Participating Bank with the relevant amount within 14 days after theclose of the Application List.

9. The applicant irrevocably agrees and acknowledges that his Electronic Application is subject torisks of electrical, electronic, technical and computer-related faults and breakdowns, ®res, actsof God and other events beyond the control of the Participating Banks, the Company and theManager and if, in any such event, the Company, the Manager and/or the relevant ParticipatingBank do not record or receive the applicant's Electronic Application, or data relating to theapplicant's Electronic Application or the tape containing such data is lost, corrupted, destroyedor not otherwise accessible, whether wholly or partially for whatever reason, the applicant shallbe deemed not to have made an Electronic Application and the applicant shall have no claimwhatsoever against the Company, the Manager and/or the relevant Participating Bank for theOffer Shares applied for or for any compensation, loss or damage.

10. The existence of a trust will not be recognised. Any Electronic Application by an applicant mustbe made in his own name and without quali®cation. The Company will reject any ElectronicApplication by any person acting as nominee.

11. All particulars of the applicant in the records of his Participating Bank at the time he makes hisElectronic Application shall be deemed to be true and correct and his Participating Bank and theRelevant Parties shall be entitled to rely on the accuracy thereof. If there has been any change inthe particulars of the applicant after the time of the making of his Electronic Application, theapplicant shall promptly notify his Participating Bank.

12. The applicant should ensure that his personal particulars as recorded by both CDP and therelevant Participating Bank are correct and identical, otherwise, his Electronic Applicationis liable to be rejected. The applicant should promptly inform CDP of any change in address,failing which the noti®cation letter on successful allotment and other correspondence from theCDP will be sent to his address last registered with CDP.

13. In consideration of the Company arranging for the Electronic Application facility through theATMs of the Participating Banks and agreeing to close the Application List at 12.00 noon on19 March 2001 or such later time or date as the Directors, may, in consultation with theManager, decide, by making and completing an Electronic Application, the applicant agreesthat:±

(a) his Electronic Application is irrevocable;

(b) his Electronic Application, the acceptance by the Company and the contract resultingtherefrom under the Invitation shall be governed by and construed in accordance with thelaws of Singapore and he irrevocably submits to the non-exclusive jurisdiction of theSingapore courts;

(c) none of the Company, the Manager and the Participating Banks shall be liable for anydelays, failures or inaccuracies in the recording, storage or in the transmission or deliveryof data relating to his Electronic Application to the Company or CDP due to a breakdown orfailure of transmission, delivery or communication facilities or any risks referred to inparagraph 9 above of this Prospectus or to any cause beyond their respective controls;

C-10

ANNEX C

(d) in respect of Offer Shares for which his Electronic Application has been successfullycompleted and not rejected, acceptance of the applicant's Electronic Application shall beconstituted by written noti®cation by or on behalf of the Company and not otherwise,notwithstanding any payment received by or on behalf of the Company; and

(e) he will not be entitled to exercise any remedy of rescission or misrepresentation at any timeafter acceptance of his application.

Steps for ATM Electronic Applications

An applicant making an Electronic Application through the ATMs of OCBC Bank shall be viewing thefollowing instructions on the ATM screens of OCBC Bank. Certain words appearing on the screen arein abbreviated form (`à/c'', `àppln'', `ÈSA'', ``no.'' and ``&'' refer to `àccount'', `àpplication'',`èlectronic share application'', ``number'' and `ànd'' respectively). Instructions for ElectronicApplications appearing on the ATM screens of the Participating Banks (other than OCBC Bank) maydiffer from those represented below.

Step 1 : Insert your personal OCBC ATM card

2 : Enter your Personal Identi®cation Number

3 : Select `Òther Services''

4 : Select `Èlectronic Share Appln''

5 : Select ``Tung Lok''

6 : For an applicant making an Electronic Application at the ATM for the ®rst time

(a) For non-Singaporean

Press the ``Yes'' key if you are a permanent resident of Singapore, otherwise,press the ``No'' key.

(b) Enter your own Securities Account number (12 digits) eg. 168101234567 andpress ``Yes'' key to con®rm that the Securities Account number you haveentered is correct.

7 : Check your particulars appearing on the screen and press the ``Correct'' key tocon®rm that your particulars are correct.

8 : Press the ``Con®rm'' key to con®rm that you have read the following messages:±

± You have read, understood and agreed to all terms of appln & Prospectus

± You consent to disclose your NRIC/Passport No., address, nationality,securities a/c no., no. of shares applied for and CPF investment a/c no. toshare registrar, CDP, CPF, SCCS, Issuer & Vendors(s)

± This appln is made in your own name & at your own risk

9 : Press the ``Con®rm'' key again to con®rm that you have read the followingmessages:±

± Where applicable, a copy of the Prospectus/Document has been lodgedwith and registered by Registrar of Companies & Businesses in Singaporewho takes no responsibility for its contents

± The Prospectus/Document are available at various Participating Banks

10 : Select the number of Shares you wish to apply for

± For ®xed price ESA, this is the only application submitted

± Fixed Price: $0.23

C-11

ANNEX C

11 : Select the type of bank account to debit your application monies

12 : Check the details of your application appearing on the screen and press the``Con®rm'' key to con®rm your application

13 : For customers with multiple bank accounts, select the bank account from which todebit your application monies

14 : Remove Transaction Record for your reference only

C-12

ANNEX C


(#175) Dtp 65 Page:InsideBackCover

Singapore’s Best Restaurants List by Singapore Tatlersince 1985 (except for 1988, 1989 and 1992)

Wine & Dine’s Singapore’s Top Restaurants List since 1996

Singapore’s Best Restaurants List by Singapore Tatler since 1999Wine & Dine's Singapore’s Top Restaurants List since 1998Host of the World Gourmet Summit in 1998, 1999 and 2000“Best Wine List” award in the Asian category by Wine & Dine in 2000

Singapore's Best Restaurants List by Singapore Tatler since 1992 (except for 1997)Wine & Dine's Singapore's Top Restaurants List since 1996Best Service Award by Wine & Dine in 2000

“Most Popular Chinese Restaurant” in RCS Gourmet Hunt 1998Singapore’s Best Restaurants List by Singapore Tatler since 1997Wine & Dine's Singapore's Top Restaurants List since 1996

Singapore’s Best Restaurants List by Singapore Tatler since 1998Wine & Dine's Singapore’s Top Restaurants List since 1997

“Best Dish Award” in RCS Gourmet Hunt 1998Singapore’s Best Restaurants List by Singapore Tatler since 1995Wine & Dine's Singapore's Top Restaurants List since 1996


Singapore’s Best Restaurants List by Singapore Tatler in 2000


“Most Popular Chinese Restaurant” in RCS Gourmet Hunt 1997 and 2000“Best Dish Award” in RCS Gourmet Hunt 1997Singapore's Best Restaurants List by Singapore Tatler since 1985(except for 1987 to 1989)Wine & Dine’s Singapore’s Top Restaurants List since 1996Inducted into Restaurants Asia “Fine Dining Hall of Fame” in April 2000

“Best Dish Award” in RCS Gourmet Hunt 2000Singapore's Best Restaurants List by Singapore Tatler in 2000

Opened December 2000 at The Fullerton Hotel

Opened March 2001 at Novena Square


(#175) Dtp 65 Page:InsideFrontCover

the employees and business associates of the Group,

payable in full on application.

Invitation in respect of 20,000,000 new ordinary sharesof $0.025 each as follows:-

(Incorporated in the Republic of Singapore on 29 June 2000)

Manager, Underwriter and Placement Agent