realising a sustainable future

Annual Report 2009

Realising a sustainable Future

Your TrusTed ParTner in alTernaTive invesTmenTs

Contents

02 Corporate Profile05 Chairman’s Message10 Our Business19 Corporate Developments for the Year20 Milestones21 Operations Review25 Board of Directors28 Key Management31 Management Organisation32 Financial Highlights33 Corporate Governance Report45 Independent Auditors’ Report46 Balance Sheets 48 Consolidated Income Statement49 Consolidated Statement of Comprehensive Income50 Consolidated Statement of Changes in Equity51 Consolidated Cash Flow Statement53 Notes to the Consolidated Financial Statements 105 Statistics of Shareholdings107 Notice of Annual General Meeting

Uni-Asia Finance Corporation is an alternative investment company. Leveraging on our specialised skills in structured finance, we not only provide finance arrangement services for ships, but also act as an investment manager as well as an investor.

With long-term stability as our goal, we, at Uni-Asia Finance Corporation, continue to strive to create value by offering alternative investment opportunities, built on and buoyed by a strong asset mix and suite of strategies.

As we set our sights on a sustainable future, our focus is on optimising our investment in and management of quality properties and commercial maritime vessels, while maintaining a prudent operational approach.

Our Business

We are primarily engaged in providing alternative investment opportunities for investors, performing a variety of roles such as an asset manager, a hotel operator, a co-investor, a finance arranger, and a fund manager.

Our investment FOcus

Our investment mix comprises commercial vessels and properties in Japan and China. Leveraging on our background as a structured finance service provider, we have also been creating new types of investment products: private property funds and private shipping funds.

Our POsitiOn

Our unique investment platform is backed by financial expertise coupled with asset operating capabilities in hotel operations and ship management. Simultaneously, we are a one-stop financial service provider that provides various financial products that are ship-related and property-related.

Our strength

Our management team has extensive experience in the structured finance industry as well as in the shipping and property industries. We have a good understanding of industry requirements and possess a client-driven focus and an established investment strategy.

We provide integrated financial services in maritime investment and property investment. While there may be competitors in each field, we believe that we are unique in terms of asset mix and business focus.

Corporate Profile

Understanding Uni-Asia Finance Corporation

Our current business focus is in two types of underlying assets – commercial ships and real estate properties.

2 uni-Asia Finance corporation Annual Report 2009

cOrPOrAte OrgAnisAtiOn

Major group of companies are set out below:

uni-Asia Finance corporation*(Hong Kong)

Alternative Assets investments

uni-Asia capital (singapore) Limited

(Singapore)Fund Management

uni ships and management Limited

(Hong Kong)Project Management

uni-Asia Finance corporation (Japan)

(Japan)Finance Arrangement

capital Advisers co., Ltd.(Japan)

Property Investment & Management

uni-Asia capital company Limited

(Hong Kong)Investment Holding

vista hotel management co., Ltd

(and other hotel operating

companies)(Japan)

Hotel Operation

uni-Asia guangzhou Property

management company Limited

(PRC)Property Investment &

Management

Offshore Property investment corporation

Investment Holding

Business mOdeL

In our alternative investment platform, we are acting as a co-investor as well as the financial service provider.

UAF as InvestorUAF as InvestorinvestOrs uni-AsiA FinAnce (uAF) investOrs

Finance Arrangement•Charter Brokerage•Fund Initiation/Origination•Fund Management•Assets Management•Hotel Operation•

ALternAtive Asset investments

Investments Investments

100% 100% 80% 44.8% 47.9% 100%20%

100%

100%

Above is for illustrative purposes only. Some of the companies are omitted here. •

As at 31 December 2009•

* Incorporated in Cayman Islands

Property Investment/management in Japan and

Hotel Operation

Property Investment/ Management

in China

Maritime Investment/Management


Property Investment/Management in China

Listed on SGX

Properties

Office Residential Hotel

JapanChina

Commercial Vessels

Containership Bulker Product Tanker

3Realising A Sustainable Future

enhancing Our investment Platform

Chairman’s Message

“To capture upcoming business opportunities in the midst of economic recovery with less reliance on external borrowings.”

Mr Kazuhiko Yoshida Chairman and CEO

Dear Shareholders,

The year ended 31 December 2009 (“FY2009”) was a year for Uni-Asia Finance Corporation (the “Company” or collectively with its subsidiaries, the “Group”) to weather the challenging business environment caused by global financial crisis.

FY2009 started with an uncertainty and fear of a global recession, purportedly to be the worst financial crisis since the Great Depression of the 1930s. Businesses were cutting back on capital expenditure and staffing, while consumer demand decreased dramatically in the first half of the year. Governments and central banks in many countries responded to the situation with unprecedented fiscal and monetary stimulus packages to sustain their economies.

Fortunately, faster recovery in emerging countries such as India and China has propelled the world economy upward. However, most of the advanced countries recorded negative GDP growth in 2009 and the pace of recovery is said to be slower than in the past recessions.

Our ship investment / management business was unavoidably affected by the global financial crisis and recession. Because of the lack of liquidity from the banks and stringent conditions

even if loans were available, raising funds from the banks to finance vessel purchases, and arrangement of such financing had been difficult throughout the year. Investors also had a diminished appetite for ship investment due to uncertainty of the maritime industry and this also slowed down our business development.

Our property investment / management business in Japan also remained subdued throughout the year under a depressed Japanese economy, and with no signs of improvement yet. Hotel operations were also heavily hit by the deteriorating economic situation with less business trips due to budget cuts and less overseas customers due to the global recession and an appreciation of Japanese yen, which reduced our hotel income.

To cope with the above challenging business environment, the management team focused on establishing a lean cost structure by reducing operating expenses including top management’s benefits and relocating our Tokyo office. We have successfully reduced our operating cost so as to lower our breakeven point.

“Though our performance in 2009 is reflective of a challenging business outlook in a global scale, our fervor to generate value by optimising our core investment platform remains strong.”


employing Prudent measures


In the meantime, we also practised prudent cash resource management and reduced the external debt of Capital Advisers by disposing some property assets. In addition, we successfully exercised a private share placement to Yamasa Co., Ltd, by issuing 52,199,200 new shares at S$0.49, which resulted in S$25.3 million in net proceeds. This equity fund raising exercise contributed not only to the enhancement of our cash flow but also strengthened our balance sheet.

Despite the above efforts, cost reduction could not make up for the significant fall of the revenue which was more than expected. This included loss on disposal of properties (US$1.8 million) and fair value adjustment loss on investment in hotel and residential property funds (US$5.8 million), which reduced investment returns. Furthermore, impairment of assets such as hotel properties and account receivables coupled with a provision on onerous contracts increased our expenses. As a result, the Group, unfortunately incurred a net loss of US$15.7 million for FY2009.

strAtegic directiOn

The external environment, though challenging, is something that we will weather through. We will continue to seek business developments in line with our current business model in order to flexibly cope with continuous tough business environment.

While a number of indicators point to the start of an economic recovery, such as a recovering stock market and export-led growth by emerging countries, unemployment continues to be at the high throughout Europe, US, and Japan. A recovery of

consumer spending and investment by private sector is yet to be confirmed. Therefore, a return to pre-crisis condition is not imminent due to the current slow pace of recovery. Assuming a prolonged sluggish economy, we will try to focus on the following three points:

1. To capture upcoming business opportunities in the midst of economic recovery with less reliance on external borrowings;

2. To continue prudent cash resource management; and3. Stringent cost management for a more resilient cost

structure.

shiP investment / mAnAgement

We expect that the maritime industry would continue to suffer from a lower level of cargo traffic volume, though it depends on vessel types. Among the various types of vessels, we focus on dry bulk carriers, taking into consideration the liquidity and current market situation. As at 31 December 2009, the Company’s consolidated free cash balance was approximately US$53 million. We believe that we would be well positioned to capitalise on opportunities presented during the current slowdown of the shipping industry and market. Amongst other things, we are considering the launching of a new opportunity-driven fund which invests in discounted vessels, with a focus on small handy bulk carriers. We will also look at some other opportunities to expand our maritime investment/ management business in line with our business model by making use of our strengthened cash position.

“Maintaining a lean cost structure and exercising prudence in management of our cash resources remain vital to our overall strategy.”


eyeing growth Opportunities

As we foresee the continuous tight credit policy of financial institutions, we will emphasise more on equity investment with other investors, with less reliance on non-recourse ship financing.

PrOPerty investment / mAnAgement

The property market in Japan is still frozen. Lack of available financing is making the sales-purchase transactions difficult which is adversely affecting our property investment/ management business. Assuming this situation continues for the time being, we will make efforts to maintain the resilient operating cost structure. We will focus more on our fee business which does not require additional investment and bank finance. In order to improve the hotel performance, we had enhanced its management structure so that we can pay more attention to hotel operation and take necessary actions quickly to cope with the changes in the market. Even though we expect the hotel performance to improve in line with the recovery of the economy in 2010, the market situation is still unstable. To survive the tough business environment, we will undertake more detailed marketing for each hotel.

China’s economy is now one of the driving forces pulling the world economy back on track of recovery. Our first investment in office units in Guangzhou is performing well, and we will consider similar investment opportunities when available. We have been looking at logistics-related business opportunities in China, because we believe that we can leverage on our experiences in financing services for transportation / property sector. In 2009, we started to provide administrative advisory services in respect of a warehouse project in China, where the other party invests in and operates the warehouse facilities.

We are thus acting as a service provider without any equity interest in the project. We may seek for another opportunity to expand this sort of service function by using our existing capabilities in ship / property asset management.

cOnFidence FOr the Future

The outlook for the year 2010 is still uncertain, whether the world economy will be back on trail of a self sustaining economic recovery from recession or do we face prolonged sluggish economic outlook with a double dip recession in the world economy including Japan. In either case, we expect that there will be some good chances to capture attractive investment opportunities which will promote our future growth. Realising opportunities for growth, we will move quickly by taking advantage of our available cash resources. We will continue to enhance our performance by prudent resources management and appropriate resource allocation.

The Board and I are confident that our strategy and our existing resources will enable us to overcome the current difficult business environment and to attain future growth after the end of the economic crisis. We believe that our contributions as an alternative asset management company will continue to benefit our customers with outstanding growth opportunities, and create value for our shareholders.

mr Kazuhiko yoshidaChairman and CEO15 March 2010

“Signs of global economic recovery combined with potential income channels from our existing wide business network open up new possibilities for Uni-Asia Finance Corporation.”



Our Business

Income Structure

Non-recurrent income

Recurrent income

Realised gain

Arrangement & agency fee

Fair value adjustment

Incentive fee& Project

management fee

Interest on performance note

Property rental

Income from hotel operation

Asset management

fee

Administration fee

Brokerage commission

Asset Management Business

Investment Business

Hotel Operation

With our alternative investment platform, we act as a co-investor as well as financial service provider. Our income sources from these activities are categorised as: 1) fee income 2) investment returns and 3) hotel income. They are also classified as recurrent type income and non-recurrent type income. We are going to increase the proportion of recurrent income to create a more stable income structure on which we will seek for one-off income which is more opportunistic in nature.

Try to realise by taking opportunities

Strengthen as our foundation


Various activities of both the maritime investment / management and property investment /management generate various income streams in the form of fee income and investment returns. By providing an integrated service to our customer, we are thus taking various profit opportunities from multiple source of income.

Business incOme And Our Activities

ActivitiesActivities

Maritime Investment & Management

Broking vessel charter/Broking vessel sale/purchase

Divestment arrangement of the vessel under management

Private ship investment fund/ co-investment management

Chartering a vessel to third parties

Investment in shipping fund/ ship owning companies

Investment in ship owning companies (dividends/disposal)

Fair valuation of investment in shipping fund/ship owning companies

Bridge loan/shareholder’s loan to ship investment fund & co-investment

Property Investment & Management/Hotel operation

Hotel fund asset management (improvement of hotel operation)

Private property investment fund management

Hotel operation by management/lease contract with hotel owner

Fair valuation of investment in property fund/property owning SPCs

Investment in property fund (dividends/disposal)

Rental of hotel related facilities/ office unit in China to third parties

Business income

Brokerage Commission

Incentive Fee

Asset Management & Administration Fee

Charter Income

Hotel Operation Income

Interest on Performance Note

Property Rental

Realised Gain/(Loss)

Fair Value Adjustment

Interest Income

Arrangement & Agency Fee

Ship finance arrangement/ agency work

Finance arrangement/ acquisition & disposal of properties

Initiation/origination of investment project

Project ManagementFee


Our Business

investment in shiPs

As part of our business model, we act as a co-investor, while providing financial services in relation to ship investment. The purpose of our investment is to aim for investment returns as a stable income stream and also to demonstrate our confidence and commitment to investors that we invite.

Our current vessel investment portfolio comprises containerships, handy-size bulkers, and product tankers. As at 31 December 2009, the number of vessels we have invested

in (including vessels before delivery) is 11, comprising 4 handy size dry bulk ships, 2 product tankers, and 5 containerships. This number has fallen from 14 a year ago, which was caused by our cancellation of the shipbuilding contracts of three handy size bulkers of 33,400 DWT (two of them are through our wholly-owned subsidiaries) due to the shipbuilder’s financial difficulties. One dry bulk vessel and one containership were delivered in 2009 respectively. Among the 11 vessels, two vessels are before delivery.

vessel List


PROduCt tANkeR BuLkeRCONtAINeRSHIP

shipyards: (1) Kanda (2) Imabari (3) Y-Nakanishi

Legend: Before Delivery

Charter Contract

(4) Onomichi(5) Hyundai Mipo

Owner’s swap option for charter contract between two tankers

tyPe cAPAcitytyPe OF

investmentchArter PeriOd chArterer

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 Bulker (1) 32,700 DWT Ship Investment Fund

NYKGB

2 Bulker (1) 28,300 DWT Co-investment MOL

3 Bulker (2) 37,300 DWT Co-investment MOL

4 Bulker (3) 29,200 DWT Co-investment NYKGB

5 Product Tanker (4) 47,094 DWT Ship Investment Fund

TORM

6 Product Tanker (4) 50,000 DWT Ship Investment Fund

TORM

7 Container (5) 3,500 TEU Ship Investment Fund

Evergreen


Evergreen


Evergreen

10 Container (5) 4,300 TEU Co-investment Evergreen

11 Container (5) 4,300 TEU Co-investment Evergreen

* Delivery Scheduled

* Delivery Scheduled


Our maritime investment portfolio is classified as i) investment with 100% ownership, ii) co-investment with other investors and iii) investment in ship investment fund.

I) InvestMent In vessels wItH 100% ownersHIP

This is a transitional stage of investment until we invite other investors to join. When we find good investment opportunities, we will acquire vessels using our own equity investment without waiting for the establishment of a co-investment structure or ship investment fund. It is necessary for us to take a quick action in order to seize good opportunities that come our way. Fixing the charter contract will be done at the same time or immediately after the decision to acquire is made. This investment would be later changed to a co-investment or investment in ship investment fund to reduce our equity investment burden. In 2009, three vessels of such vessels were cancelled as explained and our 100% investment in a 4,300 TEU containership was changed to a co-investment with the entry of another investor. As a result, there are no vessels with us as sole investor as at 31 December 2009.

II) Co-InvestMent wItH otHer Investors

Under our co-investment activity, we invest in the vessel owning company together with a few other investors. Our investment portion is usually not more than 50%, and we can diversify our investment portfolio by sharing the risk and reward of the investment with other investors. As at 31 December 2009,

we have co-investment in 5 vessels among the total 11 vessels that we are investing and managing. While we foresee the continuous tight credit policy of financial institutions this year, we will focus more on such equity investment with less dependence on external borrowings. We will also consider to take majority interest, if necessary.

III) InvestMent In PrIvate sHIP InvestMent fund

The Akebono Fund was established in April 2007 by the Company together with other sponsors, taking advantage of the Approved Shipping Investment Enterprises status granted by Maritime & Port Authority of Singapore (“MPA”) under the Maritime Finance Incentive (“MFI”) scheme. Uni-Asia Capital (Singapore) Limited, a wholly owned subsidiary of UAF, was granted the status of Approved Shipping Investment Manager under MFI scheme, and acts as a ship investment manager.

We are investing in 6 vessels through the Akebono fund. We had also established Searex Fund I & II, which were both private ship investment funds and they were already successfully closed by disposing their vessel portfolio. We are considering launching a new opportunity–driven ship investment fund, that invests in discounted vessels, with a focus on small handy bulk carriers.

For future growth, we are also studying the possibilities of investment in different types of vessels where our business model is applied.


Our Business

mAnAgement OF shiP investment

For the private ship investment fund mentioned above, Uni-Asia Capital (Singapore) Limited acts as a ship investment manager that provides management and administration services for investors of the fund. We are also providing management and administration services to other investors in the case of co-investment.

The tonnage of vessels under our management had been increasing steadily until 2008. However, due to the cancellation of three dry bulk carriers and no new vessel investments contracts entered in 2009, it has decreased to 460k dwt from 560k dwt in 2008.

structured FinAnce ArrAngement

Our structured finance team provides integrated services to our clients, including ship investment funds and co-investments that we are involved in as an investor. In addition to financing solutions, we also provide charter arrangement services customised to our clients’ needs. These solutions do not normally involve the use of our balance sheet capital to make loans and we typically act only as the arranger and agent for the structured financing provided by third-party financial institutions.

In 2009, ship financing banks, especially European banks which had been providing ship financing aggressively until 2008, were generally quiet. Those banks were heavily impaired by the worsening global financial crisis. In addition, Basel II which requires banks to set aside more capital, further limited the capital for lending. Japanese banks were also taking conservative credit policies to ship financing. Lending terms, even if funds were available, became more stringent than before. Our structured finance business was thus affected by this market condition, and we recorded a lesser amount of financial arrangement fee in 2009.

Value of structured finance arrangement

tonnage of vessels under management

600

500

400

300

200

100

0

DW

T ‘0

00

2004 2005 2006 2007 2008 2009

1200

1000

800

600

400

200

0

US$

Mill

ion

2004 2005 2006 2007 2008 2009

Note: Including vessels wholly owned by the Company and vessels before delivery


Property Investment / Management in Japan

Similar to our maritime investment / management business, Capital Advisers Co., Ltd, our 92.7% subsidiary acts as co-investor while providing services as asset manager to show our commitment to the property project. Our focus is on i) residential properties and ii) hotel projects in Japan primarily.

investment/mAnAgement OF residentiAL PrOPerty

Our asset management portfolio of residential property consists of large and medium-sized properties and small-sized properties as below:

Assets under management (as at 31 dec 2009)(Residential property)

Asset tyPe numBer OF BuiLdings

numBer OF units

Large and Medium Sized 44 1,692

Small Sized 37 659

Residential Total 81 2,351

As for the large and medium sized residential properties, Grosvenor Asia and our company jointly established an investment partnership with another investor and our investment started in 2000 followed by the establishment of the GCAP fund in 2004. This fund is jointly managed by Grosvenor and our subsidiary, Capital Advisers. Grosvenor Asia is a subsidiary of the Grosvenor Group, which is an international property development and investment group. We started to negotiate with potential buyers for disposal of some of the projects to fix the investment return.

We have also set up another residential fund in July 2005, called “Stable Residential Fund” working jointly with Grosvenor Asia and Diamond Realty Management Inc. (“DREAM”), a 100% subsidiary of Mitsubishi Corporation, one of the major trading companies in Japan, focusing on real estate investment fund business. This fund also invests in medium to large-sized properties with a relatively high and stable occupancy, located in the Tokyo metropolitan area. The Fund’s average occupancy ratio stands at around 90% as at 31 December 2009, having been affected by the recession and fallen slightly from 92.5% a year ago. We are making efforts to increase occupancy ratio so as to improve the investment returns for investors.

The characteristics of properties under our small-sized residential fund are that they are located in Tokyo metropolitan area where population growth is expected and within walking distance from train stations. The target customer group for these properties is single working men and women in Tokyo area.

We have invested in a collection of small properties that represents a well diversified portfolio. During 2009, we disposed three small-sized residential properties, which had been solely owned by us, to reduce our bank loan balance in line with the deleveraging strategy of the Group. A number of properties held by the fund had also been transferred to third parties in 2009, which resulted in a reduction of our asset management portfolio.

SAPPORO-2

tOkyO-72

NAGOyA-1

OSAkA-1

The property market in Japan including residential property market, have been affected significantly by the global financial crisis and following recession in Japan throughout the year. Because of the diminished demand for property and lack of financing, the sales-purchase transaction market has hovered at a low level and not recovered. Our basic business model, which is the continuous cycle of A) to develop property project B) to act as asset manager for the developed project and C) to dispose properties to third party, was heavily hit by the depressed property market.

Location of residential projects under management (all residential types)


Our Business

We could not increase our investment / asset management portfolio because the market situation did not allow it. Rather, we sold some of our residential properties in order to deleverage and cope with the depressed financial market conditions.

Assets under management (residential property)

The value of our investment was also affected and we needed to recognise fair value adjustment loss on investment in residential property funds in FY2009 (US$1.6 million).

Investment / management of Hotel Project

From 2001, Capital Advisers directed its attention to the asset investment / management business in the hotel property sector. The focus has been on investment in limited-service hotels.

Assets under management (hotel property)

As at 31 December 2009, we were engaged as the asset manager for 11 hotels, a reduction from 14 hotels a year ago. The number of hotel rooms under our management also decreased from FY2008.

Hotel name no. of

Bldgs

no. of

rooms

Hotel oPerated

By ca grouP

ca’s equIty

Investment

Skycourt Hotel Asakusa 1 96 N Y

Skycourt Hotel Asagaya 1 112 N Y

Toyocho Vista Hotel 1 144 Y Y

Hotel Vista Sapporo Nakajimakohen

1 113 Y Y

Hotel Vista Shimizu 1 152 Y Y

Hotel Vista Premio Dojima 1 141 Y Y

Hotel Vista Atsugi 1 165 Y Y

Hotel Vista Kumamoto Airport

1 139 Y Y

Hotel Vista Ebina 1 176 Y Y

Hotel Vista Grande Osaka 1 304 Y N

Hotel Vista Kyoto 1 215 Y Y

total 11 1,757

The asset management fee of some of the hotels has also decreased from FY2008. This is because our fees are usually variable, depending on the performance of the hotel. Most of the hotels we managed were adversely affected by the global and domestic recession, which resulted in a decrease in the number of business travellers as well as tourists from overseas due to an appreciation of the Japanese Yen.

Our investments in hotel funds are evaluated based on the performance of property owning SPCs, which recognise the hotel as fixed assets. Our investments in hotel assets are thus subject to an impairment test. We recognised fair value adjustment loss on investment in hotel funds (US$4.2 million), which affected our financial results for FY2009.

Assets under management (hotel property) (As at 31 Dec 2009)

3000

2500

2000

1500

1000

500

0Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

3000

2500

2000

1500

1000

500

0Dec-05 Dec-06 Dec-07 Dec-08 Dec-09

No.

of R

oom

No.

of U

nit

Note: Including Capital Advisers’ own investment projects and properties under constructions

Note: Including Capital Advisers’ own investment projects and properties under constructions

Note: Including Capital Advisers’ own investment project.

16 uni-asia finance corporation Annual Report 2009

tOKyO AreA

Asakusa Vista Hotel•Toyocho Vista Hotel•Hotel Vista Kamata•Hotel Urbain Kamata •Annex

KAnAgAwA PreFecture

Hotel Vista Hashimoto•Hotel Vista Atsugi•Hotel Vista Ebina•

OsAKA AreA

Hotel Vista Grande Osaka•Hotel Vista Premio Dojima•

Hotel Vista Sapporo Nakajimakohen

Hotel Vista Shimizu

Hotel Vista Kumamoto Airport

Hotel Vista Kyoto

hOteL OPerAtiOn

Capital Advisers, as an asset manager in hotel property investment, employs a team which is experienced in the hotel sector. Capital Advisers is also involved in the hotel operation through its wholly owned subsidiary, Vista Hotel Management Co., Ltd

hotel List (Operated by capital Advisers)

hOteL LOcAtiOn OwnershiP numBer OF rOOms

Business tyPe*

OPening/AcquisitiOn

OriginAL OPening

mAJOr custOmers

1 Asakusa Vista Hotel Asakusa, Tokyo J-REIT 136 Lease August-05 December-86 Tourist

2 Toyocho Vista Hotel Toyocho, Tokyo Private Fund 144 Operation August-05 July-92 Business traveller

3 Hotel Vista Kamata Kamata, Tokyo J-REIT 106 Lease June-06 May-91 Business traveller

4 Hotel Urbain Kamata Annex Kamata, Tokyo J-REIT 70 Lease June-06 May-04 Business traveller

5 Hotel Vista Sapporo Nakajimakohen Sapporo, Hokkaido Private Fund 113 Lease December-06 - Business traveller

6 Hotel Vista Shimizu Shimizu, Shizuoka Private Fund 152 Lease March-07 - Business traveller

7 Hotel Vista Premio Dojima Dojima, Osaka Private Fund 141 Operation August-07 August-90 Business traveller

8 Hotel Vista Hashimoto Hashimoto, Kanagawa J-REIT 99 Lease August-07 December-86 Business traveller

9 Hotel Vista Atsugi Atsugi, Kanagawa Private Fund 165 Operation September-07 - Business traveller

10 Hotel Vista Kumamoto Airport Kumamoto, Kumamoto Capital Advisers 139 Own/operation January-08 - Tourist

11 Hotel Vista Ebina Ebina, Kanagawa Private Fund 176 Lease October-08 - Business traveller

12 Hotel Vista Grande Osaka Soemoncho, Osaka Private Fund 304 Lease November-08 - Tourist

13 Hotel Vista Kyoto Kyoto, Kyoto Private Fund 215 Operation June-09 - Tourist

total 1,960

* Business Type Lease: Capital Advisers Group lease-in the hotel from the owner and operates Operation: Capital Advisers Group operates the hotel under the operating contract.


Our Business

In 2009, we pulled out of the operation of Oita Toyo Hotel while Hotel Vista Kyoto opened under our operation. As at 31 December 2009, we are operating 13 hotels with our target customers being mainly business travellers and tourists who require quality hotel accomodation at reasonable rates. Hotel operations were affected by economic recession due to the travel budget cuts of the business travellers and tourists, both domestic and overseas. Overall hotel occupancy rates indicated a sharp slide since the end of 2008 and while moderate recovery was seen toward the end of 2009, the average occupancy in 2009 was lower than that of 2008. With the enhancement of the management team of Vista Hotel Management, we are trying to be back on the recovery trail in terms of hotel performance.

new Business

We have obtained two new asset management deals in which we act as an asset manager for office building funds to replace the existing asset manager. We just took over the asset manager’s position without equity investment. Office property is a new type of asset management portfolio for the company. We will try to seize such new opportunities as asset manager of the funds.

China BusinessLeveraging on our finance arrangement business and distressed asset fund management business in China, we started property investment in China in January 2007. We acquired pre-sale 14 office units with gross floor area of 1,320 sqm of the China Shine Plaza, a commercial development in the Tianhe commercial district in Guangzhou through Uni-Asia Guangzhou Property Management Co., Ltd, a wholly owned property investment company. All of 14 units are now leased out to third parties and the market value of our office property had appreciated after our purchase to date.

In 2009, we had contracted a service agreement with one of the largest trading houses in Japan, in which we provide administrative advisory services for their investment in warehouse facility in Shenzhen. This is the first time we provided such an administration service in relation to an investment in China. We will increasingly explore this sort of asset management related business in China by making use of our assets management experience in ship investment and property investment.

We have been widening our network in the field of property investment in Hong Kong with the aim of seeking out good investment opportunities. When some of these opportunities are realised, it will be the first step for us to develop our asset management business in Hong Kong.


Corporate developments for the Year

JAnuAry

Delivery of one •container ship and commencement of a 10-year charter hire contract with Evergreen Group

FeBruAry

Release of full year •results for FY2008

APriL

Receipt of refund of pre-delivery instalment •payments in relation to three bulk carriers shipbuilding contracts. US$13.1 million (JPY1.26 billion)Annual General Meeting for FY2008 at M Hotel•

mAy

Release of 2009 Q1 •resultsMeeting of Akebono •Fund noteholders held in Singapore

June

Cancellation of three shipbuilding contracts caused •by shipbuilder’s court application due to its financial problem Cancellation of charter contracts with PCL in relation to •the above cancellation of shipbuilding contractsOpening of Hotel Vista Kyoto under our operation•Capital Advisers’ relocation as a measure of cost control•

JuLy

Announcement •of cessation of an Executive Vice President

August

Extraordinary General Meeting for a private share •placement Exercise of private placement to Yamasa. Co., Ltd. •(S$25.5 million) Yamasa became the largest shareholder of the company •with 19.53% interest (registered in the name of a nominee) Release of 2009 Q2 results•

sePtemBer

Entering into loan •agreement by a ship owning subsidiary for purchase of a bulk carrier

OctOBer

Settlement of a litigation •case of Capital Advisers by judicial settlement, which is beneficial to us

decemBer

Change in shareholders structure of a ship owning subsidiary (containership) •The company’s shareholding was reduced from 100% to 50%Change in shareholders structure of a ship owning subsidiary (bulk carrier) •The company’s shareholding was reduced from 80% to 45% Conclusion of service agreement with a Japanese trading house in relation to its •warehouse project in China

nOvemBerDelivery of a bulk carrier and commencement of a 4-year •charter hire contract with NYK groupMeeting of Akebono Fund noteholders held in Singapore•Organisation of clients seminar with Dr Eisuke Sakakibara •of Waseda University as Guest Speaker in Tokyo ”Japanese economy under the new government”Release of 2009 Q3 results•Shipping industry workshop for non-executive directors by •the external consultant


Milestones

Issued 52,199,200 new shares and placed to Yamasa Co., Ltd. The paid-up •capital was increased from US$41,759.360 comprising 260,996,000 shares to US$50,111,232 comprising 313,195,200 shares

Increased equity interest in Capital Advisers to 92.7%•Increased equity interest in Uni Ships and Management Limited to 100%•

Made a direct investment into office units in Guangzhou•Launched our first Singapore ship investment fund under MFI scheme- •Akebono FundCompany was listed on the Main Board of the Singapore Exchange Securities •Trading Limited

Wholly-owned subsidiary, Uni-Asia Capital (Singapore) Limited, was granted •Approved Ship Investment Manager status by the Maritime and Port Authority of Singapore under Maritime Finance incentive("MFI") Scheme

Launched container vessel fund, specialising in investment of container •vessels

Launched private ship investment fund Searex 1 & II•Established GCAP Fund, which is managed by Grosvenor Capital Advisers Fund •Management Co. Ltd, 50% JV between Grosvenor Asia and Capital Advisers

Capital Advisers issued new shares to third parties. Our equity interest in Capital •Advisers was diluted to 44.8%Launched AAA Series II•

Launched Asian distressed assets investment fund AAA Series I•

Capital Advisers was established as a 100% subsidiary of the company•Established an investment partnership with Grosvenor Asia to invest in •residential properties in Tokyo, through Capital Advisers

Expanded into investment in alternative assets, such as distressed assets•Reported as the top arranger of structured finance for the transportation sector •in Taiwan, and ranked 4th in the category of Taiwan foreign currency loan and bond arrangement by basis point (a financial magazine)

Company was incorporated in the Cayman Islands with business presence •in Hong Kong. Our focus is on finance arrangement for companies in the transportation sector

2009

2008

2007

2006

2005

2004

2003

20012000

1998

1997


Operations Review

Overview

For the year ended 31 December 2009 (“FY2009”), the Group reported a net loss of US$15.7 million as compared to a net loss of US$3.7 million in FY2008. Total income increased by 36% from US$40.5 million in FY2008 to US$55.1 million in FY2009.

The Group’s FY2009 results have included the consolidated income statement of a shipping subsidiary, Prosperity Containership S.A. (“Prosperity”) from 13 January to 30 November 2009. Stripping off the effects of Prosperity during the year, the Group’s performance was affected largely by revaluation losses from investments in Japanese hotel and residential properties, provision made on onerous contracts related to the hotel operation, operating losses from Capital Advisers, lower fee income earned from finance arrangement and the writeoff of deferred tax assets. The Group’s income is classified under fee income, hotel income, investment returns, interest income and other income.

Fee incOme

Breakdown of fee income

Fy2009 Fy2008 % us$’000 us$’000 change

Arrangement and agency fee 1,040 2,525 (59%)Project management fee 722 – N/MBrokerage commission 995 1,337 (26%)Incentive fee 211 1,858 (89%)Asset management & administration fee * 5,863 5,989 (2%)Charter income 8,859 – N/M 17,690 11,709 51%

* Includes income earned by Capital Advisers Co., Ltd. (“Capital Advisers”) as the asset manager of hotels and residential projects of US$4.6 million for FY2009

(FY2008: US$4.6 million).


Operations Review

Fee income increased by 51% from US$11.7 million in FY2008 to US$17.7 million in FY2009 due to charter income recognised from the consolidation of the vessel owning subsidiary. A description of the Group fee income is summarised below:

(i) Arrangement and agency fee refers to income for the arrangement of syndicated loans or debt financing and for the Group’s agency duty in finance arrangement transactions. Finance arrangement and agency fee dropped by 59% to US$1.0 million in FY2009 due to the slowdown in finance arrangement activities and the completion of fewer transactions compared to FY2008.

(ii) Project management fee refers to the income earned for the initiation/origination of an investment project and is a one-off fee charged on the successful completion of the project. Project management fee totalled US$0.7 million in FY2009.

(iii) Brokerage commission refers to commission from brokering ship charters on behalf of ship-owners and the income is recurrent for the duration of the charter period/agreement. Brokerage commission totalled close to US$1.0 million in FY2009.

(iv) Incentive fee is received when the assets managed by the Group are divested with a gain exceeding the hurdle rate and is calculated based on a predetermined profit sharing ratio. There was no vessel disposal during the year. Incentive fee totalled US$0.2 million in FY2009 compared to US$1.9 million in FY2008.

(v) Asset management and administration fee is the fee for the administration and management of funds/ investments in shipping, properties and distressed assets as well as for Capital Advisers as the asset manager of hotels and residential properties in Japan. Asset management and administration fee totalled US$5.9 million in FY2009.

(vi) Charter income is the income received from chartering a vessel out to a third party. A container vessel was delivered in January 2009 and a charter income of US$8.9 million was recognised during the year when the shipping entity remained a subsidiary of the Group.


hOteL incOme

Hotel income refers to all income related to Capital Advisers’ hotel business. Capital Advisers currently owns and/ or manages 14 limited service hotels in Japan with over 2,100 rooms. Hotel income totalled US$31.8 million. Hotel income would include hotel operator fee and all income received from hotels owned and leased by the Group. Due to low occupancy and price competition, Capital Advisers experienced losses from its hotel business.

investment returns

Breakdown of investment returns

Fy2009 Fy2008 % us$’000 us$’000 change

Interest on performance notes – shipping 620 5,595 (89%)Interest on performance notes – distressed debt 87 25 248%Realised gain on investment – shipping 11,056 - N/MRealised gain on investment – hotel and residential 252 352 (28%)Realised gain on investment – others 3 - N/MRealised loss on disposal of properties for sale (1,861) - N/MProperty rental income 736 496 48%Fair value adjustment on investment properties 252 405 (38%)Fair value adjustment on investment – hotel and residential (5,982) (886) 575%Fair value adjustment on investment – shipping 72 (2,794) 103%Fair value adjustment on performance notes – hotel (25) (87) (71%)Fair value adjustment on performance notes – shipping (171) 166 (203%)Fair value adjustment on performance notes – distressed debt (262) (444) (41%)Fair value adjustment on listed shares – hotel - (306) N/MFair value adjustment on listed shares – others (134) (75) 79%Net gain / (loss) on forward currency contracts (1,041) 734 (242%)Write down of properties for sale to net realisable value – residential - (2,762) N/M 3,602 419 760%

N/M: Not meaningful

Investment returns increased from US$0.4 million in FY2008 to US$3.6 million in FY2009 due primarily to the 50% interest disposal of Prosperity in December 2009. Prosperity recognised net liabilities during the year due primarily to operating losses, fair value losses on an interest rate hedge (charged to reserve) and translation losses from a yen loan. The Group de-recognised Prosperity’s net liabilities of US$9.2 million and received sales proceeds of US$1.8 million, which resulted in a gain on disposal of US$11.0 million upon the completion of the disposal. During the year, the Group also recognised interest on performance notes of US$0.7 million, negative fair value adjustment of US$6.3 million arising primarily from revaluation of hotel and residential properties in Japan, realized losses of US$1.9 million arising from our investments in properties in Japan, rental income of US$0.7 million and losses on forward currency contracts of US$1.0 million during the year.


Operations Review

grOuP eXPenses

Employee benefits expenses dropped by 11% following the Group’s cost cutting programme. Capital Advisers’ staff cost represented close to 75% of the Group’s employee benefits expense. Amortisation and depreciation grew by 212% to US$4.7 million due to the consolidation of a then vessel owning entity when it was a subsidiary of the Group. Depreciation expenses from the two vessel owning subsidiaries represented over 77% of the Group’s total depreciation charges during the year. Other expenses increased by 64% due to the consolidation of the vessel owning subsidiary, leading to an increase in vessel operation expenses and the expansion of Capital Advisers’ hotel operation, leading to higher hotel operating expenses. Capital Advisers’ other expenses represented over 79% of the Group’s total other expenses. Hotel leases, hotel sub-operator fee and hotel operating expenses represented over 59% of the Group’s other expenses. Impairment on goodwill arose from the loss the hotel management contract from Oita Toyo Hotel during the year.

Finance cost – interest expenses rose by 1,211% from US$0.5 million to US$6.3 million as a result of the consolidation of the vessel owning subsidiary during the year.

PrOFitABiLity

Share of losses from our associated companies widened from US$0.01 million to US$0.2 million. During the year, management took a prudent view to write off deferred tax assets of US$1.8 million due to uncertainty in the recognition of such Hong Kong taxable income in the near term. As a result, tax expenses increased from a credit of US$0.5 million in FY2008 to an expense of US$1.8 million in FY2009.

LOss FOr the yeAr

In summary, the Group’s net loss totalled US$15.7 million in FY2009 as compared to a net loss of US$3.7 million in FY2008.


Board of Directors

mr. KAzuhiKO yOshidAChairman and CEO

Mr. Kazuhiko Yoshida was appointed as Chairman of the Group on 19 March 2008. He is concurrently the Chief Executive Officer, Director and one of the founders who established the Company in 1997. Mr. Yoshida is responsible for business development and the overall management of the Group. He has over 27 years of experience in banking and credit analysis, specialising in structured finance of maritime vessels and aircraft. Between 1986 and 1992, he was a senior manager in The Sumitomo Trust and Banking Co., Ltd. following which, he was a director/deputy general manager of Takugin International (Asia) Limited, the offshore merchant banking arm of The Hokkaido Takushoku Bank, Ltd. from 1992 to 1997. Takugin International (Asia) Limited provided structured finance solutions for the aviation and shipping industries, provided project financing for construction of properties, including hotels and buildings and also provided corporate financing to Chinese financial institutions and other corporations. Mr. Yoshida is also currently a director of Capital Advisers Co., Ltd, Uni-Asia Capital (Singapore) Limited, and Uni-Asia Finance Corporation (Japan). Mr. Yoshida obtained a bachelor’s degree in engineering from Hokkaido University in Japan in 1976.

mr. michiO tAnAmOtOChief Operating Officer

Mr. Michio Tanamoto is the Chief Operating Officer, Director stationed in Singapore and one of the founders who established the Company in 1997. Mr. Tanamoto is responsible for the Group’s business development, corporate strategy, finance and investor relations. He has over 29 years of experience in financial sector based in Japan, Hong Kong and Singapore. In 1980, Mr. Tanamoto joined The Hokkaido Takushoku Bank, Ltd. and was the senior manager of Takugin International (Asia) Limited in Hong Kong, the offshore merchant banking arm of The Hokkaido Takushoku Bank, Ltd. between 1988 and 1993. Following which, Mr. Tanamoto was the deputy general manager of the Singapore Branch of The Hokkaido Takushoku Bank, Ltd. from 1995 to 1997. Mr. Tanamoto is also currently the Managing Director of Uni-Asia Capital (Singapore) Limited and a director of Capital Advisers Co., Ltd. and Uni-Asia Finance Corporation (Japan). He obtained a bachelor’s degree in law from Hitotsubashi University of Japan in 1980.


1. mr. Ang miAh KhiAngLead Independent Non-Executive Director

Mr. Ang Miah Khiang was appointed as our Independent Director on 26 June 2007 and has been taking the position of a Lead Independent Director since 19 March 2008. Mr. Ang was last re-elected as Director at the Company’s Annual General Meeting on 18 April 2008.

He spent the greater part of his career in the SME financing business, having held the position of Managing Director of GE Commercial Financing (Singapore) Ltd, formerly known as Heller Financial (S) Ltd. He was also concurrently regional director for GE related businesses in Asia Pacific. Mr. Ang is a Fellow of the Institute of Certified Public Accountants of Singapore and holds a Bachelor of Accountancy degree from the University of Singapore. He is also an independent director of Asia Enterprises Holding Ltd, Avaplas Ltd, and Heng Long International Ltd.

2. mr. rOnnie teO heng hOcKIndependent Non-Executive Director

Mr. Ronnie Teo Heng Hock was appointed as Independent Director of the Company on 26 June 2007 and was last re-elected as DIrector at the Company’s Annual General Meeting on 24 April 2009. Mr. Teo is currently the Managing Director of Financial Reengineering Pte Ltd, a management consulting firm specialising in investment advisory services. Mr. Teo was previously the Managing Director of DBS Asset Management Ltd and the General Manager of DBS Finance Limited. Mr. Teo holds a Bachelor of Social Sciences (Honours) degree in Economics from the then-University of Singapore.

Mr. Teo is concurrently an independent director of Berger Paints (S) Pte Ltd, Berger International Limited, Shanghai Asia Holdings Ltd, and Yeoman 3-Rights Value Asia Fund. His directorship in listed companies over the preceding three years includes an independent director of Sunvic Chemical Holdings Ltd and Behringer Corporation Ltd.

3. mr. rAJAn menOnIndependent Non-Executive Director

Mr. Rajan Menon was appointed as Independent Non-Executive Director of the company in April 2008 and was last re-elected as Director at the Company’s Annual General Meeting on 24 April 2009. Mr. Menon’s 38 year career in Singapore comprises public appointments like Senior Deputy Registrar of Land Titles & Deed and Deputy Public Prosecutor & State Counsel. He was also a Credit Manager with The Hongkong And Shanghai Banking Corporation prior to joining the Law Practice, KhattarWong in 1981, where he was Managing Partner from 1999 to 2006 and is currently a senior partner.

Mr. Menon is an Independent Director of Berger International Limited, which is listed on the SGX-ST, and a Board Member of Manulife (Singapore) Pte Ltd, Prochem Holdings Pte Ltd, Chartered Institute of Arbitrators (Singapore) Limited, Special Olympics Asia Pacific Ltd, Tangreat Investments and Quick Investments Pte Ltd.

Mr. Menon graduated from the University of Singapore with Bachelor of Laws (Honours) degree in 1971 and was admitted as an Advocate & Solicitor of the Supreme Court of Singapore in 1973 and is a solicitor of the Supreme Court of England & Wales. Mr. Menon is a Fellow of the Chartered Institute of Arbitrators, United Kingdom; Singapore Institute of Arbitrators; Malaysian Institute of Arbitrators and Singapore Institute of Directors. He was conferred The Public Service Medal of Singapore.

Board of Directors

1 2 3


4. mr. rOng-JOng OwngNon-Executive Director

Mr. Rong-Jong Owng was appointed as Non-Executive Director of the company in April 2008 and was last re-elected as Director at the Company’s Annual General Meeting on 24 April 2009. In 1978, Mr. Owng joined the Evergreen Group and he is currently the Chief Financial Officer of Evergreen Group. Mr. Owng is responsible for all finance matters for the group companies including Evergreen Marine Corporation, Eva Airways Corporation, Evergreen International Storage and Transport Corporation, and Evergreen Logistics Corporation. Mr. Owng received his bachelor’s degree in accounting at the Tam Kian University and a master’s degree in EMBA at the National Taipei University in 2001.

5. mr. rOBert vAn Jin nienNon-Executive Director

Mr. Robert Van Jin Nien was appointed as Non-Executive Director of the Company in June 2006 and was last re-elected as Director at the Company’s Annual General Meeting on 24 April 2009. Mr. Nien has extensive experience in property and infrastructure projects in Hong Kong and the PRC Pearl River Delta area. Between 1972 and 1976, he was a manager at Citibank, N.A., following which he joined and, since 1980, has been an executive director of Hopewell Holdings Limited, which is listed on the main board of the Stock Exchange of Hong Kong Limited. Mr. Nien holds a bachelor’s degree in economics from the University of Pennsylvania and a master’s degree in business administration from the Wharton Graduate School of Business.

mr. PAuL chAngNon-Executive Director (Retired)

Mr. Paul Chang was appointed as Non-Executive Director of the company in April 2008 and resigned from his appointment on 18 January 2010. Mr. Chang was the head of shipping in HSH Nordbank AG for all ship financing business in Asia Pacific and chief executive of HSH Nordbank AG Hong Kong branch since July 2008. Prior to joining HSH Nordbank AG, he was the general manager of DVB Bank for North Asia since 1998. Before specialising himself in ship financing, Mr. Chang has more than 20 years of banking career with Standard Chartered Bank, Scandinavian Banking PLC and Rabobank where he gained extensive experience and exposure in corporate banking, trade finance, project finance, asset-based financing, structured finance and tax based financing schemes for a wide-range of industries in the Asia Pacific region. Mr. Chang holds a MBA (Marketing) degree from Leicester University from the UK.

ms. mAKiKO sAnONon-Executive Director (Retired)

Ms. Makiko Sano was appointed as non-Executive Director of the company in October 2009 and resigned on 23 February 2010. She is currently an executive director of Yamasa Co., Ltd, which is a privately held company in Japan. It is a manufacturer of amusement related hardware and software, and an owner of transportation related assets. Her directorship in Yamasa is in the field of customer service and general affairs. She is also an executive director of Yamasa Sangyo Co., Ltd, which is a group company of Yamasa. Ms. Sano has vast knowledge of internal control and compliance matters, with experiences as an internal auditor of Yamasa Co., Ltd over 7 years. Ms. Sano obtained a bachelor’s degree in Social Science from Waseda University. She has also completed Waseda University Law School.

4 5


key Management

mr. KAzuhiKO yOshidAChairman and CEO

mr. michiO tAnAmOtOChief Operating Officer

1. mr. KitArO OnishiManaging Director

Mr. Kitaro Onishi was appointed as the Managing Director of the Company on 10 March 2008. He is currently the President of Capital Advisers Co., Ltd. and is responsible for property investment business in Japan. Mr. Onishi has extensive experience in property investment business and was an investment banker. He worked for Goldman Sachs Group in the USA as well as in Japan from August 1988 to April 1992. From May 1992 to September 1998, he was with Kajima Corporation, one of the biggest general construction companies in Japan. In October 1998, he joined Credit Suisse Group as a director of the Tokyo branch and was the representative of the Tokyo wholly-owned subsidiary of Credit Suisse. He left Credit Suisse Group and joined Capital Advisers Co., Ltd. as President in May 2004 and has been leading the property investment business of Capital Advisers Co., Ltd. in Japan since then. Mr. Onishi graduated from Waseda University in 1977.

2. mr. mAsAKi FuKumOriManaging Director

Mr. Masaki Fukumori was appointed as the Managing Director on 10 March 2008. He is currently responsible for both the company’s Structured Finance and Maritime Investment Departments. Mr. Fukumori joined our Group in August 1997 and acted as Head of our Structured Finance Department until he initiated and has headed the Maritime Investment Department in 2002. He has extensive experience in marketing and syndication in the banking industry specialising in the shipping and aviation sectors spanning over 25 years as well as ship investment and investment management. Between 1985 and 1993, he was a marketing

manager at The Hokkaido Takushoku Bank, Ltd. after which, he was a senior marketing manager at Takugin International (Asia) Limited from 1993 to 1997. He is also currently a director of Uni Ships and Management Limited, Akebono Capital Limited, Rich Containerships S.A, and Sunrise Shipping S.A. Mr. Fukumori holds a bachelor’s degree in business administration from Yokohama National University obtained in 1985.

3. mr. mAsAhirO iwABuchiExecutive Vice-President

Mr. Masahiro Iwabuchi was appointed as Executive Vice-President responsible for the Distressed Asset/Properties Investment Department in April 1998. He has extensive experience in the banking industry throughout Asia including Japan, Indonesia, Singapore, Hong Kong and the PRC, having spent some 13 years with The Hokkaido Takushoku Bank, Ltd. He is also currently a director of AAA and Uni-Asia Guangzhou Property Management Co., Ltd. He completed Licensing Examination for HKSI Specialist Certificate (Asset Management, Corporate Finance, Derivatives and Securities). Mr. Iwabuchi graduated with a bachelor’s degree in economics from Hirosaki University of Japan in 1985. In addition to Japanese, Mr. Iwabuchi speaks fluent Mandarin.

4. mr. KenJi FuKuyAdOExecutive Vice-President

Mr. Kenji Fukuyado was appointed as Executive Vice-President & Head of Maritime Finance Department in January 2010. He joined our Group in 2001 and was the Managing Director of Uni-Asia Finance Corporation (Japan) from May 2003 to December 2005. He was transferred to our head office in Hong Kong and became Head of Structure Finance Department in January 2006. Mr. Fukuyado has nearly 20 years of experience in the finance industry, including structured finance and corporate finance. Between 1987 and 1998, he was a manager at The Hokkaido Takushoku Bank, Ltd. in Japan and Hong Kong. Mr. Fukuyado graduated with a bachelor’s degree in law from Waseda University in 1987.

1 2 43


5. ms. cLementine ngChief Financial Officer

Ms. Clementine Ng joined our Company in February 2004 and is the Chief Financial Officer of the Group. She has over 17 years’ experience in the financial industry, including fund management, private equity and equity research. Ms. Ng started her career in Hong Kong as a manager with the hedge fund group Gaiacorp in 1992 and took on various responsibilities in the finance industry prior to joining us, including her role as an investment analyst at Amsteel Finance Corporation, an investment associate with the direct investment arm of AIG Investment Corporation, and a director at Kaizen Property Management Limited. Ms. Ng graduated with a bachelor’s degree in commerce from the University of British Columbia, Canada and holds a master’s of business administration degree from the Judge Business School, University of Cambridge, UK.

6. mr. mAtthew yuen wAi KeungSenior Vice President

Mr. Matthew Yuen Wai Keung joined our company in October 1997 and is Senior Vice President. As head of Structured Finance Department, he is mainly responsible for fund raising for the Group’s ship investment as well as third party clients. Prior to this, Mr. Yuen worked in several international banks, specialising in marketing and syndications. Mr. Yuen graduated from The Chinese University of Hong Kong in 1987 with a second class (upper) honours degree in Business Administration and received his MBA from The Australian Graduate School of Management, University of New South Wales in 1992. Mr. Yuen is a member of the Association of Chartered Certified Accountants (ACCA).

7. mr. zAc K. hOshinOSenior Vice-President

Mr. Zac K. Hoshino joined our group in September 2007 and acted as Co-Head of our Maritime Investment Department. He is Senior Vice President responsible for all shipping related matter and technical sector. He has extensive experience with chartering, operating, and contracting in Japanese shipping company for more than 25 years including Singapore and Hong Kong representative between 2002 and 2007. He is also the Managing Director of Uni Ships and Management Limited, a director of Glory Bulkship S.A. and Prosperity Containership S.A. Mr. Hoshino graduated with a bachelor’s degree in mercantile marine science from Tokyo University of Mercantile Marine obtained in 1984.

8. mr. mAKOtO tOKOzumeSenior Vice President

Mr. Tokozume joined our company in January 2008, and is now in charge of investor relations and corporate planning. He is now stationed in Singapore as a member of Uni-Asia Capital (Singapore) Limited, 100% subsidiary of the company. He has over 21 years of working experience in financial industry in Japan and Singapore, having spent 11 years with The Hokkaido Takushoku Bank, Ltd. and nine years with The Bank of Tokyo -Mitsubishi Ltd. (currently The Bank of Tokyo-Mitsuibishi UFJ Ltd.). He graduated from Keio University with a bachelor’s degree in economics in 1986, and received his MBA from the University of Hull, UK in 2000. Mr. Tokozume is registered as Certified Public Accountant of USA.

5 6 87


key Management

9. ms KAm Xiu LinSenior Assistant to Chairman and CEO

Ms. Kam Xiu Lin was appointed as Senior Assistant to chairman and CEO responsible for the distressed asset investment and property investment in PRC in December 1998. She has extensive networks in PRC, especially in Guangdong, Beijing, Shanghai and Hong Kong.

Ms. Kam started her banking career at The Hokkaido Takushoku Bank, Ltd. in March 1985 and was appointed as a chief representative of Guangzhou representative office of the bank in 1994 and afterwards. She is also currently a director of Uni-Asia Guangzhou Property Management Co., Ltd.

9


Management Organisation

Board of directors

chairman & ceOMr. Kazuhiko Yoshida

chief Operating OfficerMr. Michio Tanamoto

Management Committee

* Mr. Kazuhiko Yoshida Mr. Michio Tanamoto Mr. Masaki Fukumori Mr. Kitaro Onishi (Capital Advisers) Mr. Hiromasa Yakushiji (Capital Advisers)

* Chairman

Maritime Investment Department (MID)

department headMr. Kenji Fukuyado

Structured Finance Department (SFD)

department headMr. Matthew Yuen Wai

Keung

Uni Ships and Management Limited Project Management

head of BusinessMr. Zac K. Hoshino

Finance Department (FD)

chief Financial OfficerMs. Clementine Ng

capital Advisers group

managing directorMr. Masaki Fukumori

managing directorMr. Kitaro Onishi

Property Investment Department (PID)

department headMr. Masahiro Iwabuchi

Uni-Asia Finance Corporation (Japan)

Ms. Yumiko Kanda

Uni-Asia Capital (Singapore) Limited

(maritime investment department in

singapore)


Financial Highlights

total Income

2005 2006 2007 2008 2009

Operating Profit/(Loss)

2005 2006 2007 2008 2009

total Liabilities

2005 2006 2007 2008 2009

yeAr tO yeAr cOmPArisOn

2008 2009No. of shares* 260,996,000 313,195,200

Earning per share (US Cents) (1.17) (5.16)

NAV per share (US$) 0.36 0.33

Other Key stAtistics

total Assets

2005 2006 2007 2008 2009

Net Profit/(Loss)

2005 2006 2007 2008 2009

total equity

2005 2006 2007 2008 2009

total Cash (US$’000)(Including deposit pledged as collateral)

61,949 67,572

107,795

178,660

147,841

18,267 19,470 21,151

40,546

55,099

9,366 9,98511,083

(2,007)

(5,280)

11,993 7,806 11,583

84,919

43,402

49,95659,766

96,212 93,741104,439

(15,683) (14,520)

(3,664) (3,055)

11,43312,416

9,439

incOme stAtement And BALAnce sheet items (us$’000)

total debt/total equitytotal debt (US$’000)

0.63

0.33

2008 20092008 20092008 2009

58,891

34,81841,245

66,418

*as at 31 Dec

Net profit/(loss) for the yearNet profit/(loss) attributable to shareholders


Corporate Governance Report

Uni-Asia Finance Corporation (the “Company”) is committed to maintaining a high standard of corporate governance within the Company and its subsidiaries (the “Group”). The board of directors of the Company (the “Board”) recognises the importance of good corporate governance and the offering of high standards of accountability to the shareholders. This report outlines the Company’s corporate governance processes and activities with specific reference to the Code of Corporate Governance 2005 (the “Code”).

The Board confirms that for the financial year ended 31 December 2009, the Company has adhered to the principles and guidelines as set out in the Code, where applicable, and has specified and explained the deviation from the Code in this report.

Board Matters

The Board oversees the business affairs of the Company and assumes responsibility for the Group’s overall strategic plans, key operational initiatives, major funding and investment proposals, financial performance reviews and corporate governance practices.

The Board is supported by the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”), each of whose members are drawn from members of the Board (together “Board Committees” and each a “Board Committee”). Each of these Board Committees operate under delegated authority from the Board.

The Board has held meetings for particular and specific matters as and when required. The Company’s Articles of Association (the “Articles”) allow a Board meeting to be conducted by means of telephone and video conference or similar communications equipment. The attendance of each Director at every Board and Board Committee meeting held during the financial year ended 31 December 2009 (“FY2009”), is set out below:

atteNdaNCe at Board & Board CoMMIttee MeetINGs

BOARD AUDIT REMUNERATION NOMINATING# No. of Meetings

Attendance # No. of Meetings

Attendance No. of Meetings

Attendance No. of Meetings

Attendance

Kazuhiko Yoshida 6 6 – – – – 1 1

Michio Tanamoto 6 6 – – – – – –

Robert Van Jin Nien 6 6 6 6 1 1 – –

Ang Miah Khiang 6 6 6 6 1 1 1 1

Ronnie Teo Heng Hock 6 5 6 5 1 1 1 1

Rong-Jong Owng 6 3 6 4 – – – –

Paul Chang (1) 6 5 – – – – – –

Rajan Menon 6 6 6 5 1 1 1 1

Makiko Sano (2) (3) 1 1 – – – – – –

(1) Resigned on 18 January 2010 (2) Appointed on 22 October 2009 (3) Resigned on 23 February 2010 # No. of meetings held whilst a Director

Board’s approval is required for matters likely to have a material impact on the Group’s operations as well as matters other than in the ordinary course of business.

New directors, upon appointment, will be briefed on the business and organization structure of the Group to ensure that they are familiar with the Group structure, its business and operations. The directors may participate in seminars and/or discussion groups to keep abreast of the latest developments which are relevant to the Group.

New directors, upon appointment, will also be briefed on their duties and obligations as directors. The Directors are aware of the requirements in respect of disclosure of interests in securities, disclosure of conflicts of interest in transactions involving the Company, prohibition on dealings in the Company’s securities and restrictions on the disclosure of price-sensitive information. Directors are also informed of regulatory changes initiated by or affecting the Company.

Principle 1:The Board’s Conduct of its Affairs

Guideline1.3: Delegation of authority on certain Board matters

Guideline 1.4: Meetings of the Board and Board Committees

Guideline 1.5:Matters requiring board approval

Guideline 1.6:Directors to receive appropriate training

Guideline 1.7:Formal letter to be provided to directors, setting out duties and obligations



Board CoMposItIoN aNd BalaNCe

The Board comprises 9 directors as at the end of FY2009 and 7 directors as at the date of this report. The Board is of the view that its current size is appropriate, taking into account the nature and the scope of operations of the Group.

The directors who held office during the year up to the date of this report are as follows:-

executive directors:

Kazuhiko Yoshida (Chairman & Chief Executive Officer)Michio Tanamoto (Chief Operating Officer)

Non-executive directors:

Robert Van Jin NienRong-Jong OwngPaul Chang (Resigned on 18 January 2010) Makiko Sano (Resigned on 23 February 2010)

Independent Non-executive directors:

Ang Miah KhiangRonnie Teo Heng HockRajan Menon

The NC, which reviews the independence of each Director on an annual basis, adopts the Code’s definition of what constitutes an independent director.

As a Group, the directors bring with them a broad range of expertise and experience in areas such as accounting, legal, finance, business and management experience, industry knowledge, strategic planning experience and customer-based experience and knowledge. The diversity of the directors’ experience allows for the useful exchange of ideas and views. The profile of all Board members is set out in the section entitled ‘Board of Directors’.

The non-executive directors aim to assist in the development of proposals on strategy by constructively challenging management. The non-executive directors would also review the performance of management in meetings.

There is an independent element on the Board, with independent directors constituting one-third of the Board.

Where warranted, the non-executive directors meet without the presence of management or executive directors to review any matters that must be raised privately.

Guideline 2.1: Independent Directors to make up at least one-third of the Board

Guideline 2.6:Meetings of Non-executive directors

Principles 2 & 4:Board MembersComposition and Balance

Guideline 2.3: Appropriate size of Board

Guideline 4.6:Key Information regarding Directors

Guideline 2.5:Roles of Non-executive directors

34 Uni-asia Finance Corporation Annual Report 2009


ChaIrMaN aNd ChIeF exeCUtIve oFFICer

Mr Kazuhiko Yoshida currently fulfills the role of Chairman of the Board (the “Chairman”) and Chief Executive Officer (the “CEO”) of the Company. Being one of the founders of the Group, Mr Yoshida plays an instrumental role in developing the business of the Group and provides the Group with strong leadership and strategic vision. All major decisions made by the Chairman and CEO are endorsed by the Board. As Chairman, he is responsible for Board processes and ensures the integrity and effectiveness of the governance process of the Board. He also ensures that the members of the Board receive accurate, timely and clear information, facilitates the contribution of non-executive directors, encourages constructive relations between executive directors, non-executive directors and management, ensures effective communication with shareholders and promotes high standards of corporate governance. The Board believes that the independent non-executive directors have demonstrated high commitment in their role as directors and have ensured that there is a good balance of power and authority.

In addition, the Board has appointed Mr Ang Miah Khiang, an independent and non-executive director, as the Lead Independent Director. Mr Ang will be available to address shareholders’ concerns when contact through the normal channels via the Chairman and CEO or other management executive has failed to provide satisfactory resolution or when such contact is inappropriate.

Board CoMMIttees

Nominating Committee (“NC”)

The NC, regulated by a set of written terms of reference, comprises 4 members, a majority of whom, including the Chairman, are independent non-executive directors. The members of the NC are as follows:

Mr Ronnie Teo Heng Hock (Chairman)Mr Ang Miah KhiangMr Rajan Menon Mr Kazuhiko Yoshida (Executive Director)

The Directors consider Mr Teo, Mr Ang and Mr Menon to be independent as they do not have any existing business or professional relationships with the Group or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent business judgement with a view to the best interests of the Company.

The principal functions of the NC stipulated in its terms of reference are summarized as follows:

(a) Reviews and makes recommendations to the Board on all board appointments;

(b) Reviews the Board structure, size and composition and makes recommendations to the Board with regards to any adjustments that are deemed necessary;

(c) Determines the independence of the Board;

(d) Makes recommendations to the Board for the continuation of services of any director who has reached the age of 60 (sixty) or otherwise;

(e) Assesses the effectiveness of the Board and the academic and professional qualifications of each individual director; and

(f ) Reviews and recommends directors retiring by rotation for re-election at each Annual General Meeting (“AGM”).

Principle 3:Chairman and Chief Executive Officer

Commentary 3.3:Lead Independent Director

Guideline 4.1:Nominating Committee to comprise at least three directors, majority of whom is independent; chairman not associated with a substantial shareholder

Principle 4:Nominating Committee



In accordance with the Company’s Articles of Association, one third, or if their number is not a multiple of three, the number nearest to but not less than one-third of the directors are required to retire from office by rotation at each AGM (provided that no director holding office as Executive Director whose term of office under a service contract with the Company is a fixed term that is unexpired and continuing as at the time of the relevant annual general meeting, shall be subject to retirement by rotation or be taken into account in determining the number of directors to retire). All newly appointed directors will have to retire at the next AGM following their appointments. The retiring directors are eligible to offer themselves for re-election. The NC had recommended the re-election of the following directors who will be retiring at the forthcoming AGM:

1. Mr Ang Miah Khiang (Article 100)2. Mr Rong-Jong Owng (Article 100)

The Board has accepted the NC’s recommendation and accordingly, the above-mentioned directors will be offering themselves for re-election at the forthcoming AGM.

Each member of the NC has abstained from reviewing and approving his own re-election.

The NC has reviewed the independence of each director for FY2009 in accordance with the Code’s definition of independence and is satisfied that one-third of the Board comprises independent non-executive directors.

Notwithstanding that some of the Directors have multiple board representations, the NC is satisfied that each Director is able to carry out and has been adequately carrying out his duties as a director of the Company.

The search and nomination process for new directors (if the need to induct a new Board member arises) will be through search companies, contacts and recommendations that go through the normal selection process for the right candidate.

The NC is responsible for assessing the effectiveness of the Board as a whole and for assessing the contribution of each individual Director. The NC is also responsible for deciding how the Board’s performance may be evaluated and proposes objective performance criteria for the Board’s approval and implementing corporate governance measures to achieve good stewardship of the Company.

The NC adopted a formal system of evaluating the Board as a whole every year. A Board performance evaluation was carried out and the assessment parameters include evaluation of the Board’s composition, size and expertise, timeliness of Board information as well as Board accountability and processes. The annual evaluation exercise provides an opportunity to obtain constructive feedback from each director on whether the Board’s procedures and processes had allowed him to discharge his duties effectively and to propose changes which may be made to enhance the Board effectiveness as a whole.

The members of the Board are provided with adequate and timely information prior to Board meetings, and on an on-going basis. The Board has separate and independent access to the Group’s senior management and the Company Secretary at all times. Requests for information from the Board are dealt with promptly by management. The Board is informed of all material events and transactions as and when they occur. Information provided to the Board include explanatory background relating to matters to be brought before the Board, budgets, forecasts and management accounts. In relation to budgets, any material variance between projections and actual results are disclosed and explained.

Principle 5:Board Performance

Principle 6:Access to information

Guideline 6.1:Board members to be provided with timely information

Guideline 6.2:To include background and explanatory information

Guideline 4.2:Re-nomination and re-election of directors

Guideline 4.3:Independence of Directors

Guideline 4.4:Multiple board representations

Guideline 4.5:Description of process of selection and appointment of new directors



The Company Secretary provides corporate secretarial support to the Board and ensures adherence to Board procedures and relevant rules and regulations which are applicable to the Company. The Company Secretary also attends Board and Board Committee meetings to take minutes. Under the direction of the Chairman, the Company Secretary, with the support of the management staff, ensures good information flows within the Board and the Board Committees and between senior management and non-executive directors as well as facilitates orientation and assists with professional development as required. The appointment and replacement of the Company Secretary is a Board reserved matter.

The Board seeks independent professional advice as and when necessary to enable it to discharge its responsibilities effectively. The directors, whether as a group or individually, may seek and obtain legal and other independent professional advice, at the Company’s expense, concerning any aspect of the Group’s operations or undertakings in order to fulfill their roles and responsibilities as directors.

remuneration Committee (“rC”)

The RC, regulated by a set of written terms of reference, comprises 4 members, all of whom are independent non-executive directors, as follows:

Mr Rajan Menon (Chairman)Mr Ang Miah KhiangMr Ronnie Teo Heng HockMr Robert Van Jin Nien

The RC reviews and recommends to the Board the fees for independent non-executive directors subject to shareholders’ approval at the AGM and all service contracts and terms of employment of the executive directors and senior executives. Each member of the RC will abstain from reviewing and approving his own remuneration.

The Company’s remuneration policy is to provide compensation packages at market rates which reward good performance and attract, retain and motivate directors and managers. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, options issued under the Uni-Asia Share Option Scheme and benefits in kinds shall be covered by the RC.

The Company has entered into separate service agreements (“Service Agreements”) with the executive directors, Mr Kazuhiko Yoshida and Mr Michio Tanamoto for an initial term of three years with effect from 7 August 2007.

The term of service shall be renewed and extended automatically on the expiry of such initial term for an indefinite term, unless and until either party has given at least six months’ written notice of termination or unless the employment is summarily terminated upon any breach by the employee.

Under the Service Agreements, the housing allowance of the executive directors is subject to annual review by the Board after the first year of appointment.

Non-executive directors (“NEDs”) are remunerated under a framework of fixed fees for serving on the board and board committees. Fees for NEDs are subject to the approval of shareholders at the AGM. Executive directors do not receive directors’ fees.

Guideline 6.5:Procedure for board to take independent professional advice at company’s cost

Guideline 6.3:Role of Company Secretary

Principle 7:Remuneration Matters

Guideline 7.1:RC to consist entirely of NEDs; majority, including RC chairman, must be independent

Principle 8:Level and Mix of Remuneration

Guideline 7.2:Duties of Remuneration Committee

Guideline 8.1:Package should align executive directors’ interests with shareholders’ interest

Guideline 8.2:Remuneration to be based on contribution, effort, time spent and responsibilities


The remuneration of directors and key executives during FY2009 are as follows:

BreakdowN oF reMUNeratIoN IN perCeNtaGe (%)

Salary Bonus Other Benefits

Fees Total

executive directors

S$250,001 to S$500,000

Kazuhiko Yoshida Executive 43 – 57 – 100

Michio Tanamoto Executive 45 – 55 – 100

Non-executive directors

Below S$250,000:

Ang Miah Khiang Independent – – – 100 100

Ronnie Teo Heng Hock Independent – – – 100 100

Rajan Menon Independent – – – 100 100

key executives

S$250,001 to S$500,000

Kitaro Onishi 93 – 7 – 100

Masaki Fukumori 44 – 56 – 100

Masahiro Iwabuchi 98 – 2 – 100

Kenji Fukuyado 100 – – – 100

Clementine Ng 90 – 10 – 100

Mr Robert Van Jin Nien, Mr Rong-Jong Owng, Mr Paul Chang and Ms Makiko Sano did not receive any directors’ fees during FY2009 as they were nominee directors.

Except as disclosed in this report, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest.

There were no employees who are immediate family members of any director or the CEO and whose remuneration exceed S$150,000 for the financial year ended 31 December 2009.

The Company has a share option scheme known as the Uni-Asia Share Option Scheme (the “Scheme”) which is administered by the RC.

There were no options granted during the financial year to subscribe for unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company.

There were no unissued shares of the Company under option at the end of the financial year.

The Scheme will provide eligible participants with an opportunity to participate in the equity of the Company as well as to motivate them to perform better through increased loyalty and dedication to the Company.

Executive, non-executive and independent directors and full-time employees of our Group are eligible to participate in the Scheme. Directors who are controlling shareholders of the Company and their associates are not eligible to participate in the Scheme.

Principle 9:Disclosure of Remuneration


Guideline 9.4:Details of employee share schemes


The number of Options to be offered to a participant of the Scheme shall be determined by the RC, who shall take into account criteria such as the rank, performance, years of service and potential for future development of that participant.

The exercise price for each share in respect of which an option is exercisable shall be fixed at:

(a) a price equal to the average of the last dealt prices for a share on the Singapore Exchange Securities Trading Limited (“SGX-ST”) for the period of three consecutive market days immediately prior to the relevant date of grant (“Market Price”) but in no event shall the exercise price per share be less than its par value (“Market Price Options”); or

(b) a price which is set at a discount to the Market Price, provided that the maximum discount shall not exceed 20% of the Market Price but in no event shall the exercise price per share be less than its par value (“Incentive Options”).

Each eligible participant who has been granted Market Price Options shall be entitled to exercise at any time after the first anniversary of the date of grant of that option. Each eligible participant who has been granted Incentive Options shall be entitled to exercise at any time after the second anniversary of the date of grant of that option.

All options must be exercised before the expiry of 10 years from the date of grant in the case of employees and before the expiry of five years in the case of non-executive directors and independent directors.

Special provisions dealing with the lapsing or permitting the earlier exercise of options under certain circumstances include the termination of the participant’s employment or appointment in our Group.

The Scheme shall continue in operation for a maximum period of ten years commencing from 26 June 2007, being the adoption date.

The nominal amount of the aggregate number of shares over which the RC may grant options on any date, when aggregated with the nominal amount of the number of shares issued and issuable in respect of all options granted under the Scheme and any other share option schemes of the Company, shall not exceed 15% of the issued share capital of the Company on the day preceding the date of the relevant grant.

accountability

The Board provides shareholders with a detailed and balanced explanation and analysis of the Company’s performance and prospects on a quarterly basis. The management provides the Board with management accounts of the Group’s performance, position and prospects on a regular basis.

audit Committee (“aC”)

The AC, regulated by a set of written terms of reference, comprises 3 independent non-executive directors and 2 non-executive directors. The members of the AC are as follows:

Mr Ang Miah Khiang (Chairman) Mr Ronnie Teo Heng Hock Mr Robert Van Jin Nien Mr Rong-Jong Owng Mr Rajan Menon

The AC has full access to, and the co-operation of management and has full discretion to invite any director or executive officer to attend its meetings and has been given adequate resources to enable it to discharge its functions.

Principle 10:Accountability and Audit

Principle 11:Audit Committee


Guideline 11.8:Disclosure of Names of Members of Audit Committee and their Activities


The AC performs the following functions:

(a) Reviews the annual and quarterly financial statements of the Company and the Group before submission to the Board for adoption;

(b) Reviews with the internal and external auditors, their audit plans and audit reports;

(c) Reviews the cooperation given by the Company’s officers to the external auditors;

(d) Reviews interested person transactions and transactions falling within the scope of Chapter 10 of the SGX-ST Listing Manual (“Listing Manual”);

(e) Nominates and reviews the appointment or re-appointment of external auditors and considers matters relating to the resignation or dismissal of external auditors;

(f ) Reviews the independence of the external auditors annually;

(g) Undertake such other reviews and projects as may be requested by the Board and report to the Board its findings from time to time on matters arising and requiring the attention of the AC; and

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

Apart from the above functions, the AC will commission and review the findings of internal investigations into matters where there is suspicion of fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation, which has or is likely to have a material impact on the operating results and/or financial position.

In the event that a member of the AC is interested in any matter being considered by the AC, he will abstain from reviewing that particular transaction or voting on that particular resolution.

Annually, the AC meets with the internal and external auditors without the presence of management.

The Company’s Whistle-Blowing programme serves to encourage and to provide a channel for staff of the Group to report and to raise, in good faith and in confidence, their concerns about possible improprieties in matters of financial reporting or other matters. To facilitate independent investigation of such matters and appropriate follow up actions, all whistle blowing reports are directed to the AC via a dedicated email address. The Whistle-Blowing programme is communicated to all staff.

In performing its functions, the AC:

(i) has met with the internal and external auditors, without the presence of management, at least once a year;

(ii) has explicit authority to investigate any matter within its terms of reference;

(iii) has had full access to and cooperation from management and has full discretion to invite any director and executive officer to attend its meetings; and

(iv) has been given reasonable resources to enable it to discharge its functions properly.

The executive management of the Company attends all meetings of the AC on invitation.

The AC noted that the external auditors of the Company had not rendered any non-audit services for the year ended 31 December 2009 and is satisfied with the independence and objectivity of the external auditors. The AC had therefore recommended to the Board that the auditors, Ernst & Young, be nominated for re-appointment as auditors at the forthcoming AGM of the Company.

The auditors, Ernst & Young, have indicated their willingness to accept re-appointment.



Internal Controls

The Group’s system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. It can only provide reasonable and not absolute assurance against material misstatement or loss. During the year, the AC, on behalf of the Board, had reviewed the effectiveness of the Group’s material internal controls, including financial, operational and compliance controls, and risk management policies and systems. The process used by the AC to review the effectiveness of the system of internal controls and risk management includes:-

(i) discussions with management on risks identified by management;

(ii) the audit processes;

(iii) the review of internal and external audit plans; and

(iv) the review of significant issues arising from internal and external audits.

The Board is responsible for ensuring that management maintains a sound system of internal controls to safeguard shareholders’ investment and the Group’s assets. The Board believes that in the absence of any evidence to the contrary and from due enquiry, the system of internal controls that has been maintained by the Group’s management and that was in place throughout the financial year and up to the date of this report is adequate to meet the needs of the Group in its current business environment.

Any material non-compliance and internal control weaknesses noted during the internal audit and the recommendations thereof are reported to the AC as part of the review of the Group’s internal control system.

risk Management

The Company has not put in place a Risk Management Committee. However, management have in place a financial risk management policy and regularly reviews the Company’s business and operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. Management reviews all significant control policies and procedures and highlights all significant matters to the directors and AC. Details of the Group’s financial risk management policy are set out in Note 33 “Financial Risk Management” of the Notes to the Consolidated Financial Statements.

Internal audit

The Group has outsourced its internal audit function to external audit professionals. Capital Advisers Co., Ltd. (“CA”), a subsidiary in Japan, has an internal auditor performing the internal audit role in CA in accordance with Japan’s regulatory requirements. The AC has initiated steps to undertake a high level review of the internal audit process in CA by a co-sourcing arrangement between the internal auditor of CA and the external audit professionals. Both parties report directly to the AC. The AC reviews and approves the annual audit plan and resources to ensure that the internal auditors have the necessary resources to adequately perform their duties.

Communication with shareholders

In line with continuous disclosure obligations, the Company is committed to regular and proactive communication with its shareholders. It is the Board’s policy that shareholders be informed of all major developments within the Group.

Price-sensitive information and results are released to the public through SGXNET on a timely basis in accordance with the requirements of the SGX-ST. The Company does not practice selective disclosure.

All shareholders of the Company receive the annual report and notice of AGM within the mandatory notice period. The notice will also be advertised in the newspapers. Shareholders are encouraged to participate at the Company’s general meetings. The Board (including the Chairman of the respective Board Committees), management, as well as the external auditors will be available at the forthcoming AGM to address any questions that shareholders may have. Shareholders are encouraged to attend the AGM to stay informed of the Company’s strategy and goals. The AGM is the principal forum for dialogue with shareholders.


Principle 12: Internal Controls

Guideline 12.2: Internal Controls, including financial operational and compliance controls and Risk Management

Principle 13: Internal Audit

Principle 14: Communication with Shareholders

Principle 15: Communication with Shareholders


dealings In securities

The Company has adopted an internal policy to govern the conduct of securities transactions by its directors and employees. All directors and officers of the Company and its subsidiaries who have access to price sensitive information are required to refrain from dealing in the Company’s securities at all times as provided under the provisions of the Securities and Futures Act (Chapter 289 of Singapore).

The directors and officers have been informed not to deal in the Company’s shares whilst in possession of price sensitive information and during the periods commencing two weeks prior to the announcement of the Company’s financial statements for each of the first three quarters of its financial year and one month before the announcement of the Company’s full year results and ending on the date of the announcement of the relevant results.

Directors and officers are required to observe insider trading provisions under the Securities and Futures Act (Chapter 289 of Singapore) at all times even when dealing in the Company’s securities within the permitted periods. Directors of the Company are required to report all dealings to the Company Secretary.

Material Contracts

Save for the service agreements entered into with Mr Kazuhiko Yoshida and Mr Michio Tanamoto which are still subsisting as at the end of FY2009, there are no material contracts involving the interests of the CEO, the Directors or controlling shareholders entered into by the Group which are still subsisting as at the end of the financial year or entered into during the financial year.

Interested person transactions

During the financial year, there were no interested person transactions entered into by the Group, as defined under the Listing Manual.

Prior to entry by the Company into an interested person transaction, the Board and the AC will review such a transaction to ensure that the relevant rules under Chapter 9 of the Listing Manual are complied with.

directors’ Interests In shares and debentures

The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company except as follows:

direct Interest deemed InterestName of director and holdings at holdings holdings at holdingscompany in which beginning of at end of beginning of at end of interests are held the year the year the year the year 01/01/2009 31/12/2009 01/01/2009 31/12/2009

the Company

Kazuhiko Yoshida – – 11,937,500 11,937,500Michio Tanamoto – – 11,937,500 11,937,500

There have been no changes in the above directors’ interest in shares of the Company as at 21 January 2010.


Listing Rule 1207, Sub-Rule (7) on Statement of Direct and Deemed Interest of each Director

Listing Rule 1207, Sub-Rule (18) on Dealings in Securities

Listing Rule 1207, Sub-Rule (8) on Material Contracts

Listing Rule 1207, Sub-Rule (16) on Interested Person Transactions


Use of placement proceeds

A status report on the use of placement proceeds raised from the additional issue of securities to Yamasa Co., Ltd during FY2009 is as follows:

placement proceeds Us$’ million Amount raised 17.80 Less: Placement expenses (0.10) Net placement proceeds 17.70

As at the date of this report, none of the net placement proceeds have been utilised.


Listing Rule 1207, Sub-Rule (19) Disclosure of Use of Proceeds


FINaNCIal CoNteNts

45 Independent auditors’ report46 Balance sheets 48 Consolidated income statement49 Consolidated statement of comprehensive income50 Consolidated statement of changes in equity51 Consolidated cash flow statement53 Notes to the consolidated financial statements

Independent Auditors’ Reportto the shareholders of Uni-asia Finance Corporation(Incorporated in the Cayman Islands with limited liability)

We have audited the financial statements of Uni-Asia Finance Corporation (the “Company”) and its subsidiaries (together, the “Group”) set out on pages 46 to 104 which comprise the consolidated and Company balance sheets as at 31 December 2009, and the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes.

MaNaGeMeNt’s respoNsIBIlIty For the FINaNCIal stateMeNts

The management of the Company are responsible for the preparation and the true and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and the true and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

aUdItors’ respoNsIBIlIty

Our responsibility is to express an opinion on these financial statements based on our audit. Our report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and true and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

opINIoN

In our opinion, the financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2009 and of the Group’s loss and cash flows for the year then ended in accordance with International Financial Reporting Standards.

ernst & youngCertified Public AccountantsHong Kong

15 March 2010


Balance SheetsYear ended 31 December 2009

Group Company Notes 2009 2008 2009 2008 US$’000 US$’000 US$’000 US$’000

assetsNon-current assets

Investment properties 5 4,335 4,082 – –Intangible assets 6 104 534 – –Property, plant and equipment 7 22,897 27,395 35 83Loans receivable 8 3,750 – 3,500 –Loans to subsidiaries 32(e) – – 7,049 15,832Investments 9 41,881 46,005 30,260 27,935Investments in subsidiaries 32 – – 1,537 15,721Investments in associates 10 77 240 – –Rental deposit 2,316 3,113 – –Deferred tax assets 24(b) 40 1,623 – 1,280Deposits for purchase of vessels – 37,347 – 4,042

Total non-current assets 75,400 120,339 42,381 64,893

Current assetsProperties for sale 11 – 9,013 – –Investments 9 643 280 – –Loans to subsidiaries 32(e) – – 11,556 12,795Derivative financial instruments 12 – 773 – 773Accounts receivable 13 3,965 4,905 483 39Amount due from subsidiaries 32(f ) – – 3,104 11,729Prepayments, deposits and other receivables 1,385 1,812 346 433Tax recoverable 30 293 – –Deposits pledged as collateral 14 13,100 12,448 12,485 12,400Cash and bank balances 15 53,318 28,797 43,814 13,689

Total current assets 72,441 58,321 71,788 51,858

Total assets 147,841 178,660 114,169 116,751


Balance Sheets (continued)Year ended 31 December 2009

Group Company Notes 2009 2008 2009 2008 US$’000 US$’000 US$’000 US$’000

eQUItyEquity attributable to owners of the parent

Share capital 16 50,111 41,759 50,111 41,759Share premium 16 30,732 21,402 30,732 21,402Retained earnings 19,812 34,332 22,021 36,376Fair value reserve (57) 322 – –Hedging reserve – (10,201) – –Exchange reserve 3,841 4,940 – 609

Total attributable to owners of the parent 104,439 92,554 102,864 100,146Non-controlling interests – 1,187 – –Total equity 104,439 93,741 102,864 100,146

lIaBIlItIesNon-current liabilities

Borrowings 17 600 13,718 – –Finance lease obligations 34(d) 11 228 – –Due to Tokumei Kumiai investors 35(a) 613 2,055 – –Retirement benefit allowance 240 656 – –Derivative financial instruments 12 – 7,850 – –Other payables 821 – – –

Total non-current liabilities 2,285 24,507 – –

Current liabilitiesBorrowings 17 34,218 45,173 10,772 16,055Finance lease obligations 34(d) 9 100 – –Accounts payable 18 2,614 3,080 – 2Amount due to subsidiaries 32(f ) – – – 2Other payables and accruals 4,100 6,821 533 546Derivative financial instruments 12 – 5,103 – –Income tax payable 176 135 – –

Total current liabilities 41,117 60,412 11,305 16,605

Total equity and liabilities 147,841 178,660 114,169 116,751


Consolidated Income StatementYear ended 31 December 2009

Notes 2009 2008 US$’000 US$’000

Fee income 19 17,690 11,709Hotel income 31,782 26,496Investment returns 20 3,602 419Interest income 21 1,549 1,330Other income 476 592Total income 55,099 40,546

Employee benefits expense 22 (16,597) (18,737)Amortization and depreciation (4,687) (1,502)Other expenses 23 (36,326) (22,198)Impairment of property, plant and equipment (2,166) –Loss on disposal of property, plant and equipment (192) (116)Impairment of goodwill (411) – (60,379) (42,553)

Operating loss (5,280) (2,007)

Finance costs - interest expense 21 (9,766) (1,369)Finance costs - others (69) (460)Share of results of associates (157) (15)Loss/ (profit) allocation to Tokumei Kumiai investors 1,383 (276 )Loss before tax (13,889) (4,127)Tax (expense)/ credit 24 (1,794) 463

Loss for the year (15,683) (3,664)

Loss attributable to:Owners of the parent (14,520) (3,055)Non-controlling interests (1,163) (609)

(15,683) (3,664)

Loss per share attributable to the equity holdersof the company during the year (US cents per share):- basic and diluted 27 (5.16) (1.17)


Consolidated Statement of Comprehensive IncomeYear ended 31 December 2009

2009 2008 US$’000 US$’000

Loss for the year (15,683) (3,664)

Other comprehensive income/ (expense) for the year, after tax:Exchange differences on translation of foreign operations (1,129) 4,462Fair value gain/ (loss) of cash flow hedges 4,891 (10,201)Fair value gain/ (loss) of available-for-sale financial assets (68) –Impairment of property, plant and equipment (316) –

Other comprehensive income/ (expense) for the year, net of tax 3,378 (5,739)

Total comprehensive expense for the year, net of tax (12,305) (9,403)

Total comprehensive expense attributable to:Owners of the parent (11,107) (9,017)Non-controlling interests (1,198) (386)

(12,305) (9,403)


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r the

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701

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Consolidated Cash Flow StatementYear ended 31 December 2009

Notes 2009 2008 US$’000 US$’000

Cash flows from operating activities

Loss before tax (13,889) (4,127)

Adjustments for:Investment returns 20 (3,602) (419)Impairment of goodwill 411 –Amortization and depreciation 4,687 1,502Realization of negative goodwill arising on acquisition of subsidiaries – (118)Gain on deconsolidation of subsidiaries 31 (2) –Impairment of property, plant and equipment 2,166 –Loss on disposal of property, plant and equipment 192 116Provision for onerous contracts 1,844 –Interest income 21 (1,549) (1,330)Finance costs - interest expense 21 9,766 1,369Finance costs - others 69 460Share of results of associates 157 15(Loss)/ profit allocation to Tokumei Kumiai investors (1,383) 276Net foreign exchange loss 3,793 211

2,660 (2,045)

Change in working capital:Net change in properties for sale (244) (6,077)Net change in accounts receivable 1,213 339Net change in prepayments, deposits and other receivables 654 492Net change in retirement benefit allowance (399) 188Net change in accounts payable (398) (1,050)Net change in other payables and accruals (2,911) (2,668)

Cash generated from/ (used in) operations 575 (10,821)

Interest received on bank balances 223 1,117Tax reimbursed/ (paid) 88 (738)

Net cash generated from/ (used in) operating activities 886 (10,442)


Consolidated Cash Flow Statement (continued)Year ended 31 December 2009

Notes 2009 2008 US$’000 US$’000

Cash flows from investing activitiesAcquisition of subsidiaries 29 – 10,747Deemed disposal of subsidiaries 30 (4,661) –Deconsolidation of subsidiaries 31 (73) (210)Purchase of investments (929) (11,050)Purchase of investment properties – (8)Proceeds from sale of investments 4,454 2,479Redemption to Tokumei Kumiai investors – (868)Deposits refunded/ (paid) for purchase of vessels 13,357 (29,531)Purchase of property, plant and equipment (72,094) (334)Proceeds from disposal of property, plant and equipment 9 1Proceeds from sale of properties for sale 6,989 –Loans advanced (250) –Loans repaid – 6,500Interest received from syndicated loans 1,342 241Net increase in deposits pledged as collateral (2,441) (6,987)Proceeds from interest on investments 836 6,046Settlement of forward currency contracts (307) –Dividends received from an associate – 19Proceeds from property rental 684 589

Net cash used in investing activities (53,084) (22,366)

Cash flows from financing activitiesProceeds from issuing shares 16 17,772 –Placement expenses 16 (90) –New borrowings 89,899 48,585Repayment of borrowings (28,491) (35,522)Interest paid on borrowings (2,561) (1,450)Payment of lease obligation (72) –Dividends paid – (5,275)

Net cash generated from financing activities 76,457 6,338

Net increase/ (decrease) in cash and cash equivalents 24,259 (26,470)

Movements in cash and cash equivalents:

Cash and cash equivalents at beginning of the year 28,797 50,800Net increase/ (decrease) in cash and cash equivalents 24,259 (26,470)Effects of exchange rate changes 262 4,467

Cash and cash equivalents at end of the year 15 53,318 28,797


1. GeNeral INForMatIoN

The principal activities of Uni-Asia Finance Corporation (the “Company”) and its subsidiaries (together, the “Group”) are finance arrangement and investment management of alternative assets including primarily shipping and real estates in Japan and China.

The Company is an exempted company incorporated in the Cayman Islands on 17 March 1997 with limited liability and it shares are listed on the Stock Exchange of Singapore.

2.1 BasIs oF preparatIoN

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”). They have been prepared under the historical cost convention, except for investment properties, derivative financial instruments, financial assets at fair value through profit or loss and investments, which have been measured at fair value. These financial statements are presented in United States dollars and all values are rounded to the nearest thousand except when otherwise indicated.

Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries (collectively referred to as the “Group”) for the year ended 31 December 2009. The results of subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. All income, expenses and unrealized gains and losses resulting from intercompany transactions and intercompany balances within the Group are eliminated on consolidation in full.

The acquisition of subsidiaries during the year has been accounted for using the purchase method of accounting. This method involves allocating the cost of the business combinations to the fair value of the identifiable assets acquired, and liabilities and contingent liabilities assumed at the date of acquisition. The cost of the acquisition is measured at the aggregate of the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.

Non-controlling interests represent the interests of outside shareholders not held by the Group in the results and net assets of the Company’s subsidiaries.

Comparative figures

Certain comparative figures have been reclassified to conform to the current year’s presentation.

2.2 ChaNGes IN aCCoUNtING polICy aNd dIsClosUres

The Group has adopted the following new and revised IFRSs for the first time for the current year’s financial statements.

IFRS 1 and IAS 27 Amendments Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and Separate Financial Statements - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

IFRS 7 Amendments Amendments to IFRS 7 Financial Instruments: Disclosures - Improving Disclosures about Financial InstrumentsIFRS 8 IFRS 8 Operating SegmentsIAS 1 (Revised) Presentation of Financial StatementsIAS 23 (Revised) Borrowing CostsIFRIC-Interpretation 16 Hedges of a Net Investment in a Foreign Operation

The adoption of these new and revised IFRSs has had no significant financial effect on these financial statements.

In the first year of application of IFRS 7 Amendments, comparative information is not required.

Notes to the Consolidated Financial StatementsYear ended 31 December 2009


2.3 IMpaCt oF IssUed BUt Not yet eFFeCtIve INterNatIoNal FINaNCIal reportING staNdards

The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective, in these financial statements.

IFRS 3 (Revised) Business Combinations 1

IFRS 9 Financial Instruments 3

IAS 27 (Revised) Consolidated and Separate Financial Statements 1

IAS 39 Amendment Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items 1

IFRIC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 2

Apart from the above, the IASB has also issued Improvements to IFRSs* which sets out amendments to a number of IFRSs primarily with a view to removing inconsistencies and clarify wording.

1 Effective for annual periods beginning on or after 1 July 20092 Effective for annual periods beginning on or after 1 July 20103 Effective for annual periods beginning on or after 1 January 2013* Improvements to IFRSs contain amendments to IFRS2, IFRS 5, IFRS 8, IAS 1, IAS 7, IAS17, IAS36, IAS 38, IAS 39, IFRIC Interpretation 9

and IFRIC Interpretation 16.

The Group is in the process of making an assessment of the impact of these new and revised IFRSs upon initial application. So far, the Group considers that these new and revised IFRSs are unlikely to have a significant impact on the Group’s results of operations and financial position.

2.4 sUMMary oF sIGNIFICaNt aCCoUNtING polICIes

(a) Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

(b) Associates

Associates are all entities, over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognized at cost.

The Group’s share of its associates’ post-acquisition profits or losses is recognized in the income statement, and its share of post-acquisition movements in equity is recognized in equity. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interests in the associates, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Investments held by venture capital or similar entities are excluded from the scope of IAS 28 where those investments are designated, upon initial recognition, as at fair value through profit or loss and are accounted for in accordance with IAS 39. Certain investments of the Group have applied this scope exemption with changes in fair value recognized in profit or loss in the period of change.



2.4 sUMMary oF sIGNIFICaNt aCCoUNtING polICIes (continued)

(c) Revenue and other income recognition

Arrangement fee is recognized on delivery and upon completion of the transaction or service when all obligations associated with the transaction are completed and when the amount of revenue can be measured reliably.

Agency fee and brokerage commission are recognized when pre-agreed duties and functions of acting as an agent has been rendered.

Project management fee, asset management fee, administration fee, incentive fee and charter income are recognized when pre-agreed terms and services has been rendered.

Hotel income is recognized on a basis that reflects the timing, nature and value when the relevant services are provided.

Rental income is recognized on a straight-line basis over the leases terms.

Interest income is recognized using the effective interest basis.

Dividend income is recognized when the right to receive payment is established.

(d) Goodwill

Goodwill is initially measured at cost being the excess of the cost of the business combination over the Group’s share in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the income statement.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

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

(e) Impairment of non-financial assets other than goodwill

Where an indication of impairment exists, or when annual impairment testing for an asset is required (other than properties for sale, deferred tax assets, financial assets, investment properties and goodwill), the asset’s recoverable amount is estimated. An asset’s recoverable amount is the higher of the asset’s or cash-generating unit’s value in use and its fair value less costs to sell, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is recognized only if the carrying amount of an asset exceeds its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is charged to the income statement in the period in which it arises.




(e) Impairment of non-financial assets other than goodwill (continued)

An assessment is made at the end of each reporting period as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognized impairment loss of an asset other than goodwill is reversed only if there has been a change in the estimates used to determine the recoverable amount of that asset, but not to an amount higher than the carrying amount that would have been determined (net of any depreciation or amortization) had no impairment loss been recognized for the asset in prior years. A reversal of such an impairment loss is credited to the income statement in the period in which it arises, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is accounted for in accordance with the relevant accounting policy for that revalued asset.

(f ) Related parties

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

(a) the party, directly or indirectly through one or more intermediaries, (i) controls, is controlled by, or is under common control with, the Group; (ii) has an interest in the Group that gives it significant influence over the Group; or (iii) has joint control over the Group;

(b) the party is an associate;

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

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

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

(f ) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e).

(g) Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Vessel repairs and surveys costs are charged as expenses as they are incurred. Dry-docking costs of a vessel are capitalized and depreciated over the period to the next estimated dry-docking date. An impairment loss is recognized for the amount by which the carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and value in use.

Freehold land in hotel properties has unlimited useful life and therefore is not depreciated.

Leasehold improvements are depreciated over the remaining period of the lease while all other fixed assets are depreciated at the following rates on a straight-line basis, which is deemed sufficient to write off their costs to their residual values over their estimated useful lives: office equipment at 33 1/3%, hotel properties 2.6%, vessels 5%-5.6%, motor vehicles 8.8% and furniture and fixtures at 25% per annum. An element of the cost of the vessel is attributed at acquisition to its service potential reflecting its maintained condition. This cost is depreciated over the period to the next dry-docking. Costs incurred on subsequent dry docking of vessel are capitalized and depreciated on a straight-line basis over the estimated period until the next dry-docking. Gain and losses on disposals are determined by comparing proceeds with carrying amounts and are included in the income statement.




(h) Investment properties

Investment properties include those portions of office buildings that are held for long-term rental yields and/ or for capital appreciation and land under operating leases that are held for long-term capital appreciation or for a currently indeterminate use.

Investment properties are initially recognized at cost and subsequently carried at fair value. Changes in fair values are recognized in the income statement.

Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalized as additions and the carrying amounts of the replaced components are written off to the income statement. The cost of maintenance, repairs and minor improvement is charged to the income statement when incurred.

On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is recognized in the income statement.

(i) Intangible assets (other than goodwill)

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each financial year end.

Trademark and licenses

Purchased trademark and licenses are stated at cost less any impairment losses and are amortized on the straight-line basis over their estimate useful lives of 3 to 10 years.

(j) Properties for sale

Properties for sale are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset must be available for immediate sale in its present condition subject only to terms that are usual and customary for the sale of such assets or disposal groups and its sale must be highly probable. Properties for sale are measured at the lower of their carrying amounts and net realizable value.

(k) Financial assets

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired.

When financial assets are recognized initially, they are measured at fair value, plus, in the case of financial assets not fair value through profit or loss, directly attributable transaction costs.




(k) Financial assets (continued)

(i) Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. Derivatives are also categorized as ‘held for trading’ unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realized within 12 months from the end of the reporting period.

For investments that meet the definition under IAS 28 “Associate” (“IAS 28”), the Group has applied the scope exemption where investments held by venture capital or similar entities are excluded from the scope of IAS 28 where those investments are designated, upon initial recognition, as at fair value through profit or loss and are accounted for in accordance with IAS 39 “Financial instruments: Recognition and Measurement”.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial assets are recognized in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include exchange differences, interest and dividend income.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such assets are subsequently measured at amortized cost using effective interest method less any impairment. Amortized cost is calculated taking into account any discount or premium on acquisition and includes fees or costs that are an integral part of the effective interest rate. The effective rate amortization is included in finance income in the income statement. The loss arising from impairment is recognized in the income statement in finance costs or other operating expenses.

(iii) Available-for-sale financial investments

Available-for-sale financial investments are non-derivative financial assets in listed and unlisted equity and debt securities. Equity investments classified as available-for-sale are those which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial recognition, available-for-sale financial investments are subsequently measured at fair value, with unrealized gains or losses recognized as other comprehensive income in the fair value reserve until the investment is derecognized, at which time the cumulative gains or losses is recognized in the income statement in investment returns, or until the investment is determined to be impaired, at which the cumulative gain or loss is recognized in the income statement and removed from the fair value reserve. Interest and dividends earned are reported as investment returns and are recognized in the income statement as investment returns in accordance with the policies.

When the fair value of unlisted equity securities cannot be reliably measured because (a) the variability in the range of reasonable fair value estimates is significant for that investment or (b) the probabilities of the various estimates within the range cannot be reasonably assessed and used in estimating fair value, such securities are stated at cost less any impairment losses.

Purchases and sales of investments are recognized at trade date - the date on which the Group commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss, are initially recognized at fair value and transaction costs are expensed in the income statement.





Fair values for unquoted securities are estimated by the management. In determining fair valuation, the management makes use of market-based information and fair valuation models such as discounted cash flow models. In many instances the management also relies on financial data of investees and on estimates provided by the management of the investee companies as to the effect of future developments.

Performance notes are investments with income and maturity values which fluctuate based on the distributions received from underlying assets, which are generally investments in property development companies, distressed loans or shipping companies.

Fair values of performance notes or other collective investment schemes are determined by the Group’s interest in the fair values of each scheme’s underlying assets.

Although the management uses their best judgment in estimating the fair value of investments, there are inherent limitations in any estimation techniques. Future confirming events will also affect the estimates of fair value and the effect of such events on the estimates of fair value, including the ultimate liquidation of investments, could be material to these consolidated financial statements.

Derecognition of financial assets

A financial asset is derecognized when:

the right to receive cash flows from the asset have expired;•

the Group has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the •received cash flows in full without material delay to a third party under a “pass-through” arrangement;

and either (a) the Group has transferred substantially a the risks and rewards of the asset, or (b) the Group has neither •transferred nor retained substantially all the risks and rewards of the assets, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. In that case, the Group also recognized an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the right and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment of financial assets

Loans and receivables

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the assets (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.





Impairment of financial assets (continued)

Loans and receivables (continued)

For loans and receivables, the Group first assesses individually whether objective evidence of impairment exists for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets’ carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced either directly or through the use of an allowance account and the amount of the loss is recognized in the income statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery or other criteria for writing off amounts charged to the allowance account against the carrying amount of impaired financial assets.

If, in subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to the income statement.

Available-for-sale financial investments

For the available-for-sale financial investments, the Group assesses at the end of each reporting period whether there is objective evidence that an investment or a group of investments is impaired.

If an available-for-sale asset is impaired, an amount comprising the difference between its costs (net of any principal payment and amortization) and its current fair value, less any impairment loss previously recognized in the income statement, is removed from other comprehensive income and recognized in the income statement.

In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in fair value of an investment below its cost. The determination of what is “significant” or “prolonged” requires judgment. “Significant” is evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss that investment previously recognized in the income statement – is removed from other comprehensive income and recognized in the income statement. Impairment losses on equity instruments classified as available-for-sale are not reversed through the income statement. Increase in their fair value after impairment are recognized directly in other comprehensive income.




(l) Financial liabilities at amortized cost (including interest-bearing loans and borrowings)

Financial liabilities including accounts and other payables, and interest-bearing loans and borrowings are initially stated at fair value less directly attributable transaction costs and are subsequently measured at amortized cost, using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost. The related interest expense is recognized within “Finance costs” in the income statement.

Gains and losses are recognized in the income statement when the liabilities are derecognized as well as through the amortization process.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognized in the income statement.

(m) Cash and bank balances

For the purpose of the consolidated cash flow statement, cash flow from operating activities includes fee income and/ or other income derived from the Group’s finance arrangement and investment management activities which are the principal activities of the Group.

Cash and cash equivalents include cash in hand, bank balances and short term bank deposits with an original maturity of less than three months.

(n) Income tax

Income tax comprises current and deferred tax. Income tax relating to items recognized outside income statement is recognized outside income statement, either in other comprehensive income or directly in equity.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period, taking into consideration interpretations and practices prevailing in the countries in which the group operates.

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

Deferred tax liabilities are recognized for all taxable temporary differences, except:

where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a •business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint •ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.




(n) Income tax (continued)

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

where the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an •asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in •joint ventures, deferred tax assets are only recognized to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.

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

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

(o) Employee benefits

Pension obligations

Group companies have various defined contribution pension schemes in accordance with the local conditions and practices in the countries in which they operate. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees benefits relating to employee services in the current and prior periods.

For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis.

Once the contributions have been paid, the Group has no further payment obligations. The regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs.

Bonus scheme

The Group pays out bonus to employees based on the overall corporate performance, the department being able to achieve the annual budget and the employee’s performance and contribution to the Group.




(p) Derivative financial instruments and hedging accounting

The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps to hedge its foreign currency and interest rate risk, respectively. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value of derivatives are taken directly to the income statement, except for the effective portion of cash flow hedges, which is recognized in other comprehensive income.

For the purpose of hedge accounting, hedges are classified as:

fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an •unrecognized firm commitment (except for foreign currency risk); or

cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk •associated with a recognized asset or liability or a highly probable forecast transaction, or a foreign currency risk in an unrecognized firm commitment.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting, the risk management objective and its strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the Group will assess the hedging instrument’s effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

Fair value hedges

The change in the fair value of an interest rate hedging derivative is recognized in the income statement in finance costs. The change in the fair value of the hedged item attributable to the risk hedged is recorded as a part of the carrying amount of the hedged item and is also recognized in the income statement in finance costs.

For fair value hedges relating to items carried at amortized cost, the adjustment to carrying value is amortized through the income statement over the remaining term to maturity. Effective interest rate amortization may begin as soon as an adjustment exists and shall begin no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognized, the unamortized fair value is recognized immediately in the income statement.

When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in the income statement. The changes in the fair value of the hedging instrument are also recognized in the income statement.




(p) Derivative financial instruments and hedging accounting (continued)

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized directly in other comprehensive income in the hedging reserve, while any ineffective portion is recognized immediately in the income statement in finance costs.

Amounts recognized in other comprehensive income are transferred to the income statement when the hedged transaction affects profit or loss, such as when hedged financial income or financial expense is recognized or when a forecast sale occurs. Where the hedged item is the cost of a nonfinancial asset or non-financial liability, the amounts recognized in other comprehensive income are transferred to the initial carrying amount of the non-financial asset or non-financial liability.

If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognized in equity are transferred to the income statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, the amounts previously recognized in other comprehensive income remain in other comprehensive income until the forecast transaction or firm commitment affects profit or loss.

(q) Foreign currency translation

The consolidated financial statements are presented in United States Dollars, which is the Company’s functional and presentation currency. Each entity in the Group determines its own functional currency. Foreign currency transactions recorded by the entities in the Group are initially recorded using their respective functional currency rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value was determined.

The functional currencies of certain overseas subsidiaries are currencies other than the United States Dollar. As at the end of the reporting period, the assets and liabilities of these entities are translated into the presentation currency of the Company at the exchange rates ruling at the end of the reporting period and their income statements are translated into United States Dollars at the average exchange rates for the year. The resulting exchange differences are recognized in other comprehensive income and accumulated in the exchange reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in the income statement.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on acquisition are treated as assets and liabilities of the foreign operation and are translated at the closing rate.

For the purpose of the consolidated cash flow statement, the cash flows of overseas subsidiaries are translated into United States Dollars at the exchange rates ruling at the dates of the cash flows. Frequently recurring cash flows of overseas subsidiaries which arise throughout the year are translated into United States Dollars at the average exchange rates for the year.




(r) Leases

Leases that transfer substantially all the rewards and risks of ownership of assets to the Group, other than legal title, are accounted for as finance leases. At the inception of a finance lease, the cost of the leased asset is capitalized at the present value of the minimum lease payments and recorded together with the obligation, excluding the interest element, to reflect the purchase and financing. Assets held under capitalized finance leases are included in property, plant and equipment, and depreciated over the shorter of the lease terms and the estimated useful lives of the assets. The finance costs of such leases are charged to the income statement so as to provide a constant periodic rate of charge over the lease terms.

Assets acquired through hire purchase contracts of a financing nature are accounted for as finance leases, but are depreciated over their estimated useful lives.

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Where the Group is the lessor, assets leased by the Group under operating leases are included in non-current assets, and rentals receivable under the operating leases are credited to the income statement on the straight-line basis over the lease terms. Where the Group is the lessee, rentals payable under the operating leases are charged to the income statement on the straight-line basis over the lease terms.

(s) Dividends distributions

Dividends distributions to the Company’s shareholders are recognized as a liability in the Group’s financial statements in the period in which dividends are approved by shareholders.

(t) Provision

A provision is recognized when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognized for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounting present value amount arising from the passage of time is included in finance costs in the income statement.

(u) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e. assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalized as part of the cost of those assets. The capitalization of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalized. All other borrowing costs are in the period in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.



3. seGMeNt INForMatIoN

Management monitors the results of its operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/ (loss) before tax from continuing operations. The adjusted profit/ (loss) before tax except that interest income, finance costs and corporate expenses are managed on a group basis and are grouped as others.

Operating segments

At 31 December 2009, the Group is organized on a worldwide basis into four main operating segments (activities): (1) structured finance; (2) maritime investment/ management; (3) distressed assets investment; (4) hotel property investment/ management; and (5) others (head office and corporate treasury functions).

The segment results for the year ended 31 December 2009 are as follows:

hotel/ Maritime distressed property structured investment/ assets investment/ finance management investment management others eliminations Group US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Total incomeExternal customers (252) 23,669 (148) 30,017 1,813 – 55,099Inter-segment – – – – 362 (362) –

(252) 23,669 (148) 30,017 2,175 (362) 55,099

ResultsDepreciation and

amortization (46) (3,626) – (1,015) – – (4,687)Impairment of property,

plant and equipment – – – (2,166) – – (2,166)Impairment of goodwill – – – (411) – – (411)Finance costs - interest

expenses – (8,525) – (1,310) (293) 362 (9,766)Finance costs - others – (43) – (26) – – (69)Share of results of

associates – – – (157) – – (157)Loss allocation to

Tokumei Kumiaiinvestors – – – 1,383 – – 1,383

(Loss)/ profit before tax (2,342) 2,864 (158) (16,134) 1,881 – (13,889)

Other segment items are as follows:

Capital expenditure 3 98,653 - 367 - - 99,023



3. seGMeNt INForMatIoN (continued)

Operating segments (continued)

The segment results for the year ended 31 December 2008 are as follows:


Total incomeExternal customers 2,842 6,919 (252) 29,512 1,525 – 40,546Inter-segment – – – – 227 (227) –

2,842 6,919 (252) 29,512 1,752 (227) 40,546

ResultsDepreciation and amortization (105) (147) – (1,250) – – (1,502)Finance costs - interest expenses – – – (1,388) (208) 227 (1,369)Finance costs - others – (158) – (302) – – (460)Share of results of associates – (4) – (11) – – (15)Profit allocation to Tokumei Kumiai

investors – – – (276) – – (276)

(Loss)/ profit before tax 343 3,839 (256) (9,597) 1,544 - (4,127)

Other segment items are as follows:

Capital expenditure 22 26 – 1,285 – – 1,333





The segment assets and liabilities as at 31 December 2009 are as follows:


Segment assets 1,031 32,054 283 47,862 - – 81,230Investments in associates – – – 77 - – 77Unallocated assets

Loans receivables – – – – 14,628 (14,628) –Deferred tax assets – – – – 40 – 40Prepayment, deposits and other receivables – – – – 76 – 76Deposits pledged as collateral – – – – 13,100 – 13,100Cash and bank balances – – – – 53,318 – 53,318

Total assets 1,031 32,054 283 47,939 81,162 (14,628) 147,841

Segment liabilities 174 551 – 45,960 – (14,628) 32,057Unallocated liabilities

Borrowings – – – – 10,772 – 10,772Other payables and accruals – – – – 397 – 397Income tax payable – – – – 176 – 176

Total liabilities 174 551 – 45,960 11, 345 (14,628) 43,402





The segment assets and liabilities as at 31 December 2008 are as follows:


Segment assets 1,474 59,817 403 73,204 – – 134,898Investments in associates – – – 240 – – 240Unallocated assets

Loan receivables – – – – 11,805 (11,805) –Deferred tax assets – – – – 1,623 – 1,623Investments – – – – 280 – 280Accounts receivables – – – - 1 – 1Prepayment, deposits and other receivables – – – - 80 – 80Tax recoverable – – – - 293 – 293Deposits pledged as collateral – – – - 12,448 – 12,448Cash and bank balances – – – - 28,797 – 28,797

Total assets 1,474 59,817 403 73,444 55,327 (11,805) 178,660

Segment liabilities 302 22, 849 – 56,681 – (11,805) 68,027Unallocated liabilities

Borrowings – – – – 16,055 – 16, 055Other payables and accruals – – – – 702 – 702Income tax payable – – – – 135 – 135

Total liabilities 302 22,849 – 56,681 16,892 (11,805) 84,919

Segment assets consist primarily of investment properties, property, plant and equipment, receivables, investments, deposits for purchase of vessels and properties for sale.

Capital expenditure represents capital additions to property, plant and equipment (note 7).

Geographical information

The Group’s four business segments operate in three main geographical areas, even though they are managed on a worldwide basis.

Global - the Global segment represents activities with assets or customers with no fixed location, which include structured finance and maritime (ship) investment/ management.

Asia (ex-Japan) - the Asia (ex-Japan) segment represents activities with assets or customers located in Asia (ex-Japan), which include structured finance, maritime investment/ management, distressed assets investment and hotel/ property investment/ management.




Geographical information (continued)

Japan – the Japan segment represents activities with assets or customers located in Japan, which include structured finance, maritime investment/ management and hotel/ property investment/ management.

2009 2008 US$’000 US$’000

Income from external customersGlobal 24,177 7,919Asia (ex-Japan) (606) 1,178Japan 29,715 29,967Unallocated 1,813 1,482

55,099 40,546

Revenue from one major customer amounted to US$8,687k, arising from fee income generated from maritime investment/ management segment in 2009. There was no single customer that generated revenue which amounted to 10 per cent or more of the Group’s revenue in 2008.

2009 2008 US$’000 US$’000

Non-current assetsGlobal 27,675 59,100Asia (ex-Japan) 4,639 4,591Japan 39,297 55,025Unallocated 3,789 1,623

75,400 120,339

Income and total assets attributable to business segments are based on the country in which the customer is located. Income generated from non-core businesses and assets not attributable to business segments are disclosed as unallocated. There are no sales between the segments. Total assets and capital expenditure are where the assets are located.

4. sIGNIFICaNt aCCoUNtING JUdGMeNts aNd estIMates

Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The preparation of the Group’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.

Judgments

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognized in the financial statements:

Operating lease commitments - Group as lessor

The Group has entered into commercial property leases on its investment properties. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties which are leased out on operating leases.



4. sIGNIFICaNt aCCoUNtING JUdGMeNts aNd estIMates (continued)

Judgments (continued)

Classification of investment properties

The Group determines whether a property qualifies as an investment property and has developed criteria in making that judgment. Investment property is a property held to earn rentals and/ or for capital appreciation. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group.

Estimation uncertainty

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

Estimation of fair value of investment properties

The Group uses management’s valuation in the fair valuation of investment properties. In the case of an internal valuation, the discounted cash flow method is used which makes reference to the estimated or actual market rental values and equivalent yields. The carrying amount of investment properties at 31 December 2009 was US$4,335k (2008: US$4,082k).

Estimated impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating units and also to choose a suitable discount rate in order to calculate the present value of those cash flows. More details are given in note 6.

Estimate impairment of property, plant and equipment

The Group uses management’s valuation to estimate the value in use of the properties. The valuations are based on the direct capitalization method and discounted cash flow method that makes reference to the estimated market rental values and equivalent yields.

Estimation of fair value of investments

The Group uses both external valuation reports and management’s valuation in the fair valuation of investments. Investments in shipping are revaluated by accredited independent valuers while investments in hotel, residential and distressed debt are revaluated by management. The valuations are based on the discounted cash flow method that makes reference to the estimated or actual market rental values and equivalent yields.

Deferred tax assets

Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The carrying value of deferred tax assets relating to recognized tax losses at 31 December 2009 was US$1k (2008: US$1,315k). The amount of unrecognized tax losses at 31 December 2009 was US$7,501k (2008: US$1,209k). Further details are contained in note 24.



4. sIGNIFICaNt aCCoUNtING JUdGMeNts aNd estIMates (continued)

Estimation uncertainty (continued)

Fair value of derivatives and other financial instruments

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Quoted market prices or dealer quotes for similar instruments are used for long term debt. Other techniques, such as estimated discounted cash flows or comparison of key valuation parameters, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date.

5. INvestMeNt propertIes

Group Note 2009 2008 US$’000 US$’000

At 1 January 4,082 3,426Additions – 8Fair value gain 20 252 405Currency translation differences 1 243

At 31 December 4,335 4,082

The investment properties are leased to third parties under operating leases, further summary details of which are included in note 34(c).

The Group uses management’s valuation in the fair valuation of investment properties. Discounted cash flow method is used which makes reference to the estimated or actual market rental values and equivalent yields. There has not been any independent valuation performed.

As at 31 December 2009, all the Group’s investment properties (2008: Nil) are pledged to secure the Group’s bank facility.

The following amounts are recognized in profit and loss:

Group 2009 2008 US$’000 US$’000

Rental income 286 196Direct operating expenses arising from investment properties that generated rental income 3 31Direct operating expenses arising from investment properties that did not generate rental income 77 62

Further particulars of the Group’s investment properties are detailed below:

Unexpiredlocation Use tenure lease term

Room 701, 712-717, 719-725, 7/F, China Shine Plaza, 9 Lin He Xi Road, Offices Leasehold 46 yearsTianhe District, Guangzhou, PRC



6. INtaNGIBle assets

other intangibleGroup Goodwill assets total US$’000 US$’000 US$’000

CostAt 1 January 2009 423 181 604Addition – 26 26Disposal – (16) (16)Currency translation differences (12) (5) (17)

At 31 December 2009 411 186 597

Accumulated amortization and impairmentAt 1 January 2009 – 70 70Amortization – 30 30Impairment 411 – 411Disposal – (16) (16)Currency translation differences – (2) (2)

At 31 December 2009 411 82 493

Net book valueAt 31 December 2009 – 104 104

CostAt 1 January 2008 – – –Acquisition of subsidiaries 29 343 249 592Disposal – (127) (127)Currency translation differences 80 59 139

At 31 December 2008 423 181 604

Accumulated amortization and impairmentAt 1 January 2008 – – –Acquisition of subsidiaries 29 – 45 45Amortization – 47 47Disposal – (40) (40)Currency translation differences – 18 18

At 31 December 2008 – 70 70

Net book valueAt 31 December 2008 43 111 534



6. INtaNGIBle assets (continued)

Goodwill impairment testing

Goodwill acquired through business combinations was allocated to the hotel/ property investment/ management cash-generating unit (the “CGU”) within the business segment identified by the Group. The recoverable amounts of the CGU are determined based on a value in use calculation. The calculation uses cash flow projections for 2009 based on financial budgets approved by management covering a five-year period and a discount rate of 2.005% (2008: 6%).

Impairment loss of US$411k has been recognized in respect of goodwill as at 31 December 2009 (2008:Nil).

7. property, plaNt aNd eQUIpMeNt

office equipment, hotel furniture MotorGroup Note properties vessels and fixtures vehicles total US$’000 US$’000 US$’000 US$’000 US$’000

CostAt 1 January 2009 26,582 – 4,901 21 31,504Additions 7 98,647 369 – 99,023Disposals – – (1,447) (14) (1,461)Deemed disposal of subsidiaries 30 – (98,647) – – (98,647)Currency translation differences (676) – (98) (1) (775)

At 31 December 2009 25,913 – 3,725 6 29,644

Accumulated depreciation and impairmentAt 1 January 2009 522 – 3,568 19 4,109Charge 674 3,577 405 1 4,657Disposals – – (832) (14) (846)Deemed disposal of subsidiaries 30 – (3,577) – – (3,577)Impairment 2,482 – – – 2,482Currency translation differences (13) – (65) – (78)

At 31 December 2009 3,665 – 3,076 6 6,747

Net book valueAt 31 December 2009, at cost 22,248 – 649 – 22,897



7. property, plaNt aNd eQUIpMeNt (continued)

office equipment, hotel furniture MotorGroup Note properties and fixtures vehicles total US$’000 US$’000 US$’000 US$’000

CostAt 1 January 2008 – 1,116 – 1,116Additions 213 1,120 – 1,333Acquisition of subsidiaries 29 13,480 2,459 17 15,956Transfer from properties for sale 9,819 – – 9,819Disposals – (299) – (299)Written off – (76) – (76)Currency translation differences 3,070 581 4 3,655

At 31 December 2008 26,582 4,901 21 31,504

Accumulated depreciationAt 1 January 2008 – 695 – 695Charge 430 1,024 1 1,455Acquisition of subsidiaries 29 – 1,605 14 1,619Disposals – (166) – (166)Written off – (75) – (75)Currency translation differences 92 485 4 581

At 31 December 2008 522 3,568 19 4,109

Net book valueAt 31 December 2008, at cost 26,060 1,333 2 27,395

Land and buildings included in the hotel properties are freehold.

As at 31 December 2009, certain of the Group’s hotel properties with a carrying amount of US$22,160k (2008: US$15,650k) were pledged to secure the Group’s bank borrowings of US$22,415k (2008: US$12,136k) (note 17).

The carrying amount of the office equipment, furniture and fixtures included an amount of US$20k (2008: US$304k) in respect of assets held under finance leases.

During the financial year, subsidiaries of the Group within the hotel/ property investment/ management segment carried out review of the recoverable amounts of the hotel properties. An impairment loss of US$2,482k (2008: Nil), representing the write-down of these hotel properties to the recoverable amount was recognized in the consolidated income statement of US$2,166k (2008: Nil) and the statement of comprehensive income of US$316k (2008: Nil) for the financial year ended 31 December 2009. The recoverable amount of the hotel properties was based on the value in use and the discount rates used were from 4.53% to 5.50%.



7. property, plaNt aNd eQUIpMeNt (continued)

office equipment, furniture andCompany fixtures US$’000

CostAt 1 January 2009 906Additions 12Disposals (13)Written off (7)

At 31 December 2009 898

Accumulated depreciationAt 1 January 2009 823Charge 60Disposals (13)Written off (7)


Net book valueAt 31 December 2009, at cost 35

CostAt 1 January 2008 950Additions 33Disposals (1)Written off (76)


Accumulated depreciationAt 1 January 2008 632Charge 267Disposals (1)Written off (75)


Net book valueAt 31 December 2008, at cost 83



8. loaNs reCeIvaBle

Group Company 2009 2008 2009 2008 US$’000 US$’000 US$’000 US$’000

Repayable between one and five yearsInterest rate at 6% p.a. 3,500 – 3,500 –Interest rate at 5% p.a. 250 – – –

3,750 – 3,500 –

The carrying amount of the loans approximates to their fair values.

Included in the Group’s loans receivable balance are receivables from related parties as disclosed in note 35(a).

9. INvestMeNts

Current Non-currentGroup 2009 2008 2009 2008 US$’000 US$’000 US$’000 US$’000

Financial assets at fair value through profit or lossUnlisted shares - hotel – – 4,140 8,340Unlisted shares - residential – – 9,659 15,297Unlisted shares - shipping – – 10,986 4,819Unlisted performance notes - hotel – – – 25Unlisted performance notes - shipping – – 16,654 16,826Unlisted performance notes - distressed debt – – 282 389Listed shares - others 643 280 – –Redeemable convertible bonds – – – 74

643 280 41,721 45,770

Available-for-sale financial assetsListed shares - hotel – – 160 235

643 280 41,881 46,005

Current Non-currentCompany 2009 2008 2009 2008 US$’000 US$’000 US$’000 US$’000

Financial assets at fair value through profit or lossUnlisted shares - residential – – 2,338 5,901Unlisted shares - shipping – – 10,986 4,819Unlisted performance notes - shipping – – 16,654 16,826Unlisted performance notes - distressed debt – – 282 389

– – 30,260 27,935

Fair values for unlisted shares are estimated by the management with reference to market-based information and fair valuation models such as discounted cash flow models.

Fair values of unlisted performance notes are determined by the Group’s interest in the fair values of each scheme’s underlying assets.



9. INvestMeNts (continued)

Distressed debt performance notes are redeemed semi-annually, in whole or in part, based on net cash recovered from underlying assets funded by the original note’s issuance. The remaining performance notes are redeemed at their principal amounts on such other date as may be agreed to by the subscribers of the performance notes.

Shipping performance notes are redeemed semi-annually, in whole or in part, based on the net cash inflow from the operation or the disposal of underlying assets. There are no maturity dates for the shipping performance notes invested by the Group.

There are no significant restrictions on the ability of investments to transfer funds to the Group in the form of cash dividends, repayment of loans or advances.

At 31 December 2009, the Company has pledged the interest in share capital of investments of US$4,000k (2008: US$3,500k) as security for investees’ bank loans and for entering into interest rate swap agreements.

10. INvestMeNts IN assoCIates

Summary of associates’ assets, liabilities and results are as follows:

2009 2008 US$’000 US$’000

Assets 204 1,216Liabilities (23) (700)Revenue 10 1,887(Loss)/ profit for the year (29) 88

Particulars of associates are as follows:

proportion principal Country of of ownership interest activities andName incorporation 2009 2008 place of operations

YK Grosvenor Japan 50% 50% Project management,Capital Advisers accounting andFund Management * administration, Japan

YK Grosvenor Japan 20% 20% Project management,Diamond Capital * accounting and administration, Japan

* Not required to be audited under the laws of the country of incorporation.

11. propertIes For sale

As at 31 December 2008, the freehold land included in properties for sale was US$4,503k.

As at 31 December 2008, the Group has pledged properties for sale amounting to US$3,387k to secure the Group’s bank borrowings of US$2,703k (note 17).

All the properties for sale were sold in 2009.



12. derIvatIve FINaNCIal INstrUMeNts


Forward currency contracts (a) – 773 – –

Financial assets – 773 – –

Forward currency contract for cash flow hedge purpose (a) – (3,913) – –Interest rate swap contracts for cash flow hedge purpose (b) – (1,190) – (7,850)

Financial liabilities – (5,103) – (7,850)


Forward currency contracts – 773 – –

Financial assets – 773 – –

The carrying amounts of the forward currency contracts and interest rate swaps are the same as their fair values.

(a) Forward currency contracts

At 31 December 2008, the Group held a forward currency contract designated as hedge in respect of a Japanese Yen loan amounting to JPY4,823 million for the purchase of a vessel in 2009. The terms of the forward currency contract have been negotiated to match with the terms of the commitment. The cash flow hedge was assessed to be highly effective and a net loss of US$3,913k was included in the hedging reserve as at 31 December 2008. The forward currency contract expired during the year.

In addition, the Group has entered into a forward currency contract to manage its exchange rate exposures which did not meet the criteria for hedge accounting during the year (2008: two forward currency contracts). The forward currency contracts expired during the year. Movement of the non-hedging currency derivatives are as follows:

Group Note 2009 2008 US$’000 US$’000

At 1 January 773 –Net (loss)/ gain on forward currency contracts 20 (1,041) 734Settlement of forward currency contracts 307 –Currency translation difference (39) 39

At 31 December – 773

(b) Interest rate swap contracts

In 2008, the Group entered into two twelve year interest rate swap contracts (callable at year 10) with a view to swap the interest payments of bank borrowings from a floating to fixed basis. The interest rate swap contracts were entered into by a subsidiary of the Group in respect of a loan to be drawn in 2009. The cash flow hedge was assessed to be highly effective and a net loss of US$6,288k was included in the hedging reserve as at 31 December 2008. The contracts were transferred out of the Group upon deemed disposal of a subsidiary (note 30).



13. aCCoUNts reCeIvaBle


Accounts receivable 5,056 4,987 483 39Provision for impairment (1,091) (82) – –

3,965 4,905 483 39

In general, the Group normally grants a credit period of 30 days to its customers. The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to minimize credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s accounts receivable relate to a large number of diversified customers, there is no significant concentration of credit risk. Accounts receivable are non-interest bearing.

An aged analysis of the accounts receivable as at the balance sheet date that past due but not impaired, is as follows:

Group 2009 2008 US$’000 US$’000

31 days to 60 days 14 105Over 61 days 199 435

213 540

The movements in provision for impairment of accounts receivable are as follows:

Group Note 2009 2008 US$’000 US$’000

At 1 January 82 –Impairment losses recognized 23 1,006 71Currency translation differences 3 11

At 31 December 1,091 82

The impairment of accounts receivable is individually determined to be impaired. The individually impaired accounts receivable relate to customers that were in financial difficulties. The Group does not hold any collateral or other credit enhancements over these balances.

Included in the Group’s accounts receivables balance are receivables from related parties as disclosed in note 35(a).

14. deposIts pledGed as Collateral

As at 31 December 2009, the Group and the Company had deposits pledged as collateral against Japanese Yen denominated revolving bank loan facilities. The aggregate amount of the deposits pledged shall not at any time be less than 110% of the outstanding amount under the revolving JPY loan facility. The carrying amounts of the pledged deposits approximate to their fair values.



15. Cash aNd BaNk BalaNCes


Cash at banks and in hand 35,059 14,295 28,310 2,008Short term time deposits 18,259 14,502 15,504 11,681

Cash and cash equivalents 53,318 28,797 43,814 13,689

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short term time deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and the Company, and earn interest at the respective short term time deposit rates. The carrying amounts of the cash and cash equivalents approximate to their fair values.

16. share CapItal aNd share preMIUM

Number of shares share capital share premium 2009 2008 2009 2008 2009 2008 ‘000 ‘000 US$’000 US$’000 US$’000 US$’000

Authorized:Ordinary shares of US$0.16 each 750,000 750,000 120,000 120,000

Issued and fully paid:At 1 January 260,996 248,182 41,759 39,709 21,402 13,353Issued for acquisition of

subsidiaries – 12,814 – 2,050 – 8,049Issued for private placement 52,199 – 8,352 – 9,330 –

At 31 December 313,195 260,996 50,111 41,759 30,732 21,402

On 4 January 2008, the Company entered into a swap agreement with the shareholders of Capital Advisers Co., Ltd. (“Capital Advisers”) to acquire an additional 47.9% equity interests in Capital Advisers, with the exchange of 12,814,000 newly issued shares.

On 7 August 2009, the company issued an additional 52,199,200 ordinary shares through a private placement. Pursuant to the issuance of the additional shares, the number of issued shares increased from 260,996,000 to 313,195,200.

17. BorrowINGs


Repayable per terms of revolving loan facilities- Secured 33,186 28,302 – 2,942- Unsecured 1,032 16,871 600 10,776

34,218 45,173 600 13,718



17. BorrowINGs (continued)


Repayable per terms of revolving loan facilities- Secured 10,772 11,055 – –- Unsecured – 5,000 – –

10,772 16,055 – –

The effective annual interest rates of the bank borrowings range from approximately 0.845% to 5.5% (2008: from approximately 0.9475% to 4.5%).

As at 31 December 2008, in addition to the information disclosed elsewhere in the notes to the consolidated financial statements, the Group has pledged a rental deposit of US$951k to secure the Group’s bank borrowing of US$938k.

18. aCCoUNts payaBle

The accounts payable are non-interest-bearing and are normally settled on 30-day terms.

19. Fee INCoMe

2009 2008 US$’000 US$’000

Arrangement and agency fee 1,040 2,525Project management fee 722 –Brokerage commission 995 1,337Incentive fee 211 1,858Asset management and administration fee 5,863 5,989Charter income 8,859 –

17,690 11,709



20. INvestMeNt retUrNs

Note 2009 2008 US$’000 US$’000

Interest on performance notes - shipping 35(a) 620 5,595Interest on performance notes - distressed debt 35(a) 87 25Realized gain on investment - shipping 35(a) 11,056 –Realized gain on investment - hotel and residential 35(a) 252 352Realized gain on investment - others 3 –Realized loss on disposal of properties for sale (1,861) –Property rental income 736 496Fair value adjustment on investment properties 5 252 405Fair value adjustment on investment - hotel and residential (5,982) (886)Fair value adjustment on investment - shipping 72 (2,794)Fair value adjustment on performance notes - hotel and residential (25) (87)Fair value adjustment on performance notes - shipping (171) 166Fair value adjustment on performance notes - distressed debt (262) (444)Fair value adjustment on listed shares - hotel – (306)Fair value adjustment on listed shares - others (134) (75)Net (loss)/ gain on forward currency contracts 12 (1,041) 734Write-down of properties for sale to net realizable value - residential – (2,762)

3,602 419

21. INterest INCoMe aNd expeNse

Note 2009 2008 US$’000 US$’000

Interest income from:- cash and cash equivalents 174 1,124- bridging loans 35(a) 1,375 206

1,549 1,330

Interest expense on:- borrowings 9,755 1,255- finance lease obligations 11 14

9,766 1,369

22. eMployee BeNeFIts expeNse

2009 2008 US$’000 US$’000

Salaries (including directors’ remuneration) 15,469 17,123Pension scheme contributions 87 184Staff residences, other welfare and allowances 1,041 1430

16,597 18,737



23. other expeNses

The following items have been included in arriving at other expenses:

Note 2009 2008 US$’000 US$’000

Operating lease expenses 1,737 1,495Hotel leases 9,712 6,316Hotel sub-operator fee 846 686Hotel operating expenses 10,584 7,110Provision for onerous contracts 1,844 –Investment properties operating expenses 3 31Vessel operating expenses 1,202 –Bad debt expenses 210 126Impairment of accounts receivable 13 1,006 71Travelling 264 1,205Entertainment 123 233Communication 221 270Agency fee 1,835 1,191Professional services fees 1,248 2,121Non-audit fee paid to auditors of the Group 23 –Non-audit fee paid to other auditors 25 53Tax and public dues 248 314Net foreign exchange loss 3,793 211Miscellaneous 1,402 765

36,326 22,198

24. tax

The Group’s taxes on assessable profits have been calculated at tax rates prevailing in the countries in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

(a) Income tax

Note 2009 2008 US$’000 US$’000

Current tax 221 331Deferred tax 24(b) 1,573 (794)

Total tax expense/ (credit) for the year 1,794 (463)



24. tax (continued)

(a) Income tax (continued)

A reconciliation between tax expense/ (credit) of the Group applicable to loss before tax using applicable rates and the tax credit for the year is as follows:

2009 2008 US$’000 US$’000

Loss before tax (13,889) (4,127)

Tax at domestic rates applicable to individual group entities (5,716) (2,481)

Tax effects of:- change in tax rate – 61- expenses not deductible for the tax purposes 7,476 3,051- income not subject to tax (6,363) (1,559)- utilization of previously unrecognized tax losses (935) (13)- deferred tax assets not recognized 7,501 1,209- partial tax exemption and tax relief (34) (39)- overprovision in respect of previous year (130) (714)- other (5) 22

Tax expense/ (credit) for the year at the Group’s effective rate of (13%) (2008: 11%) 1,794 (463)

(b) Deferred taxation

The movements in deferred tax assets and liabilities during the year are as follows:

Deferred tax assets

Group Company Notes provision tax losses total tax losses US$’000 US$’000 US$’000 US$’000

At 1 January 2008 – 1,062 1,062 1,062Credit/ (charge) to the

income statement for the year 24(a) (192) 237 45 218Credit to equity for the year 22 – 22 –Acquisition of subsidiaries 29 407 11 418 –Currency translation differences 71 5 76 –

At 31 December 2008 and 1 January 2009 308 1,315 1,623 1,280Credit/ (charge) to the income

statement for the year 24(a) (260) (1,313) (1,573) (1,280)Currency translation differences (9) (1) (10) –

At 31 December 2009 39 1 40 –



24. tax (continued)

(b) Deferred taxation (continued)

Deferred tax liabilities

UndistributedGroup Note profits of associate US$’000

At 1 January 2008 (749)Charge to the income statement for the year 24(a) 749

At 31 December 2008, 1 January 2009 and 31 December 2009 –

The above associate, Capital Advisers, became a subsidiary of the Group in 2008.

25. proFIt/ (loss) attrIBUtaBle to owNers oF the pareNt

The consolidated loss attributable to owners of the parent for the year ended 31 December 2009 includes a loss of US$14,355k (2008: profit of US$3,478k) which has been dealt with in the financial statements of the Company (note 28(b)).

26. dIvIdeNds

The dividends paid in 2008 were US$5,068k (SG cents 2.75 per share). The directors of the Company do not recommend any final dividend in respect of the current financial year.

27. loss per share

(a) Basic

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

(b) Diluted

Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive ordinary shares during the year. The Group has one category of potential ordinary shares: share options issued in 2004 by Capital Advisers. These share options are not considered to have any dilutive effect on loss per share.

2009 2008

Loss attributable to owners of the parent (US$’000) (14,520) (3,055)

Weighted average number of ordinary shares in issue (‘000) 281,447 260,891

Loss per share (US cents per share) - basic and diluted (5.16) (1.17)



28. reserves

(a) Group

The amounts of the Group’s reserves and the movements therein for the current and prior years are presented in the consolidated statement of changes in equity on page 50 of the financial statements.

(b) Company

share share retained exchange total Notes capital premium earnings reserve equity US$’000 US$’000 US$’000 US$’000 US$’000

Balance at 1 January 2009 41,759 21,402 36,376 609 100,146Loss for the year 25 – – (14,355) – (14,355)Other comprehensive income – – – (609 ) (609)

Total comprehensive income – – (14,355) (609) (14,964)Issuance of shares 16 8,352 9,330 – – 17,682

Balance at 31 December 2009 50,111 30,732 22,021 – 102,864

Balance at 1 January 2008 39,709 13,353 37,966 – 91,028Profit for the year 25 – – 3,478 – 3,478Other comprehensive income – – – 609 609

Total comprehensive income – – 3,478 609 4,087Issuance of shares 16 2,050 8,049 – – 10,099Dividends paid in respect of 2007 26 – – (5,068) – (5,068)

Balance at 31 December 2008 41,759 21,402 36,376 609 100,146

29. aCQUIsItIoN oF sUBsIdIarIes

On 4 January 2008, the Group acquired additional shares of Capital Advisers via a share swap thereby increasing the Group’s total share ownership in Capital Advisers from 44.8% to 92.7%. Based on the share price of the Company of SG$1.13 per share on 4 January 2008, the date of acquisition, total consideration of the 47.9% equity interest in Capital Advisers amounted to US$10,099k and share premium was increased by US$8,049k accordingly.

On 3 November 2008, the Group acquired additional shares of Uni Ships and Management Limited (“Uni Ships”) thereby increasing the Group’s total share ownership in Uni Ships from 30% to 100%.

Hence, Capital Advisers and Uni Ships were consolidated in 2008.



29. aCQUIsItIoN oF sUBsIdIarIes (continued)

The fair values of the identifiable assets and liabilities of Capital Advisers and Uni Ships as at the dates of acquisition were as follows:

2008 2008 Fair value recognized on Carrying Notes acquisition value US$’000 US$’000

Intangible assets 6 547 547Property, plant and equipment 7 14,337 13,730Investments 15,922 15,922Investments in associates 205 205Rental deposit 2,558 2,558Deferred tax assets 24(b) 418 418Properties for sale 12,890 12,890Accounts receivable 4,049 4,049Cash and bank balances 10,837 10,837Other assets 1,650 1,650Borrowings (31,598) (31,598)Accounts payable (3,221) (3,221)Other liabilities (7,141) (7,141)

Net identifiable assets 21,453 20,846

Non-controlling interest (1,557)Realization of negative goodwill arising on acquisition of subsidiaries (118)Reclassification from the Group’s investments in associates (9,589)

10,189

Satisfied by:Shares 10,099Cash 90

Total consideration 10,189

2008 US$’000

Net cash inflow arising on acquisition:Cash and bank balances acquired 10,837Cash consideration paid on acquisition (90)

10,747

30. deeMed dIsposal oF sUBsIdIarIes

On 30 November 2009, the Group disposed of the shares in Prosperity Containership S.A. (“Prosperity”) at the par value of the shares and received a partial refund of its initial investment in Prosperity in the amount of US$1.75 million by way of cash from Prosperity. Accordingly, the Group’s effective equity interest in Prosperity was reduced from 100% to 50%.

On 11 December 2009, Glory Bulkship S.A. (“Glory”) increased paid-in capital from US$1,000 to US$1,000,000 by cancelling the current issued shares and newly issuing 100 shares of US$10,000. The Group’s investment in Glory increased by US$449,200 from US$800 to US$450,000, but percentage of equity interest was reduced from 80% to 45%. Thereafter, Prosperity and Glory became investments of the Group.



30. deeMed dIsposal oF sUBsIdIarIes (continued)

The net liabilities of Prosperity and Glory at the date of disposal were as follows:

2009 US$’000

Net assets disposed of:Property, plant and equipment 95,070Other assets 168Deposits pledged as collateral 1,791Cash and bank balances 5,962Borrowings (98,544)Derivative financial instruments (8,062)Other liabilities (5,726)

Net liabilities disposed of (9,341)Non-controlling interests 11

(9,330)Gain on deemed disposal of subsidiaries 11,056

Total consideration 1,726

Satisfied by:Cash 1,301Investments 425

1,726

Net cash outflow arising on disposal:Cash and bank balances disposed of (5,962)Cash consideration received on disposal 1,301

(4,661)

31. deCoNsolIdatIoN oF sUBsIdIarIes

2009 2008 US$’000 US$’000

Accounts and other receivables 192 15Loans receivables 662 –Other assets 110 –Cash and bank balances 73 210Borrowings – (76)Other payables and accruals – (165)

Net identifiable assets/ (liabilities) 1,037 (16)Redemption of shares (1,039) –Non-controlling interests – 16

Gain on deconsolidation of subsidiaries (2) –

Net cash outflow arising from deconsolidation Cash and bank balances disposed of (73) (210)



32. INvestMeNts IN sUBsIdIarIes

Company 2009 2008 US$’000 US$’000

Shares, at cost 11,636 15,721Provision for impairment (10,099) –

1,537 15,721

(a) Details of principal investments in subsidiaries

Details of the principal subsidiaries within the Group at the date of this report are as follows:

2009 2008 proportion of proportion of principal activities Country/ place of ownership ownership and placeName incorporation interest interest of operation

Directly held:

Uni-Asia Capital Singapore 100% 100% Ship chartering(Singapore) Limited (i) arrangement, Singapore

Off-Shore Property British Virgin 100% 100% Holding and investmentInvestment Corporation (vi) Islands company, BVI

Uni-Asia Capital Company Hong Kong 100% 100% Property investment,Limited (ii) Hong Kong

Prosperity Containership Panama 50% 100% Shipping holding,S.A. (ii) (vii) Panama

Uni Delight Ltd. (v) (vi) Marshall Island – 100% Dissolved on 2 November 2009

Uni Elegance Ltd. (v) (vi) Marshall Island – 100% Dissolved on 2 November 2009

Uni Ships and Management Hong Kong 100% 100% Project management,Limited (ii) accounting and administration services, Hong Kong

Glory Bulkship S.A. (vi) (vii) Panama 45% 80% Shipping holding, Panama

Directly and indirectly held:

Capital Advisers Co., Ltd. (iv) Japan 92.7% 92.7% Property investment and management, Japan



32. INvestMeNts IN sUBsIdIarIes (continued)

(a) Details of principal investments in subsidiaries (continued)

2009 2008 proportion of proportion of principal activities Country/ place of ownership ownership and placeName incorporation interest interest of operation

Indirectly held:

Uni-Asia Finance Japan 100% 100% Corporate financeCorporation (Japan) (vi) services, Japan

Uni-Asia Guangzhou Property PRC 100% 100% Property investment,Management Company Limited (iii) China

<?> (Sun Vista Co., Ltd.) (vi) Japan 92.7% 92.7% Hotel management and operator, Japan

Sun Vista Oita Co., Ltd. (vi) Japan 92.7% 92.7% Under Liquidation

Sun Vista Sapporo Co., Ltd. (vi) Japan 92.7% 92.7% Hotel management, Japan

Sun Vista East Co., Ltd. (vi) Japan 92.7% 92.7% Hotel management and operator, Japan

Sun Vista West Co., Ltd. (vi) Japan 92.7% 92.7% Hotel operator, Japan

Vista Hotel Management Co., Ltd. (vi) Japan 92.7% 92.7% Hotel management, Japan

<?> Japan 92.7% 92.7% Hotel investment holding,(Vista Yugen Kaisha) (vi) Japan

<?> Japan 92.7% 92.7% Hotel investment holding,(MGH Co., Ltd.) (vi) Japan

Yugen Kaisha Atsugi Hotel (iv) (v) Japan 46.5% 44.2% Hotel management, Japan

Yugen Kaisha CA Development II (vi) Japan – 92.7% Dissolved on 21 December 2009

Tristar Asset Management Co., Ltd. (vi) Japan – 92.7% Dissolved on 19 March 2009



32. INvestMeNts IN sUBsIdIarIes (continued)

(a) Details of principal investments in subsidiaries (continued)

(i) Audited by Ernst & Young, Singapore(ii) Audited by Ernst & Young, Hong Kong(iii) Audited by , PRC(iv) Audited by Ernst & Young ShinNihon LLC(v) The members of the board of directors of the company are employees or directors of the Group, which is deemed as

having control from an accounting perspective and thus, the company is consolidated in the Group accounts.(vi) Not required to be audited under the laws of the country of incorporation(vii) During the year, the company became investments of the Group (note 30).

The above table lists the subsidiaries of the Company which, in the opinion of the directors, principally affected the results for the year or formed a substantial portion of the net assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.

(b) During 2008, the Group acquired additional equity interests in Capital Advisers and Uni Ships (note 29).

(c) During 2009, the Group disposed of partial equity interests in Prosperity and Glory (note 30).

(d) The Group has pledged the interest in share capital of a subsidiary of US$10k to secure bank borrowings granted to the subsidiary and swap agreements in relation to the bank borrowings in 2008. The subsidiary was disposed of during the year (note 30).

(e) The loans to subsidiaries are unsecured, interest-free or interest bearing from 2.15% to 3% (2008: 2.15% to 7%) and have fixed terms of repayment or repayable on demand. The carrying amounts of the loans approximate to their fair values.

(f ) The amounts due from/ to subsidiaries are unsecured, interest-free and have no fixed terms of repayment. The carrying amounts approximate to their fair values.

(g) Investments in subsidiaries engaged in hotel/ property investment/ management in Japan have been impaired by US$10,099k (2008: Nil) to reflect the recoverability of investments.

33. FINaNCIal rIsk MaNaGeMeNt

The Group is exposed to market risk (foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk from its finance arrangement and alternative investment management activities in shipping and real estate in Japan and China. The Group also has mismatched Japanese Yen denominated and RMB denominated assets and liabilities.

It is the management’s intention to wherever possible or desired hedge investments that are not denominated in US$. All hedging transactions are subject to Management Committee review and an approval process as stated in our Company’s standard operating procedure (SOP) for investments.

Forward rate agreements are used to manage the Group’s own exposures to foreign exchange and interest rate risks as part of its asset and liability management process. The Group uses financial instruments such as currency forwards, interest rate swaps and foreign currency borrowings to hedge certain financial risk exposures. Financial instruments currently traded or held include cash and cash equivalents, investments, loans and receivables and borrowings.



33. FINaNCIal rIsk MaNaGeMeNt (continued)

(i) Market risk

Market risk is the risk that the value of a financial instrument and investment will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or factors affecting all financial instruments traded in or indexed to a market. The Group is exposed to market risk on financial instruments and investments that are valued at market prices which primarily consist of investments in shipping, properties and hotels, loans, properties for sale and marketable securities.

Foreign exchange risk•

Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations when the future commercial transaction or recognized assets or liabilities are denominated in a currency other than the entity’s functional currency. Our foreign exchange exposures give rise to market risk associated with exchange rate movements against the US$, our functional and reporting currency.

The Group has certain investments in Japan and China, whose net assets or capital value are exposed to foreign exchange risk. The Group’s investments in Japan and China are currently not hedged. However, currency exposure arising from the Group’s JPY loan to the Japanese subsidiary is managed partly through JPY-denominated borrowings. The Group may use forward currency contracts to partly hedge its JPY loan exposure from a shipping subsidiary.

The Group has regional offices and presence in Hong Kong, Singapore, Japan and China. The Group’s income is denominated mostly in US$ and JPY while its operating expenses are mainly denominated in HK$, US$, SG$, JPY and RMB.

The table below summarizes the Group’s exposure to foreign exchange risk. (Amounts shown are in US$’000 equivalent)

As at 31 December 2009

Us$ Jpy others total

AssetsInvestments 27,922 13,959 643 42,524Loans receivables 3,725 25 – 3,750Accounts receivables 680 3,224 61 3,965Deposits pledged as collateral 11,311 614 1,175 13,100Cash and bank balances 26,917 6,403 19,998 53,318

70,555 24,225 21,877 116,657

LiabilitiesBorrowings – (34,818) – (34,818)Accounts payable (166) (2,448) – (2,614)Other payables and accruals (129) (3,409) (562) (4,100)

(295 ) (40,675) (562) (41,532)

Net financial assets/ (liabilities) 70,260 (16,450) 21,315 75,125

Commitments (3,950) (15,696) (1,664) (21,310)

Currency exposure 66,310 (32,146) 19,651 53,815




(i) Market risk (continued)

Foreign exchange risk (continued)•

The table below summarizes the Group’s exposure to foreign exchange risk. (Amounts shown are in US$’000 equivalent)

As at 31 December 2008

Us$ Jpy others total

AssetsInvestments 22,034 23,897 354 46,285Deposits for purchase of vessels 25,786 11,561 – 37,347Properties for sale – 9,013 – 9,013Accounts receivables 451 4,445 9 4,905Deposits pledged as collateral 11,230 48 1,170 12,448Cash and bank balances 15,094 11,775 1,928 28,797

74,595 60,739 3,461 138,795

LiabilitiesBorrowings (14,101) (44,790) – (58,891)Derivative financial instruments (5,570) (7,383) – (12,953)Accounts payable (411) (2,669) – (3,080)Other payables and accruals (343) (5,955) (523) (6,821)

(20,425) (60,797) (523) (81,745)

Net financial assets/ (liabilities) 54,170 (58) 2,938 57,050

Commitments (79,850) (149,554) (2,070) (231,474)

Currency exposure (25,680) (149,612) 868 (174,424)

Assuming a 5% change in US$ against the JPY (2008: 5%) with all other variables including tax rate being held constant, the effects arising from the net financial asset/ liability position will be as follows:

2009 2008 loss after tax loss after tax US$’000 US$’000

US$ against JPY- strengthened 783 292- weakened (783) (292)




(i) Market risk (continued)

Interest rate risk•

Interest rate risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market interest rates and the cash flow risks associated with the variability of cash flows from floating rate financial instruments. The Group is exposed to interest rate risk primarily from interest rate re-pricing differences between customers’ loans, borrowings, cash and cash equivalents and shareholders’ capital.

The Group’s cash balances are kept in interest bearing current accounts and on term deposits to maximize the level of return while maintaining an adequate level of liquidity. The Group’s borrowings at variable rates are denominated in US$ and JPY.

The Group may manage its interest rate risk through the use of interest rate swaps. These are commitments to exchange one set of cash flows for another. Swaps result in an economic exchange of currencies or interest rates (for example, fixed rate for floating rate) or a combination of all these (i.e. cross-currency interest rate swaps).

As at 31 December 2009, if US$ market interest rates had been 100 basis point higher/ lower with other variables held constant, loss after tax for the year would have been US382k (2008: US$122k) higher/ lower, mainly as a result of higher/ lower net interest income earned on floating rate financial instruments.

As at 31 December 2009, if JPY market interest rates had been 40 basis point higher/ lower with other variables held constant, loss after tax for the year would have been US$111k (2008: US$132k) higher/ lower, mainly as a result of higher/ lower net interest expense incurred on floating rate financial instruments.

Price risk•

The Group is exposed to price risk on the shipping, hotel and property investments because the investments are classified on the consolidated balance sheet at fair value through profit or loss or at the lower of carrying value or recoverable amount. The Group seeks to manage such risk exposure by keeping a balanced portfolio, performing due diligence procedures, conducting routine analysis and updates on the market and investing through specialized fund structures. The Group maintains a diversified investment portfolio in shipping, properties and other alternative asset classes.

In case of ship investment in funds which represented 59% (2008: 37%) of the shipping portfolio size, in most case, we are limited to a negative fair value loss equivalent to the initial investment amount.

In the case of investment into hotels through the specialized fund structures which represented 9% (2008: 15%) of the hotel portfolio size, we are limited to a negative fair value loss equivalent to the outstanding investment amount. An impairment loss of US$2,482k (2008: Nil) was recognized in 2009 for hotel properties classified as property, plant and equipment. As at 31 December 2009, the carrying value of hotel properties amounted to US$22,248k (2008: US$26,060k).

In the case of investment into residential properties through specialized fund structures which represented 30% (2008: 48%) of the residential portfolio, we are limited to a negative fair value loss equivalent to the outstanding investment amount.

If prices for shipping investments change by 1% (2008: 1%) with all other variables including tax rate being held constant, the loss after tax will be changed by US$1,648k (2008: US$1,088k).

If prices for residential properties investments change by 1% (2008: 1%) with all other variables including tax rate being held constant, the loss after tax will be changed by US$260k (2008: US$397k).




(ii) Credit risk

Credit risk is the risk of loss resulting from the failure of counterparties to meet the terms of their obligations under a financial instrument or customer contract. The Group is exposed to credit risk from accounts receivable and loan receivables, deposits with banks and financial institutions, foreign exchange transactions, other financial instruments, and counterparty default risk from investing activities. The Group seeks to minimize these risks by performing detailed reviews of loan counterparties or asset issuers and by either selling on participated loans to other parties or entering into offsetting loans payable when management wishes to preserve the Group’s liquidity.

The Group deals only with customers of good credit standing and the loans are currently extended only to investee or related companies. Lastly, the business of hotel operation is conducted largely on cash basis. Under special circumstances, credit may be offered to corporate account holders but this represents a very marginal part of hotel business.

The bank balances and pledged deposits are deposited with creditworthy banks with no recent history of default.

As the Group does not hold any collateral, the maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet, except as follows:

2009 2008 million million

Corporate guarantees provided to ship manufacturers JPY3,752 JPY3,752Corporate guarantees provided to bank/ lender US$16 US$8

(iii) Liquidity risk

The Group manages liquidity risk by maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions in order to meet our normal operating commitment and capital investment requirement. The table below analyses the maturity profile of the Group’s financial assets and liabilities (including derivative financial liabilities) based on contractual undiscounted cash flows.

less than 3 3-12 1-5 over 5 months months years years US$’000 US$’000 US$’000 US$’000

At 31 December 2009Financial assets

Investments 346 3,282 25,648 13,325Loans receivable 56 167 4,268 –Accounts and other receivables 4,394 34 2,476 108Deposits pledged as collateral 11,785 1,315 – –Cash and bank balances 53,325 – – –

69,906 4,798 32,392 13,433

Financial liabilitiesInterest bearing borrowings (11,161) (23,804) (609) –Finance lease obligation (2) (7) (12) –Due to Tokumei Kumiai investors – – (613) –Retirement benefit allowance – – – (240)Accounts and other payables (4,351) (80) (197) –

(15,514) (23,891) (1,431) (240)




(iii) Liquidity risk (continued)

less than 3 3-12 1-5 over 5 months months years years US$’000 US$’000 US$’000 US$’000

At 31 December 2008Financial assets

Investments 192 280 35,332 10,721Accounts and other receivables 6,954 650 2,116 110Derivative financial instruments 773 – – –Deposits pledged as collateral 12,464 48 – –Cash and bank balances 28,824 – – –

49,207 978 37,448 10,831

Financial liabilitiesInterest bearing borrowings (8,140) (38,155) (5,171) (9,899)Finance lease obligation (27) (83) (220) (32)Due to Tokumei Kumiai investors – – (2,055) –Retirement benefit allowance – – – (656)Derivative financial instruments (3,913) (1,190) (4,123) (3,727)Accounts and other payables (9,038) – – –

(21,118) (39,428) (11,569) (14,314)

(iv) Capital management

In the near term, the Group’s objective when managing capital is to maintain an optimal capital structure in order to expand the size of our investment portfolio. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell investments to reduce borrowings. The Group conducts regular cashflow analysis to determine the capital requirement of each department and the cashflow and financial position of all business activities in order to closely monitor the cashflow and capital structure of the Group.

The Group can monitor capital using the gearing ratio, which is net debt divided by total equity.




(v) Fair value estimation

Fair value•

The carrying amounts of each category of financial instruments, which approximate to their fair values, as at the end of the reporting period are as follows:

Financial assets

2009 Financial assets at fair available- loans and value through for-sale Notes receivables profit or loss financial assets US$’000 US$’000 US$’000

Investments - listed (a) – 643 160Investments - unlisted (b) – 41,721 –Loans receivable (b) 3,750 – –Accounts receivable (c) 3,965 – –Prepayments, deposits and other receivables (c) 1,385 – –Deposits pledged as collateral (c) 13,100 – –Cash and bank balances (c) 53,318 – –

Total 75,518 42,364 160

2008 Financial assets at fair available- loans and value through for-sale Notes receivables profit or loss financial assets US$’000 US$’000 US$’000

Investments - listed (a) – 280 235Investments - unlisted (b) – 45,770 –Derivative financial instruments (b) – 773 –Accounts receivable (c) 4,905 – –Prepayments, deposits and other receivables (c) 1,812 – –Deposits pledged as collateral (c) 12,448 – –Cash and bank balances (c) 28,797 – –

Total 47,962 46,823 235




(v) Fair value estimation (continued)

Fair value (continued)•

Financial liabilities

2009 2008 Financial Financial Financial liabilities at fair liabilities at liabilities at value through Notes amortized costs amortized costs profit or loss

US$’000 US$’000 US$’000

Interest bearing borrowings (b) 34,818 58,891 –Finance lease obligations (b) 20 328 –Accounts and other payables (c) 4,628 9,038 –Derivative financial instruments (b) – – 12,953

Total 39,466 68,257 12,953

Note:

The following methods and assumptions were used to estimate the fair values:

(a) Fair value of listed investments is based on price quotations at the reporting date.

(b) Fair value is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

(c) The carrying amounts approximate to their fair values due to short-term maturities of these instruments.

Fair value hierarchy•

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilitiesLevel 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable,

either directly or indirectlyLevel 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on

observable market data.




(v) Fair value estimation (continued)

Fair value hierarchy (continued)•

Analysis of financial instruments carried at fair value by level of fair value hierarchy as at the end of the reporting period are as follows:

2009 level 1 level 2 level 3 total US$’000 US$’000 US$’000 US$’000

Financial assets at fair value through profit or lossUnlisted shares – 10,986 13,799 24,785Unlisted performance notes – 16,654 282 16,936Listed shares 643 – – 643

Available-for-sale financial assetsListed shares 160 – – 160

The movements in fair value measurements in Level 3 during the year are as follows:

US$’000

Financial assets at fair value through profit or lossAt 1 January 2009 24,125Fair value adjustment recognized in the income statement (6,269)Purchases 808Disposals (3,482)Currency translation differences (1,101)

At 31 December 2009 14,081

During the year ended 31 December 2009, there were no transfers of fair value measurements between Level 1 and Level 2 and no transfer into or out of Level 3.

Impact of changes to key assumptions on fair value of Level 3 financial instruments•

Fair value of Level 3 investments in hotel and residential had been determined using a valuation technique based on assumptions of certain occupancy rate and room rate that are not supported by observable market prices or data. The valuation requires management to make estimates about expected future cash flows of the financial instruments which are discounted at current market rates.

If occupancy rate changes by 1% with all other variables including tax rate being held constant, the loss/ profit after tax will be changes by US$275k.

If room rate changes by 1% with all other variables including tax rate being held constant, the loss/ profit after tax will be changes by US$254k.



34. CoMMItMeNts

(a) Capital commitments

Capital expenditure contracted for at the balance sheet date but not recognized in the financial statements of the Group and the Company are as follows:

Group Company 2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Capital commitments in respect ofvessels under construction – 201,010 – 41,703

(b) Operating lease commitments - the Group as lessee

The Group leases certain of its office and hotel properties and office equipments under operating lease arrangements. Terms for the leases for properties range from three to six years and those for office equipments range between two and five years.

At the balance sheet date, the Group and the Company had total future minimum lease payments under non-cancellable operating leases falling due as follows:

Group Company 2009 2008 2009 2008

US$’000 US$’000 US$’000 US$’000

Premises and office equipment

Within one year 1,832 1,947 878 1,055Later than one year and not later than five years 709 925 40 786

2,541 2,872 918 1,841

Hotel properties

Within one year 7,351 8,331 – –Later than one year and not later than five years 7,448 14,983 – –

14,799 23,314 – –




34. CoMMItMeNts (continued)

(c) Operating lease commitments - the Group as lessor

The Group has entered into commercial property leases on its investment properties and leases certain of its vessels under construction under operating lease arrangements. These noncancellable leases have remaining lease terms of two years.

Future minimum rentals receivable under non-cancellable operating leases at the balance sheet date are as follows:

Group 2009 2008 US$’000 US$’000

Rental income from investment properties

Within one year 217 285Later than one year and not later than five years 70 255

287 540

Future minimum chartering income receivable under non-cancellable operating leases at the balance sheet date are as follows:

Group 2009 2008 US$’000 US$’000

Chartering income from vessels under construction

Within one year – 9,350Later than one year and not later than five years – 83,676Over five years – 58,223

– 151,249

(d) Finance lease commitments

The Group has finance leases for certain items of hotel properties and office equipment, furniture and fixtures. These leases have terms for renewal but no purchase options and escalation clauses.

Future minimum lease payments under finance leases together with the present value of net minimum lease payments are as follows:

Group Minimum lease present value of payments payments 2009 2008 2009 2008 US$’000 US$’000 US$’000 US$’000

Within one year 9 113 9 100Later than one year and not later than five years 11 249 11 228

Total minimum lease payments 20 362 20 328Less: Amount representing finance charges (34) –

Present value of minimum lease payments 20 328 20 328



34. CoMMItMeNts (continued)

(e) Investment commitments

Group and Company 2009 2008 US$’000 US$’000

Performance notes 3,950 3,950

Performance notes represent the outstanding balance of the maximum commitment to Akebono Fund in the subscription agreements dated 17 April 2007.

35. related party traNsaCtIoNs

(a) In addition to the information disclosed elsewhere in the financial statements, the following transactions took place between the Group and related parties in the normal course of business and on arm’s length basis:

2009 2008 other other Investee related Investee related associates companies companies associates companies companies US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Income StatementFee incomeArrangement and agency fee – 710 108 – 1,186 130Project management fee – 710 12 – – –Brokerage commission – 486 – 220 62 –Incentive fee – 125 – – 1,766 –Asset management and

administration fee – 3,710 – – 3,743 –

hotel income – 2,974 – – – –

Investment returnsInterest on performance notes

- shipping – 620 – – 5,595 –Interest on performance notes

- distressed debt – 87 – – 25 –Realized gain on investment

- shipping – 11,056 – – – –Realized gain on investment

- hotel and residential – 252 – 94 258 –

Interest income from participationin bridging loan – 1,375 – – 206 –

Balance SheetLoans receivable – 3,750 – – – –Accounts receivable – 2,601 16 – 1,995 35Due to Tokumei Kumiai investors – – 613 – – 2,055



35. related party traNsaCtIoNs (continued)

(b) Key Management Personnel Compensation

2009 2008 US$’000 US$’000

Short term benefits 1,262 2,357Employer’s contribution to defined contribution plans 14 103Other welfare and allowances 401 827

1,677 3,287

Included in the above is total compensation to directors of the Group amounting to US$561k (2008: US$917k).

36. CoNtINGeNt lIaBIlItIes

2009 2008 US$’000 US$’000

At the balance sheet date, there were contingent liabilities in respect of- performance guarantee to a builder for the due performance by an investment 40,335 41,395- guarantee for bank loan provided to investments 16,000 8,000

56,335 49,395

Capital Advisers was served a complaint dated 14 November 2008 to the Tokyo District Court by Kabushikikaisha Land (“seller”) in relation to a sales and purchase agreement dated 13 July 2007 (“S&P agreement”), pursuant to which Capital Advisers had cancelled the S&P agreement on May 2008 in accordance with the agreement release clause. Two lawsuits have been filed against Capital Advisers requesting for punitive damages of JPY294 million from the seller and JPY10.5 million from the broker.

On 8 October 2009 and 24 December 2009, Capital Advisers accepted the court’s recommendation for judicial settlement to pay the broker JPY200k and the seller JPY2 million, respectively, for the waiver and withdrawal of all their claims against Capital Advisers.

37. approval oF the CoNsolIdated FINaNCIal stateMeNts

The consolidated financial statements were approved and authorized for issue by the board of directors on 15 March 2010.


Statistics of ShareholdingsAs at 8 March 2010

share CapItal

Number of Issued Shares: 313,195,200Share Capital: US$50,111,232Class of Shares: Ordinary SharesVoting Rights: On show of hands - one vote On a poll - one vote for every ordinary share

tweNty larGest shareholders as at 8 MarCh 2010

No. of % of Name of shareholder shares shareholdings

1 DBS VICKERS SECURITIES (S) PTE LTD 69,421,950 22.172 EVERGREEN INTERNATIONAL S.A. 31,250,000 9.983 YAMASHIRO MOTOKUNI 27,812,000 8.884 FASTWIN INVESTMENT LIMITED 12,500,000 3.995 HSH NORDBANK AG 12,500,000 3.996 FOUNDERS CORPORATION 11,937,500 3.817 MITSUI & CO., LTD 8,968,750 2.868 OCBC SECURITIES PRIVATE LTD 7,569,000 2.429 EXENO YAMAMIZU CORPORATION 5,125,000 1.6410 UOB KAY HIAN PTE LTD 3,768,000 1.2011 CITIBANK NOMINEES SINGAPORE PTE LTD 3,350,000 1.0712 PHILLIP SECURITIES PTE LTD 3,166,000 1.0113 FUKUMORI MASAKI 1,887,500 0.6014 YEO SENG BUCK 1,822,000 0.5815 PROSPECT INVESTMENT PTE LTD 1,152,000 0.3716 CIMB-GK SECURITIES PTE. LTD. 1,044,000 0.3317 WONG YUN HEY 1,000,000 0.3218 KIM ENG SECURITIES PTE. LTD. 933,000 0.3019 LIM & TAN SECURITIES PTE LTD 854,000 0.2720 NOMURA SINGAPORE LIMITED 838,000 0.27 TOTAL 206,898,700 66.06

dIstrIBUtIoN oF shareholders By sIze oF shareholdINGs as at 8 MarCh 2010

No. of % of No. % ofsize of shareholdings shareholders shareholders of shares shareholdings

1 - 999 2 0.04 750 0.001,000 - 10,000 2,535 55.61 16,309,000 5.2110,001 - 1,000,000 2,006 44.00 93,611,750 29.891,000,001 - and above 16 0.35 203,273,700 64.90Grand Total 4,559 100.00 313,195,200 100.00


Statistics of ShareholdingsAs at 8 March 2010

sUBstaNtIal shareholders as at 8 MarCh 2010

as shown in the Company’s Register of Substantial Shareholders

shareholding registered other shareholdings in whichName of in name of substantial shareholderssubstantial shareholders substantial shareholders are deemed to have an interest

No. of % of issued No. of % of issued shares shares shares shares

Yamasa Co., Ltd – – 61,167,950(1) 19.53%Evergreen International S.A. 31,250,000 9.98% – –Yamashiro Motokuni 27,612,000(2) 8.82% – –

Notes:(1) Shares registered in the name of DBS Vickers Securities (Singapore) Pte Ltd.(2) The number of shares took into account the following trades:-

(i) Sale of 100,000 shares on 5 March 2010

(ii) Sale of 100,000 shares on 8 March 2010

pUBlIC shareholdINGs

Based on the information available to the Company as at 8 March 2010, approximately 56.90% of the total number of issued shares of the Company is held by the public and thereof, Rule 723 of the Listing Manual issued by the Singapore Exchange Securities Trading Limited is complied with.


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Uni-Asia Finance Corporation (the “Company”) will be held at Anson III, Level 2, M Hotel Singapore, 81 Anson Road Singapore 079908 on Tuesday, April 27, 2010 at 2.00 p.m. for the following purposes:

as ordINary BUsINess

1. To receive and adopt the Audited Financial Statements of the Company for the year ended December 31, 2009 together with the Auditors’ Report thereon. (resolution 1)

2. To re-elect the following Directors retiring pursuant to the Company’s Articles of Association:

Mr Ang Miah Khiang (Retiring under Article 100) (resolution 2)Mr Rong-Jong Owng (Retiring under Article 100) (resolution 3)

Mr Ang Miah Khiang will upon re-election as Director of the Company, remain as Member of the Audit Committee and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

3. To approve the payment of Directors’ fees of S$155,000 for the year ended December 31, 2009 (2008: S$140,342). (resolution 4)

4. To re-appoint Messrs Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their remuneration. (resolution 5)

5. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

as speCIal BUsINess

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:

6(i). Authority to allot and issue shares

“That pursuant to the Listing Manual of the Singapore Exchange Securities Trading Limited (“sGx-st”) and the Company’s Articles of Association, authority be and is hereby given to the directors to:

(A) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise, and /or

(ii) make or grant offers, agreements or options (collectively “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

(B) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(a) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution):

(i) by way of renounceable rights issues on a pro rata basis to shareholders of the Company (“renounceable rights Issues”) shall not exceed one hundred per centum (100%) of the total number of issued shares in the capital of the Company excluding treasury shares (as calculated in accordance with sub-paragraph (c) below); and



(ii) otherwise than by way of Renounceable Rights Issues (“other share Issues”) shall not exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with sub-paragraph (c) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with sub-paragraph (c) below);

(b) the Renounceable Rights Issues and Other Share Issues shall not, in aggregate, exceed one hundred per centum (100%) of the total number of issued shares (excuding treasury shares) of the Company (as calculated in accordance with paragraph (c) below);

(c) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (a) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) of the Company at the time this Resolution is passed, after adjusting for:

(i) new shares arising from the conversion or exercise of any convertible securities;

(ii) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time this Resolution is passed, provided the options or awards were granted in compliance with the provisions of the Listing Manual of the SGX-ST; and

(iii) any subsequent bonus issue, consolidation or subdivision of shares;

(d) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(e) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier; or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments.” (resolution 6)

In the event that Resolution 6 above is not passed by Ordinary Resolution, in the alternative, to consider and if thought fit, to pass the following resolution, with or without any modifications:

“That pursuant to the Listing Manual of the Singapore Exchange Securities Trading Limited (“sGx-st”) and the Company’s Articles of Association, authority be and is hereby given to the directors to:

(A) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise, and /or

(ii) make or grant offers, agreements or options (collectively “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and



(B) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(a) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with sub-paragraph (b) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with sub-paragraph (b) below);

(b) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (a) above, the total number of issued shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury shares) of the Company at the time this Resolution is passed, after adjusting for:-

(i) new shares arising from the conversion or exercise of any convertible securities;

(ii) new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time this Resolution is passed, provided the options or awards were granted in compliance with the provisions of the Listing Manual of the SGX-ST; and

(iii) any subsequent bonus issue, consolidation or subdivision of shares;

(c) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(d) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier; or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments.” (resolution 6a)

6(ii). Authority to offer and grant options and to allot and issue shares under the Uni-Asia Share Option Scheme

“That approval be and is hereby given to the Directors to:

(a) offer and grant options in accordance with the Uni-Asia Share Option Scheme (the “scheme”) and the Memorandum and Articles of Association of the Company; and

(b) allot and issue such number of ordinary shares (the “scheme shares”) as may be required to be issued pursuant to the exercise of options under the Scheme provided always that the aggregate number of Scheme Shares over which options granted when added to the number of shares issued and issuable in respect of all options granted under the Scheme shall not exceed fifteen per centum (15%) of the issued shares in the Company from time to time.” (resolution 7)



7. Increase in discount limit to not more than 20% for non pro rata share issue

“That, contingent on the passing of Resolution 6 or Resolution 6A, as the case may be, above, authority be and is hereby given to the Directors of the Company to fix the issue price for shares and/or Instruments that are to be issued by way of placement pursuant to the twenty per centum (20%) sub-limit for Other Share Issues on a non pro rata basis referred to in Resolution 6 or Resolution 6A, as the case may be, above, at a discount exceeding ten per centum (10%) but not more than twenty per centum (20%) of the price as determined in accordance with the Listing Manual of the SGX-ST.” (resolution 8)

By Order of the Board

Joanna lim lan simCompany Secretary

Singapore, 5 April 2010

statement pursuant to article 44 of the Company’s articles of association

The effect of the resolutions under the heading “Special Business” in this Notice of the Annual General Meeting are:

(i) The Ordinary Resolution 6 proposed in item 6(i) above, if passed, will empower the Directors to issue shares in the capital of the Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments, up to a number not exceeding (i) 100% for Renounceable Rights Issues and (ii) 50% for Other Share Issues, of which up to 20% may be issued other than on a pro rata basis to shareholders, provided that the total number of shares which may be issued pursuant to (i) and (ii) shall not exceed 100% of the issued shares in the capital of the Company excluding treasury shares. The aggregate number of shares which may be issued shall be based on the total number of issued shares in the capital of the Company (excluding treasury shares) at the time that Ordinary Resolution 6 is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution 6 is passed, and (b) any subsequent bonus issue or consolidation or subdivision of shares.

The authority for 100% Renounceable Rights Issues is proposed pursuant to one of the new measures introduced by the Singapore Exchange Limited (“sGx”) in consultation with the Monetary Authority of Singapore (“Mas”), which took effect on 20 February 2009 to accelerate and facilitate listed issuers’ fund raising efforts.

In the event that Ordinary Resolution 6 above is not passed, the Directors will immediately propose for the shareholders’ consideration the adoption of Ordinary Resolution 6A, which, if passed, will empower the Directors to issue shares and convertible securities in the Company. The number of shares and convertible securities that the Directors may issue under this Resolution would not exceed 50% of the total number of issued shares (excluding treasury shares) of the Company at the time of the passing of this Resolution. For issue of shares and convertible securities other than on a pro rata basis to all shareholders, the aggregate number of shares and convertible securities to be issued shall not exceed 20% of the total number of issued shares (excluding treasury shares) of the Company. The aggregate number of shares which may be issued shall be based on the total number of issued shares (excluding treasury shares) of the Company at the time that Ordinary Resolution 6A is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution 6A is passed, and (b) any subsequent bonus issue or consolidation or subdivision of shares.



(ii) The Ordinary Resolution 7 proposed in item 6(ii) above, if passed, will empower the Directors of the Company to grant options and issue shares pursuant to the Uni-Asia Share Option Scheme which was approved at the Extraordinary General Meeting of the Company on 26 June 2007.

(iii) The Ordinary Resolution 8 proposed in item 7 above, if passed, will authorise the Directors of the Company to fix the issue price for shares that are issued by way of placement pursuant to the 20% sub-limit for Other Share Issues on a non pro rata basis referred to in Resolution 6 or Resolution 6A, as the case may be, above at a discount exceeding 10% but not more than 20% of the price as determined in accordance with the Listing Manual of the SGX-ST (the “Maximum pricing discount”).

The authority to set the Maximum Pricing Discount is proposed pursuant to one of the new measures introduced by the SGX in consultation with the MAS, which took effect on 20 February 2009 to accelerate and facilitate the fund raising efforts of listed issuers.

Notes:

1. A member of the Company entitled to attend and vote at a meeting of the Company who is the holder of two or more shares shall be entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

2. The instrument appointing a proxy or proxies must be deposited at the office of the Company’s Share Transfer Agent in Singapore, Tricor Barbinder Share Registration Services at 8 Cross Street, #11-00 PWC Building, Singapore 048424 not less than forty-eight (48) hours before the time appointed for the Annual General Meeting.

3. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised.

4. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting.


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Corporate Information

BoARD oF DIReCtoRs

Kazuhiko Yoshida(Executive Director)

Michio Tanamoto(Executive Director)

Ang Miah Khiang(Lead Independent Non-Executive Director)

Ronnie Teo Heng Hock(Independent Non-Executive Director)

Rajan Menon(Independent Non-Executive Director)

Robert Van Jin Nien(Non-Executive Director)

Paul Chang#

(Non-Executive Director)

Rong-Jong Owng(Non-Executive Director)

Makiko Sano*^ (Non-Executive Director)

# Resigned on 18 January 2010

* Appointed on 22 October 2009

^ Resigned on 23 February 2010

Audit Committee

Ang Miah Khiang (Chairman)Ronnie Teo Heng HockRajan MenonRobert Van Jin NienRong-Jong Owng

Remuneration Committee

Rajan Menon (Chairman)Ang Miah KhiangRonnie Teo Heng HockRobert Van Jin Nien

nominating Committee

Ronnie Teo Heng Hock (Chairman)Ang Miah KhiangRajan MenonKazuhiko Yoshida

PRInCIPAL PLACes oF BUsIness

Hong KongSuite A, 26th FloorAdmiralty Centre Tower 1,18 Harcourt Road, Admiralty,Hong KongTel: (852) 2528 5016Fax: (852) 2528 5020

singapore8 Shenton Way#37-04Singapore 068811Tel: (65) 6438 1800Fax: (65) 6438 1500

JapanNipponkoa Ginza Building 3F, 7-13-10 Ginza, Chuo-ku, Tokyo, Japan 104-0061Tel: (81) 3 6278 5611Fax: (81) 3 6278 5614

Capital Advisers Co., LtdNipponkoa Ginza Building 3F, 7-13-10 Ginza, Chuo-ku, Tokyo, Japan 104-0061,Tel: (81) 3 5962 8600Fax: (81) 3 5962 8610

JoInt CoMPAnY seCRetARIes

Joanna Lim Lan Sim, ACISChan Wan Mei

Company RegistrationNo. CR-72229

ReGIsteReD oFFICe

Ugland HouseP.O. Box 309Grand CaymanCayman IslandsBritish West Indies

AUDItoRs

Ernst & Young18th FloorTwo International Finance Centre8 Finance Street, CentralHong Kong

Partner-in-charge: Agnes Tso(Appointed in 2008)

sHARe ReGIstRAR AnD sInGAPoRe sHARe tRAnsFeR AGent

Tricor Barbinder ShareRegistration Service8 Cross Street #11-00PWC BuildingSingapore 048424

PRInCIPAL BAnKeRs

Mizuho Corporate Bank, Ltd.Hong Kong Branch17/F, Two Pacific Place88 QueenswayHong Kong

The Hong Kong and Shanghai Banking Corporation LimitedPacific Place BranchTwo Pacific Place88 QueenswayHong Kong

Hang Seng Bank Limited83 Des Voeux Road, CentralHong Kong

DBS Bank Ltd6 Shenton WayDBS Building Tower OneSingapore 068809

UnI-AsIA FInAnCe CoRPoRAtIonSuite A, 26th Floor Admiralty Centre Tower 1, 18 Harcourt Road, Admiralty, Hong Kong

realising a sustainable future

Documents